10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2013

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 [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a small reporting company.  See definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [  ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

The number of shares outstanding of the registrant's common stock as of April 26, 2013, was 3,792,732.

UTG, Inc.

(The "Company")

TABLE OF CONTENTS

PART I.   Financial Information	3
Item 1.  Financial Statements	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 4.  Controls and Procedures	22
PART II.  Other Information	22
Item 1.  Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.  Defaults Upon Senior Securities	22
Item 4.  Mine Safety Disclosures	22
Item 5.  Other Information	22
Item 6.  Exhibits	22
Signatures	23
Exhibit Index	24

PART 1.  FINANCIAL INFORMATION
Item 1.  Financial Statements
UTG, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
ASSETS
		March 31,		December 31,
		2013		2012*
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost $176,113,506 and $173,526,717)	$	189,846,454	$	187,327,285
Equity securities, at fair value (cost $29,747,616 and $29,497,001)		30,535,174		30,504,914
Trading securities, at fair value (cost $6,656,101 and $14,714,333)		6,426,288		14,018,460
Mortgage loans on real estate at amortized cost		11,009,174		17,671,554
Discounted mortgage loans on real estate at cost		26,703,552		26,336,953
Investment real estate		71,025,034		68,165,013
Policy loans		12,397,405		12,591,572
Short-term investments		6,263,937		6,268,320
Total investments		354,207,018		362,884,071
Cash and cash equivalents		26,287,257		23,321,246
Accrued investment income		2,094,272		2,444,790
Reinsurance receivables:
Future policy benefits		29,045,254		29,318,018
Policy claims and other benefits		3,837,588		4,492,430
Cost of insurance acquired		11,434,677		11,700,765
Deferred policy acquisition costs		412,110		426,218
Property and equipment, net of accumulated depreciation		1,302,948		1,344,851
Income tax receivable		7,214		20,035
Other assets		3,934,639		5,381,969
Total assets	$	432,562,977	$	441,334,393
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits	$	291,223,310	$	293,800,162
Policy claims and benefits payable		4,669,151		3,371,767
Other policyholder funds		469,148		477,948
Dividend and endowment accumulations		14,113,062		14,072,513
Income tax payable		4,296		2,042,786
Deferred income taxes		12,139,693		12,301,577
Notes payable		18,848,454		18,857,954
Trading securities, at fair value (proceeds $2,729,311 and $8,094,787)		2,950,631		7,552,704
Other liabilities		9,391,959		9,202,354
Total liabilities		353,809,704		361,679,765
Shareholders' equity:
Common stock - no par value, stated value $.001 per share.  Authorized 7,000,000 shares - 3,794,728 and 3,798,871 shares outstanding		3,795		3,799
Additional paid-in capital		44,283,699		44,337,743
Retained earnings		21,007,046		21,917,318
Accumulated other comprehensive income		9,581,350		9,664,466
Total UTG shareholders' equity		74,875,890		75,923,326
Noncontrolling interests		3,877,383		3,731,302
Total shareholders' equity		78,753,273		79,654,628
Total liabilities and shareholders' equity	$	432,562,977	$	441,334,393
* Balance sheet audited at December 31, 2012.

See accompanying notes

UTG, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
		Three Months Ended
		March 31,		March 31,
		2013		2012
Revenue:
Premiums and policy fees	$	3,212,746	$	3,516,444
Ceded reinsurance premiums and policy fees		(775,702)		(908,098)
Net investment income		4,381,392		6,950,756
Other income		521,359		547,694
Revenues before realized gains		7,339,795		10,106,796
Realized investment gains, net:
Other-than-temporary impairments		(26,926)		0
Other realized investment gains, net		71,649		7,135,970
Total realized investment gains, net		44,723		7,135,970
Total revenue		7,384,518		17,242,766
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		5,856,321		5,870,808
Ceded Reinsurance benefits and claims		(597,779)		(835,875)
Annuity		267,539		260,690
Dividends to policyholders		147,222		140,624
Commissions and amortization of deferred policy acquisition costs		(23,552)		(152,813)
Amortization of cost of insurance acquired		266,088		286,375
Operating expenses		2,055,125		2,875,495
Interest expense		110,437		72,175
Total benefits and other expenses		8,081,401		8,517,479
Income (loss) before income taxes		(696,883)		8,725,287
Income tax expense		(67,308)		(3,225,556)
Net income (loss)		(764,191)		5,499,731
Net income attributable to noncontrolling interests		(146,081)		(273,214)
Net income (loss) attributable to common shareholders'	$	(910,272)	$	5,226,517
Amounts attributable to common shareholders'
Basic income (loss) per share	$	(0.24)	$	1.36
Diluted income (loss) per share	$	(0.24)	$	1.36
Basic weighted average shares outstanding		3,796,527		3,837,081
Diluted weighted average shares outstanding		3,796,527		3,837,081

See accompanying notes

UTG, Inc.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
			Three Months Ended
			March 31,		March 31,
			2013		2012
Net Income (loss)		$	(764,191)	$	5,499,731
Other comprehensive income (loss), net of tax:
	Unrealized holding gains (losses) arising during period		(23,750)		11,505,135
	Less reclassification adjustment for gains included in net income		(59,366)		(5,101,860)
	Subtotal:  Other comprehensive income (loss), net of tax		(83,116)		6,403,275
Comprehensive income (loss)			(847,307)		11,903,006
Less comprehensive (income) loss attributable to noncontrolling interests			(146,081)		(273,214)
Comprehensive income (loss) attributable to UTG, Inc.		$	(993,388)	$	11,629,792

See accompanying notes

UTG, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
		Three Months Ended
		March 31,		March 31,
		2013		2012
Cash flows from operating activities:
Net income (loss) attributable to common shareholders	$	(910,272)	$	5,226,517
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization (accretion) of investments		(403,748)		(975,910)
Realized investment gains, net		(44,723)		(7,135,970)
Unrealized trading gains (losses) included in income		297,344		(528,698)
Amortization of deferred policy acquisition costs		14,108		15,512
Amortization of cost of insurance acquired		266,088		286,375
Depreciation		320,071		446,177
Net income (loss) attributable to noncontrolling interest		146,081		273,214
Charges for mortality and administration of universal life and annuity products		(1,737,635)		(1,789,191)
Interest credited to account balances		1,450,681		1,422,593
Change in accrued investment income		350,518		(535,714)
Change in reinsurance receivables		927,606		718,638
Change in policy liabilities and accruals		(1,121,391)		(462,586)
Change in income taxes receivable (payable)		(1,982,692)		2,664,281
Change in other assets and liabilities, net		1,624,775		(1,245,683)
Net cash used in operating activities		(803,189)		(1,620,445)
Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		6,173,142		49,673,705
Equity securities available for sale		0		296,399
Trading securities		17,829,177		3,863,825
Mortgage loans		7,785,104		2,430,247
Discounted mortgage loans		1,505,565		3,257,451
Real estate		2,733,460		8,173,899
Policy loans		997,774		1,134,602
Short term		29,383		0
Total proceeds from investments sold and matured		37,053,605		68,830,128
Cost of investments acquired:
Fixed maturities available for sale		(8,856,558)		(85,553,891)
Equity securities available for sale		(250,617)		(166,407)
Trading securities		(15,124,263)		(3,443,030)
Mortgage loans		(1,122,724)		(392)
Discounted mortgage loans		(1,280,456)		(5,875,374)
Real estate		(5,918,258)		(3,203,558)
Policy loans		(803,607)		(749,810)
Short term		(25,000)		0
Total cost of investments acquired		(33,381,483)		(98,992,462)
Net cash provided by (used in) investing activities		3,672,122		(30,162,334)
Cash flows from financing activities:
Policyholder contract deposits		1,521,403		1,617,272
Policyholder contract withdrawals		(1,360,777)		(1,638,400)
Proceeds from notes payable/line of credit		0		350,000
Payments of principal on notes payable/line of credit		(9,500)		(359,347)
Purchase of treasury stock		(54,048)		(433,177)
Distributions to minority interests of consolidated subsidiaries		0		(10,000)
Net cash provided by (used in) financing activities		97,078		(473,652)
Net increase (decrease) in cash and cash equivalents		2,966,011		(32,256,431)
Cash and cash equivalents at beginning of period		23,321,246		82,925,675
Cash and cash equivalents at end of period	$	26,287,257	$	50,669,244

See accompanying notes

UTG, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements include the accounts of UTG, Inc. (the "Parent") and its subsidiaries (collectively with the Parent, the "Company").  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of management, are necessary for a fair presentation of the results for the interim periods.  The unaudited condensed consolidated financial statements included herein and these related notes should be read in conjunction with the Company's consolidated financial statements, and the notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.  The Company's results of operations for the three month period ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013 or for any other future period.

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 ("FSF"), a Kentucky corporation, and First Southern Bancorp, Inc. ("FSBI"), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank ("FSNB").  Banking activities are conducted through multiple locations within south-central and western 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 March 31, 2013, Mr. Correll owns or controls directly and indirectly approximately56%of UTG's outstanding stock.

UTG's life insurance subsidiary, Universal Guaranty Life Insurance Company ("UG"), has several wholly-owned and majority-owned subsidiaries.  The subsidiaries were formed to hold certain real estate investments.  The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Note 2 – New Accounting Standards

Comprehensive Income - In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standard which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective for periods beginning after December 15, 2012. The Company does not expect the adoption of this new guidance to have a material impact on the Company's consolidated financial statements.

Intangibles-Goodwill and Other – In July 2012, FASB issued guidance on the testing of indefinite-lived intangible assets for impairment, which is intended to reduce the cost and complexity of the impairment test for indefinite-lived intangible assets by providing an entity with the option to first assess qualitatively whether it is necessary to perform the impairment test that is currently in place. An entity would not be required to quantitatively calculate the fair value of an indefinite-lived intangible asset unless the entity determines that it is more likely than not that its fair value is less than its carrying value. This guidance is effective for interim and annual impairment tests beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance will not have a material effect on the Company's consolidated financial statements.

Note 3 – Investments

Available for Sale Securities – Fixed Maturity and Equity Securities

The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in available for sale securities are summarized as follows:

March 31, 2013		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	38,428,537	$	5,454,621	$	(281)	$	43,882,877
States, municipalities and political subdivisions		150,000		5,993		0		155,993
U.S. special revenue and assessments		2,150,766		157,779		0		2,308,545
Collateralized mortgage obligations		1,780,601		158,444		0		1,939,045
Public utilities		399,903		61,207		0		461,110
All other corporate bonds		133,203,699		9,682,828		(1,787,643)		141,098,884
		176,113,506		15,520,872		(1,787,924)		189,846,454
Equity securities		29,747,616		1,284,494		(496,936)		30,535,174
Total	$	205,861,122	$	16,805,366	$	(2,284,860)	$	220,381,628

December 31, 2012		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	33,430,165	$	5,457,009	$	0	$	38,887,174
States, municipalities and political subdivisions		160,000		6,637		0		166,637
U.S. special revenue and assessments		2,150,070		153,545		0		2,303,615
Collateralized mortgage obligations		2,241,384		183,409		(8)		2,424,785
Public utilities		399,900		63,662		0		463,562
All other corporate bonds		135,145,198		9,747,565		(1,811,251)		143,081,512
		173,526,717		15,611,827		(1,811,259)		187,327,285
Equity securities		29,497,001		1,303,328		(295,415)		30,504,914
Total	$	203,023,718	$	16,915,155	$	(2,106,674)	$	217,832,199

The amortized cost and estimated market value of debt securities at March 31, 2013, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale March 31, 2013		Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,400,052	$	2,423,382
Due after one year through five years		30,181,928		32,745,345
Due after five years through ten years		108,860,492		117,999,294
Due after ten years		32,703,905		34,549,122
Collateralized mortgage obligations		1,967,129		2,129,311
Total	$	176,113,506	$	189,846,454

The fair value of investments with sustained gross unrealized losses at March 31, 2013 and December 31, 2012 are as follows:

March 31, 2013		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
U.S. Government and govt. agencies and authorities	$	4,995,703	(282)	$	0	0	$	4,995,703	(282)
All other corporate bonds		6,638,079	(50,703)		4,383,021	(1,736,939)		11,021,100	(1,787,642)
Total fixed maturities	$	11,633,782	(50,985)	$	4,383,021	(1,736,939)	$	16,016,803	(1,787,924)
Equity securities	$	1,253,075	(496,936)	$	0	0	$	1,253,075	(496,936)

December 31, 2012		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	4,513	(8)	$	0	0	$	4,513	(8)
All other corporate bonds		13,776,705	(245,846)		385,823	(1,565,405)		14,162,528	(1,811,251)
Total fixed maturities	$	13,781,218	(245,854)	$	385,823	(1,565,405)	$	14,167,041	(1,811,259)
Equity securities	$	594,081	(295,415)	$	0	0	$	594,081	(295,415)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of March 31, 2013
Fixed maturities	8	4	12
Equity securities	4	0	4
As of December 31, 2012
Fixed maturities	8	3	11
Equity securities	9	0	9

Substantially all of the unrealized losses on fixed maturities available for sale at March 31, 2013 and December 31, 2012 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  The unrealized losses on equity investments were primarily attributable to normal market fluctuations.  The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position.  Based upon the Company's expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company's evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of March 31, 2013 and December 31, 2012.

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary.  The factors considered by management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company's intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates.  If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company's ability and intent to hold the security to recovery.  If a decline in fair value is judged by management to be other-than-temporary or management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Operations.

Based on management's review of the investment portfolio, the Company recorded the following losses for other-than-temporary impairments in the Condensed Consolidated Statements of Operations:

		Three Months Ended
		March 31,
		2013		2012
Other than temporary impairments:
Real Estate	$	26,926	$	0

The other-than-temporary impairment recognized during 2013 was due to Management's assessment of the value of the real estate. The real estate was written down to better reflect current expected market value.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Condensed Consolidated Statements of Operations.  Trading securities include exchange-traded equities and exchange-traded options.  Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.  The fair value of derivatives included in trading security assets and trading security liabilities as of March 31, 2013 was $1,324,513 and $(1,442,933), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2012 was $6,745,528 and $(6,050,344), respectively.  Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

Trading revenue charged to net investment income from trading securities was:

		Three Months Ended
		March 31,
		2013		2012
Net unrealized losses	$	(297,344)	$	528,698
Net realized gains (losses)		86,271		2,310,507
Net unrealized and realized gains (losses)	$	(211,073)	$	2,839,205

Mortgage Loans

As of March 31, 2013 and December 31, 2012, the Company's mortgage loan portfolio contained58 and 71mortgage loans, including discounted mortgage loans, with a carrying value of $37,712,726 and$44,008,507,respectively.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers' ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Given the uncertainty of the current market, management has taken a conservative approach with the discounted mortgage loans and has classified all discounted mortgage loans held as non-accrual.  In such status, the Company is not recording any accrued interest income nor is it recording any accrual of discount on the loans held.  Discount accruals reported during 2012 and 2013 were the result of the loan basis already being fully paid.

