10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Fiscal Year ended December 31, 2001
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the Transition Period from                         to                         Commission File Number 2-40764

KANSAS CITY LIFE INSURANCE COMPANY
(Exact Name of Registrant as Specified in its Charter)

Missouri	44-0308260
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification Number)
3520 Broadway, Kansas City, Missouri	64111-2565
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, including Area Code: 816-753-7000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

	Name of Each Exchange on
Title of Each Class	Which Registered
None	None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None
(Title of Class)

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

        Indicate by check mark whether the Registrant (1) has filed all reports re-quired 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     

        As of January 31, 2002, 12,018,658 shares of the Company’s capital stock par value $1.25 were outstanding, and the aggregate market value of the common stock (based upon the average bid and asked price according to Company records) of Kansas City Life Insurance Company held by non-affiliates was approximately $137,961,792.

Part II

Documents Incorporated by Reference

Item 5:	Market for Registrant's Common Equity and Related Stockholder Matters.	Page 44 of Annual Report to shareholders for the year ended December 31, 2001.
Item 6:	Selected Financial Data.	Page 24 of Annual Report to shareholders for the year ended December 31, 2001.
Item 7:	Management's Discussion and Analysis of Financial Condition and Results of Operations.	Pages 22 through 27 of Annual Report to Shareholders for The year ended December 31, 2001.
Item 7A:	Quantitative and Qualitative Disclosures about Market Risk.	Pages 25 through 27 of Annual Report to shareholders for the year ended December 31, 2001.
Item 8:	Financial Statements and Supplementary Data.	Pages 28 through 43 of Annual Report to shareholders for the year ended December 31, 2001.

Part IV

Index to Exhibits Page 20

PART I

Item 1. BUSINESS

        Kansas City Life Insurance Company (KCL) was incorporated under the assess-ment laws of Missouri in 1895 as the Bankers Life Association. In 1900, its present corporate title was adopted and it was reorganized as a legal reserve company in 1903. The Company operates nationwide, being licensed in 48 states and the District of Columbia.

        The Company primarily operates in four business segments: Kansas City Life Insurance Company, divided between its individual and group businesses, and its two insurance affiliates, Sunset Life Insurance Company of America (Sunset) and Old American Insurance Company (Old American). KCL markets its individual products, principally interest sensitive and variable products, through a career general agency sales force and these products generate 41% of consolidated insur-ance revenues. Variable universal life and annuities totaled 45% of new statutory premiums in 2001. The group products, largely life, disability and administrative services only, are sold through the general agency sales force and appointed group agents. Group revenues account for 22% of insurance revenues. Sunset markets interest sensitive and traditional products to individuals through a personal pro-ducing general agency system. Sunset operates in 43 states and the District of Columbia. This segment provides 9% of revenues. The Old American segment markets whole life final expense products to seniors through a general agency sales force. Old American operates in 46 states and the District of Columbia, and accounts for 28% of consolidated insurance revenues.

        Old American and Sunset's administrative and accounting operations and systems are merged into KCL's home office. However, each entity operates a separate and independent marketing department and field force.

        KCL and its subsidiaries are subject to state regulations in their states of domicile and in the states in which they do business. Although the federal govern-ment generally does not regulate the business of insurance, federal initiatives often have an impact on the business in a variety of ways including the taxation of insurance companies and the tax treatment of insurance products.

        KCL and its subsidiaries have 638 full time employees located in the home office. The Company considers relations with its employees to be good.

        The Company is engaged in a competitive industry, competing with 1,500 to 2,000 other life insurance companies in the United States. The industry is highly competitive with respect to pricing, selection of products and quality of service. No single competitor nor any small group of competitors dominates any of the markets in which the Company operates.

Item 2. PROPERTIES

        Kansas City Life's home office is located at 3520 Broadway in Kansas City, Missouri. The Company owns and wholly occupies two five story buildings on an eight acre site.

        The Company owns various other properties held for investment.

Item 3. LEGAL PROCEEDINGS

        In recent years, the life insurance industry, including the Company and its subsidiaries, have been subject to an increase in litigation pursued on behalf of purported classes of insurance purchasers, questioning the conduct of insurers in the marketing of their products. The Company believes that the actions described below are part of this trend. The Company denies all allegations of wrongdoing in these lawsuits, and has been defending them vigorously.

        In the previously reported case of Patricia A. Adams, et al, v. Kansas City Life Insurance Company, United States District Court for the Western District of Missouri, Case No. 981053CVW-9-6, following denial of the plaintiffs' amended motion for class certification in April, 2000, the case was transferred back to the United States District Court, Middle District of Florida, Case No. 8:97-CV-2921-T-26TGW. The Company has now settled with all individual plaintiffs for nominal amounts.

        In the previously reported case of Edgar W. Howard, Sr., Individually and on Behalf of All Others Similarly Situated v. Sunset Life Insurance Company of America, Burnett County, Texas, Thirty-third Judicial Case No. 20451, the Court of Appeals upheld the trial court's entry of a summary judgment on behalf of Sunset Life on all plaintiffs' claims.

        In the previously reported case of David Bahr, et al, v. Kansas City Life Insurance Company, Frank Sherlock, et al, San Bernardino County, California Superior Court, Case No. SCVSS 58192, it has been resolved through arbitration. The arbitrator has entered an order resolving all of plaintiff's claims in exchange for payment of less than $50,000 by the Company.

        In the case of Charles R. Sullivan, etc., previously reported in the Company's Form 10-Q Report for the Quarter Ended September 30, 2001, discovery is continuing. Management believes that it is administering and has responsibility for less than 200 of the policies involved in this dispute.

        In the previously reported case of Wilner v. Sunset Life Insurance Company, Dean Delevie, et al, Case No. SC051573, the Superior Court of the State of California, County of Los Angeles, on February 28, 2002 approved a settlement of a nation-wide class action lawsuit focusing on universal life sales practices by Sunset Life. The settlement will become final after 60 days if no appeal is taken from the court's order approving the settlement. With certain limited exceptions, the class that is bound by the terms of the settlement includes persons and entities who at any time during the class period (January 1, 1982 through December 31, 2001) had an ownership interest in one or more of Sunset Life's universal life policies during the class period. The reserve in connection with this settlement was increased to $18,000,000 in 2001. Given the uncertainties associated with estimating the reserve, it is reasonably possible that the final cost of the settlement could differ materially from the amounts presently provided for by us. We will continue to update this estimate of the final cost of the settlement as the claims are processed and more specific information is developed, particularly as the actual cost of the claims subject to a claims resolution procedure becomes available. However, based on information available at the time, and the uncertainties associated with the final claim processing and claim resolution, the range of any additional costs related to the settlement cannot be estimated with precision.

        In addition to the above, the Company and its subsidiaries are defendants in, or subject to other claims or legal actions. Some of these claims and legal actions are in jurisdictions where juries are given substantial latitude in assessing damages, including punitive damages. Although no assurances can be given and no determinations can be made at this time, management believes that the ultimate liability, if any, with respect to these other claims and legal actions, would have no material effect on the Company’s business, results of operations and financial position.

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

        No matters were submitted to a vote of the stockholders of the Company during the fourth quarter of the fiscal year ended December 31, 2001.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        Incorporated by Reference.

Item 6. SELECTED FINANCIAL DATA

        Incorporated by Reference.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        Incorporated by Reference.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Incorporated by Reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        Incorporated by Reference.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Not Applicable.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        (a)   The following information, as of December 31, 2001, is provided with respect to each Director and Nominee:

                                 Term as
                                 Director                              Served as
                                 Expires       Other Positions         Director
   Name of Director         Age  in April      with the Company          From
   ----------------         ---  --------      ----------------        ---------

Walter E. Bixby (1)(2)       42    2002      None                        1996

Webb R. Gilmore              57    2002      None                        1990
(1)(2)(4)(5)(6)

Nancy Bixby Hudson (1)(2)    49    2002      None                        1996

Daryl D. Jensen (1)(2)       62    2002      None                        1978

C. John Malacarne (3)(4)     60    2002      Senior Vice President,      1991
                                             General Counsel
                                             and Secretary

William A. Schalekamp*       57     --       Vice President and         Nominee
(1)(3)                                       Chief Compliance
                                             Officer/Associate
                                             General Counsel

J. R. Bixby (3)(4)           76    2003      Chairman of the Board       1957

R. Philip Bixby              48    2003      President, CEO and Vice     1985
(3)(4)                                       Chairman of the Board

Richard L. Finn*             60    2003      None                        1983
(3)(4)

Warren J. Hunzicker, M.D.    81    2003      None                        1989
(2)

Tracy W. Knapp*              39    2003      Senior Vice President,       --
(3)                                          Finance

Larry Winn, Jr.              82    2003      None                        1985
(2)(4)(5)(6)

William R. Blessing          47    2004      None                        2001
(2)

Bruce W. Gordon (3)*         54    2004      Senior Vice President,       --
                                             Marketing

Cecil R. Miller (2)(5)       67    2004      None                        2001

Michael J. Ross              60    2004      None                        1972
(2)(4)(5)(6)

Elizabeth T. Solberg         62    2004      None                        1997
(2)

*William A. Schalekamp has been nominated to replace C. John Malacarne who has announced he will retire after his term expires in April, 2002. Tracy W. Knapp was elected by the Board of Directors in January, 2002 to fill the expired term of Richard L. Finn who retired January, 2002. Bruce W. Gordon was elected by the Board of Directors in January, 2002 to fill the unexpired term of Jack D. Hayes who retired in December, 2001.

(1)	Subject to the approval of the shareholders at the annual meeting of share-holders to be held on April 18, 2002, will be elected for a three year term ending in 2005.
(2)	Walter E. Bixby was elected Assistant Vice President of the Company in 1985, Vice President, Marketing in 1990, Vice President, Marketing Operations in 1992, and President of Old American, a subsidiary, in 1996. He also serves as a Director of Sunset Life and Old American, subsidiaries. Mr. Blessing is currently Vice President, Business Development and Strategy, Sprint PCS, Kansas City, Missouri, a position he has held since 1998. He has been with Sprint and related entities in various capacities since 1981. Mr. Gilmore is Chairman, CEO and Shareholder of the law firm of Gilmore & Bell. Nancy Bixby Hudson has served as a Director of Sunset Life, a sub- sidiary, since 1986. Dr. Hunzicker was elected by the Board of Directors to an unexpired term in 1989. Dr. Hunzicker served as the Company's Medical Director from 1987 to 1989; he formerly served as a member of the Company's Board of Directors from 1977 to 1980. Mr. Jensen served as President of Sunset Life, a subsidiary of Registrant, from 1973 until his retirement in 1999. Mr. Jensen serves as a Director of Sunset Life and Generations Bank, subsidiaries. Mr. Miller is a retired partner of KPMG LLP (formerly Peat, Marwick, Mitchell & Co.) Mr. Miller joined KPMG in 1957 and became an audit partner in 1962 specializing in insurance and agribusiness. He retired in 1990. Mr. Ross has been Chairman of the Board of Jefferson Bank and Trust Company, St. Louis, Missouri, since 1983. Mr. Ross also serves as a Director of Generations Bank, a subsidiary. Mrs. Solberg became a Regional President and Senior Partner of Fleishman-Hillard, Inc., in January, 1998. She had been Executive Vice President since 1984. She also serves as a Director of Generations Bank, a subsidiary. Mr. Winn is retired as the Kansas Third District Representative to the U.S. Congress.
(3)	See below with respect to the business experience of executive officers of the Company.
(4)	Member of Executive Committee.
(5)	Member of Audit Committee.
(6)	Member of Compensation Committee.
	(b) Executive Officers.

Name, Age and Position	Business Experience During Past 5 Years
J. R. Bixby, 76 Chairman of the Board	Chairman since 1972; President from 1964 until he retired in April, 1990. Responsible for overall corporate policy. Chairman of the Board of Sunset Life and Old American, subsidiaries.
R. Philip Bixby, 48 President, CEO and Vice Chairman of the Board	Elected Assistant Secretary in 1979; Assistant Vice President in 1982; Vice President in 1984; Senior Vice President, Operations in 1990; Executive Vice President in 1996; President and CEO in April, 1998; and Vice Chairman of the Board in January, 2000. Director and President of Sunset Life, Director of Old American, and Director of Generations Bank, subsidiaries.
Richard L. Finn, 60 Senior Vice President, Finance	Elected Vice President in 1976; Financial Vice Presi- dent in 1983; and to present position in 1984. Chief financial officer and responsible for investment of the Company's funds, accounting and taxes. Director and Treasurer of Sunset Life, Director, Vice Presi- dent and Chief Financial Officer and Assistant Treasurer of Old American, and Director of Generations Bank, subsidiaries. Mr. Finn retired January 31, 2002.
Name, Age and Position	Business Experience During Past 5 Years
Bruce W. Gordon, 54 Senior Vice President, Marketing	Elected Senior Vice President, Marketing in July, 2001. Responsible for Marketing, Marketing Administration, Communications and Public Relations. Served as Vice President, Distribution Individual Insurance, Sun Life Financial 1999-2001; President, Product Resource Group and Vice President-ILD Marketing, Protective Life Insurance Company 1997-1999. Elected to fill the unexpired term of Jack D. Hayes on the Company's Board of Directors in January, 2002. Senior Vice President, Marketing and a member of the Board of Directors of Sunset Life, a subsidiary.
Tracy W. Knapp, 39 Senior Vice President, Finance	Was elected Senior Vice President, Finance and to the unexpired term on the Board of Directors of Richard L. Finn, who retired January 31, 2002. Chief financial officer and responsible for the investment of the Company's funds, accounting and taxes. Mr. Knapp joined the Company in 1998 and was responsible for developing a banking subsidiary. He was elected President and CEO of Generations Bank when it was chartered in July, 2000. From 1991 to 1998,he held several positions with U.S. Credit Union including Vice President, Finances and Controller.
Mark A. Milton, 43 Senior Vice President, and Actuary	Elected Assistant Actuary in 1984; Assistant Vice President/Associate Actuary in 1987; Vice President/ Associate Actuary in 1989; Vice President and Actuary in January, 2000; and to present position in January, 2001. Responsible for Actuarial Services, State Compliance and Group. Director, Vice President and Actuary of Sunset Life, a subsidiary.
Michael P. Horton, 59 Vice President, Group	Elected Director, Group Life/Sales in 1977; Assistant Vice President, Group in 1981; and to present position in 1984. Responsible for group sales and products.
Robert C. Miller, 55 Senior Vice President, Administrative Services	Elected Assistant Auditor in 1972; Auditor in 1973; Vice President and Auditor in 1987; and to present position in 1991. Responsible for Human Resources and Administrative Functions.
Charles R. Duffy, Jr., 54 Senior Vice President, Operations	Elected Vice President, Computer Information Services in 1989; Vice President, Insurance Administration in 1992; and to present position in 1996. Responsible for the Company's Computer Operations, Customer Services, Claims, Agency Administration, New Business, Medical and Underwriting. Director of Sunset Life and Old American, subsidiaries.
John K. Koetting, 56 Vice President and Controller	Elected Assistant Controller in 1975; and to present position in 1980. Chief accounting officer responsible for all corporate accounting reports. Director of Old American, a subsidiary.
Name, Age and Position	Business Experience During Past 5 Years
C. John Malacarne, 60 Senior Vice President, General Counsel and Secretary	Elected Associate General Counsel in 1976; General Counsel in 1980; Vice President and General Counsel in 1981; and to present position in 1991. Responsible for Legal Department, Office of the Secretary, Stock Transfer Department and Market Compliance. Director and Secretary of Sunset Life, Old American, and Generations Bank, subsidiaries.
Name, Age and Position	Business Experience During Past 5 Years
William A. Schalekamp, 57 Vice President and Chief Compliance Officer/ Associate General Counsel	Joined the Company in 1971. Was elected Assistant Counsel in 1973; Associate Counsel in 1975; Assistant General Counsel in 1980; Associate General Counsel in 1984 and to his present position in January,2002. Responsible for market conduct compliance and providing legal services.

        (d)    Nancy Bixby Hudson is the daughter of J. R. Bixby; R. Philip Bixby and Walter E. Bixby are brothers and the nephews of J. R. Bixby.

        (e)   See Business Experience During Past 5 Years above.

        (f)    There have been no events under any bankruptcy act, no criminal pro-ceedings and no judgments or injunctions material to the evaluation of the ability and integrity of any Director, nominee or executive officer during the past five years.

Item 11. EXECUTIVE COMPENSATION

        (a)   Compensation

        The following table sets forth information concerning cash compensation paid or accrued by the Company and its subsidiaries to the Chief Executive Officer and the other four most highly paid executive officers as of December 31, 2001 for the fiscal years ending December 31, 2001, 2000 and 1999.

                           SUMMARY COMPENSATION TABLE
                           --------------------------

                                                   Long Term    Other     All
                           Annual Compensation     Incentive    Annual   Other
                                                   Compensa-    Compen-  Compen-
      Name and                 Salary    Bonus  tion Payouts  sation   sation
 Principal Position      Year    $         $         $           $        $
 ------------------      ----  ------    -----  ------------  -------  -------
R. P. Bixby, Presi-      2001  483,660   21,682      0         7,000    45,965
dent, CEO and Vice       2000  443,700      400      0         7,000    42,287
Chairman of the Board,   1999  405,180   41,931      0         7,000    26,853
Kansas City Life;
Director of Sunset
Life, Old American,
and Generations Bank,
subsidiaries.
                         -----------------------------------------------------

R. L. Finn, Senior       2001  256,740   20,715      0         7,000    28,201
Vice President,          2000  242,160    9,049      0         7,000    24,904
Finance and Director,    1999  231,720   22,680      0         7,000    17,650
Kansas City Life;
Director of Sunset
Life, Old American,
and Generations Bank,
subsidiaries. (Retired
January 31. 2002)        _____________________________________________________

J. D. Hayes, Senior      2001  224,859   95,909      0         4,000    24,872
Vice President-          2000  210,360    4,004      0         4,000    22,986
Emeritus, Marketing,     1999  201,300   39,973      0         4,000    15,275
and Director, Kansas
City Life. (Retired
December 31, 2001)
                         -----------------------------------------------------

C. R. Duffy, Jr.,        2001  216,180   14,513      0         3,000    19,959
Senior Vice President,   2000  202,020   14,654      0         3,000    18,385
Operations, Kansas City  1999  188,760   18,349      0         3,000    12,483
Life; Director of Sunset
Life and Old American,
subsidiaries.            _____________________________________________________

C. J. Malacarne, Vice    2001  212,880   14,455      0         7,000    23,382
President, General       2000  202,740   14,886      0         7,000    20,809
Counsel and Secretary    1999  193,980   20,403      0         7,000    14,718
and Director, Kansas
City Life; Director and
Secretary of Sunset Life,
Old American and Generations
Bank, subsidiaries.
                         -----------------------------------------------------

ALL OTHER COMPENSATION INCLUDES THE FOLLOWING:

        The Company has a contributory Internal Revenue Code Section 401(k) savings and profit sharing plan. Directors and officers who are full time employees of the Registrant or its subsidiaries participate in the plan on the same basis as all other employees. Employees may contribute up to 100% of their monthly base salary. Highly compensated employees are limited to contributions of 6%. The Company contributes an amount equal to 50%, 75% or 100% of the employee contributions based on a schedule of years of employment to a maximum of 6% of an employee's compensation in the form of capital stock of the Company. The amount contributed to the plan in 2001 for the accounts of the named individuals are as follows: R. P. Bixby, $10,200; R. L. Finn, $10,200; J. D. Hayes, $10,200; C. R. Duffy, Jr.,$10,200; C. J. Malacarne, $10,200.

        The Company has adopted a nonqualified deferred compensation plan for approximately 42 highly compensated officers and employees. It is similar to the Company's 401(k) plan. Participants contribute amounts to this plan that they cannot contribute to the 401(k) plan up to a total of 25% of their monthly salary and the Company contributes up to a maximum of 6% of their monthly salary. The amount contributed to the plan in 2001 for the accounts of the named indi-viduals are as follows: R. P. Bixby, $18,820; R. L. Finn, $5,204; J. D. Hayes, $3,292; C. R. Duffy, Jr., $2,771; C. J. Malacarne, $2,573.

        The Company provides yearly renewable term insurance to its employees in the amount of 2 1/2times their annual salary. Directors and officers who are full time employees participate in the program on the same basis as all other employees. Premiums paid for the named individuals for 2001 are as follows: R. P. Bixby, $2,086; R. L. Finn, $4,687; J. D. Hayes, $4,335; C. R. Duffy, Jr. $223; C. J. Malacarne, $3,819.

        The Company has a three year long term incentive plan in place for senior management that awards participants for the increase in the price of the Company's common stock from January 25, 2000 through January 24, 2003. Participants are awarded units (phantom shares) based on their annualized salary divided by the share price of $32.25 as of January 21, 2000. At the conclusion of the plan, participants receive awards based on the increase in the per share price times their number of units. Participants are also awarded dividends on these shares commensurate with the Company's dividend policy. Payments equivalent to divi- dends received by the named individuals and included in All Other Compensation are as follows: R. P. Bixby, $14,859; R. L. Finn, $8,110; J. D. Hayes, $7,045; C. R. Duffy, Jr., $6,765; C. J. Malacarne, $6,790.

        (f)   Defined Benefit or Actuarial Plan Disclosure

        The Company has a noncontributory defined benefit pension plan which covers employees age 21 and over. Effective January 1, 1998, the pension plan was con-verted to a cash balance plan. Benefits under the plan will no longer be determined primarily by final average compensation and years of service. Each participant's benefit accrued under the prior plan formula as of December 31, 1997 was converted to an opening account balance in the cash balance plan.

        Beginning in 1998, participants accumulate annual pay credits equal to a percentage of annual compensation, ranging from 3% to 16% based on service of the participant. The cash balance account is further credited with interest annually which is based on the 30-year treasury bond rate in effect for November of the prior plan year. Upon termination of employment, the account balance as of such date may be distributed to the participant in lump sum or annuity form, at the election of the participant. Benefits vest according to years of service after age 18 on a graded scale, beginning with 30% vesting with 3 years, and becoming 100% vested with 7 years. Compensation for determining benefits under the plan is equal to base salary, excluding overtime and bonuses.

        Participants age 55 with 15 years of service as of December 31, 1997 will receive the greater of the benefit under the cash balance plan, or the prior plan formula based on final average compensation and years of service. The following table illustrates the possible annual pension benefits under the prior plan formula based upon final average compensation and years of service, for these employees. Participants may elect a lump sum distribution.

                               PENSION PLAN TABLE
                               ------------------

Compensation                    Years of Service                     SS**
- ------------   ------------------------------------------------    -------

                  10           20           30           40
                  --           --           --           --

  $ 75,000     $ 18,750     $ 37,500     $ 50,776*    $ 50,776*    $18,449
   100,000       25,000       50,000       70,000       70,776*     18,449
   125,000       31,250       62,500       87,500       90,776*     18,449
   150,000       37,500       75,000      105,000      110,776*     18,449
   200,000       50,000      100,000      140,000      150,776*     18,449
   250,000       62,500      125,000      175,000      190,776*     18,449
   300,000       75,000      150,000      210,000      230,776*     18,449
   350,000       87,500      175,000      245,000      270,776*     18,449
   400,000      100,000      200,000      280,000      310,776*     18,449
   450,000      112,500      225,000      315,000      350,776*     18,449
   500,000      125,000      250,000      350,000      390,776*     18,449

*Maximum pension based on an estimate of Social Security
**Estimated annual Social Security benefit at age 65

        A participant's base salary not to exceed $150,000 (as adjusted for cost of living) commencing January 1, 1994, was used to determine compensation under the plan for benefits from the qualified plan. For the individuals named in the Cash Compensation Table, the years of service covered by the plan for the year ended December 31, 2001, were: R. P. Bixby, 24 years; R. L. Finn, 28 years; J. D. Hayes, 8 years; C. R. Duffy, Jr., 12 years; C. J. Malacarne, 35 years.

        The estimated annual annuity benefit payable starting at normal retirement age (age 65) as accrued through December 31, 2001 under the cash balance plan for each of the named individuals are as follows: R. P. Bixby, $167,604; R. L. Finn, $153,325; J. D. Hayes, $19,899; C. R. Duffy, Jr., $28,196; C. J. Malacarne, $144,946.

        The Company has adopted an unfunded excess benefit plan which covers any employee who is an active participant in the non-contributory defined benefit pension plan and whose pension benefit under that plan would exceed the maximum benefit limited under Internal Revenue Code Section 415. A participant under this plan is entitled to a monthly benefit of the difference between the maximum monthly normal, early, or deferred vested retirement benefit determined without regard to the Internal Revenue Code Section 415 limitation and the monthly equivalent of the maximum benefit permitted by Internal Revenue Code Section 415. Participants may elect a lump sum distribution.

        (g)   Compensation of Directors

        Outside Directors are paid $5,000 quarterly; $2,000 if they attend Special Board Meetings; $1,000 if they attend Executive Committee Meetings; $1,000 if they attend Audit Committee Meeting; and $500 if they attend all other Committee Meetings. Inside Directors are paid $1,000 quarterly and $400 if they attend Special Board Meetings. The Chairman of the Board is paid $30,000 quarterly. Outside Directors of Sunset Life, a subsidiary, are paid $1,000 quarterly, inside Directors are paid $500 quarterly. The Chairman of the Board is paid $11,250 quarterly. Directors of Old American are paid $250 quarterly. The Chairman of the Board is paid $8,750 quarterly. Director fees are included in the Compensation Table.

        (h)   Employment Contracts and Termination of Employment and Change in Control Arrangements

        There are no employment contracts between the Company and its executive officers. The Company's benefit plans contain typical provisions applicable to all employees for termination of employment.

        (j)   Additional Information with Respect to Compensation Committee

        The members of the Compensation Committee: Webb R. Gilmore, Michael J. Ross and Larry Winn, Jr.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        (a)   Security Ownership of Certain Beneficial Owners

        The following table sets forth information as of January 31, 2002 concerning certain beneficial owners of voting securities of the Company's $1.25 par value capital stock ("common stock"). The common stock is the Company's only class of voting securities. As described in the notes to the table set forth below, certain named persons share the power of voting and disposition with respect to certain shares of common stock. Consequently, such shares are shown as being beneficially owned by more than one person.

                   Name and Address                       Percent of Class
                   ----------------                       ----------------

         John K. Koetting, Robert C. Miller
         and Anne C. Moberg, Trustees of the
         Kansas City Life Insurance Company
         Savings and Profit Sharing Plan and
         the Kansas City Life Employee Stock Plan
         3520 Broadway
         Kansas City, MO 64111-2565

         Amount and Nature of Ownership(1)

                  847,797 Shares                                 7.1

         WEB Interests, Ltd.
         3520 Broadway
         Kansas City, MO 64111-2565

         Amount and Nature of Ownership(2)

                   2,358,340 Shares                             19.6

         Angeline I. O'Connor
         12501 Granada Lane
         Leawood, KS 66209

         Amount and Nature of Ownership(2)(3)

                   3,084,343 Shares                             25.7

         JRB Interests, Ltd.
         3520 Broadway
         Kansas City, MO 64111-2565

         Amount and Nature of Ownership(4)

                   2,966,312 Shares                             24.7

         Margie Morris Bixby
         3530 Pennsylvania
         Kansas City, MO 64111

         Amount and Nature of Ownership(4)(5)

                   2,968,112 Shares                             24.7

         Lee M. Vogel
         4701 NW 59th Court
         Kansas City, MO 64151

         Amount and Nature of Ownership(4)(6)

                   2,973,410 Shares                             24.7

(1)	Trustees have the power to sell plan assets. Participants may instruct the Trustees how to vote their shares.
(2)	The WEB Interests, Ltd. is a Texas limited partnership (the "WEB Partner-ship"). Each partner of the WEB Partnership has the power to vote that number of shares of Common Stock owned by the WEB Partnership which equals such partner's proportionate interest in the WEB Partnership.
(3)	Includes 2,358,340 shares for which Angeline I. O'Connor ("Ms. O'Connor") shares the power of disposition as a general partner of the WEB Partnership. Of these shares, Ms. O'Connor: (a) as a general partner of the WEB Partnership, in her capacity as a co-trustee of the Walter E. Bixby, Jr. Revocable Trust, shares the power to vote 2,118,067 shares; (b) as the sole trustee of the Angeline I. O'Connor GST Trust and the Issue Trust for Angeline I. O'Connor, which trusts are limited partners of the WEB Partner-ship, has the power to vote 79,879 shares; and (c) as an individual general partner of the WEB Partnership, has the sole power to vote 212 shares. Also includes: (a) 372,315 shares for which Ms. O'Connor, as a co-trustee (with R. Philip Bixby and Walter E. Bixby) of the Walter E. Bixby Descendants Trust, shares the power to vote and the power of disposition; and (b) 353,688 shares which Ms. O'Connor owns directly and has the sole power to vote and the sole power of disposition.
(4)	The JRB Interests, Ltd. is a Texas limited partnership (the "JRB Partner- ship"). Each partner of the JRB Partnership has the power to vote that number of shares of Common Stock owned by the JRB Partnership which equals such partner's proportionate interest in the JRB Partnership.
(5)	Includes 2,966,312 shares for which Margie Morris Bixby ("MM Bixby"), as the sole trustee of the Margie Morris Bixby Revocable Trust (the "MMB Trust"), a general partner and a limited partner of the JRB Partnership, shares the power of disposition. Of these shares, MM Bixby (a) as a general partner and a limited partner of the JRB Partnership, in her capacity as sole trustee of MMB Trust, has the sole power to vote 26,552 shares; and (b) as a limited partner of the JRB Partnership, in her individual capacity, has sole power to vote 331 shares. Also includes, 1,800 shares for which MM Bixby, as a joint tenant with right of survivorship with Mr. Vogel, shares the power to vote and the power of disposition.
(6)	Includes 2,966,312 shares for which Lee M. Vogel ("Mr. Vogel"), as a general partner of the JRB Partnership, shares the power of disposition. Of these shares, Mr. Vogel: (a) as a general partner of the JRB Partnership, in his individual capacity, has the sole power to vote 263 shares; and (b) as a co-trustee (with Richard L. Finn) of the Issue Trust for Lee M. Vogel, a limited partner of the JRB Partnership, shares the power to vote 977,881 shares. Also includes: (a) 1,800 shares for which Mr. Vogel, as a joint tenant with right of survivorship with MM Bixby, shares the power to vote and the power of disposition; and (b) 5,298 shares which Mr. Vogel owns directly and has the sole power to vote and the sole power of disposition.

        (b)   Security Ownership of Management

        The following table sets forth information as of January 31, 2002 concerning officers and directors who own an interest in the Company's $1.25 par value capital stock ("common stock"). The common stock is the Company's only class of voting securities. As described in the notes to the table set forth below, certain named persons share the power of voting and disposition with respect to certain shares of Common Stock. Consequently, such shares are shown as being beneficially owned by more than one person.

