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Colonial Penn vs. AARP – Best Final Expense Insurance For 2021

Colonial Penn vs. AARP - Which Is The Best Final Expense Insurance

Long-term financial planning is a crucial but sometimes difficult step for most people to take, especially when things like funeral and burial planning are involved. But like estate planning, it is important for you to incorporate funeral and burial planning in your long term financial plan because death is inevitable. You don’t want to burden your loved ones when you pass on.

To put things into perspective, the costs associated with funerals and burials are high, with the average cost of funeral expenses ranging from about $7,000 – $10,000 or more. This average cost covers the cost of the funeral service, the burial, and the installation of the headstone.

A look at these costs can send shockwaves through your body, and your mind could be spinning as you try to figure out where to squeeze out some money and start saving to have a little bit more money in your accounts.

It’s not all grim, though. In fact, you could save your loved ones a lot more if only you took the best burial insurance. Also known as the final expense insurance or funeral insurance, burial insurance refers to the type of insurance designed for the payment of the end of life expenses.

It is a type of whole life insurance, which means that if you buy the insurance policy today, it will stay in place for your lifetime, as long as you pay the insurance. Alternatively, you could buy a term life coverage for your burial expenses.

But it’s not just about having a plan to settle your funeral and burial expenses when you pass on; some of the final expense insurance policies are structured in a way that may or may not allow you to accumulate a certain cash value that you could borrow against.

Also, there is a plan for everyone, with the most common death insurance policies ranging from $5,000 to $50,000. The death benefit from the plan is paid to your named beneficiaries after your demise to allow them to manage the burial costs.

Given the structure of most burial insurance policies, it is clear that this type of insurance differs from the traditional life insurance policies, which could offer at least $1million as coverage.

And also could be used to pay for the burial and everyday living expenses, as well as mortgages, college costs, and debts, among other expenses.

So, if your financial plan is missing one last piece, the burial insurance, this comparison article could be exactly what you need.

In it, we’ll look at two of the popular final expense insurance option – Colonial Penn and AARP, and how the two compare. So, let’s jump right into it!

Colonial Penn vs. AARP Overview

Colonial Penn Insurance

Established in 1968, Colonial Penn Insurance is a life insurance company based in Philadelphia. It’s a company best-known for some of its commercials that feature Jeopardy’s host, Alex Trebek, and it’s also notable because of its unique mode of operation, specifically, it doesn’t have any insurance agents, and it sells to its consumers directly via their online platforms and TV ads.

Colonial Penn insurance for seniors is regarded as one of the most flexible insurance options for you if you are looking for a burial insurance policy even as you inch closer to your 80s.

This is the most inviting feature about Colonial Penn insurance, especially because while most insurance policies come with a minimum age cap that one can apply for the burial insurance policy from, Colonial Penn gives you the freedom to buy burial insurance at any age.

Colonial Penn’s policy is permanent whole life insurance that you qualify for without a medical exam or answering medical/health questions. For persons between 40 and 75 years, up to $50,000.

This insurer also offers a term life protection cover for all adults between 18 and 75 years, with a guaranteed renewal of up to 90 years.

AARP Final Expense (Guaranteed/Easy Acceptance Life Insurance)

Also established in 1968, AARP is an interest-based/volunteer-based group developed to empower and to guide Americans as they age; this company still offers one of the best burial insurance options. It is not an insurance company, per se, but it offers burial insurance policies.

AARP’s final expense insurance is the permanent life insurance cover that explicitly covers burial expenses. The coverage is done in partnership with and the New York Life, and you will be happy to know that the policy features guaranteed acceptance, which means that every eligible person will get coverage, pre-existing health conditions notwithstanding.

That said, the primary condition that applicants need to meet for eligibility is to fall in the 50-80 years age gap.

Also, AARP final expense insurance members’ spouses could apply for the same burial insurance policy if they are between 45 and 80 years.

AARP’s burial insurance coverage is available to a maximum of $25,000, with premium rates also guaranteed, which is a big win because you won’t have to worry about the premiums going up as you age.

And the cherry on top is the fact that you won’t have to pay premiums once you hit 95 years, with the coverage staying in place for the rest of your life.

Colonial Penn vs. AARP: State Availability

Colonial Penn insurance is based in Pennsylvania, but its services are accessible from all but three states. Colonial Penn Life Insurance Company has been licensed to run its operations in 49 states, as well as the Virgin Islands, Puerto Rico, and the District of Columbia.

If you are in New York, you will have access to only a limited number of policies and insurance options. However, the available policies are underwritten by the Bankers Conseco Life Insurance Company.

AARP final expense insurance is regarded as one of the best burial insurance providers, and you get to enjoy the best coverage if you are between 50 and 80 years. It is accessible in most states except in the states of Minnesota, Montana, and Missouri.

Colonial Penn vs. AARP: Rates comparison

Colonial Penn vs. AARP: Rates comparison
Rate comparison of Colonial Penn ad. AARP:

Colonial Penn insurance for seniors – Rates

If you are between 50 and 85 years, the insurance coverage ranges from $1,786 (50 years) to $418 (for 85-year-old policyholder), translating to a monthly premium rate of $9.95.

