Colonial Penn is a duly licensed American life insurance company founded in 1968 that specializes exclusively in guaranteed acceptance whole life insurance for individuals ages 50 to 85. The company maintains an ‘A (Excellent)’ rating from AM Best and serves over 820,000 active policies, demonstrating legitimate regulatory status and financial stability. Despite its 58-year history and solid financial credentials, Colonial Penn faces substantial criticism for pricing that runs 40-50% higher than competitors.
The heavily advertised $9.95 per month plan only covers a single unit of insurance, delivering between $493 and $1,313 in actual coverage depending on your age and gender. Colonial Penn structures coverage using a unit-based pricing model where each unit costs a fixed $9.95 per month, but the actual coverage amount per unit varies based on age, gender, and state of residence. The policy includes a two-year limited benefit period that affects early claims, meaning death from natural causes during the first 24 months results only in a premium refund. Coverage amounts decline substantially as age increases despite consistent monthly premiums, requiring older applicants to purchase more units for equivalent protection.
Colonial Penn charges 40-50% more than competitors for equivalent coverage, making it financially disadvantageous for most consumers who can qualify for traditional policies. Insurance professionals consistently rank Colonial Penn as one of the least attractive life insurance options available to seniors, recommending the provider only as a last resort after all other coverage alternatives have been thoroughly exhausted. This review examines Colonial Penn’s pricing structure, coverage limitations, customer service record, and competitive positioning to help you determine whether guaranteed acceptance justifies the premium cost.
Is Colonial Penn Life Insurance Legit?
Colonial Penn is a duly licensed American life insurance company founded in 1968 and authorized to sell insurance throughout the USA. The company is owned by CNO Financial Group and operates as a legitimate, regulated insurance provider. Its 58-year history demonstrates sustained operations within the American insurance market.
Colonial Penn maintains an ‘A (Excellent)’ financial strength rating from AM Best, which represents the third-highest rating category available. The company also holds BBB accreditation. These credentials indicate that Colonial Penn possesses excellent ability to meet its ongoing insurance obligations to policyholders.
The company currently serves over 820,000 active life insurance policies with $3.7 billion (€3.4 billion) of life insurance coverage in force. Colonial Penn operates across 49 states plus Washington DC, Puerto Rico, and the Virgin Islands. This scale reflects significant market presence and customer base.
Despite its legitimate regulatory status and financial ratings, Colonial Penn faces substantial consumer complaints online. The company holds a Trustpilot rating of 1.3 out of 5 stars based on 53 reviews. Reviewers describe the company as “a complete rip-off” and “financially predatory,” raising concerns about customer service and policy practices.
What Is Colonial Penn Life Insurance?
Colonial Penn was founded in 1968 by Leonard Davis, AARP co-founder and philanthropist, to provide life insurance to retirees who faced rejection from traditional insurers. The company emerged from a clear market need: seniors struggled to obtain coverage due to age or health status. Davis created Colonial Penn with the mission of serving this underserved population through accessible, guaranteed acceptance policies.
Colonial Penn specializes exclusively in guaranteed acceptance whole life insurance for individuals ages 50 to 85. The company offers no term life products or other insurance lines. This focused approach allows the company to concentrate expertise on permanent coverage that helps families manage funeral costs and final expenses without medical underwriting.
The company targets seniors between ages 50 and 85 who often have existing health conditions. Traditional life insurance underwriting frequently disqualifies this demographic based on pre-existing medical issues. Colonial Penn’s guaranteed acceptance model removes medical exams and health questions, making coverage accessible to people typically denied by conventional insurers.
How Does Colonial Penn’s Guaranteed Acceptance Policy Work?
Colonial Penn’s guaranteed acceptance policy eliminates health screening requirements for applicants aged 50-85. No health questions or medical exams are necessary during the application process. Acceptance remains guaranteed regardless of pre-existing medical conditions. This streamlined approach makes life insurance accessible to seniors who might otherwise face rejection.
