Colonial Penn Life Insurance Review | Cost + Warnings

Colonial Penn Life Insurance Company, with Alex Trebek’s endorsement, offers different forms of life insurance, each with unique features and options.

  1. Guaranteed Acceptance
  2. Permanent Whole
  3. Renewable Term
  4. Living Insurance

Before you submit an application, it is in your best interest to understand the fine print and compare rates.

Everything you need to know about Colonial Penn is found here – a company overview, product details, rates, and frequently asked questions.

Table Of Contents

  1. Company Overview
  2. Products
  3. Quotes
  4. FAQs
  5. Next Steps

Company Overview

Headquartered in Philadelphia, Pennsylvania, Colonial Penn was established in 1968.

Leonard Davis, the co-founder of AARP, founded the company.

Our most popular plan is our Guaranteed Acceptance Life Insurance, available exclusively for ages 50 and over.

– Colonial Penn

With a focus on offering life insurance for seniors, Colonial Penn markets to individuals between 50 – 85 years old through mailers, television, and online.

Financial rating: A- (A.M. Best)

Interesting factJeopardy host, Alex Trebek, is a featured endorser of Colonial Penn.

Colonial Penn Products

When analyzing any given life insurance product, you will want to take a close look at a number of key features.

  • Issue ages – the age range the policy will accept
  • Face amount – the policy dollar amount available
  • Policy length – how long the policy can last
  • Premiums – whether your premiums will be fixed or can fluctuate
  • Underwriting – whether you will need to participate in a medical exam and/or answer health questions

Guaranteed Acceptance Life Insurance

Colonial Penn’s Guaranteed Acceptance life insurance is a form of guaranteed issue life insurance.

You should know this is not the first type of life insurance you should look at. On the contrary, it should be the last type of coverage you consider.

Why? Because everyone qualifies, your options are limited and your price tag is hefty.

You cannot be declined coverage because of your health.

Guaranteed issue is offered to everyone.

In fact, not only does this form of coverage skip a medical exam, you are not asked any health questions, either.

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Let’s consider the important details.

Issue Ages

You must be between the ages of 50 – 85 to purchase this policy.

All guaranteed issue forms of coverage have similar issue ages. However, Great Western does begin issuing policies at age 40.

If you cannot qualify traditional coverage, such as a 10-year term policy, and are under age 40, look to accidental death and dismemberment insurance.

Face Amount

Face amount refers to the amount of coverage the policy offers.

Colonial Penn’s Guaranteed Acceptance face amounts are based on units of coverage.

You can purchase up to 8 units of coverage.

Different than other carriers, Colonial Penn determines the value assigned to a unit of coverage based on your age, gender, and where you live.

The minimum value of a unit is about $400 and the maximum value is about $2,100.

With that in mind, the range of coverage available is roughly $400 – $17,000.

A maximum of $17,000 in coverage is modest, to say the least. You will be able to cover final expenses for that amount, and not much else.

To compare, if you can qualify for traditional term or whole life, $500,000 in coverage – or more – is often available.

Policy Length

Guaranteed issue life insurance is almost always a form of whole life insurance. Colonial Penn is no exception.

As long as you make your premium payments, your coverage will last your entire life.

Premiums

Your premiums are fixed with this policy.

What does that mean? The amount you pay for coverage will stay the same. Your rates are locked in at the time your policy is issued.

Your rate will not change for the life of the policy.

Colonial Penn

In addition, you have some flexibility pertaining to when you make your premium payments:

  • Monthly
  • Quarterly
  • Semi-annually
  • Annually

No Exam

Underwriting is the process of risk assessment a carrier implements to determine if you qualify – and how much to charge you – for coverage.

With essentially no underwriting, Colonial Penn’s Guaranteed Acceptance is the simplest form of no exam life insurance.

You will avoid:

  • Nurses
  • Needles
  • Liquid samples
  • Height/weight measurement
  • Health questions

Keep in mind, however, since you are essentially signing up for coverage and everyone qualifies, your premium rates are expensive and available face amounts are very modest.

Bottom line – guaranteed issue life insurance is ideal for someone who has been diagnosed with serious health conditions or is terminally ill.

Graded Death Benefit

It is important to note that your death benefit includes a two-year graded period.

What does this mean? If death occurs (except for accidents) during the first two policy years, your beneficiary will receive a return of premiums, plus 7% interest.

After two years, the full face amount is paid.

Note – qualifying accidental deaths will pay the full death benefit, even during the first two years.

Permanent Whole Life Insurance

Colonial Penn’s Permanent Whole life insurance includes some underwriting.

While you will avoid a medical exam, you do need to answer a few health questions.

Answers to questions on your application will help us determine your eligibility.

