5 Reasons To Avoid Costco Life Insurance In Sep 2023 | Must Read

Before you buy Costco life insurance you must read our review and discover the more affordable alternatives to Costco life insurance in 2022.

Written By Licensed Agent Sa ElJuly 20, 2023

If you're thinking about purchasing life insurance, you may wonder if Costco Life Insurance provides a good value for the price.

And here's the thing:  

If you already shop at Costco to buy other things you might think you can leverage your Costco membership for cheap life insurance. 

costco life insurance

But if you shop around, you'll undoubtedly find better life insurance policies that will meet your needs. Let's look at five reasons why Costco Life may not be your best choice for life insurance.

Costco Isn't An Insurance Company 

Costco is a warehouse club that offers deals on food, clothing, and more to its members. However; it is not an insurance company. In fact, Costco sells life insurance through Protective Life Insurance Company

How Can You Get A Costco Life Insurance Quote? 

Since Costco is what's consider a "captive broker" they can't quote you any other products.   However; we can, just heck out our form below.   

No Personal Info Needed - Get Quotes Instantly

The final insurance policy premium for any policy is determined by the underwriting insurance company following the application.

Who is Protective Life Insurance Company?

Protective Life Insurance has a history of 100+ years and has been serving Costco members as the wholesale club's exclusive life insurance provider since 2014.

But Protective may not be the best choice for you and your family to meet your life insurance needs.

Protective advertises rates as low as .51 cents per day for a term life policy.

But prices may be higher for smokers or tobacco users or anyone with pre-existing medical conditions. If you're in less than optimal health, such as showing high blood pressure or high cholesterol levels, your premiums may be higher, too.

Protective requires a medical exam for many of their life insurance applicants. If you aren't in optimal health, you might save money with a policy requiring no medical exam. Likewise, you may not want the hassle of a medical exam just to get life insurance. 

 Costco Only Offers Term Life Insurance

When you shop through a life insurance broker, you'll likely have multiple choices in life insurance products.

But Costco only offers a term life policy that expires after 10 or 20 years.

At that time, you'll need to extend the term – with annual rate increases - or convert it to a universal or whole life insurance policy, which can be confusing.

You may not get an answer immediately when you apply for term life insurance through Costco.

Underwriting can take weeks – and you can wind up paying more than you expected if something surprising shows up during the medical exam.

If Protective doesn't accept your application for any reason, you'll have to start your life insurance shopping over with a different company – after waiting weeks for an answer from Protective. 

It's better to explore life insurance options through an agency that offers more choices so that you can choose the best one for you. 

Protective Only Offers One Product With Costco

Costco provides its members with Protective's Member Advantage Term life insurance.

They do not offer a wide range of options you can get through Protective's website. For some families, a simple and affordable term life product works well. 

If you're looking for Protective's term life policy, you can find it easily by purchasing directly through Protective.

Because you'll deal directly with a life insurance agent, you'll be able to weigh all your options and know you're making the right choice. 


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Get quotes and sign up online or get help from a licensed agent, we are here if you need us. 

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You Must Be a Gold Member at Costco

Costco only offers life insurance to its Gold Members.

Membership costs $60 a year.

You may be able to find deals or discounts for the first year but, after that, it renews at the $60 annual rate. 

avoid costco life insurance

Gold membership is the lowest tier and does not offer any rewards or additional discounts beyond admission to the club.

Your Life Insurance Discount Ends After 5 Years

You may think you're getting a deal on Costco life insurance. Costco Gold Members save up to 15% off Protective's regular prices for a term life policy.

But after five years, your premiums will rise. Then, after the term life policy reaches full-term at 10 or 20 years, your premiums will continue to increase annually.

Many people who buy life insurance in their 30s, 40s, or 50s could be nearing retirement just as their term life insurance reaches its full policy level.

They will face life insurance premium increases at a time when they are trying to reduce living expenses in anticipation of retirement and potentially living on a fixed income. 

Bonus: Other Life Insurance Companies Are Better

If you're looking for life insurance without a medical exam and you'd prefer an answer in minutes – instead of weeks - consider the companies below: 


Term Life Insurance companies you can trust.

The above companies offer instant life insurance coverage from $50,000 up $2 million in terms of 10, 15, 20, 25, and 30 years. 

However, Costco's policy is only available starting at $100,000 in coverage and in terms of 10 or 20 years and takes a long time to get approval.

Taking Action

Before you choose a life insurance company, weigh your options and think about the type of insurance you need and the best way to save money on your premiums.

Costco life insurance may seem like a convenient choice, but you could get better rates, a faster decision, and more options with another life insurance company. 

If you need life insurance, you can get immediate quotes and coverage by clicking here or on any of the above buttons. 

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