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.

​In This Article



1. Costco Isn't An Insurance Company 

Costco is a warehouse club that offers deals on food, clothing, and more to its members. But it is not an insurance company.

Costco sells life insurance through 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. 

THE SIMPLY INSURANCE WAY

Life Insurance made easy.

Agents not required.

Get quotes and sign up online without talking to an agent. But, we are here if you need us. 

Unbiased, expert advice.

Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.

Coverage in minutes.

You can get life insurance coverage within minutes of getting your quotes and applying.

2. 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. 

3. 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. 

INSURANCE WHERE YOU LIVE

Life insurance by state.

4. 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.

5. 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. 

THE SIMPLY INSURANCE WAY

Life Insurance made easy.

Agents not required.

Get quotes and sign up online without talking to an agent. But, we are here if you need us. 

Unbiased, expert advice.

Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.

Coverage in minutes.

You can get life insurance coverage within minutes of getting your quotes and applying.

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 Bestow Life Insurance

Apply online and get an answer in five minutes or less, complete with a rate quote so you can make your decision right away.

Plus, you can get a term life policy for as little as $2.50 / month if you meet specific criteria. And, you won't need to pay an annual membership fee to be eligible to apply.

Bestow bears an A.M. Best rating of A+, which means the company has superior financial stability.

You can count on its ability to pay out your claim when the time comes, giving your loved ones peace-of-mind that they will be taken care of financially after your death.

Bestow offers three different policy options with coverage from $50,000 up to $1 million and terms of 10, or 20 years.

Costco's policy, on the other hand, 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. 


Sa El

About the author

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.


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