Colonial Penn $9.95 Life Insurance Review - Buyer Beware (2023)

Home / Types of Life Insurance / Colonial Penn $9.95 Life Insurance Review – Buyer Beware

Published on June 29, 2023

Written By: Mark Prip

(Video) What Does $9.95 A Month Get You With Colonial Penn Life Insurance?

It’s easy to see why the Colonial Penn $9.95 life insurance plan would pique your interest. The company boasts a guaranteed acceptance plan at a low monthly rate. While there are benefits to such a plan, there are drawbacks too. This review may help you filter the best life insurance to suit your needs.

Key Takeaways:

  • They impose a “two-year limited benefit period,” meaning that your beneficiary will not collect the death benefit if your death is non-accidental and occurs within the first two years of the policy.
  • More expensive than other Final Expense insurance companies.
  • High customer complaints, according to the BBB.

The Problem With the Colonial Penn $9.95 Plan

Death Benefit Waiting Period:

One major issue is that the policy has a “two-year limited benefit period, ” implying that if you pass away due to non-accidental causes within two years of signing the policy, your beneficiary will not receive the death benefit.

More Expensive:

At a glance, low-rate guaranteed acceptance life insurance sounds appealing, but looking closer, you may question the policy’s value. As advertised, it is not readily apparent that the $9.95 price tag is a starting price based on units. A unit represents a specific amount of coverage, which varies by age, gender, and state of residence.

When you increase the benefit amount, the premium increases likewise. For example, let’s say you are a 63-year-old male who wants to leave $10,000 to your beneficiary. If the $9.95 monthly premium buys you a $1,000 death benefit, you will buy ten units ($1,000 x 10 = $10,000) and pay a monthly premium of $99.50 ($9.95 x 10).

What Does It Cover?

When you apply for Colonial Penn’s guaranteed acceptance life insurance coverage, you can request one or multiple units. The maximum allowable purchase is 15 units. Using the previous example, if one unit equals a death benefit of $1,000, the most coverage you can buy is $15,000. At $9.95 per month per unit, your monthly premium would be $149.25 ($9.95 x 15).

The company imposes a “two-year limited benefit period,” meaning that your beneficiary will not collect the death benefit if your death is non-accidental and occurs within the first two years of the policy. Instead, the designated beneficiary receives a refund of all premiums paid plus interest compounded annually.

The insurer pays the total policy amount in the case of accidental death if death occurs within 90 days of the accident. The beneficiary receives the full death benefit after the first two years the policy is in force, regardless of the cause.

Pro tip:

The only time you need a “guaranteed acceptance life insurance policy” is if you are at higher risk, many other companies offer first-day coverage (with health questions) that does not impose a two-year limited benefit period.

How Much Do Colonial Penn Units Cost?

Colonial Penn sells units; it signifies that the coverage is provided in predetermined increments or units instead of a fixed dollar amount. The policyholder can decide on the number of units to buy depending on the coverage they need. Your age and gender will determine how much of a death benefit you can get per unit.

Here’s what the cost of each unit looks like:

Age 1 $9.95 Male Unit 1 $9.95 Female Unit

The low rate may seem attractive, but examining it closely to determine its value is essential. The stated price of $9.95 is starting price based on units, representing a specific coverage amount that varies depending on age, gender, and state of residence.

If you want to increase the amount your beneficiary will receive, your monthly premium payment will also increase.

For example, if you are a 63-year-old male and you want to leave $10,000 to your beneficiary, and your current monthly premium of $9.95 gets you a death benefit of $1,000, then you would need to buy ten units of coverage ($1,000 x 10 = $10,000) and pay a monthly premium of $99.50 ($9.95 x 10).

Pros and Cons


  • There is no prerequisite medical exam, and the insurance carrier will not ask you health questions.
  • Once coverage begins, health conditions do not impact your monthly rate or death benefit.
  • Premiums do not increase with age as long as you stay current on premium payments your entire life.
  • The application process is simple: Download and submit a one-page, seven-question enrollment form.


