Disability insurance is expensive, but if you need it, here are things you can do to lower your insurance costs.

Shop Around. Prices for disability insurance vary from company to company, so it pays to shop around. Get at least three price quotes. Don't shop on price alone. Ask friend and relatives for their recommendations.

Consider A Group Plan. Most employers offer some type of disability insurance so you should understand these benefits before you consider an individual policy. There is strength in numbers in buying disability insurance so your first choice should always be to participate in your employer's disability plan. As part of a group plan you will enjoy discounts on premiums as well as broader coverage.

Types of Disability Insurance. There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD). STD policies have a waiting period of 0 to 14 days with a maximum benefit period of no longer than two yeas. LTS policies have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life. The type of policy you select will determine you insurance premiums.

Understand the Scope of Coverage. Before deciding to purchase disability insurance, it is important that your understand the scope of coverage. First, you should understand how is "disability" defined. Some policies consider you disabled if you are unable to perform the duties of any job. Better plans pay benefits if you are unable to do the usual duties of your own occupation. You should also understand the waiting period after illness before payments begin and, after the waiting period, how long the disability payments continue. You should also understand the duration and amount of disability payments (which are generally 50%-70% of your compensation). Questions on the payments include: can benefits be reduced by Social Security disability and workers' compensation payments? Are the benefits adjusted for inflation? Will the policy provider continue making contributions to your pension plan so you have retirement benefits when the disability coverage ends?

Saving Money on Premiums. You can reduce premiums by electing longer waiting periods before your coverage begins. For example, if you have enough resources to cover expenses during the first three months of disability, your premiums will be lower than with coverage that starts after 30 days. You can also reduce premiums by electing a shorter benefit period. For example, electing that benefits are payable for a 3 to 5 year period or until age 65 instead of for a lifetime will reduce premiums. .