Rejected · Mental illness · Psychiatric treatment
Mental health or psychiatric claim rejected by insurance? Your rights in India
Insurers once routinely excluded mental illness. The law now says it must be treated on the same basis as physical illness.
By the MediclaimSaathi team Updated 8 November 20266 min read
Quick answer
The Mental Healthcare Act, 2017 requires insurers to provide medical insurance for treatment of mental illness on the same basis as for physical illness, and IRDAI later directed insurers to follow it. A blanket exclusion of mental illness is therefore hard to defend. Valid terms that apply to every illness, such as waiting periods, in-patient requirements and sum insured limits, can still apply. Ask for the exact reason in writing, get the psychiatrist’s discharge summary and treatment notes, and send a grievance. If it is not resolved in 30 days, use Bima Bharosa and the Insurance Ombudsman.
What the law says
The Mental Healthcare Act, 2017 says insurers must make provision for medical insurance for treatment of mental illness on the same basis as physical illness. IRDAI followed with a direction to insurers to comply.
In practice, “parity” means a mental illness claim should not be refused only because it is a mental illness. Ordinary policy terms still apply, such as the waiting period, the sum insured and the need for in-patient admission.
Reasons used to refuse these claims
- A blanket “mental illness excluded” clause in an older policy.
- Treatment treated as outpatient (OPD) rather than in-patient.
- Pre-existing condition or non-disclosure alleged.
- Not medically necessary or documentation missing.
- Treatment at a facility the insurer does not recognise.
How to challenge it
- 1Get the reason in writingAsk for the clause relied on and whether it is a blanket exclusion or an ordinary term.
- 2Gather the medical recordDischarge summary, diagnosis, treatment plan, psychiatrist’s certificate on why admission was needed, and bills.
- 3Quote the parity ruleRefer to the Mental Healthcare Act, 2017 and ask why the claim is treated differently from a physical illness.
- 4Write to the Grievance Redressal OfficerAttach the documents and state the amount you want.
- 5EscalateAfter 30 days of silence or a rejection, use Bima Bharosa and the Insurance Ombudsman within one year.
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Check my letter freeFrequently asked questions
Is mental illness covered by health insurance in India?+
The Mental Healthcare Act, 2017 requires insurers to cover it on the same basis as physical illness. Ordinary policy terms still apply.
Can an insurer exclude psychiatric treatment completely?+
A blanket exclusion is hard to defend after the Act and IRDAI’s direction. Ask the insurer to explain the clause in writing.
Is outpatient psychiatric treatment covered?+
Usually only if your policy has an OPD benefit. Most policies cover in-patient admission.
Who decides if admission was necessary?+
The treating psychiatrist’s certificate and records are key evidence. Attach them to your grievance.
Related guides
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Top Health Insurance Claim Rejection Reasons in India & How to Overturn Them
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Complete guide
Health insurance claim rejected? Here’s exactly what to do
Sources
- IRDAI — Master Circular on Health Insurance Business (May 2024)
- IRDAI Bima Bharosa grievance portal
- Council for Insurance Ombudsmen
This guide is general information, not legal advice. Rules change; always check the current IRDAI circulars and your policy wording. MediclaimSaathi is a document-preparation platform, not a law firm, insurer or broker.