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Critical illness insurance with a refund of premium: how it works

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Guide 2026 · Quebec

Getting your premiums back if no serious illness occurs: is it worth the extra cost?

How it works, benefits, limitations and questions to ask before choosing the premium refund formula.

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Critical illness insurance pays a lump sum payment when you are diagnosed with a covered illness, such as cancer, stroke or heart attack. But what if you never get sick and have paid premiums for 20 years? With the refund of premium option, the insurer can give you back some or all of those premiums, depending on the terms of the contract. This formula comes at a price: here’s how it works.

How premium refund works

1

You choose the option when you subscribe

The premium refund is usually selected at the time of application. It is not always possible to add it later.

2

You pay higher premiums

The insurer undertakes to return premiums: the monthly premium is therefore higher than that of insurance without reimbursement.

3

The refund depends on the situation

Depending on the contract, it can be paid at the end of the term, at cancellation after a certain number of years or at death, if no benefit has been paid.

With or without refund: comparison

sum is a
CriterionNo refundWith refund
Lower premiumsHigher (sometimes significantly)
If you are never sick Premiumsare not refundedRefund possible depending on the conditions
If a covered illness is diagnosed Paid-upLumppaid-up; reimbursement no longer generally applies
Budget flexibilityGreaterLess: long-term commitment
For whomtight budget or a need for maximum coverageSomeone who wants a structured contractual savings plan

General information and indicative prices: the conditions vary depending on the insurer and the contract.

Advantages and limitations

Benefits

You potentially get premiums back if illness doesn’t occur. This can make the expense easier to justify. It’s a form of forced savings.

Limitations

Higher premiums, long-term commitments, generally low returns. Cancellation too early may not entitle you to a refund.

To check before signing: the repayment conditions (expiry, cancellation, death), the waiting period, the exclusions and the illnesses covered. An inaccurate declaration when applying may result in the refusal of a benefit.

Which option to choose?

There is no one-size-fits-all answer. If your priority is the insured amount for the available budget, a non-reimbursement plan can often increase coverage. If you prefer an expense that can be recovered, the reimbursement plan is worth costing. In both cases, also compare the needs of your disability insurance and life insurance.

Service throughout Quebec

Partner firms registered with the AMF serve clients in Montréal, Québec City, Laval, Gatineau, Sherbrooke, Trois-Rivières, Saguenay and Longueuil, by telephone or online.

Frequently asked questions

What is a refund of premium in critical illness insurance?
It is an option that provides for the reimbursement of all or part of the premiums paid if no benefit has been paid, depending on the terms of the contract: at the end of the term, on death or cancellation after a certain number of years. The exact terms vary from one contract to another.
How much does the premium refund option cost?
Premiums are higher than with non-reimbursement insurance, sometimes significantly, because the insurer undertakes to pay premiums. The difference depends on your age, your state of health, the amount insured and the duration. Only a quote gives a precise price; any published figure is indicative.
Is the refund guaranteed?
No. It is only paid if the conditions of the contract are met. In general, a benefit paid at diagnosis terminates the contract and the reimbursement no longer applies. Read the expiry, cancellation and death clauses carefully.
What is the difference between temporary and permanent critical illness insurance?
Term coverage (10 years, 20 years, up to a certain age) costs less initially but ends at maturity. Permanent or lifetime coverage maintains coverage for longer, with higher premiums. The repayment option may be added to some plans.
Is the premium refund taxable?
The tax treatment depends on the formula chosen and your situation. It is preferable to validate this point with a tax specialist or the advisor of the partner firm before subscribing.
Is it better to invest the difference in premium rather than choosing to repay?
It’s a question of preference and discipline. Repayment is a regulated contractual savings, but with a generally low return. Investing the difference yourself offers more flexibility, with no guarantee. An advisor can put a figure on both scenarios depending on your case.
Can I add the refund of premium to an existing contract?
In most cases, the option is chosen at the time of purchase and is not added later. Some insurers allow you to convert term coverage. Check the conversion rights provided for in your contract.
How do I get a critical illness insurance quote in Quebec?
Fill out the online form in about three minutes. An advisor from a partner firm registered with the AMF will contact you to compare the formulas, with and without reimbursement, according to your profile.

Compare with and without premium refund

Free quote in 3 minutes, via partner firms registered with the AMF.

Get My Quote1-866-357-4451

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