Insurance Glossary: L

Question: What is Lapse?

Answer: A lapse is the ending of an insurance policy if premiums are not paid or becomes void for other reasons.

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Question: What is Larceny?

Answer: Larceny is the taking of tangible personal property from another with the intent to deprive him or her of it permanently including under false pretenses.

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Question: What is Last Clear Chance Rule?

Answer: A last clear chance rule is a contributory negligence defense created by evidence that a claimant had a distinct chance to avert an accident even though the defendant was negligent; therefore contributing to the loss.

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Question: What is Latent Defect?

Answer: A latent defect is a hidden flaw, weakness or defect found in a product that is not readily visible at the time of production and not discovered until later, usually when in use.

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Question: What is Law of Large Numbers?

Answer: In the law of large numbers, the larger the number of samples the more predictable the outcome.

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Question: What is Lawyers Professional Liability Insurance?

Answer: Lawyers professional liability insurance is coverage for an attorney or law firm against claims for negligent acts, errors or omissions in the performance of professional legal services.

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Question: What is a Lessee?

Answer: A lessee is usually the person or entity renting a property from another.

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Question: What is a Lessor?

Answer: A lessor is usually the person or entity renting a property to another.

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Question: What is a Level Death Benefit Option?

Answer: A level death benefit option is for the beneficiary of a life insurance policy. The person may either take the face amount or a pre-set percentage of the total actual value, whichever one is greatest.

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Question: What is Level Premium Annuity?

Answer: In a level premium annuity, the premium does not change on the policy during the term of the annuity.

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Question: What is Level Premium Life Insurance?

Answer: In a level premium life insurance policy, the premiums do not change for the entire duration of coverage.

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Question: What is Level Term Life Insurance?

Answer: Level term life insurance has the same face value throughout the entire term of the policy.

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Question: What is Liability?

Answer: Liability is having a responsibility for something, usually by law.

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Question: What is Liability Insurance?

Answer: Liability insurance provides coverage when an insured is legally obligated to pay for bodily injury or damage to property of others.

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Question: What is Libel?

Answer: Libel is a tort that occurs when a person publishes defamatory statements about another.

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Question: What is Libel Insurance?

Answer: A libel insurance contract provides coverage for claims arising from purported libel and slander.

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Question: What is a Liberalization Clause or Provision?

Answer: A liberalization clause or provision in some insurance policies provides that should the insurer offer a broader version of the current policy and there is no premium charge for increased coverage, that increased coverage will apply to the current policy.

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Question: What is a Lien?

Answer: A lien is a legally enforceable right to keep another entity’s property until the property owner satisfies a claim or debt.

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Question: What is a Lienholder?

Answer: A lienholder is the person or entity that possesses a legal claim on the property of another.

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Question: What is a Life Annuity?

Answer: A life annuity is a financial contract in which the insurer pays the insured (annuitant) fixed and regular annuity payments.

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Question: What is a Life Income Option?

Answer: A life income option is in some life insurance policies. The beneficiary can have payments converted to an annuity which is made payable as long as they are living.

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Question: What is Life Insurance?

Answer: Life insurance is protection in the form of payments which are paid upon the death of the insured. The amount is larger than the accumulated value paid into the policy.

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Question: What is a Life Insurance Trust?

Answer: In a life insurance trust, upon the death of the policyholder, the value is put into a trust instead of given to an individual beneficiary.

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Question: What is Limit or Limit of Liability?

Answer: Limit or limit of liability is the most an insurer will pay for any one liability loss according to the terms given in a policy.

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Question: What is a Limited Life Insurance Policy?

Answer: A limited life insurance policy only provides payments to the beneficiary if the insured dies of a specific illness, injury, or disease (like cancer).

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Question: What is Livery?

Answer: Livery is a vehicle used for the transport of persons or goods for hire.

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Question: What is Livestock Insurance?

Answer: Livestock insurance is for horses and cattle against injury and death.

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Question: What is Livestock Mortality Insurance?

Answer: Livestock mortality insurance is designed to protect the insured against losses resulting from the unnatural death of livestock.

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Question: What are Living Benefits?

Answer: In a life insurance policy, living benefits provide payments to the beneficiary if the insured has contracted a specific long-term illness. Its purpose is to relieve the financial burden of such illnesses as cancer or AIDS.

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Question: What is Loan Value?

Answer: Loan value is the amount of money an insured can borrow against their own life insurance policy. The loan value increases as the cash value of the policy increases.

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Question: What is Long Term Care Insurance?

Answer: Long term care insurance covers costs for nursing home care and/or in home care.

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Question: What is Long-Term Disability Insurance?

Answer: Long-term disability insurance pays the insured for more than 90 days in the event of an illness, accident, or disability.

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Question: What is a Loss?

Answer: A loss is the dollar amount the insurer is required to satisfy an insurance contract.

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Question: What is Loss Control?

Answer: Loss control are the procedures used by an insured or insurance company to mitigate, eliminate or control the frequency and/or severity of losses.

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Question: What is Loss Expectancy?

Answer: Loss expectancy is a prediction of the probable total loss for a given period for either an insured or class of business.

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Question: What is Loss Experience?

Answer: Loss experience is the historical loss data, which may include the date, type, and amount of loss for a specific risk or class of business.

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Question: What is Loss of Income Benefit?

Answer: A loss of income benefit in health, life, or disability insurance that pays the insured in the event that they have an illness, accident, or disability and cannot go to work. This supplements lost wages.

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Question: What is a Loss Payable Clause?

Answer: Loss payable clause is a condition of the policy directing the company to pay any loss due the policyholder to some other party designated, such as the lienholder.

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Question: What is a Loss Payee?

Answer: A loss payee is the company that holds the loan note and is most often used with personal property, vehicles, equipment, etc.

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Question: What are Loss Prevention Services?

Answer: Loss prevention services are the procedures used by an insured or insurance company to mitigate, eliminate or control the frequency and/or severity of losses.

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Question: What is Loss Ratio?

Answer: Loss ratio is the historical loss data for a specific risk or class of business expressed as a percentage of earned premiums.

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Question: What is Loss Report?

Answer: A loss report is a written demand made by an agent or an insured that puts the insurance company on notice of potential loss activity that needs investigation and resolution.

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Question: What is Loss Reserve?

Answer: A loss reserve is the best estimate by the insurance company of what it expects to ultimately pay out in claims handling expense and claim cost.

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Question: What is Loss Run?

Answer: A loss run lists a variety of details on losses experienced by a specific business or class of business.

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Question: What is Lump Sum or Lump Sum Distribution?

Answer: A lump sum or lump sum distribution is an option in some life insurance policies in which the beneficiary receives a single lump sum equal to the entire face value of the policy.

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