Mental Health Insurance in India (2025): Updated IRDAI Guidelines and Coverage Details

Mental health is now a recognised and integral component of health insurance in India. In line with the Mental Healthcare Act, 2017, and recent IRDAI mandates, insurers are required to offer coverage for psychiatric illnesses on par with physical conditions. By 2025, this has been further reinforced through board-approved underwriting policies that prevent insurers from rejecting applicants solely based on mental health conditions.

Recent trends show growing interest in mental health insurance in India 2025. For example, data from a research found a 41% jump in searches for mental health coverage between 2024 and 2025. This article outlines the latest IRDAI regulations, the scope of psychiatric coverage available across various health insurance plans, and practical examples to help you understand what is and isn’t covered under mental health insurance in India today.

IRDAI Mental Illness Coverage Mandates for 2025

The Mental Healthcare Act 2017 set the stage by requiring parity: insurance for mental illness must be “on the same basis as physical illness”. The IRDAI has issued multiple circulars to enforce this. Under current mandates:

• Inclusion in all plans: Since Aug 2018, every health policy must cover mental illnesses. Latest guidance (2022–23) explicitly removes mental disorders from exclusion lists. All insurers had to confirm compliance by October 2022.
• No Denial of Coverage: The 2023 IRDAI directive requires insurers to adopt a board-approved underwriting policy that ensures coverage is not denied to applicants with mental health conditions.
• Standardised products: Recognising that most health plans only cover hospitalisation, IRDAI has asked insurers to create standard products or add-ons tailored to mental health (like an “Arogya Sanjeevani” for psychiatry). These new covers are expected to include outpatient therapy benefits.
• Parity in benefits: All costs for inpatient psychiatric treatment (room, medicines, doctor fees) must be treated like any other hospitalisation. Equally, daily care, inpatient rehab, and related services in an IRDAI-recognised mental health facility should be covered without extra exclusions (aside from noted exceptions below).

Top Health Insurance Plans Covering Psychiatric Care

Many Indian insurers now include mental health cover in their individual health plans. Major public insurers (General Insurance Corporation-backed companies) have already added inpatient psychiatric care to their policies.

For example:

• United India Insurance (Family Health Insurance) – covers mental illness hospitalisation just like any other illness (post-waiting period).
• Oriental Insurance (Mediclaim) – includes mental illness cover if you are admitted to a mental hospital.
• National Insurance – similarly, mental disorders are not excluded. (It does, however, permanently exclude dementia present at policy purchase.)

Leading private insurers also offer psychiatric benefits. Some examples for 2025:

• HDFC ERGO (Health Suraksha/ProHealth Plus) – covers inpatient treatment for mental conditions. Its higher-end plans reimburse counselling or psychiatric consultations under OPD benefits.
• Care Health Insurance (Activ Assure/Saksham) – now includes reimbursement for psychologist or psychiatrist visits if you add an OPD cover.
• Niva Bupa (formerly Max Bupa) Recharge – pays for mental disorder treatment up to the sum insured, with some sublimits.
• ManipalCigna (Niva Cigna HealthFirst) – covers mental illness under its comprehensive plans (hospital expenses only).
• Bajaj Allianz Health Guard – a popular family floater, this plan includes Mental Illness Cover for hospitalisation.
• ICICI Lombard Health Booster, Tata AIG Health Guard, Kotak Health Shield, and others similarly include psychiatric hospitalisation.

In general, most standard policies today will allow you to claim inpatient care for mental illnesses. Few plans explicitly pay for outpatient therapy without buying an extra cover.

RenewBuy’s portal lists many of these plans. For example, Bajaj Allianz’s Health Guard plan (view on RenewBuy) explicitly mentions “Mental Illness Cover”. You can use the platform to compare sums insured and benefits of Bajaj Allianz, HDFC ERGO, Care Health, Tata AIG, Niva Bupa, etc., all of which feature mental health benefits.

Psychiatry Claim Rules and Coverage Nuances

Understanding how to claim is key. In practice, two main factors distinguish mental health claims: hospitalisation vs outpatient care, and specific policy limits or waiting periods.

