Answer :
Final answer:
The premium is the cost that is always incurred when buying insurance, as it is the recurring payment made to maintain coverage. Other costs like deductibles and co-payments may vary depending on the specific insurance plan. Knowing these terms is crucial when selecting insurance options.
Explanation:
Understanding Insurance Costs
When buying insurance, there are several terms related to costs that you should be familiar with. Among these, the premium is the amount you pay periodically (monthly, quarterly, or yearly) to maintain your insurance coverage. This is a fixed cost that you always incur when you have an insurance policy.
Other terms include:
- Deductible: This is the amount you must pay out of pocket before your insurance starts to cover the expenses.
- Co-payment: This is a fixed amount you pay for specific services at the time you receive them.
- Payout: This refers to the amount the insurance company will pay you or your beneficiaries in the event of a claim.
While the premium is a cost you will always incur, the deductible and co-payment vary depending on the plan and services used. Understanding these terms can help you make informed decisions about your insurance needs.
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