Colonial Penn Complaints: What Customers Are Actually Saying

Colonial Penn’s NAIC Complaint Index, Explained

The National Association of Insurance Commissioners (NAIC) tracks complaints filed against insurance companies through state insurance departments. It turns that data into a score called the complaint index.

The index works like this: a score of 1.00 means a company gets an average number of complaints for its size. A score below 1.00 means fewer complaints than expected. A score above 1.00 means more.

Colonial Penn scores well above average — and it has for years. Recent published figures place its individual life complaint index between roughly 5 and 7, depending on the year measured. Forbes Advisor calculated a three-year average of 7.13.

To put that in context, many well-known burial insurance carriers score below 1.00. Forbes noted that the competitors it analyzed ranged from 0.25 to 1.00, meaning Colonial Penn drew complaints at five to seven times the rate of similar companies.

According to NAIC data, most complaints against Colonial Penn involve delays in paying claims and poor policyholder service. The index does not tell you whether any single complaint was valid. But a pattern this far above average is worth knowing before you buy.

BBB Rating and the Most Common Complaint Themes

Colonial Penn’s Better Business Bureau profile tells two very different stories at once. The company holds a strong letter grade from the BBB itself, but its customer review score is one of the lowest you will see for a major funeral insurance carrier.

Here is the difference. The BBB letter grade mostly measures whether a company responds to complaints — and Colonial Penn does respond. The customer review score reflects what actual policyholders say, and those reviews average about 1.1 out of 5 stars.

The complaint themes repeat across BBB, Trustpilot, and Google reviews. The most common issues customers describe include:

• Surprise at how little coverage each $9.95 unit actually buys
• Confusion about the two-year waiting period on the guaranteed acceptance plan
• Difficulty canceling a policy, with repeated calls and paperwork delays
• Charges drafted from bank accounts sooner than the customer expected
• Slow, back-and-forth claims handling that requires multiple calls

Many of these complaints trace back to a gap between the TV ads and the fine print. Customers expected meaningful coverage for $9.95 a month and later learned one unit may only provide a few hundred dollars.

Telemarketing and Mail Solicitation Complaints

A separate complaint theme has nothing to do with policies at all. Many people report heavy phone and mail contact from Colonial Penn after requesting a quote — or sometimes without ever asking for one.

Reviewers on the BBB and other sites describe repeated calls and mailers that continue even after they ask the company to stop. Some say a single online quote request led to weeks of follow-up contact.

This issue has gone beyond reviews. Colonial Penn was named in a class action lawsuit in Florida alleging telemarketing calls to numbers on the National Do Not Call Registry, in violation of the Telephone Consumer Protection Act (TCPA).

If you want to research the company without triggering sales contact, be careful where you enter your phone number. Requesting a quote directly from a burial life insurance carrier’s website usually places you on its marketing list.

What Policyholders Report About Claims and Payouts

Start with the most important fact: Colonial Penn does pay valid claims. It is a licensed insurer backed by CNO Financial Group, with an A (Excellent) financial strength rating from AM Best. When a claim meets the policy terms, the company honors it.

So why do so many people ask “does Colonial Penn pay out?” Most of the frustration traces back to two things: the two-year waiting period and slow claims handling.

The waiting period causes the most painful surprises. The $9.95 guaranteed acceptance plan does not pay the full death benefit if the insured dies of natural causes in the first two years. Instead, the family receives a refund of the premiums paid plus 7% interest.

Families who did not know about this rule often describe the reduced payout as a denial. It is not a denial in the legal sense — it is the graded benefit working as written. But it is a real gap between what the ads suggest and what the fine print says.

The second theme is speed. According to NAIC data cited by Forbes, most complaints against Colonial Penn involve delays in paying claims and poor policyholder service. Reviewers describe repeated document requests, weeks or months of follow-up calls, and paperwork that must be mailed rather than filed online.

Part of the delay is structural. Colonial Penn does not offer online claim filing — beneficiaries must call to start a claim, then submit a claimant statement and certified death certificate by mail. Each mail cycle can add 7 to 10 business days.

For a family paying for a funeral, that timeline matters. Many final expense insurance buyers choose a carrier specifically because funeral homes need payment quickly, so a slow claims process defeats the purpose of the coverage.

Positive Reviews: What Satisfied Customers Say

The complaint record is loud, but it is not the whole story. Colonial Penn has sold policies for over 50 years, and many policyholders report exactly the experience they expected.

The review scores also vary by platform. While BBB and Trustpilot reviews average near 1 star, Colonial Penn’s Google reviews average about 3.1 out of 5 across more than 600 reviews — a much more mixed picture.

Satisfied customers tend to praise the same handful of things. The most common positive themes include:

• Guaranteed approval with no health questions, even with serious health conditions
• Premiums that never increase and coverage that never expires
• A simple application that takes minutes by phone or online
• Long-held policies that paid out as promised once the waiting period had passed
• Beneficiaries who received checks without trouble after submitting a death certificate

There is a pattern worth noticing in the positive reviews. The happiest policyholders are usually the ones who read the fine print first — they knew about the unit pricing and the two-year wait, so nothing came as a shock.

That is really the dividing line in Colonial Penn’s burial insurance reviews. People who understood the product going in often report it did its job. People who bought based on the TV ad alone are the ones who feel misled.

How to File a Complaint Against Colonial Penn

If you have a problem with a Colonial Penn policy or claim, there is a clear order to follow. Start with the company, and escalate from there if you do not get results.

Step 1: Contact Colonial Penn directly. Call customer service at 1-800-523-9100 and explain the issue. Keep a written log of every call — the date, the time, who you spoke with, and what they said.

Step 2: Put it in writing. If phone calls go nowhere, send a written complaint to Colonial Penn Life Insurance Company, 399 Market Street, Philadelphia, PA 19181. A paper trail matters if you escalate later.

Step 3: File with your state department of insurance. This is the step with real teeth. Only your state insurance department can take enforcement action against an insurer that violates state law — review sites cannot.

Filing is free, and most states let you file online. You can find your state’s complaint portal through the NAIC’s state insurance department directory at naic.org. Your state department will forward the complaint to Colonial Penn, which must respond within a set deadline.

Before you file with your state, gather your policy number, any claim number, copies of letters, and your call log. Stick to facts and dates — a clear, short timeline gets faster results than an emotional letter.

For unwanted calls and mailers, use different channels. Register your number at donotcall.gov, and report repeat violations to the FTC. You can also write to Colonial Penn directly and request removal from its marketing lists.

One reassurance worth knowing: an insurer cannot legally retaliate against you for filing a complaint. Whether you hold a funeral insurance policy with Colonial Penn or any other carrier, complaining to your state regulator will not affect your coverage.