Collective Long Term Saving Contracts whose Final Total Value will belong to Last Survivors: True ‘Life Insurance’ Policies

Suggestion: Group long-term ‘bets on longevity’ among same-age people

Description: Develop & implement collective savings plans for “health conscious” people offering financial incentives to those who live longer or the one who lives longest. (“True Life Insurance Policies”, which pay those who live longest (as opposed to traditional “life insurance” policies, which pay the families of those who die). Groups of same-age people (say fifty people who are 43) would deposit once and simultaneously a certain amount of money (say ten thousand dollars) and designate the other surviving group members as heirs of the ‘share’ (so excluding their families). The fund might have a certain long duration (e.g. thirty years). At such time, the fund balance is equally distributed among the survivors of the group. The fund may also expire when a predefined number of group members (for example, ninety percent of members) have passed away. (This idea originates in the XVII century ‘tontine’ practice).

Pros: People have incentives to being alive therefore they will take proper care of their lives. Medical tests are not required; just survival certifications.

Cons: The first design of these kind of policies will be rather complex (but it will become standard very soon).

Potential Drivers: Financial Institutions


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