First, the shock: according to a National Council of Applied Economic Research survey, of the 78 per cent Indian households aware of life insurance, only 24 per cent actually own one.

Now with the government announcing its "Aam aadmi bima yojna" to cover 1.5 crore (15 million) rural and landless households, private players are hoping their customers will increase and are tying up with banks and financial institutions to sell their products.

IFFCO-TOKIO General Insurance has tied up with financial service provider Peerless Group to distribute ITGI's retail and commercial products across the country.

Joydeep Roy, assistant VP (corporate marketing group), ITGI, explains, "Some employees have been trained to act as agents and they will be licenced to sell our products along with the services offered by Peerless."

Peerless Group in turn will get a commission from ITGI. ITGI also has bancassurance tie-ups with regional cooperative banks and cooperative societies.

Some banks have branched out into their own insurance lines, like ICICI and Kotak Mahindra. Tata AIG Life Insurance, has bancassurance partnerships with banks like HSBC, United Bank of India, PNB, DBS Bank, Citifinancial, and Orissa State Co-operative Bank.

Joydeep Roy, chief distribution officer at Tata AIG says, "These channels help the company reach out to customers over a much larger geography. They help diversify distribution, giving support to the company and its core channel - the agency.

Max New York Life, which has 22 bancassurance relationships including five with rural and cooperative banks and other tie-ups with financial institutions such as Peerless, GTMS, Triveni SRI, was able to reach out to almost 47 million customers through these tie-ups.

Says Gary Bennett, managing director and CEO, MNYL, "We focus on training the employees of the banks to have an understanding of the our products and to understand the needs of their customers."

Despite insurance companies claiming they don't deceive customers into buying insurance through banks, incidents where a home loan customer is forced into buying life insurance are not uncommon.