What Colonial Penn offers and who it's built for

Colonial Penn is a life insurance company owned by Torchmark Corporation that sells may provide issue whole life policies — meaning you don't have to pass a medical exam to get coverage. The company has been in business since 1957 and holds licenses in all 50 states. Their policies are straightforward: you pay a monthly premium, and when you die, the company pays a death benefit to your beneficiary.

Colonial Penn markets heavily to people over 50, and their policies are designed for that age group. The company doesn't require you to answer detailed health questions or undergo medical underwriting, which makes getting a policy fast — sometimes within days. This is the main reason people choose Colonial Penn: if you have health problems or simply want to avoid the medical exam process, you can get coverage without proving you're in good health.

The trade-off is cost. Because Colonial Penn doesn't screen applicants for health conditions, their premiums are higher than what you'd pay for a medically underwritten policy if you're in good health. You're paying for the convenience and certainty of approval, not for a competitive rate.

Key Takeaways

  • Colonial Penn offers may provide issue whole life insurance, meaning no medical exam or health questions are required to get coverage.
  • Premiums are significantly higher than traditional term or whole life policies because the company accepts all applicants regardless of health status.
  • The death benefit is reduced during the first two years (typically to the amount of premiums paid plus interest), so the policy is not designed for immediate coverage needs.
  • Colonial Penn's financial strength ratings are solid but not exceptional — A.M. Best rates them as A (Excellent), which means they can pay claims, but they're not among the highest-rated insurers.
  • If you're in good health, you'll almost always find better rates elsewhere; Colonial Penn makes sense mainly if you have health problems or want to avoid medical underwriting.

How Colonial Penn's pricing compares to other insurers

A 60-year-old in good health buying a $10,000 whole life policy from Colonial Penn might pay $60 to $80 per month. The same person buying a 20-year term policy from a company like Term4Sale or PolicyGenius would pay $15 to $25 per month. That's a significant difference over time.

The reason is simple: Colonial Penn accepts people with diabetes, heart disease, cancer history, and other serious conditions without asking. Other insurers either decline those applicants or charge them more after underwriting. Colonial Penn spreads that risk across all customers, so everyone pays higher premiums.

If you have health problems, the comparison flips. You might not be able to get approved for a standard policy at any price, or you might face a rating that makes the premium unaffordable. In that case, Colonial Penn's may provide issue policy may be your only realistic option, and the higher cost is the price of access.

The two-year graded death benefit and what it means

Colonial Penn policies have a graded death benefit, which is a built-in waiting period. During the first two years you own the policy, if you die from any cause, your beneficiary receives only the premiums you've paid plus a small amount of interest — not the full death benefit you thought you were buying.

After two years, the full death benefit pays out. This structure protects the company from people who buy a policy knowing they're terminally ill and expecting to collect immediately. It also means Colonial Penn is not a good choice if you need coverage to start working right away — for example, if you're buying it because you've just been diagnosed with a serious illness.

The graded benefit is standard for may provide issue policies, so you'll see it with other companies in this category too. It's not unique to Colonial Penn, but it's important to understand before you buy.

Financial strength and the company's ability to pay claims

A.M. Best, the major rating agency for insurance companies, rates Colonial Penn as A (Excellent). This means the company has the financial resources to pay claims and is unlikely to fail. That rating is solid and should give you confidence the company will be around to pay your beneficiary.

However, Colonial Penn is not among the very highest-rated insurers. Companies like Mutual of Omaha, New York Life, and Northwestern Mutual carry ratings of A+ or higher. Colonial Penn's A rating is good enough — it's in the range where financial failure is very unlikely — but it's not the top tier. If financial strength is your primary concern, you have options with stronger ratings, though those companies may require medical underwriting.

You can check Colonial Penn's current rating yourself on the A.M. Best website or by calling the company directly. Ratings can change, so it's worth verifying before you buy.

