In 2018, the Colorado-based tech company UKnight Interactive filed a lawsuit against the Knights of Columbus (KofC). The KofC is the biggest Catholic fraternal organization, and one of the largest fraternal-benefit societies of any kind, in the world.

UKnight made a number of sweeping allegations against the KofC, including fraud. UKnight sought damages in an amount totaling over $100 million.

Some news outlets, including BuzzFeed,[1] wrote about the assertions in tones that suggested a grand conspiracy – both against its own membership, and against the various organizations that rate insurers according to financial strength.[2] (These include AM Best and Standard & Poor’s.)

Knights of Columbus Largely Cleared

In September of 2019, the KofC appears to have been more or less entirely vindicated.[3]

A judge ordered the KofC to pay $500,000 for breach of contract.[4]

To put the ruling in perspective, consider that this amount constitutes less than half of one percent of what the plaintiffs were seeking.

This seems to suggest that most of what UKnight claimed was demonstrated to have been false.[5]

As one spokesperson for the KofC stated, the judgment is what one would expect in a “garden-variety contract case.”

Apparently, the KofC pulled the plug on its dealings with Colorado company when an emissary from the Order conducted an on-site inspection and found the UKnight facility to have been substandard.

Anecdotal reports suggest that, essentially, UKnight may have been operating servers in the basement of a private residence.

The KofC inspector reported his finding to the vice presidents at the “Supreme” Home Office, at which point the KofC made the decision to sever ties with UKnight. Unfortunately for the KofC, the court ruled that this course of action violated the contract into which the Order had entered.

The Moral of the Story

Therefore, in retrospect, and in light of the judicial ruling, UKnight’s various, sensational allegations appear to have groundless.

But, arguably, the KofC upper echelon should have used better judgment to begin with, in selecting an internet-technology company.

[1] Ema O’Connor, “Phantom Knights,” BuzzFeed, August 26, 2019, <https://www.buzzfeednews.com/article/emaoconnor/knights-of-columbus-insurance-lawsuit>.

[2] See, also: Jibran Ali Mirza, “Knights of Columbus Facing Lawsuit Over Alleged Business Misconduct,” Market Watch, S&P Global, May 10, 2018, <https://www.spglobal.com/marketintelligence/en/news-insights/trending/d63p1_ofjhj8grhfqlyu0a2>.

[3] See J.D. Flynn, “Judgment Reached in Knights of Columbus Contract Lawsuit,” Catholic News Agency,” September 13, 2019, <https://www.catholicnewsagency.com/news/judgment-reached-in-knights-of-columbus-contract-lawsuit-59714>.

[4] Christopher Hoffman, “Knights of Columbus Must Pay $500,000 in Contract Dispute,” CT Post, September 13, 2019, <https://www.ctpost.com/local/article/Knights-of-Columbus-must-pay-500-000-in-contract-14438512.php>.

[5] Or, more carefully, it suggests that most of what UKnight asserted could not be demonstrated to be true.

Proverbs 13

In the Catholic New American Bible, Revised Edition (NABRE), Proverbs 13:22b reads: “The good leave an inheritance to their children’s children…”.

Now there is no question that the Bible treats the word “inheritance” in numerous ways.

Is ‘Inheritance’ to Be taken Literally?

‘Inheritance’ as Children

For example, in the Book of Psalms, chapter 127, verse 3, we see that “…sons are a gift from the LORD, the fruit of the womb, a reward.” (NABRE) Or, as the King James Version puts it: “Lo, children are an inheritance from Jehovah.”

So, kids themselves can be an inheritance.

But, Proverbs 13:22 is unlikely to be using the word “inheritance” to mean “children.” Or else it would seem to imply that a good person bears children for his grandkids, which doesn’t seem to make much sense.

‘Inheritance’ as a Habit of Doing Good

Of course, another possibility is that “inheritance” refers to the good person’s goodness itself.

The Bible Has Dire Warnings Against Greed

There can be little doubt that the Bible often refers to good deeds as “treasure” and cautions against focusing upon the accumulation of monetary wealth.

