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Costco Life Insurance Review

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If you’re one of the millions of Costco members, then you’re familiar with their wide range of products and services, from groceries to electronics and even eye exams. But have you considered Costco for life insurance? Since 2014, through its Costco Insurance Agency Inc., Costco has provided its members with an outlet to obtain life insurance in addition to health, dental, vision, home, and auto insurance.

Focusing on life insurance, Costco offers savings on insurance policies, similar to how members can save on other products. As a member, if you purchase a life insurance policy with Costco, you can receive a small discount on your premiums for the first five years. Protective Life, a reputable name within the insurance industry, provides life insurance coverage.

So, is Costco’s life insurance the right fit for you and your family? This article will explore Costco’s life insurance offering, its unique features, advantages, and potential drawbacks to help with that descsion.

By the end, you’ll have a clearer picture of whether this often-overlooked benefit of your Costco membership could be the key to securing your loved one’s financial future. Keep reading to discover if Costco’s life insurance is the missing piece in your protection plan.

Quick Notes

  • Costco offers term life insurance policies exclusively to its members through a partnership with Protective Life, a reputable insurance company. These policies are part of the Member Advantage Life Term plan.
  • The life insurance policies are available in 10-, 20-, or 30-year term lengths, with coverage amounts ranging from $100,000 to $5 million. Costco members receive a discount on their premiums for the first five years of the policy.
  • The application process is streamlined and can be completed online or over the phone. Some applicants may qualify for coverage without a medical exam, while others may need to undergo one based on factors such as age, health history, and coverage amount.
  • Costco’s life insurance policies offer several advantages, including competitive rates, an easy application process, flexible coverage options, convertibility to permanent life insurance, and discounted premiums for the first five years.
  • However, there are some drawbacks to consider. A Costco membership doesn’t guarantee approval, and the policies may not always be the cheapest option available. Coverage is not offered to residents of New York, and there are no permanent life insurance options.
  • While Costco’s life insurance policies are exclusive to members, Protective Life’s Classic Choice Term policies, which are similar, are available through independent brokers and may offer more term length options and potentially better rates in the long run.

Costco Term Life Insurance

Costco exclusively offers term life insurance through its Member Advantage Life Term policy, available only to Costco members. Costco does not provide permanent life insurance options like universal or whole life.

Term life insurance covers a fixed period, known as the contract length. If you pass away during this term, your beneficiary will receive a death benefit. However, the policy has no cash value and will expire at the end of the term without any payout if you outlive the coverage.

Despite this, term life remains the most affordable life insurance option, making it a popular choice for many, especially young families. Costco’s Member Advantage Life Term offers 10, 20, or 30-year term durations, with death benefits ranging from $100,000 to $5 million.

Key benefits of Costco Member Advantage Term Life include:

  • Exclusive availability to Costco members
  • Streamlined online application process
  • Potential for approval without a medical exam
  • Discounted premiums for the first five years
  • Several optional policy riders
  • Option to convert to permanent life insurance
  • Competitive rates

Costco Member Advantage Life Term Overview

FeaturesCostco Term Life Insurance
Issue Ages:18-80
Term Lengths:10-Year: 18-80 (18-75 Tobacco)
20-Year: 18-70 (18-62 Tobacco)
30-Year: 18-58 (18-43 Tobacco)
Coverage Amounts:Minimum Face Amount: $100,000
Maximum Face Amount: $5,000,000
Accelerated Underwriting:
(No Medical Exam)
Up to $1,000,000 (Ages 18-45)
Up to $500,000 (Ages 46-60)
Traditional Underwriting:
(Medical Exam)
Full medical underwriting may be required for applicants that do not meet Protective’s eligibility criteria for no medical exam approval.
Policy Riders:Accidental Death Benefit Rider
Children's Term Life Insurance Rider
Income Provider Option Endorsement
Terminal Illness Accelerated Death Benefit
Waiver of Premium
Conversion Option:Convertible to age 70
State Availability:Available in all states except NY

How to Buy Term Life Insurance Through Costco

When you buy a life insurance policy through Costco, you’re purchasing it through Protective Life. Although the Member Advantage Life Term policy is exclusively available to Costco members, Costco doesn’t decide on application approval or assign premiums. They provide access to coverage, while Protective Life handles the underwriting and issuing of your policy.

To apply for a policy, visit the Costco website and navigate to the life insurance tab under the “services” section. You can view rates and apply for coverage online by completing a short application using your Costco Gold Star or Executive membership number. You can also call 1-844-737-5433 and speak with a Protective Life representative who will help you complete the application.

After submitting the online application, you will need to:

  • Complete a telephone interview with a Protective Life representative about your medical history.
  • Undergo a medical exam, if required, at no added cost. Protective will arrange for a medical professional to visit your home or office.
  • Wait for Protective to review your application, exam results, and other details to decide on approval and premium rates.
  • Accept or decline the policy and rate offered by Protective.
  • Your Costco discount will apply to your policy for the first five years. After the fifth year, the premium will change to the regular cost of the life insurance coverage and remain at that price for the remainder of the term.