– Colonial Penn

If you can qualify, you can purchase more coverage than what is available through the guaranteed acceptance product.

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Policy specifics.

Issue Ages

You must be between ages 40 – 75 to purchase Colonial Penn’s Permanent Whole Life plan.

For younger applicants in need of permanent coverage, look to all whole life insurance options, as other carriers may be a better fit.

Face Amount

The maximum amount of coverage you can purchase is $50,000.

That is more than double what their guaranteed acceptance product offers, but substantially less than traditional forms of life insurance offered through other carriers.

You may select from the following amounts:

  • $10,000
  • $20,000
  • $30,000
  • $40,000
  • $50,000

Policy Length

Your policy will last your entire life as long as you make your premium payments, just like all permanent products.

Premiums

Your premium payments are level – they will stay the same amount for the life of the policy.

No Exam

Colonial Penn’s Permanent Whole product does not require a medical exam.

You will need to complete a health questionnaire to determine eligibility.

So, the underwriting process is more involved than their guaranteed acceptance policy, but still simplistic compared to most whole life products.

Cash Value

Your policy does include cash value, which begins to build during the first year.

You may opt to borrow against your policy at a guaranteed interest rate.

Suicide Clause

If death occurs as a result of suicide during the first two years (one year for North Dakota), premiums are returned, plus interest.

Renewable Term Life Insurance

Unlike traditional term life insurance, (e.g. 20-year term policy) renewable term automatically renews your coverage at the end of a specific time period.

Colonial Penn’s renewable term utilizes 5 -year age bands, in which your rate increases with each band and is guaranteed to renew until age 90.

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Important details.

Issue Ages

This product has a wider available age range. Colonial Penn offers renewable term coverage to applicants who are ages 18 – 75.

Face Amount

Face amounts are modest, just like all Colonial Penn products.

You can purchase up to $50,000 in coverage, with the following available benefit amounts.

  • $10,000
  • $20,000
  • $30,000
  • $40,000
  • $50,000

In comparison, most no physical life insurance companies offer substantially larger face amounts and level premiums.

Policy Length

Rather than term lengths, Colonial Penn utilizes time periods, or age bands, for their term product.

Specifically, the age bands are 5 years each. They last until up to age 90.

For example, the first age band is for ages 18 – 20 and the last available age band is for ages 86 – 89 (renewal only).

Premiums

Initial premiums are based on your gender and age at the time of your policy’s issuance.

Your premiums are not level. As you enter each new age band every five years, your premiums increase.

To illustrate, consider the premium rates for a $5,000 policy:

  • 41 – 45 years old male: $5.86/mo
  • 46 – 50 years old male: $7.00/mo
  • 41 – 45 years old female: $4.87/mo
  • 46 – 50 years old female: $5.87/mo

No Exam

All of Colonial Penn’s products are forms of no exam life insurance. No medical exam is required.

You will, however, for renewable term coverage, have to participate in a basic health questionnaire to determine eligibility.

What could affect your eligibility? If you have a serious medical diagnosis, let’s say, for example, you are a cancer patient, your ability to be approved is affected.

An underwriter may call you to verify your application information.

Living Insurance

Colonial Penn’s Living Insurance option allows you to access up to 50% of your death benefit early should you become ill.

Called an early payout option, Living Insurance is an optional two-part plan:

  1. Traditional life insurance
  2. Early payout option

The feature can be added onto either a permanent whole life or a renewable term product (not a guaranteed acceptance product).

A form of an accelerated death benefit rider, Colonial Penn’s Living Insurance pays a portion of your death benefit upfront if you are diagnosed with a qualifying illness.

  • Heart attack or stroke – up to 50% of death benefit
  • Cancer – up to 25% of death benefit
  • Chronic illness – up to 50% of death benefit

Colonial Penn Quotes

For an idea of cost, evaluate the following quotes for Colonial Penn’s products.

Guaranteed Acceptance Quotes

Different than most quoting processes, your base plan coverage amount is calculated using the following factors:

  • Age
  • Gender
  • Number of units of coverage

Your options start at $9.95 per month.

Demonstrated in the graph below are the face amounts available based on age, gender, and units purchased.

