Insurance policy finite

Question

As a fringe benefit, Dennis Taylor receives a $51,000 life insurance policy from his employer. The probability that Dennis will live another year is 0.9615. If he purchases the same coverage for himself, what is the minimum amount that he can expect to pay for the policy? (Enter your answer to the nearest cent.)

$ 

Answer 1

If the expected loss for the company is zero.

Chance he dies in a year is 1 - 0.9615 = 0.0385

So if he pays p, expected loss for the insurance company in a year = 0.0385 x 51000 - 0.9615p = 0

giving p = $ 2034.50