Costco, the popular membership-based warehouse, offers term life insurance through Protective (one of Policygenius’s partners). As with many other services and products sold by Costco, its life insurance product is exclusive for its members and offers special discounts and features, like the option to adjust your death benefit over time and pay reduced premiums during the first five years of your policy.
But when planning for the financial security of your family, Costco shouldn’t be the only place you look. Costco term life insurance plan might offer short-term lower prices for someone in good health, but there’s only one policy option, leaving you with limited flexibility.
Most people are better off working with a life insurance broker to find a policy that caters to their specific needs at the most competitive price.
Key takeaways
Costco members can get discounted coverage through Protective Life Insurance.
The discount applies for the first five years of the policy, then premiums increase.
Costco life insurance might be cheaper for healthy individuals, but not for people with a more complicated medical history.
Even healthy individuals aren't guaranteed to pay less with a Costco policy, so shopping around for an insurer is the best way to get the most affordable rates.
How does Costco life insurance work?
Purchasing life insurance through Costco doesn’t mean you’re purchasing a Costco-branded policy. Costco’s life insurance page leads you to apply through a reputable life insurance company, Protective, which is also offered through the Policygenius marketplace.
Costco offers term life insurance, which is the most affordable type of life insurance. Term life insurance lasts for a set number of years and expires after that period ends.
If you purchase a Protective life insurance policy through Costco, you can choose a term of 10 years or 20 years, and coverage amounts between $100,000 and $5,000,000.
You’ll work also with a Protective agent — not a Costco employee — during the underwriting process. By buying through Costco instead of through another broker, you’ll receive discounted policy premiums for the first five years of your policy.
During the sixth year, the premiums increase and remain the same for the rest of your policy.
Should you buy a life insurance policy through Costco?
While purchasing a life insurance policy through Costco might be the most cost-effective option for some people in the short-term, it’s not the best policy option for everyone.
Every life insurance company varies in their approach to different medical conditions or lifestyle choices, and some will offer you lower rates than others.
By not shopping around with multiple insurers, you might not be getting the lowest rate for your profile. In many cases it’s possible to find a policy that costs less than comparable coverage with Costco, even if you’re in good health.
And though term life insurance is right for most people, if you need permanent life insurance, you won’t have any policy options with Costco.
Is Protective a good life insurance company?
Protective life insurance ranks high against other life insurance companies in most circumstances.
Protective typically offers lower-than-average rates across the board, allows you to manage your policy online, and even can get a lower rate after you’ve had your policy for a year if your health improves.
If you have one or more medical conditions, you might not see rates as low as other Protective customers, but you could still pay competitively priced premiums.
→ Read Policygenius’ full review of Protective life insurance
Ready to shop for life insurance?
What do you need to know about your Costco life insurance policy?
There are some key stipulations for Costco life insurance policies:
Coverage availability varies by state and is not offered in New York.
The average discount is 15% and only applies for the first five years of your policy.
If you need to increase the death benefit amount after you sign for your policy, you’ll need to prove that your income requires that coverage amount.
You can decrease your death benefit amount after your policy’s third year, but you’ll need to maintain a minimum coverage amount.
A Costco membership doesn’t automatically qualify you for Protective life insurance coverage. You’ll still need to go through the underwriting process.
How much does Costco life insurance cost?
How much you actually pay for your life insurance policy depends on multiple factors, including your family’s medical history, your health, and what you do for a living. Protective’s generally affordable rates coupled with a Costco discount make it easy to save on life insurance if you’re in good health.
Check out the table below to get a sense of how much you might end up paying for a life insurance policy through Costco versus the industry average.
Age | Gender | Costco rates for $500,000 coverage amount | Industry average for $500,000 policy | Costco rates for $1 million coverage amount | Industry average for $1,000,000 coverage amount |
|---|---|---|---|---|---|
25 | Female | $16.41 | $21.01 | $27.03 | $32.53 |
Male | $21.09 | $27.13 | $36.10 | $43.73 | |
35 | Female | $19.83 | $25.76 | $34.11 | $42.01 |
Male | $23.23 | $30.79 | $40.92 | $51.05 | |
45 | Female | $37.91 | $48.43 | $70.30 | $86.32 |
Male | $49.27 | $61.49 | $93.02 | $112.47 | |
55 | Female | $86.26 | $111.35 | $167.00 | $206.69 |
Male | $119.82 | $153.76 | $234.10 | $281.13 |
Methodology: Sample premiums are for a non-smoker males and females with a Preferred health rating; life insurance averages are based on a composite of policies offered by Policygenius from Banner Life, Brighthouse Financial, Corebridge Financial, Lincoln Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, and Transamerica, and may vary by insurer, term, coverage amount, health class, and state. Costco averages reflect rates discounted at 15%, which applies only to the first five years of the term. Not all policies are available in all states. Rate illustration valid as of June 2023.
You'll notice that the prices offered from Protective with the Costco discount are a lot lower than the industry average. However, it’s possible that a different life insurance company would offer you lower rates for your situation than Protective will.
Working with an independent life insurance broker is the best way to get the most affordable rates.
Frequently asked questions
Should I buy life insurance from Costco?
If you’re relatively healthy and the policy options suit your needs, a Costco life insurance policy is worth considering, but we recommend comparing quotes from multiple providers before committing.
What life insurance company does Costco partner with?
Costco partners with Protective to sell term life insurance policies.
Does a Costco life insurance policy offer a better deal than other life insurance?
Costco may offer lower rates than the industry average if you are in good health. It’s important to shop around to see where you can get the lowest life insurance rates.
