How Does Life Insurance Work As An Investment? 
Life Insurance works as an investment by using the excess premiums you put in , after the cost of insurance and other internal costs are paid for . This excess premium is credited interest either by an internal account or via an index if the life insurance is an equity indexed universal life or whole life policy . You get the benefit of compounding interest and tax deferral or tax free income depending on how you take the money out of the policy and the status of the policy ie. , is it lapsed or not . This is a `` cliff-notes '' version for you . Reach out to your broker/agent to get an illustration to see examples of possibilities . Keep in mind , I do not recommend using this for 100 % of your investments however to use this as a supplemental investment . 