Glossary of Investment Terms (L)
The following are useful investment terms beginning with ‘L’
Launch Date
The date a fund is first available to investors.
Level Term Assurance
A simple form of life assurance that pays out a lump sum if the policy holder dies within a specified time period
Leverage
A synonym for gearing, i.e. using financial instruments to increase investment exposure above and beyond the amount of money invested. This is commonly associated with the hedge fund sector.
Liabilities
This is an alternative term for debt or potential debt (potential liabilities).
LIBOR
This is a common abbreviation for the London Interbank Offered Rate, the interest rate at which major international banks in London will lend cash to each other. It is often used as an indicator for the direction of interest rates.
Life Assurance
An insurance policy which pays out a lump sum on the death of the policy holder
Life Assured
The Life Assured is the person (or persons) covered by a life insurance contract that has been taken out with a Life Company - not necessarily the person (persons) who took out the contract.
Life Company
Life assurance is one of the oldest forms of insurance, but now comes in a variety of forms. Put simply, it is a contract between an insurance company (the Life Company) and individual(s), where the insurance company pays out, in return for premiums paid, if the insured person dies before the end of the contract.
Life Fund
A pool of money held by a Life Company into which all life assurance policy holders' premiums are paid and all claims are made from.
Liquidity
This describes the ability of an investment to be easily converted into cash with little or no loss of capital and with minimum delay. Different financial investments will offer a varying degree of liquidity.
Liquidity Risk
This is the risk that an investment may not be easily converted into cash with little or no loss of capital and with minimum delay.
Liquid Market
A market where selling and buying can be accomplished with ease, due to the presence of a large number of interested buyers and sellers willing and able to trade substantial quantities at small price differences. Large companies on the stock market attract liquid markets while smaller companies may offer illiquid markets (it might be difficult to buy and sell a large numbers of shares).
Listed Security
This is a share which is quoted on a Stock Exchange. Specifically in the UK, this would be a listing on the main market (as opposed to the unlisted securities market or the third market).
Loan Stock
A security bearing a fixed rate of interest where the capital (the amount loaned) is repaid after a given period of time.
Long
In relation to foreign exchange and share trading, this refers to an ownership position in which the trader has bought more of a particular security than he or she has sold.
Long Term Care Bonds
This is an investment bond that is designed to cover the costs of care in old age. It can be used to cover residential home cost as well as expenses incurred when care takes place within the home.
Loss Adjuster
A person independent of the insurance company, but paid by it, who is responsible for checking that the claim is covered under the policy, and negotiates the amount paid with the policy holder.
Lower Earnings Limit
The minimum amount which must be earned in any pay period before National Insurance becomes payable.
LPI (Limited Price Indexation) See Limited Price Indexation
Pensions paid by an Occupational Pension Scheme, and Protected Rights paid by an Appropriate Personal Pension Scheme must increase by at least 5% per annum, or the increase in the Retail Price Index, whichever is less. Pension rules a regulations change on a regular basis and professional advice should be taken before any action.
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