You probably already know Costco as a reliable members-only shopping club that sells groceries and household items at very affordable prices. They have hundreds of locations in the United States, as well as locations in Canada, Mexico, Japan, South Korea, Taiwan, China, the UK, Spain, Iceland, France, and Australia. What you might not know, however, is that you can get life insurance through Costco if you have a membership with them. Here’s what you need to know about Costco’s life insurance, and whether it’s a good buy for you and your family.
Costco and Protective Life Insurance Overview
Costco offers its life insurance policies through Protective Life, a company based in Birmingham, Alabama that specializes in life insurance as well as retirement savings products. Protective Life Insurance is a very trustworthy brand, with a rating of A+ from the Better Business Bureau as well as an AA rating from Standard and Poors. They have over 100 years of experience selling life insurance and other related products. Costco is the second-largest retailer in the world and is currently ranked at #14 on Fortune 500’s list of companies by total revenue. They are currently based in the Seattle metro area in Washington state.
What Type of Life Insurance Does Costco Offer?
Costco offers term life insurance policies in 10 and 20-year increments. Some term policies have the potential to become universal later on. These term policies are generally very affordable, but when they run out, you’ll need to reapply for life insurance, and your rates may change. If the policy becomes universal, you’ll be able to put part of your premium payments towards a cash benefit, which you can use as an investment tool or your family can receive as part of a payout. Costco’s policies are available with flexible death benefits between $100,000 and $5 million. You can adjust your death benefit amount over time, and you can cancel the policy without any hidden fees.
How to Apply for Costco Life Insurance
Costco’s life insurance is only available to Costco members. A Costco membership starts at $60 per person annually. It’s very easy to get a free quote online by answering a short questionnaire that only takes a few minutes. If you decide you want to apply for a policy, you can fill out the entire application online. After your application has been submitted, a Protective Life insurance agent will call you to ask a few questions about your medical history. The phone call will take about 20 minutes. From there, you will need to schedule a free medical examination with one of Protective’s medical agents. Depending on your medical history, you may be able to obtain coverage without an exam. After you’ve been approved for a policy and it has been underwritten, Protective will send it to you electronically, so you won’t have to worry about paper documents.
Additional Riders for Costco Life Insurance
While the Costco life insurance policy is very simple, they do offer a number of different riders to amend your insurance plan and better fit your needs. Here are some of the riders that Costco offers for their life insurance:
- Terminal illness rider: This rider allows you to access up to 60 percent of your death benefit early if you are diagnosed with a terminal illness. You can use this to cope with the extra financial stress on you and your family.
- Disability benefits: If you are diagnosed with a disability, you can add a disability benefit from Protective’s larger range of products to your policy. A disability benefit will give you and your family extra support to cope with the medical bills and other additional expenses.
- Children’s term life insurance: This rider allows you to add children in your family to your life insurance plan up until they turn 25. Afterward, they can choose to start their own plan from Protective if they wish.
- Accidental death benefits: With this rider, beneficiaries will get a higher payout if the policy holder’s death is ruled an accident.
- Income provider option: This rider allows the beneficiaries of the policy to choose if they want to receive the death benefit in one lump sum or in monthly payments over the course of 30 years. If you’re buying life insurance to support your family and replace their income, this is a good option.
When you apply for Costco’s life insurance, you’ll be able to decide if you want to add one or more riders to your policy. When you talk on the phone with a Protective representative, they’ll be able to help you decide if the riders are a good fit for you.
Pros and Cons of a Costco Life Insurance Policy
There are several advantages and disadvantages to getting a Costco life insurance policy. The biggest advantage is the price point – these life insurance policies are generally very affordable, so if you’re having a hard time finding life insurance coverage that fits your budget, this could be a good choice for you. Costco also offers a discount on all monthly premiums for the first five years of the policy, which is not something you’ll find often. On top of that, it’s very easy to apply for the policy online, and you can adjust your death benefit throughout the policy period as necessary.
However, there are some disadvantages to using Costco for your life insurance. You do need to be a Costco member in order to apply, and if you don’t already have a membership, the insurance is not robust enough to be worth signing up for on its own. The terms of these life insurance policies are also very short when compared to other options on the market, and they don’t offer much in the way of flexibility. With a shorter term, you’ll be fairly likely to outlive your insurance policy, which means you’ll need to reapply later on and could incur higher rates.
Overall, Costco’s life insurance is a reliable option if you already have a Costco membership and you only need a short-term insurance plan. However, if you don’t have a Costco membership, you may want to pursue other options.