What does "conversion privilege" in term insurance allow?

The concept of "conversion privilege" in term insurance refers to the insured's ability to convert their term life insurance policy into a permanent life insurance policy without having to undergo additional medical underwriting or health evaluations. This is particularly significant because if a policyholder develops health issues during the term of their policy, they might not qualify for a new permanent policy if they had to apply for it based on their current health status.

This feature provides policyholders with flexibility and security, ensuring that they can maintain coverage even if their health declines. By allowing the conversion to a permanent policy without medical checks, the conversion privilege helps protect individuals and their beneficiaries from potentially losing life insurance coverage due to unforeseen health changes.

The other options do not accurately capture the essence of what conversion privilege entails, focusing instead on aspects not associated with this specific term in life insurance.