there's a lot of inaccurate statements in your comment, i dont know where to begin...

you can "call it" whatever you want, but if it crosses the threshold of a modified endowment contract (MEC) then it becomes taxable as an investment, not illegal.

permanent life insurance policies are tools. not every job needs a socket wrench, but when you need a socket wrench, a screwdriver doesnt cut it. if youre living paycheck to paycheck, a big whole life policy is not for you. if youre a multi millionaire (there are lots), then a whole life policy as part of an estate plan is invaluable. if you're using whole life policies as a primary investment vehicle, you're just uninformed. insurance is insurance, not a penny stock.

im a fan of term+invest, but thats not for everyone. nothing is a universal "best answer" for everyone in every situation.

policy loans are loans, and is a way to "cash out" without incurring the capital gains tax for a limited time. you can't have your cake and eat it too. you cant gut your policy AND expect your policy to be in full effect. your comment about cannibalizing the contribution soulds like a universal life policy, not a whole life policy.

"without the benefit of capital gains rates" what?

if receiving the cash value of your insurance policy is important to you, most allow you to select that option with a rider. otherwise, you get only what you pay for, the death benefit on the face value.

tldr; insurance itself is generally not a scam, but it's people who use the wrong tools for the wrong purpose because they didnt understand it, and was probably sold it by an insurance agent who probably also didnt understand it.

to avoid these situations, go to a proper estate planning attorney to get your shit together properly, instead of piecemealing a plan together on your own if u dont know what youre doing.