A few potential reasons they're interesting compared to annuities: they're more honest about the risk, the risk is easier to understand, the risk is incremental

A few potential reasons they're interesting compared to annuities: they're more honest about the risk, the risk is easier to understand, the risk is incremental rather than binary, and the lottery aspect might encourage better saving behavior/make them more marketable than annuities. Annuities are typically sold as "risk free", but you have the risk of the insurance company becoming insolvent. A tontine's risk of everyone living longer is obvious. Since annuities have general credit exposure to the insurance company, to understand the credit risk you need to understand all of the insurers lines of business. A tontine with segregated assets doesn't depend on the other business of the manager for solvency. Some of these issues with annuities can/are mitigated by regulation, but that's another thing you have to understand in order to understand the risk. Customers understanding the risk should lead to better decisions about how much to rely on it. Because annuities have guaranteed payments, if life expectancy increased the insurance company would continue paying out an an unsustainable rate, and when it ran out of money benefits would go from 100% to 0%. A tontine would instead reduce payments incrementally so that it's always sustainable. Finally, people don't always make financial decisions in the way economic theory suggests they ought to. In particular, people buy way more lottery tickets than economists think they should, and way fewer annuities. If you sprinkle a little bit of lottery into an annuity it might become more marketable, leading to better average financial decision making.