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Are Prepaid Legal Plans Worth It?

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Drive Thru LawyerA few years ago, my former company began offering prepaid legal plans as an employee benefit. I forget the exact terms of the deal but it worked a lot like medical insurance. You pay a set amount each month and you had access to the plan’s pool of lawyers. The pool could prepare certain documents for you, such as draft a will, and you could have consultations several times a year.

As young professionals, none of my friends took advantage of the plan because there didn’t seem to be a need for it, but I wondered whether prepaid legal plans were worth it.

What are Prepaid Legal Plans?

I did some research online and plans start around $15-30 a month, which was in line with the monthly cost of my former employer’s plan. What you get will vary by state because the prepaid legal firms are really intermediaries between you and a law firm. There are also add-ons you can buy, like $1 a month for 24-hour service, plus a la carte legal services in addition to the prepaid plan itself.

What do you get? For the basic family plan I looked at, you had unlimited phone consultations, one call or letter (meaning the attorney would call or write a letter as your representative), unlimited personal document review (up to ten pages each) and one business document review, and one individual Will. Most plans will offer similar services, with varying limitations.

Benefits of Prepaid Legal

Prepaid legal is a lot like medical insurance. You pay a fixed amount each month, regardless of how much you use it, and you can get access to a lawyer when you need it without paying additional fees for each service. Your annual legal costs are set and you won’t have to worry about having a particularly bad legal year extend into your finances (at least in the case of legal fees).

Since most prepaid legal plans offer unlimited phone consultations, it can pre-empt potential legal issues. If you aren’t sure about something seemingly minor, like cutting down a tree, you can call up your lawyer for advice. You may find out that you need an arborist to supervise or the permission of your neighbor.

Drawbacks of Prepaid Legal

This is the classic case of buffet vs. a la carte. With prepaid legal, you pay a set fee each month, regardless of how often you use it, and get to pick from a menu of services they provide. Otherwise, should you want those services, you pay per service.

Thinking back to the last year, I’ve only needed a lawyer once – when I was given a speeding ticket in North Carolina. For those keeping score at home, you know that I live in Maryland so self-representation was out of the question and in order to avoid getting points on my license (which insurance companies love), I paid a NC lawyer ~$200 to represent me in administrative traffic court. In my particular case, I don’t believe prepaid legal services would’ve helped but that’s the type of scenario where one could have helped.

Legal Documents

One of the benefits touted by some prepaid legal services is access to a database of legal documents. You can pick up legal documents almost anywhere, the real value is in having a lawyer’s trained eye reviewing them. If you want legal forms or documents, you can do a search on Google for them. When you find a form, make sure it’s for your state (or the state it will be used in).

A La Carte Services

As for going a la carte, you can just open up your yellow pages or ask your friends for a lawyer to fit your needs. Interview them as you would anyone else you are buying something from (like home improvement contractors) and find out whether their services are what you need.

If you prefer going the online route, Legalzoom is always an option. You can prepare a Will for as little as $69 that includes a personal “Peace of Mind” review in addition to the automated checks for spelling, grammar, completeness, etc.

So are prepaid plans worth it? I’m not entirely sure they are. When you consider many of the a la carte services are “one and done” types of services (how many Wills will I need to have prepared?), I’m thinking going a la carte is probably better.

Do you have any experience with these types of services?

(Photo: brookenovak)

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92 Responses to “Are Prepaid Legal Plans Worth It?”

  1. BrianC says:

    I haven’t used something like this, but it does sound like a reasonable option if I had a small business, or were in some other situation where legal questions came up in my life more often than they do now.

    • ROBERT COMPTON says:

      WELL BRIAN I CAN TELL YOU AS A SMALL BUSINESS OWNER PREPAID LEAGAL PLANS ARE A GREAT BENEFIT ESPECIALLY A PLAN THAT IS TRADED ON THE NEW YORK STOCK EXCHANGE JUST LIKE PREPAID LEGAL THIS MEANS THEY ARE AN OPEN BOOK YOU CAN LOOK THEM UP PPD IS THEIR STOCK SYMBOL. also they offer a small business plan that is designed to add departments to your business that you need but maybe can not afford such as a marketing ,payroll,tax department and many others . IN OUR SOCIETY I HATE TO SAY IT YOU NEED ATTORNEYS YOU CAN EITHER CHOOSE TO PAY POST PAID AT 250 TO 300 AN HOUR OR PREPAID AT 20 TO 75 DOLLARS A MONTH CALL ME IF YOU WOULD LIKE MORE INFO. 325-320-2315

  2. At least one upside of marrying a lawyer is that she can take care of all nearly all “petty” things for free. Only if real specialist skills is required would I need an other lawyer.

