A severance package is a set of benefits provided to an employee who is laid off or terminated from their job. This package often includes financial compensation, which can be based on the employee's length of service, as well as other benefits like continued health insurance coverage and assistance with job placement. Employers offer severance packages to help ease the transition for employees who are leaving the company. It can also serve to protect the employer from potential legal issues, as employees may be less likely to pursue claims if they receive a fair severance package.