Colonial Penn Life Insurance Review

Neither the Colonial Penn 995 insurance plan or their permanent whole-life insurance should ever be your first choice for life insurance.

Is Colonial Penn insurance legitimate, a scam, or a ripoff?

Many consumers ask these questions based on the high number of Colonial Penn negative reviews and complaints on their guaranteed issue $9.95 plan and their permanent whole life plans.

Some would say the 995 plan was designed with two things in mind:

  1. To make loads of money off of uninformed seniors
  2. To make it easy for their employees to sell because it has no medical questions

Their $9.95 plan is terrible for seniors who will only get minimal insurance coverage with high prices.

Table of Contents

Click any topic below to navigate to specific sections:

What To Ask Before Buying Colonial Penn Life Insurance

What Are My Policy Options With Colonial Penn?

You can have a guaranteed acceptance plan or a plan where you have to qualify medically.

Is Price The Most Important Factor?

3 P’s –

Guaranteed Acceptance $9.95 Plan

One $9.95 unit Colonial Penn life insurance coverage WILL NOT be enough to pay for a burial, and in many cases, it’s not enough to pay for a cremation.

Colonial Penn knows its pricing provides insufficient coverage, so they encourage seniors to buy more exorbitantly priced life insurance with a 2-year waiting period.

Some would say Colonial Penn offers one of the most misleading insurance products marketed toward seniors.

So, how does Colonial Penn life insurance work?

Colonial Penn uses persuasive terms to describe its 995 life insurance plan.

  • “Guaranteed acceptance life insurance.”
  • “No medical exam and no health questions required.”
  • “Guaranteed acceptance coverage options start at just $9.95 a month.”
  • “Your acceptance is guaranteed.”

The truth about Colonial Penn life insurance is that their $9.95 plan is terrible for consumers because Colonial Life insurance rates are often 30-40% higher than other companies. You have to pay these bloated premiums for the rest of your life.

If you die in the first two years for health or medical reasons, the Colonial plan won’t pay your loved ones a single penny of life insurance.

Colonial Penn unit prices determine your death benefit by age and the number of units you buy.

They aren’t like “normal” burial insurance plans that let you choose a particular death benefit to determine your rate ($10,000, for example).

Colonial life insurance plans have a pricing structure based on individual units that cost $9.95.

Your age determines the cost of each unit, and the older you are, the more a unit costs you.

If you die in the first two years, their “limited benefit period,” your beneficiary will only receive your premiums paid plus 7% interest in the first two years.

We often get calls asking, “does Colonial Penn have a waiting period?” Let’s take a look at their website.

Permanent Whole Life Insurance

Colonial Penn’s permanent whole life insurance policy for seniors is NOT the same as their $9.95 plan.

Colonial Penn life insurance for seniors is a permanent life insurance policy with no medical exam, but you need to answer many health questions to qualify. The Colonial Penn age limit for whole life insurance is 40-75.

They have strict underwriting, so often, only healthy applicants can qualify, and you will most likely be offered the Colonial Penn 995 guaranteed acceptance plan with a two-year waiting period.

Age Availability50-8540-75
Medical ExamNoNo
Health QuestionsNoYes
Coverage Amount1-15 units$10,000-$50,000
Fixed PremiumYesYes
Fixed BenefitYesYes
Living InsuranceNoYes
Advertised on TVYesNo
2-Year Waiting PeriodYesNo

Does My Agent Still Work For Colonial Penn Life Insurance?

92% of life insurance agents are out of the insurance profession within three years.

If your Colonial Penn agent has abandoned you, Funeral Funds of America can help you get a new policy or add additional coverage to your Colonial Penn policy.

What Are The Pros & Cons Of Colonial Penn Insurance?

PROS – $9.95 Plan

  • Cash Value
  • Lifetime Coverage
  • Guaranteed Acceptance

PROS – Whole Life Plan

  • No Medical exam
  • Lifetime Coverage
  • First-day Coverage

CONS – $9.95 Plan

  • Per-Unit Price
  • Expensive Rate
  • Low Death Benefit
  • 2-Year Waiting Period
  • $9.95 Pricing Gimmick
  • Many Consumer Complaint
  • The Won’t Price Shop For YoU
  • Only sell Their Insurance Products

CONS – Whole Life Plan

  • Expensive Rate
  • Low Death Benefit
  • Strict Underwriting
  • Consumer Complaints
  • Unpaid Claim Concerns
  • The Won’t Price Shop For You
  • Only Sell Their Insurance Products
  • You’ll Generally Be Sold The $9.95 Plan

Are There Any Riders Or Other Benefits With Colonial Penn Life Insurance?

