≡ Menu

Colonial Penn Life Insurance Review: 2023 Update

In the following Colonial Penn reveiw, we will cover the pros and cons of CPDirect. Over the years, we have seen many different companies make themselves available as life insurance providers and they all seem to offer something different. Of course, we all now know that life insurance is one of the most important types of insurance that needs to be in place if someone is dependent upon us but this is where the confusion starts.

With so many companies offering insurance, it can be difficult to know where to look which is why we are attempting to make the whole process easier and more accessible. Today, we will be looking into Colonial Penn and the life insurance policies offered by the CPDirect. As well as showing you the key features and information, we will also look at the pros and cons of choosing Colonial Penn.

About Colonial Penn

Before we head into the more opinion-based facts and statistics from previous customers in addition to the likes of A.M. Best, we should point out that Colonial Penn was founded in 1968 and had a brief name change between 1998-2001 to ‘Conseco Direct Life’. Originally based in Philadelphia, it was founded by an AARP expert and has since grown to numerous locations within the US. Essentially, they offer two main products – guaranteed issue and simplified issue life insurance.

When you are making a decision on burial or final expense policies, it pays to have options. At Justburyme.com, we focus on the best final expense and burial insurance companies in the marketplace. If you are interested in comparing CPDirect to one of these other companies we can certainly offer you some policy and price comparisons.

Guaranteed Issue Whole Life

With guaranteed acceptance whole life insurance, there is no way that an application will be denied as long as you are between 50-85 years. As well as a locked-in premium, the death benefit will also stay the same throughout the coverage. Furthermore, you will have the option of when you wish to pay – annually, quarterly, or monthly.

Simplified Issue Life Insurance

With simplified issue life insurance there is still no medical examination, but you will have to answer some simple questions so they get an overview of your health. After running out, the term life policy can be renewed assuming that you are under 90 years of age and the benefits can go up to $50,000. Again, there is a choice for how frequently you wish to pay the insurance premiums.

Official Colonial Penn Ratings

Before we look to the customer reviews and the overall pros and cons of going with Colonial Penn life insurance, we should look towards the A.M. Best ratings as these are normally a good indicator of performance and reliability.

A.M. Best Rating

Colonial Penn’s parent company is CNO Financial Group (CNO). As of November 2011, A.M. Best awarded CNO with an B+ (Good) rating stating, “The ratings for CNO reflect its consistent operating results, good capitalization and improved financial flexibility.”

With this in mind, it means that they are in a good position to continue business and pay all claims. With life insurance, this rating is perhaps more important than with anything else because you would hope that any claims shouldn’t be seen for many years to come and this rating suggests that they are financially sound to make it that far into the future.

BBB Rating

However, there are some very bad results when it comes to customer care and not just from the customers themselves. Nowadays, the Better Business Bureau (BBB) is well-known for giving ratings to companies based on numerous factors including their ability to deal with customer complaints. Sadly, Colonial Penn’s rating has consistently slipped through the years and it now sits at C-. Currently, the BBB uses a point scoring system out of 100; with a C- rating, this means that they fall between 70 and 74 points. Compared to other life insurance providers, this is significantly lower and could be a cause for concern for potential customers.

Customer Complaints Overview

Each year, the average amount of customer complaints is assessed for each company before then being compared to industry averages. Overall, this gives a good insight into how happy customers are with the company and whether potential consumers would be the same. In 2015, Colonial Penn had an average complaint ratio of 3.64 when it came to individual life policies; this score is always adjusted (weighted) depending on the market share of the company so bigger companies can be compared with smaller companies. In this year, the national median for complaints was 1.00 which means that Colonial Penn was much higher than the average.

Review of Colonial Penn Life Insurance Rates 

Before we look at the pros and cons, there is just one more area to assess and this is the pricing. Is it the pricing that leaves customers complaining? In truth, the pricing system isn’t actually that bad as they use ‘units’ with each unit costing $9.95. During the application process, your age, gender, location, and more will be assessed and the insurance will be valued anywhere between $500 and $2,500.

If we look at a man from Texas a couple of years away from 40 years, just $9.95 a month will be required over the course of 20 years for a policy worth $5,000. If the coverage was $25,000, of course this will increase somewhat and this is where the downside comes in. For the same cost with other insurance providers, you would be able to get policies of up to $500,000 rather than a measly $25,000 so this is definitely something to consider.

