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Colonial Penn Life Insurance Review: Policy Details, Prices & Exclusions

Written by Choice Mutual | Last updated: March 26, 2019

Disclaimer: We are NOT affiliated with Colonial Penn. This is merely our review of the their life insurance programs along with our opinions. If you here hoping to get a hold of them, contact them directly at 1-877-877-8052 or at colonialpenn.com

Do you have questions about Colonial Penn Life insurance?

If so, you came to the right place.

Everything you could want or need to know is right here in this Colonial Penn life insurance review.

You’ll see their rates, details of how their policies work, and everything in between.

Keep reading or feel free to click on one of the links below to jump to a specific section of this article that interests you most.

Article Quick Navigation Links

There Are 3 Kinds Of Colonial Penn Life Insurance For Seniors

Colonial Penn primarily markets their guaranteed acceptance whole life insurance which is a policy that has no medical underwriting whatsoever. It always comes with a two year waiting period before it will pay out a death benefit.

In addition, they also have another whole life policy that has health questions where you can be denied due to pre existing conditions. Finally, they have a term life policy that increases in price every five years, and ultimately expires at age 90.

We explain in detail how each of these policies work, and show you how much they all cost.

What’s The Story With A Colonial Penn Rate Lock?

Let’s be honest; we’ve all seen Alex Trebek advertising for Colonial Penn. They’ve been running T.V. ads for decades now, and the one thing you always hear him promote is the “rate lock”

So what’s a rate lock exactly?

Colonial Penn’s rate lock refers to the fact that your monthly premium will always stay the same if you buy one of their whole life policies.

But here’s the thing

They advertise this as some unique and special benefit that only Colonial Penn can provide.

The fact of the matter is; every single whole life insurance policy with any life insurance company will always have a rate lock. It’s just the nature of whole life insurance.

No matter who you ever buy a whole life policy from, the monthly premium will always remain the same.

Sorry but their “rate lock” is nothing more than a gimmick to trick you into thinking you are getting something special. It’s sad, but this is quite common in the advertising industry.

Policy#1: Colonial Penn Guaranteed Acceptance Whole Life Insurance | Policy Details & Prices

Alex Trebek insurance in most cases refers to this guaranteed acceptance whole life plan.

Without question, the Colonial Penn program pushes this policy far more than their other two options. Call them and they will likely try to sell you this plan first.

Take a look at their homepage below.

See how much real estate they give to this policy, and how they put it towards the top so more attention is paid to it?

If you call them for information, there’s a really good chance they will try to sell you this policy.

Straightforward Whole Life Policy

Their guaranteed acceptance plan is a whole life policy. Fortunately, whole life policies are very simple to understand. They come with the following benefits:

  1. Premiums cannot increase ever for any reason
  2. Death benefits are guaranteed to never decrease
  3. Coverage will not expire at any age
  4. Builds cash value that you can borrow from

That sums up the bulk of how this policy works. As you can see, there’s not much to it which is by no means a bad thing.

However, there’s a couple of other things you must understand about this policy that are extremely important, so keep reading

This Policy Will Not Pay A Death Benefit If Death Occurs During The First 24 Months

The main thing to understand about this policy is that it’s guaranteed issue.

That means there are no health questions or any medical underwriting of any sort.

They will literally issue the policy to anyone without knowing a single detail about their health. This is why they call it guaranteed acceptance.

Now this is important

With this policy, Colonial Penn life insurance company will not pay out a death benefit if you die from natural causes within the first 24 months of the policy.

Don’t believe us? Check out what it says below taken directly from their website.

What they will do is refund of your premiums plus 7% interest if you die during this time.

It’s important to note that death from an accident (car, plane, train crash etc) will result in the full face value of the policy being paid out even if it’s during the 24 month waiting period.

After the 24 months, your policy is active and will remain so forever unless you cancel it or stop making your payments.

What Is A Unit?

Seriously, what in the world is a unit?

It’s by far the most common question about Colonial Penn guaranteed life insurance. All their advertisements use the whole “coverage starts at only $9.95 per unit” as a hook to get you to call.

We give them points for creating something that gets the phone ringing, but it’s rather misleading to say the least.

So what the heck is it?

