Can MassMutual deny my claim due to an issue not included in my physician's formal diagnosis?

My wife saw her family doctor in 2012 for a routine physical exam and made a comment to the doctor that she had “forgetfulness”. The family doctor noted that it was due to her going through menopause. There was no further testing or recommendations for “forgetfulness”. Forgetfulness or memory issues were not a formal diagnosis made by the physician. Menopause was the diagnosis. A few months ago, both she and I applied for LTC through mass mutual and did not expect any problems with the issuing of a policy. MM came back and flat out denied her application for LTC due to the “forgetfulness” comment made by my wife. She then went back to the family doctor after the denial and asked the doctor to write a note, which she did, that indicated the symptom of “forgetfulness” was related to menopause and resolved. The letter was submitted to MM and they continued to deny her application. We have since found other companies willing to issue the LTC policy. Is this something MM can just choose to do?