Guaranteed Acceptance $9.95 Plan

No riders are available with this plan.

Permanent Whole Life Insurance

“Living Insurance” is the marketing term for Colonial Penn’s life insurance riders.

These riders allow policyholders to access 50% of their policy face amount while alive and diagnosed with a serious illness. You will have to pay a policy loan fee the entire time the borrowed money is not repaid.

  • CANCER – A policy owner can withdraw up to 25% of the face amount for any type of cancer, excluding skin cancer.
  • CHRONIC ILLNESS – Other companies call this a “critical illness rider.” A policy owner can withdraw up to 50% of the face amount for any type of cancer, excluding skin cancer.
  • HEART ATTACK OR STROKE – Other companies call this a “critical illness rider.” A policy owner can withdraw up to 50% of the face amount for any heart attack or stroke event.

Other Benefits

POLICY LOANS – You can borrow up to 100% of your cash value, but you will have to pay 8% interest on your outstanding loan balance (which will lower your face or coverage amount if not paid each month.

This is a tax-free Colonial Penn benefit but not an interest-free benefit.

Loans reduce your cash value amount and are subtracted from your death benefit, and the interest rate on policy loans varies by state.

How Do I Get Approved By Colonial Penn Life Insurance?

Guaranteed Acceptance $9.95 Plan

This plan accepts everyone with no health questions asked. The only reason to consider the Colonial Penn 2-year limited benefit period is if your health is so bad that you don’t qualify for first-day coverage.

Even if your health is so bad that you don’t qualify for a better first-day coverage plan, this 995 plan insurance is not one you should purchase.

Permanent Whole Life Insurance

There are two processes to determine if you will medically qualify for a Colonial Penn whole life insurance policy:

  1. Health questions
  2. Prescription history check

An underwriter may request to speak with you over the phone to ask some follow-up questions.

These are the health questions you will find on the application:

  1. Within the past 12 months, have you used a wheelchair or supplemental oxygen? Are you confined to a hospital or nursing facility? Are you currently receiving home health care? Have you been disabled due to an illness?
  2. Did the doctor advise you to have surgery or some diagnostic test that hasn’t been completed yet?
  3. Do you have a diagnosis and treatment for HIV or AIDS?
  4. In the previous three years, do you have a diagnosis or treatment for the following:
  • Coronary artery disease (congestive heart failure, heart attack, cardiomyopathy)
  • Lung disease (COPD, sarcoidosis, chronic bronchitis,  pulmonary fibrosis, or emphysema)
  • Kidney disease (needing dialysis for kidney insufficiency or kidney failure)
  • Heart surgery (valve repair or replacement, requires a defibrillator or pacemaker)
  • Any type of cancer or cancer recurrence(multiple myeloma, leukemia, or malignant melanoma)
  • Liver disease (hepatitis or cirrhosis)
  • Peripheral vascular disease, peripheral artery disease, transient ischemic attack, or stroke)
  • Dementia or Alzheimer’s disease
  • Mental disorders (bipolar disorder, psychosis, schizophrenia)
  • Diabetes (using insulin, diabetic complications like amputations)
  • Neuromuscular diseases (muscular dystrophy, multiple sclerosis, amyotrophic lateral sclerosis)
  • Collagen vascular diseases ( cystic fibrosis or systemic lupus erythematosus)
  • Alcohol or drug abuse

If you answer any of these questions “Yes,” your application will be DECLINED. In that case, you will be offered the Colonial Penn guaranteed life insurance plan with a terrible two-year waiting period.

Common health issues that result in a declined application for Colonial Penn whole life:

  • Bipolar disorder, Schizophrenia, Psychosis
  • Blood thinner use
  • COPD, emphysema, chronic bronchitis, pulmonary fibrosis
  • Cancer of any type
  • Cardiomyopathy, congestive heart failure, mini-strokes (TIA attack)
  • Diabetic complications such as neuropathy, retinopathy, nephropathy
  • Disabled due to an illness
  • Hospitalized within the last year
  • Insulin use or dependency
  • Liver disease, cirrhosis, hepatitis
  • Multiple sclerosis, muscular dystrophy
  • Oxygen use
  • PVD, severe obesity, or amputations
  • Receiving home health care
  • Renal disease, kidney failure
  • Systemic lupus
  • Wheelchair use

If you answered “yes” to any of these medical conditions, you would be automatically declined for Colonial Penn’s whole life policy.