Let’s start with their definition of a unit…

Basically a unit refers to the amount of coverage that is provided to you based off your age and gender.

Uh what? Let us explain…

Most life insurance companies adjust the price of coverage to increase with age.

For example, ABC insurance might charge a 50 year old $25.00 per month for $10,000 in coverage.

They would charge a 51 year old $25.50, and charge a 52 year old $26.00. As you can see, the prices increase with age. See the pattern that’s forming?

Notice how the coverage of $10,000 stays the same, and it’s the price that increases with age.

What Colonial Penn does with their unit system is the opposite.

With their unit system, what changes is the amount of coverage that a unit provides. The older you are, the less coverage a unit provides.

In addition, a unit provides less coverage for a man than it does for a woman (women always pay much less for life insurance than men)

A Unit Always Costs $9.95 For Everyone And The Most You Can Buy Is 8

Colonial Penn life insurance cost per unit is always $9.95 for everyone. No matter how old or young you are, male or female, a single unit is always $9.95.

Everyone can choose to buy between 1 and 8 units.

Again, what will change is the amount of coverage that a unit provides.

Let’s look at how much coverage a unit provides for a 50 year old male to illustrate how this strange insurance pricing method plays out.

According to their website (which the image above was taken from), a single unit would provide a 50 year old male with $1,786 in coverage.

Now let’s take a look at how much coverage a unit provides to a 51 year old male.

As you can see, a 51 year old male will get exactly $54 in less coverage for each unit of insurance compared to a 50 year old male. As the age increases, the coverage for each unit will continually decrease.

On the furthest end of the spectrum, an 85 year old male would only get $418 of coverage from each unit. 😭

Here’s How Much You Will Pay & How Much Coverage You Will Get With Colonial Penn Guaranteed Acceptance Coverage

Remember, you can buy 1-8 units, and each unit costs $9.95 for everyone.

To calculate how much you will pay and how much coverage you will get from Colonial Penn, use the two formulas below.

Your total monthly cost= [$9.95] x [Number of units you wish to buy]

Your total death benefit= [Coverage provided by a unit at your age & gender] x [Number of units]

We’ve taken the liberty of putting together a large table that shows you how much coverage you will get for 2, 4, 6, or 8 units, and what your monthly rate will be.

Click the button below if you would rather just jump to the section that shows how their guaranteed issue prices compare to other companies.

Female Colonial Penn Guaranteed Acceptance Rates

Male Colonial Penn Guaranteed Acceptance Rates

How Colonial Penn Guaranteed Acceptance Stacks Up Against The Competition

Below you will see a side by side comparison of Colonial Penn insurance rates for their Guaranteed Issue life coverage right next to Gerber Life and AIG.

This is super important

The vast majority of people should not be buying guaranteed acceptance coverage. Most folks can qualify for a policy that does ask health questions with some company. This results in substantially lower payments and no waiting periods.

However, if you truly need guaranteed acceptance coverage, you will see from these numbers that Colonial Penn charges quite a bit more than other companies.

Keep in mind

A no health question policy from Gerber Life or AIG is no different than Colonial Penn. The only difference is the price.

Since Colonial Penn final expense insurance has the strange unit pricing system, we can’t generate quotes with them for even numbers. However, you’ll see that we put in quotes for coverage that is extremely close to Colonial Penn.

Female

Male

Age State And Face Amount Limitations

Just like all other life insurance companies, Colonial Penn Insurance Company has various age, state , and face value restrictions on their policies.

States: All except New York

Ages: 50-85

Coverage Options: $418-$16,664

Why they heavily push this policy

The bottom line is this.

It’s a HUGE money maker for them!

They make a lot of money on this product for three big reasons.

  1. It’s very expensive.
  2. Aside from the extremely healthy, it’s the only Colonial Penn insurance most seniors are eligible for due to their health. These same people could almost certainly be paying substantially lesswith other companies (and avoiding a waiting period).
  3. This is the only product they have for people who are 76-85. Even if you are super healthy but you are over 75, your only option is this guaranteed acceptance policy. 😬

In essence, they have a massive pool of customers that are greatly overpaying which means high profits for them. We suspect this is how they are able to afford Alex Trebek.

Policy# 2: Colonial Penn Whole Life Insurance With Health Questions

Now if you are determined to do business with Colonial Penn insurance company, this policy (out of the 3 they have) would be your best option by far.

