Aluminum foil possesses some unique qualities that allow it to offer all these insulation perks. First, because its mass is insignificant, its absorption and retention of heat is improved. Second, its E-values (i.e., emittance values) are very low. Therefore, heat transfer by radiation is minimized.
Benefits
Because aluminum foil reflects light, it can be used for insulation, especially in areas that need to be guarded against heat. When it is used with other materials, it can be used to warm an area, too. Other materials such as paper and cotton, do not have the reflectivity that aluminum foil does, so when the sun is bearing down, they will not keep it out as well. An area that is already hot will be kept hot by aluminum foil, as it will hold in hot air. Paper and cotton will release heat at a quicker rate than aluminum foil. Aluminum foil can keep things like wires or pipes insulated, as it traps air when it is wrapped around an object. This can be achieved with several objects, though, and not just aluminum foil.
Considerations
If you would like to insulate something in a dark place, such as lunch box, another material such as cotton or paper could work just as well as aluminum foil. As a matter of fact, cotton is regularly used for insulation, as it is environmentally friendly. Because aluminum foil reflects light, when it is in a dark place, there is no light for it to reflect, so it will work similarly to other materials.