The taxable amount is referred to as a dividend by the insurance company and TurboTax looks at 1099-R as IRA/Pension payout (not insurance surrenders).
You should get a 1099R and it would be shown in the IRA/pension area:
you cash in a life insurance policy you may have taxable income. The taxable
income would be -
this only results in income on older policies. Your insurance company should
send you a Form 1099-R for the income to report.