Customer service and claims experience

Colonial Penn's customer service reputation is mixed. The National Association of Insurance Commissioners (NAIC) tracks complaints, and Colonial Penn receives more complaints per policy sold than many competitors. Common complaints involve difficulty canceling policies, confusion about the graded benefit, and premium increases after the initial rate period.

That said, the company does pay claims. There's no widespread pattern of denied death benefits. The complaints tend to be about the sales process, billing, and customer service responsiveness rather than claim denials.

Before you buy, read recent customer reviews on independent sites like Trustpilot or the Better Business Bureau. Look specifically for comments about claims experience, not just general satisfaction. If you have questions about how the graded benefit works or what happens if you want to cancel, ask the company in writing and keep the response — don't rely on what a sales agent tells you verbally.

When Colonial Penn makes sense and when it doesn't

Colonial Penn is a reasonable choice if: you're over 50, you have health problems that would make you uninsurable or very expensive elsewhere, you want to avoid a medical exam, and you don't need the coverage to take effect immediately. In that situation, you're paying for access to insurance you couldn't otherwise get, and the higher cost is the trade-off.

Colonial Penn is not a good choice if: you're in good health, you need coverage to start working right away (within two years), you're looking for the lowest possible premium, or you want a policy with a higher financial strength rating. In those cases, you'll find better options with term insurance, traditional whole life from other carriers, or may provide issue policies from competitors like Mutual of Omaha.

The best approach is to shop around. Get quotes from at least one traditional insurer (even if you think you won't may have access to) and compare them to Colonial Penn. You might be surprised at what you can get approved for, or you might confirm that Colonial Penn is your best option. Either way, you'll know you made an informed decision based on actual numbers, not marketing.

Alternatives to consider before buying

If you're drawn to Colonial Penn because you want to avoid medical underwriting, consider getting quotes from other may provide issue carriers first. Mutual of Omaha, AARP (through New York Life), and Kansas City Life all offer may provide issue policies. Rates vary by company and age, so comparing three or four options takes an hour and could save you hundreds of dollars per year.

If you're in good health but think you might not may have access to for standard underwriting, apply anyway. Many people are surprised to learn they may have access to for term insurance at reasonable rates even with health conditions like high blood pressure or diabetes that are well-controlled. The only way to know is to submit an application.

If cost is your main concern and you're willing to answer health questions, term insurance from companies like Term4Sale, PolicyGenius, or Ladder will almost always be cheaper than Colonial Penn's whole life policy. Term insurance covers you for a set period (10, 20, or 30 years) and costs less because it doesn't build cash value and the company doesn't pay out on most policies.

Frequently Asked Questions

Does Colonial Penn require a medical exam?

No. Colonial Penn's policies are may provide issue, which means you don't have to take a medical exam or answer detailed health questions. You'll answer a few basic questions about your age and whether you've had certain conditions, but there's no underwriting process. Approval typically takes a few days to a week.

Can I cancel a Colonial Penn policy and get my money back?

Yes, but with limits. Most policies have a 30-day free look period where you can cancel and get a full refund. After that, you can still cancel, but you'll receive only the cash surrender value, which is typically much less than the premiums you've paid in the first few years. Whole life policies build cash value slowly, so don't expect to break even quickly.

What happens if I die in the first two years?

Your beneficiary will receive the premiums you paid plus interest, not the full death benefit. After two years, the full death benefit pays out. This is called the graded benefit and is designed to prevent people from buying a policy when they know they're terminally ill.

Is Colonial Penn a scam?

No. Colonial Penn is a legitimate, licensed insurance company that pays claims. However, their marketing is aggressive and sometimes misleading about how much coverage you actually get in the first two years. Read the policy documents carefully before you buy, and don't rely only on what a sales agent tells you.

What's the difference between Colonial Penn and term insurance?

Colonial Penn sells whole life insurance, which covers you for your entire life and builds cash value. Term insurance covers you for a set period (like 20 years) and costs much less but expires if you outlive it. Term is cheaper; whole life is permanent. Colonial Penn's whole life is more expensive than term because it's may provide issue and doesn't require medical underwriting.