July 7, 2005

Ibolya Ignat, Staff Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

Dear Ms. Ignat:

As a follow-up to our recent telephone conversation,  as requested,  please find
below  our  proposed  expanded  discussion  we  plan  to use in  future  filings
regarding  question 1 of your letter dated June 1, 2005. We have prepared  these
additional  disclosures based on the Company's  year-end  financial  statements.
This  disclosure  would be modified as  appropriate to reflect future changes in
the facts on which they are based. If the SEC staff has no further comment,  the
Company will utilize this  information  in its upcoming  Form 10Q.  Also at your
request, please find additional  supplemental  information relative to questions
4, 5 & 6.

Question 1 response - proposed expanded discussion.

Sources of operating  cashflows of the Company, as with most insurance entities,
is comprised  primarily  for premiums  received on life  insurance  products and
income earned on investments.  Uses of operating  cashflows consist primarily of
payments of benefits to policyholders and beneficiaries and operating expenses.

Premiums received have shown a steady decline  historically,  as the Company has
not  actively  marketed  new  products in several  years.  Sources of  operating
cashflows  declined  approximately  $1,000,000  in 2004  compared to 2003,  with
premium decline  representing almost all of the decrease.  2003 compared to 2002
reflected  a decline of  approximately  $3,600,000  with  premiums  representing
approximately  22%  of  the  decline  and  investment  income  representing  the
remaining  decline.  See discussion under results of operations - revenues for a
more detailed discussion of the declines in premiums and investment income.

The decline in operating cash sources has  historically  been offset by declines
in policy  benefits  payments.  Cash  payments  for death claims  represent  the
largest  component  of uses of cash within  policy  benefits.  Uses of operating
cashflows  declined  approximately  $2,000,000  in 2004  compared to 2003.  This
decline is the result of a decrease in operating expenses as a result of a legal
matter  settled  in  2003.  2003  compared  to 2002  resulted  in a  decline  of
approximately  $1,600,000,  with  operating  expenses  increasing  approximately
$1,700,000  from  the  legal  matter  settlement  in  2003  and  a  decrease  of
approximately  $3,300,000  in policy  benefit  payments.  See  discussion  under
results of  operations - expenses for a more  detailed  discussion of changes in
operating expenses and policy benefits.

Question 4 response - expanded explanation

     Response:  The  Company  offers  various  life  insurance  products  to its
     customers.  We believe these product  offerings are similar and represent a
     single  marketplace.  All  are to  provide  protection  on the  life of the
     individual  insured.  Each product may have slightly varied options such as
     face amount of policy available or premium payment options,  but all remain
     similar in nature overall and target the same groups of clients.

     A more detailed breakdown of revenues from each product is impracticable.

Question 5 & 6 response - additional information

     Response:   Almost  all  (99.8%)  of  the  reinsurance  assumed  represents
     Universal Guaranty Life Insurance  Company's (UG) percentage  participation
     in the Servicemembers  Group Life Insurance program (SGLI). This program is
     administered by Prudential,  one of the nations largest insurance entities.
     SGLI provides term life  insurance  coverage to members of the armed forces
     of the  United  States.  UG's  participation  in this  pool is very  small,
     approximately  two  tenths  of  one  percent  (.2%)  of  the  entire  pool.
     Prudential  is a major  participant  in this  pool  as are  many  insurance
     companies,   including  most  of  the  major  carriers  in  the  U.S.  This
     arrangement  has  been  in  existence  for  many  years  as has  been  UG's
     participation  in  the  arrangement.  Management  feels  confident  in  the
     administration and handling of this pool arrangement by Prudential and does
     not believe there to be any significant  uncertainties  to this arrangement
     as compared to other  insurance  policies  currently in force.  UG received
     approximately $2,000 in 2004 under this arrangement.

     The  Company's  direct  written  life  insurance  and ceded life  insurance
     represents individual permanent life insurance products.  Policies in force
     under the SGLI  program  represent  group  term life  insurance.  Term life
     insurance is not  permanent in nature,  rather it provides  life  insurance
     coverage  over a period of time.  Additionally,  in order to  maintain  the
     insurance,  the insured must remain a member of the defined group,  in this
     case a member of the armed forces of the United States.  Once membership of
     the group terminates,  the insurance coverage also terminates.  The Company
     maintains no additional liabilities in its financial statements relative to
     the SGLI program. The program  administrator  (Prudential)  withholds funds
     from the annual  distribution to  participants as a contingent  reserve for
     future  potential   adverse   experience.   Annually,   the   administrator
     distributes  the  previous  years  results  to the  participants  less  the
     withheld  contingency reserve. As previously noted, this amounted to $2,000
     in 2004 to the Company. No other line items of the financial statements are
     impacted  under this  arrangement  other than the  recording  of the annual
     distribution. Management views this annual distribution to be immaterial to
     the financial statements of the Company.

Please  contact  me should  you have any  additional  questions  regarding  this
response or our original response.

Sincerely,

/s/ Theodore C. Miller

Theodore C. Miller
Sr. Vice President