Colonial Penn Life Insurance Review

Our expert take on Colonial Penn life insurance

Colonial Penn sells small, guaranteed issue whole life insurance policies, with coverage available to anyone ages 50 to 85. Coverage is sold by “units” for a fixed rate of $9.95 per unit per month. The coverage available per unit will depend on your age, sex and state. 

Because there is no underwriting, these policies can be issued quickly online, and you can’t be rejected or charged a higher rate if you have a pre-existing medical condition. As such, Colonial Penn can be a viable coverage option if your age and health prevent you from buying other types of life insurance. 

Still, guaranteed issue life insurance policies tend to be much more expensive for the coverage amount you get compared to other types of life insurance. In addition, our analysis of rates revealed that Colonial Penn policies are generally more expensive than similar policies from other insurers.

Because the amount of coverage per unit from Colonial Penn is based on your age and sex, coverage amounts typically don’t correspond neatly with traditional death benefit amounts offered by other companies (such as flat $10,000 or $25,000 policies). As a result, it can be difficult to make apples-to-apples quote comparisons. 

Colonial Penn’s life insurance products

Colonial Penn sells one type of life insurance: guaranteed acceptance whole life insurance. These policies are primarily used to provide beneficiaries with money to pay for final expenses such as burial, though the death benefit money can be used as the beneficiary sees fit. 

Colonial Penn’s Guaranteed Acceptance Life Insurance policy is available to applicants ages 50 to 85 without a life insurance medical exam or any health questions. The premiums and the death benefit remain level for your lifetime, and the policy can’t be canceled by Colonial Penn as long as you pay premiums.

A Colonial Penn life insurance policy also features:

• Unit-based premiums, with the option to purchase up to 25 units. However, its unit system makes it difficult to compare coverage amounts with other life insurers.
• Applicant-based coverage limits, with the maximum amount of coverage available based on your age, sex and state of residence.
• Online quote and application option (coverage via an agent is also available).
• Cash value that grows at a guaranteed rate.

Colonial Penn’s policy has a graded death benefit: If you die from nonaccidental causes within the first two years, your beneficiaries will only receive the premiums you paid plus 7% compounded annually. After the two-year mark, nonaccidental deaths are fully covered. Accidental deaths are covered as soon as your policy is in force. 

How much does Colonial Penn life insurance cost?

Colonial Penn coverage is available for $9.95 per unit per month, with the option to purchase up to 25 units. But you don’t know how much coverage a unit buys until you use the quote tool on the Colonial Penn website. 

Colonial Penn’s life insurance premiums are high compared to the average cost for a guaranteed issue policy, based on our analysis.