Legal Insurance Plans: How-to Get Insurance for Legal Services

You shouldn't have to pay thousands of dollars for simple legal problems

Lawyers are expensive, often charging hundreds of dollars per hour for their time. Many people who would benefit from legal counsel end up getting the short end of the stick because they can't afford a lawyer. The American Bar Association has estimated that about 80 percent of low-income individuals don't get the help they need because they simply can't afford the fees. Legal insurance can be a great, and affordable solution to get the help of a lawyer when you're not sure you understand your legal rights or need representation. 

Who Can Benefit From Legal Insurance?

Child Injured on the playground
martinedoucet / E+ / Getty Images

Almost anyone can benefit from purchasing a plan because legal insurance really doesn't cost very much. It can help you find advice for many situations that come up as you're starting out in life, buying a home, or starting a family.

Legal insurance can also be beneficial later in life as you sell property, manage your assets, deal with estate management or planning. Seniors are also at risk of dealing with certain types of scams and fraud. Having access to a lawyer can help prevent becoming a victim. 

For a minimal cost of less than $1 a day with most providers, and as low as $9.99 a month with others, you might be better off buying coverage rather than wait until you need help and paying sky-high legal fees  .

Does Your Home Insurance Cover Your Legal Costs?

Woman Holding Money and Smiling after Legal Help
Getting the right legal advice can help you get the money you deserve and prevent others from taking advantage of you through scams and lawsuits.. Rolf Bruderer / Blend Images / Getty Images

Your homeowners' insurance provides some legal cost coverage under its personal liability coverage, and it might offer some coverage for identity theft or fraud, but these are only a few of the legal matters you might face.

Find out what your home insurance company offers before you make a decision on your legal insurance plan options, then consider looking into coverage to plug the gaps. It pays to compare.

Legal Plans By Other Names

Collecting saving in jars
Is Legal Insurance One of The Things You've Saved For?. JGI/Jamie Grill / BlendImages / Getty Images

Legal plans go by various names, including "legal protection insurance" (LPI), "prepaid legal plans" (PPL), or just plain legal insurance.

You'll want to ask some specific questions about access to services, as well as whether there are any exclusions, so you can be sure what you're buying. Only when you understand what is being offered can you evaluate the cost.

How Does Legal Insurance Work?

Smiling Judge Get the Law On Your Side
Legal Insurance Helps Get The Law On Your Side With Good Advice. Paul Bradbury / Caiaimage / Getty Images

Legal insurance is meant to cover unexpected occurrences. If your neighbor says he's going to sue you, you can't rush out and purchase regular legal insurance that day and expect your coverage to kick in and apply to a situation you already knew about, however, there are some companies that offer coverage by way of discounts on legal services.

Legal Coverage For Existing Disputes and Ongoing Issues.

Existing issues such as divorce are usually not covered, however, there are companies that may offer discounted legal rates or coverage for a legal matter that is "in progress", even if you only call them after the fact.

Does Legal Insurance Have a Deductible?

There are typically no deductibles or co-payments, however, and some providers offer reduced fees if you have a unique problem that forces you to go out of network for an attorney. You might have to pay the attorney at the time of service, however, then seek reimbursement from the insurer in this situation. 

What Do Legal Insurance and Prepaid Legal Plans Cover?

Stack of Legal Books - Understanding the Law and Rights
Get Help Understanding Your Rights and the Law. Tetra Images / Getty Images

Coverage conditions vary from provider to provider but the plans often include counsel and legal representation in certain areas. Here are examples of coverages found in various plans.  

  • Buying and selling houses
  • Refinancing, consumer/creditor problems, avoiding bankruptcy
  • Tax questions
  • Adoption 
  • Single parent legal issues and questions
  • Help with contracts and legal documents
  • Preparing legal documents or letters
  • Protecting your rights as a tenant
  • Preparing a will or living will
  • Estate planning
  • Home improvement or contractor issues
  • Consumer protection
  • Traffic tickets

Be sure to get full details about waiting periods and eligibility for any of the above services you are interested in as each company may have limitations and exclusions.

Where to Get Legal Insurance?

Couple getting advice
Understanding Your Options With Qualified Advice Can Make a Difference. PeopleImages/DigitalVision/Getty Images

Legal insurance can be included as a benefit of a group insurance plan from your employer. First, find out if you already have coverage included through your employer group insurance or other organizations before you look into spending money on a personal plan.

Personal legal plans are sold by specific legal insurance providers who specialize in this type of coverage. LegalShield's Protection Plan offers emergency assistance around the clock. They will set you up with a local attorney for some specialized matters. They offer discounts with other lawyers who practice outside these specialized areas.

ARAG has been around for more than 80 years and it's one of the oldest providers of legal insurance with millions of customers around the world. It offers several personal plans you can choose from, as well as extensive helpful resources on their website.

U.S. Legal Services, Inc. is another provider that offers a "Family Defender Package."

Do Your Homework First

As with any type of insurance policy, do your homework before you pay for coverage. Not all insurers are created equal. Find out what type of services each plan covers and decide whether those services are likely to meet your needs.

Article Sources

  1. American Bar Association. "Access to Justice: Mitigating the Justice Gap." Accessed Feb. 24, 2020

  2. New York State Office of Children and Family Services. "New York State Cost of Financial Exploitation Study." Page 12

  3. LegalZoom. "Legal Advantage Plus Pre-Paid Legal Plan." Accessed Feb 24, 2020

  4. U.S. Legal Services. "Affordable Legal Insurance." Accessed Feb. 24, 2020

  5. Insurance Information Institute. "What Is Covered By Standard Homeowners Insurance." Accessed Feb. 28, 2020.

  6. ARAG. "Legal Now." Accessed Feb. 28, 2020

  7. LegalGuard. "Family Legal Plan." Accessed Feb. 24, 2020.

  8. LegalShield. "Personal Plan Highlights." Accessed Feb. 24, 2020.

  9. U.S. Legal Services. "Family Defender Legal Benefits Plan." Accessed Feb. 28, 2020

  10. Metlife. "Hyatt Legal Plans is Now Metlife Legal Plans." Accessed Feb. 28. 2020

  11. LegalShield. "Personal Plan Highlights." Accessed Feb. 28, 2020

  12. Arag. "About Arag." Accessed Feb. 28, 2020