Costco Life Insurance Review

Discounted term life insurance for Costco members

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overall rating

Our Take

Costco offers members up to a 15% discount on term life insurance through its partner, Protective Life. With coverage up to $5 millions and terms of 10 or 20 years, healthy members can get low-cost term coverage, but options are limited. Non-Costco members and those looking for permanent life insurance options will need to look elsewhere.

  • Pros and Cons
  • Key Takeaways
  • Specifications
Pros and Cons
  • Premium discount for first five years of policy coverage

  • Available riders to further customize insurance coverage

  • Coverage calculator to determine benefit amount needed

  • Only offers term life policy quotes

  • Discounts end after year five

  • Discounted policies only available to Costco members

Key Takeaways
  • Costco partners with Protective Life Insurance to offer discounted term life insurance.
  • Costco’s policies through Protective Life Insurance offer several riders, which is unique for term policies.
  • Costco’s partner, Protective Life Insurance, has an average customer satisfaction rating with J.D. Power and NAIC.
  • Costco does not underwrite or service any of the term life policies it offers.
  • Year Founded 1976
  • Kinds of Plans Term
  • Number of Plans 1
  • Payment Options Monthly, annual
  • Official Website


Costco offers term life insurance at discounted rates through its partner, Protective Life Insurance. We researched Costco’s financial stability, policy plan options, riders, website tools, and customer service reviews to help you compare the life insurance policy options of Costco with the competition. 

Company Overview

Costco is a warehouse club chain store that started in Kirkland, Washington, in 1976. Customers who shop at Costco are required to purchase a membership, but in turn, receive access to discounted grocery and home goods as well as a wide array of discounted services. One of those services is life insurance through Protective Life Insurance.

Costco offers discounted quotes on term life insurance policies for ages 18-75 years old, along with several riders on its policies for enhancing coverage on term life policies. Policy quotes are available online but most policies will require a medical examination before final pricing is determined. 

Costco’s partner, Protective Life Insurance, also offers a coverage calculator to help determine the amount of coverage needed. Users can find out how much coverage they need and immediately get a quote for a term policy.

Costco Life Insurance is licensed in 49 states and is not available in New York. 


Costco term life insurance plans are only available to Costco Gold Star, Gold Star Executive, and Costco Business members.

Available Plans 

Costco Life Insurance only offers term life insurance policies. Term policies are a type of temporary life insurance coverage that covers the insured for a specified amount of time. Once the term is over, policies can be renewed at a higher rate or coverage is dropped.

Protective Member Advantage Life Term EX

Costco offers discounted term life quotes through its partner, Protective Life Insurance, but the only policy available is Protective Member Advantage Life Term EX. Policies range from $100,000 to $5 million in coverage, and term lengths are either 10 or 20 years. Ten-year policies are only available for those aged 18-75 years old, and two-year policies are only available to those aged 18-65 years old.

Most Costco members will need to undergo the full underwriting process for obtaining term life insurance through Protective Life Insurance, including a medical exam and health questionnaire. To skip the medical exam, members must be in excellent health and age 18-45 applying for $1 million in coverage (or less) or age 46-60 applying for $500,000 in coverage (or less). 

Term life policies are convertible to a permanent life insurance policy at year eight on a 10-year policy and at year 18 on a 20-year policy. 

Available Riders

Costco’s partner, Protective Life Insurance, offers several available riders to customize term life policies for Costco members.

Accidental Death Benefit Rider

This optional rider can increase the death benefit to your beneficiaries if your death is due to an accident. The additional coverage may be up to $250,000. Eligible applicants must be aged 18-60, with coverage and premiums stopping at age 65.  

This rider is optional with an extra charge.

Income Provider Option Endorsement

This optional rider allows the death benefit of your policy to be paid out as a guaranteed income stream up to 30 years, with a portion available as a lump sum. This payment plan is available at no extra charge should you choose it. There may be some tax implications when choosing this option, so please consult a tax professional before choosing this rider.

Terminal Illness Accelerated Death Benefit Rider

This rider pays up to 60% of the policy face value or $1 million—whichever is less—upon a qualifying terminal illness diagnosis. The total received will reduce the death benefit of the policy. Availability of this rider varies by state. 

This rider is included at no extra charge.

Disability Waiver of Premium Rider

If you become disabled, you may be eligible to have your premiums waived (after a six-month waiting period). This rider is available at no extra charge.

Children’s Term Life Insurance Rider

This rider offers level-term life insurance for your children or grandchildren. This policy is only available if the parent or grandparent is between 18 and 75 years old and the child is between 15 days and 18 years old. Coverage benefits range from $1,000 to $5,000, and the policyholder can only cover up to nine children or grandchildren with this rider.

Customer Service: Many Ways to Connect

Costco Life Insurance support is available through Protective Life, which underwrites and services the policies. Customer service is available via phone, email, or online chat, and policyholders can manage their accounts or file a claim on Protective Life Insurance’s website.

Protective Life Insurance customer service business hours are Monday-Thursday 8:00 a.m. to 7:00 p.m. ET and Friday 8:00 a.m.-6:00 p.m. ET.