On the remainder of the mortgage loan portfolio, interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value.  The Company acquires the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary.  Those loans not currently paying are being vigorously worked by management.  The current discounted commercial mortgage loan portfolio has an average price of37.3% of face value and management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased.

Note 4 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets based on the framework set forth in the GAAP fair value accounting guidance.  The framework establishes a fair value hierarchy of three levels based upon the transparency of information used in measuring the fair value of assets or liabilities as of the measurement date.  The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three categories.

Level 1 – Valuation is based upon quoted prices for identical assets or liabilities in active markets that the Company is able to access.  Level 1 fair value is not subject to valuation adjustments.

Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active. In addition, the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability.

The Company determines the existence of an active market for an asset or liability based on its judgment as to whether transactions for the asset or liability occur in such market with sufficient frequency and volume to provide reliable pricing information.  If the Company concludes that there has been a significant decrease in the volume and level of activity for an investment in relation to normal market activity for such investment, adjustments to transactions and quoted prices are made to estimate fair value.

The inputs used in the valuation techniques employed by the Company are provided by nationally recognized pricing services, external investment managers and internal resources.  To assess these inputs, the Company's review process includes, but is not limited to, quantitative analysis including benchmarking, initial and ongoing evaluations of methodologies used by external parties to calculate fair value, and ongoing evaluations of fair value estimates based on the Company's knowledge and monitoring of market conditions.

The Company periodically reviews the pricing service provider's policies and procedures for valuing securities.  The assumptions underlying the valuations from external service providers, including unobservable inputs, are generally not readily available as this information is often deemed proprietary.  Accordingly, the Company is unable to obtain comprehensive information regarding these assumptions and methodologies.

The Company's investments in fixed maturity securities available for sale, equity securities available for sale and trading securities assets and liabilities are carried at fair value.  The following are the Company's methodologies and valuation techniques for assets and liabilities measured at fair value.

Fixed maturities available for sale mainly consist of U.S. treasury securities and corporate debt securities. The Company employs a market approach to the valuation of securities where there are sufficient market transactions involving identical or comparable assets. If sufficient market data is not available for identical or comparable assets, the Company uses an income approach to valuation. The majority of the financial instruments included in fixed maturity securities available for sale are evaluated utilizing observable inputs; accordingly, they are categorized in either Level 1 or Level 2 of the fair value hierarchy. However, in instances where significant inputs utilized in valuation of the securities are unobservable, the securities are categorized in Level 3 of the fair value hierarchy.

Corporate securities primarily include fixed rate corporate bonds. Inputs utilized in connection with the Company's valuation techniques relating to this class of securities include recently executed transactions, market price quotations, benchmark yields and issuer spreads. Corporate securities are categorized in Level 2 of the fair value hierarchy.

U.S. treasury securities are based on quoted prices in active markets and are generally categorized in Level 1 of the fair value hierarchy.

Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and insurance companies. Equity securities for which there is sufficient market data are categorized as Level 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the transaction price is used as the best estimate of fair value at inception.  When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Securities designated as trading securities consist of bonds, exchange traded equities and exchange traded options.  These securities are primarily valued at quoted active market prices, and are therefore categorized as Level 1 in the fair value hierarchy.  The exchange traded bonds consist of corporate bonds and are classified as Level 2, consistent with the classification of the fixed maturity corporate bonds.

The following table presents the Company's assets and liabilities measured at fair value in the condensed consolidated balance sheet on a recurring basis as of March 31, 2013.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	25,989,101	$	163,520,634	$	336,719	$	189,846,454
Equity Securities, available for sale		1,627,505		5,967,525		22,940,144		30,535,174
Trading Securities		6,426,288		0		0		6,426,288
Total	$	34,042,894	$	169,488,159	$	23,276,863	$	226,807,916
Liabilities
Trading Securities	$	2,950,631	$	0	$	0	$	2,950,631

The following table presents the Company's assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2012.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	20,993,398	$	166,060,160	$	273,727	$	187,327,285
Equity Securities, available for sale		1,448,585		6,092,614		22,963,715		30,504,914
Trading Securities		13,903,148		115,312		0		14,018,460
Total	$	36,345,131	$	172,268,086	$	23,237,442	$	231,850,659
Liabilities
Trading Securities	$	7,552,704	$	0	$	0	$	7,552,704

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

		Fixed Maturities, Available for Sale		Equity Securities, Available for Sale		Total
Balance at December 31, 2012	$	273,727	$	22,963,715	$	23,237,442
Total unrealized gain or losses:
Included in other comprehensive income		62,992		(23,571)		39,421
Purchases		0		0		0
Balance at March 31, 2013	$	336,719	$	22,940,144	$	23,276,863

The Level 3 securities include collateralized debt obligations of trust preferred securities issued by banks and insurance companies and certain equity securities with unobservable inputs.  None of the collateral is subprime or Alt-A mortgages (loans for which the typical documentation was not provided by the borrower).

Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans and policy loans. Accordingly such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the condensed consolidated financial statements.

The carrying values and estimated fair values of certain of the Company's financial instruments not recorded at fair value in the condensed consolidated balance sheets are shown below. Because the fair value for all condensed consolidated balance sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

		March 31, 2013				December 31, 2012
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	11,009,174	$	11,089,516	$	17,671,554	$	17,803,159
Discounted mortgage loans		26,703,552		26,703,552		26,336,953		26,336,953
Investment real estate		71,025,034		71,025,034		68,165,013		68,165,013
Policy loans		12,397,405		12,397,405		12,591,572		12,591,572
Cash and cash equivalents		26,287,257		26,287,257		23,321,246		23,321,246
Short term investments		6,263,937		6,263,937		6,268,320		6,268,320
Liabilities
Notes payable		18,848,454		18,848,454		18,857,954		18,857,954

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange.  The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.

The Company has been purchasing non-performing discounted mortgage loans at a deep discount through an auction process led by the federal government.  In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company.  Accordingly, the Company records its investment in the discounted loans at its original purchase price, which management believes approximates fair value.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell.  The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by management.

Policy loans are carried at the aggregate unpaid principal balances in the consolidated balance sheets which approximates fair value, and earn interest at rates ranging from 4% to 8%.  Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.

The carrying amount of cash and cash equivalents in the financial statements approximates fair value given the highly liquid nature of the instruments.

The carrying amount of short term investments in the financial statements approximates fair value.

The carrying value is a reasonable estimate of fair value for notes payable subject to floating rates of interest.  The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

Note 5 – Credit Arrangements

At March 31, 2013 and December 31, 2012, the Company hadthe following outstanding debt:

				Outstanding Principal Balance
Instrument	Issue Date	Maturity Date		March 31, 2013		December 31, 2012
Promissory Note:
HPG Acquisitions	2007-02-07	2017-11-07	$	193,419	$	202,919
HPG Acquisitions	2012-12-27	2018-03-04		12,000,000		12,000,000

Instrument	Issue Date	Maturity Date		Revolving Credit Limit		December 31, 2012	Borrowings	Repayments		March 31, 2013
Lines of Credit:
UTG	2012-11-20	2013-11-20	$	8,000,000	$	1,655,035	0	0	$	1,655,035
UTG Avalon	2011-12-28	2014-01-03		5,000,000		5,000,000	0	5,000,000		0
UTG Avalon	2013-03-28	2014-03-28		5,000,000		0	5,000,000	0		5,000,000
UG	2010-12-28	2013-12-06		15,000,000		0	0	0		0

The HPG Acquisitions promissory note issued on February 7, 2007 bears interest at a fixed rate of 5%.

The HPG Acquisitions promissory note issued on December 27, 2012 is secured by real estate owned by HPG. The promissory note bears interest at a fixed rate of 4%. Interest is payable monthly. Principal is payable monthly beginning in the third year of the note.

The UTG line of credit carries interest at a fixed rate of 3.75% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance  Company ("UG").

The UTG Avalon line of credit issued on December 28, 2011 carried interest at a rate of 4.0% and was payable in two semi-annual payments. This line of credit was repaid during March 2013.

The UTG Avalon line of credit issued on March 28, 2013 currently carries interest at a rate of 4.0% and is payable in two semi-annual payments. The interest rate is a variable rate that will be 0.50% above the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal.  The interest rate is subject to change monthly and changes in the interest rate will take effect on the first day of the month following the rate change.

UG is a member of the Federal Home Loan Bank ("FHLB").  This membership allows the Company access to additional credit up to a maximum of 50% of the total assets of UG.  To be a member of the FHLB, the Company was required to purchase shares of common stock of FHLB.  Borrowing capacity is based on 50 times each dollar of stock acquired in FHLB above the "base membership" amount.

The consolidated scheduled principal reductions on the notes payable for the next five years are as follows:

Year		Amount
2013	$	1,677,120
2014		5,034,154
2015		382,395
2016		518,134
2017		542,470

Note 6 – Shareholders' Equity

Stock Repurchase Programs

The Board of Directors of UTG authorized the repurchase in the open market or in privately negotiated transactions of up to $6 million of UTG's common stock. Repurchased shares are available for future issuance for general corporate purposes.  This program can be terminated at any time.  Open market purchases are made based on the last available market price and are generally limited to a maximum per share price of the most recent reported per share GAAP equity book value of the Company.  During the current year, the Company repurchased 4,143 shares through the stock repurchase program for $54,048.Through March 31, 2013, UTG has spent $4,665,744 in the acquisition of 566,833 shares under this program.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  At March 31, 2013 and March 31, 2012, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

Note 7 – 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.  In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings.  Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company's results of operations or financial position.

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.

As part of the Texas Imperial Life Insurance Company sale, the Company remains contingently liable for certain costs pending the outcome of an ongoing race-based audit on Texas Imperial Life Insurance Company by the Texas Department of Insurance.  Under the agreement, the Company is responsible for 100% of the first $50,000 of costs, 90% of the next $50,000, 75% of the third $50,000 and 50% of the costs above $150,000.  Management had conservatively estimated the Company's exposure and other costs at $50,000 based on information provided to date from the examination team and has established a contingent liability of $47,727 in its financial statements.  This contingency expires December 30, 2013.

Within the Company's trading accounts, certain trading securities carried as liabilities represent securities sold short.  A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.

On November 9, 2011, ACAP shareholders approved a proposed merger with UTG whereby ACAP shareholders received 233 shares of UTG for each share previously held of ACAP.  On November 14, 2011, the merger was completed.  Certain of the ACAP shareholders dissented to the merger requesting the courts determine the value of the ACAP shares.  The legal case is currently in the discovery phase.  The Company has established a contingent liability of $2,550,822 to cover the anticipated proceeds due to the dissenting shareholders and associated legal and other costs.

The following table represents the total funding commitments and the unfunded commitment as of March 31, 2013 related to certain investments:

		Total Funding		Unfunded
		Commitment		Commitment
RLF III, LLC	$	4,000,000	$	398,120
Llano Music, LLC		2,000,000		571,000
Marcellus III, LLP		1,250,000		294,375
Dew Learning, LLC		1,000,000		528,114
Marcellus HBPI, LLP		1,800,000		771,300
PBEX, LLC		5,625,000		2,818,750
Sovereign's Capital, LP		500,000		250,000

During 2006, the Company committed to invest in RLF III, LLC ("RLF"), which makes land-based investment in undervalued assets. RLF does capital calls as funds are needed for continued land purchases.

During 2010, the Company made a commitment to invest in Llano Music, LLC ("Llano), which invests in music royalties. Llano does capital calls to its investors as funds are needed to acquire the royalty rights.

During 2011, the Company committed to invest in Marcellus III, LLP, which purchases land for leasing opportunities to those looking to harvest natural resources. Marcellus III, LLC does capital calls to its investors as funds are needed for continued land purchases.

During 2012, the Company made a commitment to investment in Dew Learning, LLC ("Dew"), which is involved in the marketing and distribution of an electronic education based classroom model. Dew does capital calls to investors as funds are needed for continued development of the program.

During 2012, the Company committed to invest in Marcellus HBPI, LLP, which purchases land for leasing opportunities to those looking to harvest natural resources. Marcellus HPBI, LLC does capital calls to investors as funds are needed for continued land purchases.

During 2012, the Company committed to invest in PBEX, LLC, which purchases land for leasing opportunities to those looking to harvest natural resources. PBEX, LLC does capital calls to investors as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign's Capital, LP ("Sovereign's"), which invests in companies in emerging markets. Sovereign's is expected to call the remaining unfunded commitment during 2013.

Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

		Three Months Ended
		March 31,
		2013		2012
Interest expense	$	16,398	$	15,214
Federal income tax		2,050,000		22,581

During 2013, UG's wholly-owned subsidiary, UTG Avalon, LLC, entered into a noncash transaction whereas the subsidiary obtained a new line of credit in the amount of $5 million and utilized the line of credit to repay the prior line of credit. The terms of the new line of credit are consistent with the terms of the prior line of credit.

Note 9 – Concentrations 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 the largest shareholder of UTG, Mr. Jesse Correll, the Company's CEO and Chairman.  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.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is Management's discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the "Company").  The following discussion of the financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the related Notes thereto appearing in the Company's annual report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission, and our unaudited Condensed Consolidated Financial Statements and related Notes thereto appearing elsewhere in this quarterly report.

Cautionary Statement Regarding Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. We have based our forward-looking statements on our current expectations and projections about future events. Our forward-looking statements include information about possible or assumed future results of operations. All statements, other than statements of historical facts, included or incorporated by reference in this report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as the growth of our business and operations, our business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward-looking statements. Also, when we use words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "probably," or similar expressions, we are making forward-looking statements.

Numerous risks and uncertainties may impact the matters addressed by our forward-looking statements, any of which could negatively and materially affect our future financial results and performance.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. In light of these risks, uncertainties and assumptions, any forward-looking event discussed in this report may not occur.  Our forward-looking statements speak only as of the date made, and we undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments, unless the securities laws require us to do so.

Overview

UTG, Inc., a Delaware corporation, is a life insurance holding company.  The Company's dominant business is individual life insurance, which includes the servicing of existing insurance policies in force, the acquisition of other companies in the life insurance business and the administration and processing of life insurance business for other entities.  The Company's focus for the future includes growing the administrative portion of the business.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ significantly from those estimates.  The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability.  The Company's critical accounting policies and the related estimates considered most significant by Management are disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.  Management has identified the accounting policies related to 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 as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company's Condensed Consolidated Financial Statements and this Management's Discussion and Analysis.

During the three months ended March 31, 2013, there were no additions to or changes in the critical accounting policies disclosed in the 2012 Form 10-K, except for recently adopted accounting standards discussed in Note 2 of the Notes to the Condensed Consolidated Financial Statements.

