Score: 0 of 1 pt Metrics 6.1 Question Help * of Defense, as of December 31, 2014
ID: 3328083 • Letter: S
Question
Score: 0 of 1 pt Metrics 6.1 Question Help * of Defense, as of December 31, 2014 there were 1,360,024 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 5640 per year and that potential customers purchase one policy per year, use the chain ratio method to calculate the market potental for life insurance in the military market st The number of buyers nte market can be esti nated as (Round t the nearest whole number )Explanation / Answer
Firstly we need to assume all possible number of buyers in the market and then use percentages systematically to reach to an optimal number.
The veteran population (@ end of 2014) = 21 million
Assuming that 45% of the veterans opt for the Life insurance policy, as many of them won’t be eligible for the same, due to various disabilities caused during active service.
Out
So the veterans population seeking Life insurance policies would be = 21,00,000 x (45/100) = 9,45,000
On the other side those in the Active Military service people may or may not opt for the life insurance owing to higher rates of premium for people in active military service. Hence, we can assume that only 55% of the active service military personnel will purchase a Life Insurance policy, which comes to = 13,60,091 x (55/100) = 7,48,050.05 7,50,000
The total number of buyers can be estimated as = 9,45,000 + 7,50,000 = 16,95,000 17,00,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.