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How Bima-ASBA Reduces Life Insurance Payment Failures

When it comes to life insurance, making premium payments on time is crucial to keeping your coverage in place. Bima-ASBA was introduced in the light of the requests/representations the IRDAI received from the insurers to bring about operational ease in meeting these requirements and simplify the payment of premiums. It is a payment option for policy applicant apart from the traditional modes of payment like credit or debit cards and etc. The payment method has been available since March 1st 2025. This article will help you understand how Bima-ASBA can help you with optional payment feature when applying for a life insurance policy.

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, with a strong understanding of the insurance sector.
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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What is Bima-ASBA?


Bima-ASBA (Applications Supported by Blocked Amount) is a facility that allows insurers to temporarily block the premium amount in the customer's bank account when applying for a health or life policy. The amount will only be deducted if the policy is approved. If the insurer does not accept the application, the blocked amount will be released within a working day and be available for use.


Why Payment Failures Happen in Life Insurance


There are several reasons why premium payments might fail in life insurance policies. Understanding these reasons is key to recognizing how Bima-ASBA can address the problem:


Insufficient Funds:


One of the most common causes of payment failure is a lack of sufficient funds in the policyholder’s bank account. If the premium amount cannot be processed due to insufficient balance, the payment fails, and the policy may lapse.


Banking or Technical Issues:


Sometimes, the banking system or online payment systems face technical issues that cause payment delays or failures. These issues can range from server outages to transaction errors that prevent payment completion.


Incorrect Payment Details:


If incorrect payment information is entered, such as wrong bank account numbers or expired credit card details, it can lead to failed payments. This is often a result of human error when submitting payment requests.


Processing Delays:


Even with correct payment information and sufficient funds, sometimes payment transactions are delayed due to issues within the payment processing system of the insurer or intermediary.


How Bima-ASBA Reduces Payment Failures


One of the primary causes of lapsed insurance policies is the failure to pay premiums on time. A lapsed policy means losing the coverage benefits, and in some cases, policyholders may have to undergo medical examinations and re-underwriting to reinstate their policy. The Bima-ASBA facility helps prevent these issues in several ways:


Ensured Availability of Funds:


The required premium amount is set aside during the application process, ensuring it is readily available when needed.


Timely Payments:


UPI-OTM ensures that payments are made on time once the insurer approves the proposal, helping policyholders obtain life insurance policy easily.


Why IRDAI Introduced Bima-ASBA


In Bima-ASBA the insurance premium amount is blocked in the policyholder’s bank account until the insurer completes the underwriting process—an evaluation of the applicant’s health, income, and other risk factors—and decides whether to issue or reject the policy.


Here, insurers can initiate a one-time mandate to block the premium amount via UPI in the applicant’s bank account. The amount will only be debited after the insurer approves the proposal. If the proposal is rejected, the blocked amount will be automatically released back to the applicant without any deductions. In September 2024, IRDAI issued comprehensive guidelines to safeguard policyholders’ interests, clearly stating that premiums should only be paid after the insurer has communicated its decision on accepting or rejecting the policy proposal. The introduction of Bima-ASBA is aimed at ensuring the effective implementation of this directive by streamlining the premium payment process accordingly.


Conclusion


Payment failures in life insurance policies can cause unnecessary stress and result in policy lapse, loss of coverage, or financial implications. The introduction of Bima-ASBA offers a practical solution to reduce the chances of payment failures. By blocking the required funds in advance, and offering real-time tracking, Bima-ASBA provides a seamless and secure way for policyholders to ensure timely premium payment.


By following a few simple tips like maintaining sufficient funds, updating payment details, and using UPI for fast payments, policyholders can further enhance their experience with Bima-ASBA and keep their coverage active without interruption.



FAQs


  1. What is Bima-ASBA?


    Bima-ASBA (Application Supported by Blocked Amount) is a facility that helps ensure timely premium payments for life insurance policies by blocking the required amount in advance.



  2. Why do premium payments fail?


    Premium payments can fail due to insufficient funds, technical issues, incorrect payment details, missed deadlines etc.



  3. Do I need to make any advance payment with Bima-ASBA?


    No, policyholders do not need to make any advance payments before the proposal is approved.



  4. How can I ensure successful payments with Bima-ASBA?


    Maintain sufficient funds, update your payment information, enable notifications, track your payment status, and use UPI for quick payments.



  5. How long will the amount be blocked for an insurance proposal?


    The amount will be blocked for up to 14 days; if the insurer approves the proposal, it will be debited, and if rejected, the amount will be released within one working day. If no decision is made within 14 days, the amount will be automatically unblocked and stay in the customer's account.



  6. Can the premium be paid through methods other than UPI for the Bima-ASBA facility?


    No, currently the premium for the Bima-ASBA facility must be paid through UPI.



  7. What should I do if I change my bank account or UPI ID?


    Make sure to update your new bank account or UPI ID details with your insurer to avoid any payment discrepancies.



  8. Can I use UPI to make payments through Bima-ASBA?


    Yes, Bima-ASBA integrates with UPI for fast and convenient premium payments.



  9. When will Bima-ASBA be available?


    Bima-ASBA is set to be operational from March 1, 2025, for new policy purchases



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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-14155/25

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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

X
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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