It's a gamble! Lots of money if nothing goes wrong, but if something big does go wrong then it pays! Difficult one!
Best is to consider what could go wrong on your car and evaluate the risk versus cost - in many cases you could just as well invest that money so that it's there if you do need it for something slightly more minor, or part of the cost of something more major which is risk...
When I bought my 330i three years ago it had 46k km on the clock and motorplan was extended for a year, I then extended it for another year which was then the max 7 years and I think it cost me a little over R4k - would have to check it, but it was really not that much in the end.