Back to basics: how does life insurance work?

Let’s get into the nitty-gritty of what life insurance is and how it works. Once you’re clued up on the essentials, life insurance won’t seem like a world of its own anymore.

How does life insurance work?

Life insurance, in its most simple form, is a type of policy that you take out to cover yourself. If the worst were to happen during the time you’re covered, your policy will pay out a lump sum.

The main motivation for life insurance is money for your family. With a policy, you’ll have peace of mind that your loved ones won't be left struggling financially, after you’re gone.

How much does life insurance cost?

Forget what you’ve heard - there is no one set price for life insurance.

Your policy will be completely unique to you, and your circumstances. This is why your policy can never be compared to someone else's.

Why life insurance is important

If you’re on the fence about whether you need a life insurance policy - take this as your sign.

Losing a loved one is tough enough as it is. But imagine losing a family member, and then having money worries on top of everything.

A life insurance policy is there to ensure your family don’t struggle after you’re gone. With this cover in place, you’ll be able to enjoy everyday knowing your family will be financially looked after, if the worst happens.

How is the cost of your life insurance calculated?

The cost of your life insurance policy is calculated through the assessment of several different elements. When you take out life insurance, here is some of the information we’ll need:

• Age
• What you do for work
• BMI
• What type of policy you want
• If you have children
• Hobbies
• How much cover you want
• Smoking status
• How long you want to be covered for

The benefits of using a life insurance calculator

At Busy Bee, we are always trying to think of new ways to make life insurance as easy as possible.

Our latest creation can tell you a rough estimate of how much your cover could cost in just 30 seconds. Our life insurance calculator is so simple to use. You’ll be able to see a sneak peek of your costs in 3 simple steps.

Want a sneak preview of how much your cover could cost? Click the button below to try out our free calculator and get a quick life insurance quote today!

What are life insurance trusts?

Your first port of call, after setting up your policy, is putting your life insurance into trust.

There are many reasons why putting your life insurance into trust is important. The top reason you should complete your trust forms is to ensure the money from your cover goes to the right people. Other benefits include avoiding probate, and mitigating inheritance tax.

How do you put your policy in trust?

Trust forms can seem scary at first, it is a legal document after all. But don’t worry, we have our very own dedicated trust team on hand to help.

Our team is there to help you with any questions you may have about your forms. They’ll talk you through the ins and outs of everything over the phone.

At Busy Bee, we always go above and beyond for our customers. We’ll go back and forth, over your trust forms, as many times as you need. Plus, we’ll even pay to post your trust forms to your provider, making sure you’ve got a copy of your documents as well.

Life insurance isn’t all doom and gloom

As humans, our lives are very different now than they were in the 1500’s (when life insurance was first invented).

Which means that to keep up with our ever growing needs, many of the UK’s top life insurers include free extras in their cover*. Below are just a few examples of what you could get included with your cover:

• Access to online 24/7 GP appointments
• Second medical opinions
• Mental health support
• Tailored fitness and nutrition plans
• Personal nurses

What are the different types of life insurance?

There are more types of life insurance than you can shake a stick at. So how do you know which one is right for you? Here is a little summary of some of the top types of life insurance policies:

• Critical illness cover is a type of life insurance that covers you against critical illness. If you were diagnosed with a listed critical illness, your cover could pay out a lump sum. This money would mean you’d have one less thing to worry about, during your recovery.
  
  
• Term life insurance is probably what you think of when you hear the words ‘life insurance’. This type of cover protects you for a set term length, meaning if you were to pass away during this term, your cover can pay out a lump sum.
  
  
• Income protection insurance is a life insurance policy that protects the money you earn. When you have an income protection policy, you won’t need to worry about paying for the essentials whilst you’re off work injured or ill. With this cover in place, you can focus on your recovery.
  
  
• Mortgage protection is there to cover the remaining balance of your mortgage. If the worst were to happen, this type of life insurance will pay out a lump sum. This means that your loved ones won’t be left with the financial burden of paying off the mortgage, after you’re gone.

How much life insurance do you need?

Knowing how much cover you need is difficult to work out. You’ll need to consider your outgoings, any debts, and consider your priorities. But with our help, you won’t need to worry that you’ve not got the right cover.

With over 200 years combined experience under our belts, we know a thing or two about life insurance. Our experts will talk you through the ins and outs of what type of policy, and amount of cover you need.

How to buy life insurance

The best way to make sure you’re getting the cover you need, is with the help of an expert. Our experienced life insurance specialists will weigh up your current circumstances so they can find the cover you need.

We help save you both time and money. Please don’t wait. To get started with your free life insurance quote, click the button below!

*Free additional benefits are not contractual and may be withdrawn or changed at any time