Shutter Island
"Which would be worse: To live as a monster, or to die as a good man?"
At that moment it becomes clear that he is making a decision, by accepting reality he becomes the monster, the monster who ignored his wife's mental illness thereby murdering his children and his wife. Guilt is unbearable for him so much so that he becomes delusional and makes up a scenario in which he is innocent. He would have to live with this truth as a monster by being sane. or... He could continue playing in this ongoing loop of misapprehension where he truly believes that he is on the side of law and order and he is right. If he chooses to continue to believe this he will be lobotomised and will no longer have relevant brain function to question what he did or did not do. in this choice, death is not literal, it simply suggests that after the lobotomy his consciousness will effectively "die" and undoubtedly be 'a good man'.
The most cathartic thing about this whole psychological and philosophical ordeal is that he makes this decision fully sound of mind. He is aware that the doctor came to test him, he is also aware that he can not live with his crimes and would prefer to lie to his doctor as he knows this will result in his lobotomy.
This movie is an absolute masterpiece!