How to Cancel Colonial Penn Life Insurance

Before You Cancel: Three Things to Check First

Before you call anyone, take fifteen minutes to look at three things. What you find will change how you cancel, what you get back, and whether you should cancel at all.

1. Check how long you’ve had the policy.

Look at the policy date printed on the specification page of your contract. If you received your policy in the last 30 days, you may still be inside the free look window, which means a full refund. If it’s been longer than that, the money side of cancelling looks very different, and the next section covers that.

2. Check whether your policy has built cash value.

Colonial Penn’s guaranteed acceptance plan is whole life burial insurance, and whole life builds cash value over time. You can see your cash value by logging in at my.colonialpenn.com, where the account view shows coverage amounts, cash value, loan information, and payment history. Call 1-800-523-9100 if you can’t get logged in.

3. Check where you stand on the two-year waiting period.

The $9.95 guaranteed acceptance plan has a two-year waiting period for natural causes of death. If you die from natural causes during those first 24 months, your family gets your premiums back instead of the full benefit.

This matters more than people expect. If you’ve already waited out those two years, you are past the waiting period on that policy, and cancelling gives that up. A new policy may start a new waiting period unless you qualify for a plan that covers you from day one.

Step-by-Step: Canceling Your Colonial Penn Policy

Colonial Penn does not let you cancel your final expense insurance online. Their web portal handles payments, beneficiary changes, and claims, but ending the policy takes a phone call and a signed form.

Here is the process from start to finish.

A note for New York policyholders. In New York, the Colonial Penn program is underwritten by Bankers Conseco Life Insurance Company. Address your form to Bankers Conseco Life Insurance Company, Policyholder Services, at the same PO Box 1918 in Carmel, Indiana. The New York service line is 1-877-891-0915.

Send the form by certified mail with return receipt. This costs a few dollars and gives you dated proof that they received it. Colonial Penn has a heavy volume of consumer complaints on record with the NAIC, and a number of those complaints involve cancellation requests and refunds that stalled.

Do not cancel your bank draft or credit card first. If you stop the payment before the cancellation is processed, the policy lapses instead of being surrendered. That’s a different outcome, and it can cost you your cash value.

If you don’t have written confirmation within about two weeks, call and follow up. Ask them to confirm the effective cancellation date and the amount of any check being issued.

The 30-Day Free Look Refund Window

Every life insurance policy sold in the United States comes with a free look period. This is a window right after you receive the policy when you can cancel it, get all your premium back, and walk away as if it never happened.

Colonial Penn advertises a full refund if you decide the plan isn’t right for you, and reviewers of the guaranteed acceptance plan report a 30-day window. That’s generous compared to what many states require, and once a longer window is written into your contract, the carrier has to honor it.

Your exact window is in your policy, not in this article. State law sets the floor, and the floors vary. Most states require at least 10 days. California requires 30 days for everyone. Texas requires 10 days for most buyers but 30 days for anyone 65 or older. Florida sets 14 days. New York uses 10 days for most policies.

Several states extend the window specifically for seniors, which matters a lot for funeral insurance because that’s who buys it. Look at the first page or two of your contract. The free look language is printed there, and that number is the one that governs your policy.

The clock starts when you receive the policy, not when you applied or paid. That’s usually the day the paper policy lands in your mailbox. If you applied three weeks ago but the envelope arrived last Tuesday, last Tuesday is day one.

Send written notice and don’t wait until the last day. Call 1-800-523-9100 to start it, then follow up in writing by certified mail. If your policy arrives on a Friday and you set it aside until the following week, you’ve already spent several days of a short window.

If you’re past your free look window, premiums you’ve paid are gone. Cash value becomes the only money on the table, and the next section covers what that actually looks like.

Cash Surrender Value: What You’ll Actually Get Back

If your free look window has closed, cash surrender value is the only money you can get back. Here’s the honest picture: for most people cancelling a burial insurance policy, it’s less than they expect.

How cash value works. Colonial Penn’s plan is whole life, and whole life policies build cash value over time. Most of each premium pays for the insurance itself. A small piece goes into the cash value account.

The first years build almost nothing. Final expense whole life policies generally accumulate little or no cash value during the first couple of years, and Colonial Penn’s LifeChoice policy in New York doesn’t begin accumulating until after the first year. If you’ve had your policy for eighteen months, expect very little.

