Security Features of Bima-ASBA
First and foremost, Bima-ASBA uses UPI as its payment platform -- a system known for its reliable and safe money transactions. This ensures that the process of your premium payments is carried out safely and efficiently. Contrary to the traditional method where the premium funds are immediately deducted from the individual’s account, Bima-ASBA blocks the amount in your bank account via UPI’s One Time Mandate (OTM) [2]. This money will remain in your account until the insurer confirms your policy proposal. In case the policy application gets rejected or fails to get processed within 14 days[3], the blocked funds from your account will be released back into your account.. This facility allows you to continue earning interest on the money in your account.
The prospect is informed at every stage of the Bima-ASBA i.e. blockage of the amount, initiation of debit (whether in part or in full) and the unblocking of the amount. This enhanced transparency in payment proceedings not only ensures that you are aware of the status of your application but also gives you more control over your money. The declaration forms and the process of blocking and unblocking money are standardised by the Life Insurance Council and the General Insurance Council, thus ensuring uniformity across insurers[2].
How Bima-ASBA Simplifies Policy Purchase
When you are applying for a policy, Bima-ASBA enables you to utilise UPI’s OTM option, allowing you to authorise the reservation of a designated amount of up to Rs.2 lakh[3] in your bank account for premium payment. The insurance company then sends a request to the bank to block the necessary funds in your account. The bank will seek your approval. Upon receiving your consent, the bank will block the funds and inform the insurer about the same. Although the blocked amount cannot be used during the 14-day waiting period[3], the money will be held in your account until the insurer makes a decision. This amount will be deducted from your account only when the insurance company completes the underwriting process and approves your policy proposal.
As the policy application gets approved, the insurance company will direct the bank to debit the blocked amount and transfer it to their account. In case you wish to cancel the application or the policy proposal gets rejected, the blocked funds from your account will be released back into your bank accounts. The bank will automatically release your funds if the insurer doesn't process your application within 14 days[3].
Why Bima-ASBA is Safe?
Bima-ASBA is a convenient method for making insurance payments as a one-time mandate (OTM) eliminating the need for multiple transactions for policy issuance. Using UPI-OTM for premium payments ensures secure, seamless, and quick transactions. Bajaj Allianz Life is the first insurer to implement the Bima-ASBA facility.. This initiative aligns with the Insurance Regulatory and Development Authority of India’s (IRDAI) efforts to enhance policyholder convenience and ensure greater transparency in premium payments[4].
Ease of Budgeting:
Policyholders can allocate funds for premium payments without immediate deductions, simplifying financial planning.
Quick Refunds:
If an application is rejected or cancelled, the blocked amount is promptly returned to the customer.
Interest Benefits:
While the funds remain blocked, they may continue to earn interest.[4]
This facility was introduced to enhance transparency and trust among customers when it comes to premium payments. As the entire process is monitored by your bank, you don't have to worry about fraudulent or unauthorised transactions. Moreover, the bank asks for your consent before carrying out the transactions. Additionally, you can earn interest income on your blocked funds as the money is still in your bank account. [4]
Conclusion
The UPI-based insurance payment system, Bima-ASBA, ensures security by blocking your funds in your bank account until policy issuance, automatically releasing the blocked money in case the application is rejected or the insurance company fails to complete your insurance application related formalities within a timeframe.
FAQs
What is the full form of Bima-ASBA?
ASBA in Bima-ASBA stands for Applications Supported by Blocked Amount
[4].
How does Bima-ASBA work?
[5] With Bima-ASBA, you can block the money for premium payments in your account until the policy gets issued by the insurer. If the policy application gets rejected or cancelled, the blocked funds will be immediately released.
Is Bima-ASBA applicable to all insurance policies?
Currently, the Bima-ASBA facility is only applicable to
life insurance and health insurance policies. Although the insurance companies have been instructed to provide Bima-ASBA as a payment option for life and
health insurance policies, whether you want to opt for the traditional or this UPI-based payment method is up to you
[6].
How to block your funds in the bank accounts for premium payments?
While you are applying for your insurance policy, you will get a form that includes an option allowing the banks to block a designated amount in your account for premium payments. By opting for this method, you are providing your consent to block your funds
[6].
Who should I contact if I have problems with Bima-ASBA?
If you have any queries or encounter any issues related to Bima-ASBA, it's best that you contact your insurance company for assistance.
References:
[1]https://currentaffairs.adda247.com/irdai-introduces-bima-asba-for-upi-based-insurance-payments/
[2]https://www.policyx.com/health-insurance/articles/bima-asba/
[3]https://www.businesstoday.in/personal-finance/insurance/story/bima-asba-facility-you-can-use-this-feature-while-purchasing-bajaj-allianz-life-policies-check-details-465864-2025-02-25
[4]https://www.fortuneindia.com/personal-finance/irdai-launches-new-payment-system-bima-asba-can-it-be-a-game-changer-for-insurance-holders/120733
[5]https://www.businesstoday.in/personal-finance/insurance/story/bima-asba-new-upi-based-insurance-payment-system-for-policyholders-heres-how-it-works-irdai-465240-2025-02-19
[6]https://irdai.gov.in/documents/37343/365525/One-time+Mandate+for+blocking+the+amount+towards+premium+through+Unified+Payments+Interface+(UPI+mandate)+for+issuance+of+life+and+health+insurance+policies-+Bima-ASBA.pdf/d78302e2-fe28-e201-3bb0-0457a943db6e?version=1.0&t=1739883167745&download=true
An ISO 9001:2015 
