Did you know that Costco offers life insurance policy and auto insurance policy in store along with its regular products and items?
In this article, we'll take a look at what policies are available and what the coverage options are. We'll also compare Costco's rates to those of other insurers to help you decide if it's the right choice for you.
So, whether you're a current Costco life insurance Canada member or just curious about their offerings, read on for all the details!
Who is Costco Life Insurance?
Set up in 1983, Costco is a multi-billion-dollar, membership-based shopping center retail giant operating across eight countries, including Canada. In Canada alone, Costco has a store in more than one-hundred locations. They offer two Costco card membership plans to Canadians — Gold Star and Gold Star Executive.
In addition to selling a large array of physical goods, Costco now also enters the life insurance industry, Costco sells life insurance policy and car insurance policies for purchase in partnership with Manulife, one of Canada’s major life insurance companies also the oldest and best insurance companies.
While in terms of the purchase of life insurance policies, Costco is a great choice, don't be afraid to look at other options so you can find the best rate possible and save you the most money.
Costco Insurance Facts
Founded in 1983
Headquartered at Washington, USA
Costco Life Insurance Review
We could not find any online Costco life insurance review. It is likely this is because they have only been offering insurance through Manulife for a few years, which means most policies have not, as yet, paid out.
By contrast, Manulife is an old name in the insurance industry. While they do not have Google reviews, their overall score on Insureye is not overly impressive. Manulife received only 2.1 stars out of 5 (an increase from last year). That said, we recommend you take online reviews with a grain of salt when doing life insurance shopping. People are more likely to leave a bad review when they have a poor experience than a glowing review when things go smoothly.
Products and Features
Costco life insurance products line is limited, consisting of two term life plans. Furthermore, there is not an option to buy a whole life insurance or universal life policy.
Term life is regarded as the purest form of life insurance policy. It lasts for a specific period and does not include an investment component. The life insurance company pays the death benefit if you die within the policy term. Once the term ends, the insurance coverage expires.
Term Life Insurance
Buying a policy through Costco does not mean you will get a Costco-branded plan. When you click on the Term Life Insurance tab on Costco’s website, you are prompted to apply Manulife life insurance— Which as we mentioned earlier, is one of Canada’s largest insurance companies.
Costco term life insurance policies neither has an underwriting process nor sells their term life directly. They provide insurance coverage through Manulife.
If you buy a Manulife term life insurance policy through Costco, you can pick between a 5- or a 10-year term. The maximum coverage amount available is $1 million.
10 Year Term Life Insurance
As the name suggests, this plan provides protection for 10 years. Your family will receive the death benefit if you pass away during the policy term. You can renew the policy at an increased rate after every 10 years until the age of 80 years.
- The initial coverage is for 10 years
- The plan automatically renews after every 10 years, at a higher premium, until the age of 80 years
- Available to applicants between the ages of 18 and 70 years
- Coverage amount available is from $50,000 - $1 million
- Guaranteed level premium. That is, the term life insurance premiums will remain the same during the policy term, which is 10 years in this case
- Guaranteed death benefit. The insurance amount will remain the same throughout
- Applicants under 50 years of age do not need to take a medical exam to qualify
- Includes a 30-day free-look period. If you cancel your policy within 30 days of the issue date, you will receive a full refund
- Applicants between the ages of 51 and 55 can get no-medical coverage of up to $250,000
- Costco Life Insurance members get a sale of 25% on the cost of a death benefit of $250,000 or more. When the coverage is for $500,000 or more, you get prices of up to 30% off.
- Executive Costco member receive an additional 5% sale over and above the standard discounts of products, items and services
- Job Loss Waiver of Premium: In the event, you or your spouse are laid off from work while this policy is active, the insurer will waive premium payments for up to 9 months while you or your spouse look for another job. This benefit comes into effect only if you or your spouse are under the age of 70.
- Accidental Death Benefit: Your loved ones will receive an additional money — 25% of the life insurance amount or 250,000, whichever is less — if you die from injuries sustained in a covered accident before the age of 75.
- Cash Advance: If you receive a terminal illness diagnosis and are expected to live fewer than 12 months, the life insurance company will issue a cash advance of 50% of your benefit amount or in terms of money, $100,000, whichever is less. This benefit kicks in only after 2 years of uninterrupted coverage until the age of 73 years
5 Year Term Life Insurance
With this plan, the coverage lasts for 5 years. At the end of the policy term, the plan automatically renews, at a higher rate.
