Before you buy burial insurance from Colonial Penn, you may want to read our Colonial Penn burial insurance review. We examined the policies Colonial Penn offer as final expense insurance or burial insurance and break them down to help you decide whether their plans fit your needs.
You’ve probably seen Alex Trebek offering Colonial Penn Final Expense Insurance on the television commercials. The commercials are targeted towards people between the ages of 50 and 85 and promise them coverage options starting at less than 35 cents a day or $9.95 per unit.
Alex Trebek Colonial Penn Life Insurance promises affordable life insurance for seniors without the need for a medical exam to qualify.
Colonial Penn guaranteed life insurance is perhaps the most heavily promoted life insurance product directed at seniors living across the entire USA. The senior market has always been the company’s target audience. This evident in their advertising campaigns and the types of policies they offer.
Colonial Penn markets it directly to the consumer through mail, TV, phone calls and the internet. They’ve been known to have celebrity paid endorsers, including Alex Trebek, Ed McMahon, Jerry Lewis, and Joe Theismann to endorse their products.
The Colonial Penn final expense life insurance includes guaranteed acceptance life insurance and whole life insurance policy. Both types of policies do not require a medical exam.
If you’ve come to this page looking for more information, continue reading our Colonial Penn burial insurance review to get a better idea of what the company has to offer.
FOR EASIER NAVIGATION:
COLONIAL PENN HISTORY
The Colonial Penn Life Insurance Company was founded in 1968 by AARP co-founder Leonard Davis to provide insurance coverage to members of American Association of Retired Persons. FPL Group acquired the company in 1985. FPL sold the company to Leucadia National in 1991.
After several changes of ownership, 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 was changed back to Colonial Penn.
The company is based in Philadelphia, Pennsylvania. Colonial Penn is currently not serving the state of New York, but it’s covered by Banker’s Conseco Life Insurance Company which is another CNO subsidiary.
Colonial Penn is one of the first insurance companies to offer guaranteed acceptance life insurance for seniors and the elderly. They are one of the pioneers in designing insurance products for the mature market.
Today, Colonial Penn offers three plans, including term life, whole life and guaranteed acceptance insurance. A medical exam is not required in any of these plans, and the face amount is limited to a maximum of $50,000.
Colonial Penn Life Insurance Company held a total of $1 billion in assets. The company has more than 750,000 policies or $3.2 billion of life insurance in force.
If you want to reach the company directly, Colonial Penn Life phone number is 1-877-877-8052, or you can call Colonial Penn Life Insurance customer service at 800-523-9100. You can also request Colonial Penn life insurance quotes by going to their website www.colonialpenn.com
It is essential to look for the financial strength of the company because it indicates how well the company can pay claims. A high financial rating means that the company is financially stable and can pay claims due to the policyholders on time. It’s an important thing to consider before you buy a policy.
Based on its financial stability and its record of paying claims, Colonial Penn Insurance Company has received A- (Excellent) rating from A.M. Best.
Both Fitch and Standard & Poor’s have brought Colonial down to a BBB+ rating, and Moody’s has put them at Baa1. The one rating organization where they shine is the BBB. The company has been given a grade A- from Better Business Bureau from the overall grade scale of A+ to F.
Some consumer activist groups continue to storm the doorstep of Colonial Penn for targeting seniors and elderly with excessive premiums for too little coverage.
COLONIAL PENN BURIAL INSURANCE REVIEW
QUICK FACTS ABOUT COLONIAL PENN
- Colonial Penn is heavily advertised on TV by paid endorser Alex Trebek.
- Burial insurance products such as guaranteed acceptance and whole life insurance are designed for older audiences.
- Guaranteed acceptance insurance has extremely small coverage amounts. The amount of coverage is determined based on the number of units purchased.
- Colonial Penn guaranteed acceptance has a 2-year waiting period.
- No exam policies are more expensive than competitors offering the same type of policy.
- Best for people who cannot qualify for fully underwritten policies (but not the best pricing).
