What distinguishes a noncontributory group term life plan?

In a noncontributory group term life plan, the defining characteristic is that the entire cost of the premiums is paid by the employer. This arrangement means that employees do not have to contribute financially to the cost of the insurance coverage provided to them. Consequently, all eligible employees are automatically covered under the group life plan without needing to pay anything out of their own pockets.

This structure often leads to higher participation rates because employees receive the benefit without any cost to them, simplifying the administration of the plan as well. In contrast, contributory plans require contributions from employees, which might limit participation if individuals choose not to opt in due to the financial commitment.

Other options focus on characteristics that do not pertain specifically to noncontributory plans, such as coverage limitations based on the number of employees or the choice of participation, which are not defining features of this particular type of plan.