The monthly premium rates for the insurance policies offered by Colonial Penn insurance are variable, ranging from $9.95 to $133.24, depending on the type of insurance you choose.

The term life insurance rate comes in first, with the least expensive rates ranging from $12.49- $56.46 for death benefits of between $10,000 and $50,000. The catch is that the premiums increase as you grow older. The term policy comes with a year level plan with gradually increasing premiums every 5 years.

The second burial insurance policy offered by Colonial Penn insurance for seniors is the Guaranteed Acceptance Program. The monthly premium rates range from $9.95-$79.60 for death benefits between about $400 and $17,000. The good news is that you won’t have to deal with premium-rate changes as you grow older.

The third burial insurance policy is Whole Life Insurance. It is the most expensive insurance cover whose rates range from $29.65 to $133.24; for death benefits, between $10,000 and $50,000.

You wouldn’t need a medical exam for any of the three plans.

AARP final expense insurance – Rates

AARP final expense insurance offers three main life policies under its burial insurance cover;

  • Level benefit term life policy with a coverage of up to $100,000
  • Guaranteed Issue Whole Life with a coverage of up to $25,000,
  • Simplified Issue Whole Life that covers up to $50,000

Each of these policies pays out tax-free cash benefits to your beneficiaries directly to ensure that your final expenses are covered and not a burden to the family.

To enjoy the benefits offered under any of these insurance covers and to enjoy the high-interest rate of 15% payable as part of the cash benefits, AARP final expense insurance policy requires you to pay an average of $67.00 in monthly premiums.

In other words, if you are a 52-year-old male looking to buy the $15,000 policy, you will pay high premiums for the policy. Its $67 premiums per month make AARP final expense insurance rates/policy one of the most expensive burial insurance policies around.

Colonial Penn vs. AARP: Discounts comparison

Colonial Penn Insurance doesn’t seem to offer any discounts on their plans, but they make up for this with their affordable monthly premiums.

AARP’s final expense insurance’s monthly premiums might be among the highest on the market and also a little inflexible, but you get to enjoy great discounts; the rate is still higher than what’s offered or, rather, charged by Colonial Penn Insurance.

Colonial Penn vs. AARP: Coverage Options Comparison

Colonial Penn vs. AARP: Coverage Options Comparison

At the end of the day, the decision to choose one insurance coverage over the other is something that depends on the insurance plans and coverage options offered. Colonial Penn insurance for seniors offers three plans for you to choose from. These plans include:

The Guaranteed Acceptance plan ideal for individuals between 50 years and 85 years, with no medical exams required. It comes with an initial 2-year period during which the policy is guaranteed. After this initial 2-year period, policyholders are eligible for full coverage payouts.

The premium is also locked in and guaranteed, and the best part is that you are guaranteed fixed premiums that will never increase for as long as the coverage remains in effect.

They also offer the permanent whole life policy available for persons between 40 and 75 years, with a maximum coverage/death benefit of $50,000. Also, it has a cash value you could borrow a loan against. You don’t need a medical exam to be eligible for the plan.

Lastly, Colonial Penn insurance for seniors offers a renewable term life insurance plan that’s offered for individuals below 40 years. The term policy is offered to individuals between 18 – 75 years, and you get to enjoy coverage of up to $50,000.

AARP final expense insurance, on the other hand, offers the Guaranteed Acceptance Life Insurance Policy, term, and whole life policies.

The Guaranteed acceptance whole life insurance is for AARP members between 50 and 80 years and spouses between 45 and 80 years, and the acceptance is 100% guaranteed, with no questions about medical conditions.

Option 2 is the whole life insurance for persons between 50 and 80 years. The rate is fixed, and premiums are paid until 95 years. This policy ends at death regardless of the age of the policyholder. Acceptance for this policy is based on three primary health questions determined by the company.

The last policy is the term life insurance policy. Members between 50 and 74 years are eligible, and their spouses are also eligible if they fall in the 45-75 year bracket. The term’s coverage is between $10,000 and $100,000. For a higher coverage amount, you’d have to call New York Life and answer specific questions about their health.

Colonial Penn vs. AARP: Pros & Cons

Pros and Cons of Colonial Penn Insurance
All you need to know about Pros and Cons of Colonial Penn Insurance

Pros and Cons of Colonial Penn Insurance

Pros of Colonial Penn – Is Colonial Penn Good Insurance?

  • Colonial Penn Insurance for Seniors offers guaranteed acceptance policies. Members and interested persons between the ages of 50 and 85 years qualify for the acceptance policy, even without a medical exam conducted.
  • No medical history or exams required – as long as you are between 50 and 85 years and you are interested in the burial insurance policy, you will qualify for this policy, and you cannot be turned down because of your health.
  • Quotes are available online. If you are interested in a burial insurance policy from Colonial Penn, you can get a quote online, rather easily. And the best part is that you wouldn’t have to deal with an insurance agent; you can access the quote and purchase the policy online.
  • 30-Day Trial Period. Colonial Penn allows you to enjoy a 30-day trial period. What this means is that if at the end of the 30 days you realize that the plan isn’t for you, you can cancel the insurance policy, and the best part is that you get a 30-days’ refund from the policy’s activation date.

