Colonial Penn $9.95 Plan Reviews

Maybe you’ve seen the commercials selling Colonial Penn’s $9.95 plan for whole life insurance and felt the urge to buy a policy. After all, life insurance is a great asset to financially protect your loved ones after your death, and ten dollars a month is very affordable.

Colonial Penn started selling life insurance products in 1939. While it isn’t the most prominent life insurance provider in the country, it has remained a semi-popular choice for people looking for no-exam insurance for years, especially because of the commercials.

However, the Colonial Penn plan for $9.95 is a little misleading. There’s a lot of fine print that can drastically alter the price of your insurance.

Before buying a policy, you should consider Colonial Penn $9.95 plan reviews, then compare quotes with other companies. Enter your ZIP code into our free tool to see what rates might look like for you.

What is the Colonial Penn life insurance plan for $9.95?

Colonial Penn has several life insurance options, but its most famous is the $9.95 plan.

Colonial Penn life insurance for seniors at the low price of $9.95 might sound too good to be true, and that’s because it is — for the most part.

This life insurance plan is sold in units, a sales technique unique to Colonial Penn. Most life insurance companies sell a death benefit, meaning you can buy $50,000 in coverage, and you’ll pay for it each month.

With the Colonial Penn $9.95 plan, you buy units instead of selecting your death benefit. Colonial Penn takes your essential information (age, location, and gender) then tells you how much coverage each unit will give you.

To get an idea of how much coverage you can buy, check the Colonial Penn life insurance rate chart for 55-year-olds below.

This is a guaranteed issue policy, meaning you don’t need to get a medical exam before approval. However, you must be between the ages of 50 and 85 to qualify.

Below is a table for a 50-year-old and 70-year-old purchasing life insurance, though coverage is offered to those older than 70. The coverage amount is greatest when purchased at 50, with a benefit amount of $1,786, decreasing with age.

Colonial Penn Life Insurance Benefits and Rates

So, Colonial Penn does offer life insurance for $9.95 a month. It’s just not very much. If you want additional coverage, you’ll need to pay much more. Colonial Penn $9.95 plan rates are always just below ten dollars, but you’ll need to stack them to get ample coverage.

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Is Colonial Penn legit?

It is a legitimate company. If you’re asking, “is Colonial Penn good insurance?” you will have to read the Colonial Penn complaints and reviews online. Colonial Penn prices do make it seem a little too good to be true but getting information from an objective third-party resource can help you make all of your life insurance decisions.

But how bad can it be if you get Alex Trebek to endorse your life insurance? If you’re shopping around for affordable Colonial Penn life insurance (or coverage from other companies), you may also want to read through our Globe Life insurance company review.

What types of products does Colonial Penn Life have?

Colonial Penn offers three types of life insurance products: a guaranteed acceptance policy, a whole life insurance policy, as well as several term life insurance policies.

Each policy has different issuing ages and a maximum amount of benefits. However, they all have in common one benefit: no medical exam requirement. Basically, you could look at it like you’re paying for the convenience of not taking an exam.

If a company offers you no medical exams and no health questions, you pay more, but the face amount will be lower. Some policies have graded benefits, which means the policy wouldn’t pay benefits for the first two to three years. So buyer beware.

Let’s find out what each policy entails.

What is Colonial Penn guaranteed acceptance life insurance?

Guaranteed issue life insurance products typically don’t have coverage higher than $25,000. They also have a graded benefits clause, which means the carrier won’t pay the full benefits if you die within two years of when you bought the policy.

You may also be entitled to 10-15 percent interest, depending on the company.

With Colonial Penn Life, the guaranteed policy is a little different. The company doesn’t have benefits up to $25,000 as the others do; what it offers are the “units of coverage” we’ve previously discussed.

These represent the face amount or benefit amount we are all familiar with when shopping for a life insurance policy. This is permanent life insurance with a cash-saving component that requires no health questions or exams. The issue ages are 50-85 in most states.

What are the red flags for Colonial Penn’s guaranteed acceptance life insurance?

One unit represents the face amount for a specific age. For instance, if you are 50 years old, one unit represents $1,786 in benefits, two units represent $3,572, and the max you can buy is eight units for $14,288 in benefits. Here’s the issue: first, this isn’t enough coverage by any means. Second, if you bought the policy when you were a senior over the age of 80, eight units would represent only $3,408, and one unit would be $426 of the face amount. You don’t choose the amount of coverage; it’s based on age and units. Your benefit is based on your gender and age when your coverage takes effect.

This is a very deceiving marketing tactic. Using units for a set of $9.95 per month per unit is confusing to most potential customers who don’t really understand units and are used to hearing about lifetime benefits and term length.

Colonial Penn Life also mentions a 30-day money-back guarantee on every website. Again, what most consumers aren’t aware of is that all insurance companies offer this. It’s called a “30-day free look period.”

