Facility to keep money aside in your account for insurance premium will be implemented from March 1

Now, on the patterns of the IPO, you can keep a certain amount of money at hand to pay insurance premiums. The  Insurance Regulatory and Development Authority of India (IRDAI) has authorized a new facility called Insurance-ASBA by way of UPI. It will go into effect on March 1.

IRDAI said, that under the Insurance-Application Supported by Blocked Amount (Insurance-ASBA), money will be transferred from the customer's account to the insurance companies only when an insurance policy is issued. The insurance company can order the customer to block a fixed amount in the bank account through UPI.

If the customer is not satisfied with the bid of the insurance company, the blocked amount will be credited to the customer. The blocked amount will remain with the customer, while the block will be removed within a day. The amount can remain blocked at the most 14 days. If the insurance company is not satisfied with your request, you will also earn 14 days of interest on this amount.

When you are taking the policy, you will have to fill out a form at the same time where you can also choose to provide the option of getting the premium amount blocked. The company will instruct the bank to block the amount. Your bank will consider taking your request to block the amount and will inform the insurance company accordingly.