conversion privilege

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Conversion Privilege

1. In insurance, a policy in which both the premiums and the coverage are guaranteed for a certain number of years, regardless of the health of the insured person. This privilege is operative as long as premiums are paid on time. The insurer may only increase the premium if premiums are increased to the whole class of policyholders.

2. The right of a policyholder to convert a group policy to an individual policy without a health examination. This right is usually exercised after the termination of employment, and the premium is determined by the policyholder's attained age.

conversion privilege

References in periodicals archive ?
The ability of a conversion privilege and a departure from the APR to reduce the risk incentive is given by:
Tau~dC = change in the value of the conversion privilege.
Conversion privileges with multiple product options can be crucial to the consumer who purchased term insurance at ultra-preferred rates at age 29 but has grown into a 38-year-old cancer survivor or a 42-year-old with weight issues, high blood pressure and high triglycerides.
Preferably, a term life insurance policy's waiver of premium rider and conversion privilege will work simultaneously.
With conversion privileges and annuities, plus new opportunities with the same clients, well, you get the picture