The name Colonial Penn might sound familiar thanks to ubiquitous television commercials featuring its famous pitchman. Founded in 1968, Colonial Penn markets life‑insurance policies directly to consumers, targeting seniors with the promise of affordable coverage and easy approval. The company’s flagship “$9.95 plan” has become synonymous with Colonial Penn’s brand. But is it a good choice for seniors looking to protect their loved ones?
This article explains why seniors still need life insurance, unpacks Colonial Penn’s unique product structure, presents sample rates and coverage amounts, highlights advantages and drawbacks, recommends when Colonial Penn may or may not make sense, and offers tips for securing better coverage through Liberty Financial Group.
Why seniors still need life insurance
Seniors often purchase life insurance for several reasons:
- Final expenses – Funerals, burials or cremations can cost $8,000 or more. A policy prevents family members from facing an unexpected bill.
- Debt settlement – Seniors may still carry credit‑card balances, medical bills or personal loans. Life insurance provides funds to pay off these obligations.
- Providing for loved ones – A surviving spouse or dependent may rely on your income. A death benefit can help maintain their lifestyle.
- Leaving a legacy – Many grandparents want to leave money to grandchildren or charities. Life insurance can create that legacy.
Because seniors face higher premiums and potential health issues, understanding the details of any policy—especially one marketed so heavily—is essential.
Colonial Penn’s life‑insurance products for seniors
Colonial Penn focuses almost exclusively on whole life insurance. It does not offer term life insurance, which may limit options for seniors who need higher coverage for a limited time. The company sells two main whole life products:
1. The $9.95 “unit” plan (guaranteed acceptance)
The policy most advertised by Colonial Penn is a guaranteed‑acceptance whole life plan sold in units. Each unit costs $9.95 per month—hence the tagline—and provides a specific amount of coverage depending on the insured’s age and gender. Key features include:
- Guaranteed acceptance – There are no medical questions. Anyone aged 50–85 can purchase up to eight units (coverage varies by age/gender). This makes the plan accessible to seniors with serious health issues.
- Coverage per unit diminishes with age – Because everyone pays the same $9.95 per unit, the younger you are, the more insurance each unit provides. For example, a 57‑year‑old male receives $1,313 of coverage per unit while a 77‑year‑old male receives only $493. Women get slightly more coverage per unit; a 50‑year‑old woman receives $2,000 per unit, whereas a 70‑year‑old woman receives $1,000.
- Low coverage limits – To reach a desired death benefit, you must buy multiple units. A 57‑year‑old man needing roughly $10,000 in coverage would need eight units, costing $79.60 per month ($9.95 × 8). Even with eight units, older applicants may still fall short of $10,000.
- Two‑year waiting period – There is a two‑year graded death benefit for natural causes. If the insured dies from natural causes within the first two years, the beneficiary receives a return of premiums plus 7 % interest (110 % of premiums). Only accidental deaths are fully covered immediately.
- Fixed premiums – Once purchased, the monthly cost per unit remains level. However, because the death benefit per unit declines with age, older seniors receive far less coverage for the same price.
2. Simplified‑issue whole life (LifeChoice)
In some states, including New York, Colonial Penn sells a simplified‑issue whole life policy known as LifeChoice. This plan requires applicants to answer health questions; acceptance is not guaranteed. Key details:
- Coverage amounts – Policies are available in face amounts such as $10,000, $15,000 and $25,000. These levels are higher than those offered by a few units of the $9.95 plan.
- Premium examples – For a $10,000 policy, a 50‑year‑old man pays about $33.50 per month, whereas a 60‑year‑old man pays $53.10. A 50‑year‑old woman pays $28.20, and a 60‑year‑old woman pays $43.80 for the same amount. Premiums increase with age and gender; coverage over $25,000 may not be available for older applicants.
- No waiting period – Unlike the $9.95 plan, the LifeChoice policy provides immediate full coverage once the policy is issued. However, you must qualify based on your health history.
- Simplified underwriting – While no medical exam is required, the application asks about major health conditions. Applicants with serious illnesses may be declined or pay higher premiums.
Rates and cost considerations
The way Colonial Penn structures its pricing makes it difficult to compare directly to other insurers. Nevertheless, some patterns are clear:
- The cost per thousand is high – Because coverage per unit declines with age, older applicants pay significantly more per dollar of insurance. For instance, a 70‑year‑old man gets only $689 of coverage per unit. To reach $10,000, he would need 15 units, costing about $149.25 per month. Other insurers offer $10,000 of final‑expense coverage at much lower cost.
- The LifeChoice policy has more predictable pricing – For a $25,000 policy, a 60‑year‑old man pays $130.05 per month, while a 60‑year‑old woman pays $106.80. These premiums are still higher than competitors such as Mutual of Omaha or AIG, which often charge $70–$90 for similar coverage.
- No term option – Colonial Penn does not offer term life insurance. Seniors needing temporary coverage or larger face amounts have to look elsewhere.
