See this answer from one of our TurboTax agents in the following link as it does a good job in explaining this. This is not a death benefit from a life insurance policy but is an annuity that was purchased from an insurance company. It is being correctly taxed by TurboTax.
Code 4 is death and Code D is Annuity payment.This is an annuity purchased from a life insurance company, not a life insurance payout.
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