What is Colonial Penn Life Insurance?
Colonial Penn is a life insurance company founded in 1968, best known for its heavily advertised "$9.95 per month" guaranteed acceptance life insurance. They offer coverage specifically for seniors aged 50–85 with no medical exam required.
Colonial Penn offers three main products:
- Guaranteed Acceptance Whole Life — The famous $9.95/unit plan
- Permanent Whole Life — Simplified issue with health questions
- Term Life Insurance — Available for ages 18–75
The "$9.95 per month" plan sounds affordable — but you only get one "unit" of coverage. For a 70-year-old, one unit = only $791 of coverage! To get $10,000 coverage, you'd need 12-13 units = $119-130/month!
Colonial Penn Real Costs — The Unit Plan Explained
Colonial Penn's "unit" system is confusing by design. Here's what one unit actually costs per age group:
| Age | Coverage Per Unit | Units for $10K Coverage | Monthly Cost for $10K | Market Average $10K |
|---|---|---|---|---|
| 50–54 | $1,786 | 6 units | $59.70/mo | $28/mo |
| 55–59 | $1,389 | 8 units | $79.60/mo | $34/mo |
| 60–64 | $1,099 | 10 units | $99.50/mo | $42/mo |
| 65–69 | $952 | 11 units | $109.45/mo | $52/mo |
| 70–74 | $791 | 13 units | $129.35/mo | $72/mo |
| 75–79 | $634 | 16 units | $159.20/mo | $98/mo |
| 80–85 | $477 | 21 units | $208.95/mo | $135/mo |
Colonial Penn charges 50-100% more than the market average for the same $10,000 coverage. A 70-year-old pays $129/mo with Colonial Penn vs $72/mo with Mutual of Omaha for identical coverage!
Colonial Penn Pros
- 100% Guaranteed Approval: No health questions for guaranteed acceptance plan
- No Medical Exam: Easy application by phone or online
- Available to Age 85: One of few carriers accepting age 85
- Brand Recognition: Well-known company, trusted by many seniors
- Simple Process: Very easy to sign up, no complicated forms
- Fixed Premiums: Monthly rate never increases
Colonial Penn Cons
- Extremely Overpriced: 50-100% more expensive than competitors
- Misleading "$9.95" Ad: One unit provides very little coverage
- 2-Year Waiting Period: Full benefit not paid if death within 2 years
- Very Low Coverage Max: Maximum $50,000 coverage only
- Poor Customer Reviews: Many complaints about claims process
- Confusing Unit System: Designed to hide the true cost
Colonial Penn vs Competitors 2026
| Company | $10K Coverage Age 70 | Waiting Period | Max Coverage | Rating |
|---|---|---|---|---|
| Colonial Penn | $129/mo | 2 years | $50K | ⭐⭐⭐ |
| Mutual of Omaha | $72/mo | None | $40K | ⭐⭐⭐⭐⭐ |
| Transamerica | $68/mo | None | $50K | ⭐⭐⭐⭐⭐ |
| Foresters Financial | $65/mo | None | $40K | ⭐⭐⭐⭐⭐ |
| AARP/New York Life | $95/mo | None | $50K | ⭐⭐⭐⭐ |
Who Should Choose Colonial Penn?
- Seniors aged 80–85 with very serious health conditions who have been denied everywhere else
- Those who only need $1,000–$3,000 of coverage (1-3 units is affordable)
- Seniors who specifically trust the Colonial Penn brand after seeing TV ads
Who Should Avoid Colonial Penn?
- Anyone needing $5,000+ coverage — you'll massively overpay
- Seniors under age 75 — many better options available
- Anyone who hasn't compared other carriers first
- Seniors in reasonable health — simplified issue is much cheaper
Colonial Penn's "$9.95" advertising is one of the most misleading campaigns in the insurance industry. While the company is legitimate and pays claims, their prices are 50-100% higher than competitors offering identical coverage. Our recommendation: Never buy Colonial Penn without comparing at least 3 other carriers first. Most seniors find the same or better coverage for significantly less money elsewhere.
Frequently Asked Questions
Is Colonial Penn a legitimate company?
Yes, Colonial Penn is a legitimate insurance company founded in 1968 and backed by CNO Financial Group. They do pay claims. The issue is not legitimacy — it's that their prices are significantly higher than the competition.
What does Colonial Penn $9.95 actually cover?
At age 70, $9.95/month (one unit) buys only $791 of life insurance coverage. To get $10,000 of coverage at age 70, you'd need approximately 13 units at $129.35/month — far from the advertised price.
Does Colonial Penn have a waiting period?
Yes — Colonial Penn's guaranteed acceptance plan has a 2-year waiting period. If you pass away within the first 2 years from natural causes, your family receives only the premiums paid plus 10% interest, not the full death benefit.
What is better than Colonial Penn?
Mutual of Omaha, Transamerica, and Foresters Financial all offer similar guaranteed acceptance coverage at 40-50% lower prices than Colonial Penn, often with no waiting period. We compare all of these for you — completely free.
