Appraisal of financial performance is a mechanism of x-raying the capital structure of any institution. The word ‘appraisal’ is a process of valuation of a task. It may be financial, social and economical. In the phrase “financial performance”, the word performance means the efforts extended to achieve the target efficiently and effectively. The dictionary meaning of performance refers to ‘achievement’. The achievement of target involves the integrated use of human, financial and natural resources. Performance directly reflects the position and utilization of the resources. Appraisal of financial performance is very important component for a life insurer. It is very useful for management of life insurer and outsiders. Any life insurance company cannot be success without appraisal of financial performance. After the appraisal of financial performance management takes important decision for improving the profitability.