What can "conversion privilege" in a life insurance policy help avoid?

The concept of "conversion privilege" in a life insurance policy allows policyholders to convert their current term life insurance policy into a permanent life insurance policy without having to provide evidence of insurability. This means that the insurer cannot deny coverage based on health changes that may have occurred since the original policy was issued.

By enabling this conversion, the privilege effectively helps avoid the need for the insured to prove their insurability when changing policy types, which is crucial if their health has deteriorated since they first obtained coverage. Without this privilege, an individual might face difficulties or higher premiums if they are required to undergo underwriting again due to changes in their health status.

The other options relate to different aspects of insurance policies. For instance, higher premiums for older applicants pertain more to age rather than the conversion process itself. Loss of coverage during the conversion process is typically not an issue if the conversion privilege is exercised correctly, and delays in premium payments are unrelated to the conversion privilege altogether. Therefore, the ability to change policy types without proving insurability is effectively the key benefit facilitated by the conversion privilege.