COLONIAL PENN FINAL EXPENSE INSURANCE FOR SENIORS
Colonial Penn offers two types of final expense insurance for seniors – guaranteed acceptance and whole life insurance. They combine a small death benefit with limited underwriting.
These plans are suited to people that don’t necessarily want a large payout, just enough to cover the funeral cost and other final expenses, and would typically have trouble getting coverage due to their age and medical history.
GUARANTEED ACCEPTANCE LIFE INSURANCE
Guaranteed acceptance plan is a whole life insurance policy with a limited death benefit. Colonial Penn guaranteed issue life insurance is available to people ages 50 to 85 years old.
With guaranteed acceptance, you don’t need to be in perfect health to get coverage. It is permanent, whole life insurance with no medical exam and no health questions asked. It is the best option for the elderly and people with health issues because they cannot qualify for a fully underwritten life insurance policies with a medical exam.
This is advertised by Alex Trebek as being beneficial to seniors who have no life insurance plan, have health issues and worry about leaving family members with funeral costs.
- 50-75 in Minnesota and Missouri
- 55-85 in District of Columbia
- 56-85 in Pennsylvania
- 50-77 for males and 50-82 for females in New Jersey
- 50-85 in all other states
Premium Price Range: $9.95 to $79.60 per month
Unlike some burial insurance plans that let you choose a particular death benefit to determine your rate, Colonial Penn will ask you how many units of coverage you want to purchase.
How much is a unit of Colonial Penn life insurance? The monthly premium is based on the number of units purchased, with $9.95 per 1 unit. Since you can buy up to 8 units, your maximum monthly premium is $79.60 (8 units multiplied by $9.95).
If you pay annually, you will receive a discount equal to one month’s premium.
How much insurance do you get from Colonial Penn for 9.95 a month?
- Minimum: $418
- Maximum: $16,664
While the price per unit is fixed, the unit maximum face amount is set by your age and what the company decides is appropriate. One unit costs the same ($9.95) for a 50-year-old male and 85-year-old male, but the death benefit amount does not. Colonial Penn has a limited benefit life insurance.
The Colonial Penn life insurance per unit method is outright confusing and can mislead many people who are used to hearing about lifetime death benefits and term length.
1-unit represents the death benefit for a specific age. For example, if you are 50 years old male, 1-unit represents $1,786 in death benefits, and the max you can buy is 8 units for $14,288 in benefits.
1-Unit 50 year old male = $1,786 death benefit
1-Unit 85-year-old male = $418 death benefit
8-Units 50 year old male = $14,288 death benefit
8-Units 85 year old male = $3,344 death benefit
If you bought the policy when you are 85 years old, 8-units represent only $3,344, and 1-unit would be $418 of death benefits.
Both of these death benefits are inadequate for life insurance coverage, but you don’t have a choice in the amount of coverage. It is determined by your age, gender, and units bought when your coverage takes effect.
Advantages of Colonial Penn Guaranteed Acceptance Life insurance
No medical exam – you cannot be turned down because of your health condition. You are not required to take a physical exam or answer any questions about your health. Your acceptance is guaranteed.
Lifetime coverage – Colonial Penn guaranteed acceptance life insurance coverage will not expire because of advancing age or health condition. The policy will be in force for life as long as you pay the premiums on time.
Cash value builds up – cash value can accumulate tax-free after the first year of coverage. You can borrow or make a policy loan from the cash value at a guaranteed rate.
Rate Lock – Alex Trebek insurance commercials boast that premiums get locked in and guaranteed to stay the same for the life of the policy. This “Rate Lock” is creative marketing and is not unique to Colonial Penn. Every life insurance company selling whole life insurance has a “rate lock” on pricing to keep pricing level and guaranteed.
Locked-in benefit amount – the amount of death benefit is based on your gender and age when your coverage takes effect and won’t decrease because you grow older or if your health changes.
Coverage can’t be canceled – Colonial Penn cannot cancel your policy, your policy is active and will remain for life unless you cancel it or you stop making payments.
