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Colonial Penn Life Insurance company was founded in the 1960s and is a subsidiary of the Conseco Group, a Fortune 500 company. Colonial Penn Life Insurance and Conseco seek to offer affordable life insurance and financial products to families and senior citizens.

Colonial Penn's offerings include: Term life insurance policies to issue on people up to age 77; five-year renewable term insurance available to age 75 with no medical exams necessary and with face amounts of $5,000, $10,000, $15,000, $20,000, and $25,000 offered; twenty-year term life policies will lock in premiums without a physical exam available to people age 18 to 77; and accelerated death benefits which are available in case of a terminal illness.

Colonial Penn was one of the first life insurance companies to offer guaranteed acceptance life insurance--life insurance policies with small face amounts, high premiums, and no medical exams required. Colonial Penn Life Insurance marketing mainly targets senior citizens, people who have health conditions that make them uninsurable by most other insurance companies, and people with families to protect who are relatively late getting life insurance into their financial plan. Colonial Penn uses famous, older celebrities such as Ed McMahon and Alex Trebek featuring in highly-produced, almost absurdly dramatized TV and radio commercials to advertise its products.

Colonial Penn has been investigated and sued for charging outlandishly high premiums that supposedly are not risk-justified or not fully disclosed at the point of sale. The company does not receive the highest ratings from independent insurance and financial institution ratings agencies. Standard and Poor's gives them a mere BB+, and so does A.M. Best give them just a B++. Fitchgives them a BBB and Moody's a Ba1; both of those ratings are about the same as Best's.

For instance, Colonial Penn's $25,000 guaranteed acceptance 20-year term life policy on a standard 38 year old male costs a "mere" $37 a month in premiums. What's wrong with that? What's wrong is there are many other life insurance companies that would give that same man the same policy...except he would have $500,000 of death benefit. The difference would be that for those other life insurance companies, those aren't guaranteed acceptance policies--they would require a medical exam.

Guaranteed life insurance policies are usually a bad idea to start with--only somebody with a health condition that's so bad that he can't get life insurance in any other way should consider one. But Colonial Penn pushes these policies as the greatest thing since sliced bread...and they mainly market to seniors, people between the ages of 50 and 75. Using celebrities to bolster their pitch, they play on older people's fears of being uninsurable. They also play upon the sad fact that most seniors who don't have a financial background are very ignorant about full financial pictures, even if they own stocks and bonds. These people may believe that all they need as far as life insurance goes is a "burial policy" to finance their funeral.

Life insurance is not about just being buried--if you're going to buy a policy for that purpose you'd be better off trying to make sure you have enough real money in assets to cover that, instead. And even if seniors have to pay higher premiums when they buy a new life insurance policy, if they take a guaranteed acceptance policy they're not saving money at all--they're throwing it away. Most seniors are insurable, just at higher premiums for the same death benefit than younger people of the same gender have to pay. But those rates are still much lower than guaranteed acceptance policies'.

Colonial Penn agents might very well believe they are giving needy people a good service, but if they do they have been had by their own company and those expensive celebrity commercials. Few people would truly benefit from these products.

The author lives with her husband in Maryland, with their two dogs and cat. She put together the website http://www.affordable-life-insurance-guru.com in order to help the everyday person navigate the often confusing world of life insurance