Conversion Privilege

What Does Conversion Privilege Mean?

A conversion privilege is a policy provision that gives policyholders the right to convert or upgrade their policy, even in the event of a significant change in health condition. In other words, it prevents insurance companies from increasing premiums or altering the terms of policies for individuals who develop serious illnesses or other health issues.

This provision may also be referred to as a guaranteed insurability option.

Insuranceopedia Explains Conversion Privilege

Term life insurance policies often include a conversion privilege, making them known as convertible term life policies. This allows the policyholder to convert their term policy into a permanent one without needing to undergo a medical examination, even if they develop a serious health condition. Essentially, this provision guarantees that the policyholder remains insurable, regardless of any decline in their health.