For example, In Matthew 16:19-20, the Lord warns: “Do not store up for yourselves treasures on earth, where moth and decay destroy, and thieves break in and steal. But store up treasures in heaven, where neither moth nor decay destroys, nor thieves break in and steal.” (NABRE)

And then, famously, a few verses later, we see: “No one can serve two masters. He will either hate one and love the other, or be devoted to one and despise the other. You cannot serve God and mammon.”

Ecclesiates 5:10-12 states: “Where there are great riches, there are also many to devour them. Of what use are they to the owner except as a feast for the eyes alone? Sleep is sweet to the laborer, whether there is little or much to eat; but the abundance of the rich allows them no sleep. This is a grievous evil which I have seen under the sun: riches hoarded by their owners to their own hurt.” (NABRE)

Doubtless, one of the best known Bible verses of them all comes from 1 Timothy 6:10: “For the love of money is the root of all evils, and some people in their desire for it have strayed from the faith and have pierced themselves with many pains.” (NABRE)

Still, before we assume that Proverbs 13:22 is speaking metaphorically about inheritance, we should at least turn a passing glance towards the previous chapter in the epistle to Timothy.

But the Bible Also Demands That We Provide for our Families

For there, in verse 8, it says: “…whoever does not provide for relatives and especially family members has denied the faith and is worse than an unbeliever.” (NABRE)

It is difficult to see this latter passage as anything but a straightforward entreaty to care for, and provide for, one’s family — in a monetary and practical sense.

This, I believe, is the correct way to view life insurance.

It’s a provision for your family.

The death benefit of a life-insurance policy has the ability to give your survivors the amount that you wanted — and perhaps planned — to earn for them, but never got a chance.

Oftentimes, being adequately insured makes the difference between a family that disintegrates after the death of a breadwinner, and one that is able to move on.

How Can You Fulfill This Biblical Mandate?

Start by taking a hard and serious look at your finances. What would your survivors’ asset and income needs be in the event of your death?

Let us help.

Call today for a no-cost, no-obligation review of your situation.

(321)948-0707

The numbers are comparable for high schoolers (31% here, versus 10% nationwide).

This suggests that Catholic St. Louisans value the advantages of the Archdiocesan school system.

However, when push comes to shove in a financial pinch, paying for Catholic education might be relegated to the category of “non-essentials.”

Money Problems Often Come Unexpectedly

Money problems can arise in a variety of contexts and from a number of factors.

Some of these afflict breadwinners.

One class of possibilities has to do with cutbacks, downsizing, layoffs, and other unemployment woes.

Another might stem from the temporary or permanent disability.

Premature and untimely death is a tragedy on many levels — not least from the standpoint of the financial hardships with which survivors are too frequently saddled.

Other difficulties affect family members.

Sometimes, young children are diagnosed with conditions — such as cancer or autism — that require costly interventions and therapies.

Other times, families are faced with the prospect of having to assume caretaker responsibilities for older adults, perhaps suffering from cognitive impairment or physical enfeeblement.

Is Your Family Prepared for a Financial Storm?

We don’t know precisely what the future has in store. We don’t believe in crystal balls or fortune telling.

But it is the better part of wisdom to plan like we’ll live forever, even if — as Catholics — we’re called to live like we’ll die tomorrow.

I recently sat down with the daughter of a 90-year-old man and his 86-year-old wife.

The daughter commented that, many years previously, the man had stated that he had planned to get them to age 90. And when she asked, “What happens after that?” They laughed.

And now, for them, the conversation has turned to talk of nursing homes and Medicaid “spend downs.”

To be sure, not everyone will have to contend with longevity woes.

But, given our longer life expectancies, more and more of us will.

For others, the pressures may be quite different.

But There Are Some Things That You Can Do Now

Here are four quick tips.

(1) Don’t neglect future planning. Don’t be so focused on short-term needs — as pressing as they may be — that you fail to attend to long-term needs.

What would happen to your family if you were disabled or killed right now? What happens when mom or granddad needs actual long-term care?

(2) Budget, save, and live within your means. There are many different schools of thought when it comes to investments and money-handling strategies. But almost all experts will tell you to track your expenses and income, create emergency and retirement funds, and — to add a biblical flourish — to be wise stewards of the resources that God has given to you and to your family. And if authorities with far-flung opinions actually agree on something, perhaps you should listen.

