Determining the cost of a $250,000 life insurance policy depends on several factors, with the type of policy being the biggest. Are you considering a term life insurance policy that provides coverage for a set period or a whole life insurance policy that offers coverage for your entire life? Here are some sample rates for each type of policy that can give you an idea of how much your coverage might cost.
Below, we provide a brief breakdown of the pros and cons of each policy type, as well as an explanation of what a typical life insurance application entails. Other factors, such as health and lifestyle choices, can also impact the price you’ll have to pay for life insurance.
$250,000 Term Life Insurance Rates
The best 250,000 term life insurance rates are listed below. These quotes are from top-rated life insurance companies, are subject to change, and must be qualified.
| 250,000 | 10 Year Term | 15 Year Term | 20 Year Term | 30 Year Term |
|---|---|---|---|---|
| Age 20 | $9.77 | $10.19 | $12.51 | $18.04 |
| Age 30 | $9.77 | $10.38 | $12.69 | $18.77 |
| Age 40 | $11.89 | $13.08 | $17.03 | $28.66 |
| Age 50 | $24.17 | $31.26 | $39.33 | $68.68 |
| Age 60 | $59.11 | $77.74 | $77.74 | N/A |
| Age 70 | $178.86 | $251.59 | $409.53 | N/A |
| 250,000 | 10 Year Term | 15 Year Term | 20 Year Term | 30 Year Term |
|---|---|---|---|---|
| Age 20 | $8.53 | $9.33 | $11.03 | $14.97 |
| Age 30 | $8.71 | $9.68 | $11.24 | $16.10 |
| Age 40 | $10.86 | $12.67 | $15.27 | $23.59 |
| Age 50 | $20.78 | $23.95 | $30.44 | $52.10 |
| Age 60 | $41.50 | $53.55 | $76.13 | N/A |
| Age 70 | $109.97 | $155.87 | $349.13 | N/A |
$250,000 Whole Life Insurance Rates
The best $250,000 whole life insurance rates are listed below based on a preferred plus rate class for a male. These quotes are from A-rated carriers and better, are subject to change, and must be qualified for.
| Age | Male | Female |
|---|---|---|
| 20 | $132 | $132 |
| 25 | $156 | $156 |
| 30 | $188 | $188 |
| 35 | $230 | $230 |
| 40 | $278 | $278 |
| 45 | $350 | $349 |
| 50 | $429 | $429 |
| 55 | $549 | $549 |
| 60 | $700 | $700 |
| 65 | $1019 | $912 |
| 70 | $1359 | $1255 |
| 75 | $1868 | $1788 |
| 80 | $2801 | $2428 |
Term Life Insurance
Term life insurance is a policy that provides coverage for a set period, known as the “term.” If the insured person passes away during the term, the insurer pays a death benefit to the designated beneficiary. If the insured person survives the term, the policy expires without value.
Compared to permanent life insurance, which provides coverage for the entire lifetime of the insured person, term life insurance policies are typically less expensive. This is because they only cover a specific period.
Term life insurance policies can help provide financial protection for a specific need, such as paying off a mortgage or providing income for a family in case the primary earner dies. They may also be used for temporary coverage while the insured is young and healthy enough to switch to a permanent policy later.
Different term life insurance policies are available, including level term, decreasing term, and increasing term. Choosing the correct term life insurance policy type depends on your needs and financial situation.
Level Term Life Insurance
Level-term life insurance is a type of term life insurance that provides coverage for a specific period at a fixed premium rate. The death benefit and the premium remain the same throughout the policy term.
Level-term life insurance is a good choice for people who want financial protection for a specific need, such as paying off a mortgage or providing income for a family in the event of the breadwinner’s death.
It can also be a good choice for people who want to provide temporary coverage while they are young and healthy to replace the policy with a permanent one later.
One of the benefits of level-term life insurance is that it provides a predictable and stable source of financial protection. The premium and death benefit remains the same throughout the policy term, so you know exactly what you are paying for and what your beneficiaries will receive during your death.
Level-term life insurance policies are available in a range of terms, from 10 to 30 years, with some companies offering up to 40-year term life insurance. The length of the term that is right for you will depend on your specific needs and financial situation.
Choosing a term long enough to provide the financial protection you need is important but not so long that you end up paying for coverage you no longer need.
Decreasing term life insurance
Decreasing term life insurance is a type of term life insurance that provides coverage for a specific period at a premium rate that decreases over time. The death benefit remains unchanged throughout the policy term, but the premium decreases yearly.
Decreasing term life insurance is often used to provide financial protection for a specific need that reduces over time, such as a mortgage or a car loan. As the debt is paid off, the need for financial protection decreases so that the premium can be adjusted accordingly.
One of the benefits of decreasing term life insurance is that it can be more affordable than other types of term life insurance. Because the premium decreases over time, the overall cost may be lower than a level-term life insurance policy with the same death benefit.
However, it’s important to note that decreasing term life insurance may not provide as much financial protection in the policy’s later years as in the early years.
