Costco Life Insurance Review – Is It a Good Option for Seniors?
When you think about life insurance, you probably don’t think about purchasing a policy at Costco. Few people know that Costco even offers life insurance policies among the wholesale and bulk items available. You might be skeptical about Costco life insurance. Many people are because Costco doesn’t seem like a place that would offer life insurance. Before getting any type of life insurance, you should do some research. The same is true of Costco life insurance. It’s essential to see whether their life insurance is worth it.
Costco offers one type of life insurance. They only offer Member Advantage Universal Life Insurance. They do not have any other types of life insurance available. This can be limiting to some people because not one single policy works for every person.
Costco does not offer life insurance that is of its own brand. Their policies are available through Protective Life Insurance. Their policies are exclusive to members of Costco and as members, they get exclusive deals.
Based on this, some Costco members might be tempted to jump on board. People want to take advantage of as many savings and perks as possible. If you already have a Costco membership, you might be wondering why you shouldn’t get life insurance through the store.
Though it sounds like a good deal, it’s important to dig a little deeper. You don’t want to sign up for a policy you don’t fully understand. Plus, you want to make sure that you are truly getting a good deal on your life insurance policy.
Protective Life Insurance Rating
Not all life insurance companies are good ones. Financial companies rate life insurance companies so you can tell whether a company is financially stable. This helps you to know about the company’s reputation.
Protective Life Insurance is the company that Costco offers life insurance through. Moody’s gave Protective an AA rating. Standard and Poor’s also gave Protective an AA rating. The Better Business Bureau gave the insurance company an A+ rating. Overall, Costco customers can feel at ease with these ratings. They can give you peace of mind about Protective Life Insurance if you are on the fence.
OVerall protective is a great company but its only one of many options out there. You don’t want to just dive headfirst into what the offer is here without first doing your due diligence.
What Costco’s Life Insurance Has to Offer
As mentioned, Costco only offers one type of life insurance through Protective Life Insurance. The policy can work well for some people, but this does not give members a lot to work with.
With any other type of insurance, the insured would have a choice in the type of life insurance they get. Because there is only one option through Costco, you may not end up with the best policy for your needs. This is nothing against Protective Life Insurance, which is a reputable company. Most people simply need more options.
Costco’s life insurance gives you the option to select a 10 or 20-year term. It’s possible that this is how you can get such a good deal. These terms are fairly inexpensive and it’s easy for Protective to offer discounts because of that.
Costco’s life insurance is referred to as a universal policy. In reality, it’s a term policy. The term policy does have the option to turn into a universal policy though. It’s not a typical universal policy that you may have heard of.
With this policy, you will need to get a medical exam. This is covered as a part of the insurance policy from Protective. With Costco insurance, you will get the “savings” on your premiums for the first five years that the policy is active. Once those five years are up, you will have an adjusted premium.
Through Protective, Costco offers a variety of riders that you may add on. This isn’t necessarily any different from what you can expect from other life insurance companies though. You might find different or better riders from another company. Costco’s life insurance offers riders that cost extra money and riders that are free with a policy. Take a look at the rider add-ons available:
Included with coverage:
- Terminal Illness Accelerated Death Benefit Endorsement
- Income Provider Option Endorsement
Available at an extra cost:
- Children’s Term Life Insurance Rider
- Disability Benefit Rider
- Accidental Death Benefit Rider
Before committing to Costco’s life insurance through Protective, make sure you compare it to the other options available. Other companies may offer products that work better for your needs. They may even offer better deals than Costco does. Don’t be fooled by the chance to get a member-exclusive policy.
What You Should Know About the Policy
Before committing to a policy, you should learn about what it has to offer. Here are some of the details about the Costco life insurance policy through Protective:
- Online quotes are available for your convenience.
- Only Costco members get access to these policies.
- There is a premium discount for the first five years of your policy.
- The policy is offered in both 10 and 20-year term options.
- You can potentially add to a universal life insurance option.
- The policy is available for ages 18 to 75, which means most adults are eligible.
- A medical exam is required, but it is covered by Protective.
- Part of the application process includes a phone call.
