Today my car is 3, and the warranty expires.
I didn’t extend.
The only component I’d be concerned about is the infotainment screen, and the chance of that failing is very small.
Anything else can either be fixed for less, or not much more than the £400 or so quoted for annual warranty, or is so unlikely to fail at this stage that it’s not worth worrying about.
Peace of mind costs money!
That said, the package quoted by OP does look very good value, I’d probably have taken that if I didn’t already have a service agreement