Neither the Colonial Penn 995 insurance plan or their permanent whole-life insurance should ever be your first choice for life insurance. Show
Is Colonial Penn insurance legitimate, a scam, or a ripoff? Many consumers ask these questions based on the high number of Colonial Penn negative reviews and complaints on their guaranteed issue $9.95 plan and their permanent whole life plans. Some would say the 995 plan was designed with two things in mind:
Their $9.95 plan is terrible for seniors who will only get minimal insurance coverage with high prices. What To Ask Before Buying Colonial Penn Life InsuranceWhat Are My Policy Options With Colonial Penn?You can have a guaranteed acceptance plan or a plan where you have to qualify medically. Is Price The Most Important Factor?3 P’s – Guaranteed Acceptance $9.95 PlanOne $9.95 unit Colonial Penn life insurance coverage WILL NOT be enough to pay for a burial, and in many cases, it’s not enough to pay for a cremation. Colonial Penn knows its pricing provides insufficient coverage, so they encourage seniors to buy more exorbitantly priced life insurance with a 2-year waiting period. Some would say Colonial Penn offers one of the most misleading insurance products marketed toward seniors. So, how does Colonial Penn life insurance work? Colonial Penn uses persuasive terms to describe its 995 life insurance plan.
The truth about Colonial Penn life insurance is that their $9.95 plan is terrible for consumers because Colonial Life insurance rates are often 30-40% higher than other companies. You have to pay these bloated premiums for the rest of your life. If you die in the first two years for health or medical reasons, the Colonial plan won’t pay your loved ones a single penny of life insurance. Colonial Penn unit prices determine your death benefit by age and the number of units you buy. They aren’t like “normal” burial insurance plans that let you choose a particular death benefit to determine your rate ($10,000, for example). Colonial life insurance plans have a pricing structure based on individual units that cost $9.95. Your age determines the cost of each unit, and the older you are, the more a unit costs you. If you die in the first two years, their “limited benefit period,” your beneficiary will only receive your premiums paid plus 7% interest in the first two years. We often get calls asking, “does Colonial Penn have a waiting period?” Let’s take a look at their website.  Permanent Whole Life InsuranceColonial Penn’s permanent whole life insurance policy for seniors is NOT the same as their $9.95 plan. Colonial Penn life insurance for seniors is a permanent life insurance policy with no medical exam, but you need to answer many health questions to qualify. The Colonial Penn age limit for whole life insurance is 40-75. They have strict underwriting, so often, only healthy applicants can qualify, and you will most likely be offered the Colonial Penn 995 guaranteed acceptance plan with a two-year waiting period.
Does My Agent Still Work For Colonial Penn?92% of life insurance agents are out of the insurance profession within three years. If your Colonial Penn agent has abandoned you, Funeral Funds of America can help you get a new policy or add additional coverage to your Colonial Penn policy. What Are The Pros & Cons Of Colonial Penn Insurance?PROS – $9.95 Plan
PROS – Whole Life Plan
CONS – $9.95 Plan
CONS – Whole Life Plan
Are There Any Riders Or Other Benefits With Colonial Penn Life Insurance?Guaranteed Acceptance $9.95 PlanNo riders are available with this plan. Permanent Whole Life Insurance“Living Insurance” is the marketing term for Colonial Penn’s life insurance riders. These riders allow policyholders to access 50% of their policy face amount while alive and diagnosed with a serious illness. You will have to pay a policy loan fee the entire time the borrowed money is not repaid.
Other BenefitsPOLICY LOANS – You can borrow up to 100% of your cash value, but you will have to pay 8% interest on your outstanding loan balance (which will lower your face or coverage amount if not paid each month. This is a tax-free Colonial Penn benefit but not an interest-free benefit. Loans reduce your cash value amount and are subtracted from your death benefit, and the interest rate on policy loans varies by state. How Do I Get Approved By Colonial Penn?Guaranteed Acceptance $9.95 PlanThis plan accepts everyone with no health questions asked. The only reason to consider the Colonial Penn 2-year limited benefit period is if your health is so bad that you don’t qualify for first-day coverage. Even if your health is so bad that you don’t qualify for a better first-day coverage plan, this 995 plan insurance is not one you should purchase. Permanent Whole Life InsuranceThere are two processes to determine if you will medically qualify for a Colonial Penn whole life insurance policy:
An underwriter may request to speak with you over the phone to ask some follow-up questions. These are the health questions you will find on the application:
If you answer any of these questions “Yes,” your application will be DECLINED. In that case, you will be offered the Colonial Penn guaranteed life insurance plan with a terrible two-year waiting period.
If you answered “yes” to any of these medical conditions, you would be automatically declined for Colonial Penn’s whole life policy. With Colonial Penn’s strict underwriting for their permanent whole life insurance, only a small percentage of applicants will qualify for this whole life plan. If you were declined, you would typically be offered the Colonial Penn guaranteed acceptance life insurance. Rates start at 995 with an undesirable two-year waiting period. Additional Health NichesYou can view our A-Z Health issue chart to see what health conditions qualify for first-day coverage with other companies at Funeral Funds of America. How Can I Get Colonial Penn Life Insurance Pricing?Guaranteed Acceptance $9.95 PlanCheck out the Colonial Penn life insurance 995 rate charts below to see how inadequate their coverage amounts are for $9.95.
Permanent Whole Life InsuranceLook at the pricing table below to estimate coverage amounts with the Colonial Penn whole life insurance policy.
