Please see my responses below:

1. Is the limit of 125,000 points per year for each card or for both?
Total points cap = 125,000 Awards points per year

For the first 75,000 Awards points earned
- Earn 2 Awards points per $1 spent using your American Express Card
- Earn 1 Awards point per $1 spent using your MasterCard card or Visa card

Additional 50,000 Awards points earned
- Earn 1 Awards point per $1 spent using your American Express Card only.

2. Does it mean that once limit is reached, no more rewards points will be given for purchases?
- This is the points cap per year.

3. For the free travel insurance, has the full price of the ticket be paid by the credit card or only a minimum amount of the ticket price be paid?
- Here are the terms and conditions for the complimentary international travel insurance:

“Cardholders, their spouses and dependent children become eligible for this International Travel Insurance when, before leaving Australia on an overseas journey, they have a return overseas travel ticket, and at least:
(a) A$950 of each of the cardholder’s, spouse’s and dependent child(ren)’s prepaid travel costs
(i.e. costs of the return overseas travel ticket; and/or airport/departure taxes; and/or prepaid overseas accommodation/travel; and/or other prepaid overseas itinerary items); or
(b) 90% of each of the cardholder’s, spouse’s and dependent child(ren)’s return overseas travel ticket(s);
is paid for by one or a combination of the following payment methods:
charged to the cardholder’s eligible credit card account; or
paid for by the redemption of the cardholder’s Commonwealth Awards points through the Commonwealth Awards Program, this excludes points redeemed for Frequent Flyer programs;
and, in the case of the spouse and/or dependent child, they are travelling with the cardholder for the entire journey.”

Cheers

Jeremy