Colonial Penn Life Insurance Review: Rates, Coverage, and Service

Doctor writing on a life insurance form and beside it is a stethoscope, iPhone, and a laptop

Many people overlook the importance of life insurance, which leaves their loved ones in peril. Every thorough financial plan must account for the inevitable. Life insurance protects families from losing their homes, ensures children’s educational expenses, and provides coverage for final expenses. But what happens if you can’t qualify for a life insurance policy because of a medical condition? Thankfully, many companies offer guaranteed issue policies. Below we provide a Colonial Penn Life Insurance review that reveals the benefits of its guaranteed issue policies.

A Colonial Penn Life Insurance Review

Many people are familiar with Colonial Penn Life Insurance from its television commercials featuring Alex Trebek. Colonial Penn feels it’s important to get the word out about guarantee issue policies. Many people who have been turned down for life insurance grow discouraged and believe they are unable to qualify for any life insurance policy. In reality, Colonial Penn and other companies provide coverage to this high-risk market, and our Colonial Penn Life Insurance review revealed that it offers some of the most affordable and innovative guaranteed issue insurance products available.

Philadelphia-based Colonial Penn Life Insurance Company was founded in 1968 by philanthropist and AARP co-founder Leonard Davis. The company originally sold policies exclusively to people over the age of 65. Davis recognized through his work with AARP that the over 65 market was under served. Many people in that age group had developed health conditions that precluded them from qualifying for traditional life insurance policies. They needed an alternative, and Colonial Penn Life Insurance provided it. Colonial Penn now offers guaranteed life insurance policies to adults of all ages.

​Colonial Penn Life Insurance Product Specs

Qualifying

Options

​Guaranteed Acceptance Whole Life

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Guaranteed acceptance whole life ranks as Colonial Penn’s most popular product. It is open to people between the ages 50 to 85 regardless of their health. Applicants answer no health questions and take no medical exam. Coverage amounts are capped at $20,000, though the amount may be lower for some applicants. If the insured dies within two years of taking out the policy, the premiums are returned, but the death benefit is not paid, as shown in our Colonial Penn Life Insurance review.

Whole Life

Term Life

​Term Life Versus Whole Life

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Whole life policies remain in effect for the remainder of the insured’s life, provided premiums are paid, while term life offers less expensive coverage for a specified number of years. Most people carry a combination of term- and whole life. For example, a 35-year-old parent of young children might carry a $25,000 whole life policy and a $250,000 20-year term life policy. The term life policy provides coverage until the children are grown. The whole life policy remains in effect throughout the insured’s life and covers final expenses.

Many term policies contain riders that allow policyholders to convert a portion of their term policies to whole life. For example, the 35-year-old parent could in the future elect to convert $25,000 worth of his or her term policy into a whole life policy. When the term coverage expires, the parent would then have $50,000 worth of whole life coverage instead of $25,000. Whole life policies also have the advantage of level premiums that can be paid in full prior to the insured’s death.

​How It Compares

We picked a few similar products available on the market to see how they compare.

  • ​Guardian
  • ​Mutual of Omaha
  • ​New York Life

Coverage Options

For those in the guaranteed issue market, getting a quote from Colonial Penn always makes sense. It offers very high coverage limits for guaranteed whole life policies; however, individuals in need of high limit whole or term life should consider Guardian, Mutual of Omaha or New York Life.

Financial Strength

​Financial strength is the most important factor when considering a life insurance company: If the company fails and can’t make payments, it makes no difference what coverage options it offers or premiums it charges. Colonial Penn has an A- rating from A.M. Best, which is excellent. Colonial Penn can afford to pay all claims and can be expected to do so for decades to come.

Pros

  • High coverage limit for guaranteed acceptance policies
  • No medical exams for any policies
  • Focused on the 50 to 85 age group

Cons

  • Not suitable for younger people in need of high term coverage limits
  • Two year waiting period for death benefit to be payable
  • Low coverage limits for medically qualified whole life

​Guardian provides its customers with a plethora of options, making it a great choice for individuals interested in more than a final expense policy. While Colonial Life Insurance reviews show it offers a great guaranteed acceptance option, it can’t compete with Guardian when it comes to term life policies or high coverage limit whole life policies. Guardian also provides investment options, including policies with returns linked to the S&P 500 and annuities.