And yet, the devil is in the details.

(3) Review your situation; select a plan of action; and stick to it. Your plan doesn’t have to be perfect. Probably nothing this side of eternity deserves that lofty adjective. But the truth is: Your plan doesn’t have to be perfect, it just has to be better than doing nothing. You can — and should! — always readjust your sails as winds change.

Let us Help

We have expertise assisting St.-Louis-area Catholic families chart their trajectories through the uncertain — and often tumultuous — waters of life.

We can help you go over your situation and provide advice that is in line with our shared Catholic beliefs, goals, and values.

Call today for a no-cost, no-obligation review!

(321)948-0707

At a Glance, Globally

The KofC has almost $110 billion of total, in-force insurance coverage. This has issued in around $1 billion of paid benefits.

Some of these benefits include over $440 million in death proceeds from life-insurance contracts.

But, the KofC is also a “participating” company. This means that it pays a dividend. Although actual dividends are functions of how well the company does financially from year to year, and they are never guaranteed, the last numbers indicate that the KofC has paid some $260 million in dividends to its members.

Additionally, the company boasts respectable growth numbers. It added $8.6 billion in new life-insurance contracts in 2018 alone.

At a Glance, Locally

As a fraternal association, the KofC is located in numerous countries and territories, including France, Lithuania, Mexico, Philippines, Poland, Puerto Rico, South Korea, and the Ukraine. But, in terms of its insurance arm, the epicenter is in North America, with Canada and the United States.

The KofC transacts business in all 50 U.S. states.

Missouri is roughly divided into three parts.

The Kansas-City/Western Area is overseen by General Agent John Mahon. Central and Southern Missouri is largely under the care of George Spinelli. Our metropolitan area, that is, much of Eastern Missouri, is the province of Ryan Lister.

Ryan Lister took over as general agent from Mr. Greg Rackers about five or six years ago (as of this writing). He typically supervises approximately a dozen field agents who range all over the the Greater St. Louis and surrounding regions.

The Lister Agency goes as far north as Bowling Greeb, Elsberry, and Silex, as far west as Dutzow, Washington, and Wentzville, and as far south as Arnold and Festus. This at least touches on portions of Missouri counties as far flung as Franklin, Jefferson, Lincoln, Montgomery, Pike, St. Charles, St. Louis, and Warren.

In between, his Eastern-area agency covers a lot of ground, including the following municipalities and townships. Ballwin, Bel-Nor, Bel-Ridge, Bella Villa, Bellefontaine Neighbors, Bellerive, Berkeley, Beverly Hills, Black Jack, Breckenridge Hills, Brentwood, Bridgeton, Calverton Park, Champ, Charlack, Chesterfield, Clarkson Valley, Clayton, Cool Valley, Country Club Hills, Country Life Acres, Crestwood, Creve Coeur, Crystal Lake Park, Dellwood, Des Peres, Edmundson, Ellisville, Eureka, Fenton, Ferguson, Flordell Hills, Florissant, Frontenac, Glen Echo Park, Glendale, Grantwood Village, Green Park, Greendale, Hanley Hills, Hazelwood, Hillsdale, Huntleigh, Jennings, Kinloch, Kirkwood, Ladue, Lakeshire, Mackenzie, Manchester, Maplewood, Marlborough, Maryland Heights, Moline Acres, Normandy, Northwoods, Norwood Court, Oakland, Olivette, Overland, Pacific, Pagedale, Pasadena Hills, Pasadena Park (Village of), Pine Lawn, Richmond Heights, Riverview, Rock Hill, St. Ann, St. John, Shrewsbury, Sunset Hills, Sycamore Hills, Town & Country, Twin Oaks, University City, Uplands Park, Valley Park, Velda City, Velda Village Hills, Vinita Terrace (Village of ), Warson Woods, Webster Groves, Wellston, Westwood, Wilbur Park, Wildwood, Winchester, and Woodson Terrace.

And that’s just in the St.-Louis-County Area!

