CLU Practice Test

Chartered Life Underwriter Jobs

Chartered Life Underwriters, or CLUs, are financial services professionals who specialize in life insurance and estate planning. They have rigorous training that covers topics like insurance, annuities and risk management. These professionals can be found in many different industries, including banks, loan brokerages and securities firms. They may also work in government enterprises or as independent financial advisors. SmartAsset’s free advisor matching tool can help you find a local CLU in your area.

CLUs are often financial professionals who want to launch their careers in the field, but they can also be those who already hold a professional designation such as a Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC). The CLU is the industry’s oldest credential and requires extensive education, exam preparation, and continuing education.

A CLU works as a fiduciary, meaning they will only sell policies that are in their clients’ best interests. They may also help them with other aspects of their financial security, such as retirement planning. They can find jobs with life insurance companies or work as independent financial advisors.

If you are preparing for the CLU exam, you may also benefit from reviewing material for other professional designations, such as the CU practice test, which covers foundational underwriting principles that overlap with several CLU topics.

Candidates with a background in financial planning and accounting can sharpen their analytical skills by working through the CAIA practice test, which tests knowledge of alternative investments and portfolio management relevant to advanced insurance planning.

Pros and Cons at a Glance

Sample CLU - Chartered Life Underwriter Practice Questions

Try these questions from our free CLU - Chartered Life Underwriter practice tests. The correct answer and an explanation follow each question.

1. When calculating the human life value approach to life insurance needs, which factor is NOT typically included?

   • A. Future earnings of the insured
   • B. Personal consumption expenses of the insured
   • C. Investment portfolio balance of the surviving spouse
   • D. Years until the insured's retirement

Answer: C. Investment portfolio balance of the surviving spouse

The human life value approach focuses on the present value of future earnings minus personal consumption, not the surviving spouse's existing assets.

Answer: B. The employee

Under the collateral assignment method of a split-dollar plan, the employee is the owner of the life insurance policy. The employee assigns an interest in the policy's cash value and/or death benefit to the employer as collateral to secure the employer's premium payments, which are treated as loans. This contrasts with the endorsement method, where the employer owns the policy.

Answer: C. Economatic policy

The economatic policy uses dividends to purchase one-year term insurance, keeping the total death benefit constant as the whole life base grows, all at a level premium.

Answer: C. She can convert to an individual permanent policy for an amount up to the group coverage amount without proving insurability.

The group life conversion privilege allows a departing employee to convert their group coverage to an individual permanent life insurance policy (e.g., whole life) without providing evidence of insurability. The conversion must typically be done within 31 days of termination, and the amount of coverage cannot exceed the amount the employee had under the group plan.

Take the full CLU - Chartered Life Underwriter practice test