What is an Account Aggregator?
An Account Aggregator (AA) is a regulated entity licensed by the Reserve Bank of India (RBI) to enable secure, consent-based sharing of financial data. The AA acts as a bridge between Financial Information Providers (FIPs) such as banks, NBFCs, depositories, or RTAs, and Financial Information Users (FIUs) such as life insurance companies, lenders, or other regulated financial institutions. Importantly, no data is stored by the AA as it only facilitates encrypted transfer with the customer’s explicit consent.
Why Term Insurance Requires Documents
When you apply for term insurance, insurers typically ask for the following documents:
- Income documents (like salary slips, ITRs, or bank statements)
- Bank details for premium payment and future benefits
These are essential for:
- Evaluating your eligibility and ability to pay premiums
- Determining the suitable coverage amount
- Completing underwriting and policy issuance
How the AA Framework Works
Here is how you can use the AA system when buying a term insurance policy:
Initiate Consent-Based Sharing
During your application journey, the insurer may offer you the option to share your financial information via an Account Aggregator. If you agree, you will be redirected to a secure AA platform.
Select Your Financial Institution(s)
You will choose the bank or financial institution that holds your income-related data or bank account details.
Provide Secure Consent
You will review the type of data requested and provide your explicit consent. This may involve authenticating using OTP, depending on your bank’s process.
Real-Time Data Sharing
Upon verification, the selected financial information provider sends the relevant data directly to the insurer through encrypted transmission. The Account Aggregator only facilitates this flow—it does not see or store your data.
Faster Verification and Issuance
Once received, the insurer can instantly verify your details, complete the underwriting process, and move forward with policy issuance.
Benefits of Using Account Aggregators for Term Insurance
Instant Document Sharing
Your data is fetched directly from the financial information provider and is verified in real time.
Reduced Processing Time
With faster document verification, your term insurance policy can be issued more quickly.
Enhanced Accuracy
Since the data is pulled directly from your bank or financial institution, there is minimal room for manual errors or inconsistencies.
Secure and Regulated
The entire system operates under the oversight of financial regulators, ensuring that your data remains encrypted and private.
Paperless and Convenient
No branch visits, no printing or scanning of documents. Everything can be completed digitally, from your phone or laptop.
Use Case Example
Let’s say you are applying for a term insurance policy with a high sum assured. The insurer requests proof of income for the past six months and confirmation of your bank account. You can choose to share your financial data via an Account Aggregator.
In a few steps, you consent to share your salary credits and bank transactions. The insurer receives verified data and moves forward with underwriting.
Does It Replace Traditional Document Submission?
The Account Aggregator framework is designed to enhance convenience. While insurers continue to accept documents through multiple channels like offline submissions, online uploads, or email, depending on customer preference, AA adds another option by enabling secure, consent-based data sharing. But it is not mandatory.
Eligibility to Use Account Aggregators
To use the AA system for document sharing, you must:
- Have a financial relationship (like a bank account, loan, or investment) with a participating Financial Information Provider (FIP). With your consent, the FIP shares this data securely with authorised Financial Information Users (FIUs) such as insurers or lenders
- Have access to your mobile number for authentic
- ationApply for a financial product (such as life insurance) from a participating insurer
Is the Account Aggregator System Safe?
Yes, the AA framework follows strict regulatory standards. Here are some safety highlights:
- Data is shared only after your explicit consent
- Data is encrypted end-to-end
- Account Aggregators cannot see, store, or modify your information
- Consent is revocable at any time
Conclusion
With the Account Aggregator framework, you can share your financial documents instantly, securely, and entirely online. This makes the application process seamless, simpler, and more convenient—with data privacy or control.
So the next time you’re applying for a term insurance policy, look for the option to share documents via an Account Aggregator.
