Question

What does the 'law of large numbers' principle help insurance companies achieve?

a.

Increased unpredictability in results

b.

Higher profitability with fewer policies

c.

More diversity of risks in the pool

d.

Better predictability of results through selling more policies

Posted under IC38 Life Insurance Agent Exam

Answer: (d).Better predictability of results through selling more policies Explanation:The 'law of large numbers' principle helps insurance companies achieve better predictability of results by selling more policies.

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Q. What does the 'law of large numbers' principle help insurance companies achieve?
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