conversion privilege

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 ?
Conversion privilege - a ManuTerm/ManuTerm rider policy can be converted without evidence of health to any Manulife whole life, endowment or investment-linked plan before age 65 (for the same coverage benefits only).
If a conversion privilege is attached to the bond, shareholders have sold a call option to bondholders.
Because the conversion right automatically expires on the exercise of the conversion privilege, should Parent's basis in the debenture have been increased for the portion of the stock attributable to the conversion option?
The model language says that the model does not apply when "an application to the existing insurer that issued the existing policy or contract when a contractual change or a conversion privilege is being exercised; or, when the existing policy or contract is being replaced by the same insurer pursuant to a program filed with and approved by the commissioner.
Therefore, the parent would usually select noncumulative preferred stock without value supporting features (such as a conversion privilege into the common stock or a liquidation right).
Other options to consider include applying a "prior insurance credit upon transfer of life insurance" amendment, issuing a waiver of the actively-at-work requirement, educating employees about the conversion privilege or delaying the effective date to lessen change-of-carrier impact on employees.