ssume that health can measured with a single metric "hales" such that better health is measured by a higher hales. Due to the CoViD, you want to buy health insurance for the next 2 years such that if your health drops below 50 hales at the end of 2 years, the insurance can kick in. If your health stays above 50, then your insurance will not kick in and you just lose your premium. Your current health is at 85 hales. The volatility of your health is 45% per year. (There is an analogue for risk-free rate here as well, but for the moment, just assume risk-free rate is 0)

What is the Put Option Price (also called Premium) that you need to pay today to buy this insurance?