Colonial Penn Life Insurance Review: 2021 Guide

Colonial Penn Life Insurance Review
Colonial Penn Life Insurance Review: 2021 Guide

Disclaimer: Willamette Life is a direct competitor of Colonial Penn. This post is written to help you make a purchasing decision and to understand your options better.

Colonial Penn Logo

Countless life insurance companies will send direct mail promotions to your mailbox or advertise on television commercials. These companies claim to have the best burial insurance plans that are better than the competition, however, the best life insurance for seniors varies depending on the person.

Our industry experts have reviewed one of the most prominent senior life insurance companies, and there three offered plans.

Colonial Penn Life Insurance Review

Colonial Penn is a direct-to-consumer life insurance company. You will see their advertisements through television commercials and direct mail, making their brand very visible to seniors.

Colonial Penn was one of the original pioneers of the now industry-standard guaranteed acceptance life insurance plan for seniors over 50. This carrier has ventured into other life insurance products throughout the years. They currently offer products for individuals between 18 – 85 years old.

Company Details

  • Established: 1968
  • A.M. Best Financial Rating: A (excellent)
  • Headquarters: Philadelphia, PA

Plans Types

This carrier offers three final expense insurance plan options.

  • Plan 1: Guaranteed Acceptance
  • Plan 2: Permanent Whole Life
  • Plan 3: Renewable Term

Guaranteed acceptance check mark

Plan 1: Guaranteed Acceptance

This plan guarantees approval and asks no medical questions. A two-year waiting period is implemented, and a unique process is used to determine the monthly price and coverage amount.

Plan Details

  • Age Eligibility: 50 – 85
  • Coverage Amounts: $418 – $24,996 (depending on age)
  • State Availability: 49 states (excluding NY)
  • Medical Exam: No
  • Health Questions: No
  • Waiting Period: 2-years
  • Permanent Coverage: Yes
  • Builds a Cash Value: Yes

Whole Life Insurance

Whole life insurance is simple and straightforward. Each policy comes with three permanent benefits.

Coverage Never Terminates: The death benefit is permanent and will not decrease or expire.

Price Never Increases: The monthly premium will not change, allowing seniors on a fixed income not to have any unexpected rate increases.

Builds Cash Value: With every payment made, a portion will go towards the cash value. Over time this amount will grow and can be borrowed from.

No Medical Questions

This plan is guaranteed issue coverage which does not require any medical questions for approval. These plans are marketed as easy options for coverage. However, the majority of applicants do not need this type of plan.

Guaranteed acceptance plans come with higher premiums, and this Colonial Penn Guaranteed Acceptance plan is no different.

Two-Year Waiting Period

Due to no medical questions being asked, a two-year waiting period is required. This means that if the policyholder were to pass away during the first two years of the plan, the beneficiary would receive a partial distribution. If the applicant passes away due to an accident, the full policy amount will be paid.

Payout Schedule

  • Year One: All paid premiums returned plus 7%
  • Year Two: All paid premiums returned plus 7%
  • All Other Years: Full coverage amount

Colonial Penn $9.95 Per Unit

The Colonial Penn $9.95 per month plan is well marketed. This plan is measured in units and is unique compared to other final expense insurance companies. For each unit that is purchased, more coverage will be acquired.

Cost Per Unit

  • 1 Unit = $9.95
  • 2 Units = $19.90
  • 3 Units = $29.85
  • 4 Units = $39.80
  • 5 Units = $49.75
  • 6 Units = $59.70
  • 7 Units = $69.65
  • 8 Units = $79.60
  • 9 Units = $89.55
  • 10 Units = $99.50
  • 11 Units = $109.45
  • 12 Units = $119.40

Colonial Penn Life Insurance Rate Chart: Coverage Per Unit

The older the applicant is, the less coverage they will recive per unit. Each unit costs $9.95.

