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 June 30, 2005

                                       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

                                   UTG, INC.
             (Exact name of registrant as specified in its charter)

DELAWARE                                                              20-2907892
(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 July 29,
2005, was 3,940,893.



                           UTG, INC. AND SUBSIDIARIES
                                (The "Company")



                               TABLE OF CONTENTS

PART 1.   FINANCIAL INFORMATION................................................3


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

     Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004.....3
     Consolidated Statements of Operations for the three and six months
         ended June 30, 2005 and 2004..........................................4
     Consolidated Statement of Changes in Shareholders' Equity for the six
         months ended June 30, 2005............................................5
     Consolidated Statements of Cash Flows for the six months ended
         June 30, 2005 and 2004................................................6
     Notes to Consolidated Financial Statements................................7

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS................................................12

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........17

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

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


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

   ITEM 2.  CHANGE IN SECURITIES AND USE OF PROCEEDS..........................19

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

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

   ITEM 5.  OTHER INFORMATION.................................................20

   ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..................................20


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

EXHIBIT INDEX, FOLLOWED BY EXHIBITS...........................................23




                          PART 1. FINANCIAL INFORMATION
                          Item 1. Financial Statements

                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

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

                                                                                    June 30,            December 31,
                          ASSETS                                                      2005                  2004*
                                                                               ------------------    ------------------

Investments:
    Fixed maturities at amortized cost
      (market $9,637,615 and $12,097,708)                                   $          9,577,567  $         11,973,415
    Investments held for sale:
      Fixed maturities, at market (cost $134,519,452 and $147,217,453)               135,438,744           148,193,887
      Equity securities, at market (cost $14,184,971 and $15,216,214)                 23,623,214            24,399,172                    23,623,214
    Mortgage loans on real estate at amortized cost                                   32,129,367            20,722,415                             -
    Investment real estate, at cost, net of accumulated depreciation                  28,590,899            28,192,081
    Policy loans                                                                      12,769,296            12,844,748
    Short-term investments                                                                39,854                39,489
                                                                               ------------------    ------------------
                                                                                     242,168,941           246,365,207

Cash and cash equivalents                                                             17,135,724            11,859,472
Securities of affiliate                                                                4,000,000             4,000,000
Accrued investment income                                                              1,623,848             1,678,393
Reinsurance receivables:
    Future policy benefits                                                            32,086,779            32,422,529
    Policy claims and other benefits                                                   3,823,306             3,959,569
Cost of insurance acquired                                                            11,818,676            12,747,532
Deferred policy acquisition costs                                                      1,552,314             1,685,263
Property and equipment, net of accumulated depreciation                                2,061,307             2,172,636
Income taxes receivable, current                                                         168,998               181,683
Other assets                                                                             617,818               795,800
                                                                               ------------------    ------------------
          Total assets                                                      $        317,057,711  $        317,868,084
                                                                               ==================    ==================

                    LIABILITIES AND SHAREHOLDERS' EQUITY

Policy liabilities and accruals:
Future policy benefits                                                      $        235,422,105  $        235,592,973
Policy claims and benefits payable                                                     1,829,032             1,879,566
Other policyholder funds                                                               1,264,294             1,323,668
Dividend and endowment accumulations                                                  12,575,886            12,526,390
Deferred income taxes                                                                  8,410,356             8,561,010
Other liabilities                                                                      5,755,684             7,405,434
                                                                               ------------------    ------------------
          Total liabilities                                                          265,257,357           267,289,041
                                                                               ------------------    ------------------
Minority interests in consolidated subsidiaries                                        6,156,954             6,127,938
                                                                               ------------------    ------------------

Shareholders' equity:
Common stock - no par value, stated value $.02 per share
Authorized 7,000,000 shares - 3,947,003 and 3,965,533 shares issued
    after deducting treasury shares of 246,239 and 227,709                                78,947                79,315
Additional paid-in capital                                                            42,478,759            42,590,820
Accumulated deficit                                                                   (3,113,488)           (4,897,572)
Accumulated other comprehensive income                                                 6,199,182             6,678,542
                                                                               ------------------    ------------------
          Total shareholders' equity                                                  45,643,400            44,451,105
                                                                               ------------------    ------------------
          Total liabilities and shareholders' equity                        $        317,057,711  $        317,868,084
                                                                               ==================    ==================

* Balance sheet audited at December 31, 2004.

                            See accompanying notes.




