Prepaid legal plans are typically offered in two models:
"access" and "comprehensive." While every plan differs in the specifics of
what it covers, access plans generally cost much less and provide quick
access to an attorney for advice and simple legal services. Access plans
average about $150 per year for a family. If you sought an attorney's help
on your own, hourly rates average anywhere from $145 per hour up to $210,
so if you use a lawyer just once a year with a pre-paid legal plan, you've
probably saved yourself money. But be aware that some plans require a
co-pay for services just as there is for doctor visits and prescription
Comprehensive prepaid legal plans provide a much broader range of
services that require more time and effort on the part of attorneys, such
as wills, trusts, deeds, or contracts. Comprehensive plans can provide for
legal representation in negotiations and in court cases such as divorce or
child custody, and in some cases may cover all costs involved in
litigation. These plans can cost $300 a year or more and are most
beneficial to people who own more than one piece of real estate, have
complicated family situations with wills and trusts, or who run their own
business and need business support and advice.
In both cases, benefits often have caps or maximums, but comprehensive
plans will usually have higher limits.
The benefits of pre-paid legal plans, particularly the more affordable
access plans, include easy access to an attorney, significant cost
savings, and, in many cases, preventive services that can help with issues
before they reach crisis proportions. For instance, you may be able to
call on a lawyer for advice on mediating a dispute with a neighbor over
property lines instead of arguing until the dispute becomes a lawsuit.
Plans can vary in their offerings but most offer unlimited phone access
to a lawyer as part of the plan. Some go as far as to offer unlimited
office visits, depending on which plan you've paid for. Members are
usually allowed to choose any attorney from the network, but sometimes
you'll have to select an alternate due to case loads, .
What to look for
In addition to a clear outline of what is and is not covered under the
pre-paid legal plan, there are a few more things to consider when signing
up for prepaid legal services. The plan should have directions on how to
resolve a dispute with or complaint against an attorney in the plan.
There should be information on secondary sources for resolution as
well. In states that have legal insurance laws, the plans will be
regulated by your state department of insurance. However, not all states
have specific laws addressing legal insurance. In that case, each state's
bar association can provide an outlet for complaints against attorneys.
In addition, if you sign up for a legal-services plan with your
employer as part of workplace benefits, the legal services are covered
under the federal Employee Retirement Income Security Act (ERISA). This
federal regulation is a guideline to how employee benefits are managed and
provided to employees.
Choosing your attorney from the network list is up to you, so you'll
want to do a little homework before making your selection. If you already
know an attorney on the list, it makes it easier, but if you're looking at
a list of strangers, it's buyer beware. You can contact your state bar
association to find out if complaints have been filed against particular
attorneys. If the plan you've joined has other members whom you know or
work with, you can ask them for references. Groups and employers that
offer these plans should have researched law firm or attorney backgrounds
before selecting them, but it always pays to back that up with your own
Make sure you review your existing insurance policies before selecting
your pre-paid legal plan. Some legal protections and defense costs may
already be covered, and you don't want to pay for coverage twice. For
instance, your car insurance protects you in the case of car accidents
with liability and medical coverage. Your home insurance covers you in the
case of injuries on your property. If your policies already include these,
don't pay for them again in a pre-paid legal plan.
Pre-paid legal service plans are available to individuals or families
through legal service organizations and sometimes through churches,
educational institutions, alumni associations, business groups, credit
unions, and employers.
"Prepaid legal services" offer specific services for a reduced price.
You pay your annual fee and the plan pays the lawyer bills.
"Legal insurance" can also include coverage of specific legal
services, but its main function is to protect an individual against all
Legal insurance will reimburse the policyholder or pay on behalf of
the policyholder all fees, costs, and expenses for legal services
including court judgments, up to the policy limits.
In addition, legal service insurance will provide bail money,
something most pre-paid legal services do not provide.
Legal insurance will also pick up where your auto or home insurance
leaves off. For example, if you are sued for recovery of damages in a
car accident because they exceed your insurance limits, legal services
insurance can kick in to protect you.
Legal insurance also does not restrict your choice of attorneys to a
network, but rather will provide coverage regardless of which attorney
you select. However, legal insurance is much harder to obtain in most
states because few insurance companies offer it. Pre-paid legal plans
are much more accessible to the general public.
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