Results of Operations

On a consolidated basis, the Company had a net loss attributable to common shareholders of $(910,272) and net income attributable to common shareholders of $5.2 million for the three month period ended March 31, 2013 and 2012, respectively.  During the three month period ended March 31, 2013 and 2012, the Company had a net loss before income taxes of $(696,883) and net income before income taxes of $8.7 million, respectively.  During the first quarter of 2012, the positive earnings of the Company were mainly attributable to large gains recognized on the sale of bonds. Similar gains were not recognized during the first quarter of 2013.

One-time events, primarily reflected in realized gains, comprised a substantial portion of net income of the Company during 2012.  While Management believes there remain additional investments with such one-time earnings, when or if realized remains uncertain.

Total revenue was $7.4 million during the three month period ended March 31, 2013 compared to $17.2 million during the three month period ended March 31, 2012. The decrease in revenues is primarily attributable to a decrease in net investment income and realized gains on investments.  The magnitude of realized investment gains and losses in a given year is a function of the timing of trades of investments relative to the markets themselves as well as the recognition of any impairments on investments.

Total benefits and other expenses paid during the three months ended March 31, 2013 and 2012 were $8.1 million and $8.5 million respectively.

Revenues

The Company's premium and policy fee revenues, net of reinsurance, was approximately $2.4 million for the first quarter of 2013, a decrease of approximately 7% compared to the same quarter in 2012. The Company writes very little new business.  Unless the Company acquires a new insurance company or a block of in-force business, Management expects premium revenue to continue to decline on the existing blocks of business at a rate consistent with prior experience.

The Company reported net investment income of approximately $4.4 million during the first quarter 2013 and $7 million during the first quarter of 2012. The variance in 2013 and 2012 investment income results are mainly attributable to activity in the trading portfolio and the fixed maturity portfolio.

During the first quarter of 2013, the Company reported a loss of approximately $(211,000) in the trading securities portfolio while during the first quarter 2012 the Company recorded approximately $2.6 million of income from the trading securities investment portfolio.  In March 2013, Management determined it had other investment opportunities to deploy a portion of the trading account monies into and reduced the funds to be used for trading activities going forward. Volatility as well as possible losses should be expected in the trading securities portfolio. Management's target return on the trading securities portfolio is 6% to 8%.

Income from fixed maturities increased approximately 58% or $753,000 when comparing the first quarter 2013 to the first quarter 2012. The increase in income is attributable to the higher yield earned on the BBB and BB bonds the Company began investing in during 2012. In early 2012, the Company sold a significant portion of its US Treasury bonds, recognizing large gains. The proceeds from the sale of the US Treasury bonds were used to purchase BBB and BB rated bonds, which produce higher investment yields.

The Company had net realized investment gains of approximately $44,000 and $7.1 million during the first quarter of 2013 and 2012, respectively. The decrease in net realized gains in 2013, in comparison to 2012, is mainly attributable to the sale of fixed maturity investments during 2012.

During the fourth quarter of 2011 and first quarter of 2012, the Company took advantage of the unusually high price spreads on U.S. government treasury securities relative to other types of bonds in the marketplace, by selling a majority of its U.S. treasury holdings.  The Company has redeployed a majority of its excess cash balances into BBB and BB rated corporate debt issues.  Included in fixed maturity purchases, the Company purchased approximately $66,509,000 and $22,325,000 of BBB and BB rated corporate debt issues, respectively.  These corporate debt issues have an average interest yield of 5.03%.Interest spreads on these investments are higher than historic trends and Management believes this is an opportunity to enhance yield and provide more recurring investment income.  Lower rated bonds are viewed by the marketplace to inherently hold more default risk.  The trade-off on this risk is a higher interest yield.  Each investment is analyzed prior to acquisition to determine if Management is comfortable with the increased risk relative to the yield.  Management believes there are opportunities currently available in this area where certain corporate bond issues have been more harshly impacted by the marketplace than may really be justified.  It is this type of bond Management is primarily searching for to invest in.

Other income primarily represented revenues received relating to the performance of administrative work as a TPA for unaffiliated life insurance companies, which has remained consistent over the periods presented.  The Company receives monthly fees based on policy in force counts and certain other activity indicators such as number of policies issued.  Management remains committed to the pursuit of additional TPA clients and believes this area continues to show potential for growth.

Expenses

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims, increased approximately 4% in the three month period ended March 31, 2013 compared to the same period in 2012.  Policy claims vary from period to period and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Net amortization of cost of insurance acquired decreased approximately 7% in the three month period ended March 31, 2013 compared to the same period in 2012.  Cost of insurance acquired is established when an insurance company is acquired or when the Company acquires a block of in-force business.  The Company assigns a portion of its cost to the right to receive future profits from insurance contracts existing at the date of the acquisition.  Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates may vary due to risk analysis performed at the time of acquisition on the business acquired. The Company utilizes a 12% discount rate on the remaining unamortized business.  The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.  Amortization of cost of insurance acquired is particularly sensitive to changes in interest rate spreads and persistency of certain blocks of insurance in-force.  This expense is expected to decrease, unless the Company acquires a new block of business.

Operating expenses decreased approximately 29% in the three month period ended March 31, 2013 in comparison to the same period in 2012.  The decrease in 2013 expenses, in comparison to 2012, is primarily attributable to a decrease in legal expenses, information technology expenses and charitable contributions.

The Company's legal expenses decreased by approximately $213,000 when comparing the three month period ended March 31, 2013 to the same period in 2012.  During 2012, the Company's legal expenses were higher as a result of legal expenses incurred related to the merger of American Capitol and the ACAP dissenters' lawsuit.

The Company's information technology expenses decreased by approximately 38% when comparing the three month period ended March 31, 2013 to the same period in 2012.  The expenses were higher in 2012 as a result of the Company investing in new software to assist in increasing operating efficiencies and to meet regulatory requirements.

The Company's charitable contributions decreased by approximately $487,000 when comparing the three month period ended March 31, 2013 to the same period in 2012. Charitable contributions by the Company are tied to the earnings of the Company.

Management continues to place significant emphasis on expense monitoring and cost containment.  Maintaining administrative efficiencies directly impacts net income.

Interest expense increased by approximately 53% during the first three months of 2013 compared to the same period in 2012. During the fourth quarter of 2012, a majority owned subsidiary of UG, HPG Acquisitions, LLC ("HPG") obtained a $12 million note. HPG borrowed money to return capital to its investors.

Financial Condition

Investment Information

Investments represent approximately 82% of total assets at March 31, 2013 and December 31, 2012.  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 a diverse set of securities.

As of March 31, 2013, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders' equity or results from operations.  To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments held for sale".  Investments held for sale are carried at market, with changes in market value charged directly to shareholders' equity.

During the first quarter of 2013, the Company sold a substantial portion of its trading security assets and liabilities. The trading securities asset balance decreased by 54% or $7.6 million when comparing the March 31, 2013 balance to the December 31, 2012 balance.  The trading securities liability balance decreased by 61% or $4.6 million when comparing the March 31, 2013 balance to the December 31, 2012 balance.  The sale of the trading security assets and liabilities were the result of Management's decision to reduce the Company's investment risk and reduce the volatility in the investment earnings of the Company.  The proceeds from the sales of the trading securities will be used to purchase new investments that are deemed to be of less risk and which will provide more stable and predictable earnings for the Company.

Capital Resources

Total shareholders' equity decreased by approximately 1% as of March 31, 2013 compared to December 31, 2012. Retained earnings decreased by approximately 4% as of March 31, 2013 compared to December 31, 2012. The decrease in shareholders' equity and retained earnings is mainly attributable to the net loss of $910,000 reported by the company during the first quarter of 2013.

At March 31, 2013, the Company had $18.8 million of debt outstanding.  At December 31, 2012, the Company had $18.9 million of debt outstanding.  Approximately $1.6 million of this debt is related to the acquisition of ACAP Corporation.  Approximately $12.2 million of this debt is related to credit facilities extended to a majority owned subsidiary of UTG, HPG Acquisitions, LLC ("HPG"), during 2012. HPG borrowed money to return capital to its investors.  UTG Avalon, LLC, a wholly owned subsidiary of UG, has an outstanding line of credit in the amount of $5 million.

Liquidity

The Company has three principal needs for cash - the insurance companies' contractual obligations to policyholders, the payment of operating expenses and debt service.  Cash and cash equivalents as a percentage of total assets were approximately 6% and 5% as of March 31, 2013, and December 31, 2012, respectively.  Fixed maturities as a percentage of total assets were approximately 43% and 42% as of March 31, 2013 and December 31, 2012, respectively.

The Company currently has access to funds for operating liquidity.  UTG has an $8 million revolving credit note with Illinois National Bank.  On April 6, 2011, UTG Avalon was extended a credit note from First National Bank of Tennessee for $5 million. The UTG Avalon line of credit was fully repaid during March 2013 and UTG Avalon obtained a new line of credit in the amount of $5 million from a different financing source.  UG is a member of the FHLB which allows UG access to credit.  UG's current line of credit with the FHLB is $15 million.  At March 31, 2013, the Company had approximately $6.7 million of outstanding borrowings attributable to the lines of credit.

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.

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 used in operating activities was approximately $803,000 and $1.6 million for the three month period ended March 31, 2013 and 2012, respectively.

Net cash provided by (used in) investing activities was approximately $3.7 millionand $(30.2) million for the three month period ended March 31, 2013 and 2012, respectively.  During the first three months of 2012, more emphasis was placed on the sale of U.S. treasury holdings and re-deploying the cash through the purchase of BBB and BB rated corporate bonds.

Net cash provided by (used in) financing activities was approximately $97,000 and $(474,000) for the three month period ended March 31, 2013 and 2012, respectively.

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 and the servicing of its debt, are primarily provided by its subsidiaries.  On a parent only basis, UTG's cash flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances.  At March 31, 2013, substantially all of the consolidated shareholders equity represents net assets of its subsidiary.  The Company's insurance subsidiary has maintained adequate statutory capital and surplus.  The payment of cash dividends to shareholders by UTG is not legally restricted.  However, the state insurance department regulates insurance company dividend payments where the company is domiciled.  No dividends were paid to shareholders in 2012 or the first three months of 2013.

UG is an Ohio domiciled insurance company, which requires notification within five business days to the insurance commissioner following the declaration of any ordinary dividend and at least ten calendar days prior to payment of such dividend.  Ordinary dividends are defined as the greater of:  a) prior year statutory net income or b) 10% of statutory capital and surplus.  For the year ended December 31, 2012, UG had statutory net income of $6.9 million.  At December 31, 2012 UG's statutory capital and surplus amounted to $32.2 million.  Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation.  During the first three months of 2013, UG paid no ordinary dividends to UTG. During 2012, UG paid UTG ordinary dividends of approximately $3.3 million. UTG used the dividends to pay off a portion of its long-term debt and line of credit.

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

Other Items

In April 2012, the Company received the necessary approvals and completed the merger of its two 100% owned insurance subsidiaries, with American Capitol Insurance Company being merged into Universal Guaranty Life Insurance Company.  This transaction was done to provide the Company with additional administrative efficiencies and cost savings related to maintaining separate legal entities.

ITEM 4.  CONTROLS AND PROCEDURES

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to management, including the principal executive officer and principal financial officer, allowing timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

NONE

ITEM 1A.  RISK FACTORS

NONE

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4.  MINE SAFETY DISCLOSURES

NONE

ITEM 5.  OTHER INFORMATION

NONE

ITEM 6.  EXHIBITS

*10.22	Promissory Note dated March 28, 2013 between UTG Avalon, LLC and First Southern Funding
*31.1	Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*32.2	Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**101	Interactive Data File

*Filed herewith

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:	May 10, 2013	By	/s/ James P. Rousey
			James P. Rousey
			President and Director

Date:	May 10, 2013	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President
			and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number Description

*10.22	Promissory Note dated March 28, 2013 between UTG Avalon, LLC and First Southern Funding
*31.1	Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*32.2	Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**101	Interactive Data File

* Filed herewith

EX-10.22

Exhibit 10.22

  UTG Avalon, LLC PO Box 5147 Springfield IL 62703     BORROWER'S NAME AND ADDRESS "I" includes each borrower above, jointly and severally.   First Southern Funding 99 Lancaster Street Stanford, KY  40484     LENDER'S NAME AND ADDRESS "You" means the lender, its successors and assigns.   Loan Number _6206-0001_____ Date 3/28/2013_____________ Maturity Date 03/28/2014_____ Loan Amount $ 5,000,000.00___ Renewal Of _________________

For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum of _FIVE MILLION DOLLARS AND ZERO CENTS______________________________________________ Dollars $ 5,000,000.00__________________________________________

o	Single Advance: I will receive all of this principal sum on N/A__________.  No additional advances are contemplated under this note.
x	Multiple Advance: The principal sum shown above is the maximum amount of principal I can borrow under this note.  On 3/28/2013_____ ________ I will receive the amount of $ 5,000,000.00_____ and future principal advances are contemplated.
	Conditions: The conditions for future advances are _______________________________________________________________________ A.  Only upon such terms and under such conditions as you may deem appropriate at the time each advance is requested.______________ _________________________________________________________________________________________________________________ x Open End Credit: You and I agree that I may borrow up to the maximum principal sum more than one time.  This feature is subject to all other conditions and expires on __03/28/2014_________________________. o Closed End Credit: You and I agree that I may borrow (subject to all other conditions) up to the maximum principal sum only one time.
INTEREST: I agree to pay interest on the outstanding principal balance from __3/28/2013________________ at the rate of __4.000000__ %
		per year until _the rate changes as provided for in the note_______________.
x	Variable Rate: This rate may then change as stated below.
	x Index Rate: The future rate will be ___.500000___Above________________ the following index rate:____________________________ the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal_________________________________________________________________________________________________________
	o No Index: The future rate will not be subject to any internal or external index.  It will be entirely in your control. x Frequency and Timing: The rate on this note may change as often as __monthly_____________________________________________.
			A change in the interest rate will take effect _1st day of month following rate change_____________________________________.
	x Limitations: During the term of this loan, the applicable annual interest rate will not be more than ________21.000000_ % or less than
	_______4.000000 %.  The rate may not change more than ________________________ % each __________________________________.
	Effect of Variable Rate: A change in the interest rate will have the following effect on the payments:
	x The amount of each scheduled payment will change.			o The amount of the final payment will change.
	o _N/A__________________________________________________________________________________________________________.
ACCRUAL METHOD: Interest will be calculated on a _Actual/Actual____________ basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below:
	oon the same fixed or variable rate basis in effect before maturity (as indicated above). x at a rate equal to _4% in excess of the interest rate stated above that applied before maturity_________________________________.
x LATE CHARGE: If a payment is made more than _15___ days after it is due, I agree to pay a late charge of __5% of the payment__________.
x ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which o are  x are not included in the principal amount
	above: _Loan Fee__________________________________________________________________________________________________.
PAYMENTS: I agree to pay this note as follows:
x	Interest: I agree to pay accrued interest _2 Semiannually Payment(s) beginning 09-28-2013_______________________________________ _________________________________________________________________________________________________________________
x	Principal: I agree to pay the principal __03-28-2014_______________________________________________________________________ _________________________________________________________________________________________________________________
o	Installments: I agree to pay this note in ___________ payments.  The first payment will be in the amount of $ _______________________ and will be due __________________________________.  A payment of $ _____________________ will be due _____________________ ______________________________________________________________________________ thereafter.  The final payment of the entire unpaid balance of principal and interest will be due ____________________________________________________.
o	Unpaid Interest: Any accrued interest not paid when due (whether due by reason of a schedule of payments or due because of Lender's demand) will become part of the principal thereafter, and will bear interest at the interest rate in effect from time to time as provided for in this agreement.
PURPOSE: The purpose of this loan is _Line of Credit__________________________________________________________________________.
ADDITIONAL TERMS:
	This loan has a demand feature, however, if no demand is made, the loan is payable according to the terms specified under "Payments" above.

