The whole idea of insurance has developed on the fact that human life is full of uncertainties and the life of a person itself is very uncertain. Paper tells that eventualities do cast their shadows, and therefore one has to equip oneself with possible means so as to face the unforeseen. The science of life insurance revolves around the principle of providing some financial relief to the loved ones of a person in case of his sudden death. It points out that the mortality, the interest and the expenses are the three main factors which are taken into account for ascertaining the contribution of each policy-holder. Article helps in understanding the concept of life insurance by discussing its nature and scope in a very scientific way. Besides throwing light on the concept of life insurance in India it also discusses in detail the concept of insurable interest and its importance in the context of life insurance. Also, it compares that in USA and India, mere sentimental interest is sufficient to raise presumption of existence of insurable interest, but in England, a parent has no insurable interest in the life of the child simply because of mere love and affection. Paper highlights that insurable interest is the bed rock of all types of insurance contracts and without an insurable interest all contracts of insurance are invalid. Insurable interest is an interest which can be or is protected by a contract of insurance.