Understanding The Mindset: Exploring Consumer Behaviour In Health Insurance Decision-Making

Abstract

This review aims to discuss the various aspects of consumer decision-making in health insurance with a special focus on the factors and considerations that define the choices. Health insurance is a vital tool that helps to manage financial risks associated with healthcare; however, consumers encounter difficulties because of irrational behavior, lack of knowledge, and socio-economic status. The review explores the behavioral economics, cognitive bias, and socio-cultural factors that influence insurance choices. These are demographic factors including income and education levels, psychological factors including risk-taking propensity and cognitive distortions, and cultural factors influencing decision-making. The review also stresses the need to educate the consumer and build confidence in insurance service providers. It uses literature search, thematic analysis, and data synthesis to evaluate the current literature and to identify the research gaps. Research evidence indicates that socioeconomic status plays a major role in insurance decisions and that people with higher income and education make better insurance decisions. Other psychological factors include loss aversion and the influence of social networks. Moreover, culture plays a role in decision-making, especially in a collectivist culture where the decision is made based on the norms of the society and the family. In conclusion, the review recommends that there is a need to increase consumer awareness and the use of appropriate marketing techniques that respect the cultural diversity of the population to increase insurance penetration. Subsequent studies should aim at combining these determinants to design efficient interventions that would meet the needs of consumers and improve the functioning of health insurance markets.