Replacing an existing policy: the rules that protect you

The call comes on a Tuesday evening. A representative proposes a contract that is "better suited," with more generous coverage, a policy more modern than the one signed seventeen years ago. The proposal sounds reasonable, and the person at the other end of the line is 58, with a medical file that has become more complicated since then, and no idea what they stand to lose by signing.

In Québec, replacing an insurance of persons contract is not an ordinary transaction. The legislator framed the operation in an entire division of a regulation, precisely because it can put the client at a disadvantage without anything appearing to be wrong.

These rules exist. They are public. And they give the consumer a document, a time limit and a duty of justification that they have the right to demand.

First, your representative must defend the contract you have

The starting point is not neutral. The Règlement sur l'exercice des activités des représentants — the regulation governing how representatives carry out their activities — sets out in its section 20 a rule that clearly leans one way:

"The representative must promote the maintenance in force of any insurance contract unless its replacement is justified in the interest of the policyholder or the insured, the burden of proving which lies with the insurance of persons representative who carries out the replacement."

Two things are found there. The replacement must be justified in your interest, not in anyone else's. And the burden of that proof rests on the representative, not on you.

Section 21 locks the side door: the representative must not induce you to give up a contract, to let it expire or to abandon it in favour of another, except in accordance with the procedure set out in section 22.

The Autorité des marchés financiers (AMF), Québec's financial sector regulator, translates the same requirement into plain language: "your representative must promote your current insurance contract. That means they cannot propose replacing it before having analyzed it in depth in order to properly understand your current coverage and your needs." And if they do recommend the change, "they must explain to you the reasons why you would be better served by a new contract," naming the gaps in the one you already have.

The Préavis de remplacement: the document that must exist

Where taking out a new contract is likely to result in the cancellation, rescission or reduction of the benefits of another contract, section 22 imposes a precise sequence. The form in question is the one prescribed in Schedule I to the regulation: the "Préavis de remplacement d'un contrat d'assurance de personnes" (notice of replacement of an insurance of persons contract).

The representative's obligation	Timing set by section 22
Complete the Schedule I form	Before or at the same time as the insurance application
Explain the content of the form, compare the features of the contracts in force and proposed, describe the advantages and disadvantages of the replacement	At the time of presentation
Give you a copy of the form completed and signed by them	No later than 5 business days after the application is signed
Send the form to the head office of the insurers whose contracts may be replaced, by a means attesting to the date of sending	Within 5 business days of the signing of the application
Send a copy to the insurer with which they propose to place the new contract	Within the same time limit

The Authority sets out the scope of the document: it "must contain a complete comparison of your current contract and the proposed contract," as well as "all available information about your new contract and the reasons that explain the need for the change." And if the proposed contract replaces more than one — a life insurance policy and a disability policy, for example — the representative must provide you with a notice for each.

There is a practical consequence to section 22, paragraph 4. Your current insurer will be informed. Section 24 adds that the representative may not prevent it from communicating with you "in an attempt to dissuade them from replacing their contract or to offer them an equivalent contract." Receiving that call is therefore not an anomaly: it is the mechanism working.

The two clocks that restart at zero

This is the heart of the risk, and it is almost never obvious from reading a brochure.

Incontestability. Article 2424 of the Civil Code of Québec provides that "in the absence of fraud, misrepresentation or concealment in respect of the risk may not serve as grounds for the annulment or reduction of insurance in force for two years." Past that mark, a contract therefore becomes much harder to contest. The Authority says so bluntly: "Generally, when you replace an insurance contract, you have to wait another two years before benefiting from that incontestable status." A seventeen-year-old contract is incontestable; its replacement is not.

What that means in concrete terms: article 2410 provides that misrepresentations and concealment by the policyholder or the insured entail, at the insurer's request, the nullity of the contract, "even in respect of losses not connected with the risk so misrepresented." An unintentional omission in the new application therefore becomes actionable again for two years.

The suicide clause. Article 2441 provides that the insurer may not refuse to pay by reason of the insured's suicide unless it has stipulated an express exclusion, and that "even then, the stipulation is null if the suicide occurs after two years of uninterrupted insurance." The Authority confirms that "this period is also reset to zero when you replace your life insurance contract."

That same article 2441 contains a second paragraph few people know about: an amendment to the contract that increases the amount of insurance is, for the additional amount only, subject to the initial exclusion for two years of uninterrupted insurance from the date the increase takes effect. Increasing coverage is therefore not neutral either — but the older portion keeps its seniority.