It’s a standard in the industry and is required by law for all carriers. While there’s nothing wrong with advertising this, you shouldn’t consider it a benefit.

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What is Colonial Penn’s term life insurance?

Term life insurance is the easiest policy to understand.

With a term life policy, you pay per month for coverage that lasts for a specific amount of time. If you die within this period, your beneficiaries will collect the face amount you bought. There are no cash benefits, and the premium is lower than with other types of policies, like whole life.

It’s a very different case with Colonial Penn Life’s term policies. The initial premium is based on your age when the coverage takes effect and will increase as you enter a new “age band.” Say you bought a policy when you were 42 years for $35 per month. When you reach 46, the same policy will cost you $45 per month, and when you reach 51, it will be $57 each month. So, the advertisement for locked-in premium rate schedules is a little misleading.

These are renewable term life policies, which means that they do only cover you for your term but you will have the opportunity to renew them once that period of time comes to an end if you have yet to use your death benefit.

Coverage can only be renewed up to the age of 90. You aren’t buying a “leveled premium policy;” you’re buying a policy that changes every five years.

The issued ages are between 18 and 75 years old (renewable up to 90). There is no physical exam requirement, but the company does ask health questions. The benefit amounts are $10,000, $20,000, $30,000, $40,000 and $50,000 only.

What are the red flags for Colonial Penn’s term life insurance?

Colonial Penn Life claims that there is a cash value to the policy. This is unusual, and we don’t know of any other companies in the life insurance industry that offer a “term policy” with a cash value, which is designed to help you build money over time.

Colonial Penn’s website states that “depending on how long you’ve had your coverage, the cash value may be available to borrow against at a guaranteed interest rate.”

Another consideration is that it’s too expensive for a no-exam policy. For example, a 41-year-old man would pay $45.12 for $50,000 in benefits with Colonial Penn Life, and his premium would increase every five years until the age of 90. When you’re not in perfect health, it can be easier to get some type of no medical exam life insurance because they provide guaranteed acceptance coverage but it’s valuable to do some comparison shopping amongst guaranteed acceptance policies regardless of your health status.

The same individual could buy a no-exam $250,000, 30-year term policy with SBLI for $36.67 per month, and his premium would stay the same for 30 years. See our SBLI life insurance company review for more.

Finally, as mentioned above, your premium isn’t leveled. Every five years it will increase, which isn’t ideal when you buy a policy. Your premium payments are vitally important because they can quickly become a financial burden if you fall into poor health. You want to make sure that you select something you can afford; ideally, the maximum coverage you can afford to help you pay for funeral costs and offset any other end-of-life expenses that may impact your family.

Term Life Insurance Rates Chart

Due to the assessed risk factors involved, men and women face different premiums and coverage costs. Keep reading for more on how men’s and women’s life insurance rates are different.

Who is Colonial Penn’s life insurance good for?

What are the average male monthly life insurance rates by age and coverage amount? The table below shows sample life insurance rates for males.

Male Monthly Life Insurance Rates by Age and Coverage Amount

What are the average female monthly life insurance rates by age and coverage amount? The chart below, featuring sample female monthly premiums, shows that females will pay less at each issue age for their life insurance premiums.

Female Monthly Life Insurance Rates by Age and Coverage Amount

As you can see, each age is cheaper for females.

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How does Colonial Penn Term Life compare to other carriers’ life insurance rates?

Take a look at this table for a rate comparison between popular life insurers.

Colonial Penn Term Life vs. Other Carriers' Life Insurance Rates

The above illustration is for a 40-year-old male in a preferred health condition. The max benefit with Colonial Penn Life is $50,000 for $45.12 per month. The rates with all carriers are for a $250,000, 30-year term at $30.19 per month.

What is Colonial Penn whole life insurance?

As the name implies, “whole life” will last for the rest of your life, providing you with permanent protection as long as you keep up with your payments. There is a cash value to a whole life policy, which you can borrow against. You should know that there is usually a limited benefit period. For most companies, a two-year limited benefit period is standard. During that time, you may not be able to make any life insurance claims. This waiting period helps protect you and the insurance company.

Most financial advisers recommend that their clients buy traditional term life policies and invest the difference. However, some individuals want whole life and won’t settle for another type of policy.

So let’s look at some of the details in Colonial Penn’s whole life policy.

The issued ages are 40 to 75 years old. The benefit amounts are $10,000, $20,000, $30,000, $40,000 and $50,000 only. There is no medical exam, but you will have to answer some health questions, and your application could be denied.

The premium is based on age and gender when the coverage is obtained.

Premiums are payable up to age 121 or as long as the insured is living, and coverage matures and becomes payable at age 121. The premium remains the same and will not increase; coverage can’t be canceled as long as premiums are paid.

