The two-track nature of the U.S. private disability insurance system may be leading some workers to think they have more long-term disability coverage than they have.

U.S. workers “wish they have it,” says Kenneth Gelman, director of market research at AXA Equitable Life Insurance Company, New York. “They assume they have something. But they might not actually have it, and they might not have enough of it.”

Researchers at AXA Equitable’s parent company, AXA S.A., Paris, have mapped the hidden disability coverage holes in a survey analyzing gaps in protection coverage in the United States and 10 other highly developed markets.

U.S. disability insurers have been trying on their own and through the new Council for Disability Awareness, Portland, Me., to do more to tell consumers about the prevalence of disability and about the need for disability insurance.

The message seems to be getting through: 73% of the U.S. participants in the survey said they think about the risk of permanent disability. That compares with an average of just 59% for all the regions surveyed, and the U.S. participants were more likely to think about the risk of permanent disability than participants in any other region included.

About 60% of the U.S. participants said they have disability insurance from some source, compared with a disability insurance ownership rate of 54% for all participants.

But only 16% of the U.S. participants reported depending solely on individual disability insurance, compared with an average of 25% for all participants, and only residents of Spain were less likely to get part or all of their disability insurance through individual coverage.

In addition, the percentage of U.S. participants who said they have disability insurance appears to be considerably higher than the actual U.S. disability insurance ownership rate, Gelman says.

Employers help promote widespread access to LTD coverage, but the downside is that employees may not fully understand whether they have coverage or how much coverage they have, Gelman says.

The problem may be more widespread in the United States than in many other regions because of the popularity of employer-sponsored disability benefits in this country, experts interviewed say.

“Group disability is not that popular internationally,” says Stacy Varney, a vice president at JHA, Portland, Me., a disability risk management and consulting firm.

In addition to the U.S., markets where group disability coverage is popular include Germany and South Africa, Varney says.

In the U.S., the individual DI market is much less competitive than the group LTD market, and the top 5 individual DI carriers control about two-thirds of the market, says Kenneth Isenberg, an analyst at LIMRA International, Windsor, Conn.

“Many households are not approached to buy [disability insurance], and most agents do not sell an appreciable amount of DI,” Isenberg says.

AXA Equitable itself does not issue disability insurance in the U.S., but it encourages its agents to analyze and address customers’ disability insurance needs.

“I think advisors are very interested in disability insurance,” says Georgette Geller-Petro, an executive vice president in AXA Equitable’s AXA Advisors distribution arm.

Nevertheless, although consumers are concerned about disability, they’re still not buying disability coverage on their own, in part because of their false sense of already having coverage, Geller-Petro says.

“We hear from prospects, ‘We’re all taken care of,” Geller-Petro says. “But we know they’re far from taken care of.”

Even when advisors analyze disability policy documents for affluent customers, the coverage often “varies tremendously from what [the customers] think they have,” Geller-Petro says.

Joel Miller, an insurance agent and broker at the New Canaan Group Inc., Stamford, Conn., says he thinks one key to cutting through the confusion and getting clients to think realistically about disability coverage gaps is to point out that the risk of becoming disabled is greater during the typical working years than the risk of dying.

A strategy for closing a sale, he says, is to talk about the risk of becoming disabled and then to ask a client who, for example, is making $100,000 per year whether that client would be willing to accept pay of $98,000 per year in exchange for a guarantee the client would get at least $60,000 per year up till age 65.

Some producers complain about the difficulty of finding and applying for DI.

But “the coverage is out there,” Miller says. “You just need to know where to look for it. It’s a very important part of what we do for people.”