Q1. What is Bima-ASBA and how does it work?

Bima-ASBA (Applications Supported by Blocked Amount) is a UPI-based payment facility option introduced by IRDAI for the first premium of new individual life and health insurance policies. You approve a UPI one-time mandate, and your bank blocks the premium amount in your account until the insurer approves the proposal.

Q2. Is Bima-ASBA mandatory for buying insurance?

No, insurers must offer it for applicable life and health proposals effective from 1 March 2025, but it is the customer’s choice whether to use it or not. You can pay through any other method the insurer offers.

Q3. How can I use Bima-ASBA to pay my insurance premium?

Select Bima-ASBA as the payment option while filling the proposal form, if your chosen insurer supports it, and submit the standard declaration. The insurer then sends a block request through its partner bank, and you get a UPI mandate approval request in your UPI app.

Q4. What is the full form of Bima-ASBA?

Bima-ASBA full form is Bima Applications Supported by Blocked Amount.

Q5. What happens to the blocked amount if my insurance proposal is rejected?

The block is removed, and the full amount becomes available in your account again if your insurance proposal is rejected. As per the prescribed requirements, this is expected within one working day. However, the timelines may vary as per different insurers.

Q6. How long does Bima-ASBA keep money blocked in a bank account?

The amount can stay blocked for up to 14 days or until the underwriting decision, whichever comes first. During this time, you cannot use the money for other transactions, but it may continue to earn interest as per your bank's rules.

Q7. Does Bima-ASBA apply to life and health insurance policies?

Yes, it applies to new individual life and health insurance proposals, and only for the first premium. It is not used for renewal premiums and does not apply to other types of insurance, such as motor insurance.

Q8. Is Bima-ASBA available for all insurance companies in India?

IRDAI has made it mandatory for all life and health insurers to offer Bima-ASBA from 1 March 2025, so it is meant to be available across these insurers.

Q9. Can I cancel my Bima-ASBA mandate after applying for insurance?

Once you accept the mandate, you cannot cancel the mandate yourself. Only the insurer can do that. However, you can cancel your insurance proposal before the underwriting decision. The insurer then asks the bank to release the blocked amount.

Q10. What happens if the insurer does not approve my policy within 14 days?

If the insurer does not process your proposal within 14 days, the block is removed automatically through the partner bank and the money becomes available again.

Q11. Can insurance agents help customers use Bima-ASBA?

Yes, agents can explain what a UPI mandate is, help customers understand why the money stays blocked, and keep them updated on approval, rejection, and release of funds. However, the customer must approve the mandate in their own UPI app.

Bima-ASBA UPI payment system for insurance customers and agents

By Komal Bhatt Published: Oct 28, 2026

11 min read
155 views

Bima-ASBA: How the New UPI Payment System Helps Customers & Insurance Agents

A Quick Answer
Bima-ASBA (Applications Supported by Blocked Amount) is an IRDAI-backed UPI payment option for new individual life and health insurance proposals, effective from March 1, 2025. This facility allows customers the option to block the amount required for an insurance premium in their bank account without paying it immediately. The money is debited when the insurer accepts the proposal, and if the proposal is rejected, cancelled, or not processed within 14 days, the blocked amount in the policyholders’ bank account is released as per the prescribed rules.

Buying an insurance policy involves more than choosing the right coverage and paying the premium. Suppose you fill out an online proposal for a term plan or a health policy and pay the first premium immediately. A few days later, the insurer rejects the proposal, or you wish not to proceed with the insurance policy.

What happens? Your money gets stuck with the insurer, you apply for a refund and wait hours or days to get your money back. Bima-ASBA was brought in to fix exactly such issues. Under this IRDAI facility, you can opt to block your premium amount in your own bank account while the insurer reviews your proposal. It is only blocked, not paid. The insurer receives the money only after it accepts the proposal and issues the policy.

Let's understand what Bima-ASBA means, how it works, and what customers and insurance agents should know before using it.

What is Bima-ASBA?

Bima-ASBA stands for Bima Applications Supported by Blocked Amount. It is a UPI-based insurance premium payment facility introduced by IRDAI. Under this system, the customer authorises a one-time UPI mandate to block the required premium amount in their bank account. The money remains in the account but cannot be used for other transactions while the block is active.

The insurer can collect the premium after accepting the insurance proposal and completing the applicable process. It is done through the UPI one-time mandate. The mandate only blocks the amount and does not mean your policy is approved.

