What you need to know about Colonial Penn:
Colonial Penn Life Insurance typically markets to the senior market using Alex Trebek as their national spokesman in print and TV advertising.
As a sister company to Bankers Life and Casualty Company, CNO Financial owns Colonial Penn wholly as a subsidiary. Also, in the state of New York, Bankers Conseco Life Insurance underwrites all of Colonial Penn’s life insurance offerings.
Before you make a decision about going with one of their policies, you should learn a bit more about what Colonial Penn is actually offering.
The three types of policies Colonial Penn offers:
- Guaranteed Acceptance Life insurance
- Renewable Term Life Insurance
- Permanent Whole Life Insurance
Below is a more comprehensive breakdown of each policy type:
Guaranteed Acceptance Life Insurance
- Available for ages 50-85
- No medical exam, but still requires answers to health questions
- They can’t cancel your coverage
- Graded benefits for the first two years
- Locked in premiums
- Maximum benefit of $20,000
As with any guaranteed issue policy, insured’s run the issue of outliving their policy. To clarify, here’s a helpful formula to consider:
Death Benefit / (Monthly premium x 12) = How Many Years Until You Outlive Your Policy
Alongside that consideration, the benefit of this policy is also very low compared to others. Moreover, the graded death benefits mean that only a portion of the benefit will pay out if the insured dies in the first two years of their policy. In addition to the possibility of outliving your policy, these considerations should give you plenty to think about in terms of their guaranteed acceptance policy.
Renewable Term Life Insurance
- Available for ages 18-75
- No medical exam
- Builds a cash value component
- Rates increase as insureds get older, based on specific age brackets
- Guaranteed renewable until age 90
- Up to $50,000 of coverage available
- Coverage is not available in Maine, Montana, New York, or Vermont
What’s notable here is that even though this policy offers the added convenience of no medical exam, it has some issues. Specifically, the $50,000 coverage limit is very low compared to many other options that are available. In addition to the spotty availability based on your state, you may be better served looking at other term offerings.
Permanent Whole Life Insurance
- Available for ages 40-75
- No medical exam
- Builds a cash value component
- Premiums based on health and age when the policy starts
- Maximum benefit of $50,000
- Coverage is not available in Maine or Vermont
Similar to both the term and permanent policies, the maximum benefit here is a lot lower than comparably priced policies. Moreover, the policy also has variable premiums depending on your health when you apply.
Colonial Penn Life Insurance Pricing
Colonial Penn products for seniors are priced HIGHER than the similar products offered by competitors, as demonstrated below:
Alternatives to Colonial Penn Life Insurance:
The following example is for $5,000 in Guaranteed Issue coverage for non-smoking 65-year-old male in California.
|Level Premium (fixed premium)||Yes||Yes||Yes|
|Maximum Benefit Without Health Questions||$7,040||$25,000||$25,000|
|Premium||$56.53 per month||$44.78 per month||$44.81 per month|
|Percent Savings||21% savings||21% savings|
Colonial Penn Insurance Review
Colonial Penn Life Insurance does have a few blemishes regarding overall customer satisfaction. To clarify, Colonial Penn has had 42 complaints filed against the company in 2017 per NAIC, which is higher than average for a life insurance company. It’s worth noting, most of these complaints were surrounding premium refunds regarding their Guaranteed Issue policies. Click on the logos below to read more reviews on the company.
Who Is Colonial Penn Life Insurance Best For?
Based on customer reviews, pricing, and underwriting practices Colonial Penn is best for customers who cannot get guaranteed acceptance life insurance from any other life insurance company.
Many other companies like Gerber, AIG, and Mutual of Omaha offer equal or better quality guaranteed issue and final expense products at prices that are up to 33% less than Colonial Penn. In addition, the maximum benefits on their term and whole life offerings are significantly lower than many competitors as well.
As always, we highly encourage all customers to get quotes from other companies prior to purchasing any form of insurance. That is to say, prospective insureds will likely find more coverage at a better premium if they shop around.
If you would like to shop around more, True Blue Life Insurance has helpful agents who are ready to help find you the best life insurance coverage. You can review the offerings we have listed on our final expense insurance page here. Instead, if you’d like to reach us directly, give us a call at (866) 816-2100.