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The Potential Re-Emergence of the Tontine: How a Forgotten Product May Revolutionize America (Again)

Updated on October 24, 2016

What's a Tontine, Anyway?


Who Will Promote the Tontine?

Though it is completely legitimate and beneficial to anyone looking to invest, a tontine remains illegal. Throughout its curious history, tontines have been denigrated, damned, and condemned. But why? Is it the fact that an investor must assume the risk of possibly dying before his or her fellow investors and not reaping the rewards? According to the Washington Post, tontines are "sleazy." But what makes this publication make such assertions? Their ban because of a few scandals ought not paint the picture that tontines represent something nefarious. Fraud is not a product of capitalism but an issue of violating individual rights. In an era where people look forward to Social Security checks, would it be such a burden to reintroduce the tontine upon the American conscious?

For over a century, the tontine has been illicit. Instead of promoting the fact that tontines might provide investors with the option of retiring with more money than they had in the beginning, thoughtless critics have maligned them. As components of the modern life insurance policy, tontines may just show that private investors can earn more from such a plan. All the swindling and underhandedness which took place during the late 19th and early 20th centuries does not have to bar the progress of the tontine. This kind of behavior is indicative of government interference and the self-destructive desire to harm individuals. Because of government meddling into the affairs of insurance companies, tontines didn't stand a chance. As pensions became part of the American psyche, tontines would be held in low esteem. If a gamble is to risk money in expectation of a certain outcome involving chance, then the tontine is just the thing. But to say that it is a scheme to throw away money and hope that the other investors who contributed to it die is a malevolent outlook. Tontines are about choice. The decision to select which financial product other than what the government has to offer is key. While some may pick corporate pensions, it's sad to say that tontines are currently off the table. Their illegality points to the fact that the government has reached too far. As opposed to protecting the American people from crooks and thieves, bureaucrats seek to limit and eliminate freedom of choice in financial products. In what rational country would such actions be permitted? Well, since America is a semi-free country with some elements of capitalism and an abundance of regulations and controls, the tontine may never be restored. But that is to not to lose hope. With the will of individuals, tontines may just rise from relative obscurity back to national prominence.


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