Colonial Penn structures coverage using a unit-based pricing model. Each unit costs a fixed $9.95 per month, regardless of age. The actual coverage amount per unit varies based on age, gender (in Montana, age only), and state of residence. This transparent pricing allows customers to purchase multiple units to increase their total death benefit.
The policy includes a two-year limited benefit period that affects early claims. During this waiting period, death only results in a refund of premiums paid rather than the full death benefit. Accidental death claims bypass this limitation and pay the full benefit immediately. After two years, the complete death benefit becomes payable for any cause.
Coverage amounts decline substantially as age increases despite consistent monthly premiums. A 57-year-old male receives $1,313 in coverage per unit monthly. A 77-year-old male receives only $493 per unit for the same $9.95 monthly cost. This age-based reduction reflects increased mortality risk at advanced ages.
Is Colonial Penn Financially Stable?
Colonial Penn maintains financial stability through its ownership by CNO Financial Group, a publicly traded company on the New York Stock Exchange (NYSE: CNO). CNO Financial Group has operated since 1997 and serves over 4 million customers globally. The parent company manages $38 billion in total assets and administers 3.2 million policies in force, demonstrating substantial financial resources and market presence.
Colonial Penn honors the contractual obligations outlined in its policies and pays beneficiaries the full due amount upon presentation of a death certificate. This commitment to contract fulfillment remains consistent regardless of the company’s service reputation. Policyholders can rely on receiving their designated benefits when claims are submitted with proper documentation.
AM Best assigned Colonial Penn an A (Excellent) financial strength rating, confirming an excellent ability to meet future claims-payment obligations. This rating reflects the company’s capacity to honor its financial commitments. The rating does not assess customer service quality, but it does validate the company’s financial security and solvency position.
What Does the $9.95 Plan Actually Get You?
The heavily advertised $9.95 per month plan only covers a single unit of insurance, delivering between $493 and $1,313 in actual coverage depending on your age and gender. This modest benefit amount falls far short of what most consumers expect when they see the prominent “$9.95” marketing message. The plan’s structure involves purchasing individual units rather than comprehensive policies.
Achieving modest $10,000 in coverage requires purchasing 10 to 12 units at a cost exceeding $120 monthly. The maximum $25,000 coverage option costs nearly $310 per month for older applicants. These realistic monthly expenses vastly exceed the advertised entry price once consumers calculate their actual needs.
Customers consistently report feeling deceived after purchasing this plan. Consumer feedback describes the “$9.95” pitch as “misleading advertising” and “just a hook to get you in the door.” Many buyers classify the offer as “a complete scam” after discovering how minimal their actual coverage truly is relative to the marketing promise.
How Much Coverage Does $9.95 Buy?
Coverage per $9.95 unit decreases dramatically with age, ranging from $1,313 for a 57-year-old male to only $493 for a 77-year-old male. This age-based pricing structure means that the same monthly premium delivers substantially less protection as individuals grow older, making early enrollment critical for maximizing death benefit value.
Achieving $10,000 in coverage requires purchasing 10 to 12 units, depending on age. The actual monthly cost reaches $99.50 to $119.40, not the advertised $9.95. This significant gap between the base premium and the cost for meaningful coverage represents a substantial financial commitment that many consumers do not anticipate when they hear the promotional rate.
A single $9.95 unit provides only $493 to $1,313 in coverage, which is grossly insufficient for funeral expenses. Average funeral costs range from $7,000 to $12,000 (€6,400 to €11,000). One unit covers merely 4 to 19 percent of these expenses, leaving families responsible for the substantial remainder.
Does the Price Increase as You Age?
Colonial Penn locks in your premium at $9.95 per unit for life, meaning your monthly cost will never increase once your policy is issued. This guarantee protects policyholders from future premium hikes. The fixed rate remains constant throughout the entire duration of your coverage.
