A federal appeals court has backed Unum Life Insurance over a denied long-term-care claim, ruling the policy never covered losses the insured already had.
The Eighth Circuit's decision, filed May 11, 2026, affirms summary judgment for Unum out of the Northern District of Iowa. The case came down to a simple question: does a long-term-care policy cover losses the insured already had on day one? The court said no.
Denise Child lost the use of her arms and legs in a car accident more than 40 years ago. She has needed help with basic daily activities - bathing, dressing, eating – ever since. She still built a career, working as a speech therapist at an Iowa education agency for more than three decades.
Midway through her time there, the agency offered group long-term-care insurance through Unum. The policy was "guaranteed issue," meaning coverage was offered "regardless of health history." Child chose monthly benefits at or below the $6,000 mark so she could skip the medical questions.
But the policy carried what both sides called the "existing-loss provision." It carved out any "loss[es] of [an ability to perform a daily living activity]" that existed on the "effective date of coverage." The listed activities - bathing, dressing, toileting, transferring, continence, eating – covered everything Child already could not do without help.
She enrolled anyway. The benefit-election form spelled it out: the "loss of Activities of Daily Living . . . must occur after your effective date of coverage under this Long Term Care plan in order to be covered."
Child paid premiums for nearly 20 years. When she eventually filed a claim citing her bathing, dressing, toileting, transferring, continence, eating, and mobility needs, Unum denied it. Those limitations existed on day one, and the existing-loss provision applied.
She sued for breach of contract, fraudulent misrepresentation, and bad faith. She also argued an Iowa statute barring exclusions for preexisting conditions outside a six-month window forced Unum to pay.
The Eighth Circuit rejected every theory.
On the policy itself, Judge Stras wrote that under the "plain terms" of the contract, Unum "held up its end of the bargain." Child's effective date of coverage was December 1, 2003. Her losses predated it by two decades. The policy required her to "recover" from "existing loss[es]" before benefits attached, and she had not.
On the Iowa statute, the court read Iowa Code § 514G.7(3)(b) (2003) as stopping insurers from denying coverage for losses from preexisting conditions that occur beyond a six-month waiting period - not as forcing them to cover losses that happened before coverage started. Reading it Child's way, the court said, would "create a moral hazard by allowing individuals to buy insurance and receive benefits right away for past losses." It would also turn long-term-care insurance "from a product that protects against the 'risk[] of future events' to one covering 'known losses.'"
On reasonable expectations, the court found Child could not have reasonably believed her preexisting limitations were covered, given how clearly the policy and the election form said otherwise. Her calls to Unum did not change the result. She "never described the full extent of her condition or the limitations she already had," the court noted, and "[a] person cannot reasonably rely on an answer given in the absence of material facts."
The court also rejected her reliance on advice from in-house specialists at her employer, pointing to a policy disclaimer: "For all purposes of this Policy, the [employer] acts on its own behalf or as the employees' agent. Under no circumstances will the [employer] be deemed Unum's agent." The policy added that "[n]o other person, including an agent, [could] change [it] or waive any part of it."
The fraudulent-misrepresentation claim failed because any inaccurate advice came from incomplete information Child herself provided, not intentional deception. The bad-faith claim failed because Unum had a "reasonable basis" for the denial.
For carriers writing long-term-care business, the takeaway is straightforward. Guaranteed issue and pre-effective-date coverage are not the same thing. Guaranteed issue means no medical underwriting up front. It does not mean coverage for losses the insured already has.
