Final answer:
A provision in a life insurance policy that pays out an amount not exceeding the guaranteed cash value is known as a cash-value provision in a whole life insurance policy.
Step-by-step explanation:
The provision in a life insurance policy that pays the policyowner an amount which does not surpass the guaranteed cash value is commonly referred to as a cash-value provision. This type of life insurance, often known as whole life insurance, includes both a death benefit and a cash value component. The cash value accumulates over time and can be used by the policyowner as a financial account for various needs.
In the context of insurance, this provision functions as a form of financial protection where regular payments made by policyholders contribute to the accumulated cash value. However, this amount is accessible to the policyholder under specific conditions. This provision differs from a money-back guarantee, which is a promise to refund money, as the cash value can sometimes be used while the policyholder is still alive rather than exclusively serving as a death benefit.