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Colonial Penn life insurance review 2023
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Bankrate's take
Colonial Penn Life Insurance Company offers whole life insurance, including a guaranteed issue policy option, and focuses primarily on serving customers over 50. The carrier may not be the right choice for younger shoppers looking for a variety of policy options.
Colonial Penn’s guaranteed acceptance whole life insurance policy may be appealing to those who have struggled to find affordable life insurance, like those with chronic health conditions.
Colonial Penn life insurance
Colonial Penn life insurance may be an option worth considering, according to Bankrate’s analysis, especially for shoppers over age 50 looking for life insurance.
Colonial Penn offers guaranteed acceptance life insurance and whole life insurance, but it does not offer a range of permanent and universal life insurance options. If you’re looking for term life insurance or other types of life insurance, you may have to turn elsewhere.
- Permanent: Colonial Penn offers whole life insurance, which is a type of permanent life insurance policy. These types of policies remain in effect for the duration of your life or as long as you pay your premiums.
- Whole life insurance comes with a cash value account designed to accumulate interest and returns, which you may be able to use to pay your premiums or borrow against. Colonial Penn’s LifeChoice whole life insurance policy is available to those between the ages of 50 and 75 in most states, with the maximum coverage amount of $25,000. That coverage limit is considerably low compared to other life insurance companies, so whether or not Colonial Penn is the right company for you depends on how much coverage you need. For Colonial Penn’s guaranteed acceptance policies, the maximum coverage amount depends on your age and state.
- Guaranteed: Guaranteed acceptance life insurance is another permanent policy type available through Colonial Penn, which may be a good choice for individuals with health issues who are concerned about the life insurance medical exam. In most states, Colonial Penn’s guaranteed life insurance is available for those between the ages of 50 and 85. Colonial Penn issues coverage for its guaranteed acceptance policies in units, with each unit worth $1,000 of coverage. The number of units available to you may depend on your age, gender and the state you live in. Colonial Penn advertises a cost of $9.95 per unit per month. However, costs may vary based on your circumstances.
Pros and cons of Colonial Penn life insurance
As with all carriers, there are potential perks and drawbacks to consider with Colonial Penn life insurance. Here are some of the key points our insurance editorial team identified.
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Offers no-medical-exam life insurance options
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Rated A (Excellent) by AM Best for financial strength
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Customer service available in Spanish and English
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Policy types are very limited
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More complaints than the expected filed with the National Association of Insurance Commissioners
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Low coverage limits with all policy types
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Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
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Colonial Penn life insurance endorsements
Colonial Penn’s life insurance endorsement options are sparse, but you may be able to include a living benefit rider on your whole life policy. This endorsement can allow you to access up to 50 percent of your death benefit if you are diagnosed with a qualifying illness.
Compare Colonial Penn with other insurers
This Colonial Penn life Insurance review may have you wondering if this is the company for you. If you’re looking for a type of life insurance policy that Colonial Penn doesn’t offer, then you may want to compare quotes and coverage options from some (or all) of the companies below:
Colonial Penn vs. State Farm
While Colonial Penn does not offer term life insurance, State Farm won a 2023 Bankrate Award for the best term life insurance company. The provider also sells universal and whole life insurance, along with auto, business, health and home insurance products. State Farm offers a 24/7 payment line, a network of local agents and an easy-to-use mobile app.
Learn more: State Farm Insurance review
Colonial Penn vs. MassMutual
MassMutual earned a 2023 Bankrate Award for best whole life insurance company. The company earned this title in part due to its high AM Best financial strength score, high coverage capacity and numerous whole life policy riders. The carrier also sells term life insurance, along with universal and variable life policies, which Colonial Penn does not offer. If you’re looking for a whole life insurance provider with a high coverage capacity, you may want to check out MassMutual.
Learn more: MassMutual life insurance review
Colonial Penn vs. Nationwide
Nationwide offers a wide range of life insurance riders, high J.D. Power score and accessible network of local agents. The company also writes term life, variable life and life insurance for children. Nationwide life insurance policies enable you to add a long-term care rider, which can help pay the costs of home or nursing home care.
Learn more: Nationwide Insurance review
Is Colonial Penn a good insurance company?
Since 1972, Bankrate has been a trusted voice in the financial services industry (at that time, we were a print publication known as the Bank Rate Monitor). Fast forward to today, where our insurance editorial team uses our real-world insurance expertise to conduct unbiased reviews of the largest carriers by market share.
Colonial Penn life insurance has written life insurance policies for more than 60 years and was one of the first to offer guaranteed acceptance life insurance, making it a recognizable name in life insurance. If you’re looking for guaranteed acceptance, renewable term and whole life insurance, Colonial Penn may be worth considering. However, Colonial Penn life insurance may not be right for everyone, and you may need to look elsewhere if you’re looking for universal life or variable universal life.
Colonial Penn customer satisfaction
Getting a good rate is only one consideration when shopping for life insurance, especially when you consider that life insurance quotes do not vary as much between carriers as home or auto coverage. Third-party ratings can give you an idea of whether insurers have historically had the financial strength to meet their claims obligations or whether their customer service is up to par. Reviewing J.D. Power studies and AM Best ratings may be a good place to start.
Colonial Penn was not included in either of the 2022 J.D. Power Life Insurance Studies, but its AM Best rating is promising. CNO Financial Group, Colonial Penn’s parent company, improved its AM Best rating from 2021 to 2022. AM Best measures a company’s financial strength, and a high rating indicates a historical ability to meet financial claim obligations.
| Study or Rating Agency | Colonial Penn | Industry average |
|---|---|---|
| 2022 J.D. Power Individual Life Insurance Study | Not scored | 774/1,000 |
| 2022 J.D. Power Group Life Insurance Study | Not scored | 797/1,000 |
| AM Best rating | A (Excellent) | N/A |
Colonial Penn life complaints
Aside from financial strength, Bankrate also looked at customer complaints filed with the National Association of Insurance Commissioners (NAIC). Among other duties, the NAIC tracks the number of complaints filed against an insurance company and gives that company a complaint index score based on its market share. The NAIC uses 1.0 as its baseline index and tracks complaints by product type. This means that an insurer with a complaint index lower than 1.0 receives fewer complaints than expected for its size and vice versa.
Colonial Penn life complaints
Colonial Penn's NAIC Complaint Indexes for its life insurance product are not good. In 2021, Colonial Penn received over twenty times the number of complaints than expected for a company of its size. Based on this information, you may want to speak with existing policyholders about their experience before committing to a policy with Colonial Penn.
Other Colonial Penn perks worth considering
Colonial Penn does not offer policy management through a mobile app, but the following perks may be of interest.
- Instant chat feature: The company’s website features a chat box where you can ask questions and receive answers from a real agent in as little as a few seconds.
- Living Insurance endorsement: Living Insurance is an accelerated death benefit, which means you can take out up to 50 percent of your death benefit before you pass away if you’re diagnosed with a covered illness. Approved illnesses typically include heart attacks, strokes, cancer or certain chronic illnesses. You can contact a Colonial Penn agent regarding the specific details of your situation to determine your eligibility.
- Online bill pay: Through Colonial Penn’s web portal, policyholders can virtually make payments, download forms and contact customer service.
Frequently asked questions about Colonial Penn