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BIMA-ASBA Key Highlights
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Let’s be honest, buying insurance has not exactly been a smooth process. Between complicated paperwork, payment delays, and a whole lot of fine print, it often feels like more effort than it’s worth. IRDAI knows that too. That is why they have introduced BIMA-ASBA. This new process is designed to simplify how you buy insurance and protect your money while you are at it.
Here’s what you need to know.
What is BIMA-ASBA?
BIMA-ASBA stands for “Application Supported by Blocked Amount”. Sounds technical, but the idea is really simple and familiar. When you apply for a life insurance policy under this system, the premium amount gets blocked in your bank account rather than being debited right away. This mechanism borrows inspiration from the way IPO applications are handled in India. If you have ever applied for shares using ASBA, you already know the drill.
Think of it like buying a new smartphone online with the cash-on-delivery option. They cannot charge you the price unless the item reaches your home. The same logic applies here.
Key Features of BIMA-ASBA
Let’s break down what makes this system unique in the insurance sector:
1. Your money stays where it is
When you apply for insurance using BIMA-ASBA, your bank blocks the premium amount. But it is not deducted until the insurer approves your application. You earn interest on it too, depending on your insurer and bank rules.
2. No more refund drama
Previously, if your application got rejected, you would have to wait to get your money back. Now, since the amount never left your account in the first place, there is no chasing refunds.
3. Total transparency
The entire process is linked to your bank account and follows clear steps. You always know where your money is and what stage your application is in. No mysterious “in process” messages that leave you guessing for days.
4. Better trust in the system
Since the insurer only gets paid once your policy is issued, the incentive to fast-track and approve legitimate applications goes up. It also removes a big pain point for first-time buyers who feel nervous paying for something that is not instantly delivered.
5. This applies to life and health insurance for now
Currently, BIMA-ASBA is available only for life and health insurance policies. But if the rollout goes well, don’t be surprised if other categories follow suit.
Is This Mandatory?
Not at all. BIMA-ASBA is optional for now. You can still choose the traditional route if you prefer paying upfront and waiting for the insurer to process everything. But if you like the sound of more control over your money, this is a very appealing alternative.
Author Bio
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 21 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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