                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

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

                                                                  Three Months Ended                    Six Months Ended
                                                              June 30,          June 30,           June 30,          June 30,
                                                                2005              2004               2005              2004
                                                           ---------------   ----------------   ---------------   ----------------
Revenues:

    Premiums and policy fees                            $       4,316,761 $        4,513,150 $       8,521,721 $        9,134,108
    Reinsurance premiums and policy fees                         (795,524)          (841,483)       (1,487,789)        (1,588,296)
    Net investment income                                       2,356,705          2,734,854         4,789,964          4,565,931
    Realized investment gains (losses), net                     2,195,958               (619)        2,177,900            (92,754)
    Other income                                                  280,753            201,301           549,590            421,561
                                                           ---------------   ----------------   ---------------   ----------------
                                                                8,354,653          6,607,203        14,551,386         12,440,550

Benefits and other expenses:

    Benefits, claims and settlement expenses:
      Life                                                      3,634,033          5,474,567         8,504,080         10,347,645
      Reinsurance benefits and claims                            (365,406)        (1,091,949)         (669,702)        (1,358,912)
      Annuity                                                     268,183            288,938           518,251            569,633
      Dividends to policyholders                                  240,920            251,736           516,927            536,968
    Commissions and amortization of deferred
      policy acquisition costs                                    (75,815)            39,322           (58,444)            64,738
    Amortization of cost of insurance acquired                    463,293            466,550           928,856            934,418
    Operating expenses                                          1,622,680          1,432,013         2,879,564          2,829,461
    Interest expense                                                    0             24,709                13             50,343
                                                           ---------------   ----------------   ---------------   ----------------
                                                                5,787,888          6,885,886        12,619,545         13,974,294

Gain (loss) before income taxes, minority interest
    and equity in earnings of investees                         2,566,765           (278,683)        1,931,841         (1,533,744)

Income tax credit (expense)                                      (212,657)           489,652          (118,754)           611,160
Minority interest in (income) loss of
    consolidated subsidiaries                                     (23,456)          (144,128)          (29,003)           115,230
                                                           ---------------   ----------------   ---------------   ----------------

Net income (loss)                                       $       2,330,652 $           66,841 $       1,784,084 $         (807,354)
                                                           ===============   ================   ===============   ================

Basic income (loss) per share from continuing
    operations and net income (loss)                    $            0.59 $             0.02 $            0.45 $            (0.20)
                                                           ===============   ================   ===============   ================

Diluted income (loss) per share from continuing
    operations and net income (loss)                    $            0.59 $             0.02 $            0.45 $            (0.20)
                                                           ===============   ================   ===============   ================

Basic weighted average shares outstanding                       3,952,164          3,980,811         3,956,368          3,983,358
                                                           ===============   ================   ===============   ================

Diluted weighted average shares outstanding                     3,952,164          3,980,811         3,956,368          3,983,358
                                                           ===============   ================   ===============   ================

                            See accompanying notes.




                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES
            Consolidated Statement of Changes in Shareholders' Equity
               For the six months ended June 30, 2005 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------


Common stock
    Balance, beginning of year                                      $            79,315
    Issued during year                                                                0
    Retired common shares                                                             0
    Purchase treasury shares                                                       (368)
                                                                      ------------------
    Balance, end of period                                                       78,947
                                                                      ------------------

Additional paid-in capital
    Balance, beginning of year                                               42,590,820
    Issued during year                                                                0
    Retired common shares                                                             0
    Purchase treasury shares                                                   (112,061)
                                                                      ------------------
    Balance, end of period                                                   42,478,759
                                                                      ------------------

Accumulated deficit
    Balance, beginning of year                                               (4,897,572)
    Net income                                                                1,784,084       $         1,784,084
                                                                      ------------------        ------------------
    Balance, end of period                                                   (3,113,488)
                                                                      ------------------

Accumulated other comprehensive income
    Balance, beginning of year                                                6,678,542
    Other comprehensive income
      Unrealized holding loss on securities net of
        minority interest and reclassification adjustment                      (479,360)                 (479,360)
                                                                      ------------------        ------------------
    Comprehensive income                                                                      $         1,304,724
                                                                                                ==================
    Balance, end of period                                                    6,199,182
                                                                      ------------------

Total shareholders' equity, end of period                           $        45,643,400
                                                                      ==================

                            See accompanying notes.





                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

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

                                                                                          Six Months Ended
                                                                                     June 30,           June 30,
                                                                                       2005               2004
                                                                                  ---------------    ---------------
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
 Net income (loss)                                                              $       1,784,084  $        (807,354)
 Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Amortization/accretion of fixed maturities                                           355,026            291,407
     Realized investment (gains) losses, net                                           (2,177,900)            92,754
     Policy acquisition costs deferred                                                    (14,000)            (9,000)
     Amortization of deferred policy acquisition costs                                    146,949            149,690
     Amortization of cost of insurance acquired                                           928,856            934,418
     Depreciation                                                                       1,039,090            599,885
     Minority interest                                                                     29,016            955,913
     Change in accrued investment income                                                   54,545            257,808
     Change in reinsurance receivables                                                    472,013            231,415
     Change in policy liabilities and accruals                                            345,217            891,705
     Charges for mortality and administration of
       universal life and annuity products                                             (4,577,979)        (4,703,525)
     Interest credited to account balances                                              2,673,277          2,710,746
     Change in income taxes payable                                                     1,088,737           (611,928)
     Change in other assets and liabilities, net                                       (1,470,358)          (796,845)
                                                                                  ---------------    ---------------
Net cash provided by operating activities                                                 676,573            187,089

