Aditya Kumar Gupta*

Life insurance is bought lesser in India by rural population. General insurance is often bought because there are compulsions under the law or from the financiers asking for insurance as collateral security. In the case of life insurance, there is very little compulsion. The tendency is to defer the decision. The possibility of death is ignored by the rural people; however there is more possibility of such misfortune for people lives in rural areas. The rural people never believe that they can succumb to destiny and they think they will live a long and healthy life. The rural population in India is without life insurance cover and this part of the population is also subject to weak social security and pension systems with hardly any old age income security. It is an indicator that growth potential for the insurance sector is immense. Though the Government has taken steps to promote rural insurance, for nearly two decades this field has not made any head way. One of the priorities for forecasting expansion of rural insurance would be identifying of productive potential and specific insurance needs in areas not yet reached by insurer and enhancing cooperation between insurance and rural credit agencies or institutions. The buying behavior of rural consumer is influenced by the income levels and distributions and marketers efforts on promotional activities. The rural customers are risk avoider therefore insurance cannot apply the similar methodology that they apply to launch products in urban areas. The paper is an attempt to examine the current status of rural insurance penetration and to explore the reasons of poor performanc