The correct answer is: A. A policy lapses if the premium is not paid on the due date.
A policy lapses if the premium is not paid on the due date. This means that the policy will no longer be in effect and the policyholder will not be covered by the policy’s benefits. The policyholder may be able to reinstate the policy by paying the missed premium and any applicable fees, but this is not always possible.
A grace period is a period of time after the due date during which the policyholder can still pay the premium and keep the policy in effect. The length of the grace period varies by policy, but it is typically 30 days. If the premium is not paid within the grace period, the policy will lapse.
A policy does not lapse at all under any conditions is not correct. As explained above, a policy lapses if the premium is not paid on the due date.
Investment risk in a ULIP policy is borne by the Insurer is not correct. In a ULIP policy, the policyholder bears the investment risk. This means that the policyholder is responsible for any losses that occur in the investment account. The insurer does not guarantee the performance of the investment account.