Cash flows from investing activities:
 Proceeds from investments sold and matured:
   Fixed maturities held for sale                                                      17,699,090         47,830,852
   Fixed maturities matured                                                             2,800,406         10,627,244
   Equity securities                                                                    2,300,000                  0
   Mortgage loans                                                                       2,459,517          6,712,921
   Real estate                                                                                  0             87,141
   Policy loans                                                                         1,811,434          1,434,554
                                                                                  ---------------    ---------------
 Total proceeds from investments sold and matured                                      27,070,447         66,692,712
 Cost of investments acquired:
   Fixed maturities held for sale                                                      (5,268,921)       (48,702,180)
   Fixed maturities                                                                      (493,359)        (1,387,595)
   Equity securities                                                                            0         (8,033,053)
   Mortgage loans                                                                     (13,892,440)        (1,176,737)
   Real estate                                                                         (2,276,634)        (3,817,178)
   Policy loans                                                                        (1,735,982)        (1,210,886)
   Short-term                                                                                (234)              (214)
                                                                                  ---------------    ---------------
 Total cost of investments acquired                                                   (23,667,570)       (64,327,843)
 Purchase of property and equipment                                                       (18,974)            (9,977)
                                                                                  ---------------    ---------------
Net cash provided by investing activities                                               3,383,903          2,354,892

Cash flows from financing activities:
 Policyholder contract deposits                                                         4,431,978          4,735,116
 Policyholder contract withdrawals                                                     (3,103,773)        (3,645,819)
 Proceeds from line of credit                                                                   0          2,275,000
 Purchase of treasury stock                                                              (112,429)           (67,058)
 Payments of principal on notes payable                                                         0         (2,289,776)
                                                                                  ---------------    ---------------
Net cash provided by financing activities                                               1,215,776          1,007,463
                                                                                  ---------------    ---------------

Net increase in cash and cash equivalents                                               5,276,252          3,549,444
Cash and cash equivalents at beginning of period                                       11,859,472          8,749,727
                                                                                  ---------------    ---------------
Cash and cash equivalents at end of period                                      $      17,135,724  $      12,299,171
                                                                                  ===============    ===============

                            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,
2004.

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  June 30,  2005,  Mr.  Correll  owns or  controls  directly  and
indirectly approximately 66% of UTG's outstanding stock.

At June 30, 2005, consolidated  subsidiaries of United Trust Group, Inc. were as
depicted  on  the  following  organizational  chart.

Effective July 1, 2005, United Trust Group, Inc was merged into its wholly-owned
subsidiary, UTG, Inc. (See Note 10).



2.  INVESTMENTS

As of June 30, 2005 and December 31, 2004, fixed maturities and fixed maturities
held for sale represented 58% and 65%,  respectively,  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 June 30, 2005, 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 June 30,  2005 and  December 31,  2004,  the Company  had no  long-term  debt
outstanding.

On November 15, 2001, UTG was extended a $ 3,300,000 line of credit ("LOC") from
the First National Bank of Tennessee ("FNBT") located in Livingston,  Tennessee.
The LOC was for a  one-year  term  from the date of  issue.  Upon  maturity  the
Company  had renewed  the LOC for  additional  terms  until  June 1,  2005.  The
interest  rate on the LOC was  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.  The Company had no borrowings  attributable  to
this LOC during 2005. In order to provide greater operational flexibility,  this
LOC was transferred to the Company's  wholly-owned insurance subsidiary upon the
June 1, 2005 maturity.

On June 1,  2005,  UG, a subsidiary  of the Company,  was extended a $ 3,300,000
line of credit from the FNBT.  The LOC was for a one-year  term from the date of
issue. The interest rate on the LOC was 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  June 30,  2005,  the Company had no
outstanding borrowings attributable to this LOC.

On April 1,  2002, UTG was extended a $ 5,000,000  line of credit from Southwest
Bank of St. Louis.  The LOC expired one-year from the date of issue and has been
renewed for  additional  terms.  As  collateral  for any draws under the line of
credit,  UTG pledged 100% of the common stock of its insurance  subsidiary,  UG.
Borrowings  under  the LOC  bear  interest  at the  rate of  .25% in  excess  of
Southwest  Bank of St. Louis' prime rate. At June 30,  2005,  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.

During 2004 and 2003, the Board of Directors of UTG approved offerings under the
plan to qualified individuals.  For the years ended December 31,  2004 and 2003,
four individuals  purchased 14,440 and eight individuals purchased 58,891 shares
of UTG common stock,  respectively.  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 June 30,
2005, UTG had 89,877 shares outstanding that were issued under this program with
a value of $ 12.31 per share pursuant to the above formula.


