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Colonial Penn Life Insurance Review 2021

Jan. 4, 2021
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COLONIAL PENN LIFE INSURANCE

  • Rated 2 stars out of 5 by NerdWallet.
  • No medical exam is required for term or whole life.
  • Coverage amounts are relatively small.

For decades, Colonial Penn has focused on selling life insurance to older customers. Its most popular plan is a guaranteed issue whole life policy for people age 50 and older. Colonial Penn also offers term life insurance for ages 18 to 75, but the maximum coverage amount may be too small for many families.

» MORE: Compare life insurance quotes

Colonial Penn life insurance

2.0 NerdWallet rating

Colonial Penn earned 2 stars out of 5 for overall performance. NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account complaint data from the National Association of Insurance Commissioners and financial strength ratings.

Colonial Penn life insurance policies

Life insurance options from Colonial Penn include:

Term life. Applicants ages 18 to 75 can buy up to $50,000 of term life insurance. A medical exam isn’t required, but there are health questions on the application. The initial price is based on gender and age when the policy goes into effect, then increases when the insured person moves into a new five-year age band. The policy can be renewed until age 90.

Whole life. Up to $50,000 of whole life insurance is available for applicants ages 40 to 75. 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 term and whole life policies are available with a Living Insurance rider that allows you to receive part of your death benefit if you’re diagnosed with a specific health condition. This rider 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.

Complaints against Colonial Penn

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.

» MORE: The best life insurance companies

More about Colonial Penn

ProsCons
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.

Methodology: Life insurance ratings

NerdWallet’s life insurance ratings are based on weighted averages of financial strength ratings, which indicate a company’s ability to pay future claims, and complaint index scores from the National Association of Insurance Commissioners for individual life insurance. 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.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2016-2018. 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. Ratios are determined separately for auto, home (including renters and condo) and life insurance.