In life insurance, what does "conversion privilege" allow?

The concept of "conversion privilege" in life insurance is significant as it provides policyholders with flexibility in their coverage. When a person has a term life insurance policy, the conversion privilege allows them to switch their term policy to a permanent policy. This is particularly advantageous because it can typically be done without the need to provide proof of insurability, which means that the insured can convert even if their health has deteriorated since the initial purchase of the term insurance.

This feature ensures that individuals can maintain life insurance protection even after their term expires or if they outlive it, without the risk of being denied coverage due to health issues that could arise over time.

In addition to this, the features of borrowing against cash value, assigning the policy, or converting to a term policy do not align with the conventional understanding of a conversion privilege in a life insurance context. Therefore, the correct answer highlights the benefit of uninterrupted and unchallenged access to permanent insurance coverage.