That said, each Last Will & Testament creates the same scenario and (unlike in a Tontine) you typically know who you are in the Will alongside but this still doesn't seem to result in a spate of murder cases either.
In theory yes, but in practice, no such cases ever existed.
A good example is that the collapse of Swiss Air created am accidental Tontine among its pension beneficiaries. Rather than trying to bump each other off, they meet up every year to hear to jointly toast the good news about their rising income: https://tontine.com/news/swissair-the-accidental-tontine/
Good point. I mean retirement tontines and tontine trust funds that pay members an income for life secured against hard assets rather than ROSCA tontines which are community savings vehicles designed for short term borrowing between members.
There are versions of this 'ROSCA' Tontine in most countries and continents in the world. In the past when formed among strangers they have proven to be super susceptible to scams.
Where they work is when each member of the group is known to each other and therefore would lose social status by defaulting on their obligations.
The benefit of these arrangements when run properly is that instead of saving $10 per month and after a year having the $120 to buy a productive asset (let's say a cow), they can get the $120 up front from the Tontine and pay the money back to the community group out of the earnings from the milk etc.
The persistance of these schemes everywhere indicates that this is a valuable means for the less well off to gain access to lump sum amounts for purchases without paying interest. Not everyone will be happy about the last part of course.
Ahead of the launch of the first Tontine company in over 100 years, we have heard similar comments from many parents and for that reason have now created the Tontine Trust Fund.
The regular Tontine Trust is for parents that want to avoid the risking of running out of money in old age and becoming a financial burden on their children.
The Tontine Trust Fund is for parents that want to set aside an inheritance for their spouse or children now which they can configure to start paying the child a monthly income for the rest of their life starting at age X. This reduces the concern of parents that they will pass on a chunk of the inheritance to children that will 'blow the money' instead of making it last them for life.
Also, FYI:
a) Research from the insurance industry indicates that tontiners/annuitants spend double what they would without having a lifetime income, thereby enabling a better quality of life in retirement.
b) The Swiss Federal Institute of Technology, alma mater of Einstein and 28 other Nobel Prize Winners, has produced research showing that a retirees pension wealth is enhanced by 87% with zero added risk upon moving their savings into a Tontine, indicating that the gain is not 'marginal'.
All in all, the Tontine enables you to save a little less yet still spend more.