Final answer:
The assertion is true as one should weigh the costs against the benefits when deciding to obtain insurance. This involves cost/benefit analysis, considering financial impacts, negotiation benefits due to insurance companies' client base, and ensuring payments cover claims, operational costs, and the company's profit.
Step-by-step explanation:
True. The decision to obtain insurance should indeed be determined by weighing its costs and benefits. This process is known as a cost/benefit analysis, wherein the marginal costs are evaluated against the marginal benefits to make an informed decision. It's essential to consider not only the financial costs but also the effort, time, and other sacrifices made against what is potentially gained, such as security, financial protection, and potentially negotiated lower rates for services due to the bargaining power of insurance companies.
Furthermore, insurance companies, because of their vast client base, can negotiate with health care and other service providers for rates more favorable than those an individual could secure on their own, increasing the consumer benefits. In addition, when it comes to insurance, an economic principle stands: over time, an average person's insurance payments should cover their claims, the operational costs of the insurance company, and allow for the firm's profits.