An applicant who is a recreational skydiver applies for a life insurance policy. From an underwriting standpoint, the applicant's hobby is best classified as which type of hazard?

Why this is the answer

Hazards are circumstances that increase the chance or size of a loss. A physical hazard is a tangible, measurable condition — a hobby like skydiving, a pre-existing illness, a hazardous occupation. A moral hazard is dishonesty or fraudulent inclination of the insured (e.g., a history of fire claims). A morale hazard is carelessness or indifference because insurance is in place (e.g., leaving a car unlocked). 'Speculative hazard' is not a real category — speculative risk (vs pure risk) is a different concept. Skydiving is an objective, physical activity, so it is a physical hazard. Per the Florida Agent's Health & Life Exam Content Outline §III.B.4.