Colonial Penn Life Insurance Review

Colonial Penn is one of the largest advertisers of guaranteed issue life insurance. But, are they actually worth paying more for?
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Author: Brian Greenberg CEO of True Blue Life Insurance
Last updated: June 17, 2021

What you need to know about Colonial Penn:

Colonial Penn is a life insurance company based in Pennsylvania that offers term life insurance and permanent life insurance to people 18 – 85.

Colonial Penn typically markets life insurance for seniors 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:

  1. Guaranteed Acceptance Life insurance
  2. Renewable Term Life Insurance
  3. Final Expense Whole Life Insurance

Term Life Insurance

Policy Details

  • 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

Considerations:

What’s notable here is that even though this policy offers the added convenience of no medical exam life insurance, it has some issues. Specifically, the $50,000 coverage limit is very low compared to so many other options that are available. Coupled with the spotty availability based on your state, you may be better served looking at other term offerings.

Guaranteed Acceptance Life Insurance

Policy Details:

  • 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

Considerations:

As with any guaranteed issue policy, insured’s run the issue of outliving their policy. To help remedy this 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. Plus, the graded death benefits mean that the only a portion of the benefit will pay out if the insured dies in the first two years of their policy. That coupled with the possibility of outliving your policy, give you plenty to think about in terms of this policy.

Permanent Whole Life

Policy Details:

  • 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
  • Policy is not available in Maine or Vermont

Considerations:

Similar to both the term and permanent policies, the maximum benefit here is a lot lower than comparably priced policies. Not to mention, it also has variable premiums depending on your health when you apply for the policy.

Colonial Penn Life Insurance Pricing

Colonial Penn products for seniors are priced HIGHER than the similar products offered by competitors, as demonstrated below:

Colonial Penn Life Insurance Price Comparisons

CompanyGuaranteed Acceptance Whole Life PolicyMaximum CoveragePrice Per Month

Gerber
Yes$25,000$44.78

AIG
Yes$25,000$44.81

Great Western
Yes$40,000$47.50

Colonial Penn
Yes$7,040$56.53

These prices are calculated for a 65 year old male with $5,000 in coverage.

Colonial Penn Insurance Review

Customer Satisfaction

Colonial Penn Life Insurance does have a few blemishes regarding overall customer satisfaction. Colonial Penn has had 42 complaints filed against the company in 2017 per NAIC, which is higher than average for a life insurance company. 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 can not 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. Not to mention, that 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. Prospective insured will likely find more coverage at a better premium if they shop around.

If you’d like to explore their options further, you can click here to get sample quotes from Colonial Penn.

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. Instead, if you’d like to reach us directly, give us a call at (866) 816-2100.

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About the author
Brian Greenberg author
Brian Greenberg
Founder and CEO
Brian is licensed to sell life, health, annuities, and property and casualty insurance in all 50 U.S. states. He is the author of The Salesman Who Doesn't Sell and is a member of the Million Dollar Round Table, an organization that consists of the top 1% of financial advisors worldwide.