10-Q

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q


(Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 AND 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to


Commission File No. 0-16867

                            UNITED TRUST GROUP, INC.
             (Exact name of registrant as specified in its charter)

              ILLINOIS                                                37-1172848
(State or other jurisdiction of                                 (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                            5250 SOUTH SIXTH STREET
                                 P.O. BOX 5147
                             SPRINGFIELD, IL 62705
              (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code: (217) 241-6300



     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]


The number of shares outstanding of the registrant's  common stock as of October
31, 2003, were 4,008,619.






                    UNITED TRUST GROUP,INC. AND SUBSIDIARIES
                                (The "Company")



                               TABLE OF CONTENTS

Part 1.   Financial Information................................................3


   Item 1.  Financial Statements...............................................3

     Consolidated Balance Sheets as of September 30, 2003 and
         December 31, 2002.....................................................3
     Consolidated Statements of Operations for the three and nine months
         ended September 30, 2003 and 2002.....................................4
     Consolidated Statement of Changes in Shareholders' Equity for the
         nine months ended September 30, 2003..................................5
     Consolidated Statements of Cash Flows for the nine months ended
         September 30, 2003 and 2002...........................................6
     Notes to Consolidated Financial Statements................................7
   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS................................................13

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........18

   ITEM 4.  CONTROLS AND PROCEDURES...........................................18

PART II.   OTHER INFORMATION..................................................19


   ITEM 1.  LEGAL PROCEEDINGS.................................................19

   ITEM 2.  CHANGE IN SECURITIES..............................................19

   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES...................................19

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............19

   ITEM 5.  OTHER INFORMATION.................................................19

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..................................19


SIGNATURES....................................................................20

EXHIBIT INDEX.................................................................21







                         Part 1. Financial Information.
                         Item 1. Financial Statements.


                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

                     Consolidated Balance Sheets (Unaudited)
- --------------------------------------------------------------------------------

                                                                            September 30,           December 31,
     ASSETS                                                                      2003                  2002*
                                                                          -------------------    -------------------

Investments:
  Fixed maturities at amortized cost
    (market $32,489,810 and $60,517,065)                               $          31,395,132  $          58,327,663
  Investments held for sale:
     Fixed maturities, at market
      (cost $145,930,785 and $105,244,887)                                       147,673,849            108,704,518
     Equity securities, at market
      (cost $10,699,122 and $4,122,887)                                           11,714,245              4,883,870
  Mortgage loans on real estate at amortized cost                                 21,410,925             23,804,827
  Investment real estate, at cost,
    net of accumulated depreciation                                               17,863,940             17,503,812
  Policy loans                                                                    13,297,447             13,346,504
  Short-term investments                                                             131,272                377,676
                                                                          -------------------    -------------------
                                                                                 243,486,810            226,948,870

Cash and cash equivalents                                                          7,115,553             24,050,485
Accrued investment income                                                          2,041,316              2,452,840
Reinsurance receivables:
  Future policy benefits                                                          32,798,788             33,039,036
  Policy claims and other benefits                                                 3,809,551              3,770,285
Cost of insurance acquired                                                        21,937,974             23,156,164
Deferred policy acquisition costs                                                  2,172,104              2,462,487
Property and equipment,
  net of accumulated depreciation                                                  2,555,195              2,203,408
Income taxes receivable, current                                                     162,622                245,132
Other assets                                                                         299,745                574,263
                                                                          -------------------    -------------------
      Total assets                                                     $         316,379,658  $         318,902,970
                                                                          ===================    ===================


                LIABILITIES AND SHAREHOLDERS' EQUITY

Policy liabilities and accruals:
  Future policy benefits                                               $         235,992,470  $         234,762,656
  Policy claims and benefits payable                                               2,190,731              1,834,952
  Other policyholder funds                                                         1,095,666              1,176,359
  Dividend and endowment accumulations                                            12,598,522             12,628,294
Deferred income taxes                                                             10,624,608             12,239,060
Notes payable                                                                      2,289,776              2,995,275
Other liabilities                                                                  6,252,860              4,943,507
                                                                          -------------------    -------------------
      Total liabilities                                                          271,044,633            270,580,103
                                                                          -------------------    -------------------

Shareholders' equity:
Common stock - no par value, stated value $.02 per share
  Authorized 7,000,000 shares - 3,993,564 and 3,536,311 shares issued
  after deducting treasury shares of 168,692 and 147,607                              79,787                 70,726
Additional paid-in capital                                                        42,510,808             42,976,344
Retained earnings                                                                    876,098              2,503,856
Accumulated other comprehensive income                                             1,868,332              2,771,941
                                                                          -------------------    -------------------
      Total shareholders' equity                                                  45,335,025             48,322,867
                                                                          -------------------    -------------------
      Total liabilities and shareholders' equity                       $         316,379,658  $         318,902,970
                                                                          ===================    ===================

* Balance sheet audited at December 31, 2002.
                            See accompanying notes.


                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

                Consolidated Statements of Operations (Unaudited)
- -------------------------------------------------------------------------------

                                                                 Three Months Ended                    Nine Months Ended
                                                            September 30,      September 30,     September 30,      September 30,
                                                               2003               2002              2003               2002
                                                          ----------------   ---------------   ----------------   ----------------
Revenues:

  Premiums and policy fees                             $        4,462,516 $       4,458,645 $       13,832,708 $       14,408,541
  Reinsurance premiums and policy fees                           (775,932)         (732,822)        (2,169,882)        (2,017,573)
  Net investment income                                         2,656,624         3,336,329          8,305,473          9,931,415
  Realized investment gains, net                                  168,735             3,404            728,893             14,831
  Other income                                                    180,653           188,129            521,469            608,487
                                                          ----------------   ---------------   ----------------   ----------------
                                                                6,692,596         7,253,685         21,218,661         22,945,701

Benefits and other expenses:

  Benefits, claims and settlement expenses:
    Life                                                        5,647,392         5,436,371         16,174,507         15,847,861
    Reinsurance benefits and claims                              (658,342)         (950,836)        (1,815,565)        (3,010,828)
    Annuity                                                       298,465           388,660            864,818            962,456
    Dividends to policyholders                                    228,709           236,395            744,827            756,206
  Commissions and amortization of deferred
    policy acquisition costs                                       35,119           128,619            281,351            624,730
  Amortization of cost of insurance acquired                      478,369           372,664          1,218,190          1,143,859
  Operating expenses                                            1,451,973         1,441,502          6,122,220          4,621,069
  Interest expense                                                 40,400            71,230            121,778            204,834
                                                          ----------------   ---------------   ----------------   ----------------
                                                                7,522,085         7,124,605         23,712,126         21,150,187

Income (loss) before income taxes, minority interest
  and equity in earnings of investees                            (829,489)          129,080         (2,493,465)         1,795,514

Income tax (expense) credit                                       365,347           198,419            865,707             (4,687)
Minority interest in income of
  consolidated subsidiaries                                             0                 0                  0           (263,615)

                                                          ----------------   ---------------   ----------------   ----------------
Net income (loss)                                      $         (464,142)$         327,499 $       (1,627,758)$        1,527,212
                                                          ================   ===============   ================   ================

Basic income (loss) per share from continuing
  operations and net income (loss)                     $            (0.12)$            0.09 $            (0.43)$             0.44
                                                          ================   ===============   ================   ================

Diluted income (loss) per share from continuing
  operations and net income (loss)                     $            (0.12)$            0.09 $            (0.43)$             0.44
                                                          ================   ===============   ================   ================

Basic weighted average shares outstanding                       3,993,541         3,488,731          3,784,894          3,505,647
                                                          ================   ===============   ================   ================

Diluted weighted average shares outstanding                     3,993,541         3,488,731          3,784,894          3,505,647
                                                          ================   ===============   ================   ================
                            See accompanying notes.