SECURITY

SECURITY INTEREST:   I  give  you  a  security  interest  in  all  of  the   Property   described   below   that   I   own   or   have   sufficient   rights   in  which  to   transfer   an
	interest, now or in the future, wherever the Property is or will be located, and all proceeds and products of the Property.  "Property" includes all parts, accessories, repairs, replacements, improvements, and accessions to the Property; any original evidence of title or ownership; and all obligations that support the payment or performance of the Property.  "Proceeds" includes anything acquired upon the sale, lease, license, exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions on account of the Property.
	o	Accounts and Other Rights to Payment: All rights to payment, whether or not earned by performance, including, but not limited to, payment for property or services sold, leased, rented, licensed, or assigned.  This includes any rights and interests (including all liens) which I have by law or agreement against any account debtor or obligor.
	o	Inventory: All inventory held for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, work in process, or materials used or consumed in my business.
	o	Equipment: All equipment including, but not limited to machinery, vehicles, furniture, fixtures, manufacturing equipment, farm machinery and equipment, shop equipment, office and record keeping equipment, parts, and tools.  The Property includes any equipment described in a list or schedule I give to you, but such a list is not necessary to create a valid security interest in all of my equipment.
	o	Instruments and Chattel Paper: All instruments, including negotiable instruments and promissory notes and any other writings or records that evidence the right to payment of a monetary obligation, and tangible and electronic chattel paper.
	o	General Intangibles: All general intangibles including, but not limited to, tax refunds, patents and applications for patents, copyrights, trademarks, trade secrets, goodwill, trade names, customer lists, permits and franchises, payment intangibles, computer programs and all supporting information provided in connection with a transaction relating to computer programs, and the right to use my name.
	o	Documents: All documents of title including, but not limited to, bills of lading, dock warrants and receipts, and warehouse receipts.
	o	Farm Products and Supplies: All farm products including, but not limited to, all poultry and livestock and their young, along with their produce, products, and replacements; all crops, annual or perennial, and all products of the crops; and all feed, seed, fertilizer, medicines, and other supplies used or produced in my farming operations.
	o	Government Payments and Programs: All payments, accounts, general intangibles, and benefits including, but not limited to, payments in kind, deficiency payments, letters of entitlement, warehouse receipts, storage payments, emergency assistance and diversion payments, production flexibility contracts, and conservation reserve payments under any preexisting, current, or future federal or state government program.
	o	Investment Property: All investment property including, but not limited to, certificated securities, uncertificated securities, securities entitlements, securities accounts, commodity contracts, commodity accounts, and financial assets.
	o	Deposit Accounts: All deposit accounts including, but not limited to, demand, time, savings, passbook, and similar accounts.
	o	Specific Property Description: The Property includes, but is not limited by, the following:
If this agreement covers timber to be cut, enter real estate description and record owner information:_____________________________________________ _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
The Property will be used for a    o personal    o business    o agricultural    o ________________________________________________________purpose.
Borrower/Owner State of organization/registration (if applicabale)__________________________________________________________________________

ADDITIONAL TERMS OF THE SECURITY AGREEMENT

GENERALLY – This agreement secures this note and any other debt I have with you, now or later.  However, it will not secure other debts if you fail with respect to such other debts, to make any required disclosure about this security agreement or if you fail to give any required notice of the right of rescission.  If property described in this agreement is located in another state, this agreement may also, in some circumstances, be governed by the law of the state in which the Property is located.

NAME AND LOCATION – My name indicated on page 1 is my exact legal name.  If I am an individual, my address is my principal residence.  If I am not an individual, my address is the location of my chief executive offices or sole place of business.  If I am an entity organized and registered under state law, my address is located in the state in which I am registered, unless otherwise indicated on page 2.  I will provide verification of registration and location upon your request.    I will provide you with at least 30 days notice prior to any change in my name, address, or state of organization or registration

OWNERSHIP AND DUTIES TOWARD PROPERTY   –   I represent that I own all of the Property, or to the extent this is a purchase money security interest I will acquire ownership of the Property with the proceeds of the loan.  I will defend it against any other claim.  Your claim to the Property is ahead of the claims of any other creditor.  I agree to do whatever you require to protect your security interest and to keep your claim in the Property ahead of the claims of other creditors.  I will not do anything to harm your position.  I will not use the Property for a purpose that will violate any laws or subject the Property to forfeiture or seizure.

   I will keep books, records and accounts about the Property and my business in general.  I will let you examine these records at any reasonable time.  I will prepare any report or accounting you request, which deals with the Property.

   I will keep the Property in my possession and will keep it in good repair and use it only for the purpose(s) described on page 1 of this agreement.  I will not change this specified use without your express written permission.  I represent that I am the original owner of the Property and, if I am not, that I have provided you with a list of prior owners of the Property.

   I will keep the Property at my address listed on page 1 of this agreement, unless we agree I may keep it at another location.  If the Property is to be used in another state, I will give you a list of those states.  I will not try to sell the Property unless it is inventory or I receive your written permission to do so.  If I sell the Property I will have the payment made payable to the order of you and me.

   You may demand immediate payment of the debt(s) if the debtor is not a natural person and without your prior written consent; (1) a beneficial interest in the debtor is sold or transferred, or (2) there is a change in either the identity or number of members of a partnership, or (3) there is a change in ownership of more than 25 percent of the voting stock of a corporation.

   I will pay all taxes and charges on the Property as they become due.  You have the right of reasonable access in order to inspect the property.  I will immediately inform you of any loss or damage to the Property.

   If I fail to perform any of my duties under this security agreement, or any mortgage, deed of trust, lien or other security interest, you may without notice to me perform the duties or cause them to be performed.  Your right to perform for me shall not create an obligation to perform and your failure to perform will not preclude you from exercising any of your other rights under the law or this security agreement.

PURCHASE MONEY SECURITY INTEREST – For the sole purpose of determining the extent of a purchase money security interest arising under this security agreement: (a) payments on any nonpurchase money loan also secured by this agreement will not be deemed to apply to the Purchase Money Loan, and (b) payments on the Purchase Money Loan will be deemed to apply first to the nonpurchase money portion of the loan, if any, and then to the purchase money obligations in the order in which the items of collateral were acquired or if acquired at the same time, in the order selected by you.  No security interest will be terminated by application of this formula.  "Purchase Money Loan" means any loan the proceeds of which, in whole or in part, are used to acquire any collateral securing the loan and all extensions, renewals, consolidations and refinancing of such loan.

PAYMENTS BY LENDER – You are authorized to pay, on my behalf, charges I am or may become obligated to pay to preserve or protect the secured property (such as property insurance premiums).  You may treat those payments as advances and add them to the unpaid principal under the note secured by this agreement or you may demand immediate payment of the amount advanced.

INSURANCE – I agree to buy insurance on the Property against the risks and for the amounts you require and to furnish you continuing proof of coverage.  I will have the insurance company name you as loss payee on any such policy.  You may require added security if you agree that insurance proceeds may be used to repair or replace the Property.  I will buy insurance from a firm licensed to do business in the state where you are located.  The firm will be reasonably acceptable to you.  The insurance will last until the Property is released from this agreement.  If I fail to buy or maintain the insurance (or fail to name you as loss payee) you may purchase it yourself.

WARRANTIES AND REPRESENTATIONS – If this agreement includes accounts, I will not settle any account for less than its full value without your written permission.  I will collect all accounts until you tell me otherwise.  I will keep the proceeds from all the accounts and any goods which are returned to me which I take back in trust for you.  I will not mix them with any other property of mine.  I will deliver them to you at your request.  If you ask me to pay you the full price on any returned items or items retaken by myself, I will do so.  You may exercise my rights with respect to obligations of any account debtors, or other persons obligated on the Property, to pay or perform, and you may enforce any security interest that secures such obligations.

   If this agreement covers inventory, I will not dispose of it except in my ordinary course of business at the fair market value for the Property, or at a minimum price established between you and me.

Any person who signs within this box does so to give you a security interest in the Property described on this page.  This person does not promise to pay the note.  "I" as used in this security agreement will include the borrower and any person who signs within this box.

Date ___________________________

Signed ______________________________________________________________

   If this agreement covers farm products I will provide you, at your request, a written list of the buyers, commission merchants or selling agents to or through whom I may sell my farm products.  In addition to those parties named on this written list, I authorize you to notify at your sole discretion any additional parties regarding your security interest in my farm products.  I remain subject to all applicable penalties for selling my farm products in violation of my agreement with you and the Food Security Act.  In this paragraph the terms farm products, buyers, commission merchants and selling agents have the meanings given to them in the Federal Food Security Act of 1985.

   If this agreement covers chattel paper or instruments, either as original collateral or proceeds of the Property, I will note your interest on the face of the chattel paper or instruments.

REMEDIES – I will be in default on this security agreement if I am in default on any note this agreement secures or if I fail to keep any promise contained in the terms of this agreement.  If I default, you have all of the rights and remedies provided in the note and under the Uniform Commercial Code.  You may require me to make the secured property available to you at a place which is reasonably convenient.  You may take possession of the secured property and sell it as provided by law.  The proceeds will be applied first to your expenses and then to the debt.  I agree that 10 days written notice sent to my last known address by first class mail will be reasonable notice under the Uniform Commercial Code.  My current address is on page 1.

PERFECTION OF SECURITY INTEREST – I authorize you to file a financing statement covering the Property.  I will comply with, facilitate, and otherwise assist you in connection with obtaining possession of or control over the Property for purposes of perfecting your security interest under the Uniform Commercial Code.

ADDITIONAL TERMS OF THE NOTE

DEFINITIONS – As used on pages 1 and 2, "x" means the terms that apply to this loan.  "I," "me" or "my" means each Borrower who signs this note and each other person or legal entity (including guarantors, endorsers, and sureties) who agrees to pay this note (together referred to as "us").  "You" or "your" means the Lender and its successors and assigns.

APPLICABLE LAW – The law of the state of Tennessee will govern this agreement.  Any term of this agreement which is contrary to applicable law will not be effective, unless the law permits you and me to agree to such a variation.  If any provision of this agreement cannot be enforced according to its terms, this fact will not affect the enforceability of the remainder of this agreement.  No modification of this agreement may be made without your express written consent.  Time is of the essence in this agreement.

PAYMENTS – Each payment I make on this note will first reduce the amount I owe you for charges which are neither interest nor principal.  The remainder of each payment will then reduce accrued unpaid interest, and then unpaid principal.  If you and I agree to a different application of payments, we will describe our agreement on this note.  I may prepay a part of, or the entire balance of this loan without penalty, unless we specify to the contrary on this note.  Any partial prepayment will not excuse or reduce any later scheduled payment until this note is paid in full (unless, when I make the prepayment, you and I agree in writing to the contrary).

INTEREST – Interest accrues on the principal remaining unpaid from time to time, until paid in full.  If I receive the principal in more than one advance, each advance will start to earn interest only when I receive the advance.  The interest rate in effect on this note at any given time will apply to the entire principal sum outstanding at that time.  You and I may provide in this agreement for accrued interest not paid when due to be added to principal.  Notwithstanding anything to the contrary, I do not agree to pay and you do not intend to charge any rate of interest that is higher than the maximum rate of interest you could charge under applicable law for the extension of credit that is agreed to in this note (either before or after maturity).  If any notice of interest accrual is sent and is in error, we mutually agree to correct it, and if you actually collect more interest than allowed by law and this agreement, you agree to refund it to me.

INDEX RATE – The index will serve only as a device for setting the interest rate on this note.  You do not guarantee by selecting this index, or the margin, that the interest rate on this note will be the same rate you charge on any other loans or class of loans you make to me or other borrowers.

POST MATURITY RATE – For purposes of deciding when the "Post Maturity Rate" (shown on page 1) applies, the term "maturity" means the date of the last scheduled payment indicated on page 1 of this note or the date you accelerate payment on the note, whichever is earlier.

SINGLE ADVANCE LOANS – If this is a single advance loan, you and I expect that you will make only one advance of principal.  However, you may add other amounts to the principal if you make any payments described in the "PAYMENTS BY LENDER" paragraph on page 2, or if we have agreed that accrued interest not paid when due may be added to principal.

MULTIPLE ADVANCE LOANS – If this is a multiple advance loan, you and I expect that you will make more than one advance of principal.  If this is closed end credit, repaying a part of the principal will not entitle me to additional credit.

SET-OFF – I agree that you may set off any amount due and payable under this note against any right I have to receive money from you.

"Right to receive money from you" means:
(1)	any deposit account balance I have with you;
(2)	any money owed to me on an item presented to you or in your possession for collection or exchange; and
(3)	any repurchase agreement or other nondeposit obligation

   "Any amount due and payable under this note" means the total amount of which you are entitled to demand payment under the terms of this note at the time you set off.  This total included any balance the due date for which you properly accelerate under this note.

   If my right to receive money from you is also owned by someone who has not agreed to pay this note, your right of set-off will apply to my interest in the obligation and to any other amounts I could withdraw on my sole request or endorsement.  Your right of set-off does not apply to an account or other obligation where my rights are only as a representative.  It also does not apply to any Individual Retirement Account or other tax-deferred retirement account.

   You will not be liable for the dishonor of any check when the dishonor occurs because you set off this debt against any of my accounts.  I agree to hold you harmless from any such claims arising as a result of your exercise of your right to set-off.

