17. Carrie is a member of the Benevolent and Protective Order of the Elks. As such, she receives discounts on things like hotels, bike tours, online shopping, and insurance. She decides to purchase a $20,000 whole life insurance policy through the Order of the Elks. This is possible because the Elks are:
Answer: D
Carrie's purchase of a whole life insurance policy is possible because the Elks are a fraternal benefit society.
Fraternal benefit societies provide insurance and other benefits to their members, who share a common bond, such as belonging to the same organization. The Benevolent and Protective Order of the Elks operates as a fraternal benefit society, allowing members like Carrie to purchase insurance policies through them.
A) a mutual insurance company.
A mutual insurance company is owned by its policyholders, who share in the profits and losses of the company. While they may offer some similar benefits, the Elks specifically function as a fraternal benefit society, which is distinct from mutual insurance structures.
B) a reciprocal insurance group.
A reciprocal insurance group consists of members who exchange insurance contracts among themselves. While this structure involves cooperative risk-sharing, it does not align with the specific nature of the Elks as a fraternal benefit society that provides member-focused insurance products.
C) a stock insurance company.
A stock insurance company is owned by shareholders and aims to generate profits for them. This is contrary to the principles of a fraternal benefit society, which primarily serves the needs of its members rather than focusing on profit generation.
D) a fraternal benefit society.
Fraternal benefit societies are organizations that offer insurance and other benefits to their members based on a common bond, such as a shared interest or affiliation. This structure allows members like Carrie to access benefits such as whole life insurance through the Elks, making this option the correct choice.
Conclusion
The correct answer is D, as the Elks operate as a fraternal benefit society, which is designed to provide insurance and other benefits exclusively to its members. In contrast, the other options fail to accurately describe the structure and purpose of the organization, emphasizing the unique role that fraternal benefit societies play in offering insurance services to their members.