Loan Receipt

What Does Loan Receipt Mean?

A loan receipt is a document that an insurance policyholder signs to acknowledge receiving an interest-free loan from an insurance company. These loans are typically provided when a loss occurs, 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 needs to be repaid if the policyholder successfully recovers damages from the third party. For example, if the insurance company grants a loan receipt for $5,000 and the policyholder successfully sues a third party for the same amount, they would repay the full $5,000 to the insurance company. The loan receipt serves as a record of the loan amount.