Concept:Surrender value is the cash amount an insurer returns to a policyholder who voluntarily stops the policy before it matures or before a claim arises.
Explanation:A straight Life Assurance policy pays the assured sum to the beneficiary only when the insured person dies.
If Mr Biu decides to stop paying premiums and discontinue the policy, the insurance company will pay him the surrender value.
This amount is not given to a beneficiary on death, nor is it the annual premium he pays.
It is also not the same as total premiums paid plus interest, because the surrender value depends on the policy’s cash value at the time of discontinuance.
Answer:A. would be paid to Mr Biu if he should discontinue with the policy