Answer :
Final answer:
The cost that is always incurred when buying insurance is the premium, which is the payment made to maintain coverage. Other costs, such as deductibles and co-payments, depend on usage and specific policy terms. This means the premium is the consistent financial obligation associated with insurance policies.
Explanation:
Understanding Insurance Costs
When buying insurance, there are several costs associated with the policy that individuals must be aware of. One of the primary costs is the premium, which is the amount a policy-holder must pay to maintain their insurance coverage. Other costs include deductibles, co-payments, and coinsurance, but these can vary based on the specifics of the plan.
Key Cost Components
- Premium: The regular payment made to the insurance company for coverage.
- Deductible: The amount the policyholder must pay before the insurance benefits kick in.
- Co-payment: A fixed fee that the insured pays for a specific service, such as a doctor's visit.
- Payout: The amount the insurer will pay when a claim is made, though this often does not cover the entire loss.
In summary, the premium is a cost that is always incurred when purchasing insurance, unlike deductibles and co-payments which may vary depending on claims and services accessed.
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