    But then again, she clobbers me with her lawyer logic every time we debate something :) When we disagree, she usually wins :)

  3. Shirley says:

    The lawyers in my family have suggested that the a la carte choice is better in the long run.

  4. Soccer9040 says:

    Quick story: In 2009 I signed up for my company’s legal plan. We were having a baby and figured a will and trust was in needed. I paid $14 a month for the plan. So in January we make our appointment to meet with the lawyer. Very capable guy, but constantly mis-spelled my wife’s name. Anyways we meet and he gets all our info says it will be ready in a about a week. So we go back a week later, sign documents and we are all set. Feb comes around and I pay my $14 dollars again, then I leave my company. So basically my will and trust documents only cost $28. Not a bad deal. If you know you need specific services, see if you can join the plan for a year, use their services, then do not join the next year.

  5. Shock says:

    My employer offers pre-paid legal for about $8 a paycheck, so around $200 a year. Thats less than you are going to pay per a la carte service. My wife and I had our wills done in 2009 using pre-paid legal. It would have cost between $500-1000 to get it done a la carte. This year I’m going through a name change, and although it might have cost me less to do it myself, I now have a lawyer doing it for me. I think pre-paid legal offers piece of mind that you always have a lawyer when/if you need one.

    • Soccer9040 says:

      Read the fine print carefully. You would be surprised at what they don’t cover.

      • Shock says:

        I did. The exclusions are minimal. It’s well worth it for the price. You never know when you’ll need a lawyer.

      • carl lee says:

        what did you mean the fine print you sounded like a happy camper in the last comment

        • susan says:

          The “fine print” basically says the plan does not cover ALL situations as a membership benefit; whatever is not covered by the membership benefit IS covered under a 25% discount off the regular hourly rate. Common situations that are NOT covered include child custody disputes, divorce, and bankruptcy (among others, this list is not meant to be exhaustive). The reason for non-coverage is that these situations tend to be very time and resource intensive, requiring special experience and skill. The plan is designed to help people with everyday situations where timely legal advice and action could keep something small from becoming something huge. If a person had to pay a retainer to a law firm for the same basic benefits that the plan provides, the retainer would be at least $5K/month rather than under $30.

  6. Kirk says:

    I got cornered at a party by a friend of a friend of a friend who just got pre-paid legal and now was a defacto spokesman for it. There have been some good suggestions made here as to why it would be helpful to individuals and families in a proactive manner. However, he was selling it as a reactive means and thus insurance policy to the constant harassment he receives from police officers for various issues he gets himself into. We didn’t necessarily agree that flashing his prepaid legal card would help him out if he wasn’t taking the first step to keep himself out of trouble.

  7. fairydust says:

    I think this is a great idea and would love it if my employer offered something like this. In the past couple years, we’ve had an unexpectedly high number of reasons to consult a lawyer and this would’ve been just wonderful to have!

    • Marcos N says:

      It is a great idea having a prepaid legal plan. They’ve helped me out quite a bit. If you are still interested in getting a plan, shoot me an email.

  8. freeby50 says:

    My employer offers this for something like $20-$25 a month. It seemed like it might be an OK deal but when I looked at it closer it seemed they didn’t cover a lot of stuff. It might be OK to get a will done but I didn’t see too much more value than that honestly.

    • susan says:

      The plan is designed to be a “shield” from everyday, common, legal situations where the advice of an attorney would be helpful in keeping a little thing from getting out of hand. It is NOT designed to be a “sword” to slay dragons or create situations — the attorneys are GREAT dragonslayers, don’t get me wrong — it is just better for everyone to try other options FIRST. for more info, see bit.ly/4info.

  9. My wife and I got our wills and living wills done for a grand total of $200 (total for the 4 documents). Not through a prepaid plan, but just by making an appointment and paying cash. I suspect that our lawyer uses them as a loss leader to attract clients who might need more extensive legal work at a later point.