Coverage Options

If you want to compare a wide selection of policy types, such as term, whole life and life insurance products that double as investments, Guardian is a great place to start.

Financial Strength

Financial strength is the most important factor when considering a life insurance company: If the company fails and can’t make payments, it makes no difference what coverage options it offers or premiums it provides. Guardian has an A++ rating from A.M. Best, which is superior. Guardian can afford to pay all claims and can be expected to for decades to come.

Pros

  • Large selection of policy types
  • High coverage limits
  • Policies for healthy people living with HIV

Cons

  • Some medical conditions may be disqualifying
  • Underwriting process may be difficult for some applicants

Mutual of Omaha can easily serve as a one-stop shopping experience for insurance and investment products. It offers the gamut of life insurance products, from guaranteed whole life to term life to universal life. It also provides annuities, critical illness insurance, disability income, Medicare supplements and more. The company is also strong on customer service. A Mutual of Omaha agent can guide you through the process and help you determine which policy types you need.

Coverage Options

Mutual of Omaha provides not just a large selection of policy types but also numerous options within each category. For example, it offers term insurance between 10 and 30 years. It also has a high $25,000 coverage limit on guaranteed issue whole life, though some customers qualify for as low as $2,000.

Financial Strength

Financial strength is the most important factor when considering a life insurance company: If the company fails and can’t make payments, it makes no difference what coverage options it offers or premiums it provides. Mutual of Omaha has an A+ rating from A.M. Best, which is superior. Mutual of Omaha can afford to pay all claims and can be expected to do so for decades to come.

Pros

  • Wide selection of policy types
  • High coverage limit guaranteed life policies available
  • Excellent customer service

Cons

  • Limited online services
  • Underwriting may be difficult for some customers

New York Life bills itself as the original policyholder owned life insurance company. Policyholder owned companies pay dividends to the policyholders based on their profits. For example, if a policyholder paid $1,000 into a policy and the dividend rate was 3%, that policyholder earns a $30 dividend. The policyholder may elect to take the dividend in cash, use it toward premiums or to purchase additional insurance. In addition to dividends, New York Life offers a robust selection of term- and whole life products, mutual funds, annuities and long term care insurance.

Coverage Options

For life insurance coverage and investment options, New York Life offers a wide selection that suits every age and risk tolerance. New York Life customers can easily purchase inexpensive term life and whole life policies that will last a lifetime while protecting against long-term care risk and creating an investment portfolio.

Financial Strength

Financial strength is the most important factor when considering a life insurance company: If the company fails and can’t make payments, it makes no difference what coverage options it offers or premiums it provides. New York Life has an A++ rating from A.M. Best, which is superior. New York Life can afford to pay all claims and can be expected to for decades to come.

Pros

  • Dividend paying policies
  • Strong selection for term- and whole life
  • Investment options to help policyholders grow their money

Cons

  • No universal life

​Conclusion

Doctor is writing on a life insurance form beside her stethoscope

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Our Colonial Penn Life Insurance reviews demonstrate that the company serves its market very well. Its focus in on the 50+ age group, who have a more difficult time qualifying for life insurance policies. If still in relatively good health, Colonial Penn applicants can opt for its non-guaranteed acceptance whole life policy, which has lower premiums and higher coverage limits than the guaranteed acceptance plan. Those with conditions that would disqualify them from life insurance need the Colonial Penn guaranteed acceptance life insurance policy.

Going without life insurance can leave your family in dire need. It should be considered a necessity, just like health insurance. Guaranteed life insurance policies help people with severe preexisting conditions obtain life insurance. This service provides peace of mind for their families while going through a difficult time. Colonial Penn is an innovator in this space and offers one of the most affordable and reliable options for high-risk life insurance customers. Colonial Penn earns 5 stars for its service to older people with health concerns.

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