Colonial Penn vs Mutual of Omaha: Which Is Better?

Colonial Penn vs Mutual of Omaha at a Glance

Both companies sell whole life burial insurance, but they are built for two different buyers. Colonial Penn sells directly to the public with no health questions. Mutual of Omaha sells its main plan through licensed agents and asks a short list of health questions.

That one difference drives almost everything else — price, waiting period, and how much coverage you can buy.

Colonial Penn also sells a policy called LifeChoice, but only to New York residents. It asks health questions and has no waiting period if you qualify.

Mutual of Omaha has two other options besides Living Promise. There is a graded plan for people with certain health conditions ($2,000–$20,000, ages 45–80, two-year waiting period), and a guaranteed acceptance plan you can buy online with no health questions ($2,000–$25,000, ages 45–85, two-year waiting period).

That last point matters. If you go straight to Mutual of Omaha’s website instead of through an agent, the only plan they will sell you is the guaranteed acceptance version with the waiting period.

Price for the Same Coverage: A Side-by-Side Example

This is where the two companies separate the most. Colonial Penn does not sell you a dollar amount of final expense insurance — it sells you units. Each unit costs $9.95 per month, and the coverage that unit buys depends on your age and gender.

The older you are, the less each unit is worth. A 65-year-old woman gets $1,258 of coverage per unit. A 65-year-old man gets $896. A 75-year-old man gets just $549.

So reaching $10,000 in funeral insurance takes several units. Here is what that looks like next to Mutual of Omaha’s Living Promise level plan for roughly $10,000 of coverage, non-tobacco.

At every age shown, Colonial Penn costs roughly two times as much for about the same death benefit. And the Colonial Penn policy will not pay for natural death during the first two years, while the Mutual of Omaha level plan pays from day one.

Some readers will say this is not a fair fight, because Colonial Penn asks no health questions. That is a reasonable point, so here is the closer comparison.

Mutual of Omaha also sells a guaranteed acceptance plan with no health questions and the same two-year waiting period. For a 65-year-old woman with $10,000 in coverage, that plan runs about $50 per month. Colonial Penn charges $79.60 for the same terms.

In other words, Colonial Penn is more expensive than Mutual of Omaha even when you compare guaranteed acceptance to guaranteed acceptance.

One more thing worth knowing. Buying Mutual of Omaha directly from the company is not the same as buying through an agent. A 65-year-old woman purchasing $20,000 direct pays about $99.00 with a two-year wait, while the same woman through an agent pays about $78.82 with no wait.

Guaranteed Issue vs Simplified Issue Underwriting

This is the real difference between the two companies. Everything else — the price, the waiting period, how much you can buy — follows from it.

First, two phrases get mixed up constantly, and the difference matters.

• No medical exam means no nurse, no blood work, no urine sample. There are still health questions, and you can be turned down.
• No health questions means guaranteed approval. It always comes with a two-year waiting period.

Colonial Penn’s 995 plan is the second kind. Mutual of Omaha’s Living Promise is the first.

How Colonial Penn’s guaranteed acceptance works

You cannot be turned down. There is nothing to answer and nothing to fail.

The trade-off is the two-year wait. If you die from natural causes in the first 24 months, your family does not get the death benefit — they get your premiums back. Accidental death is covered in full from the start.

This is not unique to Colonial Penn. Every guaranteed acceptance burial insurance policy on the market has a two-year waiting period. Any ad promising no health questions and no waiting period is not telling the truth.

How Mutual of Omaha’s simplified issue works

A licensed agent reads you a short list of health questions over the phone. Mutual of Omaha also checks your prescription history, your MIB file, and their height-and-weight chart.

Your answers sort you into one of three outcomes.

Mutual of Omaha’s questions are among the stricter ones in the industry. That cuts both ways — more people get moved to graded or declined, but the people who pass get some of the lowest rates available.

Conditions that commonly move someone to the graded plan include diabetes diagnosed before age 50 or with complications, chronic lung disease such as COPD or emphysema, cancer treated within the past four years, chronic kidney disease, lupus, and Parkinson’s disease. More serious conditions can lead to a decline outright.

Here is the part most seniors do not expect. Common, controlled conditions usually do not block you. Diabetes managed with oral medication and high blood pressure on standard medication often still qualify for the level rating with no waiting period.

Which path fits which person

If you can answer the health questions honestly and pass, simplified issue is almost always the better deal. Lower cost, coverage from day one.

If you have been declined elsewhere, or your health makes the questions impossible to pass, guaranteed acceptance is a real option — and it may be the only one. Just know you are paying more and waiting two years for it.

One last note. Mutual of Omaha sells both types. If you go through an agent you can be considered for the simplified issue plan. If you buy from their website or answer a mailer, you only get the guaranteed acceptance version.

Coverage Amounts and Policy Features Compared

How much funeral insurance you can actually buy is where the two companies split hardest. Mutual of Omaha sells you a dollar amount. Colonial Penn sells you units, and the units shrink as you age.

How much coverage you can buy

Mutual of Omaha’s $50,000 ceiling is unusually high for this kind of policy. Most final expense insurance carriers stop at $25,000 or less.

Colonial Penn’s ceiling depends entirely on your age and gender, because 25 units is the cap no matter what those units are worth. Every column below costs the same $248.75 per month.