                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES
            Consolidated Statement of Changes in Shareholders' Equity
            For the nine months ended September 30, 2003 (Unaudited)
- -------------------------------------------------------------------------------


Common stock
  Balance, beginning of year                                 $            70,726
  Issued during year                                                      10,000
  Retired common shares                                                     (433)
  Purchase treasury shares                                                  (422)
  Cumulative change in accounting principal                                  (84)
                                                               ------------------
  Balance, end of period                                                  79,787
                                                               ------------------

Additional paid-in capital
  Balance, beginning of year                                          42,976,344
  Issued during year                                                     (10,000)
  Retired common shares                                                 (258,361)
  Purchase treasury shares                                              (147,624)
  Cumulative change in accounting principal                              (49,551)
                                                               ------------------
  Balance, end of period                                              42,510,808
                                                               ------------------

Retained earnings
  Balance, beginning of year                                           2,503,856
  Net loss                                                            (1,627,758)      $        (1,627,758)
                                                               ------------------        ------------------
  Balance, end of period                                                 876,098
                                                               ------------------

Accumulated other comprehensive income
  Balance, beginning of year                                           2,771,941
  Other comprehensive income
    Unrealized holding loss on securities
      net of minority interest and
      reclassification adjustment                                       (903,609)                 (903,609)
                                                               ------------------        ------------------
  Comprehensive income                                                                 $        (2,531,367)
                                                                                         ==================
  Balance, end of period                                               1,868,332
                                                               ------------------

Total shareholders' equity, end of period                    $        45,335,025
                                                               ==================
                            See accompanying notes.


                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Unaudited)
- -------------------------------------------------------------------------------

                                                                                Nine Months Ended
                                                                          September 30,        September 30,
                                                                            2003                2002
                                                                       ----------------    -----------------
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
  Net income (loss)                                                 $       (1,627,758) $        1,527,212
  Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:
      Amortization/accretion of fixed maturities                               777,390             343,663
      Realized investment gains, net of losses                                (728,893)            (14,831)
      Policy acquisition costs deferred                                        (51,000)            (55,000)
      Amortization of deferred policy acquisition costs                        341,383             563,324
      Amortization of cost of insurance acquired                             1,218,190           1,143,859
      Depreciation                                                             481,543             420,367
      Minority interest                                                              0             263,615
      Change in accrued investment income                                      411,524             532,264
      Change in reinsurance receivables                                        200,982             783,510
      Change in policy liabilities and accruals                              2,178,296          (1,639,905)
      Charges for mortality and administration of
        universal life and annuity products                                 (6,732,981)         (6,549,405)
      Interest credited to account balances                                  4,087,999           4,147,153
      Change in income taxes payable                                          (970,707)            (54,032)
      Change in other assets and liabilities, net                            1,731,222            (627,362)
                                                                       ----------------    ----------------
Net cash provided by operating activities                                    1,317,190             784,432

Cash flows from investing activities:
  Proceeds from investments sold and matured:
    Fixed maturities held for sale                                          56,788,550           9,070,000
    Fixed maturities matured                                                31,415,470          23,803,620
    Equity securities                                                          165,262                   0
    Mortgage loans                                                           7,759,900           5,758,639
    Real estate                                                                987,675             913,978
    Policy loans                                                             1,873,293           2,323,496
    Short-term                                                                 250,000             155,209
                                                                       ----------------    ----------------
  Total proceeds from investments sold and matured                          99,240,150          42,024,942
  Cost of investments acquired:
    Fixed maturities held for sale                                         (98,132,344)        (30,562,133)
    Fixed maturities                                                        (4,283,410)         (3,053,805)
    Equity securities                                                       (6,576,236)           (185,075)
    Mortgage loans                                                          (5,365,998)         (6,160,160)
    Real estate                                                             (1,577,323)           (206,849)
    Policy loans                                                            (1,824,238)         (2,087,314)
    Short-term                                                                  (3,596)                  0
                                                                       ----------------    ----------------
  Total cost of investments acquired                                      (117,763,145)        (42,255,336)
  Purchase of property and equipment                                          (558,602)            (22,043)
                                                                       ----------------    ----------------
Net cash used in investing activities                                      (19,081,597)           (252,437)

Cash flows from financing activities:
  Policyholder contract deposits                                             7,318,773           7,835,749
  Policyholder contract withdrawals                                         (5,376,959)         (6,206,704)
  Proceeds from line of credit                                                       0           2,000,000
  Retirement of common stock                                                  (258,794)                  0
  Purchase of treasury stock                                                  (148,046)           (467,075)
  Payments from FCC merger                                                           0          (1,525,500)
  Payments of principal on notes payable                                      (705,499)         (1,891,873)
                                                                       ----------------    ----------------
Net cash provided by (used in) financing activities                            829,475            (255,403)
                                                                       ----------------    ----------------

Net increase (decrease) in cash and cash equivalents                       (16,934,932)            276,592
Cash and cash equivalents at beginning of period                            24,050,485          15,477,348
                                                                       ----------------    ----------------
Cash and cash equivalents at end of period                          $        7,115,553  $       15,753,940
                                                                       ================    ================
                            See accompanying notes.



                   UNITED TRUST GROUP, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


1.          Basis of Presentation

The accompanying  consolidated financial statements have been prepared by United
Trust Group, Inc. ("UTG") and its consolidated subsidiaries ("Company") pursuant
to the rules and regulations of the Securities and Exchange Commission. Although
the Company  believes  the  disclosures  are  adequate  to make the  information
presented not be misleading,  it is suggested that these consolidated  financial
statements be read in conjunction with the consolidated financial statements and
the notes thereto  presented in the  Company's  Annual Report on Form 10-K filed
with the  Securities  and Exchange  Commission  for the year ended  December 31,
2002.

The  information  furnished  reflects,  in  the  opinion  of  the  Company,  all
adjustments (which include only normal and recurring  accruals)  necessary for a
fair  presentation  of the  results of  operations  for the  periods  presented.
Operating  results  for  interim  periods  are  not  necessarily  indicative  of
operating  results  to be  expected  for  the  year or of the  Company's  future
financial condition.

This document at times will refer to the Registrant's largest  shareholder,  Mr.
Jesse T. Correll and certain  companies  controlled by Mr. Correll.  Mr. Correll
holds  a  majority   ownership  of  First  Southern   Funding  LLC,  a  Kentucky
corporation,  ("FSF") and First Southern  Bancorp,  Inc.  ("FSBI"),  a financial
services  holding  company  that  owns  100% of  First  Southern  National  Bank
("FSNB"),  which  operates  in the  State  of  Kentucky.  Mr.  Correll  is Chief
Executive Officer and Chairman of the Board of Directors of UTG and is currently
UTG's  largest  shareholder  through  his  ownership  control  of FSF,  FSBI and
affiliates.  At September  30, 2003 Mr.  Correll  owns or controls  directly and
indirectly approximately 65% of UTG's outstanding stock.

At September 30, 2003,  consolidated  subsidiaries  of United Trust Group,  Inc.
were as depicted on the following  organizational  chart.  For an explanation of
recent changes to the organizational  structure,  please refer to note 10 to the
consolidated financial statements.

2.       INVESTMENTS

As of  September  30, 2003 and December 31,  2002,  fixed  maturities  and fixed
maturities held for sale represented 74% of total invested assets. As prescribed
by  the  various  state  insurance  department  statutes  and  regulations,  the
insurance  companies'  investment  portfolio  is  required  to  be  invested  in
investment grade securities to provide ample  protection for  policyholders.  In
light  of  these  statutes  and  regulations,  and the  Company's  business  and
investment  strategy,  the Company  generally  seeks to invest in United  States
government  and  government  agency  securities  and other high quality low risk
investments.  As of September  30, 2003,  the carrying  value of fixed  maturity
securities in default as to principal or interest was  immaterial in the context
of consolidated  assets or shareholders'  equity.  The investments held for sale
are  carried  at  market,  with  changes  in market  value  directly  charged to
shareholders'  equity.  To provide  additional  flexibility  and liquidity,  the
Company has  categorized  almost all fixed maturity  investments  acquired since
2000 as available for sale.