- Premiums are not based on medical underwriting (for the $9.95 plan) – Healthy seniors pay the same per unit as those with significant health issues, making the plan a poor value for those in reasonably good health who could qualify for a lower‑priced underwritten policy.
Pros and cons of choosing Colonial Penn
Strengths
- Guaranteed acceptance – Anyone age 50–85 can purchase the $9.95 plan regardless of health. This is helpful if you have been declined elsewhere.
- Easy application – The unit plan requires no medical exam or health questions. Enrollment can be completed by phone or online.
- Fixed premiums – Once purchased, the monthly cost per unit stays the same for life, making budgeting predictable.
- No waiting period for simplified‑issue plan – The LifeChoice whole life policy offers immediate full coverage if you qualify.
Limitations
- Low coverage and poor value – Coverage per unit is low and decreases with age. To achieve meaningful coverage, you must buy many units, making the policy expensive. ChoiceMutual’s analysis states there is no scenario in which the $9.95 plan should be purchased, because other companies offer more coverage for less premium.
- Two‑year waiting period – The $9.95 plan doesn’t fully cover natural deaths until two years have passed. Many competitors offer immediate coverage for similar final‑expense plans.
- No term or higher‑coverage options – Colonial Penn does not sell term life insurance or large face‑amount policies. Seniors needing more than $25,000 of coverage must look elsewhere.
- No riders or additional benefits – Colonial Penn’s policies lack riders such as accidental‑death benefits, living benefits or premium‑waiver options. The coverage is barebones.
- Higher premiums than competitors – The simplified‑issue LifeChoice rates are higher than many final‑expense carriers. Healthy seniors can find better prices through other insurers.
Recommendations for common scenarios
“I have serious health issues and have been declined elsewhere”
If you are between 50 and 85 and cannot obtain coverage with any other company due to severe health problems, Colonial Penn’s guaranteed‑acceptance unit plan may be an option. However, you should understand that coverage amounts are low, premiums are high and there is a two‑year waiting period. Before enrolling, compare guaranteed‑issue policies from other carriers (Gerber, AIG, Great Western) to see if you can obtain more coverage with better terms.
“I want a small policy to cover funeral costs”
Colonial Penn is not the best choice for final‑expense coverage. Healthy seniors can typically obtain $10,000–$15,000 of coverage from companies like Mutual of Omaha, Transamerica or Aflac at lower premiums and with no waiting period. The LifeChoice plan offers immediate coverage but is priced higher than competitors. Working with Liberty Financial Group to compare multiple carriers is the best way to find affordable final‑expense insurance.
“I need temporary coverage or higher face amounts”
Colonial Penn has no term life insurance and caps coverage at $25,000 for its simplified policy. If you need $50,000 or more—or want coverage only for 10–20 years—look at fully underwritten term or whole life products from insurers such as MassMutual, Pacific Life or Protective. These companies offer higher death benefits and level premiums.
“I’m healthy and under 70 but want easy enrollment”
Even if you are healthy, purchasing Colonial Penn’s unit plan usually doesn’t make sense because you pay the same as someone with severe health issues. Instead, consider simplified‑issue final‑expense products from carriers like Aflac or Foresters that ask a few health questions but reward you with lower premiums and immediate coverage.
Tips for getting the best deal
- Shop around – Colonial Penn’s advertising makes its policies seem attractive, but the $9.95 plan offers poor value. Compare quotes from multiple insurers before deciding.
- Know your health class – If you can answer “no” to basic health questions, you may qualify for simplified‑issue or fully underwritten policies with much lower premiums.
- Determine your coverage need – Before buying units, calculate how much coverage you require and how many units it would take. You may find that another insurer can provide the same coverage for less.
- Beware of waiting periods – Many guaranteed‑issue plans have graded benefits. If immediate coverage is important, seek carriers offering day‑one coverage.
- Consult an independent broker – An independent agency can compare Colonial Penn with dozens of other companies and help you understand the differences.
Work with Liberty Financial Group
📞 Call Liberty Financial Group at 888.414.3873
📩 Or click here to request a free quote
Life insurance for seniors should provide peace of mind, not confusion. While Colonial Penn’s heavily advertised $9.95 plan offers guaranteed acceptance, it often delivers poor value and limited coverage. Liberty Financial Group is an independent insurance brokerage that compares Colonial Penn’s offerings with those of many other carriers. Their licensed agents will evaluate your age, health and coverage needs and recommend policies that provide better benefits for your money—all at no cost to you.
Contact Liberty Financial Group today for a free, no‑obligation consultation. They will help you navigate the maze of final‑expense and senior life‑insurance options, ensuring you secure the right protection for your loved ones. Visit https://libertyfingroup.com/ or call their office to start your search.
About Liberty Financial Group
Liberty Financial Group is an independent insurance brokerage based in Florida. They specialize in helping seniors compare life‑insurance products from top insurers, ensuring clients get the best coverage for their needs and budget. Because Liberty is independent, its services are provided at no cost to you. Visit their website or speak with a licensed agent to get started.
