Is Prepaid Legal a Good Idea?

Dave Ramsey:

I wouldn’t call it a rip off. It usually costs anywhere from $18 – $25 a month, and most of the time you get a free will out of it, which usually costs around $300 bucks, so you’ll get your money back in the first year, which is nice. This also encourages people to get a will, and that is a very good thing because 70 percent of the public dies without a will, which I still don’t understand why anyone would not have a will, but that is another topic all together.

But will I recommend that the average Joe and Suzy buy it? I probably would not and here is why: $25 a month is $300 per year. Over ten years, that’s $3,000. My contention is that the typical Joe and Suzy American will not have $3,000 worth of legal needs or average expenses in a given ten-year period. If they did prepaid legal would be losing money, there would be no profit in it. And I don’t think they are in the business of losing money.

via Tufte’s Economics Classes Blog.

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