What Is a Chartered Life Underwriter (CLU)?

Life insurance can be a critical piece of people’s estate plans. It can be a way to ensure your beneficiaries receive payments and are taken care of after you’re gone. However, it can be complex to navigate and figure out how it fits into your holistic estate plan alone. For this reason, it often makes sense to hire a professional, such as someone with the Chartered Life Underwriter (CLU) designation.

In this article, we’ll outline what a CLU does and the process of becoming one, including the education they must receive and the ethical standards they must adhere to. We’ll also explain what types of clients they serve and how to find a CLU professional.

CLU Definition

Chartered Life Underwriter (CLU) is a professional certification offered by The American College of Financial Services. This reputable institution offers other titles such as Chartered Financial Consultant (ChFC) and Retirement Income Certified Professional (RICP). Titleholders must complete a program that gives them the tools to effectively understand life insurance and how it fits into their clients’ plans.

According to The American College, CLU professionals have a skillset that overlaps with:

• Financial planning
• Estate planning
• Risk management
• Insurance
• Law

CLUs often work in roles at advisory firms that help clients develop estate and retirement plans. It’s also not uncommon to see titleholders with other certifications, such as Certified Financial Planner (CFP). Professionals often carry titles, like CLU, to signal to clients and others in the industry that they’ve gained knowledge in a certain area.

Individuals who carry the CLU must follow strict ethical standards set forth by the issuing organization. Beyond the education a professional with the title must complete, this ensures that titleholders maintain high-quality interactions with clients and colleagues.                                        

Becoming a CLU

As is true with other certifications and titles in the financial advice industry, the CLU title takes considerable time and effort from individuals to achieve. Students must complete a comprehensive online program of study that dives into the essentials of life insurance and risk management. While there are no prerequisites to enter the program, candidates must collect professional experience and agree to ethical standards before they’re able to use the marks.

Here’s what it takes to become a CLU:

Education

Students must enter and pass The American College’s CLU program, which comprises five mandatory self-study online courses and takes less than 15 months. Candidates have the option to enroll in the program at a rate of $925 per course or a five-course package for $3,795. There are four required courses, along with one elective out of five options.

Below is an overview of the topics the courses cover:

• Understanding the insurance landscape, including regulations and products.
• Legal aspects surrounding life insurance.
• Principles of the estate planning process.
• Financial and estate planning principles around small businesses, retirement, and investing.

Ethical and Professional Standards

Prospective CLU titleholders must also agree to follow The American College of Financial Services’ ethical standards, including eight “canons.” The full version is available on the issuing organization’s website; however, these ensure that CLUs maintain integrity. This also includes agreeing to uphold the law and using the marks in the spirit it was intended.

CLUs must also take the college’s “Professional Pledge,” which binds individuals to follow a fiduciary duty and give their clients the same quality of service they would give to themselves.

Have Three Years of Professional Experience

Though anyone can enter the program, The American College — as it does for other programs — also imposes a professional experience requirement students must meet before using the CLU title. Specifically, individuals must gather three years of professional experience in financial planning or a similar field. While the organization doesn’t cite examples, possible alternatives may be estate planning, law, or risk management.

A requirement like this is normal before professionals can earn titles, especially for roles like CLU that intersect with many other areas of financial advice. It shows that the future titleholder has experience working with clients and colleagues on several issues and can understand how the industry works day-to-day.

Who Needs a CLU Professional?

A Chartered Life Underwriter professional is ideal if you’re looking for someone to help you navigate how components of your retirement and estate plans work together, especially including life insurance and risk management. They have advanced training centered around many areas of personal finance and can help you create and implement various types of plans.

You’ll often see CLU designees owning or employed at insurance, estate planning, or financial planning firms. Because the role requires prior professional experience, titleholders may also hold other designations, such as CFP or Chartered Retirement Planning Counselor (CRPC).

To find a CLU professional, you can use The American College of Financial Services’ YourAdvisorGuide.com search tool. This allows you to locate professionals by designation, ZIP code, and name, as well as narrow searches within a certain mile radius.

Another effective way to find a high-quality financial advisor in your area is by using a free matching tool, such as this one. After answering a few questions regarding your goals and circumstances, it will pair you with an expert tailored to your needs.

Frequently Asked Questions

Do CLU professionals follow a fiduciary duty?

CLU professionals agree to adhere to a strict ethical standard of conduct set forth by The American College. One element within this is a professional pledge, which requires titleholders to uphold a fiduciary duty, especially when providing services to clients.

Do CLUs have continuing education requirements?

To maintain their designation, CLU experts must complete a professional recertification program that includes 30 hours of continuing education every two years. They must also dedicate at least one hour of the total to ethics training.

How much does it cost to hire a CLU?

The cost to hire a CLU professional can vary on many factors, including fee structure, services, and experience. For instance, if a professional primarily offers financial planning, you may see a different fee schedule than you would if they were helping you get a life insurance policy. Specifically, the former might offer a more ongoing structure (i.e., assets under management or retainer), while the latter might have a flat rate for one service.

How long does it take to become a CLU?

According to The American College’s website, it takes less than 15 months to complete the five-course educational requirement to earn the title. However, people new to the field must complete the three-year professional experience requirement. For those who’ve already worked in the field wanting to add the designation to their repertoire, it will be as simple as completing the course and taking the ethical pledge.