Colonial Penn Life Insurance Review

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Colonial Penn Insurance

 Colonial Penn Insurance

overall rating
3.0

Colonial Penn is a well-known direct-to-consumer life insurance company that offers guaranteed insurance, whole life insurance, and term life insurance policies. While it has relatively small coverage limits and has a limited range of plan options, it can be a useful choice for people who have been denied life insurance in the past due to their health.

  • Pros & Cons
  • Key Takeaways
  • Company Overview
Pros & Cons
Pros
  • Guaranteed acceptance policies available

  • Get a quote online

  • 30-day try-it-on period

Cons
  • Guaranteed and whole life policies only available to certain age groups

  • Coverage capped at $50,000

  • Not all plans are available in New York or the Virgin Islands

Key Takeaways
  • Colonial Penn is based in Philadelphia, Pennsylvania, and has 300 employees.
  • In 2019, Colonial Penn collected nearly $307 million in life insurance premiums.
  • Colonial Penn offers permanent whole life insurance, term life insurance, and guaranteed life insurance policies.
  • You can make payments with a credit card, check, or through automatic bank account deductions.
Company Overview

Founded in 1968, Colonial Penn is a Philadelphia-based life insurance company. Best known for its commercials featuring Jeopardy host Alex Trebek, the company is notable in that it doesn’t have insurance agents. Instead, it sells directly to consumers online and through television ads. 

It was one of the first companies to offer guaranteed acceptance policies and continues to offer guaranteed acceptance life insurance plans to consumers ages 50 and older. 

Colonial Penn Life Insurance Company is licensed in 49 states, the District of Columbia, Puerto Rico, and the Virgin Islands. In New York, limited policies are available, but they are underwritten by Bankers Conseco Life Insurance Company.

  • Year Founded 1968
  • Kinds of Plans Guaranteed acceptance, whole life, renewable term life
  • Number of Plans 3
  • Payment Plan Options Monthly, annually, quarterly, semi-annually
  • Customer Service Phone, web
  • Phone 877-877-8052
  • Official Website www.colonialpenn.com/insurance
Important

Colonial Penn is not one of our top-rated life insurance companies. You can review our list of the best life insurance companies for what we think are better options.

Pros Explained

  • Guaranteed acceptance policies available: If you’re between the ages of 50 and 85, you can qualify for a guaranteed acceptance policy without a medical exam. There are no health questions asked, and you cannot be turned down because of your health. 
  • Get a quote and online: While many insurance companies require you to contact an agent to get a quote, Colonial Penn allows you to get a quote and purchase some policies online. 
  • 30-day try-it-on period: Once you sign up for a plan with Colonial Penn, you have 30 days to try it out. If you decide it isn’t right for you, you can cancel it within 30 days of its activation date for a full refund. 

Cons Explained

  • Guaranteed and whole life policies only available to certain age groups: Some policies have age restrictions. Guaranteed acceptance policies are only available to people between the ages of 50 and 85, while permanent whole life insurance is only for people between the ages of 40 and 75. 
  • Coverage capped at $50,000: The maximum amount of coverage you can get through Colonial Penn is $50,000. If you want more coverage for your family, you’ll need to get life insurance through another company like State Farm that has higher death benefit amounts. 
  • Not all plans are available in New York or the Virgin Islands: If you live in New York or the Virgin Islands, your plan options are more limited. You are not eligible for term life policies; you are only eligible for guaranteed acceptance or whole life insurance. 
Note

Colonial Penn’s parent company, CNO Financial Group, owns two other life insurance companies: Bankers Life and Washington National.

Available Plans

If you’re looking for an affordable plan that can cover your final expenses or coverage that can build cash value, Colonial Penn has a few different options to choose from. 

Guaranteed Acceptance

If you are between the ages of 50 and 85, you are eligible for guaranteed acceptance coverage. There is no medical exam required, and you don’t have to answer any questions about your health. The policy is guaranteed because there is a two-year limited benefit period. After the initial two-year period, you are eligible for the full coverage payout. The premium is locked in and guaranteed to never increase for as long as your coverage is in effect.  

Permanent Whole Life

Permanent whole life coverage is available to people between the ages of 40 and 75. You can get up to $50,000 in coverage, and whole life coverage lasts for your lifetime. The policy does build a cash value which you can borrow against if needed. There is no medical exam for whole life coverage, but underwriters will look at answers on your application to determine your eligibility for insurance. 

Renewable Term Life 

Renewable term life insurance is the only plan Colonial Life offers to people under the age of 40. Term life policies are available to anyone between the ages of 18 and 75, and you can get up to $50,000 in coverage. 

Colonial Penn’s term life policies have level terms and are guaranteed renewable up to age 90. No medical exam is required, but your eligibility is determined by your answers on the insurance application. 

Available Riders

Riders are add-ons to policies that modify or enhance your coverage. Unfortunately, Colonial Penn has very limited rider options, so there aren’t many ways to customize your plans. 

Living Insurance

Living insurance can be added to either a permanent whole life or renewable term life insurance policy. If you become seriously ill from a heart attack, cancer, or chronic illness, you can collect up to 50% of your coverage early to pay for your care. 

