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Forget about gold bars, diamonds or Mercedes Benzes, Citibank now offer a saving account that gives you not just the interest (Hibah), but an insurance protection of 36 critical illnesses (Takaful), up to RM100,000. Called Guard Saving Account-I, this saving account is based on ‘wakalah’ concept (bank as an agent for you ) that combines returns on savings (hibah) and insurance (takaful ) coverage. Currently most of the Islamic saving accounts in the country is based on ‘wadiah’ concept.

Here is how it works; as long as you keep your average monthly balance above RM2,000, you will get the 36 critical illness coverage up to RM100,000, interest rate of 0.5%, and additional rewards/gifts every 6 months.

Now let’s take a closer look at each of the benefits.

36 critical illnesses coverage
First, the coverage is ‘up to’ RM100,000. How much one actually gets covered depends on his account average monthly balance. This is where the information is hard to come by. There is no information available from the press release, or available in the citibank website.

[This is an update from the Post: The amount of insurance coverage is based on average monthly balance (withdrawal & deposit amounts divided by the frequency of withdrawal/deposit in a month, NOT MONTH-END BALANCE). If your AMB is RM5,000k, then the get only RM5,000 coverage. The maximum coverage is capped at RM100,000]

Secondly, take note - the insurance coverage excludes pre-existing conditions! That means if you found to having any of those 36 critical illnesses before you sign up, even though you maintain the required monthly average, you would not get any money. Your claim will be rejected! This is definitely a great area of concern. Now, most of the 36 critical illnesses are chronic diseases that usually have long ‘sleeping’ period. Further more, unless with regular health screening, most people are rather ignorance about their health status. You could very well have one of those diseases without knowing it! Therefore in a normal circumstance, when you are buying such health insurance, you have to give a full disclosure and undergo medical check-up before to see if your are ‘insurable’. But under the GSA-I, it insures you immediately without any screening, but penalizes you later. If something unfortunately really happens, you will find yourself taken for a ride. By all means, the regulators should not allow such ‘unfair’ practice.

But that is not all, the terror ride continues - to make any claim, you has suffer from the Critical Illness for thirty days before any claims can be paid (imagine having a heart attack for 30 days!). And if you die within 30 days of the diagnosis, nothing whatsoever shall be paid

Hibah (Interest rate)
This hibah is 0.5% based on the account balance of RM5,000 and above. This rate is neither the highest nor the lowest (see Islamic Account Saving Rate here). On top of that, account holders would also given a so-called lifestyle gifts twice yearly, depending on the average account balance over a six-month period (see chart below)

Privacy
Here is something rather ambiguous. As a GSA-I holder, you agreed to let Citibank to disclose your particulars to third party service providers and vendors for use “in relation to and for the purposes of the account”. Can’t really figure out what it means, but I definitely don’t feel comfortable with it!

Conclusion:
Who can benefits from GSA-I? If you are 100% sure that you currently do not suffering any of those nasty illnesses, GSA-I might be good for you - as a temporary shelter only. For a long term and better protection, go for a full insurance coverage.

If you are a regular reader in this blog, just as you’ve find out from CIMB’s Advance Profit FD account, nothing is ‘free’ from bank. Banks are full of MBAs, Quantum Physicist, and rocket scientists. Always read the terms and conditions carefully. If you can’t find the info you want, call and ask the bank. You will be surprise by how much ‘new’ things you can find.