What is £250,000 life insurance?

£250,000 life insurance is a life insurance policy with a sum assured (cover amount) of £250,000.

Life insurance is a financial protection policy which provides your loved ones with a lump sum payment if you pass away while your policy is active.

During the application process, you have the freedom to choose how much this payment will be (your cover amount) - this could be £250,000 if you believe this is right for your personal circumstances.

Common questions we encounter include:

  • What can £250,000 life insurance cover?
  • How much is £250,000 life insurance?
  • Where should I buy £250,000?

Why not compare £250,000 life insurance quotes with Reassured?

We’re an award-winning and FCA-regulated broker who are dedicated to finding you the right cover to meet your needs.

We can provide you with our best deals from some of the UK’s biggest insurers, free of charge.

Simply get in touch for your personalised, fee-free and no-obligation quotes.

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What can £250,000 life insurance cover?

Life insurance is typically used to financially protect certain aspects of your life for your loved ones should the worst happen.

Most commonly, a life insurance pay out is used to help cover:

  • Mortgage/rental costs
  • Household bills & utilities
  • Family living costs
  • Additional childcare expenses
  • Funeral costs
  • An inheritance

For example, if you’re securing life insurance to protect your mortgage and your remaining balance is £250,000 - taking out life insurance with £250,000 sum assured could allow your family to remain in their home if you were no longer around.

Alternatively, £250,000 may be the sum of multiple financial obligations and other costs after you pass away, like the ones listed above.

Do I need £250,000 life insurance?

Whether you need £250,000 life insurance will depend on your personal circumstances and what you’d like to cover.

To understand how much cover you might require, you can ask yourself some key questions, including:

Family Protection

Do you have a family or other dependents?
Income Protection

Are your family reliant on your income?
Mortgage

Do you have a mortgage or other large debts?
Inhertiance

Do you worry about your loved ones having to cover funeral costs? (average UK funeral cost now £4,141)[1]

By assessing what financial commitments and other essential costs you’d like to protect for your loved ones, you can estimate how much life insurance you need.

Depending on your financial commitments, you may need more or less than £250,000 of cover.

Speaking to an expert can help you determine what’s right for you.

At Reassured we can provide you with all the information you need to know to help you make an informed decision.

£250,000 life insurance calculator

Fill in the fields which apply to you to work out if £250,000 is the right cover amount for you.

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£137,934 is the estimated mortgage debt per household in the UK.

The purchase of a home is likely to be the largest financial commitment any of us will make in our lifetime. Your life insurance should cover your remaining mortgage balance to allow your loved ones to stay in the family home should anything happen to you.

Source: Moneynerd.co.uk
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The average monthly household budget in the UK is £2,548 (that’s £30,576 per year), which is spent on transport, food & drink, utilities (gas, electricity, water etc), clothing, council tax and leisure activities.

With energy prices hitting a record high and the cost of living rising sharply in the UK, you may wish to factor in utility bills and family living expenses into your cover.

Source: Nimblefins.co.uk
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The average personal debt of UK adults has risen to £34,566 (not including mortgage debt), with credit cards, personal loans and overdrafts being the most common forms of debt.

Factoring in any debts into your life insurance cover means that, if they need to be paid back from your estate after your passing, your loved ones won’t miss out financially.

Source: Money.co.uk
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According to SunLife, the average cost of a funeral in the UK is £3,953 (with the overall cost of dying at £9,200).

Funeral costs have increased by 116% since 2004 and are a significant cost which should be factored into the amount of life insurance you secure.

Source: SunLife.co.uk
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When factoring in cover for your children, you may wish to calculate the amount based on how long it is until they reach financial independence.

This could include childcare (£7,000 per year for part-time care), school expenses (£1,519 per school year for uniforms, lunches, stationary etc), as well as an additional sum for further education (this could be a contribution of up to £5,000 per year).

Sources: Daynurseries.co.uk, Primarytimes.co.uk & Savethestudent.org
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2 in 5 adults say they are relying on an inheritance to fund their retirement.

Factoring in an inheritance to your sum assured could allow loved ones to live a more financially comfortable life. Alternatively, you could leave a cash gift to a charity of your choosing.

