Treat the extended warranty like an insurance policy. Would you pay $400 per year for collision coverage on a $2000 car? Some might- I wouldn't. Also keep in mind that your TV will likely cost a lot less by the end of the warranty period; so even if you do have to replace it in a few years it won't be the same cost as now.
Yes, extended warranties are huge cash grabs; and often a salesperson will make almost as much commission selling you the warranty as the item. When I sold electronics we made about 4% on TV sales, and 15% on warranties. So on a $2000 TV with a $400 warranty, you would make $80 selling the TV, and $60 on the warranty.
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