        Walter E. Bixby, Webb R. Gilmore, Nancy Bixby Hudson and Daryl D. Jensen are currently Directors whose terms expire on April 22,2002. They, along with William A. Schalekamp, are nominees of management for election to three year terms at the annual meeting to be held April 18, 2002:

                                                Served      Shares of
                                                 as a       Record and
     Name and                Principal         Director    Beneficially   Percent
     Address                 Occupation         Since         Owned       of Class
     --------                ----------        --------    ------------   --------

Walter E. Bixby           President, Old         1996         7,223(1)      25.8
3520 Broadway             American Insur-                 2,358,340(2)(3)
Kansas City, MO           ance Company,                     366,376(4)
                          Kansas City, MO                   372,315(5)
                                                Served      Shares of
                                                 as a       Record and
     Name and                Principal         Director    Beneficially   Percent
     Address                 Occupation         Since         Owned       of Class
     --------                ----------        --------    ------------   --------

Webb R. Gilmore           Chairman, CEO          1990           500           *
833 Westover Rd.          and Shareholder,
Kansas City, MO           Gilmore & Bell,
                          Kansas City, MO

Nancy Bixby Hudson        Investor               1996     2,966,312(6)      27.4
425 Baldwin Creek Rd.                                       331,566(7)
Lander, WY

Daryl D. Jensen           Vice Chairman of       1978           939           *
2143 Old Port Dr.         the Board, Sunset
Olympia, WA               Life Insurance
                          Company of America,
                          Kansas City, MO

C. John Malacarne         Senior Vice Presi-     1991            20           *
3520 Broadway             dent, General Counsel              13,973(1)
Kansas City, MO           and Secretary

William A. Schalekamp     Vice President and    Nominee           6           *
3520 Broadway             Chief Compliance                   11,195(1)
Kansas City, MO           Officer/Associate
                          General Counsel

        The following Directors, except Mr. Knapp who replaced Richard L. Finn, were elected April 20, 2000 for a three year term:

J. R. Bixby               Chairman of the        1957     2,966,312(8)      24.7
3520 Broadway             Board
Kansas City, MO

R. Philip Bixby           President, CEO         1985     2,358,340(2)(9)   25.9
3520 Broadway             and Vice Chairman                  16,680(1)
Kansas City, MO           of the Board                      372,315(5)
                                                            361,502(10)

Richard L. Finn           Retired Senior Vice    1983            24         24.2
3520 Broadway             President, Finance                  1,192(1)
Kansas City, MO                                           2,902,845(11)

Warren J. Hunzicker, M.D. Director               1989           300           *
1248 Stratford Rd.
Kansas City, MO

Larry Winn, Jr.           Retired Represent-     1985           332           *
8420 Roe Ave.             ative, U.S. Congress
Prairie Village, KS

Tracy W. Knapp            Senior Vice Presi-     2002            76(1)        *
3520 Broadway             dent Finance
Kansas City, MO

        The following Directors, except Mr. Gordon who replaced Jack D. Hayes, were elected April 19, 2001 for a three year term:

William R. Blessing       Vice President         2001           100           *
11708 Manor               Sprint PCS
Overland Park, KS         Kansas City, MO

                                                Served      Shares of
                                                 as a       Record and
     Name and                Principal         Director    Beneficially   Percent
     Address                 Occupation         Since         Owned       of Class
     --------                ----------        --------    ------------   --------

Bruce W. Gordon           Senior Vice Presi-     2002           100           *
3520 Broadway             dent, Marketing
Kansas City, MO

Cecil R. Miller           Retired                2001           100           *
12215 Ash
Overland Park, KS

Michael J. Ross           Chairman of the        1972           600           *
12826 Dubon Lane          Board, Jefferson
St. Louis, MO             Bank and Trust
                          Company,
                          St. Louis, MO

Elizabeth T. Solberg      Regional President     1997           200           *
850 W. 52nd St.            and Senior Partner,
Kansas City, MO           Fleishman-Hillard, Inc.,
                          St. Louis, MO

All Directors, executive officers
and their spouses (also includes all
shares held by trustees of Company
benefit plans and shares held by the
Bixby Family and related Partnerships
and Trusts)                                               8,364,141         69.6

     *Less than 1%.

(1)	Approximate beneficial interest in shares held by the Trustees of Kansas City Life Insurance Company employee benefit plans. Participants have the power to vote the shares held in their account.
(2)	As general partners of the WEB Interests, Ltd., a Texas limited partnership (the "WEB Partnership"), Walter E. Bixby, R.Philip Bixby and Angeline I. O'Connor, share the power to dispose of these shares, which are owned by the WEB Partnership. As general partners, in their capacity as co-trustees of the WEB Trust, Walter E. Bixby, R. Philip Bixby and Ms. O'Connor share the power to vote 2,118,067 of these shares.
(3)	Includes (a) 212 shares for which Walter E. Bixby, as an individual general partner of the WEB Partnership, has the sole power to vote; and (b) 79,879 shares for which Walter E. Bixby, as the sole trustee of the Walter E. Bixby, III GST Trust and the Issue Trust for Walter E. Bixby, III, which trusts are limited partners of the WEB Partnership, has the power to vote.
(4)	Includes (a) 350,280 shares which Walter E. Bixby owns directly and has the sole power to vote and the sole power of disposition; and (b) 16,096 shares for which Walter E. Bixby, as custodian for certain of his minor nieces and nephews, has the sole power to vote and the sole power of disposition.
(5)	These shares are held in the Walter E. Bixby Descendants Trust. R. Philip Bixby, Walter E. Bixby and Ms. O'Connor are the co-trustees of this trust and share the power to vote and the power to dispose of these shares. The terms of the trust restrict the transfer of these shares.
(6)	Ms. Hudson, as a general partner of JRB Interests, Ltd., a Texas limited partnership (the "JRB Partnership"), shares with the managing general partner and the other general partners of the JRB Partnership, the power of disposition of these shares, which are owned by the JRB Partnership. Ms. Hudson (a) as a general partner of the JRB Partnership, has sole power to vote 263 of these shares; and (b) as a co-trustee (with Richard L. Finn) of the Nancy Bixby Hudson GST Trust and the Issue Trust for Nancy Bixby Hudson, which trusts are limited partners of the JRB Partnership, shares the power to vote 1,924,964 of these shares.
(7)	Ms. Hudson, as sole trustee of the Nancy Bixby Hudson Trust dated December 11, 1997, has the sole power to vote and the sole power to dispose of these shares.
(8)	J. R. Bixby, as sole managing general partner of the JRB Partnership, shares with the other general partners of the JRB Partnership the power of disposition of these shares, which are owned by the JRB Partnership. Of these shares, he has the sole power to vote (a) 331 of these shares as an individual limited partner of the JRB Partnership, and (b) 26,289 shares as a general partner of the JRB Partnership, in his capacity as sole trustee of the Joseph R. Bixby Revocable Trust.
(9)	Includes (a)212 shares for which R. Philip Bixby as an individual general partner of the WEB Partnership, has the sole power to vote; and (b) 79,899 shares for which R. Philip Bixby, as sole trustee of the R. Philip Bixby GST Trust and the Issue Trust for R. Philip Bixby, which trusts are limited partners of the WEB Partnership, has the power to vote.
(10)	Includes: (a) 342,814 shares which R. Philip Bixby owns directly and has the sole power to vote and the sole power of disposition; and (b) 18,688 shares for which R. Philip Bixby, as custodian for certain of his minor nieces and nephews, has the sole power to vote and the sole power of disposition.
(11)	Richard L. Finn share the power to vote (a) 1,924,964 shares with Nancy Hudson, as co-trustees of the Nancy Bixby Hudson GST Trust and the Issue Trust for Nancy Bixby Hudson, which trusts are limited partners of the JRB Partnership; and (b)977,881 shares with Lee M. Vogel, as co-trustees of the Issue Trust for Lee M. Vogel, a limited partner of the JRB Partnership.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        None.

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

        (a)  (1)   Financial Statements

        The following financial statements of Kansas City Life Insurance Company are incorporated by reference from the Company's Annual Report to Shareholders for the year ended December 31, 2001 at the following pages:

                                                                        Page
                                                                        ----

   Consolidated Income Statement - Years ended
     December 31, 2001, 2000 and 1999  . . . . . . . . . . . . . . .     28
   Consolidated Balance Sheet -
     December 31, 2001 and 2000  . . . . . . . . . . . . . . . . . .     29
   Consolidated Statement of Stockholders' Equity -
     Years ended December 31, 2001, 2000 and 1999  . . . . . . . . .     30
   Consolidated Statement of Cash Flows -
     Years ended December 31, 2001, 2000 and 1999  . . . . . . . . .     31
   Notes to Consolidated Financial Statements  . . . . . . . . . . .   32-42
   Reports of Independent Auditors . . . . . . . . . . . . . . . . .     43

        (a)  (2)   Supplementary Data and Financial Statement Schedules

        Schedules are attached hereto at the following pages:

                                                                        Page
                                                                        ----

   I   - Summary of Investments - Other than Investments
            in Related Parties, December 31, 2001  . . . . . . . . .     22
   II  - Condensed Financial Information of Registrant,
            Years ended December 31, 2001, 2000 and 1999 . . . . . .   23-25
   III - Supplementary Insurance Information, Years ended
            December 31, 2001, 2000 and 1999 . . . . . . . . . . . .     26
   IV  - Reinsurance Information, Years ended
            December 31, 2001, 2000 and 1999 . . . . . . . . . . . .     27
   V   - Valuation and Qualifying Accounts, Years ended
            December 31, 2001, 2000 and 1999 . . . . . . . . . . . .     28

        All other schedules are omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

        (b)   Reports on Form 8-K

        None.

        (c)   Exhibits

    Exhibit
    Number:                           Basic Documents:
    ------                            ---------------

      3(a)     Articles of Incorporation (as Restated in 1986 and Amended
               in 1999).  [Filed as Exhibit 3(a) to the Company's 10-Q
               Report for the quarter ended September 30, 1999 and incor-
               porated herein by reference]

      3(b)     Bylaws as Amended October 26, 1986.  [Filed as Exhibit 3(b)
               to the Company's 10-K Report for 1986 and incorporated
               herein by reference]

      4(a)     Specimen copy of Stock Certificate. [Filed as Exhibit 4(a)
               to the Company's 10-Q Report for the quarter ended
               September 30, 1999 and incorporated herein by reference]

     10(a)     Tenth Amendment, Kansas City Life Deferred Compensation Plan.

     10(b)     Twenty-seventh Amendment, Kansas City Life Insurance Company
               Savings and Profit Sharing Plan.

     10(c)     Thirteenth Amendment, Kansas City Life Employee Stock Plan.

     10(d)     Second Amendment, Kansas City Life Excess Benefit Plan.
               [Filed as Exhibit 10(d) to the Company's 10-K Report for
               1999 and incorporated herein by reference]

     13        Annual Report to Shareholders for the year ended December 31,
               2001.

     21        Subsidiaries.

     23(a)     Independent Auditors' Consent.

     23(b)     Consent of Independent Auditors.

     23(c)     Independent Auditors' Consent.

     23(d)     Consent of Independent Auditors.

     99(a)     Form 11-K for the Kansas City Life Insurance Company Savings
               and Profit Sharing Plan for the year 2001 and filed as a part
               hereof and incorporated herein by reference.

     99(b)     Prospectus for Kansas City Life Insurance Company Savings
               and Investment Plan. [Filed as Exhibit 99(b) to the Company's
               10-K Report for 2000 and incorporated herein by reference]

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) 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.

KANSAS CITY LIFE INSURANCE COMPANY

By: /s/ John K. Koetting
    ------------------------------
    John K. Koetting
    Vice President and Controller
    (Principal Accounting Officer)
Date: March 8, 2002

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Regis- trant and in the capacities and on the dates indicated.

By: /s/ R. Philip Bixby                      By: /s/ Joseph R. Bixby
    ------------------------------               ------------------------------
    R. Philip Bixby                              Joseph R. Bixby
    Director; President, Chief                   Director; Chairman of
    Executive Officer and Vice                   the Board
    Chairman of the Board                        Date: March 8, 2002
    (Principal Executive Officer)
    Date: March 8, 2002



By: /s/ Larry Winn, Jr.                      By: /s/ C. John Malacarne
    ------------------------------               ------------------------------
    Larry Winn, Jr.                              C. John Malacarne
    Director                                     Director; Vice President,
    Date: March 8, 2002                          General Counsel and Secretary
                                                 Date: March 8, 2002



By: /s/ Walter E. Bixby                      By: /s/ Daryl D. Jensen
    ------------------------------               ------------------------------
    Walter E. Bixby                              Daryl D. Jensen
    Director                                     Director
    Date: March 8, 2002                          Date: March 8, 2002



By: /s/ Webb R. Gilmore                      By: /s/ Elizabeth T. Solberg
    ------------------------------               ------------------------------
    Webb R. Gilmore                              Elizabeth T. Solberg
    Director                                     Director
    Date: March 8, 2002                          Date: March 8, 2002

Schedule I

KANSAS CITY LIFE INSURANCE COMPANY AND SUBSIDIARIES
SUMMARY OF INVESTMENTS - OTHER THAN
INVESTMENTS IN RELATED PARTIES
December 31, 2001

                                                                      Amount at
                                                                     Which Shown
                                                           Fair      in Balance
           Type of Investment                   Cost       Value        Sheet
           ------------------                   ----       -----     -----------

                                                      (in thousands)

Fixed maturities available for sale:
  Bonds:
    United States government and government
      agencies and authorities               $   47,991     50,765       50,765
    Mortgage-backed securities                  532,978    535,609      535,609
    Public utilities                            290,670    285,384      285,384
    All other bonds                           1,221,352  1,185,192    1,185,192
  Redeemable preferred stocks                     5,184      5,243        5,243
                                              ---------  ---------    ---------
    Total                                     2,098,175  2,062,193    2,062,193
                                              ---------  =========    ---------


Equity securities available for sale:
  Common stocks                                  34,167     34,069       34,069
  Perpetual preferred stocks                     35,992     33,690       33,690
                                              ---------  ---------    ---------
    Total                                        70,159     67,759       67,759
                                              ---------  =========    ---------


Mortgage loans, net                             433,095                 433,095
Real estate, net                                 61,777                  61,777
Real estate joint ventures                       33,320                  33,320
Policy loans                                    112,995                 112,995
Short-term investments                          127,984                 127,984
Other investments                                10,999                  10,999
                                              ---------               ---------
    Total investments                        $2,948,504               2,910,122
                                              =========               =========

Schedule II

KANSAS CITY LIFE INSURANCE COMPANY
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEET

                                                                 December 31

                                                             2001        2000
                                                             ----        ----

                                                                (in thousands)

Assets
Investments:
  Fixed maturities:
    Available for sale, at fair value                     $1,487,800  1,449,167
    Held to maturity, at amortized cost                            -     45,983
  Equity securities available for sale, at fair value:
    Investments in affiliates                                255,478    253,162
    Other                                                     50,442     70,170
  Mortgage loans, net                                        322,590    300,752
  Real estate, net                                            59,543     43,499
  Real estate joint ventures                                  26,724     26,481
  Policy loans                                                91,777     94,905
  Short-term investments                                      76,187      8,761
                                                           ---------  ---------
   Total investments                                       2,370,541  2,292,880

Cash                                                           9,815     17,347
Deferred acquisition costs                                   120,175    125,259
Value of purchased insurance in force                         55,020     59,124
Deferred income tax asset                                     16,695     21,685
Other assets                                                 115,714    109,397
Separate account assets                                      305,283    325,148
                                                           ---------  ---------

    Total assets                                          $2,993,243  2,950,840
                                                           =========  =========

Liabilities and stockholders' equity
Future policy benefits                                    $  519,566    528,702
Accumulated contract values                                1,308,678  1,294,399
Other liabilities                                            294,032    270,337
Separate account liabilities                                 305,283    325,148
                                                           ---------  ---------
    Total liabilities                                      2,427,559  2,418,586
                                                           ---------  ---------

Stockholders' equity:
  Common stock                                                23,121     23,121
  Paid in capital                                             21,744     20,109
  Accumulated other comprehensive loss                       (35,833)   (47,391)
  Retained earnings including $159,756,000 undis-
    tributed earnings of affiliates ($151,380,000 - 2000)    665,282    643,435
  Less treasury stock, at cost                              (108,630)  (107,020)
                                                           ---------  ---------
    Total stockholders' equity                               565,684    532,254
                                                           ---------  ---------

    Total liabilities and stockholders' equity            $2,993,243  2,950,840
                                                           =========  =========

The above condensed financial statement should be read in conjunction with the consolidated financial statements and notes thereto of Kansas City Life Insurance Company.

Schedule II
(continued)

KANSAS CITY LIFE INSURANCE COMPANY
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
INCOME STATEMENT

                                                     Years ended December 31

                                                 2001      2000       1999
                                                 ----      ----       ----

                                                      (in thousands)

Revenues
Insurance revenues:
  Premiums:
   Life insurance                              $ 27,289    25,481     30,684
Accident and  health                          44,053    42,567     40,524
  Contract charges                              82,516    83,841     82,065
Investment revenues:
  Investment income, net                        151,547   155,859    159,027
  Realized investment gains (losses),net        (14,147)     (304)     1,208
Other                                            10,447    11,042      9,690
                                                -------   -------    -------
  Total revenues                                301,705   318,486    323,198
                                                -------   -------    -------
Benefits and expenses
Policy benefits                                 191,825   191,772    197,140
Amortization of deferred
  acquisition costs                              17,034    11,437     12,443
Insurance operating expenses                     78,568    80,234     79,230
Management fees from affiliates                 (11,837)  (12,234)    (8,940)
                                                -------   -------    -------
  Total benefits and expenses                   275,590   271,209    279,873
                                                -------   -------    -------

Income before federal income taxes and
  equity in undistributed net income
  of affiliates                                  26,115    47,277     43,325

Federal income taxes                              3,247    12,773     12,545
                                                -------   -------    -------

Income before equity in undistributed
  net income of affiliates                       22,868    34,504     30,780

Equity in undistributed net income
  of affiliates                                   7,054    14,579     14,265
                                                -------   -------    -------

Net income                                     $ 29,922    49,083     45,045
                                                =======   =======    =======

The above condensed financial statement should be read in conjunction with the consolidated financial statements and notes thereto of Kansas City Life Insurance Company.

Schedule II
(continued)

KANSAS CITY LIFE INSURANCE COMPANY
CONDENSED FINANCIAL STATEMENT OF REGISTRANT
CASH FLOW STATEMENT

                                                   Years ended December 31

                                                 2001      2000       1999
                                                 ----      ----       ----

                                                      (in thousands)

Net cash provided from operating activities    $ 47,632    38,001     28,535

Investing Activities
  Purchases of investments:
    Fixed maturities available for sale        (602,440) (273,929)  (483,805)
    Fixed maturities held to maturity                 -         -     (3,354)
    Equity securities available for sale         (3,927)  (10,200)   (39,542)
  Sale of available for sale securities         498,268   274,036    333,732
  Maturities and principal paydowns
    of security investments:
    Fixed maturities available for sale         128,216    84,291    138,094
    Fixed maturities held to maturity                 -    15,414      6,993
    Equity securities available for sale         13,561    13,724        487
  Purchases of other investments               (147,068)  (77,150)   (30,833)
  Sales, maturities and principal
    paydowns of other investments                42,911    48,231     52,902
  Disposition of group insurance
    blocks - net cash paid                       (4,000)        -     (5,162)
                                                -------   -------    -------

 Net cash provided (used)                       (74,479)   74,417    (30,488)
                                                -------   -------    -------

Financing Activities
  Proceeds from borrowings                       45,530    34,700     89,950
  Repayment of borrowings                        (4,800)  (68,700)   (25,950)
  Policyholder contract deposits                110,611    97,345    105,018
  Withdrawals of policyholder
    contract deposits                          (106,387) (159,237)  (148,515)
  Change in other deposits                      (12,673)   (3,268)    14,461
  Cash dividends to stockholders                (12,991)  (12,037)   (11,841)
  Disposition (acquisition) of
    treasury stock, net                              25    (2,411)   (12,771)
                                                -------   -------    -------

  Net cash provided (used)                       19,315  (113,608)    10,352
                                                -------   -------    -------

Increase (decrease) in cash                      (7,532)   (1,190)     8,399
Cash at beginning of year                        17,347    18,537     10,138
                                                -------   -------    -------

  Cash at end of year                          $  9,815    17,347     18,537
                                                =======   =======    =======

The above condensed financial statement should be read in conjunction with the consolidated financial statements and notes thereto of Kansas City Life Insurance Company.

Schedule III

KANSAS CITY LIFE INSURANCE COMPANY
SUPPLEMENTARY INSURANCE INFORMATION

                                     Future Policy
                        Deferred   Benefits, Contract                Other
                       Acquisition  Values and Claim  Unearned   Policyholders'
                         Costs         Liabilities    Premiums       Funds
                       ----------- ------------------ --------   -------------
                                           (in thousands)
December 31, 2001:
KCL - Individual        $120,175        1,844,473          405      114,451
KCL - Group                    -            6,980          103            -
Sunset                    50,895          379,685           77        9,422
Old American              72,536          259,862          355        5,075
                         -------        ---------       ------      -------
  Total                 $243,606        2,491,000          940      128,948
                         =======        =========       ======      =======

December 31, 2000:
KCL - Individual        $125,259        1,833,620          319      131,958
KCL - Group                    -           10,935           25            -
Sunset                    48,040          373,006           99        9,508
Old American              71,661          257,696          367        7,273
                         -------        ---------       ------      -------
  Total                 $244,960        2,475,257          810      148,739
                         =======        =========       ======      =======

December 31, 1999:
KCL - Individual        $116,696        1,902,425          505      133,458
KCL - Group                    -           16,094           54            -
Sunset                    49,606          380,615          124       10,611
Old American              70,068          253,849          405        7,468
                         -------        ---------       ------      -------
  Total                 $236,370        2,552,983        1,088      151,537
                         =======        =========       ======      =======


                                     Insurance      Accident and
                         Policy      Operating     Health Written
                        Benefits     Expenses@        Premiums
                        --------     ---------     --------------
                                   (in thousands)
2001:                                                           @Allocations
KCL - Individual        $154,175        49,703            298    of Insurance
KCL - Group               37,649        21,377         45,370    Operating
Sunset                    32,172        28,900             21    Expenses are
Old American              51,649        16,759          1,738    based on a
                         -------     ---------         ------    number of
  Total                 $275,645       116,739         47,427    assumptions
                         =======     =========         ======    and esti-
                                                                 mates, and
2000:                                                            the results
KCL - Individual        $156,768        52,567            335    would change
KCL - Group               35,004        20,950         43,710    if different
Sunset                    32,387        10,167             26    methods were
Old American              52,682        17,051          2,048    applied.
                         -------     ---------         ------
  Total                 $276,841       100,735         46,119
                         =======     =========         ======

1999:
KCL - Individual        $162,336        53,507            362
KCL - Group               34,804        20,872         41,411
Sunset                    30,242        10,867             27
Old American              53,790        18,351          2,085
                         -------     ---------         ------
  Total                 $281,172       103,597         43,885
                         =======     =========         ======

All other information required by this Schedule is shown in the accompanying Segment Information Note to the Consolidated Financial Statements.

Schedule IV

KANSAS CITY LIFE INSURANCE COMPANY
REINSURANCE INFORMATION

                         Life Insurance Premiums    Accident and Health Premiums
                         -----------------------    ----------------------------
                        2001     2000      1999      2001     2000     1999
                        ----     ----      ----      ----     ----     ----
                                             (in thousands)
Direct
KCL - Individual      $ 35,862   24,951    29,725       344      379      413
KCL - Group             10,800   11,439    11,567    46,129   48,906   50,113
Sunset                   5,576    5,606     5,491        23       28       29
Old American            76,508   78,912    81,022     4,742    5,456    6,168
                       -------  -------   -------   -------  -------  -------
  Total               $128,746  120,908   127,805    51,238   54,769   56,723
                       -------  -------   -------   -------  -------  -------

Ceded
KCL - Individual       (16,363) (14,737)  (13,811)      (46)     (44)     (51)
KCL - Group             (7,944)  (2,277)   (2,333)   (2,375)  (6,674)  (9,951)
Sunset                  (5,947)  (4,523)   (5,879)       (2)      (2)      (2)
Old American            (5,467)  (6,281)   (7,232)   (3,004)  (3,408)  (4,083)
                       -------  -------   -------   -------  -------  -------
  Total                (35,721) (27,818)  (29,255)   (5,427) (10,128) (14,087)
                       -------  -------   -------   -------  -------  -------

Assumed
KCL - Individual         4,934    6,105     5,536         -        -        -
KCL - Group                  -        -         -         -        -        -
Sunset                       -        -         -         -        -        -
Old American                 -        -         -         -        -        -
                       -------  -------   -------   -------  -------  -------
  Total                  4,934    6,105     5,536         -        -        -
                       -------  -------   -------   -------  -------  -------
Net                   $ 97,959   99,195   104,086    45,811   44,641   42,636
                       =======  =======   =======   =======  =======  =======

% of Assumed to Net          5        6         5         -        -        -

                         Life Insurance in Force
                         ---- --------- -- -----
                        2001       2000      1999
                        ----       ----      ----
                              (in millions)
Direct
KCL - Individual      $ 14,068     14,003    13,386
KCL - Group              3,292      3,440     3,351
Sunset                   5,639      5,629     5,807
Old American             1,020      1,048     1,072
                       -------    -------   -------
  Total                 24,019     24,120    23,616
                       -------    -------   -------

Ceded
KCL - Individual        (5,158)    (4,749)   (3,726)
KCL - Group               (329)      (267)     (270)
Sunset                  (1,562)    (1,393)   (1,371)
Old American               (95)      (105)     (116)
                       -------    -------   -------
  Total                 (7,144)    (6,514)   (5,483)
                       -------    -------   -------

Assumed
KCL - Individual         2,626      2,818     3,131
KCL - Group                  -          -         -
Sunset                       -          -         -
Old American                 -          -         -
                       -------    -------   -------
  Total                  2,626      2,818     3,131
                       -------    -------   -------
Net                   $ 19,501     20,424    21,264
                       =======    =======   =======

% of Assumed to Net         13         14        15

All other information required by this Schedule is shown in the accompanying Reinsurance Note to the Consolidated Financial Statements.

Schedule V

KANSAS CITY LIFE INSURANCE COMPANY
VALUATION AND QUALIFYING ACCOUNTS

                                                  Years ended December 31

                                               2001         2000        1999
                                               ----         ----        ----

                                                       (in thousands)

Real estate valuation account
  Beginning of year                          $   625        1,519       2,877
  Deductions                                    (625)        (894)     (1,358)
                                              ------       ------      ------
  End of year                                $     0          625       1,519
                                              ======       ======      ======


Mortgage loan valuation account
  Beginning of year                          $ 4,030        7,000       8,500
  Deductions                                       0       (2,970)     (1,500)
                                              ------       ------      ------
  End of year                                $ 4,030        4,030       7,000
                                              ======       ======      ======


Allowance for uncollectible accounts
  Beginning of year                          $ 1,583        1,555       1,337
  Additions                                      492          218         491
  Deductions                                    (492)        (190)       (273)
                                              ------       ------      ------
  End of year                                $ 1,583        1,583       1,555
                                              ======       ======      ======

EX-10

TENTH AMENDMENT

KANSAS CITY LIFE
DEFERRED COMPENSATION PLAN

ARTICLE I

Creation and Purpose

1.	It is the intention of the Company to establish this Plan of deferred compensation for the benefit of designated employees whose contributions have been restricted by law and regulation under the Kansas City Life Insurance Company Savings and Profit Sharing Plan.
2.	By enrolling in this Plan, an employee agrees to defer a portion of his or her current earnings. It is the intent of this Plan that accumulated and vested benefits will be paid to such participants at the time of retirement, termination, death or total and permanent disability.

ARTICLE II

Definitions

(a)	“Salary” shall mean only the fixed amounts, weekly, semi-monthly, or monthly, due and payable to the employee by the Company, and does not include any bonuses, overtime pay or other extraordinary payments by the Company.
(b)	"Deferred compensation" shall mean the amount of salary not yet earned, which the participant and the Company mutually agree shall be deferred in accordance with the provisions of this Plan.
(c)	“Normal retirement” shall mean termination from em-ployment with the Company becoming effective on or about the first day of the calendar month following the participant’s attainment of age sixty-five (65).
(d)	“Early retirement” shall mean retirement from employment with the Company on the first day of any month following a participant’s fifty-fifth (55th) birthdate with the attainment of at least five years of employment. For purposes of determining the attainment of at least five (5) years of employment, the years of employment of a participant with Old American Insurance Company prior to November 1, 1991 shall not be taken into account.
(e)	"Termination of employment" shall mean the severance of the participant's employment with the Company prior to his or her eligibility for retirement.
(f)	“Participant” shall mean any employee of Kansas City Life Insurance Company, or any subsidiary corporation, under the rules of common law, who shall be a member of a select group of management or highly compensated employees designated for participation by Kansas City Life Insurance Company from time to time.
(g)	“Company” means Kansas City Life Insurance Company, a Missouri Corporation, Sunset Life Insurance Company of America, a Missouri Corporation, Old American Insurance Company, a Missouri Corporation and any other subsidiary corporation of Kansas City Life Insurance Company, any or all of which may sometimes be referred to herein as affiliated corporations.
(h)	“Company stock” shall mean shares of the common capital stock of Kansas City Life Insurance Company.

ARTICLE III

Administration

1.	The Administrative Committee, sometimes herein referred to as the “Committee”, shall consist of a number of persons, not less than three (3) nor more than five (5), designated by the Executive Committee of Kansas City Life Insurance Company, who shall serve terms of one (1) year or until their successors are designated, and said Committee shall have the responsi-bility for the general administration of the Plan and for carrying out the provisions of the Plan in accordance with its terms. The Committee shall have absolute discretion in carrying out its responsibilities.
2.	The Committee may appoint from its members such committees with such powers as it shall determine; may authorize one (1) or more of its number or any agent to execute or deliver any instrument or make any payment on its behalf; and may utilize counsel, employ agents and provide for such clerical and accounting services as it may require in carrying out the provisions of the Plan.
3.	The Committee shall hold meetings upon such notice, at such place or places, and at such time or times as it may from time to time determine.
4.	The action of a majority of the members expressed from time to time by a vote in a meeting or in writing without a meeting shall constitute the action of the Committee and shall have the same effect for all purposes as if assented to by all members of the Committee at the time in office.
5.	No member of the Committee shall receive any compensation for his services as such, and, except as required by law, no bond or other security shall be required of him in such capacity in any jurisdiction.
6.	Subject to the limitations of this Plan and Trust, the Commit-tee from time to time shall establish rules or regulations for the administration of the Plan and the transaction of its business. The Committee shall have full and complete discretionary authority to construe and interpret the Plan and decide any and all matters arising hereunder, except such matters which the Executive Committee of the Company from time to time may reserve for itself, including the right to remedy possible ambiguities, inconsistencies or omissions. All interpretations, determinations and decisions of the Committee or the Executive Committee of Kansas City Life Insurance Company in respect of any matter hereunder shall be final, conclusive and binding on all parties affected thereby. The Committee shall, when requested, submit a report to the Executive Committee of Kansas City Life Insurance Company giving a brief account of the operation of the Plan and the performance of the various funds and accounts established pursuant to the Plan.
7.	The Administrative Committee shall have full and complete discretionary authority to make all determinations as to the right of any person to a benefit. Any denial by the Committee of a claim for benefits under this Plan by a participant or a beneficiary shall be stated in writing by the Committee and delivered or mailed to the participant or the beneficiary, whichever is appropriate; and such notice shall set forth the specific reason for the denial, written to the best of the Committee’s ability in a manner that may be understood without legal or actuarial counsel. In addition, the Committee shall provide a reasonable opportunity to any participant or beneficiary whose claim for benefits has been denied for a review of the decision denying the claim.
8.	Any member of the Committee may resign by giving notice to the Executive Committee at least fifteen (15) days before the effective date of his resignation. Any Committee member shall resign upon request of the Executive Committee. The Executive Committee shall fill all vacancies on the Committee as soon as is reasonably possible after a resignation takes place, and until a new appointment takes place, the remaining members of the Committee shall have authority to act, if approved by either a majority of the remaining members or by two (2) members, whichever number is lesser.

ARTICLE IV

Participation in the Plan

1.	A qualified employee may commence his participation in this Plan as of the first day of the month coinciding with or next following his designation, whichever first occurs. He shall be notified of his eligibility from time to time by the Company.
2.	The eligible employee who desires to participate must execute a salary reduction agreement in form prescribed by the Company, and the employee shall thereby agree to the terms of this Plan and any amendments hereafter adopted.
3.	At such time as the participating employee is no longer qualified, because of the criteria established by this Plan, no further salary reductions shall be made until he shall again be qualified and have elected to participate.
4.	Commencing January 1, 1998, each participant may elect to have his or her salary reduced in an amount equivalent to one per-cent (1%) through fifteen percent (15%), and commencing January 1, 2002, through twenty-five percent (25%), and said amount shall be withheld by payroll deduction. These amounts shall be the participants’ deferred compensation. Commencing January 1, 1998, the amount subject to this reduction shall not exceed nine percent (9%), and, commencing January 1, 2002, twenty-five percent (25%) of annual salary. Prior to January 1, 2002, if the participant’s elective deferrals to the Kansas City Life Insurance Company Savings and Profit Sharing Plan exceed ten thousand dollars ($10,000.00) during any year (subject to annual adjustments of this amount in the Kansas City Life Insurance Company Savings and Profit Sharing Plan under Internal Revenue Code Sections 415(d), 402(g) and regulations), an additional amount in excess of nine percent (9%) of annual salary may be contributed by the participant. The additional amount contributed may not exceed fifteen percent (15%) of annual salary. Commencing January 1, 2002, if the participant’s elective deferrals to the Kansas City Life Insurance Company Savings and Profit Sharing Plan exceed the dollar limitation in Internal Revenue Code Section 402(g), the additional amount contributed may not exceed twenty-five percent (25%) of annual salary. A participant may change the percentage contribution rate as of the first day of any month, but not more than once in any six (6) month period pursuant to the rules of the Kansas City Life Insurance Company Savings and Profit Sharing Plan. However, this limitation shall not apply to a change in percentage contribution rate made effective January 1, 1998, or a change in percentage contribution rate made effective January 1, 2002. The contributions herein may sometimes be referred to as the participant’s “elective account”.
5.	The Company shall maintain accounts reflecting the amount of salary withheld from an individual pursuant to this Plan, and the balance in each participant’s elective account shall be fully vested at all times. The assets reflected in such accounts shall be owned by the Company and shall be subject to the claims of the Company’s creditors.
6.	At such time as Kansas City Life Insurance Company shall determine, it may provide a means whereby the respective participant may direct the investment of the value of his elective accounts during the period of his participation in the Plan. The valuation of the participant’s account shall be made by the Company not less often than quarterly, and the participant shall be entitled to receive an investment report from time to time.
7.	Amounts held in a participant’s elective account shall be distributed to him or her within a period of ninety (90) days following his retirement, termination of employment, death, or total and permanent disability as determined under the law and regulations regarding Social Security.