An 80-year-old man cannot buy more than about $10,650 from Colonial Penn at any price. If he needs $20,000, the company simply does not have a way to sell it to him.

Policy features side by side

Two of these deserve a closer look.

The accelerated death benefit on the Living Promise level plan is included free. It lets you pull the death benefit out while you are still alive if you are diagnosed with a terminal illness, or if you are confined to a nursing home for 90 days or more and expected to stay. Colonial Penn does not offer this on the 995 plan.

The payment rules run the other way. Colonial Penn takes credit cards and lets you pay online. Mutual of Omaha only takes bank draft, which some seniors find inconvenient.

Colonial Penn is also easier to buy. You can do the whole thing on their website in a few minutes with no phone call. Mutual of Omaha requires an agent to read the health questions to you out loud — that is a company rule, not an agent preference.

Financial Ratings and Customer Satisfaction Head-to-Head

There are two separate questions here, and people mix them up all the time.

The first is: will this company still be around to pay my family? The second is: what will dealing with them actually be like?

Both companies pass the first test. They part ways on the second.

Financial strength

An A rating means Colonial Penn has the money to pay claims. That is not in question. If you hold a Colonial Penn policy and die, they will pay your beneficiary once they have the death certificate.

Mutual of Omaha sits one notch higher at A+, which is AM Best’s “Superior” tier. Moody’s and S&P also place the company in their upper tiers.

For a small final expense insurance policy, both ratings are more than adequate. This category is close to a tie.

Complaints filed with regulators

This is where the two companies stop looking alike. The NAIC complaint index compares how many complaints a company gets against how many a company its size should get. A score of 1.0 is average.

Forbes Advisor put Colonial Penn’s three-year average complaint index at 7.13, while competitors ran between 0.25 and 1.00. Choice Mutual scores Colonial Penn at the bottom of its complaint scale, which is reserved for companies with more than three times the average.

Most complaints against Colonial Penn involve delays in paying claims and poor policyholder service. Some of that likely traces back to the two-year waiting period — families expect a check and get a premium refund instead.

Mutual of Omaha’s complaint index runs near 0.5, meaning about half the complaints you would expect from a company its size. It has held below average for years.

Customer satisfaction

Mutual of Omaha ranked first out of 23 carriers in J.D. Power’s 2025 U.S. Individual Life Insurance Study. It scored 707 out of 1,000 against an industry average of 650, and led six of the eight categories measured.

Colonial Penn was not included in the study.

Public review scores

Read these with caution. Review sites run low for nearly every insurance company, because people who fight a claim post about it and people whose claim paid in a week do not. The regulator data is the more reliable signal.

Both companies are BBB accredited. Colonial Penn holds an A with the BBB; Mutual of Omaha holds an A+.

Getting someone on the phone

Choice Mutual runs an automated system that calls each company’s service line on a set schedule and times the hold.

Colonial Penn is sometimes faster and sometimes much slower. Mutual of Omaha is steadier.

The honest summary

Colonial Penn is financially sound and will pay a valid claim. But by every measure of what customers actually experience — regulator complaints, satisfaction studies, service consistency — Mutual of Omaha is meaningfully ahead.

Which Company Wins for Your Situation

There is no single winner. There is a winner for you, and it comes down to your health, your age, your state, and how much coverage you need.

Here is the short version, laid out by situation.

When Mutual of Omaha is the clear choice

If you can pass the health questions, this is not a close call. You pay about half as much, you are covered from day one, and you can buy up to $50,000.

The bar is lower than most people expect. Common conditions managed with medication often still qualify for the level rating.

The catch is that you have to speak with a licensed agent. Mutual of Omaha requires the health questions to be read to you out loud. If you go to their website instead, you get the guaranteed acceptance plan with the waiting period.

When Colonial Penn makes sense

Colonial Penn is a fit in a narrow set of cases.

• You have serious health conditions and have been declined elsewhere
• You will not answer health questions under any circumstances
• You want to buy funeral insurance online right now without talking to anyone
• You are in New York, where the LifeChoice policy is available and Living Promise is not

Even in most of those cases, it is worth pricing Mutual of Omaha’s guaranteed acceptance plan first. Same no-questions terms, same two-year wait, lower monthly cost.

The part nobody advertises

Neither of these two companies is automatically your best option. Both Choice Mutual and PinnacleQuote — agencies that sell these products — make the same point: no company is best for everyone, and the only way to know is to compare several.

Aflac, Aetna, AARP, Transamerica, and TruStage all write burial insurance and all price differently. A 65-year-old woman with diabetes diagnosed at 42 might find Mutual of Omaha is not the cheapest for her at all. Aflac or Aetna could beat it by $15 a month.

An independent agent who represents ten or more carriers can run your exact health profile through all of them at once. That costs you nothing — the agent is paid by whichever company issues the policy, and your rate is the same either way.

The bottom line

For most seniors in ordinary health, Mutual of Omaha wins on price, on waiting period, on coverage limits, and on service record. Colonial Penn’s advantage is convenience and guaranteed approval, and you pay roughly double for it.

If you are healthy enough to answer a few questions, answer them. The savings over the life of the policy are substantial.