Advanced Directives and How They Affect Life Insurance

By Danielle Takacs, 2017 Summer Intern

End-of-life planning is not an easy topic to address. It can be emotional and confusing at times. An advanced directive, one kind of end of life planning document, states what type of medical care you wish to receive in the future and allows you to choose who can make medical decisions for you if you cannot to do so. A few documents make up an advance directive: a living will, a do-not-resuscitate order, and a durable power of attorney for medical care (also known as a designation of patient advocate). Questions about how advanced directives affect a life insurance policy if a person choose not to receive life saving measures are not uncommon during end-of-life planning.

In general, life insurance policies may deny coverage if a person is determined to have committed suicide. However, as people make decisions about life-prolonging procedures and medical treatment, some may opt to refuse treatments like being put on a ventilator or receiving CPR.  These choices can be communicated with a living will and through a designated patient advocate. Some people may worry that choosing not to have life-prolonging measures might be seen as suicide and affect their life insurance policy.

This is not the case, however. In Michigan, there are a few laws that make it clear that life insurers cannot invoke the suicide or intentional exclusion in a policy. One statute that says this is the Michigan Do-Not-Resuscitate Procedure Act. Another statute is the Estates and Protected Individuals Code. The Michigan Dignified Death Act also says that life insurers cannot limit insurance benefits, interpret these decisions as a cancellation of policy, or prevent beneficiaries from benefits.

Knowing this is the case, hopefully people will feel more confident with their end-of-life planning.