Random Sample
Definition of "Random sample"
Sample of n elements selected from a population of A? elements in such a way that the sample has essentially the same characteristics as the population. The random sample serves as the foundation of all probability theory as it relates to probability in sampling. In theory, all subsets drawn from the same sample have an equal chance of being drawn. Sampling is extremely important to the calculation of premium rates. For example, if the insurer wants to predict the probability that a wood-frame house will burn, the sample must be drawn from the population of wood-frame houses, not brick-frame houses.
Popular Insurance Terms
Injury that continues after a wound from physical or psychic entry. (The latter is a wound that makes a lasting impression on the mind, especially upon the subconscious mind; for example, a ...
Obligatory reinsurance contract in which a reinsurer agrees to pay for all or a large portion of losses up to a limit, when these losses exceed the retention level of the cedent. The ...
Coverage in which one premium payment is made and the policy is fully paid up with no further premiums required. ...
Form of state rating law that requires prior approval of property and casualty insurance premiums by the state insurance department for certain changes. Here, a state generally allows new ...
Actuarial evaluation of the assets of a pension plan according to the fair market value of the assets. ...
Section describing coverages under a policy. Elsewhere in the policy other sections may restrict or exclude coverages. ...
One of two bureaus that writes forms and files standard rates for inland marine insurance. The other is the inland marine insurance bureau. ...
Point in time when a term life insurance policy terminates its coverage. ...
Trust in which the trustee distributes capital and income to the beneficiaries of the trust according to their economic needs. ...
Have a question or comment?
We're here to help.