Colonial Penn Guaranteed Life Insurance Review

If you’re considering buying a guaranteed life insurance policy through Colonial Penn, chances are you’ve seen one of their commercials. Through paid celebrity endorsements on television commercials, Colonial Penn has become a well-known name in the guaranteed issue life insurance market.

This review will teach you what you need to know before purchasing a guaranteed life insurance policy. The truth is, Colonial Penn is just one of about 15 companies that offer a guaranteed issue product, and you should compare all your options before purchasing.

What You’ll Learn

About Colonial Penn Life Insurance
About Colonial Penn Guaranteed Life Insurance
Pros of Colonial Penn Guaranteed Life Insurance [Rate Lock Here]
Cons of Colonial Penn Guaranteed Life Insurance
The Best Alternative to Colonial Penn

Whether you’re looking to secure an affordable policy to cover burial, cremation, final expenses, medical bills or personal debts, we can help you find the best company for your situation.

Disclaimer: We are not Colonial Penn nor are we affiliated with Colonial Penn. You can reach the company directly by calling 1-877-877-8052 or visit online at colonialpenn.com.

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About Colonial Penn Life Insurance

Founded in 1968 in Philadelphia, Colonial Penn Life Insurance Company is the brainchild of philanthropist and AARP co-founder, Leonard Davis. The company is owned by CNO Financial Group, a financial services organization headquartered in Carmel, Indiana. Colonial Penn’s original focus was on people over age 65.

Today, Colonial Penn serves people between the ages of 18 and 85 with their insurance products, and their specialty is in guaranteed issue whole life insurance.

You may recognize Colonial Penn because of years of celebrity endorsements. These days the face of CP is Jeopardy host Alex Trebek who is a compensated endorser in advertisements. They are one of several guaranteed issue companies that put millions of dollars every year into marketing.

Colonial Penn Life Insurance Company Ratings

Knowing an insurance company’s financial strength allows you, the consumer, to know how likely they are to pay claims. There are a handful of agencies that report their own ratings, but the industry standard is through A.M. Best.

Company ratings are typically based on:

• A company’s financial holdings
• How much a company is collecting in premiums
• The amount a company is paying in claims

So what’s Colonial Penn’s rating?

As of February 8, 2017, Colonial Penn and CNO Financial Group have a rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-”. This means that the outlook for the company is stable.

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About Colonial Penn Guaranteed Life Insurance

Colonial Penn’s guaranteed life insurance policy has features similar to other guaranteed issue policies but is often more expensive.

Below, we will go over the pros and cons of their policy. In general, we do not recommend their policy because you can usually get a better rate with other companies.

Is Colonial Penn guaranteed life insurance right for you?

Probably not. Here’s why.

You should compare Colonial Penn with other companies. At Guaranteed Issue Life, we represent multiple top rated life insurance companies for high-risk candidates, and usually, find a better policy with cheaper rates through a different carrier.

Policy Overview

Below are features from Colonial Penn’s Guaranteed Acceptance policy.

Face Amount Range: $400 – $17,000 (based on units)

Age Availability: 50 – 85

State Availability: All

Graded Period: 24 months

Premiums Returned: 7%

Riders: None available

How to Apply: Directly through carrier

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Pros of Colonial Penn Guaranteed Life Insurance

There are a few positives to choosing Colonial Penn for guaranteed acceptance life insurance.

The Policy has No Medical Underwriting

This policy is offered on a guaranteed basis, meaning there is zero medical underwriting or health questions. You cannot be turned away from this policy regardless of your past or current health standing. As with all guaranteed acceptance products, people who select this type of policy are ones who have been declined for life insurance in the past.

The Policy is Available for Ages 50 to 85

This policy is available for males and females between the ages of 50 and 85. Many carriers stop at age 80, so this is a good option for those who have waited until later in life.

The Colonial Penn Rate Lock Ensures Premiums Won’t Go Up

Colonial Penn offers a guaranteed rate lock or fixed premiums for the life of the policy. Unlike other companies, such as AARP where the premiums increase every five years, Colonial Penn locks in your rate. The Colonial Penn rate lock is very popular among life insurance consumers, however, the rate you get is not nearly as competitive as other major guaranteed issue carriers.

