Colonial Penn Life Insurance Review 2022

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Colonial Penn Life Insurance
NerdWallet rating 

Bottom line: With more complaints than expected for a company of its size and relatively low coverage limits, Colonial Penn is unlikely to be the best option available to you.

Policies offered: Permanent & no-exam.

Financial strength: Strong.

Complaints: Far more than expected.

Buy online? Yes.

In our life insurance reviews, our editorial team considers both the customer and the insurer. These are some of the factors we take into account:

Policies offered. There are many types of life insurance on the market, and they fall into three key categories:

  • Term life insurance offers temporary coverage and a guaranteed payout if the policyholder dies during the term.

  • Permanent life insurance typically lasts a lifetime and builds cash value that can be borrowed against in the future.

  • No-exam life insurance issues coverage without the need for a medical exam.

Financial strength. We use A.M. Best ratings to confirm an insurer’s long-term financial stability and ability to pay claims. For life insurance, NerdWallet typically recommends considering insurers with ratings of A- or higher. Here’s the breakdown:

  • Exceptional: A+, A++

  • Strong: A, A-

  • Moderate: B+, B

Complaints. These ratings are based on complaints to state regulators relative to a company’s size, according to three years’ worth of data from the National Association of Insurance Commissioners. The best life insurance companies have fewer than the expected number of complaints.

Buy online. This indicates whether an insurer allows you to apply for and buy a policy completely online.

For decades, Colonial Penn has focused on selling life insurance to older customers, including a guaranteed issue whole life policy for people 50 and older.

Why you can trust NerdWallet: Our writers and editors follow strict editorial guidelines to ensure the content on our site is accurate and fair, so you can make financial decisions with confidence and choose the products that work best for you. Here is a list of our partners and here’s how we make money.

Colonial Penn life insurance

2.5

NerdWallet rating 

Colonial Penn earned 2.5 stars out of 5 for overall performance. NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account consumer experience, complaint data from the National Association of Insurance Commissioners and financial strength ratings.

Colonial Penn life insurance pros and cons

Pros

Cons

No medical exams required for coverage.

Far more complaints to regulators than expected for a company its size.

Guaranteed coverage available to applicants up to age 85.

Coverage amounts are relatively low.

Colonial Penn life insurance policies

Life insurance options from Colonial Penn include:

Whole life. From $10,000 to $50,000 of whole life insurance is available for applicants ages 40 to 75 (or 50 to 75 in New York, and from $5,000 to $25,000 of coverage). The application asks health questions, but there isn’t a medical exam. The price is based on age and gender and will stay the same throughout the life of the policy.

Guaranteed acceptance whole life. People ages 50 to 85 (or 50 to 75 in New York) can apply, and acceptance is guaranteed. There are no health questions or medical exam. Coverage amounts are generally small and depend on the applicant. The full death benefit isn’t paid out if the insured person dies during the first two years.

No life insurance medical exam is required for any of the company’s policies. Healthy people can generally get better prices from companies that consider more medical information when setting rates.

Colonial Penn’s whole life policies are also available under its "Living Insurance" option that allows you to receive part of your death benefit if you’re diagnosed with a specific health condition. This option isn't available for guaranteed acceptance policies.

You can choose Living Insurance coverage for heart attack or stroke, certain cancers or a debilitating chronic illness. If you develop the condition you chose, or if you’re diagnosed as terminally ill (with a life expectancy of 12 months or less), you can get 25% to 50% of the death benefit while you’re still alive. The chronic illness option isn't available to applicants ages 65 to 75.

Colonial Penn customer complaints

Over three years, Colonial Penn has drawn far more complaints to state regulators than expected for a company of its size, according to NerdWallet’s analysis of data from the National Association of Insurance Commissioners.

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Life insurance buying guide

Before you start comparing companies, choose the type of life insurance you want, such as term or whole life. Decide which life insurance riders, if any, you want the policy to include. Calculate how much life insurance you need and how long you want the coverage to last. Check that the insurers you’re considering offer the coverage you’re looking for.

When comparing rates, be sure the quotes are for the same amount of coverage over the same period of time. It’s also important to make sure the policy’s medical requirements match your needs. For example, if you want to skip the life insurance medical exam but don’t mind answering health questions, confirm that the application process for each policy you're comparing aligns with that.

Price may not be the biggest driver behind your decision to buy. Look at the number of consumer complaints each company receives, as high numbers can be a red flag about the quality of service.

For more guidance, see our life insurance buying guide.

Life insurance ratings methodology

NerdWallet’s life insurance ratings are based on consumer experience, complaint index scores from the National Association of Insurance Commissioners for individual life insurance, and weighted averages of financial strength ratings, which indicate a company’s ability to pay future claims. Within the consumer experience category, we consider ease of communication and website transparency, which looks at the depth of policy details available online. To calculate each insurer’s rating, we adjusted the scores to a curved 5-point scale.

These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2020. To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. NerdWallet conducts its data analysis and reaches conclusions independently and without the endorsement of the NAIC. Ratios are determined separately for auto, home (including renters and condo) and life insurance.

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