Note 5 – Credit Arrangements

At March 31, 2013 and December 31, 2012, the Company had the 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