State RegulationsTN specificDifficulty 1/5
A Tennessee long-term care policy has been in force for 4 months. On what basis may the insurer contest or rescind the policy because of a misrepresentation in the application?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Tennessee applies a tiered incontestability structure to long-term care policies under T.C.A. § 56-42-107(a): during the first 6 months the policy is in force, the insurer may rescind it on the basis of any material misrepresentation in the application. Because this policy is only 4 months old, the broadest tier applies and the insurer is not limited to misrepresentations tied to the claimed condition or to intentional misstatements.
Why the other options are wrong
- A) The knowing-or-intentional standard applies only after the policy has been in force for 2 years under T.C.A. § 56-42-107(c), not during the first months.
- B) The claimed-condition limitation applies to the middle tier, from 6 months to 2 years, under T.C.A. § 56-42-107(b).
- C) The policy is fully contestable for material misrepresentation during its first 6 months; contestability rights are not exhausted.
Memory hook
Under 6 months, any material lie can void an LTC policy.