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Colonial Penn vs. Mutual of Omaha – Compare & Buy Burial Insurance Plan in 2021

colonial penn vs mutual of omaha

What are the best burial insurance plans on the market? Should you buy burial insurance as a standalone package, or is whole life insurance a preferable option given its lifetime usage? Most importantly, which insurance company should you choose for the best burial insurance plans? Should you buy burial insurance from Colonial Penn insurance of Mutual of Omaha?

In this article, we’ll answer all these questions and much more as you learn about how to buy burial insurance and how to choose some of the best insurance plans.

But before we jump into the features and policies offered by the two companies, let’s first take a look at the meaning of burial insurance and what you should look out for when you buy burial insurance.

What is Burial Insurance?

What is Burial Insurance
What is Burial Insurance?

Burial insurance plans are typically smaller whole life insurance policies that cost $2,000 – $25,000, and are specifically designed to cover funeral costs, among other final expenses.

However, what you need to know is that burial insurance doesn’t exist as a standalone or a specific insurance product. The burial insurance policy is a policy that covers the specific expenses after your demise.

Often, burial insurance plans and policies go by different terms depending on the company, and some insurance companies refer to them as funeral expense insurance, burial insurance, or funeral insurance.

What’s the Difference Between Burial Insurance and Funeral Insurance?

The primary difference between burial and funeral insurance policies is that while the payout of the benefits from burial insurance goes to the named beneficiaries, the payout from payout funeral insurance goes to the funeral home directly.

But this is not the only difference between the two main types of burial/funeral insurance policies; the other differences between the two are as follows:

Burial insurance and burial insurance plans are designed to work in the same way as the standard whole life policy. Under this policy, the beneficiaries are the ones who receive the insurance benefits from the life insurance claims, and there aren’t any restrictions on how they can use the payout from the claims.

So, if you want a policy that gives your beneficiaries control and freedom over how they use the benefits, then burial insurance plans will be the most viable option for you.

On the other hand, there is funeral insurance, which is also known as the pre-need life insurance, refers to the type of insurance where the insurance payout is made to and linked to the funeral costs at a pre-arranged burial, funeral home, or cremation.

What this means is that you choose the funeral home, select the details of your funeral, the purchase the insurance policy from the selected funeral director. In other cases, the selected funeral home determines (locks in) the cost of the funeral policy so that it’s certain of the cost that’s needed to cover the funeral costs when you die. In such cases, the life insurance payout from this pre-need insurance/ burial policy will go to the funeral home.

Choosing between Colonial Penn and Mutual of Omaha

Choosing Between Colonial Penn & Mutual of Omaha

Colonial Penn and Mutual Of Omaha Overview

Colonial Penn Burial Insurance

Colonial Penn burial insurance is one of the leading burial insurance companies that have, for decades, been selling some of the best life and burial insurance covers to its older customers. The burial plans offered by the company are among the most popular plans, with the guaranteed whole life policy being one of the most popular plans offered by the company, specifically for seniors between 50 years and above.

The other feature that stands out from the plans offered by Colonial Penn burial insurance is the 18-75 years coverage under the term life insurance coverage. Unfortunately, the maximum coverage amount offered, either from the guaranteed issue whole life policy or the term insurance, is often too small for most families, especially in the absence of other types of wholesome policies offering bigger payouts.

While Colonial Penn has been receiving a lot of backlash recently over their services and burial insurance plans, it still remains a good option for younger persons as it offers plans for individuals between the ages of 18 and 75 years.

Mutual of Omaha Overview

Mutual of Omaha, on the other hand, is one of the top recommended insurance companies for anyone looking to buy burial insurance plans at the best deals. Mutual of Omaha is ideal for anyone looking for smaller burial expense funerals. If you are looking for a smaller insurance option for a smaller funeral or you’re looking for the most affordable cremation, perhaps something less than $25,000 and $50,000 for your burial insurance will be the best option for you.

Mutual of Omaha burial plans are often as low as $2,000 or $5,000 in Washington State, with their maximum insurance cover having a coverage of $25,000. However, you could qualify for higher rates if you speak to a representative from Mutual of Omaha; this maximum range for the coverage amount is between $2000 and $40,000.

Mutual of Omaha was founded in 1909, and it’s rated A+ by some of the leading insuring rating companies. The burial insurance plans fall under the whole life insurance policy, and the best part is that there is no waiting time needed, only the underwriting approval. Also, their plans are designed such that the premiums stay unchanged from the time you sign up for the insurance. That said, the name of the burial insurance plans/product is the living promise level benefit; the duration of the premiums will last forever.

