What’s The Difference Between Pre-Paid And Legal Plans?
It is not uncommon to see the terms ‘legal plans’ and ‘pre-paid legal services’ used interchangeably. While they share a lot of characteristics in common, there are a number of differences you should be aware of.
Both of these terms refer to an arrangement whereby you pay a fixed monthly or yearly fee in exchange for legal services. The idea behind them is to save users throughout high legal fees whilst offering a pricy service. That’s where the differences lie: what kind of service is tendered and what is covered. What are you entitled to in both schemes?
Pre-paid services cover for specific legal services: free phone consultation and advice, outlining of simple wills and trusts, review of sample contracts and coding of letters on your behalf. Legal services not provided will get charged at regular attorney fees, but you may be eligible for discounts.
Legal insurance, by contrast, works much like other insurance plans, like health or car insurance. Although specific legal services are tendered at times, your indemnity provider will typically offer a policy that covers for all legal services. The policy will pay throughout behalf of you, the policy holder, or reimburse all expenses, costs or fees that you pay for legal services up to the policy limit. For instance, your policy might reimburse any fees incurred in your court judgments or pay your bail money – a service not provided by most pre-paid legal plans.
Your legal indemnity is also pegged to other indemnity policies you may already have. Whenever you run into legal problems involving your other insurance, then your legal insurance policy will protect you against loss or liability. For instance, if you are involved in a car accident if you’re auto-insurance has already run out and you are subsequently sued for recovery of damages, you will be protected by a legal plan indemnity.
The other difference between the two schemes is related to your choice of attorney. In a pre-paid legal service, you get to choose from a restricted number of the attorneys in the network. By contrast, a legal insurance plan provides legal coverage regardless of attorney. You are free to set up interviews with any number of attorneys and choose the ones you think will provide the best service for your personal legal needs.
Finally, pre-paid legal plans are much more accessible to the general public. Legal plans are harder to come by as only a limited number of insurance companies offer such arrangements.
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