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Colonial Penn Life Insurance Review

By Aja McClanahan MONEY RESEARCH COLLECTIVE

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You might be familiar with Colonial Penn from the company’s long-running television advertising campaigns featuring game show host Alex Trebek. But even if you’ve heard of the name and the brand, you may not know exactly what this life insurance company offers. 

Essentially, Colonial Penn’s insurance policies meet the needs of the “mature market” and others who are otherwise ineligible for life insurance due to age or medical conditions.  Keep reading to learn more about Colonial Penn’s coverage, pricing, and industry standing. This information could help you decide if their coverage is right for you. 

Colonial Penn’s services

Colonial Penn’s credentials

Colonial Penn’s accessibility

Colonial Penn’s customer satisfaction

Colonial Penn Life Insurance vs. the competition

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Colonial Penn Life Insurance overview

Let’s take a quick look at the pros and cons Colonial Penn’s insurance coverage:

Pros
  • Provides policies for those are typically ineligible for life insurance
  • Instant quote online
  • Online application and self-service portal
Cons
  • Coverage amounts tend to be lower
  • Premiums tend to be higher 
  • Two-year limited benefit period

Colonial Penn’s services

Colonial Penn offers both permanent whole life policies and guaranteed acceptance life insurance policies.

What it offers 

Colonial Penn’s whole life insurance policies are designed for people who need life insurance coverage but may not be eligible due to age and/or health. Colonial Penn’s primary products are permanent whole life insurance and guaranteed acceptance life insurance. 

Both lock in your premium rate and give you 30 days to cancel if you are dissatisfied with your policy. You should also know that there’s a two-year limited benefit period, which means that the death benefit is limited if the insured expires within 24 months of purchasing the policy.

Although neither policy requires a medical exam, the permanent life insurance policy requires you to answer medical questions to determine your eligibility and coverage amounts. In contrast, the guaranteed acceptance policy doesn’t require completion of a medical questionnaire. For this reason, your coverage amounts will typically be higher with a permanent whole life policy versus a guaranteed acceptance policy. 

Permanent whole life insurance

  • Ages 40-75 in most states
  • No medical exam required 
  • Builds cash value after the first year of coverage
  • Lifetime coverage
  • Locked-in premium rate & flexible payment options
  • Benefit amounts vary based on age, gender and state

Although premiums vary based on several factors, you can get an instant quote on Colonial Penn’s website by entering just a few personal details. A 40-year-old man in the state of Florida would pay the following monthly premium:

Policy amount Monthly premium
$10,000 $18.21
$20,000 $32.67
$30,000 $ 47.12
$40,000 $ 61.58
$50,000 $ 76.04

You can choose an extra $10,000 to $50,000 accidental death benefit rider (available up to age 65) for just a few dollars more per month. The same 40-year-old Florida man could get up to a combined $100,000 in coverage by adding the accidental death benefit rider for about $85 per month. 

Guaranteed acceptance life insurance

  • Ages 50-85 in most states
  • No medical exam is required
  • Two-year limited benefit period
  • Lifetime coverage
  • Locked-in premium rate
  • Benefit amounts vary based on age, gender and state

Guaranteed acceptance policies are sold in units which determine the amount of coverage you’ll get with your policy. For example, a 50-year-old man in Florida could purchase one unit of coverage for as little as $9.95 per month for a death benefit of around $1,700. The monthly premium for 15 units, the maximum amount available, would be $149.25 for a death benefit of about $25,000.

An 85-year-old male, in this example, can purchase one unit for $9.95 per month for just over a $400 death benefit, while 15 units would cost about $150 per month for a death benefit of  around $6,200.

Living insurance

Living insurance is a whole life policy that offers an accelerated death benefit, allowing you to access up to 50% of your life insurance benefit if you are diagnosed with a qualifying illness. Eligible illnesses could include one or more of the following:

  • Heart attack
  • Stroke
  • Cancer (up to 25% of your death benefit. Skin cancer is excluded.)
  • Qualifying chronic or terminal illness

Colonial Penn Life Insurance coverage 

Coverage Age availability Benefit amounts Cash Value
Permanent whole life Age 40-70 Between $10,000-$50,000 The cash value schedule is located in the policy packet of paying customers.
Guaranteed acceptance Age 50-85 Up to $25,000 The cash value schedule is located in the policy packet of paying customers.

What it doesn’t offer 

Colonial Penn’s coverage varies depending on where you live. In some states, some products or product features may not be available. 

Colonial Penn life insurance cost

As mentioned, your premiums and coverage will vary based on your:

  • Age
  • Sex
  • Death benefit amount
  • The presence of certain health conditions disclosed on your medical questionnaire (if applicable)

Here are sample rates for a 50-year-old male in Illinois:

Coverage Monthly premium Policy amount
Permanent life insurance $31.33 – $141.66 $10,000 – $50,000
Guaranteed acceptance $9.95 (1 unit) – $149.25 (15 units) $1,669 – $25,035

Colonial Penn’s credentials 

Before you start your application with Colonial Penn, you should know a little more about the company. In this section, we’ll go over some company facts and background to help you vet the insurer. 

