Concept:The amount paid to a policyholder when a life assurance policy is cancelled before its maturity date is known as the surrender value.
Explanation:A life assurance policy normally pays the full sum assured only on maturity or on the death of the policyholder.
If the policyholder stops paying premiums and chooses to cash in the policy early, the insurer does not pay the full sum assured.
Instead, the insurer pays a reduced amount calculated from the total premiums paid and the policy's accumulated savings, after deducting charges.
This reduced amount is called the surrender value.
It is always less than the assured sum because the policy has not yet reached maturity.
The other options are incorrect: residual value refers to the future worth of an asset, accrued value refers to interest accumulated over time, and assured value is the full amount payable at maturity.
Answer:B. surrender value