B.  Stock Repurchase Program

On June 5,  2001, the Board of Directors of UTG authorized the repurchase in the
open  market or in  privately  negotiated  transactions  of up to $ 1 million of
UTG's common stock.  On June 16,  2004, an additional $ 1 million was authorized
for repurchased shares. Repurchased shares are available for future issuance for
general corporate purposes.  Through July 30, 2005, UTG has spent $ ,283,573 in
the acquisition of 197,182 shares 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  June 30,  2005,  diluted  earnings  per  share  were the same as basic
earnings per share since the UTG had no dilutive instruments outstanding.


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.

On June 10,  2002 UTG and Fiserv  formed an alliance  between  their  respective
organizations to provide third party  administration (TPA) services to insurance
companies seeking business process outsourcing solutions.  Fiserv is responsible
for the marketing and sales function for the alliance,  as well as providing the
operations  processing  service  for the  Company.  The  Company  will staff the
administration  effort. To facilitate the alliance, the Company plans to convert
its  existing  business  and TPA clients to "ID3",  a software  system  owned by
Fiserv to  administer  an array of life,  health  and  annuity  products  in the
insurance industry.  Fiserv 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.  The Company began the conversion of its existing  insurance business
to the "ID3" software system in February 2004. Also as part of this alliance,  a
liability   exists  which  is  contingent  on  the   completion  of  future  TPA
arrangements.  The balance remaining of this contingent  liability was $ 115,000
on June 30, 2005.

Also during June 2002, the Company entered into a five-year contract with Fiserv
for services  related to its purchase of the "ID3"  software  system.  Under the
contract,  the Company is  required  to pay a minimum of  $ 12,000  per month in
software  maintenance  costs and $ 5,000 per month in offsite  data center costs
for a five-year period from the date of the signing.

In the normal  course of business  the Company is involved  from time to time in
various  legal  actions and other state and federal  proceedings.  There were no
proceedings pending or threatened as of June 30, 2005.


6.  OTHER CASH FLOW DISCLOSURE

On a cash basis,  the Company paid $ 13 and $ 50,343 in interest  expense during
the first six months of 2005 and 2004, respectively. The Company paid no federal
income tax during the first six months of 2005 and 2004, respectively.


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  $ 11,386,000 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
              June 30, 2005                                     Amount              or Benefit           Amount
              ----------------------------------------------    ----------------    -----------------    ---------------

              Unrealized holding loss during
                   period                                   $         (696,746) $           243,861  $         (452,885)
              Less: reclassification adjustment
                   for losses realized in net income                    40,731               14,256              26,475
                                                                ----------------    -----------------    ---------------
              Net unrealized loss                                     (737,477)             258,117            (479,360)
                                                                ----------------    -----------------    ---------------
              Other comprehensive income                    $         (737,477) $           258,117  $         (479,360)
                                                                ================    =================    ===============


9.  NEW ACCOUNTING STANDARDS

The  Financial  Accounting  Standards  Board  ("FASB")  has not  issued  any new
pronouncements during the first or second quarters of 2005.


10. SUBSEQUENT EVENT

On July 1, 2005, United Trust Group, Inc. (UTG), an Illinois corporation, merged
with and into its  wholly-owned  subsidiary,  UTG, Inc.  (UTG,  Inc), a Delaware
corporation,  for the purpose of  effecting a change in the  Company's  state of
incorporation  from  Illinois to Delaware.  The merger was effected  pursuant to
that certain  Agreement and Plan of Merger dated as of April 4, 2005,  which was
approved by the boards of  directors  of both UTG and UTG,  Inc.  The merger was
approved by the holders of two-thirds of the outstanding  shares of common stock
of UTG at the 2005 annual meeting of  shareholders  on June 15, 2005, and by the
sole stockholder of UTG, Inc. on June 15, 2005.



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
financial condition, changes in financial position and results of operations for
the three months and six months  ended  June 30,  2005,  as compared to the same
period  of 2004,  of UTG and its  subsidiaries.  This  discussion  and  analysis
supplements Management's Discussion and Analysis in Form 10-K for the year ended
December 31,  2004, and should be read in conjunction with the interim financial
statements and 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 June 30, 2005.

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.

Update on Critical Accounting Policies

In our  Form  10-K for the year  ended  December 31,  2004,  we  identified  the
accounting  policies  that are critical to the  understanding  of our results of
operations and our financial position. They relate to deferred acquisition costs
(DAC),  cost of  insurance  acquired,  assumptions  and  judgments  utilized  in
determining if declines in fair values of investments are  other-than-temporary,
and valuation methods for investments that are not actively traded.

We believe that these  policies  were applied in a consistent  manner during the
first six months of 2005.


Results of Operations

(a) Revenues

The Company  experienced a nominal decrease in premiums and policy fee revenues,
net of reinsurance premiums and policy fees, when comparing the first six months
of 2005 to the same period in 2004.  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.

