If you want to ensure that you don't have a tax obligtiaon because of this withdrawal, you will want to "gross up" the amount of the withdrawl so that you can cover the ordinary income tax. While you may be exempt from the penalty, you won't be exempt from normal income. The custodians for many IRAs offer the option to select that you want "$1000" net meaning, after the 24% tax withholding.
Depending on the other items in your tax return when you file at the beginning of next year, you could still have a balance due or a refund in excess of what you withhold here - but for this specific transaction taking a higher amount to cover the tax and the amount that you need for your insurance sounds like the right solution.
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