She is now putting half of that money into the life insurance policy and half into regular mutual funds. The size of your mutual fund portion hinges on how much extra money you want to invest and the legal limit, based on your age and how much death benefit you are buying. The biggest consideration is time. If you're not in it for at least ten to 20 years, the economics of it just don't work out. Plus, if you end the policy and withdraw all the money in the first ten to 20 years, some plans take a big cut of your principal.
Policies differ quite a bit in their terms, costs and mutual fund options.
These policies are complex enough that you'll want to seek professional advice.