Insurance Regulatory and Development Authority of India (IRDAI) has introduced a new system to simplify the premium payment for life and health insurance policy. Now you will not have to face difficulties in making premium payment of life and health insurance. This is a system that will first block premium money in your account. After that, if the policy is accepted, the money will automatically cut.
The circular issued by IRDAI stated that the new system policy allows policy holders to block funds in their bank accounts for premium payment. The insurance regulator said that the new system will increase the facility and reduce the payment delay. This system will be applicable from March 1.
Insurance- How does ASBA work?
Insurance-ASBA policy holders enables insurance companies to block a certain amount before accepting the insurance proposal in their bank accounts through UPI. The amount debit is made only after the policy acceptance and if rejected, the amount is automatically unlocked within a working day.
Insurance- ASBA specialty
Until the insurer approves or rejected the policy, the fund will remain in the account of the policyholder. Under this system, money is deducted only after the policy is issued. If the policy is not approved, then automatically refunds. Most of the block time is 14 days or until the underwriting is completed. After this, the account is cut off from the account.
How to block money in bank account for premium payment?
Insurance-Choosing ASBA option: When applying for an insurance policy, fill a form that will include the bank to stop the premium amount in your account.
Block funds through UPI: The insurance company sends your bank (through its partner bank) to block the required amount to your account to block the required amount.
Preventing approval and funds: The bank takes the approval of the customers and stops the amount. If the policy is accepted, then the insurer requires the bank to debit the block fund. If the policy is united or canceled, the amount is returned without cuts.