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Taking a critical view on insurance policies for people with mental disabilities

Published on Sept 15, 2020. EST READ TIME: 5 MIN   

Stress, anxiety, depression, and more mental disorders inflict millions of Indians every year. According to a study, in 2017, 197.3 million Indians were found to be suffering from mental issues in varying degrees . This situation has only become worse with the current COVID-19 pandemic. Forced isolation, layoffs, financial distress, fear of the pandemic, etc. are contributing to the rise in cases of depression, anxiety, and other psychological issues among both rich and poor. The good part is that this has put a spotlight on mental disorders and the support system for the same. This includes the existence of health insurance for mental disorder. Read on to learn more.

Importance of mental illness cover

It was a moment of jubilation when The Mental Healthcare Act was finally passed in 2017 and came into force in July 2018, with Section 21(4) of the Act stating that insurers should make provision for medical insurance for treatment of mental illness on the same basis as is available for the treatment of physical illness.

After a year, insurance regulator, Insurance Regulatory and Development Authority of India (IRDAI) directed insurance companies to comply with the Act’s provisions. IRDAI had to issue guidelines that barred the exclusion of “mental illnesses, stress or psychological disorders, behavioural and neurodevelopmental disorders” in September 2019. The Act also defined mental illness as “any considerable disorder in an individual’s mood, thinking, perception, orientation or memory that may hamper his/her behaviour, decision making, judgement or the capability to meet ordinary day to day activities” to do away with any ambiguity.

When buying health insurance for critical illnesses , people think about the possibility of being diagnosed with cancer or a heart attack and forget to consider that mental health disorders can be equally dangerous. At present, therapy sessions for a mentally disabled person cost anywhere between INR 1,000 to INR 5,000. But if the situation gets worse, the policy holder may require hospitalisation if intensive treatment is prescribed.

According to the examining doctor’s suggestion, one may need hospitalisation for anxiety-related disorders, depression, bipolar disorder, psychotic disorders including schizophrenia, etc. Also, mental disorders are not age-specific, which means anybody can be at risk.With health insurance for mental disorder, you can seek professional help without worrying about medical bills.  Also, you can buy health policy online after comparing the different health plans from the comfort of your home.

Coverage of mental illness 

Insurance plans for mental health cover- cashless treatment, reimbursement of pre- and post-hospitalisation charges, easy renewability of the existing plan, etc. However, it’s crucial to note that there are exclusions like mental retardation, and any harm caused due to abuse of drugs or alcohol. Also, there may be a waiting period for any pre-existing disease, which you need to find out from your agent while buying the policy. Experts suggest that if you decide to take the mental illness cover, you should research about the disorders that require hospitalisation and those that can be treated through therapy and medication. In the case of the former, you should go for a comprehensive indemnity plan that provides coverage for hospitalisation, but for the latter, a plan that offers OPD (outpatient department) should suffice.

Please note, insurance companies keep updating their rules regarding the coverage and you should read the terms and conditions thoroughly to make sure the claim process is hassle-free.


Therefore, you can protect yourself and your loved ones from the costs linked to recovery from a mental illness with the help of health insurance for mental disorder. It is important to take mental issues as seriously as other health issues so that both the mind and body stay healthy and safe from infections like Covid-19.

This  blog is written by Dr. Kavita Ganesh 
Asst. Vice President, Health & Accident Product Underwriting

About The Expert :   Dr. Kavita Ganesh holds over 15 years of work experience in health insurance industry. She highly recommends buying health insurance for securing finances in case of a medical emergency. Looking at the current pandemic situation, she enforces the idea of having a higher sum insured for covering the entire family.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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