15 January 2013 0 Comments

CLU and More Alphabet Soup

College studentAn insurance agent with the letters CLU following his/her name has received the Chartered Life Underwriter designation by The American College.

The American College was founded in 1926 by Solomon S. Huebner of the Wharton School of Finance at the University of Pennsylvania.  It was first known as The American College of Life Underwriters and the only degree it offered for many years was the CLU.  Today it offers a myriad of degrees and is known as The American College of Financial Services.

To obtain the CLU designation the student must pass exams on eight subjects ranging from Fundamentals of Insurance Planning to Planning for Business Owners and Professionals to Estate Planning Applications.  There are also courses on Income Taxation, Life Insurance Law, Investments and six other courses.  The courses are academic in nature as opposed to sales training.

The next most recognized of the designations is ChFC, Chartered Financial Consultant.  Nine exams are required; much of the material is similar to the CLU courses, but with more involvement in investments beyond those offered through insurance contracts.

The designation LUTCF stands for The Life Underwriter Training Council Fellow which is a more basic area of study with greater emphasis on the sales process.

Here are a few more of the designations for which The American College provides a curriculum:

REBC:  Registered Employee Benefits Consultant

CASL:  Chartered Advisor for Senior Living

CAP:  Chartered Advisor to Philanthropy

RICP:  Retirement Income Certified Specialist

REBC:  Registered Employee Benefit Specialist

RHU:  Registered Health Underwriter

MSFS:  Master of Science in Financial Services

The fact that an insurance agent does or does not have designations does not, in itself, indicate a degree of proficiency or lack thereof.  Unlike the legal and accounting professions, becoming a life insurance agent does not require pre-certification.  All that is needed to get started is a license issued by the state of residence.  Typically the test required to obtain this license is very basic in scope.  In order to renew this license every few years, most states require the agent to complete a minimal number of hours of continuing education.  Those who choose to pursue further accreditation from The American College or other institutions will typically do so after their initial licensing.  I once heard a very successful and respected agent who did not have any of these designations state in a speech that when he needed the advice of a CLU, he hired one…a bit arrogant, but an interesting approach.

Next up, I’ll try to answer the question that is often asked:  What companies have the best policies?

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