What does a term conversion option allow a policyholder to do?

A term conversion option allows a policyholder to convert their term life insurance policy into a permanent life insurance policy without the need for medical evidence or proof of insurability. This is particularly advantageous if the policyholder has developed health issues during the term period that might make it difficult to obtain a new policy at standard rates. By exercising the conversion option, the individual can maintain coverage without the risk of losing it due to health changes, ensuring lifelong protection and potentially allowing them to accumulate cash value, which is a feature of many permanent policies.

The other choices do not align with the purpose of the term conversion option. Switching from one term policy to another involves the exchange of one term product for another, which is not what the conversion option entails. Changing the premium payment schedule does not relate to the conversion feature, as it is typically governed by the original policy's terms. Increasing the death benefit amount also does not pertain to the conversion option, which focuses solely on transitioning to a permanent policy rather than adjusting coverage amounts.