What Is a Life Settlement?
A life settlement is the legal sale of an existing life insurance policy to a licensed third-party buyer for a lump-sum cash payment. The amount you receive is typically more than the policy's cash surrender value, but less than its face value. Once the sale is complete, the buyer assumes ownership of the policy, takes over premium payments, and receives the death benefit when the insured passes away.
Life settlements are a federally recognized financial transaction and are regulated at the state level. In Washington, the Washington State Office of the Insurance Commissioner oversees and enforces the applicable rules. This secondary market gives policyholders a legitimate alternative to simply lapsing or surrendering a policy — often recovering significantly more value in the process.
To learn more about how this process works in general, visit our How It Works page.
Is Selling a Life Insurance Policy Legal in Washington?
Regulated by: Washington State Office of the Insurance Commissioner
Life settlements are legal and regulated in Washington
Washington State's Office of the Insurance Commissioner regulates life settlements in the state, overseeing licensing of providers and brokers and enforcing consumer disclosure and protection standards. Washington's regulatory approach ensures that policyholders can access the secondary market fairly and transparently.
Washington's no-income-tax environment is a meaningful benefit for life settlement sellers. However, Washington does have an estate tax, which may be relevant for larger estates. Both factors are worth discussing with an estate planning professional.
Licensing Requirements in Washington
Life settlement providers and brokers must hold valid licenses from Washington's Office of the Insurance Commissioner. Licensing requirements include qualifications review and ongoing compliance obligations.
When working with LifeSettlementEstimate.com, you can be confident that we connect you only with licensed and vetted buyers and brokers who meet Washington's regulatory requirements. Verifying licensure is a critical first step before entering into any life settlement transaction — and one we handle on your behalf.
Waiting Period Rules in Washington
Washington requires a two-year waiting period from the date of policy issuance before a life settlement transaction can be completed. Exceptions apply for terminal illness, chronic illness, and other qualifying circumstances.
Consumer Protections for Washington Residents
Washington requires providers to give sellers written pre-transaction disclosures and provides a rescission period following contract signing. These consumer protections help ensure that Washington policyholders can make well-considered decisions.
What Your Policy Might Be Worth in Washington
Life settlement offers vary widely based on individual circumstances. As a general industry benchmark, policyholders typically receive offers ranging from 10% to 30% of the policy's face value — and in some cases more, depending on the insured's age, health status, policy type, and premium obligations.
For example, a $500,000 policy in Washington could potentially generate a life settlement offer between $50,000 and $150,000 — compared to far less (or nothing) if the policy were simply lapsed or surrendered. These are industry-typical ranges and not guarantees. Your actual offer will depend entirely on your specific circumstances.
Important Disclosure
The ranges provided are general industry estimates and educational in nature. No specific payout is guaranteed. Actual offers depend on your policy details, health information, and buyer demand at the time of transaction. LifeSettlementEstimate.com does not guarantee any specific offer amount.
The best way to get an accurate picture of your policy's potential value is to start with a free, no-obligation estimate.
Tax Considerations in Washington
Washington State has no state income tax, making it one of the more tax-advantageous states for life settlement sellers. Federal income taxes still apply to gains above the policy's cost basis. Washington does have an estate tax that may affect larger estates, so consulting an estate advisor is worthwhile.
Tax Disclaimer
The above is general educational information and does not constitute tax advice. Tax laws are complex and subject to change. Please consult a licensed CPA or tax attorney before completing any life settlement transaction to understand the full tax implications of your specific situation.
How the Life Settlement Process Works
Get a Free Estimate
Use LifeSettlementEstimate.com to receive a preliminary valuation of your policy. There's no personal information required beyond the basics, and no obligation to proceed.
Submit Policy Details
If you decide to move forward, you'll submit your policy information and complete a brief medical authorization. Our team gathers records and prepares your file for buyers.
Receive Competitive Offers
Your policy is presented to our network of 50+ licensed buyers in Washington and across the country. Multiple offers are collected and presented to you for comparison.
Accept or Decline
You are never obligated to accept any offer. If you accept, the closing paperwork is handled, and funds are typically received within 30–60 days of final approval.
See our full How It Works guide for a complete walkthrough of the life settlement process.
Why Use LifeSettlementEstimate.com in Washington?
LifeSettlementEstimate.com was built around one core principle: policyholders deserve transparent, unbiased information before making a major financial decision. We are an educational-first platform, not a high-pressure sales operation.
For residents of Washington in cities like Seattle, Spokane, and beyond, our platform offers a compliance-first approach — connecting sellers with licensed, vetted buyers who operate within Washington's regulatory framework.
Free Estimate
No cost to get your initial policy valuation
No Obligation
You decide if and when to proceed
50+ Vetted Buyers
Competitive offers from licensed WA buyers
Compliance-First
HIPAA-compliant, fully transparent process
A Washington Resident's Story
Ingrid Larsson, 73
Bellevue, Washington
"Ingrid, a retired aerospace industry executive from Bellevue, had a $700,000 universal life insurance policy she had maintained throughout her career. After reviewing her estate plan with her attorney, she realized the policy was no longer central to her estate goals. The attorney noted Washington's favorable income tax environment and recommended exploring a life settlement. Ingrid used LifeSettlementEstimate.com to get an initial, no-obligation estimate."
This is a fictional illustrative scenario. It does not represent an actual client or guaranteed outcome.
Frequently Asked Questions — Washington
Get a Free Life Settlement Estimate in Washington
Ready to find out what your policy may be worth? Our free estimate takes just minutes — with no obligation, no pressure, and no cost. Join Seattle and Tacoma residents who have already used LifeSettlementEstimate.com to make informed decisions about their life insurance.
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