- The initial coverage is for 5 years
- The plan automatically renews after every 5 years, at a higher premium, until the age of 75 years
- Available to applicants between the ages of 18 and 65 years
- Coverage amount available is from $50,000 - $750,000
- Guaranteed level premium. The insurance premium will not change the same during the policy term — that is, 5 years
- Guaranteed death benefit. The amount will not change
- Applicants under 50 years of age do not need to take a medical exam to qualify
- Applicants between the ages of 51 and 55 can get no-medical coverage and save up to $250,000
- A 30-day free-look period. You are entitled to a full refund if you cancel the policy within the first 30 days
- Costco Life Insurance members get discounts of up to 10% on benefit of $200,000 or more
- Executive Costco member receive an additional 5% sale over and above the standard discounts on products, items and services
A 5-year life insurance plan offers only one benefit, namely:
- Cash Advance: If you are diagnosed with a terminal illness with a life expectancy of fewer than 12 months, you will receive a cash advance of 50% of your death benefit amount or $100,000, whichever is less. This benefit is available after 2 years of uninterrupted coverage until the age of 73 years
Riders offered by Costco are additions that you can purchase for your insurance policy to give you comprehensive, individualized coverage. Costco gives policyholders a choice of several riders, such as:
- Accidental death benefit rider: Provides your loved ones with an additional payment, in addition to the benefit amount, if you die due to an accident. Purchasing life insurance with an accidental benefit rider could make sense for someone who works in a potentially dangerous environment or drives more than average. However, when shopping for life insurance policies remember to read the terms first to understand if there are any exclusions.
- Children’s term life insurance rider: Covers the lives of your children — biological or adopted — between the ages of 15 days to 18 years. Any future children will automatically be covered. The annual premium will remain the same, regardless of how many children are covered under this rider. The coverage amount is from $1,000 - $25,000.
- Income protection disability insurance: Life insurance policy protects your loved ones from the unexpected but what protects your biggest asset — your ability to earn? This add-on provides you with an easy, economical way to protect your income if you are unable to work because of an injury or terminal illness. The life insurance company will pay a part of your income — usually not more than 60% — if you cannot work due to an injury or illness resulting in disability.
- Job loss waiver of premium: This rider ensures your policy does not lapse if you are unable to pay premiums due to injury or illness resulting in a disability. In the event of total disability, the insurer will waive premium payments during the duration of your disability. To qualify for this rider, you must be between the ages of 18 and 55 years. This rider comes with a 6-month waiting period, meaning if you become disabled, the insurer will wait for six months before waiving the premium. This waiver of premium rider is available only with Costco’s 10-year term plan.
How much coverage does Costco Canada life insurance provide?
Costco life insurance policy provides coverage for a variety of needs. The coverage amount is based on your individual needs and the type of policy you choose.
The most common type of life insurance coverage is term life coverage. With term life insurance policy, you can choose a policy with a specific term length (typically 10, 20, or 30 years) and a specific coverage amount. The coverage amount can range from $50,000 to $5 million, depending on your needs.
Why We Like Costco Insurance
Your Costco store membership can help you cut down the insurance prices substantially. For example, you can save 30% of the cost on life insurance premiums if you buy a 10-year term life policy with a benefit amount of $500,000 or more. For Costco members, you can save up to 35% of the cost of the services.
- Trusted insurance provider
Manulife is one of Canada’s largest insurance companies, collecting roughly $40 billion in annual premiums. They are very strong financially, as is reflected by their AM Best rating of A+, similar to competitors like Canada Protection Plan. It is the second-highest rating awarded by AM Best. In other words, you can rest easy knowing your investment is in safe hands.
- 30-day free-look period
You can cancel your policy anytime within the first 30 days and receive a full refund.
- Plenty of Add-ons available
You can customize your term life coverage by adding different riders to suit your unique needs.
What We Did Not Like About Costco Insurance
- Does not offer permanent life insurance options
Even though term life is sufficient for most people, in certain situations you may better off buying permanent life insurance policies. For example, applicants who have lifelong dependents or want to leave a legacy may find that permanent coverage better suits their goal. Sadly, Costco’s product range is very limited and does not include permanent life options.
