I believe that the standard card has the option to purchase insurance and it will be billed only for those days that you were abroad. I don't think that you have to activate anything if you have a plan that includes insurance (premium/metal).
From Revolut perspective: insurance theoretically could be abused but i doubt they haven't calculated the risks as it would mean losing money although i don't see how this is different than me getting travel insurance online and just providing some travel info that from X to Y i need it.