Lets say we get a 500K dollar policy and the premium is 300 dollars a month. So I pay the premium and when he dies, as morbid as that sounds, I would be the one who gets the 500K. Lets say I buy a 40 year policy at 300 per month thats an investment of $144000 with a payout of 500K. So essentially I profit 356K.
If you contributed $300 a month to a taxable account for 40 years, 10% annual return would give you roughly 1.3M after taxes. (assuming 2.5% dividend yields, 22.5% state+fed tax for qualified dividends, etc, etc, etc)
356K sounds like a huge number -- until you actually put the numbers into a spreadsheet. This is where insurance companies get people -- the general population do not understand the power of compounding returns and hence don't realize that the insurance company pays out 30% of the profits from the monthly contributions.
Most people don't do it because they spend more than they make and don't have money for neither investments nor insurance.