Similarly, Colonial Penn also promises that your benefit amount will never decrease. Once you purchase your plan, your beneficiaries are guaranteed the full amount after the two-year graded period.

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Cons of Colonial Penn Guaranteed Life Insurance

In our Colonial Penn review, we found a number of setbacks with choosing this carrier instead of other guaranteed life insurance companies.

They Only Return 7% of Premiums During the Waiting Period

Their policy features a two-year graded death benefit limitation, which means if you die in the first two years of the policy, your premiums plus 7% interest will be returned.

This is about 3% less than the average premium return with other top guaranteed issue policies. The only exclusion to this is if death occurs by accident within the first two years. If that happens, Colonial Penn will pay the full amount of the policy immediately.

They Have a Confusing & Limiting Coverage Structure

If you’ve ever received a quote from Colonial Penn in the past, you’ll know that they operate differently than 99% of other carriers.

Their coverage amounts are listed in “Units” instead of setting coverage amounts such as $5,000 or $15,000. A single unit costs $9.95 and depending on an individual’s age, gender, and location of residence, a single unit is valued between $500 and $2500. This is incredibly low and may ultimately result in a person being underinsured.

For example, one unit for a 50-year old male is $1,786 worth of coverage. This man is only allowed to purchase 8 units, so his maximum coverage is $14,288. If this same man were to wait until age 85 to purchase this policy, that same unit for $9.95 would only get him $418 of coverage with a maximum amount of $3,344 (with 8 units).

There is no reason to get insurance coverage of $418 when you can still qualify for up to $25,000 with over a dozen other top guaranteed issue carriers like AIG and Gerber Life Insurance.

The average funeral in America costs anywhere between $7,000 and $10,000 and is only increasing as space becomes more limited. Add the fact that more Americans are leaving debts and medical expenses to their family, and very quickly Colonial Penn may not provide enough coverage.

Chances are the man in the example above would not leave enough to his loved ones.

Also, it’s worth noting that the ‘unit model’ is downright confusing and results in many unhappy customers.

They Target Seniors Unfairly

Colonial Penn spends an exorbitant amount of their marketing. This is evident in their paid use of celebrity endorses, like Alex Trebek and Ed McMahon.

In their television commercials that appear 24/7 on channels frequently watched by the elderly, they oversimplify what is actually a confusing cost structure.

With claims like “less than 35 cents a day,” we understand why people would be interested. However, these dramatized commercials are a means to quickly sell their products to the elderly by instilling a sense of fear for not having insurance.

By doing so, they’re able to skip mentioning their higher cost of premiums and limiting coverage amounts.

Truthfully, we believe everyone should have a life insurance policy in place to protect their loved ones. But, it such an important decision that should not be made based off TV commercials or the host of Jeopardy alone.

Customer Complaints & Lawsuits against Colonial Penn

As independent agents, we oftentimes hear what clients have gone through with carriers. During our time we have heard many stories of people who felt deceived by Colonial Penn’s advertising.

The rates they were ultimately quoted were much higher than the marketing claims on commercials, and it wasn’t until they were on the phone with a pushy salesperson that they knew.

Colonial Penn has also been sued many times for charging higher premiums and not fully disclosing this upfront.

Many consumer advocacy websites are filled with complaints from beneficiaries saying that the death benefits they ultimately received were much lower than they expected or had been told.

We do take online reviews with a grain of salt as each person’s experience is different, but it is still worth keeping in mind. Before you sign a contract with Colonial Penn, you must MAKE SURE to read the fine print and ask many questions to the agent.

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Alternative to Colonial Penn for Guaranteed Life Insurance

The #1 alternative to Colonial Penn is to work directly with an independent life insurance agency, like us. When you go with Colonial Penn, you can only buy Colonial Penn products. With an independent agency, you can receive insurance rates and purchase a policy from a much larger pool of life insurance companies in order to find what works for you and your family.

Like with anything you buy in life, do not fall victim to shiny ads with famous celebrities as the face.

Instead, use our quote tool and give us a call to help you compare guaranteed life insurance. Our experienced agents have helped 1000’s of people already and can find a better policy than Colonial Penn guaranteed life insurance.