Add a term rider to your Ideal plan (ILP)

Add a term rider (LTA or DTA) to an Ideal plan. It should be 20 years of savings. For example, if the policyholder wish to save $250 a month, the term rider can be for $60,000.

Under LTA (level term assurance), the term rider pays $60,000 on death during 20 years, plus the saving in the Ideal plan. After 20 years, the rider expires, and the accumulated savings (which is $60,000 plus gains) will be paid.

Under DTA (decreasing term assurance), the term rider pays $60,000 reducing by $3000 each year over 20 years, plus the savings in the Ideal plan. Although the term rider reduces yearly it is more than offset by the additional savings in the year.

On death at any time, the total payout (including the savings in the Ideal plan) should be more than $60,000.

The annual premium is:

Entry  -- Male --    -- Female -
Age     LTA   DTA      LTA   DTA    

25       84    42       55    25    
35      211    85      139    57    
45      686   290      455   190

The premium rate for DTA is less than half of LTA. The cost difference is more significant at the higher entry ages.

The premium rate for female is about one-third lower than males.

The annual cost of LTA and DTA at the younger entry ages (ie less than 35) is less than $200, and is highly affordable.

RECOMMENDATION: Add a LTA or DTA to our Ideal plan. The premium is level and does not increase with age.