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Bima-ASBA: Simplifying Life Insurance Payments with UPI Technology

The introduction of UPI-linked Bima-ASBA enhances convenience, security, and transparency in insurance premium payments. This system ensures that policyholders' funds remain in their accounts until the policy is officially approved. If the policy is not approved, the refund process is quick and seamless, ensuring a smooth experience for applicants.

Starting from 1st march 2025, IRDAI has mandated all life insurance companies to include Bima ASBA as a payment option, this article explains how you can use Bima ASBA to make your policy payment.

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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The Challenges of Traditional Insurance Payments


To understand the rationale behind IRDAI’s introduction of this facility, it’s crucial to identify the challenges of the traditional payment structure of the life insurance policy purchase. Here’s an overview. To buy a life insurance policy through the traditional payment format, one needs to apply for the same with a filled-in proposal form, relevant documents, and the first premium payment either online or through a cheque in the offline mode. The money gets deducted immediately while the proposal awaits an approval from the insurance company and the policy issuance thereafter. To check the validity of the policy proposal and verify the details and documents shared, the insurer follows an underwriting process and may seek further documents or conduct medical tests if needed. The procedure may take about 15 days, and the premium paid lies with the insurer for the entire phase. The applicant might not have a clue about whether there’s any deduction for unauthorised charges, and there’s no guarantee either that the policy would get approved. Offering the Bima-ASBA facility is thus an attempt by IRDAI to sort these issues faced by those looking to purchase an insurance policy.


How Bima-ASBA solves these problems


Knowing how Bima-ASBA solves the payment issues in a policy purchase may lead to a smooth policy purchase. But before digging deeper, here’s a clarity of how Bima-ASBA can be useful.


What is Bima-ASBA?


Mandated by IRDAI since March 01, 2025, Bima-ASBA is a new payment mechanism for life and health insurance purchases. As per their recent circular, this method is to be compulsorily included in a policy proposal form as a payment option for the first premium. Under this framework, the insurer seeks authorisation from the policy seeker via UPI to block the payment towards the first premium. The said amount gets deducted only when the proposal is accepted by the insurer and the policy issuance is ensured. The amount gets immediately released if the policy application gets rejected or cancelled, or automatically after expiry of 14 days from the date of initial blocking of funds. So, here’s how Bima-ASBA helps in smoothening your policy issuance:


  • Bima-ASBA ensures that the policy applicant gets more control over the transactions, operational ease .
  • The premium gets deducted from the blocked amount only after the policy issuance is approved, and the remaining amount (if any) is released within one working day. This ensures a hassle-free and secure transaction method at your fingertips.
  • In case of a policy rejection or cancellation, the blocked amount gets released within one-working day, ensuring a smooth and quick refund of the premium, thereby saving the applicant’s time and money. The amount is also unblocked after expiry of 14 days from the initial date of fund blocking.
  • Elimination of the uncertainty and apprehensions thus makes Bima-ASBA an efficient insurance payment process.

Step by step process to pay life insurance premiums through Bima-ASBA


Opting for Bima-ASBA for a policy purchase may be a convenient choice for those looking for a smooth and secure experience. Here’s a step-by-step guide that you can follow.


  • Opt for Bima-ASBA as the premium payment mechanism through a standard declaration while applying for the policy.
  • Instead of immediate payment, you’ll get to authorise and instruct your bank to block the premium amount via a UPI platform. The blocking request will be sent by the insurer through its partner bank.
  • Upon the explicit consent, the authorised amount will get blocked, and the same will be notified to the partner bank and the insurer, and consequently to you.
  • The blocked amount will not be available for any other transaction till the completion of insurance underwriting or the 14-day waiting period, whichever is earlier.
  • The premium will get debited from the blocked amount only if the policy gets approved. The partner bank will deduct the premium and transfer the same to the insurer. The residue amount, if any, will be released immediately.
  • In case of proposal rejection or cancellation, or if the waiting period is over, the blocked amount will get released without further deduction as per the instruction of the insurer.

Comparing Bima-ASBA with other Payment Methods


Here’s a glance at a comparative study of Bima-ASBA versus the traditional insurance payments.


           Payment Mechanism ParametersBima-ASBATraditional payments

Payment format

UPI

Net banking, cards, UPI, cheque, demand draft

Blocking of money

For underwriting phase or 14 days, whichever earlier 

NA

Refund in case of policy rejection

Instantly within 1 working day

May take time

Real-time update of policy issuance

Yes

No

Unexpected Charges

NA

May occur  due to possible transaction failures


Conclusion


Life insurance being a crucial choice of investment, a hassle-free, secure, and transparent process of paying premiums may be an added relief for many. Undoubtedly, IRDAI has also attempted the same by mandating the inclusion of Bima-ASBA as a payment method. It’s the policy applicants who’ll have to choose it to reap the benefits.

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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-13977/25

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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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