What is indicated when an insurance policy is categorized as "non-contributory"?

When an insurance policy is categorized as "non-contributory," it indicates that the employer pays all the premiums associated with the insurance coverage. This arrangement means that the employees covered under the policy do not contribute financially toward the cost of the premiums; instead, the entire financial responsibility lies with the employer. Non-contributory plans are often used as an employee benefit, enhancing employee satisfaction since they receive coverage without any payroll deductions for the insurance premiums.

The significance of this type of policy lies in its ability to provide employees with essential coverage while alleviating the financial burden they might otherwise face. Such plans typically provide coverage automatically to all eligible employees, ensuring broad access to benefits without requiring any contributions from the employees themselves.