According to Colonial Penn Life’s site, you begin to build cash value after a year of coverage and use it for a loan.

What are the red flags for Colonial Penn’s whole life insurance?

It’s too expensive. For example, a 65-year-old would pay $317.24 per month for $50,000 in coverage with Colonial Penn but could buy a policy with a company like Assurity for the same $50,000 benefit for $260.57 per month.

If it’s too much, you should do more research. It’s very important to consider life insurance costs and make sure that you get sufficient life insurance. Minimum coverage amounts may not be enough and you should do your best not to undercut yourself just to save on premium rates.

You can also contact the company using the Colonial Penn insurance phone number: 1 (877) 877-8052.

Additional Add-Ons for Colonial Penn Insurance

Life insurance companies usually offer add-ons that will increase the value of your policy. Colonial Penn has one add-on you can purchase, which doesn’t compare to other companies.

Colonial Penn’s add-on is called living insurance and can be purchased for a whole or renewable term policy.

If you buy living insurance, you can collect part of your death benefit to pay for medical expenses if you become seriously ill. You can claim 50% of your benefit for heart attacks or specific chronic illnesses, or 25% if you’re diagnosed with cancer.

This add-on can help you pay for medical bills if you become ill, but only people under 65 are eligible to purchase it.

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Should I use a broker?

Buying life insurance was never intended to be done the same way as buying airline tickets or other products and services. Consider working with a broker to avoid any pitfalls.

A broker represents multiple carriers, so they won’t try to sell you on any particular policy. It’s their job to find the best policy to suit your needs. These life insurance experts will be able to help you with answers to questions, determine what type of life insurance policy is best for you, and can help you get the maximum death benefit that you can afford within your desired monthly premium range.

For example, on your own, you might buy a guaranteed issue policy when you are completely healthy and have no idea that you just bought the worst policy available. A broker will help you avoid that.

Who owns ColonialPenn.com?

The Colonial Penn Life insurance company was founded in 1968 by AARP co-founder Leonard Davis. The company is based in Philadelphia and is owned by CNO Financial Group.

Colonial Penn’s specialty is offering life insurance directly to the consumer at a lower cost through the mail, internet, phone calls, and TV spots.

The company’s most popular plan is the guaranteed acceptance life insurance policy, which is offered exclusively to those 50-85 years old. Colonial Penn started offering this policy in 1968, becoming one of the first to do so. Now, there are several guaranteed issue life insurance companies.

Colonial Penn Life Insurance Reviews

Unfortunately, Colonial Penn has a high number of complaints from its customers. Most complaints revolve around the payout process. Many customers have complained about Colonial Penn refusing to make payments after a death.

The National Association of Insurance Commissioners (NAIC) compiles information about customer complaints. It does so for every insurance company and publishes the data as a ratio compared to its size.

The average complaint ratio with the NAIC is 1.0. Companies with a ratio over 1.0 have above average complaints, while under 1.0 fall below the average. Colonial Penn’s ratio is 2.12, meaning they receive more than double the complaints compared to the average insurance company.

Colonial Penn’s complaint ratio is also on the rise. The company had a ratio of 1.16 in 2019, but a 2.12 as of 2020.

The Better Business Bureau (BBB) gives Colonial Penn an A+, but there are numerous complaints on the site. By exploring complaints and praise filed with the BBB, the pros and cons of Colonial Penn insurance are easy to see.

A.M. Best reports the financial strength of insurance companies, which lets you know the chance that any claims you make will get paid. Colonial Penn is owned by the CNO Financial Group, which receives an A- (excellent).

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What is the bottom line on Colonial Penn Life Insurance?

The bottom line? If you are healthy, avoid Colonial Penn. Even if you need a guaranteed issue policy, you’ll have no trouble finding something better.

Regardless of what company you choose to buy a policy with, two things are certain:

• Prices are fixed by law, which means you will not get a “deal.” The rates are calculated by the underwriting department based on gender, age, health, and history, to name a few.
• You still need to talk to someone. There is no way to buy a policy without talking to someone, even if you buy online.

Colonial Penn offers three life insurance products. Specifically, the company offers guaranteed acceptance, whole, and term life policies. However, there are some unique factors associated with Colonial Penn’s life insurance products.

When you’re looking to buy coverage from Colonial Penn, you’ll find that the company sells units of coverage. The unit premium never changes, and you can purchase between one and eight units, with a single unit cost of $9.95. The max term life benefit with Colonial Penn is $50,000 for $45.12 per month.

Are you ready to buy Colonial Penn life insurance? To make sure you’re getting the right Colonial Penn life insurance rates for your needs, it’s your responsibility as a consumer to do some homework and reach a conclusion.

Before you leave our Colonial Pen life insurance review, enter your ZIP code in our free tool to find quotes from companies near you.

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