TONTINE: a joint financial arrangement whereby the participants usually contribute equally to a prize that is awarded entirely to the final survivor
Tontines were named after their creator, Neapolitan banker Lorenzo Tonti. In 1653, Tonti convinced investors to buy shares in a fund he had created. Each year, the investors earned dividends, and when one of them died, his or her share of the profits was redistributed among the survivors. When the last investor died, the capital reverted to the state. Louis XIV of France used tontines to save his ailing treasury and to fun municipal projects, and private tontines (where the last surviving investor and subsequently his or her heirs got the cash instead of the state) became popular throughout Europe and in the United States. Eventually, though, tontines were banned: there was just too much temptation for unscrupulous investors to bump off their fellow subscribers.
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