ARTICLE V

Company Contributions

1.	The Company shall, with respect to each participant, maintain an account in an amount equal to one hundred percent (100%) of such participant’s contribution resulting from his salary reduction agreement prior to December 31, 1997. The Company may, solely at its discretion, add additional amounts for the accounts of designated individuals as offsetting deferred compensation for amounts which would have otherwise been credited to them except for regulatory restrictions. Com-mencing January 1, 1998, with respect to participants whose elective deferrals to the Kansas City Life Insurance Company Savings and Profit Sharing Plan exceed ten thousand dollars ($10,000.00) during any year (subject to annual adjustments of this amount under Internal Revenue Code Sections 415(d), 402(g) and regulations), and, commencing January 1, 2002, exceed the dollar limitation contained in Internal Revenue Code Section 402(g), these additional amounts will include an amount equal to that which would otherwise have been con-tributed for these participants as a matching contribution under the Kansas City Life Insurance Company Savings and Profit Sharing Plan. Such Company contributions account shall be separate from the participant’s elective account. Commencing January 1, 2000, with respect to participants whose compensation exceeds the annual compensation limit of one hundred seventy thousand dollars ($170,000.00) during any year [subject to annual adjustments of this amount under Internal Revenue Code Sections 401(a)(17) and 404(l)], these additional amounts will include an amount equal to that which otherwise would have been contributed for these participants but for the annual compensation limit as a profit sharing contribution to the Kansas City Life Insurance Company Savings and Profit Sharing Plan for those years in which such a contribution was made to that Plan. Such Company contributions shall be kept separate from the participant’s elective account and matching contribution account. Such Company contributions account shall be separate from the participant’s elective account. Gains and losses regarding the value of such accounts shall be determined by the changes in market value of the common capital stock of the Company and the accumulation of dividends. In the event of any change in the outstanding stock of the Company by reason of a stock dividend, recapitalization, merger, consolidation, exchange of shares, or any similar device, the account balance shall be adjusted appropriately.
2.	For purposes of fixing the amount of contributions made pursuant to this paragraph, the value of stock shall be at the average of its bid price on the over-the-counter market for all business days following the previous monthly valuation date. The participant shall not have the right to direct the investment of the Company account established for his benefit.
3.	The balance in the Company account established for each participant shall be subject to the vesting provisions of Article VII. The value of the Company account for such participant shall be distributed to him or her at the time of his retirement, termination of employment, death or total and permanent disability as defined under the law and regulations of the Social Security law. The participant shall not be entitled to shares of the Company stock, and shall be entitled only to cash.

ARTICLE VI

Allocation to and Evaluation of Participants’ Accounts

1.	Investment funds. The value of all accounts shall be determined on the basis of market values as of the last market business day of each month, except that when the value of any account is determined based upon the value of Kansas City Life stock the Kansas City Life stock shall be valued at the average of its bid price on the over-the-counter market for all business days following the previous monthly valuation date. Accounting procedures shall reflect the establishment of at least four (4) separate accounts, sometimes herein referred to as Fund I, Fund II, Fund III and Fund IV, and commencing September 1, 1993, five (5) additional separate accounts shall be established, sometimes hereinafter referred to as Fund V, Fund VI, Fund VII, Fund VIII and Fund IX, and, commencing July 1, 2001, one (1) additional separate account shall be established, sometimes hereinafter referred to as Fund X, with the intent that all participants’ deferred compensation, and any earnings thereon, will be accounted for in Fund I, Fund II, Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X, and with the intent that all Company contributions, and any earnings thereon, will be accounted for in Fund III. The value of deferred compensation referenced to Funds I, IV, V, VI, VII, VIII, IX and X shall be determined by the Company’s general investments and the values of Funds II and III shall be determined by reference to the stock of Kansas City Life Insurance Company. The Company shall have the right to segregate and maintain in trust specific assets for the purpose of valuing, managing and holding assets for the respective accounts.
2.	Participants’ accounts. An account shall be established for each participant with respect to Fund I, Fund II, Fund III and with respect to Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X or any other such fund that reasonable accounting practices shall require be established. All Funds shall be maintained in United States dollars. A determination shall be made on each monthly valuation date of the value with respect to each fund, and shall reflect contributions made by both the participant and the Company and any gains or losses of the funds. Notwithstanding the foregoing, the Company shall have the right to change the method of accounting from time to time.
3.	Selected investment. Commencing September 1, 1993, a par-ticipant’s deferred compensation may be invested one hundred percent (100%) in any one (1) of Funds I, II, IV, V, VI, VII, VIII or IX, and, commencing July 1, 2001, Fund X or if he wishes to invest in more than one (1) fund, he shall specify the percentage to be invested in each fund. However, such percentage must be a whole percentage, for example, one percent (1%), twenty-six percent (26%) or eighty percent (80%), and no fractional percentages will be permitted. Each participant may make new investment choices for his deferred compensation to be effective September 1, 1993 notwithstanding any changes made in the prior twelve (12) months. Thereafter, a participant may request changes not more often than once a month. However, if a participant is investing all or a portion of his deferred compensation in Fund II and transfers all or a part of his Fund II account to another fund (as described in the following paragraph 4), deferred compensation investment in Fund II must cease until at least six (6) months from the date of said transfer from Fund II. The participant’s deferred compensation shall also be invested in the same manner as the participant shall have designated pursuant to the rules of The Kansas City Life Insurance Company Savings and Profit Sharing Plan. Commencing November 1, 1996, a participant may request changes in the investment choices not more often than once a month without regard to investment choices made in the Kansas City Life Insurance Company Savings and Profit Sharing Plan. However, if a participant is investing all or a portion of his deferred compensation in Fund II and transfers all or a part of his Fund II account to another fund (as described in the following Paragraph 4), deferred compensation investment in Fund II must cease until at least six (6) months from the date of said transfer from Fund II.
4.	Investment changes. Commencing September 1, 1993, any par-ticipant shall have the right not more often than once a month and notwithstanding any transfers made in the twelve (12) months prior to September 1, 1993, to require the value of any one (1) or more of his accounts be transferred for his account in any of Funds I, II, IV, V, VI, VII, VIII or IX, and, commencing July 1, 2001, Fund X provided such transfer shall be in whole percentages. This right shall not apply to Fund III, and a participant that transferred the value of his account from Fund II to another fund in the six (6) months prior to September 1, 1993 may not transfer any amount into Fund II until at least six (6) months after the date of said transfer from Fund II. Thereafter, transfers to or from Fund II may occur only once in a six (6) month period. Such transfers shall also be governed by reasonable rules of the Committee regarding the timeliness of notice. Such transfers shall only occur at such time, and in the same manner, as the participant shall have designated pursuant to the rules of the Kansas City Life Insurance Company Savings and Profit Sharing Plan. Commencing November 1, 1996, the participant may require the value of his accounts be transferred not more often than once a month to any one (1) or more of the other funds without regard to transfers made in the Kansas City Life Insurance Company Savings and Profit Sharing Plan except for Fund II. Transfers to or from Fund II may only occur once in a six (6) month period and must be transferred at such time and in the same manner as the participant shall have designated pursuant to the rules of the Kansas City Life Insurance Company Savings and Profit Sharing Plan.

ARTICLE VII

Vesting

1. The value of a participant’s account with respect to Company contributions made for his benefit shall be vested, to the extent of the percentage applicable, upon the valuation date of the month in which the participant completes the years of employment with the Company in accordance with the following schedule:

                   Years of                Percentage
                  Employment                 Vested
                  ----------               ----------

                        1                          0
                        2                          0
                        3                         30
                        4                         40
                        5                         60
                        6                         80
                        7                        100

         Commencing January 1, 2002, the schedule shall be as follows:

                     Years of                Percentage
                    Employment                 Vested
                    ----------               ----------

                        1                          0
                        2                         20
                        3                         40
                        4                         60
                        5                         80
                        6                        100

2.

A “year of employment” shall mean a twelve (12) consecutive monthly period of employment with the Company dating from commencement of employment, during which he or she shall complete at least one thousand (1,000) hours of employment. If an employee’s employment with either Kansas City Life Insurance Company or one of its affiliated corporations shall be terminated, and he is immediately employed by any other of such affiliated corporations, his employment shall be regarded as continuous and treated as if under one employer for vesting purposes. However, years of employment of an employee of Old American Insurance Company prior to November 1, 1991 shall not be taken into account for purposes of this Article VII.

3.

In the event a participant shall be terminated from employment with the Company or any of its affiliated corporations, by reason of death or retirement or early retirement as defined herein, the value of his account shall be one hundred percent (100%) vested upon the valuation date of the month in which such death or retirement occurs, and shall be distributed to him or her within a period of ninety (90) days thereafter.

ARTICLE VIII

Miscellaneous

1.	All distributions provided or pursuant to this Plan shall be in the form of a lump sum payment. If a payment is made as a result of the death of the participant, the payment shall be made to the surviving spouse of the participant, if any, unless a beneficiary designation has been provided.
2.	Any participant or retired participant shall have the right to designate a new beneficiary at any time by filing with the Company a written request for such change, but any such change shall become effective only upon receipt of such request by the Company. Upon receipt by the Company of such request, the change shall relate back to and take effect as of the date such participant signs such request whether or not such parti-cipant is living at the time the Company receives such request.
3.	If there be no designated beneficiary living or in effect at the death of such participant when any payment hereunder shall be payable to the beneficiary, then such payment shall be made as follows: To such participant’s spouse, if living; if not living, to such participant’s then living lineal descendants, in equal shares, per stirpes; if none survives, to such par-ticipant’s surviving parents, equally. If neither survives, to such participant’s executors or administrators.
4.	The interest hereunder of any participant, retired participant or beneficiary shall not be alienable, either by assignment or by any other method, and to the maximum extent permissible by law, shall not be subject to being taken, by any process whatever, by the creditors of such participant, retired participant or beneficiary.
5.	Nothing herein contained nor any action taken under the provisions hereof shall be construed as giving any employee the right to be retained in the employment of the Company.
6.	The Company shall have the right to amend or terminate this Plan at any time.

EX-10

TWENTY-SEVENTH AMENDMENT

KANSAS CITY LIFE INSURANCE COMPANY
SAVINGS AND PROFIT SHARING PLAN

        THIS TWENTY-SEVENTH AMENDMENT, comprising the restated Kansas City Life Insurance Company Savings and Profit Sharing Plan, except as otherwise specifically stated in the Plan, is effective the lst day of January, 2002, and is entered into by and between Kansas City Life Insurance Company, a Corporation organized and existing under the Laws of the State of Missouri, hereinafter called the “Company”, and John K. Koetting, Robert C. Miller and Anne C. Moberg, hereinafter referred to as the “Trustees”.

ARTICLE I

Creation and Purpose of Trust

        1.1 Name. The Company hereby creates this Plan and Trust to be known as the “Kansas City Life Insurance Company Savings and Profit Sharing Plan” (formerly the Kansas City Life Insurance Company Savings and Investment Plan), hereinafter sometimes re-ferred to as the “Plan” or “Trust”.
        1.2 Purpose. It is the purpose of this Plan to recognize the contributions of its employees to the successful operation of the Company and to reward such contributions by providing certain savings and investment and profit sharing benefits for those who become participants under the Plan, and for their beneficiaries.
        1.3 Exclusive Benefit of Employees. This Agreement has been made, and this Plan and Trust created, for the exclusive benefit of the Company's full time employees and their beneficiaries. The terms of this Plan are intended to comply with the provisions of Sections 401(a), 501(a) and 401(k) of the Internal Revenue Code of 1986 as amended from time to time, and Treasury Department Regu-lations in connection therewith in order that the Plan and Trust may qualify for tax exemption. Under no circumstances shall any part of the principal or income of the Plan and Trust be used for, or revert to, the Company, or be used for, or diverted to, any pur-poses other than for the exclusive benefit of the employees and their beneficiaries. This Plan and Trust shall not be construed, however, as giving any employee, or any other person, any right, legal or equitable as against the Company, the Trustees, or the principal or income of the Trust, except as specifically provided for herein, nor shall it be construed as giving any employee the right to remain with the Company or in the Company’s employment.

ARTICLE II

Qualification and Eligibility

        2.1 Qualification. The requirements of qualification for employees are set forth hereinafter.

A.	Employees. Beginning February 1, 2002, each present and future employee shall be qualified to enter into a compensation reduction agreement under Paragraph 3.1 at the time specified in Paragraph 2.2 following the later of his date of hire or attaining the age of twenty-one (21) years.
	Each present and future employee shall be qualified to receive a matching Company contribution as specified in Paragraph 4.1 and a discretionary profit sharing contribution as specified in Paragraph 4.2 of this Plan,

(1)	who shall have completed one (1) year of employment with the Company during which he shall have com-pleted one thousand (1,000) hours of employment from date of hire, or if he has not completed one thousand (1,000) hours of employment within such period, then one thousand (1,000) hours of employ-ment during a calendar year beginning with the calendar year which includes the first anniversary of the employee’s date of hire, and
(2)	who shall have attained the age of twenty-one (21) years.
(3)	With respect to this Plan, an "hour of employment" shall mean:

(a)	Each hour for which an employee is directly or indirectly paid, or entitled to payment, by the Company for the performance of duties. These hours shall be credited to the employee for the computation period or periods in which the duties are performed; and
(b)	Each hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Company, with no duplica-tion of credit for hours under Subparagraphs (a), (b) and (c). These hours shall be credited to the employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made. With respect to periods described in Subparagraph (c) below, crediting of back pay hours shall be subject to the limitations set forth in that Subparagraph.
(c)	Each hour for which an employee is directly or indirectly paid, or entitled to payment, by the Company for reasons such as vacation, holidays, illness, incapacity (including disa-bility), layoff, jury duty, military leave or leave of absence in a period during which no duties are performed (irrespective of whether the employment relationship has terminated). These hours shall be credited to the employee for the computation period or periods during which the nonperformance of such duties occurs. No hour shall be credited based on any payment under a plan maintained solely to comply with applicable workers’ compensation, unemployment compensation, or disability insurance laws, or which solely reimburses an employee for medical or medically-related expenses incurred by the employee. No more than five hundred one (501) hours shall be credited under this Subparagraph for any con-tinuous period during which the employee did not or would not have performed duties. Hours of service for periods of time during which no duties are performed under Subparagraphs (b) and (c) shall be calculated and credited according to Department of Labor Regulations 2530.200b-2(b) and (c).
(d)	In computing an employee’s hours of employment on a weekly or monthly basis, when a record of hours of employment is not available to determine the hours of employment under Subparagraphs (a), (b) and (c), the employee shall be assumed to have worked forty-five (45) hours for each week, or one hundred ninety (190) hours for each month (as appli-cable), for which the employee would be required to be credited with at least one (1) hour of employment under Subparagraphs (a), (b) and (c) above.
(e)	An "hour of employment" shall also include time for which an employee is absent from work either

(i)	by reason of the pregnancy of such employee,
(ii)	by reason of the birth of a child of the employee,
(iii)	by reason of the placement of a child in connection with the adoption of the child by the employee, or
(iv)	for purposes of caring for the child during the period immediately fol-lowing the birth or placement for adoption, or
(v)	a leave of absence covered under the Family and Medical Leave Act of 1993.

However, the total number of hours of such service counted for any one (1) period shall not exceed five hundred one (501) hours.

(4) For the purpose of computing continuous employment, leaves of absence may be included which have been authorized by the Company for any of the following reasons:

(a)	Sickness.
(b)	Disability.
(c)	Service with the armed forces of the United States during any war or national emergency declared by the President or the Congress, or undeclared.
(d)	Pregnancy, not to exceed twelve (12) months.
(e)	Public service, whether elected or otherwise.
(f)	Obtaining additional education, involving periods of time not to exceed twelve (12) months for each leave of absence granted, but only after completion of one (1) full year of full time employment.

(5)

Such leaves of absence may be counted in computing continuous employment provided the employee returns to active employment on or before the end of such leave of absence, and when because of service in the armed forces as stated above, provided the employee returns to active employment with the Company within ninety (90) days following his discharge from such service, or such longer period during which his re-employment rights are protected by law.

(6)

Any such employee who is not qualified as a participant prior to the commencement of such a leave of absence shall not be so qualified until his return to active employment. The provisions of this Section shall be applied in a like manner to all employees under similar circumstances.

        2.2 Eligibility Date. Except as provided in the next sentence, any employee of the Company who becomes qualified after the effective date of this Agreement, shall be eligible to become a participant as of the first (1st) business day of the month coinciding with or next following the employee’s qualification, whichever first occurs. Any employee of Old American Insurance Company shall be eligible to become a participant no earlier than November 1, 1992 and in accordance with the terms of the Adoption Agreement dated December 19, 1991.
        2.3 Company to Furnish Eligibility Lists. Each month, the Company shall transmit to the Committee the names of all employees and such other information concerning them as the Committee may request. The Committee shall then determine the employees who are eligible, or who will be eligible as of the first (1st) business day of each month to become participants and shall notify each such employee in writing of the existence of this Trust and of its basic provisions, and of the employee’s eligibility, and shall provide a form or application for participation, and such other forms, if any, as may be required to effect participation.
        2.4 Election to Participate. Any eligible employee who desires to become a participant must execute and deliver to the Committee an application for participation on the form provided by the Committee and such other forms, if any, as may be required. In such application for participation, the employee shall agree to be bound by the terms of this Plan and Trust and of all amendments hereafter adopted with the same force and effect as if the employee had executed this Plan and Trust, and shall set forth such reason-able information as may be required by the Committee to effect participation and maintain the qualified status of this Plan and Trust.
        2.5 Failure to Elect. Any employee who fails to elect to become a participant at the time of first becoming eligible, may elect to commence participation on the first (1st) business day of any succeeding month provided the employee shall then be eligible. Any employee on a leave of absence authorized by the Company, as defined in Subparagraph A(4) hereinabove, at a time when he or she could otherwise be eligible to become a participant, shall be eligible on the first (1st) business day of the first (1st) month coinciding with or next following return to active employment with the Company provided that on such date he shall meet the eligi-bility requirements.
        2.6 Participation and Service on Re-employment. Subject to the provisions of this Plan, participation in the Plan by an employee shall cease upon termination of employment with the Company. Upon an employee’s termination on or after January 1, 1976, any twelve (12) month employment period during which the employee completes less than five hundred one (501) hours of employment or work due to a termination shall constitute a one (1) year break in service.
        Upon the re-employment by the Company of any person whose participation has been terminated from January 1, 1976 through December 31, 1984, the following rule shall apply in determining his participation and vesting in the Plan:

(a)	Participation - before a break in service: If the employee is rehired before he has a one (1) year break in service, he shall be eligible to participate in the plan on the first (1st) business day of the month immediately following the date of his re-employment if he shall be otherwise qualified.
	After a break in service: If an employee is rehired after he has a one (1) year break in service, he shall be eligible to participate in the Plan upon his completion of the requirements set forth in Paragraph 2.1 herein.
(b)	Service - for vested participants: In the case of a person who was vested when his prior period of employment terminated, any service attributable to his prior period of employment shall be reinstated as of the date of his reparticipation and he shall be vested immediately upon his reparticipation.
	For other persons: In the case of a re-employed employee who was not a participant in the Plan during his prior period of employment, or in the case of a participant who was not vested when his prior period of employment terminated, any service attributable to his prior period of employment shall be restored only if the number of consecutive years of his break in service was less than the aggregate number of his years of prebreak service.

        Upon the re-employment by the Company of any person who has been terminated on or after January 1, 1985, the following rules shall apply in determining his participation and vesting in the Plan:

(a)	Participation - before a five (5) year break in service: If the employee is rehired before the number of one (1) year breaks in service equals or exceeds the greater of five (5) consecutive years of service, or the aggregate number of years of service earned before the consecutive breaks in service, he shall be eligible to participate in the Plan on the first (1st) business day of the month immediately following the date of his re-employment if he shall be otherwise qualified. This rule of parity will apply to employees who had no vested interest on separation of employment.
	After a five (5) year break in service: If an employee is re-hired and he does not qualify for participation or vesting under the rule in the above Paragraph, he shall be eligible to participate in the Plan upon his com-pletion of the requirements set forth in Paragraph 2.1 herein.
(b)	Service - for vested participants: In the case of a person who was fully or partially vested in his Fund III account when his prior period of employment terminated, any service attributable to his prior period of employment shall be reinstated as of the date of his re-employment and he shall participate immediately and also be vested in accordance with prior years of service.
	For other persons: In the case of a re-employed employee who was not a participant in the Plan during his prior period of employment, or in the case of a participant who was not vested when his prior period of employment terminated, any service attributable to his prior period of employment shall be restored unless the number of one (1) year breaks in service equals or exceeds the greater of five (5) consecutive years of service, or the aggregate number of years of service earned before the consecutive breaks in service.
	Sunset Life and Old American Insurance Company: If an employee’s employment with either Kansas City Life Insurance Company, Sunset Life Insurance Company of America, Old American Insurance Company, or any other affiliated corporation of Kansas City Life Insurance Company, shall be terminated and he is subsequently employed by any other of the affiliated corporations, his employment shall be treated as if under one (1) employer for the purpose of this Plan.

        2.7 In determining whether a break in service has occurred, and not for purposes of determining a participant’s vesting service, the hours described in Paragraph 2.1A(3)(e) above shall be treated as hours of service (i) only in the year in which the absence from work begins, if a participant would be prevented from incurring a one (1) year break in service in such year solely because the period of absence is treated as hours of service as provided in Paragraph 2.1A(3)(e), or (ii) in any other case, in the immediately following year.

ARTICLE III

Member Contributions

        3.1 Rate of Contribution. Commencing January 1, 1988, each participant may elect to enter into a compensation reduction agreement with the Company by which a contribution will be made for his or her respective account in an amount equivalent to one percent (1%) (commencing September 1, 1993), two percent (2%), three percent (3%), four percent (4%), five percent (5%), six percent (6%), seven percent (7%), eight percent (8%), nine percent (9%), ten percent (10%), and commencing January 1, 1998, eleven percent (11%), twelve percent (12%), thirteen percent (13%), fourteen percent (14%), or fifteen percent (15%), and commencing January 1, 2002, any percentage not to exceed one hundred percent (100%) of his unreduced monthly salary or earnings, whichever may be applicable; provided however, that no contribution in excess of five percent (5%), and, commencing January 1, 1994, six percent (6%), shall be made for any participant who shall be classified as a highly compensated person. A participant may elect to change his contribution percentage rate as of the first (1st) day of any month, but not more than once in any six (6) month period, by giving such written notice as shall be prescribed by the Committee. However, this limitation shall not apply to a change in contribution percentage rate effective January 1, 1994 made by a highly compensated person, a change in contribution percentage rate made by any participant that was effective January 1, 1998, or a change in contribution percentage rate effective January 1, 2002 made by a participant who is not a highly compensated person. The contribution for each participant shall be paid to the Trustees not less often than monthly and credited to the respective participant’s accounts. No contribution for a participant shall exceed ten thousand dollars ($10,000.00) each calendar year, subject to annual adjustments pursuant to Internal Revenue Code Sections 415(d), 402(g) and regulations. The contributions herein may sometimes be referred to as the participant’s “elective account”.
        Beginning with years after December 31, 2001, no participant shall be permitted to have elective contributions made under this Plan, or any other qualified plan maintained by the Company during any taxable year, in excess of the dollar limitation contained in Code Section 402(g) in effect for such taxable year, except for catch-up elective contributions permitted in the following paragraph and Code Section 414(v).
        Beginning with contributions made after December 31, 2001, all employees who are eligible to make elective contributions under this Plan and who have attained age fifty (50) before the close of the Plan year shall be eligible to make catch-up elective contri-butions in accordance with, and subject to the limitations of, Code Section 414(v). Such catch-up elective contributions shall not be taken into account for purposes of the provisions of the Plan implementing the required limitations of Code Sections 402(g) and 415. The Plan shall not be treated as failing to satisfy the provisions of the Plan implementing the requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416, as applicable, by reason of the making of such catch-up elective contributions.
        3.2 Salary or Compensation Defined.

A.	For the purposes of Paragraph 3.1 herein and with respect to employees of the Company, the term “salary” or “compensation”, includes only the fixed amounts, hourly, weekly, semi-monthly or monthly, due and payable to the employees of the Company, not reduced by any salary reductions, but not to exceed, commencing January 1, 1994, one hundred fifty thousand dollars ($150,000.00), and, commencing January 1, 2002, two hundred thousand dollars ($200,000.00) for each calendar year, and does not include any bonuses, overtime, pay in lieu of vacation, pay while on layoff, severance pay, or other extraordinary payments by the Company.
B.	The one hundred fifty thousand dollar ($150,000.00) amount shall be adjusted at the same time and in such manner as permitted under Code Sections 401(a)(17), 415(d) and regulations thereunder. The two hundred thousand dollar ($200,000.00) amount shall be adjusted at the same time and in such manner in accordance with Code Section 401(a)(17). For all other purposes of this Plan, compensation shall be defined by the provisions of Internal Revenue Code Regulation 1.415-2(d)(11)(i) and shall also include any amount not includable in the gross income of an employee under Code Sections 125, 132(f)(4), 402(e)(3), 402(h) and 403(b).
C.	The family aggregation rules of Section 414(q) of the Internal Revenue Code, as modified by Section 401(a)(17), apply with respect to the requirement that the Plan must limit the amount of contributions taken into account in determining contributions. That is, the Plan must treat the following family unit as a single employee with one compensation to which the annual compensation limit under the plan applies:
	An employee who is either a five percent (5%) owner or is both a highly compensated employee and one of the ten (10) most highly compensated employees, such employee’s spouse, and any lineal descendants of such employee who have not attained age nineteen (19) before the close of the year. If the compensation for the family unit exceeds the annual compensation limit, then the Plan must prorate the limit among the members of the family unit in proportion to each individual’s compensation.
	The family aggregation rules shall not apply effective January 1, 1997.

        3.3 Suspension of Contributions. A participant may suspend his compensation reduction agreement as of the last day of any month by giving such notice as shall be prescribed by the Com-mittee, and no contribution shall be made during such suspension period. Such suspension may last indefinitely. The participant may resume his compensation reduction agreement on the first (1st) day of any month following the expiration of six (6) months from the date his agreement was suspended, providing he shall then be eligible to participate, by giving such notice as shall be prescribed by the Committee.
        3.4 Distribution Conditions. The balance in each partici-pant's elective account shall be fully vested at all times and shall not be subject to forfeiture for any reason. Amounts held in the participant's elective account may not be distributable prior to the earlier of,

(1)	his retirement, termination of employment or death;
(2)	his attainment of age fifty-nine and one-half (59 1/2);
(3)	termination of the Plan without establishment of a successor Plan by the Company or an affiliated employer;
(4)	the date of the sale by the Company to an entity that is not an affiliated employer of substantially all the assets, within the meaning of Code Section 409(d)(2), with respect to a participant who continues employment with the corporation acquiring such assets;
(5)	the date of the sale by the Company or an affiliated employer of its interest in a subsidiary to an entity which is not an affiliated employer with respect to a participant who continues employment with such sub-sidiary; or
(6)	proven financial hardship, subject to the limitations of Section 3.5.

        For distributions occurring after December 31, 2001, a participant’s elective contributions and earnings attributable to those contributions shall be distributed on account of the parti-cipant’s severance of employment. However, such a distribution shall be subject to the other provisions of the Plan regarding distributions, other than provisions of the Plan that require a separation from service before such amounts may be distributed.
        In the event that the dollar limitation provided for in Para-graph 3.1 is exceeded, the Administrative Committee shall direct the Trustees to distribute such excess amount, and any income allocable to such amount, to the participant not later than April 15th following the close of the participant’s taxable year. If there is a loss allocable to such excess amount, the distribution shall in no event be less than the lesser of the participant’s elective account or the amount of the contribution made for such participant’s elective account in the calendar year resulting from his salary reduction agreement.
        In the event that a participant is also a participant in another qualified cash or deferred arrangement as defined in Code Section 401(k), a simplified employee pension plan as defined in Code Section 408(k), or a salary reduction arrangement within the meaning of Code Section 3121(a)(5)(d), and the elective deferrals, as defined in Code Section 402(g)(3), made under such other arrangements and this Plan cumulatively exceed ten thousand dollars ($10,000.00) or such amount adjusted annually as provided in Code Section 415(d) and regulations for such participant’s taxable year, the participant may, not later than March 1st following the close of his taxable year, notify the Administrative Committee in writing of such excess and request that his deferred compensation to this Plan be reduced by an amount specified by the participant. Such amount shall then be distributed in the same manner as provided in the previous Paragraph.
        3.5 Withdrawal, Extreme Financial Necessity. The Adminis-trative Committee, in its sole discretion, may direct the Trustees to distribute to any participant or his beneficiary up to one hundred percent (100%) of the participant’s elective account, valued as of the most recent valuation date, in the case of proven extreme financial necessity. Commencing January 1, 1988, such distribution shall be limited solely to the participant’s deferred compensation without regard to any earnings on such deferred com-pensation. Withdrawal under this section shall only be authorized in the event of financial hardship resulting from accident to or sickness of a participant or his dependents; or financial hardship resulting from the establishing or preserving of the home in which the participant resides, provided funds are not reasonably available from other financial resources to the participant. Furthermore, any withdrawal pursuant to the provisions of this section shall be governed by the provisions of ARTICLE IX herein regarding suspension of participation and forfeitures, except that the period of suspension shall be twelve (12) months, and the Administrative Committee’s determination with respect to any question herein shall be final. However, a participant who receives a distribution from his elective account after December 31, 2001 on account of hardship shall be prohibited from making contributions to his elective account for six (6) months after receipt of the distribution. A participant who receives a distribution from his elective account in calendar year 2001 on account of hardship shall be prohibited from making contributions to his elective account for six (6) months after receipt of the distribution or until January 1, 2002, if later. Withdrawals pursuant to this Paragraph may not be made by an individual who is an alternate payee under a Qualified Domestic Relations Order and for whom an account is being separately maintained, nor shall withdrawals pursuant to this Paragraph be made by a former employee who was a participant and who has not withdrawn all the value of his elective account pursuant to Paragraph 10.4.
        The Company and the Administrative Committee shall adopt procedures necessary to implement the compensation reduction elections provided for herein.
        3.6 Compensation Reduction Limitations. To insure continued qualification of the Plan, a test sometimes referred to as the “actual deferral percentage test” must be met for each Plan year. In order to meet the ADP test, it may be necessary to adjust contributions made by the Company resulting from the compensation reduction agreements entered into by certain of the participants.
        In the event that the contribution ratios of the Plan do not satisfy the test, the Administrative Committee shall adjust the contributions resulting from the compensation reduction agreements as follows effective January 1, 1997:

(a) Any distribution under this Paragraph shall be made on or before the fifteenth (15th) day of the third (3rd) month following the end of the Plan year, but in no event later than the close of the following Plan year, which in this case is a calendar year, and shall be determined in the following manner:

(i)	The dollar amount of excess contributions for each highly compensated participant shall be calculated.
(ii)	The total of the dollar amounts in (i) shall be determined.
(iii)	The contributions resulting from the com-pensation reduction agreement (“elective contributions”) of the highly compensated participant with the highest dollar amount of elective contributions shall be reduced by the amount required to cause that highly com-pensated participant’s elective contributions to equal the dollar amount of the elective contributions of the highly compensated participant with the next highest dollar amount of elective contributions. This amount shall be distributed to the highly compensated participant with the highest dollar amount. However, if a lesser reduction, when added to the dollar amount already distributed under this (iii) would equal the total excess contributions, the lesser reduction amount shall be distributed.
(iv)	If the total amount distributed is less than the total excess contributions, reductions shall continue to be made in accordance with (iii) until the total amount distributed equals the total excess contributions.

