Colonial Penn is one of the most popular companies offering guaranteed life insurance.
With household names like Alex Trebek featured in its commercials, Colonial Penn has become a widely recognizable name.
The company is best known for its guaranteed life product and compelling commercials, but there’s more to Colonial Penn than just one product and memorable advertising.
Before you purchase a product from Colonial Penn, you may want to read the review below, which traces the company’s history, finances, and all of its product offerings.
As with all of our life insurance carrier reviews, let our research and opinion be a supplement to your own due diligence as you pick a life insurance company.
Our Colonial Penn Life Insurance Company Review
Based in Philadelphia, Colonial Penn has made a mark in its half of a century in business.
While the company, founded in 1968, is not among our best life insurance companies for the year, they have certainly put their stake in the ground, with more than 750,000 policies boasting over $3.2B of in-force insurance.
Colonial Penn helped lay the foundation for guaranteed products as one of the first companies to bring this type of insurance plan to the market.
The focus of their initial products is still a strong backbone of the company as they continue to market to mature and senior audiences.
With their core and largest piece of business being in the senior market, Colonial Penn advertises a little differently than some of its competitors, utilizing direct mail, call centers, and, of course, television.
Their paid endorsers have included familiar faces like Alex Trebek, Ed McMahon, and Joe Theismann, who appeal to the company’s target audience.
Financial Strength and Ratings
One of the best ways to assess a company’s financial stability is to study its credit ratings.
Colonial Penn is a subsidiary of CNO Financial Group, Inc., based out of Carmel, Indiana.
Here’s how their rating stack up:
(Note: This is the same parent company of Bankers Life and Washington National.)
These scores suggest Colonial Penn is in decent financial standing, albeit not the best.
We can also assess the company’s stability by consumer sentiment. While the company is not BBB-accredited, it does hold an “A+” from the BBB.
Like most life insurance companies, it has its fair share of complaints.
One recurring issue is with the company’s choice to target the elderly with high premiums for too little coverage.
There are also complaints over claims and payouts, which largely stems from a misunderstanding of how guaranteed life products work, and no fault of Colonial Penn’s.
Guaranteed policy carries a two-year waiting period, much like many other guaranteed products, which usually results in returned premium payments, plus possible interest, but the full death benefit can be denied.
Overall, Colonial Penn is in good financial shape and can be counted on to pay policies as promised.
Just make sure you read the fine print and understand the terms before signing on.
Colonial Penn Life Insurance Company offers three main products:
Each type of policy comes with its own unique features and benefits.
Let’s take a deeper look at what they have to offer.
Guaranteed Issue Life
The most prominent product Colonial Penn offers is their guaranteed acceptance life insurance.
Guaranteed issue life insurance is appealing because it features no medical exams, requires minimal information, and the company claims you can not be declined with a proper application.
This offer, of course, comes with a few strings.
The product offers very low face amounts, also referred to as death benefits, and the cost per thousand is relatively high because of the lack of underwriting.
As mentioned above, you also need to understand how the policy will pay out, especially if you pass away within the first few policy years.
If you’re looking for a more traditional policy, Colonial Penn does offer term life insurance.
Term life insurance from Colonial Penn has some advantageous features, like acceptance for applicants up to age 75, but the coverage itself is very limited.
- The maximum death benefit is $50,000
- Rates increase in age bands
A solid term product should allow you to choose how many years you want to lock in your rates, but Colonial Penn’s term does not.
You should also note that many other no exam carriers offer death benefits of $250,000 and even up to $1,000,000.
Therefore, Colonial Penn is likely not your best choice for term insurance plans.
Whole life insurance offered by Colonial Penn isn’t much more substantial than its term option.
These no exam policies are available to 40 to 75-year-old applicants and offer cash value, locked rates, and flexible payment options.
But once again, they come with a low death benefit.
Like their term counterparts, the maximum face amount of these policies is $50,000.
Unlike Colonial Penn’s term life products, the pricing structure for whole life policies is based on your true age and gender, rather a group band.
Most carriers are also able to issue these products up to the age of 85, so there’s a large gap in availability here, too.
Alternatives to Colonial Penn
Colonial Penn is far from your only option for affordable life insurance, regardless of what type of policy you’re looking for.
Before buying from Colonial Penn, be sure to take a look at our suggested companies below:
- Gerber: While you may only think of babies when you hear the name, Gerber offers competitively priced guaranteed issue policies perfect for seniors.
- MassMutual: Perhaps one of the best products on the market, a final expense policy from MassMutual is a very worthy competitor, and likely beats Colonial Penn on most fronts.
- Prudential: If you’re worried your sub-par health will hinder your access to insurance, give Prudential a look. They’re known for generous underwriting for high-risk applicants.
What We Like About Colonial Penn
There are some benefits to working with Colonial Penn, which we’ll cover below.
- Speed: Because of its simplified underwriting process, Colonial Penn is able to offer quick acceptance and coverage to applicants.
- No exam: Colonial Penn does offer coverage without requiring a medical exam for any of its three life insurance products.
- Guaranteed issue: Not all companies offer this type of policy, which can be beneficial to some older applicants.
- Quotes: Colonial Penn offers quick online quotes in exchange for your contact information, which not all company websites are apt to do.
What We Don’t Like About Colonial Penn
While there are some advantages to partnering with Colonial Penn, choosing the provider also has a fair share of disadvantages.
- High premiums: For the amount of coverage offered, Colonial Penn’s premiums are steeper than many of its alternatives.
- Small policies: Capped at $50,000, Colonial Penn’s whole and term life policies may not be adequate and usually aren’t cost-efficient.
- Limited products: Colonial Penn’s lineup lacks many of the policy types applicants are searching for.
- Increasing rates: Rather than 10, 20, 0r 30 year terms with locked rates, Colonial Penn’s age bands mean your term life insurance premiums could climb every few years.
- Slipping financial ratings: While none of the company’s financial ratings are in dangerous territory, per se, some of them have dropped into average territory in recent years.
It’s easy to see why Colonial Penn appeals to elderly applicants.
The idea of a guaranteed policy where acceptance doesn’t hinge on your age and health is attractive.
But regardless of your health status, you’re likely to find more comprehensive and affordable coverage elsewhere.
Whether you’re young or old, know that you have ample options.
At the very least, you should compare quotes before locking into a policy with Colonial Penn.
More than likely, you’ll find better value from another company who offers life insurance, whether it’s term or whole.