Many consumers find it difficult or stressful to think about taking on another monthly bill, even more so when it is related to their death. Some people are considering the Costco life insurance policy because it is cheaper. However, there are a few things that you should know before making a decision.
It is a common mistake to underestimate the expenses that are related to someone’s death. Alongside funerals, which are nowadays costly, family members have to make up for the lost income that their passed-away loved one no longer makes. Meanwhile, monthly bills and debt payments will remain consistent.
One of the best aspects about the Costco life insurance policy is the low premiums. In addition, the coverage tends to be high and comprehensive. It is important to keep in mind, though, that many people already have a life insurance policy that they don’t know about. While Costco offers cheaper premiums, potential buyers might also want to study the quality of the coverage.
Costco Life Insurance: Best of Both Worlds
When customers get a membership with the wholesale giant, they enjoy less expensive goods and products. Adding life insurance to the mix of benefits makes things even better.
Costco members, on average, get a 15% discount when they buy a policy. This is a major positive aspect. Generally speaking, before qualifying for life insurance, applicants need to provide information about their health and wellbeing.
Older consumers and those who smoke, for example, have to pay higher premiums. This is because they are more likely to die in comparison to younger populations and non-smokers.
The Costco life insurance discount, on the other hand, offsets these negative aspects. Moreover, members enjoy lower payments on both their premiums and general expenses when they go shopping.
On top of this, customers can qualify for coverage that ranges from $100,000 and all the way up to $5 million. In the future, if their current 30 year mortgage rate increases or they take on additional bills, members can increase their Costco life insurance benefits.
What’s Not to Like?
Unfortunately, the answer is plenty. At one point or another, you may have received an advertisement in the mail saying that you can get millions in life insurance coverage for a small amount. In most cases, the premium is pennies per month. However, there is a reason it’s cheap.
Generally speaking, policies with low payments and plenty of benefits will only payout under limited circumstances. It is very easy to get an accidental casualty policy, but this doesn’t cover any other cause of death.
When it comes to Costco life insurance, policyholders will get paid whether they die in an accident or for any other reason. However, it is cheap because it is only a term policy. After a few years, the coverage expires and consumers need to re-qualify at a higher rate (because they get older and, in most cases, less healthy).
Costco doesn’t offer a whole life policy, which covers consumers throughout their entire lives. These tend to be more expensive, but buyers are locked in for the same premium payments and coverage for as long as the policy remains active.
It is important to keep in mind that, since Costco life insurance is bought from an external provider, consumers have the chance to modify the policy type in the future. However, many people already have term life policies through their employers.
Unless you are a business owner, self-employed, or looking for additional coverage (on top of what you get from work), Costco’s life insurance might be useless.
The Pros & Cons
The benefits of a Costco membership, in itself, are great. When combined with low premiums and plenty of life insurance coverage, things get even better. Yet, this low cost is also a potential downside. Costco life insurance policies will only cover you for a limited amount of time.
In addition, before enrolling, buyers should make sure that they don’t have a term policy through their work. After all, no one likes to pay for something that they already have.