Life insurance policies other than term can certainly be very useful for wealthy individuals. The tax advantage is the main reason - i.e., "Rich Man's Roth IRA"...
If you make a good living above a certain level you're not Roth-eligible. That means you'll eventually have to pay taxes on your retirement plans. But if you invest at least some $ in appropriate life insurance products, you'll get the tax-free appreciation benefit. And you have annual contribution limits with traditional IRA / 401k / SEP plans. Obama even wants to limit the total accumulation amounts of the investments in tax-advantaged plans.
Another advantage of these products is that they are good ways to transfer wealth to heirs tax-free as well.
If you don't make $200k or more a year, and don't ever see yourself being a multi-millionaire, you can certainly do other things with your money than invest in these products. And if you are or plan to be in the $200k+ a year / multimillionaire club, you probably don't want to have everything in life insurance products, and certainly not all with one company - in the event any company or companies become insolvent.
Disadvantages are that the fees are typically higher than average and that the quality of the investment choices within the products tend to not be so great, much like with variable annuities (another good vehicle for the right person). You are also taking a risk on the insurance company itself anytime you give them $, so it's best to keep these investments with better companies, not put all your eggs in the insurance basket, and spread the insurance $ out among several insurance companies if possible.
