Best Children’s Life Insurance Companies of 2025

Best Children’s Life Insurance Companies of 2025

Finding the right life insurance for your child is an important step in family financial planning. According to Investopedia’s comprehensive research, Nationwide stands out as the best overall choice for children’s life insurance. This ranking reflects the company’s strong coverage options, favorable customer complaint record, and the flexibility to transfer policies as children grow into adulthood.

Children’s life insurance offers crucial financial protection. It can help families manage funeral expenses and provides children with the opportunity to secure affordable coverage that can continue into their adult years. Investopedia’s evaluation involved a detailed review of 45 insurance companies, each assessed against 70 criteria, including financial stability, coverage limits, and customer satisfaction.

Here are the top-rated children’s life insurance companies for March 2025, according to Investopedia:

• Best Overall: Nationwide
• Best for Customer Satisfaction: Penn Mutual
• Best Child Term Rider: Protective Life
• Best for Financial Stability: USAA

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Why These Companies Were Chosen

• Nationwide: Receives the best overall rating due to its flexible coverage options. These options include standalone whole life policies and riders that parents can add to their existing policies to provide families with dependable coverage.

  • Pros:
    • No coverage limit for children’s whole life policies
    • Offers Child Term Rider
    • High-quality life insurance for parents
  • Cons:
    • Whole life policies don’t earn dividends
    • Child term riders end at age 22 or marriage
    • No online claims process

• Penn Mutual: Penn Mutual has a low customer complaint index indicating high customer satisfaction relative to its market share.

  • Pros:
    • Few customer complaints
    • No coverage limits on child whole life policies
    • Whole life policies earn dividends
  • Cons:
    • No online quotes
    • No online applications

• Protective Life: Offers a child term rider that allows coverage until age 25, providing the longest terms in the study.

  • Pros:
    • Child term rider convertible to permanent coverage at adulthood
    • Coverage lasts until age 25
    • Online quotes and applications
  • Cons:
    • No children’s whole life policies

• USAA: USAA holds a top-tier AM Best financial strength rating, showing long-term financial stability.

  • Pros:
    • A++ financial stability rating
    • Offers children’s whole life and child term rider
    • Children’s whole life coverage up to $10 million
  • Cons:
    • No dividends on whole life insurance
    • Only available to military members, veterans, and their families

How Children’s Life Insurance Works

Similar to adult life insurance, children’s policies name an adult, usually a parent, as the policyholder. The parent also designates themselves as the beneficiary, receiving the death benefit upon the child’s death. This benefit helps cover costs like funeral expenses or mortgage payments.

Two main types of policies are available:

• Whole Life Insurance: Provides lifelong coverage. These policies often feature lower coverage amounts because children typically don’t have dependents. They also offer fixed premiums and can include a cash value component that grows over time and can be withdrawn or borrowed against.
• Child Term Rider: This is an add-on to an existing policy. It provides temporary coverage for multiple children. While usually more affordable, the coverage ends at a certain age, often between 22 and 26. Some riders are convertible to permanent policies without a medical exam.

Advantages and Disadvantages of Children’s Life Insurance

Pros:

• Lock in Affordable Premiums: Securing coverage early can guarantee lower premiums, as children are generally healthier.
• Financial Security: Life insurance eases the financial burden of a child’s death by providing for funeral expenses and offering a financial cushion.
• Cash Value Accumulation: Whole life policies build cash value, offering a future source of funds for the child.

Cons:

• Long-Term Premium Payments: Whole life policies require premiums for the child’s entire life. Premiums paid might exceed the death benefit paid out.
• Potential for Lower Returns: Other investments, such as custodial brokerage accounts or 529 savings plans, could offer greater returns compared to the cash value component of a whole life insurance policy.
• Coverage Limitations: Policies for children provide lower coverage amounts.

Methodology

Investopedia conducted comprehensive research into 45 life insurance companies, focusing on factors such as financial strength, customer satisfaction, policy options, and digital tools.

To determine rankings, analysts combined their own findings with industry research and insights from a survey of roughly 500 life insurance purchasers from the prior two years. The companies were assessed according to 70 specific criteria, sorted into categories, with the following weights:

• Policy Features and Riders: 80%
• Financial Stability: 10%
• Customer Satisfaction: 10%