Based out of Philadelphia Pennsylvania Colonial Penn Life Insurance has gained its popularity recently through whole life insurance policies geared toward people ages 50-85. Adding Jeopardys’ talk show host Alex Trebek has helped capture quite the audience with his catchy commercials.
Colonial Penn has gone through a series of changes since its inception in 1968. At Good Life Protection we would like to point out that they came nowhere near the top of the list for best life insurance companies and this includes reviews of over 200 total life insurance companies. They are known for primarily targeting the senior market and offering “cheap” no-medical exam life insurance which we will touch on more further in the review.
During a brief period between 1998-2001 Colonial Penn was referred to as Conseco Direct Life Insurance. In 2001, reverted back to its original name in a majority of the states except for New York. Where it’s still referred to as Bankers Conseco Life Insurance Company.
Financial Strength- Financial Strength for a Life Insurance Company should always be a strong consideration point. History and time holding down a valued stake in the market is an important factor to consider. Colonial Penn does not have the longevity like many other Life Insurance Companies have accomplished.
Established in only 1968 years makes 2018 only a 50th anniversary for the company. Driven by popular celebrities running eye-catching advertising clips to grab the viewer’s attention. Something else that should grab your attention about Colonial Penn is the financial rating attached to them.
Who, how and why are financial strength ratings published and determined? Why are they important?
Agencies that provide valuable information in regards to a company’s financial stability. This provides you and I an honest, reliable way to check and examine a company.
This should always be a consideration you take before entrusting a company to provide you and your families financial security.
In the Life Insurance Industry, you’re often looking at whole life policies. This so happens to be one of Colonial Penn’s hot market products. So financial strength is even more of the essence because after all, we do need them around for the remainder of whole life at this point, correct?
Colonial Penn Life Insurance Review of financial Strength- A huge piece of the puzzle.
Let’s First Examine the Grade Report Available to Companies from the Major Rating Agencies.
Side Note – Consider the Ratings from All Three Rating Agencies
Where does Colonial Penn Fall into this 2018- A.M Best just recently downgraded Colonial
Penn from an A rating to an “A-“ This will be the only company left standing still falling into the A rating category.You do still have Fitch and Moody’s remaining, Does the forecast look any better? No, it does not! Fitch has Colonial Penn downgraded down to a “BBB+” rating, and Moody’s is following suit with the same financial rating.
Financial Ratings are not the only to consider when picking a life insurance company and life insurance policy. It’s an important factor but let’s look further into other factors and see how they stack up.
The life insurance product line up consists of the big three options you see with nearly every life insurance carrier.
Term Life- Colonial Penn offers term life insurance but it has some key downfalls. First off, you have
Limited Coverage Amounts- 50,000.00- Yep that’s it. 50,000.00 is the current maximum coverage offered by Colonial Penn. How many of you only need 50,000.00 in coverage to cover all protection needs?
So you’re probably thinking this doesn’t require a medical background?
The term product offered by Colonial Penn still requires all medical questions and yes you can still be turned down for coverage. Due to the limited amount of questions asked for the medical background.
The Average Cost per 1,000.00 face amount of coverage is often more expensive than an alternative option for coverage. Seek a company that allows full underwriting. Shop the market with an Independent Insurance Agent to make sure you’re not wasting your hard earned money.
Whole Life- Guaranteed Issue– This is the product line Colonial Penn is supposed to hold a specialty in. Alex Trebek seems to believe so as well. We have all seen the commercials. So how does it stack up against the competitor?
-Maximum Allowed Coverage- Just over 16,000.00 (well under other competitors) – The average maximum amount of coverage allowed for Guaranteed Issue Whole Life is 25,000.00.
-Ages Afforded the Coverage- 50-85- Nothing wrong here, this is the same basically with all companies offering Guaranteed Issue Whole Life coverage.
Things to Consider
Coloniol Penn Life Insurance Review of Whole Life Insurance– This option again is a downfall for Colonial Penn. 50,000.00 is the max amount of coverage allowed. Ages allowed for coverage for a whole life policy is 40-75. Medical Background is again required. Only exclusions for payouts is suicide in which Colonial Penn will refund premiums plus interest earned and compounded annually.
