Colonial Penn: Best Life Insurance Option For Seniors?

Colonial Penn Life Insurance is a legitimate company that offers guaranteed acceptance life insurance policies to seniors aged 50-85. The company has been in business for over 60 years and is known for its simple and accessible insurance plans. Their policies do not require a medical exam, making them a good option for those with pre-existing health conditions. However, it's important to note that their coverage amounts are relatively low, with a maximum of $50,000, and their pricing structure can be confusing. Additionally, Colonial Penn has received a high volume of complaints, which may be a cause for concern. Overall, while Colonial Penn may be a suitable option for some seniors, it's important to carefully review their policies and compare them with other insurance providers to ensure you're getting the best coverage for your needs.

Pros and cons of Colonial Penn Life Insurance

Pros of Colonial Penn Life Insurance:

• Offers guaranteed acceptance life insurance without medical exams, health questions or rate increases.
• Rated A (Excellent) by AM Best, indicating an excellent ability to meet ongoing insurance obligations.
• Offers guaranteed acceptance whole life insurance for those aged 50-85 in most states, with options starting at $9.95 a month.
• Coverage can't be cancelled as long as premiums are paid.
• Offers flexible payment options.
• Has a 30-day free cancellation period.
• Has a strong financial rating and offers coverage in all states.
• Online quotes and applications are available.
• Customer service is available in Spanish and English.

Cons of Colonial Penn Life Insurance:

• Has received a large number of complaints over the past three years, with a high NAIC National Complaint Index score.
• Coverage amounts are relatively low, with a maximum coverage amount of $50,000.
• The company's policies are very limited, offering only guaranteed acceptance whole life insurance.
• The unit system used to determine coverage amounts can be confusing.
• The full death benefit is not paid out if the insured person dies during the first two years of taking out a policy.

Who should get Colonial Penn Life Insurance?

Colonial Penn offers whole life and guaranteed issue life insurance policies for individuals age 50 or older. The company's guaranteed acceptance policy has a graded death benefit, which means that if the insured dies during the first two years of the policy, the beneficiary will receive the premiums paid plus 7% interest compounded annually. After the first two years, the full death benefit will be paid out regardless of the cause of death.

Colonial Penn's life insurance policies are aimed at helping cover end-of-life expenses and funeral costs, with low coverage amounts. The company sells units of coverage with a maximum of 25 units for its guaranteed issue policy. The amount of coverage a single unit provides depends on the policyholder's age, gender, and state of residence.

Colonial Penn's life insurance is a good option for those who:

• Are aged 50 or older
• Are looking for a guaranteed acceptance life insurance policy to help with end-of-life planning
• Have faced challenges getting insured due to health status
• Prefer a policy that does not require a medical exam or health questionnaire
• Are seeking a policy with fixed premiums and coverage that can't be cancelled

It's important to note that Colonial Penn has received a high number of complaints compared to other life insurance companies, and its coverage amounts are relatively low. Before deciding, it's recommended to compare Colonial Penn's offerings with other insurers to ensure you find the best option for your needs.

What does Colonial Penn Life Insurance cover?

Colonial Penn offers two types of permanent life insurance policies: guaranteed acceptance whole life insurance and LifeChoice whole life insurance. Both policies offer a lump-sum death benefit payout, and the policyholder can access the cash value while they are still alive.

Guaranteed Acceptance Whole Life Insurance

This policy is available to people aged 50 to 85 in most states, and applicants cannot be turned down because of their health. There are no medical exams or health questions to answer. Premiums are locked in, so your premium won’t ever increase as long as your coverage lasts, and as long as you pay your premium, your coverage can’t be canceled. The policy builds cash value after the first year of coverage, and you can borrow against that cash value.

The guaranteed acceptance policy has a two-year graded death benefit for non-accidental deaths. If the insured person dies before the two-year period ends, beneficiaries will receive the premiums paid plus 7% compounded annual interest. For death from an accidental cause during the first two years, the full face amount of the policy will be paid. The accident must occur while coverage is in force, and the death must occur within 90 days of the accident (or 180 days in Oregon and Utah). If the insured person dies after the first two years, the full face amount will be paid, regardless of the cause of death.

LifeChoice Whole Life Insurance

The LifeChoice plan is only available to New York residents. It is available to males aged 50 to 73 and females aged 50 to 75. No medical exams are required, but a short medical questionnaire is necessary to determine eligibility. Premiums are locked in for the life of the policy, and benefits are available up to $25,000. You can borrow against the plan at a guaranteed rate.

Riders and benefits of Colonial Penn Life Insurance

Colonial Penn offers two types of life insurance policies: Guaranteed Acceptance Whole Life Insurance and LifeChoice Whole Life Plan. The former is available to people aged 50 to 85 in most states, while the latter is exclusive to New York residents aged 50 to 75 (males) or 50 to 73 (females).

Colonial Penn currently offers only one rider: the Accidental Death Rider. This rider is available for whole life insurance policyholders aged 40 to 65 and provides an additional death benefit of $10,000 to $50,000 in the event of an accidental death.

Colonial Penn's whole life insurance policies also include the following benefits:

• No medical exam or health questionnaire required
• Locked-in premium rate that won't increase
• Flexible payment options
• Coverage can't be canceled as long as premiums are paid
• Policies build cash value, which can be borrowed against

Customer satisfaction and complaints

Colonial Penn has received a high volume of customer complaints, with a National Association of Insurance Commissioners (NAIC) score of 2.67, indicating a rate of complaints more than twice as high as expected in the market. The company's complaint index has improved in recent years, dropping to 7.81 in 2023, though this is still above the NAIC baseline. The majority of complaints concern delays in paying claims and poor policyholder service.

Colonial Penn's customer reviews are mixed. The company has an average rating of 4.6 out of 5 stars on its website, with some customers praising the company's "great customer service" and "knowledgeable" agents, while others criticise the company for being "deceptive" and difficult to deal with when trying to cancel a policy.

On Trustpilot, Colonial Penn has received a rating of 1.09 out of 5 stars, with many customers expressing disappointment and confusion over the company's unit system and the limited benefits provided. Similarly, Quora users have highlighted concerns about the value and terms of Colonial Penn's policies, particularly the waiting periods for benefits and the potential decrease in coverage value over time.

Frequently asked questions