CLU study guide
CLU · Work through your exam, one topic at a time.
The Chartered Life Underwriter® (CLU®) is a specialized designation for financial professionals who want deep, practical expertise in life insurance and its use inside a holistic financial plan. It is offered by The American College of Financial Services and is aimed at advisors, agents, and planners whose clients need help with risk management, estate planning, business continuity, key person coverage, and related employee benefits. The CLU study guide has 4 sections and about 1,441 words.
01Fundamentals of Insurance Planning
Risk is uncertainty about loss; insurance transfers pure risk (loss or no loss) to a pool. Candidates must distinguish pure from speculative risk, personal from property/liability exposure, and the risk-management techniques: avoidance, retention, loss reduction, sharing, and transfer.
353 words, about 2 min02Tools and Techniques of Life Insurance Planning
Temporary needs (mortgage, income replacement to a date) call for term insurance: level, decreasing, annually renewable, convertible. Permanent needs (estate liquidity, final expenses, business funding) call for cash-value products: whole life (level premium, guaranteed cash value, participating dividends), universal life (flexible premium, cost-of-insurance charges against cash value, interest crediting), variable life (separate account, securities registration, client bears investment risk), and indexed UL (index credits subject to a cap, participation rate, and floor).
329 words, about 2 min03Fundamentals of Estate Planning
Start with §2033 (all property owned at death), then add the strings: §2036 (retained life estate or right to income), §2037 (reversionary interest above 5%), §2038 (revocable transfers and powers to alter), §2041 (general power of appointment), §2042 (incidents of ownership in life insurance), and §2035 (certain transfers within three years of death, including life insurance policies transferred while retaining incidents). Deductions come off the top: administration expenses and debts (§2053), casualty losses (§2054), charitable gifts (§2055), and the marital deduction (§2056) for property passing to a spouse in qualifying form.
366 words, about 2 min04Planning for Business Owners and Professionals
Sole proprietorship, partnership, LLC, S corporation, and C corporation differ on self-employment tax, fringe-benefit deductibility, and exit strategy. S corporation more-than-2% shareholders are taxed on many fringe benefits; C corporations face double taxation on dividends; entity type determines whether a buy-sell is a redemption or a cross-purchase.
393 words, about 2 min