So i have an old family friend from my childhood that is selling (among other things) indexed life insurance from Minnesota life. I understand how it works but reviews on the internet are very polarized to one side or the other.

Im 27 and trying to get to a point i can kick back and semi retire in 10 to 13 years. At that point id give up my high stress job and work 10 or 20 hours a week keeping up on my investments so i can spend the rest of my time enjoying my family and hobbies.

Im needing some life insurance anyway and the fact that i can borrow from it in a few years is appealing so in my mind the coverage is very cheap. My money wouldnt be tied up long and i can then use it to buy more rentals or cattle which is where most of my money is at now.

Concerns:

1. Returns. I dont trust sales data. At 5 or 8 percent return the deal is a home run but my reading makes me think my return would be 1 to 3 percent. At 3 or 4 percent it seems like it would be very affordable coverage and not tie up cash flow beyond the first 2 or 3 years if i get in a bind and need money.

2. The salesman. He is a family friend but went bankrupt as a farmer/rancher. I am automatically skeptical of people that failed in business trying to tell me how to be more successful with money.

3. Im just leery of things im not educated on.

So total scam or possibly decent product for my situation?

The general consensus is that it is a bad idea.  Insurance is not an investment.

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=138710

I had a knock-down drag-out argument with my father-in-law when he started selling this stuff through New York Life.  He tried to hard sell us.  I lost all respect I might have had for him.

I highly recommend looking into John Bogle's philosphpy.

If you don't completely understand how it works, I'd pass. A couple guys I work with brought into something similar. I asked them how it worked and got blank stares.

Insure risk, invest for growth.  Think of this like your wife and your girlfriend.   Somewhere in you mind you think if they got together this could be hot.   Your friends are pushing you to break the ice.  If you do it you will be lucky to walk away with ringing ears and missing a penis.  Don't do it.  

To be serious if you can be FI that early your investing is going well don't get involved with that crap.  Look up term prices they are crazy cheap.  I got a 30yr fix million for 675 a year.   How much better than that can it get.  Remember life insurance is for those left behind.  If you don't have kids or married have 15k set aside to bury you and you are done.  

The whole life, or add your new special name for it, cash value insurance, will eat you alive in hidden fees.  Why do you think nobody likes it unless they are selling it.  Don't believe me check the IRS ruling on this type of insurance and tax implications.

I guess you're right. I have a small term policy for 200k but thats as high as i could go with that plan as it was just a supplement thing offered through work. I probably just need to get another 800k in term and call it good.

It was just appealing bc i like being able to cash out of things and still benefit if things get tight. I have an 80k loan from my ira right now for instance. I just worry a lot bc i have a huge debt load and i worry that if i die a big chunk of my net worth is 20 percent equity in my rentals and im not certain there really is 20 percent there if the market is a little sluggish. Ive borrowed aggressively to make it cash flow instead of grow in value. That only leaves my other investments which my wife would have to cash out of Bc she isnt capable of managing them.

There is no such thing.
http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Loans

That brings up a whole different question then. My boss and the ira plan people approved it but they told me because it was two different plans from two companies it was okay? Or did i fuck up?

My original loan was from a solo401k from a company i had, so i basically just wrote a check from the trust account and told my accountant. I pay it back with interest like im supposed to. I took another loan years after that when i went back to a company i had already worked before i had my business.