Further out, we’re talking about Bowling Green, Foristell, Hawk Point, Lake Saint Louis, Moscow Mills, O’Fallon, Silex, Troy, Warrenton, Wentzville, and Wright City, as well as Arnold, Barnhart, Fenton, Imperial, Mehlville, and Oakville.

What Kinds of Insurance Are Available?

The KofC has annuities, disability insurance, life insurance (including MEC policies, term, universal life, and whole life), long-term-care insurance, and can help area families with their burial, funeral, income-replacement, legacy, retirement, and tax-planning situations.

Call today for a no-cost, no-obligation review or quote!

(321)948-0707

Let’s briefly run through each option, in alphabetical order.

Catholic Benevolent Legion

It was founded in New York around 1881. Since 1969, this Catholic organization has been a part of the Knights of Columbus. (See further down.)

Catholic Financial Life

This organization was created in 2010. But it was formed from the merger of smaller Catholic associations, some of which go back a bit farther. It appears that Catholic Financial Life has licensed agents in around 36 states.

Catholic Order of Foresters

The Catholic Order of Foresters was started in Chicago, Illinois in 1883. Today, the Order has upwards of 100,000 members and, at last count, provides insurance to families in 32 U.S. states as well as in the District of Columbia.  

At this time, the Foresters only have one agent listed for our metro area.

Catholic United Financial

This is a fairly new arrival, as far as Catholic fraternal societies go. Based out of Arden Hills, Minnesota, Catholic United Financial currently is only licensed in a handful of U.S. States. These include, Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin.

In that regard, at least for the time being, St. Louisans and those from neighboring locales will have to look elsewhere for their insurance needs.

Knights of Columbus

Without question, the Knights of Columbus is by far biggest Catholic-fraternal society in the world. Its roots go back to 1882 when it was founded in New Haven, Connecticut. The Knights of Columbus give more money to charities than any other Catholic organization except for the Vatican itself. It has around 2 million members stretching around the globe. The Knights of Columbus is also a Fortune-1000 company, with millions of in-force insurance contracts, totaling in the vicinity of $110 billion.

The Knights are licensed in all 50 states, Washington, D.C., Canada, as well as numerous U.S. Commonwealths and Territories. Find an agent, order-wide, HERE.

The Order is active in Greater St. Louis, and surrounding counties, with over a dozen agents in the metro area alone.

Not Sure Where to Start?

Contact me by telephone or email to be connected with an appropriate agent in your area, or to set up a no-cost, no-obligation review of your situation.

stlouismoinsurance@gmail.com

(321)948-0707

Just a Final Note

The St. Louis Archdiocese offers group supplement life-insurance benefits to employees, including teachers and staff. But, it doesn’t offer insurance products beyond that.

What is “guaranteed-issue” life insurance?

This question is probably best answered by comparing and contrasting this sort of life-insurance coverage against what it is opposed to: namely, policies that are not guaranteed to be issued.

What does it mean for a policy to be “issued”?

For privately obtained life insurance – that is, for life insurance that you get on your own, apart from any “Group” benefits associated with your place of employment – there is a several-step process that has to be worked through.

Here are the usual steps for a policy that is not guaranteed to be issued.

• The application

In the application stage, an eligible (more on this, below), proposed insured expresses interest in obtaining coverage. Part of the regular application process is a “Declaration of Insurability,” which is essentially a battery of questions about your health history, driving record, and financial situation. The purpose of these questions is to help the insurance company determine your risk level.

• The underwriting

“Underwriters” are those people employed by the insurance company to assess the risk involved in assuming a liability. “Assuming a liability” just basically means becoming responsible for something. So, if the insurance company determines that your risk of dying is something they are willing to take responsibility for, then they will be willing to cover you – that is, to pay out a death benefit in the event of your death. For non-guaranteed coverage, the insurance company may accept or decline you as a risk.

• The offer

If the insurance company accepts you as a risk, then it will make you an offer or coverage. This offer will state what underwriting classification you have been assigned, and, by extension, it will disclose what premium the company is willing to accept in exchange for the promised death benefit.

