Does Insurance Cover Therapy in India?

Wondering if therapy is covered by insurance in India? Learn about mental health coverage, available policies, and how counselling expenses are supported. 

Introduction

The awareness around mental health in India has grown significantly in recent years. More individuals are seeking therapy, counselling, and psychiatric care for issues such as stress, anxiety, depression, trauma, and relationship challenges. Yet, one question continues to hold many people back: “Does insurance cover therapy in India?”

Until a few years ago, mental health was often left out of health insurance policies. This meant that even if someone had insurance for physical health conditions, therapy or counselling sessions were considered an “out-of-pocket” expense. However, with policy reforms and the growing recognition of mental health as integral to overall well-being, insurance coverage for therapy in India has begun to change.

This blog explores how mental health insurance in India works, what it covers, its limitations, and how individuals can maximize their benefits when seeking therapy.

The Evolution of Mental Health Coverage in India

1. The Mental Healthcare Act, 2017

A landmark change came with the Mental Healthcare Act, 2017. This law mandated that mental health conditions must be treated on par with physical illnesses. This was a breakthrough for counselling coverage in India, as insurers could no longer deny claims simply because the treatment was for a psychological disorder.

2. IRDAI Guidelines (2018–2020)

The Insurance Regulatory and Development Authority of India (IRDAI) issued a circular in 2018 directing insurance companies to include mental illnesses under health insurance. By 2020, insurers had begun rolling out updated policies that included mental health coverage.

3. Current Landscape

Today, most major insurers in India provide some form of mental health insurance coverage. However, the extent of coverage varies, and therapy or counselling sessions are not always included directly.

What Mental Health Insurance in India Covers

While specific coverage depends on the policy and provider, here are the general areas covered under mental health insurance in India:

1. In-Patient Hospitalization
   
   • If a person is hospitalized for a mental health condition (e.g., severe depression, psychosis), insurance typically covers hospitalization expenses such as room charges, medication, and doctor consultation fees.
     
2. Psychiatric Treatment
   
   • Psychiatrist consultations and prescribed medication are often included.
     
3. Rehabilitation for Severe Disorders
   
   • Policies may cover rehabilitation programs for severe mental illnesses such as schizophrenia, bipolar disorder, or substance use disorders.
     
4. Day-Care Procedures
   
   • Some policies cover day-care treatments or outpatient visits for mental health conditions.
     

Does Therapy Get Covered?

This is where the details matter. Therapy and counselling sessions are not always directly covered under standard policies. While hospitalization and psychiatric consultations are generally included, outpatient therapy sessions with psychologists or counsellors are often excluded or only partially covered.

Outpatient Department (OPD) Coverage

Some insurance providers now offer OPD coverage, which may include:

• Therapy sessions with a psychologist.
  
• Counselling services for conditions like stress, anxiety, and depression.
  
• Limited reimbursement for sessions, usually capped at a certain number or amount annually.
  

However, this is not universal. Many plans still leave therapy as an out-of-pocket expense unless you specifically opt for OPD-inclusive coverage.

Limitations of Therapy Insurance in India

While progress has been made, therapy insurance in India comes with challenges:

1. Exclusion of Regular Counselling Sessions
   Most policies prioritize psychiatric treatment over therapy with psychologists.
   
2. Low Reimbursement Limits
   Even if therapy is covered, the annual cap (for example, ₹5,000–₹10,000) may not be enough to cover multiple sessions.
   
3. Complex Claim Processes
   Filing claims for therapy sessions can be difficult, as insurers may demand prescriptions, detailed reports, and hospital tie-ups.
   
4. Variation Among Insurers
   Not all insurers interpret the Mental Healthcare Act equally, leading to inconsistent coverage across providers.
   

 Learn more about mental health insurance: IRDAI Guidelines on Mental Health

How to Choose the Right Policy for Mental Health Coverage

If you are considering therapy insurance in India, here are steps to make the most informed choice:

1. Look for OPD Coverage
   Ensure the policy explicitly mentions outpatient therapy or counselling.
   
2. Check Psychiatric vs. Psychological Coverage
   Understand whether the policy covers only psychiatrists (who prescribe medication) or also psychologists/counsellors (who provide therapy).
   
3. Verify Claim Procedures
   Ask your insurer about the documentation required for claiming therapy expenses.
   
4. Compare Annual Limits
   Policies vary in how much they reimburse. Look for higher coverage amounts if therapy is a priority.
   

The Role of Online Therapy in Insurance

With the rise of online counselling platforms in India, therapy has become more accessible. Some insurers now extend coverage to online consultations if conducted through approved platforms. However, direct coverage for online therapy remains limited.

At PsyQuench, clients can explore affordable counselling services and also receive guidance on how to integrate therapy into existing insurance benefits.

Browse therapy resources and courses: PsyQuench Courses

Summary

Mental health insurance in India has evolved significantly since the Mental Healthcare Act, 2017. While hospitalization and psychiatric treatments are now widely covered, regular therapy and counselling sessions often fall into grey areas. Some policies with OPD coverage provide limited reimbursement, but for many people, therapy still remains an out-of-pocket investment.

Understanding your policy, choosing insurers that include outpatient therapy, and exploring affordable platforms like PsyQuench can help bridge the gap.

Save smart. Explore therapy + insurance with PsyQuench.: PsyQuench Counselling

Conclusion

The journey toward complete therapy insurance coverage in India is still ongoing. While legal reforms and IRDAI guidelines have ensured that mental health is no longer ignored, much work remains to make therapy as accessible and insurable as physical health treatments. For now, individuals need to carefully choose policies with OPD coverage, ask the right questions, and view therapy as an investment in long-term well-being.

PsyQuench continues to provide accessible therapy services while also guiding clients in navigating the complexities of mental health insurance in India. Talking to a counsellor should not be a privilege, it should be a right, supported by both awareness and policy.

FAQs

1. Does insurance cover therapy in India?
Yes, but with limitations. Most policies cover psychiatric consultations and hospitalization. Therapy sessions may be included only if OPD coverage is available.

2. What does the Mental Healthcare Act, 2017 guarantee?
It ensures that mental health conditions must be covered by insurers on par with physical health conditions.

3. How can I know if my therapy sessions are covered?
Check your policy documents for OPD benefits or ask your insurance provider directly.

4. Are online counselling sessions covered by insurance in India?
Some insurers allow reimbursement for online consultations, but this is not yet universal.

5. What if my policy doesn’t cover therapy?
You can either upgrade to a policy with OPD coverage or explore affordable therapy services like those offered by PsyQuench.