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Overcoming Challenges in Availing Life Insurance Through Bima ASBA

Purchasing life insurance is a significant choice for many. The Insurance Regulatory and Development Authority of India (IRDAI) launched Bima ASBA (Applications Supported by Blocked Amount) to facilitate smooth transactions of payment of premium . Applicants can authorise blocking premium amounts from their bank accounts through the Unified Payments Interface (UPI).

Premium amount will only be debited from the bank account upon policy approval.

Though Bima ASBA has several benefits, candidates can face specific challenges. Let's examine the common problems that could be experienced while applying for life insurance policies under Bima ASBA and the solutions to address them.

 

This move from the regulator further highlights IRDAI’s efforts to eliminate unauthorised deductions, ensuring that premium payments are collected only upon policy acceptance. Insurers are instructed to integrate Bima-ASBA into their systems starting from March 1, 2025. Bajaj Allianz Life became the first insurer to go live with Bima-ASBA.

To help you understand Bima-ASBA better, we will discuss some of the common mistakes that policyholders make while using Bima-ASBA and how to resolve them. Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 31st March 2025
Modified on: 1st April 2025
Reading Time: 14 Mins
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Limited Awareness and Understanding


Challenge:


Potential applicants might not be aware of the Bima ASBA facility and could be unclear about application procedure.


Solution:


Take an active initiative to seek advice from your Insurance companies and/or financial advisors and make yourself aware of Bima ASBA. You could also refer to online content that explain features of Bima ASBA in detail. Remember if you keep yourself well-informed you can opt where you wish to opt for Bima ASBA or traditional payment method.


Technical Challenges with UPI Integration


Challenge:


Certain applicants can experience technical challenges in mapping their UPI accounts to the Bima ASBA system, resulting in transaction failures or delays.


Solution:


To minimise technical problems, applicants must keep their UPI accounts active and ensure they have adequate transaction limits to cover the premium amount. Insurance companies can partner with banks and UPI service providers to provide smooth integration and diagnostic support for typical technical issues.


Inadequate Funds Causing Application Rejection


Challenge:


When the applicant's bank account does not have adequate funds to pay the premium amount while blocking, the Bima ASBA process cannot proceed, causing application delays or rejection.


Solution:


Applicants can check their account balances before starting the Bima ASBA process to confirm that sufficient funds are available. Low-balance alerts given by the Bank can also be referred to ensure adequate funds for premium payments.


How To Use OTM (One Time Mandate)


Policyholders can simplify their premium payment process by following these steps:


  1. Choose BIMA-ASBA


    Select BIMA-ASBA as the payment method while purchasing the policy.


  2. Fund Blocking Request


    The insurer, via its banking partner, requests to block the premium amount.


  3. Consent & Confirmation 


    The policyholder provides consent, and the bank notifies the insurer once funds are blocked.


  4. Funds on Hold 


    The blocked amount remains in the policy applicant’s account until policy approval. But do note that you won’t be able to use these funds for any transactions till such time the underwriting decision is made by the Insurer.


  5. Premium Payment 


    Upon approval, the insurer instructs the bank to release the funds.


  6. Refund on Rejection


    If the policy is cancelled or rejected, the full blocked amount is released back to the policyholder within one working day.


Conclusion


Bima ASBA is a big leap in the ease of premium payments for life insurance policies in India. Granting the ability to block money instead of instant debiting gives applicants better control and security over their finances.


FAQs


  1. What is the UPI-linked Bima-ASBA facility?


    • Bima-ASBA (Application Supported by Blocked Amount) is a payment method that allows policyholders to authorize the blocking of a specified premium amount in their bank account using UPI's One-Time Mandate (OTM). The premium is debited only after the insurer approves the policy.
  2. How does Bima-ASBA benefit policyholders?


    • Policyholders' funds remain in their accounts and continue to earn interest during the policy approval process. The premium amount is debited only upon policy issuance, ensuring better fund utilization and transparency.
  3. What happens if my insurance application is rejected?


    • If the insurer declines the policy application, the blocked funds are promptly released back into your account within one working day, eliminating the need for refund processing.
  4. Is there a maximum limit for the premium amount under Bima-ASBA?


    • Yes, the Bima-ASBA facility allows for the blocking of premium amounts up to ₹2 lakh using UPI's One-Time Mandate.
  5. Which insurers currently offer the Bima-ASBA facility?


    • Bajaj Allianz Life Insurance is among the first insurers to launch the Bima-ASBA facility. It's advisable to check with your insurer to confirm the availability of this payment option.
  6. How does Bima-ASBA impact the interest earned on my bank account?


    • Since the premium amount remains in your account until underwriting decision is made or 14 days whichever is earlier, and may continue to earn interest as per the extant legal provisions applicable to banks.
  7. Can I use Bima-ASBA for all types of insurance policies?


    • The availability of Bima-ASBA may vary depending on the insurer and the type of insurance policy. It's recommended to consult with your insurance provider to determine eligibility.
  8. What are the steps to use the Bima-ASBA facility?


    • To utilize Bima-ASBA, select it as your payment method when purchasing a policy. Authorize the blocking of the premium amount via UPI's One-Time Mandate. The funds will be blocked in your account and debited only upon policy approval.
  9. Does Bima-ASBA ensure faster refunds?


    • Yes, since the funds are only blocked and not debited until policy approval, any rejection results in immediate release of the blocked amount, facilitating quick access to your funds.
  10. Is Bima-ASBA similar to the ASBA facility used for IPO applications?


    • Yes, Bima-ASBA is modeled after the ASBA facility used in IPO applications, where funds are blocked in the applicant's account and debited only upon allocation, ensuring efficient fund management.

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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

 

BJAZ-WEB-EC-13979/25

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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