Choosing life insurance is an important decision. It helps you protect your loved ones and prepare for the future. One company that offers life insurance to many people across the U.S. is Colonial Penn Life Insurance.
You may have seen their TV ads or come across them while researching options. But what does Colonial Penn really offer? And is it the right choice for you?
In this article, we’ll take a closer look at Colonial Penn Life Insurance, the types of coverage they provide, who they’re best for, and what you should keep in mind before buying a policy. So, stick with us to be enlightened.
Who or What Is Colonial Penn?
Colonial Penn is a life insurance company based in Philadelphia, Pennsylvania. The company has been around since 1968 and is known for offering life insurance to people who may find it hard to get coverage elsewhere, especially older adults. In fact, many of their products are designed specifically for people over the age of 50.
Colonial Penn is a part of CNO Financial Group, a larger insurance organization. Over the years, the company has focused on making life insurance simple and easy to understand, with fixed premiums and guaranteed acceptance policies that don’t require medical exams.
Types of Life Insurance Colonial Penn Offers
Colonial Penn doesn’t offer a wide range of life insurance products like some larger companies. However, they focus on a few specific types that may be helpful for certain people, especially those in their 50s, 60s, or 70s. Below are the main types of coverage they offer:
Guaranteed Acceptance Life Insurance
This is one of Colonial Penn’s most well-known products. It’s made for people between ages 50 and 85 (in most states). Here’s how it works:
- No medical exam is needed.
- You can’t be turned down because of your health.
- The policy has a limited death benefit during the first two years, unless death is accidental.
- The coverage amount is based on units. Each unit has a fixed cost, but the actual payout can vary depending on your age and gender.
- Premiums are fixed for life, which means they will never go up.
This type of policy is best for people who may have health issues or are older and don’t qualify for other kinds of life insurance.
Term Life Insurance
Colonial Penn also offers a renewable term life insurance policy for people between ages 18 and 75. This policy:
- Lasts for one-year terms, and you can renew it each year until age 90.
- Does require you to answer health questions, though there’s still no medical exam.
- Offers higher coverage amounts than guaranteed acceptance policies.
- Premiums go up as you get older.
Term life insurance is usually more affordable at first, but the price increases over time. It’s a good choice for people who are relatively healthy and want more coverage at a lower starting cost.
Whole Life Insurance
Colonial Penn’s whole life insurance is available for people ages 40 to 75. It provides:
- Lifelong coverage, as long as you pay your premiums.
- A fixed death benefit that doesn’t decrease.
- A cash value that builds over time, which you can borrow against.
- Premiums that never change.
This type of policy may work well for people who want permanent coverage and don’t mind paying a little more to build cash value.
How Much Does It Cost?
Colonial Penn is known for offering life insurance starting at just $9.95 per month. However, this price only buys one unit of coverage, and that amount is usually very small, often less than $1,000, depending on your age and gender.
So while the starting price is low, you may need to buy several units to get enough coverage. The more units you buy, the higher your monthly payment will be.
It’s also important to know that the value of each unit changes with your age and sex. For example, a 50-year-old woman may get more coverage per unit than a 75-year-old man.
Benefits of Colonial Penn Life Insurance
Here are some reasons why Colonial Penn Life Insurance is worth considering.
No Medical Exams
Many of their plans don’t require a physical exam, which makes them a good option for people with health issues.
Easy to Qualify
If you are between 50 and 85, you can be guaranteed acceptance for some plans, no matter your health history.
Fixed Premiums
Once you buy your policy, the monthly cost stays the same for life. This helps with long-term budgeting.
Simple Application
You can apply online or over the phone. The process is quick and doesn’t involve much paperwork.
Things to Consider Before You Buy
While Colonial Penn offers easy access to coverage, there are a few things you should think about:
Low Coverage Amounts
Their policies may not provide enough money to fully cover funeral costs or support loved ones, especially if you only buy one or two units.
Two-Year Waiting Period
For guaranteed acceptance life insurance, there is a two-year waiting period. If you pass away from natural causes during this time, your beneficiaries won’t receive the full death benefit, just a return of premiums with interest.
Expensive for the Value
If you are healthy and younger, you may be able to find more coverage for less money from other insurance companies.
Complex Unit System
The unit-based pricing system can be confusing. It’s not always clear how much actual coverage you’re buying.
Who Is Colonial Penn Best For?
Colonial Penn is a good option for:
- Older adults who have trouble qualifying for other life insurance
- People who want guaranteed acceptance without a health check
- Individuals looking for small coverage amounts mainly for funeral costs
- Those who prefer fixed payments that won’t increase over time
If you are younger or in good health, though, you may want to compare offers from other insurance companies. You might be able to get more coverage for less money.
Final Thoughts
Colonial Penn Life Insurance is well-known for offering easy-to-get coverage, especially for people over 50. Their plans are simple, require no medical exams, and offer guaranteed acceptance for some policies.
While the coverage amounts can be low and the pricing may seem a bit high for what you get, it can still be a helpful option for people with limited choices.
Before you make a decision, take time to review your needs, compare quotes from other providers, and read the fine print.
