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Lapse: The
termination or discontinuance of an insurance policy
due to non-payment of a premium.
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Lapsed
Policy: A policy terminated for non-payment
of premiums. The term is sometimes limited to a termination
occurring before the policy has a cash or other surrender
value.
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Larceny-theft:
The unlawful taking, carrying, leading or riding away
of another person's property.
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Last
Clear Chance Rule: Statutory modification
of the contributory negligence law allowing the claimant
endangered by his or her own negligence to recover
damages from a defendant if the defendant has a last
clear chance to avoid the accident but fails to do
so.
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Law
of Large Numbers: Concept that the greater
the number of exposures, the more closely will actual
results approach the probable results expected from
an infinite number of exposures.
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Legal Reserve:
The minimum reserve which a company must keep to meet
future claims and obligations as they are calculated
under the state insurance code.
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Legal
Reserve Life Insurance Company: A life insurance
company operating under state insurance laws specifying
the minimum basis for the reserves the company must
maintain on its policies.
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Level
Commission Scale: A commission scale providing
for payment of commissions at the same rate every
year the policy is in force.
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Level Premium:
A premium which remains unchanged throughout the life
of a policy.
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Level
Premium Life Insurance: Life insurance for
which the premium remains the same from year to year.
The premium is more than the actual cost of protection
during the earlier years of the policy and less than
the actual cost in the later years. The building of
a reserve is a natural result of level premiums. The
overpayments in the early years, together with the
interest that is to a earned, serve to balance out
the underpayments of the later years.
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Liability
Insurance: Insurance covering the policyholder's
legal liability resulting from injuries to other persons
or damage to their property.
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Liability
Insurance: Provides protection for the insured
against loss arising out of legal liability to third
parties.
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Liability
Limits: The stipulated sum or sums beyond
which an insurance company is not liable to protect
the insured.
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Liability
Without Fault: Principle on which workers
compensation is based, holding the employer absolutely
liable for occupational injuries or disease suffered
by workers, regardless of who is at fault.
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License
and Permit Bond: Type of surety bond guaranteeing
that the person bonded will comply with all laws and
regulations that govern his or her activities.
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Life Annuity:
A series of payments under which payments, once begun,
continue throughout the remaining lifetime of the
annuitant but not beyond.
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Life
Annuity With 10 Years Certain: An annuity
which pays an income to the annuitant for as long
as he or she lives, but if death occurs within 10
years after the annuity payments begin, payments are
continued to a named beneficiary for the remainder
of the 10 years.
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Life
Expectancy: The average number of years of
life remaining for a group of persons of a given age
according to a particular mortality table.
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Life
Income Option: Life insurance settlement option
in which the policy proceeds are paid during the lifetime
of the beneficiary. A certain number of guaranteed
payments may also be payable.
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Life Insurance:
Insurance providing for payment of a specified amount
on the insured's death, either to his or her estate
or to a designated beneficiary; or in the case of
an endowment policy, to the policy holder at a specified
date.
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Life
Insurance in Force: The sum of the face amounts,
plus dividend additions, of life insurance polices
outstanding at a given time. Additional amounts payable
under accidental death or other special provisions
are not included.
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Life
Insurance Programming: Systematic method of
determining the insured's financial goals, which are
translated into specific amounts of life insurance,
then periodically reviewed for possible changes.
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Lifetime
Disability Benefit: A benefit to help replace
income lost by an insured person as long as he/she
is totally disabled, even for a lifetime.
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Limited
Payment Life Insurance: Whole life insurance
on which premiums are payable for a specified number
of years or until death if death occurs before the
end of the specified period.
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Limited
Policy: A contract which covers only certain
specified diseases or accidents.
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Liquidation:
Dissolving a company by selling its assets for cash.
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Living
Benefits Rider: A rider that allows insureds
who are terminally ill or who suffer from certain
catastrophic diseases to collect part of their life
insurance benefits before they die, primarily to pay
for the care they require.
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Living Trust:
A trust created while the creator of the trust is
living. Also known as an inter vivos trust.
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LLoyd's
of London: insurance marketplace where
brokers, representing clients with insurable risks,
deal with Lloyd's underwriters, who in turn represent
investors. The investors are grouped together
into syndicates that provide capital to insure the
risks.
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Loading:
The amount that must be added to the pure premium
for expenses, profit, and a margin for contingencies.
Also known as expense loading.
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Long-Term
Care: The continuum of broad-ranged maintenance
and health services to the chronically ill, disabled,
or retarded. Services may be provided on an inpatient
(rehabilitation facility, nursing home, mental hospital),
outpatient, or at-home basis.
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Long-Term
Disability Income Insurance: Insurance issued
to an employer (group) or individual to provide a
reasonable replacement of a portion of an employee's
earned income lost through serious and prolonged illness
or injury during the normal work career. (See also
Integration.)
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Loss: The
happening of the event for which insurance pays.
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Loss Avoidance:
A risk management technique whereby a situation or
activity that may result in a loss for a firm is avoided
or abandoned.
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Loss control:
any conscious action (or decision not to act) intended
to reduce the frequency, severity, or unpredictability
of accidental losses.
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Loss
Expense - Allocated: Handling expenses, such
as legal or independent adjuster fees, paid by an
insurance company in settling a claim which can be
definitely charged to that particular claim.
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Loss
Expense - Unallocated: Salaries and other
expenses incurred in connection with the operation
of a claim department of an insurance carrier which
cannot be charged to individual claims.
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Loss of use:
Value assigned to not having damaged property available,
e.g., the cost of renting a replacement vehicle while
one's car is being repaired.
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Loss
Payable Clause: Means 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.
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Loss
Prevention: Any measure which reduces the
probability or frequency of a particular loss but
does not eliminate completely all possibility of that
loss
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Loss Ratio:
A ratio calculated by divinding claims into premiums.
It may be calculated in several different ways, using
paid premiums or earned premiums, and using paid claims
with or without changes in claim reserves and with
or without changes in active reserves.
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Loss Reserve:
The amount set up as the estimated cost of a claim.
(See IBNR Reserve)
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Loss
Reserve Development: how the latest
estimate of an insurance company's claim obligations
compares to an earlier projection.
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Lump-Sum
Distribution: Payment within one taxable year
of the entire balance payable to an employee from
a trust which forms part of a qualified pension or
employee annuity plan on account of that person's
death, separation from service or attainment of age
59.
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