Term Life Insurance Glossary
L
Lapse
The termination 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 provides for payment of the proceeds when both insureds have died. It is generally designed to pay estate taxes.
Also known as second-to-die life insurance.
Late-Remittance Offer
A means of encouraging reinstatement of lapsed insurance policies. A late-remittance offer specifies that the company will accept an overdue premium after the grace period ends and will reinstate the policy without requiring the policyowner to complete a reinstatement application or submit evidence of insurability.
Also called a late-payment offer.
Level Premiums
Premiums that remain the same each year that the term life insurance policy is in force.
Level Term Life Insurance
A type of term life insurance that provides 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 as long as the beneficiary lives.
Life Income Option With Period Certain
A term life insurance settlement option in which the insurer guarantees to pay the beneficiary a series of equal payments for a designated period, such as 10 years; thereafter, the payments will continue only as long as the original beneficiary lives. If the original beneficiary dies during the guaranteed period, payments will be made to a recipient designated by the original beneficiary until the end of the guaranteed period, at which time all payments will stop.
Life Income Option With Refund
A type of life income settlement option in which the insurer guarantees that if the beneficiary dies before the total amount paid under the option equals the proceeds of the policy, then the insurer will pay the difference to a contingent payee.
Also called a refund life income option. See also cash refund option, installment refund option, and settlement options.
Life Insurance
Insurance that provides protection against the economic loss caused by the death of the person insured.
Living Benefit Rider
See accelerated death benefit rider.
Long-Term Care (LTC) Benefit
An accelerated death benefit provided by some individual term life insurance policies under which the insurer agrees to pay a monthly benefit to an insured who requires constant care for a medical condition.
Long-Term Care (LTC) Insurance
Coverage that provides medical and other services to insureds who need constant care in their own home or in a nursing home.
Long-Term Disability Income Insurance
In group life insurance, disability income insurance whose maximum benefit period is greater than one year. The maximum benefit period commonly extends to retirement or age 70. In individual insurance, disability income insurance where maximum benefit period is greater than five years, commonly extending to age 65 or for the insured’s lifetime.
See also disability income insurance and short-term disability income insurance.
LTC benefit
See long-term care (LTC) benefit.
LTC insurance
See long-term care (LTC) insurance.
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