you bought a lifetime license then the regular updates come through microsoft, should be no cost. (I dont believe MS even has my credit card or bank info, as I bought my software through MacWorld). Its only if you want to upgrade to a different version (such as 2021 to 2023 for instance) that you would have to pay for a new license. Hope that makes sense.
For updates, I have my settings set to check for the updates and My message (at top of spreadsheet) says there is an update that requires a restart of the app. I click to restart the app and it updates. Alternatively I think you can go to the about page and click to check for updates.
I only do version upgrades if I really feel new features are worth it, or if my hardware (like the new Mac) demands it. Thats why I used office 2003 for so long. If it aint broke and all that
but I do the updates as they pop up on a regular basis. Sometimes I wonder if it is just M$ keeping tabs on me, but thats probably just my distrust of big business paranoia
With a regular update (of same version) you should have no troubles with the opening of files. If you purchase a new version of Office, I believe the versions are backwards compatible and I have not had problems with opening older files. Thats my experience at least. I cant guarantee anything but I have not had any problems with either updates or upgrades of MS Office on my Macs.
On edit: if you click for an update and it tries to get you to enter payment info, you should be able to back out, click out or just close the browser. Also, its been a couple years but I seem to remember when I installed the 2021 version on my new Mac, that MS wanted to direct me to office 365 so I had to read carefully to make sure and bypass that option for the lifetime license version.