Life Insurance and Life Settlement Glossary - L

Life Insurance and Life Settlement Terms - L

Licensed Life Settlement Broker

Although many states do not offer license for life settlement brokers, this term generally refers to a licensed life settlement broker, life settlement viatical broker or a life settlement agent.

Life Expectancy

Refers to the number of years an individual is projected to live. Mortality tables and medical records are use to determine an individual’s life expectancy.

Life Insurance Cash Surrender Value

Life insurance cash value-is the sum of cash in the life insurance policy that the concern has agreed to disburse the policy or annuity holder when he or she terminates the policy before it matures or prior to the applicable death occurs.

Life Settlement Company

Generally a life settlement concern is an entity whose purpose is to buy life insurance policies.

Life Settlement

A life insurance settlement is the actual transaction in which a policy owner vends ownership and beneficiary rights of his or her policy to a third party life Settlement Concern for a lump sum of money. The original policy owner and insured, if they are two separate people, ought to agree on the sale first.

Life Settlement Alliance (Life Insurance Alliance)

In a life insurance settlement transaction, a settlement firm buys a life insurance policy from the original owner of the policy. The owner of the policy has the right to transfer the policy as long as the insured individual is without a terminal sickness.

Life Settlements and Trade Organization

A company that is responsible for controlling and creating standards for the life settlement industry.

Life Settlement Investor Pool

Disparate the hedge funds created when many life insurance policies are "pooled" together, a Life Settlement Investor pool deals with the investors purchasing the policies rather than the policies themselves.

Life Settlement Provider or Issuer

A life settlement provider or issuer is dissimilar than the broker or dealer who buys life insurance for a settlement buyer. Instead, a life settlement provider may actually be considered the settlement purchaser.

Life Settlement Network (or Life Settlement Alliance)

A life settlement network-also called life settlement alliance-is a strategic life insurance alliance of life settlement companies with the purpose of creating and maintaining "fair practice" standards for everybody who is involved in the purchasing and selling of life insurance on the secondary market.

Life Settlement Policies

Life insurance policies that are sold in the secondary life insurance market are known as life settlement policies. The insured have to be at least 65 years of age to be part of a life settlement policy transaction.

Life Settlement Provider

A unit with the purpose of buying life insurance policies. Upon purchase, the entity becomes the contractual owner and beneficiary of the policy and will also be required to disburse the ongoing premium payments.

Life Settlement Solutions

References the ability to vend a life insurance policy on the secondary insurance market in place of surrendering the policy or letting it to lapse.

Level Premium Life Insurance

Life insurance for which the premium remains the same every year. The premium is usually more than the actual cost of protection during the earlier years of the policy and less than the actual cost in the later years. The building of cash value is a natural result of level premiums over a long term.

Loan (Policy Loan)

A loan made by a life insurance company from its normal funds to a policyowner on the security of the cash value of a policy. In general, loans reduce the policy's death benefit and cash value by the amount of the outstanding loan plus interest.

Level Term

A kind of term life insurance policy that provides a fixed death benefit for a period of time during which the premiums payable do not rise and the death benefit remains constant over the same term.

Life Expectancy

An estimate of the number of months or years a given individual may be expected to live based on an evaluation of their age, gender, lifestyle and family/medical history.

Life Insurance Cash Settlement

Life insurance cash settlement is similar to life settlement.

Life Insurance Policy

A legal contract entered into among a life insurance company and the policy owner. The agreement provides for the payment by the concern of a sum of money (the death benefit) to the beneficiary when the covered life (the insured) expires.

Life Settlement

The sale of a life insurance policy that covers the life of an individual whose life expectancy is restricted and ascertainable based on age and/or medical history. (See also Viatical Settlement, Senior Settlement, Senior Life Settlement, and Life Insurance Settlement).

Life Settlement Broker

A party who represents financial advisors, life insurance agents, insurance agencies and consumers with respect to the vending of life insurance policies in the secondary market.

Life Settlement Co.

Life Settlement Company is similar to Life Settlement Provider.

Life Settlement Provider

A company whose initial business activity involves buying life insurance policies through viatical or life settlement transactions. Life settlement providers may buy policies for their own account or on behalf of financing entity clients.

Life Settlements

Life insurance policies that have been sold in the secondary market.

Life Settlor

The seller of a life insurance policy that is the subject of a life settlement.


Acronym that stands for the Life Insurance Settlement Association, the largest and oldest life and viatical settlement industry group indicating the life settlement industry.


The discontinuation of an insurance policy because a renewal premium is not paid before the end of the grace period.

Last Survivor Life Insurance

Whole life insurance that covers two persons and offers for payment of the proceeds when both insured have died. It is normally designed to pay estate taxes.

Late-Remittance Offer

A means of motivating reinstatement of lapsed insurance policies. A late-remittance offer specifies that the company will accept an overdue premium after the grace period finishes and will reinstate the policy without requiring the policyowner to complete a reinstatement application or submit proof of insurability.

Level Premiums

Premiums that remain the same every year that the term life insurance policy is in force.

Level Term Life Insurance

A type of term life insurance that gives a death benefit that remains the same during the term of coverage.

Life Income Option

A term life insurance settlement option under which the insurer uses the policy proceeds and interest to pay the beneficiary a series of equal payments for provided that the beneficiary lives.

Life Income Option with Period Certain

A term life insurance settlement option in which the insurer assures to disburse the beneficiary a series of equal payments for a designated period, like 10 years; thereafter, the payments will carry on only as long as the original beneficiary lives.

Life Income Option with Refund

A type of life income settlement choice in which the insurer guarantees that if the beneficiary dies before the total amount paid under the choice equals the proceeds of the policy, then the insurer will disburse the difference to a contingent payee.

Life Insurance

Insurance that gives protection against the economic loss caused by the death of the person insured.

Long-Term Care (LTC) Insurance

Coverage that provides medical and other services to insured who require constant care in their own home or in a nursing home.

Long-Term Disability Income Insurance

In group life insurance, disability income insurance whose utmost benefit period is greater than one year. The maximum benefit period usually extends to retirement or age 70. In individual insurance, disability income insurance where utmost benefit period is greater than five years, commonly extending to age 65 or for the insured’s lifetime.

Long-term care (LTC) benefit

An accelerated death benefit given by some person life insurance policies under which the insurer agrees to disburse a monthly benefit to an insured that needs constant care for a medical condition.

Loss Adjustment Expenses

The amount insurers pay for investigating and settling insurance claims, including the cost of defending a lawsuit in court.

Loss Of Use

A provision in homeowners and renters insurance policies that pays policyholders for any extra living expenses due to having to live somewhere else while their home is being restored following a disaster.

Loss Ratio

Percentage of every premium dollar an insurer spends on claims.

Loss Reserves

The concern’s best estimate of what it will disburse for claims, which is periodically readjusted. They indicate a liability on the insurer’s balance sheet.

Long-Term Disability Insurance

A disability insurance policy that gives coverage in the form of monthly income payments for as long as the insured remains disabled (normally up to age 65).