Everyone has seen the commercial advertising $9.95 for life insurance coverage from Colonial Penn. This seems like a great deal, but you may be surprised by the fine print.
The TV commercial is not telling you that $9.95 will not get you much. For example, a 65-year-old male would only receive $932 of coverage for $9.95 a month. Along with this minimal coverage comes a two-year waiting period, but many seniors can get approved for burial insurance with no waiting period.
Although Colonial Penn’s $9.95 plan is legit and not fake, it is overhyped and marketed to make you think it has excellent value. In reality, it is an average plan with basic features.
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How Does The Colonial Penn $9.95 Life Insurance Plan Work?
The $9.95 plan guarantees approval and asks no medical questions. A two-year waiting period is required, and the monthly price and coverage amount are determined through a “unit” system. Each unit costs $9.95 and the coverage amount increases with each unit purchased.
Plan Details
- Age Eligibility: 50 – 85
- Price Per Unit: $9.95 (Up to 15 units)
- State Availability: 49 states (excluding NY)
- Medical Exam: No
- Health Questions: No
- Waiting Period: 2-years
- Permanent Coverage: Yes
- Builds a Cash Value: Yes
No Medical Questions
This is guaranteed issue coverage which does not require any medical questions for approval. These plans are marketed as easy options for coverage.
However, most applicants do not need this type of product as they usually can qualify for immediate coverage. Guaranteed acceptance plans come with higher premiums, and this Colonial Penn $9.95 plan is no different.
Two-Year Waiting Period
Due to no medical questions being asked, a two-year waiting period is required, which is standard with guaranteed issue plans. If the policyholder were to pass away during the plan’s first two years, the beneficiary would receive a partial distribution.
Colonial Penn’s final expense insurance will pay the entire coverage amount if the applicant passes away due to accidental death in the first two policy years.
The payout schedule is listed below.
- Year One: All paid premiums returned plus 7%
- Year Two: All paid premiums returned plus 7%
- All Other Years: Full coverage amount
What is a Unit from Colonial Penn?
When buying from Colonial Penn, coverage is measured in units, which is unique compared to other final expense insurance companies. Each unit purchased is $9.95, and depending on your age, the coverage amount associated with each unit will differ. You get more coverage with each unit purchased.
If you bought one unit, your monthly premium would be $9.95. If you bought five units, your monthly premium would be $49.75. (5 units x $9.95 = $49.75)
What do You Get for $9.95 a Month From Colonial Penn?
Females ages 50 – 85 can expect to receive between $468 – $2,000 of coverage for $9.95 a month. In comparison, males should anticipate coverage amounts between $418 – $1,669 for $9.95 a month. Women will receive more coverage than men even though both are paying $9.95 per unit.
How Much is a Unit of Colonial Penn Life Insurance?
One unit of coverage starts at $9.95, and applicants can apply for up to 15 units. Every time you add an additional unit to your coverage, the monthly premium will increase.
- 1 Unit = $9.95
- 2 Units = $19.90
- 3 Units = $29.85
- 4 Units = $39.80
- 5 Units = $49.75
- 6 Units = $59.70
- 7 Units = $69.65
- 8 Units = $79.60
- 9 Units = $89.55
- 10 Units = $99.50
- 11 Units = $109.45
- 12 Units = $119.40
- 13 Units = $129.35
- 14 Units = $139.30
- 15 Units = $149.25
Colonial Penn Life Insurance Rate Chart (1 Unit)
This rate chart will show how much coverage you will receive for $9.95 per month. Keep in mind the older the applicant, the less coverage will be offered per unit.
| Age | Female (1 Unit $9.95) | Male (1 Unit $9.95) |
|---|---|---|
|
|
Coverage |
Coverage |
|
50 |
$2,000 |
$1,669 |
|
51 |
$1,942 |
$1,620 |
|
52 |
$1,890 |
$1,565 |
|
53 |
$1,845 |
$1,515 |
|
54 |
$1,802 |
$1,460 |
|
55 |
$1,761 |
$1,420 |
|
56 |
$1,719 |
$1,370 |
|
57 |
$1,669 |
$1,313 |
|
58 |
$1,620 |
$1,258 |
|
59 |
$1,565 |
$1,200 |
|
60 |
$1,515 |
$1,167 |
|
61 |
$1,460 |
$1,112 |
|
62 |
$1,420 |
$1,057 |
|
63 |
$1,370 |
$1,000 |
|
64 |
$1,313 |
$949 |
|
65 |
$1,258 |
$896 |
|
66 |
$1,200 |
$846 |
|
67 |
$1,167 |
$802 |
|
68 |
$1,112 |
$762 |
|
69 |
$1,057 |
$724 |
|
70 |
$1,000 |
$689 |
|
71 |
$949 |
$657 |
|
72 |
$896 |
$627 |
|
73 |
$846 |
$608 |
|
74 |
$802 |
$578 |
|
75 |
$762 |
$549 |
|
76 |
$724 |
$521 |
|
77 |
$689 |
$493 |
|
78 |
$657 |
$468 |
|
79 |
$627 |
$441 |
|
80 |
$608 |
$426 |
|
81 |
$578 |
$424 |
|
82 |
$549 |
$423 |
|
83 |
$521 |
$421 |
|
84 |
$493 |
$420 |
|
85 |
$468 |
$418 |
Colonial Penn Life Insurance Rate Chart: Per Unit
This Colonial Penn life insurance rate chart shows how much coverage will be given when purchasing multiple units. A maximum of 15 units can be bought, and a two-year waiting period will be required.
