IRDAI introduces a new system to simplify insurance premium payment: Know about Insurance-ASBA

The Insurance Regulatory and Development Authority of India (IRDAI) has introduced a new and convenient system for health and life insurance policy holders, which aims to make insurance premium payment more simple. The name of this new system is “Insurance-ASBA”, which is going to give a new twist to insurance premium payment.

The main objective of the Insurance-ASBA system is to help policy holders pay their insurance premium in an easy way, so that they do not face any kind of hassle. This system provides policyholders the option to block a certain amount in their bank accounts, so that there is no delay in premium payment and the payment process becomes more transparent and convenient. This new system will come into effect from March 1, 2025, which will improve the premium payment experience for both insurance companies and customers.

What is Insurance-ASBA? The full form of “Insurance-ASBA” is Insurance Application Supported by Blocked Amount. In this system, when policyholders apply for an insurance policy, they are allowed to block a certain amount in their bank accounts in advance. This amount is blocked until the policy is approved. That amount is debited from the bank only after the policy is approved.

If the policy is rejected for any reason, that amount is automatically transferred back to the policyholder’s account. If the policyholder does not decide about the policy, the amount is returned after 14 days. This is the reason why this system is considered very convenient because in this no money is debited without approval and the policyholder gets protection.

How does Insurance-ASBA work? The working of Insurance-ASBA system is very straightforward and simple. It works as follows:

1 When applying for a policy – When you apply for your health or life insurance policy, you will be given the option to block the premium amount. You can choose this option so that a certain amount from the bank gets blocked in your account.

2 Amount to be blocked – When you choose this option, the insurance company will send a request to your bank to block the required amount.

3 Review and Approval – After this amount is blocked, a final approval is required from the policyholder. This amount will be debited from the bank only after the approval is given by the policyholder.

4 Refund of amount on rejection – If the policy is rejected, the amount is automatically transferred back to the policyholder’s account.

5 Amount blocked period – This amount remains blocked for a maximum of 14 days. If the policy is approved during this time, the money will be deducted from the bank, and if the policy is not approved, the amount will be automatically refunded to your account.

This process will protect policyholders from any kind of mistake or irregular deduction of money and the insurance premium payment process will become completely transparent.

Benefits of this initiative of IRDAI Transparency – The Insurance-ASBA system provides complete transparency to the policyholders. They get complete information about how much money is blocked and when it will be debited even before the money is deducted from their bank account.

2 Security – In this system, the policyholder gets the security that no amount will be debited from the bank without their approval.

3 Time saving – The policyholder will not have to bother to make payments again and again. This system will ensure timely payment.

4 Less delay – This system makes the process of premium payment fast and convenient, thereby reducing the delay in payment between insurance companies and customers.

5 Policyholder Rights – To save the policyholder from any kind of hassle, he/she always has the right to decide whether to reject or accept the policy and get the money back if the policy is rejected.

How to choose Insurance-ASBA? You have to choose the option of Insurance-ASBA at the time of applying for the insurance policy. When you apply for the policy, you will get a form in which you will get the opportunity to choose this option. You have to give approval to block the premium amount while choosing this option. The insurance company will then request your bank to block the amount, and the money will be debited only after your approval.

How will this move of IRDAI prove to be helpful in the future? This new system introduced by IRDAI will prove to be beneficial not only for policyholders but also for insurance companies. This system will make their collections more secure and trackable for insurance companies.

Apart from this, it will save policyholders from any kind of misunderstanding, as all the processes will be completely transparent. This can prove to be a big change for policyholders, as now they will get a way to pay their premiums without any worries.

New system will be implemented from March 1 This new system will be effective from March 1, 2025, and after its implementation, policyholders will get the facility that they can block their premium amount and get it debited only after their approval. This initiative will improve the experience of policyholders and they will feel more confident about their insurance policy.

Conclusion: IRDAI’s Insurance-ASBA initiative is a major step towards making the insurance premium payment process simpler and more efficient. This will not only make it easier for policyholders, but will also help insurance companies track the payment process and ensure timely payment. This system will ensure transparency, security, and fewer delays in premium payments, which will be beneficial for all.

Disclaimer: This article is for information purposes only and is not intended to promote any specific insurance plan or product. The information provided herein is based solely on reliable sources, but you should consult your financial advisor before making any decision. The terms and conditions imposed by IRDAI may change, so please get the latest information from your respective insurance company or the official website. The author or the website will not be responsible for any loss or damage arising as a result of the use of this information.