If Maggie’s means are as limited as you say (and she may not have revealed all of her finances to you, so you may not know what you think you know about her status), then the plaintiffs here are attempting to defraud the insurance company – and everyone knows that. By the time this makes it to any kind of adjudicating body, a mediator or judge, even they will know that it’s an attempt at fraud – it happens every day.
But let’s assume that Maggie really does have limited means – and assets (don’t forget that if she owns a home, then that’s an asset that a lien can be applied against in a judgment, so even if she doesn’t have much income, she would never be able to cash in on the value of her home if a judgment goes against her and the insurance is somehow obviated). But that’s not to say that she should get an attorney; I think she should consider the defense that the insurance company will mount, her relationship with the insurer (that is, that her policy is paid up to date and she hasn’t made significant other claims – the insurer will have had experiences where both parties in the fraudulent claim are in on the scheme, so if there’s any doubt about her own bona fides, they may not worry about throwing her under a bus.
But that’s all speculation: Assuming Maggie is straight up with the insurer, not rich, not hiding any assets, and an innocent party in an apparent attempt to rip off the insurer, then all of their aims align (hers and the insurer’s, that is), and the insurer will certainly not want to pay out a bogus claim. (They might settle for a token amount just to avoid the cost of a trial – that happens every day, too – but Maggie won’t have any part in that.)
Even if the case goes to hell and the insurer is somehow obviated from paying – for whatever reason – the old saying applies: “You can’t get blood from a stone.” Maggie is what is commonly known as “judgment-proof”. If she has nothing much of value to lose, then she can’t lose what she doesn’t have.
I think if I were Maggie, and the straight shooter that you believe her to be, then I would urge total cooperation and alignment with the insurer and their attorney. A separate attorney of her own might set off alarm bells with the insurer (why does she need an attorney of her own when their interests are in alignment?), and it’s a cost that she doesn’t need to bear to protect retirement income (I presume) that can’t be taken from her, anyway.