IRDAI launches Bima-ASBA via UPI to make insurance premium payment easier when you buy a policy
IRDAI) has allowed policyholders to set aside funds for premiums through a new payment mechanism called Bima-ASBA (Applications Supported by Blocked Amount) via Unified Payments Interface (UPI).
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The initiative, which aims to streamline the payment process for life and health insurance policies, allows policyholders to block funds in their bank accounts for premium payments, ensuring smooth transactions without immediate debits, according to a circular by IRDAI on February 18, 2025.
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The new payment mechanism will be effective from March 1, 2025, as per the IRDAI circular. “Under the facility called the Bima-Applications Supported by Blocked Amount (Bima-ASBA), the transfer of money from the prospect to the insurer happens only when an insurance policy is issued. In this facility, insurers can offer a one-time mandate for blocking a certain amount through UPI in the bank account for the concerned prospect,” the circular said.
Introduction of one-time mandate (OTM) via UPI
Customers can authorise insurers to block a specific amount in their bank accounts through the Unified Payments Interface (UPI) before the insurance proposal is accepted. The amount is debited only after the insurer approves the policy. If the proposal is not accepted, the
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