Be mindful of sub-limits on mental illnesses in your insurance cover

OPD covers compensate for counselling sessions, but these always have a sub-limit

In a recent case, the Delhi High Court asked the Insurance Regulatory and Development Authority of India to explain the basis on which it has approved insurance policies that have sub-limits on the coverage of mental health conditions.

A person had purchased a policy from Max Bupa Health Insurance with a sum insured of Rs 35 lakh. When he made a claim, he was informed that the policy has a sub-limit of Rs 50,000 for m­ental health conditions. Clearly, buyers need to scrutinise policies at the time of purchase to avoid unpleasant surprises.

What the regulations say

According to the Mental Healthcare Act of 2017, there can be no discrimination between mental and physical illnesses, and in providing insurance for the two. 

“The regulations say mental health has to be covered under a health insurance policy. Mental ailments should be treated on a par with other ailments," says Sanjay Datta, chief of underwriting, claims and reinsurance, ICICI Lombard General Insurance.

Several insurers – ICICI Lom­bard, Star Health, and Reliance General Insurance – Business Standard spoke to said their po­licies have no sub-limits on the treatment of mental ailments. 

“It is not a common practice. You are more likely to find sub-limits in lower-priced policies,” says Kapil Mehta, co-founder and managing director (MD), SecureNow Insurance Broker.

Ideally, policies should cover mental ailments to the full extent of their sum insured. But some don't. 

"The proposer should ascertain that mental health conditions will be covered like any other disease in the policy he wants to buy," says S Prakash, MD, Star Health and Allied Insurance.

Declare pre-existing conditions

Policy proposals of people who have pre-existing mental health conditions do get turned down. Many buyers are, therefore, tempted not to disclose them at the time of purchase. This is not advisable. 

"Declare any pre-existing issues you are already suffering from, so that you don’t face adverse experiences at the time of claim,” says Rakesh Jain, executive director and chief executive officer (CEO), Reliance General Insurance Company. 

When writing a patient’s case history, the doctor mentions his health history. Insurers, who have access to these documents, easily discover pre-existing conditions. Those who have a pre-existing mental health condition should be prepared for a waiting period, as in any physical ailment. 

"The waiting period could be two, three or four years, depending on the products selected," says Jain.

Limitations of OPD covers

Most health policies are hospitalisation covers. But the bulk of mental health treatment does not take place through hospitalisation. 

Psychiatrists mostly treat patients on an outpatient depa­rtment (OPD) basis. Nowadays, some health policies come with add-ons, like an OPD cover. Such policies will reimburse you for mental health consultations under their OPD covers. 

“But remember that OPD coverages come with a sub-limit,” says Dutta. 

If these annual limits do not suffice, patients will have to fall back on their own resources.

According to Naval Goel, CEO and founder, PolicyX.com, “Only a limited number of policies cover OPD expenses. Even here, counselling and therapy sessions may be covered by some insurers and not by others under OPD cover, so check.”

Some serious pre-existing conditions can also be permanently excluded at the time of issuing the policy. Mehta says this is another point you should watch out for. 

The bottom line is that policy buyers must check for sub-limits and exclusions of mental health conditions (as they would for physical ailments) because these are the two areas that have the potential to deliver the maximum number shocks at the time of claim.