Knowing these details can help you to make a decision about Costco’s life insurance policy. You can decide whether the policy is the right choice for you. Depending on your needs, these details may help you or hinder you when it comes to getting life insurance.
Downsides of Single-Policy Providers
One concern with single-policy providers is that you don’t have any other options. You could be declined based on your medical history or current health status. If this happens, there are no other policies available through Costco and Protective. You will have to get life insurance from another company at that point.
In addition, you cannot make comparisons between the different options because there is only one option. The price you are quoted is the only one available. The universal life policy is the only policy you can choose from. This is true whether or not the policy and its price is the right fit for you.
Keep in mind that Costco life insurance requires a medical exam. If you undergo the medical exam and do not qualify for life insurance through Costco and Protective, you cannot find another option through these companies. If you are aware of your poor health, you cannot choose a no-exam policy through Costco and Protective. You only have one chance of getting life insurance with Costco and Protective. This can be difficult for those with health issues or those who might need no-exam policy options.
Available Coverage Amounts with Costco Life Insurance
As mentioned, Costco life insurance does not give you a lot of options to work with. With Costco life insurance, you do have some options when it comes to coverage amounts. You get to choose the coverage amount that is paid out on your death.
The options that Costco and Protective offer vary from $100,000 to $5,000,000. This is a good range of coverage options to work with, making it easy for you to find what works best for you.
Exchanging Your Policy
With Costco life insurance, you can exchange your policy during the initial fixed term you chose. You can exchange the policy for another Protective Life Insurance policy. You may do this at any time as long as that initial fixed term policy is still active.
By doing this, you can avoid going through the underwriting process again. You will not need to have another medical exam in order to exchange your policy. Keep in mind that this can only be done until the age of 70.
Savings on Costco Life Insurance
One of the major draws to Costco life insurance is the savings factor. If you are a Costco member, you get to get life insurance at a discounted rate. Costco Gold Star members and Costco Business members both save 20% on their life insurance.
Though this can have a big impact on how much you are paying on life insurance, make sure you fully understand what you’re getting into. Additionally, you should check out other life insurance policies. Though 20% can be a good discount, there may be other no-discount options that are more affordable or offer other benefits. If you compare rates across all companies, it’s feasible to find a 20% or more difference in pricing for the same product.
While you do get reduced premiums through Costco and Protective for the first five years of your policy. This can be a great savings option and can help you to cut back on your expenses. Again, compare this savings option with other policies that are available.
Pros of Costco Life Insurance
As with all insurance policies, there are pros and cons. These are the advantages to selecting Costco life insurance:
- You can save money for the first five years of your policy.
- There are a variety of add-ons available that may be useful, depending on your needs.
- You have the option to switch to a universal life policy.
- You can save 20% on your life insurance simply by being a Costco member.
- You can trust Protective Life to be a financially sound company.
Cons of Costco Life Insurance
You should be aware of these disadvantages before getting a life insurance policy. These are the cons of using Costco for life insurance:
- You cannot compare prices among companies because only one company is offered through Costco. This is the only policy available through Costco.
- You’re limited when it comes to terms. While other companies offer a variety of term lengths, Costco only offers 10 and 20-year options.
- You will miss out on other types of life insurance. Life insurance is very specific to your individual needs. For example, you cannot get whole life insurance or no-exam life insurance through Costco, among other types of life insurance.
- You won’t get a lot of policy features that are available from other companies. The features of Costco life insurance are basic.
- You need to be a Costco member to get Costco life insurance.
Is It a Good Option for Seniors?
If you are a senior who is considering Costco life insurance, you should make sure it’s the right fit for your needs.
Costco’s life insurance is most comparable to a term life insurance policy. This can be the right fit for seniors due to its low cost. It’s a very affordable type of life insurance. With term life insurance, you can select the term duration that you need coverage for. You can get term life insurance when you need it most.
Costco offers the option to convert your policy into a universal life insurance policy. This is a good option for anyone who wants permanent coverage.
Given these considerations, Costco life insurance can be a good option for seniors. Term life and guaranteed universal life are two of the best options for life insurance for seniors.
However, the drawback remains that you are only given one product to work with. Whether you need permanent or term coverage, the best bet is to always shop around.
