Americans spend $230 billion a year on attorneys. At the same time, a recent report states that about 360 online legal providers have popped up in the past three years to help consumers solve those legal problems — including document providers and discounted legal plans. What’s the difference between a legal insurance plan and non-insurance legal products? Which is best for your employees and clients?

I believe the quality that comes with a comprehensive insurance program translates to better outcomes and greater satisfaction for members. And, greater member satisfaction means less administration and fewer questions for employers, as well as their brokers and advisers. Highlights of a legal insurance plan are as follows:

Improved customer experience

  • Less out-of-pocket costs: Unlike prepaid/discount programs, legal insurance pays 100% of attorney fees for covered issues when using in-network attorneys.
  • Higher customer service: When risk is with the carrier, the attorneys get paid — allowing them to focus on representing the plan member. When the attorney bears the risk, there is the possibility of a fee dispute.
  • Greater choice: Employees have options when seeking assistance from any attorney and can rest easy knowing they are working with screened, qualified and credentialed Network Attorneys.

Additional benefits when working with a regulated company

  • Consumer protection: Insurance policy forms are reviewed and approved by State Insurance Departments. This ensures the policy terms are in compliance with state insurance laws and designed to protect consumers.
  • Data security: An insurance company’s data security is modeled after HIPAA practices to ensure data is secure, privacy is protected and sensitive information is preserved.
  • Payment of claims: Insurance requirements assure monies are available to pay future claims.
  • Reasonable rates: Rates are filed and approved by State Insurance Departments to ensure consumers are getting value and the rates being charged are reasonable.
  • Financial strength: Statements must be filed to monitor the financial condition of an insurance company.

While some type of legal protection is better than nothing, your clients can rest assured knowing that a comprehensive legal insurance plan is their best policy. To learn more about the different types of legal products available, read “Trends in the Legal Plan Marketplace: Understanding the Options to Cover Legal Expenses” by Attorney John R. Wachsmann.

Cavanaugh will be speaking at the Workplace Benefits Mania conference in Las Vegas on Wednesday, July 30 at 11:10 a.m. on the panel: Earn More With Legal Plans. To find out more about WBM, hosted by EBA’s parent company SourceMedia, click here.

Cavanaugh is managing director of ARAG. He can be reached at:

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access