After receiving letters from "a number of top insurers" warning that premiums are set to rise, Life Insurance Direct chief executive Russell Cain said the life offices should be bringing prices down instead.
Mr Cain said all of the insurers he received letters from cited "sustainability" as the reason behind the price hike.
He pointed out that as advisers are soon to take a reduction in how much commission they are paid, insurers should look to reduce premiums, not increase them.
"This leads us to question whether life insurers are price gouging," Mr Cain said.
The lower commissions, coupled with increases in premiums, will ultimately improve the insurers' bottom line, he added.
"It's certainly not in the best interests of consumers and neither does it help maintain the sustainability of the thousands of small financial advice businesses, which provide the real human connection that clients and claimants so desperately need," Mr Cain said.
"We believe this is an attempt by some of the insurers, many of whom are owned by the major banks, to continue to push consumers into their own direct products.
"Consumers who buy direct policies may pay as much as 100 per cent or more for life insurance products than those who take up policies offered via advisers," he said.
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