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Costco Life Insurance Review

Costco offers one insurance product through Protective Life Insurance. Protective is a reputable insurance provider and the term life policy they offer is exclusive to Costco members
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Costco Life Insurance Review

Written by Brian Greenberg
CEO / Founder & Licensed Insurance Agent

Last updated: August 9th, 2022

Reviewed by Grant Desselle
Licensed Insurance Agent

Costco offers one insurance product through Protective Life Insurance.Protective is a reputable insurance provider and the term life policy they offer is exclusive to Costco members.

Protective is a financially stable life insurance company boasting “AA” ratings from both Moody’s and Standard and Poor’s. They also have an “A+” from the Better Business Bureau. With that in mind, their insurance reputation should speak for itself.
On the surface, their offering with Costco sounds like it could be a sweet, exclusive deal. But, you’ll want to dig in and see everything their policy offers before you make your final choice.

Here’s everything you need to know:

Costco’s Life Insurance Offering

Member Advantage Universal Life Insurance

Policy Details:

  • 10-20 year term (with options to extend for life)
  • Applicable for ages 18-75 (18-65 for a 20-year term)
  • Exclusive for Costco members
  • Easy online quote/application process
  • Medical exam required (but covered by Protective)
  • Premium discount for the first five years


When it comes to buying life insurance from Costco, you have to consider what kind of deal you’re actually getting from this member exclusive. While Protective is a reputable insurer, they’re only offering you one kind of policy, versus the full breadth of Protective’s offerings.

Alongside this, policies from Protective will also require applicants to take a free medical exam. Though, they do offer a discount on the premium for the first five years the policy is in force. Ultimately, this all that their term life insurance policy has to offer.

None of this is to say that Protective’s insurance product is bad. On the contrary, True Blue offers nearly the same product, but we only put customers in it about 5% of the time. You have to make sure the policy is the right fit, so you don’t wind up paying more than you need to. Especially if you can possibly get a better deal from a different insurer based on your health history. And if you ultimately find that this Protective policy is your best option, then we encourage you to apply through Costco, as they offer additional consumer protection on all their insurance options. Whether it be life insurance, auto insurance, or homeowners.

Alternatives with medical exams to Protective:

  • Lincoln
  • Pacific Life
  • AIG
  • Banner

Alternatives with no medical exams to Protective:

  • Sagicor
  • Assurity
  • Foresters
  • Transamerica
  • Mutual of Omaha

Why are there only 10 or 20-year terms?

In the case of Costco’s policies offered through Protective, they don’t offer anything more than 10 or 20-year term policies. While we at True Blue can’t say for sure why they offer this, we can speculate that it is so they can keep their prices down.

This means they can offer discounted rates for the first five years, which usually amounts to around a 10-20% discount. Because of this, they likely need to keep their costs down, so they would be better served to keep the terms short. (Though, it is worth noting that they do offer a universal component to their policy)

How does Costco’s life insurance application process work?

In order to get a policy from Costco, you’ll have to fill out their handy online application to get a quote. There, they will get your member number and help set up payment options.  From there, a customer service representative will reach out and help guide prospective insureds through the next steps. On a 20-minute phone call, they’ll talk to you about getting a paramedical exam, your medical history, and the underwriting process at large.

Does Costco offer any additional riders?

At the same time, this process will involve going through and deciding what riders they’d like to add to their policy. These additional riders include:

  • Terminal Illness Accelerated Death Benefits Rider (w/ no extra charge)
    • In the event you’re diagnosed with a terminal illness, this allows you up to 60% of your policy’s death benefits to cope with emotional and financial costs.
  • Income Provider Option Endorsement Rider (w/ no extra charge)
    • This allows the insured to select whether the death benefit is paid out as a lump sum or over 30 years.
  • Disability Benefit Rider (w/ extra charge)
    • In the event you’re hit with a disability, this rider allows you access to coverage as an add-on to your existing life insurance policy.
  • Accidental Death Benefits Rider (w/ extra charge)
    • This rider allows for a greater death benefit to be paid out if the insured’s death is ruled an accident.
  • Children’s Term Life insurance Rider (w/ extra charge)
    • If you want to add your children to your life insurance policy, this rider will cover them up to the age of 25. After that point, they can either terminate the policy or pick up the policy from protective on their own.

From there, they will review your application and analyze your medical history, exam results and perform a background check. They will use that information to make their final decision about accepting your application.

Is Costco life insurance your best deal?

The thing to consider with Costco’s life insurance offerings is that they aren’t offering a lot of variety. Their agents through Protective can only sell you this singular policy, versus the breadth of policies an independent agent can offer. Because of this, there’s a strong possibility that you can find a better deal.

Even more so, an independent agent can better advocate for you to underwriters. Coupled with their access to more products and this advocacy, you’re likely going to find something better
Click here to see what kind of quote you can get from Costco and Protective.

If you’d like to explore your options further, True Blue Life Insurance is here to help. You can click here to use our questionnaire and quote engine to compare and find the best fit policy. Or, if you’d like to speak with us directly, you can follow the contact links below:
Toll-Free: (866) 816-2100
E-mail: [email protected]
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