Unfortunately, this policy is much more expensive relative to other burial insurance companies. Furthermore, the underwriting is fairly strict, so few will qualify for it.

This Colonial Penn Burial Insurance Is A Standard Whole Life Policy So It Won’t Change

Just like their guaranteed acceptance policy, this one is also whole life. Because of that, the policy will work in the following ways:

  1. Fixed monthly rates
  2. Policy will never expire at any age
  3. Cash value accumulates over time that you may borrow against
  4. Death benefits will never decrease
  5. Coverage goes into full effect if you qualify

In order to qualify for this policy, Colonial Penn will employ two processes to determine if you are medically eligible for this coverage.

  • Formal health questions
  • Prescription history check

With this information, they will be able to come to a decision regarding your eligibility. Just so you know, you do not need to take a medical exam.

It’s important to note that an underwriter might request to speak with you over the phone to ask you some follow up questions.

Here Are The Health Issues They Will Not Accept But Our Companies Will

The truth is Penn life insurance is just like an illusion. Sure, it’s there, but then again it’s really not. When most people go to qualify for it, it becomes out of reach due to their strict underwriting.

Here’s the bottom line

The overwhelming majority of seniors looking for burial insurance coverage simply will not qualify for Colonial Penn whole life insurance. 😮

Their underwriting simply does not accept many very common health issues that many seniors deal with.

Sadly, most folks that do apply will see this message ↓

Below you can see all the health issues they will not accept for this policy.

Keep this in mind

Colonial Penn life insurance company will decline you for every single condition below. At the same time, we have companies that will gladly accept them. 😉

  • Any blood thinner usage (Coumadin, Warfarin, Plavix, etc)
  • Insulin dependent diabetics
  • Diabetic complications: neuropathy, PVD, retinopathy, severe obesity, hospitalizations due to diabetes
  • Wheelchair use
  • Oxygen use
  • Hospitalized within the last year
  • Receiving home health care
  • Disabled due to an illness
  • Currently undergoing evaluation for symptoms of an illness
  • COPD
  • Chronic Bronchitis
  • Emphysema
  • Sarcoidosis
  • Pulmonary Fibrosis
  • Kidney disease or insufficiency
  • Kidney failure
  • Coronary artery disease
  • Cardiomyopathy
  • Congestive heart failure
  • More than one occurrence of cancer
  • Liver disease
  • Cirrhosis
  • Hepatitis
  • Mini strokes (TIA attack)
  • Peripheral vascular disease
  • Bipolar disorder
  • Schizophrenia
  • Psychosis
  • Multiple sclerosis
  • Muscular dystrophy
  • Systemic lupus
  • Cystic fibrosis

Our Companies Have Shorter Look Back Periods Too

Not only do they not accept a ton of conditions, but their look back periods for certain high-risk events is much longer. We have final expense companies that have significantly shorter look back periods compared to Colonial Penn.

See for yourself below:

  • Cancer: They look back 3 years. We have companies that only look back 2 years .
  • Heart attacks: They look back 3 years. We have a few companies that only look back only 1 year, and a bunch that only look back 2 years.
  • Full blown strokes: They look back 3 years. We have a few companies that only look back only 1 year, and a bunch that only look back 2 years.
  • Heart or circulatory surgeries: They look back 3 years. We have a few companies that only look back only 1 year, and a bunch that only look back 2 years.

88% Of The Time Colonial Penn Funeral Insurance Prices Are Way Too Expensive

Below you can see all the prices for whole life Colonial Penn life insurance quotes for both males and females. In addition, we included the prices from a few of our companies to show you just how expensive they can be.

Want to know when they are actually a low-price leader?

As you will see for yourself, they are actually priced well for females age 50-57, and males age 50. However, outside of those groups, their prices are really bad relative to what other companies charge.

For anyone in those two small groups, Alex Trebek life insurance is actually a really good deal. Honestly, you should heavily consider it because the price is right.

But remember this

Their underwriting is very strict, so if you have any of those conditions we outlined above, you will not qualify for this product.

If you do apply are not accepted for any reason, they will offer you their guaranteed acceptance policy.

