This study is intended in search for the challenges and prospects of life insurance in Ethiopia.rnDescriptive research design is used to identify the challenges and prospects of life insurance inrnEthiopia. Quantitative and qualitative research approach and Survey method is used. Semirnstructured 5 lickert scale questionnaire and self administered interview were used as a datarncollection instrument. All insurance companies operating life business as of Dec 2017 and 87rnprofessionals working for the selected companies were included in the survey. Descriptivernstatistics is used to analyze the data. Income, inflation and interest rate are found to be therneconomic challenges; awareness, education, urbanization, religion are demographic challenges.rnWeak strategic focus, weak awareness creation strategy , lack of professional in the field ,rninability to develop unique product ,and absence of local actuary are institutional challenges ,rnwhereas absence of independent regulatory organ, government restrictions on investment ,rnrestriction on foreign insurers entry ,weak contribution of academic institutions in cultivatingrninsurance professionals , unfair competition in the industry, absence of integrated information orrndatabase are external challenges that are contributing for the weak performance of liferninsurance. Regarding the opportunities, emerging information technology, enforcement ofrninsurance companies to customize their process using information technology, initiatives of therngovernment in human development in the stream of insurance, the effort of Ethiopia to be arnmember of WTO, the increasing trend of middle income group, the increase in population andrnthe untapped market of life insurance are the opportunities for the development of life insurance.rnThere is a need of collaborative effort to increase the awareness of the public about liferninsurance, insurance companies should device clear strategy towards doing life insurancernbusiness, they have to develop suitable affordable and Varity of products for the public, therninsurance regulator need to be organized independently and equipped with insurancernprofessionals, The government , the insurance association and academic institutions should workrntogether to establish Insurance academy to address the scarcity of insurance professionals.rnInformation technology should be used to cater the cost of distributing insurance. Regulationsrnaffecting life insurance like investment restrictions, pension and social health insurance scheme,rntax imposition on life insurance should be revisited by the government.