How Much Does a $250,000 Life Insurance Policy Cost?
A $250,000 life insurance policy is an investment that can financially assist your loved ones after you pass away. It’s a good idea to shop around for the most affordable options before you buy a life insurance policy.
The monthly premiums for a $250,000 life insurance policy vary by company. There are factors to consider other than pricing. Some companies may offer cheaper policies, while others better fit your needs and unique situation. While insurance companies provide a range of policies, the $250,000 life insurance policy is the most common coverage amount.
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Key Takeaways
For a 20-year term, a $250,000 life insurance policy can cost as little as $12.15 per month on average.
It’s best to compare rates since factors like your health and age influence the price of your life insurance policy.
Among top insurers, the average cost for a 20-year term is $18.09 per month.
How Much Is a $250,000 Life Insurance Policy?
On average, a $250,000 life insurance policy costs $14.75 per month for a 10-year term and $18.09 for a 20-year term. The right term length for you will depend on your financial needs.
A homeowner close to paying off their mortgage may want the financial protection that 10-year term insurance provides. If you’re looking for more long-term coverage or have family members who depend on your income, a 20-year plan might be a good option for you.
The final cost of a $250,00 life insurance policy depends on several factors like your overall health and medical history, age, gender and term length.
Winner: Cheapest $250,000 Life Insurance: State Farm
- MoneyGeek Score: 97.4
- J.D. Power Rating: 820.5
- AM Best Rating: A++
- NAIC Score: 0.19
- Average Policy Cost (20-year term, $250k coverage): $17.41 per month
State Farm sells insurance policies in almost all states and is transparent about the differences between the policies it offers. Out of more than 800 life insurance companies across the United States, State Farm consistently ranks among the top 25.
State Farm provides affordable $250,000 life insurance, with an average rate of $17.41 per month for a 20-year term.
Runner-Up: Cheapest $250,000 Life Insurance
- MoneyGeek Score: 88.6
- J.D. Power Rating: 785.5
- AM Best Rating: A+
- NAIC Score: 0.10
- Average Policy Cost (20-yr Term, $250k Coverage): $15.42 per month
Nationwide was established in 1925 and has grown to be a Fortune 100 company. Nationwide is one of the largest insurance companies in the country, providing a wide range of insurance and financial services.
At an average cost of $15.42 per month for a 20-year term, Nationwide offers relatively cheap $250,000 life insurance.
Average Cost of a $250,000 Term Life Insurance Policy by Term Length
The term length is how long your policy will last before expiring, with the most common term lengths at 10, 15, 20 and 30 years. For a 20-year term, the cheapest life insurance provider is Transamerica at $12.15 per month on average, while Prudential offers the most expensive average life insurance at $33.89 per month.
The average cost of a $250,000 life insurance policy by term length:
- 10-year term: $14.76 per month
- 15-year term: $16.42 per month
- 20-year term: $18.09 per month
- 30-year term: $26.09 per month
Average Monthly Rates for $250,000 Coverage for Different Term Lengths
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- Company10-Year Term15-Year Term20-Year Term30-Year Term
- State Farm$16.65$17.41$24.05
- Nationwide$11.70$15.42$21.55
- Transamerica$9.14$10.00$12.15$17.96
- Mutual of Omaha$12.04$13.23$14.09$20.11
- Mass Mutual$10.78$11.86$14.47$21.10
- AAA$12.65$14.19$16.72$24.75
- Progressive$15.67$17.73$20.56$27.08
- Prudential$29.41$31.49$33.89$52.11
Average Cost of a $250,000 Term Life Insurance Policy $250,000 by Age
People usually purchase life insurance around the age of 30. When you first take out a life insurance policy, the younger you are, the lower your rates. The cost of life insurance increases over time since you move closer to your life expectancy as you age.
MoneyGeek listed the different premiums for $250,000 life insurance by age per term length in the table below.
