Bima-ASBA: Insurance Regulatory and Development Authority of India (IRDAI) has announced a major relief for insurance policyholders. Now policyholders will be able to set aside funds for premiums using a new payment system called ‘Insurance-ASBA’ (Applications Supported by Blocked Amount) through Unified Payments Interface (UPI).
According to a circular issued by IRDAI on February 18, 2025, the initiative aims to streamline the payment process for life and health insurance policies. When a person buys an insurance policy, he has to pay the premium. Under “Insurance-ASBA”, the policyholder can block the premium amount in his bank account. When the policy is issued, the money will be deducted automatically.
When will it be implemented?
According to the IRDAI circular, this new payment system will be effective from March 1, 2025. Under this new rule, a facility named ‘Insurance-ASBA’ will be started. ‘Insurance-ASBA’ means – “Insurance-Applications Supported by Blocked Amount”. When you apply to buy an insurance policy, some money will be blocked from your bank account. This money will be given to the insurance company only when your policy is approved. The insurance company will ask you to block a certain amount in your bank account through UPI.
How does ‘Insurance-ASBA’ work?
Choosing Insurance-ASBA: When you apply for an insurance policy, you fill up a form that includes an option to allow your bank to block the premium amount in your account. The insurance company sends a request to your bank (through its partner bank) to block the required amount in your account. Your bank asks for your approval. Once you agree, the bank blocks the premium amount and informs the insurance company.
The money remains in your account but cannot be used for anything else until the insurer decides to accept your insurance application. It remains blocked for 14 days and can accrue interest. If the insurer accepts your application, they notify you and request the bank to debit the blocked amount and transfer it to your account.
If the insurer rejects your application or if you cancel it, the blocked amount will be refunded to your account without any deduction.
Related Articles:_
- Ticket Rule Changed: Railways changed the rules for those traveling with general tickets, check details
- 7th Pay Commission: DA hike will increase by 3% before Holi, government will announce it on this date
- Train Cancelled List: Passengers alert! Railways has cancelled these 8 trains till 28 February, see the full list
- US Visa Exemption: No interview required for these visa categories of America – Know all Details
- iPhone 16e Price: New iPhone launched at half the price, see the amazing look
