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A.Word.A.Daywith Anu Garg
noun: A form of investment in which participants pool their money into a common fund and receive an annuity. Each person's share increases as members die until the last survivor takes the whole.
From French tontine. Named after Lorenzo Tonti, a Neapolitan banker, who started the scheme in France. Earliest documented use: 1765.
A tontine was also used a way to raise money for the state, often for fighting wars, as the fund went to the crown after the last person died. Crown funding via crowdfunding. As there was a perverse incentive to hasten the demise of other members of a tontine to increase one's share, eventually it was made illegal. Tontine has been used as a plot device in many works of fiction.
"I am not saying that tontines should replace life annuities. Rather, they should be reintroduced and then coexist in the market."
Moshe A. Milevsky; Wealth Management; The Wall Street Journal (New York); Apr 22, 2013.
See more usage examples of tontine in Vocabulary.com's dictionary.
A THOUGHT FOR TODAY:A body of clay, a mind full of play, a moment's life -- that's me. -Harivansh Rai Bachchan, poet (1907-2003)