What does "conversion privilege" in a health insurance policy refer to?

The concept of "conversion privilege" within a health insurance policy pertains to the right of an insured individual to switch from one type of coverage to another without needing to provide proof of insurability. This typically occurs when an individual leaves a group insurance plan, such as employer-sponsored health insurance, and wants to transition to an individual plan.

This privilege is significant because it allows insured individuals to obtain continuous coverage even if their health status has changed. In situations where an individual's health has deteriorated, obtaining new insurance could otherwise be more challenging or result in denials by insurers due to pre-existing conditions. Therefore, conversion privilege ensures that individuals can maintain their health insurance coverage without facing barriers based on their current health.

Understanding this provision is crucial for both consumers and insurance professionals, as it helps ensure the continuity of care and addresses concerns related to obtaining coverage during health changes.