Many people have health, life, car and home insurance coverage but how prevalent is legal insurance? The amount of legal run-ins people finds themselves in has turned the question from Will I ever need legal help? to When will I need legal help? The American Bar Association (ABA) is of the opinion that most Americans see legal assistance as essential, but due to high attorney fees, most people do not use legal representation when they really need it.
The average legal representation can cost anywhere from $100 to $1000. These high fees make people weary of seeking legal representation unless absolutely necessary. There are many instances where a person could have gotten better legal advice on a specific issue had it not been for their reluctance in paying the high fees.
The answer to this could be prepaid legal insurance. Just like other prepaid insurance schemes, prepaid legal insurance will ensure that you benefit from certain legal representation and advice in exchange for a fixed low monthly fee. The fee would often be payable in advance and you could then be able to access legal services as stated in your contract.
You would normally be able to access a variety of services from assistance in appraising legal documents, divorce representation in case of divorce matters with your spouse, DUI, real estate planning and court appearances. Sometimes, a small business owner working out of his home can even get business legal representation from a small business attorney as part of the legal insurance cover.
This kind of contract is ideal for those who are not financially able to have an attorney on retainer basis. This deal also gives you a network of legal experts for any legal matter you may be facing, that is covered by your legal insurance. The deal could also include a discounted rate on services not covered by your contract.
As great as this concept is, the reality is that more than 50 percent of new subscribers will end the contract after only one year. This is due to people not needing legal representation in their first year, so they feel like they are wasting money paying this monthly fee. Some subscribers who leave after a year may have had legal issues within that first year, but realise that their legal issues may not be covered in their contract and have had to pay an additional fee to get legal representation, thus one should consult a contract lawyer to check any contract before signing.
Any unclear terms in any signed contract can cause the holder of prepaid legal insurance to feel like this is not beneficial for them. The onus should be on those who offer these contracts to ensure that subscribers are getting their money’s worth to avoid high levels of cancellations. Other issues that have been noted is that with pre-paid legal plans, the chances are high that you will get a beginner or trainee lawyer due to pre-paid legal subscribers paying a lower legal costs than clients on retainers.
The inexperience of their legal representatives can cause subscribers to deduce that it’s not worth the subscription and they often end up cancelling the plan because of that. Some people will convince themselves that they can save the monthly subscription fee in the event they might need legal representation. This might seem like a better solution to some simply because this gives them certainty that their legal requirements will be met and more so with the quality and seriousness they think it deserves.