In tight times, more and more people are turning to pre-paid legal plans (PLPs), a relatively new and increasingly popular form of insurance. A standard PLP offer members access to a range of legal services in exchange for a monthly fee of anywhere from $10 to $150. Many plan members enroll and pay into the plan for months, even years, before actually using it. When they do, some are surprised to find that the legal services they need are not covered under the plan.
Pre-Paid Legal Services Inc., the largest PLP provider in the United States and the only publicly held pre-paid legal service company, has been on both the winning and losing sides of fraud lawsuits alleging that the company overstates the coverage available under its plans. The company was also recently under investigation by both the FTC and SEC. Despite this legal wrangling, the PLP business is booming: Pre-Paid Legal Services signed up a record 125,417 new members from April to June 2010 and posted record earnings per share for the 1st quarter of that year [source: PR Newswire].
While a PLP can be a valuable investment for certain people -- like some small-business owners seeking very basic services without a hefty retainer fee -- potential plan members should be careful to read the fine print and understand the extent of coverage offered before enrolling in a plan.