An insurance company has decided to offer “college insurance.” This is a plan that guarantees that a child who is the subject of the insurance will be provided with $30,000 a year for four years of college education upon turning eighteen. Such plans are great for attracting new business to the company, but the insurance company executives worry that the company will lose money, as the premiums may not be enough to pay for the education claims.
Which of the following plans will best help to prevent the insurance company from losing money on the college insurance policies?
A) Requiring that the policies be purchased only for children under the age of two.
B) Insuring children whose families are able to pay for college on their own.
C) Offering an optional five thousand dollar benefit to be used for educational travel abroad.
D) Insuring only one child per family.
E) Offering premium discounts for multiple-policy holders.
The Official Answer is A.
Why the E is not the correct choice?
Which of the following plans will best help to prevent the insurance company from losing money on the college insurance policies?
A) Requiring that the policies be purchased only for children under the age of two.
B) Insuring children whose families are able to pay for college on their own.
C) Offering an optional five thousand dollar benefit to be used for educational travel abroad.
D) Insuring only one child per family.
E) Offering premium discounts for multiple-policy holders.
The Official Answer is A.
Why the E is not the correct choice?