The  Company's  primary  source  of  new  business  production  comes  from  the
conservation effort implemented several years ago. This effort was an attempt to
improve the persistency rate of the insurance company's policies. Several of the
customer  service  representatives  of the Company are also  licensed  insurance
agents,  allowing them to offer other products within the Company's portfolio to
existing  customers.  Additionally,  stronger  efforts  have been made in policy
retention  through more personal contact with the customer  including  telephone
calls to discuss  alternatives and reasons for a customer's request to surrender
their policy.  Previously,  the Company's agency force was primarily responsible
for  conservation  efforts.  With the  decline in the  number of  agents,  their
ability  to  reach  these  customers  diminished,  making  conservation  efforts
difficult.   The  conservation  efforts  described  above  have  been  generally
positive. Management will continue to monitor these efforts and make adjustments
as seen  appropriate to enhance the future success of the program.  In 2003, the
Company  replaced its original  universal life product with a new universal life
contract  referred to as "the  Legacy".  This  product was designed for use with
several distribution  channels including the Company's own internal agents, bank
agent/employees  and through  personally  producing  general agents  "PPGA".  In
addition,  the Company has introduced  other new and updated  products in recent
periods including the Horizon Annuity and Kid Kare (a single premium, child term
policy).  The company is currently  working on  development  of a level term and
decreasing term product.  Management has no current plans to increase  marketing
efforts.  New product  development is anticipated to be utilized in conservation
efforts  and sales to  existing  customers.  Such sales are not  expected  to be
material.

The Company has considered the feasibility of a marketing opportunity with First
Southern  National  Bank  (FSNB)  an  affiliate  of UTG's  largest  shareholder,
Chairman  and CEO, Mr.  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.  The Company has designed an annuity  product  ("Horizon") as
well as two life  products  ("Legacy"  and "Kid  Kare")  which are to be used in
marketing  efforts by FSNB. The  introduction of these new products is currently
not expected to produce significant  premium writings.  The Company is currently
looking at other products to compliment the existing offerings.

Net investment  income  increased 5% when comparing the first six months of 2005
to the same period in 2004.  While there has been a significant  increase in the
national prime rate during the last year, from 4.00% to 6.25%, this has not been
the driving  factor in the  increase in the  Company's  net  investment  income.
Interest  rates  on  long-term  bonds  available  in the  marketplace  have  not
experienced a similar  increase.  Management has begun to lengthen the Company's
portfolio  while  maintaining a  conservative  investment  philosophy.  As such,
following  an analysis of current  holdings  during the first half of 2004,  the
Company liquidated  approximately  $ 38,212,000 of its  collateralized  mortgage
obligation  bond  portfolio  in order to limit its interest  rate and  extension
risk. In addition,  there were $ 20,246,000 in bonds that matured or were called
during the first six months of 2004. The result of these transactions  caused an
excess of cash  invested in  short-term  money market funds during the first six
months of 2004.  The  Company  reinvested  this  cash over the next nine  months
primarily in governmental  bonds at lower yields.  Although this hurt investment
earnings in the short run,  the Company has not had to write off any  investment
losses due to excessive risk.

In response to the interest  rate  environment  in the bond market,  the Company
increased  its  investment  in mortgage  loans.  The  balance of  mortgage  loan
investments  increased  from  approximately  $ 21,180,000  at  June 30,  2004 to
$ 32,129,000  at June 30,  2005.  This has allowed the Company to obtain  higher
yields than available in the bond market, lengthen the overall portfolio average
life and still maintain a conservative  investment  portfolio.  During 2005, the
Company issued  $ 13,892,440 in new mortgage loans.  These loans have an average
loan to value rate of 43% and an average yield of 5.88%.

More  significant  than the  change in bond  income was the  performance  of the
Company's real estate  investments  during the first six months of 2005 compared
to 2004. Net income from the Company's primary real estate holding improved more
than  $ 400,000  in  comparing  the  first  six  months  of  2005 to  2004.  The
improvement  in real estate  investment  income is  principally  due to a higher
occupancy lease rate resulting in increased earnings in Hampshire Plaza.

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%. The Company has lowered all rate-adjustable  products to their guaranteed
minimums. The guaranteed minimum crediting rates on these products range from 3%
to 5.5%.  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 realized  investment gains of $ 2,177,900 in the first six months of
2005 compared to net realized  investment losses of $ 92,754 for the same period
in 2004. The net realized gains in 2005 were primarily the result of the sale of
2,216,776  shares of common stock owned of BNL  Financial  Corporation  ("BNL").
These shares represented  approximately  10.57% of the then current  outstanding
shares of BNL and represent  all shares owned by UG. The shares were  reacquired
by the issuing  entity for an agreed upon sales  price of  $ 2,300,000.  The net
realized loss in 2004 is primarily  comprised of $ 93,969 in net realized losses
from  the  disposal  of  the  collateralized   mortgage  obligations  previously
discussed.

