Yes, when you purchase, you get that version + free updates and support for a year.
After the first year, you can still use the software, but if you want support or to get the newest features and update to the latest versions, you can pay to renew your support period.
For the pricing, usually a renewal for an extra year is about 10-30% of the original license price.
It seems to work quite well for both my customers and my products.