DEFAULT – I will be in default if any one or more of the following occur: (1) I fail to make a payment on time or in the amount due; (2) I fail to keep the Property insured, if required; (3) I fail to pay, or keep any promise, on any debt or agreement I have with you; (4) any other creditor of mine attempts to collect any debt I owe him through court proceedings; (5) I die, am declared incompetent, make an assignment for the benefit of creditors, or become insolvent (either because my liabilities exceed my assets or I am unable to pay my debts as they become due); (6) I make any written statement or provide any financial information that is untrue or inaccurate at the time it was provided; (7) I do or fail to do something which causes you to believe you will have difficulty collecting the amount I owe you; (8) any collateral securing this note is used in a manner or for a purpose which threatens confiscation by a legal authority; (9) I change my name or assume an additional name without first notifying you before making such a change; (10) I fail to plant, cultivate and harvest crops in due season if I am a producer of crops; (11) any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.

REMEDIES - If I am in default on this note you have, but are not limited to, the following remedies:

(1)	You may demand immediate payment of all I owe you under this note (principal, accrued unpaid interest and other accrued unpaid charges).
(2)	You may set off this debt against any right I have to the payment of money from you, subject to the terms of the "SET-OFF" paragraph herein.
(3)	You may demand security, additional security, or additional parties to be obligated to pay this note as a condition for not using any other remedy.
(4)	You may refuse to make advances to me or allow purchases on credit by me.
(5)	You may use any remedy you have under state or federal law.
(6)	You may make use of any remedy given to you in any agreement securing this note.

   By selecting any one or more of these remedies you do not give up your right to use later any other remedy.  By waiving your right to declare an event to be a default, you do not waive your right to consider later the event a default if it continues or happens again.

COLLECTION COSTS AND ATTORNEY'S FEES – I agree to pay all costs of collection, replevin or any other or similar type of cost if I am in default.  In addition, if you hire an attorney to collect this note, I also agree to pay any fee you incur with such attorney plus court costs (except where prohibited by law).  To the extent permitted by the United States Bankruptcy Code, I also agree to pay the reasonable attorney's fees and costs you incur to collect this debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.

WAIVER – I give up my rights to require you to do certain things.  I will not require you to:

(1)	demand payment of amounts due (presentment);
(2)	obtain official certification of nonpayment (protest); or
(3)	give notice that amounts due have not been paid (notice of dishonor).

   I waive any defenses I have based on suretyship or impairment of collateral.

OBLIGATIONS INDEPENDENT – I understand that I must pay this note even if someone else has also agreed to pay it (by, for example, signing this form or a separate guarantee or endorsement).  You may sue me alone, or anyone else who is obligated on this note, or any number of us together, to collect this note.  You may without notice release any party to this agreement without releasing any other party.  If you give up any of your rights, with or without notice, it will not affect my duty to pay this note.  Any extension of new credit to any of us, or renewal of this note by all or less than all of us will not release me from duty to pay it.  (Of course, you are entitled to only one payment in full.)  I agree that you may at your option extend this note or the debt represented by this note, or any portion of the note or debt, from time to time without limit or notice and for any term without affecting my liability for payment of the note.  I will not assign my obligation under this agreement without your prior written approval.

FINANCIAL INFORMATION – I agree to provide you, upon request, any financial statement or information you may deem necessary.  I warrant that the financial statements and information I provide to you are or will be accurate, correct and complete.

SIGNATURES: I AGREE TO THE TERMS OF THIS AGREEMENT (INCLUDING THOSE ON PAGES 1 AND 2).  I have received a copy on today's date.

/s/ Theodore C. Miller		/s/ James P. Rousey
Theodore C. Miller,      Manager		James P. Rousey,     Authorized Signer
SIGNATAURE FOR LENDER:	/s/ Jill Martin, Secretary & Manager, First Southern Funding, LLC

  UTG Avalon, LLC PO Box 5147 Springfield IL 62703     BORROWER'S NAME AND ADDRESS "I" includes each borrower above, jointly and severally.   First Southern Funding 99 Lancaster Street Stanford, KY  40484     LENDER'S NAME AND ADDRESS "You" means the lender, its successors and assigns.     Line of Credit No. _6206-0001 ____ Date 3/28/2013________________ Max. Credit Amt. $ 5,000,000.00__ Loan Ref. No. _________________

You have extended to me a line of credit in the

AMOUNT of _FIVE MILLION DOLLARS AND ZERO CENTS__________________________________________ Dollars $ 5,000,000.00__________.

You will make loans to me from time to time until ____________4:30_____ _p_m. on __________03/28/2014_____________________.  Although the line of credit expires on that date, I will remain obligated to perform all my duties under this agreement so long as I owe you any money advanced according to the terms of this agreement, as evidenced by any note or notes I have signed promising to repay these amounts.

This line of credit is an agreement between you and me.  It is not intended that any third party receive any benefit from this agreement, whether by direct payment, reliance for future payment or in any other manner.  This agreement is not a letter of credit.

1. AMOUNT:  This line of credit is:

o OBLIGATORY:  You may not refuse to make a loan to me under this line of credit unless one of the following occurs:

a.  I have borrowed the maximum amount available to me;

b. This line of credit has expired;

c. I have defaulted on the note (or notes) which show my indebtedness under this line of credit;

d. I have violated any term of this line of credit or any note or other agreement entered into in connection with this line of credit;

e. I have suffered any deterioration in my financial condition as believed or determined by you, in your sole discretion, on the basis of such information as may be available to you from time to time.___________________________________________________________________

________________________________________________________________________________________________________________

x DISCRETIONARY:  You may refuse to make a loan to me under this line of credit once the aggregate outstanding advances equal or exceed ONE DOLLARS AND ZERO CENTS_______________________ $ 1.00______________________.

Subject to the obligatory or discretionary limitations above, this line of credit is:

x OPEN-END (Business or Agricultural only):  I may borrow up to the maximum amount of principal more than one time.

o  CLOSED-END:  I may borrow up to the maximum only one time.

2. PROMISSORY NOTE:  I will repay any advances made according to this line of credit agreement as set out in the promissory note, I signed on originating this __agreement____, or any note(s) I sign at a later time which represent advances under this agreement.  The note(s) set(s) out the terms relating to maturity, interest rate, repayment and advances.  If indicated on the promissory note, the advances will be made as follows:

A. Only upon such terms and under such conditions as you may deem appropriate at the time each advance is requested.____________________________

______________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________

3. RELATED DOCUMENTS:  I have signed the following documents in connection with this line of credit and note(s) entered into in accordance with this line of credit:

o security agreement dated ____________________________________o ________________________________________________________

o mortgage dated ____________________________________________o ________________________________________________________

o guaranty dated ____________________________________________o ________________________________________________________

4. REMEDIES:  If I am in default on the note(s) you may:

a. take any action as provided in the related documents;

b. without notice to me, terminate this line of credit.

By selecting any of these remedies you do no give up your right to later use any other remedy.  By deciding not to use any remedy should I default, you do not waive your right to later consider the event a default, if it happens again.

5. COSTS AND FEES:  If you hire an attorney to enforce this agreement I will pay your reasonable attorney's fees, where permitted by law.  I will also pay your court costs and costs of collection, where permitted by law.

6. COVENANTS:  For as long as this line of credit is in effect or I owe you money for advances made in accordance with the line of credit, I will do the following:

a.  maintain books and records of my operation relating to the need for this line of credit;

b. permit you or any of your representatives to inspect and /or copy these records;

c. provide to you any documentation requested by you which support the reason for making any advance under this line of credit;

d. permit you to make any advance payable to the seller (or seller and me) of any items being purchased with that advance;

e. __use all funds advanced under this line of credit for the following and no other purpose(s):_______________________________________________

___Line of Credit________________________________________________________________________________________________________

_____________________________________________________________________________________________________________________

7. NOTICES:  All notices or other correspondence with me should be sent to my address stated above.  The notice or correspondence shall be effective when deposited in the mail, first class, or delivered to me in person.

8. MISCELLANEOUS:  This line of credit may not be changed except by a written agreement signed by you and me.  The law of the state in which you are located will govern this agreement.  Any term of this agreement which is contrary to applicable law will not be effective, unless the law permits you and me to agree to such a variation.

FOR THE LENDER /s/ Jill Martin		SIGNATURES:  I AGREE TO THE TERMS OF THIS LINE OF CREDIT.  I HAVE RECEIVED A COPY ON TODAY'S DATE. /s/ Theodore C. Miller
Title	Secretary & Manager, First Southern Funding, LLC	Theodore C. Miller, Manager /s/ James P. Rousey
		James P. Rousey, Authorized Signer

EX-31.1

Exhibit 31.1

CERTIFICATIONS
I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of UTG, Inc., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
2.	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;
3.	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;
4.	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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) 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.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	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
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying 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 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 controls over financial reporting.

Date:	May 10, 2013	By	/s/ Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS
I, Theodore C. Miller,  Senior Vice President, Corporate Secretary and Chief Financial Officer of UTG, Inc., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
2.	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;
3.	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;
4.	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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) 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.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	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
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying 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 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 controls over financial reporting.

Date:	May 10, 2013	By	/s/ Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended September 30, 2012, 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

Date:	May 10, 2013	By:	/s/ Jesse T. Correll
			Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended September 30, 2012 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

Date:	May 10, 2013	By:	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President, Corporate
			Secretary and Chief Financial Officer

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SHAREHOLDERS' EQUITY (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
STOCK REPURCHASE PROGRAM [Abstract]
Stock repurchase program authorized amount	$ 6,000,000
Treasury Stock, Shares, Acquired	4,143
Amount paid to repurchase shares during the year	54,048
Amount of common stock repurchased	$ 4,665,744
Number of common stock acquired (in shares)	566,833

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INVESTMENTS

3 Months Ended

Mar. 31, 2013

INVESTMENTS [Abstract]

INVESTMENTS

Note 3 – Investments

Available for Sale Securities – Fixed Maturity and Equity Securities

The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in available for sale securities are summarized as follows:

March 31, 2013		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	38,428,537	$	5,454,621	$	(281)	$	43,882,877
States, municipalities and political subdivisions		150,000		5,993		0		155,993
U.S. special revenue and assessments		2,150,766		157,779		0		2,308,545
Collateralized mortgage obligations		1,780,601		158,444		0		1,939,045
Public utilities		399,903		61,207		0		461,110
All other corporate bonds		133,203,699		9,682,828		(1,787,643)		141,098,884
		176,113,506		15,520,872		(1,787,924)		189,846,454
Equity securities		29,747,616		1,284,494		(496,936)		30,535,174
Total	$	205,861,122	$	16,805,366	$	(2,284,860)	$	220,381,628

December 31, 2012		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	33,430,165	$	5,457,009	$	0	$	38,887,174
States, municipalities and political subdivisions		160,000		6,637		0		166,637
U.S. special revenue and assessments		2,150,070		153,545		0		2,303,615
Collateralized mortgage obligations		2,241,384		183,409		(8)		2,424,785
Public utilities		399,900		63,662		0		463,562
All other corporate bonds		135,145,198		9,747,565		(1,811,251)		143,081,512
		173,526,717		15,611,827		(1,811,259)		187,327,285
Equity securities		29,497,001		1,303,328		(295,415)		30,504,914
Total	$	203,023,718	$	16,915,155	$	(2,106,674)	$	217,832,199

The amortized cost and estimated market value of debt securities at March 31, 2013, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale March 31, 2013		Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,400,052	$	2,423,382
Due after one year through five years		30,181,928		32,745,345
Due after five years through ten years		108,860,492		117,999,294
Due after ten years		32,703,905		34,549,122
Collateralized mortgage obligations		1,967,129		2,129,311
Total	$	176,113,506	$	189,846,454

The fair value of investments with sustained gross unrealized losses at March 31, 2013 and December 31, 2012 are as follows:

March 31, 2013		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
U.S. Government and govt. agencies and authorities	$	4,995,703	(282)	$	0	0	$	4,995,703	(282)
All other corporate bonds		6,638,079	(50,703)		4,383,021	(1,736,939)		11,021,100	(1,787,642)
Total fixed maturities	$	11,633,782	(50,985)	$	4,383,021	(1,736,939)	$	16,016,803	(1,787,924)
Equity securities	$	1,253,075	(496,936)	$	0	0	$	1,253,075	(496,936)

December 31, 2012		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	4,513	(8)	$	0	0	$	4,513	(8)
All other corporate bonds		13,776,705	(245,846)		385,823	(1,565,405)		14,162,528	(1,811,251)
Total fixed maturities	$	13,781,218	(245,854)	$	385,823	(1,565,405)	$	14,167,041	(1,811,259)
Equity securities	$	594,081	(295,415)	$	0	0	$	594,081	(295,415)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of March 31, 2013
Fixed maturities	8	4	12
Equity securities	4	0	4
As of December 31, 2012
Fixed maturities	8	3	11
Equity securities	9	0	9

Substantially all of the unrealized losses on fixed maturities available for sale at March 31, 2013 and December 31, 2012 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  The unrealized losses on equity investments were primarily attributable to normal market fluctuations.  The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position.  Based upon the Company's expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company's evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of March 31, 2013 and December 31, 2012.

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary.  The factors considered by management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company's intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates.  If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company's ability and intent to hold the security to recovery.  If a decline in fair value is judged by management to be other-than-temporary or management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Condensed Consolidated Statements of Operations.

Based on management's review of the investment portfolio, the Company recorded the following losses for other-than-temporary impairments in the Condensed Consolidated Statements of Operations:

		Three Months Ended
		March 31,
		2013		2012
Other than temporary impairments:
Real Estate	$	26,926	$	0

The other-than-temporary impairment recognized during 2013 was due to Management's assessment of the value of the real estate. The real estate was written down to better reflect current expected market value.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Condensed Consolidated Statements of Operations.  Trading securities include exchange-traded equities and exchange-traded options.  Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.  The fair value of derivatives included in trading security assets and trading security liabilities as of March 31, 2013 was $1,324,513 and $(1,442,933), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2012 was $6,745,528 and $(6,050,344), respectively.  Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

Trading revenue charged to net investment income from trading securities was:

		Three Months Ended
		March 31,
		2013		2012
Net unrealized losses	$	(297,344)	$	528,698
Net realized gains (losses)		86,271		2,310,507
Net unrealized and realized gains (losses)	$	(211,073)	$	2,839,205

Mortgage Loans

As of March 31, 2013 and December 31, 2012, the Company's mortgage loan portfolio contained58 and 71mortgage loans, including discounted mortgage loans, with a carrying value of $37,712,726 and$44,008,507,respectively.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers' ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Given the uncertainty of the current market, management has taken a conservative approach with the discounted mortgage loans and has classified all discounted mortgage loans held as non-accrual.  In such status, the Company is not recording any accrued interest income nor is it recording any accrual of discount on the loans held.  Discount accruals reported during 2012 and 2013 were the result of the loan basis already being fully paid.

On the remainder of the mortgage loan portfolio, interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value.  The Company acquires the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary.  Those loans not currently paying are being vigorously worked by management.  The current discounted commercial mortgage loan portfolio has an average price of37.3% of face value and management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased.

