Which of the following terms best describes a policy that has lapsed?

A policy that is described as having lapsed specifically refers to a situation where the policy has been terminated because the premiums have not been paid. When a policyholder fails to make required premium payments by the due date, the insurance provider may allow a grace period, after which the policy can lapse if payment is not received. This lapse means that the policyholder no longer has coverage under that policy, and any claims made during this period would not be honored by the insurer.

The other options do not fit the definition of a lapsed policy. A policy at risk of cancellation suggests that it is still active but may soon be terminated, which is not the same as being lapsed. A policy that has been upgraded relates to changes in coverage, and a policy under investigation for fraudulent claims remains active until the investigation concludes, regardless of the claims' legitimacy. Thus, the most accurate term for a policy that has lapsed is indeed one that has been terminated due to unpaid premiums.