Behavioral Finance in India: Exploring Cognitive Biases and The Implication
for Insurance Decisions and Outcomes

Dr. Rajeesh. P

doi:10.46609/IJSSER.2026.v11i07.002

Title: Behavioral Finance in India: Exploring Cognitive Biases and The Implication for Insurance Decisions and Outcomes
Authors: Dr. Rajeesh. P
Journal: International Journal of Social Science and Economic Research (IJSSER) ISSN: 2455-8834 Volume: 11 Issue: 7 Publication Date: July 2026 DOI: 10.46609/IJSSER.2026.v11i07.002
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Dr. Rajeesh. P Assistant Professor, Department of Economics, NSS College, Nemmara, Palakkad 678508.
MLA 8 P, Dr. Rajeesh. "Behavioral Finance in India: Exploring Cognitive Biases and The Implication for Insurance Decisions and Outcomes." Int. j. of Social Science and Economic Research, vol. 11, no. 7, July 2026, pp. 2874-2890, doi.org/10.46609/IJSSER.2026.v11i07.002. Accessed July 2026. APA 6 P, D. (2026, July). Behavioral Finance in India: Exploring Cognitive Biases and The Implication for Insurance Decisions and Outcomes. Int. j. of Social Science and Economic Research, 11(7), 2874-2890. Retrieved from https://doi.org/10.46609/IJSSER.2026.v11i07.002 Chicago P, Dr. Rajeesh. "Behavioral Finance in India: Exploring Cognitive Biases and The Implication for Insurance Decisions and Outcomes." Int. j. of Social Science and Economic Research 11, no. 7 (July 2026), 2874-2890. Accessed July, 2026. https://doi.org/10.46609/IJSSER.2026.v11i07.002.
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ABSTRACT: This research paper examines the impact of behavioural finance on insurance choice and efficiency in India. Behavioural finance incorporates cognitive biases and individual behaviours that influence investment choices. This paper examines the literature on overconfidence, loss aversion, and mental accounting, and considers how these notions might relate to insurance decisions and marketplace anomalies. The results of Statistical and regression analysis indicate that these cognitive biases significantly influence insurance-purchase behaviour. Cognitive biases significantly influence insurance purchase decisions. Behavioural Finance Theory suggests that biases can lead individuals to make choices that are not always economically optimal, thereby affecting their insurance buying behaviour. The findings are useful for developing effective behaviour strategies, enhancing insurance literacy, promoting appropriate insurance-related decision-making, and strengthening the stability of the insurance market in India. This study contributes to the existing literature on behavioural finance and offers useful guidance for insurers, financial advisors, and policymakers in developing effective insurance related policies and practices.

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