Good News: New insurance premium payment facility via UPI from March 1
MFNews
This feature will allow policyholders to block funds in their bank accounts for premium payments, ensuring transactions without immediate debits.
New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) has announced a new premium payment mechanism, Bima-ASBA (Applications Supported by Blocked Amount), using the Unified Payments Interface (UPI). This feature will allow policyholders to block funds in their bank accounts for premium payments, ensuring transactions without immediate debits.
As per IRDAI’s circular issued on February 18, 2025, all insurers must offer the Bima-ASBA facility by March 1, 2025. This directive is part of the Master Circular on ‘Protection of Policyholders’ Interests’ issued on September 5, 2024. With Bima-ASBA, money transfers will occur only when the insurer issues the policy.
Insurers will create a one-time mandate via UPI to block the required amount in the prospect’s bank account. The premium amount will be debited only if the insurer accepts the policy proposal. If the insurer rejects the proposal, the blocked amount will be automatically released. Policyholders will be able to block funds without immediate deductions, ensuring better financial management.