  • The $9.95 monthly premium advertised is only a starting price.
  • Customer complaints on the BBB site are indicative of poor customer service.
  • A two-year waiting period applies before benefits kick in unless you meet the criteria for accidental death.
  • In most states, the policy is only available to applicants aged 50 to 85.

Weighing the pros and cons of Colonial Penn’s guaranteed acceptance insurance, it becomes clear that it pays to shop around. Other life insurance companies will offer coverage with NO waiting period, with a straightforward pricing approach and better value. If your priority is coverage of funeral costs and other final expenses, you may want to explore final expense life insurance, otherwise known as burial insurance.

Colonial Penn Customer Complaints

The Better Business Bureau A+ rating and accreditation is encouraging. However, customer feedback is not a contributing factor in the assessment. The BBB states that the rating does not take customer reviews into account. The Colonial Penn average star rating from 153 customers is 1.2 out of 5. The BBB reports 297 complaints closed in the last three years, 102 complaints in the past 12 months alone.

Bottom Line

In conclusion, Colonial Penn’s $9.95 life insurance plan may be appealing at first glance. Still, upon closer inspection, there are a number of drawbacks that make it less attractive than other options on the market. The two-year waiting period for non-accidental death benefits and customer complaints regarding poor service should give potential customers pause when considering this policy.

Weighing the pros and cons of Colonial Penn’s guaranteed acceptance insurance, it pays to shop around for better value elsewhere.

One of our licensed insurance agents can help you explore other options and insurance carriers.

Articles sources: The Annuity ExpertBetter Business BureauFinal Expense Direct


  • What Is The Death Benefit of Colonial Penn $9.95 Plan?

    The Colonial Penn Guaranteed Acceptance life insurance policy provides a death benefit with a two-year graded period. Suppose the policyholder passes away within the first two years of the policy. In that case, the beneficiary will receive a payment equal to the total premiums paid, along with 7% interest on those payments. The total death benefit will be given to the beneficiaries only after two years of the policy.

  • How Much Coverage Do You Get With A $9.95 Plan?

    The Colonial Penn $9.95 permanent whole-life plan offers up to $50,000 in coverage.

  • What is A Unit With The Colonial Penn $9.95 Plan?

    When you apply for Colonial Penn’s guaranteed acceptance life insurance coverage, you can request one or multiple units. The maximum allowable purchase is 15 units. Using the previous example, if one unit equals a death benefit of $1,000, the most coverage you can buy is $15,000. At $9.95 per month per unit, your monthly premium would be $149.25 ($9.95 x 15).

Colonial Penn $9.95 Life Insurance Review - Buyer Beware (1)

Mark Prip

Since 2003, Mark Prip has been leading Policy Guide, Inc., providing knowledgeable information about Medicare, life insurance, and dental coverage to clients in over forty states. With his unparalleled hands-on experience aiding countless Medicare beneficiaries in selecting an appropriate health plan, he is a prime example amongst other competitors for expertise and assistance.Mark has held his Florida Health & Life Insurance License (E051889) since 2003.View his license profile on the Florida Department of Insurance website.


What is the payout on the $9.95 plan? ›

$9.95 will buy one unit of insurance coverage. If you are a 50-year old man, that means your policy will pay out a death benefit of $1,669 when you pass away (if you pass away after two years). If you are a female, your unit will pay out $2,000 in death benefits if you pass away after two years.

How much is a $50000 life insurance policy from Colonial Penn? ›

Colonial Penn term life insurance

For example, a woman who purchases $50,000 of coverage would pay: $35.21/month between the ages of 41 and 45. $45.21/month between the ages of 46 and 50. $56.46/month between the ages of 51 and 55.

Does Colonial Penn pay for cremation? ›

Their major drawback with Colonial Penn is the Guaranteed Acceptance, aka $9.95 plan. The whole concept is a great marketing concept, but at one unit of coverage, it's barely enough to cover cremation costs. Even if you select the maximum 15 units of coverage, the death benefit is usually less than $20,000.