  10. zapeta says:

    I’d check to see what you get for what you pay before you use a prepaid legal plan. It sounds like there could be a lot of exceptions! My employer doesn’t offer anything like this but I probably wouldn’t take advantage of it if they did.

  11. jsbrendog says:

    i didn’t even know something like this even existed. This is crazy. again though you make a good point of paying for it and not knowing whether you’ll need it or not. It could be a beneficiary expense if you can afford it….like insurance on a cell phone. I do not bother with it anymore because I have never broken a phone and it doesnt cover loss.

  12. Dave says:

    The only time I can imagine it would be worth it is if you knew something that was going to require a lawyer was coming.

    For example, in NJ, to buy and sell a home, you need a lawyer. My company offers a prepaid legal plan, but I didn’t even think about using it. If I had, I could have spend $200 vs. the $1500 I spent on lawyer fees.

  13. Kate says:

    I agree with BrianC that it would be a good idea for a small business. Other than that, I don’t see the allure.

  14. Scott says:

    My former employer had this and the general synopsis I got when I joined there and asked people about it was they said just forget about it – the costs don’t justify the benefits except in rare cases. If you’re willing to shop around a little for lawyers, I think you can easily do better financially (and probably legally too) than through a pre-paid plan.

    Jim – In most plans I’ve ever come across, speeding tickets and any sort of personal defense is not covered.

    • Shock says:

      Speeding tickets and court representation is covered in my employer’s pre-paid legal plan.

    • LCJ says:

      Pre-Paid Legal provides representation for speeding tickets, it does not pay your fine. You get representation for civil lawsuits and job related criminal issues included in your membership fee. All other personal defense is provided at a 25% discount. Pre-paid Legal also provides representation if you have a car accident and somebody dies.

  15. eric says:

    wow never heard about this. i’m more interested in how your traffic case went lol.

  16. Chris says:

    While there are many legit offerings on the market, there are also a lot of MLM’s pushing this product now too.

  17. NK says:

    Hello. I’m really puzzled at the bad rap PPL has gotten over the years. I’ve had PPL for about 7 years now. I think one of the reasons people are turned off with PPL is because of the name itself; it’s almost cringe-worthy in my opinion. But alas, I have used this service on so many different occasions with the outcome usually in my favor, not just for my small business but in personal matters as well…actually, mostly in personal matters. I just recently got a speeding ticket that my lawyer gave me some advice with, and he reassured me that if it goes before the judge, he would be coming right along with me as part of my benefit with PPL. pretty cool right? I say it’s absolutely worth it, to have that peace of mind that I can just call up my law firm and get solid advice and help. I’m also an associate just because I’ve referred it to some of my friends, but I’m not an active agent at all. I strongly encourage people to add this to their list of insurance coverage.

    • Cheryl says:

      My experience with Pre-paid Legal was much different. I called when I got a speeding ticket last month and when the attorney called me back, she said that it wasn’t worth her going before the judge. It was a 2 point ticket 54/45 and that the best that could happen is the judge would grant me an extension of time if I asked. So I went without an attorney, and when I asked the judge for time to pay (I’ve been unemployed for over a year), he gave me 3 days, like that helped! Now my insurance has gone up, albeit $5 a month, but when you’re unemployed that makes a difference. I haven’t had any positive experiences with PPL, and I am looking at how to cancel because I really cannot afford paying for something that I receive no benefit in having.

    • kim says:

      Hi NK:

      What is the name of the service you use?

  18. Chris says:

    Not entirely sure, but I think PPL would have had a local NC firm represent you for a flat $25 fee for the ticket. (Like a co-pay.) If you got charged with vehicular manslaughter or one of those nasty “OH CRAP YOU KILLED SOMEONE!” situations, they’d charge you $49 or $59 / hour to defend you. (Very reduced rate.)

    • susan says:

      So you are partially right, and yet entirely wrong.