3.       NOTES PAYABLE

At September  30, 2003 and December 31,  2002,  the Company had  $2,289,776  and
$2,995,275 in long-term debt outstanding,  respectively.  The notes payable were
incurred  in April 2001 to  facilitate  the  repurchase  of common  stock  owned
primarily  by James E.  Melville and Larry E.  Ryherd,  two former  officers and
directors of UTG,  and members of their  respective  families.  These notes bear
interest at the fixed rate of 7% per annum  (paid  quarterly)  with  payments of
principal to be made in five equal annual installments.

The collective  scheduled principal  reductions on these notes for the next four
years is as follows:

                         Year                     Amount

                         2003                  $         0
                         2004                      763,259
                         2005                      763,259
                         2006                      763,258


A.   Lines of Credit

On November 15, 2001, UTG was extended a $3,300,000  line of credit ("LOC") from
the First  National  Bank of the  Cumberlands  ("FNBC")  located in  Livingston,
Tennessee.  The FNBC is owned by, Millard V. Oakley, who is a former Director of
UTG.  The line of credit  was for a one-year  term from the date of issue.  Upon
maturity  the  Company  renewed the LOC for an  additional  one-year  term.  The
interest  rate on the LOC is  variable  and indexed to be the lowest of the U.S.
prime rates as published  in the Wall Street  Journal,  with any  interest  rate
adjustments  to be made  monthly.  At  September  30,  2003,  the Company had no
outstanding borrowings attributable to this LOC.

On April 1, 2002,  UTG was extended a $5,000,000  line of credit ("LOC") from an
unaffiliated  third  party,  Southwest  Bank  of St.  Louis.  The  LOC was for a
one-year term from the date of issue.  Upon maturity the Company renewed the LOC
for an  additional  one-year  term,  with a maturity  date of April 30, 2004. As
collateral for any draws under the line of credit, the former FCC, which has now
merged into UTG,  pledged 100% of the common stock of its  insurance  subsidiary
UG. Borrowings under the LOC will bear interest at the rate of .25% in excess of
Southwest  Bank of St. Louis' prime rate. At September 30, 2003, the Company had
no outstanding borrowings attributable to this LOC.


4.       CAPITAL STOCK TRANSACTIONS

A.   Employee and Director Stock Purchase Program

On March 26, 2002, the Board of Directors of UTG adopted,  and on June 11, 2002,
the  shareholders  of UTG approved,  the United Trust Group,  Inc.  Employee and
Director Stock  Purchase  Plan. The plan's purpose is to encourage  ownership of
UTG stock by eligible  directors  and employees of UTG and its  subsidiaries  by
providing them with an opportunity to invest in shares of UTG common stock.  The
plan is administered by the Board of Directors of UTG.

A total of  400,000  shares of common  stock  may be  purchased  under the plan,
subject to appropriate  adjustment for stock dividends,  stock splits or similar
recapitalizations  resulting  in a  change  in  shares  of UTG.  The plan is not
intended to qualify as an "employee  stock  purchase  plan" under Section 423 of
the Internal Revenue Code. At its September 2003 meeting, the Board of Directors
of UTG  approved  a second  offering  under the plan to  qualified  individuals.
Following the 30-day offer period,  ending in October  2003,  three  individuals
executed the  appropriate  documents  and acquired  16,546  shares of UTG common
stock. UTG received $195,905 from the issuance of these shares. Each participant
under the plan  executed a "stock  restriction  and buy-sell  agreement",  which
among  other  things  provides  UTG with a right of first  refusal on any future
sales of the shares acquired by the participant under this plan.

The  purchase  price of  shares  repurchased  under the  stock  restriction  and
buy-sell agreement shall be computed,  on a per share basis, equal to the sum of
(i) the  original  purchase  price paid to acquire such shares from UTG and (ii)
the  consolidated  statutory net earnings (loss) per share of such shares during
the  period  from the end of the month  next  preceding  the month in which such
shares  were  acquired  pursuant  to the  plan,  to the  end of the  month  next
preceding the month in which the sale of such shares to UTG occurs. At September
30, 2003, UTG had 37,229 shares  outstanding that were issued under this program
with a value of $11.88 per share pursuant to the above formula.


B.   Stock Repurchase Program

On June 5, 2001, the board of directors of UTG  authorized  the repurchase  from
time to time in the open market or in privately negotiated transactions of up to
$1 million of UTG's common stock.  Repurchased  shares under the program will be
available for future issuance for general  corporate  purposes.  Through October
31, 2003,  UTG has spent  $807,477 in the  acquisition  of 115,016 shares of its
common stock under this program.


C.   Earnings Per Share Calculations

Earnings per share are based on the  weighted  average  number of common  shares
outstanding  during each  period,  retroactively  adjusted to give effect to all
stock splits, in accordance with Statement of Financial Accounting Standards No.
128. At September  30, 2003 and  September  30, 2002 diluted  earnings per share
were  the  same as  basic  earnings  per  share  since  the UTG had no  dilutive
instruments outstanding.


D.    Shares Acquired by FSF and Affiliates with Options Granted

On November 20, 1998, FSF and affiliates acquired 929,904 shares of common stock
of UTG from UTG and certain UTG  shareholders.  As consideration for the shares,
FSF paid UTG  $10,999,995  and  certain  shareholders  of UTG  $999,990 in cash.
Included in the stock acquisition agreement was an earnings covenant whereby UTG
warranted UTG and its  subsidiaries and affiliates would have future earnings of
at least  $30,000,000  for a five-year  period  beginning  January 1, 1998. Such
earnings  were  computed  based on  statutory  results  excluding  inter-company
activities such as  inter-company  dividends plus realized and unrealized  gains
and losses on real estate, mortgage loans and unaffiliated common stocks. At the
end of the covenant period, an adjustment was to be made equal to the difference
between the then market value and statutory  carrying value of real estate still
owned that existed at the beginning of the covenant period.  Should UTG not meet
the covenant  requirements,  any shortfall  would first be reduced by the actual
average  tax rate for UTG for the  period,  then  would be  further  reduced  by
one-half of the percentage,  if any,  representing UTG's ownership percentage of
the  insurance  company  subsidiaries.  This  result  would  then be  reduced by
$250,000.  The  remaining  amount would be paid by UTG in the form of UTG common
stock valued at $15.00 per share with a maximum number of shares to be issued of
500,000.  However,  there was to be no limit to the number of shares transferred
to the extent that there were legal fees, settlements,  damage payments or other
losses as a result of certain legal action taken. The price and number of shares
would be adjusted for any  applicable  stock  splits,  stock  dividends or other
recapitalizations.  For the five-year period starting January 1, 1998 and ending
December 31, 2002, the Company had total  earnings of $16,970,883  applicable to
this covenant. Therefore, UTG did not meet the earnings requirements stipulated,
and pursuant to the covenant  based on a final  accounting,  the Company  issued
500,000 previously unissued shares of UTG common stock to FSF on April 30, 2003.


5.   COMMITMENTS AND CONTINGENCIES

The insurance  industry has  experienced  a number of civil jury verdicts  which
have been  returned  against life and health  insurers in the  jurisdictions  in
which the Company does business involving the insurers' sales practices, alleged
agent misconduct,  failure to properly supervise agents, and other matters. Some
of the lawsuits have resulted in the award of substantial  judgments against the
insurer,  including material amounts of punitive damages. In some states, juries
have substantial discretion in awarding punitive damages in these circumstances.
The  Company  cannot  predict  the effect  that these  lawsuits  may have on the
Company in the future.

Under the insurance guaranty fund laws in most states, insurance companies doing
business in a  participating  state can be assessed up to prescribed  limits for
policyholder  losses  incurred  by  insolvent  or  failed  insurance  companies.
Although the Company cannot predict the amount of any future  assessments,  most
insurance guaranty fund laws currently provide that an assessment may be excused
or deferred if it would  threaten an  insurer's  financial  strength.  Mandatory
assessments may be partially recovered through a reduction in future premium tax
in some states. The Company does not believe such assessments will be materially
different from amounts already provided for in the financial statements,  though
the Company has no control over such assessments.

