Life Insurance....What a BAD joke

I can not believe the absolute SCAM I found out about. My father in law passed away. As most of you know it is the 4th death we have had to deal with in this past 12 months. We knew he was going to pass but felt relief in the fact he had life insurance and we would not be stuck with a giant bill like we were when Cathy died.
I do not know why I was shocked when I got the statement. His insurance paid face value of the policy of $2500. I thought it was going to be a bigger policy because grandpa has been paying $40 a month since 1991. Yes I did the math too and realized he paid $40 for 220 months = $8800!!!! I was livid. I thought to myself there is no way this was legal but incredibly it was. The agent told me and the Kansas Insurance Commission office confirmed it. They explained to me that if grandpa would have died the day after he got the policy they would have had to pay the $2500 but because he lived longer, he helped pay for the losses the insurance company had to pay for people who died sooner. I think that is so wrong, I know everyone needs to make a living but that's insane. I think that once the $2500 was paid, he shouldn't have to keep paying. Let the insurance company invest the money or keep interest but to make $6000 plus in profit off an old man is criminal in my opinion.
If grandpa would have put that same $40 a month is a savings account, the whole funeral would be paid for and then some. I know people never know when they will pass but to make this big a profit off the backs of elderly people is appalling. The agents scare people into buying these policies and its just wrong.
Now I'm sitting here with a bill for $841.88. I know this is not an astronomical amount to most people but top it off with the $871.55 we have left from Cathy's funeral, the fact that JR just lost his job and we are financially strapped as it is, this may as well be a million dollars. It will not take long before we lose everything. It will be hard to write on this blog when we are living under the 6th street bridge. Thanks Obama, your doing a bang up job there. Maybe you should look into life insurance companies too, not just health-care. Something has to happen so you don't cripple your family with debt when you die.