Prepaid Legal Compensation plan explained? Ada Oklahoma

After a person keeps their membership for a year, you begin to get paid residual income from the continued service.

If someone drops the service and signs back up which is what a few people do with me, you get paid as-earned commission for the sale which is about 13.00 a month.



Prepaid Legal started out as a direct marketing company and the commission structure was the same as a health and life insurance rep. It became an MLM in 1983, went back to a direct marketing company in the late 80's and returned as an MLM company in the early 90's.

You can built your business like an MLM group but the majority of the big earners do group memberships and direct marketing. So while it is a network marketing company, the most successful people are those who just sell memberships

Ok Melvin. So basically you're saying that you have to continue to sell memberships in order to make money, so if you don't sell any memberships, eventually they stop paying you? If that is the case, it's not a true MLM. I can give you 10 MLM's that i can put down the number of people i personally recruit in a spreadsheet, and it will calculate exactly how much money i am suppose to make according to the compensation plan. Obviously the assumption is that it's a perfect situation and everyone does what they are suppose to, but at least i can see what the earning potential is....

I can't do this with prepaid legal.

What you're saying is go sell memberships and you'll get paid - which i understand. What i want to know is how much. If they can't tell me in an easy, clearly explained fashion, how can i trust that i am getting paid for my work? You may be doing an excellent job selling memberships, but what would happen if one day you find out that they should be paying you double the amount for what you're putting into the company right now? But they never mentioned anything because you never asked?

Yes, I was sarcastic because the OP is asking for a spreadsheet for how much money he would make in Pre-Paid Legal if he recruited so many people or sold so many memberships.


There is no formula needed. Simply put, if you work hard and honest with people and don't give them any sh@# faced lies then you'll make a lot of money in Pre-Paid Legal....period. That's in any business. I've ran into people at the PPL convention who I would like to kick the living dog crap out of for hearing about what they do but most of time, the company finds out and does it for me.

Pre-Paid Legal is just a business, its how I pay the bills. I sell memberships and I get my money. Then after buying the lady some silly gift and the kids a toy, I drink a six pack of beer and watch wrestling or go to Hooters and eat some wings and drink more beer. I have a nice home in the mountains away from noisy neighbors and a couple of pit bulls that keeps Quixtar Salesman and Mormons away. I drive a Ford F350 Super Duty, not one of those sissy Ferrari's or Mercedes that you hear Carruthers bragging about about.

To summarize, just sell memberships and do what you want to do with your money

Okay "Melvin", I detect sarcasm in your post. If you're really an "employee" as you claim to be, you clearly lack social skills, hence the rude comments you've made in your post. What's the matter, is your "business" on life support because of your underwhelming ability to get people/KEEP people in your downline?


How is it "retarded" to request numbers and figures in spreadsheet format since they aren't clearly explained? Any credible home business (or ANY business for that matter) will have their compensation plan CLEARLY laid out so there wouldn't be any questions about how the employees are paid.

Thanks for the information guys, but i still have an issue with something.

What is the formula? So if we go by the standard recruiting example of; I get 3 people, they get 3, and they get 3 (3-9-27=39 people total in downline). What is the residual income that i make off of 39 people?

Lets make the assumption that we are operating in a vacuum and all conditions are perfect. No one quits, everyone is in 100%.

So if i have 39 people in my downline, how much money do i make, and what do i have to do to keep that money coming in?

Thanks for your help.

Disclaimer: I am not an expert, but I will try to answer your questions objectively with what I know.

1. Residual income comes from those customers that continue to renew the membership. It does not matter if it is a direct sale that you made or an override that you are getting because someone on your team made a sale. You get a portion of what the customer is paying on a monthly basis.

2. You get advanced compensation for a full year up front when a customer signs up. So basically you are earning residual income during months 2 through 12. Every month the customers pays they are in essence "renewing". The company pays you up front for that first year so you do not actually see another "check" on that sale until month 13. This is actually a very nice feature. The company is expecting most customers to keep the membership for a year. After month 12 you have fully earned out the original compensation payment. Of course if one of the customers cancels before the year is up, then you have to pay back the unearned portion. They take this out of future sales. Again this concept applies to both direct sales you make and sales that your team members make. You can opt to have them pay you on an "as earned" basis for your direct sales if you want.

3. No, the income you get after month 12 is based on a calculation that they term "persistency". Keeping it simple - persistency is a ratio of how many customers signed up against how many cancelled in that first year. The higher ratio of customers that you keep on the books, the more residual income you earn on those sales. As far as the first 45 days (this is just my opinion) - this creates a sense of urgency so new associates will go out and do something right away. It is a win-win for the company and the associate because the company expands its customer base and sales force while the associate gets a check. This check you could say "validates" that the process really works so they are less likely to quit.

