Glossary: L

LEGAL STATUS

Your legal status can refer to whether you are married, single, divorced, widowed or separated. Sometimes it can refer to whether you are a citizen of the UK and whether you have a right to work in this country.

LIFE INSURANCE

This type of insurance pays out a lump sum to your family if you die. It is necessary, for example, if you are paying an interest-only mortgage. With a life insurance plan, the insurer will pay off the mortgage with a lump sum if you die before you’ve paid it off. You can insure for more than the cost of the mortgage to make sure that your family has some money to live on as well.

LOAN

A sum of money which you borrow, usually with interest.

LOAN SHARK

Someone who lends money and charges a very high rate of interest. They will not hold a consumer credit licence.

LOYALTY CARDS

Loyalty cards are offered by some shops and supermarkets to encourage people to shop there. You cannot usually use your loyalty card to pay for anything, but every time you spend money at that shop you will be given ‘points’ on your card. When you have saved enough points, you may be able to use them to get vouchers to help pay for your shopping, or perhaps other things such as air-miles.

LUMP SUM

A lump sum is a one-off payment. Some people have insurance policies that pay a lump sum if they have an accident or are ill. Other people prefer to have a policy that provides an income over a long period of time.