Other income  increased  when comparing the first six months of 2005 to the same
period in 2004.  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 six months of 2005 and
2004, the Company received $ 452,844 and $ 274,760 respectively,  for this work.
These TPA  revenue  fees are  included  in the line item  "other  income" on the
Company's  consolidated  statements of operations.  During the second quarter of
2004, the Company reached an agreement with an insurance  provider that provides
approximately  $ 300,000  in  gross  annual  revenue  for  these  services.  The
agreement  began  during  the third  quarter  of 2004.  The  Company  intends to
continue to pursue other TPA arrangements  through its alliance with Fiserv Life
Insurance Solutions (Fiserv LIS), to provide TPA services to insurance companies
seeking business process  outsourcing  solutions.  Fiserv LIS is 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.  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,  decreased  12% in the first six  months  of 2005  compared  to the same
period in 2004. Policy claims decreased  $ 1,844,000 for the first six months of
2005  compared to the same period in 2004.  Policy claims vary from year to year
and  therefore,  fluctuations  in  mortality  are to be  expected  and  are  not
considered unusual by management. Policy surrenders decreased when comparing the
first six months of 2005 to the same period in 2004. Consequently, the change in
reserves  decreased due to a leveling of  surrenders,  reduction in premiums and
decreased  interest crediting rates.  Overall,  reserves continue to increase on
in-force policies as the age of the insured increases.

Commissions  and  amortization of deferred  policy  acquisition  costs decreased
$ 128,744  for the first six months of 2005 compared to the same period in 2004.
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 slightly in the first six months of 2005 compared
to the same period in 2004.  The  increase in  expenses is due  primarily  to an
increase  in  information  technology  costs.  Excluding  these  expense  items,
expenses  declined due to reductions  made in the normal course of business,  as
the Company  simplifies its  organizational  structure and continually  monitors
expenditures looking for savings opportunities.

Interest expense  decreased 100% in the first six months of 2005 compared to the
same  period in 2004.  The  Company  repaid all  outside  debt in 2004,  through
operating cash flows and dividends  received from its subsidiary UG. At June 30,
2005, UTG had no debt outstanding.

(c) Net income

The  Company  had a net gain of  $ 1,784,084  in the  first  six  months of 2005
compared to a net loss of $ 807,354 for the same period in 2004. The net gain in
2005 was mainly  attributable  to the gain from the sale of the common  stock of
BNL  during  the  second  quarter  of  2005.  The net  loss in 2004  was  mainly
attributable to the decrease in investment income and premium income.


Financial Condition

The financial  condition of the Company has improved  since  December 31,  2004.
Total shareholders'  equity increased  approximately  $ 1,192,000 as of June 30,
2005 compared to  December 31,  2004. The increase is  attributable  to the gain
from  operations,  as  described  above.  This  offset  the  decline  in  equity
investments of approximately $ 479,000, net of deferred taxes, that was included
in the accumulated other  comprehensive  income.  The Company purchased treasury
shares in the amount of $ 112,429, which decreased shareholders' equity.

Investments represent approximately 76% and 78% of total assets at June 30, 2005
and December 31,  2004, respectively.  Accordingly,  investments are the largest
asset group of the Company.  The Company's insurance  subsidiary is regulated by
insurance  statutes and  regulations  as to the type of  investments  that it is
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 June 30,  2005, 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  two  principal  needs  for  cash  - the  insurance  company's
contractual  obligations to policyholders and the payment of operating expenses.
Cash and cash equivalents as a percentage of total assets were  approximately 5%
and  4%  as  of  June 30,  2005,  and  December 31,  2004,  respectively.  Fixed
maturities as a percentage of total assets were  approximately 46% and 50% as of
June 30, 2005 and December 31, 2004, respectively.

Net cash  provided by operating  activities  was $ 676,573 and $ 187,089 for the
six months ending June 30, 2005 and 2004, respectively.

Sources of operating cash flows of the Company, as with most insurance entities,
is  comprised  primarily  of premiums  received on life  insurance  products and
income earned on investments.  Uses of operating cash flows 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.  Premiums  received  have
shown a steady decline  historically,  as the Company has not actively  marketed
new  products  in  several  years.  Sources  of  operating  cashflows  increased
approximately  $ 2,100,000  in 2005  compared  to 2004,  with  investment  gains
representing  almost  all of the  increase.  See  discussion  under  results  of
operations - revenues for a more detailed  discussion of the changes 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.  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 $ 1,300,000 in 2005 compared to 2004. This decline is the
result of a decrease in policy benefit payments. See discussion under results of
operations - expenses  for a more  detailed  discussion  of changes in operating
expenses and policy benefits.

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 investing  activities was  $ 3,383,903  and $ 2,354,892 for
the  six-month  periods  ending June 30, 2005 and 2004,  respectively.  The most
significant  aspect  of cash  provided  by  investing  activities  is the  fixed
maturity  transactions.  The  Company  had  fixed  maturities  in the  amount of
$ 17,699,090 and  $ 47,830,852  that sold and matured in the first six months of
2005  and  2004,  respectively.  This  is in  addition  to the  $ 2,800,406  and
$ 10,627,244  of the held to maturity  securities  that matured in the first six
months  of 2005 and 2004,  respectively.  In  addition,  the  Company  purchased
$ 5,762,280 and $ 50,089,775 of fixed maturities in 2005 and 2004, respectively.
Also, the investment in mortgage loans  increased from  $ 1,176,737 in the first
six months of 2004 to $ 13,892,440 in the same period of 2005.

