mdames, it's likely that you are misinterpreting what TurboTax is showing you. With the correct taxable amount in box 2a and the investment in the contract that is nontaxable shown in box 5, it's unlikely that TurboTax would include the entire box 1 amount on Form 1040 line 4d unless you made an entry error. Check your Form 1040 to see that the entire box 1 amount is included on line 4c but only the taxable amount from box 2a is on line 4d.
If the full box 1 amount is being included on line 4d, it's likely that you mistakenly marked the IRA/SEP/SIMPLE box on TurboTax's 1099-R form for this distribution. The code D that you indicated in another post is accompanying the code 7 indicates that the distribution is not from an IRA and must not have the IRA/SEP/SIMPLE box marked.
Also make sure that you have not allowed TurboTax to use the Simplified Method to determine the taxable amount. If you did, delete the 1099-R form from TurboTax and reenter it.
