A Loan Receipt is best described as which of the following?

• A. A written statement acknowledging that money received in settlement is an advance pending the outcome
• B. A document releasing the insurer from liability
• C. A confirmation of policy issuance
• D. A waiver of subrogation

Answer: (A)

A loan receipt is an instrument used when the insurer pays money to the claimant as an advance on a claim, not as the final settlement. It records that the payment is an advance against a future settlement or award and that it must be repaid or deducted from the eventual settlement. This distinguishes it from a release of liability, a confirmation of policy issuance, or a waiver of subrogation. In other words, the payment is temporarily advanced and contingent on the final outcome, rather than constituting a final resolution of the claim.