Legal Protection

Lawyers are notoriously expensive, often charging hundreds of dollars per hour of their time. Many people who would benefit from legal counsel end up getting the short end of the stick because they can't afford a lawyer. The American Bar Association has estimated that about 80 percent of low-income individuals don't get the help they need because they simply can't afford the fees.

But even those with more solid incomes might wince at what it will cost them if they should ever need legal help. Legal insurance can be a great, relatively inexpensive option when you need guidance or you're not sure you understand your legal rights.

Who Can Benefit From Legal Insurance?

Almost anyone can benefit from purchasing a plan because legal insurance really doesn't cost very much. It can help you find advice for many situations that come up as you're starting out in life, buying a home, or starting a family.

Legal insurance can also be beneficial later in life as you sell property, manage your assets, deal with estate management or planning. Seniors are at increased risk of dealing with certain types of scams and fraud. Having access to a lawyer can help prevent becoming a victim.

For a minimal cost of less than $1 a day with most providers, and as low as $15 a month with others, you might be better off buying coverage rather than wait until you need help and paying sky-high legal fees. Some plans are pricier, however—up to $100 a month in some cases, but you get what you pay for.

Does Your Home Insurance Cover Your Legal Costs?

Your homeowners' insurance provides some legal cost coverage under its personal liability coverage, and it might offer some coverage for identity theft or fraud, but these are only a few of the legal matters you might face.

Find out what your home insurance company offers before you make a decision on your legal insurance plan options, the consider coverage to plug the gaps. This could save you some money, so it pays to compare.

Legal Plans By Other Names

Legal plans go by various names, including "legal protection insurance" (LPI), "prepaid legal plans" (PPL), or just plain legal insurance.

You'll want to ask some specific questions about access to services, as well as whether there are any exclusions, so you can be sure what you're buying. Only when you understand what is being offered can you evaluate the cost.

How Does Legal Insurance Works?

Legal insurance is most often compared to health insurance, where you can be covered for issues that did not exist when you first purchased the coverage. Issues that existed before the purchase of the coverage are sometimes excluded.

Legal insurance is meant to cover unexpected occurrences. If your neighbor says he's going to sue you, you can't rush out and purchase legal insurance that day and expect your coverage to kick in and apply to a situation you already knew about.

There are typically no deductibles or co-payments, however, and some providers offer reduced fees if you have a unique problem that forces you to go out of network for an attorney. You might have to pay the attorney at the time of service, however, then seek reimbursement from the insurer in this situation.