Colonial Penn offers a range of life insurance products that combine simplified underwriting with a limited death benefit. They are best suited towards shoppers that don’t necessarily want a large payout, perhaps just enough to cover expenses associated with their passing, and would typically have trouble obtaining coverage elsewhere due to their age or medical history.
While the costs for Colonial Penn’s guaranteed acceptance insurance are on-par with those available for similar final expense products, if you are in good health or young, you should probably compare quotes from other insurers.
Colonial Penn’s term and whole life insurance products don’t require a medical exam and have a maximum death benefit of $50,000, meaning you will typically pay higher premiums and won’t be able to purchase a greater amount of coverage should your financial needs change.
- Final expense insurance
- Quick turnaround coverage
- Flexible coverage lengths
- Income replacement
- Low-cost term life insurance
- Terminally ill consumers
Colonial Penn life insurance products by type
Colonial Penn specializes in life insurance products with smaller death benefits and limited underwriting. Often referred to as final expense insurance, these products make the most sense for people who want to have coverage in place quickly. For instance, someone in poor health may want just a small payout to cover funeral expenses, a loan, or other limited financial obligations.
|Term Life Insurance
|Guaranteed Acceptance Program
|Whole Life Insurance
|Monthly Premium Range
|$12.49 – $56.46
|$9.95 – $79.60
|$29.65 – $133.24
|Changes in Premium?
|Yes, premiums increase with age
|$10,000 – $50,000
|Approx. $400 – $17,000
|$10,000 – $50,000
|Application with health questions, no medical exam
|No health questions, no medical exam
|Application with health questions, no medical
Depending on your financial needs, Colonial Penn offers three types of life insurance policy:
Sample premiums are for a 50-year-old male, with the range representing the difference between the minimum and maximum coverage offered
All of Colonial Penn’s life insurance products can be applied online and none require a medical exam, both convenient features for those that want to quickly purchase coverage. While Colonial Penn also advertises 30-day money-back guarantee, this feature isn’t unique and shouldn’t be a reason you decide to purchase from them. Most states have “free look” laws requiring insurers to provide a full refund, if requested, for 10 to 30 days after purchase.
Colonial Penn Term Life Insurance
Colonial Penn offers a 1-year level term life insurance policy, meaning you essentially start a new term each year. Their term life policy also has a limited death benefit, with the maximum value being $50,000, which can be designated to either 1 or 2 beneficiaries.
Since the policy has a 1-year term, the premiums you pay increase as you get older, typically in 5-year increments. For example, a woman that purchased $50,000 of coverage would pay:
- $35.21 per month between the ages of 41 to 45
- $45.21 per month between the ages of 46 to 50
- $56.46 per month between the ages of 51 to 55
This means that if you know that you want coverage for a longer period of time, you will pay a higher average premium with Colonial Penn than if you purchased a long term policy elsewhere (such as a 10-year or 20-year term) since your risk profile increases with age.
Besides, you can find lower prices with other insurers for significantly higher levels of coverage because Colonial Penn has a limited underwriting process with no medical exam. This raises premiums, as they are unable to verify your health status. Given these factors, if you are fairly healthy and not concerned about your ability to pass a medical exam (they’re simple and only take about 30 minutes), you can save a lot of money over time by getting a fully underwritten policy elsewhere.
Colonial Penn does not offer term life insurance in Maine, Massachusetts, Montana, New York, or Vermont. New policies are only available until age 75 but, if you already have coverage in place with Colonial Penn, you can continue to renew annually and maintain coverage until age 90.
Colonial Penn Guaranteed Acceptance Program
Colonial Penn’s Guaranteed Acceptance Program is a whole life insurance policy with a limited death benefit and is often marketed to seniors that want to reduce their family’s financial impact upon their death.
Unlike some final expense insurance products that let you choose a particular payout, Colonial Penn collects your age, gender, and location, and then assigns you a “unit” of coverage which can be purchased for $9.95 (you can purchase up to 8 units of coverage).
Since the price is fixed, the amount of coverage available per unit varies according to your risk profile. The minimum value of a unit of coverage is approximately $400 and the maximum is approximately $2,100, meaning the maximum death benefit you could select, assuming you qualified, is less than $17,000.
As an example, for a 60-year-old woman, 1 unit of coverage would provide a $1,621 death benefit. If she wanted coverage to take care of all the costs associated with her funeral (the average cost being around $10,000), she could purchase 7 units of coverage for $69.95 per month. This would offer a total death benefit to her beneficiary of $11,437 when she passed (7 multiplied by $1,621).
Since the Guaranteed Acceptance coverage is a form of whole life insurance, it accumulates a cash value that can be borrowed against at an 8% annual interest rate.
Monthly premiums are directly tied to the number of units of coverage purchased, with 1 unit equaling $9.95 per month. Since you can purchase up to 8 units, the maximum monthly premium is $79.60 (8 multiplied by $9.95/mo). Keep in mind that, if you pay annually, you receive a discount equal to one month’s premium, or an 8.3% discount for the year.
A Guaranteed Acceptance policy can only be purchased between the ages of 50 to 85, and the policy’s death benefit is limited for the first 2 years of coverage. This just means that in the case that you died during the first 2 years of coverage unless your passing was considered to be an accidental death by the insurer your beneficiaries would only receive a minor payout (the sum of your premium payments with 7% interest compounded annually).
This type of clause is regularly included by every insurer that offers guaranteed acceptance policies, as it wouldn’t be economical for them to offer such a product otherwise.
Colonial Penn Whole Life Insurance
If you are willing to answer health questions about yourself or haven’t yet reached 50, Colonial Penn offers traditional whole life insurance as an alternative to their Guaranteed Acceptance Program. Since they’re better able to assess your risk through the health questions, this policy’s death benefit can be as high as $50,000 in value, though this is still significantly lower than what is available through alternate insurers.
Colonial Penn’s whole life policy lets you choose the particular death benefit you want, meaning premiums vary based upon your risk profile. To give you a sense of the range of monthly premiums, we have pulled sample rates for the maximum and minimum coverage amounts offered:
|75 Year Old
|$10,000 Death Benefit
|$50,000 Death Benefit
These quotes are meant to be illustrative and are not binding. You may be quoted a different amount based upon your personal details.
Also, Colonial Penn does not offer whole life insurance in Maine, New York, or Vermont, and policies can only be purchased between the ages of 40 and 75.
Colonial Penn Customer Reviews & Complaints
Colonial Penn has an A-, or Excellent, rating from A.M. Best, indicating their financial strength as a life insurance company. This is also reflected in the positive feedback they receive from consumers. Many beneficiaries have experienced a quick and simple claims process once their loved ones passed.
However, Colonial Penn receives a significant number of complaints suggesting they have aggressive sales tactics targeting the elderly (some even criticizing Alex Trebek, their spokesman). Besides, many purchasers felt they purchased either the wrong product or a product whose features weren’t properly explained beforehand.
While this is true for any insurance product, if you are considering purchasing life insurance from Colonial Penn, it’s incredibly important to review all documents and materials yourself before submitting an application or purchasing coverage.