Colonial Penn Life Insurance

Mar 26, 2023 By Kelly Walker

Colonial Penn's policies are something to consider if you have preexisting health concerns that would render a traditional life insurance policy exorbitant or impossible to get for you. If so, you should be able to go elsewhere for life insurance and locate policies that provide a significantly bigger death benefit at much cheaper rates.

You may be acquainted with Colonial Penn Life Insurance due to its television advertisements, which are shown nationwide. Those aged 50 and above makeup Colonial Penn's target demographic. It offers entire life insurance plans to customers and now has 3.5 billion dollars worth of life insurance in place.

Complaint Index

In comparison to other companies of similar size, Colonial Penn got an abnormally high number of consumer complaints. The data provided by the National Association of Insurance Commissioners serves as the foundation for this assertion. It keeps track of customer complaints and utilizes those figures to build its Complaint Index, which compares businesses of comparable sizes based on the number of complaints made by policyholders.

A number is provided to an insurance business based on how many customer complaints it gets in a given year, with 1.0 being the anticipated number of complaints given the firm's size. This figure is called the customer complaint ratio. A complaint index of one is assigned to a business if it receives the anticipated number of complaints. If the number is less than 1, it indicates that the firm got fewer complaints than was anticipated, and if the number is larger than 1, it indicates that the company received more complaints. An index of 2, for instance, would suggest twice as many complaints as anticipated.

The NAIC average index for Colonial Penn over three years was 3.06, which indicates that the firm received three times as many complaints as a business of its size should get. This score indicates that the level of customer satisfaction is much lower than the industry average. (To put this into perspective, the majority of the most reputable life insurance companies have an index lower than 1, and out of the 91 firms we investigated, only eight others earned an index average lower than Colonial Penn's.)

Third-Party Ratings

The ratings of Colonial Penn's financial strength supplied by AM Best are higher than those of the other companies. The capacity of a life insurance firm to fulfill its contractual obligations to policyholders is evaluated by the credit rating agency using a grading scale. The grades range from A++ down to D. Colonial Penn received an A- grade in 2021, reflecting outstanding but not exceptional financial health. AM Best gave a score greater than Colonial Penn's to almost ninety percent of the other firms we looked into.

Policies Available

Currently, Colonial Penn has two options for whole life insurance, neither needing a medical exam to be completed. They are broken out farther down the page.

Whole Life

Beneficiaries of whole-life insurance get a reward when the insured passes away. If the premiums are kept up, the policy is certain to be in effect for the duration of the insured's life. The insurance's cash value accumulates over time, allowing the insured to borrow against it as needed. During the duration of the insurance, premium rates are guaranteed to remain the same.

Permanent Whole-Life Insurance:

Even though this is standard whole-life insurance, a medical checkup is unnecessary. Nevertheless, applicants will be asked to answer questions about their health to evaluate eligibility under this policy. The policy has a maximum payout of $50,000, may be purchased by anyone between the ages of 40 and 75, and can be used to augment other types of insurance coverage. The premiums are fixed for the insurance term, and the cash value will accumulate after the first year.

Final Expense or Burial Insurance

A guaranteed-issue policy is a sort of whole-life insurance in which the policyholder is not required to undergo a physical examination or respond to any queries about their health. You have assured coverage as long as you meet the age criteria. Nevertheless, these plans have a graduated death benefit, which means that for the first two years of coverage, the death benefit is limited to a refund of the premiums you paid plus a modest portion.

Guaranteed Acceptance Whole-Life Insurance:

Applicants between 50 and 85 can purchase Colonial Penn's guaranteed-issue insurance in most states. Following first year, monetary value starts to grow up, but there is 2-year waiting period before full benefits may be awarded unless death was caused by accident. If you pass away within this period due to natural causes, your heirs will be entitled to a refund of the premiums you paid and an additional 7%.

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