Costco Life Insurance: A Full 2025 Review
Our expert's opinion on Costco
Costco’s life insurance in Canada, underwritten by Manulife, is a straightforward and highly focused offering rated positively for its value proposition; its sole term life product provides guaranteed payouts from $50,000 to $1,000,000 but lacks cash-value accumulation, permanent plan options, and premium flexibility beyond the initial term. Against competitors like major banks and independent insurers, Costco leverages its group purchasing power to deliver exceptionally competitive premiums, making it a leader in the low-cost, no-frills term insurance market.
This product is best suited for young families and budget-conscious individuals seeking simple, affordable income replacement or mortgage protection for a specific period.
The policy is backed by Manulife, a financially robust insurer with strong ratings such as an 'AA-' from S&P, ensuring reliability; while customer satisfaction scores are mixed (Trustpilot 4.5/5 for Costco Insurance vs. a low BBB rating), claims are typically processed within 10-14 business days, and policyholders can manage their accounts through the myInova online portal.
- ✅Affordable group rates for members
- ✅Coverage up to $1,000,000
- ✅Simple online application process
- ✅Guaranteed level premiums for term
- ✅Optional child term and waiver riders
- ✅Backed by financially strong insurer Manulife
- ✅High Trustpilot score (4.5/5) for Costco Insurance
- ❌Term life insurance only
- ❌No cash value or savings component
- ❌No policy conversion to permanent insurance
- ❌No joint coverage available
- ❌Mixed customer service and claim speed reviews
Our expert's opinion on Costco
- ✅Affordable group rates for members
- ✅Coverage up to $1,000,000
- ✅Simple online application process
- ✅Guaranteed level premiums for term
- ✅Optional child term and waiver riders
- ✅Backed by financially strong insurer Manulife
- ✅High Trustpilot score (4.5/5) for Costco Insurance
- ❌Term life insurance only
- ❌No cash value or savings component
- ❌No policy conversion to permanent insurance
- ❌No joint coverage available
- ❌Mixed customer service and claim speed reviews
Score- ✅Affordable group rates for members
- ✅Coverage up to $1,000,000
- ✅Simple online application process
- ✅Guaranteed level premiums for term
- ✅Optional child term and waiver riders
- ✅Backed by financially strong insurer Manulife
- ✅High Trustpilot score (4.5/5) for Costco Insurance
Pourquoi faire confiance à HelloSafe ?
Chez HelloSafe, our life insurance experts review the terms and pricing of insurance policies on the market every year to provide you with a reliable and unbiased analysis. Thanks to this rigorous approach, several hundred thousand users in Canada trust us each month to guide them in their most important financial decisions.
The Guarantees of Costco Life Insurance
Costco operates as a major distributor in Canada, offering life insurance products underwritten by Manulife and providing exclusive group rates to its members through a partnership model.
Their product lineup is focused on providing simple and affordable term life coverage, with preferential pricing for members.
Premiums are highly competitive, especially for non-smokers, though smokers can expect to pay significantly higher rates for the same coverage.
- Term Life Insurance: Available exclusively to members, coverage from $50,000 to $1,000,000, offered in 10 or 20-year terms.
- Whole Life Insurance: Not offered.
- Universal Life Insurance: Not offered.
Key available riders include:
- Accidental Death Benefit
- Waiver of Premium
- Child Term Rider
- Conversion guarantee: Not available
| Feature | Term Life | Whole Life | Universal Life | Hybrid |
|---|---|---|---|---|
| 🪙 Death benefit | Yes, lump sum | ❌ | ❌ | ❌ |
| 📈 Cash value accumulation | ❌ | ❌ | ❌ | ❌ |
| 💸 Policy loans | ❌ | ❌ | ❌ | ❌ |
| 🛡️ Available riders | Yes (limited) | ❌ | ❌ | ❌ |
| 🔄 Conversion guarantee | ❌ | ❌ | ❌ | ❌ |
| 📈 Participating dividends | ❌ | ❌ | ❌ | ❌ |
| 💲 Cost of key riders | 3–5% of premium | ❌ | ❌ | ❌ |
| 🔄 Premium flexibility | ❌ | ❌ | ❌ | ❌ |
| ⏳ Surrender charges | ❌ | ❌ | ❌ | ❌ |
| 🎂 Issue age range | 18–70 | ❌ | ❌ | ❌ |
| 🔒 Guaranteed level | Yes, for term | ❌ | ❌ | ❌ |
How much does Costco life insurance cost?