4. This depends on your goals. You dont ever have to recruit anyone. There are many people in prepaid legal who make a lot of money by just marketing the memberships. There are group sales where you can make money selling the product as an employee benefit. There is also a small business plan - which by the way has the best persistency out of all the plans and pays the highest commission (not sure if they have this in Canada though). You can quit whenever you want. As long as your customers stay on the books you get paid the residual income. One caveat is you should always keep your own membership. As long as you keep a membership of your own then you are an active associate - even if you are not selling. You can take as much time off as you like and come back whever you feel like it.

5. Yes.

6. You are not charged when someone else quits. You are charged if they cancel their membership. The problem with many is that they buy the membership just to join as an associate so when the business does not work for them they cancel their membership. Again you are "charged back" for the unearned portion of that 12 month advanced compensation that you were paid up front for at the time of the sale. This is where a lot of the "dissatisfaction" comes in with MLM companies. If you market the product properly this problem is eliminated. Prepaid Legal is actually a service that has tremendous value. This value is overshadowed many times by "hype". Many sell the business opportunity without properly explaining the product. Prepaid Legal has a leg up on other MLM companies when it comes to this because the cost is low and the value is high. They are not peddling miracle juice or the latest greatest diet pill.

7. I have not reached the executive director level. I know how it works and can explain the concept. Basically you or your team has to make 75 sales in a given month. You have to qualify for this level month to month. So lets say last month you and your team sold 75 memberships so now this month you will be paid at the executive director level on you and your teams sales. For each 26$ standard canadian standard plan sold you will get a commission. If it is one that you personally sell, your commission will be 182.50. If someone on your team sold it, then you will get an override ranging anywhere from 32.50 to 132.50 depending on what level that person is at. If you do not have a team and make 75 sales by yourself you would get 182.50 * 75 = 13687.50 minus any chargebacks from early cancellations as previously explained. these are real numbers that many associates accomplish all the time. Ok now lets say you build a team of 1000 associates and only 10% of them sell 1 per month. You would get 82.50 * 100 = 8250.00 (this is an estimated average override as it will vary depending on what level each team member is at).

All in all I would say prepaid legal is a very good company with a good product. At the end of the day it is a business of selling the membership and looking for others that want to do the same. No money is made until a membership is sold! That sounds easy, but it is not. There are many people from all walks of life that are successful and many that are not. MLM is a curse word to many who have been burned by the industry so that is a stigma that you have to overcome. Many associates quit before they have a chance to realize the value of their efforts.

Hopefully this helps you and I did not overtype!

1. You made residual income off the renewal of memberships you sell. The percentage is based on whether you are honest and sincere with people or if you like to tell fishing stories.

2. Try looking it up in the dictionary. Residual income is passive income from work that you've done in the past. The money you make upfront from the sale of a membership is direct sales advanced commission, if the person keeps the policy running after a year, you are paid a residual income.

3. 45 days has nothing to do with residual income. Pre-Paid Legal has a 45 day requirement to sell at least 5 memberships or recruit 3 people to become a fully vested associate. If not you'll won't be paid the vested associate income until you sell 25 memberships. When you start out in Pre-Paid Legal, you are a trainee.

4. Recruiting people only brings in secondary income but not really residual income. Residual income in this business mainly comes from customers who keep their policies running. In other words, if you want to make the most money in Pre-Paid Legal...then sell a lot of memberships.

5. Uh....Yes, you can quit anytime.

6. You are not. If you opt for 1 year advanced commissions and someone cancels within the year, you are charged back for those months not completed. However, it simply stays on your associate record and is counted against your next sales unless you quit the business.


7. There are plenty of us "top producers" around but asking for a spreadsheet of sales and earnings is retarded as it would not garrantee any income made. Those who do send out spreadsheets are called scam artist and you might want to avoid them

Example: If you sell 3 memberships at a commission rate of $125.00 apiece then you have made 375.00.... :)





Honestly, if you are looking for garranteed money...get a regular job like scrubbing garbage cans or mowing grass. This is a business opportunity and everyone controls their own destiny. The equation in how much money you wish to make all depends on you. And since you've chosen not to sign up...you've made what you put in which is nothing at all.

1. You made residual income off the renewal of memberships you sell. The percentage is based on whether you are honest and sincere with people or if you like to tell fishing stories.

2. Try looking it up in the dictionary. Residual income is passive income from work that you've done in the past. The money you make upfront from the sale of a membership is direct sales advanced commission, if the person keeps the policy running after a year, you are paid a residual income.

