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Costco Life Insurance Review

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Insurance Quotes 2 Day Team

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University, a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA and Top of the Table member of the Million Dollar Round Table (MDRT). Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

 5 minute read

Did you know that you can buy your life insurance at Costco and get a 20% discount. 

That is if you are a Costco member.

Protective life is the issuing life insurance company.  We like Protective life and give them a thumbs up.

Is it a smart move to buy the Costco Life Insurance plan?  

The wholesale club giant, Costco offers more than great deals on groceries, dog food and gas? 

In fact, Costco offers its customers term life insurance, issued by Protective Life Insurance Company.

The policy can be converted into a permanent life insurance policy down the road if you need it longer than 10 years or 20 years.  The reason you would want to convert or replace your life insurance policy is to keep it past the original term period. 

If you are using the Costco Gold Star and Business memberships can potentially save customers on their life insurance premium – up to 20% even.

Costco is a wholesale club, that also works alongside Protective Life Insurance in order to provide life insurance policies as well.  Protective Life was founded in 1907 in Birmingham, Alabama. The Protective life insurance company has grown at a steady rate through the years, merging with the Alabama National Insurance Company in 1927.  At this time, Protective Life Life Insurance offers life insurance policies in all 50 states.  They have acquired other life insurance companies like West Coast Life, Empire General, and Chase.

Costco made a good move by partnering with Protective Life

With a combined 110 years of experience in the life insurance industry, Protective Life has received “A” ratings or better among the leading insurance rating agencies. 

As mentioned before, Protective Life currently offers insurance products in all 50 states, and has over 7 million active policies to date.  Additionally, greater than $2 billion has been paid in claims to its beneficiaries.

Costco Life Insurance Offerings

Costco keeps their insurance selection simple by offering the Member Advantage Life UL (universal life) policy – the universal life insurance plan with term life features. 

With this policy, you are given the choice between a 10-year or 20-year level term policy.  The premiums and death benefit of this policy are guaranteed to remain fixed through the entire level period.

The policies are currently fully underwritten requiring applicants to take a life insurance medical exam.  Many companies today offer a form of underwriting call accelerated underwriting or no medical exam life insurance.  Make sure you are prepared to take your exam and know how to pass your life insurance medical exam.

One key benefit to this plan is that the premium payments are smaller during the first five years of either the 10 or 20-year level premium policies.  After that, the premiums are re-adjusted and then remain at that level for the remainder of the coverage term. 

Once the 10 or 20-year level term is finished, you are given the opportunity to continue coverage at the same price, however, the death benefit is reduced each year until it equals $10,000.  If you are a Costco Gold Star Member or Costco Business Member, you will enjoy a 20% savings on your life insurance plan.

Costco Life Insurance Limits

Costco Protective Life Insurance offers coverage ranging from $100,000 to $5 million. 

As long as you keep your premium payments current, the amount of coverage chosen will be paid to your beneficiaries at the time of your death.  Additionally, you have the option to exchange your policy for a different Protective Life policy at anytime during the initial term.  What does this mean for you?  No further medical underwriting will be necessary, so no medical exam is required (up to 70 years of age).

Protective Life Insurance Policy Benefits

The following includes the additional benefits of the Costco – Protective Life Insurance Policy:

 Income Provider Option Endorsement 

Want to make sure your loved ones don’t run out of money right away? This option allows your beneficiary to receive a smaller lump sum when you die and then get an income stream paid over the next 30 years.

 Terminal Illness Accelerated Death Benefit Endorsement 

If elected you can receive 60% or the death benefit upon the diagnosis of a terminal illness.  This cash is very handy in helping cover your medical expenses as well as normal household expenses.  Noticed we said if elected.  The amounts received will be deducted from your final death benefit and reduce the amount of life insurance benefits your family will receive.

