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What are prepaid legal services?

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Quick Answer

Prepaid legal services function similarly to health insurance; a person pays a certain rate every month, and when he needs a legal service such as a will drafted, a lawyer performs the service, according to the American Bar Association. Basic service tends to include telephone consultations and simple in-person visits.

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Full Answer

The majority of prepaid legal services provide for review of legal documents such as contracts, preparing a basic will, and basic letters and phone calls for a lawyer to make in a legal matter, says the American Bar Association. A customer can use basic prepaid legal services to get representation in traffic court, make a living will or make provisions for nursing home care, and analyze buyer offers on a home sale. More advanced plans include coverage for trials, bankruptcy, real estate issues, marital issues and more.

For lawyers, one advantage to becoming a provider of prepaid legal services is that when a client develops a relationship with a lawyer, he is more likely to use that lawyer for services not covered under the prepaid plan, explains the American Bar Association. When a client needs a covered service, he either works with a specific lawyer or goes through a network of lawyers, depending on the plan. Some employers offer prepaid legal services plans.

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