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Pros and Cons of Colonial Penn Insurance

Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in…

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Benjamin Carr was a licensed insurance agent in Georgia and has two years’ experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by

Benji Carr

Former Licensed Life Insurance Agent

UPDATED: Jan 30, 2022

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Quick Facts

  • Colonial Penn offers no-exam life insurance for those who need no-exam policies
  • People enjoy being able to buy whole, term, or guaranteed acceptance through Colonial Penn for fairly affordable prices
  • The National Association of Insurance Commissioners reports a high rate of complaints against the company, the majority of which center around the claims process and how difficult it can be to resolve issues

While Colonial Penn isn’t the biggest life insurance provider in the country, it’s a semi-popular choice for people looking for no-exam insurance.

However, the insurance company has restrictive limits and plan options. It might not be the best choice for you unless your circumstances call for a no-exam life insurance policy.

You should consider the pros and cons of Colonial Penn insurance before buying a policy, and compare quotes with other companies. Enter your ZIP code into our free tool to see what rates might look like for you.

What is Colonial Penn life insurance?

Colonial Penn has several life insurance options you can purchase. Most life insurance companies sell term and whole life, and Colonial Penn is no exception. They also sell policies that don’t require a medical exam.

One unique note about Colonial Penn is that they have strict age limits for their policies. If you’re looking for more inclusive options, it might be best to go elsewhere.

Colonial Penn Whole Life

As its name suggests, whole life insurance covers you for the rest of your life, as long as you keep up on your payments. It also builds cash value as you make payments, which you can borrow against.

Unlike most whole life insurance plans, Colonial Penn doesn’t require a medical exam. However, you will still need to answer questions about your health in an interview with your agent. You might not qualify for a whole life policy, but chances are you will.

Colonial Penn offers permanent life insurance for people between the ages of 40 and 75, for up to $50,000.

Colonial Penn Term Life

Term life is the most common type of life insurance people buy. In general, term is less expensive than whole life while offering similar coverage. The two most significant differences are that there is no cash value accumulation with term and that it doesn’t last your entire life.

Colonial Penn’s term life is renewable, which means you can renew your policy when the term ends. Your policy is guaranteed renewable until you reach 90 years old, without you having to worry about questions regarding your health.

If you’re interested in Colonial renewable term, you need to be between the ages of 18 and 40. People ages 18 to 75 can buy regular term. Like with whole life, the maximum amount of term coverage you can buy is $50,000.

Colonial Penn Guaranteed Acceptance

As long as you are between the ages of 50 and 85, you can qualify for Colonial Penn’s guaranteed acceptance coverage. There are no medical exams or interviews with this policy, meaning you’ll be eligible no matter what your health status is.

This policy has a two-year waiting period. If you die before the waiting period passes, your beneficiary won’t receive the full payout. However, your full death benefit will be paid after that period passes.

Add-Ons for Colonial Penn Insurance

Most life insurance companies offer add-ons that you can purchase to increase the value of your policy. Colonial Penn has one add-on available for purchase, which is much fewer than other companies.

The add-on is called Living Insurance and can be purchased for a whole or renewable term policy.

Living insurance allows you to collect a portion of your death benefit if you become seriously ill. You can claim up to 50% of your benefit for certain chronic illnesses and heart attacks. If you become ill with cancer, you’re eligible for 25%.

This add-on can help you pay for medical bills if you become ill, but only people under 65 are eligible to purchase it.

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How much does Colonial Penn life insurance cost?

Despite limited options, Colonial Penn offers affordable prices. The cheapest option starts at $10 a month, but consider the following prices to get an idea of what you might pay.

The prices above are for a whole life insurance policy for a 45-year-old man and woman. There are cheaper options out there, but this can be a good option if you need no-exam life insurance.

Colonial Penn Life Insurance Reviews

Colonial Penn has an unfortunate number of customer complaints. The main complaints regard the payout process. Numerous customers complain that Colonial Penn refuses to make payments after the insured died.

The National Association of Insurance Commissioners (NAIC) compiles information about customer complaints. It does so for every insurance company and publishes the information as a ratio, taking company size into account.

The average complaint ratio with the NAIC is 1.0. Companies with anything over 1.0 are considered above average, and under are below average. Colonial Penn has a ratio of 2.12, meaning they receive more than double the complaints of the average insurance company.

Colonial Penn’s complaint ratio is rising, too. The 2.12 ratio is from 2020. In 2019, the company had a ratio of 1.16.

A.M. Best judges the financial security of a company. The financial strength of an insurer lets you know how likely it is that it can pay your claims. Colonial Penn is owned by the CNO Financial Group, which receives an A- (excellent).

Pros and Cons of Colonial Penn Insurance

So, what are the pros and cons of Colonial Penn insurance? Consider the following to make it easier to decide if Colonial Penn is right for you.

As you can see, there are some good reasons to consider Colonial Penn, especially if you need no-exam life insurance. However, you can probably find a different insurance provider to fit your needs better.

Is Colonial Penn right for you?

Colonial Penn life insurance might be the best choice for you if you need no-exam life insurance. Though coverage limits are low, some life insurance is better than none.

Now that you’ve seen the pros and cons of Colonial Penn insurance, you might have a better idea of whether this company is best for you. However, you should still compare companies to get the best rates. Enter your ZIP code into our free tool to see what quotes might look like for you.



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