Note: It is important to note that the IRDAI Bima-ASBA (Applications Supported by Blocked Amount) facility is currently restricted to new individual life and health insurance proposals for the first premium payment and does not apply to motor insurance.

Why Did IRDAI Introduce Bima-ASBA?

Bima-ASBA is part of IRDAI’s wider push to make insurance an accessible, simpler, and transparent process alongside initiatives like Bima Sugam, Bima Vahak and Bima Vistaar. Here are the main reasons why IRDAI introduced it:

Reducing refund-related concerns: When customers pay a premium upfront, they may have to wait for their money if the insurer rejects the proposal. With Bima-ASBA, if the proposal is not accepted, the funds are released according to the prescribed process.
Improving payment transparency: Customers receive information about the blocking of funds, the initiation of a debit, and the release of the blocked amount.
Protecting customer consent: The mechanism uses a UPI one-time mandate that requires the customer's authorisation, which helps establish a clear payment authorisation process.
Making insurance applications more convenient: Customers can arrange for the required amount to be available without having to pay it upfront through this facility. This can make the application process easier to manage.

Note: Bima-ASBA is an additional payment option, not a compulsory payment method for every customer. Customers can continue using the other payment methods available through their insurer.

How Does Bima-ASBA Work? Step-by-Step Process

The Bima-ASBA process generally has four stages. Here is what happens at each stage:

Step 1: Choosing Bima-ASBA during the application

While filling out the proposal form, you will see Bima-ASBA as a payment option if the insurer supports it. You opt it by giving a standard declaration which is a part of the proposal. Additionally, an insurer cannot reject your proposal only because you did not use the ASBA option.

Step 2: Authorising the UPI mandate

After the declaration, the insurer sends a block request through its partner bank. You receive a UPI mandate request on your phone. Before you approve, it is recommended that you check three things:

Insurer name: It should match the company you are buying from.
Amount: It should match the premium you expect to pay.
Validity: Consider and check how long the block will stay active.

Approve the request only from your own authorised UPI app. Never share your UPI PIN or OTP with anyone, including an agent.

Step 3: Blocking the premium amount

Once you approve, the bank blocks the amount in your account. The block lasts until the underwriting decision or 14 days, whichever is earlier. You will get updates when the amount is blocked, debited, or released. Moreover, since the money stays in your savings account, it may keep earning interest as per your bank's rules.

Step 4: Debiting the premium after policy approval

When the insurer accepts the proposal and issues the policy, it instructs the partner bank to debit the blocked amount and transfer it to the insurer. When Bima-ASBA is used, risk cover begins from the date the insurer accepts the proposal, even if the debit happens a little later.

Once the policy is issued, it may also become part of IRDAI’s proposed Public Insurance Registry, which aims to bring policy records into one place. However, it is important to note that the Public Insurance Registry is still a proposal and is yet to be finalized by IRDAI.

Key Benefits of Bima - ASBA for Customers and Insurance Agents

It can make the insurance buying process more convenient by reducing upfront payment concerns and giving customers greater clarity about their money. It also gives insurance agents another payment option to explain when helping customers apply for eligible policies. Here are some of the key Bima-ASBA benefits for customers and insurance agents.

For Customers

No immediate premium debit: The amount is blocked in their bank account until the insurer makes its underwriting decision or the mandate expires, whichever happens first.
Less hassle on rejection: If the insurer rejects the proposal, the blocked amount is released according to the prescribed rules.
Money continues to earn interest: Since the amount remains in the customer's bank account while blocked, it may continue to earn interest, depending on the bank account's terms.
Greater transparency: Customers receive updates about the blocking of funds, the premium debit, and the release of the amount.

For Insurance Agents

Easier Understanding with Customers: Insurance agents can address concerns among customers who are unsure about paying before their proposal is accepted.
Better customer communication: Agents can explain what happens if the insurer approves or rejects the proposal, or if the underwriting decision is delayed.
An additional payment option to offer: It gives agents another payment option to discuss with eligible customers.
An opportunity to build customer trust: When agents explain both the benefits and challenges of Bima-ASBA accurately, customers can make decisions with a clearer understanding.

