Greed is a bad habit overwhelming a king (7)
I believe the answer is:
avarice
'greed' is the definition.
(avarice is a kind of greed)
'a bad habit overwhelming a king' is the wordplay.
'bad habit' becomes 'vice' (a sin or weakness).
'overwhelming' indicates putting letters inside.
'king' becomes 'r' (r is abbreviation for rex).
'a'+'r'='ar'
'vice' placed around 'ar' is 'varice'.
'a'+'varice'='AVARICE'
'is' acts as a link.
(Other definitions for avarice that I've seen before include "Extreme greed for wealth" , "Greed for gain" , "Eager desire" , "Insatiable lust" , "Parsimony" .)