Most of experts research the behavior of agricultural insurance basing onthe expected utility theory.The hypothesis of expected utility theory is that thedecision makers are rational economic man,they are risks-averse,and they can makedecision with objective probability when facing the uncertain events.Because the farmerslow cultural level,incomplete information,farmers hardly can be a rationaleconomic man to decide whether they need to buy agricultural insurance.Therefore,the paper questions the rationality of using the expected utility theory to analyze theconsumption behavior of agricultural insurance,and it introduces the prospect theory,which is often used by behavioral economics researchers,can response the realsituation better.The advantage of the prospect theory is that it suggests that thedecision makers are risks-averse in the face of benefits,but risk-appetite in the face oflosses; decision makers will be based on their experience and subjective perception tocorrect the objective risks probability.So the prospect theory can be used to analyzethe agricultural insurance which is " cold both in supply and demand " better.