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# An insurance company has decided to offer “college insurance.”

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Director
Joined: 03 Feb 2013
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Re: An insurance company has decided to offer “college insurance.” [#permalink]
Top Contributor
Mahmud6 wrote:
kinjiGC wrote:
How can company increase the premium.

A) Requiring that the policies be purchased only for children under the age of two. -> This increases the tenure of the policy and that increases the premiums

If the tenor of the policy increased, the size of the premiums may also be decreased.

I meant the total premium (accumulated amount) as the tenure increases as the company doesn't have to pay tuition till eighteen years of age.
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Re: An insurance company has decided to offer “college insurance.” [#permalink]
How I understood the argument is that by setting the age limit of 2 years and below, more parents will be looking forward to buy that insurance thereby increasing number of premiums than by increasing the premiums.

Thanks

Waiting for more explanation.
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Re: An insurance company has decided to offer “college insurance.” [#permalink]
1
Kudos

Option A doesn't seem very convincing. If the company requires that the policies be purchased only for children under the age of two, still the premium can be so low that company may may run at a loss. None of the answer choices seem convincing. Can we regard this as a poor quality question?
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Re: An insurance company has decided to offer “college insurance.” [#permalink]
Prateek176

Sometimes all option doesn't seem right, or say no option is an perfect ans, then choose the least bad option.
Same case applies to this question .

All other options except A are way to far. Only option A seems logical.

Hope it helps.
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Re: An insurance company has decided to offer “college insurance.” [#permalink]
Not a great question.It makes the people bring in information from outside world.
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Re: An insurance company has decided to offer “college insurance.” [#permalink]
Poor question, requires a logical leap and external information which is materially important to the questio, what is the premium being paid ?

Should be deleted from the forum
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Re: An insurance company has decided to offer college insurance. [#permalink]
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: An insurance company has decided to offer college insurance. [#permalink]
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