Colonial Penn Insurance: Term Or Whole Life?

Colonial Penn offers guaranteed acceptance whole life insurance to customers aged 50 to 85. The company advertises simple plans and affordable rates, but its high ratio of consumer complaints makes these policies less appealing than they initially seem. The Philadelphia-based insurer is owned by CNO Financial Group and does not sell its policies through agents.

Colonial Penn's whole life insurance coverage

After the first year of coverage, the policy begins to build cash value, which can be borrowed against at a guaranteed rate. Premiums are locked in when the coverage takes effect and will not change for the duration of the policy. This type of insurance is often purchased by individuals with pre-existing conditions that prevent them from being approved for traditional life insurance policies. It is also a good option for those who want to ensure their funeral and burial costs are covered, and those concerned about medical or hospital expenses.

Colonial Penn's whole life insurance includes a two-year graded death benefit for non-accidental deaths. If the insured person dies within the first two years of the policy, beneficiaries will receive the premiums paid, plus 7% compounded annual interest. For accidental deaths during the first two years, the full face amount of the policy will be paid out, as long as the death occurs within 90 days of the accident (or 180 days in Oregon and Utah). After the first two years, the full face amount will be paid out, regardless of the cause of death.

The company's high number of customer complaints

Colonial Penn's complaint level for individual life insurance is extremely high, with the company receiving more than seven times the industry average. The National Association of Insurance Commissioners collects complaint data from state insurance departments across the United States, and according to their data, most complaints against Colonial Penn are about delays in paying claims and poor policyholder service.

A quick scan of the Better Business Bureau website reveals a multitude of complaints against Colonial Penn. Many customers have complained about the company's pushy sales tactics, misleading advertisements, and difficulty in cancelling policies and obtaining refunds. There are also complaints about unexpected charges and issues with processing claims. Some customers have reported that the company has given them incorrect or inconsistent information, making it difficult to fulfil their contractual obligations.

Colonial Penn has responded to some of these complaints, apologising for the issues and stating that they have taken steps to address the problems. In some cases, they have offered refunds or cancelled policies as requested. However, the high volume of complaints suggests that these issues are pervasive and may indicate underlying problems with the company's practices and policies.

It is worth noting that Colonial Penn has an A+ rating from the Better Business Bureau and has been in business for over 60 years. The company also claims to be dedicated to providing ethical and valuable products to its customers. However, the high number of complaints may be a cause for concern for potential customers. It is always important to research a company thoroughly before purchasing any product or service, especially when it comes to important financial decisions like life insurance.

The pros and cons of Colonial Penn's insurance policies

Colonial Penn offers guaranteed acceptance whole life insurance for those aged 50-85 (in most states), with options starting at $9.95 per month. The pros and cons of their insurance policies are outlined below.

Pros

• No medical exam or health questions required
• Locked-in premium rate that won't increase
• Flexible payment options
• Coverage can't be cancelled as long as premiums are paid
• Rated A (Excellent) by AM Best for financial strength
• Customer service available in Spanish and English
• 30-day free cancellation period
• Online policy management

Cons

• Policy types are very limited
• More complaints filed with the National Association of Insurance Commissioners than other companies of its size
• Low coverage limits with all policy types
• High level of complaints about its life insurance
• Low maximum coverage amounts of up to $50,000
• Beneficiaries won't receive full death benefits if the policyholder passes away within two years of buying the policy and the death is non-accidental

How to apply for a policy

Colonial Penn offers guaranteed acceptance whole life insurance to individuals aged 50 to 85 in most states, with options starting at $9.95 per month. The company does not sell term life insurance.

Get a Quote

Start by obtaining a quote on the company website. You can also call the company's toll-free number, (877) 877-8052, and speak with one of their agents.

Download and Fill Out the Application

You can download an application form from the Colonial Penn website.

Submit the Application

Submit your completed application form to Colonial Penn. The company offers online, phone, and mail submission options.

Make the Initial Payment

Colonial Penn offers flexible payment options, allowing you to budget confidently.

Register for an Online Account

Once your policy is approved, you can register for an online account on the MyColonialPenn website. You will need your name, address, phone number, policy number, the date of birth of the insured person, and a valid email address.

With an online account, you can easily manage your policy, make updates, and view important information such as cash value, loan information, and payment history.

How much Colonial Penn's insurance coverage costs

Colonial Penn's insurance coverage costs vary depending on the type of policy, the age, gender, and location of the insured, and the number of coverage units purchased. The company offers guaranteed acceptance whole life insurance, with coverage starting at $9.95 per unit per month. Each unit provides a fixed amount of coverage, which depends on the age and gender of the insured. For example, a 66-year-old male would receive $846 in life insurance from a single unit, while a 65-year-old female would receive $1,000 in coverage. The maximum number of units that can be purchased is 15, allowing for a larger death benefit.

Colonial Penn's term life insurance policies are available only in certain states, including New York and the U.S. Virgin Islands, and are not offered in Maine, Massachusetts, Montana, Vermont, or New York. The rates for these policies depend on the age and gender of the insured and the desired coverage amount. For example, a woman aged 41-45 would pay $35.21 per month for $50,000 of coverage, while a 50-year-old man could expect to pay between $13 and $57 per month for a similar policy.

Colonial Penn also offers final expense or guaranteed acceptance insurance, which is often marketed to seniors to reduce the financial burden on their families in the event of their death. These policies have a limited death benefit, with a maximum value of $16,800. The cost of this coverage is $9.95 per unit per month, and up to eight units can be purchased, resulting in a maximum monthly premium of $79.60.

In summary, the cost of Colonial Penn's insurance coverage depends on the type of policy, the age, gender, and location of the insured, and the desired coverage amount. The company offers a range of options, including whole life, term, and final expense insurance, with rates starting as low as $9.95 per unit per month.

Frequently asked questions