What Is Legal Insurance?

Chances are you already have car insurance, health insurance and homeowners insurance, but do you have personal legal insurance? While legal services may not be something you think about often, there are many times in life that having legal advice or representation can help, such as setting up a will, going through a divorce or being sued by your neighbor over a property dispute.

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Unfortunately, legal fees can be quite high, but legal insurance helps reduce these fees and provides the advice or representation you need. Whether you’re considering purchasing your own personal legal insurance plan or a group plan through your employer, it’s important to understand exactly what legal insurance is and how it works.

What Is Personal Legal Insurance?

Personal legal insurance — also referred to as prepaid legal services or personal legal protection insurance — covers certain types of legal services. While the policyholder is always covered, some plans also cover services for the policyholder’s family members, including their spouse and children.

Typically, legal insurance covers legal fees when working with an in-network attorney. Some plans may also cover a portion of legal fees for out-of-network legal services. Additionally, some plans include access to free legal advice through a toll-free number.

Some employers offer legal insurance as an extra benefit. However, you can also purchase this type of insurance on your own. The cost of this insurance is usually very low.

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How Does It Work?

There are several factors to consider when using your legal insurance.

Services Covered

Most legal insurance plans detail exactly what services they cover. Common legal services covered include:

• Wills and estate planning
• Minor legal representation (traffic court, misdemeanors, civil cases)
• Real estate transactions
• Family law issues (prenups, divorce, child custody, adoption)
• Contract reviews (leases, nursing home agreements, loans)
• Bankruptcies
• Identity theft
• Property disputes (claims filed against you)

In-Network Legal Services

Most legal insurance plans also have a network of legal attorneys and services. To receive coverage for these services, you must go to an attorney within this network. While some plans will cover a portion of the costs for out-of-network legal services, it’s important to read the specifics of your plan to learn more.

Coverage Limitations

Most plans also come with various limitations. For instance, it might limit the number of hours it will cover for certain legal services. It may also limit the number and type of criminal cases it covers per year.

If you’re getting your insurance through your employer, it likely won’t cover any costs for legal action against your employer, such as a workers’ compensation or an unemployment claim. Additionally, if you quit your job or you’re terminated, your insurance will likely end on your last day of work.

Waiting Period

Your legal insurance plan will likely include a waiting period. This means you have to wait several months before you can use these services. The purpose of this waiting period is to prevent individuals from waiting until they need legal support to purchase a policy.

Claims Process

If the type of legal services you need meets the insurance plan’s requirements, your first step should be to contact your insurance provider. The insurance company will request your basic information, policy number and a brief explanation of the legal services or representation you need. Your insurance provider can connect you to an in-network attorney that best meets your needs.

More Related Articles:

• When Do You Need a Lawyer? Determine If You Need to Hire an Attorney
• How Much Are Court Costs?
• What Is a Misdemeanor?
• What Is Legal Precedent?
• How Do You Fire Your Attorney?

Who Is Personal Legal Insurance for?

Anyone can benefit from personal legal insurance. Because the premiums for this type of insurance are so affordable, it can typically pay for itself with just a few legal services per year. After all, legal fees can cost well over a hundred dollars per hour.

If your employer offers a personal legal insurance option, premiums can be deducted from your paycheck for added convenience. On the other hand, if you choose to purchase individual legal insurance, you can make monthly or annual payments.