Prepaid Legal Insurance Plans – Pros and Cons of Insurance Plans for Employees

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Last month the United States Office of Personnel Management asked congress to consider offering federal employees voluntary benefits to make working for the government more attractive. Employees and consumers want services such as these to be readily available more than ever before. OPM pointed out that similar plans have been available in the private sector already and have been beneficial in recruiting and retaining employees.

Despite the popularity, some say it’s not worth spending their hard-earned money on such services and others feel it’s better to have the service and not need it rather than need it and not have it. To make an informed decision, employees need to understand what prepaid legal plans are.

What is a Prepaid Legal Plan?

Prepaid legal plans are designed to provide affordable legal resources for all. Employee legal insurance is more of a discount plan than insurance. For a reasonable fee, individuals have access to certain covered services. After a car accident, for example, Jonathan Rosenfeld advises that injured victims always consult with their attorney before speaking to an insurance company representative. 

What Are the Advantages and Disadvantages of a Prepaid Legal Insurance Plan?

Progress 

Prepaid legal services have been available for over 50 years; adding them as employee benefits is a more recent advancement. With the current consumer market, expanding services using technology is vital to connect members with legal representation. A recent advance is the provision of mobile apps that give 24/7 access to legal assistance, information, and even documents on the go.  

Pros

The average cost for a legal plan is approximately $250 a year. Memberships for legal service plans are often at no charge (except for your monthly membership), some at a discounted rate, and can expand to cover your partner and even dependents. If the legal need is just a quick consultation, prepaid legal services could be entirely appropriate to take advantage of.

Prepaid insurance plans usually have a network of well-qualified attorneys who accept their members and can recommend attorneys in your area by their specialty. Phone consultations can provide timely, accurate legal advice. An in-person meeting is covered in full, and you won’t need to pay anything out of pocket. This makes it easy to be proactive about personal legal issues such as estate planning without worrying about the extra cost, and a qualified expert does it. 

Cons

Having benefits that include prepaid legal services might not save you money in legal fees. The idea is that legal services can be cheaper when bought in bulk. For a low price, they claim to cover several legal tasks. However, many low-cost plans include only some quick phone consultations, and possibly a few essential services such as a simple will. 

Beyond that, you receive a discount for other types of legal services. Sometimes individuals need to dig around to find the details on what services may or may not have coverage within their plan. Some of the legal services offered are free of cost to the employee, but they may need to pay out of pocket for dependent coverage. 

Often the types of services covered are reasonably priced ones, such as creating a will. If the employee doesn’t need legal help frequently, it can be harder to judge whether it’s worth opting into the legal services insurance.

To Opt-In or To Not Opt-In – That is the Question

Consider the likelihood of your needing covered services such as estate planning, document preparation, consumer protection, or even a traffic ticket defense. If you’re on a budget and need legal help in areas such as these, a prepaid plan could be a great choice. Research the company and check references, and above all, make sure you know precisely what the legal program covers before you opt-in.