Costco Life Insurance – Should You Buy Life Insurance from Costco?

costco life insurance

Costco offers Members Advantage life insurance, a Protective Life Insurance Company product, exclusively to members.

Protective Life is a reputable company with which we have worked since 1998. This guide provides the most recent 2024 information about the Costco program and Protective Life.

Is Costco Life Insurance Worth It? Pros & Cons at a Glance

Before buying any term life insurance policy, it’s important to consider the product’s pros and cons.

Here’s a quick look at whether a big-box retail store like Costco is the right choice for you:

Pros 1Cons
Potentially Excellent Rates: If you qualify for the top health class, the initial 5-year discount makes Costco very competitive.Limited Term Options: Only 10, 20- and 30-year terms are available, which might not suit everyone’s needs.
Convenient Application: The online application process is straightforward.Medical Exam Likely: Unless you’re very young and healthy, you’ll probably need a medical exam to qualify.
Membership Perk: Executive members get an additional discount, adding to the potential savings.Discount Ends: The member discount only lasts 5 years, after which premiums increase.
Potentially Fast Approval: Some applicants might qualify for coverage without a medical exam, leading to a quick decision.Membership Cost: You need a Costco membership to be eligible, which is an added expense for non-members.
Conversion: No conversion privilege is indicated on the Costco Protective

Costco Life Insurance Review Highlights:

The Member Advantage term life insurance product offers the following:

  • Minimum Policy – $100,000
  • Maximum Policy – $5,000,000
  • Issue Ages:
    • 10-Year Term – Ages 18-80 (75 for tobacco)
    • 20-Year Term – Ages 18-70 (62 for tobacco)
    • 30-Year Term – Ages 18-58 (43 for tobacco)

Understanding Niche Programs

Like Costco or the AICPA Term Life program, most niche programs have certain pros and cons. It’s important to note that Costco Protective Life only offers term life insurance; universal or whole-life products are not part of the program.

Who Might Benefit from Costco Life?

With the discount, Costco Protective Life Insurance may be an excellent option for you, your spouse, or even your ex-spouse. While the no-exam aspect isn’t unique (many life insurers offer $500k – $3 million with no medical exam),

One question we haven’t resolved is:

What happens to your discount if you are no longer a member of Costco or change your membership level???

Costco Membership

If you’re new to life insurance, check out our Life Insurance 101 guide.

Costco Term Life Insurance: Who’s It Best For (And Who Should Look Elsewhere)

Here’s a quick breakdown to help you decide if Costco Term Life Insurance is best for your needs:

Costco Life Insurance might be a GREAT fit if:

  • You’re in excellent health: The best rates are reserved for the healthiest individuals.
  • If you need a basic term life policy: Costco offers 10, 20, or 30-year term life insurance.
  • Price is a major factor: Potential savings are important, even considering the required membership fee.
  • Convenience matters: You appreciate a streamlined application process.

You might want to consider other options if:

  • You have health conditions: Certain medical conditions might disqualify you from the best rates or even lead to a denial of life insurance.
  • Family History: You have a parent or sibling who has had heart disease or cancer.
  • You need longer duration coverage: With limited term options, you may require more flexibility, like a 40-year term.
  • You use tobacco products: Better options exist for cigar smokers or chewing tobacco users through companies like Banner Life, Corebridge, and Prudential.
  • You want a permanent policy: Costco life only offers term coverage.
  • You don’t want to pay for a Costco membership: If the additional membership cost outweighs the potential savings, it’s worth comparing quotes from other companies.

Is Costco Always The Best Price?

No, better rates are available elsewhere, especially if you do not qualify for Select Preferred rates.

  • Costco has stricter rules for family history: If a parent had or died of cancer before age 60, you wouldn’t get the “very good” or “good” rate with Costco.
  • Banner Life is a better choice in this situation: They offer their “preferred best” rates if a parent dies of cancer before age 60.2

If you have a pre-existing medical condition such as diabetes, heart disease, or cancer history, you should definitely consider other life insurers like Corebridge Financial or Prudential.

Member Advantage Riders

The member advantage program at Costco has several life insurance riders available, including:

Accidental Death Benefit: Do You Need Extra Protection?