Your contract has the exact numbers. Every whole life policy includes a table of guaranteed values showing the precise cash value for each policy year. Find that table in your contract, or log in at my.colonialpenn.com where cash value and loan information are displayed. You can also call and ask them to quote your current surrender value before you commit to anything.

Surrender value is almost never close to what you paid in. Someone who has paid $9.95 a month for three years has paid about $358 total. The cash value on that policy will be a small fraction of that number, because most of the money bought insurance coverage, not savings.

One tax note. If you surrender a policy and receive back more than you paid in total premiums, the excess counts as taxable income. This almost never happens with a small final expense insurance policy, but it’s worth knowing. We’re not tax advisors, so ask a tax professional if your numbers are unusual.

Ask for the surrender value in writing before you decide. Call Policyholder Services and ask what your policy would pay if surrendered today. That number, next to what you’d pay for replacement coverage, is what the decision actually turns on.

Secure Replacement Coverage Before You Cancel

If you’re cancelling because you found something better, the order of operations matters more than anything else in this guide. Get the new policy approved and in force first. Cancel Colonial Penn second.

Three things can go wrong if you cancel first.

That last row is the one people miss. If you’ve already served two years with Colonial Penn and you replace it with another no-health-questions plan, you start a fresh two-year wait. You’d be giving up coverage you already earned.

Answering health questions is usually the better path. There are two kinds of funeral insurance. Guaranteed acceptance asks nothing about your health, approves everyone, and always carries a two-year waiting period. Simplified issue asks health questions, requires no medical exam, and pays the full benefit from day one if you’re approved.

Most seniors qualify for simplified issue, even with pre-existing conditions. The exceptions tend to be serious ones like dementia or a terminal diagnosis. Simplified issue is also generally cheaper, because the insurer knows something about your health.

Shop more than one carrier. Every company prices health conditions differently, and the same person can get very different answers from different insurers. Independent agencies compare multiple carriers at once, which is why a policy bought directly from a single company is usually the narrowest option available to you.

Know your rights when you replace a policy. Replacing life insurance is a regulated transaction in every state, based on the NAIC’s replacement model regulation. When you apply for a policy that will replace an existing one, the agent and the new insurer must give you a written replacement notice. You also have the right to request an in-force illustration or policy summary from Colonial Penn so you can compare the two side by side.

Replacement policies often carry a longer free look window than ordinary ones — 20 days or more in many states. Regulators built that in specifically so people don’t give up something valuable without understanding what they’re getting.

The safe sequence. Apply for the new policy. Wait for written approval. Confirm the effective date and that the first premium has been processed. Read the new policy when it arrives. Only then start the Colonial Penn cancellation.

Yes, this means paying two premiums for a few weeks. That overlap is cheap insurance against a gap in coverage.

What Happens If You Just Stop Paying Premiums

Some people skip the paperwork and simply cancel the bank draft. It’s tempting, and it’s the worst way to end a burial insurance policy. Here’s what actually happens.

First comes the grace period. Miss a payment and your policy enters a grace period, typically 30 or 31 days. Your coverage stays fully in force during this window. If you died during the grace period, your family would still be paid, minus the premium you owe.

Then the policy lapses. If the grace period ends with no payment, coverage stops. Your beneficiaries get nothing if you die after that date. Insurers are required to notify you when a payment is late and again when the policy lapses, so watch your mail.

But whole life doesn’t always just vanish. State nonforfeiture laws require permanent policies to include options that protect whatever cash value you’ve built. Your contract will name one as the default, and the insurer applies it if they can’t reach you.

The catch for most Colonial Penn policyholders. These options only help if you have meaningful cash value. If you’ve had the policy two or three years, there’s likely too little to buy much of anything, and lapsing simply ends the coverage.

Why surrendering beats lapsing. When you surrender on purpose, you request the cash value, you get written confirmation, and you know the date coverage ended. When you lapse by accident, an automatic premium loan may quietly drain your cash value first, and you may never get a clean confirmation of anything.

Reinstatement is possible but not easy. Most policies allow you to restore a lapsed policy, often within three to five years. You’d need to pay all back premiums with interest, and the insurer can require evidence that your health hasn’t changed. Reinstating also restarts the two-year contestability period.

One protection worth using. Many states let policyholders name a secondary addressee — an adult child or trusted friend who receives the same lapse warning letters you do. These rules are especially common for people over 64. If you plan to keep your policy, call Colonial Penn and ask whether your state allows it.

If you’ve decided to end the policy, do it deliberately. Call, request the surrender form, mail it certified, and stop the payment only after you have confirmation in writing.