- Limited choice of a term life insurance policy
With Costco life insurance policies, there are two term options: 5-year and 10-year. Whereas, other providers offer the options of longer terms for term life policies, like 20, 25, and even 30 years.
So, if your home loan is for 30 years, the longest Manulife’s term policy through Costco will expire 20 years before your mortgage does, leaving your loved ones financially vulnerable.
- Might not be the best option for people with an underlying health condition
A pre-existing health condition or a dangerous hobby can bump up your premium rate. However, since Costco's life insurance policies only offers life insurance policies from one provider, you cannot compare quotes. As a result, you may end up paying a higher premium rate than you would otherwise.
- Available only for Costco members
You cannot apply unless you have a Costco store membership. If you are not already one of the Costco members, factor in the membership prices into your premium calculations if you are planning to buy Costco life insurance policies.
Is This Insurance right for you?
Costco life insurance policies offers two term life plans — 5-year and 10-year — to Costco members in partnership with Manulife. If you are a healthy individual and looking for a 5-year or 10-year term life policy, Costco life insurance policies may be an affordable option. If you want a longer term or a permanent life policy, you will need to look elsewhere. Another downside is that their insurance policies are only available to Costco members.
Frequently Asked Questions
What are the eligibility requirements for Costco Canada life insurance?
In order to be eligible for Costco Canada life insurance plan, you must:
- Be a Canadian citizen or permanent resident
- Be between the ages of 18 and 74
- Is a valid Costco member
In addition, you must not have any pre-existing medical conditions that would make you ineligible for coverage.
How much does Costco's life insurance policies cost?
Costco life insurance costs vary depending on a variety of factors, such as your age, health, lifestyle, and the type of coverage you are looking for. Generally, life insurance premiums are based on your age, health, and the amount of coverage you are looking for.
For term life insurance policy, the cost is typically based on the amount of coverage you are looking for and the length of the term. Generally, the longer the term, the higher the premium.
Where can I find more information on this Costco insurance?
The best place to find more information on an insurance company is to start with the company’s website. Most companies have a “About Us” page that provides an overview of the company, its history, and its mission. You can also find contact information for customer service, as well as a list of products and services offered.
Is Costco life insurance worth the cost?
There is no one definitive answer to this question. Some people may find that Costco's life insurance is worth the cost, while others may not. Ultimately, it depends on each individual's unique circumstances.
Who offers Costco life insurance?
Costco does not offer life insurance directly, but they have partnered with Manulife Financial to provide life insurance products to Costco member. Manulife Financial is one of Canada’s leading life insurance companies, and they offer a variety of life insurance products to meet the needs of Costco members. Manulife Financial offers a range of life insurance products, including term life insurance, permanent life insurance, and critical illness insurance.
How long does Costco life insurance coverage last?
Costco life insurance coverage is designed to provide financial protection for your family in the event of your death. The length of coverage depends on the type of policy you have.
Term life insurance policies provides coverage for a specific period of time, usually 10, 20, or 30 years. At the end of the term, the policy will expire and you will no longer have coverage.
Where do I sign up for coverage?
If you’re looking to sign up for coverage, the first step is to determine what type of coverage you need. Do you need health insurance, life insurance, auto insurance, or something else? Once you’ve determined what type of coverage you need, you can begin researching different providers and plans.
When researching providers, it’s important to consider factors such as cost, coverage, customer service, and customer reviews.
Does all life insurance needs Medical Exam?
No, a medical exam is not always required. Lots of providers offer insurance policies that do not need a medical exam, making the application process quick and convenient. However, the need for a medical exam depends on factors such as the coverage amount, age, medical history, and pre-existing conditions. If a medical exam is necessary, work with the provider to schedule the medical exam at a convenient time and location.
How does Costco life insurance compare to other life insurance options?
Costco life insurance is a great option for Canadians looking for life insurance coverage. It offers competitive rates and a variety of coverage options to suit different needs.
Costco life insurance premiums are typically affordable. However, you can also buy equivalent life insurance coverage directly from Manulife. Work with an independent life insurance broker like Dundas Life to assist you.
👉 Interested in learning about other insurance companies? Read more here