Coverage Per Unit

Female

Age Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Unit 8 Unit 9 Unit 10 Unit 11 Unit 12
50 $2,083 $4,166 $6,249 $8,332 $10,415 $12,498 $14,581 $16,664 $18,747 $20,830 $22,913 $24,996
55 $1,884 $3,768 $5,652 $7,536 $9,420 $11,304 $13,188 $15,072 $16,956 $18,840 $20,724 $22,608
60 $1,621 $3,242 $4,863 $6,484 $8,105 $9,726 $11,347 $12,968 $14,589 $16,210 $17,831 $19,452
65 $1,333 $2,666 $3,999 $5,332 $6,665 $7,998 $9,331 $10,664 $11,997 $13,330 $14,663 $15,996
70 $1,043 $2,086 $3,129 $4,172 $5,215 $6,258 $7,301 $8,344 $9,387 $10,430 $11,473 $12,516
75 $792 $1,584 $2,376 $3,168 $3,960 $4,752 $5,544 $6,336 $7,128 $7,920 $8,712 $9,504
80 $620 $1,240 $1,860 $2,480 $3,100 $3,720 $4,340 $4,960 $5,580 $6,200 $6,820 $7,440
85 $477 $954 $1,431 $1,908 $2,385 $2,862 $3,339 $3,816 $4,293 $4,770 $5,247 $5,724

Coverage Per Unit

Male

Age Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Unit 8 Unit 9 Unit 10 Unit 11 Unit 12
50 $1,786 $3,572 $5,358 $7,144 $8,930 $10,716 $12,502 $14,288 $16,074 $17,860 $19,646 $21,432
55 $1,506 $3,012 $4,518 $6,024 $7,530 $9,036 $10,542 $12,048 $13,554 $15,060 $16,566 $18,072
60 $1,214 $2,428 $3,642 $4,856 $6,070 $7,284 $8,498 $9,712 $10,926 $12,140 $13,354 $14,568
65 $932 $1,864 $2,796 $3,728 $4,660 $5,592 $6,524 $7,456 $8,388 $9,320 $10,252 $11,184
70 $717 $1,434 $2,151 $2,868 $3,585 $4,302 $5,019 $5,736 $6,453 $7,170 $7,887 $8,604
75 $560 $1,120 $1,680 $2,240 $2,800 $3,360 $3,920 $4,480 $5,040 $5,600 $6,160 $6,720
80 $426 $852 $1,278 $1,704 $2,130 $2,556 $2,982 $3,408 $3,834 $4,260 $4,686 $5,112
85 $418 $836 $1,254 $1,672 $2,090 $2,508 $2,926 $3,344 $3,762 $4,180 $4,598 $5,016

Permanent Whole Life

Plan 2: Permanent Whole Life

The Permanent Whole Life plan offers immediate coverage and the option of additional benefits.

Plan Details

  • Age Eligibility: 40 – 75
  • Coverage Amounts: $10,000 – $50,000
  • State Availability: 49 states (excluding NY)
  • Medical Exam: No
  • Health Questions: Yes
  • Waiting Period: No
  • Permanent Coverage: Yes
  • Builds a Cash Value: Yes

Whole Life Benefits

Like the Guaranteed Acceptance plan, this product has whole life benefits, including permanent coverage, no premium increases, and a cash value that builds over time.

Immediate Coverage

The Permanent Whole Life plan awards day-one coverage. This means the family of the policyholder would have financial protection immediately. Health questions are required to be eligible for this plan.

Living Benefits

This rider allows for a percentage of the death benefit to be paid out early upon diagnosing one of the approved medical conditions. There is an additional cost to include this benefit. Colonial Penn makes the applicant choose one of three medical conditions they would like this rider to cover.

Heart Attack/Stroke: This benefit will payout 50% of the policy amount early if the policyholder has a heart attack or stroke.

Cancer: If diagnosed with cancer, this benefit allows the policyholder to collect up to 25% of the coverage amount.

Chronic Illness: With a chronic illness diagnosis, this coverage will award up to 50% of the coverage amount to the policyholder.

Accidental Death Benefit Rider

If the policyholder were to die of accidental death, the beneficiary would be awarded an additional payout. This benefit can be added for an extra fee each month. The age eligibility for this rider is 40 – 65 years old.

Accidental death coverage amounts are available from $10,000 – $50,000.

Colonial Penn Whole Life Insurance Quotes

The premiums from Colonial Penn’s Whole Life plan are higher than competing burial insurance programs.

