Life & viatical settlements in Washington

How life settlements work in Washington

Washington regulates life settlement transactions under state insurance law, with licensing required for providers and brokers operating in the state.

The Washington Office of the Insurance Commissioner licenses life settlement providers and brokers and serves as the primary regulatory authority for Washington consumers with insurance-related questions. Washington law gives policy owners the right to rescind a life settlement contract within 15 days after the contract is executed. Washington is also one of six states that requires insurance carriers to tell policyholders about the life settlement option before a policy is allowed to lapse or be surrendered.

For cancer patients in Washington, the most common path is a viatical settlement under IRS §101(g), where proceeds are generally tax-free at the federal level if the insured is certified as terminally or chronically ill. Washington generally follows federal income tax treatment for qualifying viatical settlements.

Medicaid impact in Washington

A life or viatical settlement can affect eligibility for Medicaid and other means-tested public assistance programs. Washington's Medicaid asset limit for individuals is currently $2,000 (2026). Because Medicaid rules vary by program and individual circumstances, Washington residents should review current eligibility requirements through the Apple Health (Washington Medicaid) before accepting a settlement.

Depending on your situation, planning tools such as special needs trusts or pooled trusts may help preserve eligibility for certain public benefits. These arrangements generally should be established before settlement proceeds are received.

This is often the most important planning consideration for Washington cancer patients considering a life or viatical settlement. We can help connect you with a Washington elder law attorney if additional guidance is needed.

What’s different about Washington

• Washington regulates life settlements through licensing requirements for providers and brokers
• Owners have a statutory right to rescind a life settlement contract within 15 days of execution
• State oversight rests with the Washington Office of the Insurance Commissioner
• Medical and policy information remain protected under HIPAA privacy requirements
• Federal tax-free treatment may apply to qualifying viatical settlements under IRS §101(g)
• Medicaid eligibility may be affected by settlement proceeds depending on the recipient's circumstances

Major Washington cities we serve

Statewide. Our licensed specialists work with policies throughout Washington, including Seattle, Spokane, Tacoma, Vancouver, Bellevue, and Everett, and surrounding communities. No in-person meetings are required. Documentation, signatures, and notarization can all be completed remotely.