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If your employer offers Colonial Life Insurance products as part of your voluntary benefits package, it’s worth considering. But be aware that you can also buy life insurance directly from other life insurance providers with better financial strength and customer satisfaction ratings.
- Pros & Cons
- Company Overview
Portable term and whole life policies
Coverage available without a medical exam
Limited policy details available online
No direct online quotes
Founded in 1937 and known by its current name since 1939, Columbia, South Carolina-based Colonial Life is a subsidiary of Unum Group. It pioneered the introduction of voluntary benefits to the workplace through payroll deductions. The company offers life insurance as voluntary benefits through employers, along with a wide range of other coverages. Today the company has nearly $1.5 billion in premiums, and servers over 3.7 million policyholders from over 90,000 client organizations.
- Year Founded 1937
- Kinds of Policies Term life, whole life
- Payment Options Payroll deduction, direct billing if you leave job
- Customer Service Mail. Phone: 1-800-325-4368. Fax: 1-800-880-9325
- Official Website https://www.coloniallife.com/
- Customizable coverage: You can choose policy riders that provide term coverage for a spouse, living benefits, the ability to pause premiums, and more.
- Portable term and whole life policies: You can take your coverage with you when you leave your employer. You’ll just need to change your payment method.
- Coverage available without a medical exam: Colonial Life offers the opportunity to buy life insurance without a medical exam with guaranteed issue policies which also have no health questions.
- Limited policy details available online: If you want to know about specific plan details or how the riders work, you’ll need to talk to your benefits counselor.
- No direct online quotes: You can’t get a pricing estimate online, so you’ll need to go through your employer.
Colonial Life had slightly fewer complaints from consumers over the last three years than expected considering the company’s size, according to the National Association of Insurance Commissioners (NAIC). Each year, the NAIC reports a complaint index for every life insurance company that indicates how the company fares with regards to consumer complaints. An index of 1.00 means that a company received the expected number of complaints given its size. An index of less than 1.00 is ideal, and the lower the better. In 2022, Colonial Life's complaint index was 0.47. For 2021, Colonial Life had a complaint index of 0.64 and in 2020 their index was 0.50.
Colonial Life fares well with regards to financial stability, according to independent credit ratings agency AM Best. The company received an A (Excellent) financial strength rating from AM Best, which indicates that the company has an excellent ability to honor its ongoing insurance obligations.
AM Best evaluates insurance companies based on the likelihood that they can fulfill their ongoing insurance obligations and pay claims to beneficiaries, and assigns each company a financial strength grade. Grades range from D to A++. We typically don’t recommend insurers that score below an A-.
Term Life Insurance
Term life insurance consists of affordable coverage that lasts for a predetermined period. For example, Colonial Life offers 10-, 15-, 20-, and 30-year term options. Term coverage is designed to protect your family if you die before certain financial obligations are fulfilled, such as paying off your mortgage or sending kids to college. Premiums stay level for the duration of the term.
Whole Life Insurance
Whole life insurance is a type of permanent coverage that provides a guaranteed payout to your beneficiaries no matter when you die, as long as premiums are paid. It also has a cash value component that you can typically borrow against. However, whole life insurance is much more expensive than term life insurance. With Colonial Life, you can elect to pay premiums up to age 70 or up to age 100. Your premiums will stay level until they are paid up, and coverage continues once they are paid.
Riders increase the benefits of your life insurance policy and may be available for an additional cost or, occasionally, included with coverage. Some of the riders Colonial Life offers are below.
Accelerated Death Benefit: Terminal Illness Rider
This rider is a type of living benefit rider and is included with Colonial Life term policies. Terminal illness riders provide a portion of the death benefit while you are still living if you’re diagnosed with a terminal illness and expected to die within a certain time frame.
Accelerated Death Benefit: Chronic Care Rider
This optional rider provides access to the death benefit while you’re still alive should you be diagnosed with a chronic illness.
Accelerated Death Benefit: Critical Illness Rider
This optional rider pays a lump sum if you are diagnosed with a critical illness. The accelerated death benefit can be helpful for covering your medical bills.
Spouse Term Rider
At Colonial Life, you can add 10 or 20 years of term coverage for your spouse onto your policy.
Children’s Term Rider
This optional rider provides term coverage for your children.
Waiver of Premium Rider
A waiver of premium rider allows you to pause premium payments in certain instances, such as if you become totally disabled. There is typically a waiting period and requirements to meet.
These riders may be available with Colonial Life term policies. Colonial Life doesn’t specify which riders, if any, are available with its whole life insurance product, so ask your HR representative.
If you have questions about Colonial Life’s policies, the best place to start is by contacting your company’s human resources department. If you’re already a policyholder, many transactions can be completed in your online account. If you still need assistance, you can request support within your account or call 1-800-325-4368 on weekdays between 8 a.m. and 8 p.m. ET. You can also fax claims information to 1-800-880-9325.
If a Colonial Life insurance policy is offered as part of your benefits package, check it out to see if it meets your needs. Just keep in mind there are companies with better financial strength and customer service ratings that might be a better fit instead.
Frequently Asked Questions
How Does Colonial Life Rank Financially?
Colonial Life scores an A (Strong) rating with AM Best for financial stability. It also scores an A (Strong) rating with Standard and Poor's, an A3 (Good) rating from Moody's Investors Service, and an A- (Strong) rating from Fitch.
Is Colonial Life Insurance Expensive?
Colonial Life doesn't publish prices for its insurance policies online, but you can customize the type of policy and term length to get coverage for an affordable cost. It offers term life and whole life insurance policies. A whole life insurance policy will likely cost more than a term life policy.
Can I Cash out My Colonial Life Insurance Policy?
Yes, you should be able to cash out your Colonial Life insurance policy if you want.
You are allowed one withdrawal per year (or "partial surrender," as it's called) if you have a Universal Life policy. All other withdrawals will be treated as policy loans, and are subject to Colonial Life approval. There will be a processing fee, and you can elect to have taxes withheld at the time of the withdrawal. You may also choose to surrender the policy altogether.
Who Bought out Colonial Life Insurance?
Colonial Life Insurance is a subsidiary of Unum Group. Founded in Maine in 1848 as Union Mutual, the company changed its name to Unum in 1986 and merged with Colonial Life in 1993. After merging with Provident, Unum's three main divisions were Unum US, Unum UK, and Colonial Life.
We designed a comprehensive ranking methodology based on consumer priorities and life insurance company fundamentals to rank more than 90 insurers across five general categories: financial stability, customer satisfaction, product and feature variety, the overall buying experience, and cost.
In order to do this, we collected over 5,000 data points and scored each company based on 55 metrics. We grouped metrics by category to see how insurers performed in each; we then weighted category scores to determine how companies performed overall.
Colonial Life. "Colonial Life's History."
Colonial Life. "Our Company."
National Association of Insurance Commissioners. "Colonial Life & Accident Ins Co National Complaint Index Report."
Colonial Life. "Financial Overview."
Colonial Life. "Life Insurance Can Help You Plan for the Future."
Colonial Life. "Colonial Life’s New Life Coverage Helps Customers Personalize Benefits."
Colonial Life. "Request for Service Form," Pages 1-2.