Open Question: have a potential for a relatives life insurance policy to be cashed out early...?

They plan(but that could change) on giving that amount to me before they die to avoid any disputes after their death with the money. The sum is larger than the gift tax but smaller than the lifetime gift limit. If they hand cash in the large amount I am trying to figure out what obligations I have on taxes and such if I were to deposit said amount in my bank account assuming they do hand me the money. larger than the gift tax yearly limit that is.