Colonial Penn

Corporate Overview

• Company Name: Colonial Penn Life Insurance Company
• Parent Organization: CNO Financial Group (NYSE: CNO)
  • Sister Companies: Bankers Life and Washington National.
• Headquarters: Philadelphia, Pennsylvania
• Founding Date: 1968 (Origins date to 1957 with AARP partnership).
• Primary Focus: Guaranteed Acceptance Whole Life (Final Expense) for seniors ages 50–85.
• Distribution Model: Direct-to-Consumer (TV, Mail, Call Centers). They do not use independent field agents.
• Financial Strength: Rated A- (Excellent) by AM Best.
  • Source: AM Best Rating Commentary (Affirmed 2025)

10 Key Highlights

1. **The "$9.95 Plan":** Their flagship product is marketed as costing "$9.95 a month." This price is per unit, not for the whole policy. The price never changes, but the coverage amount you get for that $9.95 depends entirely on your age and gender when you sign up.
2. Alex Trebek & Jonathan Lawson: The brand is culturally iconic due to its spokespeople. For years, Alex Trebek (Jeopardy!) was the face of the brand. Today, Jonathan Lawson is the primary spokesperson seen in the "3 P's" commercials.
3. AARP Origins: Colonial Penn was originally founded by Leonard Davis specifically to serve members of the AARP. For decades, they were the exclusive life insurance provider for AARP until New York Life took over that contract.
4. Guaranteed Acceptance: Their core selling proposition is that no one is turned down for health reasons. There are no medical exams and no health questions.
5. The "Two-Year Wait": Because they ask no health questions, the policy comes with a Two-Year Limited Benefit Period. If the insured dies of natural causes in the first two years, the beneficiary gets the premiums back plus interest, not the full death benefit.
6. CNO Financial Group: While they operate independently in Philadelphia, they are owned by CNO Financial Group (formerly Conseco), a large holding company based in Carmel, Indiana, that also owns Bankers Life.
7. Direct-to-Consumer Only: You cannot buy Colonial Penn from a local State Farm or independent broker. It is sold strictly over the phone or online, which keeps their acquisition costs centralized.
8. Unit "Shrinkflation": A common consumer complaint is realizing how small the coverage is. For an 80-year-old male, one unit ($9.95/mo) might purchase only **$418** of life insurance—barely enough to cover an urn, let alone a funeral.
9. Early "Living Insurance": Colonial Penn was a pioneer in offering "Living Insurance" riders (early payout for heart attack/stroke) on their term products, though their fame rests entirely on the whole life side.
10. Active Service: Despite the "low coverage" criticisms, they are known for fast claims payment and a very efficient, U.S.-based call center tailored to speaking with elderly clients.

Corporate History

1957–1980s: The AARP EraLeonard Davis, a retired insurance executive, helped found the AARP (American Association of Retired Persons) and created Colonial Penn to be its insurance arm.

• The Monopoly: For years, if you were an AARP member, your health and life insurance came from Colonial Penn.
• The Split: Legal battles and regulatory scrutiny over the "exclusive" nature of the relationship led AARP to sever ties with Colonial Penn in the 1990s (switching to New York Life and UnitedHealthcare).

1990s: The M&A CarouselAfter losing the AARP contract, the company passed through several owners.

• 1985: Acquired by FPL Group (Florida Power & Light).
• 1991: Sold to Leucadia National.
• 1997: Acquired by Conseco (now CNO Financial) for $460 million.

1998–Present: The Direct Marketing MachineUnder CNO/Conseco, the company was briefly rebranded as Conseco Direct Life, but the name was toxic due to Conseco’s financial struggles.

• The Revert: The company wisely switched the name back to Colonial Penn in 2001.
• Strategy: They doubled down on direct response TV advertising (DRTV), making them one of the largest purchasers of daytime cable TV ad slots in America.

‍