Lapse - Termination of a policy when a required premium has not been paid by the end of the policy's grace period.

Large-Cap - A stock with a high level of capitalization, usually at least $5 billion in market value (market value = price per share multiplied by number of shares outstanding).

Legal list - A list of investments selected by various states in which certain institutions and fiduciaries, such as insurance companies and banks, may invest. Legal lists are often restricted to high-quality securities meeting certain specifications.

Legacy Hedge - A hedge position held by a company that's held for an extended period of time. Commodity companies, such as gold and oil producers, will often have legacy hedges on its reserves, which give the companies a more stable stream of revenue as the hedge provides price guarantees.

Leverage - The effect on a company when the company has bonds, preferred stock, or both outstanding. Example: If the earnings of a company with 1,000,000 common shares increases from $1,000,000 to $1,500,000, earnings per share would go up from $1 to $1.50, or an increase of 50%. But if earnings of a company that had to pay $500,000 in bond interest increased that much, earnings per common share would jump from $.50 to $1 a share, or 100%.

Leveraged Loan - Leveraged loans are loans extended to companies or individuals that already have considerable amounts of debt. Lenders consider these loans to carry a higher risk of default and, as a result, a leveraged loan is more costly to the borrower.

Liabilities - All the claims against a corporation. Liabilities include accounts, wages and salaries payable; dividends declared payable; accrued taxes payable; and fixed or long-term liabilities, such as mortgage bonds, debentures and bank loans.

Life Tenancy - After the owner sells a home, he or she leases it back and receives a written guarantee (life tenancy) that he or she can continue to live in the home for the rest of his or her life. A life tenancy is often arranged with an annuity set up to pay the rent.

Lifetime Maximum - The maximum amount of policy benefits available to an insured person during his or her lifetime.

Limited Payment Option - Premiums are paid for only a set period of time. After the last premium payment, the policy becomes paid-up for the remaining duration of the policy. After it becomes paid-up, the insurance company cannot cancel the policy and they cannot ask for more premiums. The tradeoff? - while premiums are being paid, limited payment plans are more expensive than continuous payment policies.

Limit, limited order, or limited price order - An order to buy or sell a stated amount of a security at a specified price, or at a better price, if obtainable after the order is represented in the trading crowd.

Liquidation - The process of converting securities or other property into cash. The dissolution of a company, with cash remaining after sale of its assets and payment of all indebtedness being distributed to the shareholders.

Liquidity - The ability of the market in a particular security to absorb a reasonable amount of buying or selling at reasonable price changes. Liquidity is one of the most important characteristics of a good market.

Listed stock - The stock of a company that is traded on a securities exchange.

Limited Payment Option - Premiums are paid for only a set period of time. After the last premium payment, the policy becomes paid-up for the remaining duration of the policy. After it becomes paid-up, the insurance company cannot cancel the policy and they cannot ask for more premiums. The tradeoff? - while premiums are being paid, limited payment plans are more expensive than continuous payment policies.

Living Trust - A trust created during someone's lifetime to hold assets during that person's lifetime, thereby removing those assets from probate at death. A living trust can be either revocable or irrevocable. It avoids probate and therefore gets assets distributed significantly faster than a will. Assets that a person wants to move to a living trust, such as real estate and bank or brokerage accounts, must be re-titled so that the trust becomes the owner.

Living Will - A legal document in which a person specifies which life-prolonging medical measures he or she does, and does not, want to be taken if he or she becomes terminally ill or incapacitated.  

Load - The portion of the offering price of shares of open-end investment companies in excess of the value of the underlying assets. Covers sales commissions and all other costs of distribution. The load is usually incurred only on purchase, there being, in most cases, no charge when the shares are sold (redeemed).

Loan Modification - A modification to an existing loan made by a lender in response to a borrower's long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default.

Locked in - Investors are said to be locked in when they have profit on a security they own but do not sell because their profit would immediately become subject to the capital gains tax.

Long - Signifies ownership of securities. "I am long 100 U.S. steel" means the speaker owns 100 shares.

Long-Term Care - A variety of services provided over an extended period of time to people who need help to perform normal activities of daily living because of cognitive impairment or loss of muscular strength or control. Care may include rehabilitative therapies, skilled nursing, and palliative care, as well as supervision and a wide range of supportive personal care and social services. It may also include training to help older people adjust to or overcome many of the limitations that often come with aging. Long-term care can be provided at home, in the community, or in various types of facilities, including nursing homes and assisted living facilities. Regardless of where it is provided, most long-term care is custodial care, the type of care that is not paid for by Medicare.

Long-Term Care Insurance - An insurance policy that helps pay for some long-term medical and non-medical care, like help with activities of daily living. Because Medicare generally does not pay for long-term care, this type of insurance policy may help pay for long-term care that you may need in the future. Some long-term care insurance policies offer potential tax benefits; these are called "Tax-Qualified Policies."