TONTINES Meaning and
Definition
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Tontines refer to a form of investment or insurance arrangement in which a group of individuals pool their money together, and as each member of the group passes away, their share is redistributed among the surviving members. This redistribution process continues until only one member remains, who then receives the entire collective sum.
Originating in the 17th century, tontines were initially used as a means to provide lifetime income for participants. The concept was popularized by Lorenzo Tonti, an Italian banker, hence the name "tontine." Tontines were often established as long-term schemes, with payouts typically made on an annual basis. While the primary objective of tontines was to financially assist participants during their lifetime, they also served as a form of life insurance, offering larger payouts to the last surviving member or their beneficiaries.
Tontines have garnered both praise and controversy throughout their history. They can be seen as a way to incentivize longevity, as each surviving member's share increases with the passing of others. However, critics argue that tontines create an ethical dilemma, as participants are essentially gambling on each other's lives. There have been instances of fraud and exploitation associated with tontine schemes, which led to their decline in popularity in the early 20th century.
In modern times, tontines have gained renewed interest as a potential solution to retirement income challenges. Advocates highlight their potential to provide lifelong income without the need for annuities or managed funds, while critics remain cautious due to the historical concerns surrounding tontines.
Common Misspellings for TONTINES
- tontins
- rontines
- fontines
- gontines
- yontines
- 6ontines
- 5ontines
- tintines
- tkntines
- tlntines
- tpntines
- t0ntines
- t9ntines
- tobtines
- tomtines
- tojtines
- tohtines
- tonrines
- tonfines
- tongines
Etymology of TONTINES
The word "tontines" is derived from "tontine", which traces its origin back to the 17th century in France. It is named after Lorenzo Tonti, an Italian banker who devised the first known tontine scheme. The French government adopted Tonti's idea to raise funds in the 1680s, offering annuities to subscribers. These annuities were different from regular ones as the capital sum was guaranteed but the interest was derived from the pooled contributions of the participants. As participants died, their shares would be divided among the remaining subscribers, ultimately benefiting the last survivor. The term "tontine" became associated with this scheme, and subsequently "tontines" became the plural form referring to such financial arrangements. The concept spread to other countries, adapting to various forms and purposes over time.
Similar spelling word for TONTINES
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