Is Legal Insurance for You?
You probably don’t spend much time thinking about the legal system until some sort of problem arises. Then episodes of Law and Order or The Good Wife run through your mind, bringing worries and stress.
Legal matters are not always bad news. Maybe you inherit some property or aren’t sure about a contract. Other times you want to defend yourself from a traffic ticket or preparing for the future with a will. When you are faced with these kind of situations, legal insurance can come in handy.
Depending on your needs, you might want to look at insurance that provides coverage for routine work, or insurance that gives you more comprehensive services.
Ann McDonald is Communications Manager for Hyatt Legal Plans, part of Met Life. They offer prepaid legal plans through employers. “This is a voluntary benefit with the fee deducted automatically from your paycheck with no copays,” she explains. A plan will cost $15 to $20 each month. Within your plan guidelines, you can use attorneys as little or as much as you want during a year. 70 million people have these sorts of plans.
A prepaid plan is typically good for document work of all kinds. The hours involved in going to court are outside the scope of most of these agreements. McDonald says it is important to ask questions before signing onto a prepaid legal plan, things like “How many attorneys are in the network? Are services fully covered? Are there usage limits? What kind of customer service does the company provide? How will issues with attorneys be resolved?”
If you don’t like what your company offers, you should look elsewhere for a prepaid or insurance plan that better fits what you feel comfortable with.
Lawyers on Call
The other type of plan is insurance where you pay a monthly fee, around $20, for discounted attorney fees when needed. ARAG sells individual legal insurance plans. Dennis Healy of the ARAG executive team, says, “Legal insurance makes attorney visits more affordable. It is different than prepaid legal plans. Pre-paid plans generally give you a bank of hours and once you use that up, you have to pay for everything.” When the time comes to use an attorney, you’ll be responsible for a deductible, typically $250, similar to health insurance plans.
Another benefit of legal insurance is the ease of finding an attorney. When you need legal help is not the time to be calling every name in the phone book. If you have an insurance plan, one call can get you to someone able to find the right lawyer for your situation. Lawyer on Call plans are less common than the basic version: about one million people hold these policies.
Choosing a policy, Healy warns that you’ll need to look out for exclusions—situations where your legal insurance won’t cover you. Employment matters are usually not covered, and felonies are covered at a lower rate. You want to make an informed decision and be clear about how much you’ll be responsible for paying in different circumstances.
An additional benefit available through some legal insurance plans is elder care help. That can include guidance about living wills, power of attorney, long term care, financial counseling, and more. Each stage of life involves different legal issues, so part of choosing a plan means knowing what is on the horizon for you.