Costco Life Insurance Review

Save 15% on term life policies

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more.



Our Take

For Costco members looking for a simple term life insurance policy, Costco life insurance can be an affordable option. Members can purchase up to $5 million in term life coverage and save an average of 15% on premiums.

  • Pros & Cons
  • Key Takeaways
  • Company Overview
Pros & Cons
  • Costco members save an average of 15%

  • Online quotes are available

  • Accelerated underwriting available for some customers

  • Must be a Costco member

  • Only term life policies available

  • Premiums increase starting in year six

Key Takeaways
  • Costco was launched in 1976.
  • Costco partnered with Protective Life to offer discounted term life policies to its members.
  • Coverage amounts range from $100,000 to $5 million.
  • On average, customers save 15% on their premiums.
  • Policies are not available in New York.
Company Overview

Initially launched in 1976, Costco is now a national warehouse club chain that sells groceries, home goods, clothing, and electronics. It requires shoppers to become members before they can purchase any items or take advantage of its benefits. As an added benefit for members, Costco offers additional discounts on services like identity protection, car insurance, and life insurance. 

While Costco sells life insurance on its website, it doesn’t underwrite any policies. Instead, Costco acts as a licensed insurance agent and partners with Protective Life to issue policies to customers. Through its partnership, Costco members can receive discounts on its term life insurance premiums.

  • Year Founded 1976
  • Kinds of Plans Term
  • Number of Plans 1
  • Payment Plan Options Monthly
  • Customer Service Online, Phone
  • Phone 844-737-5433
  • Official Website

Costco is not one of our top-rated life insurance companies. You can review our list of the best life insurance companies for what we think are better options.

Pros Explained

  • Costco members save an average of 15%: Through its partnership with Protective Life, Costco is able to offer its members discounts on life insurance policies. On average, customers save 15% on their insurance premiums. 
  • Online quotes available: By entering some basic information about yourself, you can get a detailed quote for term life coverage. You can get a quote without submitting your contact information, and you don’t have to speak with an agent.
  • Accelerated underwriting available for some customers: While most coverage amounts require customers to undergo a medical exam, accelerated underwriting is available in some cases. Depending on your age, you could get $500,000 to $1 million in coverage without a medical exam. 

Cons Explained

  • Must be a Costco member: Before you can purchase a life insurance policy, you must become a Costco member. The annual fee ranges from $60 to $120 depending on which membership level you choose. This cost is in addition to your life insurance premiums. 
  • Only term life policies available: While Protective Life sells universal and whole life policies, those plans aren’t included in the company’s partnership with Costco. The only discounted policy Protective Life offers to Costco members is term life coverage. 
  • Premiums increase starting in year six: With a Costco term life policy, your rates are relatively low for the first five years. In year six, your premiums increase and stay level for the remainder of your term. 
What You Need to Know

Since its partnership with Costco began in 2014, Protective Life has issued more than $12 billion in life insurance coverage to Costco members.

Available Plans

If you plan on purchasing life insurance through Costco, be aware that there is only one insurance option: term life coverage underwritten by Protective Life.

Term life

Term life is generally the least expensive form of life insurance you can get. It’s temporary, covering you and providing your beneficiaries with a death benefit only during the policy’s term. 

With Costco life insurance, term life policy amounts range from $100,000 to $5 million and you can choose a term of either 10 or 20 years. 

Most customers will go through a full underwriting process that includes a 20-minute phone interview about their medical history and a health examination. 

Protective Life does offer accelerated underwriting for some Costco members. Accelerated underwriting is only available to applicants between the ages of 18 and 45 for up to $1 million in coverage, or 46 to 60 for up to $500,000 of coverage. If you qualify for accelerated underwriting, you don’t need to get a medical exam.  

Available Riders

With most insurance companies, you can add optional insurance endorsements or riders to your policy. With a rider, you can often get coverage for family members, access some of your benefits if you become seriously ill, or convert your policy to permanent insurance. 

