Q. My father has purchased a whole life insurance policy for each of his grandchildren. He says it’s good forced savings, but I’d rather he put the money into an investment such as a 529 college savings plan or custodial account. What do you think?

A. I’m with you. I’d lobby for a 529 plan or Coverdell plan, both offering tax-free college savings.

Whole life policies are useful for some adults, but it’s hard to see that they have much value for small children.

True, it is cheaper to buy life insurance for the young because the odds are the insurer won’t have to pay off soon. But since children don’t have dependents, they don’t need life insurance at all.

When they grow up and need insurance to protect spouses and children, it’s far cheaper to buy simple term policies than whole life.

Term policies give coverage for a certain number of years — typically 10, 20 or 30. If you don’t die during that period, your beneficiaries don’t get anything — just as you don’t get anything out of your car insurance unless you have a wreck or the car is stolen.

On the other hand, term policies may sell for one-tenth the cost of whole life. You can pay much less for a given amount of coverage, or pay the same amount and get much more protection.

Typically, parents would get a 20-year term policy on themselves to protect the family until the children are grown.

Whole life policies are “permanent.” So long as the premium payments are kept up, the coverage lasts for the insured person’s lifetime. A whole life policy might be useful, for example, if you have a spouse who is completely dependent on you financially. Whole life is also used by people who are worried about paying off estate taxes.

In a typical whole life policy, part of the premium pays for the insurance coverage, the rest goes into a long-term investment. If all goes well, the investment eventually generates enough income to cover the insurance premium.

The policyholder usually has the right to withdraw all or part of the cash value, or to borrow against it.

Whole life policies can be very difficult to understand, and it can be even harder to compare one to another, as the features may be very different.

These policies often have steep sales commissions and other charges that gnaw away at investment returns. There also may be early withdrawal penalties. The investment component is tax deferred — you pay no annual tax on gains — but tax is usually due when cash value is withdrawn.

If your goal is insurance, term is the cheapest way to go, especially if you need coverage for only a given period.

If your goal is investment, you’re better off with a few low-fee mutual funds.

And if the goal is to do something good for young children, it’s hard to beat the two tax-free college saving accounts I mentioned earlier.

Coverdell Education Savings Accounts work much like IRAs. As much as $2,000 per year can be invested for each child. There’s no tax deduction on contributions, but money can be withdrawn tax-free for primary or secondary education, or college.

A couple filing a joint federal income tax return can make a full contribution so long as their modified adjusted gross income does not exceed $190,000. The maximum contribution gradually falls to zero as income rises to $220,000. For single persons, those figures are $95,000 and $110,000.

Just about any bank, brokerage or mutual fund company can give you details and set up a Coverdell.

Section 529 plans are state-sponsored college savings plans. Like Coverdells, they offer no tax deduction, but withdrawals are tax-free if they are used for college (but not for primary or secondary education).

Best of all, anyone can contribute to a 529 plan, as there is no income limit. And much more can be put in. A couple, for instance, could give up to $110,000 to each beneficiary in a single year without triggering gift tax.

Bookstores and libraries have lots of guides to 529 plans.

For young children, college saving is the priority, not life insurance. Ask your father to update his strategy.