As everyone keeps pointing out, a word document is not plain text.
What they have not asked is what format of word document are you processing?
Are you processing a DOC or a DOCX file? i.e. does it conform to the OpenXML format?
If you are reading a DOC file, then you need to use the correct interop/libary to extract the raw text data which you can then encrypt. (I suggest you start with the Word Interop, an alternative that doesn't require Word to be installed is NPOI
NPOI[
^], the 2.0 beta version also supports DOCX files)
If you are reading a DOCX file, then you need to the an OpenXML libary to extract the raw text data, and then encrypt it and insert it back into the document.
Microsoft Help Page[
^]