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
Variable-rate bonds whose coupon and value increases as interest rates decrease. ...
Important 1944 U.S. Supreme Court ruling that the insurance business constituted interstate commerce and was thus subject to the SHERMAN antitrust act. This decision came in U.S. v. ...
Option clause in a disability buy-out insurance policy that permits the owner of the policy to increase the limits of coverage for the expenses associated with the buy-out process. Usually, ...
Death caused by a person without legal justification. Wrongful death may be the result of negligence, such as when a drunken driver hits and kills someone; or it may be intentional, as when ...
Act that mandates that employers who have at least 26 employees must provide a terminating employee and family members, if residents of employee's household, with health insurance coverage ...
Status in which an insurance company holds funds of its insureds (the payment of premiums) in trust, and through an insuring agreement promises to make all benefit payments for which it has ...
Addition to reflect exposures with a greater probability of loss than standard exposures. For example, insuring a munitions factory obviously requires a premium greater than that required ...
Type of hold-harmless agreement made by a property owner as a condition for being served by a railroad spur. If the owner wants a special sidetrack, the railroad requires the owner to ...
Term referring to the most common charge, in health insurance, for a service. ...
Have a question or comment?
We're here to help.