Costco Life Insurance Rates

The rates for Costco’s Member Advantage Life plans are excellent. We know this firsthand, as No Medical Exam Quotes is partnered with Protective, which offers some of the most competitive rates for term life insurance. But here’s the bonus—as a Costco member, you’ll get an exclusive 5-year discount that could make this policy the cheapest option on the market.

Check out the rates in the table below to understand how affordable Costco’s life insurance can be. These are real numbers from Costco’s life insurance calculator, showing the monthly cost of a 10-year, $500,000 policy for both a man and a woman in excellent health.

Remember that your actual rates will depend on a few factors, like your age, health, and the amount of coverage you need. When you apply, you’ll be put into an underwriting category (like select preferred, preferred, non-tobacco, or tobacco) based on your current health and medical history.

Costco Term Life Insurance Rates: $500,000 Death Benefit

AgeGender10-Year Term
(Policy Years 1-5)
10-Year Term
(Policy Years 6-10)
Age 30Male$12.42 / monthly$14.03 / monthly
Age 30Female$10.81 / monthly$12.33 / monthly
Age 35Male$12.60 / monthly$14.45 / monthly
Age 35Female$11.41 / monthly$13.18 / monthly
Age 40Male$16.08 / monthly$18.28 / monthly
Age 40Female$14.64 / monthly$15.58 / monthly
Age 45Male$24.71 / monthly$28.05 / monthly
Age 45Female$20.89 / monthly$23.80 / monthly
Age 50Male$35.12 / monthly$39.95 / monthly
Age 50Female$29.50 / monthly$33.58 / monthly
Age 55Male$59.04 / monthly$67.15 / monthly
Age 55Female$43.71 / monthly$49.73 / monthly
Age 60Male$96.03 / monthly$109.65 / monthly
Age 60Female$63.84 / monthly$72.68 / monthly
Age 65Male$166.00 / monthly$189.13 / monthly
Age 65Female$107.18 / monthly$121.98 / monthly

*Rates shown in the above table are based on a male/female considered excellent health and do not use tobacco. Rates are current as of 3/18/2024, representing the cost of a $500,000 Costco Members Advantage Life 10-Year plan with an Executive membership.

Advantages of Costco Life Insurance

Costco’s term life insurance offering stands out when protecting your loved ones. By partnering with Protective Life, a trusted name in the insurance industry, Costco provides its members with an affordable and flexible way to secure their family’s financial future. But what sets Costco’s life insurance apart? Let’s dive into some of the top advantages of this coverage that are worth considering.

Trusted Insurer

Protective Life, a well-established and reputable insurance company, issues Costco’s life insurance policies. It has been in business since 1907 and earned an A+ rating from AM Best, the second-highest out of 15 possible ratings.

AM Best is a respected credit rating agency that assesses insurance companies’ financial strength and stability. A high rating from AM Best indicates that Protective Life can meet its financial obligations and pay out claims to policyholders, giving you peace of mind when choosing a Costco life insurance policy.

Easy Application Process

Applying for a Costco life insurance policy is designed to be simple and convenient. You can complete the application process online or over the phone without face-to-face meetings or extensive paperwork.

Costco, through Protective Life, offers a simplified underwriting process, meaning the application is streamlined and straightforward. In some cases, you may even qualify for coverage without having to undergo a medical exam, saving you time and hassle.

Flexible Coverage Options

Costco’s life insurance policies offer a range of coverage options to suit your individual needs and budget. You can choose from 10-, 20-, or 30-year level premium terms, allowing you to select the duration of coverage that best aligns with your financial goals.

Additionally, coverage amounts range from $100,000 to $5 million, allowing you to choose the amount of protection suitable for your family. You can also customize your policy with optional riders, such as an accidental death benefit or a children’s term life insurance rider, to tailor your coverage to your specific needs.

Convertibility

One of the advantages of a Costco life insurance policy is the option to convert your term coverage to a permanent life insurance policy in the future. This feature allows you to adapt your coverage as your life circumstances change. Suppose you decide that you need lifelong protection.

In that case, you can convert your term policy to a permanent one without going through the underwriting process again or proving your insurability. This can be particularly beneficial if your health status changes and you become ineligible for a new policy.

Discounted Premiums

As a Costco member, you can take advantage of reduced premiums during the first five years of your life insurance policy. This discount (which varies between 10% and 15%) can make your coverage more affordable, especially in the initial years when you may have other financial obligations.

After the first five years, your premiums will adjust to level standard rates, but the initial savings can help you get the coverage you need at a more manageable cost. While the discounted premiums are attractive, comparing rates from multiple providers is essential to ensure you get the best overall value for your situation.

Drawbacks to a Costco Life Insurance Policy

A Costco life insurance policy isn’t the right fit for everyone. Below are some of the major drawbacks.

