Welcome to GetSure and this review of the Colonial Penn $9.95 a month guaranteed acceptance whole life insurance plan!
In this review, we discuss four main topics:
- The first is all about pricing: it breaks down the amount of death benefit you get for $9.95 by age and gender and also explains why Colonial Penn’s rates are so high
- The second is our analysis of Colonial Penn’s Better Business Bureau customer reviews, where we highlight key themes and actual quotes from policyholders (hint: they’re more scandalous than supportive)
- Third, for those looking for an alternative to this plan, we compare Colonial Penn’s rates to the lowest rates from competing burial insurance companies, like Mutual of Omaha, Aetna, Transamerica, and others
- Finally, for those unfamiliar with it, we cover the details of the 995 plan itself
How Much Coverage Do You Get For $9.95?
The first question most people want answered in this Colonial Penn life insurance review is: “How much coverage is the Colonial Penn $9.95 plan?” So let’s dive into that.
|Age||Payout For $9.95 (Men)||Payout For $9.95 (Women)|
How It Works: “Units” Of Life Insurance Coverage
How does Colonial Penn sell life insurance plans to everyone for the same price? By offering 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, they quote you a price for that amount of coverage.
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.
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 995 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’s life insurance rates by age).
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.
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 units of coverage.
Colonial Penn Pricing: A Brief Case Study
If you’re a little lost, an example may help.
Let’s say the customer is a 55-year-old male named Derek. Derek wants to buy a final expense insurance policy so his end-of-life costs won’t burden his family.
When he requests a quote, Colonial Penn tells him that $9.95 will buy him $1,560 of whole life insurance coverage.
If this is enough coverage for Derek, he can fill out a one-page application, make his first $9.95 payment, and he will have whole life insurance.
However, Derek prefers to be buried in his family’s plot. And these days, $1,560 of final expense coverage is not enough for a funeral service and burial.
Derek can buy up to 15 units, depending on the monthly payment he can afford.
If he can afford $50 per month, he can buy 5 units of coverage. Since one unit of coverage is $1,560, five units of coverage would be five times this amount, or $7,800.
Why Are Colonial Penn Life Insurance’s Rates So High?
There are two main reasons that Colonial Penn’s rates are so high.
Someone has to pay for their marketing, and in the end, that’s the policyholder. (It’s not cheap to place all of those TV ads.)
Colonial Penn’s $9.95 life insurance is priced to account for the risk that the Company is taking on.
As mentioned above, this policy is “guaranteed acceptance.” It has no health questions and no medical exam. While this convenience is nice, it also means that people in poor health (even people on their deathbeds) can apply and get covered.
That makes it hard for the life insurance company (Colonial Penn, in this case) to make money. The longer you live, the more money life insurance companies make.
If the insured person is in poor health, they cannot pay the life insurance company for long. So the life insurance company has to make money faster, which means higher monthly prices.
To compensate for people who will require them to make a death benefit payout ASAP, life insurance companies selling “guaranteed acceptance” policies have to charge higher prices and include “waiting periods”.
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.
|Colonial Penn |
|Rate for $5,000|
(Age 65, F)
The takeaway? You can buy just as much coverage from Mutual of Omaha for ~half the price of the 995 plan!
Colonial Penn Negative Reviews
Enough from us, right? Let’s dive into some third-party opinions on Colonial Penn.
Colonial Penn $9.95 Plan Reviews
On TrustPilot, a third-party site aggregating customer reviews, Colonial Penn has an average rating of 2.9 from 2 reviews.
You can find screenshots of these reviews at the top of the page.
Concerns raised include: poor customer service, a pushy sales experience, and difficulty getting a refund during the 30-day no-obligation period.
Colonial Penn Life Insurance Reviews BBB
Colonial Penn Life Insurance Company, a member of the Better Business Bureau since 1985, currently holds an A+ BBB rating.
However, their BBB customer reviews tell a different story. Based on our analysis of Colonial Penn Life Insurance customer reviews.
- One common issue customers report is difficulty getting accurate information about their policies and payments.
- For example, one customer wrote: “I paid my bill on time in January & then I found out they sent the payment back! So I called & spoke to two different people to find out why (because I wasn’t informed by anyone that my money was being returned! So that made me behind on my Insurance!).”
- Another customer reported similar issues with Colonial Penn’s billing department: “After you set it up and Make Your Payments, they claim they didn’t receive the payments…and Demand Large Payments or They will Cancel Your Policies!!”
- In addition to billing issues, some customers have reported delays in receiving payouts after a loved one’s death.