Colonial Penn and Mutual of Omaha Consumer Ratings

One of the important considerations you need to keep in mind when looking for burial insurance plans is to evaluate different customer reviews, as well as the insurer’s financial strength. This information is important because it allows you to choose the insurance company that suits your needs best.

Mutual of Omaha is a top-rated burial insurance company that offers some of the best burial insurance rates. It is A+ rated, and the best part is that the company is capable of paying the burial insurance benefits while ensuring customer satisfaction at all times.

On the other hand, Colonial Penn burial insurance is one of the popular insurance companies around, but it might not be the best. While it’s A+-rated by Better Business Bureau, Colonial Penn has, in the recent past, received a big number of complaints about the company, all centered around billing, advertising, as well as issues with sales.

But with no issues around the processing of claims and the payment of benefits, you will be happy to note that your Colonial Penn insurance policy is in the right hands.

Pros and Cons

Pros and Cons of Colonial Penn and Mutual of Omaha
All you need to know about Pros and Cons of Colonial Penn Burial Insurance Plan

Colonial Penn Burial Insurance Plans

Pros

  • No medical exams needed for the guaranteed acceptance insurance
  • Affordable rates about $9.95 minimum, for all age groups.
  • There is a guaranteed insurance rate offered
  • There is the potential of borrowing money against the cash value insured. 
  • Fast payout rate

Cons

  • Coverage benefits for the first two years are limited.
  • Variable maximum coverage and you only know what your limit is after application.
  • The maximum insurance payout is capped at $50,000.
  • Mutual of Omaha Burial Insurance Plans – Pros and Cons 

Mutual of Omaha

Pros

  • Affordable burial insurance rates
  • No medical underwriting needed for guaranteed insurance coverage
  • They run a Mutual Perks program that offers extra benefits.
  • The simplified version is suitable for persons between 45 and 85 years.
  • There is a guaranteed issue policy offered to all the seniors.
  • Positive customer rankings and strong positive reviews

Cons

  • Limited benefits the first two years
  • The information offered online is rather limited.
  • There are graded death benefits offered on specific plans, with a 2-year waiting period.
  • You have to talk to the agents/representatives for more information about the plans offered.

Colonial Penn and Mutual of Omaha Products and Services

Products and Services: Colonial Penn and Mutual of Omaha

If you are looking to buy burial insurance plans, Colonial Penn and Mutual of Omaha offer some of the best burial insurance products and services, allowing your beneficiaries to have an easier time laying you to rest when your time comes. To help you make the best choice about which of these two companies should buy burial insurance from, let’s take a look at the products and services offered by the two companies.

Colonial Penn Products

To ensure that there is something for everyone, Colonial Penn offers three main types of burial insurance covers – the guaranteed acceptance life insurance, whole life insurance (permanent), and term life (renewable) insurance covers.

Guaranteed Acceptance Life Insurance is offered in most states and available to people between the ages of 50 and 85 years. This life insurance policy needs no medical examinations for approval, but it comes with a limited 2-year limited benefits period, which means that in the event of death within the first two years after applying for the policy, the company will not pay out the death benefits.

The other important thing to keep in mind is that this insurance policy builds some cash value from the beginning of the first year for coverage, and you also get to choose the limit of the death benefits. With the Colonial Penn Guaranteed Acceptance policy, you get coverage for your whole life, as long as you keep paying the insurance premiums. You will be happy with the fixed rate of insurance premiums payable, and you also get to make the same premium payments for the rest of your life.

Permanent Whole Life Insurance is the second type of insurance policy offered by Colonial Penn Burial Insurance Company. The policy is designed for interested individuals in the 40 to 75 age group. The terms of this insurance policy do not, however, apply to the applicants in the Virgin Islands and in New York. You don’t need a medical examination to qualify for the policy, although you need to complete a specific eligibility questionnaire.

The other notable feature of the permanent whole life burial insurance cover is that it gives you coverage for the rest of your life, with a death benefit capped at $50,000. It also builds its cash value from the first year of taking the policy. The features of this coverage include the fixed rate. Note, however, that the premium costs vary depending on the age and the gender of the applicants, except in the state of Montana, where the premium rates are only affected by age.

Renewable term life insurance is the last type of burial insurance offered by Colonial Penn is the term insurance policy that is offered in all states except the Virgin Islands, New York, and Montana. This term plan is offered for individuals from 18 years to 75 years, and it’s renewable up to 90 years while carrying a maximum death benefit of at least $50,000. These rates vary depending on age and gender, and the premiums only increase as one grows older.

