What is a Service Plan?

wiseGEEK Writer

A service plan can have a number of different definitions. It may be a warranty of sorts that comes with a product or that can be purchased separately. These warranties could entitle customers to a level of customer service or repairs on a product for the length the plan lasts. Other ways service plan could be used to describe a contract that specifies terms of service at a specific price per month and which may have different levels of service that increase as price increases. There are even uses of this term to discuss some forms of insurance, and one of the largest vision insurance companies is called Vision Service Plan® or VSP®.

A cell phone service plan should match a user's mobile usage habits and communication needs.
A cell phone service plan should match a user's mobile usage habits and communication needs.

When a service plan is a warranty or customer service arrangement, it is often purchased separately from the product or service offered. An example of this the AppleCare Protection Plan. For a set price, Apple® offers its customers the option of getting certain repairs and/or telephone advice to fix problems. It is essentially an extended warranty that combines a customer service component for troubleshooting computer issues at home with repairs of major computer parts. When people lack this plan, which can usually be purchased for up to a year after a computer is purchased, they have to pay to get technical advice of most sorts, and they won’t have an extended warranty on the equipment they’ve purchased. Most AppleCare plans last for three years from date of purchase of equipment.

A cellphone service plan might limit how many texts a user can send.
A cellphone service plan might limit how many texts a user can send.

Service plan is a term used often by cellphone and satellite TV or cable companies. There are great differences between use of the term in these contexts and the idea of purchasing any form of warranty. A plan in these cases is still a contract of sorts and might require use of the service for an extended period, like a year or more. It defines cost and limitations (minutes per month, amount of texting, types of cable channels, etc). If it is a contract of a specific length, cost per month remains stable, but if no contract is assigned, cost of a service plan could increase unless a person has signed on to get a specific deal for a set time period ($30 US dollars (USD) a month for cable for a year, for instance).

A phone's service plan might include Internet usage.
A phone's service plan might include Internet usage.

As previously mentioned, companies like Vision Service Plan® really are providers of insurance. The plan purchased entitles the customer to specific things as defined. These could include yearly visual check ups, opportunities to buy glasses at low prices or at a discount, and possibly emergency eye care. Cost may vary depending on the amount paid and plan purchased, just as it does with extended warranties and or cable/phone plans.

In most instances, the service plan charges a defined amount of money, and sets the terms by which any services will be provided. This is usually in the form of a contract. People should read these carefully to determine whether price is worth potential services rendered.

Seniors may look for a trimmed down service plan as they don't require the same features that younger users do.
Seniors may look for a trimmed down service plan as they don't require the same features that younger users do.

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Discussion Comments


Bhutan-I also heard that the Nextel service plan is also the same as the Sprint service plan because they are the same company and their service is not too bad as well.

You really have to shop around to find the best mobile service plan. There are even cell phones with no service plans.

They are the prepaid plans in which you buy a block of minutes and you have to reload your card in order to get more minutes. It really works best with teenagers in order to control costly cell phone minutes.


Mutsy-My husband has the TMobile service plan and he hates it. He said that although it is the most cost effective carrier on the market for his business, it also has the poorest reception and frequency of dropped calls.

I think the best mobile service plan has to be Verizon. I have never had a dropped call and the reception is excellent.

They also are becoming more competitive in their phone service plan by offering 10 people that you can talk to in an unlimited fashion, while T Mobile only offers 5 on their My Faves plan in which you can program five numbers for unlimited usage.


A wireless service plan is a cellular service plan that dictates the number of minutes of talk time available as well as the fees for exceeding these limits.

It also denotes the usage level of the premium services like internet browsing, emailing and texting.

Often a cell phone service plan will require an inclusion of a data services plan in addition to the traditional service plan that outlines your minutes.

For example, if you have a Blackberry handset you will also have to subscribe to a premium package that includes unlimited email and internet browsing which is usually an additional $40 a month.

This plan will also allow you to make and receive attachments along with unlimited email and it is basically designed for the business traveler.

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