Prepaid Legal Statutes

There are two broad categories of legal plans – insured and uninsured or access plans. The term prepaid can be misleading and is a hangover from when only insured plans existed. True prepaid legal programs are a form of insurance, require substantial reserve deposits be made with the state and are regulated by the insurance commissioner. Access plans (clients pay for services when they are rendered) do not represent the same underwriting risk as true insured plans and are much less regulated.

If your estate-planning service involves the delivery of “future benefits or services” without compensation at the time the service is rendered, you have potentially triggered an insured plan. Making promises about the cost, or lack thereof, for future services should be avoided. It sets the stage for an unsatisfied customer and could be perceived as a deceptive or misleading sales practice.

Contact us if you are concerned that your present sales methods or procedures involve references to future services.