Life Insurance Explained: How It Works

It may not be the most exciting thing in the world but deciding to get life insurance could be one of the most important things you could do for your loved ones. We’ve all worked hard to build lives we can be proud of for our families. Which means it can be hard to imagine what life would be like for them if we weren’t there anymore.

At Smart Insurance we understand that the process can seem intimidating at first. It could be your first time even thinking about life insurance. We’re here to make sure that you have the tools to secure a life insurance policy that you can feel confident in.

Afterall, life insurance is affordable, available and it's never too late to secure a policy. We won’t make you jump through endless hoops to secure cover. With just one simple phone call you could have peace of mind that you’ve protected the life you’ve built for the ones you love.

How does Smart Life Family Life Insurance work?

An easy way to think of Life insurance is that it’s a contract between you and a life insurance company. If you pass away during the contract your family will receive a cash lump sum payment called your benefit amount. To maintain the cover, you agree to pay a certain amount each month. The amount you pay will be agreed upon during the application process.

Smart Family Life Insurance is designed with families in mind. Available to UK residents aged 18 to 64, it’s a way for you to provide a cash lump sum if you were to pass away unexpectedly. Depending on your age you can apply for up to £750,000 worth of cover.

Raising a family can feel like a full-time job. At the best of times, you’re being pulled in ten different directions. It can feel like there aren’t enough hours in the day to get everything done. It can be tempting to put something like life insurance off. However, getting a life insurance policy could be one of the most important things you do for your loved ones.

At Smart Insurance, we want to make it as straightforward as possible to help protect your loved ones. You can secure your policy over the phone in a matter of minutes with one of our life insurance specialists. There’s no need to waste time searching around and waiting for quotes, you can get a high-quality life insurance policy without the stress.

What kind of cover should you get?

No two families are the same and no two life insurance policies are the exact same either. At Smart Insurance, we offer two types of life insurance policies, Smart Family Life Insurance and Guaranteed Life Insurance. Both offer to pay a cash lump sum to your loved ones if you pass away unexpectedly. There are, however, some differences between the two.

With Smart Family Life Insurance, you must be aged 18-64 to apply. You can also apply for up to £750,000 depending on your age. During the application process you will have to answer a few simple health and lifestyle questions.

Guaranteed Life Insurance is available to UK residents aged 30 to 80. You can apply for up to £20,000 depending on your age. With Guaranteed Life Insurance there are no health and lifestyle questions you are guaranteed to be accepted.

The decision of which policy you would like to go with is up to you. It’s important to carefully consider your own personal situation and what your family’s needs are.

How much cover should you get?

Deciding how much cover to get is a big part of the application process. The amount of cover you choose will have an impact on how much your life insurance policy will cost.

The main consideration to think about is what you would like your policy to potentially pay for in the future. It can be hard to consider but you should think about what your family might have to pay for if you were no longer around. It can be things like a mortgage or other outstanding loans and debts. These things can put your family under financial pressure and lead them to make big changes to their lifestyle.

The cash lump sum from a life insurance policy can help to relieve these pressures. This can give you peace of mind that the life you’ve built for them is protected. If you’re still unsure of where to start you can use our handy life insurance calculator to get a better idea of how much cover would suit.

If you would like to know more about this, you can check out our guide on how your Life Insurance policy is calculated.

Applying for Smart Family Life Insurance

We know that your time is precious and finding time in the day for something like life insurance can be a lot to ask. That’s why our UK based team of Life insurance specialists will only give you the information that’s necessary. With them you can secure your policy over the phone in a matter of minutes. They’ll answer every question you have and make sure you have all the information you need to make a decision.

During the process they’ll ask you a few simple health and lifestyle questions. Don’t worry though, it won’t take more than a few minutes. The next part of the process is deciding which type of cover you would like. With Smart Family Life Insurance, we offer Age Based or Level policies.

Age-Based policies

An Age-Based policy is a type of increasing life insurance. This means that your monthly premium will start at a lower amount than a Level policy and is recalculated every year based on your age. This increase will also include any applicable benefit amount increases for the first 10 years.

Level based policies

A Level policy is a type of term life insurance. It can be a great option for people who would like to know exactly what they’ll be paying now and in the future. With a Level Smart Family Life Insurance policy, the monthly cost will stay the same each year. You have a choice of a fixed term from 10 to 40 years and at the end of this time, your cover will come to an end.

Again, deciding which policy is for you will ultimately depend on your own personal needs and circumstances.

Adding optional covers

Another way you can tailor your policy is by choosing to add an optional cover on top of your existing policy. For Smart Family Life Insurance, we offer optional Critical Illness and Children’s cover.

Critical Illness Cover

It’s impossible to know what’s around the corner. Sometimes a critical illness can come from nowhere when you least expect it. With optional Critical Illness Cover from Smart Insurance you can have peace of mind that if you were to suffer an illness from a specified list of illnesses you could have financial support. It will provide a lump sum payment from your life insurance benefit should you suffer from a specified critical illness. You can choose a benefit amount of up to 50% of your existing Life Insurance benefit. This can relieve the pressure of finances during an already difficult time, allowing you to recover in peace with the ones you love.

Children’s Cover

Illness and accidents can happen to anyone, no matter their age. When a child has a serious accident or suffers from a critical illness, it can be a difficult time and the last thing you might be thinking about is your finances. With optional Children’s Cover, you can choose a benefit amount of between £10,000 and £30,000, which will be paid out for example if your child suffers a serious illness or injury or passes away in an accident. This can give you and your family some relief if the worst was to happen to your child. It can also allow you to be there for your child without having to worry about income or finances.

