If you’re considering buying a 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 acceptance life insurance market.
Before purchasing a Colonial Penn guaranteed life insurance policy, we suggest reading this article to get a full understanding. The truth is, Colonial Penn is just one of about 15 companies that offer a top rated guaranteed issue product.
What You’ll Learn
About Colonial Penn Life Insurance
Colonial Penn Life Insurance Company Ratings
About Their Guaranteed Acceptance Policy
Pros of Colonial Penn Guaranteed Life Insurance [Rate Lock Here]
Cons of Colonial Penn Guaranteed Life Insurance
Alternatives 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 align you with the best company. Our goal is always to find the sweet spot between price and value based on your individual needs.
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.
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, which ultimately became the focus of American Association of Retired Persons (AARP).
Today, Colonial Penn serves people between the ages of 18 and 85 with their insurance products, and their specialty is in guaranteed acceptance whole life.
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
As with all of our best carrier reviews, we like to provide ratings about the company’s financial strength. This allows you, the consumer, to know how likely an insurer is to pay its 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.
About Colonial Penn Guaranteed Life Insurance
Is Colonial Penn the right guaranteed acceptance life insurance company for you?
Let’s just say it’s always great to have options, especially with such an important purchase like insurance. At GuaranteedIssueLife, we represent multiple top rated best life insurance companies for high-risk candidates.
Ultimately, the choice is up to you whether Colonial Penn or another carrier is the right choice. Yet we want to help you make this decision in an educated manner. In this review of Colonial Penn Life Insurance and their Guaranteed Acceptance Whole Life policy, we will discuss the pros, the cons, and the alternatives.
Continue reading to see if Colonial Penn has the right plan for your life insurance needs.
Guaranteed Acceptance Policy Overview & Rates
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
Pros of Colonial Penn Guaranteed Life Insurance
There are a few positives to choosing Colonial Penn for guaranteed acceptance life insurance. See them below before reading the drawbacks to decide if it’s right for you.
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.
It features a two-year graded death benefit limitation, which means if you die in the first two years of the policy, your premium 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.
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.
Colonial Penn Rate Lock
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.
Cons of Colonial Penn Guaranteed Acceptance Life Insurance
In our Colonial Penn review, we found a number of setbacks with choosing this carrier instead of other guaranteed life insurance companies.
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…even with insurance!
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).
We can’t speak for you, but it seems absolutely pointless 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. To see what the exact policy amount that you’re interested in would cost you across multiple other carriers, use the free quote tool on this page.
Also, it’s worth noting that the ‘unit model’ is downright confusing and results in many unhappy customers.
Targeting 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, CP oversimplifies what is truthfully 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. The financial security of your loved ones depends on this decision, and you will not be there to help if they run into future frustrations.
Alternatives to Colonial Penn for a Guaranteed Acceptance Policy
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. Especially with life insurance! Leave Alex Trebek to be the host of a game show, not the spokesperson for one of your most important purchases in life.
What can you do instead? Easy! Just give us a call and let us earn your business through friendly, non-pushy customer service and decades of experience.
You can also learn more about the best guaranteed issue companies to see if one of our top choices meets your needs.
Compare Colonial Penn to Others Through A Life Insurance Expert
We are not a life insurance carrier. We are an agency with a full team of knowledgeable and experienced life insurance agents. We are licensed in all 50 states and can shop across more than a dozen carriers to find the best product for you.
Life insurance is one of those purchases that should’ve been made yesterday, so let’s not wait any longer. Give us a call today to see what we can do for you!
You may also use our free guaranteed life insurance quote tool on the side of this page for instant pricing.