(b) For purposes of this Paragraph, income means the gain or loss allocable to excess contributions which shall equal the sum of the allocable gain or loss for the Plan year and the allocable gain or loss for the period between the end of the Plan year and the date of distribution (gap period). The income or loss allocable for the Plan year and the gap period is calculated separately and is determined by multiplying the income or loss for the Plan year and gap period by a fraction. The numerator of the fraction is the excess contributions made by the employee for the Plan year, and the denominator is the total account balance of the employee attributable to elective contributions as of the end of the Plan year, reduced by the gain allocable to such total amount for the Plan year and increased by the loss allocable to such total amount for the Plan year. The income allocable to excess contributions for the period between the end of the Plan year and the date of distribution shall be calculated in the same manner by substituting “gap period” for “Plan year” in the fraction.

        3.7 Deferral Percentage Test.

(a) Maximum annual allocation: Effective January 1, 1997, the actual deferral percentage for eligible highly compensated employees for the Plan year bears a relationship to the actual deferral percentage for all other eligible employees for the preceding Plan year which meets either of the following tests:

1.

The actual deferral percentage for the highly compensated participant group shall not be more than the actual deferral percentage of the nonhighly compensated participant group multiplied by 1.25, or

2.

The excess of the actual deferral percentage for the highly compensated participant group over the actual deferral percentage for the nonhighly compensated participant group shall not be more than two (2) percentage points or such lesser amount determined pursuant to regulations to prevent the multiple use of this alternative limitation with respect to any highly compensated participant. Additionally, the actual deferral percentage for the highly compensated participant group shall not exceed the actual deferral per-centage for the nonhighly compensated participant group multipled by two (2).

(b)

For the purposes of this section, actual deferral percentage means, with respect to the highly compensated participant group and nonhighly compensated participant group for a Plan year the average of the ratio, cal-culated separately for each participant in such group, of the amount of contribution allocated to each partici-pant’s account resulting from compensation reduction agreements, unreduced by distributions made pursuant to Paragraph 3.5 for such Plan year, to such participant’s compensation for such Plan year. In addition, for purposes of this section, highly compensated participant and non-highly compensated participant shall include any employee eligible to enter into a compensation reduction agreement whether or not such agreement was made, or suspended under the provisions of this Plan.

(c)

In the application of the tests referred to above, the Plan shall take elective contributions into account for the Plan year only if attributable to compensation that would be received by the participant during the Plan year, or earned during the Plan year and received within two and one-half (2 1/2) months after the end of the Plan year. Such contribution shall be taken into account for a Plan year only if it is allocated to the participant’s account on a day within the Plan year.

        3.8 Actual Contribution Percentage (ACP) Test. In addition to the “actual deferred percentage test” referred to in Paragraph 3.6 above, the Plan must comply with the “actual contribution percentage test” required by Section 401(m)(1) and (2) of the Internal Revenue Code. Effective January 1, 1997, the actual contribution percentage for eligible highly compensated employees for the Plan year shall bear a relationship to the actual contribution percentage for all other employees for the preceding Plan year which meets either of the tests similar to those stated in Paragraph 3.7(a). Rather than stating the test in this Plan, the test is adopted by incorporating by reference herein the provisions of said Section 401(m)(1) and (2) and the regulations issued thereunder by the Internal Revenue Service.

(a)	In the event the actual contribution ratios of the Plan do not satisfy the test, the Administrative Committee shall distribute any excess aggregate contributions in a manner similar to that stated in Paragraph 3.6(a). However, if the highly compensated participant is not fully vested in the matching Company contribution and income allocable to such contribution, the non-vested amounts shall be forfeited pursuant to ARTICLE X and applied pursuant to ARTICLE XI.
(b)	For purposes of this Paragraph, income means the income or loss allocable to excess aggregate contributions which shall equal the sum of the allocable gain or loss for the Plan year and the allocable gain or loss for the period between the end of the Plan year and the date of distri-bution (gap period). The income or loss allocable to excess aggregate contributions for the Plan year and gap period is calculated separately by multiplying the income or loss allocable to matching contributions by a fraction. The numerator of the fraction is the amount of excess aggregate contributions made on behalf of the employee for the Plan year or gap period. The denomi-nator is the total account balance of the employee attributable to matching contributions as of the end of the Plan year or gap period reduced by the gain allocable to such total amount for the Plan year or gap period and increased by the loss allocable to such total amount for the Plan year or gap period.
(c)	All such distributions shall be made on or before the fifteenth (15th) day of the third (3rd) month following the end of the Plan year in which the excess aggregate contributions were made, and no later than the end of the following Plan year.
(d)	Any distribution or forfeiture of excess aggregate contributions for any Plan year shall be made on the basis of the respective portions of such amounts attributable to each highly compensated person.
(e)	Matching contributions that are vested may not be forfeited to correct excess aggregate contributions.
(f)	Furthermore, with respect to the application of the actual deferred percentage test and the actual contribution percentage test, the multiple use of alternative limitation rule may be applied. For this purpose, proposed Regulation 1.401(m)-2 is hereby incorporated by reference.

        3.9 Combined Deferral Plans. For the purposes of this Plan, a highly compensated participant and nonhighly compensated participant shall include any employee eligible to participate in this Plan whether or not such participation was elected, or any eligible employee whose participation has been suspended pursuant to Paragraphs 3.3 or 3.5.
        For the purposes of this Plan, if two (2) or more plans which include cash or deferred arrangements are considered one (1) plan for the purposes of Internal Revenue Code Section 401(a)(4) or Section 410(b), the cash or deferred arrangements included in such plan shall be treated as one (1) arrangement.
        For the purposes of this Plan, if a highly compensated participant is a participant under two (2) or more cash or deferred arrangements of the Company or an affiliated company, all such cash or deferred arrangements shall be treated as one (1) cash or deferred arrangement for the purpose of determining the deferral percentage with respect to such highly compensated participant.
        Notwithstanding the above, the determination and treatment of elective contributions and "actual deferral percentage" of any participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.
        3.10 Rollover Contributions.

A.	Rollover of distribution from qualified plan. Effective January 1, 1998, an employee of the Company may, in accordance with procedures approved by the Administrative Committee, contribute to the Plan, as a rollover con-tribution, part or all of a cash distribution, or cash proceeds from a sale of property included in a distribution, that qualifies as an “eligible rollover distribution”, within the meaning of Code Section 402(c)(4) [excluding, beginning January 1, 2002, any after tax employee contributions], from a plan qualified under Code Section 401(a) in which the employee was a participant, provided, however, that such amount shall be paid to the Trustees on or before the sixtieth (60th) day after receipt by the employee of the distribution from the other qualified plan. An employee shall be entitled to make such a rollover contribution regardless of whether the employee has satisfied the service and age qualification requirements of Paragraph 2.1A(1) and (2).
	Alternatively, the Trustee may receive such contribution in a direct rollover from another plan qualified under Code Section 401(a) in which the employee was a participant.
	An employee shall not be permitted to make a rollover contribution of any amount that is or has been in an individual retirement account or an individual retirement annuity, as defined in Code Section 408, regardless of whether such amount originated in a plan qualified under Code Section 401(a) in which the employee was a participant.
	Beginning January 1, 2002, an employee shall not be permitted to make a rollover contribution of any amount to this Plan from, nor may the Trustee receive a direct rollover to this Plan of any amount from, an annuity plan described in Code Section 403(a), or an annuity contract described in Code Section 403(b) or an eligible plan under Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.
B.	Accounting for and distribution of contributions. All amounts received as rollover contributions pursuant to Paragraph A of this section shall be credited to the employee’s “elective account” as if they were partici-pant contributions pursuant to a compensation reduction agreement. They shall be invested in the same way that contributions under Paragraph 3.1 are invested, and they shall be subject to the same rules as apply to contri-butions under Paragraph 3.1 relating to withdrawal and distributions. Rollover contributions shall be one hundred percent (100%) vested at all times.
	Nothwithstanding the preceding provisions of this section

(1)	rollover contributions shall not be treated as annual additions for purposes of Code Section 415; and
(2)	rollover contributions shall not be taken into account for purposes of either the actual deferral percentage test of Code Section 401(k)(3) or the average compensation percentage test of Code Section 401(m)(3).

ARTICLE IV

Matching Company Contributions

        4.1 Rate of Contribution. The Company shall, with respect to each participant qualified under Paragraph 2.1A (1) and (2), contribute to the Trustees as soon as practicable after the end of each month, out of its current or accumulated earnings and profits as shown on the books used in preparing its annual reports, without regard to whether it has any current or accumulated earnings and profits for federal income tax purposes, a matching amount determined as follows:

(a)	for employees for whom compensation reduction agreements were in effect on December 31, 1997, and
(b)	for employees hired by the Company in 1997 or earlier who are not eligible to make compensation reduction agree-ments as of December 31, 1997 but who choose to make compensation reduction agreements when they first become eligible to participate, the Company shall match the participant’s compensation reduction $1.00 for each $1.00 deferred, with a maximum of six percent (6%) of a participant’s compensation.
(c)	for all other employees, the matching amount contributed by the Company shall vary depending on the employee’s years of employment [as defined in Paragraph 8.1], as follows:

                                      Matching Amount per
                                        $1.00 Deferred
                                      (Counting Deferrals
       Years of Employment         up to 6% of Compensation)

      Less than 5                        $0.50
              5 - 9                           0.75
           10 or More                         1.00

        Company contributions with respect to a participant shall be paid into the Trust and credited to such participant’s account with respect to Fund III. Effective January 1, 2002, Company matching contributions at the applicable matching amount shall continue to be made for the remainder of a year on behalf of a participant who attains the elective contribution dollar limitation contained in Internal Revenue Code Section 402(g) during a year. However, the Company will not contribute a matching amount based upon any catch-up elective contributions made by a participant as permitted in Paragraph 3.1.
        4.2 Discretionary Profit Sharing Contribution. Beginning with the Plan year ending December 31, 1998 and for each Plan year thereafter, the Company may, at its discretion, make a contribution to the Plan on behalf of each employee of the Company eligible under Paragraph 2.1A (1) and (2) to participate in the Plan who is employed on the last day of the Plan year based on profits regardless of whether the employee has elected to make compensation reduction contributions. The profit sharing contribution shall be in the form specified in Paragraph 4.3 and shall be accounted for in Fund III. The profit sharing contribution shall be allocated to each employee in the proportion that each employee’s compensation (as defined in Paragraph 3.2) for the Plan year bears to the total compensation for all employees for the Plan year, but shall not exceed four percent (4%) of each employee’s compensation for the Plan year.
        4.3 Form of Payment. The contributions of Kansas City Life Insurance Company may be made in cash, in treasury stock or in shares of authorized but unissued stock of Kansas City Life Insurance Company. If the Company or any affiliated participating company shall make its contribution in cash, the Trustees shall have the authority to purchase shares, acting independently as to when purchases are made, the number of shares to be purchased, the prices to be paid, and the broker, if any employed, to effect the purchases. The contributions of any participating affiliated corporation shall be converted to stock in such manner as shall be satisfactory to the Trustees and the respective companies from time to time. For purposes of fixing the amount of contributions made with shares of treasury stock, or shares of authorized but unissued stock, and commencing with the valuation date of the Plan in June, 1982, such stock shall be valued at the average of its bid price on the over-the-counter market for all business days following the previous monthly valuation date. In the event the Company is precluded from delivering such shares to the Trustees by law or because of the unavailability of such shares, the Company’s contribution to the Trustees shall be in cash, and said cash shall be invested until such time as shares of the Company stock shall be available for purchase by the Trustees.

ARTICLE V

Investment of Contributions

        5.1 Investment of Funds. Contributions to the Trust shall be invested in accordance with the authority granted to the Trustees pursuant to the provisions of this Plan and Trust. It is con-templated that the contribution made by the Company from time to time be in the form of shares of the Company stock, and that cash contributions to the Trust, whether by the Company or the parti-cipant, may be used for the purchase of Company stock.
        5.2 Voting of Shares. The Trustees shall vote the shares of stock of the Company for the respective accounts of the partici-pants only in accordance with the directions of such participants, which directions may be certified to the Trustees by the Committee, or any agent designated thereby, provided such directions are received by the Trustees at least five (5) days before the date set for the meeting at which such shares are to be voted. Shares with respect to which no such direction shall be received and the fractional shares shall be voted by the Trustees in the same proportions as are shares as to which voting instructions have been received.
        5.3 Tender Offer. Notwithstanding any language in this Plan to the contrary, if the common capital stock of Kansas City Life Insurance Company shall become the subject of a tender offer, the Trustees may not take any action in response to such tender offer except as otherwise provided herein.
        Upon notice from the Trustees of the Plan, and subject to their rules of procedure then issued, each participant may direct the Trustees to sell, offer to sell, exchange or otherwise dispose of the common capital stock of Kansas City Life Insurance Company allocated to such participant in Fund II and Fund III. The participant’s direction may apply to either or both of said funds. Any such action shall only be in accordance with the provisions, conditions and terms of such tender offer and the provisions of this Plan.
        The Trustees shall sell, offer to sell, exchange or otherwise dispose of the common stock allocated to Fund II and Fund III of the participants with respect to which they have received directions to do so pursuant to this ARTICLE.
        To the extent to which participants do not instruct the Trustees or do not issue valid directions to the Trustees to sell, offer to sell, exchange or otherwise dispose of the common stock allocated to their Fund II and/or Fund III, such participants shall be deemed to have directed the Trustees that such shares shall remain invested in said common capital stock.
        If a participant’s tender shall be accepted, the account or accounts of the participant whose stock has been tendered shall be reduced by the value of the stock so tendered. The date for valuation shall be established by the Trustees, and in order to facilitate such tender offers the Trustees may require special valuation dates.
        At such time as cash is received for the benefit of a tendering participant, such cash shall be maintained in an escrow account for the benefit of such participant until such time as the Trustees shall determine that the reinvestment of the funds in the accounts of Fund II and/or Fund III shall be appropriate. Interest as earned by the Trustees in such escrow account shall be credited to the accounts of those participants whose cash is held. The availability of such cash for investment shall be the primary objective of the Trustees in the selection of the escrow account.

ARTICLE VI

Allocation to and Evaluation of Participants' Accounts

        6.1 Investment Funds. The value of all Trust assets shall be determined on the basis of market values as of the last market business day of each month, except that the Kansas City Life stock shall be valued at the average of its bid price on the over-the-counter market for all business days following the previous monthly valuation date. Accounting procedures shall reflect the establish-ment of at least four (4) separate funds, sometimes herein referred to as Fund I, Fund II, Fund III and Fund IV, with the intent that all participants’ contributions, and any earnings thereon, will be accounted for in Fund I, Fund II and Fund IV, and with the intent that all Company contributions, and any earnings thereon, will be accounted for in Fund III. Commencing January 1, 1988, the Administrative Committee may elect to establish new or subaccounts within the four (4) funds referred to herein for the purpose of separately accounting for the participants’ elective deferral accounts and the Company’s equivalent matching contributions. Commencing September 1, 1993, five (5) additional Funds (and new or subaccounts within them) shall be established, hereinafter called Fund V, Fund VI, Fund VII, Fund VIII and Fund IX, for the purpose of separately accounting for the participants’ elective deferral accounts and accounts attributable to the participants’ contribu-tions prior to January 1, 1988, and earnings thereon. Commencing July 1, 2001, one (1) additional fund (and new or subaccount within it), hereinafter called Fund X, shall be established for the same purpose. Contributions to Funds I, IV, V, VI, VII, VIII, IX and X shall be invested by the Trustees in general investments pursuant to ARTICLE XIV. Contributions to Fund II shall be invested in shares of the Company stock pursuant to Paragraph 6.5, and the contributions to Fund III shall be in the form of shares of the Company stock pursuant to ARTICLE IV. There shall be no guarantee regarding interest or gain, nor shall there by an guarantee against loss of principal in any of these Funds. It is intended that the Plan comply with Section 404(c) of the Employee Retirement Income Security Act of 1974.
        6.2 Participants’ Accounts. An account shall be established for each participant with respect to Fund I, Fund II and with respect to Fund III, Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X or any other such fund that reasonable accounting practices shall require be established. All Funds shall be maintained in United States dollars. A determination shall be made on each monthly valuation date of the value with respect to each fund, and shall reflect contributions made by both the participant and the Company and any gains or losses of the funds. Each participant shall be provided a statement of his accounts, reflecting the value thereof, not less often than annually. Notwithstanding the foregoing, the Company shall have the right to change the method of accounting from time to time except that no participant’s account balances shall be reduced because of such change.
        6.3 Selected Investments. Each participant shall have the right to require the Trustees to invest all or a portion of his monthly contribution in either the assets of Fund I, Fund II or Fund IV. He shall initially indicate his choice at the time he commences his participation, in accordance with the requirements of the Committee, and he may subsequently request changes in accord-ance with the provisions of Paragraph 6.4 herein. His contributions shall so be invested under one of the following options:

(a)	One hundred percent (100%) in Fund I, one hundred percent (100%) in Fund II or one hundred percent (100%) in Fund IV.
(b)	Thirty-three and one-third percent (33 1/3%) in each of Funds I, II and IV.
(c)	Fifty percent (50%) in each of any two (2) of Funds I, II and IV.

        Commencing September 1, 1993, a participant may require the Trustees to invest all or a portion of his monthly contribution in either the assets of Fund I, Fund II, Fund IV, Fund V, Fund VI, Fund VII, Fund VIII or Fund IX, and commencing July 1, 2001, Fund X. His contributions may be invested one hundred percent (100%) in any one of these Funds, or, if he wishes to invest in more than one (1) Fund, he shall specify the percentage to be invested in each Fund. However, such percentage must be a whole percentage, for example, one percent (1%), twenty-six percent (26%) or eighty percent (80%), and no fractional percentages will be permitted.
        Each participant may make new investment choices for his monthly contribution to be effective September 1, 1993 notwith-standing any changes made in the prior twelve (12) months. Thereafter, a participant may request changes not more often than once a month. However, if a participant is investing all or a portion of his monthly contribution in Fund II and transfers all or a part of his Fund II account to another fund (as described in Paragraph 6.4), monthly contributions to Fund II must cease until at least six (6) months after the date of said transfer from Fund II.
        6.4 Investment Changes. Any participant shall have the right from time to time, although not more often than once within a twelve (12) month period, to require that the value of any one (1) or more of his accounts be transferred for investment for his account in any of Funds I, II or IV, provided that this right shall not apply to Fund III, and, commencing January 1, 1977, no such transfers shall be permitted from Fund IV to any other fund, and no such transfers shall be permitted from Fund I to Fund II. Such transfer shall also be governed by reasonable rules of the Adminis-trative Committee regarding the timeliness of notice.
        Commencing September 1, 1993, a participant shall have the right, not more often than once a month and not withstanding any transfers made in the twelve (12) months prior to September 1, 1993, to require that the value of any one (1) or more of his accounts be transferred for investment for his account in any of Funds I, II, IV, V, VI, VII, VIII or IX, and, commencing July 1, 2001, Fund X provided that such transfer shall be made in whole percentages. This right shall not apply to Fund III, and a participant that transferred the value of his account from Fund II to another fund in the six (6) months prior to September 1, 1993 may not transfer any amount into Fund II until at least six (6) months after the date of said transfer from Fund II. Thereafter, transfers to or from Fund II may occur only once in a six (6) month period. All transfers shall be governed by reasonable rules of the Administrative Committee regarding the timeliness of notice.
        6.5 Fund II Assets. A participant’s contributions allocated to Fund II pursuant to Paragraph 6.3 herein shall be invested in shares of the Company stock subject to the limitations herein. Such shares shall be purchased by the Trustees, acting indepen-dently as to when purchases are made, the number of shares to be purchased, the prices to be paid, and the broker, if any employed to effect the purchases; provided however, that during any period during which the Company or the Trustees are precluded from making purchases of Kansas City Life Insurance Company shares by law, or at any other time the Trustees may elect and the Company shall agree, if permitted by law, the Trustees may purchase shares of the Company’s treasury stock or shares of its authorized but unissued stock. Such stock shall be valued in accordance with Paragraph 4.2 herein. In the event the Company does not agree to sell its treasury stock or authorized but unissued stock, and if the Trustees are precluded from buying or are unable to buy such stock on the market, the Trustees shall invest such contributions until such time as shares of the Company stock shall be available for purchase by the Trustees.
        6.6 Dividend Reinvestment. Dividends and any other distri-butions received by the Trustees with respect to the investments allocated to Fund II and Fund III shall be invested in shares of the Company stock subject to the provisions of Paragraphs 4.2 and 6.5 herein.
        6.7 Fund IV Account and Additional Fund Accounts. Commencing with the first (1st) valuation date in January, 1977, Fund IV shall then and thereafter be placed on the unit valuation system, as prescribed by Paragraph 6.2 herein, and the following amended provisions of this Paragraph 6.7 shall also then apply. This fund shall now be maintained in United States dollars. Commencing January 1, 1988, Fund IV and commencing September 1, 1993, Fund V, Fund VI, Fund VII, Fund VIII and Fund IX, and, commencing July 1, 2001, Fund X shall be invested by the Trustees in general investments pursuant to ARTICLE XIV. There shall be no guarantee regarding interest, nor shall there be any guarantee against loss of principal. All gains or losses, if any, shall be allocated to the accounts of the participants in the Funds when realized.

ARTICLE VII

Allocation of Fiduciary Responsibility

        7.1 Fiduciaries. The fiduciaries shall have only those specific powers, duties, responsibilities and obligations as are specifically given them under this Plan. The Company shall have the sole responsibility for making the contributions required by the provisions of ARTICLE IV, shall have the sole authority to appoint and remove the Trustees, members of the Administrative Committee, and to amend or terminate, in whole or in part, this Plan and Trust.
        7.2 Administration. The Administrative Committee shall have the sole responsibility for the administration of this Plan, which responsibility is specifically described in ARTICLE XII herein.
        7.3 Trustees. The Trustees shall have the sole responsi-bility for the administration and management of the assets held pursuant to this Plan and Trust, all as specifically provided for herein.
        7.4 Duties. Each fiduciary warrants that any direction given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan and Trust, authorizing or providing for such direction, information, or action. Further-more, each fiduciary may rely upon any such direction, information, or action of another fiduciary as being proper under this Plan, and is not required herein to inquire into the propriety of any such direction, information, or action. It is intended under this Plan that each fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities, and obligations pursuant to the Plan and shall not be responsible for any act or failure to act of another fiduciary. No fiduciary guarantees the Trust fund in any manner against investment loss or depreciation in asset value.

ARTICLE VIII

Vesting

        8.1 Vesting of Company Contributions. Commencing January 1, 1988, the value of a participant’s account with respect to Company contributions made for his benefit shall be vested, to the extent of the percentage applicable, upon the valuation date of the month in which the participant completes the years of employment with the Company in accordance with the following schedule:

                Years of             Percentage
               Employment              Vested  


                  1                       0
                   2                       0
                   3                      30
                   4                      40
                   5                      60
                   6                      80
                   7                     100

        Commencing January 1, 2002, for a participant who completes one (1) hour of service after December 31, 2001, the value of a participant’s account with respect to Company contributions made for his benefit shall be vested upon the valuation date of the month in which the participant completes the years of employment with the Company in accordance with the following schedule:

                Years of             Percentage
               Employment              Vested   


                   1                      0
                   2                     20
                   3                     40
                   4                     60
                   5                     80
                   6                    100

A “year of employment” shall be deemed to mean twelve (12) con-secutive monthly periods of employment with the Company, dating from the commencement of employment, during which he or she shall complete at least one thousand (1,000) hours of employment. Beginning January 1, 1998, a “year of employment” shall mean one thousand (1,000) hours of employment during the calendar year. An employee who completes one thousand (1,000) hours of employment in the twelve (12) month period beginning with his date of employment in 1997 (or an anniversary of his date of employment if he began his employment before 1997) and also completes one thousand (1,000) hours of employment in the 1998 calendar year will be credited with two (2) years of employment for purposes of this Paragraph. How-ever, years of employment of an employee of Old American Insurance Company prior to November 1, 1991 shall not be taken into account for purposes of this ARTICLE VIII. If an employee’s employment with either Kansas City Life Insurance Company or one of its affiliated corporations shall be terminated, and he is immediately employed by any other of such affiliated corporations, his employment shall be regarded as continuous and treated as if under one (1) employer for vesting purposes.
        In the event a participant shall be terminated from employment with the Company or any of its affiliated corporations, by reason of death or retirement, the value of his or her account with respect to Company contributions shall be one hundred percent (100%) vested upon the valuation date of the month in which such death or retirement occurs.
        The value of a participant's account with respect to his or her personal contributions, and accounted for in Fund I, Fund II, Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X shall be fully vested at all times.
        8.2 Vesting of Company Contributions upon Termination of Plan. Notwithstanding any other provision hereof, the full value of a participant’s account, including not only his own contribu-tions and the earnings thereon, but the contributions of the Company, and any earnings thereon, shall be fully vested in him when and if the Plan shall at any time be terminated for any reason, or upon the complete discontinuance of Company contribu-tions hereunder, or upon termination of employment of a group of participants constituting a partial termination of the Plan.

ARTICLE IX

Account Withdrawals

        9.1 Optional Withdrawals. Commencing January 1, 1988, a participant may elect to withdraw at any time all or any part of the value of his accounts with respect to Fund I, Fund II and Fund IV attributable to the participant’s contributions made prior to January 1, 1988, and, commencing September 1, 1993, a participant may also elect to withdraw at any time all or any part of the value of his accounts with respect to Fund V, Fund VI, Fund VII, Fund VIII or Fund IX, and, commencing July 1,2001, Fund X attributable to the participant’s contributions made prior to January 1, 1988. However, no withdrawal of any part of Company matching contributions allocated to his account with respect to Fund III shall be permitted except as provided in Paragraph 9.2; and further provided that any withdrawal of a participant’s “elective account” referred to in Paragraph 3.1 shall be subject to the restrictions of Paragraph 3.5. However, withdrawals pursuant to this Paragraph may not be made by an individual who is an alternate payee under a Qualified Domestic Relations Order and for whom an account is being separately maintained. No amounts attributable to the Company’s profit sharing contributions may be withdrawn under this ARTICLE IX.
        9.2 Withdrawals for Financial Need. Commencing January 1, 1988, no withdrawal of funds for financial need shall be made except as permitted pursuant to Paragraph 3.5 herein.
        9.3 Penalty for Withdrawal. Commencing January 1, 1985, any participant who withdraws funds under Paragraph 9.1 will not be permitted to make contributions for a period of six (6) months from the date of withdrawal. All amounts withdrawn may be replaced, but not less than all, within five (5) years of the date of withdrawal. No forfeiture from his account with respect to Fund III shall occur as a result of any such withdrawals effected after January 1, 1976 if he shall be at least fifty percent (50%) vested. If the participant who makes a withdrawal is less than fifty percent (50%) vested at the time of such withdrawal, he shall he shall forfeit the dollar amount from his account with respect to Fund III equivalent to fifty percent (50%) of the dollar amount his accounts with respect to Fund I, Fund II and Fund IV (and, commencing September 1, 1993, Fund V, Fund VI, Fund VII, Fund VIII and Fund IX, and, commencing July 1, 2001, Fund X) are reduced by virtue of said withdrawal, provided however, the amount so forfeited from Fund III shall not exceed the total dollar value of said participant’s nonvested funds determined pursuant to Paragraph 8.1 herein. The amount subject to such forfeiture shall be set aside by the Trustees in an interest bearing account. If the participant returns the full amount of his withdrawal to the Trustees within five (5) years of the date of withdrawal, the full value of the amount initially set aside in the interest account shall thereupon be reinvested and restored to his account in Fund III. The interest earned on such amount shall be treated as interest earnings of Fund III for the benefit of all participants in such Fund. In the event the amount withdrawn is not returned within the time period referred to herein, the amount subject to forfeiture shall be treated as a forfeiture in accordance with Paragraph 11.1 of this Plan.
        9.4 Time and Method of Payment. All payments under this ARTICLE shall be made as soon as practicable after the next monthly valuation following the giving of such written notice as shall be prescribed by the Committee with respect to withdrawals pursuant to Paragraph 9.1, or a decision of the Committee as provided with respect to withdrawals pursuant to Paragraph 3.5, and shall be paid either in cash or in shares of Kansas City Life Insurance Company stock pursuant to this Plan. The funds shall reflect the value of any withdrawal pursuant to the provisions of this ARTICLE IX.
        9.5 Elective Account Loans. Commencing January 1, 1988, a participant may request a loan to be made from his or her elective account or accounts under such conditions and terms as shall be approved from time to time by the Adminstrative Committee. Any loan made pursuant to this Paragraph, when added to the outstanding balance of all other loans made to the participant, shall be limited to the lesser of:

(a)	Fifty thousand dollars ($50,000.00) reduced by the excess of the highest outstanding balance of loans to the parti-cipant during the twelve (12) month period ending on the day before the date on which such loan is made, over the outstanding balance of loans to the participant on the date on which such loan is made, or
(b)	The greater of ten thousand dollars ($10,000.00) or one-half (1/2) of the value of the participant’s elective accounts as of the valuation date coincident with or next preceding the date as of which the loan is calculated.

        Any such loan shall be made for a period not to exceed five (5) years, and shall provide for a level amortization with payments to be made not less often than quarterly. However, loans used to acquire a primary residence of the participant may provide for periodic repayments over a reasonable period of time that may exceed five (5) years.
        Any loan made pursuant to this Paragraph shall result in the reduction of the participant’s accounts reflecting the dollar amount loaned based on the monthly valuation on which such loan is effected. A reasonable rate of interest may be charged, as established by the Administrative Committee, and such interest payments shall be treated as earnings of the borrower’s account. Minimum loan repayments shall be made by payroll deduction, or, if the participant is disabled or becomes disabled and is receiving or begins to receive payments from the Kansas City Life Disability Plan or Sunset Life Disability Plan, by deduction from those payments or by a method of direct payment by the disabled participant that is acceptable to the Administrative Committee. The Administrative Committee shall have the right to deny a parti-cipant’s loan request. Loans shall become immediately due and payable in full upon the occurrence of one of the distribution events described in ARTICLE X. However, loans pursuant to this Paragraph will not be made to an individual who is an alternate payee under a Qualified Domestic Relations Order and for whom an account is being separately maintained, or to a former employee who was a participant and who has not withdrawn all the value of his accounts pursuant to Paragraph 10.4 unless the former employee is a party in interest as defined in ERISA Section 3(14) with respect to the Plan.

ARTICLE X

Distributions

        10.1 Distribution of Full Value of Accounts. A participant shall be entitled to the full value of all of his accounts in all Funds upon termination of his employment by reason of death or retirement, in which event such accounts of such participant shall be fully vested in him.
        10.2 Termination. If prior to the termination of the Plan or the complete discontinuance of Company contributions hereunder, in either of which event a participant’s accounts shall be fully vested, an employee participant’s termination of employment occurs for any reason other than one of the events specified in Paragraph 10.1, and if such employee shall not thereafter be employed by any affiliated corporation of the Company, such participant shall then be entitled to receive his or her one hundred percent (100%) vested interest in the full value of his account with respect to Fund I, Fund II, Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X and that percentage of his or her vested interest in the value of his account with respect to Fund III as authorized by Paragraph 8.1 herein.
        Any amount not vested at the time of such termination shall immediately be forfeited. Such forfeited amount shall then be used to reduce the amount of Company contributions in accordance with Paragraph 11.1 herein. If the terminated participant returns to his status of employment with the Company or any of its affiliated corporations, and is otherwise fully qualified to participate, and if the terminated participant repays, before the earlier of five (5) years after the first date on which the participant is re-employed or the close of the first period of five (5) consecutive one (1) year breaks in service commencing after the withdrawal, the amount of the distribution, if any, he received from his account with respect to Fund III at the time of his termination of employment, the Company shall restore the forfeited amount, without any gain or loss, to his Fund III account on the valuation date of the month in which such repayment occurs. The repaid amount shall also be similarly restored to an accounted for in Fund III.
        10.3 Method of Distribution. All distributions provided under this ARTICLE upon termination of employment, unless elected otherwise pursuant to the written request of the participant, or the written request of said participant’s beneficiary if said participant shall not be living, shall be in the form of a lump sum payment. If the payment is made as a result of the death of the participant, the payment shall be made to the surviving spouse of the participant, if any, unless the participant and the spouse have requested a distribution in any other form as to any other benefi-ciary. Any such request shall be written and on forms prescribed by the Administrative Committee and made within sixty (60) days of termination of employment. Requests may be made for distribution in one (1) of the following methods:

(a)	By the purchase of a nontransferable annuity providing for retirement payments to be made in equal monthly installments for a period of one hundred twenty (120) months certain and for the remainder of his lifetime. Any annuity contract must comply with the minimum distribution incidental benefit requirements of Internal Revenue Code Proposed Regulation 1.401(a)(9)-2 hereby incorporated by reference. If the participant is married, the annuity shall be a single premium non-transferable annuity contract in the form of a fifty percent (50%) contingent annuity under which the participant’s spouse is named as the contingent annuitant unless the participant elects some other form in accordance wth Subparagraph (c) below with the consent of the spouse.
(b)	In the event that a lump sum payment shall be requested, the party entitled thereto shall have the further right to require that shares of Kansas City Life Insurance Company stock be issued to him as a part of said payment, in accordance with the following formula: He shall have the right to withdraw the number of said shares equal to the value that is derived by multiplying the percentage that his account in Fund III divided by the total of all accounts in Fund III equals, by the value of all Kansas City Life Insurance Company stock in Fund III. He shall also be entitled to any such stock purchased for his account in Fund II, the amount thereof to be determined in accordance with the above formula as applied to Fund II. He shall also be entitled to receive the number of shares of such stock which can be purchased with the value of his account with respect to Fund I Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X.
(c)	The Administrative Committee of the Plan, or its delegate, shall provide a participant who is entitled to receive a joint and survivor annuity, the information in nontechnical language, which will inform him of the availability of the election and a general description of the joint and survivor annuity, as well as an explanation of the circumstances in which it will be provided if a contrary election is not made. The eligible participant shall also be advised of the dollar difference resulting from his election and that he may obtain additional information upon request. The participant shall be permitted to make his election during a period of at least ninety (90) days after he is furnished with the necessary information and which ends prior to the commencement of benefits. The participant may waive this requirement (with any applicable spousal consent) if the distribution commences more than seven (7) days after such explanation is provided. If the participant requests additional information, the election period must include at least ninety (90) days after such information is furnished. The Committee, however, may provide that the additional information must be requested within sixty (60) days after the original information as to the election is first furnished to the participant. The election is to be witnessed by a plan representative or notary public, acknowledging the effect of the election and any specific non-spouse beneficiary, including any class of beneficiary or any contingent beneficiary designated under the form of benefit elected. Any spousal consent shall be irrevocable unless revocation shall be agreed to by the participant. It is intended that no election period shall extend beyond the par-ticipant’s retirement date.