Colonial Penn has been around for over 60 years, assisting mature policyholders with obtaining life insurance coverage despite their age or medical history. The company is headquartered in Pennsylvania and is licensed to do business in all 50 states, Washington D.C., and Puerto Rico. The company operates under the National Association of Insurance Commissioners  (NAIC) ID number 62065. 

The insurer is also registered with each state department of insurance and may have a state-specific ID number. These licenses cover the sale and distribution of insurance policies with several affiliated and unaffiliated insurance providers. 

To get state-based license numbers and additional information about Colonial Penn’s licenses,  you can search on the NAIC website.  

Awards and certifications

Colonial Penn’s has been rated A (excellent) by AM Best. AM Best reviews insurers based on their financial viability, ability to pay claims and similar factors. 

Regulatory or legal actions

According to our research, there are no significant regulatory or legal actions against Colonial Penn. In 2021, the company faced a class action lawsuit regarding automated calls to people on the Do Not Call (DNC) registry. However, we could not find any lawsuits for fraudulent practices  or other serious allegations.

Colonial Penn’s accessibility

 Here are ways to connect with Colonial Penn.

Availability

Colonial Penn’s sales department is available on the following days during the following hours. 

Monday – Thursday:

8:30 AM – 10 PM EST

Friday:

8:30 AM – 7 PM EST

Saturday:

9 AM – 5 PM ET

The service department is available Monday through  Friday from 8:30 AM to 5:30 PM EST.

Contact information

You can reach Colonial Penn’s sales department at 1-877-887-0490 and the customer department at service at 1-877-887-0490.

User experience

Colonial Penn’s customer service portal is accessible at MyColonialPenn.com This portal allows policyholders to file claims, see information about cash values and loans as well as make payments and update the insured’s address. 

The pre-sales experience on the website is also very efficient. The site features informational pages on Colonial Penn policies that answer most questions you’d have about its coverage. There’s also an on-site chatbot that can help you with common questions. You can also get an instant life insurance quote on the site within a few seconds.  

Limitations

The insurer doesn’t have a smartphone app that allows customers to manage their accounts. However, you can access the customer service portal through any mobile browser you’d use to access the internet.

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Colonial Penn’s customer satisfaction

Colonial Penn doesn’t have many reviews on ratings websites or with consumer advocacy organizations like the Better Business Bureau or Trustpilot. However, the NAICS website tracks a customer complaint index, dividing the company’s share of complaints in the U.S. market by the company’s share of premiums in the U.S. market. The complaint index is 1.0, so a company with a complaint index of 2.0 means that it has received twice as many complaints as expected in a given market in a given year. 

Here’s Colonial Penn’s complaint record for the past three years:

  • 2019- 1.17
  • 2020- 2.06
  • 2021- 3.06

These figures suggest a significant growth in the number of complaints about the company in recent years.

Colonial Penn Life Insurance vs. the competition

Here are sample rates for a 50-year-old in Florida. 

Colonial Penn AARP AAA
Age  50 50 50
Coverage  Whole Life Whole Life Whole Life
Rates for a $10,000 death benefit. $31.33 per month   $34 *per month   $63.50**
Medical exam 

*  Rate requires AARP membership.

** AAA members get a 10% discount on premiums

Colonial Penn Life Insurance FAQs

How can I get a free Colonial Penn quote?

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You can get a free life insurance quote at the Colonial Penn website: www.colonialpenn.com

What does Colonial Penn offer you for their $9.95 plan?

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The $9.95 most likely refers to one unit of coverage for the Guaranteed Acceptance policy for a death benefit of about $1,700 for the youngest eligible policyholder at age 50. 

Can I cash out of my Colonial Penn life insurance policy?

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You may borrow against a Colonial Penn policy after the first year of paying premiums. Any outstanding loan will reduce the death benefit by the same amount of the loan. 

How we evaluated Colonial Penn Life Insurance 

To create this review of Colonial Penn life insurance products, we consulted several sources, including the company’s website, third-party review sites, consumer advocacy and watchdog organization sites, and government regulatory sites. 

Summary of Miami Herald’s Colonial Penn review

Colonial Penn’s products serve a very specific niche: the elderly and those who are medically ineligible for more affordable products like term life insurance. For this reason, premiums are typically very high, while death benefits are very low. We like that the company has been around for decades and is rated well for its financial stability and ability to pay out on claims.

This kind of insurance doesn’t offer the best value for your money but serves a purpose for those who may not otherwise qualify for life insurance. If you can qualify for an insurance policy with lower premiums and higher death benefits, we recommend you check out our guide on the best life insurance companies. This way, you can get estimates for more affordable term life insurance policies.

Aja McClanahan

Aja McClanahan is a writer that covers personal finance and a number of related topics. Her work and personal story of paying down over $120,000 in debt have been featured in publications around the web including sites like Money, CreditCards.com, Business Insider, Inc., Experian and many others.