• The issuance

If you decline the offer, then the policy will not go into effect, and any temporary or conditional agreement will cease. If you accept the offer, then the policy will be considered “issued” – that is, its coverage will go into effect. If you pay all the scheduled premiums on time, then you can expect to have your life covered according to the terms of the contract. If the policy is term coverage, then your coverage period will be specified. If the policy is some sort of permanent insurance (like whole life), then the coverage will be in place for the remainder of your life.[1]

For ‘non-guaranteed’ coverage, you may be declined.

Recall that with a regular life-insurance application, you’re going to disclose certain facts concerning your health. You’re going to concern you’re going to disclose or have to disclose certain things about your medical record. You’re going to have to allow the insurance company to access the driving record, certain financial statements, and things like this.

The level of scrutiny applied to you will be commensurate with the level of dollars of coverage requested. Underwriting standards vary.

You’ve got a certain subset of people who will apply for coverage. Of those people, a smaller subset will be approved. And their health and insurability make all the difference for a typical life-insurance policy.

For “regular” insurance, there’s no guarantee that you’re going to get accepted as a as a risk. They may view you as too risky in some way.

It doesn’t necessarily have to be because you’re unhealthy. It could be because you are reckless driver or because you are too risky financially (perhaps because you are financially irresponsible).

How does a ‘guaranteed-issue’ policy differ?

First and foremost, a “guaranteed-issue” policy has no medical underwriting.

You will not be declined due to poor health, for example. There are any of a number of conditions that might be relevant, here.

Seniors are often afflicted with Alzheimer’s Disease (or other forms of dementia or “End-Stage Senescence”), Amyotrophic Lateral Sclerosis (ALS), cancers of various sorts (including bladder, breast, colorectal, endometrial, kidney/renal, leukemia, lung, non-Hodgkin’s lymphoma, pancreatic, prostate, skin, and thyroid), cardia problems, Human Immunodeficiency Virus (HIV), liver disease, multiple sclerosis, pulmonary disease, strokes, and other miscellaneous conditions that sometimes fall under the umbrella term “Failure to Thrive.”

Adults and young adults may have to contend with cancers (such as those affecting the breasts, lungs, colorectal area, prostate, and skin).  

Even children may suffer from serious conditions like Acquired Immune Deficiency Syndrome (AIDS), autism, cancers (including leukemia and lymphoma), cerebral palsy, congenital heart defects, cystic fibrosis, diabetes, epilepsy, sickle-cell anemia, and spina bifida. All of these may negatively affect insurability.

Others may be obese – potentially leading to cancer, diabetes, gallbladder conditions, heart disease, high blood pressure, sleep apnea, and stroke – or might be heavy tobacco users – the end result of which may be chronic-obstructive pulmonary disease (COPD), emphysema, or lung cancer.

There still are eligibility tests.

There are still some kinds of caveats and things along those lines.

For instance, a person who is 86 years old will not be approved even for a “guaranteed-issue” policy if the cutoff for eligible ages is 75, 80, or 85.

Additionally, there may also be restrictions in terms of association or group affiliation. For instance, the auto group AAA may have guaranteed-issued contracts, but you will need to join AAA in order to avail yourself of one of them.

Fraternal insurance groups, such as Baptist Life, The Woodmen, and the Knights of Columbus, require insured persons to hold membership in the respective society. This is partly because these groups enjoy tax-favored treatment as 501(c)(8) organizations.

So, check with an insurance agent or broker.

If you’re not a member of the fraternity, then you may be declined even for guaranteed issue policy. Or if you are outside of the age range, you will be declined even for guaranteed issue policy.

It’s not as if there are absolutely no restrictions whatever.

But, it you’re eligible, then there is no medical underwriting.

Pros to Guaranteed-Issue Policies

You may obtain life-insurance coverage even if you are chronically or terminally ill.

There is no medical underwriting. So, your health situation and history will not be strikes against your approvability.

Cons to Guaranteed-Issue Policies

Because there is no medical underwriting, the issuing company is going to assume that you pose a significant risk. The assumption is that if you were insurable otherwise, you would obtain coverage through the regular, underwriting process.

As a result, there may be – and doubtless will be – limitations in terms of the amount of death benefit that you get through a guaranteed-issue contract.

