Colonial Penn Insurance Review & Complaints: Life Insurance

Colonial Penn Insurance reviews reveal a company rating of A- with the Better Business Bureau, but Colonial Penn Insurance rates are not the best value when it comes to your life insurance policy. Compare Colonial Penn life Insurance quotes online before buying a policy.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: May 3, 2021

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With Jeopardy host Alex Trebek as the spokesperson, Colonial Penn is one of the better-known names in life insurance. Colonial Penn focuses on guaranteed acceptance plans aimed at the senior market, but also offers other plans.

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What is Colonial Penn life insurance?

Colonial Penn was founded in 1968 by AARP co-founder Leonard Davis, which makes it not at all surprising that the retired and senior market has always been the company’s main target audience. The company was purchased by Conseco, now known as CNO Financial Group, in 1997. For a brief period of time, Colonial Penn operated under the name Conseco Direct Life before returning to the more recognizable brand.

The Colonial Penn program directs much of its advertising at the 50 plus market, using a series of paid celebrity endorsers that have included Ed McMahon and Joe Theismann. Alex Trebek was the face of Colonial Penn for years. In addition to their simplified issue policies for the over 50 market, the company also offers whole life insurance and term life insurance plans to a wider age range.

Colonial Penn’s headquarters is in Philadelphia, PA, and they remain true to their roots as a direct market life insurance company. They have moved into the new age, however, offering online services in addition to their phone and direct mail approaches.

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What are Colonial Penn life insurance coverage options?

What type of policy do you need? Keeping things simple, Colonial Penn Life Insurance Company has only three type of life insurance options to choose from, including their best-known guaranteed acceptance life insurance option. All of the company’s plans come with a 30-day money-back cancellation period.

What is guaranteed acceptance life insurance?

Colonial Penn’s whole life insurance plan is offered to those between the ages of 50 and 85. While it has no medical exams or questions, there is a two-year limited benefit period from the date of issue. The plan, as the name implies, guarantees issue regardless of what medical conditions may exist.

Guaranteed Acceptance Life offers flexible payments, from monthly to annually, and a range of benefit amounts. The site does not list the available life insurance benefit amounts but states that life coverage benefits can be seen when running a quote, this is because life insurance benefit amounts are determined based on applicant information. Our quote returned a maximum death benefit amount of $14,288, and we explain this odd amount and how Colonial Penn Life Insurance Company determines it in further detail in the rates section below.

What is whole life coverage?

The basic whole life plan from the life insurance company can be taken out a little younger, starting at age 40. While this plan also has no medical exam, some medical and health questions will be taken into account during underwriting.

Like all whole life plans, Colonial Penn Life Insurance Company offers a cash accumulation benefit along with the chosen death benefit. The maximum coverage amount for this policy is $50,000.

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What is term life insurance?

Colonial Penn’s renewable term life insurance product can be issued between the ages of 18 and 75 and can be renewed up to age 90. Unlike the other renewable term life coverage plans, this product does see an increase in rates over time as the policy is renewed at an older age.

Benefit amounts for the term life policy product are available up to $50,000.

How much is a unit of Colonial Penn life insurance?

We ran a quick quote on life insurance rates for the Guaranteed Acceptance product with a male from California aged 50 years. The plan returned a range of life insurance rates based on units of life coverage.

What are the rates for life policies?

The rates for life policies vary depending on the applicant. In our life insurance quotes for a life insurance policy, one unit came out to somewhat of an awkward number. The reason being is because Colonial Penn’s rates are determined in the opposite way from how most insurance companies determine their rates – life insurance cost is set at intervals starting at $9.95 for one unit, and what one unit is will vary depending on specifics about the applicant.

Thus, a different applicant would receive a different amount of insurance coverage for the same premium. The maximum premium on this quote came out of $79.60 a month with a death benefit of $14,288.

This allows Colonial Penn to advertise that anyone can get coverage for $9.95 a month – which they can – but not everyone will get the same amount of coverage. A 70-year-old male, according to our quote, gets on $717 worth of coverage at the $9.95 a month rate; that same individual would get only $5,736 at the top $79.50 a month rate. Although it’s all in the fine print, it’s a bit deceiving to the average insurance shopper.

By comparison, we ran the same sample age (50) through Colonial Penn’s standard whole life and returned $10,000 in coverage for $29.65 a month and the maximum of $50,000 for $133.24 a month. That makes the latter a better value for those who do not have concerns about eligibility and thus do not need to go the guaranteed acceptance route.

In the interest of comparing Colonial Penn to our standard sample at a younger issue age, we also ran quotes for a 30-year-old male. At this age, only the term life policy is offered.

The quote came back at $5.99 for $10,000 in coverage and $23.96 for $50,000 in coverage. These numbers are on the high side; we have seen double the coverage for a lower monthly premium elsewhere – it is also important to note that these premiums will go up as the policy is renewed over time.

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How are claims handled?

Colonial Penn has an informative life insurance claims section that provides all of the details needed to file a claim as well as helping information in regards to the process.

Claims can be filed only through the mail, but assistance is offered via a toll-free number. Claim forms can be downloaded from the website, or they can be sent out to the beneficiary by request.

While the claims process does not utilize online services as much as we like to see, it is in line with companies who focus on the senior market.

How are the financial strength ratings, Colonial Penn customer reviews & customer complaints?

Colonial Penn has an A- with the Better Business Bureau, docked according to the page for the five complaints against the company in the past three years, though only one was closed in the past 12 months. Considering the size and reach of this company, the complaint volume here is quite low compared to customer satisfaction.

Oddly for such a well-known company, we were unable to find much in the way of reviews by consumers. Certainly, a lack of complaints can generally be construed as a good thing.

Colonial Penn Life Insurance Review: What’s the bottom line?

Colonial Penn has the star power to sell its products to people, but it does not offer the best value in life insurance rates. The unit system for the guaranteed acceptance policies makes the rates look appealing to a potential customer, but the practice is at best confusing and at worst deceptive. Although the rates for the standard plans are a better value, be sure and do the appropriate homework and rate comparisons to ensure you are getting the rate best suited to you.

Enter your ZIP code below to get started comparing rates today. With our free tool, you can get multiple quotes to begin comparison shopping.

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