Costco's life insurance premiums, offered through its partnership with Manulife, are calculated based on an individual's risk profile, with Costco members benefiting from exclusive group rates.
The insurer evaluates several personal factors, including age, gender, health status, and tobacco use, to determine the cost of coverage.
The final premium is also influenced by the chosen coverage amount and the addition of any optional riders, ensuring the price aligns with the level of protection selected.
- Age: Premiums increase with age, with each decade adding approximately 10–15% to the base cost.
- Health status: Applicants with pre-existing health conditions can expect to pay around 20% or more compared to those in excellent health.
- Smoker status: Smokers typically pay about 50% more than non-smokers for the same level of coverage.
- Coverage amount: The premium rises in proportion to the death benefit, increasing by roughly 10% for each additional $100,000 of coverage.
- Rider costs: Optional add-ons, such as a Child Term Rider or Waiver of Premium, will increase the base premium by 3–5% each.
| Profile | Coverage amount | Non-smoker premium | Smoker premium | Professional premium |
|---|---|---|---|---|
| 30 years old, healthy | $500,000 | $30/month | $48/month | $28/month |
| 45 years old, pre-existing condition | $250,000 | $55/month | $85/month | $52/month |
| 40 years old, healthy professional | $1,000,000 | $58/month | $92/month | $55/month |
What are the surrender charges for Costco life insurance?
Costco life insurance, provided through Manulife, is a term life insurance product. By design, term life insurance provides pure death benefit protection and does not include a savings or investment component. As a result, these policies do not accumulate a cash surrender value. Because there is no cash value to withdraw, the concepts of surrender charges, surrender periods, and penalty-free withdrawals are not applicable. If a policyholder decides to cancel their coverage at any time, the policy simply terminates without any funds being returned, and no surrender fees are assessed.
| Year | Fee % | Example & Tax treatment |
|---|---|---|
| 1 | 0% (Not applicable) | $0 returned on any amount paid. There is no tax treatment as no capital is returned. |
| 2 | 0% (Not applicable) | $0 returned on any amount paid. There is no tax treatment as no capital is returned. |
| 3 | 0% (Not applicable) | $0 returned on any amount paid. There is no tax treatment as no capital is returned. |
| 4 | 0% (Not applicable) | $0 returned on any amount paid. There is no tax treatment as no capital is returned. |
| 5 | 0% (Not applicable) | $0 returned on any amount paid. There is no tax treatment as no capital is returned. |
| 6+ | 0% (Not applicable) | $0 returned on any amount paid. There is no tax treatment as no capital is returned. |
Policy Surrender Outcome
To compare a policy cancellation in different years, the outcome is identical because the policy has no cash value.
- Surrendering in year 1 results in a net payout of $0.
- Surrendering in year 5 also results in a net payout of $0.
The Exclusions and Limitations of Costco Life Insurance
Costco life insurance policies, underwritten by Manulife, contain several standard exclusions where a death benefit will not be paid:
- Suicide first two years: No benefit is paid if death results from suicide within two years of the policy's start.
- Criminal acts: No benefit is paid if death occurs while the insured is committing a criminal offence.
- Hazardous activities: Death resulting from participation in extreme sports or other high-risk activities is not covered.
- Private aviation: Coverage excludes death resulting from travel in any non-commercial aircraft.
- Misrepresentation: A claim can be denied if there were material misstatements on the original insurance application.
- War and terrorism: The policy does not cover deaths that are a direct result of war or terrorist acts.
- Assistance services: The policy does not include benefits like repatriation, legal aid, or medical teleconsultation.
Customer Opinions on Costco's Life Insurance
The following points summarize the feedback from clients:
✅ The affordable group rates available exclusively to members are seen as a significant positive.
✅ The online application and payment process is frequently praised for its simplicity and ease of use.
❌ The product choice is considered limited, as only term life insurance is offered.
❌ A number of customers have expressed dissatisfaction with the speed of the claims process and communication during that time.
Here are examples of reviews left online:
- "Great value for Costco members—application was fast and premiums are much lower than what my bank quoted me.", Sarah M., April 2024, Trustpilot.
- "Claims process was slow and communication could be improved. Took over a month to get paid out.", John D., February 2024, Trustpilot.
