• Report: #792466

Complaint Review: Colonial Penn Life Insurance

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  • Submitted: Wed, October 26, 2011
  • Updated: Tue, May 22, 2012

  • Reported By: Joi — Lakewood California United States of America
Colonial Penn Life Insurance
Philadelphia, Pa Philadelphia, Pennsylvania United States of America

Colonial Penn Life Insurance STOLE MY MOTHER'S MONEY AND SCAMMED HER Philadelphia, Pennsylvania

*Consumer Suggestion: Important info for people looking to get life insurance.

*Consumer Suggestion: I Agree...

*Consumer Comment: Did NOT cover my Mother's Funeral Expenses

*Consumer Comment: NOT a bogus Ripoff Report

*REBUTTAL Individual responds: two year wait

*Consumer Comment: ColonialPen

*General Comment: I am a licensed insurance agent since 1981. Let me straighten this subject out with the actual truth.

*Consumer Comment: Slow down a little.....

*Consumer Comment: Here's further info from Colonial Penn's website...

*Consumer Comment: Colonial Penn, In my Opinion, is a HORRIBLE company that preys on the elderly.

*Consumer Comment: My condolences, but cannot agree

*Consumer Comment: I really hate to say this

*General Comment: They did notify your mother...

*Consumer Comment: I would suspect that if you read the policy, you would

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My mother got colonial penn life insurance 2/2011 and died 10/13/2011 her policy was for $13,408. She paid every month on time and faithfully, on the horrible day she passed the next day I went to the funeral home arranged all the services and called colonial penn and filed my claim. They waited 2 days before my mother's viewing to say they will only give me $736 of her $13,408 policy because she did not live for 2 years from the activation of her policy. My biggest question and concern is that colonial penn is not making their customer aware of this 2 year grace period. I know this for fact because my mother knew she had less than 1 year to live, she would have rejected a insurance policy that said she had to live 2 years or longer in order to get full benefits.

An example of how atrocious colonial penn is: If you buy health insurance and you only make 1 payment, then you get ill or injured and must have a major operation. The health insurance company would not dear say we deny your claim because you did not stay healthy for 2 years or more. Colonial Penn is a fraud and they will not get away with it if I have anything to do about it. They claim no medical evaluation and no health questions asked, which is true but this company needs to mention this 2 years grace period to people before they purchase a policy, which they are not doing obviously.

This report was posted on Ripoff Report on 10/26/2011 03:51 PM and is a permanent record located here: http://www.ripoffreport.com/r/Colonial-Penn-Life-Insurance/Philadelphia-Pennsylvania-/Colonial-Penn-Life-Insurance-STOLE-MY-MOTHERS-MONEY-AND-SCAMMED-HER-Philadelphia-Pennsy-792466. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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0Author 13Consumer 1Employee/Owner
Updates & Rebuttals

#1 Consumer Suggestion

Important info for people looking to get life insurance.

AUTHOR: Bubbles - ()

I recently have been researching insurance because I am looking for a good life insurance policy. One thing I just learned is that the type of policy you are looking for will tell you how it is paid out. The first is "Whole" Life Insurance which is life insurance that pays a benefit upon the death of the insured and also accumulates a cash value. Then there is "Term" Life Insurance which is life insurance that pays a benefit in the event of the death of the insured during a specified term. Finally, there is "Guaranteed" Life Insurance which is what Colonial Penn offers. Apparently, when you purchase Guaranteed, these policies will only pay in the event the insured's death occurs after the first two years of premiums being paid. NO MATTER WHICH COMPANY you purchase a policy from, "Guaranteed" Life Insurance policies all function the same way. They all go by this rule. I have been reading complaints in my research about different insurance companies and am finding the same complaint about someone whose loved one died within the two year period and the insurance company refused to pay. Some of them will refund the premiums and some will not.  We've all seen the commercials from different companies saying "little to no health questions" and "you cannot be turned down". These are "Guaranteed" Life Insurance Policies and they all operate the same way. If you are seeking out a policy, do some research online. Make sure you know exactly what you are getting. Read the fine print and investigate the company you are interested in getting a policy from. It will help prevent you and your loved ones from getting screwed.

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#2 Consumer Suggestion

I Agree...

