As far as popular American life insurance providers go, some people might be surprised to find Costco life insurance among them.
The following Costco life insurance review aims to provide you with all the information you need to know about this insurance option.
In This Review
About Costco Life Insurance for Members
Though the wholesale club is Costco’s focus business, since 2014, it has been working with Protective Life Insurance, providing its members with Costco life insurance policies.
Protective Life Insurance is a firm that began in 1907 with headquarters in Birmingham, AL.
The company grew steadily in the years following its introduction, merging with Alabama National Insurance Company in 1927.
Since then, it has expanded immensely, acquiring West Coast Life in 1997, Chase Insurance Group in 2006, and MONY Life Insurance Groups in 2013.
Today, Protective Life Insurance has coverage for all 50 states and is among the largest life insurance providers in America.
Company Rating
Costco life insurance is still relatively new to the insurance industry.
Though the Better Business Bureau (BBB) does not accredit Protective Life Insurance, it still gives it an A+ rating.
And if Protective Life Insurance’s position is anything to go by, Costco life insurance might be worth purchasing.
Life Insurance Products Offered by Costco
Costco offers life insurance coverage, which it refers to as the Member Advantage Life UL.
Costco Member Advantage Life UL
The product is a universal life insurance coverage with features similar to those you would find in a term life policy.
The coverage gives you the option to choose between a level term policy of either 10 or 20 years.
What’s more is that, for both levels, your death benefits and premiums do not change throughout the entire level period.
Once you complete the level term period, you can choose to continue the coverage at similar prices, though your death benefit reduces every year until it gets to $10,000.
On reaching this amount, your premiums become a rate that increases annually.
If you own a Costco Business or Gold Star membership, you get a 20% saving on your policy.
This discount will, however, only be implemented in the first five years of your level contract.
Once you reach the sixth year, Costco readjusts the premiums to your life insurance’s original cost, with the price remaining unchanged for the remaining level term duration.
While Protective Life Insurance provides Costco’s life insurance policy, purchasing it through Costco only gives you access to one type of policy.
Therefore, before signing up for it, you have to make sure that this policy is right for you and offers you the best value.
Costco Life Insurance Additional Benefits
The Costco life insurance policy also offers additional benefits.
Some of them are included within your premiums, while other add-ons will incur an extra fee.
The coverage benefits that come without any additional charge are the:
- Income provider option endorsement
- Terminal illness accelerated death benefit endorsement
- Disability benefit rider
INCOME PROVIDER OPTION ENDORSEMENT
Instead of paying the entire sum of death benefits to your beneficiaries, this option will give them a smaller lump sum payment.
It will then pay them the rest of the amount as an income for 30 years.
TERMINAL ILLNESS ACCELERATED DEATH BENEFIT ENDORSEMENT
For this option, the company will pay you 60% of the death benefits after being diagnosed with a terminal illness.
The payment is intended to cover all your immediate expenses.
This amount is removed from the final death benefits your beneficiaries will receive.
DISABILITY BENEFIT RIDER
The disability benefit rider enables you to retain your premiums if you cannot work after becoming disabled.
After six months, the company credits your monthly premium payments to your policy to keep it active while you are disabled.
CHILDREN’S TERM LIFE INSURANCE RIDERS
This rider enables you to include your children, either natural or adopted, who are 18 years or younger, in your insurance policy.
The insurance will give them coverage of up to $20,000 until they turn 25.
After that, they can either terminate it or choose to convert that coverage into their policy.
ACCIDENTAL DEATH BENEFIT RIDER
If an accident is the cause of your death, the rider will provide an additional coverage level that will offer higher payout levels for all your beneficiaries.
Eligibility & Application Process
As far as eligibility goes, the 10-year level premium policy applies to people aged 18 to 75.
On the other hand, only 18 and 65-year-olds are eligible for the 20-year level premium policy.
If you are eligible, getting a Costco life insurance policy is a simple and streamlined process.
You will begin by getting a quote, then fill out an online application form on the Costco website.
The form will ask you to enter your information, as well as the names of your beneficiaries.
You will also be asked to designate what percentage each beneficiary is meant to receive.
A representative will contact you upon submitting your form, conducting a 20-minute interview regarding your medical history.
You will then have to schedule a medical examination. However, you will not need to visit a doctor—a medical representative will come to you instead.
In some cases, some applicants can obtain insurance coverage without having a full exam.
A representative will then review your information, application, and the outcome of the medical exam.
Depending on the exam results and your medical history, the company might need other underwriting requirements.
Once the review is complete, you will receive a notification, along with electronic versions of all the necessary documentation.
Costco Life Insurance Pros
There are several advantages that you could enjoy if you choose the Costco life insurance policy.
The main advantage is its death benefit that has coverage ranging from $100,000 to five million dollars.
With Costco life insurance, if you’re below 70, you have the option of exchanging your policy with a different Protective Life Insurance policy during the initial fixed term without going through another underwriting process.
Other Pros Include:
- Costco Business and Gold Card members get a 20% discount on premiums for the first five years
- Purchasing the policy is simple and straightforward, with only an online form and a brief phone call needed
- Provides you with an easy online quote
- Protective Life Insurance will cover the medical exam you are required to take
Costco Life Insurance Cons
Though the provider of Costco life insurance is one of the best life insurance companies in the country, it still comes with a few drawbacks such as:
- It only offers a policy from one insurance company, meaning you can’t know whether you are getting the best price
- While other options include various term length options, Costco life insurance only offers 10 and 20 years term lengths
- The policy is only available as a term insurance
- It does not offer various policy features like life insurance with living benefits
- The insurance policy is only available for Costco members, meaning you will have to factor in the membership fee in your cost calculations
Is a Costco Life Insurance Policy Best for You?
Though Costco life insurance offers a good product from an insurance company with a stellar reputation, there might be other better-suited options out there.
This Costco life insurance review points out a lot of features and advantages. Should you choose to go with it, you will be buying into a worthwhile investment.
