From the IRS Tax Topic 430:
If you elected to receive cash instead of stock in the tax-free
reorganization, you are deemed to have received shares and then to
have sold them back to the corporation (i.e., redeemed your
shares). Generally this results in capital gain or loss reportable
on Form 1040, Schedule D, Capital Gains and Losses. If you owned
the policy for more than one year as of the date of the
demutualization, the gain or loss is treated as long-term capital
gain or loss. If you owned the policy for a year or less, the gain
or loss is short-term capital gain or loss.
So basically, you'll report the payment on Schedule D either as
long- or short-term depending on how long you'd owned the original
policy.