The decision to purchase life insurance is significantly influenced by socio-economic factors that shape an individual’s financial behaviour and long-term planning. In India, the Life Insurance Corporation of India (LIC) has been a dominant and trusted provider of life insurance services across diverse population segments. However, the decision-making behaviour of LIC policyholders varies widely due to differences in income, education, occupation, age, gender, family structure, and geographical location. This study examines the impact of these socio-economic factors on the insurance decision-making process of LIC policyholders. Using insights derived from secondary data, field-based observations, and a review of existing literature, the study identifies patterns in policy preference, awareness levels, and purchasing behaviour. The findings reveal that income and education play a decisive role in policy selection, while gender, occupation, and urban–rural differences significantly affect awareness and access to insurance services. The study also highlights emerging trends such as increasing financial awareness among youth and women, along with challenges related to financial literacy and product complexity. The paper concludes with strategic recommendations for LIC and policymakers to enhance insurance penetration, inclusiveness, and customer-centric product design in India.