How Much Does Legal Insurance Cost?

by Lisa A. Koosis
Judge gavel at the judicial office for judicial matters.

Whether you’re buying a home, disputing a traffic violation or preparing to head to court, lawyers’ fees can be staggering. Although costs vary widely depending on where you live and the type of services you need, you can expect to pay at least $50, according to Forbes. (CAD 67) per hour to work with an attorney. In many cases, you'll have to shell out even more, with average hourly costs nationwide coming in at a whopping $250 to $350 (CAD 337 to CAD 471).

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Personal legal insurance, which can be purchased for as low as 50 cents (CAD 0.67) per day, can make it more affordable to seek legal assistance, but not all plans are created equal. Here’s what you should know before signing on the dotted line for a prepaid legal services plan.

What Is Personal Legal Insurance?

The term "personal legal insurance" is actually a misnomer, because these policies aren’t insurance at all. Although they’re sometimes sold by traditional insurance companies, such as MetLife and Allstate, personal legal insurance policies are prepaid programs that offer access to a network of attorneys at a discounted price or no cost at all. They’re sometimes referred to as prepaid legal services or legal services memberships.

Essentially, these plans are designed to keep legal services affordable for consumers. Depending on the program, a subscriber may seek legal services through plan-contracted attorneys at no cost or at a reduced hourly rate. Personal legal insurance may also help consumers avoid having to lay out costly retainers before contracting with a lawyer.

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What Does Personal Legal Insurance Cover?

Although the specific coverage you'll get depends on the provider and plan you choose, you can typically get assistance for a wide array of legal issues, including:

  • Contracts
  • Identity theft
  • Credit issues
  • Estate planning
  • Traffic violations
  • Personal injuries
  • Property damage
  • Personal real estate
  • Document preparation
  • Consumer protection

It's important to note that most personal legal plans have limitations and may not cover all legal matters. For example, many plans don’t cover divorce, custody issues and other family court matters. Plus, because these prepaid plans are designed for personal use, they typically don’t cover business-related issues, including malpractice. Some plans may also limit the number of visits or the amount of hours allotted for services.

Additionally, many personal legal plans have waiting periods before coverage begins. However, if you’re experiencing legal trouble, some plans will cover pre-existing legal matters, as long as you haven’t already retained a lawyer.

What Other Benefits Does Legal Insurance Provide?

Many legal insurance providers offer supplemental digital resources at no additional cost. These may include knowledge databases and self-guided online forms for creating wills, living trusts, divorce agreements and power of attorney documents. 

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How Much Does Personal Legal Insurance Cost?

Personal legal insurance typically costs anywhere from 50 cents to $1 (CAD 0.67 to CAD 1.35) per day, which translates to about $15 to $30 (CAD 20 to CAD 40) per month. However, the cost of these plans varies depending on variables such as:

  • The issuer
  • The deductible
  • The level of coverage
  • The network size
  • The availability of specialty attorneys
  • Coverage for spouses and dependents
  • The option of using out-of-network attorneys
  • The type of services available
  • The availability of discounts for non-covered services

Many issuers offer several plan tiers, so consumers may choose a coverage level, deductible and premium payment that fits their needs. Some companies may refer to these premium payments as membership fees.

Additionally, some employers may offer a legal insurance plan as part of a comprehensive benefits package. These programs may be paid for by the employer or may be available for employees to purchase at a special group rate through a standard payroll deduction.

All CAD conversions are based on the exchange rate on the date of publication.

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