at a glance
- Older people with health conditions can qualify for whole life coverage.
- No medical exam is required.
- Some whole life policies are available for people up to age 85.
You may know Colonial Penn from its TV commercials with pitchman Alex Trebek. The company promotes life insurance that doesn’t require applicants to take a medical exam.
A.M. Best financial strength rating: A- (excellent)
Colonial Penn’s financial strength is “excellent,” according to ratings agency A.M. Best.
Financial strength is important because it indicates how well an insurer can pay claims. It’s especially important when choosing a life insurance company because claims might not be made until many decades after a policy is purchased.
Consumer complaints: Worse than the median
Colonial Penn draws more complaints to state regulators than the national median for life insurance companies of its size.
Colonial Penn’s complaint ratio score for individual life policies was 3.64 in 2015. The score is the number of complaints adjusted for the insurer’s market share. The national median is 1. Scores higher than 1 mean more complaints.
Colonial Penn life insurance coverage options
|Guaranteed acceptance whole life insurance||Whole life insurance|
|* Applies for just one year in Colorado, Montana and North Dakota, and doesn’t apply in Kentucky.|
|Age availability||50 to 85||40 to 75|
|Can be rejected?||No||Yes|
|Maximum coverage||$3,344 to $16,664, depending on age and gender||$50,000|
|Payout if you die within first two years of coverage||Premiums paid plus 7% interest compounded annually. Full payout if it was an accidental death.||Full amount, except for cases of suicide, in which payout is premiums plus interest*|
|Not available in||Massachusetts and Washington||Maine, Massachusetts, Montana, New York, Vermont and Washington|
Colonial Penn offers guaranteed acceptance whole life coverage, as well as whole life policies that require applicants to answer health questions. Both types of policies require no medical exam, provide lifetime coverage and build cash value. One key disadvantage of Colonial Penn’s policies is that the maximum coverage you can buy is low — especially for guaranteed acceptance life insurance — and declines as your age at application increases.
Guaranteed acceptance life insurance generally costs more than fully underwritten life insurance, which bases prices on each applicant’s health, family history and other risk factors. That, and the relatively high number of complaints against Colonial Penn, underline the importance of shopping around before buying a policy.
Updated Jan. 3, 2017