- One customer wrote: “My grandmother passed away in Oct 2021…she had 2 life insurance policies with Colonial Penn. We just NOW received the checks for those policies.. today…7 months later.”
- Other customers have expressed frustration with unexpected rate increases or policy changes without proper notification.
- For example, one customer wrote: “This insurance offered on the commercial is a scam. They guaranteed my rate. I paid 6 months in advance for 3 years, then they went up to $200 a month without notice!”
- Some customers have even accused the company of being a scam or engaging in false advertising.
- One customer wrote: “This company needs to be investigated for FALSE ADVERTISING & making FAKSE CLAIMS.” Another wrote: “This company is the most immoral company I’ve ever seen.”
Colonial Penn Customer Complaints
An equally revealing part of their BBB profile is the customer complaints section. (Note: for a more detailed overview of Colonial Penn’s complaint and negative review history, see the linked article.)
Over the past three years, Colonial Penn has had 183 customer complaints filed with the BBB, with 124 closed in the last 12 months.
Based on the text of the Colonial Penn BBB complaints, there are several issues that customers have faced with the company. The most common complaints include problems with product/service, difficulty in resolving issues, and poor customer service.
Many customers have reported delays in receiving funds owed to them after a loved one’s passing. Despite multiple calls and complaints, some customers have waited for months without any resolution to their issue. Others have reported being harassed by Colonial Penn through postal mail and phone calls even after requesting them to stop.
Additionally, some customers have expressed frustration with the lack of communication from Colonial Penn representatives. They report being given conflicting information or being told that their issue is being resolved when it is not.
Colonial Penn Life Insurance Ratings
Financial Strength Ratings
Colonial Penn Life Insurance Company has strong financial strength ratings. This means they have the resources to pay out life insurance claims, regardless of the economic environment.
Colonial Penn Life Insurance Company currently holds the following ratings:
- A.M. Best: A-
- S&P: A-
- Moody’s: A3
- Fitch: A-
Who is Colonial Penn?
Founded in 1957 by Leonard Davis and headquartered in Pennsylvania, Colonial Penn is a nationally-recognized life insurance provider and a wholly-owned subsidiary of CNO Financial Group, a public company.
The Company exclusively sells permanent whole life insurance (life insurance that covers you for your entire life), primarily the guaranteed acceptance life insurance plan described above. Colonial Penn does NOT offer any term life insurance options (including renewable term life insurance, as companies like Globe Life and AARP do).
Colonial Penn advertises its brand through TV and direct mail, employing savvy marketing tactics and well-known public figures to get customers to call in. Their spokespeople over the years have included Alex Trebek, Meredith Viera, and, most recently, Jonathan Lawson.
What Is The $9.95 Plan from Colonial Penn?
The most popular Colonial Penn life insurance product is its guaranteed acceptance whole life insurance policy. The card above summarizes the policy’s features, and we’ll go into more detail below.
|Address||399 Market Street |
Philadelphia, PA 19106
|A.M. Best Rating||A- (Excellent)|
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.
Guaranteed Acceptance (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 whole life insurance policy when you are terminally ill? You would receive the policy’s full life insurance death benefit for only a few months of premium payments.
If it sounds too good to be true, it probably is. Guaranteed acceptance policies always include 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.
Colonial Penn Life Insurance FAQs
Does Colonial Penn’s $9.95 Life Insurance Have A Waiting Period?
Yes, Colonial Penn’s life insurance policies is 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 policies, 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, keep in mind that, their $9.95 whole life insurance offer is largely a gimmick. The reason they can charge so little is because they offer you such little coverage for this amount ($500 to $2,000).
Is Colonial Penn’s $9.95 Per Month Whole Life Insurance Worth It For You?
The one area Colonial Penn Insurance Company 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.
If you intend to have a direct cremation (which costs roughly $1,500), Colonial Penn’s burial insurance product may work for you.
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? Because while there are some 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, AIG, or United of Omaha.
Unlike other insurance companies, Colonial Penn whole life insurance does not offer additional benefits, such as the accelerated death benefit rider. For example, this benefit allows you to receive coverage while living to cover expenses should you have a terminal illness. It would be best to work with an independent insurance agency to learn more about other plans that offer living benefits like this one.
No matter what you decide, remember that you can cancel your Colonial Penn policy at any time without a penalty. And if you cancel within the first 30 days (during Colonial’s “try it on” period), you will even get a refund of your first premium payment.
If 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. We’ll be sure to get back to you within 24 hours!
The GetSure Team