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Insurance and economic development in India exhibits a direct positive correlation on the growth path. Insurance companies, both life and non–life, have been playing the role of financial intermediaries and performing extremely useful functions in our economy. In India, insurance sector was opened for private participation with the enactment of the IDRA Act, 1999. Since then, 22 private companies have been established in life insurance sector. All these players are actively introducing innovative products to meet the specific needs of the prospective policyholders. However, life insurance companies, particularly private sector players, give more attention in selling unit linked plans that are not suited to the real needs of the insured. Of the various alternative distribution channels, agency is still dominating and the successful one. Given poor level of consumer awareness, strong customer education programs and promotional strategies are the immediate requirements. Exploring more distribution channels of microinsurance for untapped rural market is extremely important. Further more customer service is the key for the success and life insurance companies therefore should give more attention in post–sales services rather than pre–sales services. Overall, our paper shows the important aspects of life insurance marketing activity from a services perspective and highlights the contemporary issues and challenges facing the life insurance companies in product marketing.