Costco Life Insurance does not handle customer service issues and will forward you to a Protective Life Insurance agent for assistance.

Customer Satisfaction: Lower Than Average Scores  

According to the NAIC, Costco’s partner, Protective Life Insurance, receives fewer complaints than the industry average life insurance company. While an average complaint score is 1.0 (the lower, the better), Protective Life Insurance received a 0.87 score. While this score is slightly better than average, it is far higher than its 2019 score of 0.17, and 2018 score of 0.11.

J.D. Power also ranks companies based on customer satisfaction, and they ranked Costco’s partner, Protective Life Insurance, 12 out of 23 life insurance companies in the U.S. in their 2020 Life Insurance Study. Its ranking is slightly less than the industry average customer satisfaction ranking based on application and orientation (on-boarding process), communications, interaction, price, product offerings, and statements.

Financial Strength: A+ (Superior)

Costco Life Insurance partners with Protective Life Insurance, which is a strong financial company with an A+ (Superior) rating from AM Best. This rating is based on a very strong balance sheet, operating performance, and risk management. 

A high rating from AM Best affirms that Protective Life Insurance is financially able to meet its obligations and pay out claims as they arise.

Cancellation Policy: Standard Free-Look Period

Most states require a minimum “free look” period for insurance policies (usually at least 10 days), and Costco’s partner, Protective Life Insurance, adheres to this policy. This policy allows for new policyholders to cancel their policy and receive a full refund of premiums paid. There are no extended cancellation policy details listed on Protective Life Insurance’s website, so policyholders will want to understand their state’s free-look policy before applying.

After the free look period, term policies can be canceled at any time, but will not refund premiums paid.

Price of Costco Life Insurance: Low Cost for First Five Years

Costco members receive a 15% discount on Protective Life term life insurance rates for the first five years of their policy. After that, policy premiums rise back to their “normal” rate. 

Quotes are based on age and the answers to their short health questionnaire. Final rates are determined after a medical interview and examination for most policyholders. Premiums can be paid monthly or annually. Costco Life Insurance premiums rates were obtained from the Costco website.

Term Life Rates

These sample rates are based on 20-year term policy for a non-smoking individual in excellent health.

Age Male Female
20 years old $10.72/month (first 5 years) $12.54/month (years 6-20) $9.58/month (first 5 years) $11.27/month (years 6-20)
30 years old $10.93/month (first 5 years) $12.75/month (years 6-20) $9.76/month (first 5 years) $11.48/month (years 6-20)
40 years old $15.13/month (first 5 years) $17.64/month (years 6-20) $13.09/month (first 5 years) $15.30/month (years 6-20)

How Costco Life Insurance Compares to Other Life Insurance

Costco Life Insurance offers only term life insurance, but its partner, Protective Life Insurance, gives discounts to its members for a portion of the policy term. Protective also has available riders that policyholders can add to their policy, giving them more coverage and flexibility than a traditional term policy.

That said, customers who want the discounted rate must be Costco Gold Star, Gold Star Executive, or Costco Business members, which comes with an annual fee. Here’s how Costco Life Insurance compares to another life insurance company.

Costco Life Insurance vs. John Hancock Life Insurance

Both Costco and John Hancock offer term life insurance policies at competitive rates. Both companies also offer no-exam term life insurance for some young, healthy applicants. But John Hancock has more life insurance policies available, as well as discount incentives.

Here are a few key differences between Costco Life Insurance and John Hancock:

  • John Hancock offers significant savings to smokers with their Quit Smoking incentive.
  • Costco gives members a 15% discount on premiums for the first five years of the policy.
  • John Hancock offers many permanent life insurance options, including whole and universal life policies.
  • Costco term life policies have optional riders available, while John Hancock term policies do not.

While Costco offers great rates for its members on term policies for healthy individuals, smokers may benefit more from John Hancock’s Quit Smoking incentive plan, giving a significant discount on premiums for up to three years. 

Read our full John Hancock Life Insurance review.

  Costco Life Insurance (underwritten by Protective Life Insurance) John Hancock Life Insurance
Market Share N/A Ninth-largest in the U.S., 2.73%
Number of Plans One 14
Online Quotes Available? Yes (term life only) No
Service Method Email, phone, chat Email, phone
AM Best Rating A+ (Superior) A+ (Superior)
Complaints Index 0.87 (above average) 1.53 (far below average)

Final Verdict

Costco Life Insurance offers low rates on term life insurance for its members, especially for young, healthy individuals. That said, policies are only available in 10- or 20-year term lengths, discounts stop after year five, and there are no permanent life insurance options available.

If you are a Costco member and in the market for cheap term life insurance, Costco may be a good option. If you are looking for more flexibility in your life insurance coverage, or the option to have permanent coverage with the ability to build cash value, you will need to look elsewhere.


All of our reviews of life insurance companies are based on extensive research and analysis of each company’s offerings, customer service, financial stability, cost, and more. For each company, we compared the life insurance products offered, as well as available features, and reported customer experiences. Visit our life insurance review methodology for the full breakdown of what we evaluated for over two dozen companies.