Net cash provided by financing  activities was  $ 1,215,776  and $ 1,007,463 for
the six month periods ending June 30, 2005 and 2004, respectively.  Policyholder
contract  deposits  decreased 6% in the first six months of 2005 compared to the
same period in 2004.  Policyholder  contract  withdrawals  decreased  15% in the
first six months of 2005 compared to the same period in 2004.

At June 30, 2005, the Company had no short-term  debt  outstanding,  compared to
$ 2,275,000 outstanding at June 30, 2004.

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  June 30,  2005,   substantially  all  of  the
consolidated shareholders equity represents net assets of its subsidiaries.  The
Company's  insurance  subsidiary has maintained  adequate  statutory capital and
surplus and has 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,
2004 UG's total  statutory  capital and surplus  amounted  to  $ 21,860,401.  At
December 31,  2004,  UG had a  statutory  loss  from  operations  of  $ 762,152.
Extraordinary  dividends  (amounts in excess of ordinary  dividend  limitations)
require prior approval of the insurance commissioner and are not restricted to a
specific calculation.

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


Regulatory Environment

In March 2005,  UTG's Board of Directors  adopted a proposal to change the state
of incorporation of UTG from Illinois to Delaware by merging UTG with and into a
wholly-owned  Delaware subsidiary (the "reincorporation  merger").  The Board of
Directors and management of UTG believe that  reincorporation  in Delaware would
be  beneficial  to  the  Company   because   Delaware   corporate  law  is  more
comprehensive,   widely  used  and  extensively  interpreted  than  other  state
corporate laws,  including  Illinois corporate law. The  reincorporation  merger
will effect only a change in UTG's legal domicile and certain other changes of a
legal nature.  It will not result in any change in UTG's  business,  management,
fiscal year, assets or liabilities or location of its principal  facilities.  At
the  2005  annual  meeting  of  shareholders,   the  shareholders  approved  the
reincorporation merger to be effective July 1, 2005.


Accounting Developments

The  Financial  Accounting  Standards  Board  ("FASB")  has not  issued  any new
pronouncements during the first six months of 2005.


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's  exposure to interest  rate changes  results  from a  significant
holding of fixed maturity  investments and mortgage loans on real estate, all of
which  comprised  approximately  73% of the investment  portfolio as of June 30,
2005.  These  investments are mainly exposed to changes in treasury  rates.  The
fixed maturities investments include U.S. government bonds, securities issued by
government agencies,  mortgage-backed  bonds and corporate bonds.  Approximately
77% of the fixed maturities owned at June 30, 2005 are instruments of the United
States  government  or  are  backed  by  U.S.  government  agencies  or  private
corporations  carrying  the  implied  full faith and credit  backing of the U.S.
government.

To manage interest rate risk, the Company performs periodic projections of asset
and  liability  cash  flows  to  evaluate  the  potential   sensitivity  of  the
investments and liabilities.  Management assesses interest rate sensitivity with
respect  to  the   available-for-sale   fixed   maturities   investments   using
hypothetical  test  scenarios  that assume either  upward or downward  100-basis
point shifts in the prevailing  interest rates.  The following  tables set forth
the  potential  amount of  unrealized  gains  (losses)  that  could be caused by
100-basis  point  upward and  downward  shifts on the  available-for-sale  fixed
maturities investments as of June 30, 2005:


        Decreases in Interest Rates                Increases in Interest Rates
        ----------------------- ------------------ ----------------- ---------------------- -----------------------
              200 Basis               100 Basis          100 Basis         200 Basis              300 Basis
               Points                  Points             Points            Points                 Points
        ----------------------- ------------------ ----------------- ---------------------- -----------------------
            $ 6,707,000             $ 4,206,000        $ (5,060,000)     $ (10,694,000)         $ (16,062,000)
        ----------------------- ------------------ ----------------- ---------------------- -----------------------

While the test scenario is for  illustrative  purposes only and does not reflect
our  expectations   regarding  future  interest  rates  or  the  performance  of
fixed-income  markets,  it is a near-term  change that illustrates the potential
impact of such events. Due to the composition of the Company's book of insurance
business,  management  believes it is unlikely that the Company would  encounter
large  surrender  activity due an interest  rate  increase  that would force the
disposal of fixed maturities at a loss.

There are no fixed maturities or other investment that management  classifies as
trading  instruments.  At June 30,  2005 and  December 31,  2004,  there were no
investments in derivative instruments.

The Company had no long-term debt, capital lease obligations, material operating
lease obligations or purchase obligations outstanding as of June 30, 2005.

