A-B-C-D-E-F-G-H-I-J-K-L-M-N-O-P-Q-R-S-T-U-V-W-X-Y-Z

LAD:
Limited assigned distribution

Lapse:
Termination of coverage because of nonpayment within a specified time period. 

Lapse Ratio:
Surrenders and lapses as a percentage of average insurance in force for the year.

Lapsed Policy:
A policy terminated at the end of the grace period because of non-payment of premiums.

LEA:
Loss adjustment expenses

Legal Reserve:
The minimum reserve, as calculated under the state insurance code, which a company must keep to meet future claims and obligations.

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.

Lender Captive Reinsurance:
Reinsurance of an insurer by a captive reinsurance subsidiary of a lender. The captive typically reinsures only business produced by its parent and insured by one insurer. Trusts are established to control the flow of funds into and out of the captive. As with contract underwriting and GSE pool insurance, lender captive relationships are offered by insurers as a means of protecting primary business.

Level Premium:
Rating structure under which the premium level remains the same throughout the life of the policy.

Level Premium Insurance:
Insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than the actual cost of protection in the earlier years of the policy and less than the actual cost in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years.

Liability:
Liability involves the cause of damage to someone's property and the bodily injury someone incurs as a result of the negligence of another party.  Liability insurance provides coverage for either individuals or businesses.

Life Annuity:
A contract that provides an income for life.

Life Expectancy:
The average number of years of life remaining for a group of people of a given age according to a particular mortality table.

Life Insurance In Force:
The sum of the face amounts, plus dividend additions, of life insurance policies outstanding at a given time. Additional amounts payable under accidental death or other special provisions are not included.

Lifetime Disability Benefit:
A provision making benefits payable for an insured's lifetime as long as the insured person is totally disabled.

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.

Llimited Policy:
Policy that covers only specified accidents or sicknesses.

LIMRA:
Life Insurance Marketing Research Association

Liquidity Margin of Safety:
The ratio of liquidity resources (liquid investments, net operating cash flow, risk-adjusted soft capital) to liquidity exposure (unanticipated defaults on principal and interest, unanticipated draws on DSR surety policies, and municipal investment contracts (MICs) and deal-specific liquidity.) 

Liquidity Ratio:
Standard & Poor's measure of an insurer's liquidity.

Living Benefits:
Another name for accelerated death benefits.

Load:
Any sales fees or charges paid in purchasing an annuity contract.

Loan-to-Value Ratio (LTV):
Generally refers to the original amount of a mortgage loan and the original appraised value of the home.

LOB:
Line of business 

Long-Term Care:
A continuum of maintenance, custodial, and health services for the chronically ill or disabled. Such services may be provided on an inpatient (rehabilitation facility, nursing home, mental hospital) or outpatient basis, or at home.

Long Term Care Insurance:
A health-insurance variation designed to cover the costs of long term care at home or in a nursing home. These policies offer a specified nursing home benefit and home-care benefit. Some policies also account for inflation. The popularity of long term care insurance has grown as federal laws have changed, making it less likely that Medicaid will pick up the tab for long term care. These policies are usually rather expensive, and grow even more costly as the policyholder ages.

Long-Term Disability Income Insurance (LTD):
Plan that helps replace income lost through inability to work because of disability caused by an accident or illness.

loss adjustments expenses (LAE):
All costs related to claims adjudication, management and payment. 

Loss Mitigation:
Practices and procedures that usually do not involve foreclosure carried out with delinquent borrowers with the goal of reducing loss.  Examples are pre-foreclosure sales and adding missed interest payments to the principal amount of the mortgage. Loss mitigation, and, more generally, claims handling are performed by lender-servicers, the GSEs and the insurers themselves.

Loss Ratio:
The ratio of losses incurred and loss expenses incurred to net premiums earned.

Loss Reserve:
The liability recorded on the balance sheet for unpaid losses. The loss reserve consists of the case basis reserve, the reserve for claims known to the company but not yet paid; and the reserve for incurred but not reported losses (IBNR). IBNR in residential mortgage insurance is a small amount compared to IBNR in many long-tail property-casualty lines of business and consists mainly of an estimate of the aggregate dollar amount of currently delinquent mortgages which will remain delinquent or go to claim in a short period of time, causing the establishment or increase of case basis reserves for those mortgages.