The ABCs of life insurance pros
By Prakash Gandhi • Bankrate.com

Shopping for a good life insurance agent but confused about the alphabet-soup that follows their names on business cards? It's not jabberwocky -- they're abbreviations for professional designations that could be a big help in choosing the agent right for you.

Here's a rundown on some of the more popular ones:

CLU: Chartered Life Underwriter -- a professional adviser in all areas of business and family financial security encompassed by life insurance. To get a CLU designation from the accrediting institution, the American College in Bryn Mawr, Pa., an individual must successfully complete a comprehensive course of study and show competence by passing a series of 10 college-level exams in several subject areas including life insurance, pensions, taxation, finance, economics and business and estate planning. Strict ethical and experience requirements must also be met. As a result, it usually takes candidates five years to become a CLU.

LUTCF: Life Underwriter Training Council Fellow is the designation given to those who meet or exceed the tough qualification standards determined by the two joint sponsors -- The American College and the National Association of Insurance and Financial Advisors (NAIFA), formerly the National Association of Life Underwriters (NALU). This designation shows a strong commitment to NAIFA's code of ethics and establishes an agent's credentials in dealing with other financial professionals. It also clearly marks the agent's long-term commitment to professional development and growth. To satisfy the educational requirements for the LUTCF credential, students must successfully complete five courses. Two of these classes must be either in the personal insurance series or the business insurance series.

ChFC: Chartered Financial Consultant. Agents who are also financial planners may have other designations such as Chartered Financial Consultant, a professional in life insurance and financial planning. To display this designation, an individual must successfully complete a broad program covering several financial-services-related subjects. The program courses help to teach the individual about planning in the tax, insurance, business, retirement and investment fields.

To receive this designation, individuals must meet specific experience requirements and ethical standards and agree to comply with The American College Code of Ethics and Procedures.

AEP: Accredited Estate Planner. The AEP is awarded by the National Association of Estate Planners & Councils to professional estate planners, attorneys, CLUs, ChFCs and others who meet certain qualification requirements and pass two graduate level courses administered by The American College.

CFP: Certified Financial Planner. Introduced in 1972, the CFP has become a widely recognized financial planning credential among consumers. The right to use the designation goes to individuals who have met its rigorous educational standards and have agreed to the CFP Board Code of Ethics and Professional Responsibility.

FLMI: Fellow Life Management Institute was established in 1932 and is administered by the Life Office Management Association. To earn this designation, students must complete 10 courses which provide a solid foundation of knowledge in life and health insurance.

Before choosing an agent, consumers should also learn about membership in a professional association, such as the National Association of Insurance and Financial Advisors (NAIFA), which provides educational seminars and helps update agents on trends.

-- Posted: July 28, 2004