995 Plan from Colonial Penn: A 2024 Review

Colonial Penn’s TV commercials are pretty slick. Whether they feature Alex Trebek or their newest spokesperson, Jonathan Lawson, pitching guaranteed life insurance starting at $9.95 per month, it’s hard not to find them compelling.

But is there substance behind their appealing marketing? That’s where we can help.

The “$9.95 Plan” (or “995 Plan”) is a whole life insurance product from Colonial Penn.

The plan offers lifetime coverage, guaranteed acceptance, and a quick online application. However, it has major drawbacks, including a 2-year waiting period and BBB complaints about claims and payout difficulties. Worst of all, it’s a ripoff.

How Much Coverage Is The 995 Plan?

First, we’ll look at the key question most people want answered: “How much coverage is the $9.95 plan?”

You know the premium rate ($9.95), and this cost is small enough to fit any consumer budget, but what cash payout will you get?

Table: The Coverage You Get For $9.95

As you can see, the life insurance benefit amount you can purchase varies widely, depending on your age and gender.

The cost ranges from as much as $2,000 for a 50-year-old woman to as little as $418 for an 85-year-old man.

Buying Multiple Units Of Coverage

As you can see, one “unit” does NOT provide much coverage.  So what if you need more coverage?

Colonial Penn allows you to purchase up to 15 units of coverage, with each unit costing $9.95.

This is how Colonial Penn can get expensive: You have to buy many units to get reasonably covered.

You can purchase two coverage units if you can afford twice that amount ($20). You can purchase three coverage units if you can afford three times that amount ($30). And so on, up to ~$150 per month for 15 coverage units.

Colonial Penn vs. Other Life Insurance For Seniors

Below is a comparison of burial insurance plans like the Colonial Penn 995 Plan and its three major competitors: AARP, Globe Life, and Mutual of Omaha.

The takeaway?  You can buy just as much coverage from Mutual of Omaha for ~half the price of the 9.95 insurance plan!

Colonial Penn 995 Plan Ratings & Reviews

Enough from us, right?  Let’s dive into some third-party opinions on Colonial Penn.

Financial Strength Ratings

Colonial Penn has strong financial strength ratings. This means it has the resources to pay out life insurance claims regardless of the economic environment.

Colonial Life Insurance currently holds the following ratings:

• A.M. Best:  A-
• S&P:  A-
• Moody’s:  A3
• Fitch:  A-

Colonial Penn 995 Plan Better Business Bureau (BBB) Reviews

However, the Company’s Better Business Bureau page paints a much different picture of Colonial Penn.

Over the past three years, Colonial Penn has had 183 customer complaints filed with the BBB, with 124 closed in the last 12 months.

An equally revealing part of their BBB profile is the customer complaints section. (See the linked article for a more detailed overview of Colonial Penn’s complaint and negative review history.)

Our Recommendation

Colonial Penn is a well-known insurance company with a smooth application process and a strong history of paying out on claims.

However, remember that their $9.95 whole life insurance offer is a gimmick.  The price is low simply because they give you such little coverage in return ($500 – $1,500)!

Is Colonial Penn’s $9.95 Per Month Whole Life Insurance Worth It For You?

Colonial Pennl has a legitimate competitive advantage in one area: the size of its policies. While most burial insurance companies start coverage at $2,000, Colonial also sells policies in the $500 to $2,000 range.

Colonial Penn’s burial insurance product may be suitable if you intend to have a direct cremation (roughly $1,500).

While these policies will still be expensive per dollar, you will likely save money by not paying for coverage you do not need.

However, those who want a traditional burial and funeral service (or a cremation with a memorial service) will need a larger payout.  Why?

While there are ways to reduce the funeral service’s extravagance, you cannot buy half a casket or half a headstone. In other words, these final arrangements require a minimum expenditure of approximately $5,000.

Colonial Penn’s $9.95 Plan is not the most affordable option for policies of this size.  You can likely save 40%-60% by going with a traditional insurance company, such as Aetna, Transamerica, or Mutual of Omaha.

If you’re still unsure, check out our summary of the benefits and drawbacks of Colonial Penn.

Finally, if you have any questions we haven’t answered, don’t hesitate to comment or email us.

Warm Regards,
The GetSure Team