General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An insured with diabetes who skips checkups, and who also exaggerates symptoms to obtain stronger medication, presents which combination of hazards?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The diabetes itself is a physical hazard - a tangible medical condition that increases the chance of loss. Deliberately exaggerating symptoms to get stronger medication is dishonesty, which is a moral hazard. Carelessness after coverage would be a morale hazard, but exaggeration for benefit is intentional, so it is moral rather than morale. The diabetes is a condition, not a peril (the event that triggers a claim).
Why the other options are wrong
- B) The deliberate exaggeration is a moral hazard, so both physical and moral categories are present.
- C) Diabetes is physical, not moral; only the exaggeration is a moral hazard.
- D) Diabetes is a condition (hazard), not a peril, which would be the actual illness event that triggers the claim.
Memory hook
Body condition = physical. Scheme = moral. Carelessness = morale.