In our effort to educate our prospective insurance clients, we feel obligated to offer our Colonial Penn Life Insurance review. If you watch any television at all, you’ve likely seen Jeopardy host Alex Trebek talking about guaranteed acceptance insurance from Colonial Penn Life Insurance Company. Now, actor Jonathon Lawson is the Colonial Penn spokesperson. The message sounds good, but is Colonial Penn worth it?
The Colonial Penn program specializes in offering and providing guaranteed acceptance life insurance for seniors aged 50 to 85, in most states, who may or may not have medical issues that could prevent them from purchasing traditional life insurance.
But that is not all.
As you will read below, Colonial Penn doesn’t really have much to offer.
Colonial Penn Whole Life Insurance Policies
Colonial Penn Insurance has a limited selection of senior life insurance policies. Actually they now only have one product. Guaranteed Acceptance life insurance.
Regretfully, unlike other national insurance companies, a Colonial Penn Life Insurance rate chart is not available, so the only way you can compare the Colonial Penn program rates with other national carriers is to visit their website to obtain Colonial Penn life insurance rates.
Guaranteed Acceptance Life Insurance from Colonial Penn Insurance
Colonial Penn’s guaranteed acceptance insurance, also called guaranteed issue insurance, is whole life insurance that is traditionally marketed toward seniors because there are no health questions asked and no medical exam required.
Today, the insurance industry refers to this type of life insurance as Final Expense or Burial Insurance.
The Colonial Penn Guaranteed Acceptance Life Insurance policy goes a step further and will cover anyone between the ages of 50 and 85.
You can’t be turned down even if you are unhealthy.
It’s important to note that since Colonial Penn guaranteed acceptance life insurance requires little to no underwriting, it will usually be priced higher than traditional life insurance and should only be considered a policy of last resort.
Unfortunately, many seniors let their emotions get the best of them and call for coverage shortly after watching their television advertisements, which intentionally plays on the consumers’ emotions.
Complaints have been alleged against Colonial Penn that the guaranteed acceptance policy has a two-year waiting period. This means that if the insured dies as a result of natural causes in the first two years, a benefit of the total amount of premiums paid plus 7% compounded annually will be paid to the beneficiary.
Here is a screenshot from the Colonial Penn website where they point this out in writing:
Other companies like AIG, Gerber, or Mutual of Omaha that offer guaranteed acceptance insurance with a two-year waiting period will pay a modified death benefit that is typically the sum of all premiums paid plus 10% interest.
Additionally, if the insured dies in the first two years by accidental death, Colonial Penn will pay the full face amount. The accident must happen while the policy is in force, and the death must occur within 90 days of the accident.
Colonial Penn’s Guaranteed Acceptance Insurance Pricing
Colonial Penn’s whole life insurance uses an unusual method of pricing for its guaranteed acceptance insurance, which explains why they do not offer a Colonial Penn life insurance rate chart. The Colonial Penn program is very different than most national carriers, and is why they want you to spend time on the phone with a salesperson for every quote.
The pricing for coverage is based on unit price, so how much is a unit of Colonial Penn life insurance? And, to make things even more confusing, the amount of insurance in a unit is based on the age and gender of the applicant.
The $9.95 per unit pricing method is rather complicated.
Like most life insurance policy rates, Colonial Penn life insurance rates are based on age and sex. The younger your age, the lower the cost of life insurance. Female insureds will also get lower rates as women tend to live longer than men.
So, how much is a unit of Colonial Penn? It is not a simple answer. Here are some sample rates for the Colonial Penn Guaranteed Acceptance policy:
Mrs. Jones, a sixty-year-old woman in average health is offered a unit of coverage equal to $1,519 in coverage at the rate of $9.95 per unit. Mrs. Jones wants to get as much coverage as possible, so she purchases the maximum amount of units, which is 15 units. Her death benefit after the two-year waiting period would be $22,725, with a monthly premium of $149.25.
Mr. Jones, on the other hand is 60 years old male who has had multiple heart attacks and is a type 1 diabetic. He would normally be declined for life insurance. With Colonial Penn, he can qualify for 15 units of coverage for $9.95 per unit, but the units are only equal to $1,167. The 15 coverage units only result in a total face amount of $17,505.
Colonial Penn rates seem to be a moving target and change most years.
Benefits included with Colonial Penn Guaranteed Acceptance Insurance?
Although guaranteed acceptance life insurance is priced higher than traditional whole life insurance and has a waiting period of two years, like traditional whole life insurance, some benefits come with the Colonial Penn Guaranteed Acceptance policy:
- Lifetime insurance protection – Your guaranteed acceptance whole life policy cannot be canceled for any reason except non-payment of premium.
