The cost that is always incurred when buying insurance is the premium. The premium is the regular amount paid to maintain the insurance policy, regardless of whether any claims are made or not. Other costs like deductible, co-payment, or payout depend on the usage of the insurance and are not always paid up front or consistently:
- Deductible is an amount paid out of pocket before the insurance coverage begins, usually per policy period.
- Co-payment is a fixed amount or percentage paid each time a medical service is used.
- Payout is the amount paid by the insurance company for a claim, not a cost to the insured.
Therefore, the premium is the only cost that is always present when buying insurance.
