Rather than just a medical issue health status of a population is now considered an important economic indicator of development for any economy. Health services have a major influence on the well-being of individuals and societies, and are an important part of a nation's politics and economy. Traditionally, tied agents have been the primary channel for insurance distribution in Indian market targeting mostly the middle segment of people, who can afford an insurance policy and are residing within their approach, resulting in creating a niche of population having insurance cover over uncertainties in the region. None of the companies emphasize on lower class of people and those residing in rural areas of a state. Now-a-days, with the change in current market scenario, private players as well as government bodies have started catering to the lower class segments of people with their product mix (offerings), but everybody has met with serious failure in J&K state. In this context, this study is an attempt to find out what are the issues involved in J&K as far as health insurance distribution is concerned. The study also tries to identify different challenges associated with it. Finally, it deals with providing solutions to insurance providers for better equitable and easy access of health insurance for lower classes of people and even for those who are residing in interiors or rural areas of the Jammu region.