The Collaborative International Dictionary of English v.0.48:

Tontine \Ton*tine"\, n. [F., from It. tontina; -- so called from
   its inventor, Tonti, an Italian, of the 17th century.]
   An annuity, with the benefit of survivorship, or a loan
   raised on life annuities with the benefit of survivorship.
   Thus, an annuity is shared among a number, on the principle
   that the share of each, at his death, is enjoyed by the
   survivors, until at last the whole goes to the last survivor,
   or to the last two or three, according to the terms on which
   the money is advanced. Used also adjectively; as, tontine
   insurance.
   [1913 Webster]

         Too many of the financiers by professions are apt to
         see nothing in revenue but banks, and circulations, and
         annuities on lives, and tontines, and perpetual rents,
         and all the small wares of the shop.     --Burke.
   [1913 Webster]

WordNet (r) 3.0 (2006):

tontine
    n 1: a form of life insurance whereby on the death or default of
         a participant his share is distributed to the remaining
         members [syn: tontine, tontine insurance]
    2: an annuity scheme wherein participants share certain benefits
       and on the death of any participant his benefits are
       redistributed among the remaining participants; can run for a
       fixed period of time or until the death of all but one
       participant

Bouvier's Law Dictionary, Revised 6th Ed (1856):

TONTINE, French law. The name of a partnership composed of creditors or,
recipients of perpetual or life-rents or annuities, formed on the condition
that the rents of those who may die, shall accrue to the survivors, either
in whole or in part.
     2. This kind of partnership took its name from Tonti, an Italian, who
first conceived the idea and put it in practice. Merl. Repert. h.t. Dall.
Dict. h.t.; 5 Watts, 851.