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Ask Dave

Pre-Paid Legal?

Juan shouldn't pay for prepaid legal services. Dave says most people won't ever use as much on lawyers as they'd be paying.

QUESTION: Juan asks if purchasing Pre-paid Legal is a good idea.

ANSWER: You should not buy pre-paid legal.  It’s an unnecessary type of insurance.  It costs an average of $25 a month and they provide a lawyer if you ever need one.  The cost doesn’t seem like much until you add it up.  In ten years, that’s $3,000 and most people don’t spend $3,000 on lawyers in ten years.  That’s how pre-paid legal makes money. 

Just set up a good emergency fund and that will allow you be self-insured for any type of unexpected situation.