Future policy  benefits  reflected as  liabilities of the Company on its balance
sheet as of June 30,  2005,  represent  actuarial  estimates of  liabilities  of
future  policy  obligations  such as  expected  death  claims  on the  insurance
policies in force as of the financial reporting date. Due to the nature of these
liabilities,  maturity is event dependent and therefore,  these liabilities have
been classified as having an indeterminate maturity.


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 AND USE OF PROCEEDS.

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

NONE

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

At the Annual  Meeting of  Shareholders  held on June 15,  2005,  the  following
matters were submitted to the shareholders of UTG and voted on as indicated:

1.   To elect  eight  directors  to serve for a term of one year and until their
     successors are elected and qualified:

             --------------------------- --------------- ---------------- ---------------



             DIRECTOR                    FOR             WITHHELD         AGAINST

             --------------------------- --------------- ---------------- ---------------
             John S. Albin               2,746,076          510           10,059
             --------------------------- --------------- ---------------- ---------------
             Randall L. Attkisson        2,731,638       14,810           10,197
             --------------------------- --------------- ---------------- ---------------
             Joseph A. Brinck            2,746,574            0           10,071
             --------------------------- --------------- ---------------- ---------------
             Jesse T. Correll            2,731,680       14,810           10,155
             --------------------------- --------------- ---------------- ---------------
             Ward F. Correll             2,731,638       14,810           10,197
             --------------------------- --------------- ---------------- ---------------
             Thomas F. Darden            2,746,658            0            9,987
             --------------------------- --------------- ---------------- ---------------
             William W. Perry            2,746,658            0            9,987
             --------------------------- --------------- ---------------- ---------------
             James P. Rousey             2,731,764       14,810           10,071
             --------------------------- --------------- ---------------- ---------------


2.   To change  the state of  incorporation  of the  Company  from  Illinois  to
     Delaware by merging  the  Company  into a  wholly-owned  subsidiary  of the
     Company that is incorporated under the laws of Delaware:

     In March 2005,  UTG's Board of  Directors  adopted a proposal to change the
     state of incorporation of UTG from Illinois to Delaware by merging UTG with
     and into a wholly-owned Delaware subsidiary (the "reincorporation merger").
     The Board of Directors and  management of UTG believe that  reincorporation
     in Delaware would be beneficial to the Company because  Delaware  corporate
     law is more  comprehensive,  widely used and extensively  interpreted  than
     other  state  corporate  laws,   including   Illinois  corporate  law.  The
     reincorporation  merger would effect only a change in UTG's legal  domicile
     and certain  other  changes of a legal  nature.  It would not result in any
     change in UTG's business, management, fiscal year, assets or liabilities or
     location of its principal facilities.

     A vote of the shareholders of UTG regarding the proposed merger occurred on
     June 15,  2005  at  the  annual  shareholders  meeting.  Shareholders  cast
     2,727,502 votes in favor of the merger and 29,487 votes against the merger.
     On July 1, 2005,  United Trust Group,  Inc., an Illinois  corporation (UTG)
     merged with and into its  wholly-owned  subsidiary,  UTG,  Inc., a Delaware
     corporation.

ITEM 5.  OTHER INFORMATION.

NONE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     11. 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

     12. REPORTS ON FORM 8-K

On April 20, 2005, UTG filed a report on Form 8-K regarding Item 1.01 Entry into
a Material Definitive  Agreement.  The information reported in the 8-K discussed
the completion of the agreement for the sale of 2,216,776 shares of common stock
owned of BNL Financial Corporation.

                                   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.




                                   UTG, INC.
                                  (Registrant)










Date:   August 9, 2005                                        By  /s/ Randall L. Attkisson

                                                                  Randall L. Attkisson
                                                                  President, Chief Operating Officer
                                                                     and Director








Date:   August 9, 2005                                        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

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

I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;

Based on my  knowledge,  this 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 report;

Based on my knowledge, the financial statements, and other financial information
included in this 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 report;

The  registrant's  other  certifying   officer(s)  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  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

The registrant's other certifying officer(s) 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 the  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 information ; and

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




Date:   August 9, 2005                                        By  /s/ Jesse T. Correll

                                                                  Chairman of the Board and
                                                                  Chief Executive Officer

EX-31

                                                                    EXHIBIT 31.2

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

I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;

Based on my  knowledge,  this 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 report;

Based on my knowledge, the financial statements, and other financial information
included in this 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 report;

The  registrant's  other  certifying   officer(s)  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  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

The registrant's other certifying officer(s) 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 the  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 information ; and

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




Date:   August 9, 2005                                        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  UTG,  Inc.  (the
"Company")  for the  quarterly  period  ended June 30,  2004,  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.§ 1350,  as  adopted  pursuant  to § 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: August 9, 2005

EX-32

                                                                    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  UTG,  Inc.  (the
"Company")  for the  quarterly  period  ended June 30,  2004,  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.§ 1350,  as  adopted
pursuant to § 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: August 9, 2005