Colonial Penn is a life insurance company perhaps best known for its television commercials starring Alex Trebek. It was also one of the first life insurance companies to issue “Guaranteed Acceptance Life Insurance” plans for people age 50 and older in 1968. It now offers life insurance products for customers between 18 and 85. Here’s what you need to know before deciding if Colonial Penn is the right life insurance company for you.
Is Colonial Penn Right For You?
Colonial Penn may be a good option if you’re looking for life insurance of $50,000 or less to cover final expenses, like funeral expenses, or if you’re between the ages of 50 and 85 and don’t need access to full death benefits for at least two years (in most states). It can also be a good option if you’re looking for a life insurance policy that doesn’t require a medical exam.
Colonial Penn may not be the best option if you want a life insurance policy to provide more than $50,000 in benefits.
Where is Colonial Penn offered?
Colonial Penn is available in all 50 states, the District of Columbia, Puerto Rico, and the US Virgin Islands. However, plan features and restrictions may vary by state. For example, in New York, Colonial Penn is underwritten by Bankers Conseco Life Insurance Company. Also, their renewable term life insurance plan is not offered in Montana, New York, or the US Virgin Islands.
Pros and Cons of Colonial Penn Insurance
- No medical exam is required.
- Possible borrowing capacity against the cash value
- Guaranteed rate
- $50,000 maximum insurance payout
- Two-year limited benefit period.
Colonial Penn Pros Explained
- No Medical Exam Required: While many life insurance plans ask health questions or require medical exams, the guaranteed whole life insurance option does not, and Colonial Penn certifies that you will be approved.
- Potential Borrowing Capacity Against Cash Value: Some Colonial Penn insurance plans may allow you to borrow money from your life insurance policy. This includes both term and whole life insurance policies.
- Guaranteed Rate: For the guaranteed acceptance plan, your monthly premium stays the same for the policy’s life.
Colonial Penn Cons Explained
- $50,000 maximum insurance payout: The maximum insurance death benefit is $50,000, with some policies having lower or variable maximums. These lower payments are usually only enough for limited final expenses.
- Two-year limited benefit period. For the guaranteed acceptance of the whole life insurance plan, you must wait at least two years before filing a claim for full benefits for non-accidental deaths. A percentage of the face value of the program may be paid for non-accidental deaths, with the total amount paid for accidental deaths. This may vary by state.
If you’re in good health, you may pay less for a life insurance policy that requires a medical exam. Because it uses your specific health information to decide your premium and underwriting cost. Ask about the cost difference for insurance with a medical exam versus one without.
Colonial Penn Products and Notable Deals
Colonial Penn specializes in life insurance, but not all types are available in all states.
- Guaranteed Acceptance Life Insurance: Age to apply varies by state
- Permanent Life Insurance: You must be between the ages of 40 and 75 to apply
- Renewable Term Life Insurance: You must be between the ages of 18 and 75 to apply for coverage up to $50,000, renewable through age 90, and premium rates increase with age
- LifeChoice Life Insurance: New York residents only, must be between 50 and 75 years of age to apply
- Life Insurance Rider: For an additional premium, you can add a health condition rider to a term or whole life insurance policy, so you have the option to collect up to 50% of your death benefit after diagnosis of cancer, chronic illness, stroke or heart attack or terminal illness
If you’re not satisfied with your plan, Colonial Penn offers a 30-day money-back guarantee.
What discounts are offered?
Colonial Penn reveals very few discounts on its website. However, it does offer a prepaid discount on some of its insurance plans. Pay annually and save up to a month on your premium.
If you are younger or in good health, consider investigating other insurance options such as critical illness insurance, long-term care insurance, or other combination policy options with a health professional, life insurance agent, or financial planner.
Colonial Penn Insurance Ratings & Reviews
Colonial Penn Life Insurance received a financial strength rating of “A- (Excellent)” from AM Best. It is not accredited by the Better Business Bureau (BBB), and more than 80 complaints have been filed with the BBB.
The Bottom Line at Colonial Penn
Colonial Penn has a solid financial strength rating and has been around for more than 60 years. And offers life insurance without a medical exam for people up to age 75. If you’re shopping for insurance, you may be able to get a lower price if you’re younger, in good health, or able to pass a medical exam. Whenever you want to compare life insurance options, consider enlisting the help of a licensed life insurance broker or agent to help you review policies and quotes.