Aluminium (-containing) foils are used for insulation, eg. in emergency situations where injured people are covered in them, to prevent heat loss. On the other hand, aluminium is used for heatsinks, since it conducts heat well. So, how come it works both ways? How come, that in the first use case, the AL foil does not absorb the body heat and dissipate it, causing the person to cool down? Is it because here it is deflecting heat radiation?
In general there are several ways in which heat can be transferred from two bodies. Some of them are: Advection is the transport mechanism of a fluid from one location to another, and is dependent on motion and momentum of that fluid.
- Conduction by contact
Heat moves between bodies placed in physical contact one to the other. Aluminum has a high thermal conductivity, so it can be used in heatsinks because it can absorb the heat from, e.g., the CPU of a computer. All metals, e.g., aluminum but also copper, iron, etc. have high thermal conductivities.
- Radiative conduction
Heat is transferred by the emission/absorbtion of electromagnetic waves, typically infrared radiation (low energy and low temperature) or visible light (higher energy, higher temperature). Human bodies emits in the infrared. Now aluminum has a very high reflectiviry, and as a consequence the infrared radiation emitted by the human body is reflected back, so heat transfer is minimized. Other metals have a good reflectivity too, but aluminum has the advantage that it does not oxidize in normal condition. When a metal oxidize, it is no longer reflecting but it becomes opaque. Copper oxides and becomes green/opaque, iron oxides too (it rusts), and many other metals tend to oxidize pretty easily. Aluminum, gold, silver do not. However aluminum is cheaper.
- Convection of fluids or air.
There is heat loss due to the air. This is not changed by the aluminum itself, but covering one body with a blanket (aluminum or any other material) prevents the heat to go from one body to the external atmosphere. Hot air is basically trapped between the body and the blanket.
So yes, you are basically correct. Aluminum reflects heat radiation back and prevents heat transfer.