For international travel insurance the qualification for coverage is set out on page 9: basically you have to charge either A$950 of your prepaid travel costs to the card to the card or pay for them using CBA rewards points. Alternatively if you pay for 90% of the ticket costs on the card you are covered.
What this means is that you can activate the coverage provided you prepay $950 of travel expenses to your card, for example, by booking overseas hotel accommodation. Once you have done that you are covered and the fact you are flying on FF points becomes irrelevant.
Note that the coverage rules for Transit Accident Insurance are different. You are only eligible for this cover if you are travelling on a defined "trip" and "trip" is defined on page 5 to be trips where the ticket was charged to the card.