Colonial Penn life insurance review 2021

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Colonial Penn has been in the life insurance business for more than six decades. The provider offers life insurance policies in 49 states, the District of Columbia, Puerto Rico and the Virgin Islands. Colonial Penn sells life insurance to folks 18 to 85 years old.

Term and whole life insurance are the two types of life insurance products offered by Colonial Penn. None of the life insurance policies require a medical exam, but there are a few health questions to answer to see if you are eligible for coverage. The renewable term life insurance offers the chance to renew up to age 90, based on your current age at renewal. People over 40 are eligible for whole life insurance with the option for an early payout they call Living Insurance. Colonial Penn also offers a guaranteed acceptance whole life policy for those over 50, which has no medical questions involved.

Colonial Penn life insurance

Life insurance policies have a death benefit, which pays a predetermined amount of money to a beneficiary when the insured dies. For example, if you purchase a $50,000 life insurance policy and pass away during the policy term, your beneficiary will receive the $50,000 death benefit. Life insurance policies fall into two categories:

Colonial Penn offers term life and traditional whole life insurance policies. All policies feature flexible payment options, enabling you to pay every month, quarter, six months or 12 months.

Guaranteed acceptance life insurance

In most states, people aged 50 to 85 years of age can apply for Colonial Penn’s guaranteed acceptance life insurance policies. This whole life policy does not require a medical examination but has a two-year limited benefit period meaning that your policy will not pay out a death benefit in the first two years. The policy builds a cash value, beginning after the first year of coverage, and allows you to choose the death benefit limit.

A Colonial Penn Guaranteed Acceptance policy covers you your entire life if you continue to pay the premium. It features a fixed rate, so you will pay the same premium throughout the life of the policy.

Permanent whole life insurance

Colonial Penn’s permanent whole life insurance policy is available to customers aged 40 to 75 years old, except for applicants in New York or the Virgin Islands. The policy does not require a medical examination, but you will need to complete a questionnaire to determine your eligibility.

This whole life policy covers you throughout your life and has a maximum death benefit of $50,000. It builds a cash value starting after the first year of the policy. The coverage features a fixed rate, but the premium cost will depend upon your age and gender, except in Montana, where Colonial Penn rates premiums based only on age.

Renewable term life insurance

Colonial Penn’s renewable term life insurance policy is available in all locations except California, Montana, New York and the Virgin Islands. It’s available to people aged 18 to 75 years old, renewable to age 90 and carries a maximum death benefit of $50,000. Colonial Penn bases rates on your age and gender and premiums increase as you grow older.

Your term life policy may earn a cash value, depending on how long you keep the coverage. Colonial Penn does not require a medical exam for its term life policies, but determines your eligibility based on a medical questionnaire.

Living insurance

Colonial Penn offers a living insurance option with its permanent whole life insurance and renewable term life insurance policies. This accelerated death benefit rider enables you to receive up to 50% of your whole life or term life death benefit if you are diagnosed with cancer or another chronic illness, or if you suffer a heart attack or stroke.

Colonial Penn ratings, reviews, customer satisfaction and complaints

Colonial Penn didn’t make the cut in J.D. Power’s 2020 U.S. Life Insurance Study but the Better Business Bureau gives Colonial Penn an A+ rating. In the last three years, 81 consumers have filed BBB complaints against Colonial Penn, most centered on advertising, billing and sales issues.

AM Best gives Colonial Penn an A- (Excellent) financial rating. AM Best has analyzed Colonial Penn since 1969 and the provider has maintained an A- rating for the last five years.

Reasons why Colonial Penn is a great option

If you’re looking for one-stop insurance shopping, Colonial Penn isn’t the right insurer for you. While some life insurance providers can also cover your business, car and house, Colonial Penn keeps it simple by only offering quality life and supplemental health insurance policies.

Colonial Penn also falls short with its death benefit limits. Both term and whole life policies provide a maximum death benefit of $50,000, much lower than policies offered by many other insurers.

Colonial Penn is a good option for people looking for a whole life policy. If you have a preexisting condition that might prevent you from purchasing life insurance from another carrier, Colonial Penn’s Guaranteed Acceptance Life Insurance might provide just the coverage you need.

Colonial Penn’s term life policies offer a few advantages over many of its competitors. They don’t require a medical exam and if you continue to renew your term life coverage, your policy may build a cash value. And, while many providers only offer term life policies that cover you to age 85, Colonial Penn extends coverage to age 90.

All Colonial Penn policies also come with a 30-day trial period. If you decide to cancel or change your policy during the first 30 days of coverage, the provider will issue a full refund.

Additional policies offered by Colonial Penn

Unlike many major insurers, Colonial Penn doesn’t offer a broad portfolio of insurance products, like business, car and home insurance. However, the carrier’s Active Care supplemental health insurance can complement your life insurance policy by providing asset protection when you need it most.

Today’s high healthcare costs can cause a serious financial burden, even if you carry medical insurance. Colonial Penn’s Active Care coverage can help pay expenses related to a variety of health conditions, including:

  • Accidental injuries
  • Alzheimer’s disease
  • Cancer
  • Diabetic complications
  • Heart attacks
  • Strokes

Active Care pays up to $60,000. And unlike your health insurance coverage, this supplemental policy pays the benefit directly to you. You can use the payment to pay copayments and deductibles required by your healthcare coverage, or to pay medical bills and everyday expenses such as car payments, groceries, mortgage payments or rent.

Colonial Penn offers Active Care to adults and children. If you don’t file a claim before the end of the policy term, Colonial Penn will return a portion of your premium. Availability of Active Care and the cash return benefit may vary by state.

Frequently asked questions

How much insurance do you get from Colonial Penn for $9.95 per month?

In its TV ads, Colonial Penn advertises life insurance coverage starting at $9.95 per month for its guaranteed acceptance life insurance. While the policy doesn’t require a medical exam, it only offers limited benefits for the first two years. But the price you’ll pay for the policy may depend on your age, amount of coverage and location.

What is the best life insurance company?

According to J.D. Power’s 2019 U.S. Life Insurance Study, Northwestern Mutual, State Farm and Mutual of Omaha rank among the top life insurance companies. In the 2019 survey, Colonial Penn didn’t earn a ranking. However, choosing the best life insurance company will depend on your personal needs. Some insurers offer a wide variety of insurance products, like auto, business and home coverages, while others, including Colonial Penn, don’t offer such a broad portfolio. If you’re only looking for life insurance, Colonial Penn might provide the right fit, but if you need a wide range of coverages, you’ll need to find another insurer.

How do I file a life insurance claim with Colonial Penn?

Colonial Penn only accepts claims through the mail. To file a claim, the named beneficiary must submit a claim form, the original insurance contract and a certified copy of the deceased death certificate.

Written by
Michael Evans
Personal Finance Contributor
Michael Evans has worked in numerous industries, including education, finance, government, insurance and journalism. He began writing professionally while working for the world's first online mortgage brokerage in San Francisco, California. His writings have appeared in print and online publications, including Fox Business, International Living, Motley Fool and Yahoo Finance. Michael has contributed to Bankrate since 2013. He and his family divide their time between residences in Northern California and Colombia. When Michael is not writing, he enjoys working in his photography business and playing with his cat, Cyndi Lou.
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