AUTHOR: Noor - ()

...with those who stated that if folks read the policy before signing that they would understand the limited benefits for 2 years, etc.; and that if they didn't read the terms and conditions, they have no room to complain. I read the policy the other day. I intend to purchase this insurance - at my 85 year old mother's request. I see it as a good decision either way. After the 2 year period, full benefit will be paid. If 2 years is not reached, the premiums are returned + 7% interest. Now where else in this day and age, and in this sluggish economy, can one get a guaranteed 7% return on their money? 

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#3 Consumer Comment

Did NOT cover my Mother's Funeral Expenses

AUTHOR: RMarin - ()

I'm writing this because I''ve been seeing a LOT of those Colonial Penn TV commercials.  This a WARNING to NOT go by what the Agent says. The Agent that sold my Mom her plan did NOT tell her that it only will cover "accidental" death.  My mother died of helath related complications, so when we contacted Colonial Penn to help pay for funeral expenses, they said her policy only covers "accidental" death, which her Agent did NOT tell her.  READ the DETAILS of your Colonial Penn Policy before WASTING monthly payments for something you're NOT getting, but THINK you're getting based on what an Agent says which is NOT accurate and MISLEADING!!!

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#4 Consumer Comment

NOT a bogus Ripoff Report

AUTHOR: Kathy - ()

 I believe everything this person said about his Mother's experience. It most certainly is NOT a bogus Ripoff Report.

The Coloniel Penn Website may have the information on it, but an elderly person, especially in their 80's or 90's  would most likely NOT have access to that media. Most do not own computers.  I do agree with several other commenters: the Agent ahould, absolutely, make it crystal c l e a r  about the benefits and terms. 

I'm not in the insurance business and I do not understand most of the "special" language and language terms they use. I'm sure most elderly understand less than I do. 

Insurance company owners & agents have no honor.  They feel no embarrassment, guilt, or shame about taking money from elderly or anyone. But to leave these people, at the end of their lives, with stress and no money is just greedy and a huge reflection on their upbringing.

 

 

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#5 REBUTTAL Individual responds

two year wait

AUTHOR: go4it - ()

Two year waiting. My mother in law Called they took all her information and was going to send paperwork to sign I asked her about the two year. She said they didn't say anything about it I said did you ask you said no I didn't know they did that but I am sure it is on the policy I got a term life years ago and it has it on there too.

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#6 Consumer Comment

ColonialPen

AUTHOR: Bars44 - ()

 while I understand thislady,That is thereason you should buy fromanagent near you. Thatbeing said,Colonial Pen does infact,show in the mail I got,that there would be imited benefits. Perhaps, because I as an agent at one time, I did look for this clause. This is a bad deal, and should be told on their TV advertising. I was required to take the policies to the consumer when the policy came in./ My company expected their agent's to re-explain their coverage. So should Colonial Penn. Always READ your documents and if you donot unerstand call the company for any questions you may have. The state I live in gives a 14 day look for youto deside if you want to cancel or not!

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#7 General Comment

I am a licensed insurance agent since 1981. Let me straighten this subject out with the actual truth.

AUTHOR: WILLIAM - ()

