Until the early of 1980s, marketers focused on the acquisition of customers by attempting to develop a better marketing mix than the competition. Today, this paradigm is gradually loosing its position. New approaches are emerging in marketing research. The new relationship marketing paradigm reflects a change from traditional marketing to customer-focused management or market oriented management. Relationship marketing in the service context was first introduced by Berry (1983) to describe a long-term approach to marketing. The Customer Relationship Management is a new strategy in marketing where the marketer tries to develop long term collaborative relationship with customers to develop them as life time customers. In the services sector, Customer Relationship Management has gained some recognition, especially in insurance sector. The consequent increase in competition has made “Relationship” a key differentiating factor to Life Insurance Corporation attempting to improve their market and profit positions. The wave of reforms that swept across the economy during 1990’s had its impact on the insurance sector also. The Malhotra Committee was constituted by the government in 1993