A student prepares for examination. (Photo/ CNS)

A college student has sold 100 "test flunking" insurances to her schoolmates before final exams in two days. Only three of those insured flunked.

Guan Lingzi, a sophomore of Shanghai University of Finance and Economy started up her business on campus and launched a micro financial product - the "test flunking" insurance during June of this year.

Students only need to pay five yuan for each copy of the test flunking insurance according to Guan. Insured students will get a 30 yuan claim settlement if he or she failed the examination. For those who got great marks, they will also have a bonus of 20 yuan.

After scores come out, Guan’s team claimed all settlements. "We thought we were losing heavily," said Guan. In fact, the result is far beyond their expectation.

"We only lost ten yuan in total. And the claim settlement mainly occurs in bonus for high marks," Guan added.

Once the test flunking insurance was launched, Guan and her team have been involved in debate and questions both on campus and online.

In response to the moral concerns that students might cheat for compensation and fail the examination on purpose, Guan said, in fact, their team has considered the possibility and cost of cheating.

"In our school, to catch up to the credits, students who failed the final test need to study the subject again to get the chance for makeup examination. Usually a subject requires two credits. For each credit, students need to pay 100 yuan for studying again,” Guan said.

"I do not think that students would like to ignore the high cost and flunk on purpose to get the 30 yuan claims. Not to mention the time he or she will spend on regaining credits," Guan analyzed.

Executive vice president of the college Liu Zhiyang said the "test flunking" insurance is of great creativity in terms of research and development projects for start-ups.

"As far as I know, Guan’s team has already contacted the insurance company to get more support for their project," Liu added.

Guan Lingzi said that in future her team is planning to launch more types of insurance for students, such as insurance covering stolen bikes.