Protective Life offers the following riders for Costco members: 

Accidental death benefit

Available at an additional charge, this optional rider provides your beneficiary with an additional death benefit if you die due to a covered accident. Your beneficiaries will get double their original benefit.

Children’s term rider

The children’s term rider is an optional endorsement that comes with an extra charge. You can purchase term life insurance for children under the age of 18. Once they turn a certain age between 18-25, the coverage ends, but they can often convert their coverage to their own permanent plan.

Terminal illness accelerated benefit endorsement

The terminal illness accelerated benefit endorsement is included with your policy at no additional charge. If you become terminally ill, you can access up to 60% of your death benefit or $1 million, whichever is less, while you’re still living. 

Waiver of premium

If you are between the ages of 18 and 55, you can add the waiver of premium rider to your policy. While it does have an extra cost, the rider waives your premiums if you become disabled and are unable to work. 

Customer Service

You can get quotes and apply for coverage online with Costco life insurance underwritten by Protective Life. You can also call and speak with a licensed insurance agent if you have questions or need more information. Costco members can reach customer support by calling 1-844-737-5433.

Through Protective Life’s website, policyholders can manage their accounts online. You can make payments, change beneficiaries, and start a claim. 

Complaint Index

Looking at how many complaints a company receives from consumers can help you choose the right insurer. A good indicator is the National Association of Insurance Commissioners (NAIC) complaint index. 

The complaint index is a measure of how many complaints a company received relative to its share of the market. On the complaint index scale, 1.0 is considered the standard complaint ratio. A company with a ratio below 1.0 received fewer complaints than expected for its size. Likewise, a company with a ratio over 1.0 received more complaints than expected. 

In 2022, Protective Life Insurance Company’s complaint ratio was 0.20. 

What You Need to Know

Protective Life’s complaint ratio has been consistently better than the national average. Its ratios for 2020, 2021, and 2022 were all below 1.0.

Third-Party Ratings

As Costco’s life insurance partner, Protective Life is a reputable company. 

Protective Life was part of the J.D. Power 2022 U.S. Individual Life Insurance Study that evaluated top insurance companies’ available policies, customer service, and pricing. J.D. Power ranked Protective Life 15th out of 22 insurance companies, and gave it a below average score. 

AM Best has given Protective Life an A+ (Superior) Financial Strength Rating. In its announcement, AM Best cited the company’s strong business profile and operating performance as its rationale for the rating. According to AM Best, companies with a high rating are likely to be able to meet their policy and contractual obligations, an important factor to keep in mind when choosing an insurer. 

Cancellation Policy

When you purchase a life insurance policy through Costco or any insurance company, you’re entitled to a free look period. Depending on the laws in your state, the free look period lasts for either 10 days after receiving your policy documents or 45 days after you sign your application. During the free look period, you can cancel your policy and get a full refund. 

After the free look period ends, Costco allows you to cancel your policy at any time without any fees or penalties. However, you won’t receive a refund of any premiums paid. 

To cancel your coverage, call 1-844-737-5433. 


While Protective Life’s pricing is about average for the industry, you should be aware that the company uses a tiered payment schedule for Costco members. For the first five years of your policy, your payments will be fairly low. But in year six, your premiums will increase and remain level for the remainder of your policy term. 

Despite the increase in premiums, Costco members may still save money on their policies. According to the company, Costco members save an average of 15% on their premiums. 

To compare, we got quotes from Costco and directly through Protective Life for $500,000 in term life insurance. The quotes were for a 30-year-old woman in excellent health.

  Monthly Premium Through Costco Monthly Premium Through
Protective Life
10-Year Policy $10.54 for first five years, $11.90 for years six to 10 $12.35
20-Year Policy $14.83 for the first five years, $17.43 for years six to 20  $16.80 

In general, quotes from Costco were slightly lower than quotes directly from Protective Life. 

