CLU Study Guide 2026
Everything you need to pass the CLU exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 CLU Exam Format at a Glance
📚 CLU Topics to Study (43)
✍️ Sample CLU Questions & Answers
1. Which life insurance concept describes the present value of future premiums expected to be paid, subtracted from the present value of future benefits?
The policy reserve (legal reserve) equals the present value of future benefits minus the present value of future net premiums, representing the insurer's liability for each in-force policy.
2. Under the incontestability clause, after what period can an insurer generally NOT contest a life insurance policy for misrepresentation?
Most states require that life insurance policies become incontestable after 2 years, meaning the insurer cannot void the policy for misrepresentation after that period, except in cases of fraud.
3. What is the primary advantage of a Roth conversion ladder for early retirement planning?
Each Roth conversion becomes penalty-free after its own 5-year holding period, allowing early retirees to access funds before age 59½.
4. A 'transfer for value' rule violation causes which portion of a life insurance death benefit to become taxable?
When a policy is transferred for valuable consideration, the death benefit exceeding the buyer's investment (amount paid plus premiums paid after transfer) loses its income-tax exclusion.
5. Which of the following types of price-setting is the least common?
The following nations now conduct auctions: France, Israel, Taiwan, and the United States.
6. What is the 'sequence of returns risk' and when is it most damaging to a retirement portfolio?
Negative returns early in the distribution phase force selling more shares at depressed prices, permanently reducing the portfolio's ability to recover even if later returns are positive.