Updated: November 20, 2024
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A $250,000 term life insurance policy costs around $23 per month on average. Premiums typically differ by company. While insurance companies provide a range of policies, the $250,000 life insurance policy is the most common coverage amount. This can financially assist your loved ones after you pass away.
Why Trust MoneyGeek? We analyzed 1,488 of life insurance quotes to determine the average cost of a $250,000 life insurance policy for a variety of needs.
Coverage costs and company information for life insurance providers were updated in 2023.
The average cost of a $250,000 policy is $23 per month for a 10-year term and $29 for a 20-year term.
It’s best to compare rates since factors like your health, gender, lifestyle and age influence the price of your life insurance policy.
Although a $250,000 coverage amount is the most common option, it may not always be the best. As a rule of thumb, the right coverage is around 10 to 20 times your monthly income.
Life insurance premiums are calculated based on a range of factors such as your age, gender, health status, lifestyle and the specifics of the policy you choose, including term length and coverage amount.
For a 40-year-old male in excellent health, the average monthly premium for a $250,000 policy with a 10-year term is about $23. A 20-year term will cost an average of $29 per month.
Term length refers to how long your policy will last before expiring. If you pass away within your chosen term length, your insurance company will pay the death benefit to your beneficiaries. Insurers typically offer 10- to 30-year term life insurance policies.
The right term length for you will depend on your financial needs. For example, 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.
Below are the average costs of a $250,000 term policy for different term lengths.
| 10-Year Term | $23 |
| 20-Year Term | $29 |
Age is one of the main factors insurance companies consider when determining premiums because it significantly impacts risk. While the 40s are a common age to buy life insurance, getting a policy earlier can result in lower monthly premiums.
For example, a 30-year-old could pay an average of $16 a month for a 10-year term, whereas a 50-year-old would be looking at a monthly rate of $45 for the same coverage. The term length also affects the price. A 30-year-old would pay an average of $16 per month for a 10-year term but could expect to pay $20 per month for a 20-year term. As you get older, you get closer to your life expectancy, which makes insurance more expensive.
To help you make an informed choice, compare rates for different age groups. The table below shows the different premiums for a $250,000 life insurance policy, sorted by age and term length.
| 30 | $16 |
| 40 | $23 |
| 50 | $45 |
| 60 | $91 |
| 70 | $243 |
Health conditions and lifestyle choices like smoking significantly impact the cost of life insurance premiums. Smokers and individuals with health issues such as diabetes, cancer or high cholesterol often face higher rates. This is because these factors increase the risk of early mortality.
For example, a healthy non-smoker might pay an average of $23 per month for a 10-year term life insurance policy. A smoker could expect to pay as much as $50 monthly for the same policy, and someone with poor health might get a $25 monthly premium rate.
Improving your health can be an effective strategy to lower your insurance costs. The following tables show average premiums for $250,000 term life insurance for smokers and those with poor health.
| 10-Year Term | $50 |
| 20-Year Term | $65 |
| 10-Year Term | $25 |
| 20-Year Term | $32 |
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 which life insurance term and payout option works best for you and your loved ones.
Permanent life insurance, including whole and universal life, offers coverage for your entire life but can be up to 20 times more expensive than term life insurance. Whole life has fixed premiums and a set death benefit, making it a straightforward, long-term option. Universal life is more flexible; you can adjust your premiums and death benefits based on your financial situation. These permanent options cost more because they guarantee a payout to your beneficiaries as long as you keep paying the premiums. They can also supplement your retirement savings.
For those with serious health issues, guaranteed issue life insurance is also available. It doesn't require a medical exam but is also typically more expensive.
Given the variety and costs of these permanent policies, it's important to weigh your long-term financial and health needs carefully when choosing your coverage.
Instant life insurance is an affordable and convenient option. It needs no medical exam and has no waiting periods. You can complete the application process online and expect an immediate response from the insurance provider. Those who can buy instant life insurance save time and money, mainly because the cost is often the same as a traditional policy.
Whether 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. An instant life option is mainly for young and healthy individuals, and a simplified issue policy caters to seniors or those with pre-existing conditions.
You can secure a $250,000 life insurance policy from different providers, either online or through traditional methods. Financial advisors and online comparison tools can also assist you in finding the most suitable rates and coverage.
The table below presents a comparison of average monthly premiums for a 10-year term life insurance policy with $250,000 coverage from various companies.
| Allstate | $12 |
| Transamerica | $12 |
| GEICO | $13 |
| Protective | $13 |
| Nationwide | $16 |
| AAA | $17 |
| Mutual of Omaha | $17 |
| Prudential | $17 |
| Fidelity | $20 |
| Haven | $22 |
| State Farm | $22 |
| Bestow | $27 |
| Progressive | $31 |
| Gerber | $76 |
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.
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.
On average, a $250,00 life insurance policy costs $23 per month for a 10-year term and $29 for a 20-year term. Final premiums depend on factors like your overall health, age and term length.
If you purchase a $250,000 life insurance policy and die before your term ends, your beneficiary will receive the coverage amount when they file a claim.
See also: How does life insurance work?
To determine if a $250,000 life insurance policy is right for you, multiply your monthly income at least 10 to 20 times and consider your debts and other financial needs. It’s a good idea to compare quotes between different insurers to choose the right policy for you.
Young, healthy individuals may qualify for instant life insurance, which is convenient since it doesn’t require medical exams and has almost immediate coverage. Some companies let you purchase guaranteed acceptance and simplified issue policies.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