3. 45 days has nothing to do with residual income. Pre-Paid Legal has a 45 day requirement to sell at least 5 memberships or recruit 3 people to become a fully vested associate. If not you'll won't be paid the vested associate income until you sell 25 memberships. When you start out in Pre-Paid Legal, you are a trainee.

4. Recruiting people only brings in secondary income but not really residual income. Residual income in this business mainly comes from customers who keep their policies running. In other words, if you want to make the most money in Pre-Paid Legal...then sell a lot of memberships.

5. Uh....Yes, you can quit anytime.

6. You are not. If you opt for 1 year advanced commissions and someone cancels within the year, you are charged back for those months not completed. However, it simply stays on your associate record and is counted against your next sales unless you quit the business.


7. There are plenty of us "top producers" around but asking for a spreadsheet of sales and earnings is retarded as it would not garrantee any income made. Those who do send out spreadsheets are called scam artist and you might want to avoid them

Example: If you sell 3 memberships at a commission rate of $125.00 apiece then you have made 375.00.... :)





Honestly, if you are looking for garranteed money...get a regular job like scrubbing garbage cans or mowing grass. This is a business opportunity and everyone controls their own destiny. The equation in how much money you wish to make all depends on you. And since you've chosen not to sign up...you've made what you put in which is nothing at all.

1. You made residual income off the renewal of memberships you sell. The percentage is based on whether you are honest and sincere with people or if you like to tell fishing stories.

2. Try looking it up in the dictionary. Residual income is passive income from work that you've done in the past. The money you make upfront from the sale of a membership is direct sales advanced commission, if the person keeps the policy running after a year, you are paid a residual income.

3. 45 days has nothing to do with residual income. Pre-Paid Legal has a 45 day requirement to sell at least 5 memberships or recruit 3 people to become a fully vested associate. If not you'll won't be paid the vested associate income until you sell 25 memberships. When you start out in Pre-Paid Legal, you are a trainee.

4. Recruiting people only brings in secondary income but not really residual income. Residual income in this business mainly comes from customers who keep their policies running. In other words, if you want to make the most money in Pre-Paid Legal...then sell a lot of memberships.

5. Uh....Yes, you can quit anytime.

6. You are not. If you opt for 1 year advanced commissions and someone cancels within the year, you are charged back for those months not completed. However, it simply stays on your associate record and is counted against your next sales unless you quit the business.


7. There are plenty of us "top producers" around but asking for a spreadsheet of sales and earnings is retarded as it would not garrantee any income made. Those who do send out spreadsheets are called scam artist and you might want to avoid them

Example: If you sell 3 memberships at a commission rate of $125.00 apiece then you have made 375.00.... :)





Honestly, if you are looking for garranteed money...get a regular job like scrubbing garbage cans or mowing grass. This is a business opportunity and everyone controls their own destiny. The equation in how much money you wish to make all depends on you. And since you've chosen not to sign up...you've made what you put in which is nothing at all.

1. You made residual income off the renewal of memberships you sell. The percentage is based on whether you are honest and sincere with people or if you like to tell fishing stories.

2. Try looking it up in the dictionary. Residual income is passive income from work that you've done in the past. The money you make upfront from the sale of a membership is direct sales advanced commission, if the person keeps the policy running after a year, you are paid a residual income.

3. 45 days has nothing to do with residual income. Pre-Paid Legal has a 45 day requirement to sell at least 5 memberships or recruit 3 people to become a fully vested associate. If not you'll won't be paid the vested associate income until you sell 25 memberships. When you start out in Pre-Paid Legal, you are a trainee.

4. Recruiting people only brings in secondary income but not really residual income. Residual income in this business mainly comes from customers who keep their policies running. In other words, if you want to make the most money in Pre-Paid Legal...then sell a lot of memberships.

5. Uh....Yes, you can quit anytime.

6. You are not. If you opt for 1 year advanced commissions and someone cancels within the year, you are charged back for those months not completed. However, it simply stays on your associate record and is counted against your next sales unless you quit the business.


7. There are plenty of us "top producers" around but asking for a spreadsheet of sales and earnings is retarded as it would not garrantee any income made. Those who do send out spreadsheets are called scam artist and you might want to avoid them

Example: If you sell 3 memberships at a commission rate of $125.00 apiece then you have made 375.00.... :)





Honestly, if you are looking for garranteed money...get a regular job like scrubbing garbage cans or mowing grass. This is a business opportunity and everyone controls their own destiny. The equation in how much money you wish to make all depends on you. And since you've chosen not to sign up...you've made what you put in which is nothing at all.