Using the chain ratio method, estimate the market potential for life insurance in the military (active...

Using the chain ratio method, estimate the market potential for life insurance in the military (active duty and veterans) market for a country. Assume that there are 22,600,000 veterans. Additionally, the number of active duty personnel is 1,972,175 The percentage of the population that has life insurance is 51%. Also assume the average price for a for life insurance is $3,000 and veterans and active duty personnel will purchase only one life insurance policy. 1. Given the data, what is the number of buyers in this market? 2. Given the data, what is the market demand?

Solutions

Expert Solution

Total Population= total veterans +tota active duty personnel= 22,600,000+1,972,175= 24,572,175

51% of population has Life insurance= 0.51*24,572,175= 12,531,809.8

49% do not have the life insurance= 0.49*24,572,175=12,040,365.8

1. Estimate of no. of buyers=12,040,365.8

2. Market Demand= 12,040,365.8 buyers with 1 policy per person so=12,040,365.8*1*3000=

$36121097400

keosha answered 1 year ago

Next > < Previous

Related Solutions

The potential market represents all active duty military members, all veterans, and their families. Assume that...

The potential market represents all active duty military members, all veterans, and their families. Assume that according to the United States Department of Defense, as of December 31, 2014 there were 1,360,671 active duty personnel in all armed services. The veteran population totaled 21 million at the end of 2014. Assuming the average cost of life insurance is $710 per year and that potential customers purchase one policy per year, use the chain ratio method to calculate the market potential...

In the chain ratio method of estimating demand, a base number is multiplied by a chain...

In the chain ratio method of estimating demand, a base number is multiplied by a chain of adjusting percentages. The upper limit of market demand is called market potential. The % market that willing and able to buy is available market under the current conditions. ZIVAGO sells HDTV and a recent marketing research survey found the following information: Number of US households: 230,000 Access to HD Internet = 65% of the households. Among the households with access to HD internet,...

Life Insurance: A life insurance company wants to estimate the probability that a 40-year-old male will...

Life Insurance: A life insurance company wants to estimate the probability that a 40-year-old male will live through the next year. In a sample of 7000 such men from prior years, 6993 lived through the year. Use the relative frequency approximation to estimate the probability that a randomly selected 40-year-old male will live through the next year. Round your answer to 4 decimal places. P(he lives through the year) =????

In a typical month, an insurance agent presents life insurance plans to 40 potential customers. Historically,...

In a typical month, an insurance agent presents life insurance plans to 40 potential customers. Historically, one in four such customers chooses to buy life insurance from this agent. You may treat this as a binomial experiment. What is the probability of success for this problem? What is the total number of trials in this problem? Create a probability distribution table which includes the value for the random variable and the probability of each possible outcome of the random variable....

Industry market potential is an estimate of the likely sales for all companies in a specific...

Industry market potential is an estimate of the likely sales for all companies in a specific industry during a particular period. Managers use various methods to estimate industry market potential. There are at least six methods for a manager to gather the information. Use THREE (3) methods that are used by these international managers.

1)In a typical month, an insurance agent presents life insurance plans to 40 potential customers. Historically,...

1)In a typical month, an insurance agent presents life insurance plans to 40 potential customers. Historically, one in four such customers chooses to buy life insurance from this agent. You may treat this as a binomial experiment. What is the probability of success? What is the total number of trials? Create a probability distribution table which includes probability of each possible outcome. Also create the cumulative probability column. What is the probability that exactly five customers will buy life insurance...

Design the flexible pavement using Group index method and California bearing ratio method using the following...

Design the flexible pavement using Group index method and California bearing ratio method using the following data and compare the pavements. Soil portion passing 75 micron sieve = 60% Liquid limit = 43% and plastic limit = 28% Area of the plunger = 19.6 cm2 Load at 2.5 mm penetration = 45kg Load at 5 mm penetration = 68kg Sub-base CBR = 30% Base course CBR = 70% Expected traffic = 900 vehicles per day.

Using time dependent perturbation theory, estimate the ratio of the probability of a transition to a...

Using time dependent perturbation theory, estimate the ratio of the probability of a transition to a 3p orbital compared to that to a 2p orbital when a hydrogen atom in its ground electronic state is exposed to 105nm light for 1 femptosecond. What is the ratio for a 2 femptosecond exposure? Explain the difference. (Hint: orbital functions in addition to energy differences need to be considered; an integral table is also helpful)

The DINK method of determining life insurance needs reccomends adding an additional insurance cushion if your...

The DINK method of determining life insurance needs reccomends adding an additional insurance cushion if your spouse is?

Which of the following is not a valid method for determining life insurance needs? Group of...

Which of the following is not a valid method for determining life insurance needs? Group of answer choices The Financial Needs Method. The Human Life Value Method. The Dependency Method. The Capitalization of Earnings Method.

Subjects