What Does Loan Receipt Mean?
A loan receipt is a document that an insurance policyholder signs to signify that they have received an interest-free loan from an insurance company. These loans are typically given out when a loss has occurred and the policyholder is suing a third party for damages related to that loss.
Insuranceopedia Explains Loan Receipt
When a loan receipt is issued by an insurance company, the loan typically only has to be repaid if the policyholder successfully recovers damages from the third party. So, for example, assuming a loan receipt is granted by an insurance company for $5,000. If the policyholder successfully sues a third party for $5,000, then they would pay back the full $5,000 to the insurance company. The loan receipt simply as a record of the loan amount.