You are pretending that Peter is speaking backwards about the people who are in his audience alive. That is just illogical thinking. Peter says they will have to give account to him who is ready to judge the living and the dead, so that they might be judged according to men in regard to the body, but live according to God in regard to the spirit. If these dead people learned of Jesus while they were alive, then why will their bodies be judged according to men? When a person is saved, they live WITH their body ACCORDING to God through the Spirit.
You are ignoring context. The context is the suffering and persecution of Christians. Many of their loved ones had died under the great persecution of the Roman government. Peter says don't be concerned about them. They have had the gospel preached to them. No matter what their decision was it is now final. They will, in the future, stand before God and be judged. There is nothing that they can do about it now.
Consider the context. Here are the verses preceding verse, and including verse 6:
1 Peter 4:3 For the time past of
our life may suffice us to have wrought the will of the Gentiles, when we walked in lasciviousness, lusts, excess of wine, revellings, banquetings, and abominable idolatries:
4 Wherein they think it strange that ye run not with
them to the same excess of riot, speaking evil of
you:
5 Who shall give account to him that is ready to judge the quick and the dead.
6 For for this cause was the gospel preached also to them that are dead, that they might be judged according to men in the flesh, but live according to God in the spirit.
In verse 3, he speaks of their former lives, and the wickedness that they themselves lived before they were saved. "our life...when we walked..."
In verse 4 their enemies think it is strange that they don't do the same things that they did before they were saved.
In verse 5. Their enemies will give account of themselves before God.
In verse 6 Their enemies had the gospel preached to them also.
1 Peter 4:7 But the end of all things is at hand: be ye therefore sober, and watch unto prayer.
8 And above all things have fervent charity among yourselves: for charity shall cover the multitude of sins.
9 Use hospitality one to another without grudging.
10 As every man hath received the gift,
even so minister the same one to another, as good stewards of the manifold grace of God.
--In verse 7 the end is near, Jesus is coming soon.
In verse 8, Practice love, even to your enemies.
In verse 9 practice hospitality, even to your enemies.
In verse 10 Be good steward of the grace of God, to all people.
Thus verse 6 may not be speaking of their relatives, but rather about the unsaved who have heard the gospel, and they too will stand before God and receive just judgment. Either way they are people who have already died and will some day stand before God.