The 'insurance' covers the cost of any penalties. You probably have no coverage for this under any other insurance policy. Basically they cover you if you, a traveling companion or an immediate family member, suffers an injury, sickness or death. You can see right away that there could be lots of circumstances where you might have to cancel and you won't be covered. Be sure you understand what these are.
Most policies have exclusions for pre-existing conditions.
Read this part very carefully. Princess - provides voluntary cancellation coverage for any reason not covered by insurance. This includes changing your mind. Holland America - coverage stops 24 hours before the start of the cruise, and there is no trip interruption coverage. Must be paid for when you make the initial deposit.