The rollover must be completed before the end of the 1-year period beginning on the date you received the payment.

You are correct – the rollover period begins on the date the payment is received, and extends for 1 year.

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If you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, you can contribute (roll over) all or part of the amount received to your Roth IRA. The contribution is treated as a qualified rollover contribution.

The amount you can roll over to your Roth IRA cannot exceed the total amount that you received reduced by any part of that amount that was contributed to a Coverdell ESA or another Roth IRA. Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers.

The rollover must be completed before the end of the 1-year period beginning on the date you received the payment.

The amount contributed to your Roth IRA is treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed.

QUESTION: We have one year to roll the insurance proceeds into a Roth IRA from the date payment is received. That is, when the insurance money is paid by the insurer, NOT date of death. Is this correct?