47% of Americans say their household would struggle within 6 months of losing the primary wage earner's income.
July 28, 2026
No one likes to think about what would happen financially if their family’s primary breadwinner passed away. However, according to LIMRA’s 2025 Insurance Barometer Study, conducted jointly with Life Happens, nearly half of Americans (47%) say their household would have trouble paying living expenses within six months of the primary wage earner’s death.
Six months. Not a lifetime, not even a full year — six months before the bills start becoming a crisis. And this isn’t a fringe concern: 40% of adults say their loved ones would be barely or not at all financially secure if the primary wage earner died unexpectedly today.
This is really what life insurance is for. It’s not about the policy itself or the payout as an abstract number. It provides your loved ones with the ability to keep living the life they’re living now, in the home they’re in now, without you there to help pay for it.
The same LIMRA study found that 51% of American adults have some form of life insurance, whether an individual policy, a group policy through work, or both. However, 40% of adults — representing close to 100 million people — say they believe they need more coverage than they currently have.
That gap isn’t evenly distributed. Men remain more likely than women to own life insurance (54% versus 48%), and LIMRA found that Gen Z and Hispanic adults are the least likely of any group to say they own a policy at all.
When you ask people why they haven’t bought life insurance yet, the two most common responses are: it’s too expensive and there are other financial priorities, such as paying living expenses, building savings, managing debt, or saving for retirement.
This doesn’t surprise me at all. Almost 8 out of 10 people in America can’t even save $1,000. When families look at their budget, they only look at what is coming in. They don’t usually think about what will happen if the income stops.
Almost a quarter of Americans also say they simply don’t know how much coverage they need or what type to buy, and only 29% of consumers describe themselves as knowledgeable about life insurance in the first place. That’s a real barrier, because most people have never sat down and worked through how life insurance actually functions or what it’s realistically meant to replace.
According to Barbara Pietrangelo, a certified financial planner and member of the National Association of Insurance and Financial Advisors Board of Trustees, most people don’t understand the value of life insurance, and concentrate more on the expense and less on the benefits a policy will bring.
To understand why the six-month number is so sobering, it helps to look at what a household is on the hook for the moment a primary wage earner’s income disappears — and how little cushion most families have to absorb it.
According to LIMRA, more than half of consumers say their loved ones would turn to life insurance proceeds specifically to pay basic living expenses, and one in five policyholders cite paying off the mortgage as a top reason for owning coverage at all.
Without that income, a household isn’t just losing a paycheck — it’s often losing the ability to keep the home it’s in. This is the core, practical case for life insurance: it’s less an investment product than a stand-in for the paycheck that would otherwise stop.
LIMRA found that covering burial and final expenses is the single most common reason Americans say they own life insurance (60%), and it’s easy to see why: the National Funeral Directors Association puts the median cost of a funeral with viewing and burial at $8,300, and a funeral with cremation at $6,280 — figures that don’t include a burial plot, headstone, flowers, or reception. That’s a five-figure bill arriving within days of a death, often before any other financial support kicks in.
The Federal Reserve’s most recent Survey of Household Economics and Decisionmaking found that only 55% of adults had set aside enough savings to cover three months of expenses in 2024 — meaning close to half of Americans didn’t.
Combine that with LIMRA’s finding that 47% would struggle within six months of losing a primary income, and the math is unforgiving: for a lot of families, the runway between “we’re fine” and “we’re in trouble” is measured in weeks, not months.
Social Security survivors benefits exist and can genuinely help: a surviving spouse can receive between 71% and 100% of the deceased worker’s benefit depending on age, and a dependent child can receive 75%, according to the Social Security Administration.
The SSA itself notes that the value of these survivor benefits can, over time, exceed what many people carry in individual life insurance. However, those benefits are capped as a percentage of the deceased’s earnings record, subject to a family maximum, and the one-time lump-sum death payment is just $255 — a figure that hasn’t changed in decades and covers a rounding error’s worth of funeral costs.
