You've probably seen TV commercials for the Colonial Penn's $9.95 life insurance plan and are wondering if it is a good deal.
The short answer is no.
The $9.95 plan is what's called a "guaranteed issue life insurance policy". Like the name implies, everyone is guaranteed approval regardless of health status or medical conditions.
The catch is, there is a waiting period of two years, so, if you die before the two years are up, your beneficiaries will not receive an insurance payout - they are only entitled to the premiums already paid plus a small interest amount.
Unlike other insurance companies, Colonial Penn sells insurance coverage using a unit system in which each unit equals a small amount of life insurance.
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The big problem is, as you age these units are worth less and less, so if you only have one unit ($9.95/month) and you die at 75 years of age, the policy would pay less than $600.
So, if you are looking at one of these policies to cover funeral and burial expenses, you are out of luck.
Your age and gender determines how much coverage each unit gives you.
You can buy up to 15 units, but 15 times $9.95 is close to $150 per month, and the benefit amout is only around $8,000.
As you can see, it's no longer a good deal. There are much better deals available for people over 50.
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This table shows you how much coverage each Colonial Penn insurance unit provides, according to gender and age:
| AGE | Coverage: 1 Male Unit ($9.95) | Coverage: 1 Female Unit ($9.95) |
|---|---|---|
| 50 | $1,669 | $2,000 |
| 51 | $1,620 | $1,942 |
| 52 | $1,565 | $1,890 |
| 53 | $1,515 | $1,845 |
| 54 | $1,460 | $1,802 |
| 55 | $1,420 | $1,761 |
| 56 | $1,370 | $1,719 |
| 57 | $1,313 | $1,669 |
| 58 | $1,258 | $1,620 |
| 59 | $1,200 | $1,565 |
| 60 | $1,167 | $1,515 |
| 61 | $1,112 | $1,460 |
| 62 | $1,057 | $1,420 |
| 63 | $1,000 | $1,370 |
| 64 | $949 | $1,313 |
| 65 | $896 | $1,258 |
| 66 | $846 | $1,200 |
| 67 | $802 | $1,167 |
| 68 | $762 | $1,112 |
| 69 | $724 | $1,057 |
| 70 | $689 | $1,000 |
| 71 | $657 | $949 |
| 72 | $627 | $896 |
| 73 | $608 | $846 |
| 74 | $578 | $802 |
| 75 | $549 | $762 |
| 76 | $521 | $724 |
| 77 | $493 | $689 |
| 78 | $468 | $657 |
| 79 | $441 | $627 |
| 80 | $426 | $608 |
| 81 | $424 | $578 |
| 82 | $423 | $549 |
| 83 | $421 | $521 |
| 84 | $420 | $493 |
| 85 | $418 | $468 |