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NEW ACCOUNTING STANDARDS

3 Months Ended

Mar. 31, 2013

NEW ACCOUNTING STANDARDS [Abstract]

NEW ACCOUNTING STANDARDS

Note 2 – New Accounting Standards

Comprehensive Income - In February 2013, the Financial Accounting Standards Board ("FASB") issued an accounting standard which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This guidance is effective for periods beginning after December 15, 2012. The Company does not expect the adoption of this new guidance to have a material impact on the Company's consolidated financial statements.

Intangibles-Goodwill and Other – In July 2012, FASB issued guidance on the testing of indefinite-lived intangible assets for impairment, which is intended to reduce the cost and complexity of the impairment test for indefinite-lived intangible assets by providing an entity with the option to first assess qualitatively whether it is necessary to perform the impairment test that is currently in place. An entity would not be required to quantitatively calculate the fair value of an indefinite-lived intangible asset unless the entity determines that it is more likely than not that its fair value is less than its carrying value. This guidance is effective for interim and annual impairment tests beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance will not have a material effect on the Company's consolidated financial statements.

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Balance Sheet (USD $)	Mar. 31, 2013	Dec. 31, 2012
Investments available for sale:
Fixed maturities, at fair value (amortized cost $157,252,220 and $107,514,400)	$ 189,846,454	$ 187,327,285
Equity securities, at fair value (cost $24,813,689 and $16,200,043)	30,535,174	30,504,914
Trading securities, at fair value (cost $12,004,466 and $9,147,237)	6,426,288	14,018,460
Mortgage loans on real estate at amortized cost	11,009,174	17,671,554
Discounted mortgage loans on real estate at cost	26,703,552	26,336,953
Investment real estate	71,025,034	68,165,013
Policy loans	12,397,405	12,591,572
Short-term investments	6,263,937	6,268,320
Total investments	354,207,018	362,884,071
Cash and cash equivalents	26,287,257	23,321,246
Accrued investment income	2,094,272	2,444,790
Future policy benefits	29,045,254	29,318,018
Policy claims and other benefits	3,837,588	4,492,430
Cost of insurance acquired	11,434,677	11,700,765
Deferred policy acquisition costs	412,110	426,218
Property and equipment, net of accumulated depreciation	1,302,948	1,344,851
Income tax receivable	7,214	20,035
Other assets	3,934,639	5,381,969
Total assets	432,562,977	441,334,393
Liabilities:
Future policyholder benefits	291,223,310	293,800,162
Policy claims and benefits payable	4,669,151	3,371,767
Other policyholder funds	469,148	477,948
Dividend and endowment accumulations	14,113,062	14,072,513
Income tax payable	4,296	2,042,786
Deferred income taxes	12,139,693	12,301,577
Notes payable	18,848,454	18,857,954
Trading securities, at fair value (proceeds $8,019,351 and $6,288,562)	2,950,631	7,552,704
Other liabilities	9,391,959	9,202,354
Total liabilities	353,809,704	361,679,765
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,809,388 and 3,854,610 shares outstanding	3,795	3,799
Additional paid-in capital	44,283,699	44,337,743
Retained earnings	21,007,046	21,917,318
Accumulated other comprehensive income	9,581,350	9,664,466
Total UTG shareholders' equity	74,875,890	75,923,326
Noncontrolling interests	3,877,383	3,731,302
Total shareholders' equity	78,753,273	79,654,628
Total liabilities and shareholders' equity	$ 432,562,977	$ 441,334,393

XML

Statement of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income attributable to common shareholders	$ (910,272)	$ 5,226,517
Adjustments to reconcile net income to net cash used in operating activities net of changes in assets and liabilities resulting from the sales and purchases of subsidiaries:
Amortization (accretion) of investments	(403,748)	(975,910)
Realized investment gains, net	(44,723)	(7,135,970)
Unrealized trading gains included in income	297,344	(528,698)
Amortization of deferred policy acquisition costs	14,108	15,512
Amortization of cost of insurance acquired	266,088	286,375
Depreciation	320,071	446,177
Net income attributable to noncontrolling interest	146,081	273,214
Charges for mortality and administration of universal life and annuity products	(1,737,635)	(1,789,191)
Interest credited to account balances	1,450,681	1,422,593
Change in accrued investment income (loss)	350,518	(535,714)
Change in reinsurance receivables	927,606	718,638
Change in policy liabilities and accruals	(1,121,391)	(462,586)
Change in income taxes receivable (payable)	(1,982,692)	2,664,281
Change in other assets and liabilities, net	1,624,775	(1,245,683)
Net cash provided by (used in) operating activities	(803,189)	(1,620,445)
Proceeds from investments sold and matured:
Fixed maturities available for sale	6,173,142	49,673,705
Equity securities available for sale	0	296,399
Trading securities	17,829,177	3,863,825
Mortgage loans	7,785,104	2,430,247
Discounted mortgage loans	1,505,565	3,257,451
Real estate	2,733,460	8,173,899
Policy loans	997,774	1,134,602
Short term investments	29,383	0
Total proceeds from investments sold and matured	37,053,605	68,830,128
Cost of investments acquired:
Fixed maturities available for sale	(8,856,558)	(85,553,891)
Equity securities available for sale	(250,617)	(166,407)
Trading securities	(15,124,263)	(3,443,030)
Mortgage loans	(1,122,724)	(392)
Discounted mortgage loans	(1,280,456)	(5,875,374)
Real estate	(5,918,258)	(3,203,558)
Policy loans	(803,607)	(749,810)
Payments for (Proceeds from) Other Investing Activities	(25,000)	0
Total cost of investments acquired	(33,381,483)	(98,992,462)
Net cash used in investing activities	3,672,122	(30,162,334)
Cash flows from financing activities:
Policyholder contract deposits	1,521,403	1,617,272
Policyholder contract withdrawals	(1,360,777)	(1,638,400)
Proceeds from notes payable/line of credit	0	350,000
Payments of principal on notes payable/line of credit	(9,500)	(359,347)
Purchase of treasury stock	(54,048)	(433,177)
Distributions to minority interests of consolidated subsidiaries	0	(10,000)
Net cash provided by (used in) financing activities	97,078	(473,652)
Net increase (decrease) in cash and cash equivalents	2,966,011	(32,256,431)
Cash and cash equivalents at beginning of period	23,321,246	82,925,675
Cash and cash equivalents at end of period	$ 26,287,257	$ 50,669,244

XML

INVESTMENTS (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Amortized cost and estimated value of debt securities, by contractual maturity [Abstract]
Due in one year or less	$ 2,423,382
Due after one year through five years	32,745,345
Due after five years through ten years	117,999,294
Due after ten years	34,549,122
Collateralized mortgage obligations	2,129,311
Total	189,846,454
Fixed maturities [Abstract]
Original or Amortized Cost	205,861,122		203,023,718
Gross Unrealized Gains	16,805,366		16,915,155
Gross Unrealized Losses	(2,284,860)		(2,106,674)
Estimated Market Value	220,381,628		217,832,199
Amortized cost and estimated market value of debt securities, by contractual maturity [Abstract]
Due in one year or less	2,400,052
Due after one year through five years	30,181,928
Due after five years through ten years	108,860,492
Due after ten years	32,703,905
Collateralized mortgage obligation	1,967,129
Total	176,113,506
Other than temporary impairment losses, investments, available-for-sale securities	26,926	0
Trading Securities [Abstract]
Fair value, derivatives included in trading security assets	1,324,513		6,745,528
Fair value, derivative included in trading security liabilities	(1,442,933)		(6,050,344)
Trading securities, net unrealized gain (loss)	(297,344)	528,698
Trading securities, realized gain (loss)	86,271	2,310,507
Increase (Decrease) in Trading Securities [Abstract]
Net Realized and Unrealized Gain (Loss) on Trading Securities	(211,073)	2,839,205
Mortgages [Abstract]
Number of Mortgage Loans including Discounted Mortgage Loans	58		71
Mortgage Loans including Discounted Mortgage Loans	37,712,726		44,008,507
Mortgage loans reserve	0
Average purchase price to outstanding loan (in hundredths)	37.30%
U.S. Government and Government Agencies and Authorities [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	38,428,537		33,430,165
Gross Unrealized Gains	5,454,621		5,457,009
Gross Unrealized Losses	(281)		0
Estimated Market Value	43,882,877		38,887,174
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair value	4,995,703
Less than 12 months, Unrealized losses	(282)
Twelve months or longer, Fair value	0
Twelve months or longer, Unrealized losses	0
Total Fair value	4,995,703
Total Unrealized losses	(282)
US Special Revenue and Assessments [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	2,150,766		2,150,070
Gross Unrealized Gains	157,779		153,545
Gross Unrealized Losses	0		0
Estimated Market Value	2,308,545		2,303,615
States, Municipalities and Political Subdivisions [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	150,000		160,000
Gross Unrealized Gains	5,993		6,637
Gross Unrealized Losses	0		0
Estimated Market Value	155,993		166,637
Collateralized Mortgage Obligations [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	1,780,601		2,241,384
Gross Unrealized Gains	158,444		183,409
Gross Unrealized Losses	0		(8)
Estimated Market Value	1,939,045		2,424,785
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair value			4,513
Less than 12 months, Unrealized losses			(8)
Twelve months or longer, Fair value			0
Twelve months or longer, Unrealized losses			0
Total Fair value			4,513
Total Unrealized losses			(8)
Public Utilities [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	399,903		399,900
Gross Unrealized Gains	61,207		63,662
Gross Unrealized Losses	0		0
Estimated Market Value	461,110		463,562
Debt Securities [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	176,113,506		173,526,717
Gross Unrealized Gains	15,520,872		15,611,827
Gross Unrealized Losses	(1,787,924)		(1,811,259)
Estimated Market Value	189,846,454		187,327,285
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair value	11,633,782		13,781,218
Less than 12 months, Unrealized losses	(50,985)		(245,854)
Twelve months or longer, Fair value	4,383,021		385,823
Twelve months or longer, Unrealized losses	(1,736,939)		(1,565,405)
Total Fair value	16,016,803		14,167,041
Total Unrealized losses	(1,787,924)		(1,811,259)
Less than 12 months Number of Securities	8		8
Twelve months or longer Number of Securities	4		3
Total Number of Securities	12		11
Equity Securities [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	29,747,616		29,497,001
Gross Unrealized Gains	1,284,494		1,303,328
Gross Unrealized Losses	(496,936)		(295,415)
Estimated Market Value	30,535,174		30,504,914
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair value	1,253,075		594,081
Less than 12 months, Unrealized losses	(496,936)		(295,415)
Twelve months or longer, Fair value	0		0
Twelve months or longer, Unrealized losses	0		0
Total Fair value	1,253,075		594,081
Total Unrealized losses	(496,936)		(295,415)
Less than 12 months Number of Securities	4		9
Twelve months or longer Number of Securities	0		0
Total Number of Securities	4		9
All Other Corporate Bonds [Member]
Fixed maturities [Abstract]
Original or Amortized Cost	133,203,699		135,145,198
Gross Unrealized Gains	9,682,828		9,747,565
Gross Unrealized Losses	(1,787,643)		(1,811,251)
Estimated Market Value	141,098,884		143,081,512
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, Fair value	6,638,079		13,776,705
Less than 12 months, Unrealized losses	(50,703)		(245,846)
Twelve months or longer, Fair value	4,383,021		385,823
Twelve months or longer, Unrealized losses	(1,736,939)		(1,565,405)
Total Fair value	11,021,100		14,162,528
Total Unrealized losses	$ (1,787,642)		$ (1,811,251)

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CREDIT ARRANGEMENTS (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Issue Date	Dec. 27, 2012
Maturity Date	Mar. 04, 2018
Outstanding principal balance	$ 12,000,000	$ 12,000,000
Revolving Credit Limit	5,000,000
Outstanding Balance	5,000,000	0
Borrowings	5,000,000
Repayments	0
Scheduled principal reductions on notes payable for the next five years [Abstract]
2013	1,677,120
2014	5,034,154
2015	382,395
2016	518,134
2017	542,470
UTG [Member]
Debt Instrument [Line Items]
Issue Date	Nov. 20, 2012
Maturity Date	Nov. 20, 2013
Revolving Credit Limit	8,000,000
Outstanding Balance	1,655,035	1,655,035
Borrowings	0
Repayments	0
UTG Avalon [Member]
Debt Instrument [Line Items]
Issue Date	Dec. 28, 2011
Maturity Date	Jan. 03, 2014
Revolving Credit Limit	5,000,000
Outstanding Balance	0	5,000,000
Borrowings	0
Repayments	5,000,000
UG [Member]
Debt Instrument [Line Items]
Issue Date	Dec. 28, 2010
Maturity Date	Dec. 06, 2013
Revolving Credit Limit	15,000,000
Outstanding Balance	0	0
Borrowings	0
Repayments	0
HPG Acquisitions [Member]
Debt Instrument [Line Items]
Issue Date	Feb. 07, 2007
Maturity Date	Nov. 07, 2017
Outstanding principal balance	$ 193,419	$ 202,919

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2013

BASIS OF PRESENTATION [Abstract]

BASIS OF PRESENTATION

Note 1 – Basis of Presentation

The accompanying condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements include the accounts of UTG, Inc. (the "Parent") and its subsidiaries (collectively with the Parent, the "Company").  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of management, are necessary for a fair presentation of the results for the interim periods.  The unaudited condensed consolidated financial statements included herein and these related notes should be read in conjunction with the Company's consolidated financial statements, and the notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.  The Company's results of operations for the three month period ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013 or for any other future period.

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 ("FSF"), a Kentucky corporation, and First Southern Bancorp, Inc. ("FSBI"), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank ("FSNB").  Banking activities are conducted through multiple locations within south-central and western 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 March 31, 2013, Mr. Correll owns or controls directly and indirectly approximately56%of UTG's outstanding stock.

