Section 30, The Income Tax Act, 2000

insurance policy. (1) The proceeds of a life insurance policy paid by a life insurance company to the insured or his beneficiaries byreason either, of the death of the insured or, subject to subsection (2), the surrender or maturity of the policy, are exempt from income tax except to the extent attributable to premiums for which a deduction was allowed. (2) Exemption from income tax for surrendered or matured policies shall be given— a) for policies on which annual premiums were fully paid for at least eleven years, in full; or b) for other policies, at the rate of ten percent per annum for each year after the first in which annual premiums were paid.