Colonial Penn is a U.S. life insurance company known especially for its guaranteed-acceptance whole life policies marketed toward older adults. While “no medical exam required” and “as low as $9.95/month” are terms you’ll likely have seen, there are several trade-offs. In this article, we’ll explain what Colonial Penn offers, how its products work, and the potential downsides you should know before purchasing a policy.
What Is Colonial Penn Insurance?
History & Mission
- Colonial Penn Life Insurance Company was founded in 1968, based in Philadelphia, Pennsylvania. (Colonial Penn)
- It specializes in life insurance plans for individuals aged roughly 50 to 85, focusing on “guaranteed acceptance” whole life insurance and simplified issue plans for older consumers. (ShunIns)
- It is a subsidiary of CNO Financial Group.
What Products Do They Offer?
- The main product is a Guaranteed Acceptance Whole Life Insurance that doesn’t require medical exams. You’ll see popular marketing around a $9.95/month plan for certain units of coverage. (Insurance By Heroes)
- They also have “easy‐issue” permanent/whole life insurance. These may ask fewer health questions or have lighter underwriting.
- Coverage amounts are relatively modest: maximum benefits tend to be low relative to other life insurance options. (ShunIns)
Key Features
- No medical exam required for many of their plans.
- Premiums that are fixed (don’t increase) for whole life (if you keep the policy in force).
- Available in almost all states.
What Is the Downside of Colonial Penn Insurance?
While it might sound appealing, there are several downsides. Here are the main ones, and how they might affect you.
1. Two-Year Waiting Period for Full Death Benefit
One of the biggest issues is the waiting period: for guaranteed‐acceptance policies, if you (the insured) die from natural causes within the first two years, the policy will not pay the full death benefit. Instead, beneficiaries generally receive only the premiums paid plus interest. (Policy Guide)
This means if you buy a policy and pass away early, you may get much less than you expected or what the marketing implied.
2. Low Coverage Amounts & High Cost per Dollar of Coverage
- The $9.95/month advertised plan corresponds to one “unit” of coverage. What a unit actually provides depends heavily on your age and gender—and it’s often quite low.
- If you want more substantial coverage (for example, enough to cover a funeral + debts), you may need many units, which adds up to a much higher cost. The cost per $1,000 of benefit for Colonial Penn tends to be higher than competitors, especially for healthier people. (Insurance By Heroes)
3. Potentially Misleading Advertising / Fine Print Issues
- Many customers say the advertising (TV, direct mail) emphasizes “$9.95/month”, “no health questions”, etc., but do not make clear the limits: how small the coverage is, how the waiting period works, or what “units” mean. (TrustedChoice.com)
- There have been complaints that customers misunderstand the terms and later feel misled.
4. Customer Complaints and Reputation
- Colonial Penn has a high number of consumer complaints compared to other insurers. Complaints tend to revolve around claim delays, difficulty obtaining payouts, billing issues, and customer service challenges.
- Trusted Choice gives it a low rating (2/5 stars) largely because of feedback about transparency, claims, and customer service. (TrustedChoice.com)
5. Limited Policy Options and Flexibility
- The company offers mostly guaranteed acceptance or simplified whole life policies, which are less flexible than term life or universal life in many modern insurers.
- Few riders or additional benefits are available, so customizing coverage (e.g., adding extra protections) may be difficult or expensive.
6. High Effective Costs for Those in Good Health or Younger Ages
If you are relatively healthy or younger than the typical customer Colonial Penn targets, you can often get better value elsewhere with medical underwriting. Their products are designed to be accessible even for those in worse health, but that means pricing must account for that risk, and so premiums are higher than lowest‐risk estimates. (Insurance By Heroes)
Should You Consider Colonial Penn?
Colonial Penn might make sense in certain scenarios:
- If you’re older (50‐85) and/or have health issues that make medical exams difficult or that would lead to high premiums elsewhere.
- If you need a modest life insurance to cover final expenses (funeral, small debts) rather than leaving large inheritance or big financial legacies.
But if you are younger, healthy, or need a larger death benefit, you’ll likely find better value with insurers who offer term life or whole life policies with stronger benefits per dollar.
Comparison with Alternatives
| Feature | Colonial Penn Guaranteed Acceptance Plan | Typical Term Life Insurance from Other Carriers |
| Medical exam / health questions | No exam; minimal questions | Often require health exam, medical history review |
| Waiting period for full payout (non‐accidental death) | 2 years | Usually immediate after policy starts (no waiting in many term policies) |
| Cost per $1,000 of coverage | High, especially for older age or multiple units | Lower for healthy, young applicants due to underwriting and competition |
| Maximum benefit / flexibility | Limited; few riders; modest death benefits | Often large benefit amounts; riders; more policy options |
Last Words
What is Colonial Penn Insurance? It’s a life insurance provider specializing in guaranteed and simplified acceptance whole life policies, mostly for older consumers. It offers accessibility, fixed premiums, and minimal health requirements.
What is the downside? The trade-offs can be significant: limited coverage amounts, high cost per dollar of benefit, waiting periods, customer service complaints, and advertising practices that may obscure true value. Before buying, compare alternatives carefully, read the policy fine print, and perhaps get quotes from multiple insurers.
