I have also been looking into this and worked my way through the Sterling offer a few weeks ago. I actually thought that at my age (mid 40's), circa 15 pounds a month for 100000 payout was not too bad - especially as I am already warned off for another ooa in a few months and given my branch/competencies can expect another 2 or 3 ooa (at least) before retirement. Given that there are only 170000ish of us in all 3 armed forces now, (of which presumably only a small fraction actually think they are going seriously enough into harms way to take this cover out) and the rate at which front line folk are getting killed, I would be surprised if they are making a fortune out of this. (I don't begrudge them a sensible profit - there has to be an incentive to do business)
I also have struggled to find other insurers that cover war risks to the same extent (or to any extent) and to be honest I was surprised by how low the pax+ payouts were - you have to buy a lot of units to get to the point where the payout is realistic to support the family you leave behind. If anyone can point me at better deals I'd love to hear from you.
Finally, I know this cover only pays out for death - I am somewhat naively hoping that in the event of being injured enough to have to leave then the compensation scheme will ease my transition back to civvy street.