Loan Receipt Law and Legal Definition

Loan receipt is an acknowledgment by the policy owner that s/he has received the requested policy loan. In other words, it is the document signed by the assured where s/he acknowledges receipt of money given by the insurance company as an interest free loan (instead of payment of a loss). The money has to be repaid to the insurance company only if the loss is recovered from a third party and only to the extent of the recovery.