        10.4 Commencement of Distribution. All distributions shall be made or commenced to be made as soon as practicable after the valuation date coincident with or next following the occurrence of one of the distribution events described in this ARTICLE X. Upon written notice to the Committee no later than the end of the calendar month following the month in which termination occurs, a participant (or, in case of death, his beneficiary), entitled to a lump sum payment may make an irrevocable election to receive the value of his distribution on January 31st of the next succeeding calendar year. Alternatively, the participant may choose not to withdraw any of his vested accounts when one of the distribution events occurs, and later elect to have the distribution made upon written notice before a subsequent valuation date. However, unless the participant chooses to receive the distribution in the form of an annuity pursuant to Paragraph 10.3(a), only a full and complete distribution of the vested accounts will be allowed whether the participant withdraws his vested accounts at the time a distribu-tion event occurs or at some later date. No partial withdrawals shall be permitted. Notwithstanding, no distribution of three thousand five hundred dollars ($3,500.00) [five thousand dollars ($5,000.00) beginning January 1, 1998] or more shall be made to a participant unless the participant shall have consented in writing to such distribution, all in accordance with the provisions of Internal Revenue Code Section 411 and related regulations. Beginning January 1, 2002, with respect to participants separating from service and distributions after that date, the value of a participant’s vested accounts shall be determined without regard to that portion of the vested account that is attributable to rollover contributions (and any earnings allocable thereto) within the meaning of Code Section 402(c). If the value of the participant’s vested accounts as so determined is five thousand dollars ($5,000.00) or less, the Plan shall immediately distribute the participant’s entire vested account balance.
        10.5 Valuation. The value of a participant’s accounts with respect to Fund I, Fund II, Fund III, Fund IV, Fund V, Fund VI, Fund VII, Fund VIII, Fund IX and Fund X upon termination shall be the value on the valuation date in January of the year elected pursuant to Paragraph 10.4, except that the valuation of any shares of stock of Kansas City Life Insurance Company shall be determined by the provisions of Paragraph 4.2 herein. If such election is not so made, such value shall be determined on the valuation date coin-cident with or next following the date the participant (or, in case of death, his beneficiary) elects to receive his distribution, or the receipt by the Trustees of notice of said participant’s ter-mination, whichever shall occur later.
        10.6 Facility of Payment. If the Committee shall receive evidence satisfactory to it that a participant, retired participant or beneficiary is physically or mentally incompetent to receive any payment which shall be due hereunder and to give a valid release therefor and that another person or an institution is then main-taining or has custody of such participant, retired participant, or beneficiary, and that no guardian, committee or other represen-tative of the estate of such participant, retired participant or beneficiary, shall have been duly appointed, the Committee may, at its option, make payments otherwise payable to such participant, retired participant or beneficiary, to such other person or institution, and the release of such other person or institution shall be valid and complete discharge for such payments.
        10.7 Beneficial Designation. Any participant or retired participant shall have the right to designate a new beneficiary at any time by filing with the Committee a written request for such change, but any such change shall become effective only upon receipt of such request by the Committee, and provided that any change of beneficiary to a person other than a surviving spouse must be consented to in writing by said participant’s spouse. Upon receipt by the Committee of such request the change shall relate back to and take effect as of the date such participant signs such request whether or not such participant is living at the time the Committee receives such request.
        If there be no designated beneficiary living or in effect at the death of such participant when any payment hereunder shall be payable to the beneficiary, then such payment shall be made as follows: To such participant’s wife or husband, if living; if not living, to such participant’s then living lineal descendants, in equal shares, per stirpes; if none survives, to such participant’s surviving parents, equally; if neither survives, to such partici-pant’s executors or administrators.
        10.8 Fractional Shares. With respect to any distribution of stock pursuant to the provisions of this Plan, a participant shall be entitled to receive the number of whole shares which the value of his account equals and the balance of said account value in cash.

ARTICLE XI

Application of Forfeitures

        11.1 Any of the assets attributable to Company contributions, reflected in the value of Fund III, which shall be forfeited by a participant with respect to his account in Fund III pursuant to the provisions of Paragraphs 9.3 and 10.2 herein, shall be applied, as soon as practicable, to reduce the amount of Company contributions required by this Plan. Shares of Kansas City Life Insurance Company stock applied to reduce the amount of any Company contri-bution for any month shall be valued in accordance with the procedures set forth hereinbefore on the date of such application.

ARTICLE XII

Administrative Committee

        12.1 Membership. The Administrative Committee, sometimes herein referred to as the “Committee”, shall consist of a number of persons, not less than three (3) nor more than five (5), designated by the Executive Committee of the Company, who shall serve terms of one (1) year or until their successors are designated, and said Committee shall have the responsibility for the general adminis-tration of the Plan and for carrying out the provisions of the Plan in accordance with its terms. The Committee shall have absolute discretion in carrying out its responsibilities.
        12.2 The Committee may appoint from its members such com-mittees with such powers as it shall determine; may authorize one (1) or more of its number or any agent to execute or deliver any instrument or make any payment on its behalf; and may utilize counsel, employ agents and provide for such clerical and accounting services as it may require in carrying out the provisions of the Plan.
        12.3 The Committee shall hold meetings upon such notice, at such place or places, and at such time or times as it may from time to time determine.
        12.4 The action of a majority of the members expressed from time to time by a vote in a meeting or in writing without a meeting shall constitute the action of the Committee and shall have the same effect for all purposes as if assented to by all members of the Committee at the time in office.
        12.5 No member of the Committee shall receive any compensa-tion for his services as such, and, except as required by law, no bond or other security shall be required of him in such capacity in any jurisdiction.
        12.6 Subject to the limitations of this Plan and Trust, the Committee from time to time shall establish rules or regulations for the administration of the Plan and the transaction of its business. The Committee shall have full and complete discretionary authority to construe and interpret the Plan and decide any and all matters arising hereunder, except such matters which the Executive Committee of the Company from time to time may reserve for itself, including the right to remedy possible ambiguities, inconsistencies or omissions. All interpretations, determinations and decisions of the Committee or the Executive Committee of the Company in respect of any matter hereunder shall be final, conclusive and binding on all parties affected thereby. The Committee shall, when requested, submit a report to the Executive Committee of the Company giving a brief account of the operation of the Plan and the performance of the various funds and accounts established pursuant to the Plan.
        12.7 Claims Procedure. The Administrative Committee shall have full and complete discretionary authority to make all determinations as to the right of any person to a benefit. Any denial by the Committee of a claim for benefits under this Plan by a participant or a beneficiary shall be stated in writing by the Committee and delivered or mailed to the participant or the beneficiary, whichever is appropriate; and such notice shall set forth the specific reason for the denial, written to the best of the Committee’s ability in a manner that may be understood without legal or actuarial counsel. In addition, the Committee shall provide a reasonable opportunity to any participant or beneficiary whose claim for benefits has been denied for a review of the decision denying the claim.
        12.8 Any member of the Committee may resign by giving notice to the Executive Committee at least fifteen (15) days before the effective date of his resignation. Any Committee member shall resign upon request of the Executive Committee. The Executive Committee shall fill all vacancies on the Committee as soon as is reasonably possible after a resignation takes place, and until a new appointment takes place, the remaining members of the Committee shall have authority to act, if approved by either a majority of the remaining members or by two (2) members, whichever number is lesser.

ARTICLE XIII

Amendment and Termination

        13.1 Amendment. Kansas City Life Insurance Company reserves the right at any time, and from time to time, and retroactively if deemed necessary or appropriate to conform with governmental regulations or other policies, to modify or amend, in whole or in part, any or all of the provisions of this Plan and Trust by adoption of a written resolution by the Board of Directors of Kansas City Life Insurance Company, or the Executive Committee of the Board of Directors; provided that no such modification or amendment shall make it possible for any part of the contributions of the Company, or any other funds of the Trust, to be used for, or diverted to, purposes other than for the exclusive benefit of participants, retired participants, or their beneficiaries. Except as may be required to conform with governmental regulations, no such amendment shall adversely affect the rights of any participant with respect to contributions made by him prior to the date of such amendment.
        13.2 Termination. This Plan and Trust is purely voluntary on the part of the Company, and Kansas City Life Insurance Company reserves the right to terminate the Plan and the Trust provided herein by adoption of a written resolution by the Board of Directors of Kansas City Life Insurance Company, or the Executive Committee of the Board of Directors. Upon termination of, or upon the complete discontinuance of contributions within the meaning of Section 411(d)(3) of the Internal Revenue Code, participant’s accounts shall become fully vested and nonforfeitable and distri-bution shall be made as promptly as possible in accordance with the directions of the Committee.
        13.3 Merger. This Plan and Trust shall not be merged or consolidated with, nor shall any assets or liabilities be trans-ferred to any other Plan or Trust, unless the accrued benefit of each participant, if the Plan and Trust were terminated immediately after such action, would be equal to or greater than the accrued benefit to which such participant would have been entitled if this Plan and Trust had been terminated immediately before such action.

ARTICLE XIV

The Trust

        14.1 Number of Trustees. There shall be three (3) Trustees for this Trust with the Trustees hereinbefore named being the original Trustees.
        14.2 Trustees shall Receive Sums Paid. The Trustees shall accept and receive all sums of money paid to them from time to time by the Company, and shall hold, invest, reinvest, manage and administer such monies and the increment, increase, earnings and income thereof as a Trust for the exclusive benefit of the employees and agents participating in the Plan, and their beneficiaries. All income and earnings of the Trust shall be accumulated by the Trustees and by them held, invested and reinvested as a part of the principal of the said Trust.
        14.3 Investment of Funds.

(a)	Except as hereinafter provided with respect to the cash reserve, the Trustees shall invest and reinvest the prin-cipal and income of the Trust in their discretion in such securities, common and preferred stocks, real estate mortgages, debentures, bonds, promissory notes, real estate, real estate improvements, leaseholds or any other income-producing properties or securities, real or personal, within or without the State of Missouri, and other investments as the Trustees shall, after investi-gation, believe to be sound and suitable investments for this Trust, although the same may not be of the character permitted for Trustee’s investments by the Laws of the State of Missouri. The Trustees are specifically empowered to invest the Trust assets in the capital stock of Kansas City Life Insurance Company, including but not limited to, its treasury stock.
(b)	The Trustees may retain in cash so much of the Trust assets as they may deem advisable.
(c)	The Trustees may sell property held by the Trust at either public or private sale, for cash or on credit, at such times as they may deem appropriate; they may exchange such property, and they may grant options for the purchase or exchange thereof.
(d)	The Trustees may consent to and participate in any plan of reorganization, consolidation, merger, extension or other similar plan affecting property held by the Trust; they may consent to any contract, lease, mortgage, purchase, sale or other action by any corporation pursuant to any such plan; they may accept and retain property issued under any such plan, even though it would not be eligible as a new investment under the provisions of this Section.
(e)	The Trustees may deposit property held in the Trust with any protective, reorganization or similar committee, and may delegate discretionary power thereto to pay its reasonable share of such committee’s expenses and com-pensation and any assessments levied with respect to any property so deposited.
(f)	The Trustees may exercise all conversion and subscription rights pertaining to property held in the Trust.
(g)	The Trustees may exercise all voting rights with respect to property held in the Trust, and in connection there-with grant proxies discretionary or otherwise, all in accordance with the provisions of this Plan and Trust.
(h)	The Trustees may cause securities and other property to be registered and held in their names, the name of any one (1) of them, or in the name of their nominee.
(i)	The Trustees may borrow money for the purposes of the Trust, and pledge or mortgage securities or other assets owned by the Trust as security for the payment thereof.
(j)	The Trustees may compromise, compound and settle any debt or obligation due to or from them as Trustee; they may reduce the rate of interest on any obligation due them as Trustee; they may extend the time of payment of both interest and principal, or otherwise modify the terms of any obligation due them as Trustee; upon default of any obligation due them as Trustee, they may foreclose or otherwise enforce any obligation belonging to the Trust.
(k)	The Trustees may generally do all such acts, execute all such instruments, take all such proceedings and exercise all such rights and privileges with relation to property belonging to the Trust as if the Trustees were the absolute owners thereof.

        14.4 Approval of Investments. Before making any new invest-ment or reinvestment of any funds of this Trust, the Trustees shall submit to the Executive Committee of the Company, or its designated subcommittee, a list of such securities in which it proposes to invest such funds and the amount proposed to be invested in each security, and the Trustees shall proceed to purchase, or refrain from purchasing, such securities in accordance with the acceptance or rejection, in whole or in part, of such proposals by the Executive Committee of the Company, or its designated subcommittee. Acceptance or rejection of such proposals, or any of them by the said Committee, shall be signified in writing and delivered to the Trustees within thirty (30) days of the submission of such proposals by the Trustees, provided however, that if no written acceptance or rejection of such proposals, or any of them, shall be so delivered by the said Committee within the time herein limited therefor, the Trustees shall be warranted and protected in assuming that all of the proposed investments which have not been specifi-cally rejected as aforesaid, meet with the complete approval of said Executive Committee or its designated subcommittee.
        14.5 Cash Reserve. The Trustees may maintain a cash reserve in such amount as to provide for current distribution of benefits under the Plan. Such cash reserve may consist of uninvested contributions of the Company and participants in the Plan, or of the proceeds of the sale of investments of the Trust. All of the funds held in such cash reserve as well as all funds and securities and assets belonging to the Trust shall be safely kept by the Trustees on deposit or in the vaults of a bank or trust company selected and designated by the Board of Directors or the Executive Committee of the Company.
        14.6 Disbursement of Funds. Disbursement of the funds of this Trust shall be made by the Trustees only to or for the benefit of the participants in the Plan or their beneficiaries, and only at the time, in the amount and in the manner prescribed in written instructions of the Administrative Committee delivered by such Committee to the Trustees. The Trustees are empowered to sell securities belonging to the Trust to meet said disbursements when the cash reserve is sufficient.
        14.7 Instructions to Trustees. The Trustees shall not be obligated or required to determine whether any instructions issued to them by the Administrative Committee are in fact so issued in accordance with the terms of the Plan or the powers and duties thereunder of said Committee.
        14.8 Fiduciary Insurance. The Trustees or the Administrative Committee shall have the right to purchase insurance on behalf of themselves or anyone acting in a fiduciary capacity with respect to the Plan and Trust, to cover liability or losses occurring by reason of the act or omission of a fiduciary, if such insurance permits recourse by the insurer against the fiduciary in the case of a breach of a fiduciary obligation by such fiduciary.
        14.9 Accounting by Trustees. Each year the Trustees shall render to the Company an account of their administration of the Trust for the year ending on the preceding 31st of December. The written approval of said account by the Board of Directors or the Executive Committee of the Company shall, as to all matters and transactions stated therein or shown thereby, be final and binding upon all persons who are then or who may thereafter become interested in this Plan and Trust.
        14.10 Compensation. No Trustee shall receive any compensa-tion for his services as such Trustee. In the administration of said Trust the Trustees, if they deem it advisable, may employ an executive director, secretary or treasurer and fix reasonable compensation therefor, and a Trustee may act as such executive director, secretary or treasurer and receive the compensation so fixed. The Trustees may in their discretion employ clerical help, actuaries, accountants, attorneys or other necessary personal services of a person or corporation as may be necessary to properly administer, defend and protect the Trust, and reasonable compensa-tion for said services may be paid by the Trustees from the Trust in the event the Company does not elect to pay for such services. Any taxes that may be levied against said Trust shall be paid by the Trustees from the Trust assets after liability for said taxes, if any, has been established, and in determining the liability for taxes the Trustees are specifically authorized to use their own discretion in contesting taxes claimed to be due against said Trust, and said Trustees may employ counsel for such purposes and pay said counsel fees from the Trust assets in the event the Company does not elect to pay said costs and fees.
        14.11 Trustees and Vacancies. The Trustees administering this Trust shall at all times be Officers of the Company, and any Trustee may at any time be removed from the office of Trustee, with or without cause, by the Board of Directors or the Executive Committee of the Company. The Trustees named herein shall serve as such Trustees until their resignation, death or removal by the Board of Directors or the Executive Committee of the Company. When any Trustee ceases to be an Officer of the Company he automatically ceases to be a Trustee. Resignation of a Trustee shall be by written notice given to the Board of Directors or the Executive Committee of the Company. Whenever a vacancy occurs by resigna-tion, death or removal of one (1) or more of the Trustees, the Board of Directors or the Executive Committee shall promptly fill said vacancy or vacancies so created by naming a successor Trustee or successor Trustees possessing the qualifications herein prescribed. All successor Trustees shall have the same powers in connection with said Trust as the initial Trustees have, and they shall be subject to the same limitations and directions as prescribed herein for the initial Trustees.
        14.12 Rules. The Trustees may make proper rules for carrying out the purposes of the Trust, and may amend said rules from time to time. A majority of the Trustees shall constitute a quorum, and the action taken by a quorum shall be controlling and shall be deemed the act of the Trustees. The Trustees may designate any one (1) of their number to act as chairman or presiding officer. Any one (1) of the Trustees shall be and is hereby authorized to affix his signature as the signature of all of the Trustees when such may be desirable in the performance of their duties pursuant hereto. This Plan and Trust shall be construed and enforced according to the Laws of the State of Missouri, and all provisions thereof shall be administered according to the laws of such state. Any suit at law or in equity brought against the Trustees or the Company by any person, firm or corporation, including the participants in the Plan, must be first instituted in Jackson County, Missouri, which County and State is the situs of the parties hereto and the only jurisdiction within which this Plan and Trust is to be administered or located.

ARTICLE XV

General Provisions

        15.1 Expenses. The Company shall pay all expenses incurred in administering the Plan and managing the Trust assets. The Company shall not pay any brokerage fees, commissions, stock transfer taxes and other charges and expenses in connection with the purchase and sale of securities under the Plan.
        15.2 Source of Payment. Benefits pursuant to the Plan shall be payable only out of the assets of the Trust or pursuant to any qualified nontransferable annuity purchased pursuant to the provisions of ARTICLE X. No person shall have any right under the Plan with respect to the assets of the Trust, or against any Trustee, insurance company, or the Company, except as specifically provided for herein.
        15.3 Inalienability of Benefits. The interest hereunder of any participant, retired participant or beneficiary, except as may be required by a Qualified Domestic Relations Order defined in Section 414(p) of the Internal Revenue Code, or as otherwise provided in Section 401(a)(13) of the Internal Revenue Code, shall not be alienable, either by assignment or by any other method, and to the maximum extent permissible by law, shall not be subject to being taken, by any process whatever, by the creditors of such participant, retired participant or beneficiary.
        15.4 No Right to Employment. Nothing herein contained nor any action taken under the provisions hereof shall be construed as giving any employee the right to be retained in the employment of the Company.
        15.5 Unknown Heirs. If within four (4) years after any distribution becomes due to a participant, retired participant or his beneficiary, the same shall not have been claimed, provided due care shall have been exercised in attempting to make such distri-bution, the amount thereof shall be treated as forfeited and applied as provided for in ARTICLE XI.
        15.6 Accrued Benefit. The term "accrued benefit" shall mean the value of a participant's account or accounts with respect to all funds in this Plan.
        15.7 Uniform Administration. Whenever in the administration of the Plan any action is required by the Committee, such action shall be uniform in nature as applied to all persons similarly situated and no such action shall be taken which will discriminate in favor of shareholders of the Company, highly compensated participants or participants whose principal duties consist of supervising the work of others.
        15.8 Beneficiary. The word “beneficiary” shall be deemed to include the estate of the participant, dependents of the partici-pant, persons who are the natural objects of the participant’s bounty, and any person designated by the participant to share in the benefits of the Plan and Trust after the death of the participant. Wherever the rights of participants are stated or limited herein, their beneficiaries shall be bound thereby.
        15.9 Severability. In the event that any provision of this Plan and Trust shall be held invalid or illegal for any reason, such determination shall not affect the remaining provisions of this Plan, but this Plan shall be construed and enforced as if such invalid or illegal provision had never been included in the Plan. This Plan shall be construed in accordance with the Laws of the State of Missouri.
        15.10 Articles. Titles of Articles are for general infor-mation only and this Plan shall not be construed by reference to such titles.
        15.11 Gender. Words used in the masculine gender shall be read and construed to include the feminine gender.
        15.12 Plural. Wherever required, the singular of any word in this Plan and Trust shall include the plural and the plural may be read in the singular.
        15.13 Disability. The term “disability” as used in this Plan means a physical or mental condition of a participant which results in the receipt of benefits by such participant pursuant to the provisions of either the Kansas City Life Disability Plan or the Sunset Life Disability Plan.
        15.14 Initial Participation Date. The “initial participation date” shall mean the first (1st) day of the first (1st) month designated by either the Board of Directors or the Executive Committee of the Company for the commencement of contributions and the administration of this Plan.
        15.15 Retirement Dates.

(a)	Commencing January 1, 1988, the normal retirement date for all employees participating in this Plan shall be the earlier of the first (1st) day of the month following attainment of sixty (60) years of age, or the first (1st) day of the month following attainment of fifty-five (55) years of age and completion of five (5) years of employ-ment. For purposes of determining the completion of five (5) years of employment, the years of employment of an employee of Old American Insurance Company prior to November 1, 1991 shall not be taken into account.
(b)	For the purposes of this Plan, a participant who reaches his normal retirement date shall be deemed to have retired on such date and shall thereupon become entitled to the retirement benefits herein, except as provided in Subparagraph (c). The value of all contributions allocated to his respective accounts shall be one hundred percent (100%) vested.
(c)	A participant may continue his employment for purposes herein beyond his normal retirement date, and the participant will commence receiving benefits on his actual retirement date; provided, however, distributions to a five percent (5%) owner of the Company as defined in the Internal Revenue Code shall commence no later than April 1st of the calendar year following the calendar year in which he attains age seventy and one-half (70 1/2), and distributions to other participants shall commence no later than April 1st of the year in which such other participant attains the age of seventy and one-half (70 1/2), unless such other participant shall have attained age seventy and one-half (70 1/2) prior to January 1, 1988 and was not a five percent (5%) owner at any time during the period beginning with the Plan year ending with the year in which he attained age sixty-six and one-half (66 1/2) and any subsequent year. Contri-butions may be continued until such actual retirement date at the option of the participant. Effective January 1, 1989, the minimum distribution and the minimum dis-tribution incidental benefit requirements of Internal Revenue Code Proposed Regulations 1.401(a)(9)-1 and 1.401(a)(9)-2 are hereby incorporated by reference. Effective January 1, 1997, for participants other than a five percent (5%) owner of the Company, distributions shall commence no later than April 1st of the calendar year following the later of:

(i)	the year in which the participant attains age 70 1/2, or
(ii)	the year in which the participant retires.

With respect to distributions under the Plan made on or after January 1, 2001 for calendar years beginning on or after January 1, 2001, the Plan will apply the minimum distribution requirements of Code Sectionn 401(a)(9) in accordance with the regulations under Code Section 401(a)(9) that were proposed on January 17,2001. This amendment shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under Code Section 401(a)(9) or such other date as may be specified in guidance published by the Internal Revenue Service.
        15.16 Initial Qualification. The Company reserves the right to have all its contributions returned to it free of this Trust, and to terminate said Plan and Trust, if the Trust does not initially meet the qualification requirements of the Internal Revenue Code.
        15.17 Company. The term “Company” means Kansas City Life Insurance Company, a Missouri Corporation, Sunset Life Insurance Company of America, a Missouri Corporation, Old American Insur-ance Company, a Missouri Corporation, and any other subsidiary corporation of Kansas City Life Insurance Company required to be treated as a single employer under Internal Revenue Code Section 414(b), (c), (m) and (o), any or all of which may sometimes be referred to herein as affiliated corporations.
        15.18 Employee. The term “employee” shall mean any person employed by Kansas City Life Insurance Company or any subsidiary corporation under the rules of common law, and shall not include agents, general agents, consultants or other independent contractors, or, effective January 1, 1989, leased employees as defined in Section 414(n) or (o) of the Internal Revenue Code. Effective January 1, 1997, “leased employee” shall mean any person other than an employee of the Company who has performed services for the Company under an agreement between the Company and a leasing organization on a substantially full time basis for at least one (1) year, provided such services are performed under the primary direction or control by the Company.
        Leased employees shall not participate in this Plan. Further-more, a person who is not designated as an “employee” in the Company’s employment records during a particular period of time, including a person designated as an “independent contractor”, is not considered to be an employee during that period of time. Such a person shall not be considered to be an employee even if a determination is made by the Internal Revenue Service, the Depart-ment of Labor, or any other government agency, court, or other tribunal, that such person is an employee for any purpose, unless and until the Company in fact designates such person as an employee for purposes of this Plan. If such a designation is made, the designation shall be applied prospectively only unless the Company specifically provides otherwise.
        15.19 Agents. Commencing January 1, 1990, no life insurance salesman of Kansas City Life Insurance Company, sometimes referred to herein as “agent” shall be eligible to participate. Accounts of all participating agents shall be finally valued on the last business day of December, 1989, shall be one hundred percent (100%) vested, and shall be paid to them in January, 1990 in such form as permitted by the provisions of this Plan. No further deferral in this Plan shall be permitted.
        15.20 Company Stock. The term "Company stock" shall mean shares of the common capital stock of Kansas City Life Insurance Company.
        15.21 Executive Committee. Wherever in the Plan and Trust the term "Executive Committee" is used, it shall be taken to mean only the Executive Committee of the Board of Directors of Kansas City Life Insurance Company.
        15.22 Board of Directors. Wherever in the Plan and Trust the term “Board of Directors” is used, it shall be taken to mean only the Board of Directors of Kansas City Life Insurance Company.
        15.23 Maximum Limitation. Commencing January 1, 1983, in no event shall the sum of the annual additions to a participant's account for any Plan year exceed the lesser of:

(a)	Thirty thousand dollars ($30,000.00) (subject to annual adjustments pursuant to Internal Revenue Code Section 415(d) and regulations), or
(b)	Twenty-five percent (25%) of such participant's compen-sation.

        Commencing January 1, 2002, except for Paragraph 3.1 and Internal Revenue Code Section 414(v), the annual additions to a participant’s account for any Plan year shall not exceed the lesser of:

(a)	Forty thousand dollars ($40,000.00) [subject to annual adjustments pursuant to Internal Revenue Code Section 415(d)]
(b)	One hundred percent (100%) of such participant’s compensation within the meaning of Internal Revenue Code Section 415(c)(3) for the Plan year.

        The compensation limit referred to in (b) shall not apply to any contribution for medical benefits after separation from service [within the meaning of Internal Revenue Code Sections 401(h) or 419A(f)(2)] which is otherwise treated as an annual addition.
        15.24 Annual Additions. For the purposes of this Plan, "annual addition" shall be the sum for any year of the Company contributions plus the amount of any employee contributions, plus the forfeitures.
        15.25 Annual Additions Reduction. If any participant is a participant under any other defined contribution plan maintained by the Company, the total of the annual additions to such partici-pant’s account from all such defined contribution plans shall not exceed the limitations set forth in Paragraph 15.23. If it is determined that as a result of the limitation set forth in the preceding sentence, the annual additions to the participant’s account in this Plan are excessive, a reduction of such shall be effected by a return to the participant of a dollar amount (with any earnings attributable to the dollar amount) from his elective accounts, which with an equal amount of the Company’s contributions accounted for in accordance with the following formula, eliminates such excess: The excess amounts in the participant’s Company account (Fund III) must be used to reduce Company contributions for the next limitation year (and succeeding limitation years, as necessary) for that participant if that participant is covered by the Plan as of the end of the limitation year. However, if the participant is not covered by the Plan as of the end of the limitation year, then the excess amounts must be held in unallocated in a suspense account for the limitation year and allocated and reallocated in the next limitation year to all of the remaining participants in the Plan in accordance with the rules set forth in Subparagraph (6)(i) of Regulation Section 1.415-6(b). Furthermore, the excess amounts must be used to reduce the Company contributions for the next limitation year (and succeeding limi-tation years, as necessary) for all of the remaining participants in the Plan. For purposes of this Paragraph, excess amounts may not be distributed to participants or former participants.
        15.26 Annual Additions Reduction. If any participant is a participant under a defined benefit plan maintained by the Company, the sum of the defined benefit plan fraction for a Plan year and the defined contribution plan fraction for that year shall be no greater than one (1.00). If it is determined that the limitation set forth in the preceding sentence has been exceeded, the numerator of the defined benefit plan fraction shall be adjusted by freezing or adjusting the rate of benefit authorized by the defined benefit plan so that the sum of both fractions shall not exceed one (1) for the respective participant. Effective January 1, 2000, this Paragraph shall not apply.
        15.27 Retirement Plan. As used in this section, the words "retirement plan" shall mean:

(a)	Any profit sharing, pension or stock bonus plan described in Section 401(a) and 501(a) of the Internal Revenue Code;
(b)	Any annuity plan or annuity contract described in Section 403(a) or 403 (b) of the Internal Revenue Code;
(c)	Any qualified bond purchase plan described in Section 405(a) of the Internal Revenue Code; and
(d)	Any individual retirement account, individual retirement annuity or retirement bond described in Section 408(a), 408(b) or 409 of the Internal Revenue Code.

        15.28 Defined Contribution Plan. As used in this section, the words “defined contribution plan” shall mean a retirement plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the par-ticipant’s account and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s accounts.
        15.29 Defined Benefit Plan. As used in this section, the words "defined benefit plan" shall mean any retirement plan which is not a defined contribution plan.
        15.30 Defined Benefit Plan Fraction. As used in this section, the words "defined benefit plan fraction" shall mean, for any Plan year, a fraction,

(a)

the numerator of which is the projected annual benefit of the participant, that is, the annual benefit to which he would be entitled under the terms of the defined benefit plan on the assumptions that he continues employment until his normal retirement date as determined under the terms of the defined benefit plan, that his compensation continues at the same rate as in effect in the Plan year under consideration until his normal retirement date and that all other relevant factors used to determine bene-fits under such defined benefit plan remain constant as of the current Plan year for all future Plan years, under all defined benefit plans maintained by the Company, determined as of the close of the Plan year; and,

(b)

the denominator of which is the lesser of: (i) the maximum dollar limit for such year (for example, ninety thousand dollars ($90,000.00) for 1983, and adjusted annually for increases in the cost of living as permitted under Section 415(d) of the Internal Revenue Code) times 1.25, or (ii) the percentage of compensation limit for such year times 1.4.

