Which type of insurer is characterized by members pooling resources to provide mutual aid?

The correct answer is a fraternal insurer. Fraternal insurance organizations are unique in that they operate on a mutual aid system, where members come together to pool their resources for the mutual benefit of all members. This model typically involves sharing risks and providing insurance to members at lower costs compared to traditional insurance models, since the focus is on community and support rather than profit. Members often have a common affiliation, such as a religion or a specific occupation, which strengthens the sense of community and mutual assistance among them.

The fraternal model emphasizes the collective well-being of its members rather than the profit motive found in stock insurers or the purely governmental functions of government insurers. Each member contributes to the overall fund, and in cases of need—such as death or disability—benefits are paid out from this pooled resource. This structure fosters solidarity and emphasizes mutual support among members, distinguishing fraternal organizations from other types of insurers, such as stock corporations or government-sponsored entities.