Lapse:
Termination of a policy due to nonpayment of premiums.

Lapsed policy:
A policy terminated because of nonpayment of premiums.

Level premium term life insurance policy:
A term life insurance policy in which the premium remains unchanged throughout the life of the policy (the term).

Liabilities:
Debts and obligations.

License:
With respect to insurance, certification issued by the appropriate state department(s) of insurance that an individual is qualified to solicit insurance applications for the period of time covered.  Usually issued for a period of one or two years, renewable upon application, without the necessity of the applicant’s undergoing the original qualifying requirements.  However, proof of completion of continuing education courses is typically required by most states at renewal time.

Life expectancy:
The average duration of the life remaining to a number of persons of a given age, according to a given mortality table.

Life insurance:
Insurance in which the risk insured against is the death of a particular person (known as the insured), upon whose death within a stated term (for term insurance), or whenever death occurs (for permanent insurance), the insurance company agrees to pay a stated sum or income to the beneficiary.

Life insurance trust:
A trust for the purpose of distributing life insurance proceeds.  Life insurance companies usually cannot act as trustees or guardians, nor exercise discretion in making payments to beneficiaries.  In some cases, it is advisable to have the policy proceeds paid into a trust and distributed under the terms of a trust agreement, thereby permitting greater flexibility in the distribution of the proceeds.

Living trust:
A trust created to take effect during the lifetime of the grantor.

Lump sum:
Payment of the entire proceeds of a life insurance policy in one sum.  The method of settlement provided by most policies unless an alternate settlement is elected by the policyowner before the insured’s death or thereafter by the beneficiary before receiving the payment.

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