Your age, gender, and state determine the coverage amount you receive per unit at the time of application. The $9.95 per-unit premium stays the same, but the actual benefit you obtain is permanently set based on these factors. Applicants cannot change their initial coverage amount later.
Older applicants receive significantly less coverage per $9.95 unit compared to younger applicants. The value proposition deteriorates as age increases at purchase. This means an 80-year-old pays the same premium as a 50-year-old but receives substantially lower benefit amounts.
What Are the Benefits of Colonial Penn Life Insurance?
Colonial Penn life insurance provides guaranteed acceptance regardless of health conditions, making coverage accessible for individuals declined by other insurers due to serious health issues or pre-existing conditions. This feature eliminates medical underwriting barriers that typically prevent high-risk applicants from obtaining traditional life insurance protection.
The application process is remarkably simple and takes only minutes to complete online, by phone at 1-877-469-5128, or by mail. Applicants answer no medical exam questions. Colonial Penn streamlines enrollment to ensure rapid approval and policy activation.
Colonial Penn whole life policies build cash value after the first year that policyholders can borrow against for financial emergencies. The policy loans carry an 8% compounded annual interest rate. This accumulated cash value provides a flexible financial resource throughout the policy’s lifetime.
Colonial Penn cannot cancel a policy as long as premiums are paid on time, providing lifetime coverage certainty. Policyholders retain absolute control over their coverage. This cancellation protection ensures consistent protection without risk of involuntary termination by the insurer.
Can You Get Coverage Without a Medical Exam?
Guaranteed acceptance whole life policies require no medical exam and no health questions, making coverage accessible to applicants ages 50-85 regardless of pre-existing medical conditions. This type of policy eliminates the underwriting barrier that prevents many older adults from obtaining life insurance protection.
Applicants receive coverage immediately based only on age, sex, and state of residence without any health screening, physical examination, or medical records review. The application process streamlines dramatically when insurers forego medical evaluation requirements. Coverage approval happens within days rather than weeks.
The guaranteed acceptance without medical exam results in significantly higher premiums and lower coverage amounts compared to medically underwritten policies. Trade-offs exist between accessibility and affordability in this insurance category. Applicants accept higher costs to secure guaranteed eligibility regardless of health status.
Is There a Waiting Period Before Benefits Pay Out?
Guaranteed acceptance policies include a mandatory two-year limited benefit period during which death from natural causes results in a refund of premiums paid rather than the full death benefit. This restricted period applies to all applicants regardless of health status. Natural death claims during this window receive only premium reimbursement to the beneficiary.
Full death benefit payment occurs immediately if death results from an accident during the two-year waiting period. An optional accidental death benefit rider is available in most states for applicants ages 50 to 80 (inclusive). This rider ensures comprehensive accident coverage from the policy’s first day.
After 24 months of policy ownership, the full death benefit amount is paid out for any cause of death, whether natural or accidental. Complete coverage activation occurs automatically at the two-year mark. Beneficiaries receive the full contracted benefit regardless of how death occurs after this period expires.
What Do Colonial Penn Customer Reviews Say?
Colonial Penn receives consistently poor customer satisfaction ratings across major review platforms. Trustpilot awards the company only 1.3 out of 5 stars based on 53 customer reviews, while InsuredBetter gives 2 out of 5 stars and reports that customer reviews have only deteriorated over time. These low scores reflect widespread dissatisfaction among policyholders.
The Better Business Bureau accredits Colonial Penn but documents a substantial number of consumer complaints. Multiple review sources identify a high ratio of customer service complaints relative to the company’s customer base. This pattern indicates systemic issues in how the company handles customer inquiries and dispute resolution.
Dominant negative themes emerge consistently throughout customer reviews of Colonial Penn. Customers describe the company as misleading, calling it a complete rip-off and financially predatory. Reviews frequently cite aggressive marketing tactics that target elderly and low-income individuals as a core business strategy.
What Are the Most Common Complaints?
