How Much Life Insurance Do You Really Need? A Fresh Look in the New Year
January 6, 2026
January marks a fresh start — and for many, it’s also a time for financial checkups. However, while reviewing budgets and retirement plans often tops the list, evaluating your life insurance policy is equally important. Misunderstood terms, such as face amount versus death benefit, can leave people unsure about whether their coverage still meets their needs.
So, what’s the difference between the face amount and the death benefit in a life insurance policy? And how do you know if your policy is still right for you? Let’s take a closer look.
What Do Face Amount, Face Value & Death Benefit Really Mean?
Understanding the language of life insurance is the first step in making sure your policy does what you need it to do.
- Face amount (or face value insurance) is the initial coverage amount listed on your policy — essentially the dollar amount your policy is worth at the time of issue.
- Death benefit is the amount actually paid out to your beneficiaries. While it often equals the face amount, this isn’t always the case.
Why not? Because features like policy loans, riders, or unpaid premiums can reduce the final payout. On the other hand, some policies offer bonuses or dividends that increase the total benefit over time.
How Do Life Insurance Needs Change Over Time?
Life is full of change, and your insurance should evolve with it. Coverage that made sense when you were single might not work once you have a spouse, children, or a mortgage.
Examples of how life events affect your life insurance requirements:
- Marriage or partnership: More shared financial obligations
- Children: Need for income replacement and future planning
- Homeownership: A mortgage to protect
- Career changes or retirement: Shifts in income and savings goals
You might also find you’re over-insured if your kids are grown or if your debts are paid off. Or maybe you want to redirect your legacy to support a cause or help a grandchild with college expenses.
How Can You Reevaluate Your Coverage in the New Year?
A life insurance review doesn’t have to be complicated. Here are some simple ways to check if your policy still fits:
- Reconsider: Review your beneficiaries to make sure they reflect your current wishes.
- Assess your financial picture: Look at income, debts, and future needs.
- Check for policy changes: Have you taken a loan or added a rider?
- Consider your goals: Do you want to leave a legacy, cover final expenses, or establish financial security?
If you’re unsure where to start, we can help clarify your needs and goals.
Life Insurance Should Grow With You
The right life insurance policy doesn’t stay static — it adapts as you do. An annual checkup ensures that your coverage reflects your real life, not your life 10 or 20 years ago.
At 1891 Financial Life, we specialize in providing tailored insurance solutions that cater to diverse needs. Our team is equipped to help you navigate these challenges with expertise and compassion. Contact us today for personalized assistance and to explore your options.
Your future changes, and your coverage should, too.
About 1891 Financial Life
Our culture is about looking out for you, for others, for family, for the community. That is how we go “Beyond Life Insurance.”
At 1891 Financial Life, we don’t just sell policies, we offer possibilities. We take pride in giving back to the communities we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits, along with social, educational, and volunteer programs designed to respond to community needs. Our commitment to excellence has been recognized by Forbes, naming 1891 Financial Life among “The World’s Best Life Insurance Companies” in 2023 - and for the second time, as one of “America’s Best Life Insurance Companies,” ranking #1 in Term Life Insurance for 2026.
Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs, no matter what stage of life you’re in.