Coverage Per Unit
Female
| Unit 1 | Unit 2 | Unit 3 | Unit 4 | Unit 5 | Unit 6 | Unit 7 | Unit 8 | Unit 9 | Unit 10 | Unit 11 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
|
50 |
$2,000 |
$4,000 |
$6,000 |
$8,000 |
$10,000 |
$12,000 |
$14,000 |
$16,000 |
$18,000 |
$20,000 |
$22,000 |
|
55 |
$1,761 |
$3,522 |
$5,283 |
$7,044 |
$8,805 |
$10,566 |
$12,327 |
$14,088 |
$15,849 |
$17,610 |
$19,371 |
|
60 |
$1,515 |
$3,030 |
$4,545 |
$6,060 |
$7,575 |
$9,090 |
$10,605 |
$12,120 |
$13,635 |
$15,150 |
$16,665 |
|
65 |
$1,258 |
$2,516 |
$3,774 |
$5,032 |
$6,290 |
$7,548 |
$8,806 |
$10,064 |
$11,322 |
$12,580 |
$13,838 |
|
70 |
$1,000 |
$2,000 |
$3,000 |
$4,000 |
$5,000 |
$6,000 |
$7,000 |
$8,000 |
$9,000 |
$10,000 |
$11,000 |
|
75 |
$762 |
$1,524 |
$2,286 |
$3,048 |
$3,810 |
$4,572 |
$5,334 |
$6,096 |
$6,858 |
$7,620 |
$8,382 |
|
80 |
$608 |
$1,216 |
$1,824 |
$2,432 |
$3,040 |
$3,648 |
$4,256 |
$4,864 |
$5,472 |
$6,080 |
$6,688 |
|
85 |
$468 |
$936 |
$1,404 |
$1,872 |
$2,340 |
$2,808 |
$3,276 |
$3,744 |
$4,212 |
$4,680 |
$5,148 |
Coverage Per Unit
Male
| Unit 1 | Unit 2 | Unit 3 | Unit 4 | Unit 5 | Unit 6 | Unit 7 | Unit 8 | Unit 9 | Unit 10 | Unit 11 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
|
50 |
$1,669 |
$3,338 |
$5,007 |
$6,676 |
$8,345 |
$10,014 |
$11,683 |
$13,352 |
$15,021 |
$16,690 |
$18,359 |
|
55 |
$1,420 |
$2,840 |
$4,260 |
$5,680 |
$7,100 |
$8,520 |
$9,940 |
$11,360 |
$12,780 |
$14,200 |
$15,620 |
|
60 |
$1,167 |
$2,334 |
$3,501 |
$4,668 |
$5,835 |
$7,002 |
$8,169 |
$9,336 |
$10,503 |
$11,670 |
$12,837 |
|
65 |
$896 |
$1,792 |
$2,688 |
$3,584 |
$4,480 |
$5,376 |
$6,272 |
$7,168 |
$8,064 |
$8,960 |
$9,856 |
|
70 |
$689 |
$1,378 |
$2,067 |
$2,756 |
$3,445 |
$4,134 |
$4,823 |
$5,512 |
$6,201 |
$6,890 |
$7,579 |
|
75 |
$549 |
$1,098 |
$1,647 |
$2,196 |
$2,745 |
$3,294 |
$3,843 |
$4,392 |
$4,941 |
$5,490 |
$6,039 |
|
80 |
$426 |
$852 |
$1,278 |
$1,704 |
$2,130 |
$2,556 |
$2,982 |
$3,408 |
$3,834 |
$4,260 |
$4,686 |
|
85 |
$418 |
$836 |
$1,254 |
$1,672 |
$2,090 |
$2,508 |
$2,926 |
$3,344 |
$3,762 |
$4,180 |
$4,598 |
Permanent Whole Life Insurance With Medical Questions
Although this alternantive plan is not as actively marketed by the carrier it is still avalible for applicants through the company website. In contrast with the Colonial Penn 995 plan, the Permanent Whole Life plan has medical questions and offers immediate coverage upon approval.