The most frequent complaint involves misleading ‘$9.95’ advertising that obscures actual coverage amounts. Customers report that Colonial Penn fails to disclose upfront that this price only purchases $800 in coverage. This deceptive marketing strategy functions as a hook designed to attract initial inquiries before revealing the policy’s true limitations.
Denied coverage represents a significant complaint despite the company’s heavily advertised ‘guaranteed acceptance’ and ‘no health questions’ messaging. Multiple customers report that Colonial Penn rejected their claims based on medical history, contradicting the advertised guarantees. This gap between promises and actual underwriting practices generates substantial customer frustration.
Customer service delays plague the claims process significantly. Customers struggle to cancel policies and cannot access 24/7 online or telephone claims reporting. The company’s administrative infrastructure fails to meet modern customer service standards.
Rate transparency remains absent from Colonial Penn’s business model entirely. The company refuses to publish rate charts publicly. This practice prevents customers from comparing prices or understanding total costs before engaging with sales representatives.
Are There Any Positive Customer Experiences?
Colonial Penn provides coverage for applicants with serious health conditions who have been declined by other insurers. Customers with pre-existing medical issues report that the company accepted them when no other coverage option existed. This accessibility fills a critical gap for individuals facing medical underwriting rejection from competitors.
Older customers appreciate the straightforward application process at Colonial Penn. The application takes minutes to complete and requires no complex medical underwriting. Seniors value this accessibility for obtaining coverage without navigating burdensome qualification procedures.
Colonial Penn demonstrates reliability in honoring contract terms and paying beneficiaries the due amount upon submission of a death certificate. This contractual fulfillment stands out despite the company’s poor service reputation. The organization upholds its fundamental obligation to deliver death benefits when policy conditions are satisfied.
How Much Does Colonial Penn Life Insurance Cost?
Colonial Penn structures its pricing on a unit-based system where each unit of coverage costs exactly $9.95 per month regardless of age or gender. The total monthly premium depends on how many units an individual purchases to reach their desired coverage amount. This straightforward per-unit model means older applicants often pay significantly more overall because they require more units to obtain adequate death benefits.
A 65-year-old male can secure approximately $10,000 in coverage through 12 units for $119.40 monthly. Maximum coverage of $25,000 requires 25 units and costs nearly $310 per month (£205) at advanced ages. Real-world premiums demonstrate how coverage amounts scale directly with unit purchases across different age groups.
Colonial Penn’s cost-to-coverage ratio performs 40-50% worse than competitors in the marketplace. The same $120 monthly premium purchases $10,000 with Colonial Penn but provides $20,000 to $25,000 from many alternative insurers. This pricing disadvantage makes Colonial Penn significantly more expensive for equivalent death benefit protection.
What Are the Rates for Different Ages?
Coverage amounts decline significantly with age, requiring older applicants to purchase more units for equivalent protection. A 57-year-old male receives $1,313 per unit, while a 77-year-old male receives only $493 per unit. The reduction in per-unit value means applicants in their late seventies must buy substantially more coverage to match the protection available to younger policyholders.
Monthly premiums increase dramatically across age brackets for the same $10,000 coverage amount. Younger applicants in their fifties pay approximately $76–$95 per month (8–10 units), while older applicants in their seventies and eighties pay $200–$250 per month (20–25 units). This cost escalation reflects the higher mortality risk associated with advanced age.
Colonial Penn does not publish detailed rate charts showing coverage amounts by age on their website. Prospective customers must call the company directly or use the online calculator to determine their specific rates and coverage options. This lack of transparency makes comparison shopping difficult for potential policyholders.
Is Colonial Penn More Expensive Than Competitors?
Colonial Penn charges 40-50% more for the same coverage compared to competing insurers. Most other life insurance providers deliver lower premiums, broader coverage options, and superior policy terms. This pricing gap positions Colonial Penn as a costlier choice for seniors evaluating affordable life insurance solutions.
