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Our Expert Take
Our Expert Take
If you have health conditions that will make a standard life insurance policy unaffordable or unattainable, a Colonial Penn policy might be worth considering. It sells guaranteed issue life insurance, which means you can’t be turned down. Colonial Penn’s target market is people ages 50 and over.
Otherwise, you can probably find life insurance elsewhere with a much higher death benefit and lower premiums.
Pros
- Offers whole life insurance with no medical exam to people ages 50 to 85.
- You can’t be turned down, even if you have medical conditions.
Cons
- Extremely high level of complaints about its life insurance.
- Low maximum coverage amounts of only up to $50,000.
- Beneficiaries won’t receive full death benefits if you pass away within two years after buying the policy and the death is non-accidental.
- Does not offer term life insurance.
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Type of company
Stock
AM Best rating
A (Excellent)
Table of Contents
- Colonial Penn Doesn’t Sell Term Life Insurance
- Types of Colonial Penn Life Insurance Policies
- Colonial Penn’s Life Insurance Riders
- How Do I Buy Life Insurance From Colonial Penn?
- How to File a Claim with Colonial Penn
- Colonial Penn Life Insurance Customer Experience
- Colonial Penn Company History
- Colonial Penn Life Insurance Frequently Asked Questions (FAQs)
Show more
Colonial Penn Doesn’t Sell Term Life Insurance
Colonial Penn stopped selling term life insurance in 2021. Before that, its term life policies were available only in New York and the U.S. Virgin Islands.
Types of Colonial Penn Life Insurance Policies
Colonial Penn Guaranteed Acceptance Whole Life Insurance
Colonial Penn’s guaranteed acceptance life insurance is a type of whole life insurance. You buy a number of coverage units from one to 15. The per-unit price is a fixed amount, and pricing starts at $9.95 per unit. Several units can be purchased to build a bigger death benefit.
Colonial Penn policies are available to people ages 50 to 85 in most states, except Minnesota, New Jersey and Pennsylvania where the age ranges vary.
The policy builds cash value after the first year of coverage and then you can borrow against that cash value.
Colonial Penn’s guaranteed acceptance life insurance requires no medical exams and no health questionnaires. Someone can buy this coverage regardless of any pre-existing health conditions.
The policy has a two-year graded death benefit from non-accidental causes. If the insured person dies before the two-year period ends, the beneficiaries will receive the premiums paid plus 7% compounded annual interest.
For death from an accidental cause during the first two years, the full face amount of the policy will be paid. The accident must occur while coverage is in force, and the death must occur within 90 days of the accident (or 180 days in Oregon and Utah).
If the insured dies after the first two years, the full face amount will be paid for death, regardless of cause.
Colonial Penn’s Life Insurance Riders
A life insurance rider lets you buy extra coverage or features to add to your policy. Colonial Penn offers:
- Accidental Death Rider. This rider from Colonial Penn allows someone 40 to 65 years old to add an accidental death benefit ranging from $10,000 to $50,000.
- Chronic Illness and Terminal Illness Rider. This rider enables you to tap into your whole life insurance death benefit if you have a heart attack, stroke or are diagnosed with a chronic or terminal illness.
How Do I Buy Life Insurance From Colonial Penn?
Colonial Penn policies are available online or by calling the company’s toll-free phone number (877) 877-8052. Colonial Penn policies are sold by captive agents. When you speak with someone from Colonial Penn they will only offer you products from Colonial Penn.
How to File a Claim with Colonial Penn
You can file a Colonial Penn life insurance claim by filling out a claim form on the company website and then mailing it to the company at the following address. You can call customer service for more information at (800) 523-9100.
Colonial Penn Life Insurance Co.
Life Claims Dept
PO Box 1918
Carmel, IN 46082-1918
Colonial Penn Life Insurance Customer Experience
Colonial Penn’s complaint level for individual life insurance is extremely high, at more than seven times the industry average. For this reason alone we caution against buying a Colonial Life policy.
The National Association of Insurance Commissioners collects complaint data from state insurance departments around the country. According to its data, most complaints against Colonial Penn are about delays in paying claims and poor policyholder service.
Colonial Penn Company History
Established in 1963 by AARP co-founder Leonard Davis, Colonial Penn is now a subsidiary of Carmel, Indiana-based CNO Financial Group Inc. Two other CNO companies also sell life insurance: Bankers Life and Washington National. Colonial Penn is headquartered in Philadelphia.
In 1968, Colonial Penn became one of the first insurers to offer guaranteed acceptance life insurance solely for people ages 50 and over.
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Colonial Penn Life Insurance Frequently Asked Questions (FAQs)
Can I cash out my Colonial Penn life insurance policy?
If you have a Colonial Penn permanent life insurance policy with cash value, you may be able to access the cash value or surrender the policy and receive any remaining cash value.
Is Colonial Penn life insurance worth it?
Colonial Penn sells only guaranteed acceptance whole life insurance. Guaranteed acceptance life insurance is typically the most expensive way to buy insurance. Coverage amounts are also limited. Due to its high level of customer complaints and limited policy options, Colonial Penn is not a top choice for life insurance.
Does Colonial Penn life insurance pay out?
Yes, if your life insurance claim is approved, Colonial Penn will pay out the policy death benefit. However, the highest number of complaints against Colonial Penn are about delayed claim payments.
Do all Colonial Penn life insurance policies pay dividends?
Colonial Penn does not pay life insurance dividends.
How much can you borrow from a Colonial Penn life insurance policy?
If you have Colonial Penn life insurance, you may be able to borrow from your life insurance policy. How much depends on the accessible cash value.
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