The  State of  Florida  began an  investigation  of  industrial  life  insurance
policies in the fall of 1999 regarding policies with race-based  premiums.  This
investigation  has  quickly  spread to other  states and to other types of small
face amount  policies  and was expanded to consider the fairness of premiums for
all small policies  including  policies which did not have race-based  premiums.
The NAIC  historically  has defined a "small  face amount  policy" as one with a
face  amount of  $15,000  or less.  Under  current  reviews,  some  states  have
increased  this  amount  to  policies  of  $25,000  or less.  These  states  are
attempting  to force  insurers  to  refund  "excess  premiums"  to  insureds  or
beneficiaries  of  insureds.   The  Company's  insurance  subsidiaries  have  no
race-based  premium  products,  but do have policies with face amounts under the
above-scrutinized  limitations.  The  outcome of this issue could be dramatic on
the  insurance  industry as a whole as well as the Company  itself.  The Company
will continue to monitor developments regarding this matter to determine to what
extent, if any, the Company may be exposed.

On October 26,  2001,  President  Bush signed into law the "USA  PATRIOT" Act of
2001 ("the Patriot Act"). This Law, enacted in response to the terrorist attacks
of September 11, 2001,  strengthens our Nation's ability to combat terrorism and
prevent and detect money-laundering activities. Under Section 352 of the Patriot
Act,  financial  institutions  (definition  includes  insurance  companies)  are
required  to  develop  an  anti-money  laundering  program.  The  practices  and
procedures  implemented  under the  program  should  reflect  the risks of money
laundering given the entity's  products,  methods of distribution,  contact with
customers and forms of customer payment and deposits.  In addition,  Section 326
of  the  Patriot  Act  creates  minimum  standards  for  financial  institutions
regarding the identity of their  customers in connection  with the purchase of a
policy or contract of insurance.  Final regulations regarding the aforementioned
Patriot Act,  were issued by the  Department  of the Treasury in April 2003.  As
such, the Company has instituted an anti-money laundering program to comply with
Section 352, and has communicated this program throughout the organization.  The
Company currently has in place a database program to facilitate  compliance with
Section 326. The Company will continue to monitor developments regarding the Act
to determine if any adjustments are needed for continued compliance.

On July 30, 2002,  President  Bush signed into law the  "SARBANES-OXLEY"  Act of
2002 ("the Act"). This Law, enacted in response to several high-profile business
failures,  was developed to provide  meaningful  reforms that protect the public
interest and restore  confidence in the reporting  practices of publicly  traded
companies. The implications of the Act to public companies, (which includes UTG)
are vast, widespread,  and evolving.  Many of the new requirements will not take
effect or full effect until after  calendar-year-end  companies  have  completed
their 2005 annual reports.  The Company has implemented  requirements  affecting
the current reporting period,  and is continually  monitoring,  evaluating,  and
planning  implementation of requirements that will need to be taken into account
in future reporting periods.

On April 25,  2003 the Company  entered  into an  agreement  with Fiserv for the
conversion of the two TPA client  companies to the "ID3" system.  The conversion
began in May 2003 and is expected to be  completed  by December  31,  2003.  The
conversion is being performed  utilizing  Company personnel with onsite training
and  guidance   provided  by  Fiserv.   The   conversion  is  expected  to  cost
approximately   $600,000.   Through  September  30,  the  Company  has  incurred
approximately  $240,000 in expenses  relating to this conversion.  Following the
conversion  of these  blocks of  business  the Company  anticipates  immediately
starting  the  conversion  of the  remaining  insurance  business  to the  "ID3"
software system. Fiserv LIS is a unit of Fiserv, Inc. (Nasdaq: FISV) which is an
independent, full-service provider of integrated data processing and information
management  systems to the  financial  industry,  headquartered  in  Brookfield,
Wisconsin.

As previously disclosed in the Company's filings, litigation styled David Morlan
et al. v. Universal  Guaranty Life  Insurance  Company,  United Trust  Assurance
Company,  United Security Assurance Company,  United Trust Group, Inc. and First
Commonwealth  Corporation,  is currently  pending in the United States  District
Court for the Southern District of Illinois.

In late June 2003,  a mediation  was held in an attempt to bring  resolution  to
this  lawsuit.  The  negotiations  continued in July and August,  and a proposed
settlement was  ultimately  reached.  Although the Company  continues to believe
that it has meritorious grounds to defend this lawsuit, the legal process can be
lengthy and costly, with no guarantee of success in the final resolution.  Under
these  circumstances,  management  believes a settlement of the matter may be in
the best interests of the Company.  Under the terms of the proposed  settlement,
the Company will pay  approximately  $1,950,000  in attorneys'  fees,  costs and
expenses,  and the Company,  through its  insurance  subsidiaries,  will provide
certain life insurance  benefits at a discount to members of the class (or their
transferees) choosing to purchase life insurance benefits.

On October 27, 2003, Hon. G. Patrick  Murphy,  Chief Judge for the United States
District Court for the Southern District of Illinois,  ruled from the bench that
he was approving the proposed  settlement.  The settlement  will become final 30
days after the Court enters an order approving the settlement,  unless the order
is  appealed.  Given the status of the  proposed  settlement,  the  Company  has
established a contingent  liability in its financial  statements of  $1,950,000.
This figure represents management's best estimation of the initial out-of-pocket
costs associated with the proposed  settlement.  The ultimate impact, if any, on
the Company's  financial  condition  from  providing  discounted  life insurance
benefits  to class  members  who  elect to  purchase  such  benefits  cannot  be
determined  at this  time as the  Company  does not yet know who among the class
members, if any, will elect to purchase such benefits.

UTG and its  subsidiaries  are named as  defendants in a number of legal actions
arising as a part of the  ordinary  course of  business  relating  primarily  to
claims made under  insurance  policies.  Those  actions have been  considered in
establishing  the Company's  liabilities.  Management is of the opinion that the
settlement  of those  actions  will not have a  material  adverse  effect on the
Company's financial position or results of operations.


6.       Other Cash Flow Disclosure

On a cash basis,  the Company paid  $121,778  and  $190,379 in interest  expense
during the first nine months of 2003 and 2002,  respectively.  The Company  paid
$105,000 and $45,290 in federal  income tax during the first nine months of 2003
and 2002,  respectively.  In April 2003, the Company  issued 500,000  previously
unissued  shares  of UTG  common  stock to FSF  (please  refer to note 4C to the
consolidated financial statements for further discussion).


7.     CONCENTRATION OF CREDIT RISK

The Company maintains cash balances in financial  institutions that at times may
exceed federally  insured limits.  The Company  maintains its primary  operating
cash accounts with First  Southern  National  Bank, an affiliate of UTG, and its
largest  shareholder,  Chairman  and  CEO,  Jesse  Correll.  The  Company  holds
approximately $400,000 for which there are no pledges or guarantees outside FDIC
insurance  limits.  The Company has not  experienced any losses in such accounts
and believes it is not exposed to any  significant  credit risk on cash and cash
equivalents.


8.     COMPREHENSIVE INCOME


                                                                                    Tax
                                                                Before-Tax          (Expense)            Net of Tax
              September 30, 2003                                Amount              or Benefit           Amount
              ----------------------------------------------    ----------------    -----------------    ---------------

              Unrealized holding losses during
                   Period                                   $   (1,389,547)     $          486,342    $         (903,205)
              Less: reclassification adjustment
                   for gains realized in net income                   (621)                    217                  (404)
                                                                ----------------    -----------------    ---------------
              Net unrealized losses                             (1,390,168)                486,559
                                                                                                                (903,609)
                                                                ----------------    -----------------    ---------------
              Other comprehensive income                    $   (1,390,168)     $          486,559    $         (903,609)
                                                                ================    =================    ===============



9.     RELATED PARTY TRANSACTIONS

On February 20, 2003,  UG purchased  $4,000,000  of a trust  preferred  security
offering  issued by an upstream  affiliate,  First  Southern  Bancorp,  Inc. The
security has a mandatory redemption after 30 years with a call provision after 5
years. The security pays a quarterly dividend at a fixed rate of 6.515%.


