Colonial Penn Life Insurance company has received a lot of flak in the insurance world. Many members of the public have even taken efforts to warn others about the Colonial Penn Life Insurance scam that the people behind Colonial Penn Life Insurance are running. However, Colonial Penn Life Insurance is not a scam. It is just a very expensive type of insurance, as explained below.
High insurance premiums
Colonial Penn Life charges insurance premiums according to a unit system. One unit costs $9.95. Depending on a person’s gender, age and state of residence, one unit of insurance premium can get them an insurance cover that is worth anywhere between $500 and $2,500.
As an example, a 38 year old man residing in the state of Texas will have to pay $9.25 per month, for twenty years, to avail a life insurance cover that is worth $5,000. If he wants a $25,000 cover, he will have to pay $37.27 per month, over the next 20 years.
At other insurance companies, a $37.25 monthly payment, for the next 20 years, will fetch a life insurance cover that is worth $500,000, a huge upgrade from the meager $25,000 coverage that Colonial Penn Life Insurance hands out.
The difference however is that Colonial Penn Life does not require its policy holders to undergo medical examinations or get evaluated on health grounds. Anybody can sign up for a life insurance policy at Colonial Penn Life Insurance. Other insurance companies that hand out much larger covers on life insurance policies require policy holders to undergo fairly rigorous physical examinations. If one is found to be plagued by a disease or a serious heart condition or something along those lines, he or she might be denied a life insurance policy. Colonial Penn Life Insurance doesn’t deny anyone although it makes a trade off with reduced coverage on the face value of an insurance policy.
Defaulted premiums lead to cancellation of the life insurance policy at Colonial Penn Life
Another reason for a lot of propaganda surrounding the supposed Colonial Penn Life Insurance scam is that the company strictly enforces a policy where even one defaulted or missed insurance premium can lead to a cancellation of the whole insurance policy, even if the policy holder had made timely payments for several years. Many beneficiaries of insurance policy holders at Colonial Penn Life Insurance started making complaints after they found out that the company didn’t owe them a dime, because the insurance holder defaulted on a few payments that made their life insurance policy null and void.