I'm a bit confused with the Type 2 & Type 4 annuities. What is the intuitive difference between them?
I am under the impression that with type 4, the 'n' term/duration refers to duration of payments which starts for (y) after the death of (x) and for type 2, the 'n' term/duration refers to the duration of the policy and starts from the issue of the policy. So with type 2, the number of payments made to (y) after the death of (x) would depend on the time (x) died and how much longer (y) lived, whereas with type 4 it would only depend on how long (y) lives? Is this correct?