A rapid development of western economies was the result of an increasing rate of investment, which was made possible by an almost proportionate rise in the rate of savings. Saving is therefore the key factor in achieving a high rate of investment. The saving rate in India was fairly high in the last five years. In this context, the present study attempts to evaluate selected demographic spreads and its impact on savings and investment in insurance. It also describes the perceptions of people about the importance of saving and the investment opportunities in the field of insurance. The factors affecting the period of saving, the amount of saving, main mode of saving and the purpose of saving were determined. The study also identified the areas unattended by the insurance sector in the present Indian economic scenario.

In economic analysis, the concept of saving plays an important role. Saving is defined as the difference between income and consumption (Salam and Kulsum, 2000). In India, during the pre independence period, people spent most of their income on consumption and only a small amount of income was left in the form of saving. So the saving rate was very low, especially in the rural sector. After Independence in 1947, the major objective of the government policy has been the promotion of saving and capital formation as they are the primary instruments of economic growth.

The rate of investment is proportionately increasing with the rate of savings. Therefore, saving is the key factor in achieving a high rate of investment

There has been a consistent increase in the national saving rate in India through the post independence period (Athukorala and Sen, 2004), though with considerable fluctuations from year to year. The national saving rate increased from about 10% in the early 1950s to 17% in the early 1970s and then to over 25% by the mid 1990s. From then on, there has been a significant increase in the saving rate well into the 1990s.

Chandrasekhar and Ghosh (2006) report that the domestic savings rate or the ratio of gross savings to GDP is estimated to have touched a record level of 29.1% in 2004 05.

Risk And Insurance Journal, Insurance Schemes, Insurance Sector, Economic Growth, Government Policy, Gross Domestic Product, GDP, Indian Economy, Structural Reform Program, Decision Making Process, Econometric Analysis, Multiple Regression, Logistic Regression, Educational Qualification, Investment Schemes, Investment Companies.