To cancel a Colonial Penn life insurance policy, call customer service at 1-800-523-9100 (Monday through Friday, 8:30 a.m. to 5:30 p.m. ET) or mail a signed written request to the company’s policyholder services office in Carmel, Indiana.1Colonial Penn. How Do I Contact You? If you’re still within the 30-day period after receiving your policy documents, you get every premium back. After that, you receive the policy’s net cash surrender value, which can be small in the early years and larger later on.2Colonial Penn. What Is Cash Value Life Insurance?
Cancel Within 30 Days for a Full Refund
Colonial Penn advertises a “30-Day Try-It-On Period” that lets you return a newly issued policy and get back every dollar of premium you’ve paid.3Colonial Penn. About the Colonial Penn Life Insurance Products The clock starts the day you receive the physical policy packet, not the day you applied or paid.
This free look protection is required by state law in every state, with minimum lengths ranging from 10 to 30 days. Many states extend the window for seniors, which matters here because Colonial Penn’s customers are almost entirely age 50 and up. Cancel inside the window and the policy is voided as if it never existed, with all premiums and fees refunded. If you’re close to the deadline, call first and follow up in writing so there’s a record of the timing.
What to Gather Before You Call or Write
A few details will keep the process moving:
- Your policy number, from the annual statement or original policy packet. If you hold more than one Colonial Penn policy, pull the number for each one you want to end.4Colonial Penn. Manage My Policy
- The insured person’s date of birth, which Colonial Penn uses with the policy number to verify identity.
- Your current mailing address, since final correspondence and any surrender check go to the address on file.
One point worth checking before you dial: the policy owner is the only person who can cancel. If a spouse or adult child owns a policy on your life, that owner has to authorize the surrender, not you as the insured. Colonial Penn will typically send a surrender form for the owner to sign and return, and signature requirements can tighten (including notarization) if the signature on file doesn’t match.
How to Submit Your Cancellation
The fastest route is the phone. Call 1-800-523-9100 during business hours.1Colonial Penn. How Do I Contact You? The representative will verify your identity, confirm the surrender request, and mail you a form to sign and return. Policyholders report the paperwork typically arrives within 7 to 10 business days.
You can also start by mail. Send a written request with your name, policy number, and a clear statement that you want to surrender the policy to:
Colonial Penn Life Insurance Company
Policyholder Services
PO Box 1918
Carmel, IN 46082-99031Colonial Penn. How Do I Contact You?
New York policyholders should address correspondence to Bankers Conseco Life Insurance Company at the same PO Box.1Colonial Penn. How Do I Contact You?
One limitation to know. The MyColonialPenn.com portal lets you see your current cash value, coverage amounts, and payment history, but it doesn’t appear to accept cancellation or surrender requests directly.5Colonial Penn. Do You Offer Online Customer Service? Use it to check your figures first, then call or mail to actually cancel.
What You’ll Get Back
Colonial Penn primarily sells guaranteed acceptance whole life insurance. These policies start accruing cash value after the first year, but the balance builds slowly, and the early-year amount is often small.2Colonial Penn. What Is Cash Value Life Insurance? When you surrender, the company starts with the gross cash value, then subtracts any surrender charges and outstanding policy loans. What’s left is your net cash surrender value, and that’s your check.
Surrender charges are common in whole life policies during the first 10 to 15 years. They shrink as the policy ages and eventually disappear, so the longer you’ve held the policy, the closer your payout gets to the full cash value. In year one or two, those charges can wipe out most of what has accumulated. Pull your exact surrender figure from MyColonialPenn.com or over the phone before you commit, because the number is often lower than policyholders expect.5Colonial Penn. Do You Offer Online Customer Service?
One more thing to weigh if you’re canceling early: Colonial Penn’s guaranteed acceptance policies carry a two-year limited benefit period, during which the policy doesn’t pay a full death benefit if the insured dies.6Colonial Penn. What Is a Two-Year Limited Benefit Period? Canceling inside that window means the policy never actually delivered the coverage you were paying toward.
Will You Owe Tax on the Payout?
Surrendering a life insurance policy can create a taxable event. The IRS treats any amount paid out above your “investment in the contract” (essentially the total premiums you paid in, minus anything already received tax-free such as dividends or partial withdrawals) as ordinary income.7Internal Revenue Service. For Senior Taxpayers8Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
For most policyholders canceling in the first several years, the cash surrender value is less than total premiums paid, so no tax is owed. Taxes come into play on older policies where cash value has grown past the premium total. In that case, Colonial Penn issues a Form 1099-R showing the gross distribution and the taxable portion, which you report on Form 1040 or Form 1040-SR.7Internal Revenue Service. For Senior Taxpayers
Alternatives Worth Asking About First
Full surrender permanently ends your death benefit, and if your health has changed since you bought the policy, you may not qualify for replacement coverage. A few options keep part of the policy alive:
- Reduced paid-up insurance uses your existing cash value to buy a smaller, fully paid-up policy. Premiums stop, surrender charges don’t apply, and the coverage stays in force for life.
- Extended term insurance converts your cash value into term coverage at the original face amount for a limited number of years. You keep the full death benefit without paying another premium until the term runs out.
- A policy loan lets you pull cash out while keeping the death benefit. Interest accrues, there’s no fixed repayment schedule, and if the loan balance grows large enough the policy can lapse to cover the debt, which produces the same tax result as a surrender.5Colonial Penn. Do You Offer Online Customer Service?
- A 1035 exchange under the Internal Revenue Code moves your cash value tax-free into another life insurance policy, annuity, or long-term care contract. The new policy may start its own surrender period, so read those terms before signing.
Not every policy will have enough cash value for reduced paid-up or extended term to be meaningful, especially in the early years. Ask Colonial Penn what your specific nonforfeiture figures look like before defaulting to a full surrender.
Don’t Just Stop Paying
Letting the policy lapse by missing premiums is not the same as canceling. State law gives you a grace period of at least 31 days in most states, during which coverage stays in force and the death benefit is still payable (minus the overdue premium) if the insured dies.
Once the grace period runs out, the policy lapses, and what happens next depends on the nonforfeiture provisions. Many whole life policies automatically convert the cash value into extended term or reduced paid-up coverage unless you’ve chosen otherwise. If the policy simply terminates, any cash value above your cost basis is still taxable as income, except now you didn’t choose when the payout happened. A formal cancellation gives you control over the timing and makes sure the cash value actually reaches you instead of defaulting into a coverage option you didn’t pick.