Anchoring Bias in Health Insurance: Insights and Debiasing Pathways from Indian Knowledge Systems

Anchoring bias—a cognitive tendency to rely heavily on the first piece of information encountered—has a profound influence on consumer decision-making in health insurance. Individuals often fixate on the initial premium quoted, neglecting to evaluate policy features such as coverage adequacy, exclusions, and long-term benefits. This results in suboptimal insurance choices and increased vulnerability to financial risk. While behavioral economics has proposed various debiasing strategies, the integration of Indigenous Knowledge Systems (IKS) offers a culturally rooted and holistic approach to addressing this bias. Drawing upon principles from Indian philosophical traditions, including Viveka (discriminative wisdom), Samyama (discipline of focus), Yukta Āhāra-Vihāra (balance in choices), and Niti (practical wisdom), this paper develops a conceptual framework for IKS-informed debiasing of anchoring bias in health insurance decisions. The study adopts a qualitative, conceptual methodology, mapping bias manifestations to corresponding IKS constructs and proposing tailored debiasing techniques. The findings highlight how ancient wisdom can complement modern behavioral insights, fostering reflective, balanced, and informed decision-making among consumers. The paper contributes to both the behavioral finance literature and health insurance practice by offering a novel IKS-based debiasing framework, with implications for policy design, consumer education, and sustainable financial wellbeing.