Cons of Colonial Penn

  • The life policies are age-restricted – The reason for this is that the whole life and the guaranteed policies are only available to persons in specific age groups. The guaranteed acceptance life policies are available to persons between the ages of 50 and 85 years, while the permanent whole life insurance policies are only between 40 and 75 years old.
  • The maximum value of the insurance policies is capped at $50,000. While Colonial Penn offers a maximum policy coverage of $50,000, this amount can only go so far for families, meaning that if you are looking for a policy for your cover, you might want to look for other plans by other companies.
  • Not available everywhere.
  • The Colonial Penn final expense insurance covers aren’t accessible in the Virgin Islands or New York, meaning that if you live in either of these places, you will have limited options.
  • No 24/7 options for claims reporting done via the phone, and online claims reporting is not an option either.
  • No information about discounts offered on the website
  • Increasing customer complaints

AARP: Pros and Cons

AARP Final Expense Insurance – Pros

Premium payments stop at 95 years for the guaranteed acceptance products, and the coverage stops at 95, meaning if you are still alive at 95 years, you won’t have to make the payments anymore while enjoying the full coverage benefits from the plan.

High-interest rates. AARP final expense insurance coverage allows you to enjoy a high insurance benefit at a rate of 25%, which is significantly higher than what you get from other policies and insurance covers

Great benefits from the guaranteed acceptance whole life policy. AARP’s policy offers great coverage, with excellent benefits to boot. Some of these benefits include the fixed monthly premiums that will never change, fixed death benefits, non-expiry date policies at an acceptable age, as well as graded death benefits for the policy’s first two years after the policy is in force.

The graded death benefits mean that AARP will refund the policy’s premiums plus interest of 25%, should the policyholder die within the first 2 years.

AARP Final Expense Insurance – Cons

Higher, more expensive premiums – AARP’s policies are significantly more expensive than the policies offered by other companies. The average of $67.00 a month is significantly higher than the rates charged by other companies. AARP competitors offer cheaper premiums.

Long processing times for claims – AARP’s final expense policies take about 1 – 2 months on average to be processed and for the families to get processed.

This applies to the contested claims too. Unfortunately, this is significantly longer than other companies, which pay in a week or even two weeks after the claim has been filed.

AARP isn’t an insurance company – As mentioned above, AARP is not an insurance company, which is the reason why the company charges more than other companies. The company’s model makes it the highest bidder.

Colonial Penn Final Expense Insurance vs. AARP Final Expense: Customer satisfaction ratings

Colonial Penn final expense insurance – Despite offering some of the best plans for burial insurance, Colonial Penn insurance has been on the receiving end of a host of complaints from customers, according to data from the National Association of Insurance Commissioners.

This is not to say that all customers are dissatisfied. Despite small insurance coverage, no requirement for medical exams, and the coverage applicable to older people, even the ones with health conditions, it might not be the best option for you.

On the other hand, AARP final expense insurance might be expensive, but it’s regarded as one of the best burial service providers on the market.

According to consumer complaints and insurance regulators, AARP’s services are better than most of the alternatives. The coverage options offered are more feasible and ideal for most people.

Colonial Penn vs. AARP: Which is Better?

Although the AARP final expense policies are more expensive than the ones offered by Colonial Penn, AARP offers better burial insurance covers than Colonial Penn insurance.

Frequently Asked Questions

How Does Burial Insurance Work?

The best final expense insurance coverage process starts when you decide that you need the burial insurance cover. The process involves the analysis of the applicant’s overall financial picture, and if you think that your family would need some additional funds to cover their burial expenses, then the insurance company will start the search for the most appropriate insurance policy.

The insured would make monthly payments from then, and upon your death, your beneficiaries would get the payments that would go towards the payment of the burial costs.

Is Burial Insurance Worth The Cast?

Generally, the burial insurance isn’t worth the cost, but it is a payment made in addition to a life insurance policy. The amount is significantly smaller, though, but it’s a more cost-effective solution if you are looking for a means of paying for the burial expenses.

How Much Is The Cost Of Burial Insurance?

The cost of the best final expense insurance varies depending on age, gender, and health, but the average cost of burial insurance charged is about $50 in monthly premiums for the $10,000 insurance policy.

Conclusion

The burial insurance policies offered by Colonial Penn final expense insurance and AARP are some of the best final expense insurance options on the market for you. But overall, AARP’s plans are better than Colonial Penn’s, and with the negative feedback recently received for Colonial Penn insurance from seniors, AARP might be the better option for you, albeit at a higher cost. The one thing that stands out from the Colonial Penn insurance cover is that they offer plans to persons from 18 years, too, unlike AARP’s minimum age of 50 years.