The fund value in Life Insurance usually refers to the Cash Value of a permanent Life Insurance policy. It is the amount that could be borrowed from if the policy owner wanted to use those funds for current needs. To find the cash value or fund value, a policy owner can order a current illustration that will show that value.
Life & Health Insurance Agent, The Tooker Agency, Riverhead NY
When talking about cash value in life insurance policies it is important to differentiate between the policy value and the surrender value.
For example, in a universal life insurance policy the policy value (or fund value) would be the accumulated cash value which is earning interest. However, almost all universal life insurance policies have a decreasing surrender charge schedule. This means that if you were to surrender the policy in the early years the surrender charge could reduce most (or all) of the value you receive. The value you would receive is called the net surrender value, because it is net of all charges.
At some point, say 10 or 20 years down the road, the surrender charges will go away and the policy value will equal the net surrender value. This is part of the reason why cash value life insurance should always be looked at as a long term proposition.
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For example, in a universal life insurance policy the policy value (or fund value) would be the accumulated cash value which is earning interest. However, almost all universal life insurance policies have a decreasing surrender charge schedule. This means that if you were to surrender the policy in the early years the surrender charge could reduce most (or all) of the value you receive. The value you would receive is called the net surrender value, because it is net of all charges.
At some point, say 10 or 20 years down the road, the surrender charges will go away and the policy value will equal the net surrender value. This is part of the reason why cash value life insurance should always be looked at as a long term proposition.