Life risk brokers “act for and on behalf” of clients, providing critical support in understanding and obtaining cover, the National Insurance Brokers Association (NIBA) says in a submission to a parliamentary inquiry.

In extreme cases the broker’s role includes assisting clients with claims and ensuring life insurers honour contractual obligations.

“Life insurance policies are not the same,” CEO Dallas Booth says in the submission.

“There can and will be wide variation between policies regarding the nature and level of cover offered by the policy.

“Given the wide range of policies available in the market, NIBA submits there is a very strong and valid need for people to have ready access to expert, professional advice on life insurance risks, and the range of policies that might be available to insure those risks.

“NIBA believes that unless the consumer is very familiar with the nature of life insurance cover, they should be strongly encouraged to seek professional advice from an experienced life risk broker to ensure the cover they are seeking will actually meet their needs and circumstances, and is the most cost-effective insurance cover available in the market.”

The submission is to the Parliamentary Joint Committee on Corporations and Financial Services, which will deliver a report on the industry by June 30.

The inquiry’s terms of reference include examining the need for further reform and improved oversight of the life industry, sales practices and approved product lists, claims management, and insurers’ internal dispute resolution processes.

Life insurance disputes accounted for 5% of cases reported by the Financial Ombudsman Service last financial year, the NIBA submission says.