Colonial Penn Life Insurance Review

Updated: October 30, 2024

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MoneyGeek’s Take: Is Colonial Penn Right for You?

Colonial Penn provides life insurance with a simple application process and offers guaranteed coverage for seniors with no medical exam required. However, it offers a limited death benefit and does not have any policies available to those under 40. Colonial Penn may be an ideal choice for individuals who have small coverage needs and are looking to cover end-of-life expenses.

Colonial Penn only offers permanent life insurance options, so if you're looking for term life insurance, MoneyGeek recommends Mutual of Omaha. In addition, adults in their 30s may find that Nationwide is a better fit.

At a Glance: Colonial Penn Life Insurance

Colonial Penn

pros

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Offers online quotes and applications

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Doesn’t require medical exam

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Provides 30-day free cancellation period

cons

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Low maximum payout of $50,000

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Doesn't offer term life insurance plans

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High customer complaint rating

COMPANY HIGHLIGHTS

Established in 1957 and headquartered in Philadelphia, Colonial Penn provides life insurance coverage to customers in all 50 U.S. states, as well as Washington, D.C. and Puerto Rico. The company currently has over $3.5 billion of life insurance in force. The National Association of Insurance Commissioners' complaint report shows that Colonial Penn has a higher-than-average complaint index of 19.47.

This insurance provider offers two types of permanent life insurance, Guaranteed Acceptance Life Insurance and Permanent Whole Life Insurance, which cover the policyholder for their whole lifetime and build up a cash value component that can be borrowed against.

The Guaranteed Acceptance policy is available to those between the ages of 50 and 85 (in most states) and doesn't require a medical exam or health questionnaire — all qualified individuals are guaranteed to get coverage regardless of health. In some states, including Missouri and Minnesota, the maximum age is 75.

The Permanent Whole Life policy is available for those aged 45 to 75 and offers coverage ranging from $10,000 to $50,000. Colonial Penn also offers Living Insurance, which combines its Permanent Whole Life policy with an Accelerated Death Benefit Rider, allowing policyholders to access up to 50% of their benefit if they are diagnosed with a covered illness.

If you purchase a Colonial Penn policy, you can take advantage of the company's 30-day money-back guarantee, which allows you to cancel the policy within the first 30 days for a full refund if you are unsatisfied for any reason.

TABLE OF CONTENTS

Key Takeaways

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Colonial Penn final expense coverage can help seniors provide for their families after they pass away.

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Medical exams are not required for its whole life and guaranteed acceptance life insurance.

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Colonial Penn no longer offers term insurance.

Colonial Penn Policy Options Explained

According to Life Insurance Marketing and Research Association’s 2022 Insurance Barometer Study, 68% of life insurance policyholders with financial dependents feel financially secure, compared to only 47% of non-insured adults. With Colonial Penn life insurance policies, you can also feel secure and help provide for your family and loved ones when you pass.

Whole Life Insurance Options From Colonial Penn

Whole life insurance is a type of permanent life insurance that covers you for your whole life. It provides a guaranteed death benefit to your beneficiaries when you pass away and also builds cash value over time that you can benefit from while you're still alive.

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    Permanent Whole Life Insurance Plan

    Colonial Penn's Permanent Whole Life Insurance Plan provides a lifetime of protection with no medical exam required. This plan is available to individuals ages 40–75 (in most states) and offers flexible payment options, allowing you to pay your premiums monthly, quarterly, semi-annually or annually.

    Your premium is based on gender and age when the policy takes effect (in Montana, it's based on age only), and the rate will never increase. Benefit amounts are available in increments of $10,000 up to a maximum of $50,000. You can also opt for living benefits to cover critical illnesses such as cancer, heart attack or stroke.

Colonial Penn's whole life insurance plan is ideal for those looking for lifelong protection and have relatively low coverage needs. This policy can also help beneficiaries cover end-of-life expenses and may appeal to those who want a cash value component that they can borrow against.

