An Important Guide To Term Insurance For Mental Well-Being in 2025

According to the National Institute of Mental Health and Neuro-Sciences, over 80% of Indians cannot access mental health care. One of the reasons for this lack of awareness and access to facilities. If you are wondering how to manage your mental well-being, consider getting term insurance with mental health benefits.

Getting insurance coverage for mental health allows you to not worry about the financial impact of treatment and access the best facilities as well as professionals. Learn how you can secure holistic wellness through insurance.

Over 60 to 70 million Indians struggle with mental health issues, such as depression and anxiety. With such high prevalence, it is crucial that medical insurance cover mental health. In fact, the Mental Healthcare Act mandates coverage for mental illness to be on par with physical illness. 

Here are other reasons why it is important to have insurance coverage for mental health:

• With insurance, you can easily access the required treatment and ensure timely treatment

• Since the insurer will cover the expenses of the treatment, your out-of-pocket expenses are reduced

In this type of insurance, coverage is offered for a specific period, and if the policyholder dies during this period, the nominee receives a lump sum payment. However, the death benefit is offered under certain types of death and in some cases, death by mental illness is not covered. 

By choosing policies that offer coverage and protection for mental health illnesses, you can ensure that your claim isn’t denied and your family receives the required support. It is important to note that many policies do not offer mental health coverage directly. 

However, you can get riders to enhance coverage of your term insurance for mental well-being. With riders, you can generally get a lump sum payout from the insurer, which will allow you to manage treatment expenses.

Holistic wellness through insurance is possible if you choose the right insurer and policy. To do this, consider several factors from compliance and waiting periods to inclusions and exclusions. Here is an overview:

• Compliance with IRDAI Rules and Mandates

As per IRDAI and the Mental Healthcare Act, health insurers have to offer coverage for mental illnesses, such as depression, anxiety, PTSD, and more. Ensure that the insurer you choose complies with this to get comprehensive coverage.

• Waiting Period

Health insurance often has a waiting period for certain pre-existing conditions, including some mental illnesses. However, this varies depending on several factors. By assessing this period, you can determine when you can get coverage for the specified condition and plan better.

• Inclusions and Exclusions

Not all conditions and circumstances are covered by the insurer. As such, it is crucial to assess what is covered and what is not. Make sure you study the comprehensive list of inclusions and exclusions, and ensure that what you may need is included.

• Affordability and Accessibility

The premium you will have to pay depends on various factors, such as the type of policy, insurer, riders, and more. Compare your options to ensure that you choose the most economical option. You should also check the list of network hospitals and facilities to access treatment when needed easily.

• Add-ons and Other Benefits

Ensure you are familiar with the various riders and other advantages that insurance providers offer. This way, you can get comprehensive protection for your and your family’s needs.

Opting for riders and choosing the right insurer can help you get mental health-focused term insurance. Consider the above points while evaluating your options to ensure you choose the right one. 

1. Does term insurance cover mental health treatments?

Generally, the coverage for mental health treatment is not included in term insurance as it is a type of life insurance. However, you can get a plan that offers a payout in the event of death due to mental illness. You can contact the insurance provider for further details and learn how to ensure financial security and mental health protection.

2. Why is mental health important in financial planning?

Financial security and mental health are closely connected. The stress from your financial obligations can negatively impact your mental health. Emotional distress can impair your decision-making ability, reduce productivity, and more, which in turn will affect your finances. With effective financial planning, you can improve and maintain your mental well-being.

3. How can term insurance provide holistic wellness?

Term insurance is a form of life insurance and offers financial support to the family in the event of demise. Here is how holistic wellness through insurance is possible:

• Financial security during difficult times, which helps reduce stress

• Riders and other options to extend coverage for critical illnesses and ensure added protection 

• Premiums are eligible for a deduction under the Income Tax Act, which helps improve your savings

• Several payout options offer flexibility to access funds as needed

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