Professional Designations

What is a Chartered Life Underwriter (CLU)?

By  Brian Thorp

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The Chartered Life Underwriter (CLU) is a certification for financial professionals who specialize in life insurance as it relates to estate planning and business planning. It involves an extensive educational program that covers topics such as insurance, annuities, risk management, and more. 

The CLU is one of the oldest designations as it’s been around since the late 1920s when The American College of Financial Services made its debut.

Let’s take a closer look at what this financial certification is, what it takes to earn it, and how you may benefit from working with a CLU. 

What is a Chartered Life Underwriter (CLU)?

CLUs are financial advisors with a primary focus on life insurance. Many of them work for insurance companies and sell products to a variety of clients. They are highly knowledgeable in the plethora of life insurance policies available and can help clients find the right fit for their unique situations. 

Despite the fact that life insurance rates often depend on medical history and age, CLUs often find the most affordable rates for their clients. To earn the CLU designation, candidates are required to complete courses in life insurance and estate planning. They must also have solid work experience in the life insurance industry. 

Even though CLUs sell life insurance, they work as fiduciaries. Therefore, they’ll only sell policies that are in the best financial interests of their clients, rather those that will earn them the highest commissions. 

CLUs are often those who hope to launch their insurance careers or already hold the CFP or ChFC but wish to enhance their life insurance knowledge. Other legal or financial professionals who are involved with life insurance underwriting in some way may also sit for the CLU. 

Should You Hire a CLU?

A CLU has the advanced life insurance expertise and depth of financial knowledge that may help you if you:

  • Need Help Buying Life Insurance: If you’d like a life insurance policy but don’t know where to start, a CLU is an invaluable resource. They’ll take the time to get to know your particular needs and situation so they can present a few good options. With a CLU’s support, you can make an informed decision. 
  • Would Like a Good Deal on Life Insurance: Even if you’re not in the best health, a CLU may help you secure an affordable rate on your life insurance policy. They have strong relationships with many companies and can save you a lot of money by offering rates that you may not find elsewhere.
  • Are a Business Owner: As a business owner, you have unique life insurance needs that individuals may not necessarily have. A CLU can educate you on everything you need to consider so you can figure out which policies to purchase for you and/or your employees. In addition, they may advise you on how to legally organize a business, plan for succession, transfer a family business, and more. 
  • Hope to Increase Estate Value: If your goal is to increase the value of your estate, a CLU may be a good option as they are well-versed on estate planning. They can help you conserve the assets you currently have and achieve financial security during your retirement years.

What Does it Take to Earn and Maintain the CLU?

Those who hope to earn a CLU designation must fulfill certain requirements set forth by The American College. Here’s a brief overview of what that they are.

Education

CLU candidates are required to complete a total of eight college level courses, five core courses and three electives. The core courses include: 

  • Fundamentals of Insurance Planning
  • Individual Life Insurance
  • Life Insurance Law
  • Fundamentals of Estate Planning
  • Planning for Business Owners and Professionals

Electives relate to topics such as retirement planning, investments, group benefits, and income taxation. Some courses are offered via the new Personal Pathway™ which involves a combination of digital textbooks, webinars, interactive lessons, discussion forums, and expanded instructor support. 

Experience

To sit for the CLU, candidates need at least three years of full-time work experience in the life insurance industry. This experience must be within the five years before the date of their certification award. 

Those with an undergraduate or graduate degree from an accredited college or university can count their education as one year of work experience. Additionally, part-time experience translates into hourly credit and 2,000 credits equate to one full year of experience. 

Exam

CLU candidates must pass eight exams, which are usually administered by The American College via the Pearson VUE testing centre network. Each exam is dedicated to one of the five required courses or three elective courses. It’s two hours long and consists of 100-questions. A minimum score of 70% for all exams is necessary to pass. 

Continuing Education

Most CLU candidates are required to complete 30 hours of continuing education every two years. Those who do not fall into any of these categories, however, are exempt:

  • Licensed insurance agent, broker, or consultant
  • Licensed security representative
  • Registered investment advisor
  • Financial consultant, attorney, accountant, or employee benefits specialist
  • Any professional who offers advice on insurance, employee benefits, estate planning, or financial planning

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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