prepaid legal

Everything You Need to Know About Prepaid Legal Plans

Legal issues can crop up at any time, and having access to affordable legal services is important. Prepaid legal plans allow people to pay a monthly fee to have access to a range of legal services from qualified attorneys. These plans help make legal help more accessible and affordable.

What are Prepaid Legal Plans?

Prepaid legal plans, sometimes called legal insurance, are plans that people pay into each month to cover the costs of basic legal needs that may come up (kinda like car insurance, but for lawyers). For a monthly fee – usually between $10-50 per month – members get access to a network of attorneys who have agreed to take on cases at reduced rates.
So in a nutshell, prepaid legal works like this:
You pay a monthly fee, like an insurance premium
That fee covers the costs for a network of lawyers to take on your basic legal issues at reduced rates
When you have a legal need come up, you contact the plan and get matched to a participating lawyer
You pay small copays or deductibles, if anything at all
It’s a great way to get affordable access to legal help!

What Types of Legal Issues Do These Plans Cover?

Prepaid plans cover day-to-day legal needs – not super complex stuff. The most common services included are:
Creating wills and trusts
Real estate transactions – buying/selling property
Traffic ticket defense
Small claims court cases
Basic contract review
Identity theft help
General legal advice/consultation
Many plans also cover defending you in civil lawsuits, IRS audits, or if you need help with landlord/tenant disputes. Some plans offer help with family law issues like adoption, divorce, or custody matters.
So while prepaid legal plans don’t cover super complex litigation, they are great for those typical legal headaches that pop up.

Are Prepaid Legal Plans Worth It?

Short answer – yes! Prepaid legal can save you a ton of money on routine legal matters. Let’s break down some numbers:
Without a legal plan, here is what you may pay:
Creating basic will: $150-$500
Real estate closing: $500-$1,500
Traffic ticket defense: $250-$500
Consulting a lawyer: $100-$350 per hour
Whereas with a prepaid legal plan, you’ll pay:
$10-50 per month for the plan
Small copays for services – like $50 for estate planning, $100 for traffic court, etc.
Run some numbers with your own state’s average legal fees here on Avvo’s legal fee database. You’ll see pretty quickly that prepaid legal can save you big time by handling common needs at reduced rates.
Some plans let your whole family enroll for the same monthly cost. That’s a crazy good deal considering a basic legal consultation alone can run you a few hundred bucks.
Plus, knowing affordable legal help is available prevents stress and gives you peace of mind.

How Do I Pick A Prepaid Legal Plan?

With different plans available from various companies, it’s important to pick one that fits your needs and budget. When shopping prepaid legal plans, look for:
✅ A reputable provider – Pick an established company with a good track record. Avoid fly-by-night companies. Do your homework.
✅ Highly rated lawyers – Make sure the plan’s attorneys are legit and have good reviews. Vet a few of their top lawyers.
✅ A reasonable monthly cost – Expect fees between $10-50 per month. Compare plans to find one that fits your budget.
✅ Good coverage – Look for a plan that covers your basic legal needs around wills, real estate, traffic tickets, advice and consults, etc. See what’s excluded too.
I recommend checking reviews on sites like Avvo and LawInfo to research plans. Most state bar associations also review legal plans, which helps spot the better ones.
Overall, look for prepaid legal plans with affordable rates for everyday legal needs, access to vetted lawyers, and good value for your money.

Who Offers the Best Prepaid Legal Plans?

There are a lot of options out there! But in my opinion, here are some of the best prepaid legal plans available:
ARAG – Offers comprehensive legal plans starting around $25/month. Get access to a national network of 8,000+ attorneys. Lots of good coverage options.
LegalShield – One of the biggest names in legal plans with rates starting at $20/month. Choose from basic and more premium plans. Access to lawyers in 50 states.
Rocket Lawyer – Affordable legal plans that include online legal document creation tools. Prices from $39.99 per month. Good option for DIYers.
LegalZoom – Known for their DIY legal document software, they also offer lawyer plans from $14.99 per month. Better Business Bureau accredited.
There are also some smaller regional and employee-based prepaid legal plans worth checking out. Your employer may even offer these benefits, so ask your HR department.
Do some comparing to find the best match based on pricing, services covered, lawyer availability in your state, and overall value.

What Are the Downsides of Prepaid Legal Plans?