• Hospitalisation cover: Standard health insurance policies treat psychiatric hospital stays like any other. If you are admitted for mental illness (in a licensed mental health establishment, on a psychiatrist’s advice), all inpatient costs are paid as per the sum insured. (IRDAI calls this inpatient care, and it generally covers room charges, medications, tests, counselling, etc., during the stay.) In short, if you’re hospitalised, the claim process is similar to any illness: submit the admission record, discharge summary, and bills.
• Outpatient therapy (OPD): However, most base plans exclude routine psychiatry sessions or counselling. As one official policy wording states: “Any kind of psychological counselling…for which hospitalisation is not necessary shall not be covered.” In other words, sessions with a therapist, psychologist, or psychiatrist (that don’t involve hospital admission) are excluded by default.
• Mental wellness add-ons (OPD riders): A few insurers now sell optional OPD covers that include psychologist/psychiatrist visits. These are often called “mental wellness add-ons” or simply OPD cover. With such an add-on, you can get reimbursed for a limited number of therapy consultations per year. Without it, therapy bills must come out of your pocket.

Other practical points (sometimes called psychiatry claim rules) include:

• Pre-existing waiting periods: Mental illnesses usually have a waiting period (often 2 years), like other chronic conditions. This means new-onset psychiatric conditions are covered after the waiting period. IRDAI rules forbid outright denial, but pre-existing disorders are subject to normal waiting terms.
• Sub-limits or caps: Some policies impose sub-limits on mental health claims (for example, a small cap per year). This practice is disputed (a Max Bupa case accused insurers of capping mental illness claims at ₹50,000). Check policy terms carefully.
• Exclusions: Treatments related to self-harm, attempted suicide, or substance abuse are often excluded by many plans, although this is against MHCA’s spirit. (Watch for such exclusions; IRDAI is expected to address them.)
• Claim documentation: You will typically need a psychiatrist’s prescription/diagnosis and a hospital bill if claiming inpatient care. For OPD claims (with add-on), submit consultation bills, prescriptions, and payment receipts as with any outpatient claim.

Depression Therapy and Mental Wellness Add-ons

The following use cases illustrate with depression, a common condition. By itself, depression is covered as an illness under policies. But insurance only pays if the patient is hospitalised for depression (say, severe depression requiring inpatient therapy). Outpatient treatment – e.g., weekly counselling for mild/moderate depression – is not paid by default.

In such cases, mental wellness add-ons are beneficial. For example, Care Health Insurance’s OPD rider lets you claim up to 4 psychologist consultations per year. HDFC ERGO’s top plans similarly allow limited psychiatrist visits under OPD. On RenewBuy, you can filter plans that include OPD cover or add-ons for consultations. Buying one means “depression therapy insurance” — you’ll get some therapy costs reimbursed. Without it, only hospitalisation (and medication) can be claimed.

Mental Health Insurance in India 2025: Use-Case Scenarios

• Therapy for depression (outpatient): Suppose you have moderate depression and see a therapist monthly. A standard plan won’t reimburse these sessions. But if you buy a mental wellness add-on, you can claim part of these costs. For example, with Care Health’s OPD rider, you could claim up to four therapy visits per year. Without the add-on, even a certified depression diagnosis won’t get outpatient claims paid.
• Bipolar disorder (hospitalisation): A patient with bipolar disorder needs a one-week hospital stay for mood stabilisation. Under most policies, all hospital expenses (bed, medication, psychiatrist fees) are covered like any other illness. So the insurer will pay the claim (subject to the sum insured and deductibles).
• Anxiety disorder (medication): A person sees a psychiatrist for severe anxiety but is never admitted. Here again, without an OPD cover, monthly treatment costs (consultation fees, MRI/EEG tests, medications) are not paid. With an OPD rider, those outpatient costs become eligible.
• Schizophrenia (long-term care): Inpatient treatment for psychosis (e.g., 2-week hospital care) is covered. Continuing medications after discharge remain out-of-pocket unless an OPD cover is bought.

Using RenewBuy to Compare and Buy Plans

With mental health coverage now a regulatory requirement in India, most comprehensive health insurance plans include inpatient psychiatric care. However, outpatient services like therapy sessions and medications are often excluded under base plans and may require additional riders or wellness add-ons.

Using RenewBuy, you can easily compare health insurance policies from multiple insurers, understand the psychiatric benefits offered, and choose the plan that best fits your mental wellness needs. Whether you're looking for hospitalisation coverage, OPD therapy options, or specific mental illness protection, RenewBuy simplifies the decision-making process with expert assistance and side-by-side plan comparisons.

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