IRDAI has introduced a payment method called Bima-ASBA. You can now pay insurance premiums smartly, and there will be no deductions until policy approval.
Starting from March 1, 2025, policyholders can now block their insurance premium amount in their bank account, which will only be debited once their insurance policy is approved. This eliminates concerns about refund delays, unauthorized deductions, and policy rejections after payment.
IRDAI’s Bima-ASBA – Pay Insurance Premiums Smartly And No Deductions Until Approval!
What is Bima-ASBA and How Does It Work?
Bima-ASBA is modeled after the ASBA system used in IPO applications, where funds remain in the bank account and are only debited after final approval. Here’s how it works for insurance premium payments:
- Choose Bima-ASBA while applying for a policy – When purchasing an insurance plan, you can opt for the Bima-ASBA payment method.
- Authorize fund blocking via UPI One-Time Mandate (OTM) – Your bank will block the required premium amount (up to Rs.2 lakh) in your account, ensuring no upfront payment is deducted.
- Insurer processes your application – The insurance company will review your proposal to assess eligibility and underwriting requirements.
- Final payment upon approval – If your application is accepted, the blocked amount is debited automatically.
- Automatic unblocking if rejected – If the insurer rejects the proposal or does not process it within 14 days, the amount is automatically unblocked without requiring any manual refund request.
Key Benefits of Bima-ASBA for Policyholders
1. No Upfront Payment Hassles
Unlike traditional premium payments where funds are immediately deducted, Bima-ASBA blocks the amount but does not debit it until the policy is confirmed.
2. Full Control Over Your Money
Since the premium remains in your bank account until approval, you have greater control over your finances. No more unnecessary deductions or refund delays.
3. Earn Interest Until Final Payment
Because your money stays in your savings account, you continue to earn interest on the blocked amount until it is debited.
4. No Need to Track Refunds
Previously, if an insurer rejected a policy, policyholders had to wait for refunds. With Bima-ASBA, the blocked amount automatically gets released if the policy is rejected or not processed in time.
5. Increased Transparency and Security
This system ensures a fraud-proof process where policyholders are protected from unauthorized withdrawals or delays in policy issuance.
Which Insurance Companies Are Implementing Bima-ASBA?
Bajaj Allianz Life is the first insurer to introduce this facility, following IRDAI’s directive to make premium payments more secure and policyholder-friendly. More insurance companies are expected to adopt this model soon.
Why Bima-ASBA is a Game-Changer for Insurance Buyers
For years, insurance buyers have faced issues like premium debits before policy approval, refund delays, and payment frauds. Bima-ASBA resolves these concerns by ensuring that:
- Your money stays safe until the insurer finalizes your application.
- No need to follow up for refunds if the policy is rejected.
- The process is quick, automated, and transparent.
Final Thoughts: Should You Opt for Bima-ASBA?
If you’re planning to buy an insurance policy, choosing Bima-ASBA is a smart move. It provides a hassle-free payment experience, financial security, and peace of mind. With growing adoption, this system is set to become the new standard for premium payments in India.