Colonial Penn is a life insurance company perhaps best known for its television commercials starring Alex Trebek. It was also one of the first life insurance companies to issue “Guaranteed Acceptance Life Insurance” plans for people over 50 years of age in 1968. It now offers life insurance products for customers between 18 and 85. Here’s what you need to know before deciding if Colonial Penn is the right life insurance company for you.
Is Colonial Penn Right For You?
Colonial Penn may be a good option if you’re looking for $50,000 or less in life insurance to cover final expenses, like funeral costs, or if you’re between the ages of 50 and 85 and won’t need access to full death benefits to at least two years (in most states). It can also be a good option if you’re looking for a life insurance policy that doesn’t require a medical exam.
Colonial Penn may not be the best option if you want a life insurance policy to provide more than $50,000 in benefits.
Where is Colonial Penn offered?
Colonial Penn is available in all 50 states, the District of Columbia, Puerto Rico, and the US Virgin Islands. However, plan features and restrictions may vary by state. For example, in New York, Colonial Penn is insured by Bankers Conseco Life Insurance Company. Also, their renewable term life insurance plan is not offered in Montana, New York, or the US Virgin Islands.
Pros and Cons of Colonial Penn Insurance
Pros
- No medical exam required
- Potential ability to borrow against the cash value
- guaranteed rate
Cons
- $50,000 maximum insurance payout
- Two-year limited benefit period
Colonial Penn Pros Explained
- No Medical Exam Required: While many life insurance plans ask health questions or require medical exams, the guaranteed whole life insurance option does not, and Colonial Penn certifies that you will be approved.
- Potential Ability to Borrow Against Cash Value: Some Colonial Penn insurance plans may allow you to borrow money from your life insurance policy. This includes whole life and term life insurance policies.
- Guaranteed rate: For the Guaranteed Acceptance plan, your monthly premium stays the same for the policy’s life.
Colonial Penn Cons Explained
- $50,000 Maximum Insurance Payout: The maximum insurance death benefit is $50,000, and some policies have lower or variable maximums. These lower payments are usually only enough for limited final expenses.
- Two-year limited benefit period: For the Guaranteed Acceptance whole life insurance plan, you must wait at least two years before you can file a claim for full non-accidental death benefits. A percentage of the face value of the procedure may be paid for non-accidental deaths, and the full face amount paid for accidental deaths. This may vary by state.
If you’re in good health, you may pay less for a life insurance policy that requires a medical exam because it uses your specific medical information to decide your premium and underwriting cost. Ask about the difference in price between insurance with a medical exam and one without.
Colonial Penn Products and Notable Deals
Colonial Penn specializes in life insurance, but not all types are available in all states. It offers coverage starting at just $9.95 per month, which can be more affordable than other insurance plans, though it’s always wise to shop around.
- Guaranteed Acceptance Life Insurance: Age to apply varies by state
- Permanent life insurance: You must be between the ages of 40 and 75 to apply.
- Renewable Term Life Insurance: You must be between 18 and 75 to apply for up to $50,000 of coverage, renewable through age 90, and premium rates increase with age.
- LifeChoice Whole Life Insurance: Exclusive to New York residents, must be between 50 and 75 to apply.
- Life insurance rider: For an additional premium, you can add a condition type rider to a term or whole life insurance policy, so you have the option to collect up to 50% of your benefit for death at diagnosis from cancer, chronic illness, stroke or heart attack, or terminal illness
If you’re not satisfied with your plan, Colonial Penn offers a 30-day money-back guarantee.
What discounts are offered?
Colonial Penn advertises very few discounts on its website. However, it does offer a prepaid discount on some of its insurance plans. Pay annually and save up to a month on your premium.
If you are younger or in good health, consider investigating other insurance options, such as critical illness insurance, long-term care insurance, or bundled policy options with a professional health or life insurance agent or planner. Financial.
Colonial Penn Insurance Ratings & Reviews
AM Best received a financial strength rating of “A- (Excellent)” by Colonial Penn Life Insurance. It is not accredited by the Better Business Bureau (BBB) , and more than 80 complaints have been filed with the BBB.
The conclusion about Colonial Penn
Colonial Penn has a solid financial strength rating, has been in existence for more than 60 years, and offers life insurance without a medical exam for people up to age 75. If you’re looking for insurance, you can get a lower price if you’re younger, in good health, or able to pass a medical exam. Whenever you want to compare life insurance options, consider enlisting the help of a licensed life insurance broker or agent to help you review policies and quotes.
