Tontine Insurance and the Armstrong Investigation: A Case of Stifled Innovation, 1868–1905
- 1 June 1987
- journal article
- research article
- Published by Cambridge University Press (CUP) in The Journal of Economic History
- Vol. 47 (2) , 379-390
- https://doi.org/10.1017/s0022050700048130
Abstract
Tontine insurance, introduced in 1868, combined the features of life insurance with an unusual old-age saving plan. A portion of the annual premium was accumulated in a fund that was divided among the surviving policyholders after twenty years. By 1905, two-thirds of all life insurance in force was of this type. Despite consumer appeal, sales of tontine policies were prohibited in 1906 after the Armstrong Investigation charged the tontine business with corruption and extravagance. We argue that tontine insurance was actuarially sound and an attractive life-cycle investment. Prohibition was probably unnecessary.Keywords
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