A practical comparison reveals the disparity clearly. A 65-year-old male pays $120 monthly (USD) for $10,000 in coverage with Colonial Penn, subject to a waiting period. Alternative insurers provide $20,000 to $25,000 (USD) in coverage at comparable or lower monthly rates, offering substantially better protection per premium dollar.
Insurance professionals consistently rank Colonial Penn as one of the least attractive life insurance options available to seniors. Experts recommend the provider only as a last resort after all other coverage alternatives have been thoroughly exhausted. This consensus reflects widespread concern about Colonial Penn’s value proposition relative to the broader competitive marketplace.
Colonial Penn vs Mutual of Omaha: Which Is Better?
Mutual of Omaha delivers superior value through guaranteed issue policies that provide 40-50% more death benefit at the same monthly premium as Colonial Penn. The coverage-to-premium ratio favors Mutual of Omaha significantly. Consumers receive substantially higher protection without paying additional costs, making it the more cost-effective choice for life insurance protection.
Mutual of Omaha structures policies with straightforward death benefit amounts instead of Colonial Penn’s unit-based system. Transparent pricing enables consumers to compare costs easily and understand exactly what coverage they receive. This clarity eliminates confusion when evaluating policy options and selecting appropriate protection levels.
Customer satisfaction ratings strongly favor Mutual of Omaha over Colonial Penn. Mutual of Omaha processes claims faster and maintains higher service standards. Colonial Penn’s substantial complaint ratio and documented service delays make Mutual of Omaha the superior choice for reliable customer support and efficient claims handling.
Colonial Penn vs AARP Life Insurance: How Do They Compare?
Colonial Penn was founded by AARP co-founder Leonard Davis and originally provided insurance through AARP. The two companies share a historical connection that defined the early life insurance market for seniors. Today, they operate as separate entities with distinct business models and coverage approaches.
AARP partners with New York Life to offer its life insurance products to members. These policies provide competitive pricing with higher coverage amounts and minimal waiting period restrictions. Members gain access to better rates compared to Colonial Penn’s standard offerings.
Colonial Penn and AARP life insurance both serve seniors aged 50 and older. AARP requires health screening to qualify for its best rates, benefiting applicants in good health. Colonial Penn accepts applicants regardless of health status, making guaranteed acceptance a key differentiator.
What Are the Drawbacks of Colonial Penn?
Colonial Penn charges 40-50% more than competitors for equivalent coverage, making it financially disadvantageous for most consumers. Industry analysis reveals that the same premium buys 2-2.5 times more coverage elsewhere, with consumer reviews describing the value proposition as a “complete rip-off” and “financially predatory.” This significant price disadvantage represents the primary concern for prospective policyholders.
Colonial Penn imposes a two-year limited benefit waiting period that severely restricts actual coverage value. Death from natural causes during the first 24 months results only in a premium refund, not the full death benefit payout. This means policyholders receive no meaningful insurance protection for two years, fundamentally defeating the purpose of life insurance during the critical initial period.
The company employs misleading advertising that obscures true coverage levels and prevents informed comparison. The heavily promoted “$9.95” plan buys minimal coverage ranging from $493 to $1,313 per unit. Colonial Penn publishes no accessible rate charts, making it nearly impossible for consumers to compare their offerings with competitors before purchasing.
Colonial Penn demonstrates poor customer service quality across multiple dimensions. The company holds a Trustpilot rating of 1.3 out of 5 stars (Bad) and faces substantial complaints with the Better Business Bureau. Additional service deficiencies include no 24/7 claims reporting, delays in claims processing, and documented difficulty for customers attempting to cancel policies.
Why Doesn’t Colonial Penn Publish Rate Charts?
Colonial Penn deliberately avoids publishing rate charts to maintain pricing opacity and conceal their poor value proposition. The company’s unit-based pricing system with variable age and gender coverage amounts creates complexity that makes traditional rate comparisons difficult. This intentional lack of transparency prevents customers from easily shopping around and recognizing the unfavorable pricing structure.