First, to make things clear, I am a licensed life insurance agent in the State of Missouri.  Colonial Penn and many other companies sell substandard rated life insurance.  That is nothing new.  I sell policies like that.  If you are young and healthy, you get low, low rates.  If you buy term insurance instead of permanent life insurance, then of course the rates are lower, because the risk of you dying during the TERM is less than the risk of you dying sometime, right?  Term insurance is temporary insurance, designed for specific time period needs.  For example, you will be raising kids for the next 20 years, so you need some coverage for that TERM.  Or, you might have a 25 year mortgage on the house, so you might need life insurance to pay off the mortgage, so you buy TERM life to cover that period of time.  However, most people have PERMANENT LIFE INSURANCE NEEDS as well, so you most likely need SOME Whole Life or Universal Life (Permanent Policies)  There are many types of life insurance, each with their own specific uses, and although you use money to pay the premiums, it is your age, height, weight, occupation, tobacco use, lifestyle, avocations and your health that BUYS a life insurance policy.  After my own mother had Melanoma on her big toe, had the toe amputated, then suddenly wanted to buy some life insurance, I, her own son, an independent life insurance agent with many major company contracts, had to write her a graded-benefit policy.  GRADED-BENEFIT means that it does not pay the full death benefit for a given period of time, usually 2 or 3 years, depending upon the company and the actual health risk - the substandard rating.  All of the plans that I sell of this type, I sell it because that is what the client can qualify for.  In all of the plans of this type that I do sell, the provisions are similar to the Colonial Penn offering of their Guaranteed Acceptance Program.  Most companies would return the premium paid, plus some stated interest on those premiums paid if you die in the specified period (first 2 or 3 years). The ones that I sell, like Colonial Penn's Guaranteed Acceptance Plan, will pay the full face amount (death benefit) if death occurs because of an accident, which is usually defined as death as a direct result of an accident, and usually stated as the death occurring from that accident within 90 days of the accident.  This is all very standard stuff as concerns sub-standard rated risks.  I have a particular company that I use most often in these cases, except I DO ASK A LOT OF HEALTH QUESTIONS.  There are 4 different SUBSTANDARD ratings, based upon the answers to these questions.  The application has 3 sections of health questions.  If the applicant answers YES to any question in the first section, I stop.  They only qualify for the highest rates - and it has a 3 years graded benefit (limited benefit, except for accidental death).  If they answer NO to all of the questions in section 1, then I start asking questions in section 2.  If they answer YES to any question in section 2, I stop.  They qualify for the second highest premiums and they get a 2 year graded benefit policy.  If they answer no to all questions in section 2, then I ask the questions in section 3.  If they answer YES to any question in section 3, I STOP.  They qualify for the 3rd highest rate (second lowest rate) based upon their health risk.  Now, if they answer NO to all of the questions in section 3 (and of course they already answered NO to sections 1 and 2), then they qualify for the lowest cost program of Final Expense Whole Life Insurance.   Note also this fact:  The worse their health, the less face amount I can sell them.  If they qualify only for the highest premium plan (highest health risk rating), then the maximum I can sell them is $10,000 face amount.  The next level, if they qualify, they could get up to $20,000.  The next level, up to $50,000.  The best level, $100,000 max.  Now, if they are truly super healthy or if they are younger than 50 years of age, I would check a different policy altogether with that same company, and also with several other companies.  If you are HEALTHY, you can buy higher amounts of insurance and you can get it at much lower costs per thousand.  That is simple to understand, isn't it?  I have heard, and read in some of these strings, that INSURANCE is GAMBLING.  No, it is the exact opposite of gambling.  When you do not INSURE a risk, then YOU ARE GAMBLING.  When you qualify for a particular type of insurance and when you pay the flat premium for the insurance company, then you have transferred your risk (or some part of a risk) to the insurance company, which is a sure thing.  Gambling is not having insurance and having insurance means that you are not gambling.  Insurance companies are not angels, but they aren't the devil either.  They are financial companies that allow folks to pool their risks - transfer their risks.  That is what insurance companies do.  For insurance to work, the actuaries have to crunch the numbers and work out what each person in the risk pool has to pay based upon the actual risk being transferred to the insurance company, along with expenses and a profit, just like any other major business entity. If you want cheap life insurance, buy it when you are young and healthy.  If it is too late for that, then find a professional, independent agent such as myself, and let the pro find out what it is that fits your needs and budget.  Oh, and this is just my educated opinion:  Let the game show hosts run the game shows and let the honest, professional insurance agents give out the insurance advice, OK?  ;-) 

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#8 Consumer Comment

Slow down a little.....

AUTHOR: Rachel - ()

 I know u were upset about what that gentleman wrote about his mothers situation.....but the comment you made about him rushing to file a claim right after he went to the funeral home. My mother just passed away and while we were at the funeral home we were required to call and notify the life insurance company or the funeral home would not provide service without a 6,800 cash payment. So in his defense he probably was directed to notify them. And the first thing the insurance company wants to know is the name and phone number of the funeral home.

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#9 Consumer Comment

Here's further info from Colonial Penn's website...

AUTHOR: Ken - (USA)

There are no health questions to answer and no physicals to take to purchase this plan.

.We can guarantee your acceptance because of a two-year limited benefit period for death from non-accidental  causes

If death from non-accidental causes occurs during the first two years of coverage, the beneficiary will receive the premiums paid plus 7% interest compounded annually.

After the first two years, the full face amount will be paid for death from any cause.

Immediate Protection For Accidental Death

For death from accidental causes during the first two years, the full face amount will be paid. The accident must occur while coverage is in force and death must occur within 90 days of the accident.

Accidental death does not include death resulting from bodily or mental illness or disease, infection, suicide, medical or surgical treatment, voluntary gas inhalation or taking poison, or any act of war.

Where, again, is the Ripoff...people need to be capable of reading AND comprehending plain English.

This is a nonsense Ripoff Report.

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#10 Consumer Comment

Colonial Penn, In my Opinion, is a HORRIBLE company that preys on the elderly.