Membership Doesn’t Guarantee Approval

While Costco’s life insurance policies are exclusively available to members, it’s important to note that having a membership doesn’t automatically qualify you for coverage. You’ll still need to go through the underwriting process, which considers your age, health, and lifestyle factors.

A Medical Exam May Be Required

Although some applicants may qualify for coverage without a medical exam, others may need to undergo one as part of the underwriting process. The requirement for a medical exam is determined by factors such as age, health history, and the amount of coverage requested. If a medical exam is necessary, it will be scheduled at your convenience and paid for by the insurer.

May Not Be the Cheapest Option

Costco’s life insurance policies offer competitive rates but may not always be the least expensive option. It’s important to compare quotes from multiple providers to ensure you’re getting the best deal for your specific needs and circumstances. While the initial discounted premiums can be attractive, the long-term cost of the policy should be considered when making your decision.

Coverage Not Offered to People Who Live in New York

Unfortunately, Costco’s life insurance policies are unavailable to New York residents. If you live in New York and want life insurance coverage, you must explore other options from different providers. It’s always a good idea to shop around and compare policies from various insurers to find the best fit for your needs.

No Permanent Life Insurance Options

Costco’s life insurance offerings are limited to term life policies, which provide coverage for a specific period (10, 20, or 30 years). If you’re looking for permanent life insurance options, such as whole life or universal life, you won’t find them through Costco. Permanent life insurance policies offer lifelong coverage and often include a savings component, but they also tend to be more expensive than term policies.

Limited to One Company’s Rates and Policy Features

When you purchase a life insurance policy through Costco, you’re limited to the rates and policy features offered by Protective Life Insurance. While Protective is known for having competitive rates, they may not always be the lowest available in the market.

If you don’t shop around and compare quotes from multiple companies, you could miss out on potentially better rates or unique policy features, such as living benefit riders that provide a steady income stream if you become critically or chronically ill.

Independent Brokers May Offer Better Options

Protective Life’s term insurance, Classic Choice Term, is widely available through independent brokers (such as No Medical Exam Quotes) and may be a better option than Costco’s term insurance plan. Classic Choice offers more contract lengths, including 35—and 40-year terms, which are rare in the industry.

Both term insurance options share the same conversion options and policy riders. Although Costco’s rates are lower during the first five policy years, Classic Choice tends to be more affordable throughout the remainder of the term. If you’re considering Costco’s term life insurance plan, speak with an independent agent or agency currently partnered with Protective Life and request a quote comparison to see which will offer the best option.

Check out the table below, which compares both Protective Life term insurance options.

FeaturesProtective/CostcoProtective/Brokers
Plan Name:Member Advantage Life TermClassic Choice Term
Issue Ages:10-Year: 18-80 (18-75 Tobacco)
20-Year: 18-70 (18-62 Tobacco)
30-Year: 18-58 (18-43 Tobacco)
10-Year: 18-80 (18-75 Tobacco)
15-Year: 18-75 (18-68 Tobacco)
20-Year: 18-70 (18-62 Tobacco)
25-Year: 18-60 (18-52 Tobacco)
30-Year: 18-58 (18-43 Tobacco)
35-Year: 18-50 (18-40 Tobacco)
40-Year: 18-45 (18-40 Tobacco)
Minimum Amount:$100,000$100,000
Maximum Amount:$5,000,000$10,000,000
Medical Exam:Non-medical options availableNon-medical options available
Conversion Option:YesYes
Policy Riders:Accidental Death Benefit Rider
Children's Term Life Insurance Rider
Income Provider Option
Terminal Illness Death Benefit
Waiver of Premium
Accidental Death Benefit Rider
Children's Term Life Insurance Rider
Income Provider Option
Terminal Illness Death Benefit
Waiver of Premium

Frequently Asked Questions

No, Costco’s life insurance policies are exclusively available to Costco members. However, a comparable policy would be the Classic Choice Term policy offered through Protective Life.

Costco offers term life insurance policies with 10-, 20-, or 30-year term lengths. They do not provide permanent life insurance options, such as whole or universal life.

Coverage amounts range from $100,000 to $5 million.

Some applicants may qualify for coverage without a medical exam, while others may need one based on age, health history, and coverage amount.

While Costco’s life insurance policies offer competitive rates and discounted premiums for the first five years, they may not always be the cheapest option. It’s essential to compare quotes from multiple providers.

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Picture of Jeffrey Manola - Life Insurance Expert
Jeffrey Manola - Life Insurance Expert

Jeffrey Manola is the founder of No Medical Exam Quotes, an online insurance agency that strongly focuses on helping people shop for the perfect life insurance policy. He is a licensed life insurance expert and content creator for the website.

Before becoming a life insurance agent, he served in the United States Marine Corps, transitioning from serving his country to helping families find affordable life insurance coverage beginning in 2009. Since starting a career as a licensed life insurance agent, Jeffrey has helped thousands of families with their life insurance needs.

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