Question: How does one determine what the appropriate premium is for an insurance policy? I don't understand how to start the below question from my study

How does one determine what the appropriate premium is for an insurance policy? I don't understand how to start the below question from my study guide

Suppose Craig gets 30 dollars tomorrow if he is employed and 0 dollars if he is laid off. Craig is risk averse and has utility function U(x) = x. Craig's exploitative friend Jenny is risk neutral and offers Craig insurance. Jenny makes the following take it or leave it offer to Craig: she asks him to pay a premium P in the case he is employed, and in exchange offers benefit B if Craig gets laid off. The commonly known probability of Craig being laid off is p (0, 1).

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The quality of the argumentation

The status rule: We tend to have more confidence in information presented by someone who has a relatively high status and rank in society than by someone who hasnt.

The spatial rule: The closer spatial proximity we have to an event, the more importance we will attach to it.