Flexible Funding

What Does Flexible Funding Mean?

Flexible funding is a type of pooled investment that allows a money manager to shift investments between asset classes as they see fit. This approach differs from other types of funds that focus on a single asset class.

Many insurance companies allocate capital through flexible funding.

Insuranceopedia Explains Flexible Funding

Flexible funding can also refer to the process of establishing a pre-tax spending account for health-related expenses that are not covered by insurance. These accounts may be exempt from income taxes, but they must be used exclusively for specific types of expenses to remain valid. For example, expenses related to dependent care would qualify. The types of out-of-pocket costs that qualify often overlap with premiums, deductibles, and co-pays that policyholders already pay under their regular health plan.

Flexible funding can help individuals save money on income taxes when they are required to pay significant amounts for uncovered medical care. Knowing how much you typically spend out of pocket each year is useful when both setting up a flexible spending account and choosing a health insurance plan.