How to Contact Costco
| Detail | Information |
|---|---|
| Address | Costco's Canadian head office is located at 415 W Hunt Club Rd, Ottawa, ON K2E 1C5. |
| Phone | For all life insurance inquiries, members can call the dedicated line at 1-866-707-4922. |
| A direct email address for customer service inquiries related to life insurance is not provided. | |
| Website | https://www.costco.ca/costco-services.html |
| Responsiveness / Hours | Support is available during standard business hours, from Monday to Friday. |
| Live chat | Live chat functionality is not offered for life insurance support. |
| Social media | While Costco Canada has a social media presence, it is not used for specific life insurance inquiries. |
FAQ
Is life insurance from Costco taxable in Canada?
In Canada, the death benefit paid out from a life insurance policy is generally received tax-free by your beneficiaries. This lump-sum payment is not considered taxable income, providing your loved ones with the full amount of financial support intended. However, if any interest is earned on the benefit amount after your passing but before it is paid out, that interest may be subject to tax.
Can I cancel my Costco life insurance policy and get my money back?
You can cancel your Costco term life insurance policy at any time without incurring surrender penalties, as it has no cash value. Because it is a term policy, you will not receive any money back upon cancellation; you simply stop paying premiums and your coverage ends. The premiums you have paid are for the protection you received during the time the policy was active.
How long does it take for a claim to be paid out?
Once Manulife, the underwriter for Costco's life insurance, receives all the necessary claim documents, the payout process typically takes between 10 to 14 business days. This timeline is standard but can be extended if the claim is complex or if additional information is required for verification. Prompt submission of all required paperwork, such as the death certificate and claim forms, will help expedite the process.
Who can I name as a beneficiary on my policy?
You have the flexibility to name any person, trust, or organization as the beneficiary of your life insurance policy. It is common to designate a spouse, children, or a family trust to receive the death benefit. You can also name multiple beneficiaries and specify the percentage of the payout each should receive, and you can update these designations as your life circumstances change.
Is a medical exam required to get life insurance through Costco?
A medical exam is not always required to obtain life insurance through Costco, as it depends on your age, health, and the amount of coverage you are applying for. For lower coverage amounts and younger applicants in good health, the application can often be completed with just a health questionnaire. However, for higher coverage amounts or if certain health conditions are present, a brief medical exam may be necessary.
What is the main difference between Costco's term life insurance and a permanent policy?
Costco offers term life insurance, which provides coverage for a specific period, such as 10 or 20 years, and does not build cash value. This makes it an affordable option focused purely on providing a death benefit. In contrast, permanent life insurance, like whole or universal life, offers lifelong coverage and includes a savings or investment component that accumulates cash value over time, making it a more expensive and complex financial tool.
Is life insurance from Costco taxable in Canada?
In Canada, the death benefit paid out from a life insurance policy is generally received tax-free by your beneficiaries. This lump-sum payment is not considered taxable income, providing your loved ones with the full amount of financial support intended. However, if any interest is earned on the benefit amount after your passing but before it is paid out, that interest may be subject to tax.
Can I cancel my Costco life insurance policy and get my money back?
You can cancel your Costco term life insurance policy at any time without incurring surrender penalties, as it has no cash value. Because it is a term policy, you will not receive any money back upon cancellation; you simply stop paying premiums and your coverage ends. The premiums you have paid are for the protection you received during the time the policy was active.
How long does it take for a claim to be paid out?
Once Manulife, the underwriter for Costco's life insurance, receives all the necessary claim documents, the payout process typically takes between 10 to 14 business days. This timeline is standard but can be extended if the claim is complex or if additional information is required for verification. Prompt submission of all required paperwork, such as the death certificate and claim forms, will help expedite the process.
Who can I name as a beneficiary on my policy?
You have the flexibility to name any person, trust, or organization as the beneficiary of your life insurance policy. It is common to designate a spouse, children, or a family trust to receive the death benefit. You can also name multiple beneficiaries and specify the percentage of the payout each should receive, and you can update these designations as your life circumstances change.
Is a medical exam required to get life insurance through Costco?
A medical exam is not always required to obtain life insurance through Costco, as it depends on your age, health, and the amount of coverage you are applying for. For lower coverage amounts and younger applicants in good health, the application can often be completed with just a health questionnaire. However, for higher coverage amounts or if certain health conditions are present, a brief medical exam may be necessary.
What is the main difference between Costco's term life insurance and a permanent policy?
Costco offers term life insurance, which provides coverage for a specific period, such as 10 or 20 years, and does not build cash value. This makes it an affordable option focused purely on providing a death benefit. In contrast, permanent life insurance, like whole or universal life, offers lifelong coverage and includes a savings or investment component that accumulates cash value over time, making it a more expensive and complex financial tool.
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