What is the best way to record the payout of a life insurance policy? (using Q Mac)

Normally, I would record this in my checking account as a deposit from life insurance company and categorize it as "Misc. Income, non-taxable".
Next I would contact a tax advisor or tax attorney and try to find out if there are any tax consequences.
If, for example, the life insurance company also sends you a federal 1099-MISC income tax form, you need to recategorize it as taxable income, as indicated on the form and include it in your 1040.