Toad:
Is he saying that there'd be a 40 year payout of ~$1500 per month with the first 20 years tax free?
AND the family gets $350K insurance coverage throughout?
I think he is saying 60% of the $1500/month is taxable income for the first 20 yrs, after that the entire $1500 is fully taxable. But the payout continues until you die - there is no period certain.
Here is one more hurdle to clear: With SS, your earnings and contributions are kept track of, and once you pass certain milestones, you are eligible to draw benefits when you retire - the longer you work and the more you put in, the more you will qualfy for to draw out. You can stop and start working during your career without having your SS benefits expire or lapse.
A WL policy, however, depends on you to make regular, on-time premium payments, and will LAPSE if you do not make these payments. Thus, if you are laid off and unable to find employment for a while, or stop working by choice, you still must make these premium payments or you will be without both your cash value and your family's death benefit. Now companies don't want their policyholder's contracts lapsing, so most have some automatic premium loan mechanism that kicks in and starts paying premiums out of the accumulated cash value. But if that happens, it will reduce your projected cash value and thus your retirement benefits. And if it goes on long enough, you lose your benefits (less the paid-up additions purchased with the policy dividends), which is something that wouldn't happen under SS.
Still, I don't think is a show-stopper. I'm sure some clever actuary could find a way around that problem - maybe instead of a traditional WL policy, you would just purchase a stream of Paid-Up Additions as you worked...