2 Year Waiting Period … 2 year waiting period … 2 year waiting period
As we go on, please remember … you’re going to be waiting TWO long years with Colonial Penn to get full life Insurance for final expense burial coverage. You die a month after you take out the policy, you are NOT getting full coverage. If you die 18 months into the policy, you are NOT getting that full coverage.
It’s Called a Two Year Waiting Period and NO .. It’s Not What You Want
Why do carriers like Colonial Penn do the two year deal? It’s simple, they can take the chance on folks that are not in perfect health, because they will have 24 months of payments before they are on the hook for coverage.
It’s also easier to sell, because you can take almost anyone (even though Colonial oddy asks medical questions even with the 2 year waiting period) and it creates a simple flat (but high) rate for their phone operators to sell.
That’s the simple, dirty truth in our opinion. There are a lot of other issues with the coverage they provide, but not all is bad, so we will temper our stinging critique with kudos (when deserved) as well.
Is there a better way to do insurance for Final Expense?
Yes, yes and yes … but first ….
Here is our REVIEW of Colonial Penn (our opinions) …
Colonial Penn Life Insurance is a significant player in the senior’s market. Corporate management understands the value of elderly insurance policyholders, and Colonial Penn actively pursues enrolling people in their golden years. Their marketing campaign, to say the least, is proactive. Alex Trebek is a spokesman for the company and television advertisements featuring Mr. Trebek are widespread. This is in addition to mailings and telephone robocalls. Colonial Penn Life Insurance wants your business.
We are not saying that this is not a reputable company. Colonial Penn Insurance has been around for a long time and has many satisfied policyholders. We believe it is crucial not to accept the advertising without question and learn more about what this major insurance company is offering. It is possible there may be some jeopardy and people should be aware of that.
Some Research is a Good Idea
Consumers are encouraged to do some research before they make any purchase, and that is undoubtedly true about insurance policies. Senior citizens should take a moment and look at what is behind the advertising curtain and make insurance choices based on uncovered facts instead of slogans.
- What Do You Know About the Waiting Period?
Colonial Penn Life Insurance offers a product that has a 24-month waiting period. It means that if you died from natural causes in the first 24 months of owning the policy, there would be no death benefit paid by Colonial Penn (Interestingly though, if an insured person dies because of an accident the full amount of the policy will be paid, with specific stipulations.). What your beneficiaries will receive from the insurance company are the premiums paid on the policy and 7% interest compounded annually.
The waiting period is not a problem if you’re in relatively good health. It does represent a risk that a person takes in purchasing the policy. If you compare Colonial Penn Life Insurance with another insurance company, you should look at the waiting period of the latter. Under no circumstances should you accept a policy with a three-year waiting period.
- Guaranteed Acceptance Whole Life Concept
Colonial Penn Life Insurance makes a point of telling people it has a policy that does not ask health questions no matter what your physical condition happens to be. This is known as guaranteed acceptance whole life insurance. What Colonial Penn is doing is offering you a policy that has no underwriting.
It sounds great until you realize you are paying more for a policy that is delivering less. We say that because this product has a 24-month waiting period and could deny your beneficiaries the full benefit of the policy. Life insurance products that require health questions to be answered may seem intrusive. Still, on the other hand, these not only have full protection from the day your policy goes into effect, but you also pay less in premium than you would with guaranteed acceptance whole life insurance.
The smaller premium reflects the lower risk you present because the life insurance company knows about your health condition. Frankly, someone who is in good health is going to do better without a guaranteed acceptance whole life insurance policy.
Some Terms That Might Seem Vague
Senior citizens must remember that advertising seeks to persuade a person to buy something. Standard industry terms, when used by the marketing department, can convince a consumer that a policy is too good to ignore. Locked rates is one of the terms Colonial Penn uses in its marketing.
What it means is that your monthly premium is fixed or “locked” for the life of your policy, and the rates will never go up. Anyone who is on a fixed income would be interested in a life insurance product whose premium will not inflate over the years. Other insurance companies promote locked rates in their advertising. Why is that?
Because a rate lock is a common feature of a whole life insurance policy, that is why.
A consumer can look at any whole life insurance policy and discover there is a rate lock, guaranteeing that the premium will not go up. It is essential when you are shopping around to know that you can consider rate lock as a given in a whole life insurance policy. You can look instead for what benefits the coverage will provide for you.
Marketing will also talk about units of coverage. These are attached to a specific price. For example, Colonial Penn’s guaranteed life insurance will state that coverage starts only $9.95 per unit. It does sound attractive, but a smart shopper needs to know a little bit about what units mean.
In simple terms, a unit of coverage is the amount of life insurance benefit an individual can buy, and the cost depends on age, state of residence, and gender (Women, by the way, do not pay as much as men for units of life insurance.) The premiums that you pay for $25,000 in coverage will increase with a person’s age. What a consumer may think is a beautiful bargain has a caveat buried within it. Colonial Penn Life Insurance will charge a lower premium per unit; however, that unit of coverage decreases in size as you grow older. Moreover, Colonial Penn limits the number of units of insurance you may purchase.
Insurance Products for the Elderly
Colonial Penn Life Insurance targets the senior citizen market and has several products with the older consumer in mind. We’ve already discussed the guaranteed acceptance whole life insurance policy, and there are two other that Colonial Penn offers for golden-agers.
- A Policy That Asks Health Questions.
This Colonial Penn Life Insurance policy asks health questions and will also do a check of the applicant’s prescription history. Eligibility is going to be based on that information, but there is no need to have a medical examination.
