Final answer:
The term for exchanging an existing insurance policy for a new one is conversion, which is particularly useful for individuals with changed health conditions who may not qualify for new insurance.
Step-by-step explanation:
The term used when exchanging a new policy for one already in force is conversion. This process allows policyholders to change their existing life insurance or health insurance policy to a new one with different terms and conditions, without having to provide evidence of insurability.
The option for policy conversion is particularly important for those whose health conditions have changed, making it more difficult to qualify for a new policy.
The term used when exchanging a new policy for one already in force is replacement. When you replace an existing insurance policy, you are essentially cancelling the old policy and getting a new one with different terms or coverage. This can happen when you find a better deal or when your needs change.