You’re not going to find a million-dollar guaranteed-issue policy, for example.

Typically, policies of this sort will be less than $25,000.

Many such policies fall somewhere between $5,000 and $10,000 worth of coverage.

The small dollar amounts are functions of the fact that the risk is assumed to be very high. The insurer limits its liability, not be declining the coverage, but by limiting the coverage amount.

Moreover, some of these policies are what are called “graded-death-benefit” policies. These policies generally have two different periods of time.

One period of time is kind of a probationary period. Many times, this period may be something like 1 to 5 years long. If the insured dies within the probationary window, the insurer’s liability is often limited to a return of the premium paid, perhaps plus some interest. In other words, if the policy is “graded” in terms of its benefit, the policy will not pay out the full death benefit on an insured who dies within the probationary time frame.

For instance, let’s say the probationary period is one year on a $10,000 contract that was issued January 1. And let’s say John dies on December 15 later that same year. Then John’s beneficiary will receive a refund for the premiums that were paid on John’s policy. Often – but not always – there is interest that exceeds that which would have been applied in a savings account or in a certificate of deposit.

But if John dies January 15 the following year, then the full $10,00 will pay out in this case.[2]

It’s important to realize that the, for the (family of the) person who dies during the probationary period, it’s certainly not the case that they would be paying into a policy and getting absolutely nothing. That’s not the case.

But, if the insured outlives the probationary period, the death benefit pays fully.

Think of it in terms of numbers.

Let’s say you’ve got a terminal cancer patient and a probation period of one year on a $10,000 policy. Let’s also suppose they’re paying $50 a month in premium.  Over a year, they would have paid $600.

If the insured dies within a year, the beneficiary would receive $600 plus interest.

If the insured dies after that, the beneficiary receives the full $10,000.

Conclusion

For some people, guaranteed-issue policies may be the only non-group coverage they qualify for.

Is guaranteed-issue coverage available in the St. Louis area? Yes!

For a no-cost consultation or review, and to assess your eligibility, call (321) 948-0707. Or email me at stlcatholicinsurance@gmail.com

[1] Again, assuming that the policy is not allowed to lapse for premium non-payment and that you do not exercise certain prerogatives of ownership and surrender the policy, terminate the policy, or otherwise loan against its values (if applicable) in such a way as to undermine your coverage.

[2] Check the terms and conditions of the policy for actual details that apply to your personal situation.

In order to answer the question, we have to make sure that we’re clear on what we are actually talking about.

What Catholic Insurance Isn’t

So, the basic principle of insurance is risk transfer.

You “insure” against a loss because you are seeking to transfer risk from yourself to another person or entity.

Take an example from property and casualty insurance, for instance.

I might have homeowners insurance on my house to protect myself in case my home burns down. If this tragic event were to occur, then the property and casualty company would pay to replace the house. I wouldn’t have to pay for the loss myself.

So, in insuring my home, I just transferred the risk of my home burning down from myself to a property-and-casualty insurance company.

Now the company doesn’t take this risk on out of the kindness of its heart.

It’s an exchange.

I pay the company some money (each month, quarter, year, etc.) and, in exchange, it takes on my risk.

Of course, the company’s actuaries evaluate the risk to see if it’s the sort of liability they want to accept. They’ll evaluate the likelihood of my house burning down.

They perform this assessment based on various questions about where the house is located, my personal track record in owning a house, and so on.

In general, the risk assessments are based upon the “law of large numbers,” which is a principle that – simply stated – means that the bigger your sample set is, the more accurately you’ll be able to predict the frequency of an event.

In insurance terms, the “event” in question is some kind of loss – like a house burning up.

The insurance company’s number crunchers are going to ask whether or not they think my risk is a risk worth taking on – and at what premium rate.

If they think there’s little risk, my premium will be low. If there’s a more than a little risk, my premium will be high. If the risk is significant, they may decline to cover me at all.

So far, so good.

In terms of all this, there’s really not any kind of a specific “Catholic” way of insuring people or performing risk-assessments.

It’s not like Catholics transfer risk in some unique way. And it’s not as if a Catholic insurer is a using different math or evaluating probabilities in vastly different ways than commercial insurers.

