Final answer:
A Second-to-die whole life policy is most suitable for Ryan and Jody as it is designed to cover estate taxes that will occur upon the second spouse's death. This policy aligns with their need to provide for heirs without liquidating assets to pay taxes. Other policies like annually renewable term or first-to-die whole life would not meet their specific requirements for estate planning.
Step-by-step explanation:
For Ryan and Jody, who are concerned about estate taxes upon the second spouse's death, the most suitable life insurance policy would be a Second-to-die whole life policy. This type of policy pays out the death benefit after both spouses have passed away, which coincides with the time estate taxes would be due. This policy is specifically designed to help cover estate tax liabilities and ensures that the beneficiaries have the funds necessary to handle these taxes without liquidating other assets.
The other options, such as Annually renewable term insurance, First-to-die whole life policies (repeated twice with and without typographical error), would not be as effective. A term policy has to be renewed annually, and the premiums can become prohibitively expensive as the insured ages. First-to-die policies pay out upon the death of the first spouse, which would not align with the specific need of covering estate taxes that will be triggered by the death of the surviving spouse.
A cash-value (whole) life insurance policy, like the second-to-die policy, also offers a death benefit and a cash value component that may serve as a resource during the policyholder's lifetime. However, the key advantage of a second-to-die policy in this case is its focus on covering estate taxes after both policyholders have passed.