You report it on Schedule I. You don't need to separate the insurance from the investment portion - it wouldn't make any difference anyway since there is no step up on basis with a variable annuity.

When it's a first-to-die return, I often use the last statement before the date of death for the value. With a second-to-die you should write to the annuity company. The actual payoff figure will include interest from the date of death so that's not the value you want.