I wonder if anyone makes a phone with LEDs for all hardware functions, like some laptops have LEDs which light up whenever anything accesses the built-in webcam?
That would be interesting. But having a completely modular phone with hardware kill switches would be better imo. That way you can just dismantle it when not in use. Put it back together when going out. Switch the mic on when needed etc.
Unfortunately we can't do fine grained permissions like that on any common smart phone OS. You'll have to either take their word for it, or decompile the app and make sure they are telling the truth.
But that's also really easy phrasing to write a loophole for :P