Colonial Penn Insurance: An Overview

Is this Colonial Penn right for you?

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Colonial Penn is a life insurance company perhaps best known for its TV commercials starring Alex Trebek. It was also one of the first life insurance companies to issue “Guaranteed Acceptance Life Insurance” plans for people over 50, which it did in 1968. It now offers life insurance products for customers between 18 and 85 years of age. Here’s what to know before deciding if Colonial Penn is the right life insurance company for you.

Is Colonial Penn Right for You?

Colonial Penn may be a good fit if you’re looking for $50,000 or less in life insurance to cover final expenses, like funeral costs, or if you are between the ages of 50 and 85 and won’t need to access full death benefits for at least two years (in most states). It may also be a good fit if you’re looking for a life insurance policy that doesn’t require a medical exam.

Colonial Penn may not be the best choice if you want a life insurance policy to provide over $50,000 in benefits. 

Where Is Colonial Penn Offered?

Colonial Penn is available in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. However plan features and restrictions may differ by state. For instance, in New York, Colonial Penn is underwritten by Bankers Conseco Life Insurance Company. Additionally, its renewable term life insurance plan is not offered in Montana, New York, or the U.S. Virgin Islands.

Pros and Cons of Colonial Penn Insurance

Pros

  • No medical exam required

  • Potential ability to borrow against cash value

  • Guaranteed rate

Cons

  • $50,000 maximum insurance payout

  • Two-year limited benefit period

Colonial Penn Pros Explained

  • No medical exam required: While many life insurance plans ask health questions or require medical exams, the Guaranteed Acceptance whole life insurance option doesn’t—and Colonial Penn guarantees you’ll be approved.
  • Potential ability to borrow against cash value: Some Colonial Penn insurance plans may allow you to borrow money from your life insurance policy. This includes both term and whole life insurance policies.
  • Guaranteed rate: For the Guaranteed Acceptance plan, your monthly premium stays the same over the policy life.

Colonial Penn Cons Explained

  • $50,000 maximum insurance payout: The maximum insurance death benefit is $50,000, and some policies have lower or varying maximums. Typically, these lower payouts are only sufficient for limited final expenses.
  • Two-year limited benefit period: For the Guaranteed Acceptance whole life insurance plan, you must wait at least two years before you can make a claim for full benefits for non-accidental deaths. A percentage of the plan’s face value may be paid for non-accidental deaths, with the full face amount paid for accidental deaths. This may vary by state.

If you’re in good health, you may pay less for a life insurance policy that requires a medical exam since it uses your specific health information to decide the cost of premium and underwriting. Ask about the cost difference for insurance with a medical exam versus one without. 

Colonial Penn Products and Notable Offerings

Colonial Penn specializes in life insurance, but not all types are available in all states. It offers coverage starting at just $9.95 per month, which may be more affordable than other insurance plans, though it’s always smart to compare.

  • Guaranteed Acceptance life insurance: Age to apply varies by state 
  • Permanent whole life insurance: Must be between 40 and 75 years of age to apply
  • Renewable term life insurance: Must be between 18 and 75 years of age to apply for up to $50,000 of coverage, renewable until age 90, and premium rates increase with age
  • LifeChoice whole life insurance: Exclusive to New York residents, must be between 50 and 75 years of age to apply
  • Living insurance rider: For an additional premium, you can add one rider per health issue type to a term or whole life insurance policy, so that you have the option to collect up to 50% of your death benefit upon diagnosis of cancer, chronic disease, stroke or heart attack, or terminal illness

If you’re not satisfied with your plan, Colonial Penn offers a 30-day money back guarantee.

What Discounts Are Offered?

Colonial Penn discloses very few discounts on its website. However, it does offer a prepay discount on some of its insurance plans. Simply pay annually and save up to one month’s worth on your premium.

If you’re younger or in good health, consider investigating other insurance options such as critical illness insurance, long term care insurance, or other combined policy options with a professional health or life insurance agent or financial planner. 

Colonial Penn Insurance Ratings and Reviews

Colonial Penn Life Insurance was given a Financial Strength Rating of “A- (Excellent)” by A.M. Best. It is not accredited by the Better Business Bureau (BBB), and more than 80 complaints have been filed with the BBB.

The Bottom Line on Colonial Penn

Colonial Penn has a strong financial strength rating, has been around for over 60 years, and offers life insurance with no medical exam for people up to age 75. If you’re shopping for insurance, you may get a lower price if you’re younger, in good health, or can pass a medical exam. Whenever you’re looking to compare life insurance options, consider the help of a licensed life insurance broker or agent to help you review policies and quotes.

Article Sources

  1. Colonial Penn. "About Us." Accessed Jan. 14, 2020.

  2. Colonial Penn. "Colonial Penn." Accessed Jan. 14, 2020.

  3. Colonial Penn. "Guaranteed Acceptance." Accessed Jan. 14, 2020.

  4. Colonial Penn. "Term Life," Accessed Jan. 14, 2020.

  5. Colonial Penn. "LifeChoice Whole Life Insurance." Accessed Jan. 14, 2020.

  6. Colonial Penn. "Notices and Disclosures." Accessed Jan. 14, 2020.

  7. Colonial Penn. "Disclosure for Accelerated Death Benefit Riders." Accessed Jan. 14, 2020.

  8. A.M. Best. "AM Best Affirms Credit Ratings of CNO Financial Group, Inc. and Its Life/Health Subsidiaries." Accessed Jan. 14, 2020.

  9. Better Business Bureau. "Colonial Penn Life Insurance Company." Accessed Jan. 14, 2020.