Like other insurance companies, Costco and Protective Life require you to select male or female when getting a quote or applying for a life insurance policy. Being nonbinary doesn’t disqualify you from getting life insurance. However, you should be aware that most insurance companies haven’t updated their underwriting processes to reflect a current awareness of gender issues. 


While Costco sells affordable term life coverage, it doesn’t offer any other types of life insurance. Plus, its policies are only available to Costco members, which requires an additional fee. 

For an insurer that offers more options and doesn’t require a membership fee, consider Prudential, our pick for the best overall life insurance company. Prudential stands out from Costco because of its plans, coverage amounts, and optional insurance riders. 

Unlike Costco, which only sells one life insurance plan, Prudential has 13 policies to choose from. Its life insurance options include term, whole, and universal life policies. Depending on your desired coverage amount and the type of insurance you want to buy, you could purchase a policy completely online without getting a medical exam.

  Costco (Underwritten by Protective Life) Prudential
Market Share Not applicable Fourth-largest in the U.S., 5.45%
Number of Plans 13
Dividends for 2023 Not applicable $1.3 Billion
Wellness Program Discounts/Quit Smoking Incentives Not applicable  Not applicable 
Service Method Online, phone  Financial professional, online 
AM Best Rating A+ (Superior)  A+ (Superior) 
Price Rank About Average  About Average 
Complaints Trend 0.29 (Individual life) 4.71 (Individual life)

Final Verdict

If you're currently a Costco member and looking for a basic term life insurance policy to protect your loved ones, Costco life insurance could be a good choice. You can get up to $5 million in coverage and get a discount on your premiums. However, Costco doesn’t offer permanent life insurance; if you’re looking for permanent coverage, you’ll have to work with another company.

Frequently Asked Questions

What kind of insurance does Costco offer?

Costco offers homeowners' insurance, auto insurance, life insurance, business health insurance, and pet insurance.

Does Costco have life insurance for employees?

Costco does offer their employees life insurance, also offering it to the spouses and dependents of their employees.

Does Costco's life insurance require a medical exam?

Most customers will go through a full underwriting process that includes a 20-minute phone interview about their medical history and a health examination. If you qualify for accelerated underwriting—only available to applicants between the ages of 18 and 45 for up to $1 million in coverage, or 46 to 60 for up to $500,000 of coverage—you don’t need to get a medical exam.


Our reviews of life insurance companies are based on a quantitative methodology that analyzes each insurer on their stability and reliability, customer service, claims experience, diversity of product lines, and cost. We compare the terms of each type of policy offered—including available coverage amounts, optional riders, and premium payment options—with those of other major life insurance companies. Lastly, we look at how the company is rated by third-party organizations to determine its reliability and overall reputation.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Costco. "Exclusive Term Life Insurance for Costco Members."

  2. Protective. "Life Insurance Made Easy."

  3. Costco. "About Us."

  4. Costco. "Exclusive Term Life Insurance for Costco Members."

  5. Protective. "Life Insurance Made Easy."

  6. Costco. "About Us."

  7. Costco. "Exclusive Term Life Insurance for Costco Members."

  8. Costco. "Exclusive Term Life Insurance for Costco Members."

  9. Costco. "Exclusive Term Life Insurance for Costco Members."

  10. Costco. "Exclusive Term Life Insurance for Costco Members."

  11. Protective. "Protective Classic Choice Term."

  12. NAIC. "Protective Life Ins Co National Complaint Index Report."

  13. J.D. Power. "Both Life Insurance and Annuity Customer Satisfaction Decline as Pandemic Fears Wane, J.D. Power Finds."

  14. AM Best. "AM Best Affirms Credit Ratings of Protective Life Corporation and Its Key Life Subsidiaries."

  15. U.S. Securities and Exchange Commission. "Protective Life Insurance Company Form N-6."

  16. Prudential. "Finding the Right Life Insurance Policy."

  17. Costco. "Exclusive Term Life Insurance for Costco Members."