Legal Definitions - friendly society

A friendly society is a type of voluntary organization, predominantly found in the United Kingdom, where individuals contribute regular payments into a shared fund. The primary goal of these societies is to offer financial support and relief to members who experience illness, and to their families (such as spouses and children) in the event of a member's death. These organizations operate under specific legal frameworks and regulations.

• Example 1 (Sickness Benefit): Imagine a group of self-employed carpenters who form a friendly society. Each carpenter pays a small monthly contribution. If one of them becomes too ill to work for an extended period, the society provides a regular income replacement payment from the collective fund, ensuring they can still pay their bills and support their family during recovery.

  Explanation: This demonstrates how a friendly society provides financial relief to an ill member through pooled contributions from a voluntary association.

• Example 2 (Death Benefit for Dependents): Consider a friendly society established within a community for local shopkeepers. If a contributing shopkeeper passes away, the society provides a pre-agreed lump sum payment to their surviving spouse or children. This financial aid helps the family cover immediate expenses like funeral costs or provides a safety net during a difficult transition.

  Explanation: This illustrates the society's function of offering financial support to a member's family upon their death, funded by the ongoing contributions of its members.