Last Updated: November 12th, 2025
Costco life insurance is underwritten by Protective Life and offers term life coverage with reduced member premiums for the first five years. You can choose from 10, 20, or 30-year terms with death benefits from $100,000 to $5 million, but you’re limited to a single carrier and product type compared to shopping the open market.
Costco has expanded beyond bulk groceries and $1.50 hot dogs. Since 2014, the warehouse club has partnered with Protective Life Insurance to offer life insurance exclusively to its members.
If you’re already a Costco member and considering life insurance, you might wonder if their offering provides the same value as their famous rotisserie chicken. This review breaks down everything you need to know about Costco life insurance, from coverage details to whether it’s actually worth purchasing.
About Costco Life Insurance for Members
Costco doesn’t underwrite life insurance itself. Instead, it partners with Protective Life Insurance Company to provide coverage to its members through a program called Member Advantage Life Term.
Protective Life Insurance began in 1907 and is headquartered in Birmingham, Alabama. The company has grown substantially over the past century, merging with Alabama National Insurance Company in 1927. It expanded further by acquiring West Coast Life in 1997, Chase Insurance Group in 2006, and MONY Life Insurance Groups in 2013.
Today, Protective Life operates in all 50 states and ranks among America’s largest life insurance providers. The company has been protecting families for over 110 years.
Company Financial Strength Ratings
While Costco itself doesn’t hold insurance ratings, Protective Life Insurance maintains strong financial stability ratings.
The Better Business Bureau doesn’t accredit Protective Life Insurance but assigns it an A+ rating based on business practices and complaint history.
Protective Life holds an A+ (Superior) rating from AM Best, indicating excellent financial strength and ability to meet policyholder obligations. The company’s long history and substantial asset base provide confidence in its ability to pay claims.
Life Insurance Coverage: Member Advantage Life Term
Costco offers one specific life insurance product designed as straightforward term life insurance for its members.
Policy Structure
The Member Advantage Life Term policy functions as traditional term life insurance with level premiums and death benefits during your chosen term period.
You can choose between three term lengths:
- 10-year term
- 20-year term
- 30-year term
During your chosen term period, both your death benefit and premiums remain fixed. There’s no worry about price increases or coverage reductions during this time.
Death Benefit Options
Coverage amounts range from $100,000 to $5 million, giving you flexibility to match your family’s financial protection needs.
Member Premium Advantage
Costco members receive reduced premiums during the first five years of their policy. This member advantage provides immediate savings compared to standard market rates.
Starting in year six, your premiums return to the standard market cost for your coverage. This is a one-time adjustment, and your premium then remains level for the remainder of your term period.
This pricing structure is important to understand when comparing costs. The first five years offer member savings, while years six through the end of your term reflect standard market rates.
After the Term Period Ends
Once you complete your initial 10, 20, or 30-year term, the policy continues but changes significantly. You can keep the coverage, but your death benefit decreases annually until it reaches $10,000.
After the death benefit drops to $10,000, your premiums switch to an annually increasing rate.
Eligibility Requirements
Age eligibility varies by term length:
10-Year Term:
- Available for ages 18 to 80
- Tobacco users: ages 18 to 75
20-Year Term:
- Available for ages 18 to 70
- Tobacco users: ages 18 to 62
30-Year Term:
- Available for ages 18 to 58
- Tobacco users: ages 18 to 43
You must be a current Costco member to apply.
Additional Coverage Benefits and Riders
Costco life insurance includes several built-in benefits and optional add-ons you can purchase for additional protection.
Included Benefits (No Extra Cost)
Income Provider Option Endorsement
Rather than paying your beneficiaries the entire death benefit at once, this option provides them with a smaller lump sum upfront. The remaining amount is then distributed as income payments over a period you choose, up to 30 years.
This feature helps beneficiaries who might struggle with managing a large sum of money all at once. Adding this option at policy issue can even result in lower premiums than a traditional lump-sum death benefit policy.
Terminal Illness Accelerated Death Benefit Endorsement
If you’re diagnosed with a terminal illness, Protective Life pays you up to 60% of your death benefits or $1 million (whichever is less) while you’re still living. This money can cover medical expenses, treatments, or any other immediate financial needs.
The amount paid to you is deducted from the death benefits your beneficiaries will eventually receive. While there’s no charge for this benefit, accumulated interest at a specified rate is added to the reduction.
Optional Riders (Additional Cost)
Disability Waiver of Premium
If you become disabled and can’t work, this rider protects your policy from lapsing. After six months of disability, the company waives your premium payments to keep your policy active.
Applicants aged 18 to 55 are eligible for this rider.
Children’s Term Life Insurance Rider
This rider extends coverage to your natural or adopted children and stepchildren from as young as 15 days old through age 18. The rider also covers future children as young as 15 days old or as of the adoption date.
Each child receives coverage up to age 25, the expiry date of the rider, or termination of the policy (whichever is earlier). Coverage is available in $1,000 increments ranging from $1,000 up to $25,000. The annual premium is a fixed amount and remains level, regardless of the number of children covered.
At age 25, your child can convert the coverage to a permanent Protective Life policy up to five times the amount of the rider’s coverage without going through medical underwriting.
Applicants aged 18 to 64 are eligible for the Children’s Term Life Insurance Rider.
Accidental Death Benefit Rider
If an accident causes your death, this rider provides additional coverage on top of your base death benefit. Your additional coverage can be as much as your base policy’s death benefit, but no greater than $250,000.
Applicants aged 18 to 60 are eligible for this rider, with coverage and premiums stopping at age 65.
Application Process
Getting Costco life insurance follows a straightforward process:
1. Get a Quote
Visit the Costco insurance services website and request a quote. You’ll enter basic information about yourself and your desired coverage amount.
