General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
A disabled insured must stop working due to a heart condition worsened by a sedentary lifestyle, and the policy pays a monthly income benefit. Which pairing of terms is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The heart condition is the illness that actually caused the disability, so it is the peril. The sedentary lifestyle is a condition that increased the likelihood of the heart condition, making it a hazard. The lost income, which the monthly benefit replaces, is the financial loss. Distinguishing peril, hazard, and loss in a single scenario is a core accident and health skill because it determines how a claim is analyzed, how policy language is applied, and how risks are described.
Why the other options are wrong
- B) A lifestyle pattern is a hazard, while the medical condition is the peril; the consequence is lost income, not merely the inability to work.
- C) The monthly benefit is the payment the policy makes, not a peril; a sedentary lifestyle is a hazard, not a loss.
- D) Inability to work is an effect of the peril that relates to the loss, and the monthly benefit is the remedy, not the loss itself.
Memory hook
The cause equals peril, the aggravator equals hazard, and the damage equals loss.