Vinod Khanna, aged 27 years, is having a policy of Rs. 15 Lac sum assured and is paying premium of Rs. 14,800/- . The cash surrender value of this policy is at the end of previous year was Rs. 35,000. It is estimated that by this year end, the cash surrender value of this policy would be Rs. 40,000/-. Bonus under this old policy is Rs. 10,000/-.
There is another term insurance policy of Rs. 15 Lac Sum Assured is available to Vinod at Rs. 4,200/- per annum.
If rate of interest is 8 % then first calculate the CPT of existing and new policy respectively and then advise Vinod if it is better to continue this policy or to discontinue it?
A . 2.59 ,2.88.Continue this policy
B . 2.45,3.35.Continue this policy
C . 3.91 ,2.79.Discontinue this policy
D . 3.13 ,2.97.Disontinue this policy
Answer: A