Compare $250,000 life insurance policies

No one can predict the future, but life insurance can help you protect your family. Ideally, your policy should allow your beneficiaries to maintain the lifestyle they’ve grown accustomed to. A $250,000 policy is generally inexpensive and popular among seniors and young earners, as well as careful savers who have healthy savings, retirement and 401(k) accounts.

Average cost of a $250,000 life insurance policy

Rates are on the lower end for policies around $250,000, especially if you’re young, healthy and a non-smoker. The average cost of a 20-year term, $250,000 policy for a healthy 30-year-old is $14.89 a month for a man and $13.06 for a woman. Expect your rates to differ based on your gender, age, health, lifestyle, occupation and the policy length you choose.

*Rates are provided by Quotacy and valid as of 2021 in all states except Montana

When a $250,000 life insurance policy makes sense

Consider getting a $250,000 life insurance policy if you:

• Have dependents or family who depend on your income.
• Earn an annual salary between $25,000 to $50,000.
• Have $250,000 in mortgage, student loan, credit card or other debt.
• Have some money in savings and retirement accounts.
• Can’t afford more coverage.

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Is $250,000 enough life insurance coverage?

The amount of coverage you buy should account for three things: your income, your assets and your financial obligations. Do your financial obligations minus other assets add up to $250,000? If so, $250,000 may be enough coverage to meet your needs.

Here’s what to consider:

• Your income. Most people purchase policies that replace their income and cover their family’s cost of living for 5 to 10 years. Use your salary as a starting point, and consider any other funds your family would have access to when you die, such as retirement accounts, savings and Social Security.
• Your assets. If your estate is worth $250,000, a life insurance policy can protect it and provide liquid cash to pay estate taxes. But if you’re a careful saver with healthy bank accounts and lucrative investments, you may need a smaller policy.
• Your other policies. Consider any other life insurance policies you already own when making the decision to add additional coverage. Do you have a policy through your employer? Even though many employer-based policies are small, say $50,000 or one year of your salary, include the policy in your overall calculations. You may not need a $250,000 policy once you add in other policies you have.
• Your financial obligations. Assess everything you pay for now and expect to pay for in the future, such as debt, family living costss, college epenses, end-of-life expenses and taking care of aging parents.

How to qualify for a $250,000 life insurance policy

Your eligibility depends on your age and income. Depending on your age, you’ll need to be earning $10,000 to $50,000 a year to qualify, or you’ll need to prove that $250,000 is between five and 25 times your annual income. The good news is that the financial requirements for $250,000 of coverage aren’t too high.

Typically, insurers approve applicants earning at least an annual salary of:

• Age 18–40: $10,000
• Age 41–50: $16,666
• Age 51–55: $50,000
• Age 56–65: $25,000
• Age 66–70: $50,000

If you’re self-employed, insurers might scrutinize your application more than if you worked for someone else, and you may pay higher rates to compensate for your less-secure income. It may be harder to get a no-exam life insurance policy as a self-employed individual, too.

Can I get $250,000 coverage without a medical exam?

With some insurers, like Brighthouse, Lincoln TermAccel, Haven Life or Principal, you may be able to get $250,000 policy without taking a medical exam. However, it may still require an online questionnaire, agent screening or a phone interview.

These types of policies are generally only open to people between the ages of 18 and 60 and are exclusively available for those in excellent health. If a company catches any medical conditions — even minor ones — in its screening process, you’ll probably have to take a medical exam or won’t qualify for the policy.

If you’re in good health and have the time — and inclination — to take a medical exam, you’re more likely to get a better deal. No-exam policies are much quicker to secure, but that convenience comes at a hefty cost in the form of high premiums.

Term or whole life insurance

When you’re considering purchasing a $250,000 life insurance policy you’ll need to decide between a term or whole life policy. Both policy types are sold by various insurers at this coverage level so you will have several options regardless of whether you pick a term or whole life insurance policy.

Term insurance is a simple product that meets many people’s life insurance needs by providing a death benefit to the beneficiary if the policyholder dies during the policy term, often 20 years. The policy ends when the term expires, although some term policies can be extended or converted to permanent policies.

Whole life policies are permanent policies that continue through the insured’s lifetime, as long as premiums are paid. Whole life policies can accrue cash value and can be used as investments.

Bottom line

The concept behind life insurance is simple: Pay now to protect your family later. When you’re working out how much coverage to buy, carefully think about your assets and financial responsibilities.

If they add up to $250,000, it’s worth looking into this kind of coverage. If not, continue comparing life insurance options to find the best policy and coverage for you and your family.