This is a summary of the Insanity system used in Reality Blurs' Realms of Cthulhu. Just like we use the same chart for Criticals and Incapacitation, I also think this system and crit chart can be used for Fear and powers that cause mental effects including psychic damage.
This system works very similar to the Wounds system where:
Mental Anguish/Damage (often called psychic damage) = Damage.
Sanity = Toughness
Madness = Wounds.
So, when you suffer mental damage you compare the amount of damage to your Sanity and for every raise on the damage you suffer a level of Madness. Beyond Madness 3 you roll on the Insanity Critical Chart (just as you would for Incapacitation for wounds).
The Mental Trauma / Fear / Insanity Chart
This chart is on the DM Tools page and is part of the Criticals Doc. It operates exactly the same as the normal critical chart. So rolls are made to determine how long the effects just as a critical.
(NB: However, if you roll on this chart b/c you suffered more than 3 Madness points the effects are harder to make go away - just like reaching Incapacitation in our wounds rolls. See Realms of Cthulhu p26 to see how long Insanity lasts).
Just like Criticals delivered via physical means, this chart can be used for mental damage before Insanity kicks in.
Whenever 2 raises are scored with a mental attack the attacker rolls on the first column of the chart. If 3+ raises are scored they roll on both just like with other critical hits!
This chart also replaces the Fear Chart from SWD. Instead, if you fail a Fear check, you roll a d10 for the first column on this new chart. If the character rolls a 1 (or modified roll of less than 1) in their attempt to resist fear, roll on both columns of the critical chart.
See 'Mental Recuperation' in Realms of Cthulhu p30 for modifiers.
This basically works like Healing Wounds, but requires 20 minutes of quiet time with the victim. In Savage Worlds Knowledge (Psychology) is used. For our SW-SIF it is simply Healing with the Treat Mind Specialty.
A change from Realms of Cthulhu (to bring in line with the new Healing rules in SWD) is that only one attempt can be made for each person attempting to 'treat mind'. The patient does NOT get worse on a roll of 1. Simply adapt to the new healing rules in SWD.