Colonial Penn Guaranteed Acceptance Base Plan Coverage Male

Age 1 unit ($9.95)5 units ($49.75)8 units ($79.60)
50 year old$1,786$8,930$14,288
55 year old$1,506$7,530$12,048
60 year old$1,214$6,070$9,712
65 year old$932$4,660$7,456
70 year old$717$3,585$5,736
75 year old$560$2,800$4,480
80 year old$426$2,130$3,408
Subject to change

Colonial Penn Guaranteed Acceptance Base Plan Coverage Female

Age 1 unit ($9.95)5 units ($49.75)8 units ($79.60)
50 year old$2,083$10,415$16,664
55 year old$1,884$9,420$15,072
60 year old$1,621$8,105$12,968
65 year old$1,333$6,665$10,664
70 year old$1,043$5,215$8,344
75 year old$792$3,960$6,336
80 year old$620$3,100$4,960
Subject to change

Permanent Whole Quotes

Colonial Penn Permanent Whole Life Insurance Quotes Male

Age $10,000$30,000$50,000
40 year old$18.21$47.12$76.04
45 year old$22.74$60.72$98.70
50 year old$29.65$81.45$133.24
55 year old$39.07$109.70$180.33
60 year old$51.00$145.49$239.99
65 year old$66.45$191.84$317.24
70 year old$87.46$254.89$422.32
75 year old $118.29$347.36$576.44
Subject to change

Colonial Penn Permanent Whole Life Insurance Quotes Female

Age $10,000$30,000$50,000
40 year old$14.36$35.57$56.79
45 year old$17.11$43.82$70.54
50 year old$21.28$56.35$91.41
55 year old$27.42$74.75$122.08
60 year old$35.84$100.02$164.20
65 year old$47.43$134.79$222.16
70 year old$65.68$189.54$313.40
75 year old $94.07$274.71$455.36
Subject to change

Renewable Term Quotes

Remember, premiums increase and are based on age bands rather than term lengths.

Sample rates are for monthly premiums.

Colonial Penn Renewable Term Quotes Male

Age $5,000$25,000$50,000
18 - 20$2.75$7.73$13.96
21 - 25$3.25$10.23$18.96
26 - 30$3.75$12.73$23.96
31 - 35$4.24$15.21$28.92
36 - 40$4.87$18.35$35.21
41 - 45$5.86$23.31$45.12
46 - 50$7.00$28.98$56.46
51 - 55$9.00$38.98$76.46
56 - 60$11.33$50.64$99.79
61 - 65$15.36$70.81$140.12
66 - 70$20.50$96.52$191.53
71 - 75$28.31$135.56$269.61
76 - 80*$40.31$195.55$389.61
81 - 85*$56.59$276.95$552.39
86 - 89*$81.43$401.15$800.80
*Renewal only

Colonial Penn Renewable Term Quotes Female

Age $5,000$25,000$50,000
18 - 20$2.54$6.69$11.87
21 - 25$2.76$7.81$14.12
26 - 30$3.26$10.31$19.12
31 - 35$3.76$12.81$24.12
36 - 40$4.26$15.31$29.12
41 - 45$4.87$18.35$35.21
46 - 50$5.87$23.35$45.21
51 - 55$7.00$28.98$56.46
56 - 60$8.50$36.48$71.46
61 - 65$10.83$48.16$94.83
66 - 70$14.18$64.89$128.29
71 - 75$19.18$89.89$178.28
76 - 80*$27.18$129.89$258.28
81 - 85*$38.68$187.39$373.28
86 - 89*$54.22$265.09$528.69
*Renewal only

Frequently Asked Questions

Frequently asked questions about Colonial Penn Life Insurance Company.

Is Colonial Penn good?

A.M. Best rates Colonial Penn as Excellent, with an A- rating.

Additionally, the Better Business Bureau gives the carrier an A+ rating.

You should know, however, customer complaints do exist about poor communication pertaining to their products and expensive premiums compared to other carriers.

Will I need to take a medical exam?

No.

All of Colonial Penn’s products do not require a medical exam.

You may, depending on your application and policy you are applying for, be contacted by an underwriter to clarify application answers.

Can I list more than one beneficiary?

Yes.

Colonial Penn allows up to two beneficiary designations. You must have the total shares add up to 100%, with many opting to split the death benefit at 50% each.

Does cash value build?

Yes.

Most of Colonial Penn’s products do build cash value. After the first, policy year, you may access the cash via a policy loan or withdrawal.

Is there customer service?

Yes.

You can reach the client helpdesk either online or over the phone.

Are there flexible premium payment options?

Yes.

Depending on the product, you may opt to make monthly, quarterly, semi-annual, or annual premium payments.

Can I buy a policy online?

Yes.

Colonial Penn is designed to be purchased either online or through the mail.

Before you buy, be sure to compare and contrast your options with multiple carriers by using our free quote tool.

Next Steps

We recommended doing two things before purchasing a Colonial Penn policy, or any life insurance product for that matter.

First, talk about your options with an independent agent.

Why? An independent agent will access the top-rated carriers to compare and contrast multiple policy features and quotes.

It’s unlikely you will find the best life insurance to meet your needs by looking at only one company.

Second, gather pertinent information so that you are ready for the application.

Jot down your health history, current medications, financial needs, and beneficiary information.

That way, your application will be streamlined.

To get started, fill out a free quote.