The gross premium income of Chinese life insurance market ranks second in the world, but it is still a developing country in the life insurance market. With the growing importance of bancassurance in Chinese life insurance market, this research set the Chinese life insurance industry as the main object to explore the correlation between bancassurance and market competitiveness. The study showed that the Chinese life insurance market is a monopolistic competitive market. The results show that the bancassurance engagement has a significantly positive effect to market competitiveness, and the bancassurance engagement of foreign life insurers has a higher effect on market competitiveness than Chinese life insurers. Therefore, compared with Chinese life insurers, foreign life insurers care about the development of high-value security business. In the current environment where the insurance industry is returning to protection, the development strategies of foreign life insurers are more adaptable to the changes in the insurance circumstance.