Insurance is an important part in the financial sector that contributes significantly to the economy of a country. Insurance market contributes to the economic growth as a financial intermediary and also helps in managing risk more effectively. This piece of research work made an attempt to examine the relationship between insurance and economic growth in India considering the state level data and contributing to the existing literature. The data is collected for twenty-five states of India and covers the time period for 2000 to 2015. Endogenous growth model with a modified Cobb-Douglass production function is used. This result implies that the insurance policies which can improve the insurance penetration in different states of India should be promoted. The relationship between physical capital and economic growth indicates that more investments should be made on the policies of infrastructure like health facilities, road etc. This research work could be useful for the state Governments to improve the economic growth and also is useful for the development of the insurance sector in India.