lapse
The termination of an insurance policy
because premiums were not paid when they came due.
late-remittance offer
A means of encouraging
reinstatement of lapsed insurance policies. A late-remittance offer
specifies that the company will accept an overdue premium after the
grace period ends and will reinstate the policy without requiring
the policyowner to complete a reinstatement application or submit
evidence of insurability. Also called a late-payment offer.
late retirement age
Retirement after the normal
retirement age (usually age 65) contained in a pension plan. In the
United States, a qualified pension plan generally cannot force a
plan participant to retire at the normal retirement age or any other
age and generally cannot stop accruing pension benefits for a plan
participant who elects to work beyond the normal retirement age. See
also early retirement age and normal retirement age.
law of large numbers
The theory of probability which
specifies that the greater the number of observations made of a
particular event, the more likely it will be that the observed
results will approximate the results anticipated by the mathematics
of probability.
legal actions provision
In an individual health
insurance policy, a provision that limits the period during which a
claimant may sue the insurer to collect a disputed claim amount and
which specifies that no suit may be brought against an insurer until
a specified period after a claim is filed.
letters patent
In Canada, a procedure used by insurance
companies wishing to incorporate through the federal government or
in the provinces of Quebec, New Brunswick, Prince Edward Island, and
Manitoba to petition the appropriate government agency for
incorporation.
level commission schedule
A commission schedule that
provides the same commission rate for the first and renewal years.
levelized commission schedule
A commission schedule
that provides different percentages for first-year and renewal
commissions, but the differences between these percentages are
smaller than the differences between first-year and renewal
commissions under traditional commission schedules. Also known as a
heaped commission schedule.
level premium annuity
A deferred annuity for which the
purchaser of the annuity pays equal premium amounts at regular
intervals, such as monthly or annually, until the date the benefit
payments are scheduled to begin.
level premiums
Premiums that remain the same each year
that the life insurance policy is in force.
level premium system
A life insurance pricing system
whereby the purchaser pays the same premium amount each year the
policy is in force.
level premium whole life insurance
A type of whole life
insurance for which equal premiums are payable throughout the
premium payment period.
level term insurance
A type of term insurance that
provides a death benefit that remains the same during the period
specified. Premiums for level term insurance policies usually remain
the same throughout each term of coverage.
leveraged ESOP
An employee stock ownership plan (ESOP)
that borrows money and uses the borrowed funds to buy stock of the
employer. The employer then makes regular contributions to the plan
on behalf of the participating employees. The ESOP uses this
contributed money to pay back the loan and allocates the stock
little by little to the employees. The employer's contributions are
tax deductible for the employer and tax deferred for the employee.
liabilities
A company's debts and future obligations.
For an insurance company, liabilities include amounts owed to
creditors and the actual and expected claims of its policyowners and
their beneficiaries.
liability insurance
A kind of insurance that provides a
benefit payable on behalf of a covered party who is held legally
responsible for harming others or their property.
licensed broker
An insurance salesperson who is not
under an agency contract with any insurance company, and who is
usually considered to be an agent of the client rather than of the
insurer. Also known as a pure broker.
life annuity
A series of payments that are made at
regular intervals as long as a designated person, the annuitant, is
then alive.
L: Part
Two
