Differences between Pre-Paid and Legal Plans

It is not uncommon to see the terms “legal plans” and “pre-paid legal

services” used interchangeably. While they share a lot of characteristics

in common, there are a number of differences you should be aware of.

Both of these terms refer to an arrangement whereby you pay a fixed monthly

or yearly fee in exchange for legal services. The idea behind them is to

save consumers on high legal fees whilst offering a valuable service.

That’s where the differences lie: what kind of service is offered and what

is covered. What are you entitled to in both schemes?

Pre-paid services cover for specific legal services: free phone

consultation and advice, drafting of simple wills and trusts, review of

sample contracts and writing of letters on your behalf. Legal services not

provided will get charged at regular attorney fees, but you may be eligible

for discounts.

Legal insurance, by contrast, works much like other insurance plans, like

health or car insurance. Although specific legal services are offered at

times, your insurance provider will typically offer a policy that covers

for all legal services. The policy will pay on behalf of you, the policy

holder, or reimburse all expenses, costs or fees that you pay for legal

services up to the policy limit. For instance, your policy might reimburse

any fees incurred in your court judgments or pay your bail money – a

service not provided by most pre-paid legal plans.

Your legal insurance is also pegged to other insurance policies you may

already have. If you run into legal problems involving your other

insurance, then your legal insurance policy will protect you against loss

or liability. For instance, if you are involved in a car accident when your

auto-insurance has already run out and you are subsequently sued for

recovery of damages, you will be protected by a legal plan insurance.

The other difference between the two schemes is related to your choice of

attorney. In a pre-paid legal service, you get to choose from a restricted

number of the attorneys in the network. By contrast, a legal insurance plan

provides legal coverage regardless of attorney. You are free to set up

interviews with any number of attorneys and choose the ones you think will

provide the best service for your personal legal needs.

Finally, pre-paid legal plans are much more accessible to the general

public. Legal plans are harder to come by as only a limited number of

insurance companies offer such arrangements.

An Intro To Legal Plans

What if you could pick up the phone and call an attorney to get advice

about any and all legal matters of interest to you? The attorney would

draft your will, review it and update it for every other year, make phone

calls and write letters on your behalf negotiate your contracts and

represent you in court. If you are traveling in another state and need any

form of legal advice, he will refer you to a competent attorney in that

state for no extra cost to you.

This all seems great on paper, but the mere thought of paying hundreds of

dollars an hour to put an attorney on retainer is enough to persuade most

people not to seek legal coverage.

You will be surprised to know that such coverage does indeed exist under

an arrangement similar to your health or insurance plan. Pre-paid legal

plans offer you access to all these legal services, for a monthly charge

of $10 to $25. If you are employed, you may incur no charge if your

employer provides legal services as a fringe benefit.

Access Plans

If you are a member of a pre-paid access plan and are not getting the
legal services you think you need, then it is probably time to upgrade
to a more comprehensive plan.

A comprehensive prepaid legal service plan is designed to cover for the

majority of your legal service needs in a given year. Access services, such

as legal advice and information by toll-free number and follow-up service,

are provided at no cost to you. It’s in the realm of more complex legal

matters that require more time and effort from your attorney, that the

comprehensive plan is more beneficial than a basic, access plan. You
can have your trust set up, instead of a simple will, and a more
complicated business sale contract drawn up as opposed to a simple
contract. Legal representation can equally be provided in court for
some cases, such as child custody.

Comprehensive prepaid plans are most suitable for people who need
business advice, have family trusts or own real estates properties.

Common Services offered by Pre-paid legal Plans

Considering a pre-paid legal plan? Here’s a run-down of the services

you’re most likely to get and also some legal documents you need to sign

before you enroll.

Telephone and Office Consultation: You have unlimited telephone
access to a panel of attorneys regarding any legal matter of interest to
you. You can also make brief consultation visits to your lawyer for
up to 30 minutes per day at no cost to you.

The only condition placed on these two benefits is that you enquire about

a different legal matter.

This aspect of coverage provided by legal plans is one of the most

beneficial because it promotes preventive law. Preventive law is very
much like preventive medicine – it helps in anticipating potential
problems and taking the appropriate legal steps so that unnecessary
legal problems or risks are avoided. With a simple phone call to
your lawyer you can avoid getting embroiled in a hellish legal situation,
and you can even identify legal rights you don’t even know you had.

Follow-Up Service: The panel of lawyers will write letters and
make phone calls on your behalf to adverse third parties.
Such follow-up service may be all it takes to solve many of
your legal problems.

Legal document review: Simple personal legal documents, such
as your insurance policies, sales contracts and leases will be reviewed.
Any questions of legal nature that you have about the documents will
also get answered by your attorney.

Drafting of wills: A will is a written document that regulates how
you want your property distributed after your death. Your attorney
will draft your will according to your state’s laws so that it’s valid
when you die. He will also advise you on any provisions you might
want to consider, such as appointing a guardian and establishing a trust.

Discount on regular fees: Any additional services not covered in the

written fee agreement will be at regular fees – either hourly or flat –

with a discount between 20 to 30%. These services generally include
family matters, such as divorce and the custody of children, and court

representation, such as traffic tickets and lawsuits.

Some of the legal paperwork you need to read carefully, agree on and
sign include the following:

Written fee agreement: This is an agreement that outlines what
services are provided in the plan, how much it costs and the
methods of payment.

Grievance procedure: This document details the procedures
that will be taken by the provide to resolve any complaints about
attorneys or disputes regarding service fees.

Benefits of Pre-paid legal plan for your company

Employers are on the hunt - researching benefit tools that are low-cost,

easily administered and satisfy their employees’ needs. One such tool is

pre-paid group insurance. We examine the benefits of having such a

work-benefit option from an employer’s perspective.