No, in these senses, there is arguably no such thing as “Catholic insurance.”

All insurance companies – Catholic or not – calculate risks and then accept them (or not) in exchange for premiums. In this regard, all companies conduct business the same way.

What Catholic Insurance Is

So, is there a difference? And, if so, what is it?

In fact, there are differences. I’ll mention two.

Fraternal Insurance

The first difference has to do with who may avail themselves of the coverage.

Commercial insurance is basically available to anybody. Anyone who takes notices of a commercial insurance company can do apply for coverage.

It’s a bit different with a Catholic insurance company.

A distinctly Catholic company is a type of company called a fraternal insurance company.

With fraternal insurance, you have to be a part of a particular “fraternal group” in order to do business with that group.

It’s an imprecise comparison, but there’s an analogy with the United Services Automobile Association, or USAA for short.

In order to do business with the USAA, you have to have some current or past connection to the United States Armed Forces.

Fraternal insurers are similarly restricted.

“Fraternal” groups – also sometimes termed “fraternal benefit societies” – might be organized around a group with some sort of ethnic, geographic, religious, social, vocational or other commonality. You might have a fraternal group that’s based around a particular nationality or you might have a fraternal group that’s organized around a particular labor discipline.

In the case of a Catholic company, it’s centered around a fraternal group that’s based around a particular religion.

And Catholics are certainly not the only religious group so organized. Baptists, Lutherans, Mennonites, and many other groups have their own societies – and insurance benefits.

One feature of fraternal associations is that they are tax exempt under the current Internal Revenue Service Code and are designated as 501(c)(8) organizations.

But, to maintain this tax-advantaged status, these associations have to scrupulously adhere to the principles of their bylaws, charters, constitutions, or other founding documents. Individuals seeking insurance coverage have to have some membership tie to the insuring society.

Thus, the real, first-line difference between Catholic insurance and commercial insurance is that, by “Catholic insurance,” we’re really talking about a particular sort of fraternal tie.

If you’re Catholic, then you may become affiliated with a Catholic fraternal group and, through that group, obtain insurance protection for you and your family.

Investment Philosophy

But there is something additional that arguably separates “Catholic insurance” from its non-Catholic cousin.

This second difference has to do with how a Catholic company handles its money.

Every insurance company is required to have access to a certain amount of money in order to be able to pay claims and policy surrenders.

But it’s not as if they’re keeping this money in tin cans or stuffed into mattresses at the company headquarters.

They’re going to have the money inside of some investment vehicle or other.

What makes Catholic written legal reserves a little bit different is that the kinds of things that Catholics invest in are going be those things that are going to comport with Catholic belief, and Catholic doctrine.

In particular, Catholic companies will invest in things that the Holy See – that is, the Vatican; the Pope, in conjunction with the College of Cardinals – holds to be a permissible way to spend money.

So, since the Catholic Church opposes abortion, Catholic insurance companies will not invest money in that industry. They won’t donate dollars to Planned Parenthood. And so on.

This is important, I think, because Catholics have definite moral beliefs. One of the distinguishing features of Catholic insurance, then, is that, in their investment decisions, Catholic companies mirror these beliefs.

In Summary

Catholic insurance is based upon the same sort of risk transference that all insurance is based upon. In this relationship the insured pays money (a premium) and in return the insurer promises to cover the insured in the event of a loss.

Catholic insurance companies do not generally assess risks differently. All life-insurance companies use universal mortality tables (e.g., the Commissioner’s Standard Ordinary Table) and calculate risks use the same mathematical procedures.

These are not the main points of difference.

Where Catholic insurance companies do differ is with respect to who may apply for coverage. As fraternal-benefit societies, Catholic insurance companies may only offer coverage to members. And members will be active Catholics in good standing with the Catholic Church.

Additionally, Catholic insurance companies will adopt investment strategies that reflect Catholic moral beliefs. They will not put their money into industries – like pornography – that conflicts with Catholic teaching.

If so, it is a good idea to reevaluate your insurance needs.

Call or email today to learn how!

Matthew Bell
(321)948-0707
stlouismoinsurance@gmail.com