Colonial Penn Pros and Cons

Pros of Colonial Penn

When comparing life insurance companies, reviewing the pros and cons is always a good idea because you get to see the facts in their most basic form. For the pros, we are going to split them between the guaranteed option and then the simplified issue option so you get a clear view of where the benefits are coming from. So far, we have been a little negative so now would be a good time to look at the good points of Colonial Penn life insurance.

Whole Life + Term Life

  • First of all, we should note that there is no medical exam required for this type of insurance. For those who want to avoid this process because of certain health conditions or maybe even just because it is intrusive, this is good news. Instead, there will be a few simple health questions that will determine whether or not you can receive coverage.
  • Next up, you will be able to get coverage for up to $50,000 which is quite good considering there is no medical examination. Whenever the medical is exam is removed from the application process, it presents a risk to the insurer because they are potentially covering someone without having the full details of their condition. With this in mind, $50,000 can be good coverage if this is all you need.
  • When it comes to age, term life insurance is very open in that it can be purchased by anyone between the ages of 18 and 75. For the younger generations who have partners or children dependent on them, this can be a great way to get started with life insurance at a young age. For whole life insurance, the lower limit rises to 40 years.
  • Finally, we should mention that Colonial Penn is very big on its 30-day money back guarantee. If you change your mind within the first 30 days, you will have an opportunity to cancel the whole policy and receive your money back in full. However, we should also point out that this ‘free look’ policy is normally available with all companies as many states require it for all customers.

Guaranteed Issue Whole Life

  • To start, the obvious benefit to this policy is that all applicants are guaranteed coverage regardless of their health or any other circumstances – these are normally burial or final expense insurance policies.
  • Throughout the process, no information will be required regarding your health and there will also be no medical examination. If you are interested in this option, you should know that it comes with a two-year graded benefit which means that the death benefit will not be active in the first two years of the policy. If you were to pass away within this two-year period, the full death benefit will not be made available. Instead, the life insurance beneficiary would receive a return of premium plus 7% interest compounded annually.
  • As long as you keep paying your premiums at the intervals you had chosen at the very beginning, the death benefit will remain the same regardless of how long it is before you pass away. With some companies and policies, the death benefit reduces over time..
  • With the previous option, we saw that the upper age limit was 75 years but this is a decade higher for guaranteed issue insurance. For both genders, the upper limit is 85 which is fantastic for those who want to protect loved ones and have been rejected for life insurance previously.
  • Finally, we have seen that the death benefit remains the same and this can also be said for the premiums. With some policies, such as Globe Life and AARP, you will find that the premium increases at five-year intervals so this will ensure you aren’t paying more as you get older whilst your income remains steady.

Cons to Colonial Penn

So we have the pros and they look very good, however there are also some potential drawbacks to this company that we should mention so you can get a full overview.

  • As you saw earlier, some of the official ratings for Colonial Penn look a little dubious and this is coupled with the poor reviews from customers. As you would expect, there are plenty of customers completely happy with the service they receive with Colonial Penn but there are also more complaints than normal and this needs to be considered. If customer satisfaction is important to your decision, you might want to consider another company before this one.
  • Second, you do need to be careful of increasing premiums. Although we said premiums generally remain the same for the duration of the coverage, some customers of term life insurance have noticed their premiums increasing with age. Before you make any decisions, you need to make a point of asking whether your insurance premiums will increase at any point. If they increase as you age, you will be left struggling in retirement.
  • Next, we should probably mention the price. If you were to visit a price comparison site, Colonial Penn wouldn’t exactly be the cheapest option for guaranteed issue around. Gerber life insurance offers more competitive pricing.
  • However, we aren’t saying that you should be put off of Colonial Penn for this. Colonial Penn is a great option for stacking multiple guaranteed acceptance policies, since most companies limit the amount of coverage you can get to $20,000 or $25,000.
  • Finally, the two-year graded benefit may be a concern if you were to go for the guaranteed issue life insurance. If you were to pass away within these two years, your investment could be lost and your loved ones would not get the death benefit you planned.

Colonial Penn Life Insurance Review Summary

As you can see, you now have many points to consider. As long as you look at all your options and find a solution that works for you, even if this requires professional help, you will be in a good position moving forward!