Now you can use Bima-ASBA Facility while buying policy from Bajaj Allianz

Policyholders can utilise UPI's one-time mandate to authorise the blocking of a specified amount in their bank account through UPI

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Bajaj Allianz Life has become the first insurer to go live with the BIMA-Application Supported by Blocked Amount (Bima-ASBA) facility. This initiative is in line with the Insurance Regulatory and Development Authority of India’s (Irdai) plan to improve policyholder convenience and ensure transparency in premium payments.

 

Bima-ASBA enables policyholders to opt for UPI’s One-Time Mandate (OTM), allowing them to authorise the blocking of a specified amount – up to Rs 2 lakh – in their bank account. The amount is only debited once the insurance company completes the underwriting process and accepts the policy proposal. If the application is not processed within 14 days or is declined, the blocked amount is automatically released back to the customer’s account. This ensures that policy buyers’ funds remain accessible and continue earning interest until policy issuance is confirmed.

 

According to a circular issued on February 18, all insurers must offer the Bima-ASBA facility by March 1. Bajaj Allianz Life, in collaboration with its payment partners, has successfully launched this process, following Irdai’s circular.

 

“In line with the vision of ‘Insurance for All by 2047,’ Irdai is taking commendable steps toward enhancing transparency, trust, and digitization for customer convenience. These measures are designed to further benefit customers by strengthening the insurance ecosystem,” said Tarun Chugh, managing director and chief executive officer, Bajaj Allianz Life.

 

How Bima-ASBA works

 

Opting for Bima-ASBA: When applying for an insurance policy, customers can select an option that allows their bank to block the premium amount.

 

Request for blocking funds: The insurance company sends a request through its partner bank to block the required amount in the customer's account.

 

Consent and blocking of funds: The bank seeks approval from the customer. Upon consent, the bank blocks the premium amount and notifies the insurer.

 

Waiting period: The blocked funds remain in the customer's account but are unusable until the insurer decides on the application.

 

Payment on acceptance: If approved, the insurer requests the bank to debit the blocked funds and transfer them to their account.

 

Refund on rejection or cancellation: If rejected or if the customer cancels their application, the blocked amount is released back into their account.

 

If an insurer does not process an application within 14 days, the blocked amount will automatically be unblocked by the partner bank.

 

Benefits of Bima-ASBA

 

Convenience: Policyholders can ensure that sufficient funds are available for premium payments without immediate deductions, making budgeting easier.

 

Automatic refunds: In cases where applications are not accepted or are canceled, customers can expect a swift return of their funds.

 

Interest accrual: While funds are blocked, they may continue to earn interest, providing additional financial benefits.