Colonial Penn Life Insurance Review: Is the $9.95 Plan Worth It?

What Is Colonial Penn? Company History and Financial Strength

Colonial Penn is a life insurance company based in Philadelphia, Pennsylvania. It is best known for selling burial insurance directly to seniors through television ads.

The company was founded by Leonard Davis, who also helped start AARP. Colonial Penn has offered guaranteed acceptance life insurance to people age 50 and older since 1968, though the company’s own website traces its history back to 1957. Sources do not agree on this, so treat both dates as reported rather than settled.

Its early focus was on older adults. Colonial Penn began as an insurance provider through AARP aimed at people over 65, and now markets to people between 50 and 85.

Who Owns Colonial Penn Today

Colonial Penn is not an independent company. It is one brand inside a larger, publicly traded parent.

Conseco bought Colonial Penn in 1997 and renamed it Conseco Direct Life in 1998. The Colonial Penn name returned in 2001, and the company remains a subsidiary of the renamed CNO Financial Group, alongside Bankers Life and Washington National Insurance Company.

Why You See Colonial Penn on TV

Colonial Penn does not use outside agents. It sells straight to the public, and it has leaned on famous faces to do it.

Ed McMahon was the original spokesman. Alex Trebek later became a prominent pitchman, and other spokespeople have included Lou Rawls, Meredith Vieira, Mary Lou Retton, Tom Bergeron, and Joe Theismann. Since 2019, Colonial Penn sales manager Jonathan Lawson has appeared in the commercials.

This matters for one practical reason. Colonial Penn agents cannot and will not recommend products from other companies, so the only funeral insurance they can show you is their own.

Financial Strength: Can They Pay a Claim?

Financial strength ratings measure whether an insurer has the money to pay claims down the road. They say nothing about price or customer service.

On this measure, Colonial Penn does fine. It holds an A rating with AM Best and is a duly licensed American life insurance company authorized to sell insurance throughout the USA.

AM Best’s scale runs from A++ down to D-. An A sits in the “Excellent” band, below Superior but comfortably above the middle.

The Gap Between Strength and Satisfaction

Here is the part that surprises people. A financially strong company can still leave customers unhappy.

Colonial Penn is accredited by the BBB, it has a substantial number of consumer complaints, and that if you hold a policy and die, they will honor the contract and pay your beneficiaries once they have a death certificate.

The complaint volume is the standout number. Colonial Penn’s NAIC complaint index at 5.71, well above the industry average, alongside an A rating from AM Best and an A+ BBB rating — a strong company whose product may still be a poor value.

So the honest read is this: the company will very likely pay. The arguments against Colonial Penn are about what the burial life insurance costs and how it is sold, not about whether the check clears.

Complaint themes are consistent across sources. Common feedback includes surprise at how little coverage each $9.95 unit provides, frustration over the two-year waiting period, disappointment when families realize the policy will not cover a full funeral, and mixed experiences with customer service and claims.

The Two Products Colonial Penn Actually Sells

Colonial Penn’s ads make it sound like the company has a full shelf of options. It does not.

Today the company sells two whole life products, and most people can only buy one of them. Which one you can apply for depends entirely on where you live.

Product One: Guaranteed Acceptance Whole Life

This is the plan from the commercials. It is the only funeral insurance Colonial Penn offers in 49 states.

Colonial Penn describes it plainly: applicants are issued a policy regardless of health, with no medical exam and no health questions to answer, so acceptance is guaranteed. After the first year, the policy begins to build cash value that can be borrowed against at a guaranteed rate, and premiums are locked in when coverage takes effect.

The company says this plan is often bought by people who have pre-existing conditions that prevent approval for traditional life insurance, who want to keep funeral and burial costs off their loved ones, or who are worried about medical bills they may leave behind.

The trade-off is the waiting period. The fine print includes a two-year waiting period, during which death would only return your premiums to your beneficiaries rather than the full benefit.

Product Two: LifeChoice Whole Life (New York Only)

New York gets a different product, and a better one.

LifeChoice is a simplified issue policy with no medical exam, where eligibility depends on your current and past health issues. If you are approved, there is no waiting period and the full death benefit is payable from the first day.

Coverage runs from $5,000 to $25,000, with a $15,000 maximum for applicants age 66 and older. LifeChoice policy is reasonably priced and an excellent option, while noting it is not available in any other state — and that customers report frequent denials for various pre-existing health conditions.

