A life insurance company that markets itself primarily to those between the the ages of 50 and 85, Colonial Penn is most famous for its commercials with “Jeopardy” host Alex Trebek. It advertises policies starting at $9.95 per month, and you can get life insurance through Colonial Penn without a health exam. That advertised price is deceptive, though, and getting adequate coverage through Colonial Penn is actually very expensive, making this company a poor choice for most consumers.
High Premiums for Low Coverage
Colonial Penn offers term life insurance for those between 18 and 75, and whole life insurance for those between 40 and 75. The company doesn’t turn down anyone, require a health exam, or even ask any health questions, which is why it’s most popular among older adults who would otherwise have trouble getting life insurance. Colonial Penn offers life insurance in units, with each unit costing $9.95, but the amount of coverage that unit provides varies depending on your age, gender, and state. One major benefit of Colonial Penn is that premiums never go up.
The most significant drawback to Colonial Penn’s life insurance is the low coverage. For example, for adults in that 50 to 85 age range, one unit may only provide $1,000 to $2,000 in coverage, which isn’t even enough to cover typical funeral costs. Colonial Penn maxes out at $50,000 in coverage, but the amount you’d pay per month would be as much as some other life insurance companies charge for $500,000 in coverage.
The Claims Process
Filing a claim with Colonial Penn is fairly user friendly, and you can do it over the phone or by sending the company an email. It’s important to note that if the policy holder passes away within the first two years of getting the policy, Colonial Penn refunds any premiums paid instead of paying out the coverage amount. While some customers have complained about slow settlements, the number of claims complaints is about average for a life insurance company.
A Basic Website
Colonial Penn’s website is designed to highlight the company’s strong points and get potential customers to sign up right away. It’s fast and easy to get a quote, but the website doesn’t provide much in terms of information, especially compared to the major life insurance companies. Many customers have complained about Colonial Penn’s deceptive advertising, and those complaints apply to both its television advertising and the advertising on its website. The website doesn’t have an online claim option, instead requiring customers to send an email through the contact page. Unlike many life insurance companies, Colonial Penn doesn’t have a mobile app.
Compared to most other life insurance companies, Colonial Penn isn’t competitive in terms of pricing or coverage. Its main selling point is that it provides life insurance for anyone, regardless of medical history, which means it’s really only the company to choose if you can’t get coverage anywhere else. Even then, it’s almost always a better choice to put the money you would have spent on premiums in a retirement account or a savings account.