Defeating an inner entity could restore some sanity (configurable). As if the player had managed to overcome his own mind and his own fears.

Another suggestion, but I think this one would be more work to develop, would be: There could be an late-game item that when consumed (This item could only be consumed once) increases the maximum value of sanity. So going insane would take longer and bring a kind of progression to the mod. The item could be called "Shock Therapy".