Legal insurance plans work in a variety of ways. Depending upon the plan, features may include some of the following:
Discounts on legal services through a network of attorneys;
Free legal services, such as a brief phone consultation or the preparation of a property deed or simple will; and
Access to a database of legal forms and documents.
One of the major legal services plans reports that more than half of new subscribers drop out of the plan after their first year. This suggests that many people either obtain a prepaid services plan only when they need it, or don't find the benefits to be worth the price.
How do you determine if a legal insurance plan is right for you? You evaluate your probable legal needs over the term of the plan, generally one year, and evaluate whether the plan will provide you with discounts or covered services that exceed its cost.
When you consider a plan, pay careful attention to what the plan does and does not cover. If you don't anticipate having legal needs in the coming year which will be covered by the plan, you should think carefully before purchasing a plan. Similarly, if you think that you might take advantage of a service under the plan, such as the preparation of a simple will, be aware that attorneys who accept the plan will likely try to sell you an upgraded service. In some cases, it will make sense to obtain the upgraded service but there may not be any cost savings as a result of plan membership.
Also, if you find that you don't like the attorney available through your plan, you may find that you are unable to change attorneys through the plan, or that there are no other attorneys in the area who participate in the plan. You may wish to inquire as to the identities of local attorneys who accept the plan before making the decision to purchase any given plan.
The most clever use of a legal insurance plan that I have heard about was by a real estate agent, who found a plan that covered the preparation of a deed for a real estate transfer. He would have his clients sign up for the plan, and they would then obtain the deed through the plan's attorney. The cost of the plan was significantly less than the attorney would otherwise charge for the deed. On top of that, the real estate agent received a commission on each plan sold. The clients typically cancelled the policies after the first year. While not every situation or plan is amenable to such clever use, this example does illustrate that a well-chosen prepaid legal services plan can benefit a consumer with a known legal need. (That particular plan is no longer available.)
Purchasing Legal Insurance
You may be eligible for a legal insurance plan through your employer. If not, you may wish to look at plans endorsed by or sponsored by a reputable organization, such as the American Bar Association. Similarly, your regional Better Business Bureau may be able to provide you with consumer information about particular plans.
If you are purchasing a plan through an independent representative, as opposed to directly from the corporation that sponsors the plan, you should pay special attention to the written language of the plan as opposed to any promises made by the representative. Plans that sell through multi-level marketing may refuse to take responsibility for any false promises made by an independent representative, who may well be primarily motivated by earning a commission rather than your best interests.
Some legal insurance plans solicit members of the public to sell the plans through multi-level marketing programs. Most people who participate in multi-level marketing do not enjoy the experience and drop out. Some people seem to have a natural inclination toward that type of marketing and to network sales, and thus may find this type of program to be attractive. As the example of the real estate agent, described above, indicates, there may be a natural niche in your business where selling prepaid legal services plans can benefit both you and the buyer, and it may be a good adjunct to your regular business activities.
While typically charging for the privilege of selling their plans, some plans which engage in network marketing report that more than half of their associates do not sell even a single plan. Be very careful about paying for the opportunity to participate in any multi-level marketing scheme, as often the largest profits are in the sale of the opportunity as opposed to the product ostensibly being marketed through the scheme.
If you search the Internet, you will find a lot of information about legal insurance plans, and complaints by former sales associates and customers.