Immediate protection for accidental death – the full face amount will be paid for death from accidental causes during the first two years. The beneficiary will receive a payout if the accident occurs while coverage is in force and death happens within 90 days of the accident. Accidental death does not include death from natural causes or suicide.
Examples of accidental deaths:
• Motor vehicle accidents
• Fire-related injuries
• Industrial accidents
• Other accidents
Flexible payment options – there is a flexibility to pay premiums monthly, quarterly (every three months), semi-annually (every six months) or annually (once a year).
You can save a full month’s premium by paying annually. You get 12 months of protection for the cost of 11 months. You can even pay your premium online using your banking information or credit card.
30-Day Money-Back Guarantee – if you decide that the coverage is not for you, Colonial Penn has a 30-day money back guarantee. You can cancel your policy within 30 days of receipt for a complete refund. Just return your insurance documents within 30 days after receiving them, and you will get your money back with no questions asked.
This 30-day money back guarantee is not unique to Colonial Penn. Every insurance company has this feature. It’s called a “30-day free look period.” It’s standard in the industry and mandated by law to all carriers.
DISADVANTAGES OF COLONIAL PENN GUARANTEED ISSUE LIFE INSURANCE
Waiting period – No Colonial Penn life insurance review would be complete without mentioning their two-year limited benefit period (two-year waiting period). It is because their policy is a guaranteed acceptance without medical underwriting.
A policyholder who passes away during this waiting period is not paid out the full death benefit amount. Instead, premiums paid are refunded plus 7% interest compounded annually. After the two-year waiting period, the total death benefit becomes effective and will remain for one’s remaining life.
Graded death benefit – This graded final expense policy will not pay a death benefit if death occurs during the first two years.
There is a two-year waiting period; full death benefit will only be paid out to the beneficiary if the policyholder dies from an accident. In order for the policy to pay out on death from natural causes, the policy must be in force for two years and a day.
Price – Colonial Penn pricing is obscured in a way that can be confusing to the customers.
They sell their guaranteed acceptance policy on a per unit basis. How much is a unit of Life Insurance? A unit cost $9.95, and the most you can buy is 8 units. The Colonial Penn life insurance per unit method is outright confusing and is difficult to understand for many people shopping for burial coverage.
Age and gender determine the amount of coverage the unit provides. With most life insurance carriers the price is adjusted to increase with age, but with Colonial Penn life insurance 9.95 per unit, the older you are, the less coverage a unit provides.
Aside from this, a unit offers less coverage for a man than a woman. 1-unit cost the same $9.95 for both a 50-year-old male and 70 years old, but the 50-year-old benefit amount is $1,786 while the 70-year-old is only $717. As you get older, the coverage for each unit continually decreases.
Guaranteed acceptance policies designed to attract customers with serious health issues. For this reason, Colonial Penn charges a higher rate for the company to offset the cost of death claims.
Colonial Penn guaranteed acceptance policy is more expensive compared with other final expense companies.
Very low death benefits – Colonial Penn life insurance for seniors coverage varies depending on the age and gender of the applicant, but the maximum death benefit is $16,664 for females and $14,288 for males. It is often not enough coverage to cover final expenses.
COLONIAL PENN WHOLE LIFE INSURANCE
This plan is a permanent whole life insurance policy with no medical exam but few health questions to qualify. Whole life insurance can be a good choice for people who want permanent protection.
If you’re willing to answer health questions, Colonial Penn offers traditional whole life insurance with immediate benefit. This policy’s death benefit max at $50,000, though this is still significantly lower than other carriers it is better than the guaranteed acceptance plan.
Age and State Availability – the Colonial Penn whole life insurance plan is available to ages 40 to 75. It is available in all states except Maine, New York, and Vermont.
Premium Price Range: $14.36 to $576.44 per month
Colonial Penn’s whole life policy lets you choose the particular death benefit you want, but the premiums vary based on your risk profile.