2. Complete the Application
Fill out the application online or over the phone with a Protective Life representative. You’ll provide your personal information, Costco membership number, and beneficiary details.
3. Phone Interview
A Protective Life representative contacts you to conduct a medical history interview, typically taking 20 minutes or more. They’ll ask questions about your health, lifestyle, and family medical history.
4. Medical Examination (If Required)
If required, you’ll schedule a medical exam, but you won’t need to visit a doctor’s office. A paramedical examiner comes to your home or workplace at a time convenient for you. Protective Life covers the cost of this exam.
For some qualifying applicants, a medical exam may not be required, depending on their age, health status, and coverage amount.
5. Underwriting Review
A representative reviews your application, phone interview, and medical exam results (if required). Depending on your medical history and exam outcomes, they might request additional information or medical records.
6. Approval and Documentation
Once approved, you receive an electronic copy of your policy. You should notify your beneficiaries and keep the documentation with your other important papers.
The entire process typically takes a few weeks from application to approval.
Costco Life Insurance Advantages
Competitive Death Benefits
The policy offers substantial coverage ranging from $100,000 to $5 million. This range accommodates various financial protection needs, from basic coverage to comprehensive family security.
Three Term Length Options
Unlike the original offering, Costco now provides 10, 20, and 30-year terms. This gives you more flexibility to match your coverage period to specific needs like mortgage length or until children are financially independent.
Member Premium Advantage
Costco members receive reduced premiums for the first five years. This discount makes the initial period more affordable than standard market rates for comparable policies.
Simple Application Process
The application can be completed conveniently online or over the phone. You don’t need to coordinate multiple appointments or gather extensive documentation upfront.
Convenient Medical Exam
When required, Protective Life arranges for a medical examiner to come to your location rather than requiring you to visit a medical facility. The company covers the exam cost.
Online Quote Access
You can quickly get a quote online without speaking to a sales representative, making it easy to see estimated costs before starting the application.
Strong Underwriter
Protective Life’s 110+ year history and A+ financial strength rating from AM Best provide confidence that claims will be paid when needed.
Costco Life Insurance Disadvantages
Single Carrier Limitation
Costco partners exclusively with Protective Life Insurance. You can’t compare offerings from multiple carriers or shop around for the most competitive rates for your specific situation.
Working with an independent broker who represents multiple top-rated insurance companies often yields better pricing and more suitable policy options.
Premium Increase After Year Five
The reduced member premiums only apply for the first five years. Your premiums increase in year six to standard market rates. This price adjustment can be significant compared to competitors whose rates remain level throughout the entire term.
If you’re comparing quotes, make sure to factor in the higher cost for years six and beyond, not just the discounted first five years.
No Permanent Life Insurance Options
Costco only offers term life insurance. If you want traditional whole life, guaranteed universal life, or other permanent insurance types, you’ll need to look elsewhere.
Missing Modern Policy Features
The Costco policy doesn’t include living benefits that let you access your death benefit for chronic illness or critical illness needs. Many modern policies include these features as standard or optional additions.
Membership Cost Consideration
You must maintain a Costco membership to keep your policy. The membership fee ($60-$120 annually depending on tier) adds to your total insurance cost.
If you’re not already shopping at Costco regularly, purchasing a membership solely for life insurance access might not make financial sense.
Limited Term Options vs. Market
While Costco now offers three term lengths (10, 20, 30 years), other providers typically also offer 15 and 25-year terms. These intermediate options can better align with specific timelines like when your youngest child graduates college.
Frequently Asked Questions
Is Costco life insurance any good?
Costco life insurance is a legitimate product underwritten by Protective Life, a highly-rated carrier with strong financial stability. The coverage itself is solid, but it’s limited to one carrier and product type. Most people find better rates and more suitable policy options by comparing quotes from multiple insurers through an independent broker.
Who underwrites Costco life insurance policies?
Protective Life Insurance Company underwrites all Costco life insurance policies. Protective Life is an established carrier with an A+ rating from AM Best and has been in business since 1907.
Is Costco life insurance cheaper than buying directly?
The reduced member premiums make Costco competitive for the first five years, but your rates increase to standard market cost in year six. Shopping with multiple carriers often reveals lower rates that stay level throughout your entire term, making them cheaper over the long run.
Can I keep my Costco life insurance if I cancel my membership?
No, you must maintain an active Costco membership to keep your life insurance policy in force. If you cancel your membership, you’ll need to convert your policy or let it lapse.
What term lengths does Costco offer?
Costco offers three term length options: 10 years, 20 years, and 30 years. The 30-year term is ideal for young parents who want long-term protection until their children are financially independent.
What happens to my Costco life insurance after the term ends?
After your 10, 20, or 30-year term ends, you can continue the policy, but your death benefit decreases each year until it reaches $10,000. Once at $10,000, your premiums begin increasing annually.
How long does it take to get approved for Costco life insurance?
The approval process typically takes a few weeks from application to final approval, depending on how quickly you complete any required medical exam and whether underwriting requires additional information.
Key Takeaways
- Costco partners with Protective Life to offer term life insurance with 10, 20, or 30-year level periods exclusively for members
- Members receive reduced premiums for the first five years only, then rates return to standard market cost for the remaining term
- Coverage amounts range from $100,000 to $5 million with several included benefits like terminal illness acceleration and optional riders for children, accidental death, and disability premium waiver
- Age eligibility varies by term length, with the 30-year option available only to ages 18-58 (18-43 for tobacco users)
- The main drawback is access to only one carrier and limited policy flexibility compared to shopping with an independent broker who represents multiple insurers
Need help comparing life insurance options? Our independent agents work with dozens of top-rated carriers to find the best coverage and rates for your situation.