While prepaid legal has lots of benefits, there are some potential drawbacks to consider too:
❌ Limited services – Plans only cover routine legal matters, not complex cases. Unique issues may not be included.
❌ Restricted lawyer networks – You can only use attorneys who participate in the plan, limiting your choices.
❌ Upselling for some services – Some lawyers may try upselling you premium services not covered by the plan.
❌ Pre-existing issues may not be covered immediately – Many plans have waiting periods before covering pre-existing matters.
❌ Confusing exclusions – Watch for vague exclusions for “unreasonable” or “frivolous” matters. Know what you are and aren’t getting.
The key is reading the fine print to know exactly what is and isn’t covered, being a wise consumer, and finding an ethical attorney you trust.
While prepaid legal has some limitations, it still delivers good value and protection if you choose the right plan.

Does Prepaid Legal Cover Pre-Existing Conditions?

This is a tricky question. Many legal plans have waiting periods before they will cover pre-existing legal matters – often 6 months. This prevents people from buying coverage only when they are slapped with a lawsuit.
However, some plans offer add-on policies that provide immediate coverage for issues that already exist. For example, ARAG offers a “past-events coverage” rider which is super helpful if you already have pending issues.
During enrollment, be upfront about any legal situations you’re already facing. See if they can be covered or if a waiting period applies. Don’t get caught off-guard!
For new legal issues that come up after enrollment, you’re usually covered immediately as soon as your first payment goes through.

Can Prepaid Legal Help With Debt Collection?

Debt collection and harassment by creditors is very common. Many prepaid plans provide help defending against illegal collection practices and lawsuits by creditors or debt collectors.
Having a lawyer review the details of your case, negotiate with collectors, and represent you in court can give you a much better outcome. Creditors often back down quickly when they realize you have legal backup.
Some things covered related to debt collection issues include:
Reviewing contracts related to debts
Negotiating with creditors for reduced settlements
Drafting responses to collection lawsuits
Defending against illegal harassment/practices
Helping fix credit report errors
I definitely recommend asking debt-related questions upfront when shopping prepaid legal plans, especially if you are already dealing with collections. While coverage varies by plan, many do include help fighting unfair collectors.

What If I Have Ongoing Legal Needs Not Covered by the Plan?

Prepaid legal plans work great for one-off legal issues that come up. But what happens if you require extended, complex representation not covered by the plan?
First, understand the plan’s limitations. Know what types of matters have coverage caps or are excluded.
For more complex issues, most plans give members a reduced rate for legal services above and beyond the plan’s scope. Typically 25-50% off the lawyers normal rates.
So while stuff like complicated lawsuits or drawn-out family law issues may not be 100% covered, you still get discounted rates for additional services.
Some plans also offer “legal insurance” policies as an add-on, which act more like traditional insurance by covering a wider range of legal costs. For example, ARAG offers Protector Plus policies to handle bigger legal needs.
Just be aware that prepaid legal plans focus on simpler legal situations. For anything super complex, additional services will mean paying extra fees.

How Are Prepaid Legal Plans Different Than Just Hiring a Lawyer?

Hiring a lawyer directly seems simple enough. But prepaid legal membership actually makes the process of getting legal help much smoother.
Here are some of the key differences of using a prepaid legal plan instead of hiring lawyers on your own:
No hunting for the right lawyer – Your plan matches you to a qualified attorney, saving you tons research time.
Reduced rates for services – The plan network lawyers work for much less than their normal fees.
Everything is super clear upfront – You know exactly what you’ll pay, no surprise legal bills.
More lawyers to choose from – Plans give you access to a wider range of lawyer options.
Advice is only a phone call away – Easy access to a lawyer for quick questions.
Ongoing support – Plans assign you a dedicated law firm for 12 months.
Smoothing out payment – Small monthly costs vs. huge one-time legal fees.
Taking the prepaid legal route just alleviates so much of the hassle of finding legal help on your own. Well worth it for the savings and simplicity!

Ready to Learn More?

Hopefully this breakdown gave you a clear overview explaining how prepaid legal plans work and their many benefits. Getting affordable access to lawyers for life’s common legal needs brings big value and peace of mind.
For more help understanding legal plans available where you live and work, I recommend connecting with the knowledgeable folks over at LegalShield. Their prepaid services have saved people across North America millions in legal fees.
Need more legal help understanding your options? Avvo’s lawyer directory makes it easy to connect with attorneys in your area to discuss whether a prepaid legal membership is right for your situation.
Don’t get stuck handling legal issues on your own. Prepaid plans bring welcome help and savings!