Companies That Offer Similiar Product Offerings
There are other companies that offer similar policies to Costco’s policy. These are worth comparing with Costco life insurance to ensure that you get the best price and best benefits. These companies include:
- Lincoln National
These are just some of the companies out there that offer similar products. The truth is, there are dozens of A-rated companies that offer a similar product, and most likely at a similar rate.
Keep in mind that not all of the policies are the same. You don’t just have to comapre apples to apples. It’s important to compare the different policies that each company offers. Then, you can get the best policy for your needs and insure that you’ve got something that’s specific to your life and what you’re looking to protect rather than just another cookie-cutter policy.
Difference Between Costco Life insurance and Traditional Term or GUL Policies From Popular Companies
Costco life insurance is different from other policies offered from popular companies. One of the main differences is that Costco only offers one policy. You cannot choose from a variety of policies to find what best fits your needs. Other companies offer several different policies for you to choose from so you can find what works best for you. Insurance is not one-size-fits-all.
With Costco, you will get special member-exclusive savings for the first five years of your policy. This is not typically an option with other popular companies. You also get 20% off with your Costco membership. This is an extra perk. With other companies, you will have to pay what you were quoted. Special savings are not always available.
Costco offers a convenience component. You can get life insurance while you shop at the wholesale store. There is still an application process and a medical exam, but you can get started while shopping. Other insurance companies do not offer this same option.
These are some of the major differences between Costco and other popular insurance companies. Overall, the policies can be similar. Some of the factors that go into the policy and how you get it are different.
Pros and Cons of Costco Life Insurance for Seniors
There are a few pros and cons of Costco life insurance for seniors. Be sure to take a look at the pros and cons so you understand what to expect from the company and their policy.
- It is convenient for seniors to get life insurance while they shop at Costco.
- There are a couple of ways to save money with Costco’s life insurance, including reduced premiums for the first five years and 20% off with a Costco membership.
- The term life policy that Costco offers can be a great fit for seniors. It often meets the needs that seniors are looking for in life insurance.
- Term life insurance is typically very affordable, which helps seniors to save money.
- The only life insurance option from Costco requires a medical exam, which may make some seniors ineligible.
- You can only exchange your policy through Costco until the age of 70, so some seniors cannot do this.
- The application process may be inconvenient for seniors due to the phone call and medical exam.
- Seniors cannot compare different options with Costco life insurance because only one policy is available.
Overall seniors are better off working with a life insurance professional who has access to multiple companies.
Why You Should Work With an Independent Agent
When you shop for life insurance, it is a great idea to work with an independent agent. The main benefit is that you will not have to pay any extra money to work with an independent agent and do the shopping for you.
When you work with an independent agent, you will have access to a variety of options. The agent does not work for a single company so they will not try to sell you a product that may not be the right fit for your needs. The life insurance companies compensate them so you can get the carrier with the best rate.
You can even find an independent agent who specializes in working with seniors. This can be very helpful because the agent will know exactly how to help you find what you’re looking for.
While there aren’t any red flags with Costco’s life insurance offering, you’re better off doing your due diligence and shopping around. The limits can make it very hard to assure that you got the best deal out there. While the company they offer, Protective, is a good one, they only offer a limited product option and it may not be for the best rate that you can get.
You May End Up Overpaying
When it comes to shopping for rates, companies can often offer the same products, at the same coverage amount, with a completely different premium. You can easily find companies with the same product have a difference of 50% to 100% in premium. This can create a huge gap in your wallet every month that didn’t have to be there. This is the case amongst A-rated carriers as well. So despite the savings, you still want to compare rates to see if there is a better offer for you.
You may also want to lock in a permanent policy sooner than later rather than wait to convert your term policy. Shop around for GUL policies that can help you gauge what a permanent pure protection coverage would cost at your age, rather than paying more for it if you decide to convert in the future.
The good news for you is we represent dozens of A-rated life insurance companies. We will be able to compare your rate to Protective life insurance and all the other great companies on the market. The best part is we do this without charging you a penny. We specialize in getting people coverage that best fits their needs and their budget. Give us a call or use the quoter on this page to compare rates with all of the carriers comparable to Costco’s life insurance offering.