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# Tontines

## Definition

A system of raising government revenue through life annuities where survivors
inherit the annuities of those who die, continuing until the last survivor
receives all remaining payments, named after their inventor Lorenzo Tonti.

## Source Chapter

Book V, Chapter 3

## Context

Smith explains tontines as a method of granting annuities that raises more
money than separate life annuities because people overestimate their chances
of long survival and are willing to pay premiums for survivorship rights.

## Economic Domain

Regulation

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