Bima-ASBA Eligibility Requirements

You might think that you need to comply with some critical Bima-ASBA rules in India to use the ASBA option. There are no strict rules for it, provided the following conditions are met:

Applicable Insurance Category: As of now, the facility is introduced only for life and health insurance policies.
Type of Applicant: It is intended for eligible individual policy applicants and can not be used for renewal premiums.
Payment Method: It uses a UPI one-time mandate to block the premium amount.
Customer Consent: The applicant must authorise the mandate.
Policy Approval: The insurer must complete its underwriting assessment before accepting the proposal.
Available as an option: The facility must be offered as an option, but customers can choose another available payment method.
Mandate Validity: The blocking period is limited to a maximum of 14 days or until the underwriting decision, whichever occurs earlier.

According to reports, the maximum blocking limit under Bima-ASBA is currently reported as ₹2 lakh per proposal, though this is subject to NPCI guidelines and may slightly vary as per different sources.

Common Bima-ASBA Challenges and How to Handle Them

Although it is designed to simplify premium payments, customers may still face technical or processing issues, which are as follows:

UPI mandate not received or approved

There might be a situation where you may not receive the mandate request or may be unable to approve it. In such situations, you need to:

Check whether the UPI application and linked bank account are working.
Confirm that the application details and payment information are correct.
Check the insurer's application status before attempting another payment.
Contact the insurer or its payment support team if the request remains unavailable.

Insufficient account balance

It may also happen that your bank account does not have a sufficient amount to be blocked for Bima- ASBA. To find a solution, you should:

Check the available balance in the linked bank account.
Add funds if necessary and follow the insurer's instructions for retrying the mandate.
Remember that existing holds or other pending transactions may affect the amount available.

Blocked amount not released as expected

You may also notice that your Bima-ASBA blocked amount is not released even after the proposal is rejected or the mandate expires. Under the prescribed requirements, the Bima-ASBA premium refund must be completed within one working day of the proposal not being accepted. If the insurer does not process the application within 14 days, the amount is automatically unblocked under the applicable arrangement. If it does not get released:

Check the status of the insurance application and UPI mandate for insurance premium.
Confirm when the proposal was rejected or when the blocking period began.
Contact the insurer with the application number and transaction details.
Contact the bank or payment service if the insurer confirms that the release has been initiated

If the insurer still doesn’t resolve your issue, you can file a complaint on the Bima Bharosa portal with complete and correct records and track it online.

Policy approved but premium debit pending

Sometimes, the insurer may accept the proposal, but you may not immediately see the premium debit status of your bank account. To confirm the status:

Check whether the insurer has confirmed acceptance of the proposal.
Review the UPI mandate and bank transaction status.
Contact the insurer to confirm whether the premium debit has been initiated.

What Insurance Agents Need to Do with Bima-ASBA?

Understanding the ASBA option is important for insurance agents since they help customers understand policy options, complete applications, and complete the payment process. Here are a few important things agents must convey to their customers about IRDAI’s Bima ASBA:

Explain the UPI mandate clearly: Agents should explain that Bima-ASBA authorises the bank to block a specified amount for the proposed insurance premium. They should also clarify that approving the UPI mandate is not meant as making the final premium payment.
Help customers understand blocked funds: Some customers may assume that money remains freely available because it has not been debited. Agents should clarify that the amount remains in the bank account but cannot be used for other transactions while it is blocked.
Communicate approval, rejection, and release of funds: Agents should keep customers informed about the distinction between application submission, underwriting, premium debit, and policy issuance.
Avoid promising guaranteed policy issuance: A successful UPI mandate does not mean the insurer has approved the application. Agents must explain this distinction before helping customers authorise the mandate.
Keep records of customer communication: Agents should maintain appropriate records of the application status, payment authorisation, customer queries, and any support requests.

Agents should also stay within the IRDAI rules and code of conduct for insurance agents while explaining payment options to their customers.

Conclusion

Bima-ASBA brings a simple change to how the first premium is paid. Instead of paying upfront and waiting for a refund if things do not work out, the customer lets the bank block the amount. The insurer collects it only after accepting the proposal and issuing the policy. If the proposal is rejected, cancelled, or not processed within 14 days, the amount is released.

For customers, this means more control over their money, regular updates, and no refund chasing. For insurance agents, the role extends to clear communication. Remember that the ASBA payment option by IRDAI is optional for policy applicants and applies only to the first premium of new individual life and health proposals.

Disclaimer: The information provided in the blog is for informational and educational purposes only. While every effort has been made to provide accurate and updated information, the details may vary as per different sources. You are advised to consult qualified professionals before making any decision.