Colonial Penn 995 Plan vs. Competitors (2023)

After 20+ years in the insurance industry, I know how bad Colonial Penn’s guawrantee Plan is for seniors. I know that dozens of companies offer burial insurance at better prices and with no waiting period (check your rate below to see for yourself).

However, whenever I see their TV commercials, whether they feature Alex Trebek or their newest spokesperson, Jonathan Lawson, I find them compelling. There’s no doubt that Colonial Penn has an excellent marketing team.

So if you’re here because Colonial Penn has piqued your interest in life insurance, you’re not alone. But do your research. And that’s where we can help. Let’s dig in.

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What Is The $9.95 Plan From Colonial Penn?

The “$9.95 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 not good value for your money.

This infographic is split into three sections: (1) the first looks at the pros and cons of the 995 plan, (2) the second shows how much one unit of coverage is for men and women ages 50-85, and (3) the third shows a comparison of Colonial Penn's Plan to other well-known life insurance options for seniors

Eligibility & Coverage Period

Any U.S. resident ages 50-85 is eligible to buy a policy (50-75 years old in New York).

As suggested by its name, whole life insurance covers your entire lifetime (as long as you keep paying your premiums).

Your benefits will never terminate, no matter how old you are.

Attribute Details
Founded 1968
Address 399 Market Street
Philadelphia, PA 19106
Email N/A
Phone (800) 523-9100
BBB Rating A+
A.M. Best Rating A- (Excellent)

Guaranteed Acceptance Life Insurance (No Underwriting)

A key draw of this product is its “guaranteed acceptance” feature.  No matter what, you cannot be denied coverage for health-related reasons. This is true even if you have a complicated medical history, chronic illness, or pre-existing conditions.

Colonial Penn life insurance = NO medical exam or health questions (guaranteed acceptance).

Two-Year Waiting Period

How can life insurance companies afford to guarantee acceptance?

Couldn’t you buy a life insurance policy when terminally ill?  You would receive the policy’s full life insurance death benefit for only a few months of premium Colonial Penn payment.

If it sounds too good to be true, it probably is.  Guaranteed acceptance policies always include a “waiting period.”

Does Colonial Penn have a waiting period?

Colonial Penn’s $9.95 plan has a 2-year “waiting period”.  If you die during the first 2 years, your policy will NOT pay out your full death benefit.

In this case, the Colonial Penn life insurance plan will pay a death benefit, which is the return of the premiums paid (plus 7% interest) to your beneficiary.  You won’t lose money, but your whole life insurance policy won’t serve its purpose.

Note: The waiting period does not apply to accidental deaths.

If you die, for example, from a fall or car accident, your final expense life insurance policy will always pay out your full death benefit.

How Much Coverage Do You Get For $9.95?

Now let’s dive into the key question that most people want answered: “How much coverage is the $9.95 plan?”

How It Works: “Units” Of Life Insurance Coverage

How does Colonial Penn work for everyone at the same rate?  They offer different amounts of coverage to each person for $9.95.

Most other life insurance companies let you choose the amount of coverage you want.  Then, you’ll get a quote for that ColonialPenn coverage amount.

Colonial Penn does it in reverse. You choose your price.  And then they tell you how much life insurance coverage you can buy for that price.

How do they refer to what they sell for $9.95?  Well, they can’t say they sell $1,000 of coverage or $2,000 of coverage because it’s different for every person.  So instead, they call this a “unit” of coverage. But exactly, what is a unit of life insurance?

A unit of life insurance coverage = the amount of coverage a specific person can buy for $9.95.

So How Much Coverage Will They Offer Me…?

Let’s return to the original question: how much coverage do you get with Colonial Penn??

The answer is: it depends on your age and gender.

Men and women ages 50-85 are eligible to purchase the 9.95 plan from Colonial Penn.

The table below answers the question, “How much coverage is the $9.95 plan?”  (For a more detailed look at Colonial Penn’s rates, be sure to check out our article on Colonial Penn life insurance rates by age).

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Table: The Coverage You Get For $9.95

Age Coverage For $9.95 (Men) Coverage For $9.95 (Women)
50 $1,669 $2,000
51 $1,620 $1,942
52 $1,565 $1,890
53 $1,515 $1,845
54 $1,460 $1,802
55 $1,420 $1,759
56 $1,370 $1,719
57 $1,313 $1,669
58 $1,258 $1,620
59 $1,200 $1,565
60 $1,167 $1,515
61 $1,112 $1,460
62 $1,057 $1,420
63 $1,000 $1,370
64 $949 $1,313
65 $896 $1,258
66 $846 $1,200
67 $802 $1,167
68 $762 $1,112
69 $724 $1,057
70 $689 $1,000
71 $657 $949
72 $627 $896
73 $608 $846
74 $578 $802
75 $549 $762
76 $521 $724
77 $493 $689
78 $468 $657
79 $441 $627
80 $426 $608
81 $424 $578
82 $423 $549
83 $421 $521
84 $420 $493
85 $418 $468

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

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 must buy multiple coverage units for $9.95 each 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 $9.95 Plan vs. Competing Life Insurance For Seniors

Plans like Colonial Penn’s $9.95 plan are informally referred to as “burial insurance” (also called “funeral insurance” or “final expense insurance”).  Let’s look at why this is the case.