There are two processes to determine if you will medically qualify for this policy:
- Health questions
- Prescription history check
An underwriter may request to speak with you over the phone to ask some follow up questions.
Health Qualification Questions for Whole Life Insurance
These are the health questions you will find on the application:
- Within the past 12 months, have you used a wheelchair or supplemental oyxgen? Are you confined to a hospital or nursing facility? Are you currently receiving home health care? Have you been disabled due to an illness?
- Did the doctor advised you to have surgery or some diagnostic test that hasn’t been completed yet?
- Do you have a diagnosis and treatment for HIV or AIDS?
- 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, required 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 disorder (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 yes to any of these questions, your application will be DECLINED.
Advantages of Colonial Penn Whole Life Insurance
No medical exam – a medical exam is not required for a whole life insurance plan. You just need to answer some health questions on the application to determine your eligibility. An underwriter may contact you by phone for more information.
Lifetime coverage – you are covered for life as long as premiums are paid on time.
Leveled premium – the premium is based on gender and age when coverage takes effect. Premium is fixed and will not increase for any reason.
Rates will remain the same as long as the policy is in force. Once in force, the premium on these plans will not change. It is advantageous for seniors who are on a limited budget to anticipate how much their premium will be for the long term.
Locked-in benefit amount – death benefit is locked-in and guaranteed to never decrease over the life of the policy and will remain fixed as long as you continue to make premium payments.
Flexible payment options – you can enjoy the flexibility of paying premiums monthly, quarterly, semi-annually or annually. You can pay through direct billing, electronic funds transfer, automatic drafts, or credit cards. Accepted credit cards include Visa, MasterCard, or Discover.
Premium discount – There is a discount which is equivalent to one month’s premium if you pay for a year in advance.
Cash value build up – the policy will build cash value after the first year of coverage, and you can borrow against this cash value by taking a policy loan at a guaranteed rate.
Smoking Rates – No increased premium rate for smokers, tobacco and e-cigarette users.
Disadvantages of Colonial Penn Whole Life Insurance
Price – Colonial Penn life insurance rates are more expensive than its many competitors, specifically Gerber Life and Mutual of Omaha which offer considerably lower prices.
Colonial Penn is only priced well for females age 50-57 and males age 50. Outside of those age groups, their prices are more expensive to what other companies charge.
Low coverage amounts – you can only purchase a maximum coverage amout of $50,000.
Other insurance companies offer more coverage than Colonial Penn typically $50,000 to $5,000,000. It can be a non-competitive option for people needing more coverage for things like income replacement or protecting a mortgage.
No riders are available – most final expense life insurance companies offer policy add-ons and riders to meet specific needs and expand coverage, but the company doesn’t offer any riders at all.
Whole life is not available in all states – whole life insurance is not available in New York, Maine, and Vermont.
Strict underwriting – Colonial burial insurance has strict underwriting. You will be declined if you have the following conditions:
- You are using blood thinners
- You are insulin dependent
- You have diabetic complications such as neuropathy, retinopathy, PVD, severe obesity, hospitalizations due to diabetes
- You are using a wheelchair
- Using oxygen
- Disabled due to an illness
- Receiving home health care
- Hospitalized within the last year
- COPD, emphysema, chronic bronchitis, pulmonary fibrosis
- Renal disease, kidney failure
- Cardiomyopathy, congestive heart failure, mini-strokes (TIA attack)
- Cancer of any type
- Liver disease, cirrhosis, hepatitis
- Bipolar disorder, Schizophrenia, Psychosis
- Multiple sclerosis, muscular dystrophy
- Systemic lupus
A high number of complaints – Over the years the company has obtained a significant number of insurance complaints. They draw more complaints to state regulators than the national median for life insurance carriers of its size. The national median of complaints is 1.00 while their complaint ratio is 2.49 in 2017 which indicates more complaints than normal.
Most complaints concerned problems with the life insurance policies as well as advertising and billing issues. There are several accounts of Colonial Penn being sued over claims that have not been paid.
