North Bay Woman

56 NORTH BAY WOMAN | S U M M E R 2 0 1 5 One way to reduce the impact of adverse events is through insurance. Krys- talynn Schlegel of the Novato boutique insurance company M.G. Schlegel and Associates, Inc., stresses the defensive strategy of financial planning. In addition to a plan for financial gain, she says, we have to protect ourselves against loss. "We can't win the game of life without balance." The first thing Schlegel recommends is having major medical insurance. "When you're young and healthy, you think 'Nothing's going to hap- pen to me.' But an accident or illness can be devastating." For the same reason, she also rec- ommends disability insurance for younger couples, since statistically, they are more likely to suffer a disability than death. However, young people should also consider term life insurance, which is inexpensive for someone in their 20s or 30s. Odds are you won't need it, but it will be a blessing if you do. And having it will insure your insurability in the future, when it's both more expensive and harder to get. "Have these defensive strategies in place first," Schlegel cautions, "before having a home." Both of you should carry life insurance, she says, and gives an example. A young man has 20-30 years of earning ahead of him. If he makes $150,000 a year, that's about $4.5 million over his working life. If you lose that earning capacity, where is the money going to come from to support your lifestyle? Add a child or two into the mix, and the cost of living is even more. For older couples, life insurance is equally important, although for other reasons. Since the proceeds pass tax-free directly to the bene- ficiary, life insurance is a good way to pay for a grandchild's education, for example. "For women, if you're not a breadwinner or household earner, make sure you have those coverag- es in place, and have that discus- sion with your spouse to make sure those proceeds come to you," Schlegel advises. As with a pension plan, make sure that beneficiaries are updated, since these are con- tracts that cannot be changed by probate court should your husband have kept his first wife as payee. Another reason for older couples to carry life insurance is for a long-term care rider. When you're active and healthy, no one wants to think about needing help in later years. But odds are 6 in 10 men and 8 in 10 women will need chronic care, and the aver- age cost for long-term care in the Bay Area is $120,000 a year. Where will that money come from? "For women, this is very big," Schlegel says. "Women will be the caregivers for the male, but they live longer and end up needing the care themselves." The solution is not necessarily insurance, she notes, but the issue should be part of your financial conversation, whether you're newlyweds for the first or second time or have been married for three or four decades. "It's imperative that people talk about it be- cause it's so likely to happen," Schlegel says. 'Til Death Do Us Part The final step of any wise financial strategy is to plan for the end of life and beyond. This means estate planning. "People think it's for older, rich people, but it's for everyone," says Schlegel. "Guardians, health proxies, it's all part of estate planning that people need." And review your financial plan on a regular basis. "A financial plan is not something you do once and put away in a closet," says Scaff. "It requires ongoing upkeep and attention. Just like the relationship." ■ Arguments about money, even in the early stages of a relationship, are by far the top predictor of divorce SUMMER

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