What does the 'Conversion Privilege' allow policyholders to do?

The 'Conversion Privilege' is a clause often found in group health insurance policies that allows policyholders to convert their group coverage into an individual policy when the group coverage terminates or lapses. This is particularly essential for ensuring continuity of coverage when a policyholder's employment ends, they retire, or if they otherwise lose their eligibility for the group plan. Under this provision, individuals can obtain a personal insurance policy without needing to provide evidence of insurability, which could otherwise complicate access to coverage based on health status.

This provision is designed to protect individuals by giving them a safety net and maintaining their insurance coverage, especially during times of transition. It is crucial for individuals who might otherwise struggle to secure individual coverage due to preexisting conditions or other health issues.

The other options do not accurately reflect the purpose of the 'Conversion Privilege.' For instance, the ability to switch from individual to group coverage does not align with the intent of this provision, as it specifically addresses the conversion from group to individual. Similarly, changing categories of insurance providers or transferring claims to another insurer are not functions of the Conversion Privilege and do not encapsulate the primary objective of ensuring ongoing coverage after group insurance is lost.