So the honest summary for a New York reader is: you have a real choice. For everyone else, there is one product.

What Colonial Penn No Longer Sells

Older reviews of this company describe a third product, and this trips people up.

Colonial Penn used to offer a renewable term life policy with premiums that stepped up in five-year age bands. That product is gone. According to the products page of Colonial Penn’s website, the company does not offer term life insurance and only sells permanent whole life.

If you find a review listing three Colonial Penn products, check the date. It is describing a lineup that no longer exists.

One Add-On Worth Knowing About

Colonial Penn does not sell riders as separate products, but one is available.

In most states, applicants aged 50–80 can pay a small extra fee for an accidental death benefit rider, which pays additional money if death is specifically caused by an accident.

That is the full menu. Two whole life policies and one optional rider — not the broad product family the burial insurance ads imply.

The $9.95 Plan at a Glance

Here is the short version of how the plan works. The full pricing math — what a unit actually pays at your age, and what any coverage amount really costs — lives on our dedicated Colonial Penn $9.95 plan rate guide.

The key thing to understand is that $9.95 is not the price of a policy. It is the price of one unit.

The plan is a guaranteed acceptance policy sold in units, where each unit costs $9.95 a month and the coverage per unit changes based on your age and gender.

How the Unit System Works

Everyone pays the same $9.95 per unit. What differs is what that unit buys.

Your age and gender determine the net death benefit per unit, and that if you want a meaningful amount of coverage, you will need to buy more than one unit.

Coverage per unit shrinks as you get older. So an older buyer pays the same $9.95 and receives less protection than a younger one.

To reach a typical funeral-sized benefit, most people need many units. Most seniors need five to ten units just to reach $10,000 in coverage.

The cap is at 25 units, based on Colonial Penn’s own quote tool, with a lower cap of 12 units in New York.

The Two-Year Waiting Period

This is the single most important detail the ads leave out.

The plan carries a two-year waiting period for natural death. If you die from natural causes during those first 24 months, your beneficiaries do not receive the death benefit. They receive your premiums back instead, plus a modest amount of interest — U.S. News reports the rate as 7% annually.

Accidental death is treated differently and is generally paid in full from the start.

Confusion and frustration over the waiting period is one of the most common complaints, along with surprise at how little coverage each unit provides.

The Plan in Brief

The Honest Read

The plan does exactly what it says. You cannot be turned down, the price never goes up, and the coverage never ends.

What the ads skip is the other half. The biggest problem is that $9.95 buys an incredibly small amount of coverage, and you must wait two years before being covered for natural causes of death.

Whether that trade is worth it depends entirely on your health and your alternatives, which is what the rest of this review works through. For the actual numbers at your age, see our full $9.95 rate breakdown.

Colonial Penn Pros and Cons

Colonial Penn is not a scam, and it is not a bargain. It is a legitimate company selling a product with real strengths and real costs.

Here is the balance sheet, drawn from independent reviews and the carrier’s own policy details.

The Real Strengths

Take the pros seriously. They are not marketing fluff.

Guaranteed acceptance coverage, whole life insurance with a fixed cost and coverage lasting your entire life, and a financially sound insurance company.

Guaranteed acceptance even with severe health conditions, fixed premiums that never increase, and lifetime coverage as the plan’s advantages.

For someone who has been declined elsewhere, “you cannot be turned down” is not a small thing. It is the whole point.

The Real Weaknesses

The problems are mostly about value, not legitimacy.

The coverage is very overpriced compared to other companies, the plan carries a two-year waiting period before natural death is covered, and the company has an enormous number of negative reviews.

The pricing gap is the clearest way to see it. A 65-year-old male would pay $119.40 monthly with Colonial Penn for about $10,000 in coverage with a waiting period, while the same man could get a $20,000 to $25,000 policy for roughly $120 monthly from many other companies.

Coverage is extremely limited, often hundreds rather than thousands of dollars, at a far higher cost per dollar of protection than competitors.

Two Cons That Rarely Get Mentioned

First, the interest paid during the waiting period is below average. If you die of natural causes in the first two years, U.S. News reports Colonial Penn returns premiums plus 7% annually. Guaranteed issue policies typically refund premiums plus interest at around 10%, so Colonial Penn’s rate sits under the industry norm.

Second, you are talking to a captive salesperson. Colonial Penn agents cannot and will not recommend products from other companies, so the only burial life insurance they can show you is theirs.

