Whole life insurance is a permanent life insurance type where the insured person is covered for the lifetime duration, as long as the premiums are paid on time. Permanent life insurance is slightly different than the term life insurance, which includes the person insured for a certain amount of time.
The most common type of permanent life insurance policy is Whole Life Insurance, that most people purchase. Like many of permanent life insurance policies, the whole life also offers a savings component known as the cash value.
Whole life insurance gives a lot of benefits as the premiums are fixed and never go up, no matter what the market conditions are. Also, one may be able to withdraw funds and take out a loan, plus the death benefit is guaranteed as long as one makes the premium payments that are required.
Colonial Penn Life Insurance
Colonial Penn is a Life Insurance company based in Philadelphia USA and was founded in 1968 by the cofounder of AARP Leonard Davis. The company is basically owned by the CNO financial group. Its specialty is offering life insurance to the consumer directly at a lower cost.
If one watches TV, it is very likely that Alex Trebek has been seen talking about the guaranteed acceptance life insurance from the Colonial Penn Life Insurance Company. It is one of the first life insurance companies to offer guaranteed issue policy plans for people over 50.
As of now, it offers life insurance products for customers between the ages of 18 and 85 years who may or may not have medical problems. This might prevent them from purchasing traditional life insurance. It is available in all 50 states. However, the plan features and the restrictions may differ by state.
Colonial Penn offers a range of life insurance products that are best suited towards the shoppers that necessarily don’t want a large payout. They would perhaps want just enough to cover expenses that are associated with their passing that would have trouble obtaining coverage elsewhere.
As far as the costs are concerned, Colonial Penn’s guaranteed acceptance insurance is on par with the ones available for the similar products of final expense. The Term and Whole life insurance products of Colonial Penn don’t require a medical exam and have a maximum death benefit of $50,000.
Colonial Penn Company Ratings
According to the AM Best, Colonial Penn Life has an A- (Excellent) rating. Fitch also gave a rating of BBB+, while Standard and Poor’s also gave a rating of BBB+. This high financial rating shows that Colonial Penn is financially solvent. This obviously means that they are able to pay claims to the policyholders.
This rating certainly indicates the service quality& whether a product is good for the specific requirements of the policyholder. The customer considers offered policies, the underwriting process, the benefit amount, and current health to be the foundation when they look for a life insurance policy.
Advantages of Colonial Penn Insurance
A medical exam is not required
It is a fact that many life insurance plans ask health-related questions or require medical exams. Colonial Penn, on the other hand, guarantees its customers about their approval. Therefore, its Guaranteed Acceptance Whole Life Insurance would not require any medical exam.
Ability to borrow against each value
Some plans of Colonial Penn Insurance may offer its customers to borrow money from their life insurance policy. This not only includes the Whole life insurance policies but applies to the Term life insurance policies also.
The policy holder’s monthly premium stays the same over the life policy. Therefore, there is a lock in the premium and benefits amount. Even if a customer is diagnosed with a terminal illness or have to live in a nursing home, the company cannot increase the rates of insurance.
As most of the traditional whole life insurance policies build cash value over time, so will the guaranteed acceptance policy of Colonial Penn will allow accessing that money using the policy loans or withdrawals.
Disadvantages of Colonial Penn Insurance
Maximum insurance payout of $50,000
Colonial Penn offers a maximum insurance death benefit of $50,000, while some of its policies have lower of varying maximums. Normally, these lower payouts are sufficient only for limited final expenses.
Limited benefit period of two years
One has to wait for a period of at least two years before making a claim for full benefits in case of non-accidental deaths. A plan’s face value may offer a percentage that might be paid for non-accidental deaths, with the full face amount paid for accidental deaths.
Colonial Penn Life Insurance Products
The Colonial Penn Life Insurance Company is specialized in different life insurance products that have limited underwriting and small death benefits as final expense insurance. These products can be used at the best if one requires coverage quickly, perhaps because of poor health.
It also helps if the policyholder requires a small payout in case of passing like expenses of a funeral, a loan, or any other financial obligation that is limited. Its products can be applied online as a medical examination is not required. It is convenient for people who want to purchase coverage quickly.
Colonial Penn offers a 30-day money-back guarantee, though this feature shouldn’t be a reason for people to decide to purchase from them. Colonial Penn has three types of life insurance policies that depend on the financial needs of the policyholder.
Colonial Penn Term Life Insurance
The term life insurance of Colonial Penn is of 1 year, which means one can essentially start a new term each year. The death benefit of the Term Life Policy is limited with a maximum value amounting to $50,000, while 1 or 2 beneficiaries are to be designated this amount.
