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
A Colonial Penn Life Insurance review shows that all of its products have relaxed underwriting standards. This makes Colonial Penn unique amongst its competitors. Other insurance companies, such as Guardian, New York Life and Mutual of Omaha, are more focused on policies that require medical qualifications, though some offer guaranteed issue options as well.
As a result, Colonial Penn offers more robust options for people in the guaranteed issue market than nearly any company. If you have a disqualifying medical condition, getting a quote from Colonial Penn Life Insurance is always a good idea.
Colonial Penn provides three options: term life, whole life and guaranteed acceptance whole life. The coverage maximums are very low compared to other insurance companies, which is due to Colonial Penn’s focus on the highest risk insurance marketplace. No company offers guaranteed acceptance policies with high coverage maximums, so for customers in that space, the low coverage maximums at Colonial Penn are not a disadvantage. However, customers seeking term- or whole life policies who are healthy can get much higher coverage limits elsewhere.
Guaranteed Acceptance Whole Life
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.
The non-guaranteed whole life option provides up to $50,000 in coverage. In our Colonial Penn Life review, we discovered that applicants must be between the ages of 40 to 75 to quality. As with a Colonial Penn term policy, there are health questions but no medical exam requirement. Unlike the Colonial Penn term life option, premiums remain level, and the policy stays in effect until the insured’s death provided premiums are paid.
Colonial Penn Life Insurance reviews show it offers term policies for applicants between the ages of 18 and 75. Term policies are not guaranteed issue. Customers qualify based on their answers to a series of health questions, though there is no medical exam requirement. Applicants must be between the ages of 18 and 75. There is a $50,000 coverage maximum. They base premiums on age and gender. Premiums climb higher as the insured moves into a new five-year age bracket. The policies can be kept in force until the insured turns 90.
Term Life Versus Whole Life
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.
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 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.
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.
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 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.
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.
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 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.
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.
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 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.
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.