This is because the death benefit remains the same. Still, the premium decreases, meaning that the policy may not cover the total amount of the outstanding debt if the insured person dies in the later years of the policy.
Increasing Term
If your premium increases yearly or every five years, you probably have an increasing term life insurance policy. These policies are popular for people looking for smaller face amounts and more affordable premiums.
The problem with an increasing term life insurance policy is that the premiums increase, but the death benefit stays the same. Another problem is the policy typically has an end date, such as age 80. So when you get this type of term coverage, you are getting a more expensive policy that ends at an age when you probably need it most.
Whole Life Insurance
Whole life insurance, also known as permanent life insurance, is a type of life insurance that provides coverage for the entire lifetime of the insured person. The policy remains in force as long as the premiums are paid and the insurer pays a death benefit to the designated beneficiary upon the insured person’s death.
Whole life insurance policies typically have a death benefit and a cash value component. The death benefit is the amount of money the insurer pays the beneficiary upon the insured person’s death. The cash value component is a savings element that builds up over time and can be accessed by the policyholder while they are alive.
One of the benefits of whole life insurance is that it provides a guaranteed death benefit and a guaranteed cash value component that accumulates over time.
The premiums for whole life insurance are generally higher than those for term life insurance. Still, the policy remains in force for the entire lifetime of the insured person as long as premiums are paid.
Several types of permanent life insurance policies are available, including traditional whole life insurance discussed above, but also universal life insurance, and variable life insurance.
Universal Life Insurance
Universal life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the insured person. It combines a death benefit with a cash value component that accumulates over time and can be accessed by the policyholder while they are alive.
One of the critical features of universal life insurance is that it offers flexibility in terms of the premiums and the death benefit. The policyholder can choose to pay a higher or lower premium and can also choose to increase or decrease the death benefit as their needs change. The excess premiums above the insurance cost are credited to the policy’s cash value, which can be accessed through policy loans or withdrawals.
Universal life insurance policies typically have a minimum and maximum premium payment requirement and a minimum and maximum death benefit. The policyholder must pay enough premiums to cover the insurance cost but can pay more to build up the policy’s cash value.
Universal life insurance can be a good choice for people who want the flexibility to adjust their premiums and death benefits as their needs change and who want to build up a cash value that can be accessed while they are alive.
Indexed Universal Life
Indexed Universal Life (IUL) provides the flexibility of universal life but with gains tied to the performance of an index, such as the stock market.
An IUL offers a cap and a floor, so you can only earn up to a certain percentage of a return, typically 10-12% maximum. Still, a floor, generally around 0%, protects your policy from having a negative return.
Variable Life Insurance
Variable whole life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the insured person. It combines a death benefit with a cash value component invested in various investment options, such as stocks, bonds, and mutual funds.
The policy’s cash value can fluctuate based on the performance of the underlying investments.
One of the critical features of variable life insurance is that it offers the potential for higher returns on the cash value component of the policy, as the policyholder can choose to invest in higher-risk, higher-reward investment options.
However, it’s important to note that the policy’s cash value can also decrease depending on the performance of the underlying investments.
Variable life insurance can be a good choice for people who are comfortable taking on investment risk and want to potentially earn higher returns on their life insurance policy’s cash value.
However, it’s important to carefully consider the terms of the policy, the financial strength of the insurance company, and the potential risks and rewards of the investment options before making a decision.
Which $250,000 Life Insurance Policy is Best for Me?
There is no one-size-fits-all answer to which type of life insurance policy is best, as the right policy for you will depend on your specific needs and financial situation. Here is a recap of the different types of coverage and the benefits of each:
- Term life insurance: Term life insurance covers a specific period and is generally less expensive than permanent life insurance. It can be a good choice for people who want to provide financial protection for a particular need, such as paying off a mortgage or providing income for a family in the event of the breadwinner’s death.
- Whole life insurance: Whole life insurance provides coverage for the entire lifetime of the insured person. It typically has a higher premium than term life insurance but also has a cash value component that accumulates over time and can be accessed by the policyholder while they are alive. Whole life insurance can be a good choice for people who want a guaranteed death benefit and a guaranteed cash value component.
- Universal life insurance: Universal life insurance is a type of permanent life insurance that offers flexibility regarding the premiums and the death benefit. The policyholder can choose to pay a higher or lower premium and can also choose to increase or decrease the death benefit as their needs change. Universal life insurance can be a good choice for people who want the flexibility to adjust their premiums and death benefits as their needs change and who want to build up a cash value that can be accessed while they are alive.
- Variable life insurance: Variable life insurance is a type of permanent life insurance that offers the potential for higher returns on the cash value component of the policy, as the policyholder can choose to invest in higher-risk, higher-reward investment options. However, the policy’s cash value can also go down, depending on the performance of the underlying investments. Variable whole life insurance can be a good choice for people who are comfortable taking on investment risk and want to potentially earn higher returns on their life insurance policy’s cash value.
Ultimately, the decision will be up to you. However, we here at IBUSA are experts at helping individuals like yourself come to a conclusion that will be the right one for you. So, call us when you’re ready; we’re here to help!