Social Security is a real safety net, but for most families it’s a floor, not a replacement for the income that’s gone. Life insurance is the piece designed to fill the rest of that gap, on a timeline and in an amount the family actually chooses.
None of this is because people don’t care about their families. LIMRA’s data points to something more mundane: cost perception and inertia. People assume life insurance is expensive — it’s often far cheaper than assumed, especially a term policy bought at a younger age — and they assume they’ll get to it later, after more pressing financial priorities are handled.
There’s also a real information gap. Nearly a quarter of Gen Z adults (23%) say they haven’t purchased life insurance simply because they haven’t been approached by an agent, and one in 10 Americans overall believe — often incorrectly — that they wouldn’t qualify for coverage at all.
The reassuring part of LIMRA’s research is that it isn’t really about whether people value protecting their families — the overwhelming majority clearly do. It’s about closing the gap between intention and action. A few concrete steps:
Instead of guessing at a coverage amount, add up what your family would need to cover: the remaining mortgage, other debts, funeral costs, and however many years of income replacement would let your household maintain its current lifestyle.
There are a few reliable formulas for figuring out how much coverage you actually need, and a quick calculator can get you a starting estimate in a few minutes.
Price has seen underinsured families struggle because they thought they had enough.
One family thought that they didn’t need a big life insurance policy and ended up turning to a GoFundMe to raise money to try to live on while they were rebuilding their life.
Pietrangelo has also worked with individuals who had to go to extremes because they were underinsured.
I’ve seen cases where a surviving spouse marries someone primarily because they have the financial means to support them and replace the lost income. Others end up moving in with a family member or friend, placing financial and emotional strain on both households because they can no longer afford to maintain their own lifestyle.
Be proactive to ensure you’re never in the same boat.
If your biggest financial exposure is a 20-year mortgage or the years until your kids are financially independent, a term policy that matches that window is usually the most efficient way to close the gap.
It concentrates coverage exactly where the risk is highest instead of paying for protection you may not need for life.
Coverage is generally cheaper the younger and healthier you are when you buy it, so the cost of waiting isn’t just risk — it’s a rising price tag.
A healthy person today who waits 5 years might not qualify for coverage if their health changes.
Get familiar with the most common mistakes people make when buying life insurance before you sit down to shop, so you don’t have to unlearn them later.
Some employers offer life insurance as part of their employee benefit plans. However, the coverage is usually minimal.
While many people receive their life insurance through their employer, this amount may not be enough to cover costs they may leave behind and typically doesn’t follow you when you leave a job.
This makes it critical for current policy-holders to give serious thought and planning to how they would maintain and/or increase coverage were they to lose out on employer-provided benefits.
Premiums and underwriting requirements for the same coverage can vary significantly between insurance companies, so it’s worth it to compare quotes across a few companies rather than accepting the first one you get.
It might also make sense to work with a life insurance agent or financial professional who can help you understand the different policies available to you and choose the right one for your unique situation.
The question isn’t really “do you need life insurance” in the abstract — it’s whether the people who depend on your income could stay in their home, keep their routines, and cover a five-figure funeral bill if that income stopped tomorrow.
According to LIMRA, for nearly half of American households, the honest answer today is no, not for long. Social Security survivor benefits and existing savings can help, but for most families they’re not designed to fully replace a lost income on their own.
Being underinsured not only causes financial complications, but emotional ones as well. Few people know they are underinsured, so the consequences of it are often felt when it’s too late.
That’s why it’s important to think ahead. By taking the time to review your situation and plan for the future, you can protect your loved ones financially and gain some much needed peace of mind.
Anna Baluch is an insurance and finance expert at BestMoney.com. With over a decade of writing experience, she specializes in insurance, banking, mortgages, personal loans, and retirement planning. Her work has been featured in publications like Forbes, Newsweek, Fox Business, Credit Karma, Insurify, and Realtor.com. Anna holds a bachelor’s in marketing from Northwood University and an MBA from Roosevelt University. Her goal is to empower consumers to make smart financial decisions.
