What is a Non-Contributory insurance plan?

A Non-Contributory insurance plan is characterized by the employer covering the entire cost of the premiums for the insurance coverage provided to employees. This type of plan does not require any contributions from the employees, meaning they do not pay for any part of the insurance costs. As a result, all benefits are fully funded by the employer, making it an attractive option for employees as they receive coverage without any financial contribution required from their side.

This arrangement also often encourages higher participation rates among employees since they can access benefits without any out-of-pocket expenses. Non-contributory plans are commonly used for group life and disability insurance, providing a safety net for employees while simplifying the administration of benefits for the employer.