Conversion Privilege

An insurance policy in which the insurer is required to renew or update the policy regardless of the insured's health. An insurance policy with this type of provision allows the insured to switch to a different type of policy without submitting to a physical examination.

A conversion privilege also guarantees coverage and set premium payments for a certain number of years regardless of the health status of the insured. Term life insurance policies usually offer the conversion privilege option. This option allows you to convert your term policy to a permanent policy that will provide insurance for the rest of your life. Therefore, even if you are diagnosed with a serious illness at the end of your term policy, you will have the option to switch to a permanent policy without having to submit to another physical exam. In effect, this option protects the insured from being declined insurance based on a change in health.


Investment dictionary. . 2012.

Look at other dictionaries:

  • conversion privilege — right of the borrower to change the nature of a property on which a mortgage has been placed …   English contemporary dictionary

  • conversion privilege — noun : the contractual right to exchange one security for another at the owner s option (as the right to exchange bonds to common stock of the issuer at a fixed ratio) …   Useful english dictionary

  • Conversion (law) — For other uses of the word conversion , see Conversion. Conversion is a common law tort. A conversion is a voluntary act by one person inconsistent with the ownership rights of another.[1] It is a tort of strict liability.[2] Its criminal… …   Wikipedia

  • conversion of insurance policy — The surrender of a life insurance policy to the insurer in exchange for another policy pursuant to a right or privilege provided the insured in the original policy. 29 Am J2d Ins § 367. See exchange of policy …   Ballentine's law dictionary

  • forced conversion — Refers to a conversion of a convertible security that follows a call for redemption at a time when the value of the conversion security into which it may be converted is greater than the amount that will be received if the holder permits the… …   Black's law dictionary

  • Adjustment in Conversion Terms — A term used to describe the adjustment made to a convertible securities conversion factor when the exchangeable stock underlying the convertible undergoes a split. In some convertibles, an adjustment in conversion terms is a scheduled event.… …   Investment dictionary

  • security — /si kyoor i tee/, n., pl. securities, adj. n. 1. freedom from danger, risk, etc.; safety. 2. freedom from care, anxiety, or doubt; well founded confidence. 3. something that secures or makes safe; protection; defense. 4. freedom from financial… …   Universalium

  • convertible shares — Shares (common/ordinary) that, at the option of the holder, can be converted into other securities, at a designated rate. The conversion privilege may be perpetual or limited to a specific period. Euroclear Clearing and Settlement glossary …   Financial and business terms

  • preferred convertible shares — Preferred shares (common/ordinary or preferred) that, at the option of the holder, are convertible into other securities, usually common shares, at a designated rate. The conversion privilege may be perpetual or limited to a specified period.… …   Financial and business terms

  • convertible shares — Shares (common/ordinary) that, at the option of the holder, can be converted into other securities, at a designated rate. The conversion privilege may be perpetual or limited to a specific period …   Euroclear glossary

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