While it's called loss of license, as Rick pointed out above, it's more for losing your medical cert. Why would you want/need it? If you are young and healthy, probably less of a reason to have it. If you are prone to accidents, and would require extended time off work to heal, you may want it. If you are older, and more likely to fail a medical exam, you might want it.
Another thing to check out is your company's policy on when it goes into effect. Is it right away? Do you have to be unable to fly for an extended period of time? Can you do other work while you are not flying to supplement your income? Will the income you get from LOL insurance (pun intended) be enough for you and your family to live?
I know a pilot who had it, lost his medical, and was able to stay with his company (as a refueler) while maintaining his pilot salary (at the LOL rate of pay) for a year or slightly more. When LOL ran out, the company offered him the same job, but at normal wages for that position. He took it. But it kept him employed at a higher rate for a year or more. For him, I think it was worth it. Like all insurance, you are paying in the hopes you never need it, but when you need it, it comes in handy. The insurance company is hoping you never need it, too. Ever.