Hi Prashant,
In SAP CRM (on premise) standard there is no appropriate business object that represents an FS-PM Policy as a lean proxy object. Overall CRM doesn't provide any insurance-specific proxy objects in standard, which could represent original Business objects like a policy (e.g. from FS-PM), a commission contract (e.g. from FS-ICM), or a claim (e.g. from FS-CM).
Therefore one can implement the CRM 'One Order' object or alternatively the 'Financial Service Product', please see
One Order
CRM Status Life Cycle (One Order) - Sales Analyses - SAP Library
http://scn.sap.com/thread/818419
SAP CRM Technical Tutorials by Naval Bhatt.: One order framework
Financial Service Product
Creating Financial Service Products - Account Origination - SAP Library
Financial Service Product (FS product) - Account Origination - SAP Library
http://scn.sap.com/thread/922657
Set Types for Financial Service Products - Account Origination - SAP Library
Kind regards,
Jochem