With Colonial Penn’s strict underwriting for their permanent whole life insurance, only a small percentage of applicants will qualify for this whole life plan.

If you were declined, you would typically be offered the Colonial Penn guaranteed acceptance life insurance. Rates start at 995 with an undesirable two-year waiting period.

Additional Health Niches

You can view our A-Z Health issue chart to see what health conditions qualify for first-day coverage with other companies at Funeral Funds of America.

How Can I Get Colonial Penn Life Insurance Pricing?

Guaranteed Acceptance $9.95 Plan

Check out the Colonial Penn life insurance 995 rate charts below to see how inadequate their coverage amounts are for $9.95.

50$9.95$1,786$2,0832-Year Wait
51$9.95$1,732$2,0682-Year Wait
52$9.95$1,676$2,0222-Year Wait
53$9.95$1,621$1,9732-Year Wait
54$9.95$1,562$1,9292-Year Wait
55$9.95$1,506$1,8842-Year Wait
56$9.95$1,452$1,8382-Year Wait
57$9.95$1,392$1,7862-Year Wait
58$9.95$1,333$1,7322-Year Wait
59$9.95$1,273$1,6762-Year Wait
60$9.95$1,214$1,6212-Year Wait
61$9.95$1,157$1,5622-Year Wait
62$9.95$1,099$1,5062-Year Wait
63$9.95$1,043$1,4522-Year Wait
64$9.95$987$1,3922-Year Wait
65$9.95$932$1,3332-Year Wait
66$9.95$880$1,2732-Year Wait
67$9.95$834$1,2142-Year Wait
68$9.95$792$1,1572-Year Wait
69$9.95$753$1.0992-Year Wait
70$9.95$717$1,0432-Year Wait
71$9.95$683$9872-Year Wait
72$9.95$652$9322-Year Wait
73$9.95$620$8802-Year Wait
74$9.95$589$8342-Year Wait
75$9.95$560$7922-Year Wait

Permanent Whole Life Insurance

Look at the pricing table below to estimate coverage amounts with the Colonial Penn whole life insurance policy.

60 $24.26
65 $28.16
70 $34.15
75 $43.08
60 $27.90
65 $33.01
70 $40.62
75 $51.62

Colonial Penn rates are based on your age, gender, health, coverage amount, and the state you live in at the time of application.

*Pricing for illustration purposes only and are subject to change without notice.

Common Colonial Penn Life Insurance Company Questions

What Is Colonial Penn’s Operational History

The Colonial Penn Life Insurance Company was founded in 1968 by AARP co-founder Leonard Davis to provide insurance coverage to the American Association of Retired Persons members.

FPL Group acquired the company in 1985. FPL sold the company to Leucadia National in 1991.

After several ownership changes, in 1997, it became a subsidiary of Conseco, now known as CNO Financial Group.

In 1998, Colonial Penn was renamed Conseco Direct Life to show Conseco ownership. But, in 2001, the insurance name reverted its name back to Colonial Penn.

The company is based in Philadelphia, Pennsylvania. Colonial Penn is not serving New York, but it’s covered by Banker’s Conseco Life Insurance Company, another CNO subsidiary.

Colonial Penn

399 Market Street
Philadelphia, PA 19106
Customer service – 800-523-9100
Life insurance in New York – 877-891-0915

Colonial Penn Claims

Life Claims Dept
PO Box 1918
Carmel, IN 46082-1918
Life insurance sales -877-877-8052

What Is Colonial Penn’s Financial Rating?

Based on its financial stability and record of paying claims, Colonial Penn Insurance Company has received an A- (Excellent) rating from A.M. Best.

Does Colonial Penn Have Any Consumer Complaints?

Consumers would be wise to ask themselves, is the 995 plan any good?

The Better Business Bureau gives Colonial Penn 1.18 stars out of 5, citing many consumer complaints.

Investopedia states, “Some 90% of the companies we reviewed received a higher grade than Colonial Penn from AM Best.” They rate Colonial Penn as 2.4 out of 5 stars.

The National Association of Insurance Commissioners (NAIC) states that the national median of complaints is 1.00, while Colonial Penn’s complaint ratio is 3.06.