Permanent Whole Life

Female

Age $10,000 $20,000 $30,000 $40,000 $50,000
40 $14.36 $24.97 $35.57 $46.18 $56.79
45 $17.11 $30.47 $43.82 $57.18 $70.54
50 $21.28 $38.82 $56.35 $73.88 $91.41
55 $27.42 $51.08 $74.75 $98.41 $122.08
60 $35.84 $67.93 $100.02 $132.11 $164.20
65 $47.43 $91.11 $134.79 $178.48 $222.16
70 $65.68 $127.61 $189.54 $251.47 $313.40
75 $94.07 $184.39 $274.71 $365.04 $455.36

Permanent Whole Life

Male

Age $10,000 $20,000 $30,000 $40,000 $50,000
40 $18.21 $32.67 $47.12 $61.58 $76.04
45 $22.74 $41.73 $60.72 $79.71 $98.70
50 $29.65 $55.55 $81.45 $107.35 $133.24
55 $39.07 $74.38 $109.70 $145.01 $180.33
60 $51.00 $98.25 $145.49 $192.74 $239.99
65 $66.45 $129.14 $191.84 $254.54 $317.24
70 $87.46 $171.18 $254.89 $338.60 $422.32
75 $118.29 $232.82 $347.36 $461.90 $576.44

Renewable Term Graph

Plan 3: Renewable Term

The Renewable Term plan will increase in price the older the applicant gets. Once the senior reaches 90 years old, coverage will expire.

Plan Details

  • Age Eligibility: 18 – 75 (initial coverage)
  • Coverage Amounts: $10,000 – $50,000
  • State Availability: 49 states (excluding NY)
  • Medical Exam: No
  • Health Questions: Yes
  • Waiting Period: No
  • Permanent Coverage: No
  • Builds a Cash Value: No

Coverage Will Terminate

Once you reach the age of 90, the policy terminates with no option to renew. You can renew your existing policy between the ages of 75 and 90 but cannot take out a new policy after age 75.

Price Increases Over Time

As the policyholder gets older, the premiums will increase. Roughly every five years, the monthly premiums will rise into another age band.

What is an Age Band?

An age band is a five-year time period where your price is locked in. Once you graduate to the next age band, your price will increase. The following age ranges are what Colonial Penn considers an age band.

  • 46 – 50
  • 51 – 55
  • 56 – 60
  • 61 – 65
  • 66 – 70
  • 71 – 75
  • 76 – 80
  • 81 – 85
  • 86 – 89
  • 90 policy terminates

Living Benefits & Accidental Death Benefit Riders

Like the Permanent Whole Life plan, the Renewable Term plan offers the same living benefits and accidental death rider, both for an additional cost.

Colonial Term Life Insurance Quotes

The monthly premiums will increase once the policyholder reaches each new age band.

Renewable Term

Female

Age Band $10,000 $20,000 $50,000
46 – 50 $10.24 $18.98 $45.21
51 – 55 $12.49 $23.48 $56.46
56 – 60 $15.49 $29.48 $71.46
61 – 65 $20.17 $38.83 $94.83
66 – 70 $26.86 $52.21 $128.29
71 – 75 $36.86 $72.21 $178.28
76 – 80 $52.86 $104.21 $258.28
81 – 85 $75.86 $150.21 $373.28
86 – 89 $106.94 $212.37 $528.69
90 Plan Terminates Plan Terminates Plan Terminates

Renewable Term

Male

Age Band $10,000 $20,000 $50,000
46 – 50 $12.49 $23.48 $56.46
51 – 55 $16.49 $31.48 $76.46
56 – 60 $21.16 $40.82 $99.79
61 – 65 $29.22 $56.95 $140.12
66 – 70 $39.51 $77.51 $191.53
71 – 75 $55.12 $108.75 $269.61
76 – 80 $79.12 $156.74 $389.61
81 – 85 $111.68 $221.86 $552.39
86 – 89 $161.36 $321.22 $800.80
90 Plan Terminates Plan Terminates Plan Terminates

Medical Underwriting

This section will display the medical underwriting questions for the Permanent Whole Life and Renewable Term plans. The applicant will need to answer “no” to all of the following questions to be eligible for coverage.

Part 1

(1) Are you currently, or have you within the past 3 years:

used a wheelchair, used oxygen, been confined to a hospital or nursing facility, received or receiving home health or hospice care, or been disabled due to an illness?

