Lapse: The termination of an insurance policy due to non-payment of premium(s).
Lapsed Policy: A policy terminated for non-payment of premiums.
Larceny: The unlawful taking of personal property of another.
Law of Large Numbers: A concept that the greater number of exposures, the more closely actual results approach the probable results expected from a number of exposures.
Legal Reserve: The minimum reserve which an insurance company must keep to meet future claims and obligations, as calculated under their state insurance code.
Level Premium: A premium which remains unchanged throughout the life of a policy, example: level term insurance and long term care insurance.
Level Premium Life Insurance: Life insurance for which the premium remains the same from year to year.
Liability: Any legally enforceable act or obligation.
Liability Insurance: Insurance covering the legal liability of the insured resulting from injuries to a third party to their body or damage to their property.
Liability Limits: The maximum sums listed on a liability policy which an insurance company provides protection.
License and Permit Bond: A type of surety bond guaranteeing that a person bonded will comply with all laws and regulations that govern their activities.
Life Annuity: A series of payments which once begun, continue throughout the remaining lifetime of the annuitant but not beyond.
Life Expectancy: The average number of years of life remaining for a group of persons of a given age.
Life Income: A life insurance settlement option in which the policy proceeds are paid during the lifetime of the beneficiary.
Life Insurance: Insurance providing payment of a specified amount on the insured’s death, either to his or her estate or to a designated beneficiary.
Life Insurance in Force: The total sum of the face amount, plus dividend additions, of life insurance polices outstanding at a given time.
Lifetime Disability Benefit: A disability benefit to replace income lost by an insured person as long as they are totally disabled, even for a lifetime.
Limited Policy: A contract which covers only certain specified diseases or accidents.
Liquidation: The dissolving of a company by selling its assets for cash.
Liquor Liability Insurance: Provides protection for the owners of an establishment that sells alcoholic beverages against liability arising out of accidents caused by intoxicated customers.
Living Benefits Rider: A rider that allows insureds to add Long Term Care benefits to a life insurance policy.
Living Trust: A trust created while the creator of the trust is living.
Long-Term Care: The care of broad-ranged maintenance and health services to the chronically ill or disabled. Services may be provided on an inpatient (rehabilitation facility, nursing home, mental hospital), outpatient, or at-home basis. Most long term care premiums are level.
Long-Term Disability Insurance: Insurance to provide a reasonable replacement of a portion of an employee’s earned income lost through serious illness or injury during the normal work career.
Loss: The reduction in the value of an insured’s property caused by a covered peril.
Loss Control: Any actions intended to reduce the frequency or severity of losses.
Loss Payable Clause: A mean of protecting a mortgagee’s interest in property by directing the insurer to make a loss payment to the mortgagee in the event of a loss.
Loss Prevention: A measure which reduces the probability of a particular loss but does not eliminate completely all possibility of that loss
Loss Ratio: The ratio of claims to premiums.
Loss Reserve: An amount set up as the estimated cost of a claim.
Payment within one taxable year of the entire balance payable to a beneficiary.