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Who needs a $250,000 term life insurance policy?

Find out what a $250,000 term life insurance policy really costs, and whether it’s the right coverage amount for you and your loved ones.

When you think of life insurance coverage amounts of $500,000, $1 million or even $3 million, a $250,000 term life insurance policy might not seem like a substantial amount. But let us be clear, $250,000 is still a lot of money and would have a huge, positive impact on a family if their loved one died. For just one example, it’s roughly the cost of a brand new Italian sports car. So who needs that much coverage? And how much does a $250k term life insurance policy actually cost, anyway?

We’ve broken it all down below, including the questions you’ll need to ask to determine if a quarter-million-dollar policy (or even a $200,000 policy) is right for you.

In this article:

Who needs life insurance?

Let’s start here — after all, term life insurance isn’t right for everybody. (And yes, we realize this isn’t a statement most life insurance agencies selling term life insurance typically make.) In short, term life insurance is a way of providing financial protection for your loved ones in case something happens to you within a set number of years (aka, the term).

If you die before the policy term ends, your designated beneficiaries will receive the full value of your policy from the life insurance company — in this case, $250,000 — which can be used to cover both short- and long-term expenses. These might include financial obligations like the cost of burial, paying off the remainder of your mortgage, even future tuition bills. This $250,000 life insurance payout is typically tax-free, and can be thought of as a financial safety net for when and if you’re not around. And if you don’t die before your policy term ends, good news: You’re still here.

For the most part, if you have other people who depend on you to pay for things, you probably should have life insurance. Most commonly, this would mean having children who rely on you for food, shelter, Legos, and so forth. This might include a spouse or partner with whom you share the cost of living, from rent or a mortgage to groceries. This could also include an aging parent, a relative with special needs, even a pet. (It’s not like your dog ever volunteers to pay for Purina.) Life insurance is a way of helping ensure that your family can to take care of financial obligations, even after you’re no longer there to pay for them.

In short, you should consider getting life insurance if (but not only if):

So who needs a $250,000 term life insurance policy?

In general, the rule of thumb is that you should multiply your annual salary by five or ten to determine how much life insurance you need. Reverse that math, and you’ll see that a $250,000 policy is right for someone who makes between $25,000 and $50,000 per year. (If you’re in that range, you might also consider a $200,000 policy, which is right for someone who makes between $20,000 and $40,000 per year.) There are reasons why that figure might vary — if, for example, you’re the family breadwinner, you might need to multiply your base salary by even more, in which case you might need more insurance coverage than $250,000 can provide. But in general, that rule of thumb is a rule of thumb for a reason.

Paradoxically, that means a $200,000 or $250,000 policy might be right for someone just starting out, who is currently at the lower end of the salary spectrum. Or it might make sense for someone closer to retirement age, who is looking for a policy to bridge the gap between an expired policy and, say, retirement, or the kids going off to college.

Based on the salary-based rule of thumb outlined above, and the reality that, for most people, it doesn’t make sense to carry term life insurance policy once their house is paid off and/or their kids have graduated from college, there are roughly two groups of people who might want a $250,000 term life insurance policy:

This might include parents of middle school-aged children, or someone nearing the end of their mortgage payments. Ultimately, the ideal length of the term depends on a number of factors, including your age and overall health. And as you can see from below, this level of coverage only costs a little more than it takes to fill up your car with gas.

What does a $250,000 life insurance policy cost?

In general, a $250,000 policy is one of your more affordable life insurance options. (The reality is, you can have too much life insurance — yet another thing you never expected to hear from a life insurance agency.) The life insurance rate will depend on the length of your term, your age and your health at the time you apply, and a range of other factors. If the life insurance rate for a $500,000 policy exceeds your monthly budget, and you wisely don’t want to go without coverage, a $250,000 policy or even $200,000 policy might be a good fit. (And you can always purchase additional coverage as your budget changes.)

You can get a quote online, or just check this preview of what you might expect to pay for this insurance product if you’re a non-smoker in excellent health.

Average premium payment for a $200,000 or $250,000 term life insurance policy

Coverage amount Age and gender 10-year term 20-year term 30-year term
$200,000 30, male $10.75 $15.74 $22.42
$200,000 30, female $9.94 $13.19 $18.42
$200,000 40, male $12.93 $20.49 $33.64
$200,000 40, female $11.96 $17.13 $26.96
$200,000 50, male $27.32 $46.39 N/A*
$200,000 50, female $22.65 $34.18 N/A*
$250,000 30, male $11.94 $17.43 $26.53
$250,000 30, female $10.93 $14.99 $21.52
$250,000 40, male $14.66 $24.12 $40.55
$250,000 40, female $13.45 $19.91 $32.20
$250,000 50, male $32.65 $56.49 N/A*
$250,000 50, female $26.82 $41.23 N/A*
Source: Term life insurance quotes for the medically underwritten Haven Term policy issued by MassMutual. Coverage is available up to $3 million. * 30-year term lengths are available to applicants up to age 49.
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Finding the right coverage for you

The reality is, there are a lot of variables that go into determining how many years and dollars of coverage you should get. The lists above are by no means exhaustive, and there are lots of reasons why you might need life insurance, even beyond what we’ve mentioned already.

The best place to start? An online life insurance calculator. On average, a Haven Life customer gets 20 years and $600,000 in coverage. That might or might not make sense for you. Haven Life is committed to making sure you get no more, but no less, coverage than you need and can afford. Whatever life insurance product you end up with, you’ll get the added bonus of inner peace — or, at the very least, the security of knowing your loved ones will be provided for, come what may.

Life insurance is more affordable than you think

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About Louis Wilson

Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children.

Read more by Louis Wilson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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