Colonial Penn has 300+% more complaints than other insurance companies, according to the NAIC.

Some NAIC-reported complaints filed against Colonial Penn:

  • Lack of death benefit
  • Exclusions and riders that significantly reduce death benefit payouts
  • High premiums
  • Pressure to buy other products
  • Bait and switch tactics

The Colonial Penn $9.95 life insurance advertising creates a lot of interest, phone calls, and possibly thousands of negative consumer reviews and complaints annually.

It would be wise to research Colonial Penn life insurance complaints to see if this is the company you want to buy insurance from.

What Should You Know Before Buying Colonial Penn Life Insurance?

What Is Colonial Penn’s Sales Process?

Colonial Penn agents can only sell Colonial Penn products. “Captive Carrier” is the term used to describe insurance companies that only sell their products.

If other companies offer lower pricing (and I can assure you there are many), Colonial Penn agents will never tell you about those other low rates.

Almost all other life insurance companies offer better coverage and rates and most come with no waiting period.

Are Any Health Conditions Not Accepted By Colonial Penn?

These health issues are not accepted for first-day coverage.

  • Activities Of Daily Living (ADLs)
  • Alzheimer’s or Dementia
  • AIDs, HIV, ARC
  • Current Cancer
  • Congestive Heart Failure
  • Cardiomyopathy
  • Dementia
  • Dialysis
  • Diabetic Amputation
  • End-stage Renal Disease
  • Hospice
  • Nursing Home Confinement
  • Organ or Tissue Transplant
  • Oxygen Use
  • Terminal Illness

If you have any of these health conditions, you will be offered a guaranteed issue policy.

How Can I Get Pricing Help Today?

If you need burial, cremation, final expense, or funeral insurance coverage and want to ensure you get the lowest premium possible, we can help you shop and compare companies, policies, and prices.

Use our quoting software below to see how Colonial Penn pricing compares to other companies.

  • $10,000 to 15,000 is often appropriate for burial needs
  • $3,000 to $7,000 is often appropriate for cremation needs

What Are The Top 10 Questions About Colonial Penn?

What is a Colonial Penn Rate Lock? Colonial Penn 9.95 life insurance plan boasts about the rate lock. A rate lock means your premium will be locked in at your current age and will never increase as you get older. This is not a unique benefit. Every life insurance company offering whole life insurance has this feature on their insurance product.
Is Colonial Penn policy replacement possible? Yes, Colonial Penn policy replacement is possible. But make sure you already have another life insurance policy from a better company before you cancel your Colonial Penn policy.
What is 995 plan? The Colonial Penn 995 is often confused with Colonial Penn 985 plan and 9.99 life insurance for seniors. It is a guaranteed issue whole life insurance with a two-year waiting period. They accept all applicants regardless of their medical condition. If the policyholder dies during the waiting period, the beneficiaries will only receive the return of premium plus a small interest.
What is a unit of life insurance coverage? A unit is the amount of coverage you can get for $9.95 per month.
How much is a unit of life insurance? One unit cost $9.95 a month.
Are the 3-P’s important? Price is important, if you get what you pay for. The fact is that $9.95 a month provides very little coverage. In fact, so little coverage, that this marketing tactic results in many consumer complaints.
What does Colonial Penn give you for $9.95 a month? Colonial Penn gives you a specific death benefit amount for $9.95 depending on your age and gender.
How much coverage do you get with a 995 plan? The death coverage you can get for $9.95 will depend on your gender and age.
Does Colonial Penn 995 have a waiting period? Colonial Penn $9.95 plan has a two-year waiting period.
Standard Terms When Searching For Colonial Penn Insurance
  • Colonial Penn Burial Insurance
  • Colonial Penn Cremation Insurance
  • Colonial Penn Final Expense Insurance
  • Colonial Penn Funeral Insurance
  • Colonial Penn Term Life Insurance
  • Colonial Penn Universal Life Insurance
  • Colonial Penn Whole Life Insurance

Sources Cited In This Article

  • Richard Burke. “Colonial Penn Life Insurance Review”. Updated June 24, 2022.
  • Colonial Penn. “Coverage Options Starting At $9.95 A Month”. Accessed October 12, 2022.
  • Better Business Bureau. “Colonial Penn Life Insurance Company”. Accessed October 12, 2022.
  • NAIC. “Results By Complaint Index”. Accessed October 12, 2022.
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