What the Scores Say

Independent scoring puts Colonial Penn near the bottom of the final expense market.

Notice the pattern. Colonial Penn scores well on whether it can pay and how fast it answers the phone. It scores poorly on price, waiting period, and complaints — the three things that decide whether the funeral insurance is a good buy.

Who Colonial Penn Makes Sense For — and Who Should Skip It

There is a small group of people for whom this plan is a reasonable answer, and a much larger group who can do better.

The dividing line is simple: can you get approved somewhere else?

Colonial Penn May Make Sense If

You have a health condition that gets you declined everywhere. Guaranteed acceptance final expense insurance exists for people whose health rules out everything else, and the $9.95 plan fits a narrow set of seniors who truly cannot qualify for traditional final expense coverage.

Conditions that commonly trigger declines include dialysis, terminal illness, hospice care, a pending organ transplant, AIDS or HIV, and Alzheimer’s or dementia. Recent cancer or advanced kidney disease often qualify too.

You want a small benefit and nothing more. If your goal is a few thousand dollars toward a cremation, the math is less punishing than it is for someone chasing a full funeral benefit.

You will not talk to an agent under any circumstances. Buying burial coverage without ever speaking to an agent is only possible through guaranteed acceptance plans, which all carry a two-year wait and cost much more.

You live in New York. This is the exception. LifeChoice whole life policy is reasonably priced and an excellent option — but warns that customers report frequent denials for various pre-existing conditions.

You Should Probably Skip It If

You are in average health. This is most people, and it is the biggest reason to look elsewhere. Most seniors needing a policy for funeral costs should not opt for guaranteed acceptance plans, because most applicants can qualify for coverage with health questions — which means full benefits from day one and a lower price.

The list of conditions that still get approved is longer than people expect. Diabetes, high blood pressure, COPD, and previous heart attacks among the conditions that can absolutely qualify for a policy with medical questions.

You have not shopped yet. Ogletree Financial’s review puts it plainly: Colonial Penn should only be considered if you have been declined by multiple other insurers or have serious health conditions.

You want real funeral money. Most seniors need five to ten units just to reach $10,000, and that cremations now run $2,500 to $7,000.

You are healthy and want guaranteed issue anyway. Even then, Colonial Penn is not the cheapest door. Mutual of Omaha, AIG, and Royal Neighbors offer cheaper guaranteed acceptance options.

A Simple Way to Decide

The order matters more than the answer. Treat guaranteed issue as a last resort, after you have exhausted trying to qualify for underwritten policies — because some conditions leave no other option, but far fewer than people assume.

Our Verdict on Colonial Penn

Colonial Penn will pay your claim. That is the good news, and it is worth stating first.

The company holds an A rating from AM Best, is licensed in all 50 states, and honors its contracts. If you hold a policy and die, they will pay your beneficiaries the amount due once they have a death certificate.

Our verdict is not about trust. It is about value.

The Case Against, in One Sentence

For nearly everyone, the same money buys more protection somewhere else, sooner.

There is no scenario in which the Colonial Penn 995 plan should be purchased, because you can obtain significantly more coverage from multiple other providers for a substantially lower price.

The plan is not a scam but heavily marketed in a misleading way, with $9.95 barely covering anything.

We would put it slightly less absolutely. The plan is a poor value for most buyers, and a defensible last resort for a few.

Where We Land

That last row matters. If you already own the policy and have cleared the waiting period, you hold something with real value. Do not drop it until new coverage is actually approved and active.

Why the Ads Feel Different From the Math

The gap between the commercial and the contract is the whole story here.

The ad tells you the price of one unit. The contract tells you what that unit pays, and that natural death in the first two years returns premiums instead of the benefit. Both are true. Only one is in the commercial.

That is not unique to Colonial Penn. It is how most direct-to-consumer burial insurance is sold. But Colonial Penn’s unit system makes the comparison harder than most, which is exactly why the plan survives on television.

Our Bottom Line

Colonial Penn is a real company that sells a real whole life policy and pays real claims. It is also one of the most expensive ways to buy a small death benefit, and it makes you wait two years for it.

If you have been turned down repeatedly, it may be your answer. If you have not tried, it should not be your first stop.

The single most useful thing you can do before buying any final expense insurance is answer the health questions somewhere. You may find you qualify for more coverage, at a lower price, effective the day the policy issues — and if you do not, guaranteed acceptance will still be there.