10.    MERGER OF LIFE INSURANCE SUBSIDIARIES

At the March 2003  Board of  Directors  meeting,  the ABE,  APPL,  and UG Boards
reaffirmed  the merger of ABE and APPL with and into UG and  approved  the final
merger documents. Upon receiving the necessary regulatory approvals, the mergers
were  consummated  effective  July 1,  2003.  ABE and APPL were each 100%  owned
subsidiaries of UG prior to the merger.  The mergers result in a more simplified
holding company structure.


11.      NEW ACCOUNTING STANDARDS

The Financial  Accounting Standards Board ("FASB") has issued Statement No. 150,
Accounting  for  Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and Equity.  Statement  No. 150 was issued to address how an issuer
classifies and measures certain financial  instruments with  characteristics  of
both  liabilities  and  equity.  It  requires  that an issuer  must  classify  a
financial  instrument  that is within its scope as a  liability  (or an asset in
some  circumstances)  which  may have  previously  been  classified  as  equity.
Examples of such a  financial  instrument  would be shares that are  mandatorily
redeemable  which include an  unconditional  obligation  requiring the issuer to
redeem them by transferring its assets at a specified date or upon an event that
is certain to occur, or a financial  instrument other than an outstanding  share
that, at inception,  includes an  obligation to repurchase  the issuer's  equity
shares and that  requires or may require the issuer to settle the  obligation by
transferring assets.

This  statement  was  effective  at the  beginning of the first  interim  period
beginning  after June 15, 2003.  The Company  adopted  Statement  No. 150 in its
September 30, 2003  financials and as a result,  4,178 shares of common stock no
longer met the  requirements  to be classified  as equity.  The adoption of this
Statement resulted in a reclassification of $49,635 from Shareholders' Equity to
Other Liabilities.




ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The purpose of this section is to discuss and analyze the Company's consolidated
results of operations,  financial condition and liquidity and capital resources.
This analysis  should be read in  conjunction  with the  consolidated  financial
statements and related notes that appear  elsewhere in this report.  The Company
reports  financial results on a consolidated  basis. The consolidated  financial
statements  include the accounts of UTG and its  subsidiaries  at September  30,
2003.

Cautionary Statement Regarding Forward-Looking Statements

Any  forward-looking  statement contained herein or in any other oral or written
statement  by the Company or any of its  officers,  directors  or  employees  is
qualified by the fact that actual  results of the Company may differ  materially
from any such  statement due to the  following  important  factors,  among other
risks and uncertainties inherent in the Company's business:

1.   Prevailing  interest  rate  levels,  which may  affect  the  ability of the
     Company to sell its products, the market value of the Company's investments
     and the lapse  ratio of the  Company's  policies,  notwithstanding  product
     design features intended to enhance persistency of the Company's products.

2.   Changes in the federal income tax laws and regulations which may affect the
     relative tax advantages of the Company's products.

3.   Changes in the regulation of financial  services,  including bank sales and
     underwriting  of  insurance  products,  which may  affect  the  competitive
     environment for the Company's products.

4.   Other factors affecting the performance of the Company,  including, but not
     limited  to,  market  conduct  claims,   insurance  industry  insolvencies,
     insurance   regulatory   initiatives   and   developments,   stock   market
     performance,  an unfavorable outcome in pending litigation,  and investment
     performance.


Results of Operations

(a)  Revenues

Premiums and policy fee revenues,  net of reinsurance  premiums and policy fees,
decreased 6% when  comparing the first nine months of 2003 to the same period in
2002, and decreased 1% for the third quarter  comparison.  The Company currently
writes  little new  business.  Unless the  Company  acquires a block of in-force
business or significantly  increases its marketing,  management  expects premium
revenue to continue to decline at a similar rate, which is consistent with prior
experience.

Since early 2002, the Company has been putting renewed efforts in  strengthening
conservation  efforts.  The Company has seen an  improvement in lapse rates over
historic trends since conservation efforts have been a focus. These efforts have
been focused in the customer service area, where requests for policy termination
are  received.  As  part  of  this  effort,  several  of  the  customer  service
representatives of the Company have become licensed  insurance agents,  allowing
them to offer products within the Company's portfolio to existing customers.

The  Company  is in  the  early  stages  of  moving  forward  with  a  marketing
opportunity  with First  Southern  National  Bank ("FSNB") an affiliate of UTG's
largest  shareholder,  Chairman  and  CEO,  Jesse  T.  Correll.  Management  has
considered various products including annuity type products, mortgage protection
products and existing  insurance  products,  as potential products that could be
marketed to banking customers.  This marketing  opportunity has potential and is
believed to be a viable niche.

Although   premium   writings   through  FSNB  and  by  the   customer   service
representatives  of the Company are not  expected to be  significant  to Company
revenue in the near future,  management  believes it is a start in their attempt
to slow down the yearly  decline  in  premium  revenue.  Net  investment  income
decreased 16% when comparing the first nine months of 2003 to the same period in
2002,  and decreased 20% for the third quarter  comparison.  The national  prime
rate was 4.75%  during the first nine  months of 2002 and ranged  from a high of
4.25% to a low of 4.00%  during the first nine  months of 2003.  This  declining
interest rate  environment has resulted in lower earnings on short-term funds as
well as on  longer-term  investments  acquired.  Should  this  economic  climate
continue, net investment income should continue to decline as the Company, along
with others in the insurance  industry,  seeks adequate  returns on investments,
while  staying  within  the  conservative  investment  guidelines  set  forth by
insurance  regulations.  Management  has  shortened  the length of the Company's
portfolio  and  maintained  a  conservative  investment  philosophy.   As  such,
following an analysis of current holdings during the second quarter of 2003, the
Company liquidated approximately $4,084,000 of its corporate bonds. In addition,
as  investments  have  matured or been  called,  the Company has  reinvested  at
current lower yields.  Although this hurts investment earnings in the short run,
the  Company  has not had to write off any  investment  losses due to  excessive
risk.

The Company's  investments are generally  managed to match related insurance and
policyholder liabilities.  The comparison of investment return with insurance or
investment  product crediting rates establishes an interest spread.  The Company
monitors  investment  yields, and when necessary adjusts credited interest rates
on its insurance products to preserve targeted interest spreads, ranging from 1%
to 2%. At the March 2002 Board of Directors meeting, the Boards of the insurance
subsidiaries lowered all remaining  rate-adjustable products to their guaranteed
minimum rates.  The guaranteed  minimum  crediting rates on these products range
from 3% to 5.5%. These adjustments were in response to the continued declines in
interest rates in the marketplace. Policy interest crediting rate changes become
effective  on an  individual  policy  basis on the next policy  anniversary.  If
interest  rates  continue to decline,  the Company won't be able to lower rates,
and both net investment income and net income will be impacted negatively.

The Company had realized  investment  gains of $728,893 in the first nine months
of 2003 compared to net realized investment gains of $14,831 for the same period
in 2002.  The net realized  gains in 2003 consist of a $319,022 gain on bonds of
which $316,966 was  attributable  to the Company's  liquidation of its corporate
bonds discussed above.  Additionally,  in 2003, the Company reported $244,608 in
net  realized  gains  on real  estate  that was  primarily  from the sale of two
separate parcels of land held for investment purposes in Springfield,  Illinois,
and  $165,262  in gain  realized  from the sale of common  stock.  In 2002,  net
realized  gains  consisted  of a $5,476  gain on bonds and a $9,355 gain on real
estate. A quarterly  comparison shows realized  investment gains of $168,735 for
the quarterly period ended September 30, 2003, and $3,404 for the same period in
2002.  The  large  net  realized  gain  during  the  third  quarter  of  2003 is
attributable  to the sale of the  Company's  common stock  holdings in Principal
Financial Group.

