Personal Legal Expense Insurance
The “Lawyer on Retainer” You Can Actually Afford
My friend was having a dispute with her landlord over her security deposit. Hiring a lawyer would have cost hundreds just for a consultation. But she had a personal legal insurance plan through her job, which she paid about $20 a month for. She was able to get a free consultation with a local, in-network attorney who reviewed her lease and wrote a strongly worded letter to her landlord. The landlord quickly returned her deposit. That one letter saved her over $1,000, more than covering her premiums for the next four years.
Lawyer Fees Cost $300/Hour? How I Got Legal Help for $25/Month
Making Legal Advice Accessible
I needed to get a proper will and power of attorney drafted. I called a few local estate planning attorneys, and their fees were going to be over $1,500. Then I remembered I had signed up for a legal expense insurance plan during my company’s open enrollment for about $25 a month. I logged into the plan’s portal, found a highly-rated in-network estate planning lawyer, and the plan covered the entire cost of drafting all my documents. I got top-tier legal work done for the cost of my low monthly premium.
Is Personal Legal Insurance (Prepaid Legal) Worth the Money?
A Cost-Benefit Analysis for Your Legal Needs
Whether a legal plan is “worth it” depends on your life situation. If you are a renter, have kids, own a home, or are dealing with aging parents, you are likely to face a legal issue—a landlord dispute, a will, a traffic ticket—at some point. The cost of a single hour with a lawyer can often exceed the entire annual premium for a legal plan. For about
20−20-20−
30 a month, you get access to a network of attorneys for many common legal matters, making it a very cost-effective way to handle life’s legal curveballs.
What Types of Legal Issues Does Legal Expense Insurance Cover? (Wills, Traffic Tickets, Landlord Disputes)
The “Greatest Hits” of Everyday Legal Problems
A legal insurance plan is not for major criminal trials. It is designed to cover the most common legal issues that average people face. This typically includes the drafting of estate planning documents (wills, trusts, powers of attorney), reviewing contracts (like a lease or a purchase agreement), help with traffic ticket defense, resolving landlord/tenant disputes, and assistance with consumer protection issues. For these everyday legal headaches, a legal plan can be an incredibly valuable and convenient resource.
Finding a Lawyer Through Your Legal Insurance Network
A Curated List of Vetted Attorneys
One of the best features of a legal plan is that it makes finding a lawyer simple. When I needed to create my will, I didn’t have to Google “lawyers near me” and hope for the best. I logged into my legal plan’s website and it showed me a list of five qualified, in-network estate planning attorneys in my area. The plan provider has already vetted these attorneys, so you know you are getting a reputable professional. It takes the guesswork and the stress out of finding the right lawyer for your specific issue.
Does Legal Insurance Cover Pre-Existing Legal Matters? Usually Not.
You Can’t Buy Fire Insurance for a House That’s Already on Fire
This is a critical rule to understand. A legal insurance plan will not cover a legal issue that already existed before you enrolled in the plan. You cannot get served with a lawsuit on Monday and then sign up for a legal plan on Tuesday expecting it to be covered. The plan is designed to provide protection for future, unforeseen legal events. This is why it is smart to enroll in a plan during your open enrollment period, before you actually have a specific legal problem.
Comparing Legal Insurance Plans: MetLife Legal, ARAG, LegalShield, etc.
Look at the Covered Services and Network Size
The major players in the legal insurance space are companies like MetLife Legal Plans, ARAG, and LegalShield. When you compare them, look beyond the monthly premium. You need to compare the specific list of covered legal services. Does the plan cover traffic tickets? Does it include help with a real estate closing? You should also compare the size and quality of their attorney network in your local area. A plan is only as good as the lawyers you have access to, so make sure there are plenty of well-regarded, in-network attorneys near you.
Getting Legal Insurance Through Your Employer Benefits Package
The Easiest and Cheapest Way to Get Covered
The best way to get a personal legal plan is through your employer during open enrollment. The premiums are significantly lower due to the group rate, and you have the convenience of paying through a simple payroll deduction. Many large employers now offer a legal plan as a voluntary benefit, right alongside dental and vision insurance. It’s often one of the most overlooked but highest-value perks in the entire benefits package. For around $20 a month, it provides an incredible amount of peace of mind.
Understanding Coverage Limits and Exclusions in Legal Plans
Know What’s Not Included
A legal plan doesn’t cover everything. It is crucial to understand the exclusions. Most plans will not cover legal issues related to your business or employment. They also typically exclude complex, contentious litigation, like a messy divorce or a major criminal defense case (though they may provide an initial consultation). The plan is designed for common, transactional legal matters. Always read the “What’s Not Covered” section of your plan documents so you have realistic expectations.
Using Legal Insurance for Creating Wills and Estate Planning Documents
The Most Popular and Valuable Benefit
This is, without a doubt, the number one reason most young professionals should have a legal plan. A comprehensive estate plan—including a will, a living will, and powers of attorney for finance and healthcare—can easily cost $1,000 to $2,000 if you pay a lawyer directly. A good legal insurance plan will typically cover the full cost of having all of these crucial documents drafted by a qualified, in-network attorney. The plan often pays for itself in the very first year with this single, incredibly valuable benefit.