This product has stringent underwriting guidelines. There is a long list of health conditions which Colonial Penn will not cover, and these include chronic bronchitis, muscular dystrophy, and congestive heart failure, among others. The health conditions include many health issues that senior citizens have, and it makes it difficult to be accepted.
Other companies will accept health conditions that Colonial Penn will not. It does require doing a little shopping to find those other carriers. Those insurance companies may charge lower premiums.
- The Colonial Penn Term Life Insurance.
This is different than a whole life insurance policy. Insurance professionals will tell you that term insurance is always cheaper than whole life. The reason is straightforward: term life insurance expires. Your beneficiaries are guaranteed a death benefit with a whole life insurance policy, and that is not always the case with term insurance. There is a point in time when the policy expires.
Colonial Penn Term Life Insurance expires when a person is 90 years old. That seems reasonable, but there is a catch and it impacts your wallet. The Colonial Penn product has premium increases every five years, and the policy can be costly for anyone in their 80s. It is a simple question of arithmetic. Anyone who is on a fixed income will gradually see their insurance expenses rise to the point where the policy is too expensive to keep, and that is when the policyholder will ordinarily cancel.
Shop Around for Better Deals
It is hard for anyone to resist the marketing promises. After all, seeing Alex Trebek recommend any product on national TV has to be beyond tempting and deserving of your trust.
Nevertheless, a smart consumer will look behind the curtain of advertising (and a wonderful mouthpiece for the company) and examine any insurance product critically.
After all, Alex Trebek while a very sympathetic figure with his health issues, will never be on a fixed budget like you the consumer is.
We mentioned a few areas where Colonial Penn Life Insurance is not quite the fantastic bargain their advertising suggests. Some comparisons between Colonial Penn and some other companies will show that a buyer can get a better policy at a lower premium. Colonial Penn Life Insurance takes common life insurance terminology and spins it into something that looks too good to be true. Frankly, looks aren’t everything.
Smart shopping requires knowing what you need before you start looking. A good final expense insurance policy, one that will cover all the burial costs, will include:
- An expiration date that doesn’t end the policy at a given age
- A benefit that does not decrease over time
- Coverage that covers the insured immediately after qualification
- Monthly premiums that stay the same for the life of the policy.
These objectives are combined with personal needs you want to have satisfied. Something you ought to keep in mind about insurance agents is they are ethically bound to answer any question completely and honestly. You have the responsibility of asking the questions, and doing a little research helps you craft those inquiries.
You should include in your investigations any consumer complaints about the insurance company. Looking at consumer review boards such as Yelp or professional organizations such as Better Business Bureau can help in deciding about which insurance company to approach. Colonial Penn Life Insurance has not always satisfied the needs of its policyholders. Complaints have been filed against them. It is worth your time to look at those negative thoughts.
Buying Burial Insurance Can Be an Emotional Experience
We want to stress that Colonial Penn Life Insurance is not a shady operation. This is a major insurance company with an A.M. Best rating of A-, which is pretty good. What we want to impress on people is that if your life insurance policy is providing less than what you need, then you are paying more than you should.
Final Expense or Burial Insurance is an Emotional Issue for Many Older People
They do not want their loved ones to pay for an expensive funeral out of their own pockets. The insurance lightens the financial load of the burial. What is unfortunate is by trying to lower the family’s costs, an older person is increasing his or her own expenses. The good news is that this does not always have to be the case. There are plenty of insurance companies that are offering whole life insurance policies and specifically final expense life insurance that are highly affordable. The challenge is to find them.
It’s a fact of life that people will pay more for a lack of knowledge, whether it is in money or time. You certainly can do the research necessary to find the best policy for your needs, and you don’t have to be swayed by a sophisticated marketing strategy. Many people don’t have the time to do this kind of work. It is a better idea to look for a policy with the help of an insurance agent.
Many insurance agencies represent several companies. Insurance professionals can help an older person find exactly what he or she needs. Filling out forms is impersonal, and standard applications do not always address the requirements of an individual. It takes being able to sit down with an insurance agent and have a face-to-face conversation about insurance coverage.
Based on what the buyer tells the agent that insurance expert can look through the insurance companies and find the right policy that covers all of what a person would like to have.
Colonial Penn Life Insurance has a fantastic marketing and advertising program. The company is very persuasive, and an uninformed person can easily be convinced that this insurance company has precisely what is needed. It isn’t always the case, and an individual can end up buying an expensive insurance policy. We do not want that to happen to anyone.
The Policy Holder is #1
You will discover when you work with Insurance for Final Expense that we put the policy holder first. We are not as concerned about collecting premiums as we are about making sure that an individual gets the insurance coverage he or she wants to have. We work with MANY insurance carriers, and we believe we can find what you’re looking for at a price you can afford.
And after all, would you rather trust Colonial Penn that was founded in 1968 or a major carrier that we provide like Mutual of Omaha, who has 100% name recognition of anyone over the age of 30 in the United States.
By the way, Mutual of Omaha was founded in 1909, survived the Great Depression with little or no problem, and today boasts of over 6,000 employees nationwide.
Meanwhile, their coverage, is in our opinion FAR superior to that of Colonial Penn, with NO 2 year waiting period and fantastic rates that seem too good to be true …
But aren’t … It’s one of our favorite options for clients across this great land, that could be a lot greater, but first Washington DC needs to get their act together and start representing the people again. (Apologies for that political aside).
We understand that senior citizens are concerned about value and price. We keep those points in mind as we search for a policy review. We are not interested in just “selling” you any coverage so the CEO of our company can live the high life. First things first, make the consumer happy. Turn the consumer into a client. Get the client the coverage they absolutely need and deserve.
Our financial goals will be more than met, but you come FIRST.
Gary P. Cubeta
(Serving Americans In All 50 States)