Chartered Life Underwriter (CLU) Exam

1. Insurance Planning and Ethics • Overview of the Insurance Industry o Types of insurance companies o Role of life insurance in financial planning o Ethical standards in life insurance practice • Legal and Regulatory Environment o Key regulations and governing bodies (e.g., NAIC, state insurance commissions) o Understanding of the insurance code of ethics o Consumer protection laws and practices • Ethical Decision Making o Guidelines for professional conduct o Conflicts of interest in life insurance o Fair dealing and full disclosure • Sales Practices and Procedures o Client needs analysis o Product suitability and compliance o Ethical selling techniques 2. Life Insurance Basics • Types of Life Insurance Policies o Term Life Insurance o Whole Life Insurance o Universal Life Insurance o Variable Life Insurance o Indexed Life Insurance o Combination Policies (e.g., term riders, whole life) • Policy Provisions, Options, and Riders o Common policy provisions (e.g., grace period, incontestability, suicide clause) o Riders and endorsements (e.g., accidental death, waiver of premium) • Underwriting and Risk Selection o Factors influencing underwriting decisions o Medical underwriting vs. non-medical underwriting o The role of the insurance company’s underwriters 3. Financial Planning and Needs Analysis • Life Insurance as Part of Financial Planning o Insurance needs analysis: understanding the client’s life stage o Quantifying life insurance requirements (e.g., income replacement, debt repayment, education funding) • Estate Planning and Life Insurance o The role of life insurance in estate planning o Tax implications of life insurance in estate planning o Planning for beneficiaries and inheritance • Retirement Planning o How life insurance fits into retirement planning o Use of life insurance in funding retirement income • Business Insurance Planning o Key person insurance o Buy-sell agreements and funding with life insurance o Executive bonus plans and deferred compensation 4. Advanced Life Insurance Products • Universal Life Insurance o Characteristics and flexibility of universal life policies o Interest rates and premium payments o Cash value accumulation and withdrawals • Variable Life Insurance o Investment options and risk considerations o Premium flexibility and death benefit options o Tax treatment of variable life insurance products • Indexed Life Insurance o How indexed life policies work (e.g., linking to a stock market index) o Pros and cons of indexed life insurance • Long-Term Care Insurance o Integration of long-term care riders with life insurance o Hybrid policies and their benefits o Legal and regulatory considerations in long-term care 5. Insurance Company Operations and Financial Statements • Overview of Life Insurance Company Operations o Structure of life insurance companies o The role of actuaries, underwriters, and agents o Overview of life insurance operations and distribution channels • Understanding Life Insurance Company Financials o Financial statements: balance sheet, income statement, and cash flow o Regulatory reporting and solvency requirements o Profitability and pricing strategies in life insurance • Risk Management for Life Insurers o Life insurance product pricing models o Reinsurance and its role in risk management o Investment strategies for life insurance companies 6. Estate and Gift Taxation • Basic Estate Tax Rules o Estate tax exemption and thresholds o Filing requirements for estates o Taxable estate and deductions • Gift Taxation o Annual exclusions and gift tax exemptions o Lifetime gift tax exemptions o Tax treatment of gifts under the estate tax rules • Estate Tax Planning Strategies o Charitable giving and its impact on estate tax o Life insurance as an estate tax planning tool o Use of trusts in estate tax planning (e.g., irrevocable life insurance trust) 7. Employee Benefits and Group Insurance • Group Life Insurance o Types of group life insurance plans (e.g., term, permanent) o Funding and premium considerations o Regulatory requirements for group life policies • Employer-Sponsored Retirement Plans o Qualified vs. non-qualified plans o Use of life insurance in funding retirement benefits • Health Benefits and Life Insurance o Integration of life insurance with health benefits o Impact of health care reform on employee benefits 8. Life Insurance Policyholders and Beneficiaries • Policyholder Rights and Responsibilities o Premium payments, grace periods, and lapses o Policy dividends and cash value options o Surrendering a life insurance policy • Beneficiaries and Their Rights o Designating beneficiaries: types and impact on policy o Contestability and beneficiary challenges o Policy claims process 9. Taxation of Life Insurance • Taxation of Life Insurance Products o Tax treatment of policy proceeds o Tax advantages of life insurance (e.g., death benefit exclusion) o Cash value accumulation and taxation • Premium Payments and Deductions o Premium deductions for businesses o Tax implications for policyholders and businesses • Tax-Qualified and Non-Tax Qualified Policies o Overview of tax-qualified policies (e.g., retirement policies) o Non-tax-qualified policies and their tax treatment 10. Retirement and Post-Retirement Planning • Retirement Income Planning and Life Insurance o How life insurance can be used to supplement retirement income o Annuities in combination with life insurance • Tax-Efficient Retirement Planning o Tax implications of retirement withdrawals and distributions o Use of tax-deferred growth through life insurance in retirement • Post-Retirement Insurance Planning o Long-term care insurance options and the role of life insurance in post-retirement planning 11. Life Underwriting and Risk Management • Life Insurance Underwriting Process o Risk assessment factors: age, health, lifestyle, occupation o Medical exams, questionnaires, and risk classification o Understanding underwriting decisions and their impact on policyholders • Risk Management for the Policyholder o Evaluating the amount and type of coverage needed o Managing risk exposure through diversification of insurance products 12. Claims, Settlements, and Payments • Claims Process in Life Insurance o Understanding the claim submission and approval process o Contestability periods and beneficiary disputes • Settlements and Payment Options o Types of settlements (e.g., lump sum, annuity payments) o Impact of the settlement option on beneficiaries • Accelerated Benefits and Living Benefits o Use of life insurance for chronic illness or terminal illness o Long-term care rider and accelerated death benefit options