- Key Features of Bima ASBA
- Benefits for Policyholders
- Payment Lock
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Bima ASBA: A New Way to Pay Your Insurance Premiums
Bima ASBA is your newly launched go-to payment method. The IRDAI has launched Bima ASBA which stands for Applications Supported by Blocked Amount. It allows you to make your premium payments via UPI for life and health insurance policies. You can now set aside the premiums through this method. You can send a one-time mandate to block a certain amount for your insurance premium.
Key Features of Bima ASBA
- Blocking of funds: The required premium amount is blocked in your bank account.
- Automatic deduction: The amount is debited only after the insurance company accepts the policy proposal and issues the policy.
- Enhanced transparency: You are informed about the policy approval before any payment deduction takes place.
- UPI-OTM integration: Bima ASBA utilizes the UPI-One Time Mandate feature. This allows for a one-time authorization to block the funds, simplifying the process and reducing the need for multiple transactions.
- Standardised process: The process for blocking and unblocking funds, as well as the declaration forms, are standardized by the Life Insurance Council and the General Insurance Council to ensure uniformity across insurers.
What are the Benefits of Bima ASBA for Policyholders?
Convenient Payment Processing:
Bima ASBA simplifies the payment process by allowing you to block funds in your account until the policy is issued. This eliminates the need for immediate payment and ensures that funds are available when required.Eliminates Manual Transactions:
With Bima ASBA, the premium payment process becomes automated. Once the policy is approved, the blocked amount is automatically debited from your account, eliminating the need for manual transactions and reducing the risk of missed payments.Greater Financial Flexibility:
By allowing you to keep funds in your account until the policy is issued, Bima ASBA provides greater financial flexibility. You can continue to earn interest on the blocked amount and manage your cash flow more effectively.Enhanced Transparency:
Bima ASBA offers enhanced transparency by informing you about the policy approval before any payment deduction occurs. This ensures that you are aware of the status of your application and have control over your funds.Hassle-free Refunds:
In case your policy application is rejected or you decide to cancel it, the blocked amount is automatically released back into your account. This eliminates the need for you to follow up for refunds, making the process hassle-free.Secure Transactions:
Bima ASBA utilizes the Unified Payments Interface (UPI) platform, which is known for its secure and reliable transactions. This ensures that your premium payments are processed safely and efficiently.Quick Release:
In case your policy is not approved by the insurance company, the blocked amount will be automatically released to your bank account quickly without waiting for days.
traordinary Facts
Earn Interest Income on the Blocked Amount The customers can continue to earn interest on the blocked amount as the money lies in their bank account. Other payment methods do not offer this benefit.
Benefits For Insurance Companies
Reduce policy lapse
One of the most common problems for insurance companies is that some policyholders do not complete payment after policy application. With Bima ASBA, the funds are pre-blocked which guarantees policy payment.Easy and fast policy issuanc
The policy issuance process will become faster with the UPI mandate as insurers don’t have to wait for the payment confirmation.Enhances customer experience
A smooth policy issuance process will enhance the overall customer experience and satisfaction. These customers are more likely to recommend the insurer if the overall experience is good.Reduces payment failure risksCashless hospitalization
Traditional payment instruments such as credit cards, debit cards, and net banking have higher chances of payment failures. Since the funds are already blocked, there is an increased chance of premium collection.
Bottom Line
Bima ASBA represents a significant leap forward in making insurance more accessible and user-friendly. By combining the security of UPI with the convenience of automated payments and the financial advantage of earning interest on blocked funds, it empowers policyholders while simultaneously streamlining operations for insurers. This innovative approach promises to significantly contribute to the IRDAI’s mission of "Insurance for All by 2047." Ready to experience the future of insurance premium payments? Contact PolicyX.com today to learn more about how you can switch to Bima ASBA and simplify your insurance journey.
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Bima ASBA: FAQs
1. How does Bima ASBA work?
You authorize a one-time mandate via UPI to block the premium amount in your bank account. The insurer reviews your application. If approved, they debit the blocked amount. If rejected or cancelled, the blocked amount is automatically released.
2. Which insurance policies are eligible for Bima ASBA?
Currently, Bima ASBA is applicable for life and health insurance policies.
3. Is Bima ASBA mandatory?
IRDAI has mandated that all life and health insurance companies offer Bima ASBA as a payment option.
4. What is UPI-OTM?
UPI-OTM (one-time mandate) is a feature of the Unified Payments Interface (UPI) that allows you to authorize a one-time block on funds in your account. This simplifies recurring or future payments.
5. Can I earn interest on the blocked amount?
Yes, the blocked amount remains in your bank account until the policy is issued, so you continue to earn interest as per your bank’s terms.
6. What happens if my policy application is rejected?
The blocked amount is automatically released back into your account.
7. When will the blocked amount be debited from my account?
The blocked amount will only be debited after the insurance company approves your policy proposal and issues the policy.
8. What if I don’t have enough funds in my account when the policy is approved?
The transaction will fail. You’ll need to ensure sufficient funds are available in your account before the policy is issued. Contact your insurer to discuss alternative payment options.
9. How do I unblock the funds if I want to cancel my application?
The block is automatically released if your application is rejected or if you cancel it within the allowed timeframe. You generally don’t need to take any separate action to unblock.
10. Who should I contact if I have problems with Bima ASBA?
Contact your insurance provider’s customer support for any queries or issues related to Bima ASBA payments. You can also contact your bank or UPI service provider for transaction-related issues.
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Written By: Simran Saxena
Simran has over 3 years of experience in content marketing, insurance, and healthcare sectors. Her motto to make health and term insurance simple for our readers has proven to make insurance lingos simple and easy to understand by our readers.
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