Question 4 (17 Marks) a. Why are deductibles used in insurance? 4 marks b. Melon Convenient Store incurred the following insured losses, in the order given, during the current policy year: Loss A B Amount of loss $5,000 $8,000 $12,000 c. How much would the insurance company pay for each loss if the Melon's policy contained the following type of deductible? i. $1,000 straight deductible ii. $20,000 annual aggregate deductible 6 marks Peter has a major medical insurance policy with a $8,000 deductible and an 80 - 20 percentage participation clause'. Last month, Peter was hospitalized and his covered medical expenses were $110,000 i. How much of the $110,000 will be paid by the insurer under Peter's major medical insurance policy? How much will Peter have to pay himself? Show all your calculations. 4 marks ii. Explain the purpose of a percentage participation clause in medical health insurance. 3 marks