Source: Moneyage.co.uk
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If you’re lucky enough to have your own savings or are part of the 30% of UK residents who already have a life insurance policy in place, this can provide financial protection for loved ones.

By entering your current cover, savings or death in service amount you can reduce the sum assured you require.

Source: Scottishbusinessnews.net
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£250,000 life insurance policy options

If you’re looking to secure £250,000 life insurance cover, you have the option of term-based and whole of life insurance.

£250,000 decreasing term life insurance

Term-based life insurance

Term life insurance provides cover for a specific period (the term) and will pay out if you pass away during this time.

  • Term length up to 40 years
  • Choose between a level or decreasing pay out
  • Can help to cover a mortgage, other debts, family living costs and/or funeral costs
  • Maximum sum assured up to £1,000,000
  • Typically the cheapest form of cover
  • Premiums start from 20p-a-day through Reassured
£250,000 whole of life insurance

Whole of life insurance

Whole of life insurance provides lifelong cover, paying out when and not if you pass away.

  • Cover lasts for life
  • Provides a fixed (level) pay out
  • Pay out can help to cover funeral costs and/or provide an inheritance for loved ones
  • Maximum sum assured £1,000,000
  • Can be more expensive than term cover
  • Premiums start from 27p-a-day through Reassured's advised team ±

At Reassured we can provide you with both term-based and whole of life quotes from some of the UK’s best life insurance providers.

We can provide you with our best quotes, allowing you to secure a great deal on a policy that meets all your needs. Simply get in touch for your fee-free quotes.

How much is a £250,000 life insurance policy?

The price you pay for a £250,000 life insurance policy will vary.

This is because insurers will take into consideration your personal and policy details to assess the level of risk you pose.

Your monthly life insurance premium will then be calculated accordingly.

You’ll be required to provide the following information:

  • Age
  • Health & wellbeing
  • Lifestyle (occupation, hobbies, alcohol consumption)
  • Smoking status
  • Policy type
  • Policy term
  • Sum assured

The table below shows example prices for £250,000 life insurance cover. Quotes are based on a non-smoker, in good health, for a level term life insurance policy with a 20 year term:

Age Aviva AIG logo Legal & General
20£4.92£5.60£6.77
25£5.65£6.58£6.99
30£8.24£8.59£8.52
35£11.36£12.26£11.53
40£16.25£18.41£16.69
45£24.96£28.40£24.96
50£40.49£42.99£39.40


As your cover amount is one of the factors that influences the price you pay, by taking out £250,000 you could be paying more for your policy. For example, a policy with £100,000 life insurance is likely to be cheaper.

Therefore, it’s important to only take out what you need to avoid paying for unnecessary cover.

Why not contact Reassured to find a policy with your ideal cover amount? We can provide you with our best quotes from top UK insurers, free of charge.

Can I buy £250,000 life insurance online?

Yes, if you know that £250,000 life insurance is right for you and you know which policy you need, it’s possible to secure a policy online.

Benefits of buying life insurance online:

  • Get multiple quotes from leading UK insurers at your fingertips
  • Secure a policy at your own leisure
  • Your loved ones could be covered in under 11 minutes ^

Buying life insurance online puts you in charge of where and when you secure a policy.

You can go through the application form as quickly (or as slowly) as you need, and you can do it at a time that suits you.

If you get stuck at any point or have any questions, a friendly member of our team is just a phone call away.

Head over to our dedicated buy life insurance online guide to find out more about this option »

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Should I take out a joint policy with £250,000 life insurance?

If you and your partner have shared assets, you may wish to secure a joint life insurance policy.

A joint life insurance policy protects two lives simultaneously under one policy.

You’ll only fill in one application form (with details about you both) and you’ll only need to pay one premium.

However, the policy will only provide one pay out (usually after the first death). After this, cover will expire, leaving the surviving partner needing to secure new policy.

The table below shows a price comparison between £250,000 joint life insurance vs two single policies.

Quotes are based on non-smokers in good health for a level term life insurance policy with a 20 year term:

AgeOne joint £250,000 life insurance policyTwo single £250,000 life insurance policies
20£8.36£9.84
25£11.18£11.30
30£14.36£16.48
35£20.12£22.72
40£29.54£32.50
45£46.02£49.92
50£73.59£78.80


As you can see, securing a joint policy could help you to save money on a policy if you’re on a tight budget and want some form of cover in place.