Plan Details
- Age Eligibility: 40 – 75
- Coverage Amounts: $10,000 – $50,000
- State Availability: 49 states (excluding NY)
- Medical Exam: No
- Health Questions: Yes
- Waiting Period: No
- Permanent Coverage: Yes
- Builds a Cash Value: Yes
Whole Life Coverage & Underwriting
Similar to the $9.95 Guaranteed Acceptance plan, this product has whole life benefits, including permanent coverage, no price increases, and a cash value that builds over time.
Health questions will be asked to determine eligibility for this plan. Underwriting is more strict than other companies, and you could be denied unless you are in great health.
Prices are High
The premiums from Colonial Penn’s Whole Life plans are higher than competing burial insurance programs. The price is not close compared to a top burial insurance product like Mutual of Omaha Living Promise. For $10,000 of coverage, a 68-year-old woman would pay $57 a month with Colonial Penn’s plan and just $48 a month with Mutual of Omaha.
Living Insurance from Colonial Penn
Living insurance from Colonial Penn comes with the Permanent Whole Life plan and allows you to choose from one of three living benefits. This additional feature will make your monthly premium slightly more expensive.
Heart Attack/Stroke: This feature will pay out 50% of the death benefit early if the policyholder has a heart attack or stroke.
Cancer: If diagnosed with cancer, this benefit allows the policyholder to collect up to 25% of the coverage amount.
Chronic Illness: With a chronic illness diagnosis, this benefit will award up to 50% of the coverage amount to the policyholder.
Comparing The $9.95 Plan Vs. Whole Life with Medical Questions
The two plans offered by Colonial Penn have permanent coverage but have distinct differences. The $9.95 Guaranteed Issue plan has a two-year waiting period, and Permanent Whole Life has immediate coverage.
| Plan Details | Guaranteed Acceptance ($9.95 Whole Life) | Whole Life (Health Questions) |
|---|---|---|
|
Age Eligibility |
50 - 85 |
40 - 75 |
|
Coverage Options |
1 - 15 Units |
$10,000 - $50,000 |
|
Medical Questions |
No |
Yes |
|
Waiting Period |
Yes |
No |
|
Permanent Coverage |
Yes |
Yes |
FAQ – Colonial Penn Life Insurance Review
Is Colonial Penn Legit?
Colonial Penn is a legitimate insurance company that has been in business for over 50 years. It has an “A” financial rating from independent rating companies, including AM Best and the Better Business Bureau. The company markets directly to consumers and creates high brand awareness through the Jonathan Lawson Colonial Penn tv commercials.
Is Colonial Penn Expensive?
For both males and females, prices for the $9.95 Guaranteed Acceptance Life Insurance plan will range from $9.95 – $149.10 per month, depending on the number of units purchased. For the Permanent Whole Life Insurance plan that asks medical questions to qualify, a $10,000 coverage amount will have a male pay between $18 – $118 and a female pay between $15 – $94 a month, based on age.
What is the Colonial Penn 995 a Month Plan?
Colonial Penn offers their guaranteed acceptance $9.95 plan through units of coverage. Each unit is $9.95, and up to 15 units of coverage can be purchased. This is, however, misleading because the older the applicant is, the less coverage per unit they will be able to receive. The phrase $9.95 for coverage is a good marketing tagline, but there are flaws in the plan.
Understanding that Colonial Penn funeral insurance determines coverage amounts through units will help the applicant make an informed purchasing decision.
Does Colonial Penn have Term Life Insurance?
In the past, Colonial Penn term life insurance was offered by the company. However, this product has been discontinued, but if you currently have Colonial Penn term life insurance, they will recognize your plan as active. Generally, it is best to avoid term life insurance when looking for final expense coverage.
Colonial Penn Company Details
Colonial Penn is a direct-to-consumer life insurance company. You will see “life insurance for $9.95” advertised through television commercials and direct mail, making their brand visible to seniors.
Colonial Penn was one of the original pioneers of the now industry-standard guaranteed acceptance life insurance plan for seniors over 50. They currently offer products for individuals between 40 – 85 years old.
- Established: 1968
- A.M. Best Financial Rating: A (excellent)
- Headquarters: Philadelphia, PA
Finding Lower Prices and Better Coverage Than Colonial Penn
There are less expensive burial insurance options on the market. When working with Colonial Penn, you are shown one company and one price. Unfortunately for them, their price is higher than the competition. Find an insurance agency that specializes in burial insurance. This will assure you work with an expert and get the lowest prices possible.
Final Thoughts About The Colonial Penn Life Insurance Review
a. The Colonial Penn Life Insurance review has shown that it is a legit company with a solid financial rating.
b. They offer two permanent whole life insurance plans. However, their $9.95 Guaranteed Issue plan is the most marketed and popular product they offer.
c. The cost per unit pricing that the $9.95 plan offers can be deceiving. This is because the older the applicant, the less coverage they will receive.