The rural insurance is a major concern for the government today. The various financial institutions are also showing their keen interest towards fulfilling all insurance assistance to the rural people. Most of the banks, financial institutions, and insurance companies are now focusing on rural banking and rural insurance. The main objectives of these institutions are to provide agriculture insurance, crop insurance, life insurance, and rural health insurance. At present, about 80% of the rural population is not insured in any form of insurance. The government has stressed more on the Foreign Direct Investment limit but it is not a permanent solution because foreign investors are having their own vested interest. In the recent development, 49% of FDI is allowed in the insurance sector from earlier 26% to increase the inflow of funds in this sector. There is a need to make an aggressive approach towards increasing insurance penetration in those areas where it is very low. The insurance companies need to4 make all efforts to reach out to every section of the society with customized rural insurance products. This will lead to the inclusive growth of the marginalized section of the society and thus it will lead to the economic development of the society as well. This paper is primarily based on the study of insurance companies and their approaches towards the marginalized section of the society. It is also to find out the main reasons behind the underutilization of insurance in rural areas.