If your budget allows, securing two single policies can allow you to provide a greater level of cover by providing two separate pay outs.

Reassured can help you conduct a full joint life insurance vs two single policies comparison to help you establish the right option for your needs.

Simply get in touch to obtain our free quotes.

Can I write £250,000 life insurance in trust?

Yes, it’s possible to write a £250,000 life insurance policy in trust.

Writing your life insurance policy in trust is a process which can detach the pay out from your estate.

After your passing, the funds from your policy will be passed to a nominated trustee, who will distribute the pay out as per your wishes.

Consider writing your policy in trust to:

  • Avoid/minimise 40% inheritance tax for your loved ones
    In the UK, inheritance tax is charged at 40% on any sum that takes your estate above the £325,000 threshold. Your estate is made up of any property, possessions, and savings you own - therefore a £250,000 life insurance policy could easily take your estate above this value.
  • Bypass the lengthy probate process
    Probate is the legal process which distributes your estate after your passing, typically this can take between 9 - 12 months. If your policy is separate from your estate, the pay out won’t need to go through this process, allowing your loved ones to get a quick pay out.
  • Have more control over who gets what (and when)
    Writing your policy in trust allows you to specify who you would like the proceeds to go to and when you’d like them to receive it. For example, if leaving a sum of money to a child, you could specify that they must reach a certain age before the funds are paid out.

Reassured offer a FREE trust service with the majority of the policies we sell.

A friendly member of our team will be happy to guide you through the process and answer any questions you might have.

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Where should I buy £250,000 life insurance?

You can secure a life insurance policy directly through an insurer, through a comparison site or through a broker.

  1. Conduct your own research and obtain quotes directly from an insurer
    If you obtain a quote directly from an insurer, this is unlikely to get you the best deal. You’d need to source quotes from multiple insurers to ensure you were getting a good deal on a policy (which could become very time consuming).
  2. Use a comparison site
    A comparison site allows you to obtain and browse multiple quotes at once, ensuring you get a great deal. However, if you get stuck during the application or have questions, you won’t have anyone to support you.
  3. Use a life insurance broker
    A life insurance broker     offers the convenience of providing you with multiple quotes at once, with a dedicated expert to support and guide you through the process of securing cover.

Securing a policy can seem like a daunting process if you don’t know where to begin.

One of the main advantages of using a broker is that you can benefit from their wealth of industry knowledge and experience.

Reassured are the UK’s largest life insurance broker, with over 14 years of experience in helping families secure the right cover.

Compare £250,000 life insurance quotes

Reassured can help you compare £250,000 life insurance quotes from some of the UK’s best insurers.

We work with a panel of leading insurers and smaller specialists. Our main aim is to find you the right cover to meet your needs at our best available price.

A friendly member of our team will also be on hand to support you through the application, answer any questions and decode any jargon.

We’re FCA-regulated and our service is rated ‘Excellent’ by our customers on Trustpilot, with over 70,000 reviews.

Start your journey today and get in touch for your personalised, fee-free quotes.

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FAQs

What is the average cost of life insurance per month UK?

£34.43 is the average cost of life insurance according to our internal sales data.

We calculated this average cost from 119,244 term life insurance policies, sold between 01/01/23 - 31/12/23, with an average cover amount (the sum assured) of £162,038.

While this is the average cost, the actual price you pay will be calculated using your personal circumstances.

This means your monthly premium could be much less. In fact, it’s possible to secure life cover from just £5 per month through Reassured.

What happens after a 25 year life insurance policy?

If you outlive the term of your policy, cover will simply expire and no pay out will be made.

If cover expires, you may wish to secure a new policy to reflect your new circumstances.

For example, you may have taken out a policy with a term length of 25 years to protect your mortgage. After this time has passed, your mortgage may be paid off and you may need cover to help protect other aspects of your life (such as funeral costs).

How much should life insurance pay out?

How much a life insurance policy should pay out will depend on what you want the policy to cover.

Everyone has different needs and reasons for securing cover, therefore there’s no universal answer of how much life insurance should pay out.

Sources:

[1] https://www.sunlife.co.uk/funeral-costs/

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