This policy could also earn some cash value, depending on the length of the insurance coverage. Like the other burial insurance plans by Colonial Penn, medical exams aren’t required for the application to be approved, although there is a medical questionnaire to be filled for the determination of the applicant’s eligibility.

As a bonus, there is a living insurance policy. Colonial Penn provides a living insurance policy as an option between the permanent whole life policy and the renewable term life insurance. The Living insurance policy is the accelerated death benefit rider, which allows you to receive up to 50% of the term or whole life death benefits in case you receive a cancer diagnosis or diagnosis for any other chronic illness, including a stroke or a heart attack.

Mutual of Omaha – Products and Services

Mutual of Omaha also offers plans designed to meet different client needs, which means that there is an insurance product for everyone.

Term Life Insurance – This is the simplest and also the most affordable term insurance product offered by Mutual of Omaha. The term policy is offered in different lengths from 10, 15, 20, and 30 years. You can buy burial insurance policies, and the best part is that the payout of the benefits will be at least $100,000. The term policies are also converted into the permanent life insurance policy, as long as you apply for the conversion is done before the term policy expires.

Whole Life Insurance – The permanent life insurance product is the other product offered by Mutual of Omaha. The insurance company’s whole life insurance policy provides guaranteed use, which means that you won’t be asked for a medical exam before the application is approved, and also, you won’t have to answer any health-related questions.

In addition to the death benefit payout, there is also the whole life insurance cover with a whole life insurance cover whose cash value builds up with time and could be used as security while you are still alive. This plan works for persons between 45 and 85 years, and you access coverage valued at $2,000 – $4,000. The whole life insurance policy features a specific set of premiums that are fixed and will not increase for as long as you are alive.

The cash value of this policy is also tax-deferred, and it might be the best option for you if you need a plan that earns interest with risk-free gains. The best part about this policy and Mutual of Omaha insurance policies is that the company will process as much as 85% of all its claims and have them paid within a 24-hour period.

Universal Life Insurance – This is the other burial insurance plan offered by Mutual of Omaha, and it is one of the best burial insurance covers offered by the company. This insurance cover is one of the most popular insurance policies offering lifetime coverage, which means that you will be covered for as long as you are covered. It features different products, including the Income Advantage, which means that the policy gives you the chance to earn from your cash value funds.

It is the most flexible of life insurance policies and products, and the best part is that the policy allows you to change the frequency of the premium payments, and you also get to adjust the death benefits under the policy, if and when needed. There is also the life protection advantage that also includes the accelerated death benefits and the guaranteed refunds.

Colonial Penn and Mutual Of Omaha Burial Insurance Plans

Here are the plans offered by both Colonial Penn and Mutual of Omaha.

Colonial Penn Burial Insurance Plans

The Colonial Penn burial insurance plans include:

  • The term life policy for applicants between 18 and 75 years, with a maximum death benefit of $50,000. The policy is renewable until the age of 90.
  • Whole life policy with a maximum death benefit of $50,000, for persons between 40 and 75 years; and premiums dependent on gender and age.
  • Guaranteed acceptance whole life policy for persons between the ages of 50 and 85 years.

Mutual of Omaha Burial Insurance Plans

  • Term Life Insurance has a maximum coverage of $100,000 for term policies.
  • Whole life insurance is between 45 and 85 years, with a coverage of between $2,000 and $40,000.
  • Universal life insurance, on the other hand, has no limits and no time specifications.

The Colonial Penn and Mutual Of Omaha Reviews

Colonial Penn Reviews

Colonial Penn boasts above-average ratings, and though there have been a number of negative reviews recently, it is still rated as one of the best companies you may want to buy burial insurance covers offered by the company.

Mutual of Omaha Reviews

Mutual of Omaha boasts numerous positive reviews, including A+ ratings from AM Best financial rating, S&P Global, as well as BBB. Customers are also quite happy with the services and how fast the claims are paid, with the company boasting an 85% pay-rate within 24 hours of the claim being filed.

Conclusion

While the 2019 survey didn’t earn Colonial Penn a ranking, Mutual of Omaha has been ranked the top life insurance company of the year in 2019. Both companies, however, offer some of the best burial insurance policies. If you are looking to buy burial insurance policies, these two companies might be the options for you.

But if you are to choose between these two companies, we’d recommend Mutual of Omaha’s burial insurance plans.