can you or @ExGingi give 3 examples besides tax planning that's it would be a better alternative to what I described?
I can give you one reason (not that there aren't other reasons, but I think this one is strong and stands on its own merits):
A wealth accumulation plan founded on overfunded whole life
will work.
The numbers WILL BE DIFFERENT than what's shown on the illustration, but the concept will work similarly to what is shown on the illustration. It will be a sound plan that won't depend on the timing of events beyond your control. Additionally, it will be protected from certain catastrophic events beyond your control, such as death (and for many people that add the riders - disability, and in more recent years, even riders that provide for long-term care). In any given year, once you have a certain value accumulated, the
future values are guaranteed to be higher. And I can only tell you by looking at my own Whole Life plans, that the cash over cash annual growth is in excess of 4%, while I'm able to get a line of credit and borrow against it at 3.25% (or 3%) because the banks know that there's no way they can lose money on this.
On the other hand, BTID (buy term and invest the difference) as you describe, especially if talking over a 40 year period, could work spectacularly, but could also fail (and by fail, I don't mean underperform from expectations that might have been set too high, I mean actually ending up without enough money to pay for life expenses). You seem to be harping on investing at the S&P500 (which sounds great as to passive investing) but other testimony I have heard seems to indicate that Dave Ramsey actually advocates active management. You are also asking to use a 40 year period, ignoring the fact that 40 year term insurance is either non-existant, rare (i.e. other products could be structured to work that way), or would have significant rising costs (or would require repeated underwriting, that might be challenging as we get further along in life).
BTW, for myself, I buy Whole Life, Term, and various investments. I used to also own a VUL which I bought when I was much younger, thought I was very smart and understood everything better. While that policy did serve it's good purpose for several years (possibly not at the most optimal cost) I have intentinally let that policy lapse a few years ago after analyzing it and deciding that it doesn't fit into my overall financial picture. And as
@Mordyk mentioned, the important thing about this and many other financial decisions is, that this was an intentional decision.