You can use any money you want to make a regular contribution to an IRA, but you can't do a rollover of any distribution from this life insurance policy. The amount in box 2a of the Form 1099-R reporting the distribution from the life insurance policy is includible in your AGI.
Enter a new IRA contribution under Deductions & Credits -> Retirement and Investments -> Traditional and Roth IRA Contributions.
If you deposited an amount into an IRA that was more than you were eligible to contribution to an IRA as a new contribution, it's an excess contribution.