Colonial Penn

Colonial Penn is one of the leading life insurance companies in the United States offering a selection of insurance options specifically to seniors. 

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5.1
Grand Score
8
User Score
5.1
Grand Score
8
User Score
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Colonial Penn has become a popular choice for those in the market for life and burial insurance. The company offers its own guaranteed acceptance life insurance product (also known as burial insurance) with advertised low monthly premiums. Guaranteed acceptance life insurance ensures you can receive coverage to help cover final expenses easily, without completing a medical exam, health questionnaire or any complex paperwork. 

Colonial Penn also offers term and whole life insurance options with a maximum coverage amount of $50,000. Term life insurance policies are guaranteed renewable up to age 90. Rates are guaranteed to stay the same and will not increase until a new age band is reached. Whole life insurance is guaranteed to remain active for the insured's lifetime if the required premiums are paid, or until the maturity date. Whole Life insurance premium rates will not change for the life of the policy.

Grandfolk Scoring
Waiting period 6/10
Customer service 8/10
Medical exam 5/10
Maximum coverage 5/10
Coverage age limit 6/10
Living benefits 1/10
Exclusions 1/10
Rate increases 10/10
Cost 8/10
Ease of enrollment 10/10
Coverage 7/10
Waiting period
Does coverage have a waiting period?
After a two-year waiting period
Customer service
Availability of and ease of access to customer service?
Representatives are available 8:30 AM-5:30 PM EST Mon- Fri
Medical exam
Medical exam required to obtain coverage?
No medical exams are required
Maximum coverage
What is the maximum coverage available for burial insurance?
Colonial Penn offers up to $50,000 in coverage
Coverage age limit
Who is eligible for burial insurance coverage?
50-85 in most states
Living benefits
Are chronic and terminal illness benefits included with burial insurance?
No
Exclusions
What isn’t covered?
Limited benefit for death during the first two years of coverage
Rate increases
Will the rates increase each year?
The rate will remain the same for the duration of the policy
Cost
Monthly premium
Varies based on age and other factors
Ease of enrollment
Ways you can enroll
Online, by phone, or by mail
Coverage
What services are covered?
Burial insurance
Age Score:
5
50-64 Years
4
65-74 Years
3
75-84 Years
1
85-Older

Unfortunately, when compared to other companies, Colonial Penn’s burial insurance rates are not the most competitive. Its options generally cost more than options offered by other companies. Though Colonial Penn does not base its rates on the applicant’s health, family history or other risk factors, its rates are often substantially higher than the rates of its competitors. 

However, Colonial Penn’s maximum coverage for burial insurance peaks at $50,000. This maximum coverage limit is actually above average when compared to policies by other companies in the market. In many cases, coverage of at least $50,000 is required to cover expenses left behind, such as a mortgage.

Health Score:
7
Poor Health
6
Fair Health
3
Good Health
1
Great Health

Some agencies do not have specific conditions outlining when a benefit can be received. However, in Colonial Penn’s terms and conditions for its Guaranteed Acceptance Life Insurance policies, it has outlined stipulations that insurance benefits may not be paid out if the insured person passes away within 24 months of enrolling in coverage. In the unfortunate case that death does occur during the first two years of the policy, in most states, the policy will only return the paid premiums in addition to interest. 

Many beneficiaries who were not aware of these terms have made formal complaints after their claims were denied. When choosing a life insurance policy, a 24-month waiting period should be weighed heavily against the odds, especially if you are experiencing a declining health condition. Most companies reserve specific guidelines for those with pre-existing conditions, but ‘across the board’ waiting periods are unusual with traditional life insurance policies.

Pros:

  • Colonial Penn does not require an applicant to complete a medical exam or medical questionnaire. 
  • Colonial Penn offers a 30 Day Free Look period that offers a 30-day money-back guarantee.
  • Colonial Penn’s Guaranteed Issue Whole Life policy has a fixed premium, which allows premiums to remain the same throughout the life of the policy.
  • Colonial Penn offers flexible payment options. Payments can be made monthly, quarterly, semi-annually or annually.
  • Coverage cannot be canceled by Colonial Penn.

Cons:

  • Colonial Penn’s life insurance rates are not always the most competitive
  •  A death claim on the guaranteed issue product will not be paid if the insured dies in the first two years of the policy, even if the death results from natural causes.  
  • There is no option to add additional riders to the burial insurance product.

Bottom Line:

Overall, Colonial Penn’s final expense products are pretty standard among other insurance companies in the business. Still, its prices are higher when compared to their competitors.’ Additionally, Colonial Penn has been investigated and sued for charging its members absurdly high premiums that were not risk-justified, or not fully disclosed, at the time of enrollment.

Colonial Penn also has less-than-stellar ratings from financial institutions and insurance rating agencies. Actually, the company has a mere BB rating from Standard & Poor’s, and A.M. Best Fitch gives the insurer a rather low rating of BBB. Moody’s rated the company a Ba1.

The process of purchasing burial insurance can be overwhelming. There are so many different factors to consider in both a plan and company. To make certain you are getting the most fitting plan, you should research and compare all aspects of a company and its products to guarantee you are selecting a strong, stable and reputable insurance company. While Colonial Penn is a highly recognized and branded company, this may be mostly due to its excessive amount of marketing rather than its products or financial stability.  

A number of complaints have been filed against Colonial Penn regarding difficulties in filing claims and collecting benefits. Furthermore, more than 80 lawsuits were filed last year alone for reasons related to denied claims.

Frequently Asked Questions:

Does your term coverage include an ‘accelerated death benefit?’
Unfortunately, an “accelerated death benefit” option is not offered with this product. 

How do I get started?
You may contact the call center and speak to a representative to get started. You also have the option of enrolling online through the website. There is also a third option to print an application and mail it in.

What if I apply but change my mind later?
Each policy or certificate issued comes with a 30-Day Free Look Guarantee. If you decide this insurance is not for you, no matter what the reason, you may return your insurance documents within 30 days of receipt for a complete refund.
 

More Information:

Product Details 

Overview: Colonial Penn Life Insurance Company seeks to offer affordable life insurance and financial products to families. 

Package Details: 
Optional Accessories or Add-on Services: N/A

 

Additional Company Details

 

Contract Details: N/A

Warranty: N/A 

Accreditations: Colonial Penn does not have an accredited business profile with the Better Business Bureau, but maintains an A- rating. 


Company Details: Colonial Penn Life Insurance Company was founded in the 1960s. Initially, it was one of the few life insurance carriers to offer a guaranteed acceptance life insurance option designed exclusively for seniors over the age 50. Today, Colonial Penn is a Fortune 500 company. In 2016, the company reported a net income of $358 million. Colonial Penn Life Insurance markets specifically to seniors. 

Contact 

Colonial Penn Life Insurance Company
399 Market Street
Philadelphia, PA 19106
Phone: 877-877-8052
Website: https://www.colonialpenn.com/ 

 

T. Mashae Pearson - Senior Advisor

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