A client in Quebec, Monsieur Dubois, 70, currently holds a T100 policy he purchased 20 years ago. His health has declined significantly, and he now finds the premiums burdensome. He is considering lapsing the policy. What is the most critical information his advisor should convey regarding the lapse of his T100 policy?

Question: A client in Quebec, Monsieur Dubois, 70, currently holds a T100 policy he purchased 20 years ago. His health has declined significantly, and he now finds the premiums burdensome. He is considering lapsing the policy. What is the most critical information his advisor should convey regarding the lapse of his T100 policy?

Answer options: ✅ Lapsing the policy means losing the death benefit coverage entirely, and there will be no cash value available to him, as T100 policies typically do not accumulate cash surrender value.

• The policy will automatically convert to a reduced paid-up policy, maintaining some level of coverage without further premiums.
• He can reinstate the policy within two years of lapse by paying arrears without providing evidence of insurability.
• He can convert the T100 policy into an annuity to provide him with an income stream.

Correct answer: Lapsing the policy means losing the death benefit coverage entirely, and there will be no cash value available to him, as T100 policies typically do not accumulate cash surrender value.

Explanation: Lapsing a T100 policy results in the complete loss of the death benefit, and since T100 policies generally do not build cash surrender values, there will be no payout. This is a key characteristic distinguishing T100 from other permanent plans with cash value components, as per the typical structure of T100 policies.