Final Expense Insurance Options From Colonial Penn

Final expense insurance is designed to cover the costs associated with end-of-life expenses, including funeral and burial costs and outstanding debts. It's a great way to ensure that final expenses are taken care of when you pass and take the burden off your loved ones.

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    Guaranteed Acceptance Whole Life Insurance

    Colonial Penn's final expense product is its Guaranteed Acceptance Whole Life Insurance, which guarantees coverage to applicants between the ages of 50 and 85 regardless of their health. Benefit amounts are not listed on the company's website, but you can get a free quote, which includes more information for your state, through the site. Locked-in premium rates start at $9.95 monthly.

    As long as the premiums are paid, the coverage remains in effect for the policyholder's lifetime. It starts to build cash value after the first year, which can be borrowed against at a guaranteed rate.

This policy type is best for seniors over the age of 50 who want to provide a secure financial future for their loved ones. It offers guaranteed acceptance, flexibility in coverage amounts and locked-in premium rates, making it a great option for those seeking end-of-life insurance with no health questions asked.

Colonial Penn’s Life Insurance Riders

A rider is an add-on to an existing insurance policy that provides extra coverage or benefits. Colonial Penn offers a variety of riders to supplement its life insurance policies and provide extra security to policyholders.

Rider
Description

Accidental Death Benefit Rider

Provides additional coverage ranging from $10,000 to $50,000 if you die in a covered accident.

Accelerated Death Benefit Rider

Allows you to access a portion of your benefit early if you are diagnosed with a qualifying
illness. Colonial Penn offers three early payout options: heart attack and stroke, cancer or
chronic illness. This rider, combined with its Permanent Whole Life policies, is branded
as its Living Insurance product.

How to Get Colonial Penn Life Insurance

If you've decided that Colonial Penn life insurance fits your needs, the next step is to apply for it. Here's how to purchase a life insurance policy, as well as what to do if the company denies you coverage.

How to Buy Life Insurance From Colonial Penn

  1. 1

    Do Your Research

    The process of buying life insurance from Colonial Penn is simple. Start by researching available options to find which works best for you. Colonial Penn offers an online quote tool to help give you an idea of how much you can expect to pay for your selected coverage amount.

  2. 2

    Compare Quotes

    Once you have your quote, it's always a good idea to compare estimates from different companies to ensure you get the best rate. Your age, health history and lifestyle can all affect your eligibility and rate.

  3. 3

    Health Check

    To apply for a Colonial Penn policy, simply fill out the online application. If you're applying for its Guaranteed Acceptance plan, you are guaranteed to be approved and will then find out your coverage limits and rates. Otherwise, you will receive a response shortly after submitting the application.

  4. 4

    Approval

    Once you're approved, you will need to sign the policy documents and make the first payment to activate your coverage. Be sure to reach out to an agent with any questions.

What to Do if Colonial Penn Insurance Denies You Coverage

  1. 1

    Contact Your Broker

    If Colonial Penn denies you coverage, there are still many options for life insurance available to you. Start by contacting an agent to find out why your application was denied.

  2. 2

    Lifestyle Changes

    You may need to make some lifestyle changes in order to improve your health before reapplying.

  3. 3

    Explore Other Options

    You can also explore other life insurance companies or policy types, such as final expense insurance. These policies are usually easier to get approved for, although you may end up paying a higher rate for more limited coverage.

Frequently Asked Questions About Colonial Penn Life Insurance

MoneyGeek answered some of the most commonly asked questions about Colonial Penn life insurance policies to help you make an informed decision.

Can you borrow from your Colonial Penn life insurance policy?

What’s the maximum amount of life insurance coverage available from Colonial Penn?

Do life insurance policies from Colonial Penn pay dividends?

Can you get life insurance from Colonial Penn if you have cancer?

Do life insurance policies from Colonial Penn cover death by drug overdose?

Do life insurance policies from Colonial Penn cover death by suicide?

About Mark Fitzpatrick

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Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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