An insured with a long-term care (LTC) policy knowingly and intentionally misrepresented relevant facts relating to the insured’s health. How long…

Under Virginia law governing Long-Term Care (LTC) insurance, a standard two-year incontestability period applies. During this time, an insurer can contest the policy for material misstatements. However, after the policy has been in force for two years, it can only be contested if the insured "knowingly and intentionally misrepresented relevant facts relating to the insured's health." This language describes fraudulent misrepresentation. The fraud exception to the incontestability clause allows the insurer to contest the policy at any time, as fraud invalidates the premise of the contract.

A. Any time up to six months: This is incorrect. This timeframe is too short and relates to a different standard for rescission based on material misrepresentation, not fraud.

B. Any time up to two years: This is the standard time limit for contesting a policy based on non-fraudulent misstatements, but it does not apply in cases of intentional fraud.

D. The insurer is prohibited from contesting the coverage: This is incorrect. Insurers have a legal right to contest policies, especially when there is evidence of fraudulent misrepresentation by the insured.

1. Code of Virginia. Title 38.2. Insurance, Chapter 52. Long-Term Care Insurance. § 38.2-5207. Incontestability period.

Section Reference: Subsection C of § 38.2-5207 states: "After a policy has been in force for two years it is not contestable upon the grounds of a misrepresentation alone; such policy may be contested only if the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health." This codifies the fraud exception, allowing contestability beyond two years.

2. Abraham, K. S. (2017). Insurance Law and Regulation (6th ed.). Foundation Press.

Section Reference: Chapter 3, Section B, "Misrepresentation." This university-level casebook explains that the incontestability clause in health and life insurance policies does not protect against fraudulent misstatements, allowing insurers to contest the policy at any time if fraud can be proven. This is a foundational principle of insurance contract law.