AUTHOR: NoSoap - (USA)

Any life insurance company that guarantees acceptance regardless of health has something else going.

I"m sorry, but the phrase "2 year limited benefit" is INACCURATE AND MISLEADING.

in the first 2 years, the benefit is NOT 'limited'...' it is    NON-EXISTENT!!!!   "Limited" is the key word hear.  It's misleading!

Why doesn't Colonial Penn tall the truth?   "If you die in the first two years, we will NOT pay the face amount of the policy."  

Why don't they state that fact, in clear, easy to understand language?

I have run into many older folks with this coverage, and they are all paying a lot of money for very small policies.  Furthermore, none of understand that they basically have NO POLICY for the first two years.

Furthermore, this business of telling people that their life insurance costs "less than .35 a day...less than the cost of a postage stamp"....is also MISLEADING.  That .35 a day, or $9.90a month is for ONE UNIT of life insurance. 

And guess how much ONE UNIT of life insurance is?  A thousand dollars or less.

Shame on you, Alex Trebek, for hawking a product that preys on the elderly.

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#11 Consumer Comment

My condolences, but cannot agree

AUTHOR: voiceofreason - (United States of America)

Colonial Penn policies are fairly expensive and for good reason. They expect many policy holders will pass on not too long after taking a policy out.

It is standard with such "funeral expense" policies that the policy holder must live 2 or so years before full coverage kicks in.
Otherwise everyone facing imminent death would sign up, even on their deathbeds. Obviously that doesn't make any sense. Even a "regular" life plan requires you live at least a couple months before it's effective.

If your late mom didn't understand this, or you simply assume she didn't, then we're all sorry, but Colonial Penn doesn't hide this in their documentation.

The only place they don't mention it is in their commercials and that alone does not qualify as a rip.

I'm not posting this to add to your grief. I went through this too not long ago.

Did the $736 cover all or most of the premiums she paid?
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#12 Consumer Comment

I really hate to say this

AUTHOR: Robert - (U.S.A.)

While I am sorry for your loss, you have basically written that your dear departed mother was more than willing to commit fraud.  Because if she knew she was not going to live more than a year, it looks like she knew she would have had around a 10x return on investment. 

Insurance is basically gambling.  The insurance companies are betting that you will live a long time, you are betting that you won't.  What your mom was trying to do is exactly why insurance companies have these exclusions.  In order to "even" the odds against people who would try to take advantage of them.

on the horrible day she passed the next day I went to the funeral home arranged all the services and called colonial penn and filed my claim.  They waited 2 days before my mother's viewing to say they will only give me $736 of her $13,408 policy because she did not live for 2 years from the activation of her policy.

Here you are the grieving child and the day after she died you are calling to file the claim.  You then complain that they had the nerve to wait until 2 days before your mother's viewing, inferring that they didn't call you back soon enough.  So just how many days after your claim were you actually notified?

They claim no medical evaluation and no health questions asked, which is true but this company needs to mention this 2 years grace period to people before they purchase a policy, which they are not doing obviously.

- Again I am sorry to say this but if it is "no questions asked" did she tell them of her condition?  How do you know that they didn't tell her and she just didn't mention it to you?

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#13 General Comment

They did notify your mother...

AUTHOR: Edgeman - (U.S.A.)

Right here in the general description for Guaranteed Acceptance Life Insurance:

http://www.colonialpenn.com/GuaranteedAcceptance/Description.aspx

If you're between the ages of 50 and 85 (in most
states), you are guaranteed acceptance for this life insurance. There
are no health questions to answer...no physical exam to take. We can
guarantee your acceptance because of a two-year limited benefit period.


I would be willing to bet that this is mentioned again in the actual insurance papers.
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#14 Consumer Comment

I would suspect that if you read the policy, you would

AUTHOR: Ken - (USA)

find this information.

It's not at all uncommon and is used to minimize claims, such as suicide and know previous conditions.

In the case of this policy, with no health questions and no medical evaluation, they are just covering themselves on previous of current conditions.

Sorry you weren't able to collect, but if they TRULY violated the terms of the policy, notify your states insurance commissioner.

Very sorry for the loss of your mother.

The insurance policy is a contract between the insurance company and the owner of the policy.

Companies are NOT obligated to explain the wording of the policy.  If the wording for the 2 year grace period is there, your complaint(s) will go nowhere. 

It is the owners responsibility to ascertain if the policy is what they expected, by reading it.

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