Insurance Term
Law of Large Numbers
Statistical principle stating that as exposure units increase, actual losses approach expected losses.
What does Law of Large Numbers mean in insurance?
Insurers rely on large sample sizes to calculate accurate premium rates.
Related insurance terms
Premium Study Material
Don't just memorize terms.
Master the exam.
Get access to 650+ exam-like questions, detailed explanations, and specific state law-supplements for your state.
Pass Guarantee
State-Specific Content
Unlimited Practice Tests
Instant Feedback
Practice QuestionEasy
Which of the following best describes the concept of Law of Large Numbers?
Start Practicing →