        15.31 Defined Contribution Plan Fraction. As used in this section, the words "defined contribution plan fraction" shall mean, for any Plan year, a fraction,

(a)	the numerator of which is the sum of the annual additions to the participant's account under all defined contribu-tion plans maintained by the Company in that Plan year; and,
(b)	the denominator of which is the sum of the lesser of the following amounts, determined for the year and for each prior year of service with the Company: (i) the product of 1.25 multiplied by the dollar limitation in effect for the year, or (ii) the product of 1.4 multiplied by the percentage of compensation limit (IRC 415(e)(3) as amended).
(c)	In computing the defined contribution plan fraction above, for years ending after December 31, 1982, at the election of the Company, the amount to be taken into account for all years ending before January 1, 1983, may be computed to be an amount equal to the denominator of the fraction, as in effect for the year ending in 1982, multiplied by a transition fraction,

1.	the numerator of which is the lesser of (i) fifty-one thousand eight hundred seventy-five dollars ($51,875.00), or (ii) 1.4 multiplied by twenty-five percent (25%) of the participant's compensation for the year ending in 1981; and,
2.	the denominator of which is the lesser of (i) forty-one thousand five hundred dollars ($41,500.00), or (ii) twenty-five percent (25%) of the participant's compensation for the year ending in 1981.

        15.32 Affiliated Company Participation. Notwithstanding anything in this Agreement to the contrary, no employee of any subsidiary or affiliated corporation of Kansas City Life Insurance Company shall have the right to make contributions to this Plan unless such Plan shall have been adopted by the corporation for which such employee is employed.
        15.33 Highly Compensated Person. Prior to January 1, 1997, the term "highly compensated person", for the purposes of this Plan, shall mean any employee who at any time during the preceding year, or the lookback year,

(a)	was a five percent (5%) owner of the Company, or
(b)	had compensation in excess of seventy-five thousand dollars ($75,000.00) per year, or
(c)	was in the highest paid twenty percent (20%) of the employees of the Company (ranked on the basis of compensation paid during such year) with compensation in excess of fifty thousand dollars ($50,000.00) per year (top-paid group), or
(d)	was an officer with compensation in excess of fifty percent (50%) of the amount in effect under IRC Section 415(b)(1)(A) for such year (counting at least one (1) officer, regardless of compensation; but counting no more than fifty (50), or if less, ten percent (10%) of all employees or three (3) employees, whichever is greater).

        In the case of the year for which the relevant determination is being made, an employee not described in Subparagraph (b), (c) or (d) for the preceding year (without regard to this Paragraph) shall not be treated as described in Subparagraph (b), (c) or (d) unless such employee is a member of the group consisting of the one hundred (100) employees paid the greatest compensation during the year for which such determination is being made.
        For purposes of this Paragraph, “lookback year” shall be the twelve (12) month period immediately preceding the year for which the relevant determination is being made, and the term “compensa-tion” shall be compensation defined in Paragraph 3.2 including additional amounts described in Code Sections 125, 402(e)(3), 402(h) and 403(b).
        If an employee is a “family member” of a five percent (5%) owner or of a highly compensated employee who is one of the ten (10) most highly compensated employees ranked on the basis of compensation paid by the employer during such year, the employee and the five percent (5%) owner or top ten (10) highly compensated employees will be aggregated and treated as a single employee receiving compensation and a Plan contribution that is based on the compensation or Plan contribution of such employee and five percent (5%) owner or top ten (10) highly compensated employee. For this purpose, “family member” shall mean the employee’s spouse and lineal ascendants or descendants, and the spouses of the lineal ascendants or descendants. Effective January 1, 1997, for purposes of Subparagraph (e) below, an employee who is a “family member” of a five percent (5%) owner at any time during the year shall be considered a highly compensated person regardless of compensation. For this purpose, “family member” shall mean the five percent (5%) owner’s spouse, child, parent or grandchild.
        Effective January 1, 1997, "highly compensated person" shall mean an employee who

(e)	was a five percent (5%) owner of the Company at any time during the year or preceding year, or
(f)	for the preceding year

1.	had compensation [as defined in Code Section 415(c)(3)] from the Company in excess of $80,000.00, and
2.	if the Company elects the application of this clause for the preceding year, was in the group consisting of the top twenty percent (20%) of the employees ranked on the basis of compensation paid during such preceding year.

        The dollar amounts in Subparagraphs (b), (c) and (f)1 shall be adjusted at the same time and in such manner as under Code Section 415(d) and Regulations thereunder.
        In determining who is a highly compensated person, all employers required to be aggregated under subsections (b), (c), (m), (n) and (o) of Code Section 414 shall be taken into account as a single employer. However, leased employees within the meaning of Code Sections 414(n) and (o) shall not be considered employees if the leased employees are covered by a plan described in Code Section 414(n)(5) and are not covered in any qualified plan maintained by the employer.
        If a former employee separated from service prior to the calendar year and was an active highly compensated person in the year of separation, or in any year after attaining fifty-five (55), the former employee was counted as a highly compensated person, the former employee shall be treated as an employee for purposes of determining the number of highly compensated persons. However, if such former employee separated from service prior to 1987, he will be treated as a highly compensated person only if during the separation year (or the year preceding the separation year) or any year after the employee attained age fifty-five (55) [or the last year ending before the employee’s fifty-fifth (55th) birthday], he received compensation in excess of fifty thousand dollars ($50,000.00) or was a five percent (5%) owner.
        For purposes of determining the number of employees in Sub-paragraphs (c) and (f)2, nonresident aliens shall not be treated as employees. Employees who (1) have not completed six (6) months of service, or (2) normally work less than seventeen and one-half (17 1/2) hours per week, or (3) normally work less than six (6) months during any year, or (4) have not attained age twenty-one (21) shall also be excluded (but these latter employees will still be con-sidered for purposes of identifying the particular employees in the top-paid group), and (5) to the extent allowable under regulations, employees covered by a collective bargaining agreement between the Company and employee representatives.
        15.34 Direct Rollovers. The provisions of this Paragraph shall be effective January 1, 1993 and apply to distributions after January 1, 1993. Notwithstanding any provision of this Plan to the contrary, a distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. The Administrative Committee may prescribe the time and manner in which this election is made.
        As used in this Paragraph, "eligible rollover distribution", "eligible retirement plan", "distributee", and "direct rollover" shall mean:

(a) "Eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee. However, an eligible rollover distribution shall not include:

(i)	any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expec-tancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more;
(ii)	any distribution required under Code Section 401(a)(9); or
(iii)	beginning January 1, 1999, any hardship dis-tribution described in Code Section 401(k)(2)(B)(i)(IV) received after December 31, 1998, and, beginning January 1, 2002, any amount distributed on account of hardship; or
(iv)	the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities. However, beginning January 1, 2002, a portion of the distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after tax employee contributions which are not includible in gross income. Such portion may be transferred only to an individual retire-ment account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for amounts so transferred, including separately accounting for the portion of the distribution which is includible in gross income and the portion of the distribution which is not so includible.

(b) "Eligible retirement plan" is:

(i)	an individual retirement account (described in Code Section 408(a)) or individual retirement annuity (described in Code Section 408(b)); or
(ii)	an annuity plan (described in Code Section 403(a)); or
(iii)	a qualified trust (described in Code Section 401(a)) that accepts the distributee’s eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, eligible retirement plan shall mean only the items in (i) above.
(iv)	beginning January 1, 2002, an annuity contract described in Code Section 403(b) and an eligible plan described in Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political sub-division of a state and which agrees to separately account for amounts transferred into such plan from this Plan.

(c)	“Distributee” shall include an employee or former employee. An employee’s or former employee’s surviving spouse and the employee’s or former employee’s spouse or former spouse who is an alternate payee under a qualified domestic relations order (defined in Code Section 414(p)) are distributees with regard to the interest of the spouse or former spouse.
(d)	"Direct rollover" is a payment by the Plan to the eligible retirement plan specified by the distributee.

        15.35 Participants who Enter Armed Forces. Effective December 12, 1994, notwithstanding any provision of this Plan to the contrary, contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u). Further, the repayment of any elective account loan made under Paragraph 9.5 will be suspended as permitted by Code Section 414(u)(4).
        15.36 Contribution Under Mistake of Fact. If a contribution is made by the Company by a mistake of fact, such contribution may be returned to the Company within one (1) year after the payment of the contribution. Any contribution returned to the Company shall not include any investment earnings thereon, but shall be net of any investment losses thereon.
        15.37 Contributions Conditioned on Deductibility. Company contributions are expressly conditioned upon deductibility of contributions under Section 404 of the Internal Revenue Code. If any part or all of a contribution is disallowed as a deduction under Section 404, then to the extent a contribution is disallowed as a deduction, it may be returned to the Company within one (1) year after the later of the date of payment of the contribution or the date the deduction for the contribution was disallowed. Any con-tributions returned shall not include any investment earnings thereon, but shall be net of any investment losses thereon.

ARTICLE XVI

Top Heavy Provisions

        16.1 Compensation Limits. With respect to compensation as defined in this Plan, for any Top Heavy Plan year, compensation in excess of two hundred thousand dollars ($200,000.00), or such other amount as the Secretary of the Treasury may designate, shall be disregarded. Beginning January 1, 1989, compensation to be dis-regarded shall be the amount stated in Paragraph 3.2. Furthermore, for the purposes of this ARTICLE XVI, compensation shall be as defined in Paragraph 3.2.
        16.2 Key Employee. “Key employee” means any employee or former employee (and his beneficiaries) who, at any time during the Plan year or any of the preceding four (4) Plan years, is:

(a)	An officer of the Company, as that term is defined within the meaning of the regulations under Internal Revenue Code Section 416. For the years 1984 through 1987, an officer is not treated as a key employee if the officer has an annual compensation of forty-five thousand dollars ($45,000.00) or less.
(b)	One of the ten (10) employees owning (or considered as owning within the meaning of Code Section 318) the largest interests in all employers required to be aggre-gated under Code Sections 414(b), (c), and (m). However, an employee will not be considered a top ten (10) owner for a Plan year if the employee earns less than thirty thousand dollars ($30,000.00), or such other amount adjusted in accordance with Code Section 415(c)(1)(A) as in effect for the calendar year in which the determi-nation date falls.
(c)	A five percent (5%) owner of the Company. “Five percent (5%) owner” means any person who owns (or is considered as owning within the meaning of Code Section 318) more than five percent (5%) of the total combined voting power of all stock of the Company.
(d)	A one percent (1%) owner of the Company having an annual compensation from the Company of more than one hundred fifty thousand dollars ($150,000.00). “One percent (1%) owner” means any person who owns (or is considered as owning within the meaning of Code Section 318) more than one percent (1%) of the outstanding stock of the Company or stock possessing more than one percent (1%) of the total combined voting power of all stock of the Company. In determining percentage ownership hereunder, employers that would otherwise be aggregated under Code Sections 414(b), (c), and (m) shall be treated as separate employers. However, in determining whether an individual has compensation of more than one hundred fifty thousand dollars ($150,000.00), compensation from each employer required to be aggregated under Code Sections 414(b), (c), and (m) shall be taken into account.

        16.3 Non-Key Employee. "Non-key employee" means any employee who is not a key employee.
        16.4 Super Top Heavy Plan. "Super Top Heavy Plan" means, for Plan years commencing after December 31, 1983, that, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of the Company’s aggregation group, exceeds ninety percent (90%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of the Company’s aggregation group.
        16.5 Top Heavy Plan. “Top Heavy Plan” means, for Plan years commencing after December 31, 1983, that, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of the Company’s aggregation group, exceeds sixty percent (60%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of the Company’s aggregation group.
        16.6 Top Heavy Plan Year. "Top Heavy Plan year" means any calendar year after December 31, 1983 in which the Plan is a top heavy plan.
        16.7 Top Heavy Plan Requirements.

(a) For any “Top Heavy Plan year”, the following provisions shall apply notwithstanding any other provision in this Plan to the contrary:

1. Any person who is a participant in this Plan in any year in which it shall be a “Top Heavy Plan” shall have his or her benefits vested in accordance with the following schedules: twenty percent (20%) after two (2) years of service; forty percent (40%) after three (3) years of service; sixty percent (60%) after four (4) years of service; eighty percent (80%) after five (5) years of service; and one hundred percent (100%) after six (6) years of service. Effective January 1, 1989, there shall be no decrease in a participant’s nonforfeitable percentage in the event the Plan’s status as top heavy changes for any year. Further, if the vesting schedule shifts in and out of the above schedule for any year because the Plan’s top heavy status changes, such shift shall be considered an amendment of the vesting schedule. If this occurs, each participant with at least three (3) years of service with the Company may elect to have his nonforfeitable percentage determined without regard to the shift. The election period will begin with the date the deemed amendment is made and shall end on the later of:

A.	Sixty (60) days after the deemed amendment is adopted;
B.	Sixty (60) days after the deemed amendment is effective; or
C.	Sixty (60) days after the participant is issued written notice of the deemed amendment by the Administrative Committee.

2.	Notwithstanding anything in this plan to the contrary, for any Top Heavy Plan Year, the Company shall make a minimum contribution for each non-key employee equal to three percent (3%) of such non-key employee’s salary, which shall be invested and accounted for in Fund III.
3.	For any year in which this Plan is top heavy, each non-key employee will receive a minimum contribu-tion if the non-key employee has not separated from service at the end of the top heavy year, regard-less of whether the non-key employee has less than one thousand (1,000) hours of service in such year. Furthermore, such non-key employee shall receive such minimum contribution regardless of his or her level of compensation, and regardless of whether he or she declines to make a mandatory personal contribution. No such minimum contribution made by the Company pursuant to these top heavy provisions shall be subject to forfeiture if a non-key employee withdraws his or her mandatory contributions.
4.	Notwithstanding the foregoing, so long as any non-key employee is covered by both the Company’s Pension Plan and this Plan, the minimum contri-bution required herein shall be satisfied by the accrual of the defined benefit minimum by the respective non-key employee for any top heavy year.
5.	If the Company shall be maintaining both this Plan and a defined benefit plan in any top heavy year, a factor of 1.0 must be applied to the denominators of the defined benefit and defined contribution fractions.

        16.8 Determination of Top Heavy Status.

(a)	This Plan shall be a Top Heavy Plan for any Plan year commencing after December 31, 1983, in which, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of an aggregation group, exceeds sixty percent (60%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of an aggregation group.
	If any participant is a non-key employee for any Plan year, but such participant was a key employee for any prior Plan year, such participant’s present value of accrued benefit and/or aggregate account balance shall not be taken into account for purposes of determining whether this Plan is a Top Heavy Plan (or whether any aggregation group which includes this Plan is a Top Heavy group).
(b)	This Plan shall be a Super Top Heavy Plan for any Plan year commencing after December 31, 1983, in which, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggre-gate accounts of key employees under this Plan and any Plan of an aggregation group, exceeds ninety percent (90%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of an aggregation group.
(c)	Aggregate account. A participant's aggregate account as of the determination date is the sum of:

1.	His participant’s account balance as of the most recent valuation occurring within a twelve (12) month period ending on the determination date.
2.	Contributions that would be allocated as of a date not later than the determination date, even though those amounts are not yet made or required to be made.
3.	Any Plan distributions made within the Plan year that includes the determination date or within the four (4) preceding Plan years. However, in the case of distributions made after the valuation date and prior to the determination date, such dis-tributions are not included as distributions for Top Heavy purposes to the extent that such distributions are already included in the participant’s aggregate account balance as of the valuation date. Notwithstanding anything herein to the contrary, all distributions, including distributions made prior to January 1, 1984, will be counted.
4.	Any employee contributions, whether voluntary or mandatory. However, amounts attributable to tax deductible qualified employee contributions shall not be considered to be a part of the participants aggregate account balance.

(d) "Aggregation group" means either a required aggregation group or a permissive aggregation group as hereinafter determined.

1.	Required aggregation group. In determining a required aggregation group hereunder, each Plan of the Company in which a key employee is a parti-cipant, and each other Plan of the Company which enables any Plan in which a key employee participates to meet the requirements of Code Sections 401(a)(4) and 410, will be required to be aggregated. Such group shall be known as a required aggregation group, and shall include any terminated plan which if it had not been terminated would have been required to be included in the aggregation group.
	In the case of a required aggregation group, each Plan in the group will be considered a Top Heavy Plan if the required aggregation group is a Top Heavy group. No Plan in the required aggregation group will be considered a Top Heavy Plan if the required aggregation group is not a Top Heavy group.
2.	Permissive aggregation group. The Company may also include any other Plan not required to be included in the required aggregation group, provided the resulting group, taken as a whole, would continue to satisfy the provisions of Internal Revenue Code Sections 401(a) or 410. Such group shall be known as a permissive aggregation group.
	In the case of a permissive aggregation group, only a Plan that is part of the required aggregation group will be considered a Top Heavy Plan if the permissive aggregation group is a Top Heavy group. No Plan in the permissive aggregation group will be considered a Top Heavy Plan if the permissive aggregation group is not a Top Heavy Plan group.
3.	Only those Plans of the Company in which the determination dates fall within the same calendar year shall be aggregated in order to determine whether such Plans are Top Heavy Plans.
4.	For purposes of determining the present value of the cumulative accrued benefit for any employee, or the amount of the account of any employee, the value or amount shall be increased by the aggregate distributions made with respect to such employee under the plan during the five year period ending on the determination date. The preceding sentence also applies to distributions under a terminated plan which if it had not been terminated would have been required to be included in an aggregation group. If any individual is a non-key employee with respect to any plan for any plan year, but such individual was a key employee with respect to such plan for any prior plan year, any accrued benefit for such employee (and the account of such employee) shall not be taken into account. The accrued benefit of an employee who has performed no services for the Company during the five (5) year period ending on the determination date will not be taken into account.

(e)	“Determination date” means (1) the last day of the preceding Plan year, or (2) in the case of the first Plan year, the last day of such Plan year.
(f)	Present value of accrued benefit. In the case of a defined benefit plan, a participant’s present value of accrued benefit shall be as determined under the provisions of the applicable defined benefit plan.
(g)	"Top Heavy group" means an aggregation group in which, as of the determination date, the sum of:

1.	The present value of accrued benefits of key employees under all defined benefit plans included in the group; and
2.	The aggregate accounts of key employees under all defined contribution plans included in the group, exceeds sixty percent (60%) of a similar sum determined for all participants.

(h) Notwithstanding anything herein to the contrary, the effective date otherwise provided for herein for the application of Code Section 416 to this Plan (Plan years beginning after December 31, 1983) shall be extended in accordance with any legislative act of Congress.

        16.9 Modification of Top Heavy Rules.

(a)	For Plan years beginning after December 31, 2001, this paragraph shall apply for purposes of determining whether the Plan is top heavy under code Section 416(g), and whether the Plan satisfies the minimum requirements of Code Section 416(c) for such years. This paragraph amends paragraphs of this ARTICLE XVI, including, but not limited to, part or all of Paragraphs 16.2, 16.7(a)1 and (a)2, and 16.8(c)(3).
(b)	“Key employee” means any employee or former employee (including any deceased employee) who at any time during the Plan year that includes the determination date was an officer of the Company having annual compensation greater than $130,000.00 [as adjusted under Code Section 416(i)(l)] for Plan years beginning after December 31, 2002, a five percent (5%) owner of the Company, or a one percent (1%) owner of the Company having annual compen-sation of more than $150,000.00. For this purpose, annual compensation means compensation within the meaning of Code Section 415(c)(3). The determination of who is a key employee will be made in accordance with Code Section 416(i)(l) and the applicable regulations and other guidance of general applicability issued thereunder.
(c)	For purposes of determining the present values of accrued benefits and the amounts of account balances of employees as of the determination date, the following shall apply:

1.

The present value of accrued benefits and the amounts of account balances of a employee as of the determination date shall be increased by the distributions made with respect to the employee under the Plan and any plan aggregated with the Plan under Code Section 416(g)(2) during the one (1) year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than separation from service, death or disability, this provision shall be applied by substituting “five (5) year period” for” one (1) year period”.

2.

The accrued benefits and accounts of any individual who has not performed services for the Company during the one (1) year period ending on the deter-mination date shall not be taken into account.

(d)

Company matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code Section 416(c)(2) and the Plan. Company matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code Section 401(m).

(e)

Notwithstanding the foregoing, so long as any non-key employee is covered by both this Plan and the Kansas City Life Insurance Company Cash Balance Pension Plan, the minimum contribution required herein shall be satisfied by the accrual of the defined benefit minimum by the respective non-key employee for any top heavy year.

ARTICLE XVII

Disabled Employee Participants

        17.1 Contributions Cease on Disability. Notwithstanding anything in this Plan to the contrary, when an employee-participant commences to receive benefits because of disability as defined in this Plan, he shall not be permitted to continue contributions, and all Company contributions for his benefit shall cease until such time as he again qualifies as a full time active employee.
        17.2 Vesting at Disability. During any period of time in which a participant shall qualify for benefits because of disability as defined in this Plan, he shall be treated as if his employment is continuous for purposes of vesting and shall continue to vest at the rate provided by ARTICLE VIII herein.
        17.3 Distribution. At such time as a disabled participant attains eligibility for retirement pursuant to Paragraph 15.15 herein, his or her fully vested accounts may then be distributed in accordance with Plan provisions.

        IN WITNESS WHEREOF, the Company has caused this Twenty-seventh Amendment to be executed by its authorized Officers and its Cor-porate Seal to be hereunto affixed, and the Trustees have executed this Trust, all on the day of , 2002.

KANSAS CITY LIFE INSURANCE COMPANY

By:                         

Its: Vice President

ATTEST:

By:                                 
Its: Assistant Secretary

TRUSTEES

EX-10

THIRTEENTH AMENDMENT

KANSAS CITY LIFE
EMPLOYEE STOCK PLAN

        THIS THIRTEENTH AMENDMENT, comprising the restated Kansas City Life Employee Stock Plan, is effective the 1st day of January, 2001, and is entered into by and between Kansas City Life Insurance Company, a Corporation organized and existing under the Laws of the State of Missouri, hereinafter called the “Company”, and John K. Koetting, Robert C. Miller and Anne C. Moberg, hereinafter referred to as the “Trustees”.

ARTICLE I

Creation and Purpose of Trust

        1.1 Name. The Company hereby creates this Plan and Trust to be known as the “Kansas City Life Employee Tax Credit Stock Owner-ship Plan”, also sometimes referred to as the “Kansas City Life Employee Stock Plan”, or the “Kansas City Life ESOP”, hereinafter sometimes referred to as the “Plan” or “Trust”.
        1.2 Purpose. It is the purpose of this Plan to encourage the contributions of its employees to the success of the Company and to reward such contributions by providing the privileges of ownership through stock acquisition, and it shall be qualified as an employee stock ownership plan and as a payroll tax credit employee stock ownership plan. It is designed to invest primarily in qualifying Company stock.
        1.3 Exclusive Benefit of Employees. This Agreement has been made, and this Plan and Trust created, for the exclusive benefit of the Company’s full time employees and their beneficiaries. The terms of this Plan are intended to comply with the present pro-visions of Sections 401(a), 409, 501(a) and 4975(d)(3) and (e)(7) of the Internal Revenue Code, and as they may hereafter be amended, and Treasury Department Regulations in connection therewith, in order that the Plan and Trust may qualify for tax exemption. Under no circumstances shall any part of the principal or income of the Plan and Trust be used for, or revert to, the Company, or be used for, or diverted to, any purposes other than for the exclusive benefit of the employees and their beneficiaries. This Plan and Trust shall not be construed, however, as giving any employee, or any other person, any right, legal or equitable as against the Company, the Trustees or the principal or income of the Trust, except as specifically provided for herein, nor shall it be con-strued as giving any employee the right to remain in the Company’s employment.

ARTICLE II

Eligibility

        2.1 Commencing January 1, 1983, each present and future employee shall be qualified as a participant in this Plan in accordance with the following provisions:

(a)	He shall have attained the age of twenty-one (21) years.
(b)	Any employee whose employment commences prior to his attainment of age twenty-one (21), shall become a participant on the first (1st) day of the month following his twenty-first (21st) birthday.
(c)	Any employee whose employment commences after his attainment of age twenty-one (21), shall become a par-ticipant on the first (1st) day of the month following his date of employment.
(d)	Any employee of Old American Insurance Company who is age twenty-one (21) on November 1, 1991 or becomes age twenty-one (21) on or before December 31, 1991 shall become a participant on January 1, 1992 in accordance with the terms of the Adoption Agreement dated December 19, 1991. Thereafter, any employee of Old American Insurance Company will become a participant in accordance with subparagraphs (a), (b) and (c) of this section.

         2.2 With respect to this Plan, an "hour of employment" shall mean:

(a)	Each hour for which an employee is directly or indirectly paid, or entitled to payment, by the Company for the performance of duties. These hours shall be credited to the employee for the computation period or periods in which the duties are performed; and
(b)	Each hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Company, with no duplication of credit for hours under Subparagraphs (a), (b) and (c). These hours shall be credited to the employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made. With respect to periods described in Subparagraph (c) below, crediting of back pay hours shall be subject to the limitations set forth in that Subpara-graph.
(c)	Each hour for which an employee is directly or indirectly paid, or entitled to payment, by the Company for reasons such as vacation, holidays, illness, incapacity (includ-ing disability), layoff, jury duty, military leave or leave of absence in a period during which no duties are performed (irrespective of whether the employment relationship was terminated). These hours shall be credited to the employee for the computation period or periods during which the nonperformance of such duties occurs. No hour shall be credited based on any payment under a plan maintained solely to comply with applicable workers’ compensation, unemployment compensation, or disability insurance laws, or which solely reimburses an employee for medical or medically-related expenses incurred by the employee. No more than five hundred one (501) hours shall be credited under this Subparagraph for any continuous period during which the employee did not or would not have performed duties. Hours of service for periods of time during which no duties are performed under Subparagraphs (b) and (c) shall be calculated and credited according to Department of Labor Regulations 2530.200b-2 (b) and (c).
(d)	In computing an employee’s hours of employment on a weekly or monthly basis, when a record of hours of em-ployment is not available to determine the hours of employment under Subparagraphs (a), (b) and (c), the employee shall be assumed to have worked forty-five (45) hours for each week, or one hundred ninety (190) hours for each month (as applicable), for which the employee would be required to be credited with at least one (1) hour of employment under Subparagraphs (a), (b) or (c) above.
(e)	An "hour of employment" shall also include time for which an employee is absent from work either

(i)	by reason of the pregnancy of such employee,
(ii)	by reason of the birth of a child of the employee,
(iii)	by reason of the placement of a child in connection with the adoption of the child by the employee, or
(iv)	for purposes of caring for the child during the period immediately following the birth or placement for adoption.
(v)	a leave of absence covered under the Family and Medical Leave Act of 1993.

However, the total number of hours of such service counted for any one (1) period shall not exceed five hundred one (501) hours.

         2.3 Leaves of Absence.

(a) For the purpose of computing continuous employment, leaves of absence may be included which have been authorized by the Company for any of the following reasons:

(i)	Sickness.
(ii)	Disability.
(iii)	Service with the armed forces of the United States during any war or national emergency declared by the President or the Congress, or undeclared.
(iv)	Pregnancy, not to exceed twelve (12) months.
(v)	Public service, whether elected or otherwise.
(vi)	Obtaining additional education, involving periods of time not to exceed twelve (12) months for each leave of absence granted, but only after completion of one (1) full year of full time employment.

(b)

Such leaves of absence may be counted in computing continuous employment provided the employee returns to active employment on or before the end of such leave of absence, and, when because of service in the armed forces as stated above, provided the employee returns to active employment with the Company within ninety (90) days following his discharge from such service, or such longer period during which his re-employment rights are pro-tected by law.

(c)

Any such employee who is not qualified as a participant prior to the commencement of such a leave of absence shall not be so qualified until his return to active employment. The provisions of this Section shall be applied in a like manner to all employees under similar circumstances.

ARTICLE III

Company Contributions

        3.1 Rate of Contribution. Commencing January 1, 1983, in the discretion of the Executive Committee of the Company, or its designated subcommittee, the Company will annually contribute to the Plan an amount of common capital stock of the Company equal to one-half of one percent (.5%) of the aggregate compensation of participants in the Plan for compensation paid or accrued during calendar years 1983 and 1984, and equal to such other percentage as shall be permissible by law, currently one-half of one percent (.5%), for compensation paid or accrued during calendar years 1985 through 1987.
        No contribution will be made for a year for which the payroll tax credit is not available. Notwithstanding the provisions of the preceding sentence, the Company may, but shall not be required, to make a contribution to the Plan for a Plan year in which the payroll tax credit is not available. Any contribution made for a Plan year in which the payroll tax credit is not available shall be accounted for separately and shall be in accordance with the rules and regulations pertaining to ESOPs then in effect.
        3.2 No Employee Contribution. No contribution shall be required of a participant, nor will any participant be eligible to make a contribution.
        3.3 Investment Credit Recapture. Amounts contributed to the Plan attributable to all or a portion of the qualified investment credit claimed by the Company shall remain in the Plan (and, if allocated pursuant to the Plan, shall remain so allocated) even though part or all of such ESOP credit is recaptured or redeter-mined.
        3.4 Form of Payment. The stock contributions of Kansas City Life Insurance Company shall be made in treasury stock or in shares of authorized but unissued stock of Kansas City Life Insurance Company. For purposes of fixing the amount of contributions made with shares of treasury stock, or shares of authorized but unissued stock, such stock shall be valued at its bid price on the over-the-counter market on the valuation day of the month in which the Company’s contribution becomes due, or if the market is closed on that day then on the last preceding day during which it was open. Effective January 1, 1995, such stock shall be valued at the average of its bid price on the over-the-counter market for all business days in the month of the valuation day. In the event the Company is precluded from delivering such shares to the Trustees by law or because of the unavailability of such shares, the Company’s contribution to the Trustees shall be in cash, and said cash shall be invested until such time as shares of the Company stock shall be available for purchase by the Trustees.

ARTICLE IV

Investment of Contributions

        4.1 Investment of Funds. Contributions to the Trust shall be invested in accordance with the authority granted to the Trustees pursuant to the provisions of this Plan and Trust. It is contem-plated that the contribution made by the Company from time to time be in shares of the Company stock, or in cash if necessary to implement the provision of the Plan.
        4.2 Voting of Shares. The Trustees shall vote the shares of stock of the Company for the respective accounts of the partici-pants only in accordance with the direction of such participants, which directions may be certified to the Trustees by the Committee, or any agent designated thereby, provided such directions are received by the Trustees at least five (5) days before the date set for the meeting at which such shares are to be voted. Shares with respect to which no such direction shall be received and the fractional shares shall be voted by the Trustees in the same pro-portions as are shares as to which voting instructions have been received.

ARTICLE V

Allocation to and Evaluation of Participants Accounts

        5.1 Allocation and Evaluation. The value of all Trust assets shall be determined on the basis of market values as of the last market business day of each calendar quarter. Effective January 1, 1995, the value of the Kansas City Life stock shall be determined on the basis of the average of its bid price on the over-the-counter market for all business days in the last month of each calendar quarter.
        All stock transferred to or purchased by the Trust with respect to a Plan year shall be allocated among the accounts of persons who were participants on the last day of the Plan year and who completed at least one thousand (1,000) hours of employment during such Plan year. The allocation to each participant shall be an amount which bears the same proportion to the amount of such securities allocated to all participants in the Plan for that Plan year as the amount of each participant’s compensation during the entire year bears to total compensation paid to all participants during the entire year. (Compensation in excess of one hundred thousand dollars ($100,000.00) per year with respect to any participant will be disregarded for this purpose.)
        5.2 Dividends. Except for amounts needed to cover cash distributions in place of distributions of fractional shares, divi-dends on shares shall be reinvested in shares of common stock of the Company. Such shares and uninvested dividends shall be allo-cated quarterly among participants’ accounts in proportion to the value of each participant’s account as of the end of the quarter.
        5.3 Stock Fund. The Trustees shall maintain a “Stock Fund” which shall cover the aggregate shares of capital stock contributed to and purchased by the Plan and any uninvested cash. The Stock Fund shall be valued as of each valuation date, which shall be the last business day of each quarter or such other dates as the Committee may establish, on the basis of the then current fair market value of the assets held therein, as determined by the Trustees. Effective January 1, 1995, the value of the Kansas City Life stock shall be determined on the basis of the average of its bid price on the over-the-counter market for all the business days in the last month of the calendar quarter or in the month of such other date as the Committee may establish. The Administrative Committee shall maintain records reflecting the account of each participant in the Stock Fund.
        5.4 Annual Account. The Administrative Committee shall furnish to each participant at least once each year a statement of shares and uninvested cash in the Stock Fund allocated to the participant's account as of a specified date.

