The correct answer is $39,600 . To determine the insurer’s payment, the deductible and coinsurance provisions must be applied to the total covered medical expenses. First, the insured must pay the $500 deductible . Subtracting this amount from the total covered losses of $50,000 leaves $49,500 of eligible expenses subject to coinsurance.

Under an 80/20 coinsurance arrangement , the insurer pays 80% of the covered expenses and the insured pays 20% . Applying the insurer’s portion to the remaining amount:

80% × $49,500 = $39,600 .

Therefore, the insurer’s payment equals $39,600 , while the insured would pay the deductible plus their coinsurance share. Although the policy mentions a $10,000 out-of-pocket limit , the insured’s cost in this situation (the $500 deductible plus 20% of the remaining expenses) does not exceed that limit , so the limit does not affect the calculation.

Thus, after applying the deductible and coinsurance provisions, the insurer pays $39,600 , making Option B the correct answer.