Please do not take it! Call us instead. Out of the 20 funeral insurance companies we work with, we can likely find you one that will approve you. It never hurts to try.

Female

Male

The Formal Health Questions

Below are all the health questions they will ask you on the application. They will also check your medication history to see if you have had any treatments for these conditions.

  1. Are you currently, or have you within the past year used a wheelchair, used oxygen, been confined to a hospital or nursing facility, received or receiving home health care, or been disabled due to an illness?
  2. Have you been advised by a member of the medical profession to have surgery which has no yet been performed or testing that has not been completed, every had an organ transplant, or are you currently undergoing an evaluation or diagnostic testing for symptoms of an illness?
  3. Have you been diagnosed by a member of the medical profession with or received treatment for aids (Acquired Immune Deficiency Syndrome) or infection with HIV (Human immunodeficiency Virus)?
  4. In the past 3 years, have you had been diagnosed by a member of the medical profession with, received treatment for had treatment recommended for the following:
    • Lung disease including chronic obstructive pulmonary disease (COPD), emphysema, chronic bronchitis, sarcoidosis or pulmonary fibrosis?
    • Kidney disease, kidney insufficiency, kidney failure or required dialysis?
    • Coronary artery disease, heart attack, cardiomyopathy or congestive heart failure?
    • Heart surgery including valve replacement or repair or required a pacemaker or defibrillator?
    • Any cancer or recurrence of cancer such as leukemia, malignant melanoma or multiple myeloma (excluding basal cell and squamous cell skin cancer)?
    • Liver disease, cirrhosis or hepatitis?
    • Stroke, transient ischemic attack (TIA) or peripheral vascular disease?
    • Alzheimer’s disease or dementia?
    • Bipolar disorder, schizophrenia or psychosis?
    • Alcohol or drug abuse?
    • Diabetes requiring insulin, amputations or been hospitalized for diabetic complications?
    • Multiple sclerosis, muscular dystrophy, collagen vascular disease such as systemic lupus, erythematosus, cystic fibrosis or amyotrophic later sclerosis (ALS)?

Colonial Penn Final Expense Insurance Age State And Face Amount Limitations

Just like all their other policies, Colonial Penn also has age, face amount, and state restrictions on their whole life insurance. You can see them all below.

States: All but ME, NY, and VT.

Coverage Options: $10,000- $50,000

Policy# 3: Colonial Penn Term Life Insurance (The One That Expires)

Not too long ago, Penn Life insurance company added this last policy to their product offering. By far, it’s their worst one for two mains reasons.

  • It expires at age 90.
  • The premiums increase every five years, and becomes completely unaffordable in your 80’s (you’ll see below).

Here’s the bottom line

A term life policy that expires will always cost less than a permanent whole life one. Term life is cheaper because it expires. With whole life, the insurance company is guaranteed to pay out a death claim.

If you are trying to save money by taking out a term policy, and you are comfortable with rolling the dice hoping you will pass away before it expires go for it. It’s a free country.

However, most of the people we speak with want a policy that is guaranteed to always be there. The only kind of policy that does that is truly guaranteed to always be there for you is a whole life policy.

The Underwriting For Their Term Policy Is Very Strict Just Like Their Whole Life (Few Will Qualify)

Just like Colonial Penn whole life insurance, their term life also has very strict underwriting.

Bottom line?

Very few people will qualify for this product even if they were willing to accept the risk of taking out a policy that expires at age 90.

The health questions they ask on this policy are identical to the health questions they ask for their whole life policy. You can scroll up or click on the button below to see all the health issues that will get you declined for their term life or whole life policy.

Colonial Penn Term Life Insurance Rates

The premiums on this policy increase every five years. It’s honestly just like how AARP burial insurance works.

As you enter a new age bracket, your payment will adjust to the rate shown for the corresponding age bracket.

For example, if you were a 67 year old female and you bought $20,000 of their term coverage your monthly payment will be $52.21.

When you turn 71, you would enter the 71-75 bracket and your payment would now be $72.21. The price will continually increase as you enter each new age bracket until the policy completely expires at 90.

At that point, you would have no more life insurance coverage. At 90, there are no options. You could not get coverage from any company due you being 90.


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SOURCE: http://choicemutual.com/colonial-penn-life-insurance-review/

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