What Is Legal Insurance and Is it Worth It? 

Having an experienced lawyer or team by your side can make all the difference if and when legal matters arise. But sometimes, finding an attorney can be challenging. Legal insurance, which provides access to a network of attorneys to assist in navigating legal matters, can help. Let’s discuss what legal insurance is, what it can cover, and how to decide if it’s worth it for you. 

What is legal insurance?

Legal insurance, also known as prepaid legal or group legal, offers coverage that grants individuals and families access to a network of qualified attorneys. With legal insurance, participants can receive advice, have attorneys review and draft legal documents, and receive consultation or representation in court — typically at a fraction of the cost associated with hiring a lawyer.  

How does legal insurance work?

Legal insurance is often included as part of a workplace benefits package. Employees have the option to enroll in a plan by paying a monthly premium or yearly fee to gain access to the benefits. 

These plans leverage a network of attorneys who have agreed to provide services as part of their contract with an organization. There are typically no bills, deductibles, or claims forms to fill out, provided you use an attorney within the plan’s network.  

What does legal insurance cover?

Legal insurance usually provides coverage for a wide range of legal issues, excluding some matters like those involving the workplace. The areas and circumstances they typically cover include:

• Wills and estate planning - Last will and testament, trust funds, asset distribution, etc. 
• Relationship changes - Marriage, separation, divorce, etc.
• Family law matters - Custody, adoption, child fostering, etc. 
• Real estate - Buying or selling a house, land disputes, etc. 
• Minor legal infractions - Traffic violations, civil cases, property disputes, etc. 
• Consumer protection - False advertising, unfair business practices, etc. 
• Bankruptcy - Choosing which chapter to file, associated legal proceedings, asset protection, etc.
• Personal protection - Identity theft, fraud, etc. 
• Contract law - Understanding, interpreting, and identifying potential issues such as loopholes, handling sensitive information, compliance, etc. 
• Sending kids to college - Security deposit costs, lease documents, student loans, etc.
• Caring for aging parents - Nursing home agreements, Medicare/Medicaid, hospital bills, etc.

Is legal insurance worth it?

Even if you don't anticipate facing legal issues or needing a lawyer, having some form of protection to support you can be extremely valuable. It's important to remember that not all legal matters involve conflicts. Simply having a lawyer to navigate complex documents or agreements can bring reassurance during major life events like buying a home or adopting a child. Legal insurance can help you save money and effort. Here are some reasons why enrolling in a plan may be a wise investment: 

It can provide a cheaper avenue to legal services 

An attorney's average hourly rate is around $391. But with legal insurance, you get access to a network of attorneys at a lower cost.  

You can get quicker access to qualified attorneys 

Legal insurance provides access to a network of reputable professionals. This can save you time, stress, and effort when searching for a trusted lawyer. 

It can help prevent court delays 

A lawyer can review your legal documents to help prevent inaccuracies and complications in court. For instance, relying solely on a free online will without a properly executed trust could lead to your estate being stuck in probate for several months to more than a year.

This can cause financial difficulties for your heirs (or beneficiaries) if they don't have access to funds for funeral bills or mortgages. A lawyer won’t necessarily guarantee your estate avoids probate, but their expertise can help improve the chances of a smoother, faster process. 

You have access to coverage

Legal insurance covers more than just estate planning. Coverage can encompass family law, real estate matters, and civil litigation. Review the specific coverage details of your plan to understand any limitations or exclusions. 

When is it a good idea to get legal insurance?  

Enrolling in legal insurance can be beneficial in several situations. For example, it can provide valuable assistance if you’re actively planning or preparing for big life changes — like marriage, divorce, or adoption. These events often involve complex legal procedures and documents, such as prenuptial agreements, divorce settlements, and adoption agreements. It can also help you create essential life-planning documents, like a will.

Also, unforeseen circumstances — like traffic tickets, identity theft cases, or sudden deaths — can require legal protection. Enrolling in a legal insurance plan before you need legal assistance can help you feel supported and prepared. 

How can I get legal insurance? 

You can enroll in legal insurance during an open enrollment period — typically in October and November — if it's offered as a group benefit by your employer. You may also be able to enroll if you experience a qualifying life event outside of open enrollment. In either scenario, check with your company’s human resources department for more details. 

To determine which legal plan best fits your needs, review and compare various plan options, coverage details, costs, and any limitations or exclusions. Then, follow the enrollment process outlined by your employer or insurance provider.  

As you prepare for open enrollment, consider the advantage of adding legal services to your financial protection benefits. Enrolling in a legal plan means having access to qualified lawyers who can guide you through legal processes whenever you need it – and at a significantly lower cost than typical legal fees.