How to choose health insurance cover for mental illness?

With the aim of making mental healthcare available to all, the Insurance Regulatory Development Authority of India (IRDAI) has asked insurers to include mental illness in all regular health insurance coverage. Insurance companies have been mandated to treat it as a normal disease.

As per rule, insurance companies cannot deny coverage to customers who have used opioids or anti-depressants in the past.

"Also, insurers can't deny coverage to people with a proven history of clinical depression, personality or neurodegenerative disorders, sociopathy and psychopathy," explains Amit Chhabra, head-health insurance, Policybazaar.

While this is an obvious respite for policyholders, insurance companies have also welcomed the move.

In words of Sanjay Datta, Chief, Underwriting, Claims and Reinsurance, ICICI Lombard General Insurance, "Earlier we used to build data, understand the cost and then provide the coverage. Now, with IRDAI's mandate, mental health can be covered on a broader point."

Now, if customers want to invest in a mental illness cover, they should check if the disorder requires hospitalisation or can be treated through therapy and medication.

In the case of the former, Naval Goel, chief executive officer and founder of PolicyX suggests to go for a comprehensive indemnity plan that covers hospitalisation.

"The latter will require a plan that also offers outpatient department (OPD)," he added.

Outpatient counselling or therapy is only covered if the plan offers OPD benefit.

If an individual is diagnosed with a mental illness subsequent to buying a health insurance policy, the insurer cannot reject the claim.

Some insurers have already started customising products that cater to the specific needs of people suffering from mental illnesses.

"These plans cover various expenses such as OPD costs, doctor consultation fees, hospitalisation and rehabilitation. There are certain plans which offer a sub-limit on the sum insured for pre-existing conditions or comes with a waiting period," explains Rakesh Goyal, director, Probus Insurance, Insurtech Broking Company.

The coverage of each plan may vary and depend on the insurance plan and its underwriting limitations.

In case of a pre-existing mental disorder, the insurer is at liberty to treat it as one and decide on the waiting period, usually 2-3 years.

One of the most recent plans, according to Chhabra, that provide comprehensive OPD cover for psychiatric illness and other ailments within the base plan is Digit’s OPD Policy.

"The policy offers OPD cover up to Rs 10,000 and is available in two variants - PB OPD family and PB OPD 1 adult. For now, the plan is available in two sum insured options – minimum Rs 5 lakh and maximum Rs 10 lakh. One can choose any sum insured from Rs 5 lakh to Rs 10 lakh," he explains.

Max Bupa’s GoActive plan and Manipal Cigna’s ProHealth Insurance also cover conditions related to mental illnesses.

"Similarly, HDFC Ergo’s Critical Illness Plan – Platinum covers a popular mental disorder – Alzheimer among 15 other critical illnesses. Star Health and Allied Insurance’s Star Special Care plan covers autism in people from 3 to 25 years of age," Chhabra added.

Reliance General Insurance Company and Max Bupa Health Insurance have also introduced health plans which are specifically designed for people suffering from mental illnesses.