UTG's life insurance subsidiary, Universal Guaranty Life Insurance Company ("UG"), has several wholly-owned and majority-owned subsidiaries.  The subsidiaries were formed to hold certain real estate investments.  The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

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Balance Sheet Parenthetical (USD $)	Mar. 31, 2013	Dec. 31, 2012
Investments available for sale:
Fixed maturities, amortized cost	$ 176,113,506	$ 173,526,717
Equity securities, cost	29,747,616	29,497,001
Trading securities, cost	6,656,101	14,714,333
Liabilities:
Trading Securities, Proceeds	$ 2,729,311	$ 8,094,787
Shareholders' equity:
Common stock, stated value (in dollars per share)	$ 0.001
Common stock, authorized (in shares)	7,000,000
Common stock, outstanding (in shares)	3,794,728	3,798,871

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2013

FAIR VALUE MEASUREMENTS [Abstract]

Financial assets and liabilities measured on recurring basis

The following table presents the Company's assets and liabilities measured at fair value in the condensed consolidated balance sheet on a recurring basis as of March 31, 2013.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	25,989,101	$	163,520,634	$	336,719	$	189,846,454
Equity Securities, available for sale		1,627,505		5,967,525		22,940,144		30,535,174
Trading Securities		6,426,288		0		0		6,426,288
Total	$	34,042,894	$	169,488,159	$	23,276,863	$	226,807,916
Liabilities
Trading Securities	$	2,950,631	$	0	$	0	$	2,950,631

The following table presents the Company's assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2012.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	20,993,398	$	166,060,160	$	273,727	$	187,327,285
Equity Securities, available for sale		1,448,585		6,092,614		22,963,715		30,504,914
Trading Securities		13,903,148		115,312		0		14,018,460
Total	$	36,345,131	$	172,268,086	$	23,237,442	$	231,850,659
Liabilities
Trading Securities	$	7,552,704	$	0	$	0	$	7,552,704

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

		Fixed Maturities, Available for Sale		Equity Securities, Available for Sale		Total
Balance at December 31, 2012	$	273,727	$	22,963,715	$	23,237,442
Total unrealized gain or losses:
Included in other comprehensive income		62,992		(23,571)		39,421
Purchases		0		0		0
Balance at March 31, 2013	$	336,719	$	22,940,144	$	23,276,863

Estimated fair value of financial instruments required to be valued by ASC 820

The carrying values and estimated fair values of certain of the Company's financial instruments not recorded at fair value in the condensed consolidated balance sheets are shown below. Because the fair value for all condensed consolidated balance sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

		March 31, 2013				December 31, 2012
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	11,009,174	$	11,089,516	$	17,671,554	$	17,803,159
Discounted mortgage loans		26,703,552		26,703,552		26,336,953		26,336,953
Investment real estate		71,025,034		71,025,034		68,165,013		68,165,013
Policy loans		12,397,405		12,397,405		12,591,572		12,591,572
Cash and cash equivalents		26,287,257		26,287,257		23,321,246		23,321,246
Short term investments		6,263,937		6,263,937		6,268,320		6,268,320
Liabilities
Notes payable		18,848,454		18,848,454		18,857,954		18,857,954

XML

Document and Entity Information (USD $)	3 Months Ended
	Mar. 31, 2013	Apr. 26, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	UTG Inc
Entity Central Index Key	0000832480
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Filer Category	Smaller Reporting Company
Entity Public Float	$ 0
Entity Common Stock, Shares Outstanding		3,792,732
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013

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CREDIT ARRANGEMENTS (Tables)

3 Months Ended

Mar. 31, 2013

NOTES PAYABLE [Abstract]

Schedule of promissory note

At March 31, 2013 and December 31, 2012, the Company hadthe following outstanding debt:

				Outstanding Principal Balance
Instrument	Issue Date	Maturity Date		March 31, 2013		December 31, 2012
Promissory Note:
HPG Acquisitions	2007-02-07	2017-11-07	$	193,419	$	202,919
HPG Acquisitions	2012-12-27	2018-03-04		12,000,000		12,000,000

Schedule of lines of credit

Instrument	Issue Date	Maturity Date		Revolving Credit Limit		December 31, 2012	Borrowings	Repayments		March 31, 2013
Lines of Credit:
UTG	2012-11-20	2013-11-20	$	8,000,000	$	1,655,035	0	0	$	1,655,035
UTG Avalon	2011-12-28	2014-01-03		5,000,000		5,000,000	0	5,000,000		0
UTG Avalon	2013-03-28	2014-03-28		5,000,000		0	5,000,000	0		5,000,000
UG	2010-12-28	2013-12-06		15,000,000		0	0	0		0

Scheduled principal reduction on notes payable for the next five years

The consolidated scheduled principal reductions on the notes payable for the next five years are as follows:

Year		Amount
2013	$	1,677,120
2014		5,034,154
2015		382,395
2016		518,134
2017		542,470

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Income Statement (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues:
Premiums and policy fees	$ 3,212,746	$ 3,516,444
Ceded reinsurance premiums and policy fees	(775,702)	(908,098)
Net investment income	4,381,392	6,950,756
Other income	521,359	547,694
Revenues before realized gains	7,339,795	10,106,796
Realized investment gains (losses), net:
Other-than-temporary impairments	(26,926)	0
Other realized investment gains, net	71,649	7,135,970
Total realized investment gains, net	44,723	7,135,970
Total revenue	7,384,518	17,242,766
Benefits, claims and settlement expenses:
Life	5,856,321	5,870,808
Ceded Reinsurance benefits and claims	(597,779)	(835,875)
Annuity	267,539	260,690
Dividends to policyholders	147,222	140,624
Commissions and amortization of deferred policy acquisition costs	(23,552)	(152,813)
Amortization of cost of insurance acquired	266,088	286,375
Operating expenses	2,055,125	2,875,495
Interest expense	110,437	72,175
Total benefits and other expenses	8,081,401	8,517,479
Income before income taxes	(696,883)	8,725,287
Income tax expense	(67,308)	(3,225,556)
Net income	(764,191)	5,499,731
Net income attributable to noncontrolling interests	(146,081)	(273,214)
Net income attributable to common shareholders'	$ (910,272)	$ 5,226,517
Amounts attributable to common shareholders':
Basic income per share (in dollars per share)	$ (0.24)	$ 1.36
Diluted income per share (in dollars per share)	$ (0.24)	$ 1.36
Basic weighted average shares outstanding (in shares)	3,796,527	3,837,081
Diluted weighted average shares outstanding (in shares)	3,796,527	3,837,081

XML

SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2013

CAPITAL STOCK TRANSACTIONS [Abstract]

CAPITAL STOCK TRANSACTIONS

Note 6 – Shareholders' Equity

Stock Repurchase Programs

The Board of Directors of UTG authorized the repurchase in the open market or in privately negotiated transactions of up to $6 million of UTG's common stock. Repurchased shares are available for future issuance for general corporate purposes.  This program can be terminated at any time.  Open market purchases are made based on the last available market price and are generally limited to a maximum per share price of the most recent reported per share GAAP equity book value of the Company.  During the current year, the Company repurchased 4,143 shares through the stock repurchase program for $54,048.Through March 31, 2013, UTG has spent $4,665,744 in the acquisition of 566,833 shares under this program.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  At March 31, 2013 and March 31, 2012, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

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CREDIT ARRANGEMENTS

3 Months Ended

Mar. 31, 2013

NOTES PAYABLE [Abstract]

NOTES PAYABLE

Note 5 – Credit Arrangements

At March 31, 2013 and December 31, 2012, the Company hadthe following outstanding debt:

				Outstanding Principal Balance
Instrument	Issue Date	Maturity Date		March 31, 2013		December 31, 2012
Promissory Note:
HPG Acquisitions	2007-02-07	2017-11-07	$	193,419	$	202,919
HPG Acquisitions	2012-12-27	2018-03-04		12,000,000		12,000,000

Instrument	Issue Date	Maturity Date		Revolving Credit Limit		December 31, 2012	Borrowings	Repayments		March 31, 2013
Lines of Credit:
UTG	2012-11-20	2013-11-20	$	8,000,000	$	1,655,035	0	0	$	1,655,035
UTG Avalon	2011-12-28	2014-01-03		5,000,000		5,000,000	0	5,000,000		0
UTG Avalon	2013-03-28	2014-03-28		5,000,000		0	5,000,000	0		5,000,000
UG	2010-12-28	2013-12-06		15,000,000		0	0	0		0

The HPG Acquisitions promissory note issued on February 7, 2007 bears interest at a fixed rate of 5%.

The HPG Acquisitions promissory note issued on December 27, 2012 is secured by real estate owned by HPG. The promissory note bears interest at a fixed rate of 4%. Interest is payable monthly. Principal is payable monthly beginning in the third year of the note.

The UTG line of credit carries interest at a fixed rate of 3.75% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance  Company ("UG").

The UTG Avalon line of credit issued on December 28, 2011 carried interest at a rate of 4.0% and was payable in two semi-annual payments. This line of credit was repaid during March 2013.

The UTG Avalon line of credit issued on March 28, 2013 currently carries interest at a rate of 4.0% and is payable in two semi-annual payments. The interest rate is a variable rate that will be 0.50% above the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal.  The interest rate is subject to change monthly and changes in the interest rate will take effect on the first day of the month following the rate change.

UG is a member of the Federal Home Loan Bank ("FHLB").  This membership allows the Company access to additional credit up to a maximum of 50% of the total assets of UG.  To be a member of the FHLB, the Company was required to purchase shares of common stock of FHLB.  Borrowing capacity is based on 50 times each dollar of stock acquired in FHLB above the "base membership" amount.

The consolidated scheduled principal reductions on the notes payable for the next five years are as follows:

Year		Amount
2013	$	1,677,120
2014		5,034,154
2015		382,395
2016		518,134
2017		542,470

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FAIR VALUE MEASUREMENTS (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Liabilities [Abstract]
Trading Securities	$ 1,442,933	$ 6,050,344
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	23,237,442
Total Unrealized Gains (Losses) Included in Other Comprehensive Income	39,421
Purchases	0
Ending Balance	23,276,863
Assets [Abstract]
Discounted mortgage loans	26,703,552	26,336,953
Investment real estate	71,025,034	68,165,013
Cash and cash equivalents	26,287,257	23,321,246	50,669,244	82,925,675
Liabilities [Abstract]
Policy loan interest rate, minimum (in hundredths)	4.00%
Policy loan interest rate, maximum (in hundredths)	8.00%
Carrying Amount [Member]
Assets [Abstract]
Mortgage loans on real estate	11,009,174	17,671,554
Discounted mortgage loans	26,703,552	26,336,953
Investment real estate	71,025,034	68,165,013
Policy Loans	12,397,405	12,591,572
Cash and cash equivalents	26,287,257	23,321,246
Other Assets, Fair Value Disclosure	6,263,937	6,268,320
Liabilities [Abstract]
Notes payable	18,848,454	18,857,954
Estimated Fair Value [Member]
Assets [Abstract]
Mortgage loans on real estate	11,089,516	17,803,159
Discounted mortgage loans	26,703,552	26,336,953
Investment real estate	71,025,034	68,165,013
Policy Loans	12,397,405	12,591,572
Cash and cash equivalents	26,287,257	23,321,246
Other Assets, Fair Value Disclosure	6,263,937	6,268,320
Liabilities [Abstract]
Notes payable	18,848,454	18,857,954
Fixed Maturities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	273,727
Total Unrealized Gains (Losses) Included in Other Comprehensive Income	62,992
Purchases	0
Ending Balance	336,719
Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	22,963,715
Total Unrealized Gains (Losses) Included in Other Comprehensive Income	(23,571)
Purchases	0
Ending Balance	22,940,144
Level 1 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	25,989,101	20,993,398
Equity Securities, available for sale	1,627,505	1,448,585
Trading Securities	6,426,288	13,903,148
Total Financial Assets	34,042,894	36,345,131
Liabilities [Abstract]
Trading Securities	2,950,631	7,552,704
Level 2 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	163,520,634	166,060,160
Equity Securities, available for sale	5,967,525	6,092,614
Trading Securities	0	115,312
Total Financial Assets	169,488,159	172,268,086
Liabilities [Abstract]
Trading Securities	0	0
Level 3 [Member]
Assets [Abstract]
Fixed Maturities, available for sale	336,719	273,727
Equity Securities, available for sale	22,940,144	22,963,715
Trading Securities	0	0
Total Financial Assets	23,276,863	23,237,442
Liabilities [Abstract]
Trading Securities	0	0
Measured on a recurring basis [Member]
Assets [Abstract]
Fixed Maturities, available for sale	189,846,454	187,327,285
Equity Securities, available for sale	30,535,174	30,504,914
Trading Securities	6,426,288	14,018,460
Total Financial Assets	226,807,916	231,850,659
Liabilities [Abstract]
Trading Securities	$ 2,950,631	$ 7,552,704

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

Funding commitment and unfunded commitment

The following table represents the total funding commitments and the unfunded commitment as of March 31, 2013 related to certain investments:

		Total Funding		Unfunded
		Commitment		Commitment
RLF III, LLC	$	4,000,000	$	398,120
Llano Music, LLC		2,000,000		571,000
Marcellus III, LLP		1,250,000		294,375
Dew Learning, LLC		1,000,000		528,114
Marcellus HBPI, LLP		1,800,000		771,300
PBEX, LLC		5,625,000		2,818,750
Sovereign's Capital, LP		500,000		250,000

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CONCENTRATIONS

3 Months Ended

Mar. 31, 2013

CONCENTRATIONS [Abstract]

CONCENTRATIONS

Note 9 – Concentrations 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 the largest shareholder of UTG, Mr. Jesse Correll, the Company's CEO and Chairman.  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.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 7 – 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.  In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings.  Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company's results of operations or financial position.

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.

As part of the Texas Imperial Life Insurance Company sale, the Company remains contingently liable for certain costs pending the outcome of an ongoing race-based audit on Texas Imperial Life Insurance Company by the Texas Department of Insurance.  Under the agreement, the Company is responsible for 100% of the first $50,000 of costs, 90% of the next $50,000, 75% of the third $50,000 and 50% of the costs above $150,000.  Management had conservatively estimated the Company's exposure and other costs at $50,000 based on information provided to date from the examination team and has established a contingent liability of $47,727 in its financial statements.  This contingency expires December 30, 2013.

Within the Company's trading accounts, certain trading securities carried as liabilities represent securities sold short.  A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.

On November 9, 2011, ACAP shareholders approved a proposed merger with UTG whereby ACAP shareholders received 233 shares of UTG for each share previously held of ACAP.  On November 14, 2011, the merger was completed.  Certain of the ACAP shareholders dissented to the merger requesting the courts determine the value of the ACAP shares.  The legal case is currently in the discovery phase.  The Company has established a contingent liability of $2,550,822 to cover the anticipated proceeds due to the dissenting shareholders and associated legal and other costs.

The following table represents the total funding commitments and the unfunded commitment as of March 31, 2013 related to certain investments:

		Total Funding		Unfunded
		Commitment		Commitment
RLF III, LLC	$	4,000,000	$	398,120
Llano Music, LLC		2,000,000		571,000
Marcellus III, LLP		1,250,000		294,375
Dew Learning, LLC		1,000,000		528,114
Marcellus HBPI, LLP		1,800,000		771,300
PBEX, LLC		5,625,000		2,818,750
Sovereign's Capital, LP		500,000		250,000

During 2006, the Company committed to invest in RLF III, LLC ("RLF"), which makes land-based investment in undervalued assets. RLF does capital calls as funds are needed for continued land purchases.

