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 like deductibles and co-payments may vary depending on the situation or plan. Therefore, the premium is the fundamental, consistent cost of having insurance.
Explanation:
Understanding Insurance Costs
When buying insurance, there are several costs associated with it, including the premium, deductible, co-payment, and payout. Among these, the premium is the cost that is always incurred when purchasing insurance.
The premium is the amount you pay, typically on a monthly or yearly basis, to maintain your insurance coverage. This cost is required regardless of whether you make a claim or not. For example, if you have health insurance, you'll pay your premium monthly and be covered for eligible medical expenses, even if you don't need to visit a doctor.
In comparison, other terms like deductible, co-payment, and payout refer to expenses or payments that may vary depending on the specific claims made or the plan chosen. The deductible is the amount you must pay out-of-pocket before your insurance kicks in, while a co-payment is a fixed fee you pay for specific services. Finally, the payout is the amount the insurance company pays you or a service provider when you make a successful claim.
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