tontine insurance
Noun: A type of life insurance arrangement where the contributions of deceased or defaulting participants are not paid out as a death benefit to their beneficiaries. Instead, these funds are redistributed among the surviving, continuing members of the insurance pool, thereby increasing the value of their shares or potential payouts.
This term is used specifically in the context of life insurance and historical financial schemes. It describes a collective investment or insurance plan with a survivorship benefit structure. - Tontine insurance was more common in the 18th and 19th centuries. - The policy was structured as a tontine insurance, so the final survivor received a large sum.
- The novel's plot involved a mysterious policy that motivated the characters.
- Historians study as an early precursor to modern pension plans.
- Due to regulatory changes, is rarely offered today.
- "to be in a tontine insurance": to be a participant in such a scheme.
- Several investors were in a tontine insurance that would mature in thirty years.
- Tontine (noun): The broader category of financial schemes or annuities based on survivorship principles, of which tontine insurance is a specific type.
- He invested in a tontine that paid dividends to the surviving members.
- Survivorship annuity
- Last-man-standing insurance (informal)
The core concept is the survivorship principle. Unlike standard life insurance, the financial benefit is not primarily designed for the participant's heirs upon their death, but is retained for the group of surviving participants. This creates a dynamic where the value for each remaining member grows as others in the pool die or drop out. Modern regulations in many countries restrict or prohibit such structures due to potential ethical concerns.
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a form of life insurance whereby on the death or default of a participant his share is distributed to the remaining members
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