(2) Have you ever:

had an organ transplant, been advised in the past 5 years by a member of the medical profession to have surgery which has not yet been performed or testing that has not been completed, or are you currently undergoing an evaluation or diagnostic testing for symptoms of an illness, excluding testing related to AIDS (Acquired Immune Deficiency Syndrome) or HIV (Human Immunodeficiency Virus)?

(3) Have you been diagnosed by a member of the medical profession with or received treatment for:

AIDS (Acquired Immune Deficiency Syndrome) or infection with HIV (Human Immunodeficiency Virus)?

Part 2

(1) In the past 3 years, have you been diagnosed by a member of the medical profession with, received treatment or had treatment recommended for any condition listed below?

(a) Lung disease including chronic obstructive pulmonary disease (COPD), emphysema, chronic bronchitis, sarcoidosis or pulmonary fibrosis

(b) Kidney disease, kidney insufficiency, acute or chronic kidney failure or any use of dialysis

(c) Heart disease, including, but not limited to coronary artery disease, myocardial infarction/heart attack, cardiomyopathy, congestive heart failure (CHF), angina

(d) Heart surgery including coronary artery bypass grafting, angioplasty with or without stent placement, valve replacement or repair, or implantation of a pacemaker or defibrillator

(e) Any cancer or recurrence of cancer including, but not limited to leukemia, malignant melanoma or multiple myeloma and excluding basal cell and squamous cell skin cancers

(f) Liver disease, including, but not limited to hepatitis (any type), cirrhosis

(g) Stroke, transient ischemic attack (TIA), peripheral vascular disease, or cerebrovascular disease

(h) Alzheimer’s disease or dementia

(i) Bipolar disorder, schizophrenia or psychosis

(j) Alcohol or drug abuse

(k) Diabetes requiring insulin, or hospitalization for complications of diabetes including amputation

(l) Multiple sclerosis, muscular dystrophy, cystic fibrosis, amyotrophic lateral sclerosis (ALS), or collagen vascular disease, including, but not limited to systemic lupus erythematosus (SLE), rheumatoid arthritis

women looking at computer

Colonial Penn Life Insurance For Seniors FAQ’s

Is Colonial Penn a Good Life Insurance?

This carrier markets directly to consumers and has high brand awareness. Colonial Penn is a legitimate insurance company, but its prices are higher than other funeral insurance options on the market.

What is the 9.95 Plan with Colonial Penn?

Colonial Penn offers their guaranteed acceptance plan through units of coverage. Each unit is $9.95, and up to 12 units of coverage can be purchased. This is, however, misleading because the older the applicant is, the less coverage per unit they will be able to receive.

How Much Insurance do you get from Colonial Penn for $9.95 Per Month?

Coverage for seniors from the Colonial Penn life insurance $9.95 per month plan will vary depending on age. This is because the older the applicant is, the lower the amount of coverage they can obtain. This is a confusing way to do business and can leave applicants frustrated.

How Good is Colonial Life Insurance?

This carrier has a very effective marketing strategy, but their prices and coverage are below average in reality. Most seniors would be better off using a different carrier.

Is Colonial Penn Life Insurance a Good Deal?

The phrase $9.95 for coverage is a good marketing tagline, but there are flaws in the plan. The older the applicant is, the less of a death benefit they will receive for $9.95. Understanding the cost per unit formula that Colonial Penn uses will help the applicant make an informed purchasing decision.

Should I Use Colonial Penn or an Independent Agent?

There are two ways to secure life insurance coverage.

Colonial Penn: You can get Colonial Penn Life Insurance through their website. This will only allow you to see the plans they offer and limit your final expense insurance coverage options.

Independent: Working with an independent agent allows the applicant to have a wide variety of funeral insurance companies to choose from. Choosing to work with a highly rated agent will get you a lower price and better coverage.

Why Should I Use Willamette Life?

Willamette Life specializes in final expense life insurance. Our industry experts have access to multiple carriers and will find the best plan for your budget and medical history.

Call us at 844-576-0019

man looking at computer

Final Thoughts

a. This Colonial Penn Life Insurance review has shown that it is a legit company with a solid financial rating.

b. They offer three plans, each with different coverage options and plan details. However, each plan has drawbacks and is higher priced than other top carriers.

c. Everyone has a different medical history and plan needs. Working with an independent agent will be the applicant’s best opportunity to find a great burial insurance plan.

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