Colonial Penn Life Insurance Review

Policies you can access early if you become sick or disabled

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Colonial Penn

Colonial Penn

overall rating
3.0

You should be aware that not all life insurance companies are currently accepting insurance applications due to COVID-19 pandemic. We'll update our reviews as we find more information about what companies are currently accepting new applications.

Our Take

Colonial Penn Life offers an insurance option for those who might find it difficult to get life insurance from other carriers. The guaranteed issuance does come with death benefit limitations. Colonial Penn Life is a good option for people who want to purchase small-dollar life insurance policies without a medical exam.

  • Pros and Cons
  • Key Takeaways
  • Specifications
Pros and Cons
Pros
  • Insurance available without medical exams or questions

  • Don’t worry about being rejected—acceptance is guaranteed

  • Living insurance that makes benefits available while you’re still alive

  • 30-day risk-free try-it-on-period

  • Backed by independently-rated holding company, CNO Financial

  • Renewable term policies with guaranteed coverage up to age 90

Cons
  • Coverage provided without a medical exam may be more expensive

  • Coverage limited to $50,000

Key Takeaways
  • Guarantee yourself a life insurance policy to cover final expenses. 
  • Colonial Penn makes life insurance affordable with low premiums. 
  • A generous 30-day free look period lets you review the policy with no obligation. 
  • Bypass the need for a medical exam when buying permanent life insurance.  
  • There is a limited selection of riders for policyholders to choose from, limiting customization for policies.
Specifications
  • Year Founded 1968
  • Average Cost Per Month $24 to $29 per month for 35-year-old customers who want $50,000 in term life coverage
  • Kinds of Plans Guaranteed acceptance, whole life, renewable term life, living insurance
  • Number of Plans Three
  • Payment plan options Monthly, quarterly, annually, semi-annually, online, credit cards accepted
  • Official Website https://colonialpenn.com/

Colonial Penn Life Insurance was founded in 1968 and is owned by financial giant CNO. They're known for specializing in providing core types of life insurance without medical exams, which is a very attractive benefit for those shopping around for a plan. But what else should you know about Colonial Penn Life Insurance? We reviewed the company's offerings, pricing, financial stability, and customer satisfaction, and more to see how they really stack up. See our full findings below.

Company Overview: Part of a Powerhouse Family of Financial Companies 

Colonial Penn was founded in 1968 and is headquartered in Philadelphia, Pennsylvania. The company is owned by CNO Financial Group, the same firm that owns several other insurances and financial companies including Bankers Life, Washington National Insurance, and Bankers Conseco. Colonial Penn has over 760,000 life insurance policies and $3.5 billion of life insurance in force.

Available Plans: A Bare-Bones Line-up

Colonial Penn only offers three different types of life insurance. While they don’t offer variable universal or indexed universal options available with a lot of other providers, Colonial Penn does offer term, whole, and guaranteed life that don’t require medical exams. 

Colonial Penn Life offers the following policies:

Guaranteed Acceptance Life Insurance

Colonial Penn’s guaranteed-acceptance life policy is available for customers age 50 to 85 in most states. The policy doesn’t require any medical exam or health questions. Guaranteed life policies offer permanent coverage for final expenses and pre-set premiums ranging from $10 to $80 per month that won’t change over time. The benefits built into policies vary based on age, gender, and location.

Permanent Whole Life Insurance 

Colonial Penn offers whole life coverage up to $50,000 for customers age 40 to 75 that remain in force as long as you pay your premiums. Policies don’t require a medical exam—but do have questions on applications that will determine eligibility—and premiums will never go up.

Renewable Term Life Insurance 

Renewable term insurance is available through Colonial Penn for customers age 18 to 75. These policies also don’t have medical exams but do have questions on the application that will determine eligibility. Term life policies through Colonial Penn offer up to $50,000 in coverage and last for five years and can be renewed for five additional years. However, policies can’t be renewed after policyholders reach age 90.

Some policies have what is referred to as Living Insurance®. This is a two-part plan that extends the value of your life insurance, so you can collect up to 50% of it early in the policy term if you become seriously ill.

Available Riders: Not Much of a Selection

Riders, sometimes called endorsements, are additions you can elect on some policies to help customize your insurance. Some life insurance policies available through Colonial Penn offer optional riders that can help policyholders get more value from their policies. Colonial Penn’s most significant rider is an accelerated death benefit rider to make policies “living insurance.” Not all riders are available for all policy types.

