What is a defining feature of a Salary Continuation Plan?

The defining feature of a Salary Continuation Plan is its requirement for the employee to continue working until retirement. This type of plan is designed to replace a portion of an employee's salary if they become unable to work due to injury or illness, but it typically does not come into effect until the employee has reached retirement age or has retired from their position.

In this context, the Salary Continuation Plan aligns closely with the idea that it is a benefit that is tied to the employee's ongoing service. As employees remain active and continue to contribute to the company, they build the entitlement to receive benefits upon reaching retirement.

Other options do not capture the essence of a Salary Continuation Plan. For instance, immediate payment after termination does not reflect the plan's primary purpose, which is often structured around retirement timelines rather than immediate termination. While retirement benefits are acknowledged, they are not a defining feature, as they do not trigger payments during active employment. Permanent life insurance policies are distinctly separate from the salary continuation aspect and do not define this type of plan. Thus, the requirement for continued work until retirement is what truly characterizes a Salary Continuation Plan.