- Lifetime Level Premiums – Once your guaranteed acceptance policy is issued, the premiums will remain the same and cannot be increased by the company. Even if you are diagnosed with a terminal illness or have to live in a nursing home, your company cannot increase your insurance rates.
- Cash Value – Just as a traditional whole life insurance policy builds cash value over time, so will your guaranteed acceptance policy. You can access that money using policy loans or withdrawals. The current loan rate to borrow money from your Colonial Penn policy is 8%.
You can also add accidental death benefit protection to your Colonial Penn Guaranteed Acceptance. The maximum amount you can add is $10,000 and will cost $2.00 per month.
Colonial Penn Life Insurance Rates VS Competition
As we mentioned earlier, a guaranteed acceptance or guaranteed issue policy should only be purchased as a last resort. These policies are for applicants who have severe or multiple health issues and cannot qualify for traditional life insurance that has a level death benefit and first-day coverage.
Here are some comparisons using Mrs. Jones, the 60-year-old woman in average health who is purchasing a $9,336 policy for $79.60 per month from Colonial Penn:
| Colonial Penn Life | AIG Life |
| $79.60 | $50.49 |
Since Mrs. Jones is in average health. she would likely qualify for a level benefit policy where the rates are much lower than the Colonial Penn rates, and there is no waiting period.
| Colonial Penn | Mutual of Omaha |
| $79.60 | $30.90 |
It is important to consider that if Mrs. Jones would have qualified for a level benefit policy, her monthly payment would have been less than half of the Colonial Penn rates, and she could have bought a much higher death benefit if she only knew to shop around for competitive rates.
Colonial Penn’s Financial Ratings and Consumer Reviews
| Rating Service | Rating |
| A.M. Best | A- |
| Fitch | BBB+ |
| Standard & Poor’s | BBB+ |
Although most independent insurance agents represent many insurance companies that offer guaranteed acceptance life insurance, the agents will always try and place the client in a level benefit policy that provides first-day coverage and only offer the guaranteed acceptance policy if the applicant could not qualify for the level benefit policy.
Where is Colonial Penn Life Insurance Company located?
To be clear, we are not Colonial Penn, this is just a review of their policy. If you need help with your Colonial Penn policy, you can find them at this address:
Colonial Penn Life Insurance Company
399 Market Street • Philadelphia, PA 19181
877-877-0490 and website address is www.colonialpenn.com
What are Customers Saying about Colonial Penn Whole Life Insurance?
No insurance company is immune to consumer complaints, especially since you can go online and voice an opinion about a service or claim issue. Since the information is out there, consumers should check out their company BEFORE buying a policy rather than after. There are plenty of Colonial Penn life insurance reviews on the internet and we found more negative than positive but to be fair, we did not read them all. You can also find Colonial Penn reviews that have been posted by other independent agents.
It’s important to note, however, that one of the first things a terminated employee might do is go online and write a bogus complaint about their former employer. For this reason, it’s probably a good idea to ignore complaints that you find hard to believe.
The Better Business Bureau is one of the better places to look for Colonial Penn reviews and complaints because in most cases, they will list the response from the company.
We found that Colonial Penn had 82 complaints listed on their BBB page and the majority of them were about problems with a product or service. Considering the number of policies Colonial Penn has likely sold over the years, 82 complaints do not seem to be out of the ordinary.
Pros and Cons of Colonial Penn Insurance
Colonial Penn certainly has a fit in the life insurance marketplace. We do feel that Colonial Penn life insurance rates are a bit on the high side. With all of the options currently available, you really need to shop around for a competitively-priced policy.
It is our opinion that you should shop around for the best coverage. Some great comparison companies to Colonial Penn are:
- Royal Neighbors
- Mutual of Omaha
- United Home Life
- American Amicable
Colonial Penn Insurance FAQs
What kind of life insurance does Colonial Penn have?
Colonial Penn life insurance company offers guaranteed acceptance, permanent whole life and renewable term to age 90. New for 2019, Colonial Penn offers living insurance that offers an early payout for certain illnesses such as heart attack, cancer and strokes.
Can I be turned down for Colonial Penn Life Insurance?
Colonial Penn offers a guaranteed acceptance policy for all applicants age 50 to 85 with no medical questions – you can’t be turned down.
How much does Colonial Penn life insurance cost?
Colonial Penn guaranteed acceptance offers life insurance in units priced at $9.95 per unit. An applicant can purchase up to 8 units of coverage. The amount of the unit will be based on the age and gender of the applicant.
How can I compare life insurance rates?
We offer a very simple tool for online life insurance rate comparisons with over 40 life insurance companies.
Compare rates now.
