It's a fucking scam? The life insurance company exists to make money. That requires paying out less than they take in.
Perhaps you are conflating term life insurance and whole life insurance. And even there, you are over generalizing.
Term life insurance is simple: you pay periodically and if you die they pay out. This not only isn't a scam, it's a sound idea for earners with dependents.
In whole life insurance, you pay a little more periodically and if you die they pay out. If at the end date (ie age 65) if you are still alive, you get a different pay out. This isn't inherently a scam either, but there are two problems with it: 1) the combining of plain old insurance with savings makes it less transparent and 2) in practice it is mostly sold by high commission salesmen.
In either case, the insurance company will invest the premiums to save for later payouts; this reduces the overhead of the risk pooling.
Advice: Get a term life insurance policy of a size to not leave your spouse and kids in the lurch if you die. When the kids finish college--- or at latest, when you retire--- let the insurance lapse. Save for retirement separately, mostly in a Vanguard S&P 500 index fund or similar.