One of the best ways to advance your career is to earn or obtain additional professional certifications. When choosing from among many certifications – and there are many in the insurance industry – it makes sense to choose the one that offers the best opportunities for career advancement.
For insurance professionals, particularly those focused on life insurance, they can obtain what’s called the “gold standard” in insurance planning and life insurance planning – the Chartered Life Underwriter (CLU).
The CLU is not only one of the most respected and well-known certifications, but also one of the oldest. This certification has been around since the late 1920s and is conferred by one of the oldest educational institutions in the US, the American College of Financial Services.
Anyone with this certification is expected to have comprehensive knowledge about personal risk management, life insurance, and estate planning. So, how do you obtain this prestigious title? Is it worth getting the CLU designation? What are the requirements? In this article, we’ll shed light on these and more questions about the CLU.
The Chartered Life Underwriter is a professional designation. This credential is primarily meant for individuals who specialize in life insurance, estate planning, and business planning. The CLU program not only endows insurance or financial professionals with considerable knowledge and skill, but it also serves as proof of their expertise in life insurance, risk management, and insurance solutions.
This designation is of great value to insurance and financial services professionals, since it equips them with many specialized skills to help clients. For instance, the CLU program teaches many aspects of personal and business financial planning, such as:
Earning the CLU designation requires candidates to complete the following:
Take note that until April 4, 2022, this was previously an 8-course program, which is now streamlined to a 5-course program. This change was implemented by the American College to allow students to focus better on topics that can help them easier navigate the increasingly complex insurance landscape.
Most US citizens can obtain the Chartered Life Underwriter designation if they meet basic eligibility. These requirements include:
The only formal educational requirement is for candidates to have at least a high school diploma or GED equivalent. However, keep in mind that an undergraduate or graduate degree is considered by the American College as equivalent to a year of work experience for earning the CLU designation.
The Financial Industry Regulatory Authority (FINRA) requires that CLU hopefuls must have at least three years of work experience earned within the five years before getting the certification.
As the minimum requirement for earning this certification is three years, a candidate who holds a degree or master’s degree already has fulfilled one year of this three-year work experience prerequisite.
Chartered Life Underwriter aspirants will typically need relevant, significant experience selling life insurance or giving financial advice. They must have a track record of selling complex life insurance products and giving complex financial planning advice to clients. To be able to meet such requirements, candidates would have worked as a licensed life insurance agent.
Most anyone who can obtain the requisite work experience and complete the courses and exams can get the CLU designation. This includes financial professionals who meet the specific eligibility criteria, including financial planners, insurance brokers and agents, and business owners.
Earning a Chartered Life Underwriter designation can be a straightforward process and can be accomplished by following these steps:
These courses teach students the practical, legal, and ethical aspects of life insurance. Candidates must choose four out of these core courses:
Candidates must pass a closed-book, proctored final exam after each course. Each of these exams consist of 100 questions and must be completed within a two-hour limit. These exams are available at national testing centers throughout the year, and you can have the exam results immediately after completing them.
After completing all the courses and passing the exams, candidates must agree to comply with The American College Code of Ethics and Procedures.
The CLU requires candidates to have three years of accumulated relevant work experience. This requirement should be met within five years prior to obtaining the designation.
Fulfilling this requirement may not be difficult, since an undergraduate or graduate degree at an accredited institution counts as a year’s worth of work experience. If the candidate works part-time, their work is credited on an hourly basis, with 2,000 hours equal to one year of full-time work experience.
To maintain their designation, Chartered Life Underwriters must complete a minimum of 30 hours of continuing education (CE) every two years. This includes a minimum of one hour of ethics CE classes. You can check out our top picks for CE course providers in this guide.
Students are advised to devote around 50 to 70 hours studying for each course. Committing this much time to studying often yields the best results.
As for the total time to take the courses and exams for the designation, this can usually take a year and three months to two years. Depending on their personal circumstances, some aspiring CLUs may take less or more time. Add the three years of relevant work experience, and the entire process to get the CLU can take between four and six years on average.
Those who specialize in life insurance or financial planning may be curious as to how the CLU stacks up against other designations that may prove useful to their careers. Here’s a short comparison of the CLU to some other commonly pursued titles. Depending on their career goals, CLU holders can pair with or forego these certifications:
The CLU offers more in-depth knowledge and study of insurance, while the CFP has a broader approach. Certified Financial Planners touch on multiple aspects of personal finance. Financial planners or advisors who want to gain expertise in both personal finance and insurance may want to take both certifications.
Both of these designations cover generally similar financial planning topics, although the CLU focuses more on life insurance and estate planning. The ChFC, on the other hand, offers broader applications in wealth management.
The CLU is for insurance professionals, with a focus on life insurance and estate planning. Meanwhile, the CFA is primarily for investment professionals, focusing on portfolio management and investment analysis. It is unlikely that CLUs will take on the CFA certification and vice versa; these designations are intended for very different career paths.
CPAs specialize in accounting and tax, offering expertise in financial reporting and tax compliance.
The CLU focuses on insurance and its role in financial planning. It may be advantageous for some professionals to study for the CPA title to complement their CLU credential.
A CRM certification can help insurance professionals assess businesses, analyze their operations, and pinpoint their risks. The CRM program equips risk and insurance professionals with an in-depth knowledge of policy and insurance language.
On the other hand, the Chartered Life Underwriter provides intricate knowledge of life insurance and its importance for safe and secure investments. CLUs gain in-depth knowledge of life insurance concepts and life insurance law within the context of overall risk management. Pairing this with the CRM title can make an insurance professional very knowledgeable and valuable for employers and clients.
Why should you get this designation? Mainly because of the many benefits this title offers. Here are some of them:
In terms of your career, having a CLU designation translates to better client retention, higher earnings and growth within your organization. Note that the CLU is not the only title that can help advance your career. There are several other designations that can greatly enhance your career prospects and opportunities.
CLU holders gain access to highly specialized, critical knowledge in areas like life insurance coverage, insurance mechanisms, and evaluating insurers.
The CLU program provides a holistic understanding of financial services, as its curriculum includes financial planning, health insurance, income taxation, investments, and retirement planning. This extensive knowledge allows CLUs to offer comprehensive, tailored financial solutions to their clients.
With the specialized knowledge that the CLU confers, its title holders have a better chance of getting promoted or hired at insurance companies. Those with this designation are widely recognized as having earned the “gold standard” in life insurance and financial planning.
Chartered Life Underwriters are renowned and recognized by their peers to have high ethical standards. Even if a candidate passes the exams, the American College of Financial Services does not award this designation to just anyone. CLU holders must agree with and adhere to the organization’s Code of Ethics to retain their membership and the right to call themselves CLUs.
This question does not have a definitive yes or no answer. Whether the CLU is worth it depends on the individual professional. However, getting the CLU can be a worthwhile investment if you specialize in life insurance, estate planning, and business planning.
The designation can equip you with an in-depth knowledge of these areas of insurance and financial planning, which can translate to better career outcomes. The fact that this designation also requires strict adherence to a strong code of ethics can make Chartered Life Underwriters more appealing to potential employers and clients.
Choosing the right certifications to pair with the CLU or relying on the CLU alone largely depends on the insurance professional’s career aspirations. If you think you need more certifications, remember to do your due diligence and research their requirements. Most certifications require a significant investment in terms of money, time, and effort, so choose those most compatible with your career goals.
Did this guide on the Chartered Life Underwriter designation provide you with tips on how to advance your career? Let us know in the comments if you found this helpful or informative
