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Glosary of Life Insurance Terms
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LIAASee Life Insurance Association of America.
LIAMASee Life Insurance Agency Management Association.
LIMRASee Life Insurance Marketing and Research Association.
LOMASee Life Office Management Association.
LUPACSee Life Underwriting Political Action Committee.
LUTCSee Life Underwriting Training Council.
Lapse RatioThe ratio of the number of Life Insurance contracts lapsed within a given period to the number in force at the beginning of that period.
Ledger CostThe net cost of a Life Insurance contract which is found by subtracting the cash value of the contract at the end of a given year from the premiums paid, less all dividends.
Legal Reserve Life Insurance CompanyA Life insurer that maintains the reserves required by the jurisdiction within which it operates.
Level Death Benefit OptionUnder Universal Life insurance, the level death benefit option provides the greater of
(1) the face amount of the policy at the time of death, or
(2) a stipulated percentage of the accumulation value.
Level Premium InsuranceThat form if insurance for which the premium remains the same throughout the life of the contract. Most Whole Life Insurance is paid for in this way. The amount of a level premium is higher than needed for the protection afforded in the early years of the contract but less than needed for protection in the later years. It is a method of leveling off the cost of insurance so as not to have it increase each year until it becomes inaffordable. See also Net Level Premium.
Level Term InsuranceA type of term policy where the face value remains the same from the effective date until the expiration date. See also Term Insurance.
Lien Plan(1) A plan for issuing coverage on substandard risks under which a standard premium is paid but less than the full face amount of the policy is payable if death occurs within a certain period of years. It is rarely used and is even illegal in some states.
(2) A plan under which an impairment of the insurer's assets if offset by pro rata liens against policies to be deducted from the face amount when paid as a claim.
Life ConservationThe administration of efforts to preserve human life through research, legislation, and appeals to society.
Life ExpectancyThe average number of years remaining for a person of a given age to live as shown on the mortality or annuity table used as a reference.
Life Expectancy Term InsuranceA form of Term Life Insurance that provides protection for a person's "expectation of life." This becomes the term of the policy, as opposed to the ordinary Term policies which are for a given number of years or to a stated age, such as 65.
Life IncomeA settlement option under which equal installments are paid as long as the beneficiary lives, even if the principal has been exhausted.
Life Insurance (Generic)A contractual system of risk sharing under which contributions are accumulated and redistributed to meet the economic consequences of the uncertain duration of life.
Life Insurance (Narrow)An agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured, or under other circumstances specified in the contract, such as total disability.
Life Insurance Agency Management Association (LIAMA)An organization that, through research, seeks solutions to the problems of administering the agency force of a Life insurer.
Life Insurance Association of America (LIAA)Formerly an organization that served as the legislative relations arm of a large segment of the Life Insurance business. Now a part of the American Council of Life Insurance.
Life Insurance Marketing and Research Association (LIMRA)An organization that, through research, seeks solutions to the problems of administering the agency costs of a Life insurer.
Life Insurance TrustA type of Life Insurance policy where a trust company is named as the beneficiary and distributes the proceeds of the policy under the terms of the trust agreement.
Life Insurance, OrdinarySee Ordinary Life Insurance.
Life Insurance, StraightSee Ordinary Life Insurance.
Life Insurance, Whole LifeSee Whole Life Insurance.
Life Insurers ConferenceAn organization that provides for exchange of information on management problems among the member insurers.
Life Office Management Association (LOMA)An organization serving a large proportion of the Life Insurance business by providing educational programs relating to administrative and technical procedures within the industry. It confers the designation of Fellow, Life Management Institute (FLMI) upon those who complete a prescribed course of study.
Life Paid Up At AgeA form of limited payment Life Insurance that provides protection for the whole of life but with payment of premiums to stop at a particular age, thus paying up the policy. A common form would be Life Paid Up At Age 65.
Life UnderwriterUsually, a Life Insurance agent. It can be more narrowly defined as a risk appraiser. See also Risk Appraiser.
Life Underwriter Political Action Committee (LUPAC)A lobbying organization established by the National Association of Life Underwriters.
Life Underwriting Training Council (LUTC)An organization that prepares and administers training programs for Life Insurance agents.
Lifetime Policy(1) A policy guaranteed renewable or noncancellable to age 65 or some later date.
(2) A policy paying disability benefits for life.
Limited Payment LifeA Life Insurance contract providing protection for the whole of life with premiums paid for an indicated number of years. See also Life Paid Up At Age.
Limited Policies(1) Health Insurance contracts, such as those offered by newspapers to their customers, with low limits and somewhat restricted forms.
(2) Policies paid only upon the occurrence of certain contingencies, such as cancer, in contrast to policies covering all contingencies other than those excluded.
Loan ValueA term which refers to the amount of money an insured can borrow using the cash value of his Life Insurance policy as security.
Lump SumA method of settlement whereby the beneficiary receives the entire proceeds of a policy at once rather than in installments.
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