ARTICLE VI

Allocation of Fiduciary Responsibility

        6.1 Fiduciaries. The fiduciaries shall have only those specific powers, duties, responsibilities and obligations as are specifically given them under this Plan. The Company shall have the sole responsibility for making the contributions required by the Plan, shall have the sole authority to appoint and remove the Trustees, members of the Administrative Committee, and to amend or terminate, in whole or in part, this Plan and Trust.
        6.2 Administration. The Administrative Committee shall have the sole responsibility for the administration of this Plan, which responsibility is specifically described in ARTICLE IX herein.
        6.3 Trustees. The Trustees shall have such responsibility for the administration and management of the assets held pursuant to this Plan and Trust, as is specifically provided for in the Plan.
        6.4 Duties. Each fiduciary warrants that any direction given, information furnished or action taken by it shall be in accordance with the provisions of the Plan and Trust, authorizing or providing for such direction, information or action. Further-more, each fiduciary may rely upon any such direction, information or action of another fiduciary as being proper under this Plan, and is not required herein to inquire into the propriety of any such direction, information or action. It is intended under this Plan that each fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations pursuant to the Plan and shall not be responsible for any act or failure to act of another fiduciary. No fiduciary guarantees the Trust fund in any manner against investment loss or depreciation in asset value.

ARTICLE VII

Vesting

        7.1 Vesting of Company Contributions. Each participant shall be one hundred per cent (100%) vested and shall have a nonfor-feitable right to the full value of his or her account and to any stock and uninvested cash allocated thereto.

ARTICLE VIII

Distributions

        8.1 Seven (7) Year Retention. No stock or uninvested cash allocated to a participant’s account may be distributed from that account before the end of eighty-four (84) months beginning after the month in which the stock and uninvested cash is allocated to the account, except in the case of separation from employment for death or any other reason, or except in the case of a participant who has become disabled and is receiving benefits from the Kansas City Life or Sunset Life Disability Plans. Notwithstanding the foregoing, commencing January 1, 1988, if an employee shall continue in the Company’s employment after his or her sixty-fifth (65th) birthday, and commencing January 1, 1998, after his or her sixtieth (60th) birthday (normal retirement date), such employee shall commence to receive distributions as defined in the Internal Revenue Code on the earlier of his termination of employment with the Company or April 1st of the year following the calendar year in which he or she attains the age of seventy and one-half (70 1/2). Effective January 1, 1989, the minimum distribution and the minimum distribution incidental benefit requirements of Internal Revenue Proposed Regulations 1.401(a)(9)-1 and 1.401(a)(9)-2 are hereby incorporated by reference. Effective January 1, 1997, for par-ticipants other than a five percent (5%) owner of the Company, distributions shall commence no later than April 1st of the calendar year following the later of:

(a)	The year in which the participant attains age seventy and one-half (70 1/2), or
(b)	The year in which the participant retires.

With respect to distributions under the Plan made on or after January 1, 2001 for calendar years beginning on or after January 1, 2001, the Plan will apply the minimum distribution requirements of Code Section 401(a)(9) in accordance with regulations under Code Section 401(a)(9) that were proposed on January 17, 2001. This amendment shall continue in effect until the end of the last calendar year beginning before the effective date of final regulations under Code Section 401(a)(9) or such other date as may be specified in guidance published by the Internal Revenue Service.
        8.2 Separation from Employment. In the case of separation from employment, whether by death or for any other reason, or in the event a disabled participant so elects, the account of the participant in the Stock Fund shall be determined as of the end of the quarter in which such event occurs and shall be distributed to the participant or beneficiary (in case of death) as soon there-after as practicable. If separation from service, or if the disabled participant’s election occurs on or after the last day of a Plan year, but prior to the date on which the Company makes its contribution for the Plan year just ended, and if the participant is entitled to share in such contribution, then such participant’s share shall be determined as of the end of the quarter in which the Company’s contribution is made and shall be distributed thereafter as soon as practicable.
        8.3 Pre-retirement Distribution. Any participant who remains in the employ of the Company may request a distribution of stock allocated to his or her account as of the end of any quarter next following the expiration of eighty-four (84) months following the month in which the stock was allocated to the account, but not more often than once within any twelve (12) month period. Requests for distribution must be in writing, filed with the Administrative Committee at least fifteen (15) days prior to the end of any such quarter. Distribution shall be made to such participant as soon as practicable following the end of the quarter in which the request is made. However, distributions pursuant to this Paragraph may not be made to an individual who is an alternate payee under a Quali-fied Domestic Relations Order and for whom an account is being separately maintained.
        8.4 Right to Stock. Any participant who shall be entitled to a distribution from the Plan shall have the right to demand that his benefits be distributed in the form of capital stock of the Company. Notwithstanding the foregoing, any fractional share will be converted to cash, at the valuation date as of which the distribution is made based on the fair market value at that time as determined by the Trustees.
        8.5 Method of Distribution. All distributions provided pur- suant to this Plan shall be by a lump sum payment.
        8.6 Commencement of Distributions. All distributions shall be made or commenced to be made as soon as practicable after the valuation date coincident with or next following the occurrence of one of the distribution events described in this ARTICLE VIII. Upon written notice to the Committee no later than the end of the calendar month following the month in which termination occurs, a participant (or, in the case of death, his beneficiary) entitled to a lump sum payment may make an irrevocable election to receive the value of his distribution on January 31st of the next succeeding calendar year. Alternatively, the participant may choose not to withdraw his benefits when one of the distribution events occurs, and later elect to have the distribution made upon written notice before a subsequent valuation date. However, only a full and complete distribution of his benefits will be allowed whether the participant withdraws his benefits at the time a distribution event occurs or at some later date. No partial withdrawals shall be permitted. Notwithstanding, should the value of a participant’s account in the Stock Fund not exceed five thousand dollars ($5,000.00), a distribution shall be made to the participant (or his beneficiary in case of death) without any requirement that the participant or his/her spouse consent to the distribution.
        8.7 Valuation. The value of a participant’s account upon termination shall be the value on the most recent valuation date preceding January of the year elected pursuant to Paragraph 8.6. If such election is not so made, such value shall be determined on the valuation date coincident with or next following the date the par-ticipant (or, in case of death, his beneficiary) elects within the election period specified in Paragraph 8.6 above, to receive his distribution, or the receipt by the Trustees of notice of said participant’s termination, whichever shall occur later.
        8.8 Facility of Payment. If the Committee shall receive evidence satisfactory to it that a participant or beneficiary is physically or mentally incompetent to receive any payment which shall be due hereunder and to give a valid release therefor and that another person or an institution is then maintaining or has custody of such participant or beneficiary, and that no guardian, committee or other representative of the estate of such participant or beneficiary, shall have been duly appointed, the Committee may, at its option, make payments otherwise payable to such participant or beneficiary, to such other person or institution, and the release of such other person or institution shall be a valid and complete discharge for such payments.
        8.9 Beneficial Designation. Any participant shall have the right to designate a new beneficiary at any time by filing with the Committee a written request for such change, but any such change shall become effective only upon receipt of such request by the Committee. If the payment is made as a result of the death of the participant, the payment shall be made to the surviving spouse of the participant, if any, unless the participant and the spouse have requested a distribution to any other beneficiary. Any such request shall be written and on forms prescribed by the Adminis-trative Committee. Upon receipt by the Committee of such request, the change shall relate back to and take effect as of the date such participant signs such request whether or not such participant is living at the time the Committee receives such request.
        If there be no designated beneficiary living at the death of such participant when any payment hereunder shall be payable to the beneficiary, then such payment shall be made as follows: To such participant’s wife or husband, if living; if not living, to such participant’s then living lineal descendants, in equal shares, per stirpes; if none survives, to such participant’s surviving parents, equally; if neither survives, to such participant’s executors or administrators.
        8.10 Diversification of Investments.

(i)	Each qualified participant in the plan may elect within (90) ninety days after the close of each calendar year in the qualified election period to direct the Trustees as to the investment of at least twenty-five percent (25%) of his or her account in the plan (to the extent such portion exceeds the amount to which a prior election under this paragraph applies). In the case of the election year in which the participant can make his or her last election, the preceding sentence shall be applied by substituting "fifty percent (50%)" for "twenty-five percent (25%)".
(ii)	If a participant makes an election, the Trustees may either (a) distribute the portion of the participant’s account covered by the election to him or her within ninety (90) days after the period during which the election may be made, or (b) offer at least three invest-ment options (not inconsistent with regulations prescribed by the Secretary of the Treasury) to each participant making an election.
(iii)	For purposes of this paragraph, the term “qualified participant” means any employee who has completed at least ten (10) years of participation under the plan and has attained age fifty-five (55).
(iv)	For purposes of this paragraph, the term “qualified election period” means the five-plan-year period beginning with the plan year after the plan year in which the participant attains age fifty-five (55) (or, if later, beginning with the plan year after the first plan year in which the individual first became a qualified participant).

ARTICLE IX

Administrative Committee

        9.1 Membership. The Administrative Committee, sometimes herein referred to as the “Committee”, shall consist of a number of persons, not less than three (3) nor more than five (5), designated by the Executive Committee of the Company, who shall serve terms of one (1) year or until their successors are designated, and said Committee shall have the responsibility for the general administra-tion of the Plan and for carrying out the provisions of the Plan in accordance with its terms. The Committee shall have absolute discretion in carrying out its responsibilities.
        9.2 Subcommittees. The Committee may appoint from its members such committees with such powers as it shall determine; may authorize one (1) or more of its number or any agent to execute or deliver any instrument or make any payment on its behalf; and may utilize counsel, employ agents and provide for such clerical and accounting services as it may require in carrying out the pro-visions of the Plan.
        9.3 Meetings. The Committee shall hold meetings upon such notice, at such place or places, and at such time or times as it may from time to time determine.
        9.4 Majority Action. The action of a majority of the members expressed from time to time by a vote in a meeting or in writing without a meeting shall constitute the action of the Committee and shall have the same effect for all purposes as if assented to by all members of the Committee at the time in office.
        9.5 No Compensation. No member of the Committee shall receive any compensation for his services as such, and, except as required by law, no bond or other security shall be required of him in such capacity in any jurisdiction.
        9.6 Committee Rules. Subject to the limitations of this Plan and Trust, the Committee from time to time shall establish rules or regulations for the administration of the Plan and the transaction of its business. The Committee shall have full and complete discretionary authority to construe and interpret the Plan and decide any and all matters rising hereunder, except such matters which the Executive Committee of the Company from time to time may reserve for itself, including the right to remedy possible ambiguities, inconsistencies or omissions. All interpretations, determinations and decisions of the Committee or the Executive Committee of the Company in respect of any matter hereunder shall be final, conclusive and binding on all parties affected thereby. The Committee shall, when requested, submit a report to the Executive Committee of the Company giving a brief account of the operation of the Plan and the performance of the various accounts established pursuant to the Plan.
        9.7 Claims Procedure. The Administrative Committee shall have full and complete discretionary authority to make all determinations as to the right of any person to a benefit. Any denial by the Committee of a claim for benefits under this Plan by a participant or a beneficiary shall be stated in writing by the Committee and delivered or mailed to the participant or the beneficiary, whichever is appropriate; and such notice shall set forth the specific reason for the denial, written to the best of the Committee’s ability in a manner that may be understood without legal or actuarial counsel. In addition, the Committee shall provide a reasonable opportunity to any participant or beneficiary whose claim for benefits has been denied for a review of the decision denying the claim.
        9.8 Resignation of Member. Any member of the Committee may resign by giving notice to the Executive Committee at least fifteen (15) days before the effective date of his resignation. Any Com- mittee member shall resign upon request of the Executive Committee. The Executive Committee shall fill all vacancies on the Committee as soon as is reasonably possible after a resignation takes place, and until a new appointment takes place, the remaining members of the Committee shall have authority to act, if approved by either a majority of the remaining members or by two (2) members, whichever number is lesser.

ARTICLE X

Amendment and Termination

        10.1 Amendment. Kansas City Life Insurance Company reserves the right at any time and from time to time, and retroactively if deemed necessary or appropriate to conform with governmental regu- lations or other policies, to modify or amend, in whole or in part, any or all of the provisions of this Plan and Trust by adoption of a written resolution by the Board of Directors of Kansas City Life Insurance Company or the Executive Committee of the Board of Directors; provided that no such modification or amendment shall make it possible for any part of the contributions of the Company, or any other funds of the Trust, to be used for, or diverted to, purposes other than for the exclusive benefit of participants or their beneficiaries.
        10.2 Termination. This Plan and Trust is purely voluntary on the part of the Company, and Kansas City Life Insurance Company reserves the right to terminate the Plan and the Trust provided herein by adoption of a written resolution by the Board of Directors of Kansas City Life Insurance Company or the Executive Committee of the Board of Directors. Upon termination of, or upon the complete discontinuance of contributions within the meaning of Section 411(d)(3)(B) of the Internal Revenue Code, participants’ accounts shall become fully vested and nonforfeitable and distribution shall be made as promptly as possible in accordance with the directions of the Committee.
        10.3 Merger. This Plan and Trust shall not be merged or consolidated with, nor shall any assets or liabilities be transferred to any other Plan or Trust, unless the accrued benefit of each participant, if the Plan and Trust were terminated immediately after such action, would be equal to or greater than the accrued benefit to which such participant would have been entitled if this Plan and Trust had been terminated immediately before such action.

ARTICLE XI

The Trust

        11.1 Number of Trustees. There shall be three (3) Trustees for this Trust with the Trustees hereinbefore named being the original Trustees.
        11.2 Trustees shall Receive Sums Paid. The Trustees shall accept and receive all sums of money paid to them from time to time by the Company, and shall hold, invest, reinvest, manage and administer such monies and the increment, increase, earnings and income thereof as a Trust for the exclusive benefit of the employees participating in the Plan, and their beneficiaries. All income and earnings of the Trust shall be accumulated by the Trustees and by them held, invested and reinvested as a part of the principal of the said Trust.
        11.3 Investment of Funds.

(a)	Except as hereinafter provided with respect to the cash reserve, the Trustees shall invest and reinvest the principal and income of the Trust in the capital stock of the Company. Income from investments and proceeds of the sale of securities shall be reinvested in the same manner as contributions received for investment. Any funds held by the Trustees pending investment in the capital stock of the Company may be invested temporarily in short-term corporate or governmental debt securities, or in such other investments as the Trustees shall, after investi-gation, believe to be sound and suitable investments for this Trust, although the same may not be of the character permitted for Trustee’s investments by the Laws of the State of Missouri, all subject to the approval of the Executive Committee, or its designated subcommittee, as hereinafter provided.
(b)	The Trustees may retain in cash so much of the Trust assets as they may deem advisable.
(c)	The Trustees may sell property held by the Trust at either public or private sale, for cash or on credit, at such times as they may deem appropriate; they may ex-change such property, and they may grant options for the purchase or exchange thereof.
(d)	The Trustees may consent to and participate in any plan of reorganization, consolidation, merger, extension or other similar plan affecting property held by the Trust; they may consent to any contract, lease, mortgage, pur-chase, sale or other action by any corporation pursuant to any such plan; they may accept and retain property issued under any such plan, even though it would not be eligible as a new investment under the provisions of this Section.
(e)	The Trustees may deposit property held in the Trust with any protective, reorganization or similar committee, and may delegate discretionary power thereto to pay its reasonable share of such committee’s expenses and com-pensation and any assessments levied with respect to any property so deposited.
(f)	The Trustees may exercise all conversion and subscription rights pertaining to property held in the Trust.
(g)	The Trustees may exercise all voting rights with respect to property held in the Trust, and in connection there-with grant proxies discretionary or otherwise, all in accordance with the provisions of this Plan and Trust.
(h)	The Trustees may cause securities and other property to be registered and held in their names, the name of any one (1) of them, or in the name of their nominee.
(i)	The Trustees may borrow money from others, including the Company, for the purposes of the Trust, and issue their promissory note or notes for the same, and pledge or mortgage securities or other assets owned by the Trust as security for the payment thereof. Any such loan shall be subject to approval as required of investments herein, and also to the provisions of Paragraph 11.4 herein.
(j)	The Trustees may compromise, compound and settle any debt or obligation due to or from them as Trustee; they may reduce the rate of interest on any obligation due them as Trustee; they may extend the time of payment of both interest and principal, or otherwise modify the terms of any obligation due them as Trustee; upon default of any obligation due them as Trustee, they may foreclose or otherwise enforce any obligation belonging to the Trust.
(k)	The Trustees may generally do all such acts, execute all such instruments, take all such proceedings and exercise all such rights and privileges with relation to property belonging to the Trust as if the Trustees were the absolute owners thereof.

        11.4 Loan Provisions. The following provisions shall apply to any loan made to the Trust fund:

(a)	The loan must be at a reasonable rate of interest, for a specific period of time, and shall not be payable on demand;
(b)	Any collateral pledged to the creditor by the Trust shall consist only of the assets purchased with the borrowed funds (although in addition to such collateral, the Company may guarantee repayment of the loan);
(c)	Under the terms of the loan, the creditor shall have no recourse against the Trust except with respect to such collateral;
(d)	The loan shall be repaid only from those amounts con-tributed by the Company to the Trust and from amounts earned on Trust investments;
(e)	The Company must contribute to the Trust amounts suf-ficient to enable the Trust to pay each installment of principal and interest on the loan on or before the date such installment is due, even if no tax benefit results from such contribution; and
(f)	Upon the repayment of any portion of the balance due on the loan, the assets originally pledged as collateral for such portion shall be released from encumbrance. Released shares shall be allocated to the accounts of participants during the fiscal year such portion is paid off. Such allocation shall be made in the same manner provided under the Plan for allocating shares when no loan is involved.
(g)	Any such loans shall be effected primarily in the interest of participants and their beneficiaries.
(h)	Notwithstanding the foregoing, in the event an exempt loan is effected it shall be subject to the following additional provisions and the proceeds thereof must be used within a reasonable time after their receipt only for any or all of the following purposes:

(i)	To acquire qualifying Company securities.
(ii)	To repay such loan.
(iii)	To repay a prior exempt loan. A new loan, the proceeds of which are so used, must satisfy the provisions of this Subparagraph (h).

(i)	Except as provided hereinafter or as otherwise required by applicable law, no security acquired with the proceeds of an exempt loan may be subject to a put, call or other option, or buy-sell or similar arrangement while held by and distributed from the Plan, whether or not the Plan is then an ESOP.
(j)	A qualifying Company security acquired with the proceeds of an exempt loan by the Plan, must be subject to a put option if it is not publicly traded when distributed or if it is subject to a trading limitation when distrib-uted. For purposes of this Subparagraph, a “trading limitation” on a security is a restriction under any federal or state securities law, any regulation there-under or an agreement, not prohibited herein, affecting the security which would make the security not as freely tradable as one not subject to such restriction. The put option must be exercisable only by a participant, by the participant’s donees or by a person (including an estate or its distributee) to whom the security passes by reason of a participant’s death. (Under this Subparagraph (j), “participant” means a participant and beneficiaries of the participant under the ESOP.) The put option must permit a participant to put the security to the Company. Under no circumstances may the put option bind the Plan. However, it may grant the Plan an option to assume the rights and obligations of the Company at the time that the put option is exercised. If it is known at the time a loan is made that federal or state law will be violated by the Company’s honoring such put option, the put option must permit the security to be put, in a manner con-sistent with such law, to a third party (e.g., an affiliate of the Company or a shareholder other than the Plan) that has substantial net worth at the time the loan is made and whose net worth is reasonably expected to remain substantial.
(k)	General rule:

(i) A put option must last for a period of at least sixty (60) days following the date of distribution to the participant. If the put option is not exercised during that period, it must be available to the participant for a period of at least sixty (60) days in the following Plan year as provided in regulations prescribed by the Internal Revenue Service.

(l) Other put option provisions:

(i)	Manner of exercise. A put option is exercised by the holder notifying the Company in writing that the put option is being exercised.
(ii)	Time excluded from duration of put option. The period during which a put option is exercisable does not include any time when a distributee is unable to exercise it because the party bound by the put option is prohibited from honoring it by applicable federal or state law.
(iii)	Price. The price at which a put option must be exercisable is the value of the security, at its bid price on the over-the-counter market on the day in which such put option may and shall be exercised.
(iv)	Payment terms. The provisions for payment under a put option must be reasonable. The deferral of payment is reasonable if adequate security and a reasonable interest rate are provided for any credit extended and if the cumulative payments at any time are no less than the aggregate of reasonable periodic payments as of such time. Periodic payments are reasonable if annual installments, be-ginning with thirty (30) days after the date the put option is exercised, are substantially equal. Generally, the payment period may not end more than five (5) years after the date the put option is exercised. However, it may be extended to a date no later than the earlier of ten (10) years from the date the put option is exercised or the date the proceeds of the loan used by the Plan to acquire the security subject to the put option are entirely repaid.
(v)	Payments restrictions. Payment under a put option may be restricted by the terms of a loan. Otherwise, payment under a put option must not be restricted by the provisions of a loan or any other arrangement, including the terms of the Company's Articles of Incorpo-ration, unless so required by applicable state law.

(m)

The provisions of Subparagraphs (j), (k) and (l) hereinabove are nonterminable. If the Plan holds or has distributed securities acquired with the proceeds of an exempt loan and either the loan is repaid or the Plan ceases to be an ESOP, these protections and rights shall continue to exist. However, the protections and rights will not fail to be nonterminable merely because they are not exercisable under Subparagraphs (k) and (l).

(n)

All assets acquired by the Plan with the proceeds of an exempt loan referred to hereinabove must be added to and maintained in a suspense account. Such assets are to be withdrawn from the suspense account only in accordance with rules and regulations of the Internal Revenue Ser-vice and as if all securities in the suspense account were encumbered. Assets in such suspense account are assets of this ESOP Plan.

        11.5 Approval of Investments. Before obtaining any loan or making any new investment or reinvestment of any funds of this Trust, the Trustees shall submit to the Executive Committee of the Company, or its designated subcommittee, a proposal of the terms of any such loan, or a list of any such securities in which it pro-poses to invest such funds and the amount proposed to be invested in each security, the Trustees shall proceed to act on such loan, to purchase, or refrain from purchasing, such securities in accordance with the acceptance or rejection, in whole or in part, of such proposals by the Executive Committee of the Company, or its designated subcommittee. Acceptance or rejection of such pro-posals, or any modification thereof, or any of them by the said Committee, shall be signified in writing and delivered to the Trustees within thirty (30) days of the submission of such proposals by the Trustees, provided however, that if no written modification, acceptance or rejection of such proposals, or any of them, shall be so delivered by the said Committee within the time herein limited therefor, the Trustees shall be warranted and protected in assuming that all of the proposed loans or investments which have not been specifically modified or rejected as aforesaid, meet with the complete approval of said Executive Committee, or its designated subcommittee.
        11.6 Cash Reserve. The Trustees may maintain a cash reserve in such amount as to provide for current distribution of benefits under the Plan. Such cash reserve may consist of uninvested con-tributions of the Company, or of the proceeds of the sale of investments of the Trust. All of the funds held in such cash reserve as well as all funds and securities and assets belonging to the Trust shall be safely kept by the Trustees on deposit or in the vaults of a bank or trust company selected and designated by the Board of Directors or the Executive Committee of the Company.
        11.7 Disbursement of Funds. Disbursement of the assets of this Trust shall be made by the Trustees only to or for the benefit of the participants in the Plan or their beneficiaries, and only at the time, in the amount and in the manner prescribed in written instructions of the Administrative Committee delivered by such Committee to the Trustees.
        11.8 Instructions to Trustees. The Trustees shall not be obligated or required to determine whether any instructions issued to them by the Administrative Committee are in fact so issued in accordance with the terms of the Plan or the powers and duties thereunder of said Committee.
        11.9 Fiduciary Insurance. The Trustees or the Administrative Committee shall have the right to purchase insurance on behalf of themselves or anyone acting in a fiduciary capacity with respect to the Plan and Trust, to cover liability or losses occurring by reason of the act or omission of a fiduciary, if such insurance permits recourse by the insurer against the fiduciary in the case of a breach of a fiduciary obligation by such fiduciary.
        11.10 Accounting by Trustees. Each year the Trustees shall render to the Company an account of their administration of the Trust for the year ending on the preceding 31st of December. The written approval of said account by the Board of Directors or the Executive Committee of the Company shall, as to all matters and transactions stated therein or shown thereby, be final and binding upon all persons who are then or who may thereafter become interested in this Plan and Trust.
        11.11 Compensation. No Trustee shall receive any compensa-tion for his services as such Trustee. In the administration of said Trust, the Trustees, if they deem it advisable, may employ an executive director, secretary or treasurer and fix reasonable compensation therefor, and a Trustee may act as such executive director, secretary or treasurer and receive the compensation so fixed. The Trustees may in their discretion employ clerical help, actuaries, accountants, attorneys or other necessary personal services of a person or corporation as may be necessary to properly administer, defend and protect the Trust, and reasonable compensa-tion for said services may be paid by the Trustees from the Trust in the event the Company does not elect to pay for such services. Any taxes that may be levied against said Trust shall be paid by the Trustees from the Trust assets after liability for said taxes, if any, has been established, and in determining the liability for taxes the Trustees are specifically authorized to use their own discretion in contesting taxes claimed to be due against said Trust, and said Trustees may employ counsel for such purposes and pay said counsel fees from the Trust assets in the event the Company does not elect to pay said costs and fees.
        11.12 Trustees and Vacancies. The Trustees administering this Trust shall at all times be Officers of the Company, and any Trustee may at any time be removed from the office of Trustee, with or without cause, by the Board of Directors or the Executive Com-mittee of the Company. The Trustees named herein shall serve as such Trustees until their resignation, death or removal by the Board of Directors or the Executive Committee of the Company. When any Trustee ceases to be an Officer of the Company, he automati-cally ceases to be a Trustee. Resignation of a Trustee shall be by written notice given to the Board of Directors or the Executive Committee of the Company. Whenever a vacancy occurs by resigna-tion, death or removal of one (1) or more of the Trustees, the Board of Directors or the Executive Committee shall promptly fill said vacancy or vacancies so created by naming a successor Trustee or successor Trustees possessing the qualifications herein prescribed. All successor Trustees shall have the same powers in connection with said Trust as the initial Trustees have, and they shall be subject to the same limitations and directions as prescribed herein for the initial Trustees.
        11.13 Rules. The Trustees may make proper rules for carrying out the purposes of the Trust, and may amend said rules from time to time. A majority of the Trustees shall constitute a quorum, and the action taken by a quorum shall be controlling and shall be deemed the act of the Trustees. The Trustees may designate any one (1) of their number to act as chairman or presiding officer. Any one (1) of the Trustees shall be and is hereby authorized to affix his signature as the signature of all the Trustees when such may be desirable in the performance of their duties pursuant hereto. This Plan and Trust shall be construed and enforced according to the Laws of the State of Missouri, and all provisions thereof shall be administered according to the laws of such state. Any suit at law or in equity brought against the Trustees or the Company by any person, firm or corporation, including the participants in the Plan, must be first instituted in Jackson County, Missouri, which County and State is the situs of the parties hereto and the only jurisdiction within which this Plan and Trust is to be administered or located.

ARTICLE XII

Allocations Limitations

        12.1 Maximum Limitation. Commencing January 1, 1983, in no event shall the sum of the annual additions to a participant’s account for any Plan year exceed the lesser of:

(a)

(i) Thirty thousand dollars ($30,000.00) or such higher amount as may be prescribed by regulations issued pur-suant to Section 415(d) of the Internal Revenue Code to reflect increases in the cost of living; plus (ii) the lesser of thirty thousand dollars ($30,000.00) (as adjusted for cost of living increases) or the amount of Company stock contributed to the Plan; [Effective January 1, 1989, Subparagraph (ii) is deleted] or

(b)

Twenty-five percent (25%) of such participant's compen-sation for the Plan year.

         Commencing January 1, 2002, the annual additions to a participant's account for any Plan year shall not exceed the lesser of:

(a)	(a) Forty-thousand dollars ($40,000.00) [subject to annual adjustments pursuant to Internal Revenue Code Section 415(d)].
(b)	One hundred percent (100%) of such participant’s com-pensation within the meaning of Internal Revenue Code Section 415(c)(3) for the Plan year.

        The compensation limit referred to in (b) shall not apply to any contribution for medical benefits after separation from service [within the meaning of Internal Revenue Code Sections 401(h) or 419A(f)(2)] which is otherwise treated as an annual addition.
        No more than one-third (1/3) of the Company contributions for a year shall be allocated to the group of “highly compensated employees” defined as follows:
        Prior to January 1, 1997, an employee who, during the year or the preceding year:

(1)	Was at any time a five percent (5%) owner of the company,
(2)	Received compensation from the company in excess of seventy-five thousand dollars ($75,000.00),
(3)	Received compensation from the company in excess of fifty thousand dollars ($50,000.00) and was in the top-paid group of employees for such year, or
(4)	Was at any time an officer and received compensation greater than fifty percent (50%) of the amount in effect under Section 415(b)(1)(A) of the Internal Revenue Code for such year.

        Beginning January 1, 1997, an employee who:

(5)	Was a five percent (5%) owner of the Company at any time during the year or preceding year, or
(6)	For the preceding year

A.	had compensation [as defined in Code Section 415(c)(3)] from the Company in excess of $80,000.00 and
B.	if the Company elects the application of this clause for the preceding year, was in the group consisting of the top twenty percent (20%) of the employees ranked on the basis of compensation paid during the preceding year.

        Annual additions to a participant’s account for a Plan year shall be the sum for any year of the Company’s contributions plus the amount of any employee contributions plus the forfeitures.
        12.2 Reallocation. If, but for the limitations set forth in Paragraph 12.1, the annual additions to a participant’s account for any Plan year would exceed the limitation set forth in that Para-graph, such annual additions shall be reduced to the extent necessary to comply with the requirements of Paragraph 12.1. Any portion of the Company’s contribution which must be reallocated as a result of the requirements of Paragraph 12.1 shall be reallocated among the accounts of the remaining active participants in the same manner as the initial allocation was made.
        12.3 Annual Additions Reduction. If any participant is a participant under any other Defined Contribution Plan maintained by the Company, the total of the annual additions to such partici-pant’s account from all such Defined Contribution Plans shall not exceed the limitations set forth in Paragraph 12.1. If it is determined that as a result of the limitation set forth in the preceding sentence, the annual additions to the participant’s account in this Plan must be reduced, such reduction shall be accomplished in accordance with the provisions of Paragraph 12.2.
        12.4 Annual Additions Reduction. If any participant is a participant under a Defined Benefit Plan maintained by the Company, the sum of the Defined Benefit Plan fraction for a Plan year and the Defined Contribution Plan fraction for that year shall be no greater than one (1.00). If it is determined that the limitation set forth in the preceding sentence has been exceeded, the numerator of the defined benefit plan fraction shall be adjusted by freezing or adjusting the rate of benefit authorized by the defined benefit plan so that the sum of both fractions shall not exceed one (1) for the respective participant. Effective January 1, 2000, this paragraph shall not apply.
        12.5 Retirement Plan. As used in this Section, the words "retirement plan" shall mean:

(a)	Any profit sharing, pension or stock bonus plan described in Section 401(a) and 501(a) of the Internal Revenue Code;
(b)	Any annuity plan or annuity contract described in Section 403(a) or 403(b) of the Internal Revenue Code;
(c)	Any qualified bond purchase plan described in Section 405(a) of the Internal Revenue Code; and
(d)	Any individual retirement account, individual retirement annuity or retirement bond described in Section 408(a), 408(b) or 409 of the Internal Revenue Code.

        12.6 Defined Contribution Plan. As used in this Section, the words “Defined Contribution Plan” shall mean a retirement plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the par-ticipant’s account and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s accounts.
        12.7 Defined Benefit Plan. As used in this Section, the words "Defined Benefit Plan" shall mean any retirement plan which is not a Defined Contribution Plan.
        12.8 Defined Benefit Plan Fraction. As used in this Section, the words "Defined Benefit Plan fraction" shall mean, for any Plan year, a fraction,

(a)

the numerator of which is the projected annual benefit of the participant, that is, the annual benefit to which he would be entitled under the terms of the Defined Benefit Plan on the assumptions that he continues employment until his normal retirement date as determined under the terms of the Defined Benefit Plan, that his compensation continues at the same rate as in effect in the Plan year under consideration until his normal retirement date and that all other relevant factors used to determine bene-fits under such Defined Benefit Plan remain constant as of the current Plan year for all future Plan years, under all Defined Benefit Plans maintained by the Company determined as of the close of the Plan year, and

(b)

the denominator of which is the lesser of: (i) the maximum dollar limit for such year (for example, ninety thousand dollars ($90,000.00) for 1983 and adjusted annually for increases in the cost of living as permitted under Section 415(d) of the Internal Revenue Code) times 1.25, or (ii) the percentage of compensation limit for such year times 1.4.