 Disability Benefit Rider 

This is not disability insurance.  If you should become disabled and unable to work, the disability benefit rider will cover your premium payments.  After 6 months of disability, Protective Life will waive your premiums.  This way you will not lose your life insurance because you can’t pay the premium.   

 Accidental Death Benefit Rider 

This rider offers an additional level of coverage, which will give your beneficiaries a greater payout should your death be the result of an accident.  This can come in handy knowing that very few term life insurance policies even pay a death benefit.

 Children’s Term Life Insurance Rider 

This rider gives you the option to add any natural or adopted children under the age of 18 to your life insurance policy.  It provides up to $20,000 in coverage until the age of 25.  At this point, your children are then able to convert their coverage into their own life insurance policy.

Cons to using Costco Life Insurance Agency

Even though the policy is being offered by one of the leading life insurance companies, there are several disadvantages to keep in mind.

  • Costco is limited to one life insurance provider, which makes it difficult to know if you’re getting the best price compared to other companies.
  • The policy is limited to term periods of 10 or 20 years, while other policies offer 15, 25, and sometimes 30 year term periods.
  • The policy is limited to term life insurance with the option to convert to a universal life insurance policy in the future. This means that there are no options for a return of premium life insurance, whole life insurance, or indexed universal life insurance.
  • There are no policy features such as critical illness or chronic illness insurance 
  • You must be a Costco member to apply.

Additional Costco Life Insurance Products

Both term life insurance and permanent life insurance are available through Protective Life Insurance, in addition to Costco Life Insurance.  Universal life and Whole Life are the two permanent life insurance options offered.  Both permanent options have an available cash value, which can later be drawn against after the cash value has grown inside your policy.  Protective life is really know as a cheap term life insurance company.

Should You Purchase a Costco Life Insurance Policy?

Even though Costco provides an adequate life insurance policy from a highly reputable life insurance provider, there may be better options for you. 

This policy offered through Costco life is also afforded by numerous other independent life insurance  companies. 

In fact, working with an independent life insurance broker like Ogletree Financial can ensure that you are receiving the best price for life insurance coverage.

Besides getting the best policy price, an independent life insurance agent will also be able to find the coverage that works best with your lifestyle and financial needs. 

This removes the guesswork from you and helps you to find the best choice possible for your individual and financial needs.

 

 

Frequently Asked Questions

What does Costco offer for life insurance?

Costco keeps their insurance selection simple by offering the Member Advantage Life UL (universal life) policy – the universal life insurance plan with term life features.  With this policy, you are given the choice between a 10-year or 20-year level term policy.  The premiums and death benefit of this policy are guaranteed to remain fixed through the entire level period.

Are there any disadvantages to Costco life insurance?

A couple of disadvantages are that Costco is limited to one life insurance provider (Protective Life), which makes it difficult to know if you’re getting the best price compared to other companies and the policy is limited to term periods of 10 or 20 years, while other policies offer 15, 25, and sometimes 30 year term periods.

What are some features of Costco life insurance?

Once the 10 or 20-year level term is finished, you are given the opportunity to continue coverage at the same price, however, the death benefit is reduced each year until it equals $10,000.  If you are a Costco Gold Star Member or Costco Business Member, you will enjoy a 20% savings on your life insurance plan.

 

 

author avatar
Doug Mitchell, CLU Independant Advisor
Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent almost 30 years in the life insurance industry and has also held licenses to sell securities, long-term care insurance and home and auto insurance. Doug is a Top of the Table Million Dollar Round Table member (MDRT).  MDRT is a global, independent association of the world's leading life insurance advisors.  For two years, Doug served as President of the Auburn Opelika Association of Financial Advisors and has been a member of the Million Dollar Round Table. He obtained Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award. Later in his career with New York Life he was an Executive Council Member. Doug currently serves as President of Ogletree Financial, a managing general agency serving life insurance agents and clients in all parts of the United States. Today, Doug’s main focus is servicing 1000s of policyholders and growing the agency through the reach of  insurancequotes2day.com.

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