Why choose Smart Family Life Insurance?

Getting to grips with life insurance can be a little overwhelming at first. To make things a little bit easier, here are some of the benefits of choosing Smart Insurance as your life insurance provider:

  • Personalised protection – Apply for up to 750,000 of cover depending on your age with optional extras such as Critical Illness and Children’s Cover
  • Immediate cover – Get cover from day one1
  • Terminal Illness cover – Get 100% of your benefit amount in advance if you’re diagnosed with a terminal illness2
  • Easy to apply with a simple process
  • Award-winning service – We’ve earned an ‘Excellent’ rating on Trustpilot, and a Platinum Trusted Service award from Feefo. We’re also rated Gold and ranked No.1 in the life insurance market for customer experience by Fairer Finance
  • 5-star product – Smart Family Life Insurance has been rated 5 stars by Defaqto, so you know you’re getting a high-quality policy
  • 99% of all claims having been paid3– Rest easy in knowing you’ve chosen protection with a great track record
  • Gift Card worth £125* – Choose a Gift Card from, Tesco or Argos
  • FREE Health and Wellbeing services4
  • Great value – Get cover from as little as £14.77 a month5 in the first year for a £250,000 benefit amount
  • Smart Cashback – Get 10% of your first year's premiums back once you've made your first 12 successful monthly payments6

How does Guaranteed Life Insurance work?

If you just want a fixed lump sum to cover funeral expenses and any other outstanding debts, our Guaranteed Life cover offers a maximum benefit between £2,000 and £20,000 at an affordable premium starting as low as £3.57 a month.6

Our Guaranteed Life Insurance is available to any UK resident aged between 30 and 80. There’s no medical or blood tests involved.

How much does Guaranteed Life Insurance cost?

How much your Guaranteed Life Insurance policy will cost will depend on the benefit amount you choose. This policy offers a fixed benefit ranging from £2,000 to £20,000, depending on age. If you’re under 54, you can insure for the full amount, whereas if you’re starting your policy after 75, your maximum benefit is £6,000 – which could still be enough to cover funeral costs.

These figures are for the benefit paid out in the event of death by natural causes. Another feature of our Guaranteed Life cover is that the policy will pay out three times your benefit amount in the event of accidental death.

What exclusions apply?

Smart Family Insurance does not cover any death that is the result of suicide within the first 12 months, however, all other causes of death are covered from day 1.

The benefit amount from your Critical Illness Cover will only pay out if you suffer from Cancer (excluding less advanced cases), Coronary artery bypass grafts (with surgery to divide the breastbone), Heart attack (of specified severity), or Stroke (resulting in permanent symptoms) up to the age of 64. You can check out a full list of the exclusions in our Terms and Conditions.

Lastly, with a Guaranteed Life Insurance policy, you won’t have full cover for the first two years. Your benefit amount will only be paid if your death is due to an accident. If you pass away from a non-accidental death in these first two years, we will refund any of the premiums paid towards your individual cover.

How do claims work?

It’s important to understand the claims process, after all, it’s why you are getting your policy in the first place. We understand that when your loved ones are making a claim it can be a very difficult and stressful time. That’s why we will handle every claim with the care and sensitivity it deserves.

The first step in the process is to get in touch with us. Your loved ones can call us or email to get the claims process started. Our experienced UK-based claims team are specially trained to help your loved ones and reassure them during this time.

The next part of the process is the review. When we have been notified of the death, we will send out all the documentation and forms that need to be filled out. Once the filled-in documents have been received, our team will review them. We always aim to do this as quickly as possible.

As soon as the claim has been accepted, we will pay the benefit amount to the person legally entitled to it. At Smart Insurance we work with Scottish Friendly to provide our policies who approved and paid 99.38% of all life insurance claims received in 2022.

Can I put my policy into trust?

It’s your right to limit the amount of tax and duty your family would have to pay on your Life Insurance benefit, so we can help you put your policy in a trust to maximise its value.

Protect your family, the Smart way

In the beginning there’s no doubt that life insurance can seem confusing. There are lots of different terms you’ve never heard of before. However, protecting our family is an instinct we all share. We all want to be there for them but it’s true that we don’t really know what could be around the corner.

Life insurance is about wanting to provide protection for your family. At Smart Insurance we can help you get a straightforward life insurance policy without the fuss. Our exclusive tailored policies can only be bought directly from us. So instead of wasting precious time searching around, get a policy you can feel confident in from an experienced award-winning provider. Our UK-based team of specialists are ready and waiting to help secure cover you and your family can rely on.

Protect the life you’ve built, the Smart way

incentive image

For new Family Life Insurance policy holders only, once a minimum of 6 successful monthly premiums have been paid and the total premiums paid exceed the face value of the gift card. View full terms and conditions. Restrictions apply, see


You will have full cover from day one except if death is the result of self-inflicted injury in the first 12 months.


If you are diagnosed with 12 months or less to live by a medical specialist, the benefit would be paid in full.


Smart Insurance products are provided by Scottish Friendly, who approved and paid 99.38% of all life insurance claims they received in 2022.


Please note that the Smart Insurance Health and Wellbeing services do not form part of your life cover contract and it could be changed or removed in the future. This is a non-contractual benefit from Smart Insurance and can be withdrawn at any time. These services are only available to customers who purchased their policy on or after 27th September 2023.


Based on £250,000 of cover for a 32-year old non-smoker, on an individual age-based policy in the first year. Premiums depend on personal circumstances and increase annually based on age and cover. T&Cs apply.


For a 30-year-old, on an individual policy with £2,000 of cover. Premiums depend on age and your selected benefit amount. Terms and Conditions apply.