Price– Colonial Penn when it comes to pricing also does not fair well. They are going to be higher than many other companies for the same product. You should always shop the insurance market and research several different options.
Increasing Term*- Always be watchful for term policies that premiums increase after an increment of years such as “5”. These policies may lure you in at first glance, but you will be going through this process again in 4 years and 11 months if you don’t. At that time, the new company you wish to purchase life insurance with will underwrite you at your current age. Don’t fall into the typical trap where you save a few dollars today but pay the price tomorrow.
2 Year Graded Period– Colonial Penn does nothing out of the ordinary with the Guaranteed Issue policy and nothing should be held against them. However, as a consumer, you need to understand how this works. During the 2 years waiting period if death occurs…..you get. Premiums returned plus interest (compounded annually with Colonial Penn). You do not receive the full 100% death benefit completion of this waiting period.
Downfalls– Colonial Penn’s financial strength rating is the first warning sign that a better option may be available. To be fair, however, they have been around 50 years and have proven solvent. The products offered are very limited without many additional “riders” or “living benefits” that are other life insurance carriers offer.
The positives of our Colonial Penn Life Insurance Review
Colonial Penn does have some positives going for them. They do have no medical exam required insurance policies which not all carriers offer. The guaranteed issue whole life product all though capping at less potential coverage does stand pretty comparable to all other carriers offering the same policies. The permanent products are fixed prices. So if you do go with Colonial Penn for a whole life policy, the rate will not increase on you. The price will be fixed over the life of the policy.
30 Day Return– All companies are required by law to offer a “free look provision” within a life insurance policy. Sometimes 10 days, sometimes 20 days. However, Colonial Penn enjoys advertising the 30-day money back guarantee. It’s a positive so worth mentioning. If you’re not happy with your current policy, exercise this benefit.
If not Colonial Penn….Who can help me achieve my needs?
If you are in overall good health, you should definitely consider other options. They will be cheaper. They will include more benefits that will help you and your family. Look for policies that include living benefits. Look for policies that include these and still do not require a medical exam.
If you’re after cash growth returns on a whole life policy. Search for a company with higher historical returns on whole life policies. Look for companies with A- A+ financial strength ratings. Find an Independent broker who can help you find the best insurance possible.
Start by searching for companies that offer the product you’re specifically after. If your set with the option presented by Colonial Penn, it may very well be a fit. Do your research.
Companies such as AIG, Gerber and Great Western also offer great Guaranteed Issue Policies and for a cheaper rate. They also provide higher returns during the 2 year waiting period if death occurs.
Another thing they boast?
Higher Financial Strength ratings. It can’t be stressed enough to look around and do your due diligence when searching for a good fit for your life insurance. The budget has always been a driving force behind the purchase of life insurance so search for something that can save you a few dollars per month.
After all, it adds up over a long period of time. Life insurance is usually a product that requires a payment for a long duration of time so it could be substantial savings in the long run.
Colonial Penn Life Insurance Review- The Bad Exposed
Colonial Penn doesn’t exactly flood the internet with positive reviews. However, in Colonial Penn’s defense, it’s not all on them.
Most of the bad reviews you come across relate to customer service or no death claims being paid. The problem with some of the complaints has more to do with not understanding a 2-year waiting period on guaranteed issue policies issued by Colonial Penn.
You may even run into bad reviews related to prior employees not enjoying their previous careers too much. This isn’t something to necessarily take into consideration when picking the best life insurance policy for you and your family.
Sorry, Alex, you’re going to have to bring more to the table!
How much is a Unit of Colonial Penn Life Insurance?
To give a clear picture of how we determined the rates for Colonial Penn Life Insurance, take a glance at the image below. We ran the rates for a Male with the date of birth of 5/15/1950. The rates don’t change based on male or female or age. It’s strictly set at price per “unit” with a maximum of 8 units open for purchase.
Yes, unfortunately as discussed previously, it also has the 2-year waiting period attached to the coverage.
