The $9.95 Hook and Why People Ask “How Does It Work?”
If you’ve seen Colonial Penn’s commercials, you’ve probably heard the famous “Just $9.95 a month” promise. Sounds simple, right?
Well… not exactly. That $9.95 doesn’t buy you a flat amount of coverage. It buys a unit, and what you get for that unit depends entirely on your age and gender.
Understanding how Colonial Penn’s $9.95 plan works is the key to deciding whether it’s a smart buy—or whether your money could work harder elsewhere.
Quick Colonial Penn Overview
Colonial Penn has been selling life insurance for decades, with Alex Trebek (and now Jonathan Lawson) fronting the ads. Their most famous product is the Guaranteed Acceptance Whole Life plan—no medical questions, acceptance guaranteed, but with a 2-year waiting period before full benefits kick in.
What Is a $9.95 Unit?
A “unit” is just Colonial Penn’s way of pricing coverage.
- Each $9.95 unit buys a small amount of life insurance.
- The older you are, the less coverage you get per unit.
- As of 2025, you can buy up to 15 units—but your cost increases with each one.
Here’s an example:
| Age | Gender | Coverage per Unit | Cost per Month (1 unit) | Max Coverage (15 units) |
|---|---|---|---|---|
| 50 | Male | ~$1,669 | $9.95 | ~$25,035 |
| 50 | Female | ~$2,000 | $9.95 | ~$30,000 |
| 70 | Male | ~$717 | $9.95 | ~$10,755 |
| 70 | Female | ~$1,000 | $9.95 | ~$15,000 |
Coverage Limits and Payouts
- Minimum: 1 unit ($9.95/mo)
- Maximum (2025): 15 units (~$149.25/mo)
- Coverage shrinks as you age—if you start later in life, you’ll get far less coverage for the same money.
The 2-Year Waiting Period
Colonial Penn’s Guaranteed Acceptance plan comes with a graded death benefit:
- If you pass away from natural causes in the first 2 years, your beneficiary only receives premiums paid + 7% interest.
- Full benefits are only paid after the 2-year period.
- Accidental death is covered immediately.
Cost Examples by Age
| Age | Gender | Units | Monthly Cost | Total Coverage |
|---|---|---|---|---|
| 60 | Male | 6 | $59.70 | ~$9,600 |
| 65 | Female | 8 | $79.60 | ~$14,400 |
| 75 | Male | 15 | $149.25 | ~$10,725 |
Pros & Cons
| Pros | Cons |
|---|---|
| No health questions | Very low coverage for cost |
| Acceptance guaranteed | 2-year waiting period |
| Fixed rates for life | Unit pricing can confuse buyers |
| Builds small cash value | Alternatives often provide more coverage |
Who Colonial Penn Works Best For
This plan might make sense if:
- You have serious health conditions and have been declined elsewhere
- You only need a very small amount of coverage to cover final expenses
- You understand and accept the 2-year waiting period
It’s not a great fit if:
- You want maximum coverage for your budget
- You are in decent health and can qualify for standard rates elsewhere
Better Alternatives
We’ve reviewed Colonial Penn’s plan in-depth in our Colonial Penn Life Insurance Review, where we compare it to top carriers that often offer 2X the coverage for the same cost.
FAQs
Is Colonial Penn life insurance guaranteed?
Yes. There are no health questions, but there is a 2-year waiting period.
What does $9.95 buy from Colonial Penn?
The amount depends on your age and gender. For example, a 70-year-old male gets only ~$717 per unit.
Can I cancel my Colonial Penn life insurance policy?
Yes, anytime with no penalties.
Michael is a veteran independent life and health insurance agent who specializes in guiding people with even high risk health conditions thru the insurance process. He is passionate about helping individuals and families get their unique financial protection needs met, providing his experienced based advise and delivering affordable, dependable coverage you can count on.