Taking life insurance is a great way to protect your family after you are gone. Thus, you should always seek to provide the ultimate protection for your family in uncertain times. There are many companies offering life insurance. There are also just as many, who pretend to offer services they don’t.
But, to settle on a good life insurance firm, you must research. One of the questions you will ask when thinking of life insurance is how much it costs.
Then, you probably need to have a look at Costco Life Insurance Reviews. The company has its eyes trailed on keeping the price low.
So, the lower cost of insurance is the main selling point of Costco Life Insurance. The company has been around for as long as insurance existed. They offer products in the wholesale line, coupled with a tempting price tag through Protective life insurance.
Costco Life Insurance Policies at a Glance
- Offers a 10 and 20-year terms life insurance policy.
- The above policy carries the potential for a universal life insurance policy.
- Applies to anyone aged from 18 years to 75 years. The 20-year term policy has pegged it at 18 to 65.
- Online quotes are available.
- Only offered to members of Costco.
- There is a phone call before you complete the application.
- You get a premium discount for the first five years.
- A medical exam is mandatory
About Costco Life Insurance Company
Protective is one of the oldest insurance firms in town. They started business in 1907. They set up their headquarters in Birmingham, Alabama. The firm has undergone several transformations including merging with Alabama National Insurance.
The firm has grown over the years and expanded its hold of the American market. It has a presence in over 50 states. It acquired West Coast Life insurance company in 1997. The company is also swallowed several other companies in later years.
It is now a large and widely respected insurance company with a huge capital base. It has been providing term life insurance cover which can be converted to permanent life insurance.
Costco says that they can help you save up 20% on the premiums. So, one of the questions we seek to answer in this review is whether Costco is worth your while. Is Costco truly comprehensive?
Costco is yet to be passed through the sieve. It has only been offering life insurance via Protective Life Insurance from 2014. It means that its insurance policies have yet to be paid out.
However, on a general scale, the product performance and the reaction from the customers are positive. The fact that the Better Business Bureau does not accredit protective Life Insurance is worrisome.
However, it should be noted that accreditation is not compulsory. Even with these facts in mind, the Better Business Bureau still gave Protective Life Insurance an A+. The Moody’s and Standards and Poor’s have also granted the company impressive ‘‘AA’’ ratings.
The customer complaints log shows only 39 complaints which have since been closed. Given the number of clients and the size of the company, 39 is a small number. Moreover, the company has already responded to these complaints.
Costco is a life insurance intermediary and retailer, anchored on membership. The company boasts of a simple process of application and allows users easy joining options. It should also be noted; now, whenever you mention Costco, it refers to Protective Life Insurance.
The reverse may not be accurate, though. Protective boasts over 110 years of insurance service providers. The firm was chosen as the sole provider of life insurance because of its proven track record. So far, the firm services over 7 million policies.
Protective is reputed for having demystified the life insurance concept. Families can now choose wisely after information regarding life insurance was made easily available. The company is also said to handle its online application process faster than most other players.
It is also reported to be paying out over $2 billion in claims to beneficiaries every year. Their customer service has been hailed from several quarters.
On its part, Costco relies on Protective for basic services. If you have a query for Costco, Protective Life Insurance will respond. The leverage they have in customer service is that their online support system is fully developed. Their website is filled with a huge list of FAQs. They also have a lot of links to other useful resources.
Features Of Costco Life Insurance Products
Protective Life Insurance offers life insurance via Costco. The insurance dubbed Member Advantage
Life is a life insurance policy laced with term life insurance provisions. The policy gives users the option of choosing between a 10 and 20-years premium policy.
The premiums and the death benefits you get from either contract remain constant through the level duration. For instance, if you choose a ten-year contract, the premiums will not change for the duration.
We did an in-depth analysis of the plans offered by Costco. It emerges that the premiums are relatively cheaper for the first five years for both plans.
The duration that follows the first five years sees the company readjust the premiums to level. After you complete the level term, you have the option to extend the coverage at the same charges.
However, there is a catch. The benefits of death will keep reducing until they hit the $10000 mark. The premium then turns into an annually increasing rate. The good news is that if you are a Gold or Business member, you can save up to 20% on the premiums.
Crunching the Figures
Although the 20% reduction in charges is true, it emerges that the gains are marginal. For instance, in the example provided above, the premium reduces by a mere $0.45 every month. Remember that the premium is only discounted for the first 5 years.
