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June 23, 2021

Are prepaid services ever worth the money?

Although not nearly as popular here as in the litigious United States, a few Canadian companies offer prepaid legal plans as an employee benefit

Legal Much like medical insurance, you pay a set amount each month and have access to the plan’s pool of lawyers. Members can prepare certain documents for you, such as draft a will, and you can have consultations (on the phone at least) a few times a year.

It's a hard-won perk for unions like the Canadian Auto Workers but is it worth the expense? Maybe, depending on your needs, but I’d prefer to go the 'a la carte' route, calling in the professionals when I need them and then taking my chances.

In fact, I’m hard pressed to come up with many services that I’d be willing to pay for before I really need them.

Prepaid credit cards and cell phones may help you control your spending but paying way up front for a cruise, for instance, doesn’t make much sense to me.

In fact, it can even backfire. Since high fuel prices sent airfares soaring, making a European cruise suddenly more expensive for North Americans, cruise lines have been forced to slash prices to fill those ships. Great for current shoppers but not for those who have already signed up.

Although she likes getting a jump on pest control each year, add prepaid funerals, tuition, and timeshares to that list, says blogger Miranda Marquit. Paying ahead of time for any of these seldom makes sense, she argues.

What's your take? Do you ever pay upfront to ensure that you'll be looked after when the time comes? How have things worked out?

By Gordon Powers, MSN Money

* Follow Gordon on Twitter here.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...