Insurance business is found as important supporting business in expediting the economy by covering the risk of lives and assets. The growth in insurance business is the indicator of economic growth in every country. The awareness and confidence in insurance business is important as it is a long term contract between policy holders and insurers. Besides the demographic, financial and managerial factors are to be considered in utilizing the prospects of that business in an economy of very poor penetration ratio. The objective of the research is to find the demographic and financial factors of policyholders and the managerial factors of insurers along with the legal support of an economy in the growth of insurance business by continuation of insurance policies to get the benefits and create more awareness to the mass populations. This descriptive analytical research was done by survey technique with well-structured questionnaire to collect primary data. The collected data were analyzed by using simple statistical methods, cross tabulation and chi-square analysis. The findings highlighted the impact of laws on development of insurance business. To utilize the opportunities, the awareness and confidence on insurance must be built up. The demographic and financial factors of prospects should be analyzed as some elements may discourage penetration ratio and encourage lapse ratio. The managerial aspects must play the highest role in availing the opportunity of huge insurance business in this country by attracting and restoring the prospects.