LIFE is all about souls going on a spiritual journey in Creation, gaining experience and understanding, lifetime after lifetime, until God-realization, when the soul rejoins the Divine.
Humans are born, live and die many, many times in the reincarnatory process. Before being human, souls have many, many lifetimes in the mineral, plant and animal kingdoms. As souls go through these lifetimes they make karma. The karma can be positive or negative, it can be physical, astral or mental karma. There is some balancing of karma, but most balancing occurs in later lives. Towards the end, karma is more or less balanced.
In Life through many, many lives souls experience a near infinite number of situations that Life can provide. In this way souls learn, gain understanding of Life, of themselves and of what God is not, and what God is. Souls also increase in consciousness.
In human lifetimes a soul experiences being sane and stable in some lives. In other lifetimes a soul will experience what we currently think of as a mental illness. All souls in human form will have experienced many mental illnesses in their lifetimes. Suicidal thoughts, illnesses related to food, depression, anxiety, the various addictions, anxiety, fear and panic attacks, psychopathic tendencies, sociopathic tendencies, narcissism, low self-esteem, lack of confidence, schizophrenia, madness, and so on. We have all been there in some lifetime.