Find out what a $ 250,000 life insurance policy really costs and if it's the right amount of coverage for you and your loved ones.
When you think of $ 500,000 life insurance, $ 1 million, or even $ 3 million, a life insurance policy of $ 250,000 may not seem like a significant amount. But let's be clear, $ 250,000 is still a lot of money and would have a huge, positive impact on a family if their loved ones die. For just one example, it's about the cost of a brand new Italian sports car. So who needs so much coverage? And how much does a $ 250,000 life insurance policy really cost anyway?
We've covered everything below, including the questions you need to ask to determine if a quarter of a million dollars insurance (or even $ 200,000 insurance) is right for you.
In this article:
Who needs life insurance?
Let's start here – after all, life insurance is not right for everyone. (And yes, we realize that this is not a statement that most life insurance companies that sell forward insurance usually make.) In short, life insurance is a way to provide financial protection for your loved ones if something happens to you within a set. number of years (aka, the term).
If you die before the end of the insurance period, your designated beneficiaries will receive the full value of your insurance – in this case $ 250,000 – which can be used to cover both short- and long-term expenses. These can include the cost of the funeral, paying off the rest of your mortgage, even tuition bills. This payment is usually tax free and can be considered as a financial safety net for when and if you are not there. And if you do not die before the end of your insurance period, good news: You're still here.
Most of the time, if you have other people who depend on you to pay for things, you should probably have life insurance. Most often, this would mean that you would have children who trust you for food, protection, Legos and so on. This can include a spouse or partner with whom you share the cost of living, from rent or mortgage to groceries. This can also include an aging parent, a relative with special needs, even a pet. (It's not like your dog will ever voluntarily pay for Purina.) Life insurance is a way to help ensure that their expenses continue to be paid, even after you are no longer there to pay for them.
Consider getting life insurance if (but not only if):
- You are a new parent (or planning to become one).
- You and a partner or spouse share expenses or other financial commitments.
- Other people trust you for their living expenses.
- You are worried about leaving a legacy after you.
So who needs $ 250,000 life insurance?
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 math and you will see that a policy of 250,000 USD is right for someone who earns between 25,000 and 50,000 USD per year. (If you are in that range, you may also want to consider a $ 200,000 policy, which is right for someone earning between $ 20,000 and $ 40,000 a year.) There are reasons why that figure may vary – if you For example, if you are a family breadwinner, you may need to multiply your base salary by even more, in which case you may need more coverage than $ 250,000 can provide. But in general, this rule of thumb is a rule of thumb for a reason.
Paradoxically, this means that a policy of 200,000 or 250,000 dollars may be right for someone who has just started, who is currently at the lower end of the pay spectrum. Or it may make sense for someone closer to retirement age, who is looking for a policy to bridge the gap between an expired policy and, for example, retirement, or the children going to college.
Based on the salary-based rule above, and the reality that for most people it does not make sense to have life insurance when their house is relieved and / or their children have graduated from college, there are about two groups of people who may want to have a $ 250,000 life insurance policy:
- People earning between $ 25,000 and $ 50,000 per year
- People who only need a few years' coverage
This may include parents of middle school children or someone approaching the end of their mortgage payments. Ultimately, the ideal length of the term depends on a number of factors, including your age and your general health. And as you can see from below, this level of coverage costs just a little more than what is required to fill your car with gasoline.
What does a $ 250,000 life insurance policy cost?
Generally a life insurance policy of $ 250,000. policy is one of your cheaper options. (The reality is that you may have too much life insurance – another thing you never expected to hear from a life insurance agency.) The price depends on the length of your period, your age and your health when you apply, and a number of other factors. If the price of $ 500,000 insurance exceeds your monthly budget and you wisely do not want to go without life insurance, $ 250,000 insurance or even $ 200,000 may be a good fit. (And you can always buy additional coverage when your budget changes.)
You can get a quote online or just check this preview of what you can expect to pay for such a policy on you are a non-smoker with excellent health.
Average premium cost for a life insurance policy of $ 200,000 or $ 250,000
|Coverage amount||Age and sex||Ten-year period||20-year term||30-year period|
|$ 200,000  30, male||$ 10.75||$ 15.74||$ 22.42|
|$ 200,000||30, female||$ 9.94||$ 13.19||] $ 18.42|
|$ 200,000||40, rooster||$ 12.93||$ 20.49||$ 33.64|
|$ 200,000||40, female||$ 11.96||$ 17.13||$ 26.96|
|$||50, male||$ 27.32||$ 46.39||N / A *|
|200,000 $||50, female||$ 22.65||$ 34.18||N / A *|
|$ 250,000||30, mal e||$ 11.94||$ 17.43||$ 26.53|
|$ 250,000||30, female||$ 10.93||$ 14.99||$ 21.52|
|$ 250,000||40, male||$ 14.66||19659030] $ 24.12||$ 40.55|
|$ 250,000||40, female||$ 13.45||$ 19.91||$ 32, 20|
|$ 250,000||50, male||$ 32.65||$ 56.49||Not applicable *|
|$ 250,000||50, female||$ 26, 82||$ 41.23||Not Available *|
|Source: Life Insurance Notes for the Medically Guaranteed Haven Term Insurance Issued by MassMutual. Coverage is available up to $ 3 million. * 30-year lengths are available for applicants up to 49 years.|
Finding the Right Coverage for You
The reality is that there are many variables that go into determining how many years and dollars of coverage you should receive. The lists above are not exhaustive and there are many reasons why you may need life insurance, even in addition to what we already mentioned.
The best place to start? A lifesaving counter online. On average, a Haven Life customer receives 20 years and $ 600,000 in coverage. It may or may not make sense to you. Haven Life is committed to ensuring that you do not receive more, but not less, coverage than you need and can afford. No matter what you end up with, you get the added bonus of inner peace – or at least the security of knowing your loved ones will be provided, whatever it may be.
About Louis Wilson
Louis Wilson is a freelance writer whose work has appeared widely spectrum 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 unlimited 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 supported and wholly owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and general well-being can be refreshingly easy.
Our Editorial Policy
Haven Life is a customer-centric life insurance agency that is supported and wholly owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and general well-being can be refreshingly easy.
Our content is created for educational purposes only. Haven Life does not support the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they suit your situation.
Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to be provided and should not be relied upon for tax, legal or investment advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
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 Life Insurance Issue (ICC19PCM-SI 0819 in certain states, including NC) issued by C.M. Life Insurance Companies, Enfield, CT 06082. Numbers and functions for insurance and equestrian forms may vary by state and may not be available in all states. Our agency license number in California is OK71922 and in Arkansas 100139527.
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