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Ask Dave

Prepaid Legal Services

Dave says it's better to self-insure by having an emergency fund, instead of using a prepaid legal service.

QUESTION: Chad asks Dave what prepaid legal services are, and if Dave recommends them. Dave does lots of one, and not a lot of the other.

ANSWER: Prepaid legal is basically lawyer insurance program. You pay $25 or so a month and if you have need for a lawyer, one is furnished to you. That’s $300 a year. I don’t advise that because you are better off to self-insure your need for a lawyer. The reason being, on the average of 10 years, most people don’t spend $3,000 on attorney fees. We know this because if people did spend more than that, prepaid legal would be losing money. Self-insure by having an emergency fund.