As per Section 10(10D), the payment made on surrender or maturity of an insurance policy or at the time of a policyholder’s demise will be tax fee. However, you need to satisfy the following conditions: In the case of insurance policies issued prior to April 1, 2012, the sum assured will have to be 20 times (minimum) the premium.  In the case of insurance policies issued after April 1, 2012, the premium amount should not go beyond 10% of the sum assured.