I have a 2020 27" Mac and it has a 250.29 hard drive. Can a larger hard drive be installed?

No, the drive is an integral part of the logic board upgradable only at the time of purchase via selectable purchase options.

However, external drives work very well with our two 2020 27" iMacs.

Here is how to: Use an external SSD as your startup disk … - Apple Community

Also, beginning in 2020 all iMacs use SSDs and do not have hard disks. Use the internal SSD for start up and for storing apps and buy an external HD for storage.

Also please do not forget to buy a second External Hard Disk for your backup drive!!!