Other income  decreased 14% when  comparing the first nine months of 2003 to the
same period in 2002,  and  decreased 4% for the third  quarter  comparison.  The
majority  of the  revenue in this line item comes  from the  Company  performing
administrative work as a third party administrator ("TPA") for unaffiliated life
insurance companies, and as such, receives monthly fees based on policy in force
counts  and  certain  other  activity  indicators  such  as  number  of  premium
collections  performed.  During  the first  nine  months  of 2003 and 2002,  the
Company received $347,555 and $392,503  respectively,  for this work. During the
third  quarter of 2003 and 2002,  the Company  received  $115,307  and  $120,881
respectively,  for this work.  These TPA revenue  fees are  included in the line
item "other income" on the Company's consolidated statements of operations.  The
Company  intends to pursue other TPA  arrangements,  and in 2002 entered into an
alliance  with Fiserv Life  Insurance  Solutions  (Fiserv  LIS),  to provide TPA
services to insurance companies seeking business process outsourcing  solutions.
Fiserv LIS will be  responsible  for the  marketing  and sales  function for the
alliance,  as well as providing the data center  operations.  UTG will staff the
administration  effort.  Management  believes  this  alliance  with  Fiserv  LIS
positions the Company to generate additional revenues by utilizing the Company's
current excess capacity,  administrative services, and implementation of the new
Fiserv LIS "ID3" software system.  Currently,  the Company operates on the "Life
70" software  system,  which is no longer being supported.  In addition,  due to
ongoing regulatory changes and the fact the Company is repositioning  itself for
future growth, the Company believes  implementation of the "ID3" software system
is critical in order to proceed in the  Company's new direction of TPA services.
Fiserv LIS is a unit of Fiserv,  Inc.  (Nasdaq:  FISV) which is an  independent,
full-service  provider of integrated data processing and information  management
systems to the financial industry, headquartered in Brookfield, Wisconsin.




(b)  Expenses

Life benefits,  claims and settlement  expenses net of reinsurance  benefits and
claims,  increased  12% in the first nine  months of 2003  compared  to the same
period  in 2002,  and  increased  11% for the  third  quarter  comparison.  This
increase for the first nine months is due to a reduction in reinsurance benefits
incurred  year to date.  The Company had fewer high face death  claims that were
reinsured  in the first nine months of 2003 as compared to the first nine months
of 2002. The Company  reinsures its risks as to not retain more than $125,000 on
any  one  life.  Therefore,  the  amount  of  reinsurance  benefit  incurred  is
determined by the size of an insured's  policy when a claim for benefit is made.
Aside from the effect of reinsurance,  policy surrenders  remained at comparable
levels when  comparing the first nine months of 2003 to the same period in 2002.
A third quarter  comparison  revealed the Company had  approximately  $2,800,000
less in direct death benefits. Consequently, the reinsurance benefits and claims
received,  decreased  accordingly.  Policy  claims  vary  from  year to year and
therefore,  fluctuations  in mortality are to be expected and are not considered
unusual by  management.  Overall,  reserves  continue  to  increase  on in-force
policies as the age of the insureds increases.

Commissions and amortization of deferred policy  acquisition costs decreased 55%
for the first  nine  months of 2003  compared  to the same  period in 2002,  and
decreased 73% for the third quarter  comparison.  The most significant factor in
the decrease is attributable to the Company paying fewer commissions,  since the
company  writes  very  little new  business  and  renewal  premiums  on existing
business  continue  to  decline.  Commissions  paid will  continue to decline as
terminated agents discontinue their association with the Company. Depending upon
the nature of the contract  that the agent has with the  Company,  the agent may
become  vested,  a process which allows them to continue to receive  commissions
for a certain period even after the agent has  discontinued his association with
the Company.  Over time,  fewer and fewer agents have remained  vested,  further
reducing the commissions payable by the Company.  Another factor of the decrease
is attributable to normal  amortization of the deferred policy acquisition costs
asset.  The  Company  reviews the  recoverability  of the asset based on current
trends and known events compared to the assumptions used in the establishment of
the  original  asset.  No  impairments  were  recorded  in either of the periods
reported.

Operating  expenses  increased  32% in the first nine months of 2003 compared to
the same period in 2002, and increased 1% for the third quarter comparison. This
increase for the first nine months of 2003 is attributable to the  establishment
of a contingent liability of $1,950,000 relating to a lawsuit (see note 5 to the
consolidated  financial  statements  for  further  discussion).   Excluding  the
contingency established, expenses declined due to expense reductions made in the
normal  course  of  business,  as  the  Company  simplifies  its  organizational
structure   and   continually   monitors   expenditures   looking   for  savings
opportunities.  In April 2003, the Company entered into an agreement with Fiserv
for  the  conversion  of two TPA  client  companies  to the  "ID3"  system.  The
conversion  began in May 2003 and is expected to be completed by December  2003.
The  conversion  is being  performed  utilizing  Company  personnel  with onsite
training and guidance  provided by Fiserv.  The  conversion  is expected to cost
approximately  $600,000.  Through  September 30, 2003,  the Company has incurred
expenses of $240,000 relating to this conversion.

Interest expense  decreased 41% in the first nine months of 2003 compared to the
same period in 2002,  and decreased 43% for the third  quarter  comparison.  The
Company has used  dividend  payments  from its life  insurance  subsidiary UG to
reduce long term debt  outstanding  from  $4,508,797  at  September  30, 2002 to
$2,289,776 at September 30, 2003.  All remaining debt was incurred in April 2001
to  facilitate  the  repurchase  of common  stock  owned  primarily  by James E.
Melville and Larry E.  Ryherd,  two former  officers  and  directors of UTG, and
members of their respective families.  The notes bear interest at the fixed rate
of 7% per annum (paid  quarterly)  with payments of principal to be made in five
equal annual  installments.  In January 2003 the balance of an advance principal
payment in the amount of $705,499 was made on these notes. The future collective
scheduled  principal  reductions on these notes are due as follows:  $763,259 on
April 1,  2004,  $763,259  on April 1, 2005 and  $763,258  due on April 1, 2006.
Management believes overall sources available are adequate to service this debt.
These sources include current cash balances of UTG, existing lines of credit and
expected future dividends from its life insurance subsidiary UG.

(c)  Net income

The  Company  had a net loss of  $1,627,758  in the  first  nine  months of 2003
compared to net income of $1,527,212  for the same period in 2002 and a net loss
of $464,142  in the third  quarter of 2003 as compared to net income of $327,499
for the third quarter of 2002. The net loss in 2003 was mainly  attributable  to
the establishment of a contingent liability relating to a lawsuit (see note 5 to
the consolidated  financial statements for further  discussion).  The contingent
liability resulted in a decline in net income of $1,267,500, net of tax effects.
In  addition,  total  revenues  decreased  approximately  $1,727,000,  which was
primarily  attributable to a 16% decrease in investment income and a 4% decrease
in premium revenues.  Partially offsetting the above-mentioned  decreases to net
income,  was the  minority  interest in earnings  of  approximately  $264,000 at
September 30, 2002. All minority interests were retired with the merger of First
Commonwealth  Corporation (a then 82% owned subsidiary of UTG) with and into UTG
on June 12, 2002.


Financial Condition

The  financial  condition of the Company has declined  since  December 31, 2002.
Total shareholders'  equity decreased  approximately  $2,988,000 as of September
30, 2003 compared to December 31, 2002. The decrease is mainly  attributable  to
the accrual of a contingent liability of $1,267,500, net of taxes, relating to a
lawsuit  (see  note 5 to  the  consolidated  financial  statements  for  further
discussion) that was included in the net loss of $1,627,758. Unrealized gains on
investments  carried at market value  declined  $903,609  net of deferred  taxes
during the current period. In addition,  the Company  purchased  treasury shares
and  retired  common  stock in the  amount of  $406,840,  which  also  decreased
shareholders'  equity.  At September 30, 2003, the Company  implemented  FAS 150
regarding the accounting for certain financial  instruments with characteristics
of both  liabilities and equity.  This  implementation  resulted in a reclass of
$49,635 from equity to other liabilities on the financial statement.

