Tontine

A Tontine is an investment plan developed in the 17th century and widely used during the 18th and 19th centuries. It is widely known today for it's unsavory reputation that it earned due to it's structure. In the Tontine plan each subscriber to the plan puts a set amount of money towards the fund and in return receive an annuity (annual payment). As subscribers to the plan die off their shares of the fund are reallocated to the surviving members thus giving them a greater annuity. When the last subscriber dies the Tontine plan is complete.

History
This type of investment plan was devised by Neapolitan banker Lorenzo de Tonti who is accredited with it's invention in 1653.