General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
In health and disability insurance, a peril is best defined as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A peril is the event that actually causes a loss; in the accident and health context that means an illness, an accident, or an injury. Peril must be distinguished from hazard, which is a condition that increases the likelihood of loss, and from loss, which is the financial consequence that follows the event. The policyholder's attitude toward filing claims describes moral or morale hazard rather than peril. Identifying the peril is fundamental to determining what an accident and health policy actually covers.
Why the other options are wrong
- B) A condition that increases the chance of loss is a hazard, not a peril.
- C) The financial amount of the loss is the loss itself, which is the result of the peril rather than its cause.
- D) The policyholder's attitude toward filing claims describes moral or morale hazard, not peril.
Memory hook
Peril is the spark; hazard is the kindling; loss is the burnt wallet.