According to Article 2 of State Taxation Administration of The People's Republic of China's Reply on the Collection of Individual Income Tax on Undistributed Investors' Income and Individual Life Insurance Income (Guo Fa [1998] No.546), "The interest paid by insurance companies to life insurance policyholders who are not out of danger during the insurance period (or similar income paid in other names) shall be subject to individual income tax according to the interest rate of bank savings deposits in the same period.

Therefore, individuals need to pay personal income tax according to regulations when they obtain interest income paid by life insurance companies that have not been out of danger during the insurance period.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.