Its always a good practice to purchase the travel insurance when you are going on a cruise. As far as whether to go with the cruiseline or an outside company that would depend on what coverage you are looking for. Some insurance companies do not cover pre-existing conditions and some do. Prices vary depending on cost of cruise and others based on age of traveler. A good travel agent can help you decide which is best for you.
Why buy insurance??? Suppose the day before the cruise you or a loved one gets sick and you cannot make the cruise, you are in penalties with the cruise line so you would just forfiet all the money you have spent, with insurance, you would get most; if not all of the money back minus the insurance cost. No one in your family sick??? Suppose you are on the ship and have an appendix attack or something similar to that...well without insurance you would pay large sums of money to get airlifted back to the USA. A good insurance policy would pay the cost of getting you back home to your own doctor. A young couple chose not to purchase the insurance, they felt that they were young, healthy and all family members were healthy. While in Mexico one of them ended up with a ruptured appendix, not wanting foreign doctors to operate, they had to spend over $6,000. to get flown back to the USA to see their own doctor; if they had spent the few extra $$ on an insurance policy they wouldnt have only lost the balance of their vacation, but they would have been re-imbursed for the part of their vacation they lost and also the cost to get back home.
Also, the insurance will cover lost baggage, missed flights etc..depending on which insurance company you go with.
I look at it this way, kind of like homeowners insurance or auto insurance, you hate paying the price, hope you never need it, but glad you have it if the occassion arrises to use it.