3 ms·
That structure is often called a Tontine. It's illegal, because after a while it's basically a massive monetary reward for offing your fellow investors.
by byrneseyeview 16y ago
That structure is often called a Tontine. It's illegal, because after a while it's basically a massive monetary reward for offing your fellow investors.
- sp332 16y agoHah, just watched the movie Charade last night where exactly this happens.
- deleted 16y ago[deleted]
- Retric 16y agoYep, that's a major bug with the simple implementation. The simple solution is to cap the benefit and and use a large enough pool that no single death ever makes a big difference on it's own. Which gives you something like "Long Term Care Insurance" is basic a bet that you will live long enough to need it, which is subsidized by those who don't. The benefit is also fairly small so a reasonably large company is not going to try and collect.