Key Benefits of Bima-ASBA for Policyholders
No Immediate Debit:
Unlike regular UPI payments that deduct money instantly, Bima-ASBA blocks the premium amount in your account and only deducts it after the policy is issued. This ensures that funds are reserved without affecting your balance until the policy is issued.
Enhanced Security:
Since the premium amount remains blocked rather than debited upfront, the chances of fraud and unauthorised deductions are minimised. This gives policyholders more control over their transactions and protects them from financial risks.
Convenience:
One-time UPI mandate, eliminate the need for manual transactions. Once approved, the payment process is seamless, reducing paperwork and delays.
Prevention of Policy Lapses:
Since the premium amount is already blocked, payments are processed on time, reducing the risk of policy lapses.. This ensures continuous coverage without the stress of tracking due dates.
Seamless Refunds:
If the policy is not issued for any reason, the blocked amount is automatically unblocked and refunded to your account. This prevents unnecessary deductions and ensures policy applicant’s peace of mind.
How Bima-ASBA Supports Different Types of Policies
Through One-Time Mandate (OTM) via UPI
Bima-ASBA allows policyholders to block the premium amount in their bank account through UPI before the insurance application is approved. The amount is deducted only after the insurer accepts the application. If the policy is rejected, the blocked amount is refunded.
Step-by-Step Process
Filling Out the Form
Applicants can authorise their bank to block the premium amount using Bima-ASBA while applying for an insurance policy.
Approving the Payment
The insurer sends a request to the bank, which the applicant must approve. Once approved, the bank blocks the amount and informs the insurance company.
Policy Approval or Rejection
- If approved, the insurer notifies the bank, and the blocked amount is deducted as the premium payment.
- If rejected or cancelled, the blocked amount is refunded within one working day.
14-Day Auto-Release Rule
As per the IRDAI circular, if the insurer does not process the application within 14 days, the blocked amount is automatically released to the applicant's account.
Bima-ASBA is a flexible payment solution that supports various insurance policies, ensuring hassle-free and timely premium payments.
Life Insurance:
Whether a term plan or a whole life policy, Bima-ASBA helps new individual policyholders make timely payments by blocking the premium amount in advance. This ensures uninterrupted financial protection for their loved ones.
Health Insurance:
Medical emergencies can be unpredictable, but Bima-ASBA ensures that health insurance premiums are paid on time. Blocking the required amount until the payment is processed helps policyholders maintain continuous health coverage without worrying about missing deadlines.
Real-Life Scenarios: How Bima-ASBA Saves Time & Effort
Managing Finances Easily:
A salaried individual can block the insurance premium amount on payday without an immediate deduction. This secures their policy premium payment in advance.
Avoiding Double Deductions:
If someone is applying for multiple policies, Bima-ASBA ensures that money is deducted only when a policy is issued. This prevents unnecessary withdrawals and keeps financial transactions clear and hassle-free.
For example: X’s Life Insurance Application
Applying for a Life Insurance Policy
X, a working professional, decides to secure her future by purchasing a life insurance policy from an insurance company. Instead of making an upfront payment, she opts for Bima-ASBA, allowing her bank to block the premium amount through UPI until her policy is issued.
Authorising the Premium Block
After submitting her application, X receives a UPI notification from her bank requesting approval to block the premium amount. She reviews the details and approves the request, ensuring the amount remains in her account but cannot be used for other expenses.
Insurer Receives Payment Authorisation
The insurance company receives confirmation from X’s bank that the premium amount is blocked. This assures the insurer that funds are reserved while they assess her application.
Underwriting & Processing
The insurer begins underwriting and evaluating X’s medical history, lifestyle, and financial details. This process may take multiple days depending on the company. During this time, the blocked amount remains in her account and continues earning interest.
Approval & Deduction
If insurer approves X’s policy, they instruct her bank to deduct the blocked amount. The payment is then transferred to the insurer’s account, and the policy is issued.
Rejection & Refund
If the insurer rejects X’s application, it will notify her bank to release the blocked funds. The amount will be automatically unblocked, and X will regain access to her money without deductions. The amount will be released within one working day from the date of non-acceptance of the policy proposal.
Cancellation Request
Before the insurer completes underwriting, X changes her mind and cancels the application. She submits a cancellation request to the company and instructs her bank to release the blocked amount within one working day.
Benefits for X
Financial Flexibility:
X’s money remains in her account until the policy is approved, preventing unnecessary deductions.
Interest Retention:
While blocked, her funds continue earning interest.
Security & Transparency:
The premium is deducted only if the policy is issued. If rejected or cancelled, her money is refunded seamlessly.
Bima-ASBA ensures X a stress-free insurance payment experience, allowing her to secure her future without worrying about upfront payments.
Conclusion
Bima-ASBA is making premium payments secure, efficient, and hassle-free. By integrating UPI with a blocked amount mechanism, IRDAI has ensured that policyholders can manage their payments effortlessly while reducing fraud.
An ISO 9001:2015 
