(1) Subject to subsection (2) and sections 89 and 90, for the purposes of calculating the income of a person, the proceeds derived by that person from insurance is determined in accordance with section 29.

(2) Subject to section 90, a gain of an insured person from life insurance is

(a) exempt from tax when the proceeds are paid to the insured person, where the proceeds are paid by a resident insurer; and

(b) included in calculating the income of the insured person, where the proceeds are paid by a non-resident insurer.

(3) For purposes of this section, “gains of an insured person from a life insurance” means the extent to which proceeds from the life insurance paid by an insurer exceed premiums paid to that insurer with respect to the insurance.