Colonial Penn rates are based on your age, gender, health, coverage amount, and the state you live in at the time of application. *Pricing for illustration purposes only and are subject to change without notice. Common Colonial Penn Company QuestionsWhat Is Colonial Penn’s Operational HistoryThe Colonial Penn Life Insurance Company was founded in 1968 by AARP co-founder Leonard Davis to provide insurance coverage to the American Association of Retired Persons members. FPL Group acquired the company in 1985. FPL sold the company to Leucadia National in 1991. After several ownership changes, in 1997, it became a subsidiary of Conseco, now known as CNO Financial Group. In 1998, Colonial Penn was renamed Conseco Direct Life to show Conseco ownership. But, in 2001, the insurance name reverted its name back to Colonial Penn. The company is based in Philadelphia, Pennsylvania. Colonial Penn is not serving New York, but it’s covered by Banker’s Conseco Life Insurance Company, another CNO subsidiary. Colonial Penn399 Market Street Colonial Penn ClaimsLife Claims Dept What Is Colonial Penn’s Financial Rating?Based on its financial stability and record of paying claims, Colonial Penn Insurance Company has received an A- (Excellent) rating from A.M. Best. Does Colonial Penn Have Any Consumer Complaints?Consumers would be wise to ask themselves, is the 995 plan any good? The Better Business Bureau gives Colonial Penn 1.18 stars out of 5, citing many consumer complaints. Investopedia states, “Some 90% of the companies we reviewed received a higher grade than Colonial Penn from AM Best.” They rate Colonial Penn as 2.4 out of 5 stars. The National Association of Insurance Commissioners (NAIC) states that the national median of complaints is 1.00, while Colonial Penn’s complaint ratio is 3.06. Colonial Penn has 300+% more complaints than other insurance companies, according to the NAIC. Some NAIC-reported complaints filed against Colonial Penn:
The Colonial Penn $9.95 life insurance advertising creates a lot of interest, phone calls, and possibly thousands of negative consumer reviews and complaints annually. It would be wise to research Colonial Penn life insurance complaints to see if this is the company you want to buy insurance from. What Should You Know Before Buying Colonial Penn Life Insurance?What Is Colonial Penn’s Sales Process?Colonial Penn agents can only sell Colonial Penn products. “Captive Carrier” is the term used to describe insurance companies that only sell their products. If other companies offer lower pricing (and I can assure you there are many), Colonial Penn agents will never tell you about those other low rates. Almost all other life insurance companies offer better coverage and rates and most come with no waiting period. Are Any Health Conditions Not Accepted By Colonial Penn?These health issues are not accepted for first-day coverage.
If you have any of these health conditions, you will be offered a guaranteed issue policy. How Can I Get Pricing Help Today?If you need burial, cremation, final expense, or funeral insurance coverage and want to ensure you get the lowest premium possible, we can help you shop and compare companies, policies, and prices. Use our quoting software below to see how Colonial Penn pricing compares to other companies.
What Are The Top 10 Questions About Colonial Penn?What is a Colonial Penn Rate Lock? Colonial Penn 9.95 life insurance plan boasts about the rate lock. A rate lock means your premium will be locked in at your current age and will never increase as you get older. This is not a unique benefit. Every life insurance company offering whole life insurance has this feature on their insurance product. Is Colonial Penn policy replacement possible? Yes, Colonial Penn policy replacement is possible. But make sure you already have another life insurance policy from a better company before you cancel your Colonial Penn policy. What is 995 plan? The Colonial Penn 995 is often confused with Colonial Penn 985 plan and 9.99 life insurance for seniors. It is a guaranteed issue whole life insurance with a two-year waiting period. They accept all applicants regardless of their medical condition. If the policyholder dies during the waiting period, the beneficiaries will only receive the return of premium plus a small interest. What is a unit of life insurance coverage? A unit is the amount of coverage you can get for $9.95 per month. How much is a unit of life insurance? One unit cost $9.95 a month. Are the 3-P’s important? Price is important, if you get what you pay for. The fact is that $9.95 a month provides very little coverage. In fact, so little coverage, that this marketing tactic results in many consumer complaints. What does Colonial Penn give you for $9.95 a month? Colonial Penn gives you a specific death benefit amount for $9.95 depending on your age and gender. How much coverage do you get with a 995 plan? The death coverage you can get for $9.95 will depend on your gender and age. Does Colonial Penn 995 have a waiting period? Colonial Penn $9.95 plan has a two-year waiting period. Standard Terms When Searching For Colonial Penn Insurance
Sources Cited In This Article
What does Colonial Penn give you for $9.95 a month?The Colonial Penn life insurance plan for $9.95 per month is a guaranteed acceptance whole life policy with a waiting period of two years. It offers permanent lifelong coverage with a premium that will never increase and builds cash value. There are no health questions or exams to determine your eligibility.
How much is a unit of life insurance?The unit price is what you pay per bucket of coins. Life insurance will commonly price out their death benefit in $1,000 units. So when you're buying a policy with a $250,000 death benefit, what you're really buying is 250 buckets of coins.
Is Colonial Penn a good life insurance program?Bottom line: With more complaints than expected for a company of its size and relatively low coverage limits, Colonial Penn is unlikely to be the best option available to you. Policies offered: Permanent & no-exam. Financial strength: Strong. Complaints: Far more than expected.
What is the AM Best rating for Colonial Penn life insurance?Grades range from A++ to D. In 2021, Colonial Penn was assigned an A- rating, indicating an excellent but not exceptional level of financial strength. Some 90% of the companies we reviewed received a higher grade than Colonial Penn from AM Best.
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