In [Lecture 20](http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-6-topics-in-intermediate-microeconomics/uncertainty/) of MIT's Microeconomics course, a situation is proposed where a 50/50 bet will either result in losing \$100 or gaining \$125 with a starting wealth of \$100. It is stated that a person would be willing to insure themselves for \$43.75 (the difference between \$100 and \$56.25). What is the intuition behind this?

Thanks in advance!

![From MIT](https://i.stack.imgur.com/IxebN.jpg)