Your health and your age. The Authority adds the third effect: if you end a policy in order to obtain another, you will probably be asked new health questions, and the premium "could then be set according to your state of health and the age you have reached." The medical file of your 41-year-old self is not the one of your 58-year-old self.

What is not a replacement

Section 19 settles a frequent confusion: "An amendment made to an existing contract may not be considered a replacement covered by the provisions of this division." Adjusting a contract you already have and replacing it with another are two different operations, and only the second triggers the notice.

Section 18 marks out the rest. The division does not apply to the replacement of an individual annuity. It does, however, apply to the representative who enrols you in a group contract "where that enrolment results in the cancellation, rescission or reduction of the benefits of an individual insurance policy." Joining a new employer's plan while dropping your personal policy is therefore very much covered — a case our guide to group life insurance sheds light on from another angle.

Section 27 covers a more specific situation: where an insurer agrees to issue the contract requested, but at an additional premium, the representative must follow the replacement procedure before going to get the same contract elsewhere without that additional premium.

The precautions the Authority puts in writing

The most useful warning on the Authority's page fits into two sentences: "Do not cancel the first contract before receiving the one that replaces it, reading it and satisfying yourself that it suits you. If the new contract suits you, sign it and you can then end your old contract."

The order of operations is everything. Weeks can go by between the cancellation of the old one and the acceptance of the new one, and an application is not a contract: the insurer can refuse, or accept on different terms. Our guide to insurance with no medical exam explains why that acceptance step is never a foregone conclusion.

The Authority also recalls a fact you are allowed to check: "Representatives are generally paid when they sell a new insurance contract. If in doubt, you can ask your representative to explain how they are paid. The law requires them to answer you honestly." Asking the question is not rude; it is provided for.

Finally, the Authority maintains a Registre des entreprises et des individus autorisés à exercer — a register of firms and individuals authorized to practise — which lets you check that a representative or a firm really is authorized to offer you an insurance product.

The steps, in order

The Authority describes the sequence to follow if you accept the replacement. You and your representative sign the notice of replacement. The representative then prepares the insurance application, which is your official request to the insurer. You read that application and make sure every piece of information in it is accurate, failing which the insurer could contest a claim. Then you wait for the insurer's decision: if it accepts, you receive the new contract.

Only at that point does the question of ending the old one arise.

Frequently asked questions

Can I refuse to sign the notice and buy anyway?

The notice is not a formality the client works around: it is part of the procedure imposed on the representative by section 22. If a representative proposes replacing a contract without presenting you with this document, that is the signal to stop and put questions to the Autorité des marchés financiers.

Is it better to keep two policies than to replace one?

That is a possibility the regulations do not prohibit, and it avoids resetting the clocks on your existing protection. It obviously has a cost, since two contracts have to be paid for. The comparison depends on your situation, and it is exactly the kind of question to put to an authorized financial security advisor — we do not compare contracts on your behalf.

Will my old insurer call me?

It is possible, and it is legitimate. Section 22 requires the notice to be sent to the head office of the insurers concerned, and section 24 prevents the representative from blocking their approach to you. You can take the opportunity to ask your current insurer whether it can offer you an equivalent contract.

Does the new contract change my beneficiaries?

A new contract requires a new designation, with all the rules that implies in Québec, notably the presumption of irrevocability that covers the married spouse and the civil union spouse. Our guide to naming a beneficiary sets out those articles of the Civil Code in detail.

What if the replacement concerns a term policy that has reached the end of its term?

The renewal or conversion provided for in your existing contract is not the same thing as a replacement by another contract. Our guides to term and permanent insurance and to life insurance after 60 explain those end-of-term mechanisms.

Sources

• Règlement sur l'exercice des activités des représentants, RLRQ chapter D-9.2, r. 10, Division VII "Remplacement de polices," sections 18 to 27 and Schedule I: https://www.legisquebec.gouv.qc.ca/fr/document/rc/D-9.2,%20r.%2010 (accessed August 11, 2026)
• Autorité des marchés financiers, "Annuler un contrat d'assurance de personnes": https://lautorite.qc.ca/grand-public/assurance/annuler-un-contrat-dassurance-de-personnes (accessed August 11, 2026)
• Civil Code of Québec, articles 2410, 2424 and 2441, consolidated text, LégisQuébec: https://www.legisquebec.gouv.qc.ca/fr/document/lc/CCQ-1991 (accessed August 11, 2026)

This text presents general information about Québec regulation. We are neither a broker nor an insurer, and we do not give insurance advice. For your own situation, consult a financial security advisor authorized by the Autorité des marchés financiers.