      A Colorado member recently relayed his experience: He was driving along a residential side street when BOOM! he was suddenly hit in the passenger side by a motorcyclist going very fast. Motorcyclist was killed. It was later determined the motorcyclist was drunk. Nonetheless, the car driver was charged with Vehicular Homocide and Vehicular Assault Resulting in Death, and 12 other things — all bad. He was looking at a minimum 7-12 years in prison, a $250,000 fine and permanent suspension of his driving privilege. He called his Pre-Paid law firm and was told his plan entirely covered his defense. Eleven months, ten hearings, numerous consultations, expert witnesses, etc. later, he was exonerated. He paid $82.00 in court costs and saved more than $96,000 in legal fees. All from a plan that costs 35.95 per month and covers both the member and their spouse, and any children under 18 (23 if at college). Cheap at twice the price. See bit.ly/sw-info

  19. VMG says:

    PPL has given me peice of mind. I have access to attorneys for everyday life events. The average person does not use attorneys because they cant afford attorneys or are intimidated by attorneys. I have had PPL since October and have used them with reviewing my cell bill contract, prepare my will, they wrote a letter on my behalf to stop a gym membership, they saved me hundreds when they reviewed my new car contract (you would be surprised what dealerships put on those contracts), I am now in the process of suing the person who ran into my car, is it worth it? I would say so, I consider this “don’t mess with me or my family insaurance” Bad things hapen to good people everyday. The membership is so inexpensive, yet people will smoke cigarettes and say they feel this is a waste of money

  20. Chris says:

    So everyone here is discussing the benefits of legal coverage with PPL, but what about their Identity Theft coverage through Krull? My company just offering the benefits of PPL in the last week prompted me to research. Hence Bargaineering. Anyone had experience with Identity Theft sources via PPL?

  21. Sharon says:

    How about something that rolls all of this and more into one @ $19.95/mo. Best thing I have ever seen created in the financial industry.

  22. cathy says:

    I was a tractor-trailer driver for nearly 20 yrs. In 1999, I got 2 speed tickets & the second prompted me to call a prepaid legal service because as a driver I wasnt able to appear because by then I would be in a different part of the country. They required me to pay a quarter in dues ans $200 towards my first lawyer since I wasnt a member when I recieved it. They made it go away. Over the next 4 yrs I was trying to pay for my own equipment & deal with a cheating husband.I aquired a 2 page MVR of various violations, many were speed. They made them go away. In Ohio, where my CDL was from, 3 speed in a year is auto 30 day jail, loss of CDL for 90 days & fine. I had 4. They made the arrest go away as well as tickets. Maybe for the average guy its not worth it, but if your living is made on the road, it is essential.

  23. cathy says:

    Check out the transportation industrys opinion. you will find we cant do without prepaid.

  24. pam says:

    It SOUNDS great. I bought it hook line and sinker. We have had it for 5 years which means we have reached the “highest” level of service. I have used them for phone consultations and that was moderately satisfying. Everytime I have needed a lawyer for something else it isnt covered. The last time they said I had no “meritorious” defense. Legal aid is helping me and they seem to think I am right. I was REALLY disappointed because it gave me a false sense of security. It comes out of my husbands check and I am mad I cant get most of my money back.

  25. IMK says:

    The BIGGEST waste of money!

    We had a VERY, VERY serious Home Owner Association (HOA) situation…Pre-paid swore up and down they had an attorney who has HOA experience…..well, after getting egg all over our face, turned out the attorney was NOT even aware that California was in the process or had just made changes to the election requirements for Special Assessments. This guy had absolutely NO clue!

    After having been with Pre-Paid Legal for many, many years we cancelled. Several months later we decided, for some strange reason, to join again and they hiked our previous rate of $14 to $26 a month!

    Rip-off!!

    • susan says:

      No one’s rate has ever been raised WHILE THEY WERE A MEMBER. You quit and came back; they had every right to raise your rate. Anyone else would have done the same thing. Is it fair to label something a “rip-off” because you did not like the result? Having Pre-Paid Legal is not a guarantee that you will win, only that you will be represented. Another lawyer would have cost you considerably more and the result would probably be the same.

    • SW formerly susan says:

      To follow up on this issue, IF you had such a bad experience, you should report it to Customer Care (800.654.7757). You will need your member number, the issue number and the name of who you spoke to. I don’t know what resolution might be available, but it is to your benefit to discuss the situation with the company.

      • kathleen says:

        You are crazy lady—-it doesn’t matter if you do talk to their Customer Care/Corporate because they don’t do anything!!!!!!!!!!!!!!!!


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