Colonial Penn is a well-known provider of life insurance to seniors. The Company has over 60 years of experience and is known for its catchy TV commercials featuring celebrities like Alex Trebek.
Its policies assist seniors in covering the costs of their final expenses, such as funeral and burial costs, and provide financial support to their loved ones after their passing.
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Colonial Penn Policies
Colonial Penn and other companies offer seniors whole life insurance policies. These policies cover the policyholder’s entire life and accumulate cash value over time.
Colonial Penn also offers a guaranteed issue whole life policy, which does not require a medical exam or health questions. However, coverage amounts are limited, and premiums may be higher than those of the simplified issue policy.
Guaranteed Acceptance Life Insurance (The $9.95 Plan)
Colonial Penn’s $9.95 life insurance plan is designed for individuals who may have difficulty obtaining traditional life insurance coverage due to health issues. The amount of coverage the $9.95 plan offers depends on your gender and age (the plan is available to individuals 50 to 85). For example, a 50-year-old woman can get up to $2,000 of coverage, while an 85-year-old man will get approximately $400 of insurance.
This plan does not require a medical exam or health questionnaire, guaranteeing approval for anyone who fits the age eligibility criteria.
This plan has a two-year waiting period before the full death benefit is payable. During this time, if the insured dies of natural causes, the beneficiaries receive only a return of the premiums paid (plus a small amount of interest). In the case of accidental death, the full death benefit is always paid.
Whole Life Insurance
Colonial Penn’s whole life insurance policy is available to individuals between 40 and 75. Coverage amounts range from $10,000 to $50,000, with premiums remaining level for the policy’s life. The policy also builds cash value over time, providing an additional source of funds that can be borrowed against or used to pay premiums.
With Colonial Penn’s whole life insurance policy, applicants must complete a medical questionnaire, but no medical exam is necessary. This simplified underwriting process allows for a quicker application and approval process.
Colonial Penn Life Insurance Ratings
When considering life insurance providers, reviewing their ratings from independent agencies and customer reviews is important. Colonial Penn has received ratings from A.M. Best and the Better Business Bureau (BBB) and customer feedback.
A.M. Best Rating
A.M. Best is a credit rating agency that evaluates insurance companies’ financial strength and creditworthiness. A.M. Best has rated Colonial Penn an A- (Excellent) rating from A.M. Best, indicating that the company can meet its financial obligations.
BBB Rating
The BBB evaluates companies based on their customer service and business practices. Colonial Penn has been accredited by the BBB since 1985 and holds an A+ rating. This rating reflects the company’s commitment to resolving customer complaints and maintaining a positive reputation.
Customer Reviews
While some customers have reported positive experiences with the company’s simple application process, many people express dissatisfaction with the high premiums and slow claims processing.
Colonial Penn Life Insurance Pros and Cons
When considering Colonial Penn Life Insurance, it is important to weigh the pros and cons of the policy. Here are some of the advantages and disadvantages to keep in mind:
Pros
- Simplified Application Process: Colonial Penn offers simplified issue whole life insurance policies that do not require a medical exam. This can be a major advantage for individuals with pre-existing conditions or who are unable or unwilling to undergo a medical exam.
- Guaranteed Acceptance: Colonial Penn offers a guaranteed issue whole life insurance policy – i.e., its famous $9.95 plan. These policies not only have a straightforward, one-page application but also offer guaranteed approval for anyone who meets the eligibility criteria, regardless of health status.
- A+ Rating: Colonial Penn has an A+ rating from the Better Business Bureau, which can provide peace of mind to policyholders.
Cons
- High Rates: Colonial Penn’s $9.95 guaranteed acceptance plan has much higher rates than competing policie
- Low Coverage Amounts: Colonial Penn’s coverage amounts are lower than other life insurance policies. The maximum coverage amount is $50,000 for the whole life plan and far lower for the GI policy.
- Age Restrictions: Colonial Penn’s policies are only available to individuals between 40 and 85, excluding many people who need life insurance.
- Limited Benefits: Colonial Penn’s policies do not offer many additional benefits or riders, such as accidental death or long-term care coverage.
How to Apply for Colonial Penn Life Insurance
Applying for Colonial Penn Life Insurance is a straightforward process that can be done online or over the phone. Here are the steps:
- Determine the type of policy you want: Colonial Penn offers two types of whole life policies: a traditional whole life policy and a guaranteed issue policy. Neither policy requires a medical exam, but the whole life policy has a short health questionnaire.
- Calculate how much coverage you need: Colonial Penn offers coverage ranging from $10,000 to $50,000 ($5,000 to $25,000 in New York). Make sure to choose a coverage amount that will meet your needs.
- Get a quote: You can get one online or by calling Colonial Penn. The quote will provide an estimate of how much your policy will cost.
- Apply for the policy: If you are happy with the quote, you can apply online or over the phone. You must provide personal information, such as your name, address, and date of birth.
- Wait for underwriting: If you applied for the traditional policy, you must undergo underwriting. This simply involves a health questionnaire. After this, Colonial Penn will review your application and determine your eligibility for coverage.
- Receive your policy: If approved for coverage, you will receive your policy in the mail. Make sure to review it carefully and ask any questions you may have.
Colonial Penn Life Insurance FAQs
Here are some frequently asked questions about Colonial Penn Life Insurance:
What types of life insurance does Colonial Penn offer?
Colonial Penn offers two types of life insurance: whole life insurance and guaranteed issue whole life insurance. Whole life insurance provides coverage for the rest of the policyholder’s life, while guaranteed issue whole life insurance provides coverage without requiring a medical exam.
What are the coverage amounts for Colonial Penn’s life insurance policies?
For whole life insurance, coverage amounts range from $10,000 to $50,000. Coverage amounts vary based on age and risk profile for guaranteed issue whole life insurance but max out at approximately $16,000.
What is the age range for Colonial Penn’s life insurance policies?
For whole life insurance, coverage is available to ages 40 to 75. For guaranteed issue whole life insurance, coverage is available to those ages 50 to 85.
How does Colonial Penn’s claims process work?
Colonial Penn has a quick and simple claims process. Policyholders or their beneficiaries can begin filing a claim by calling the company’s toll-free claims number. Once the claim is filed, Colonial Penn will review it and issue payment if approved.
What is Colonial Penn’s financial strength rating?
Colonial Penn has a Financial Strength Rating of A- (Excellent) from A.M. Best, meaning it has plenty of resources to pay claims.
What do consumers say about Colonial Penn’s claims process?
According to the National Association of Insurance Commissioners, the company has a higher-than-average complaint index score.
Conclusion
We hope you enjoyed this review of Colonial Penn’s life insurance policies!
