A Texas long-term care insurer issues a policy even though the application contains an unresolved inconsistency about the applicant's medical history. The insured later files a claim. What is the effect of that unresolved inconsistency?

Why B is correct

The Texas long-term care rules at 28 TAC 3.3823(d) prohibit post-claims underwriting: the insurer must ask its follow-up questions and resolve inconsistencies in the application before the policy is issued, and once it issues, it cannot go back and use the information it could have obtained then to rescind or to deny the claim. Practically, this means an insurer that issues a policy without finishing its underwriting ends up covering the claim, which is why an agent should expect the carrier to press for complete answers before delivery.

Why the other options are wrong

• A) The contestable period does not revive the issue; 28 TAC 3.3823(d) bars the insurer from rescinding based on an inconsistency it left unresolved at issue.
• C) There is no partial-payment remedy under 28 TAC 3.3823(d); the prohibition applies to reducing or denying the claim, not just to rescission.
• D) The insured's signature does not shift the insurer's duty to resolve inconsistencies; the burden of pre-issue investigation sits with the insurer.

Memory hook

Ask before issue, or pay after claim.