L

“L”

Lapsed policy
A policy terminated for nonpayment of premiums. The term is sometimes used with respect to life insurance to refer specifically to a termination occurring before the policy has a cash or other surrender value.
Leased employee
A worker who performs the duties of a regular employee—and may once have been a regular employee—but is paid by and leased by a third party leasing firm that is the worker’s legal employer.
Leave
A benefit that allows employees to take time away from the job without losing employment. Leave may be paid or unpaid; benefits are often continued even during unpaid leave.
Legal reserve life insurance company
An insurance company operating under state insurance laws that specify the minimum basis for the reserves the company must maintain to meet future claims and obligations on its policies.
Level premium
A premium that remains unchanged throughout the life of a policy.
Level premium life insurance
Life insurance for which the premium remains the same from year to year. The premium is 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 a reserve is a natural result of level premiums. The overpayments in the early years, together with the interest that is to be earned, serve to balance the underpayments of the later years.
Level annual premium funding method
A method of accumulating funds for pension payments under which the level annual charge for a particular benefit is determined by the actuary for each age of entry and is payable each year until retirement, so that the benefit is fully funded at that time.
Leveraged ESOP
An employee stock ownership plan that borrows money to buy stock of the employer.
Life expectancy
The estimated average years of life remaining after an individual reaches a specified age.
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.
Life-only annuity
An annuity payable as long as the annuitant lives. All payments, except for the return of any employee contributions, cease at death.
Lifetime disability benefit
A benefit to help replace income lost by an insured person as long as that person is totally disabled, even for a lifetime.
Life Underwriter Training Council Fellow (LUTCF)
A designation granted jointly by the National Association of Life Underwriters (NALU) and the Life Underwriting Training Council to NALU members who satisfactorily complete a series of courses.
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.
Limited policy
A contract that covers only certain specified diseases or accidents.
Loading
The amount added to the pure premium for any type of insurance of a pension program to cover expenses, profits, and/or possible deviation of experience.
Locals/nationals
In international compensation, employees who are citizens of the country in which they work.
Long-term bonus
A form of deferred compensation that establishes income in the form of a bonus over time, usually two years or more.
Long-term care
Maintenance and health services provided to individuals who are chronically ill, disabled, or retarded. Services may be provided on an inpatient basis (e.g., in a rehabilitation facility, nursing home, or mental hospital), an outpatient basis, or an at-home basis.
Long-term disability income insurance
Issued to provide a reasonable replacement of a portion of an employee’s earned income that is lost as a result of serious and prolonged illness or injury during the normal work career.
Long-term disability (LTD) plan
Income insurance designed to replace income lost as a result of the inability to work because of illness or accident, up to a specified period.
Long,term incentive plan
An incentive plan that requires sustained performance of the firm for maximum benefits to the employee.
Loss-on-sale program
A relocation benefit designed to compensate employees who move out of depressed housing markets for any loss incurred on the sale of their home.
LTD plan
See long-term disability plan.
Lump-sum bonus
An incentive reward awarded on a single, fixed-cash basis.
Lump-sum distribution
A single payment to a plan participant that represents the present value of the entire balance due that participant from a pension benefits plan. Such a payment may qualify for special tax treatment.
LUTCF
See Life Underwriter Training Council Fellow.    

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