Who really needs life insurance in your household? The answer might surprise you

Who really needs life insurance in your household? The answer might surprise you

The primary breadwinner always needs the most life insurance coverage — or so societal norms suggest. But this assumption may be contributing to the roughly 60 million uninsured or underinsured American households and the average coverage gap of $200,000.

In the traditional breadwinner versus caregiver family structure, the top earner’s coverage is usually prioritized. According to LIMRA, 4 in 10 families would face financial hardship within six months if the primary earner passed away; 1 in 5 families says that it would occur within just one month.

The problem is that prioritizing the breadwinner’s coverage usually leaves the other partner underinsured or lacking coverage altogether. While the loss of a higher-income partner would clearly reduce income and might cause financial strain, losing the family’s primary caregiver could create new childcare and household expenses.

And with the average stay-at-home parent of two in the United States contributing about $4,500 of unpaid labor per month — roughly $54,000 annually, these new expenses could have a significant impact on the breadwinner’s income. Whatever the case, financial disruption is ultimately the outcome.

Family roles don’t always tell the full story. As a result, household roles alone might not be enough to guide coverage decisions.

Below, Everly Life explains how household roles influence life insurance coverage decisions and what factors families should consider when evaluating their needs.

What Should Actually Drive Coverage Decisions

While household roles can influence how families purchase life insurance coverage, there are other effective drivers to consider, including:

• Financial obligations — Would mortgage payments, medical bills, or other outstanding debts require coverage to avoid a financial crisis?
• Income replacement — How much of a partner’s income might need to be replaced to maintain a normal standard of living?
• Future financial goals — Would future financial goals, like college tuition or retirement planning, need to be paused if one partner passes away?
• Health and lifestyle factors — Could current health concerns or lifestyle factors increase the amount of coverage needed to avoid financial turmoil?
• Childcare/caregiver costs — What resources would be required to ensure the children have the care they need?

What's Behind the Barriers to Adequate Family Coverage

According to Greenwald Research in 2024, 67% of married/partnered households are likely to have a coverage gap. So, what’s keeping families underinsured?

The Gender Protection Gap

Women’s household responsibilities are evolving. In 2023, Pew Research analyzed census data, and found that almost a third of women earn as much as their male spouses. Another 16% of households cite the wife as the primary breadwinner. Regardless, women are still more likely than men to remain underinsured or lack coverage altogether (49% versus 55%, respectively).

Cost Misconceptions

LIMRA’s research shows that about 75% of Americans overestimate the cost of life insurance. With this mindset, it’s understandable that families who are already stretched thin financially or simply don’t want to incur an additional monthly expense may deprioritize buying the right amount of coverage. However, these cost misconceptions contribute to the growing number of families without adequate coverage — and put them at risk of financial hardship.

Lack of Knowledge

Education is key in determining how much life insurance coverage families need. According to LIMRA’s 2025 Insurance Barometer Study, 41% of U.S. adults say they are somewhat or not at all knowledgeable about life insurance. Furthermore, only 25% of consumers are confident in what they know about life insurance. This lack of education may be contributing to the number of families who lack the coverage they need.

Moving Beyond Household Roles in Life Insurance Coverage

Modern family structures are shifting from traditional gender roles towards more collaborative partnerships. With this shift comes the need for a holistic approach to coverage decisions rather than focusing on salaries and chores.

A holistic approach prompts partners to consider both their financial and non-financial impacts within the family. The result? Life insurance coverage that's more reflective of what families would actually need to navigate a loss.

Moving beyond household roles in life insurance planning requires partners to broaden their mindset about what life insurance means. But it’s a joint effort; carriers also have a responsibility to educate and simplify coverage explanations to help families confidently close coverage gaps and minimize financial uncertainties.

This story was produced by Everly Life and reviewed and distributed by Stacker.