At what age does Colonial Penn life insurance end? ›

Colonial Penn sells life insurance to customers between 18 to 85 years old. Colonial Penn offers life insurance products: term and whole life. None of their life insurance policies require a medical exam, but there are a few health questions to answer to see if you are eligible for coverage.

What is the monthly payment for $100000 life insurance policy? ›

The $100,000 term life insurance cost generally ranges from as low as $10 to as high as $100 per month, depending on the factors above.

What is the cash value of a $100000 life insurance policy? ›

The cash value of your settlement will depend on all the other factors mentioned above. A typical life settlement is worth around 20% of your policy value, but can range from 10-25%. So for a 100,000 dollar policy, you would be looking at anywhere from 10,000 to 25,000 dollars.

What does $9.95 a month get you with Colonial Penn? ›

The life insurance payout you get from Colonial Penn for $9.95 monthly depends on your age and gender. For example, a 62-year-old male would get $1,057 in coverage. A 62-year-old female would get $$1,420 in coverage. The older you are, the less coverage you get per $9.95 unit.

How much does a $500,000 dollar life insurance policy cost? ›

The cost of a $500,000 term life insurance policy depends on several factors, such as your age, health profile and policy details. On average, a 40-year-old with excellent health buying a $500,000 life insurance policy will pay $18.44 a month for a 10-year term and $24.82 a month for a 20-year term.

What are negatives with a Colonial Penn life insurance? ›

Pros and Cons of Colonial Penn Insurance
No-exam insurance plans available for people who don't qualify for standard policiesMaximum coverage amount is $50,000
30-day refund period where you can cancel for a full refundStrict age limits for plans
1 more row

Can a 73 year old get life insurance? ›

When you're 70 or older, finding affordable senior life insurance might feel harder than it did when you were younger. But no matter your age, life insurance is an important way to help your loved ones cover the costs of your final expenses, so it's important to explore your options.

What is the cheapest way to be buried or cremated? ›

Cremation: When choosing between cremation vs. burial, cremation is almost always more affordable since you don't need a casket, plot, or headstone.

Where is the best place to get life insurance? ›

Our picks for the best life insurance companies in August 2023
InsurerPolicies offered
Northwestern MutualTerm, whole, universal and variable universal.
New York LifeTerm, whole, universal and variable universal.
Pacific LifeTerm, universal, variable universal and indexed universal.
State FarmTerm, whole and universal.
4 more rows
7 days ago

What age is too late to get life insurance? ›

The question here is do you need more life insurance and is there an age limit for life insurance. Although buying life insurance very late in life, it is possible all the way to age 90. Many insurance companies offer Final Expense Insurance which was developed primarily for these consumers.

At what age should you stop paying life insurance? ›

Life insurance can provide peace of mind at any age, but isn't always necessary after age 60. To see if you need life insurance, assess your family's needs, your financial resources and assets, your outstanding debts and your long-term financial goals.

At what age should you stop whole life insurance? ›

You may no longer need life insurance once you've hit your 60s or 70s. If you're living on a fixed income, cutting the expense could give your budget some breathing room. Make sure to discuss your needs with an insurance agent or a financial advisor before making any major moves.

How much does a $1000000 whole life policy cost? ›

Average cost of a million-dollar life insurance policy
AgeTerm lengthAverage monthly rate
40Term length10 yearsAverage monthly rate$47.41
40Term length15 yearsAverage monthly rate$61.33
40Term length30 yearsAverage monthly rate$137.89
50Term length10 yearsAverage monthly rate$112.67
5 more rows

Do you get the full amount on life insurance payout? ›

Life insurance payouts are totally income tax free—so in most cases, you'll get the full amount of the payout. But you might have to pay other types of taxes.

Does the beneficiary get the cash value of a whole life policy? ›

Your beneficiaries will not get any of the cash value, because the policyholder can only use the cash value of a life insurance policy while they are alive.


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