Customer Service

Colonial Penn is a direct-to-consumer insurance company, so it doesn’t have insurance agents or financial professionals you can meet with to discuss your insurance needs. 

However, you can get a quote for Colonial Penn’s policies online. If you’d like to speak with Colonial Penn’s sales department, you can speak to a representative over the phone by calling 877-877-8052. Customer service is available Monday through Friday from 8:30 a.m. until 10:00 p.m. ET, and on Saturdays from 9:00 a.m. until 5:00 p.m. ET. 

Colonial Penn does have an online chat feature you can use to ask a specialist questions about insurance applications, insurance quotes, and billing options. 

Complaint Index

The National Association of Insurance Commissioners (NAIC) maintains a database of complaints about insurance companies. Every year, the NAIC publishes companies’ complaint ratios, or the number of complaints a company receives relative to its market share. 

The NAIC considers a complaint ratio of 1.0 to be average. If a company has a complaint ratio above 1.0, it has more than the usual number of complaints. A number below 1.0 indicates fewer-than-average complaints. 

In 2019, Colonial Penn’s complaint ratio was 1.31, slightly higher than average. That’s a change from 2018, when it had a better-than-average complaint ratio.

Third-Party Ratings

AM Best is a credit rating agency that is primarily focused on the insurance industry. AM Best is known for its Financial Strength Ratings (FSRs) which measure the ability of an insurance company to meet its policy and contractual obligations. 

CNO Financial Group, the parent company of Colonial Penn, has an A- (Excellent) rating from AM Best. 

Cancellation Policy

To cancel your policy, contact Colonial Penn’s customer service team by calling 800-523-9100. 

With Colonial Penn, you have 30 days to cancel your policy after enrolling. If you enroll in a plan and decide within 30 days that it’s not right for you, you can change or cancel it and get a full refund of any premiums paid. 

After the 30-day trial period expires, you can cancel at any time. Colonial Penn does not charge a penalty or cancellation fee, but it won’t refund any of your premiums. 

Price

When it comes to pricing, Colonial Penn’s options start as low as $9.95 per month. Rates are dependent on age and gender. Below are the quotes for 40-year-old adults in Florida for permanent whole life insurance.

Coverage Amount 40-year-old Female 40-year-old Male
$10,000 $14.83 $18.95
$20,000 $25.92 $34.15
$30,000 $37.00 $49.35
$40,000 $48.08 $64.55
$50,000 $59.16 $79.75

Colonial Penn does not require a medical exam, but, like most insurance companies, it does require you to select either male or female on the insurance application based on your gender at birth. Being nonbinary does not disqualify you from getting life insurance. However, many companies’ underwriting processes have not been updated based on a broader awareness of gender issues, so you may find the application process restrictive. 

Competition

While Colonial Penn does offer some useful life insurance options, particularly with guaranteed acceptance policies, it has a relatively low coverage maximum, and there are limitations on who is eligible for a policy. If you need more coverage or are outside of Colonial Penn’s restrictions, it’s wise to look at other insurance companies. 

Another option is Gerber Life Insurance Company. Gerber offers term life and guaranteed insurance policies, as well as policies for children under 14. You can get significantly higher coverage amounts through Gerber. For example, term life insurance policies are available with coverage limits up to $300,000, and no medical exam is required in most cases. 

If you’re trying to decide between the two, Gerber Life Insurance Company is likely the better choice. It offers more coverage options, higher benefit amounts, and has a higher rating from AM Best, so you can be confident that your claim will be paid out if necessary.

  Colonial Penn Gerber Life Insurance
Market Share Not applicable Not applicable
Number of Plans 3 4
Dividends for 2020 Not applicable Not applicable
Wellness Program Discounts/Quit Smoking Incentives Not applicable Not applicable
Service Method Phone, web Phone, web
AM Best Rating A- (Excellent) A
JD Power's Price Rank Fair Fair
Complaints Trend 1.31 0.51
Verdict

If you are looking for a robust life insurance policy to provide for your family after you’re gone, Colonial Penn isn’t a good fit for you. With a maximum benefit of just $50,000, Colonial Penn’s plans are relatively small and unlikely to cover more than your final expenses. 

But if you’ve struggled to get life insurance because of your health or age and are looking for a guaranteed acceptance policy to pay for your burial expenses, Colonial Penn can be a good option to give you some coverage and peace of mind.

How We Review Life Insurance Companies

Our reviews of life insurance companies are based on a quantitative approach that analyzes each insurer on their stability and reliability, customer service, claims experience, diversity of product lines, and cost. We compare the terms of each type of policy offered—including available coverage amounts, optional riders, and premium payment options—with those of other major life insurance companies. Lastly, we look at how the company is rated by third-party organizations to determine its reliability and overall reputation.

Learn more: Read our full Life Insurance Methodology here.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
  1. CNO Financial Group. "2019 Annual Report," Page 14. Accessed August 17, 2020. 

  2. National Association of Insurance Commissioners. "Complaint Index." Accessed August 17, 2020. 

  3. AM Best. "AM Best Affirms Credit Ratings of CNO Financial Group, Inc. and Its Life/Health Subsidiaries." Accessed August 17, 2020.