Colonial Penn life insurance review 2018 | finder.com

Colonial Penn life insurance

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Explore the term and whole life coverage you may qualify for without a medical exam.

If you have a preexisting condition and need a low life insurance coverage for your family, take a look at Colonial Penn. With coverage that maxes out at $50,000, it could be the affordable life insurance you need.

We take the policies Colonial Penn offer and break them down to ease the process of finding a plan that fits your needs. Read on to learn about an insurer that doesn’t require medical exams and serves applicants from ages 18 to 85.

Minimum coverageVaries by plan and state
Terms availableN/A
Payment methodsEFT, credit card, check, money order
Medical exam requiredNo
Temporary underwriting coverageN/A

Pros

  • More than $5 million in coverage is available.
  • All non-permanent plans can convert.
  • Coverage in as little as 10 minutes.
  • AAA membership not required.

Cons

  • Online application unavailable for all plans.
  • Physical exam may be necessary for many plans.
  • Not available in New York.
  • No living benefit for Guaranteed Issue plan.
Though its financial strength is rated high, it doesn’t have the best of customer reviews. As of this writing, the Better Business Bureau (BBB), which gave Colonial Penn an A+ rating, has more than 80 complaints closed over the past three years. Most complaints concerned problems with the life insurance policies as well as advertising and billing issues. Other reviews around the web cite pushy salespeople encouraging customers to take out more insurance than they need or want, lost policies after years of paying into them, being turned down for the guaranteed acceptance policy, and frequent advertising robo calls.

CNO Financial Group and its subsidiaries, Colonial Penn included, received a financial strength rating of A- (Excellent) from A.M. Best. This rating is reflective of Colonial Penn’s projected ability to payout benefits.

A.M. BestA-

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What is Colonial Penn known for?

Colonial Penn was established in 1968 as a way to provide insurance to members of American Association of Retired Persons (AARP). After changing hands a few times it ended up as a subsidiary of CNO Financial Group in 1997. New York is the only US state not served by Colonial Penn, however it’s still covered under another subsidiary of CNO — Banker’s Conseco Life Insurance Company.

You’ll find three plans available from Colonial Penn, including guaranteed acceptance, term life and whole life options. Though none of the plans require a medical exam, the coverage amount may not be substantial on its own. Free quotes are available online to help you determine what you might qualify for.

Pros

  • No medical exams for any of the three plans. If you’re worried about not getting coverage because of a preexisting condition, you won’t have to do anything more than answer some simple health questions.
  • Build cash value. Whole and term life plans gain cash value over time that you may be able to borrow against.
  • Locked-in premium and benefit amount. Your premium will stay the same for the length of your coverage for guaranteed acceptance and whole life plans.
  • Payment options. All plans offer monthly, quarterly, semi-annual and annual payment options.
  • 30-day money-back guarantee. If you decide that the life insurance policy you took out isn’t for you, you can cancel the policy before 30 days and get a full refund.

Cons

  • Low coverage amounts. $50,000 is the highest coverage amount available under any of the plans. Compared to other companies that offer upwards of $5 million, this is quite low.
  • No riders available. Most insurers offer riders or policy add-ons to expand coverage to meet your specific needs, but Colonial Penn doesn’t offer these at all.
  • Not all plans are available in all states. The Permanent Whole Life Insurance plan is unavailable to residents of Maine, New York and Vermont; term life insurance is unavailable to residents of those same states and Montana.
  • High number of complaints. Colonial Penn received a complaint ratio of 2.49 in 2017 as compared to the national median of 1.00. A ratio that’s less than one indicates fewer complaints than the national median, while above indicates more.

What life insurance coverage does Colonial Penn offer?

Colonial Penn offers both term and whole life insurance policies to help prepare you financially for the future. Of the two whole life insurance plans it offers, one is guaranteed acceptance, meaning you can’t be turned down because of your health. None of its policies require a medical exam, and you can get coverage up to $50,000 to help offset the costs of funeral expenses, credit card debt, medical bills and so on.

Here are the coverage details and price ranges for each of Colonial Penn’s three life insurance plans:

PlanCoverageMedical examAge availabilityRate increaseProtection untilPrice rangeSpecial disclaimers
Renewable Term Life Insurance$10,000–$50,000None18–75Yes, based on fixed 5-year age bandsAge 90$2.54–$800.80 per monthGuaranteed ability to exchange for permanent life insurance at age 90
Guaranteed Acceptance Whole Life InsuranceUp to $16,664None55–85 in District of Columbia; 50–75 in Minnesota and Missouri; 50–82 for females and 50–77 for males in New Jersey; 56–85 in Pennsylvania; 50–85 in all other statesRates are based on gender and age (only age in Montana) upon issue and won’t increase for any reasonFor life$9.95–$79.60 per monthYou can’t be turned down because of your health, but the first two years of coverage are limited
Permanent Whole Life Insurance$10,000–$50,000None40–75Rates are based on gender and age (only age in Montana) upon issue and won’t increase for any reasonFor life$14.36–$576.44Cash value builds after the first year that you may be able to borrow against

What’s not covered in my policy?

While most insurers offer riders or policy add-ons to expand coverage to meet your specific needs, Colonial Penn doesn’t offer these options. Here are a few things you won’t find covered in your life insurance policy:

  • Coverage for your children. No child life insurance is included with any of the Colonial Penn plans, and none of the policies indicate that a rider is available to add.
  • Disability coverage. Should you become disabled or end up in assisted living, no additional benefits will be available.
  • Premium waivers. Unlike some other insurers, Colonial Penn doesn’t provide premium waivers if a doctor decides it’s necessary for you to move into an assisted living facility.
  • Living benefits. Should you be diagnosed with a terminal illness and given a year or less to live, some insurance companies provide you with access to some or all of your benefit amount to help ease the cost. This feature isn’t offered for any of Colonial Penn’s policies.

How can I get the best rate?

Though there aren’t any full guides provided on the Colonial Penn website as to how you might get the lowest premiums, most insurers look for some common traits. Lifestyle choices and health history can usually swing your costs either way. Here are some assessment criteria underwriters generally look at:

  • History of or current use of alcohol or tobacco.
  • History of or current substance abuse.
  • Family or personal history of certain diseases.
  • Certain measures of current health, such as cholesterol.
  • High-risk hobbies or jobs.
  • Criminal convictions.

How do I file a life insurance claim with Colonial Penn?

  1. Go to the Colonial Penn website.

2. Scroll down to the bottom of the homepage and click Claims, under the “Service” header.

3. Click Download Forms along the top nav.

4. Click Claim Form for Life Insurance Death Benefits and select the state of the policyholder.

5. Download, print and fill out the form.

6. Mail the form, certified death certificate and original insurance contract to:

Colonial Penn Life Insurance Company
Life Claims Department – 2250
399 Market Street

Philadelphia, PA 19181-2250

7. Wait for an agent from Colonial Penn to contact you regarding next steps.

Bottom line

Colonial Penn offers three basic options for life insurance, including term and whole life policies. While none of them require a medical exam, the coverage is less than you might find with other providers and you can’t add on riders to better fit your needs. You can retrieve a quote quickly and easily online, or call an agent for more information.

It’s important to look at the whole of your family’s needs when you’re putting together a plan for life insurance. Make sure to take your time and compare your options before you decide on a policy with our comprehensive guide to life insurance.

Compare life insurance policies today

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