Tontine
Arrangement in which a group pools funds and the share of each member who dies is redistributed to the survivors, whose income rises accordingly.
The tontine is the mirror image of insurance. Insurance pools so the lucky compensate the unlucky; the tontine pools so the dead enrich the survivors. The math is identical and the moral sign is opposite. Lorenzo de Tonti put it to the French court in 1653, and it financed states for two centuries before falling into disrepute. In the United States, tontine-style policies built the life insurance market before being regulated. A tontine says out loud what every life annuity does quietly: the longevity of some is paid for by the disappearance of others. Its flaw was always legibility, never the math.
Retirement tontines designed today avoid pooling assets. Each member keeps a separate structure and redistribution happens after death, which reproduces longevity risk sharing without the difficulties of collective ownership.
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