Intro: Is Colonial Penn’s $9.95 Plan Worth It?
Colonial Penn’s $9.95 life insurance plan is famous for its low monthly premium—but don’t let the price fool you. Each $9.95 “unit” of coverage of can buy less than $500 in actual death benefit for seniors in their 80s. Plus, there’s a 2-year waiting period where the full death benefit won’t be paid if you die of natural causes.
If you’re shopping for final expense insurance, this means your coverage might be less than what you need when your family needs it most. We’ve been helping seniors in Michigan for nearly 25 years as well another 30 other states for decade now. Colonial Penn’s $9.95 plan is rarely the best value. This guide breaks down the facts so you can make an informed choice.
Want the fastest way to compare your real options?
Call us at 269-230-3464 get an instant comparison quote with the tool provided on this page.
How Colonial Penn Life Insurance Works
Colonial Penn offers a guaranteed acceptance whole life insurance policy for ages 50 to 85. No medical exams, no health questions—acceptance is guaranteed regardless of your medical history.
Key Features:
- Permanent coverage that never expires
- Level premiums that won’t increase with age
- No cash value buildup for the first 3 years
- 2-year graded death benefit period: If you pass away within 2 years (except accidental death), your beneficiary receives a refund of premiums paid plus interest, not the full face amount
- Coverage sold in $9.95 “units,” with a maximum of 12 units per policy
What does that mean?
If you buy 1 unit at $9.95 per month, you might only get a death benefit around $400–$1,200, depending on your age and gender. You can buy up to 12 units, but even then, your total coverage might max out under $5,000, which is often less than typical funeral costs.
What Does $9.95 Actually Buy?
Here’s a realistic breakdown of what one $9.95 unit buys by age and gender:
| Age | Gender | Death Benefit per Unit | Cost per $1,000 Coverage |
|---|---|---|---|
| 60 | Female | $1,200 | ~$8.29 |
| 70 | Female | $750 | ~$13.27 |
| 75 | Male | $418 | ~$23.80 |
| 80 | Male | $336 | ~$29.61 |
Many people assume $9.95/month buys $9,500 or $10,000 in coverage. The truth? To get close to $10,000, you’d need to pay Colonial Penn closer to $100+ a month and still wait two years for full benefits.
Pros & Cons of Colonial Penn
✅ Pros:
- Guaranteed acceptance—no medical exams or health questions
- Fixed monthly premiums for life
- Permanent coverage, doesn’t expire
- Works for people with serious health issues who have few other options
❌ Cons:
- 2-year waiting period before full benefits on natural death
- Extremely low coverage per unit of $9.95
- Complex “units” pricing can confuse consumers
- Consumer complaints notably higher than industry average
- No riders or policy customization options
Colonial Penn Complaints & Red Flags
Colonial Penn consistently shows a NAIC complaint ratio of about 4.13, compared to an industry average near 1.0. That means they get over four times the complaints per capita compared to most life insurers.
Common Complaints Include:
- Misleading advertising around the $9.95 price (many think they’re buying more coverage than they actually are)
- Confusion about the 2-year waiting period and refund process
- Delays and difficulties in claim payouts during the waiting period
- Frustration over the inability to customize coverage
These issues don’t mean Colonial Penn is a scam, but they are red flags that you need to understand before buying.
Who Should (and Shouldn’t) Buy Colonial Penn?
Best Candidates:
- Seniors aged 81–85 with serious or multiple health issues who have been declined elsewhere
- People who absolutely cannot qualify for simplified or level benefit policies
Who Should Look Elsewhere:
- Anyone under age 90 with fair to good health for their age
- Those who want larger coverage amounts without waiting periods
- Seniors who want transparent pricing and flexible options
Better Burial Insurance Alternatives
Here’s how Colonial Penn compares to some common alternatives:
| Feature | Colonial Penn | Gerber Life | Independent Agent Option |
|---|---|---|---|
| Health Questions? | ❌ None | ❌ None | ✅ Yes (lenient) |
| 2-Year Waiting Period? | ✅ Yes | ✅ Yes | ❌ No (if approved) |
| Coverage Amount | Varies with Age | Up to $25,000 | $5,000 to $50,000+ |
| Monthly Premiums | Fixed per unit | Custom quotes | Custom quotes |
| Underwriting Flexibility | None | None | High (can approve moderate risk) |
| Death Benefit Payout | Delayed if <2 years | Delayed if <2 years | Immediate |
Example:
We recently helped a 74-year-old woman replace 4 Colonial Penn units (paying $39.80/month for $1,428 coverage) with a Mutual of Omaha simplified issue policy for $36.91/month that provided $10,000 in first-day coverage.
Frequently Asked Questions
Is Colonial Penn life insurance guaranteed?
Yes, acceptance is guaranteed with no medical exams, but there’s a 2-year waiting period before full benefits apply.
What if I die within 2 years?
If death isn’t accidental, Colonial Penn refunds all premiums paid plus interest—your beneficiary won’t receive the full death benefit.
How many units can I buy?
Up to 25 units, but coverage per unit is limited, especially for older applicants.
Can I cancel my policy?
Yes, anytime, but make sure you have replacement coverage to avoid gaps.
Expert Verdict
Colonial Penn’s $9.95 plan is not a scam, but it is one of the least cost-effective burial insurance options available for most seniors. Unless your health absolutely prevents you from qualifying elsewhere, better options exist with larger coverage, no waiting periods, and clearer pricing.
Get Real Coverage and Quotes
Don’t settle for overpriced “unit” coverage that may not protect your family.
Call 269-230-3464 or request a free personalized quote online today.
We’ll help you compare top-rated carriers and find a plan that fits your health, budget, and peace of mind—no pressure, no gimmicks.
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.