Bima-ASBA Facility: You can use this feature while purchasing Bajaj Allianz Life policies; check details

Bajaj Allianz Life has become the first mainstream insurer to implement the BIMA-Application Supported by Blocked Amount (Bima-ASBA) facility. This initiative, launched by the Insurance Regulatory and Development Authority of India (IRDAI), aims to streamline operations, improve policyholder convenience, increase transparency, and simplify the insurance premium payment process. 

Bima-ASBA offers policyholders the option to utilise UPI's One-Time Mandate (OTM), which allows them to authorise the reservation of a designated amount, up to Rs 2 lakh, in their bank account. The reserved amount is only deducted once the insurance company completes the underwriting process and approves the policy proposal. 

If the application is not finalised within 14 days or is rejected, the reserved amount is automatically released back to the customer's account. This ensures that policy buyers' funds remain accessible and continue accruing interest until the policy issuance is confirmed.

Bajaj Allianz Life, in partnership with its payment partners, has successfully launched this process, it said in a release. 

Tarun Chugh, MD & CEO, Bajaj Allianz Life, said: “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. We welcome Bima-ASBA as a significant step in this direction.”

How Bima-ASBA works
 
Initiating the Process: When customers apply for an insurance policy, they have the option to choose Bima-ASBA, allowing their bank to block the premium amount.

Request for Fund Blocking: The insurance company sends a request to its partner bank to block the necessary funds in the customer's account.

Consent and Fund Blocking: The bank seeks approval from the customer. Upon consent, the bank blocks the premium amount and informs the insurer.

Waiting Period: The blocked funds are held in the customer's account but cannot be used until the insurer makes a decision on the application.

Payment Upon Approval: If the application is approved, the insurer directs the bank to debit the blocked funds and transfer them to their account.

Refund for Rejection or Cancellation: In case of rejection or if the customer cancels their application, the blocked amount is released back into their account.

Automatic Unblocking: If an insurer fails to process an application within 14 days, the partner bank will automatically unblock the funds.

How will Bima-ASBA help you

Providing Convenience: Policyholders have the option to maintain sufficient funds for premium payments without having to worry about immediate deductions, thereby simplifying the budgeting process.
Swift Automated Refunds: In situations where applications are rejected or canceled, customers can anticipate a prompt reimbursement of their funds.
Accumulation of Interest: While funds remain inaccessible, they can still accrue interest, offering policyholders with an added financial advantage.