Are Prepaid Legal Services Worth It?

If there’s one thing that watching all those episodes of Law and Order will teach you, it’s that hiring a lawyer is pretty dang pricey. We all know they make bank, so of course their legal fees are out-of-this-world expensive. Considering how much a lawyer costs, is buying something like prepaid legal services a good bet? Let’s find out.

What Are Prepaid Legal Services?

Yeah, Law and Order never covered this part, did it? Think of prepaid legal services almost like insurance—you buy them in case something goes wrong and you need them. Someone buying prepaid legal services has them to fall back on when they need to talk to a lawyer, get legal advice, or have legal papers drawn up for them (like a will). And just like insurance, you pay a little bit every month to cover you whether you need it or not.

What Do Prepaid Legal Services Cover? 

Prepaid legal services include a lot of stuff. In fact, some people say it’s like buying in bulk for legal services. These services give you the ability to chat with an attorney to talk through any questions you have or advice you might need. And most prepaid legal services include creating legal documents like a will and a trust, divorce papers, child support and even property protection (like those sticky issues between a landlord and renter).  

Are Prepaid Legal Services Worth It? 

A lot of people compare prepaid legal services to health insurance—with the idea that you’re paying into something that will be there if you need it one day. But the reality is, you’re way more likely to need health insurance than you are legal services. Think about it—when was the last time you were due for a checkup, had to get your blood drawn, or needed a prescription for flu meds? Now, when was the last time you needed a lawyer? Yep, thought so.

At first glance, you might think that buying legal services in bulk like this is a good bet. But when it all boils down to it, the lower-cost plans only cover the basics like a few phone calls and making your will. You can still get access to other legal services, but they basically end up happening at a discounted rate—not for free. So what was the point in paying for those services month after month? Your guess is as good as ours. Looks can be deceiving. And when it comes to prepaid legal services, they’re all dressed up with no place to go on a Saturday night.

And let’s be real, if you need access to one of the legal documents that prepaid legal services promise you, then just go buy the thing outright. Let’s say you’re ready to make your will. Just go purchase that at a one-time cost instead of paying monthly prepaid legal costs. It’s a much better way to spend your money. We recommend using Ramsey Trusted provider Mama Bear Legal Forms to create your will.

How Much Do Prepaid Legal Services Cost? 

Prepaid legal services will usually run you somewhere around $300 a year (depending on where you live). Over 10 years, that little $300 adds up to $3,000. And while that doesn’t sound like a whole lot of money, it’s still $3,000 that you could have kept in your pocket. The reality is, most Americans won’t spend $3,000 on legal fees in the span of 10 years. So you’ve just shelled out three grand for something you probably won’t have any use for. When all is said and done, it’s not a good way to spend your hard-earned money.

Use Your Emergency Fund Instead

Instead of paying 300 bucks a year for something you might not ever have to use, just make sure your emergency fund has your back. Then, if something does come up and you need legal services, you can just pull from that money you’ve already saved up. You’re basically self-insuring in case you need an attorney one day. And investing in your emergency fund is a much better deal than paying for prepaid legal services you might never use.  

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Instead of tossing money at prepaid legal services just so you can call up a lawyer, why not talk to one of our financial coaches about your money goals? Let a trained coach walk alongside you and help make your goals happen. They can even help shed some light on what’s worth paying for and what’s not (hello, prepaid legal services).