  • What it does: Provides an additional death benefit of up to $250,000 if you die due to accidental death. This is in addition to the main life insurance policy you buy.
  • Why consider it: If your occupation or hobbies, like private aviation, scuba diving, etc., carry a higher risk of accidental death, this coverage may be worthwhile.
  • The downside: Statistically speaking, you are less likely to die from an accidental death.
  • Cost: Accidental death riders are inexpensive compared to traditional term life insurance
  • Available to: Members aged 18-60, with coverage stopping at age 65.

Children’s Term Life Insurance: Is it Right for Your Family?

  • What it does: Provides a death benefit if your child passes away.
  • Why consider it: It can help ease the financial burden of paying for funerals and final expenses.
  • The downside: This rider still costs money, and some parents don’t like the idea of having life insurance for their children.
  • Cost: Riders for children are inexpensive, and the rider covers all of your children for one low price.

This optional rider provides $1,000 – $25,000 life insurance per child. This child rider is comparable to many other companies.

When your child reaches age 25, they can convert the child rider to a permanent policy up to 5 times the amount of the child rider.

Income Provider Option (IPO) Endorsement

  • What it does: Instead of paying a lump sum at death, this rider pays the death benefit settlement proceeds out over time to your beneficiary.
  • Why consider it: If you have concerns about your beneficiary spending all the money too quickly or want eternal control, this may be an option for you.
  • The downside: Once you select this option and benefits begin, you cannot change the payout to a lump sum.
  • Cost: There is no additional cost for this option.

The IPO endorsement allows you to spread death benefit payments over a 1-30 year period.

You can have one or multiple beneficiaries and distribute death benefits equally or how you see fit.

The life insurance settlement options include lump-sum, regular income stream, or both.

Terminal Illness Accelerated Death Benefit: Accessing Funds When You Need Them While Living

  • What it does: With this rider, if you are diagnosed with a terminal illness while still living, you can receive an advance payment of up to 60% of your death benefit, or $1 million (whichever is less).
  • Why consider it: It’s a no-cost option that is automatically included with most policies.
  • The downside: It reduces the death benefit your beneficiaries receive when you die.
  • Cost: This rider is free, but once exercised, most companies charge a one-time fee of several hundred dollars.

Waiver of Premium: Protecting Your Policy in Case of Disability

  • What it does: If you become disabled and unable to work, your premiums are waived during the period of disability.
  • Why consider it: This rider ensures your beneficiaries are protected even when you can’t pay the premium.
  • The downside: Waiver of Premium is an additional cost rider that can be expensive.
  • Cost: Cost varies by your age, health, and the company you choose.

Some riders are expensive, and we see them used for business cases like SBA life insurance or key person coverage rather than individual coverage.

When to Consider Other Life Insurance Options (Beyond Costco)

Costco Life Insurance can be a good choice, but it’s important to understand when exploring other options might serve you better. As an independent life insurance agency, we have access to over 50 top life insurance companies!

Here’s why comparing your options is smart:

  • Finding the absolute best price: Other companies might offer lower rates depending on your situation and needs, including Protective Life products offered by independent agents like us.
  • Health conditions: Some companies specialize in providing life insurance for pre-existing conditions.
  • The right coverage: Costco might not be the solution if you need longer-term lengths or permanent life insurance.
  • Personalized advice: We analyze and review your situation and recommend the best company and product based on your needs.

Costco Life Underwriting is More Strict

You must exercise caution with Costco Life if you have a family history. Below are the guidelines for Costco and Protective Life through the independent agent channel.

You will not qualify for the Costco “very good” rate if there is any family history of heart disease or cancer.

Underwriting through the independent agent channel would only penalize you if the parent or sibling died.

Costco Life
(Very Good)
Underwriting Guidelines
Protective Life3
(Select Preferred)
Underwriting Guidelines
Family History of onset and/or death from heart disease (i.e., coronary artery disease)No death from cancer, heart disease, or any cardiac-related condition of either natural parent or sibling prior to age 60.
Family history of genetically pre-dispositioned cancers (i.e., colon, lung, malignant melanoma, as well as gender-based ovarian, breast, and prostate)
Information received as of 5-7-2024

Get your personalized comparison today!

Request a free, no-obligation quote, and we’ll carefully review your needs. Our service is free of pressure.

