Tontine Policy Law and Legal Definition

Tontine Policy is an investment plan in which participants buy shares in a common fund and receive an annuity that increases every time a participant dies. Its entire fund goes to the final survivor or to those who survive after a specified time. This type of policy takes its name from Lorenzo Tonti, an Italian who invented it in 17th century. Today, newer and more ingenious forms of insurance have largely made tontine policies defunct.