Competitor Policy Comparison

Below is a comparison of burial insurance life plans from Colonial Penn and its three major competitors: AARP, Globe Life, and Mutual of Omaha.

995 Plan MoO Globe
Ages 50-85 45-85 18-80 50-80
Coverage Varies $2K-
Medical Exam No No No No
Waiting Period Yes No No Yes
Online App Yes No Yes Yes
Rates $5K (65, F) $40 $22 $30 $25

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 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 they have 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 Better Business Bureau (BBB) Reviews

The Company’s Better Business Bureau page, however, 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.

Colonial Penn Customer Complaint Summary
Is Colonial Penn a scam?

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.)

These reviews highlight several issues that customers have faced with the company. The most common complaints are about the product itself, while the remaining primarily discuss poor customer service and difficulty resolving issues.

  • Many customers also reported delays in receiving funds owed to them after a loved one’s passing. Some customers were left waiting for months without a resolution to their issue.
  • Others have reported being harassed by Colonial Penn through postal mail and phone calls even after requesting them to stop.
  • Finally, many customers also expressed frustration with Colonial Penn’s customer support team and their lack of transparency. For example, they report being given conflicting information or being told that their issue is being resolved when it is not.

Colonial Penn Life Insurance FAQs

Does Colonial Penn's $9.95 Life Insurance Have A Waiting Period?

Yes, Colonial Penn’s life insurance policies has a two-year waiting period.  If the insured dies of a non-accidental cause within the first two years, Colonial Penn’s death benefit will be to pay back your premiums (with 7% interest).  Without this waiting period, they would not be able to guarantee approval.

How Much Coverage Is The $9.95 Plan?

With the $9.95 plan from Colonial Penn, you will get between $418 and $2,000, depending on your age and gender. 50-year-old females get the highest amount ($2,000), as they are the lowest risk, while 85-year-old men get the lowest amount ($418). When purchasing life insurance, we highly recommend checking your price on our quoter for a more affordable life insurance policy.

Do I Have To Answer Health Questions?

Colonial Penn sells two types of burial insurance: standard whole life insurance and guaranteed acceptance whole life insurance. The latter involves no medical exam or health questions and guarantees acceptance. The standard whole life policy involves “simplified underwriting,” which means you do not have to take a physical exam or blood test, but you must answer a series of health questions.

Is Colonial Penn Whole Life Insurance?

Yes, Colonial Penn’s life insurance policies are whole life insurance — i.e., they provide coverage that lasts your entire life (“whole life”).  This is why they are often referred to as “permanent coverage.”  Therefore, this is not renewable term life insurance like Globe Life.

How much is a unit of colonial penn whole life insurance?

A unit of Colonial Penn life insurance costs $9.95 per month. The amount of death benefit COVERAGE (life insurance benefit) you get for one unit depends on your age and gender. Younger females, typically in better health and with longer life expectancies, can expect to get as much as $2,000 for that price. Older males, on the other hand, may get as little as $400 for that same 9.95 price.

Is Colonial Penn Life Insurance A Ripoff?

This we can say with 100% certainty. Colonial Penn’s burial insurance policies are an absolute ripoff. We hate it when we see customers who have fallen victim to the marketing efforts of this life insurance provider and we’re more than happy to get them on a lower-priced plan, so make sure you speak with an independent life insurance agent before you buy a Colonial Penn life insurance policy.! Check out our quoter to compare your rates for a wide variety of life insurance coverage options.

Is Colonial Penn term life insurance?

Colonial Penn does not offer term life insurance, unlike many competitors. However, it offers two permanent life insurance products: a guaranteed acceptance policy and a traditional permanent life insurance policy. Neither of these is “medical exam required.”

Conclusion & Key Takeaways

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?

The one area in which Colonial Pennl has a legitimate competitive advantage is 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 work for you 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 things you can do to scale down the extravagance of the funeral service, you cannot buy half a casket or half a headstone.  In other words, these types of final arrangements require a minimum amount of spend in the vicinity of $5,000.

Colonial Penn 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

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1 thought on “Colonial Penn 995 Plan vs. Competitors (2023)”

  1. The 995 plan is a ripoff, plain and simple. Shame on Colonial Penn for their misleading ads!

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