Colonial Penn Life Insurance: Is It Really $9.95?

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You’ve probably seen Alex Trebek on your television giving you the low-down on the Colonial Penn Life Insurance Company. Known for its late, beloved celebrity spokesman and its affordable insurance programs, this company is best known for its term life coverage.

Read this Colonial Penn program review guide to see if it’s the right company for you, whether you’re looking for life insurance as a low-income family, for the elderly, or in other circumstances.

Can you trust the Colonial Penn Life Insurance Company? It’s one of the most commonly asked questions on the net about this provider of cheap life insurance.

Sometimes called the Alex Trebek term life insurance company, Alex Trebek life insurance, or even Colonial Penn $9.95, there is a lot of information and disinformation floating around about Colonial Penn.

To get answers to questions you have, you can read Colonial Penn Medicare supplement reviews, and turn to this Colonial Penn insurance review. Keep in mind that Colonial Penn Life in Massachusetts does not exist as the company does not provide life insurance plans in that state.

Before we get started on this Colonial Penn life insurance review, enter your ZIP code into our free quote tool to get multiple quotes from life insurance providers. Comparing your life insurance options is the best way you can get the coverage, and peace of mind, that you’re looking for.

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.

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What is a unit of coverage when it comes to Colonial Penn life insurance?

Life insurance units are limited policies offered based on price. The Colonial Penn cost to customers will vary based on how many units are purchased.

How much are Colonial Penn rates?

The unit premium never changes, and they sell between one and eight units. One unit costs $9.95, two cost $19.90, three cost $29.85, and so on up to eight units, which cost $79.60.

Here is the issue: while the price per unit never changes, the unit max benefit (or the face amount, as we call it in insurance jargon) is set by your age and what Colonial Penn Life decides is appropriate.

So one unit costs the same $9.95 for a 77-year-old and a 50-year-old, but the 77-year-old’s benefit amount is $503 while the 50-year-old’s is $1,786.

Both of these coverages are inadequate for a life insurance policy, and luring clients with the $9.95 slogan and units is not entirely forthcoming. Start looking for the right coverage for your needs by entering your ZIP code for more information.

Life insurance is baffling already; why make it worse for those who are unfamiliar with the business? Keep reading for more.

How much life insurance can you get for the Colonial 9.95 plan?

Have you ever heard of the Colonial Penn 9.95 a month policies? This is an offer advertised by Colonial Penn Life that is much different than most life insurance quotes because of how affordable the life insurance payments are. What they don’t say here is actually how much a $9.95 monthly life insurance payment can buy.

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

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What are the average Colonial Penn life insurance benefits and rates?

Someone who is 80 would see a coverage amount of $426, it decreases to $421 for an 83-year-old, and so on.

If you’re looking for more details about the Colonial Penn rate sheet and other information about Colonial Penn burial insurance or life insurance, visit ColonialPenn.com.

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.

How is Colonial Penn life insurance for seniors rated?

Colonial Penn Life, as a subsidiary of CNO Financial Group, Inc., has an A- rating with A.M. Best.

A good rating like this from A.M. Best means that the company is financially solvent and can pay claims to its policyholders. This is an important point to consider before you buy a policy, but you should never stop there.

This rating indicates nothing about the quality of service or whether it will be good for your specific needs. Types of offered policies, underwriting process, benefit amount, and your current health should be your foundation when looking for a life insurance policy.

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What do Colonial Penn reviews & complaints say?

As we just noted, A.M. Best rates Colonial Penn’s financial strength at an A-. The company also has a decent rating in customer feedback on the website.

However, Colonial Penn receives a large number of complaints based on its aggressive recruiting of seniors.

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.

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.

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Why should I pay attention when buying the “Alex Trebek” life insurance?

This is a complex topic but you can protect your family’s financial future with life insurance and that is some of the most valuable protection you can ever get. Some policies can even payout early if you come down with a covered illness, so even in the event of you getting diagnosed with a chronic illness, you can be financially protected. You should feel confident in your life plan and a broker can help you do that by making sure you understand your coverage options.

Read the next section for a quick summary of the highlights of our review on Colonial Penn.

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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