Under what circumstances can a long-term care (LTC) policy be rescinded by an insurer?

A long-term care (LTC) policy may be rescinded by an insurer if misrepresentation is proven within a specified time frame. This is because insurance policies are based on the accurate disclosure of information by the policyholder during the application process. If the insurer discovers that the policyholder provided incorrect or incomplete information that significantly affects underwriting decisions or the risk assessment, they have the right to rescind the policy.

Typically, there is a specific time frame within which this misrepresentation must be identified—often outlined in the policy terms and regulated by insurance laws. This provides a balance between protecting insurers from fraudulent behavior and ensuring that policyholders have some degree of security once the policy is in force, as long as they have been honest in their disclosures.

Rescission due to misrepresentation is a key principle in insurance, emphasizing the importance of integrity and transparency when obtaining coverage. It reflects an essential aspect of risk management within the insurance industry.