Confused about indexation?

Indexation is one of those things that sounds a lot more complicated than it actually is and at Busy Bee, we don’t think life insurance should be complicated. So let’s get you clued up on the basics of what indexation is and how it can have a positive affect on your life insurance policy!

What is indexation?

With most providers, when indexation is added onto your cover, your policy will be index-linked. Put simply, all this means is that each year your policy will increase roughly in line with inflation.

How does it work?

When you initially arrange your life insurance with Busy Bee, you will be asked if you want your policy to be index-linked or not.

By agreeing to the addition of indexation, then your life insurance provider will increase your sum assured by a small percentage each year. In turn, this will also increase your monthly premium by the same small percentage. Plus, the good news is, you can opt out at any time!

Opting out

Indexation is totally optional and you can opt out at any time. Your chosen life insurance provider will contact you yearly and ask you if you want to opt out.

For example, you could have an index-linked policy and accept the increase for 5 years but suddenly decide you don’t want this add on anymore and opt out. It really is that simple!

Is it important to have an index-linked policy?

For most of us, life insurance feels like a difficult topic to talk about. But by speaking to our Busy Bee protection specialists, they will talk you through every little detail you need to know when arranging life insurance, and that includes indexation!

When you initially arrange your policy, you will be asked if you want to include indexation within your policy - it’s totally up to you if you want to add it or not. However, bear in mind, the benefits of having this included in your policy can far outweigh the cons.

Why do I need it?

You don’t need indexation, however, the benefits of adding it onto your policy are huge. The biggest advantage is that the pay-out from your policy will increase in line with inflation.

You might be wondering - what does inflation have to do with my life insurance policy? However, it’s actually really important. With an index-linked life insurance policy, the pay-out amount from your life insurance policy will stay roughly in line with the costs of goods and services in the UK.

So with an index-linked policy, you are essentially combating inflation. This could ensure that if the worst were to happen, the pay-out from your life insurance policy would be a sufficient amount to financially protect your loved ones.

Changed your mind?

If you can't remember if you added indexation onto your policy, or you’ve changed your mind and now want indexation - let us help!

You can see if you have it included by checking the policy documents that we send you when you initially take out your policy. If you can’t find these then call us up and we can re-send them to you. Alternatively, you can call up 0161 241 6146 and one of our friendly customer care team can tell you if you have indexation included with your policy.

However, if you initially declined indexation but you’ve changed your mind and want to add it, then one of our Busy Bee review specialists will be able to help you review current policy and offer advice regarding indexation.