What does the conversion privilege allow regarding term policies?

The conversion privilege in term life insurance policies is a valuable feature that allows policyholders to convert their term policy into a permanent life insurance policy without the need for proof of insurability. This ensures that the individual can obtain a permanent policy even if their health has deteriorated since the inception of the term policy.

This is particularly beneficial for those who may develop health issues that would typically make acquiring new coverage difficult or more expensive. The ability to convert without undergoing another health examination or providing additional evidence of insurability provides peace of mind and enhances the policy's value over time. As such, this feature can be crucial for individuals who want to maintain life insurance coverage regardless of changes in their health status.

Other options relating to automatic upgrades, premium reductions, or contingent medical exams do not accurately depict the nature of conversion privileges, as they do not encapsulate the key benefit of guaranteed conversion regardless of health changes.