Note 5 – Credit Arrangements

At September 30, 2013 and December 31, 2012, the Company had the following outstanding debt:

					Outstanding Principal Balance
Instrument	Issue Date		Maturity Date		September 30, 2013		December 31, 2012
Promissory Note:
HPG Acquisitions		2007-02-07		2017-11-07	$	0	$	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		September 30, 2013
Lines of Credit:
UTG		2012-11-20		2013-11-20	$	8,000,000	$	1,655,035		0		1,655,035	$	0
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%. This promissory note was fully repaid during the second quarter of 2013.

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 line of credit was fully repaid on July 5, 2013. On October 28, 2013, the Company borrowed $3,000,000 on its line of credit. The funds were used to pay the ACAP dissenting shareholders. See Note 7 for further information regarding this matter.

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 and replaced by the line of credit described below.

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	$	0
2014		5,000,000
2015		345,460
2016		478,193
2017		499,277