C—Salary Allotment

The compensation provided to most employees consists of both salary and benefits. Benefits can often equal 30 percent or more of direct payroll costs. With a salary allotment plan, it is possible to contain these expenses, while at the same time offering a valuable benefit with no direct cost to the employer.

A salary allotment plan can also be very attractive to employees. By purchasing a base of permanent life insurance during his working years, an employee can avoid the prohibitive costs often associated with converting group life insurance upon retirement. This then guarantees that some life insurance will always be available, whether death occurs before or after retirement.