Funeral expense insurance in Quebec has been prohibited since 1976, according to Sylvain Théberge, Director of Media Relations at the Autorité des marchés financiers (AMF). Indeed, section 2442 of the Civil Code states: “A contract of insurance for funeral expenses whereby a person undertakes, for a premium paid in a single payment or by instalments, to provide services or goods upon the death of another person, to pay funeral expenses or to set aside a sum of money for that purpose is null.”
In 2017, Quebec’s Liberal government of Philippe Couillard proposed reintroducing the sale of funeral expense insurance when it tabled Bill 141 on the regulation of the financial sector. “It’s the same concept as financing a car over three or five years,” argues Annie St-Pierre, Executive Director of the Corporation des thanatologues du Québec. “If it allows someone to finance their prearrangement for $25 a month, why not, as long as they are aware that in the end they will pay two or three times as much?”
But the Liberals backed down in the face of strong opposition. “Funeral expense insurance is very widespread in the rest of Canada; it allows people to spread the cost generally over three, five, or ten years,” notes Mathieu Houle, Executive Director of the Fédération des coopératives funéraires du Québec (FCFQ). “But the more the amount is spread out over time, the higher the total payment is compared with the actual funeral expenses, because of interest.”
The trust guarantee
Amounts paid to the funeral home must be placed in trust.
– Annie St-Pierre
In Quebec, 32% of deceased persons had signed a prearrangement contract during their lifetime in 2024, compared with 26% in 2022, reports Annie St-Pierre. This signing occurs on average seven to eight years before death, according to Mathieu Houle.
Prearrangements are governed by the Act respecting arrangements for funeral services and sepultures, in force since 1987. Funeral expenses fall under a contract with the funeral home, while costs related to burial are the subject of a contract with the cemetery. And each is subject to distinct requirements.
“Amounts paid to the funeral home must be placed in trust,” explains Annie St-Pierre. “They fluctuate according to the consumer price index from year to year, which guarantees coverage of inflation between the time the person enters into their funeral arrangement and their death.” More specifically, 90% of the amount set aside for the funeral is placed in a trust account, while 10% may be retained to cover management costs of the funeral home and the trust.
Charles Tanguay, spokesperson for the Office de la protection du consommateur (OPC), believes that “this law ensures the protection of amounts paid and regulates business practices in order to better protect consumers, who are often elderly and vulnerable.” Since January 2021, a provincial registry has centralized all prearrangement contracts entered into in Quebec, to prevent families from paying twice.
Payment options
Mathieu Houle, of the FCFQ, notes that the average cost of funeral expenses in a cooperative that is a member of the federation is $4,570. This amount does not include the cost of the burial plot or interment fees. “In large cities, a cemetery plot costs several thousand dollars, and digging for the casket can cost from $1,000 to $1,500,” says Houle. Additional services provided by external vendors must also be added, such as flowers or catering.
In the absence of funeral expense insurance, how can payment for prearrangements be spread out? Sylvain Théberge notes that installment sales are permitted, but that 90% of the interest charged is then also placed in trust. For his part, Mathieu Houle specifies that cooperatives offer the option of paying for prearrangements over a maximum of five years (60 months), interest-free. In the event of death before the installments are completed, the family settles the balance.
An exemption for TruStage
Since funeral expense insurance is prohibited, the funeral home cannot be designated as beneficiary [of life insurance or death savings].
– Sylvain Théberge
Since 2003, the government has authorized by decree, under section 428 of the Act respecting the distribution of financial products and services, TruStage Life of Canada to offer life insurance and death savings plans through funeral homes. “Concretely, under this decree, funeral homes may, at the time of selling a prearrangement, offer an insurance or savings product,” comments Sylvain Théberge of the AMF.
Life insurance corresponds to an individual life insurance policy funded by regular payments, while death savings constitute a single-premium deferred annuity plan. Both products provide coverage for final expenses, but this coverage is incontestable only if death does not occur within two years.
Sylvain Théberge specifies that “since funeral expense insurance is prohibited, the funeral home cannot be designated as beneficiary of these products.” This is despite lobbying efforts by TruStage to that effect in 2022–2023. That said, the beneficiary may legally use or assign all or part of the money received to pay the insured person’s funeral expenses.
