Explain to preschoolers what the word "insect" means and that "bug" is another name for insect. Then, go around the circle and ask them to name all of the different bugs they know and make one long list. You can then post the list for the kids to refer to throughout the length of the lesson. They can even draw pictures of different bugs to add a pictorial element to the list.
Music is always a fun part of circle time with preschoolers, so teach them songs about bugs. Options include "The Itsy Bitsy Spider," "The Ants Go Marching One By One" and "Baby Bumblebee." Teach students hand motions to accompany each song to make it fun and more interactive. They can sing the songs themselves or sing along to a pre-recorded music track to make it more festive.
Pass around a bug in a jar, covered with a rubber band and cloth so it can breathe. Allow children to watch how the insects respond to their faces and encourage them to pay attention to the insect's physical characteristics. Reiterate that they cannot take the bug out of the jar, or they might hurt it.
Books like "The Hungry Caterpillar" explain to students the life cycle this insect experiences. This book is a good addition to a lesson on the metamorphosis a butterfly undergoes when he changes from a caterpillar to a full-fledged butterfly. You might also bring in a butterfly kit and set it up in front of the circle so that you can watch the process together with your class.