During 2010, the Company made a commitment to invest in Llano Music, LLC ("Llano), which invests in music royalties. Llano does capital calls to its investors as funds are needed to acquire the royalty rights.

During 2011, the Company committed to invest in Marcellus III, LLP, which purchases land for leasing opportunities to those looking to harvest natural resources. Marcellus III, LLC does capital calls to its investors as funds are needed for continued land purchases.

During 2012, the Company made a commitment to investment in Dew Learning, LLC ("Dew"), which is involved in the marketing and distribution of an electronic education based classroom model. Dew does capital calls to investors as funds are needed for continued development of the program.

During 2012, the Company committed to invest in Marcellus HBPI, LLP, which purchases land for leasing opportunities to those looking to harvest natural resources. Marcellus HPBI, LLC does capital calls to investors as funds are needed for continued land purchases.

During 2012, the Company committed to invest in PBEX, LLC, which purchases land for leasing opportunities to those looking to harvest natural resources. PBEX, LLC does capital calls to investors as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign's Capital, LP ("Sovereign's"), which invests in companies in emerging markets. Sovereign's is expected to call the remaining unfunded commitment during 2013.

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OTHER CASH FLOW DISCLOSURES

3 Months Ended

Mar. 31, 2013

OTHER CASH FLOW DISCLOSURES [Abstract]

OTHER CASH FLOW DISCLOSURES

Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

		Three Months Ended
		March 31,
		2013		2012
Interest expense	$	16,398	$	15,214
Federal income tax		2,050,000		22,581

During 2013, UG's wholly-owned subsidiary, UTG Avalon, LLC, entered into a noncash transaction whereas the subsidiary obtained a new line of credit in the amount of $5 million and utilized the line of credit to repay the prior line of credit. The terms of the new line of credit are consistent with the terms of the prior line of credit.

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INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2013

INVESTMENTS [Abstract]

Amortized cost and estimated values of investments in securities including investments held for sale

Investments in available for sale securities are summarized as follows:

March 31, 2013		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	38,428,537	$	5,454,621	$	(281)	$	43,882,877
States, municipalities and political subdivisions		150,000		5,993		0		155,993
U.S. special revenue and assessments		2,150,766		157,779		0		2,308,545
Collateralized mortgage obligations		1,780,601		158,444		0		1,939,045
Public utilities		399,903		61,207		0		461,110
All other corporate bonds		133,203,699		9,682,828		(1,787,643)		141,098,884
		176,113,506		15,520,872		(1,787,924)		189,846,454
Equity securities		29,747,616		1,284,494		(496,936)		30,535,174
Total	$	205,861,122	$	16,805,366	$	(2,284,860)	$	220,381,628

December 31, 2012		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	33,430,165	$	5,457,009	$	0	$	38,887,174
States, municipalities and political subdivisions		160,000		6,637		0		166,637
U.S. special revenue and assessments		2,150,070		153,545		0		2,303,615
Collateralized mortgage obligations		2,241,384		183,409		(8)		2,424,785
Public utilities		399,900		63,662		0		463,562
All other corporate bonds		135,145,198		9,747,565		(1,811,251)		143,081,512
		173,526,717		15,611,827		(1,811,259)		187,327,285
Equity securities		29,497,001		1,303,328		(295,415)		30,504,914
Total	$	203,023,718	$	16,915,155	$	(2,106,674)	$	217,832,199

Amortized cost and estimated market value of debt securities, by contractual maturity

The amortized cost and estimated market value of debt securities at March 31, 2013, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale March 31, 2013		Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,400,052	$	2,423,382
Due after one year through five years		30,181,928		32,745,345
Due after five years through ten years		108,860,492		117,999,294
Due after ten years		32,703,905		34,549,122
Collateralized mortgage obligations		1,967,129		2,129,311
Total	$	176,113,506	$	189,846,454

Fair value of investments with sustained gross unrealized losses

The fair value of investments with sustained gross unrealized losses at March 31, 2013 and December 31, 2012 are as follows:

March 31, 2013		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
U.S. Government and govt. agencies and authorities	$	4,995,703	(282)	$	0	0	$	4,995,703	(282)
All other corporate bonds		6,638,079	(50,703)		4,383,021	(1,736,939)		11,021,100	(1,787,642)
Total fixed maturities	$	11,633,782	(50,985)	$	4,383,021	(1,736,939)	$	16,016,803	(1,787,924)
Equity securities	$	1,253,075	(496,936)	$	0	0	$	1,253,075	(496,936)

December 31, 2012		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	4,513	(8)	$	0	0	$	4,513	(8)
All other corporate bonds		13,776,705	(245,846)		385,823	(1,565,405)		14,162,528	(1,811,251)
Total fixed maturities	$	13,781,218	(245,854)	$	385,823	(1,565,405)	$	14,167,041	(1,811,259)
Equity securities	$	594,081	(295,415)	$	0	0	$	594,081	(295,415)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of March 31, 2013
Fixed maturities	8	4	12
Equity securities	4	0	4
As of December 31, 2012
Fixed maturities	8	3	11
Equity securities	9	0	9

Other than temporary impairments

Based on management's review of the investment portfolio, the Company recorded the following losses for other-than-temporary impairments in the Condensed Consolidated Statements of Operations:

		Three Months Ended
		March 31,
		2013		2012
Other than temporary impairments:
Real Estate	$	26,926	$	0

Trading revenue charged to investment

Trading revenue charged to net investment income from trading securities was:

		Three Months Ended
		March 31,
		2013		2012
Net unrealized losses	$	(297,344)	$	528,698
Net realized gains (losses)		86,271		2,310,507
Net unrealized and realized gains (losses)	$	(211,073)	$	2,839,205

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BASIS OF PRESENTATION (Details)	3 Months Ended
	Mar. 31, 2013
Subsidiary or Equity Method Investee [Line Items]
Ownership in subsidiary bank (in hundredths)	100.00%
Related Party Disclosure [Line Items]
Ownership or control of outstanding common stock directly or indirectly (in hundredths)	56.00%

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	Mar. 31, 2013
Liability for contingent costs [Line Items]
Cost contingency, tier one (in hundredths)	100.00%
Cost contingency threshold, tier one	$ 50,000
Cost contingency, tier two (in hundredths)	90.00%
Cost contingency threshold, tier two	50,000
Cost contingency, tier three (in hundredths)	75.00%
Cost contingency threshold, tier three	50,000
Cost contingency, tier four (in hundredths)	50.00%
Cost contingency threshold, tier four	150,000
Estimate of cost contingency, total	50,000
Loss Contingency	47,727
RLF III, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	4,000,000
Unfunded Commitment	398,120
Llano Music, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	2,000,000
Unfunded Commitment	571,000
Marcellus III, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	1,250,000
Unfunded Commitment	294,375
Dew Learning, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	1,000,000
Unfunded Commitment	528,114
Marcellus HBPI, LLP [Member]
Investment Commitment [Line Items]
Total Funding Commitment	1,800,000
Unfunded Commitment	771,300
PBEX, LLC [Member]
Investment Commitment [Line Items]
Total Funding Commitment	5,625,000
Unfunded Commitment	2,818,750
Sovereign's Capital, LP [Member]
Investment Commitment [Line Items]
Total Funding Commitment	500,000
Unfunded Commitment	250,000
ACAP [Member]
Liability for contingent costs [Line Items]
Estimate of cost contingency, total	$ 2,550,822
Share Conversion	233

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Condensed Consolidated Statement of Comprehensive Income (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statement of Comprehensive Income (Unaudited) [Abstract]
Net Income	$ (764,191)	$ 5,499,731
Other comprehensive income, net of tax:
Unrealized holding gains/(losses) arising during period	(23,750)	11,505,135
Less reclassification adjustment for (gains)/losses included in net income	(59,366)	(5,101,860)
Subtotal: Other comprehensive income/(loss), net of tax	(83,116)	6,403,275
Comprehensive income	(847,307)	11,903,006
Less comprehensive income attributable to noncontrolling interests	(146,081)	(273,214)
Comprehensive income attributable to UTG, Inc.	$ (993,388)	$ 11,629,792

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2013

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

Note 4 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets based on the framework set forth in the GAAP fair value accounting guidance.  The framework establishes a fair value hierarchy of three levels based upon the transparency of information used in measuring the fair value of assets or liabilities as of the measurement date.  The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three categories.

Level 1 – Valuation is based upon quoted prices for identical assets or liabilities in active markets that the Company is able to access.  Level 1 fair value is not subject to valuation adjustments.

Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active. In addition, the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability.

The Company determines the existence of an active market for an asset or liability based on its judgment as to whether transactions for the asset or liability occur in such market with sufficient frequency and volume to provide reliable pricing information.  If the Company concludes that there has been a significant decrease in the volume and level of activity for an investment in relation to normal market activity for such investment, adjustments to transactions and quoted prices are made to estimate fair value.

The inputs used in the valuation techniques employed by the Company are provided by nationally recognized pricing services, external investment managers and internal resources.  To assess these inputs, the Company's review process includes, but is not limited to, quantitative analysis including benchmarking, initial and ongoing evaluations of methodologies used by external parties to calculate fair value, and ongoing evaluations of fair value estimates based on the Company's knowledge and monitoring of market conditions.

The Company periodically reviews the pricing service provider's policies and procedures for valuing securities.  The assumptions underlying the valuations from external service providers, including unobservable inputs, are generally not readily available as this information is often deemed proprietary.  Accordingly, the Company is unable to obtain comprehensive information regarding these assumptions and methodologies.

The Company's investments in fixed maturity securities available for sale, equity securities available for sale and trading securities assets and liabilities are carried at fair value.  The following are the Company's methodologies and valuation techniques for assets and liabilities measured at fair value.

Fixed maturities available for sale mainly consist of U.S. treasury securities and corporate debt securities. The Company employs a market approach to the valuation of securities where there are sufficient market transactions involving identical or comparable assets. If sufficient market data is not available for identical or comparable assets, the Company uses an income approach to valuation. The majority of the financial instruments included in fixed maturity securities available for sale are evaluated utilizing observable inputs; accordingly, they are categorized in either Level 1 or Level 2 of the fair value hierarchy. However, in instances where significant inputs utilized in valuation of the securities are unobservable, the securities are categorized in Level 3 of the fair value hierarchy.

Corporate securities primarily include fixed rate corporate bonds. Inputs utilized in connection with the Company's valuation techniques relating to this class of securities include recently executed transactions, market price quotations, benchmark yields and issuer spreads. Corporate securities are categorized in Level 2 of the fair value hierarchy.

U.S. treasury securities are based on quoted prices in active markets and are generally categorized in Level 1 of the fair value hierarchy.

Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and insurance companies. Equity securities for which there is sufficient market data are categorized as Level 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the transaction price is used as the best estimate of fair value at inception.  When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Securities designated as trading securities consist of bonds, exchange traded equities and exchange traded options.  These securities are primarily valued at quoted active market prices, and are therefore categorized as Level 1 in the fair value hierarchy.  The exchange traded bonds consist of corporate bonds and are classified as Level 2, consistent with the classification of the fixed maturity corporate bonds.

The following table presents the Company's assets and liabilities measured at fair value in the condensed consolidated balance sheet on a recurring basis as of March 31, 2013.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	25,989,101	$	163,520,634	$	336,719	$	189,846,454
Equity Securities, available for sale		1,627,505		5,967,525		22,940,144		30,535,174
Trading Securities		6,426,288		0		0		6,426,288
Total	$	34,042,894	$	169,488,159	$	23,276,863	$	226,807,916
Liabilities
Trading Securities	$	2,950,631	$	0	$	0	$	2,950,631

The following table presents the Company's assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of December 31, 2012.

		Level 1		Level 2		Level 3		Total
Assets
Fixed Maturities, available for sale	$	20,993,398	$	166,060,160	$	273,727	$	187,327,285
Equity Securities, available for sale		1,448,585		6,092,614		22,963,715		30,504,914
Trading Securities		13,903,148		115,312		0		14,018,460
Total	$	36,345,131	$	172,268,086	$	23,237,442	$	231,850,659
Liabilities
Trading Securities	$	7,552,704	$	0	$	0	$	7,552,704

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

		Fixed Maturities, Available for Sale		Equity Securities, Available for Sale		Total
Balance at December 31, 2012	$	273,727	$	22,963,715	$	23,237,442
Total unrealized gain or losses:
Included in other comprehensive income		62,992		(23,571)		39,421
Purchases		0		0		0
Balance at March 31, 2013	$	336,719	$	22,940,144	$	23,276,863

The Level 3 securities include collateralized debt obligations of trust preferred securities issued by banks and insurance companies and certain equity securities with unobservable inputs.  None of the collateral is subprime or Alt-A mortgages (loans for which the typical documentation was not provided by the borrower).

Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans and policy loans. Accordingly such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the condensed consolidated financial statements.

The carrying values and estimated fair values of certain of the Company's financial instruments not recorded at fair value in the condensed consolidated balance sheets are shown below. Because the fair value for all condensed consolidated balance sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

		March 31, 2013				December 31, 2012
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	11,009,174	$	11,089,516	$	17,671,554	$	17,803,159
Discounted mortgage loans		26,703,552		26,703,552		26,336,953		26,336,953
Investment real estate		71,025,034		71,025,034		68,165,013		68,165,013
Policy loans		12,397,405		12,397,405		12,591,572		12,591,572
Cash and cash equivalents		26,287,257		26,287,257		23,321,246		23,321,246
Short term investments		6,263,937		6,263,937		6,268,320		6,268,320
Liabilities
Notes payable		18,848,454		18,848,454		18,857,954		18,857,954

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange.  The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.

The Company has been purchasing non-performing discounted mortgage loans at a deep discount through an auction process led by the federal government.  In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company.  Accordingly, the Company records its investment in the discounted loans at its original purchase price, which management believes approximates fair value.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell.  The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by management.

Policy loans are carried at the aggregate unpaid principal balances in the consolidated balance sheets which approximates fair value, and earn interest at rates ranging from 4% to 8%.  Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.

The carrying amount of cash and cash equivalents in the financial statements approximates fair value given the highly liquid nature of the instruments.

The carrying amount of short term investments in the financial statements approximates fair value.

The carrying value is a reasonable estimate of fair value for notes payable subject to floating rates of interest.  The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

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OTHER CASH FLOW DISCLOSURES (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
OTHER CASH FLOW DISCLOSURES [Abstract]
Interest expense paid	$ 16,398	$ 15,214
Federal income tax	2,050,000	22,581
Noncash transaction LOC	$ 5,000,000

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OTHER CASH FLOW DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2013

OTHER CASH FLOW DISCLOSURES [Abstract]

Expenses paid on a cash basis

On a cash basis, the Company paid the following expenses:

		Three Months Ended
		March 31,
		2013		2012
Interest expense	$	16,398	$	15,214
Federal income tax		2,050,000		22,581