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Insurance Glossary

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  • 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 the 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 for 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.

  • Lump-Sum:
    Payment within one taxable year of the entire balance payable to a beneficiary.

 
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Insurance Glossary is Copyrighted By Richard H. Reynolds.
Insurance Network of America Uses This Glossary By Permission.

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