Probability
Definition of "Probability"
Chance that an event will occur. The foundation of insurance is probability and statistics. By pooling a large number of homogeneous exposures an insurance company can predict with a given degree of accuracy the chance that a policyholder will incur a loss. The company reflects this expectation in the pure cost of insurance, known as the pure premium.
Popular Insurance Terms
Apparent agreement that is not a valid contract. ...
Plan to which contributions are not being made, but which has not been formally terminated. The freezing of a keogh plan (hr-10) may occur in the following circumstances: self-employed ...
Mortality table that reflects irregularities from age to age due to chance fluctuations in the sequence of the rates of mortality. The rates of death as reflected by the mortality table in ...
Amount expressed as a liability on the insurance company's balance sheet for benefits owed to policy owners. These reserves must be maintained according to strict actuarial formulas as they ...
Group coverage for members of a fraternal association, usually on a nonprofit basis. ...
Same as term Adjuster: individual employed by a property and casualty insurance company to settle on its behalf claims brought by insureds. The adjuster evaluates the merits of each claim ...
Rights of employees who leave an employer with a qualified plan to withdraw their accumulated benefits. With a contributory plan, employees have immediate rights to their own contributions, ...
Performance of a deed or function. Certain acts are prohibited from coverage in insurance. For example, if the insured commits a felony, the insured's beneficiary cannot collect under the ...
Actuarial equivalent method of calculating the premium rate through the development of the following equation: probability that the event insured against occurs x face amount of policy x ...
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