New Rule from March 1: Pay Insurance Premiums Using UPI Blocked Amount, Says IRDAI
Starting March 1, 2025, paying for life and health insurance premiums will become more seamless with the introduction of the Bima-ASBA facility. The Insurance Regulatory and Development Authority of India (IRDAI) has mandated that insurers offer this payment option, which allows policy buyers to block funds in their bank accounts via Unified Payments Interface (UPI) One-Time Mandate (OTM). This ensures smooth transactions without immediate debits.
Bima Applications Supported by Blocked Amount (Bima-ASBA) is a new facility that enables customers to authorize a block on a certain amount in their bank account for insurance premiums. The actual debit happens only after the insurer accepts the policy proposal. If the proposal is not accepted, the blocked amount is automatically released.
Prospects can authorize insurers to block a certain amount in their bank account through UPI OTM.
The blocked funds remain untouched until the insurance policy is issued.
If the policy is approved, the premium amount is debited.
If the proposal is rejected, the funds are unblocked and released within one working day.
What is Bima-ASBA ?
Bima Applications Supported by Blocked Amount (Bima-ASBA) is a new facility that enables customers to authorize a block on a certain amount in their bank account for insurance premiums. The actual debit happens only after the insurer accepts the policy proposal. If the proposal is not accepted, the blocked amount is automatically released.
How It Works
Prospects can authorize insurers to block a certain amount in their bank account through UPI OTM.
The blocked funds remain untouched until the insurance policy is issued.
If the policy is approved, the premium amount is debited.
If the proposal is rejected, the funds are unblocked and released within one working day.
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