If you're that worried about your privacy, you should setup a VPN connection (Virtual Private Network) with the other party when video-conferencing, or at the very least use some software that encrypts the video stream. Google will find you loads of VPN solutions at varying prices; take your pick.
For someone to be able to use your webcam without your knowledge they would have to have totally compromised your system, and unless there is a way of disabling the power led for your webcam in software (AFAIK there isn't) then the LED will be on when it is in use.
Slainte
midders