Initials Funding Agreement

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A funding agreement is a deposit-type contract, sold by life insurance companies, that typically pays a guaranteed rate of return over a specified period of time. Insurers make money by issuing these contracts and investing the proceeds in relatively higher yielding assets.
English Language Learners Definition of arrangement : the way that things or people are organized for a particular purpose or activity : the way that things or people are arranged. : something that is done to prepare or plan for something in the future. : a usually informal agreement.
Advance funding is any advance made on a future commitment or payment.
Contract Fund Value. When premiums are paid, a portion of each payment is used to pay certain administrative and sales charges; what's left, the net premium, is applied to the account value, which is also known as the Contract Fund. > As monthly charges come due, they are then deducted from the Contract Fund.
If all premiums are paid, cash value insurance usually lasts for the entire life of a person and pays death benefits to the beneficiaries named in the policy upon the death of the insured. The cash value can be used as loan collateral for borrowing funds at the interest rate specified in the policy.
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