Recapping the 995 plan from Colonial Penn
$9.95 will buy one unit of insurance coverage.
If you are a 50-year old man, that means your policy will pay out a death benefit of $1,669 when you pass away (if you pass away after two years).
If you are a female, your unit will pay out $2,000 in death benefits if you pass away after two years.
If you are an 85-year old man, that same unit will only pay out $418 if you pass away after two years.
If you are an 85-year old woman, the death benefit will go up to $468. Should you pass away within 2 years of taking out the plan, you will only receive your premiums back plus a little interest, and no death benefit whatsoever.
The ads for the Colonial Penn $9.95 plan are extremely deceptive because although it seems that you can obtain $10,000 in life insurance for just $9.95 per month, the actual death benefit will be much lower.
The older you are, the lower the death benefit you are entitled to, despite paying the same unit price as others.
The payout depends on your gender and age, as well as the number of units you’ve purchased.
For example, a 63-year old man’s beneficiaries will receive $1,000 in death benefits upon their passing for each unit they’ve purchased.
A 66-year old woman who purchased 10 units is entitled to a $12,000 payout as each unit pays out $1,200.
Colonial Penn has been criticized for using highly deceptive advertisements, which may mislead potential customers.
Their coverage has been reported to be significantly overpriced compared to other insurance carriers, potentially making it less affordable for some individuals.
Seniors aged 75 or older face a waiting period before their coverage becomes effective.
The company also has limited options available for individuals below age 40 or above 85.
They have strict underwriting for their whole life coverage, including health questions that can result in denials for common health issues.
The unit system used by Colonial Penn to determine coverage amounts can be confusing for policyholders.
While you cannot get $50,000 in life insurance death benefits with the $9.95 plan, you can buy a whole life permanent insurance policy with a maximum death benefit of $50,000 from Colonial Penn. The coverage cost will depend on your age and type of insurance. A 40-year female will pay around $62.08 for $50,000 in coverage per month, and a 40-year man will pay around $76.04 per month.