Colonial Penn’s sales model requires potential customers to contact representatives or use website calculators rather than accessing published rates. This direct contact method creates high-pressure sales environments and eliminates anonymous price comparison opportunities. The barrier to information gathering directly benefits the company’s conversion rates.
Publishing clear rate charts would expose Colonial Penn’s significant pricing disadvantage in the marketplace. Their rates are 40-50% higher than competitor offerings, making products appear substantially less attractive upon direct comparison. Rate transparency would immediately reveal this competitive gap and likely reduce customer acquisition.
Who Should Avoid Colonial Penn Life Insurance?
Younger, healthy individuals under 60 who can qualify for better rates elsewhere should avoid Colonial Penn. Term life insurance represents a superior option for healthy people in this age group, offering lower premiums and greater coverage flexibility. Experts consistently recommend exploring alternative providers before committing to Colonial Penn’s guaranteed acceptance model.
Anyone needing larger death benefits to cover mortgages, outstanding debts, or family income replacement should look elsewhere. Colonial Penn’s maximum coverage of $25,000 falls short for individuals with substantial financial obligations. This limitation makes the policy inadequate for comprehensive financial protection needs.
Consumers prioritizing transparent and flexible pricing should avoid Colonial Penn’s opaque rate structure. The company does not publish standard rate charts and relies on a unit-based system that complicates price comparisons. Those seeking clarity in cost analysis will find competing insurers offer more straightforward pricing transparency.
Where Can You Buy Colonial Penn Life Insurance?
Colonial Penn is available in 49 out of 50 states, excluding New York for guaranteed acceptance policies, plus Washington DC, Puerto Rico, and the Virgin Islands. This extensive geographic reach makes Colonial Penn accessible to nearly all Americans seeking affordable life insurance options. The company’s broad coverage area ensures that most residents can access their guaranteed issue products without relocating or seeking alternative providers.
Customers can purchase Colonial Penn coverage through three convenient channels: online at colonialpenn.com, by phone at 1-877-469-5128 (Monday through Saturday with extended hours), or by mail using printed applications. Each method offers the same straightforward enrollment process. The multiple application options accommodate different preferences and technological comfort levels among potential policyholders.
New York residents have access to Colonial Penn’s LifeChoice Whole Life Insurance, a specialized simplified issue policy designed for males aged 50–73 and females aged 50–75. This product eliminates the waiting period and requires only health questions instead of a full medical exam. The LifeChoice option provides New York-specific protection while maintaining Colonial Penn’s commitment to accessible coverage.
Colonial Penn generates quotes immediately online based on age, sex, and state information, allowing applicants to see pricing before committing. The application process takes only minutes to complete across any of the three purchase channels. This rapid quote and enrollment system removes barriers to obtaining immediate life insurance protection.
Is Colonial Penn Life Insurance Worth It?
Colonial Penn is rarely worth considering for most people because other insurers offer lower prices, higher coverage options, and better terms. The same premium typically buys 40-50% more coverage elsewhere. Consumers should explore alternatives before settling on Colonial Penn as their primary life insurance choice.
Colonial Penn may be appropriate only as a last resort for seniors in poor health who cannot qualify for other life insurance. Individuals who have been declined by multiple insurers with serious health conditions represent the narrow population for whom Colonial Penn coverage makes sense. This limited applicability reflects the company’s niche market positioning.
Insurance professionals recommend comparing multiple providers first and working with an independent broker. Healthy individuals should consider term life insurance for better value and coverage. Colonial Penn should be approached only after exhausting all other available options in the marketplace.
Consumers should compare multiple providers and understand their financial needs before selecting a policy. Reading all policy details carefully protects against unfavorable terms and hidden restrictions. Consulting with a licensed insurance agent or financial advisor ensures informed decisions based on facts, not television advertising appeals.
