Colonial Penn vs New York Life-AARP
Choosing affordable life insurance is a priority for many seniors and their families. Colonial Penn and the AARP Life Insurance Program from New York Life are two prominent options for those seeking straightforward coverage without medical exams. This comparison breaks down how each stacks up for affordability, flexibility, and customer experience.
Life Insurance Calculator
Share This
Customer Reviews
Company Overviews
Colonial Penn
Founded in 1968 and based in Philadelphia, Colonial Penn specializes in direct-to-consumer life insurance, primarily targeting people aged 50 and older. The company is known for its guaranteed acceptance whole life insurance and its widely advertised $9.95 per month plan.
AARP Life Insurance from New York Life
AARP, through a partnership with New York Life, offers life insurance products exclusively to AARP members and their spouses. New York Life, established in 1845, is one of the largest mutual life insurers in the U.S. and provides the underwriting and administration for these policies.
Financial Strength & Ratings
| Company | AM Best | Moody’s | S&P | Fitch |
|---|---|---|---|---|
| Colonial Penn | A (Excellent) | A3 | N/A | N/A |
| New York Life (AARP) | A++ (Superior) | Aaa | AA+ | AAA |
New York Life holds the highest possible ratings from all major agencies, indicating exceptional financial strength and claims-paying ability. Colonial Penn is solid but not at the same elite level.
Policy Types Offered
| Company | Term Life | Whole Life | Guaranteed Acceptance | Universal Life |
|---|---|---|---|---|
| Colonial Penn | Yes (limited) | Yes | Yes | No |
| AARP/New York Life | Yes | Yes | Yes | No (but offers GUL outside AARP) |
Coverage Options & Flexibility
Colonial Penn:
- Guaranteed acceptance whole life: $1,000–$25,000 (up to $50,000 for some policies)
- Term and whole life: Up to $50,000
- “Units” based pricing, lower value per unit with age
AARP/New York Life:
- Term: $10,000–$150,000 (or more by phone)
- Whole life: $5,000–$50,000+ with cash value
- Guaranteed acceptance: Up to $30,000
Underwriting & Application Process
Colonial Penn: Guaranteed issue has no medical exam. Whole and term life require health questions only.
AARP/New York Life: No medical exams for any policy. Term and whole life use health questions; approval can take 6–8 weeks.
Pricing & Affordability
Colonial Penn: $9.95 per unit but coverage is low per unit. Higher cost per $1,000 compared to peers. Level premiums for life.
AARP/New York Life: Term has lower initial premiums but increases every 5 years. Whole and guaranteed acceptance have level premiums. AARP membership is required.
Alternatives to Consider
- Mutual of Omaha, Aetna, Globe Life, Gerber Life: Often cheaper final expense options
- Everdays: Digital-first final expense coverage
- For larger policies, fully underwritten options from top insurers may offer better value
Riders & Customization
Colonial Penn: Limited riders: accidental death, living benefit, waiver of premium, critical illness.
AARP/New York Life: Accelerated death benefit, waiver of premium, spouse rider, accidental death, chronic care, etc.
Best For…
| Company | Best For |
|---|---|
| Colonial Penn | Seniors with health issues needing guaranteed acceptance and low coverage |
| AARP/New York Life | AARP members wanting higher coverage and more customization with strong financial backing |
Pros and Cons
| Company | Pros | Cons |
|---|---|---|
| Colonial Penn | No exams, simple application, guaranteed acceptance, level premiums | Low coverage, high price per $1,000, high complaint index, limited riders |
| AARP/New York Life | Top-rated, more riders, higher coverage, strong reputation | Membership required, term rates rise with age |
Customer Experience & Support
Colonial Penn: Service available online and by phone. High complaint ratio, mostly about policy transparency and claims.
AARP/New York Life: Fewer complaints, strong customer satisfaction and claims handling.
Final Verdict
Colonial Penn is a simple option for those with health issues needing basic guaranteed coverage. However, it’s often expensive and limited in value.
AARP/New York Life offers stronger financial backing, broader policy choices, and better customization—ideal for AARP members seeking flexible, moderate-to-high coverage.
Tip: Always compare multiple quotes, especially if you are healthy or need more than $30,000 in coverage.
FAQs: Colonial Penn vs. New York Life-AARP Life Insurance
Blake Insurance Group
Phone: (888) 387-3687
Email: [email protected]
Hours: Mon-Fri 9:00 am to 5:00 pm
Sat-Sun: Closed
Blake Nwosu
Owner & Principal Agent