Your Life Insurance policy protects your family and your close ones in case anything happens to you. Thus you want to ensure that in any case there is enough coverage to reflect your current life situation. Typically you want to increase you coverage if any changes in your life require more financial support if you are not there e.g. birth of a new child, getting a new mortgage, increasing your debt through additional line of credit or loan. These are all financial obligations that you or your family will need to deal with in future.
At the same time sometimes the need in financial support can go down as well. Examples of such life changes can be growing children (the older are your children, the less financial support you would need to the moment when they become independent), downsizing of your properties (e.g. selling off a larger house if your kids leave on their own and paying off outstanding mortgage). Reduction in your Life Insurance coverage means that you can shift to a smaller policy saving on regular (monthly or annual) life insurance premiums.
In any case, you need to sit down with your insurance advisor (e.g. insurance broker) at least once a year to see if there are any changes in your life insurance policy are required.