Help with Traffic Tickets Using Your Legal Insurance Plan
Fighting That Unfair Ticket
We’ve all been there: a questionable speeding ticket that you feel is unfair. You can just pay it, or you can fight it. My legal plan provides a benefit for traffic ticket defense. I can get a consultation with an in-network traffic attorney who can advise me on my options. In many cases, the plan will even cover the attorney’s fee to represent me in court to try to get the ticket reduced or dismissed. This can save you from a hefty fine and a major increase in your car insurance premiums.
Landlord/Tenant Dispute Resolution with Legal Insurance Assistance
Having a Lawyer on Your Side
When my friend was moving out of her apartment, her landlord was trying to unfairly withhold her entire $2,000 security deposit. She used her legal insurance plan to get a free consultation with an attorney who specialized in tenant rights. The attorney wrote a formal demand letter to the landlord, citing the specific state laws the landlord was violating. Within a week, my friend received a check for her full deposit. The legal plan gave her access to professional power that she couldn’t have afforded on her own.
Does Legal Insurance Cover Divorce or Criminal Cases? Often Limited or Excluded.
It’s Not for Major Litigation
It is crucial to understand that a standard legal plan is not designed to cover a contested divorce or a major criminal defense case. These types of litigation can cost tens of thousands of dollars. However, most legal plans will provide a benefit for an initial consultation with a family law or criminal defense attorney. Some may also cover the legal fees for an uncontested divorce or a minor issue like a misdemeanor. For major legal battles, you should expect to pay for your attorney out-of-pocket.
Filing a “Claim” or Accessing Services Through Legal Insurance
It’s More Like a Referral Service Than a Claim
Using a legal plan is different from filing an insurance claim. You don’t have a problem and then get a reimbursement. Instead, when a legal need arises, you log into the plan’s website or call their 800-number. You tell them what your issue is (e.g., “I need a will”). They will then provide you with a case number and a list of in-network attorneys who specialize in that area of law. You then contact the attorney directly, give them your case number, and the plan covers their fees for the covered service.
The Cost of Legal Insurance vs. Paying Lawyers Out-of-Pocket
An Easy Calculation
The average hourly rate for an attorney in the U.S. is over $300. A standard legal insurance plan costs around $25 a month, or $300 a year. This means that if you use the plan for just one hour of an attorney’s time in a given year, you have already broken even. If you use it to have a will drafted, which might take several hours of an attorney’s time, you have come out far, far ahead. The math is simple: the plan is a very cost-effective way to handle common legal needs.
Is the Quality of Lawyers in Legal Plan Networks Good?
Yes, They Are Vetted Professionals
A common concern is whether the lawyers in a legal plan’s network are any good. The major legal plan providers, like MetLife Legal and ARAG, have a rigorous vetting process for the attorneys they allow into their network. These are typically established, well-regarded local attorneys and law firms. They agree to be in the network because it is a source of new client referrals for them. You are not getting a “B-team” lawyer; you are getting access to the same quality professionals you would find on your own.
My Experience Using a Prepaid Legal Service
From Skeptic to Believer in One Use
I’ll admit, I was skeptical when I signed up for my legal plan at work. It was cheap, so I figured, “why not?” Six months later, my wife and I bought our first house. I remembered the plan covered real estate matters. I used their network to find a real estate attorney to review our closing documents. The attorney’s fee of $750 was completely covered by the plan. In that one transaction, the plan saved me more than two years’ worth of premiums. I went from being a skeptic to a true believer.
Who Benefits Most from Personal Legal Expense Insurance?
People Navigating Major Life Stages
While anyone can benefit, legal insurance is especially valuable for people who are going through major life transitions. This includes young professionals who are renting apartments, buying their first home, getting married, and starting a family (which means they need a will). It’s also valuable for those who are dealing with the legal affairs of aging parents. If you anticipate needing legal services for any of these common life events in the near future, a legal plan is an incredibly smart and proactive financial choice.
Understanding In-Network vs. Out-of-Network Attorney Coverage
Staying In-Network Maximizes Your Benefit
A legal plan works best when you use an in-network attorney. For a covered service, the plan will pay the in-network attorney’s fee in full. However, most plans do provide an “out-of-network” benefit if you want to use your own lawyer. But this benefit is much more limited. The plan will simply reimburse you a set amount from a fee schedule. For example, it might reimburse you up to $500 for the cost of a will. If your out-of-network attorney charges $1,000, you will be responsible for the difference.
Trial Defense Coverage: A Key Feature in Some Legal Plans
Protection for a Civil Lawsuit
A valuable feature in some more comprehensive legal plans is a “trial defense” benefit. This provides a certain number of hours of pre-trial and trial time if you are named as the defendant in a civil lawsuit. For example, if you are sued over a contract dispute, this benefit could cover dozens of hours of your attorney’s time. This goes beyond the simple transactional matters and provides a crucial layer of protection against the high cost of litigation. It is a feature worth looking for when you are comparing plans.
Legal Insurance: Making Everyday Legal Help More Accessible
The Bottom Line
The legal system can be intimidating and expensive. A personal legal insurance plan is a simple and affordable tool that democratizes access to legal help. For a low monthly premium, it provides you with a network of vetted attorneys who can help you with the most common legal issues of modern life—from drafting a will and reviewing a contract to fighting a traffic ticket and dealing with a difficult landlord. It replaces the fear and high cost of hiring a lawyer with the confidence of knowing you have an expert on your side.