After the initial five years, the premium reverts to the actual cost of the life insurance and maintains the rates for the rest of the term of the contract.
The Coverage Amounts Available
Note that the important aspect of your payments is the death benefit. You are the one that chooses the coverage level. The benefit is paid out when you die if you have not defaulted on your payments.
Accordingly, available coverage stretches from $100 000 to $ 5 million. At Costco, you are provided with an option to interchange your policy with another type of Protective Life Policy when you are still in the initial fixed term window.
The implication is that you avoid the underwriting process. Thus, you will not be subjected to yet another round of medical exams. The exception applies only to those at 70 years and below.
There is a host of benefits your insurance accrues. However, you should not jump onto the train too soon. Some of the benefits are included in the contract, while others have to be paid for. We highlight these benefits for you below.
The benefits below are included in your contract coverage, and you will not be charged an extra fee.
Accelerated Death Benefit Endorsement
This benefit pays out 60%, at once, when a diagnosis confirms terminal illness. The payment is meant to cater for immediate expenses. The balance will be paid when actual death occurs.
Income Provider Option Endorsement
Instead of paying the whole amount to the beneficiary upon death, a small lump sum payment is made. An income payment is also made for 30 years after your death.
Charged Add-Ons – Optional
- Children’s Term Life Insurance Rider
This benefit accrues, but it is an optional one and is charged. The benefit gives you a chance to add both adopted and the children you gave birth to. It allows you to add such children as long as they are below 18 years.
The insurance covers the children with up to $ 20 000. It caters to the children until they clock 25 years. When the children clock 25 years, they can choose to convert the cover to their policies.
- Disability Benefit Rider
The Rider is a tool designed to help you to maintain your premium payments. The tool guards against unforeseen situations such as being unable to work because of disability. If you become disabled, the payments will be channeled to your life insurance policy after six months. They are to help you to continue paying your premiums.
- Accidental Death Benefit
If you die because of an accident, this charged cover allows for more payout amounts to your beneficiaries
Setbacks in Purchasing Costco Life Insurance
- Although Costco offers its insurance via a leading insurance company, there are some disadvantages. You can only access the Protective Life Insurance Company through Costco. Therefore, it is hard to know whether you have the best. The insurance industry has many players to sample. It would be better if you could get several life insurance companies to choose from.
- Costco only offers its life insurance in term limit contracts of 10 and 20 years. Some companies allow many more flexible options extending beyond 20 years.
- The insurance cover by Costco is restricted to term insurance. It only gives you the option of converting it to universal insurance after the term limit lapses. It implies that premium life insurance, whole life insurance, or indexed universal life insurance options are out of your scope.
- There are no new and exciting policies offered by Costco. Benefits of life insurance that provide living payouts are offered elsewhere.
- Costco is neither a life insurance agent nor a life insurance agency.
In addition to the limitations highlighted above, you also need to note that if you wish to purchase Costco policies, you need to have registered as a member. If you are not a member yet, then you have to add the cost of a membership to your premium computations.
The Application Process
If you intend to get a life insurance policy from Protective Life through Costco, online forms are available. You start by filling out the form and then waiting for a quote. They then get your member number and set up options for payment.
Once they are through with the preliminaries, they will call you and guide you on how you should fill the application. Prepare for some interaction and a guided 20-minute lesson on the process.
Protective Life Insurance offers a range of other products. You can access permanent life insurance directly. Their permanent life insurance policy is of two types, i.e., whole life and universal life insurance. The permanent choices give increasing cash value that can be accessed in the term of the policy. Given the broader range of premiums, it may be better than using Costco.
It should also be noted that the term life insurance from Protective Insurance is exclusive to Costco.
Costco is a gateway to services offered by an old and established insurance company. It means that it provides significant reliability. Its products have a proven track record that cannot easily be questioned. The fact that you can save up 20% on your insurance premiums is an attraction too.
The Costco mother company has branches spread across nearly all the US states. Therefore, it can fairly be said that Costco is accessible. However, the life insurance policy offered by Costco on behalf of Protective Life Insurance is limited. It does not give users the freedom they deserve.
You are limited to term life insurance covers. The gains in savings are also dismal. Costco is neither an insurance agent nor and agency. Thus, it is hard to review objectively on performance as a life insurance provider. Nevertheless, given the positive impression, Costco may be worth trying, or, at least, considering.