Colonial Penn Life Insurance Reviews – Good or Bad?

If you were planning to buy Colonial Penn Life Insurance and were trying to read up on some Colonial Penn Life insurance reviews, you will find that there are many complaints about the insurance company. Some even go to the extent of calling the company a scam. Below, one can get a proper understanding about what Colonial Penn Life Insurance is all about.

Why does Colonial Penn Life Charge high premiums?

colonial penn life insurance

Colonial Penn Life charges about $40 as a monthly insurance premium, for 20 years, to provide a life insurance policy that is worth about $25,000 to a 40 year old man. By paying that same insurance premium at other insurance companies, monthly and for 20 years, a 40 year old man can avail a life insurance cover that is worth a lot more than $25,000.

Many people automatically assume that Colonial Penn Life must hence be ripping people off, by charging high premiums for shoddy insurance covers. However, there is an explanation behind why Colonial Penn Life charges such high premiums.

It is because Colonial Penn Life Insurance, unlike other insurance companies, does not require its policy holders to undergo medical examinations or show their medical history, before they are allowed to sign up for life insurance. The company takes on the risk of insuring people even if their health is in dire straits. However, they pass on the financial risk to other policyholders, by awarding insurance covers that are much smaller than what the traditional insurance company will hand out for a life insurance cover.

Some people just don’t understand this concept and assume that Colonial Penn Life Insurance is a rip off company. Those same people need to understand that the traditional insurance company also sort of rips off people, by calculating insurance premiums that is directly based on the health of a person. In other words, the traditional life insurance company will charge high premiums to people who are sick, because they know that those people might pass away quickly, leading to insurance payouts that will lead to lower profits of the insurance company. Moreover, the traditional life insurance company will also increase premiums as a person ages or as their health conditions deteriorates, often defeating the purpose of having life insurance.

Colonial Penn Life insurance maintains the same insurance premiums, even as a person ages, and also doesn’t depreciate the insurance cover as a person ages.

Why does Colonial Penn Life reduce insurance cover payments on some occasions?

Colonial Penn Life Insurance, in its terms and conditions, clearly states why the value of the life insurance cover might be reduced, quite drastically, in some cases. There are two scenarios that can lead to the reduction of the life insurance cover at Colonial Penn Life Insurance.

First, if a policy holder defaults on insurance premiums, the value of the insurance policy can severely be compromised or even completely canceled. Many people find this particular term of the policy to be very unfair as almost everyone misses a payment every now and them, at least out of carelessness rather than due to not having the ability to pay. However, since Colonial Penn Life Insurance clearly states that missed insurance premiums can lead to a reduction or cancellation of the insurance cover, they continue to enforce the policy. Every time someone becomes a victim of this strict policy, they usually write up a review that Colonial Penn Life Insurance has ripped them off.

In reality however, Colonial Penn Life Insurance might have played by the rules, even though they have set rules that are quite unfair and unpractical to the hardworking consumer, who pays monthly premiums on his or her life insurance policy.

Secondly, the terms and conditions at Colonial Penn Life Insurance clearly state that life insurance payments will be compromised, quite severely, if the insurance holder dies within 24 months of signing up with Colonial Penn Life Insurance. Many beneficiaries of insurance policy holders at Colonial Penn Life Insurance have been enraged when they are told that there is no life insurance or very little life insurance to claim, as the insurance holder died within 24 months of coming on board with Colonial Penn Life Insurance.

However, the company openly reveals this term in its terms and conditions, when it signs up a policy holder. Some people just don’t read the fine print when they sign up, and feel that they have been duped when the company points out the fine print later on.

In conclusion, it can be said that all Colonial Penn Life Insurance reviews that call Colonial Penn Life Insurance company a scam are uncalled for. However, the negative reviews do question the strategies that Colonial Penn Life employs, as a company. The negative reviews are particularly critical of the fact that the company doesn’t do enough to openly discuss the clauses that are mentioned above, and that these clauses are usually buried in paragraphs of fine print that are difficult to read and understand, by the common person.

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