Colonial Penn 995 Plan Explained
You might have seen commercials for the Colonial Penn $9.95 plan, but it might not be as good as the T.V. sells it. You’ll have to settle for a minuscule amount of coverage or you’ll have to stack several units.
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UPDATED: Mar 18, 2022
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- Colonial Penn’s $9.95 life insurance plan is a legitimate policy, but coverage comes in units of approximately $1,000 of coverage, so you’ll need to stack units to receive more protection
- Colonial Penn also sells traditional whole and term life if you decide that the $9.95 plan doesn’t work for you
- The National Association of Insurance Commissioners reports a higher rate of complaints against the company, while the majority of customer complaints involve the claims process
Many people have seen the commercials advertising Colonial Penn’s $9.95 plan for whole life insurance. Life insurance is one of the best ways to protect your loved ones financially after your death, so a whole life insurance plan for under $10 a month seems like too good of a deal.
Colonial Penn isn’t the most celebrated name in the life insurance industry, but it’s been selling policies since 1939. You won’t find the same value you might expect from bigger names, but Colonial Penn is a semipopular choice for no exam life insurance.
Acquiring life insurance for under $10 a month appeals to many, particularly seniors who live on a budget. However, the Colonial Penn plan for $9.95 per month is misleading. The fine print that you can’t decipher in the commercial dramatically alters the final price of your insurance.
Read on to learn more about the Colonial Penn $9.95 plan and determine if the fine print will work for you. If it doesn’t, you can compare prices with other companies and obtain the life insurance coverage you need to protect your loved ones.
What is the Colonial Penn $9.95 life insurance plan?
Colonial Penn sells several types of life insurance, but it’s famous for its $9.95 plan. If you think that a whole life policy for under $10 a month is too good to be true, you’re right — for the most part.
Colonial Penn uses a unique sales technique that you won’t find at most other companies. This life insurance is sold in units. You can purchase up to $50,000 in coverage, but you’ll have to buy multiple units to reach that amount.
A unit of insurance in this plan replaces the traditional death benefit. Colonial Penn collects your basic information, such as your age, gender, and location, and then tells you how much coverage a single unit provides.
From there, you can purchase multiple units to obtain the coverage you want. To get an idea as to how much coverage will cost you, examine the sample prices for a 65-year-old below.
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The $9.95 plan is a guaranteed issue, which means you don’t need a medical exam to qualify for coverage. However, only adults aged 50 to 85 qualify for this coverage.
So, you can buy life insurance from Colonial Penn for $9.95 — it’s simply isn’t a lot of coverage. If you need more, you’ll have to pay much more. Colonial Penn $9.95 plan rates are always set slightly below ten dollars, but you’ll need to stack them to receive ample coverage.
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Does Colonial Penn sell other types of life insurance?
If purchasing by the unit doesn’t sound appealing to you, Colonial Penn offers more traditional life insurance with whole and term plans. However, these plans have strict age requirements and might not be the best value.
Read below to explore Colonial Penn’s options, and then decide if going elsewhere might be best for you.
Colonial Penn Term Life
Term life is the most commonly sold life insurance product. Generally, term life is affordable, easy to understand, and has large death benefits that make it worthwhile. If you’re deciding between term and whole life, most life insurance experts agree that term is usually sufficient.
The most significant difference between the two types is that term doesn’t accumulate cash value. Additionally, whole life is much more expensive.
Colonial Penn sells two types of term life, including standard and renewable. The standard policy is available for people between 18 and 75. The renewable policy can be renewed when the term ends, extending your coverage. Your plan will be guaranteed renewable until you’re 90 years old, but you can only purchase it between the ages of 18 and 40.
The maximum coverage available for purchase with term life is $50,000.
Colonial Penn Whole Life
As the name suggests, whole life insurance covers you for your entire life, as long as you make your monthly payments. While it’s more expensive than term, its appeal comes in the form of accumulated cash value.
You can borrow against your accumulated value for things like car or business loans.
People with health concerns like Colonial Penn’s whole life policy because it doesn’t require the standard medical exam. You’ll still have to sit through an interview regarding your health, but it’s not as invasive as an exam.
You can purchase whole life between the ages of 40 and 75. While not everyone qualifies for a policy, most people are not excluded from a Colonial Penn whole life plan.
Similar to term life, the maximum coverage you can purchase is $50,000.
Additional Add-ons for Colonial Penn Insurance
Most life insurance companies offer add-ons that increase the overall value of your policy. When you buy from a small company, you sometimes miss out on the opportunity for add-ons. This is partially true of Colonial Penn, which only offers one add-on.
Colonial Penn’s Living Insurance add-on is available for purchase for either whole or renewable term policies. It allows you to collect a portion of your death benefit to pay for medical expenses if you become seriously ill.
For heart attacks or other chronic illnesses defined by your policy, you can collect up to 50% of your benefit. For cancer, you can collect 25%.
You can use your Living Insurance to pay for medical bills, but you have to be under 65 to purchase it.
Colonial Penn Life Insurance Reviews
While people who need insurance without medical exams find valuable coverage through Colonial Penn, this company has many customer complaints. One of the most frequent complaints is that Colonial Penn Life Insurance refuses to make payments after the insured dies.
The National Association of Insurance Commissioners (NAIC) takes customer complaints and compares them to the size of a company. Then, it creates a complaint ratio. The NAIC publishes information about insurance company complaints to help the public make more informed decisions.
The national average ratio is 1.00. Anthing higher is considered a large number of complaints, while a lower number indicates that the company has a satisfied customer base. Colonial Penn’s ratio is 2.12, which indicates that it receives more than double the number of complaints than the national average.
A.M. Best reports on the financial strength of insurance companies to give you a better idea of their ability to fulfill claims. The CNO Financial Group owns Colonial Penn, and it receives a high grade of A- for its stability.
Finally, the Better Business Bureau (BBB) gives Colonial Penn an A+, but there are numerous complaints on the site.
Is Colonial Penn right for you?
The Colonial Penn $9.95 insurance plan is a real policy, but it’s not quite as good as commercials advertise it. If you want more than $1,000 in coverage, you’ll have to purchase multiple units at $9.95 each.
Now that you understand how Colonial Penn’s $9.95 plan works, you likely have an idea as to whether the plan will suit your needs. If it doesn’t sound right, you should compare companies to acquire the best rates.