Final expense insurance is one of the most commonly purchased types of life insurance for seniors who want affordable, simple coverage for end-of-life costs. Among the most recognized names in this space is Colonial Penn, known for its heavily advertised “$9.95 per month” life insurance plan. While the offer sounds appealing, many people don’t fully understand what the plan includes, how much coverage is actually provided, or how it compares to other final expense insurance options.
This comprehensive guide breaks down final expense insurance, explains the truth behind Colonial Penn’s pricing model, and helps seniors understand how coverage works. You’ll also learn how cash value policies work for older adults and how to find affordable insurance that truly meets your needs.
How much life insurance do you get for $9.95 from Colonial Penn?
Colonial Penn’s $9.95 plan is not a fixed coverage amount. Instead, it uses “units” of insurance. Each unit costs $9.95 per month, and the amount of coverage you get per unit depends entirely on your age at the time of enrollment.
Important details about the $9.95 plan:
It is Guaranteed Acceptance Life Insurance
No medical exam or health questions
Coverage amount declines with age
A “unit” of coverage varies by age group
You can buy multiple units to increase coverage
Average coverage per unit of $9.95 (approximate):
Age 50: about $1,600 per unit
Age 60: about $1,000 per unit
Age 70: about $700 per unit
Age 75–80: about $500–$600 per unit
This means a 75-year-old paying $9.95 per month only receives about $550 of coverage per unit. Seniors must often purchase 8–12 units to reach meaningful coverage amounts, raising the total premium to $79–$120+ per month.
Key limitations of the $9.95 plan:
Two-year limited benefit period (no full payout if death occurs within first 2 years except accidental death)
Designed as a final expense insurance product
Intended to cover small end-of-life expenses, not income replacement
While Colonial Penn is a legitimate insurer, its per-unit pricing model means the $9.95 cost can be misleading unless you understand how coverage is calculated.
For consumer protection guidelines on guaranteed issue life insurance, you may review the NAIC resources at https://www.naic.org.
What is final expense insurance?
Final expense insurance is a type of whole life insurance designed to cover end-of-life costs such as funeral expenses, burial fees, medical bills, and small outstanding debts. Coverage amounts typically range from $5,000 to $30,000, making it more affordable than traditional whole life insurance.
Characteristics of final expense insurance:
Whole life coverage (never expires as long as premiums are paid)
Fixed premiums that do not increase with age
Builds cash value over time
No medical exam required for most policies
Ideal for adults aged 50 to 85
Common end-of-life expenses include:
Funeral service: $7,000 to $10,000
Burial plot and cemetery fees: $2,000 to $5,000
Headstone: $1,000 to $3,000
Medical bills not covered by Medicare
Final expense insurance provides peace of mind by ensuring that loved ones are not left with financial burdens during a difficult time.
Some seniors also choose final expense insurance to cover:
Cremation costs
Travel expenses for family
Small remaining debts
Unpaid medical or hospice bills
To learn more about consumer protections for senior policies, the U.S. Department of Labor offers public resources at https://www.dol.gov.
How does life insurance work for seniors?
Life insurance for seniors focuses on affordability, simplified underwriting, and coverage tailored to realistic financial needs. Seniors typically choose between:
Final expense insurance (most popular)
Guaranteed acceptance life insurance
Simplified issue whole life insurance
Term life insurance for seniors (less common due to cost and age limits)
Key features of senior life insurance:
No medical exam options
Many senior policies rely on health questionnaires or guaranteed acceptance with no questions at all.Permanent coverage
Whole life policies for seniors do not expire, making them more practical than term life after age 60.Cash value growth
Whole life and final expense insurance slowly accumulate cash value that can be borrowed against.Coverage limits designed for affordability
Most seniors choose coverage from $5,000 to $50,000, enough to handle major final expenses.Higher pricing due to age
Life insurance costs increase significantly after age 60, which is why many seniors choose smaller, more affordable policies.
Common reasons seniors purchase life insurance:
Protect spouse or children from funeral costs
Avoid burdening family with debt
Leave a small legacy
Cover medical bills
Pay off remaining obligations
To compare life insurance options and strengthen your financial safety net, you can explore additional TCG resources:
Life Insurance Overview: https://totalcoverageguide.com/life-insurance/
Home Insurance: https://totalcoverageguide.com/home-insurance/
Auto Insurance: https://totalcoverageguide.com/auto-insurance/
Renters Insurance: https://totalcoverageguide.com/renters-insurance/
What is cash value life insurance and how does it help seniors?
Cash value life insurance is a form of permanent life insurance, such as whole life or universal life, that builds a tax-deferred savings component. This cash value grows over time and can be accessed during the policyholder’s lifetime through withdrawals or loans.
Benefits of cash value life insurance for seniors:
1. Emergency access to funds
Seniors can borrow money against the cash value without going through a bank.
2. Tax-deferred growth
Cash value grows without being taxed annually, making it attractive for long-term planning.
3. Flexible use
Borrowed funds can be used for medical bills, living expenses, or family support.
4. Lifetime coverage
Cash value policies never expire as long as premiums are paid.
5. Additional financial security
Some seniors use cash value to supplement retirement income.
Important notes:
Loans reduce the eventual death benefit if not repaid
Policies can lapse if loans exceed cash value
Premiums are higher than term life because of savings accumulation
Cash value life insurance can be a helpful tool for seniors who want both protection and financial flexibility.
For consumer education on life insurance loan rules, the Federal Trade Commission provides helpful resources at https://www.ftc.gov.
Trusted external resources
National Association of Insurance Commissioners (NAIC): https://www.naic.org
U.S. Department of Labor (Life Insurance Education): https://www.dol.gov
Medicaid & Senior Benefits: https://www.medicaid.gov
