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Colonial Penn - That’s Some Expensive Insurance!
By JLP | February 8, 2008
You see their commercials n TV all the time. Colonial Penn pretty much monopolizes cable TV with their insurance dramas. One of their commercials cracks me up. It opens with a middle-aged guy sitting up in bed in the middle of the night. He can’t sleep because something is on his mind. He gets up to go check on his kids and then he makes his way downstairs to the kitchen. He’s sitting at the table when his wife comes down and asks him what he’s doing. He tells her that he is looking at the application for some life insurance.
Here’s the clincher:
It’s for a $25,000 whole life insurance policy!
This guy was unable to sleep because he was worried about his family and $25,000 of life insurance is the answer.
Anyway, the commercial piqued my interest so I went to the Colonial Penn website to look around. I found out that they also offer term insurance so I ran a quote for the heck of it. Here’s the quote I got for both a 5-year and 20-year term insurance policy for a 38 year-old man:
A $25,000 20-year term life insurance policy runs $37.25 per month. Doesn’t seem too bad does it? Well, it’s not too good when you shop around. I went to IntelliQuote.com and did a quick quote and found out that a $25,000 20-year term policy runs around $10 per month. The same $37 monthly premium would buy you a $500,000 policy!
The only difference is that there is no medical exam required with the Colonial Penn policy, which most likely is not the case with the IntelliQuote companies. Still, I don’t think the extra $27 per month is worth not having to take a medical exam.
I guess Colonial Penn has to charge so much to pay for all those commercials.
Topics: Insurance |
February 8th, 2008 at 7:41 am
JLP,
It costs so much because of A) the TV spots you mention and B) no medical underwrtiting. People who are not healthy enough to buy standard insurance buy this type. More risk equals higher price.
Good post!
February 8th, 2008 at 8:03 am
That is quite expensive. We actually just picked up an additional $500,000 policy on my wife, 30-year term, for somewhere around $120/year, but did require a medical exam, through AIG. They had $250,000 with no medical exam for around $85/year.
Of course, this is even cheaper than usual because it was a discounted group rate for being a member of the American Bar Association.
But those term rates you pointed out above are simply outrageous.
February 8th, 2008 at 8:49 am
The problem with shopping on the internet or direct sellers for insurance is the health issue. You’re
a) going to get a quote for a policy you can’t medically qualify for
or
b) have medical issues and go immediatly for Colonial Penn of Globe Life or the other dozen or so companies that direct market with guaranteed issue.
In my agent days, it was rare for me to qualify someone for ultra-preferred or preferred rating. Unless your a non-smoker who works out regularly (or young), fuhgetaboutit.
If you can qualify for a 30 term at $500K for $120/year (that’s very cheap) then toast your good health. If you’re among the 85% of the country with SOME medical issues, then your better off shopping with an insurance agent with access to a life brokerage and access to the 2000 or so life companies in the USA.
It’s even sadder when someone in their 40s or 50s is ‘losing sleep’ over $25K. I’m hoping when I’m in my mid 50s, I’ll have outgrown my need for life insurance.
February 8th, 2008 at 8:50 am
Interestingly, I was thinking about this today. I called my State Farm agent and they quoted me an upper range for a 34yo non-smoker woman in VA of $32.21/mo for 20 year $250,000 coverage. It is based on the physical, and if I were in perfect health, with no family history risk factors, etc., the rate could go as low as $18.28/month for the same coverage.
Obviously, I didn’t shop this around, it was just something I asked my agent about this morning (and how random is it that the topic came up today?!).
N
February 8th, 2008 at 8:53 am
That’s right.
People who choose no exam life insurance usually pay more for their coverage.
If you’re healthy and young, it definitely saves you money by comparing quotes online from a life insurance quote provider that has a network of insurers to offer you instant quote comparisons.
February 8th, 2008 at 8:55 am
Wow, $25,000 is the answer? I mean it’s better than nothing, anything is better than nothing. But that’s not really enough to set one’s mind at ease. And as you say, that’s a higher price.
February 9th, 2008 at 9:36 pm
Once again you’ve provided great information. This time the timing couldn’t be better as I’ve been investigating the purchase of life insurance. I’ve also found the Colonial Penn commercials amusing. Thanks for the head’s up.
February 18th, 2008 at 8:35 am
Aggressive marketing campaigns could bring some short term earns, but I think they do harm to company when considering long term impacts on customer’s confidence. Anyway, there are so many easy to use (and easy to understand) tools on the web, which could be used by people to avoid unfair dealing. It is just matter of being informed. I use simple calculator on my website instant quote term life Canada to help people with their decision.
June 24th, 2008 at 8:57 am
Regarding those Colonial Penn ads, doesn’t that couple seem way too old to have kids living at home, certainly children they might need to check on during the night? I’d suggest they kick their 30 year old deadbeat kids out of the house and invest in a better insurance policy with the money saved.
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November 3rd, 2008 at 6:26 pm
I have found this website and the info very helpful however my biggest concern with many of these “special offers” for insurance even those through AARP is I’m never sure if when the time comes to use it whether or not I’m going to get the service and help from the insurance company. It seems that the only true colors of these insurance companies become exposed is when someone needs it and the insurance company suddenly has exceptions or provisions. So has anyone out there who has Colonial Penn or AIG etc., tried to use or claim on your policy and if so how were you treated and how quickly did they settle with you? I’ve used our local State Farm agent many times over the years and they are right there when you call them and help you every step of the way no questions asked but these other companies that are not “local” can be difficult to deal with in times of crisis, so please give me some feedback on these companies if you’ve had to deal with them during times of crisis. Thank you.
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November 30th, 2008 at 2:29 pm
I’m shopping life insurance for my mom who is 70yrs old and a dialysis patient. As a family we don’t we don’t have money to deal with funeural expenses when the time comes and neither do we have funds for an expensive policy. Any advice?
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