Below is an example of what it looks like to move through the online application process with Colonial Penn. You can see that for the guaranteed issue whole life insurance with Colonial Penn that “a unit” of coverage runs 79.60 per month. The big downfall is the limited coverage amount in this situation. 79.60 isn’t necessarily a bad price. However, 6336.00 doesn’t do a large amount of final expense planning in most circumstances. You should always run the rates with other carriers to determine your best options for life insurance.
Colonial Penn Rate Chart
Let’s look at how the rates stack up for Colonial Penn.
First, we will look at the Colonial Penn Rate Chart for the Guaranteed Issue Whole Life Coverage.
As you can see, this may not be the best life insurance for seniors needing life insurance coverage. 6,336.00 just is not enough coverage in most circumstance.
Colonial Penn advertises it’s pricing by “units” which makes it a bit confusing and misleading. Basically, they do this by advertising low prices per units which is how the final price is determined.
It makes it easy to fall victim to 1 unit of coverage for $9.95 of coverage. What??? You’re kidding! That’s a dream come true price! Especially when it’s coming from Alex Trebec. Makes it a little more believable and trustworthy, right? Don’t think so.
>Don’t get me wrong here. The product technically isn’t doing anything manipulating or scam like. It’s just the advertising is obviously built to make Colonial Penn rates look more appealing than they really are.
Colonial Penn Rate Chart- No Exam Term Insurance
This is another shortcoming for Colonial Penn. The coverage amount is very limited and overpriced for the term insurance product. You also must be very aware of the increasing numbers at the 5-year intervals for this coverage. Often when life insurance rates increase, it gets too difficult to keep the coverage and begins placing a strain on the finances. Buyers beware!
Too many other good options exist for term insurance than to lean on 5-year renewable term policies. You don’t want to fall victim to grabbing the low rate now just to be in a tough situation down the road.
The future belongs to those who plan for it today!
Colonial Penn Rate Chart for Whole Life Insurance (50,000.00)
This rate chart shows the rates for whole life insurance coverage through Colonial Penn. Our expert opinion is that the coverage is not to robust with additional perks and is high priced. It’s also very limited on options and additional riders that can be added. The product itself doesn’t come to short from other life insurance carriers but better options are on the market and available to you.
Again, Good Life Protection is not against Colonial Penn Life Insurance. We are just hoping to provide an in-depth look into the policies and providing honest reviews to the consumers. We are in no way affiliated with Colonial Penn Life Insurance Company. If you are considering Colonial Penn Life Insurance, we recommend giving them a call. After you get your information, reach out to Good Life Protection to compare rates and coverages available.
What other Options do we have? What’s the best life insurance for Seniors?
Again, we want to emphasize that Colonial Penn Life Insurance is not necessarily the worst pick or a bad decision. Good Life Protection just wants you to understand to shop around and get the best life insurance possible. Other great options that provide great plans for seniors….
If you work with an independent agency, you will be able to get rates and options tailored to your needs. Explore your options and may the best Insurance company win!
My Final Grade Report- ‘C’- Colonial Penn Life Insurance Review
Definitely not the worst company you could choose when shopping for a life insurance product. The products are average, the options are limited and the price isn’t the best. It’s still a viable option, especially for any diehard Alex Trebek fans. Always proceed with caution with any low rated companies when it comes to financial strength especially if they have suffered too many recent downturns in financial strength ratings.
Inquire as to why they have been downgraded or do your own due diligence to research any complaints or potential hazards with a life insurance carrier. Colonial Penn has proven to be a player in the life insurance industry but many stronger options are present and should be considered.
Who are we? We are an independent rating and review company. Our goal is to bring the consumer the information needed to make an educated, informed decision when shopping the life insurance market. We pride ourselves on providing honest, ethical reviews of all carriers so you can get a first-hand glance at the options in today’s life insurance market. If you enjoyed our article Colonial Penn Life Insurance Review, we would love to hear from you. Comment below with any feedback or experience using colonial Penn in the past.
FILED UNDER – INSURANCE COMPANY REVIEWS
Josh Martin is the founder of Good Life Protection. He began his career as a captive Agent working for New York Life Insurance Company. After continued education and designations, Josh founded Good Life Protection to provide consumers with more options and insurance that truly fits into your budget and health classification.