Increase in Mental Health Insurance Inquiries by 41% recorded in 2025
India Sees Significant Uptick in Mental Health Insurance
In an increasingly stressful environment among Indians, there has been a significant surge in queries for mental health insurance, a 41% increase in 2025 compared to the previous year, as per a study by Policybazaar. This trend is predominantly observed among young adults, women, and individuals in high-stress professions.
Tier 1 cities are leading the adoption of mental health insurance, accounting for 50-55% of its uptake due to factors such as higher disposable income, greater access to therapists, and progressive corporate cultures advocating for mental well-being.
The study analyzed 7500 claims in FY 25 and revealed a 30-50% rise in mental health-related claims in the past two to three years. Mild to moderate conditions were the most common claims, although chronic and severe disorders remained underreported, potentially due to lingering stigma and lack of diagnosis.
Anxiety disorders constituted 30-35% of mental health claims, while depression made up 25-30%. Workplace stress and burnout accounted for 20% of claims. Insomnia, adjustment disorders, bipolar disorders, post-traumatic stress disorders, and obsessive compulsive disorder accounted for less than 5% of claims.
Therapy sessions, psychiatric consultations, and prescribed medication were covered under mental health insurance claims. The study highlighted a growing interest among users seeking mental health coverage, driven by a post-pandemic awakening valuing mental well-being, increased availability of outpatient benefits, reduced stigma, especially in urban and educated circles, and an emerging behavioral shift where mental health is given active consideration during the evaluation of insurance policies, not as an afterthought.
Research on first-time claims suggested that major life events often triggered claims, such as career pressure, possible job relocation, burnout, financial responsibilities, caregiving for children and parents, post-retirement isolation, and health-related anxiety. The age group 25-35, grappling with unique stressors like work-life imbalance, financial insecurity, and job changes, was found to be the most likely to opt for and use mental health benefits. This demographic demonstrated the highest search interest, policy adoption, and claims. They were also observed to be actively using digital mental health platforms and therapy apps. Women were found to be more likely than men to enroll in mental health coverage.
In March 2023, the Insurance Regulatory and Development Authority of India (Irdai) made it mandatory for general insurers and stand-alone health insurers to introduce insurance policies that provide coverage for those with mental illness. The growing trend towards prioritizing mental well-being in health insurance decisions seems to be a positive step towards destigmatizing mental health care and improving access to mental health resources in India. However, the need for insurance policies to better align with real-world mental health care requirements, such as covering outpatient treatments and reducing the need for hospitalization, becomes increasingly apparent.
In the wake of a rising awareness about mental health in India, there's been an upward trend in the adoption of health-and-wellness insurance policies, particularly those covering mental health, as evidenced by a 41% increase in 2025 compared to the previous year. This growth is predominant in Tier 1 cities, where mental health insurance claims, such as therapy sessions, psychiatric consultations, and prescribed medication, have seen a significant surge, especially among young adults, women, and professionals in high-stress jobs.