Our Expert Dock Says

Living Insurance® is a two-part plan that extends the value of your life insurance, so you can collect up to 50% of it early if you become seriously ill.

The two most common riders Colonial Penn offers include:

Accelerated Death Benefit Rider 

An accelerated death benefit rider offers policyholders an early payout option that grants access to a portion of policy death benefits while the policyholder is still alive if they become disabled or are diagnosed with a chronic illness. This payout option is subject to an administrative fee and repayment of a percentage of any loans and interest. 

However, it makes a policy into so-called “living insurance” and grants policyholders greater access to stated death benefits. Living Insurance is available online, by phone, or by mail for term life policyholders age 18 to 75 and age 40 to 75 for a whole life.

Our Expert Dock Says

An early payout option is an accelerated death benefit rider that allows you to receive part of your policy’s benefit if you’re diagnosed with a covered illness. This payout is subject to an administrative fee and repayment of a percentage of any policy loans and loan interest.

Accidental Death Rider

Holders of certain Colonial Life policies have the ability to purchase accidental death riders that increases payouts if an insured dies as the result of an accident instead of an illness. This rider provides additional coverage up to $50,000.

Customer Service: Easy Live Chat & Dedicated Reps

Colonial Life customers who need assistance can contact the company by calling 1-800-523-9100 weekdays between 8:30 a.m. and 5:30 p.m. Eastern (New York residents call 1-800-323-4542). Colonial Life also offers live chat through its website.

Customer Satisfaction: Good Ratings & Mixed Reviews

Colonial Penn has an A+ rating from the BBB but also has 85 complaints, which is a high amount for their size. Complaints range from denials of coverage to excessive premiums, slow processing of paper including cancellations, and unexpected cancellation of policies without warning. The company also doesn’t have great reviews online and has a high number of customer complaints.

Financial Strength: Part of a Solid Family of Companies

As a subsidiary of another company, Colonial Penn Life doesn’t have its own ratings for financial stability. However, its parent company, CNO Financial, and the other affiliated companies owned by CNO have an A- rating from AM Best.

Cancellation Policy: A Decent Free-Look Period

Customers who decide to purchase an insurance policy from Colonial Penn have a 30-day window (a “free-look period”) in which they can cancel their policy at no cost. Customers who wait longer than 30 days to cancel their policies will incur partial or full surrender charges that are deducted from the cash values of their policies when they’re canceled, along with any outstanding loans and interest due.

Price: Premiums are Low But Only Because Coverage is Limited

Because Colonial Penn’s policies are available without medical exams, they tend to be more expensive than similar coverage from other providers. 

The older you are, the less insurance you are able to buy with Colonial Penn.

Below are sample premiums for $50,000 in term life coverage. Because there are no medical exams, all policyholders are assumed to be in standard health. Those in excellent health can probably find better rates elsewhere.

Age Male Female
25 $18.96 per month $14.12 per month
35 $28.92 per month $24.12 per month
45 $45.12 per month $35.21 per month
55 $76.46 per month $56.46 per month
65 $140.12 per month $94.83 per month

Competition: Colonial Penn vs. Mutual of Omaha

Mutual of Omaha is an older insurance company than Colonial Penn and was founded in 1909. The company is a Fortune 500 company, has A+ ratings from AM Best, and ranks third overall among all life insurance companies by JD Power. Customers should choose Mutual of Omaha if they want a more financially stable company, better customer satisfaction, and reportedly better prices. In fact, Mutual of Omaha customers can reportedly purchase almost twice as much coverage from Mutual of Omaha for each dollar of premium.

Shop premiums with other guaranteed issue life insurance to see if you can get more for your money.

Final Verdict

A Great Choice for Exam-Free Coverage

Colonial Penn is a good potential option for customers who want to buy life insurance without a medical exam. However, other providers tend to offer more types of insurance, additional riders, and other benefits that Colonial Penn lacks. Other providers—Mutual of Omaha included—can also offer lower premiums for each dollar of coverage. The fact that they get complaints that deny coverage leaves us leary about making a solid recommendation for the company.



Article Sources

The Balance requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
  1. Colonial Penn's. "Whole Life." Accessed March 9, 2020

  2. Colonial Penn. "Whole Life Living Insurance." Accessed March 9, 2020.

  3. Effortless Insurance. "Colonial Penn Life Insurance Company Review." Accessed March 9, 2020.

  4. JD Power. "2019 US Life Insurance Study." Accessed March 9, 2020.

  5. Mutual of Omaha. "Term Life Insurance Quote." Accessed March 10, 2020.