Sophie, a 55-year-old self-employed consultant in Quebec, purchased a Term-To-100 (T100) policy 10 years ago. She has been diligent with premium payments. She recently received an offer to purchase a Universal Life policy that, according to the agent, offers better investment returns. What should Sophie be advised about her existing T100 policy if she is considering replacement?

Question: Sophie, a 55-year-old self-employed consultant in Quebec, purchased a Term-To-100 (T100) policy 10 years ago. She has been diligent with premium payments. She recently received an offer to purchase a Universal Life policy that, according to the agent, offers better investment returns. What should Sophie be advised about her existing T100 policy if she is considering replacement?

Answer options: ✅ T100 policies typically have no cash surrender values, so replacement might mean losing paid premiums without accumulation.

• T100 policies guarantee a level premium for life, which newer policies may not offer at her attained age.
• Replacing a T100 policy could subject her to new underwriting, potentially resulting in higher premiums or even uninsurability.
• The death benefit of a T100 policy is generally tax-free, a feature that may not be available with Universal Life.

Correct answer: T100 policies typically have no cash surrender values, so replacement might mean losing paid premiums without accumulation.

Explanation: T100 policies are primarily designed for permanent death benefit protection with fixed premiums, not cash value accumulation. Unlike Whole Life or Universal Life, they generally do not build cash surrender values, meaning all premiums paid are for the cost of insurance and are lost if the policy is surrendered before death, as per the characteristics of Term-To-100 plans.