Average Monthly Rates for $250,000 Coverage for Different Ages
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- Age10-Year Term Average Cost15-Year Term Average Cost20-Year Term Average Cost30-Year Term Average Cost
- 30$14.75$16.42$18.09$26.09
- 40$18.72$21.44$25.50$39.34
- 50$36.67$49.46$57.31$96.91
- 60$81.52$117.78$145.89
- 70$212.54$317.11$412.96
Average Cost of $250,000 Term Life if You Smoke or Are in Poor Health
Life insurance policies for smokers and people with health problems is often much more expensive. People who smoke are more likely to pay higher premiums because smoking can cause diseases and increase mortality.
If you have severe health conditions like diabetes, cancer, or high cholesterol, your life insurance rates can also increase.
One way to keep insurance costs low is to improve your health. The below table shows the specific rates for people who smoke, those with poor health and high body mass index (BMI) according to the common term durations for a $250,000 life insurance policy.
$250,000 Monthly Rates for Smoking, Low-Health & High-BMI Individuals
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- Criteria10-Year Term Average Cost15-Year Term Average Cost20-Year Term Average Cost30-Year Term Average Cost
- Smoke$34.82$42.13$47.37$80.06
- Poor Health$19.26$23.31$24.75$41.82
- High BMI$17.87$21.62$22.91$38.73
The coverage amount that benefits you will depend on your daily expenses, debts and liabilities, personal and family goals, health condition, annual income and other essential factors.
If you purchase a $250,000 life insurance policy, the coverage amount is what your beneficiary will receive when you die.
Your beneficiary may be able to choose various payout options like a lump sum, installment plan or retained asset account. Ask your insurance provider about which life insurance term and payout option works best for you and your loved ones.
Average Cost of a $250,000 Permanent Life Insurance Policy
Permanent life insurance can potentially cost 20 times more than term life insurance. For example, if you purchase a whole life policy, it can cost you around $6,760 annually, compared to $660 per year, according to Consumer Reports.
Both whole life and universal life insurance are examples of permanent life insurance. Also called ordinary life insurance, whole life insurance is a permanent policy that features a fixed premium, surrender value and death benefit.
If you’re searching for flexible policy options, universal life insurance may be a good option for you. Universal life insurance allows you to customize premiums and has a death benefit that can be adjusted to fit your financial situation.
Annual Life Insurance Cost of Permanent vs. Term Life Insurance ($250,000 Coverage)
30-Year-Old Male Policyholder
$22630-Year-Old Male Policyholder
$3,104This is 1273% more expensive.
$250,000 Life Insurance With No Medical Exam
Instant life insurance policies are convenient because they don’t require medical exams and do not have waiting periods. Those who can buy instant life insurance save time and money, mainly because the cost is often the same as a traditional policy.
Whether or not you qualify for instant life insurance will depend on your age and whether you meet specific health parameters. Although they appear similar at first glance, instant life insurance is different from guaranteed acceptance and simplified issue insurance.
A guaranteed acceptance policy has a waiting period, unlike instant life insurance. Instant life insurance is mainly for young and healthy individuals, and a simplified issue policy caters to seniors or those with pre-existing conditions.
Overall, one of the most feasible ways to get a $250,000 life insurance policy is through an instant life option. Companies including Ethos and Jenny Life offer instant life insurance.
If you’re young and in good health, some insurers will allow you to skip the medical exam and will only ask a few questions. You could immediately qualify for a $250,000 life insurance policy, but this isn’t always the case.
Is a $250,000 Life Insurance Policy Right For You?
A good rule of thumb for deciding whether a $250,000 life insurance amount is sufficient for you is to multiply your monthly income at least 10 to 20 times. This coverage amount might be the right option for you if you’re a recent graduate, closer to retirement age or at the end of paying your mortgage.
Different insurance providers offer different rates depending on your age, lifestyle and health rating. It’s best to shop around and consider important factors like your budget, annual income, and dependents' needs before purchasing a life insurance policy.
Life Insurance FAQs
Before taking out a $250,000 life insurance policy, there are several factors to consider so you can choose the option that best fits your needs. Below are some frequently asked questions about $250,000 life insurance rates.
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sources
- Consumer Reports. "Is whole life insurance right for you?." Accessed December 6, 2021.