HOW TO FIND THE BEST PREMIUM RATES ON FINAL EXPENSE INSURANCE
When seeking the best premium rates on final expense insurance coverage from any carrier – it is recommended that you work with an independent insurance agency. Doing so will enable you to look at policies and prices from multiple insurance companies to determine which will fit your needs and your budget.
If you are interested to compare life insurance policies with Gerber Life, Globe Life, MassMutual, Mutual of Omaha, Lumico, TruStage, and AARP New York Life, we have reviews for you to explore before you buy.
When you are ready to compare life insurance coverage and premiums available, Funeral Funds can help you. We work with many top-rated life insurance companies in the market today. We can supply you with all the essential information you need to make a well-informed insurance buying decision.
If after checking our website, you still have any questions regarding final expense insurance, please call us at (888) 862-9456 or fill in the instant final expense quotes on the left side of your screen to view your options.
WHAT KIND OF BURIAL POLICIES AND FINAL EXPENSE POLICIES SHOULD I AVOID?
TV AND MAGAZINE ADVERTISEMENTS – Most burial policies or final expense policies you see advertised on television or in magazines are sold as “the no-brainer way” to shop for this protection.
In reality, most of these policies rely on you having NO BRAIN to purchase them.
Just about everyone is eligible for immediate coverage and better pricing allowed by these heavily advertised policies that cost an arm and leg.
To make a long story short, it is better to shop for burial policies with a specialist in burial insurance, like FuneralFunds.com, than to sign up with a company that spends ba-zillions of dollars each month advertising on television and in magazines.
Increasing Price Policies
Those TV and magazine final expense policies may increase in price every five years or have a two-year waiting period before your benefits kick in! What in tarnation!?!
These policies aren’t all they’re cracked up to be, and you often end up at the short end of the stick by purchasing burial insurance this way.
These tricky television magazine snake oil salesmen lure you in with an attractive rate, only to have the cost of your insurance increase every five years until you cannot afford the premiums, then you must cancel your policy.
What happens after you cancel the policy?
You’ll die and will have wasted all that money because you bought a policy that increases in price as you get older. These policies just don’t cut the mustard for most folks!
Avoid policies that increase in price every year or end at a certain age. You don’t want your family to get hung out to dry when they need this coverage the most.
Why choose Funeral Funds for my burial policy?
Most life insurance agents are fine, respectable people.
There are, however, the classic “snake oil” life insurance agents, who will sell you the easiest and most expensive policy possible.
The guaranteed issue folks claim you don’t even need to talk to an agent (but you will need to wait 2 years for your coverage to begin…even if you’re healthy). Answering a few health questions will often get you immediate coverage and MUCH better rates.
Avoid these people at all costs!
For the rest of the life insurance agents, who are fine respectable people, they are most often generalists.
They deal with all kinds of life insurance policies.
They are Jack of all trades and Masters of none.
They are nice people, but they are not the logical choice if you want the best pricing and a burial insurance policy with no waiting period.
We work with 20+ final expense companies, so we can get you qualified for the best price plan with the intent of getting folks like you immediate coverage when possible.
We have to admit that, for the average burial insurance final expense insurance shopper, all the companies and options will often leave you more confused than a woodpecker in a concrete forest.
HOW CAN FUNERAL FUNDS HELP ME?
The reality is that inexperienced and less knowledgeable insurance agents will cost you loads of money by selling you overpriced burial and final expense policies.
Getting on affordable burial or final expense policy doesn’t have to cost an arm and a leg.
Our job at Funeral Funds is to be the most knowledgeable burial insurance experts available. By doing so, we can knock it out of the park and get you the most accurate quote and affordable rates.
Once we know more about your age and health history, we can accurately give you a final expense instant quote from the final expense companies that are the best fit for you.
It is always in your best interest to work with an independent brokerage, such as Funeral Funds.
With access to all the best final expense insurance companies, we will help you understand your best options, given your current age, health, and financial situation.