How to Apply for Costco Life Insurance: A Simple Step-by-Step Guide

If you decide to apply for the Member Advantage Life Term product, you have to take the following steps:

Step 1: Get a Free Life Insurance Quote

Ten inputs are required to get your quote – coverage amount, term length, state of residence, membership type, gender, date of birth, height, weight, tobacco status, and health.

For your health category, you need to choose between:

  • Excellent
  • Very Good
  • Good
  • Fair

As you review the options, an information box below these choices will change to reflect how family history or health conditions may be a factor.

Protective uses a different system of rate classes than the terms “excellent,” “very good,” “good,” and “fair”.

Protective Offers the following rate classes:

  • Select Preferred
  • Preferred
  • Standard

Step 2: Complete the Online Application

You’ll enter your contact, beneficiary, ownership, employment, and income information.

Underwriting will check your MIB record, prescription databases, and medical records if needed.

Step 3: Complete a phone interview

A representative will contact you to review your provided information and discuss further details of the life insurance process.

Step 4: Get a Free Medical Exam

During the phone interview, a paramedical exam will be scheduled for you. Some people may be able to skip this step – you’ll know during the phone interview.

Step 5: Wait for the Underwriting Decision

The waiting time for approval ranges from days to as many as eight weeks. It will all depend on whether a medical exam and physician records are required. Once everything has been received and reviewed, you’ll receive an underwriting decision from the company.

Step 6: Accept or Reject Your Policy

Once approved, you may either accept or reject the life insurance policy. You are not obligated to accept it; there is no cost if you reject it.

We can help you with this process by providing you with quote comparisons from all the top companies so that you can make a decision.

FAQ about Costco life insurance

You may have some questions before you consider applying.

What are the minimum and maximum amounts of coverage?

The minimum is $100,000, and the maximum available is $5,000,000

Is the policy convertible to permanent life insurance?

Yes, conversion is available for a limited time—up to 8 years for the 10-year product and 18 years for the 20-year term product.

Is there a product guide available?

Yes, please see the 2024 Costco Member Advantage Consumer Approved Guide


You have questions about Costco life insurance, and we have the answers.

Costco Life Insurance Cost

Costco Life Insurance’s underwriting guidelines are strict, so we reviewed them to ensure the accuracy of our price comparisons.

Here’s the correlation with other companies’ rate classes.

Costco Life
Health Class
Other Companies
Health Class
Excellent4Preferred Best, Preferred Plus, Select Preferred, Super Preferred
Very Good5Preferred Best, Preferred Plus, Select Preferred, Super Preferred
Good 6Preferred, Standard Plus
Fair7Standard Plus, Standard

Male – Non-Smoker, Age 40 – $250,000 – 20-year term

Monthly premiums

Very Good$18.26

Is Costco Life Insurance a good deal?

Because even if you qualify for the best rates at Costco, it’s important to remember that independent companies can be just as competitive.

Final Words

Costco life insurance is a great option if you are in excellent health.

If you don’t qualify for the best rates, it makes sense to compare other options. Another life insurer may be better, even with the member discount.

Get a free, no-pressure, no-obligation life insurance quote today.

Recent Articles

  1. Information as of 5-7-2024 from Protective’s website ↩︎
  2. 2024 Banner Life Underwriting Guide as of 5-7-2024 ↩︎
  3. 2024 Protective Life Underwriting Guide as of 5-7-2024 ↩︎
  4. Costco Life as of 5-7-2024 indicates that excellent health is “I am in superior health. My cholesterol and blood pressure are normal. My parents, my siblings and I have never had any medical conditions.” ↩︎
  5. Costco Life as of 5-7-2024 indicates that very good health is “Overall, I am generally healthy and above average in the population. I take prescription medication for minor medical conditions other than cholesterol and blood pressure. My parents or siblings don’t/didn’t have any medical conditions.” ↩︎
  6. Costco Life as of 5-7-2024 indicates that good health is “I am in pretty good health, however I have some minor health issues like high blood pressure or cholesterol. My parents or siblings may have had some history of medical conditions.” ↩︎
  7. Costco Life as of 5-7-2024 indicates that fair health is “My health could be better. My blood pressure or cholesterol levels are high, and I have a history of medical conditions.” ↩︎
  8. As an independent life insurance agency, rates come from multiple companies such as Banner Life, Corebridge, etc. ↩︎
  9. The rate is discounted for the first 5 years with a membership. ↩︎
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