Is There Actually Enough
You Named the Right Beneficiary. Great. Is There Actually Enough Money?
Let’s skip the sugarcoating!
In our last article, “You Made a Will. Now Check Who Actually Gets the Money,” we talked about making sure your assets actually go to the people you intended. That matters, but getting the right name on the policy is only half the job. The next question is simpler and a lot more uncomfortable: Is there actually enough money when it gets there?
A $100,000 life insurance policy sounds like a lot until it has to replace income, help with a mortgage, cover debt, handle final expenses, and keep a family’s life from completely changing. Money is useful, but it still refuses to clone itself just because your family suddenly needs it to do six jobs at once.
💰 Having Life Insurance Does Not Mean You Have Enough
LIMRA’s 2025 research found that 40 percent of American adults believe they need more life insurance, while 47 percent said their household would struggle to pay living expenses within six months if the primary wage earner died.¹ That is why hearing someone say, “I have life insurance,” does not tell me much by itself. The real question is what the policy is actually expected to accomplish.
The Texas Department of Insurance recommends considering income replacement, mortgage debt, other debts, funeral expenses, and education costs when evaluating coverage needs.² If your family would realistically need $700,000 to keep things stable and you have $100,000 because that number sounded responsible, you do not have a complete solution. You have the first $100,000 of the problem, which is better than nothing but still nowhere close to finished.
That is not really planning. It is guessing with paperwork and hoping the math decides to be nice to you.
🏠 One Family Changed the Way I Look at This
One of the first families I ever tried to help taught me this lesson in the worst possible way. She was the primary breadwinner; they lived in a million-dollar home, their children attended private school, and they drove nice vehicles, including a G-Wagon.
We talked about life insurance and what would happen financially if one of them did not come home. They decided not to move forward. Two weeks later, she was killed after being hit by a drunk driver. Her husband lost his wife, their children lost their mother, and then the financial reality hit. The house went away, the expensive cars went away, the kids left private school, and he eventually moved himself and the children in with his parents.
They were not broke or irresponsible. They had simply built a lifestyle that depended heavily on one income continuing to show up. That is the part people screw up. A big house does not make you financially bulletproof, a G-Wagon does not replace income, and the mortgage company does not care how nice your life looked before tragedy showed up. Bills are assholes like that.
That experience stuck with me because it showed how fast a comfortable life can unravel when one income is doing more of the heavy lifting than anyone realizes. Looking successful and actually being protected are two very different things.
🙋 I Have Screwed This Up Too
Before this starts sounding like an insurance guy judging everybody else, I should admit that I waited too long on some of my own coverage. Had I made certain decisions when I was younger, comparable life insurance could have cost me roughly one-third of what it costs me today. Younger me apparently figured future me could deal with it, and future me is here now paying the bill.
Age matters, health matters, and timing matters.³ Insurance companies don't care that you finally matured as a person and now want the price you could have had ten years ago. That ship sailed, waved goodbye, and apparently took the cheap premiums with it.
I have also been guilty of thinking I had enough without really asking what “enough” meant. Enough to cover a funeral, clean up some bills, and give my family breathing room is one thing. Enough to replace years of income, keep my family in the same home, and give my wife choices instead of financial emergencies is something completely different.
Having something is not automatically the same as having enough. My own planning hasn't always been perfect either, but once you know there is a gap, ignoring it becomes a choice rather than an accident.
🧮 Give the Money a Job
No magic amount of life insurance exists that everyone should own. Look at what your family actually depends on: income, mortgage, debt, children, education costs, savings, employer coverage, and other available assets. Then ask how long the money would realistically need to last.⁴
A $250,000 policy sounds impressive until it is replacing $100,000 of annual income while also helping with a mortgage and raising children. Suddenly, that big number starts looking a lot smaller. Sometimes your existing coverage is enough, and sometimes your savings or other assets already solve most of the problem.
The point is that you should actually know. Picking a number because it feels large and hoping everything somehow works out is not exactly sophisticated financial planning.
🛡️ Check the Name. Then Check the Number.
Getting the beneficiary right is only part of the job. You also have to make sure what you leave behind is enough to do what you actually want it to do. Otherwise, congratulations, you got the money to the right person and still left them with the same damn problem.
Pull out your policy, look at the death benefit, and compare it with your income, mortgage, debt, savings, and everything else your family depends on. Then ask yourself: If I died today, how much of my family’s current life could they actually afford to keep? If you do not know, figure it out while you are still here to change it. “I think they’ll be okay” is not really a plan. It is more of a financial shrug.
And maybe your answer is simple. Maybe you just want the mortgage paid off, the major debt gone, and everyone else to keep adulting from there. That is completely fine. Seriously. You do not have to leave your family independently wealthy just to prove you loved them. Just make sure that is actually what you intended, because “they’ll figure it out” sounds a lot better when it was the plan all along. Adulting already sucks enough without turning your death into one last surprise group project.
Notes
LIMRA, “2025 Facts About Life Insurance,” 2025, based on the 2025 Insurance Barometer Study, conducted jointly by LIMRA and Life Happens, https://www.limra.com/siteassets/newsroom/liam/2025/2025_facts_about_life_insurance.pdf.
Texas Department of Insurance, “Do You Need Life Insurance?,” last updated December 12, 2025, https://www.tdi.texas.gov/tips/life-insurance.html.
Texas Department of Insurance, “Life Insurance Guide,” last updated December 12, 2025, https://www.tdi.texas.gov/pubs/consumer/cb018.html. TDI notes that life insurance costs depend on factors including age, health, and other risk factors and that premiums are generally lower for younger applicants.
National Association of Insurance Commissioners, Life Insurance Buyer’s Guide (Washington, DC: National Association of Insurance Commissioners), https://content.naic.org/sites/default/files/publication-lig-lp-consumer-life.pdf. The NAIC recommends evaluating continuing family income needs, dependents, mortgage and other debts, education expenses, final expenses, existing resources, and the length of time financial support will be needed when determining an appropriate amount of coverage.
