Salary Savings Insurance

What Does Salary Savings Insurance Mean?

Salary savings insurance is a type of life insurance in which an employer deducts a portion of an employee’s salary to cover the cost of the employee’s life insurance premiums. In other words, salary savings insurance involves the employer assisting the employee in obtaining life insurance by using a portion of their salary to fund the policy. The specific policy type depends on what the employer has arranged with the insurer, and reviewing the different types of life insurance can help employees understand what coverage they are being signed up for.

Insuranceopedia Explains Salary Savings Insurance

Salary savings insurance is more convenient for employees since they don’t have to handle the process of paying premiums themselves; instead, their employer manages it on their behalf. It still helps to know the average cost of life insurance so employees can tell whether the salary deduction matches what they would pay buying coverage independently. While the money still comes out of the employee’s earnings, it provides a simpler way to obtain life insurance compared to other options. Employers can offer this type of life insurance as a benefit to attract prospective employees to join the company.