The first benefit employers expect from legal insurance plans is increased

productivity and efficiency. Today’s employees are interested in a variety

of benefits to balance their work with their life requirements. Given that

most American household had an issue with law last year that might have
led them to hire a lawyer, it’s only normal that a legal benefit would
increase employees’ morale and efficiency.

Having legal benefit as part of a work-benefit package can help the
company recruit and retain the best employees. In this age of
work-benefithysteria, many prospective employment candidates base
their career choices on the set of benefit package provided by employers.

Cost containment is another benefit. With less time and resources to be

used for personal matters, the company expects to make significant
savings on administrative costs.

Benefits of Pre-paid legal plans

Pre-paid legal services can be a very attractive
alternative to hiring a lawyer for many people.
You should consider the importance and relative

priority of these benefits in light of your own legal
needs.

So what are the benefits going pre-paid
compared to conventional hire of lawyers?

Benefit Number 1: Cost-Effective

Pre-paid legal plans can take the sting out of hiring a lawyer. Lawyers’

fees are prohibitive for most people: you can run bills of thousands of

dollars and this is simply out of reach of most working and middle-class

families.

With pre-paid plans, what you get charged is more in line with what you

pay for your health or home insurance. Plans start as low as $9 per month

and typically don’t exceed the $30 mark.

Benefit Number 2: Simplicity

There is a number of very complicated set of fees lawyers charge:

contingency fees, flat fees, statutory fees and hourly rates. In the case

of contingency and statutory fees, you have to get into the intricate

details of how these fees are computed – say for a contingency fee how

much is the lawyer’s commission? – and their regulatory nature – who

regulates the statutory fee and how do I know if these fees are in line

with regulatory guidelines?-.

The other two types of fees can be equally as complex. Increasingly,

attorneys choose to incorporate any overheads they incur, like secretarial

expenses, parking charges and travel fees into their flat and hourly fees.

They can also set a minimum number of billing units, like three tenths of

an hour (18 minutes), irrespective of how long it takes them to deal with

your problem.

This is just a sample rundown of what might influence the various fees

charged by lawyers, other factors and arrangements can apply too.
Contrast this with the simplicity in which pre-paid legal services are
priced and furnished. The process is simple and straightforward: you
sign an agreement to pay a fixed monthly fee and that’s about it. If
what you’re looking for is not covered, your plan provider will give
you a prior notice of a different billing so that you know exactly how
much you will be charged.

Benefit Number 3: Pre-emptive Law

Pre-paid plans offer unlimited phone consultation and advice. This aspect

of the service can save you a lot of trouble, money and time in the

future. Most legal problems you are likely to face in your day-to-day life

can be solved if you take the necessary steps in line with the law. With

the right advice and consultation with your lawyer, you can detect legal

blunders before they occur and hence minimize the risk of litigation and

protection.

Durable Power Of Attorney Or Living Will

A Living Will is a legal document addressing only deathbed considerations; a client unilaterally declares his/her desire that life-prolonging measures be discontinued when there is no hope of ultimate recovery. On the other hand, people use a Durable Power of Attorney for Health Care to appoint someone to make all healthcare decisions, limited by certain elections regarding deathbed issues. The client must be at least 18 years old and mentally competent at the time he/she executes either document but incompetent to participate in the decision-making process when either is implemented. It is important to remember that both documents are only applicable if the client is incompetent. Under the a Living Will, a client declares that if he/she is certified to have an incurable, terminal injury/illness and/or to be permanently unconscious by two examining physicians (including the client's attending physician), that artificial life-support systems be withheld or disconnected. The client may also elect to discontinue artificial nutrition and hydration (intravenous feeding) by so designating on the form. (Find more information at: legalhelper.net/living-will.aspx) Under the Health Care Power of Attorney, the client makes three separate and independent elections authorizing the agent: 1. To direct disconnection of artificial life-support systems in the event of terminal illness; 2. To direct disconnection of artificial life-support systems in the event of irreversible coma; and 3. To direct discontinuation of artificial nutrition and hydration. In addition, the Health Care Power of Attorney form provides a space for the client to set forth any specific medical, religious or other desires concerning his/her health care. The client may also use this section as a backup source for organ donation. (Find more information at: legalhelper.net/power-of-attorney.aspx) Both documents are signed in front of two witnesses and a notary public or a justice of the peace who acknowledges the client's signature. The witnesses to a Living Will are sworn by the notary public/justice of the peace and indicate that the client is at least 18 years of age and signed the instrument as a free and voluntary act. The Living Will witnesses may not be the client's spouse, attending physician, heirs-at-law or person with claims against the client's estate. The Health Care Power of Attorney witnesses may not be the designated agent, the client, spouse or heir or person entitled to any portion of the client's estate upon death under Will, Trust or operation of law. People are frequently confused as to why both a Living Will and Health Care Power of Attorney are necessary or appropriate. The Living Will is helpful as a backup document: In the event that the client enters an irreversible coma and the health care agents designated in the Health Care Power of Attorney are deceased or unloadable, the Living Will sets forth the desires of the client concerning his/her death-bed treatment which may be followed by attending physicians. The law provides that to the extent that a Durable Power of Attorney conflicts with a Living Will, the Health Care Power of Attorney controls. Copies of both the Durable Power of Attorney for Health Care and the Living Will are forwarded to the client's primary care physician for inclusion in medical records. Both documents are revocable through normal revocation procedures. Note that LegalHelper.net provides an easy-to-use, quick, and economical online method for creating completed legal documents for any occasions. About the author: James Wood is a free-lance writer on family issues; his main goal is to help people during their complicated period of life, to find a right legal solution in regards to family relationship.www.legalhelper.net/power-of-attorney.aspx wjames@legalhelper.net