Colonial Penn Life Insurance Review for 2020

Colonial Penn Review

If you watch any television at all, it’s likely that you’ve seen Jeopardy host, Alex Trebek, talking about guaranteed acceptance insurance from Colonial Penn Life Insurance Company.

Colonial Penn specializes in offering and providing guaranteed acceptance life insurance for seniors age 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 has much to offer.  

 

Colonial Penn Life Insurance Policies

 

Colonial Penn has quite a selection of life insurance policies to choose from.  We have compiled a list here and will hit the pros and cons of Colonial Penn Life Insurance Company in our review.

  • Guaranteed Acceptance Life Insurance
  • Living Insurance | Permanent Whole Life Insurance (New in 2019)
  • Living Insurance | Renewable Term Life Insurance (New in 2019)
  • Permanent Whole Life Insurance
  • Renewable Term Life Insurance

 

Guaranteed Acceptance Life Insurance from Colonial Penn

 

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 insure anyone between the ages of 50 to 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 consumer’s emotions.

There have been complaints alleged against the 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 2 years, a benefit of the total amount of premiums paid plus 7% compounded annually will be paid to the beneficiary.

Other companies like AIGGerber  or Mutual of Omaha that offer guaranteed acceptance insurance with the 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 2 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 uses an unusual method of pricing for its guaranteed acceptance insurance.

The pricing for coverage is based on unit price and the amount of insurance in a unit is based on the age and gender of the applicant.

The pricing method is rather simple in terms of calculating life insurance rates since the risk profile determines the death benefit of a unit and all units are priced at $9.95 per unit.

With most life insurance policies, Colonial Penn basis the rates on age and sex.  The younger your age, the lower the cost of life insurance.  Female insureds will also experience lower rates as women tend to live longer than men.

So how much is a unit of Colonial Penn? 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 $1,676 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 eight. Her death benefit after the two-year waiting period would be $13,408 with a monthly premium of $79.60.

Mr. Jones on the other hand is 60 years old male and 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 8 units of coverage for $9.95 per unit, but the units are only equal to $1,214.  The 8 units of coverage only result in a total face amount of  $9712.

 

 

 

 

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, there are some benefits that come with the Colonial Penn Guaranteed Acceptance policy:

  • Lifetime insurance protection – Your guaranteed acceptance whole life policy is 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 and 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 Guaranteed Acceptance 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 $13,808 policy from $79.60 per month from Colonial Penn: 

Colonial Penn LifeAIG Life
$79.60$64.81

 Since Mrs. Jones is in average health. she would likely qualify for a level benefit policy where the rates are much lower and there is no waiting period. 

Colonial PennMutual of Omaha
$79.60$42.00

It is important to consider that if Mrs. Jones would have qualified for a level benefit policy, her monthly payment would have been half of the Colonial Penn payment and she could have bought a much higher death benefit if she only knew to shop around for competitive rates.

 

Colonial Penn Living Insurance Policies

Living insurance from Colonial Penn is new in 2019.  The Living Insurance policies include the following:

  • Living Insurance Permanent Whole Life Insurance
  • Living Insurance Renewable Term Life Insurance

We see these policy offerings as an upgrade to Colonial Penn policies that are currently still available.  These Living Insurance policies continue to offer a simplified underwriting process with no medical exams but have added a new optional accelerated benefit feature.   

Living Insurance policies will continue to pay a death benefit to the selected beneficiary.  The new features come in where the insured can elect an optional insurance benefit that allows the insured to access up to 50% of the death benefit as an early payout if diagnosed with a chronic illness, terminal illness, heart attack, stroke or cancer.

 

Colonial Penn Living Insurance Whole Life Insurance

 

Living insurance whole life is not a guaranteed acceptance policy but does not require a medical exam.  There are medical questions on the life insurance application that will determine if the insured is eligible.

Living insurance whole life is currently being offered to applicants age 40 to 75 in all states excluding California, Montana, New York and the Virgin Islands.

Living Insurance whole life benefits

  • Coverage Duration – Since this is a permanent policy, coverage is guaranteed for lifetime.
  • Benefit Amount – The maximum benefit for the base life insurance policy is $50,000
  • Cash Value – Colonial Penn whole life insurance starts building cash value after year one and allow you to borrow against this cash value if needed.
  • Premiums – Just like other companies, Colonial Penn bases the rates on gender and age when the policy is purchased.  These rates are guaranteed never to increase for the entire policy duration.
  • Payments – Payments can be made in monthly, quarterly, every 6 months or annually.

 

Living Insurance Renewable Term Life Insurance

 

Living insurance renewable term life insurance is available to applicants age 18 to 75.  (The Chronic Illness rider is only available ages 18 to 64)  The policy is renewable up to age 90. 

Since this is a simplified issue policy there is no medical exam but you will have to answer health questions on the application to determine your eligibility.  

Living insurance term is available in all states except CA, MT, NY and Virgin Islands.

 

Living Insurance Renewable Term life benefits

  • No medical exams needed – A health questionnaire will be used to determine if you qualify for life insurance.
  • Coverage Duration – Living insurance is renewable up to age 90.  Keep in mind that rates increase as you get older.
  • Coverage amounts – Life insurance coverage can be purchased in increments of $10,000 with the max being $50,000.
  • Premium options – Premiums can be paid monthly, quarterly, 6 months or annually.

 

Both the living insurance whole life and renewable term offer an early payout option in addition to the base life insurance coverage.

 

Colonial Penn’s Financial Ratings and Consumer Reviews

Rating ServiceRating
A.M. BestA-
FitchBBB+
Standard & Poor’sBBB+

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?

 

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.

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 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.

 

Colonial Penn Conclusion

 

Colonial Penn certainly has a fit in the life insurance marketplace.  We do feel that their pricing is 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’s probably never a good idea to purchase life insurance without guidance from an experienced and reputable independent agent.

Independent insurance agents represent multiple insurance companies that have multiple insurance products so it’s more likely that you’ll get more value for your dollar.

Insurance agents do not charge a fee for the service they provide since they are paid directly by the insurer. Most agents will attempt to develop a long-term relationship with their clients and will stay in touch to help you make necessary changes to your insurance coverage to accommodate life events that typically happen to everyone.

We are Here for Your Needs
For more information about guaranteed issue life insurance, please call us at (800) 712-8519 during normal business hours or contact us through our website and we’ll be happy to discuss it.

Colonial Penn FAQs

What kind of life insurance does Colonial Penn have?

Colonial Penn Life Insurance

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?

application denied

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?

Roth IRA

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?

life insurance at 70

We offer a very simple tool for online life insurance rate comparisons with over 40 life insurance companies.
Compare rates now.