Investments represent approximately 77% and 71% of total assets at September 30,
2003 and December  31,  2002,  respectively.  Accordingly,  investments  are the
largest asset group of the Company.  The Company's  insurance  subsidiaries  are
regulated by insurance  statutes and  regulations  as to the type of investments
that they are permitted to make and the amount of funds that may be used for any
one type of investment. In light of these statutes and regulations, the majority
of the  Company's  investment  portfolio is invested in high  quality,  low risk
investments.

As of September 30, 2003,  the carrying  value of fixed  maturity  securities in
default  as  to  principal  or  interest  was   immaterial  in  the  context  of
consolidated  assets  or  shareholders'   equity.  The  Company  has  identified
securities  it may sell and  classified  them as  "investments  held for  sale".
Investments  held for sale are carried at market,  with  changes in market value
charged directly to shareholders' equity. To provide additional  flexibility and
liquidity,  the Company has  categorized  almost all fixed maturity  investments
acquired since 2000 as available for sale.


Liquidity and Capital Resources

The  Company  has  three  principal  needs for cash - the  insurance  companies'
contractual obligations to policyholders,  the payment of operating expenses and
the servicing of its long-term debt.  Cash and cash  equivalents as a percentage
of total  assets were  approximately  2% and 8% as of September  30,  2003,  and
December 31,  2002,  respectively.  Fixed  maturities  as a percentage  of total
invested assets were approximately 74% as of September 30, 2003 and December 31,
2002.

Future policy  benefits are  primarily  long-term in nature and  therefore,  the
Company's  investments are predominantly in long-term fixed maturity investments
such as bonds and mortgage loans which provide  sufficient return to cover these
obligations. The Company has the ability and intent to hold these investments to
maturity;  consequently,  the Company's  investment in fixed  maturities held to
maturity is reported in the financial statements at their amortized cost.

Many of the Company's  products  contain  surrender  charges and other  features
which  reward  persistency  and  penalize the early  withdrawal  of funds.  With
respect to such products,  surrender  charges are generally  sufficient to cover
the Company's  unamortized deferred policy acquisition costs with respect to the
policy being surrendered.

Net cash provided by operating  activities  was  $1,317,190 and $784,432 for the
nine-month   periods   ending   September  30,  2003  and  September  30,  2002,
respectively.   The  net  cash  provided  by  operating   activities   plus  net
policyholder  contract  deposits after the payment of  policyholder  withdrawals
equaled $3,259,004 for the first nine months of 2003 and $2,413,477 for the same
period  in  2002.  Management  utilizes  this  measurement  of cash  flows as an
indicator  of the  performance  of the  Company's  insurance  operations,  since
reporting  regulations  require cash inflows and outflows  from  universal  life
insurance  products to be shown as financing  activities  when reporting on cash
flows. Net cash used in investing  activities was $19,081,597 and $252,437,  for
the  nine-month  periods  ending  September  30, 2003 and  September  30,  2002,
respectively.  The most significant aspect of cash used in investing  activities
is the fixed maturity transactions.  Fixed maturities account for 87% and 80% of
the total cost of investments  acquired in the first nine months of 2003 and for
the same period in 2002, respectively.

Net cash provided by (used in) financing  activities was $829,475 and $(255,403)
for the nine month  periods  ending  September  30, 2003 and September 30, 2002,
respectively.  Policyholder  contract  deposits  decreased  7% in the first nine
months  of 2003  compared  to the same  period  in 2002.  Policyholder  contract
withdrawals  decreased 13% in the first nine months of 2003 compared to the same
period in 2002. In addition, as of September 30, 2003, the Company had purchased
$148,046  in  treasury  stock  under its stock  repurchase  program  and retired
$258,794 in common  stock that was  originally  issued  under the  employee  and
director stock purchase program.

At September 30, 2003,  the Company had a total of $2,289,776 in long-term  debt
outstanding.  All remaining debt is owed to two former officers and directors of
the  Company  and their  respective  families as a result of an April 2001 stock
purchase  transaction.  These  notes bear  interest  at the fixed rate of 7% per
annum (paid  quarterly),  with  remaining  principal  payments  of $763,259  due
annually in 2004 and 2005 and $763,258 due in 2006.  Management believes overall
sources  available  are more than  adequate to service this debt.  These sources
include current cash balances of UTG,  expected future  operating  cashflows and
payment of dividends  from the Company's life  subsidiary,  UG. In January 2003,
UTG paid the balance of an advance  principal  payment in the amount of $705,499
completing the remaining 2003 principal payment.

UTG is a holding  company that has no day-to-day  operations  of its own.  Funds
required to meet its expenses,  generally costs  associated with maintaining the
company in good  standing with states in which it does  business,  are primarily
provided  by its  subsidiaries.  On a parent  only  basis,  UTG's  cash  flow is
dependent  on  management  fees  received  from its  subsidiaries  and  earnings
received on cash  balances.  At  September  30, 2003,  substantially  all of the
consolidated shareholders equity represents net assets of its subsidiaries.  The
Company's insurance  subsidiaries have maintained adequate statutory capital and
surplus and have not used surplus  relief or financial  reinsurance,  which have
come under  scrutiny by many state  insurance  departments.  The payment of cash
dividends  to  shareholders  is  not  legally  restricted.  However,  the  state
insurance  department  regulates  insurance  company dividend payments where the
company is domiciled.

UG is an Ohio  domiciled  insurance  company,  which  requires  five days  prior
notification  to the  insurance  commissioner  for the  payment  of an  ordinary
dividend.  Ordinary  dividends  are  defined  as the  greater  of: a) prior year
statutory  earnings or b) 10% of statutory capital and surplus.  At December 31,
2002 UG's total  statutory  capital and  surplus  amounted  to  $16,030,200.  At
December  31,  2002,  UG had a statutory  gain from  operations  of  $2,062,744.
Extraordinary  dividends  (amounts in excess of ordinary  dividend  limitations)
require prior approval of the insurance commissioner and are not restricted to a
specific  calculation.  UG paid an ordinary dividend of $600,000 to UTG in April
2003.

Management   believes  the  overall  sources  of  liquidity  available  will  be
sufficient to satisfy the Company's financial obligations.


Accounting Developments

The Financial  Accounting Standards Board ("FASB") has issued Statement No. 150,
Accounting  for  Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and Equity.  Statement  No. 150 was issued to address how an issuer
classifies and measures certain financial  instruments with  characteristics  of
both  liabilities  and  equity.  It  requires  that an issuer  must  classify  a
financial  instrument  that is within its scope as a  liability  (or an asset in
some  circumstances)  which  may have  previously  been  classified  as  equity.
Examples of such a  financial  instrument  would be shares that are  mandatorily
redeemable  which include an  unconditional  obligation  requiring the issuer to
redeem them by transferring its assets at a specified date or upon an event that
is certain to occur, or a financial  instrument other than an outstanding  share
that, at inception,  includes an  obligation to repurchase  the issuer's  equity
shares and that  requires or may require the issuer to settle the  obligation by
transferring assets.

This  statement  was  effective  at the  beginning of the first  interim  period
beginning  after June 15, 2003.  The Company  adopted  Statement  No. 150 in its
September 30, 2003  financials and as a result,  4,178 shares of common stock no
longer met the  requirements  to be classified  as equity.  The adoption of this
Statement resulted in a reclassification of $49,635 from Shareholders' Equity to
Other Liabilities.



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk relates,  broadly, to changes in the value of financial  instruments
that arise from adverse  movements in interest rates,  equity prices and foreign
exchange rates. The Company is exposed principally to changes in interest rates,
which affect the market  prices of its fixed  maturities  available for sale and
its variable rate debt outstanding.  The Company's exposure to equity prices and
foreign currency exchange rates is immaterial.  The information  presented below
is in U.S. dollars, the Company's reporting currency.

