Answer :
Final answer:
The premium is the consistent cost associated with buying insurance, while deductibles and co-payments vary. Insurance premiums are mandatory fees paid to maintain coverage. These terms help clarify common expenses in insurance plans.
Explanation:
Understanding Insurance Costs
When evaluating costs associated with insurance, one item is considered a constant expense regardless of the type of policy chosen: the premium. Here is a breakdown of common insurance terms:
- Premium: This is the amount a policy-holder must pay to maintain their insurance coverage. It is usually billed annually or monthly.
- Deductible: This is the amount that must be paid out-of-pocket by the insured before the insurance provider begins to cover costs. For example, if your deductible is [tex]$1,000, you pay that amount for medical services before insurance kicks in.
- Co-payment: A specified payment made by the insured at the time of receiving services. For instance, you might pay $[/tex]20 for a doctor’s visit.
- Payout: This refers to the compensation provided by the insurance company in the event of a claim. It is often less than the total loss due to the deductible.
In conclusion, while deductibles, copayments, and payouts vary based on specific policies, the premium is a mandatory cost that must always be paid to purchase and maintain the insurance.
Learn more about Insurance Costs here:
https://brainly.com/question/40836640