Planning for the future is one of the most responsible decisions a person can make, especially when it comes to protecting loved ones from unexpected financial burdens. Among the many life insurance options available today, the Colonial Penn 995 Plan has gained attention for its simplicity, accessibility, and guaranteed acceptance. This article provides a detailed, original, and easy-to-understand explanation of the Colonial Penn 995 Plan, helping you decide whether it fits your financial and family needs.
What Is the Colonial Penn 995 Plan?
The Colonial Penn 995 Plan is a type of guaranteed acceptance whole life insurance policy primarily designed for older adults. The plan is well known for its straightforward pricing structure, where coverage units start at approximately $9.95 per month per unit, depending on age and location.
Unlike traditional life insurance policies, this plan does not require a medical exam, blood test, or health questionnaire. Acceptance is guaranteed as long as the applicant meets the age requirements.
This feature makes the plan particularly attractive to individuals who may have health conditions or who have been declined coverage elsewhere.
Understanding How the 995 Plan Works
The Colonial Penn 995 Plan operates on a unit-based coverage system rather than offering a fixed dollar amount upfront. Each unit of coverage has a set price, but the actual death benefit per unit varies depending on:
- Your age at enrollment
- Your gender
- State regulations
For example, one unit may provide a few thousand dollars in coverage for a younger applicant but less for someone enrolling at an older age.
This structure allows policyholders to purchase multiple units to increase coverage, though there are usually limits on how many units can be bought.
Who Is Eligible for the Colonial Penn 995 Plan?
Eligibility is one of the plan’s strongest selling points.
Basic Eligibility Requirements
- Typically available to individuals between 50 and 85 years old
- No medical exams required
- No health questions asked
- U.S. residency required
Because acceptance is guaranteed, individuals with chronic illnesses, past surgeries, or high-risk medical histories can still qualify.
Key Features of the Colonial Penn 995 Plan
1. Guaranteed Acceptance
No matter your health status, you cannot be turned away if you meet the age requirement.
2. Fixed Premiums
Your monthly payment does not increase as you age, making budgeting easier.
3. Lifetime Coverage
As long as premiums are paid, coverage lasts for life.
4. Cash Value Accumulation
Like most whole life policies, the plan builds a modest cash value over time.
5. No Medical Exams
Ideal for those who want quick and hassle-free enrollment.
The Waiting Period Explained
One critical aspect of the Colonial Penn 995 Plan is the graded death benefit period.
What Is the Waiting Period?
- Typically lasts two years
- If death occurs during this period (from non-accidental causes), beneficiaries receive:
- A refund of premiums paid
- Plus interest (usually a small percentage)
Accidental Death Coverage
If death is due to an accident, the full death benefit is paid immediately, even during the waiting period.
After the waiting period ends, the policy pays the full benefit regardless of cause of death.
How Much Coverage Can You Get?
Coverage amounts are intentionally modest. This plan is primarily designed to cover:
- Funeral expenses
- Burial or cremation costs
- Medical bills
- Small debts
- Final expenses
It is not intended to replace income or cover large financial obligations like mortgages.
Cost Breakdown: Is $9.95 Really the Price?
The advertised $9.95 represents the cost per unit, not total coverage.
Example Scenario
- A 65-year-old individual may receive around $1,000–$1,500 in coverage per unit
- Purchasing 5 units would cost approximately $49.75 per month
- Total coverage might be around $6,000–$7,500
Actual costs and coverage vary based on age and gender, but this structure keeps the plan transparent and predictable.
Advantages of the Colonial Penn 995 Plan
Simple and Stress-Free Enrollment
No medical paperwork or waiting for approvals.
Ideal for Seniors
Designed with older adults in mind.
Budget-Friendly Entry Point
Low initial monthly cost per unit.
Peace of Mind
Ensures loved ones are not burdened with funeral expenses.
Potential Drawbacks to Consider
Limited Coverage Amounts
Not suitable for those needing large death benefits.
Waiting Period
Full benefits are not immediately available for natural causes.
Cost Per Dollar of Coverage
Compared to medically underwritten policies, cost per dollar is higher.
Unit-Based Complexity
Coverage amount is not always immediately clear without calculation.
Who Should Consider the Colonial Penn 995 Plan?
This plan is best suited for:
- Seniors with health issues
- Individuals declined for other life insurance
- People seeking funeral or final expense coverage
- Those who want guaranteed acceptance
- Individuals on a fixed income needing predictable payments
Who May Want to Look Elsewhere?
The plan may not be ideal for:
- Younger individuals in good health
- Those needing high coverage amounts
- Families relying on income replacement
- People seeking the lowest cost per dollar of coverage
Colonial Penn 995 Plan vs Traditional Life Insurance
| Feature | Colonial Penn 995 Plan | Traditional Life Insurance |
|---|---|---|
| Medical Exam | Not Required | Usually Required |
| Acceptance | Guaranteed | Not Guaranteed |
| Coverage Amount | Low | High Possible |
| Cost Efficiency | Lower | Higher |
| Waiting Period | Yes | No (Typically) |
Cash Value: What You Should Know
The policy accumulates cash value slowly over time. While it can be borrowed against, this feature should be viewed as a secondary benefit, not a primary investment.
Borrowing against cash value reduces the death benefit unless repaid.
How to Apply for the Colonial Penn 995 Plan
The application process is designed to be simple:
- Choose number of units
- Provide basic personal information
- Select beneficiary
- Set up payment method
- Coverage begins once approved
There is no lengthy underwriting process, making it ideal for those who want fast coverage.
Common Misconceptions About the 995 Plan
“Everyone Only Pays $9.95”
False. That is the cost per unit, not total coverage.
“Coverage Is Immediate”
Only for accidental death during the waiting period.
“It Replaces Full Life Insurance”
It is intended for final expenses, not full financial protection.
Is the Colonial Penn 995 Plan Worth It?
The value of the Colonial Penn 995 Plan depends on individual circumstances.
If you:
- Need guaranteed acceptance
- Want simple final expense coverage
- Have health challenges
- Prefer predictable payments
Then this plan can be a practical and reassuring option.
However, those in good health may find better value in medically underwritten policies.
Final Thoughts
The Colonial Penn 995 Plan fills an important niche in the life insurance market. It provides accessible coverage for individuals who might otherwise struggle to qualify for traditional policies. While it is not the cheapest or most comprehensive option, its simplicity, guaranteed acceptance, and lifetime coverage make it appealing for final expense planning.
Before committing, it’s wise to understand your financial goals, expected expenses, and family needs. Life insurance is a personal decision, and the right plan is the one that offers peace of mind and financial security for those you care about most.