Sample Rates for Males
Sample Rates for Females
As it is a 1-year term policy, the premium payment increases as the policyholder gets older, especially in 5-year increments. This means that if coverage for a longer period of time is purchased, one has to pay higher average premiums with Colonial Penn as compared to others.
Colonial Penn has a limited underwriting process with no medical exam, so one can find other insurance with lower prices for significantly high coverage levels. This results in premium raise, as they are unable to verify the policy holder’s health status.
A very few people will qualify for this particular product even if they are willing to accept the risk of taking out a policy that expires at the age of 90 years. The health questions people ask in this policy are almost the same as the whole life insurance policy.
The Colonial Penn Term Life Insurance is not offered in a few states in the USA, i.e., Montana, New York, Massachusetts, Maine, and Vermont. People with a maximum age of 75 are eligible for new policies, but if one already has coverage in place, then it can be maintained till the age of 90.
Colonial Penn Guaranteed Acceptance Program
Colonial Penn’s Guaranteed Acceptance Program is whole life insurance with a limited death benefit. Mostly this program is offered to the seniors who aim to reduce the financial impact on their family upon their death.
Unlike other financial insurance products that allow choosing a particular payout, Colonial Penn collects information regarding age, gender, and location and then assigns a coverage unit that can be purchased for $9.95.
As the price is fixed with Colonial Penn, therefore, the amount of coverage per unit varies according to the risk profile. The minimum value of the coverage unit is around $400 up to maximum, which is approximately $2100.
“Units” of coverage
Death benefit payout
Since the Guaranteed Acceptance Coverage Program is a type of whole life insurance, a cash value is accumulated by it, which can be borrowed against an annual interest rate of 8%. The monthly premiums are tied directly to the units of coverage purchased.
As Colonial Penn’s final expense insurance has a remote unit pricing system, therefore, generating quotes with them for even numbers is not at all easy. The insurance company makes huge money out of this policy as it is very expensive and is eligible only for seniors.
Colonial Penn Guaranteed Acceptance program can only be purchased between the ages of 50 and 85. The death benefit of this policy is limited for the first two years of coverage unless the passing was considered to be an accidental death by the insurer.
Such a clause is regularly included by almost every insurer that offers a guaranteed acceptance policy, as it would not be economical and a wise choice for the insurers to offer such a product otherwise.
Colonial Penn Whole Life Insurance
The Colonial Penn Whole Life Insurance will last for the rest of one’s life. There is a cash value to a whole life policy that one can borrow against. Most of the financial advisors recommend that their clients buy Term Life Insurance. However, some individuals want it and nothing else.
This policy is much more expensive in comparison to other burial insurance companies. Furthermore, its underwriting is fairly strict; therefore, a few people will qualify for it. Colonial Penn, though lets one choose the particular death benefit they want, which means that its premiums are based on one’s risk profile.
Thus, their premiums cannot increase for any reason. Also, their death benefits are guaranteed never to decrease. Their coverage doesn’t expire at any age, and thus a cash value gets to build, which can be borrowed at any time of the age.
Death benefit payout
Death benefit payout
Colonial Penn does not offer its whole life insurance policy in New York, Maine and Vermont. Its policies can only be purchased between the ages of 40 and 75.
It is also too expensive as 65 years old would pay around $317.24 monthly for a $50,000 in coverage with Colonial Penn. On the other hand, one could buy a policy with surety for the same amount of $50,000 for a monthly $260.57.
Customers reviews about Colonial Penn
Insurance companies cannot be immune to customer complaints. These days, it is very easy for people to go online and give their opinion about a service or the claim issue. As the information is out there, the customer should be varying about a company before buying its policy.
It is very important to note that most of the terminated employees might go online and write a bogus complaint regarding their former employer. Therefore, it is better to ignore the complaints that one might feel hard to believe in.
Better Business Bureau seems like a fine place to search out for complaints. The reason is that in most cases, they will list the response from the company. It has been found that Colonial Penn has 82 complaints that are listed on the Better Business Bureau page.
The majority of the complaints are about the problems with the product or service. If one considers the number of the policies that Colonial Penn has sold over the years to the policyholders, 82 complaints do not seem that much and to be out of the ordinary.
Colonial Penn Conclusion
There is no doubt, Colonial Penn, as respect in the life insurance marketplace. It is worth noting that their pricing is a bit on the higher side. Out of the currently available options, one really requires to shop around a policy that is competitively priced.
It is a good idea to purchase life insurance with proper guidance from an agent who is reputable and independent. These agents represent multiple insurance companies that have various insurance products. Therefore, it is more likely that people will get a value for the amount they spend.
As the insurance agents are directly paid by the insurers, therefore they don’t charge a service fee. Most of the agents attempt to develop a long-term client relationship & stay in touch to help them make necessary changes to their insurance coverage to accommodate life events that happen to everyone.
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