Interest rate risk

The Company could  experience  economic  losses if it were required to liquidate
fixed  income  securities  available  for sale during  periods of rising  and/or
volatile  interest  rates.  The Company  attempts to  mitigate  its  exposure to
adverse  interest rate  movements  through a staggering of the maturities of its
fixed maturity  investments  and through  maintaining  cash and other short term
investments  to  assure  sufficient  liquidity  to meet its  obligations  and to
address reinvestment risk considerations.

Tabular presentation

The following table provides information about the Company's long term debt that
is sensitive to changes in interest  rates.  The table  presents  principal cash
flows and related weighted  average  interest rates by expected  maturity dates.
The Company  has no  derivative  financial  instruments  or  interest  rate swap
contracts.



                               September 30, 2003
                             Expected maturity date

                   2003       2004       2005       2006       2007       Thereafter    Total        Fair value
Long term debt
  Fixed rate        0       763,259    763,259    763,258        0             0     2,289,776        2,401,326
  Avg. int. rate    0           7.0%       7.0%       7.0%       0             0           7.0%               0
  Variable rate     0             0          0          0        0             0             0                0
  Avg. int. rate    0             0          0          0        0             0             0                0



ITEM 4.  CONTROLS AND PROCEDURES

Within  the 90 days  prior  to the  filing  date of this  quarterly  report,  an
evaluation was performed under the supervision and with the participation of the
Company's  management,  including the President and Chief Executive Officer (the
"CEO") and the Chief Financial  Officer (the "CFO"), of the effectiveness of the
design and operation of the Company's disclosure controls and procedures.  Based
on that  evaluation,  the  Company's  management,  including  the  CEO and  CFO,
concluded that the Company's  disclosure  controls and procedures were effective
in  alerting  them on a timely  basis to  material  information  relating to the
Company  required to be  included in the  Company's  periodic  reports  filed or
submitted under the Securities Exchange Act of 1934, as amended. There have been
no significant  changes in the Company's  internal  controls or in other factors
that could significantly  affect internal controls subsequent to the date of the
evaluation.



                          PART II. OTHER INFORMATION.

ITEM 1.  LEGAL PROCEEDINGS.

NONE

ITEM 2.  CHANGE IN SECURITIES.

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

NONE

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

NONE

ITEM 5.  OTHER INFORMATION.

Effective  September 30, 2003, Mr. Robert W. Teater  resigned from the Boards of
United Trust Group,  Inc and Universal  Guaranty Life  Insurance  Company citing
health issues.

At the September 17, 2003 Board of Directors  Meeting,  Mr. Joseph A. Brinck, II
was  unanimously  approved and  appointed as a member of Board of Directors  for
both United Trust Group, Inc and Universal Guaranty Life Insurance Company.  Mr.
Brink is the CEO of Stelter & Brinck,  LTD as well as the  President of Superior
Thermal, LTD.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

Exhibit Number             Description

31.1 Certification of Jesse T. Correll,  Chief Executive Officer and Chairman of
     the Board of UTG, as required pursuant to Section 302

31.2 Certification of Theodore C. Miller,  Chief Financial Officer,  Senior Vice
     President and Corporate  Secretary of UTG, as required  pursuant to Section
     302

32.1 Certificate of Jesse T. Correll,  Chief  Executive  Officer and Chairman of
     the Board of UTG, as required pursuant to 18 U.S.C. Section 1350

32.2 Certificate of Theodore C. Miller,  Chief  Financial  Officer,  Senior Vice
     President and Corporate Secretary of UTG, as required pursuant to 18 U.S.C.
     Section 1350

99.P Code of Ethical Conduct for Senior Financial Officers

(b)      REPORTS ON FORM 8-K

On September 17, 2003,  UTG filed a report on Form 8-K  regarding  Item 5, Other
Events  and  Regulation  FD  Disclosure.  The  information  reported  in the 8-K
discussed the amendment of the Company's  Employee and Director  Stock  Purchase
Plan  due  to  the  issuance  of  FAS  150  "Accounting  for  Certain  Financial
Instruments with Characteristics of both Liabilities and Equity".

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                            UNITED TRUST GROUP, INC.
                                  (Registrant)










Date:   November 10, 2003                By  /s/ Randall L. Attkisson

                                             Randall L. Attkisson
                                             President, Chief Operating Officer
                                                and Director








Date:   November 10, 2003                By  /s/ Theodore C. Miller

                                             Theodore C. Miller
                                             Senior Vice President
                                                and Chief Financial Officer



                                 EXHIBIT INDEX



Exhibit Number             Description



31.1 Certification of Jesse T. Correll,  Chief Executive Officer and Chairman of
     the Board of UTG, as required pursuant to Section 302

31.2 Certification of Theodore C. Miller,  Chief Financial Officer,  Senior Vice
     President and Corporate  Secretary of UTG, as required  pursuant to Section
     302

32.1 Certificate of Jesse T. Correll,  Chief  Executive  Officer and Chairman of
     the Board of UTG, as required pursuant to 18 U.S.C. Section 1350

32.2 Certificate of Theodore C. Miller,  Chief  Financial  Officer,  Senior Vice
     President and Corporate Secretary of UTG, as required pursuant to 18 U.S.C.
     Section 1350

EX-31

                                                                    EXHIBIT 31.1
CERTIFICATIONS


I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of United
Trust Group, Inc., certify that:

1.   I have  reviewed  this  quarterly  report on Form  10-Q of the  registrant,
     United Trust Group, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a.   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     b.   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent  fiscal  quarter  (the  registregistrant's  fourth  fiscal
          quarter in the case of an annual report) that has materially affected,
          or  is  reasonably  likely  to  materially  affect,  the  registrant's
          internal control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation,  of internal control over financial  reporting,
     to the registrant's  auditors and the audit committee of registrant's board
     of directors (or persons performing the equivalent functions):

     a.   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls over financial reporting.


Date:   November 10, 2003                          By  /s/ Jesse T. Correll

                                                       Chairman of the Board and
                                                       Chief Executive Officer
                                                                    EXHIBIT 31.2

CERTIFICATIONS

I,  Theodore C. Miller,  Senior Vice  President,  Corporate  Secretary and Chief
Financial Officer of United Trust Group, Inc., certify that:

1.   I have  reviewed  this  quarterly  report on Form  10-Q of the  registrant,
     United Trust Group, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a.   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     b.   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation,  of internal control over financial  reporting,
     to the registrant's  auditors and the audit committee of registrant's board
     of directors (or persons performing the equivalent functions):

     a.   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls over financial reporting.

Date:   November 10, 2003                   By  /s/ Theodore C. Miller

                                              Senior Vice President, Corporate Secretary and
                                              Chief Financial Officer

EX-32

                                                                    EXHIBIT 32.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of United Trust Group, Inc.
(the "Company") for the quarterly period ended September 30, 2003, as filed with
the  Securities  and Exchange  Commission  on the date hereof (the  "Report") I,
Jesse T.  Correll,  Chairman  of the Board and Chief  Executive  Officer  of the
Company,  certify  pursuant to 18 U.S.C.ss.1350, as adopted pursuant toss.906 of
the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company


                                               By:   /s/ Jesse T. Correll
                                                     Jesse T. Correll
                                                     Chairman of the Board and
                                                     Chief Executive Officer



Date: November 10, 2003


                                                                    EXHIBIT 32.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of United Trust Group, Inc.
(the "Company") for the quarterly period ended September 30, 2003, as filed with
the  Securities  and Exchange  Commission  on the date hereof (the  "Report") I,
Theodore  C.  Miller,  Senior  Vice  President,  Corporate  Secretary  and Chief
Financial  Officer of the  Company,  certify  pursuant to 18 U.S.C.ss. 1350,  as
adopted pursuant toss.906 of the  Sarbanes-Oxley  Act of 2002, that, to the best
of my knowledge:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company


                                 By:    /s/ Theodore C. Miller
                                        Theodore C. Miller
                                        Senior Vice President, Corporate Secretary and
                                        Chief Financial Officer


Date: November 10, 2003