In India Governments play a role providing some security to poor household in general financial security remains the responsibility of individuals. Life insurance is one of the most important financial security measures undertaken in the country. In this context an attempt made to identify determinants of life insurance ownership at household level based on primary data. The major factors of insurance in urban area are caste, level of education, earning members in the family, income, savings and nature of accommodation. In the rural area caste, level of education, number of children in the family, number of dependents in the family, income and savings are the determinants of insurance. In both areas caste, level of education, income and savings are the significant factors. The scenario of fluctuating share of rural business to total business help to observe that there has been a marked dip down in the share of rural business especially during after liberalization when compared to the earlier period of liberalization and privatization in the insurance sector. This calls for the re-orientation of policy emphasis and a strategy design to push up and tap rural business potential.