        12.9 Defined Contribution Plan Fraction. As used in this Section, the words "Defined Contribution Plan fraction" shall mean, for any Plan year, a fraction,

(a)	the numerator of which is the sum of the annual additions to the participant's account under all Defined Contri-bution Plans maintained by the Company in that Plan year, and
(b)	the denominator of which is the sum of the lesser of the following amounts, determined for the year and for each prior year of service with the Company: (i) the product of 1.25 multiplied by the dollar limitation in effect for the year, or (ii) the product of 1.4 multiplied by the percentage of compensation limit (IRC § 415 (e)(3) as amended).
(c)	In computing the defined contribution plan fraction above, for years ending after December 31, 1982, at the election of the Company, the amount to be taken into account for all years ending before January 1, 1983, may be computed to be an amount equal to the denominator of the fraction, as in effect for the year ending in 1982, multiplied by a transition fraction,

1.	the numerator of which is the lesser of (i) fifty-one thousand eight hundred seventy-five dollars ($51,875.00), or (ii) 1.4 multiplied by twenty-five per cent (25%) of the participant's compensation for the year ending in 1981, and
2.	the denominator of which is the lesser of (i) forty-one thousand five hundred dollars ($41,500.00), or (ii) twenty-five per cent (25%) of the participant's compensation for the year ending in 1981.

ARTICLE XIII

General Provisions

        13.1 Expenses. The Company shall pay all expenses incurred in administering the Plan and managing the Trust assets. The Company shall not pay any brokerage fees, commissions, stock transfer taxes and other charges and expenses in connection with the purchase and sale of securities under the Plan, unless specifically approved by the Executive Committee, or its designated subcommittee.
        13.2 Source of Payment. Benefits pursuant to the Plan shall be payable only out of the assets of the Trust. No person shall have any right under the Plan with respect to the assets of the Trust, or against any Trustee, insurance company or the Company, except as specifically provided for herein.
        13.3 Inalienability of Benefits. The interest hereunder of any participant or beneficiary except as may be required by a Qualified Domestic Relations Order defined in Section 414(p) of the Internal Revenue Code, or as otherwise provided in Section 401(a)(13) of the Internal Revenue Code, shall not be alienable, either by assignment or by any other method, and to the maximum extent permissible by law, shall not be subject to being taken, by any process whatever, by the creditors of such participant or beneficiary.
        13.4 No Right to Employment. Nothing herein contained nor any action taken under the provisions hereof shall be construed as giving any employee the right to be retained in the employment of the Company.
        13.5 Accrued Benefit. The term "accrued benefit" shall mean the value of a participant's account or accounts with respect to all funds in this Plan.
        13.6 Uniform Administration. Whenever in the administration of the Plan any action is required by the Committee, such action shall be uniform in nature as applied to all persons similarly situated and no such action shall be taken which will discriminate in favor of shareholders of the Company, highly compensated par-ticipants or participants whose principal duties consist of supervising the work of others.
        13.7 Beneficiary. The word "beneficiary" shall be deemed to include the estate of the participant, dependents of the partici-pant, persons who are the natural objects of the participant’s bounty, and any person designated by the participant to share in the benefits of the Plan and Trust after the death of the participant. Wherever the rights of participants are stated or limited herein, their beneficiaries shall be bound thereby.
        13.8 Severability. In the event that any provision of this Plan and Trust shall be held invalid or illegal for any reason, such determination shall not affect the remaining provisions of this Plan, but this Plan shall be construed and enforced as if such invalid or illegal provision had never been included in the Plan. This Plan shall be construed in accordance with the Laws of the State of Missouri.
        13.9 Articles. Titles of Articles are for general information only and this Plan shall not be construed by reference to such titles.
        13.10 Gender. Words used in the masculine gender shall be read and construed to include the feminine gender.
        13.11 Plural. Wherever required, the singular of any word in this Plan and Trust shall include the plural and the plural may be read in the singular.
        13.12 Disability. The term "disability" as used in this Plan means a physical or mental condition of a participant which results in the receipt of benefits by such participant pursuant to the provisions of either the Kansas City Life Disability Plan or the Sunset Life Disability Plan.
        13.13 Compensation. For the purposes herein, the term “com-pensation” shall include all compensation, as defined in Regulation 1.415-2(d)(11)(i) of the Internal Revenue Code, due and payable to an employee by the Company, including any amount not includable in the gross income of an employee under Internal Revenue Code Sections 125, 132(f)(4), 402(e)(3), 402(h) and 403(b).
        13.14 Initial Qualifications. The Company reserves the right to have all its contributions returned to it free of this Trust, and to terminate said Plan and Trust, if the Trust does not initially meet the qualification requirements of the Internal Revenue Code for an employee stock option plan.
        13.15 Company. The term “Company” means Kansas City Life Insurance Company, a Missouri Corporation, Sunset Life Insurance Company of America, a Missouri Corporation, and Old American Insurance Company, a Missouri Corporation, and any other subsidiary corporation of Kansas City Life Insurance Company required to be treated as a single employer under Internal Revenue Code Section 414(b), (c), (m) and (o), any or all of which may sometimes be referred to herein as affiliated corporations.
        13.16 Employee. The term “employee” shall mean any person employed by Kansas City Life Insurance Company or any subsidiary corporation under the rules of common law, and shall not include agents, general agents, consultants or other independent con-tractors, or, effective January 1, 1989, leased employees as defined in Section 414(n) and (o) of the Internal Revenue Code. Effective January 1, 1997, “leased employee” shall mean any person other than an employee of the Company who has performed services for the Company under an agreement between the Company and a leasing organization on a substantially full time basis for at least one (1) year, provided such services are performed under the primary direction or control by the Company.
        Leased employees shall not participate in this Plan. Further-more, a person who is not designated as an “employee” in the Company’s employment records during a particular period of time, including a person designated as an “independent contractor”, is not to be considered to be an employee during that period of time. Such a person shall not be considered to be an employee even if a determination is made by the Internal Revenue Service, the Depart-ment of Labor, or any other government agency, court, or other tribunal, that such person is an employee for any purpose, unless and until the Company in fact designates such person as an employee for purposes of this Plan. If such a designation is made, the designation shall be applied prospectively only unless the Company specifically provides otherwise.
        13.17 Company Stock. The term "Company stock" shall mean shares of the common capital stock of Kansas City Life Insurance Company.
        13.18 Executive Committee. Wherever in the Plan and Trust the term "Executive Committee" is used, it shall be taken to mean only the Executive Committee of the Board of Directors of Kansas City Life Insurance Company.
        13.19 Board of Directors. Wherever in the Plan and Trust the term “Board of Directors” is used, it shall be taken to mean only the Board of Directors of Kansas City Life Insurance Company.
        13.20 Affiliated Company Participation. Notwithstanding any- thing in this Agreement to the contrary, no employee of any subsidiary or affiliated corporation of Kansas City Life Insurance Company shall have the right to participate in this Plan unless such Plan shall have been adopted by the corporation for which such employee is employed.
        13.21 Direct Rollovers. The provisions of this Paragraph shall be effective January 1, 1993 and apply to distributions after January 1, 1993. Notwithstanding any provision of this Plan to the contrary, a distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retire-ment plan specified by the distributee in a direct rollover. The Administrative Committee may prescribe the time and manner in which this election is made.
        As used in this Paragraph, "eligible rollover distribution", "eligible retirement plan", "distributee" and "direct rollover" shall mean:

(a) "Eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee. However, an eligible rollover distribution shall not include:

(i)	Any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expec-tancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten (10) years or more;
(ii)	Any distribution required under Code Section 401(a)(9); or
(iii)	The portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities.

(b) "Eligible retirement plan" is:

(i)	An individual retirement account (described in Code Section 408(a)) or individual retirement annuity (described in Code Section 408(b)); or
(ii)	An annuity plan (described in Code Section 403(a)); or
(iii)	A qualified trust (described in Code Section 401(a)) that accepts the distributee’s eligible rollover distribution. However, in the case of an eligible rollover distribution to a surviving spouse, eligible retirement plan shall mean only the items in (i) above.
(iv)	Beginning January 1, 2002, an annuity contract described in Code Section 403(b) and an eligible plan described in Code Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan.

(c)	“Distributee” shall include an employee or former em-ployee. An employee’s or former employee’s surviving spouse and the employee’s or former employee’s spouse or former spouse who is an alternate payee under a Qualified Domestic Relations Order (defined in Code Section 414(p)) are distributees with regard to the interest of the spouse or former spouse.
(d)	“Direct rollover” is a payment by the Plan to the eligible retirement plan specified by the distributee. The Plan shall withhold twenty percent (20%) of an eligible rollover distribution which is not paid to an eligible retirement plan.

        13.22 Participants who Enter Armed Forces. Effective December 12, 1994, notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accord-ance with Code Section 414(v).
        13.23 Contribution Under Mistake of Fact. If a contribution is made by the Company by a mistake of fact, such contribution may be returned to the Company within one (1) year after the payment of the contribution. Any contribution returned to the Company shall not include any investment earnings thereon, but shall be net of any investment losses thereon.
        13.24 Contributions Conditioned on Deductibility. Company contributions are expressly conditioned upon deductibility of contributions under Section 404 of the Internal Revenue Code. If any part or all of a contribution is disallowed as a deduction under Section 404, then to the extent a contribution is disallowed as a deduction, it may be returned to the Company within one (1) year after the later of the date of payment of the contribution or the date the deduction for the contribution was disallowed. Any contributions returned shall not include any investment earnings thereon, but shall be net of any investment losses thereon.

ARTICLE XIV

Top Heavy Provisions

        14.1 Compensation Limits. With respect to compensation as defined in this Plan, for any Top Heavy Plan year, compensation in excess of one hundred fifty thousand dollars ($150,000.00), and, commencing January 1, 2002, two hundred thousand dollars ($200,000.00), or such other amount as the Secretary of the Treasury may designate, shall be disregarded. This amount will be adjusted in accordance with Internal Revenue Code Sections 401(a)(17) and 415(d), and regulations thereunder.
        14.2 Key Employee. “Key employee” means any employee or former employee (and his beneficiaries) who, at any time during the Plan year or any of the preceding four (4) Plan years, is:

(a)	An officer of the Company, as that term is defined within the meaning of the regulations under Internal Revenue Code Section 416. For the years 1984 through 1987, an officer is not treated as a key employee if the officer has an annual compensation of forty-five thousand dollars ($45,000.00) or less.
(b)	One of the ten (10) employees owning (or considered as owning within the meaning of Code Section 318) the largest interests in all employers required to be aggregated under Code Sections 414(b), (c), and (m). However, an employee will not be considered a top ten (10) owner for a Plan year if the employee earns less than thirty thousand dollars ($30,000.00), or such other amount adjusted in accordance with Code Section 415(c)(1)(A) as in effect for the calendar year in which the determination date falls.
(c)	A five percent (5%) owner of the Company. “Five percent (5%) owner” means any person who owns (or is considered as owning within the meaning of Code Section 318) more than five percent (5%) of the outstanding stock of the Company or stock possessing more than five percent (5%) of the total combined voting power of all stock of the Company.
(d)	A one percent (1%) owner of the Company having an annual compensation from the Company of more than one hundred fifty thousand dollars ($150,000.00). “One percent (1%) owner” means any person who owns (or is considered as owning within the meaning of Code Section 318) more than one percent (1%) of the outstanding stock of the Company or stock possessing more than one percent (1%) of the total combined voting power of all stock of the Company. In determining percentage ownership hereunder, employers that would otherwise be aggregated under Code Sections 414(b), (c), and (m) shall be treated as separate em-ployers. However, in determining whether an individual has compensation of more than one hundred fifty thousand dollars ($150,000.00) compensation from each employer required to be aggregated under Code Sections 414(b), (c), and (m) shall be taken into account.

        14.3 Non-Key Employee. "Non-key employee" means any employee who is not a key employee.
        14.4 Super Top Heavy Plan. "Super Top Heavy Plan" means, for Plan years commencing after December 31, 1983, that, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of the Company’s aggregation group, exceeds ninety percent (90%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of the Company’s aggregation group.
        14.5 Top Heavy Plan. "Top Heavy Plan" means, for Plan years commencing after December 31, 1983, that, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of the Company’s aggregation group, exceeds sixty percent (60%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of the Company’s aggregation group.
        14.6 Top Heavy Plan Year. "Top Heavy Plan Year" means any calendar year after December 31, 1983 in which the Plan is a top heavy plan.
        14.7 Top Heavy Plan Requirements.

(a) For any “Top Heavy Plan Year”, the following provisions shall apply notwithstanding any other provision in this Plan to the contrary:

1.	Any person who is a participant in this Plan in any year in which it shall be a “Top Heavy Plan” shall have his or her benefits vested in accordance with the following schedules: Twenty Percent (20%) after two (2) years of service; Forty percent (40%) after three (3) years of service; Sixty percent (60%) after four (4) years of service; Eighty per-cent (80%) after five (5) years of service; One hundred percent (100%) after six (6) years of service.
	Effective January 1, 1989, there shall be no decrease in a participant’s nonforfeitable percentage in the event the Plan’s status as top heavy changes for any year. Further, if the vesting schedule shifts in and out of the above schedule for any year because the Plan’s top heavy status changes, such shift shall be considered an amendment of the vesting schedule. If this occurs, each participant with at least three (3) years of service with the Company may elect to have his nonforfeitable percentage determined without regard to the shift. The election period will begin with the date the deemed amendment is made and shall end on the later of:
	A.      Sixty (60) days after the deemed amendment is adopted;
	B.      Sixty (60) days after the deemed amendment is effective; or
	C.      Sixty (60) days after the participant is issued written notice of the deemed amendment by the Administrative Committee.
2.	Notwithstanding anything in this Plan to the contrary for any Top Heavy Plan Year, the Company shall make a minimum contribution for each non-key employee equal to three percent (3%) of such non-key employee’s salary.
3.	For any year in which this Plan is top heavy, each non-key employee will receive a minimum contribu-tion if the non-key employee has not separated from service at the end of the top heavy year, regard-less of whether the non-key employee has less than one thousand (1,000) hours of service in such year. Furthermore, such non-key employee shall receive such minimum contribution regardless of his or her level of compensation, and regardless of whether he or she declines to make a mandatory personal con-tribution.
4.	Notwithstanding the foregoing, so long as any non-key employee is covered by both the Company’s Pension Plan and this Plan, the minimum contribu-tion required herein shall be satisfied by the accrual of the defined benefit by the respective non-key employee for any top heavy year.
5.	If the Company shall be maintaining both this Plan and a defined benefit plan in any top heavy year, a factor of 1.0 must be applied to the dollar limits when the top heavy ratio exceeds ninety percent (90%).

        14.8 Determination of Top Heavy Status.

(a)	This Plan shall be a Top Heavy Plan for any Plan year commencing after December 31, 1983, in which, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of an aggregation group exceeds sixty percent (60%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of an aggregation group.
	If any participant is a non-key employee for any Plan year, but such participant was a key employee for any prior Plan year, such participant’s present value of accrued benefit and/or aggregate account balance shall not be taken into account for purposes of determining whether this Plan is a Top Heavy Plan (or whether any aggregation group which includes this Plan is a Top Heavy group).
(b)	This Plan shall be a Super Top Heavy Plan for any Plan year commencing after December 31, 1983, in which, as of the determination date, (1) the present value of accrued benefits of key employees, or (2) the sum of the aggregate accounts of key employees under this Plan and any Plan of an aggregation group, exceeds ninety percent (90%) of the present value of accrued benefits or the aggregate accounts of all participants under this Plan and any Plan of an aggregation group.
(c)	Aggregate account. A participant's aggregate account as of the determination date is the sum of:
	1.     His participant’s account balance as of the most recent valuation occurring within a twelve (12) month period ending on the determination date.
	2.     Contributions that would be allocated as of a date not later than the determination date, even though those amounts are not yet made or required to be made.
	3.     Any Plan distributions made within the Plan year that includes the determination date or within the four (4) preceding Plan years. However, in the case of distributions made after the valuation date and prior to the determination date, such distri-butions are not included as distributions for Top Heavy purposes to the extent that such distribu-tions are already included in the participant’s aggregate account balance as of the valuation date. Notwithstanding anything herein to the contrary, all distributions, including distributions made prior to January 1, 1984, will be counted.
	4.     Any employee contributions, whether voluntary or mandatory. However, amounts attributable to tax deductible qualified employee contributions shall not be considered to be a part of the participant’s aggregate account balance.
(d)	"Aggregation group" means either a required aggregation group or a permissive aggregation group as hereinafter determined.
	1.     Required aggregation group. In determining a re-quired aggregation group hereunder, each Plan of the Company in which a key employee is a parti-cipant, and each other Plan of the Company which enables any Plan in which a key employee participates to meet the requirements of Code Sections 401(a)(4) and 410, will be required to be aggregated. Such group shall be known as a required aggregation group. In the case of a required aggregation group, each Plan in the group will be considered a Top Heavy Plan if the required aggregation group is a Top Heavy group. No Plan in the required aggregation group will be considered a Top Heavy Plan if the required aggregation group is not a Top Heavy group.
	2.     Permissive aggregation group. The Company may also include any other Plan not required to be included in the required aggregation group, provided the resulting group, taken as whole, would continue to satisfy the provisions of Internal Revenue Code Sections 401(a) or 410. Such group shall be known as a permissive aggregation group.
	In the case of a permissive aggregation group, only a Plan that is part of the required aggregation group will be considered a Top Heavy Plan if the permissive aggregation group is a Top Heavy group. No Plan in the permissive aggregation group will be considered a Top Heavy Plan if the permissive aggregation group is not a Top Heavy Plan group.
	3.     Only those Plans of the Company in which the determination dates fall within the same calendar year shall be aggregated in order to determine whether such Plans are Top Heavy Plans.
(e)	“Determination date” means (1) the last day of the preceding Plan year, or (2) in the case of the first Plan year, the last day of such Plan year.
(f)	Present value of accrued benefit. In the case of a defined benefit plan, a participant’s present value of accrued benefit shall be as determined under the provisions of the applicable defined benefit plan.
(g)	"Top Heavy group" means an aggregation group in which, as of the determination date, the sum of:
	1.      The present value of accrued benefits of key employees under all defined benefit plans included in the group; and
	2.     The aggregate accounts of key employees under all defined contribution plans included in the group, exceeds sixty percent (60%) of a similar sum determined for all participants.
(h)	“Top Heavy Plan year” means that, for a particular Plan year commencing after December 31, 1983, the Plan is a Top Heavy Plan.
(i)	Notwithstanding anything herein to the contrary, the effective date otherwise provided for herein for the application of Code Section 416 to this Plan (Plan years beginning after December 31, 1983) shall be extended in accordance with any legislative act of Congress.

        14.9 Modification of Top Heavy Rules.

(a)	For Plan years beginning after December 31, 2001, this paragraph shall apply for purposes of determining whether the Plan is top heavy under Code Section 416(g), and whether the Plan satisfies the minimum requirements of Code Section 416(c) for such years. This paragraph amends paragraphs of this ARTICLE XIV, including, but not limited to, part or all of Paragraphs 14.2, 14.7(a)1 and (a)2, and 14.8(c)3.
(b)	“Key employee” means any employee or former employee (including any deceased employee) who at any time during the Plan year that includes the determination date was an officer of the Company having annual compensation greater than $130,000.00 [as adjusted under Code Section 416(i)(1)] for Plan years beginning after December 31, 2002, a five percent (5%) owner of the Company, or a one percent (1%) owner of the Company having annual compen-sation of more than $150,000.00. For this purpose, annual compensation means compensation within the meaning of Code Section 415(c)(3). The determination of who is a key employee will be made in accordance with Code Section 416(i)(1) and the applicable regulations and other guidance of general applicability issue thereunder.
(c)	For purposes of determining the present values of accrued benefits and the amounts of account balances of employees as of the determination date, the following shall apply:
	1.     The present value of accrued benefits and the amounts of account balances of a employee as of the determination date shall be increased by the distributions made with respect to the employee under the Plan and any plan aggregated with the Plan under Code Section 416(g)(2) during the one (1) year period ending on the determination date. The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than separation from service, death or disability, this provision shall be applied by substituting “five (5) year period” for “one (1) year period”.
	2.     The accrued benefits and accounts of any individual who has not performed services for the Company during the one (1) year period ending on the deter-mination date shall not be taken into account.
(d)	Company matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of Code Section 416(c)(2) and the Plan. Company matching contributions that are used to satisfy the minimum contribution requirements shall be treated as matching contributions for purposes of the actual contribution percentage test and other requirements of Code Section 401(m).
(e)	Notwithstanding the foregoing, so long as any non-key employee is covered by both this Plan and the Kansas City Life Insurance Company Cash Balance Pension plan, the minimum contribution required herein shall be satisfied by the accrual of the defined benefit minimum by the respective non-key employee for any top heavy year.

        IN WITNESS WHEREOF, the Company has caused this Thirteenth Amendment to be executed by its authorized Officers and its Corporate Seal to be hereunto affixed, and the Trustees have executed this Trust, all on the day of , 2001.

KANSAS CITY LIFE INSURANCE COMPANY

By:                          

Its: Vice President

ATTEST:



By:                                 

Its: Assistant Secretary

TRUSTEES           

EX-13

FINANCIAL SECTION

To Our Stockholders

        Management prepared the following consolidated financial statements and all other financial information included in this Annual Report and is responsible for its integrity, consistency and objectivity. In preparing these statements, management necessarily made certain estimates and judgments and selected accounting principles in conformity with generally accepted accounting principles in the United States appropriate in the circumstances.
        The Company maintains a system of internal accounting controls and procedures to provide reasonable assurance, at an appropriate cost, that its assets are protected and that its financial transactions are properly authorized and recorded. Qualified personnel in the Company maintain and monitor these internal controls on an ongoing basis.
        The Audit Committee of the Board of Directors, composed solely of outside directors, meets as required, not less than annually, with the independent auditors, management and the internal auditors. Each has free and separate access to the Committee. The Committee reviews audit procedures, scope and findings, and the adequacy of the Company's financial reporting.
        The independent auditors, KPMG LLP, are elected by the Board of Directors to audit the financial statements and render an opinion thereon.

/s/Tracy W. Knapp

Tracy W. Knapp

Senior Vice President, Finance

Contents:

Management's Discussion ........................... 22

Selected Financial Data ............................... 24

Financial Statements .................................... 28

Notes to These Statements ........................... 32

Reports of Independent Auditors ..................43

Stockholder Information .............................. 44

MANAGEMENT'S DISCUSSION
and analysis of financial condition and results of operations

Operating Results

        Net income per share rose 11 percent in 2000 but then declined 39 percent in 2001 to $2.49 a share. Operating revenues, which exclude the volatility of realized investment gains and losses, were level last year but declined 2 percent this year. Operating profit margins averaged 9.5 percent over the last three years while return on equity averaged 7.31 percent during the same period.

        These results are best analyzed by reviewing each of the Company's operating segments. However, corporate-wide factors, including investment and operating expense performance, are discussed first.

        Net investment income declined 2 percent after remaining unchanged in 2000. The investment portfolio's book value, net of borrowings, rose 2 percent this year as its net yield declined 22 basis points. The investments' book value declined 1 percent last year as its net yield rose slightly. Interest margins for the interest sensitive products were maintained this year but narrowed slightly last year. Ninety percent of this year's new investments were securities and 7 percent were mortgages. Last year mortgages comprised 15 percent of new investments. Net realized investment losses equaled $15.7 million in 2001 and $3.9 million in 2000, compared to a $2.9 million realized gain in 1999. The increased losses the past two years reflected the downturn in the economy and general volatility in the financial markets. The table to the right reflects the gross realized gains and losses incurred the past three years.

        The securities portfolio, which represents 73.2 percent of the Company's investments, is broadly diversified in terms of the number of issues, industries and sectors represented. The percentage of investment grade securities in the portfolio increased slightly over the past two years to 92 percent currently. Delinquencies and defaults represent 0.7 percent of the portfolio. Various measures have been taken to manage the portfolio's credit and interest rate risks as discussed in the Market and Interest Rate Risk Analysis Section later in this Discussion. Kansas City Life reviews its securities' values on an ongoing basis. Several factors are analyzed in evaluating securities including an analysis of the company, its industry, valuation levels and subsequent developments. Based upon these inputs, the Company wrote down the value of several securities whose impairment in value was considered to be other than temporary.

        The mortgage portfolio, which represents 14.9 percent of total investments, is primarily comprised of commercial loans on industrial warehouses and office buildings. The loans are generally dispersed geographically, but no loans have been placed in the Northeast and one-third of the properties are located in California. None of these mortgages has been restructured nor has there been any delinquent loans or loans in foreclosure over the past two years. The portfolio's estimated fair value exceeds its carrying value by $8.8 million.

        Real estate investments represent 3.3 percent of the investment portfolio. They consist principally of office buildings, shopping center joint ventures and industrial warehouses that are both completed and in the development stage. These properties' carrying value is below their estimated fair value. Real estate sales generated $2.0 million in net gains this year and $4.3 million last year.

                                 2001     2000       1999
                                       (Thousands)
Gross gains resulting from:
  Sales of securities         $  17,971    7,526    9,482
  Securities called                 359    2,104      745
  Mortgage reserve release            -    2,970    1,500
  Sales of real estate and
    joint ventures                2,559    4,395    3,928

     Total gross gains           20,889   16,995   15,655

Gross losses resulting from:
  Sales of securities           (16,132) (13,545)  (8,904)
  Write-downs of securities     (18,054)  (7,628)  (1,754)
  Securities called              (2,548)    (403)  (2,157)
  Sales of real estate and
     joint ventures                (511)     (80)    (244)

     Total gross losses         (37,245) (21,656) (13,059)

Related deferred policy
  acquisition costs                 608      790      264
Net realized gains (losses)   $ (15,748)  (3,871)   2,860

        This year's operating expenses were significantly impacted by litigation against the Company. Over the past several years, life insurers have faced extensive claims, including class action lawsuits, alleging improper marketing practices. Sunset Life is the defendant in such a class action suit regarding its sales practices. The Company increased its litigation provision for a potential settlement in this suit by $16.3 million late in the year based upon information then available. The practices in question occurred considerably before Sunset's operations were merged into Kansas City Life during 1999.

        Home office operating expenses, excluding the above increase in legal reserves and related legal fees, declined 1 percent this year and 3 percent last year. This pattern continues the Company's long-standing commitment to improving efficiency and controlling its operating costs.

        The Company's effective income tax rate declined slightly from 29.7 percent in 1999 to 28.4 percent for 2000. The rate dropped considerably to 5.1 percent for the current year due to two occurrences. Pretax earnings declined for the year while tax credits arising from investments in affordable housing properties remained unchanged. Additionally, $4.3 million in income tax allowances were released as IRS audits were completed, thus lowering taxes.

        The following describes the financial performance of each of the Company's four reportable operating segments: the Parent Company, divided between its individual and group insurance operations, and each of its life insurance affiliates. Refer also to the Segment Information Note to the Consolidated Financial Statements.

Kansas City Life Insurance Company - Individual Insurance

        Interest sensitive products contribute approximately half of the Parent Company's individual direct insurance premiums, variable products generate approximately one-third of the total and traditional products 15 percent. Universal life and annuity products provide 85 percent of total premiums. These products are marketed through a nationwide general agency distribution system. The average policy size has risen the past several years as variable products have become increasingly important to the mix of business. This segment, which includes the banking and brokerage operations, accounts for approximately three-fourths of consolidated sales and net income, and 42 percent of consolidated insurance revenues.

        Variable products have increasingly dominated the segment's sales mix over the past few years. However, the lagging stock market made interest sensitive products more appealing to the consumer this year. Sales, in terms of new annualized premiums, declined 7 percent this year after rising 1 percent last year. Variable sales rose 11 percent in 2000 but this growth largely was offset by declining interest sensitive sales. This year the reverse occurred. Variable sales declined by a third as interest sensitive sales, principally annuities, nearly doubled. Variable sales constituted half of the segment's sales this year, while interest sensitive sales accounted for 40 percent.

        Current year insurance revenues, including renewal receipts, were 3 percent below those of two years ago. Contract charges, associated with the interest sensitive and variable businesses, were level over this period. Two factors restrained growth. First, surrender charges declined, reflecting reduced surrender activity as discussed below. Second, policy charges on variable products were adversely impacted by declining accumulated values due to the depressed stock market. Life premiums decreased 12 percent over the period, reflecting the decline of traditional life business.

        Policy surrender rates on universal life business improved in 2001 after holding steady the previous two years. Surrender rates in the flexible annuity line deteriorated last year but improved considerably this year as market interest rates fell. Surrender rates rose in the variable line the past two years reflecting the difficult stock market. Changes in surrender rates have little bottom line impact in the year they occur, but they directly affect the Company's future earning power.

        Net income declined 29 percent this year after rising 3 percent a year ago. Net margins averaged 11.9 percent in 1999 and 2000 before dropping to 9.3 percent this year. Much of the decline in earnings and margins this year reflects increased realized investment losses in the segment, which rose from $300,000 last year to $14.1 million this year. These losses were cushioned somewhat by the release of tax allowances as mentioned previously. Also, both 1999 and 2000 benefited by $4.0 million from unlocking, or changing, deferred acquisition cost assumptions to reflect the emergence of actual profit margins, which were better than assumed. However, unlocking these assumptions benefited pretax earnings just $0.6 million this year.

Kansas City Life Insurance Company - Group Insurance

        Kansas City Life markets group life, dental and disability coverages as well as claim administration services. Dental coverage provides two-thirds of the segment's revenues. Group products are marketed through the Company's sales force and appointed group agents. The group market is sizable and offers a significant avenue for growth. However, this market is extremely competitive, so achieving profitable sales growth is challenging. Kansas City Life has taken significant steps the past several years in an effort to increase the segment's profitability. First, the stop loss line was discontinued in late 1999. Second, the long-term disability line was reinsured late that year as well. The Company continues to offer long-term disability coverage, but 80 percent of the business is reinsured. Third, all existing life waiver of premium business was reinsured this year. The group segment provides one-eighth of consolidated sales and nearly one-fourth of the Company's insurance revenues.

        Group sales rose 28 percent this year largely due to the addition of a significant block of dental business that caused dental sales to rise 37 percent. The dental line accounted for 83 percent of group sales. The segment's sales declined 8 percent last year due to the discontinuation of the stop loss line as noted above. Excluding stop loss, group sales rose 4 percent in 2000, again largely due to dental.

        Group's insurance revenues rose 2 percent this year and 5 percent a year ago. However, excluding the stop loss and long-term disability lines of business, revenues rose 7 percent and 12 percent in 2001 and 2000, respectively, due largely to growth in the dental line.

        The segment's earnings trend mirrored its claims ratio experience. Group's overall claims ratio a year ago was its best in five years as virtually every product line's experience improved. Thus earnings rebounded from 1999's loss to an $831,000 profit for 2000. However, the segment recorded a $692,000 loss this year as claims ratios deteriorated, principally in the dental line of business.

Sunset Life Insurance Company of America

        Sunset markets proprietary interest sensitive products, both universal life and flexible annuities, and term insurance as well as Kansas City Life's variable products to individuals through a personal producing general agency sales force. Sunset's operations were integrated into the corporate headquarters during 1999 in order to improve the affiliate's efficiency. Sunset generates 4 percent of consolidated sales, as well as 9 percent of corporate insurance revenues.

        Sunset experienced double-digit sales declines the past two years. This decline was partially due to transitioning to new marketing management in late 1999 and the challenges this entails. Kansas City Life's Chief Marketing Officer was added to Sunset's management team this year in order to lend his marketing expertise to the affiliate. The new marketing initiative being implemented during the coming year at Kansas City Life will include Sunset as well.

        Insurance revenues declined over the past two years, reflecting the sales results noted above and substantial surrender rates in the flexible annuity line of business over the past several years. However, surrender activity in the line improved considerably this year as market interest rates fell and policy conservation efforts were heightened.

        Net income was level last year but fell to a $1.5 million net loss this year due to the increase in the litigation allowance noted earlier and legal costs related to the lawsuit. However, Sunset recorded a sizable benefit to earnings from the unlocking of deferred acquisition cost assumptions arising from the reinsurance of 80 percent of its life insurance business. Excluding costs related to the lawsuit, and net of the one-time unlocking benefit, net income rose 4 percent to $9.2 million.

SELECTED FINANCIAL DATA
(Thousands, except per share data)

                                         2001           2000        1999       1998       1997


Revenues:
  Insurance                        $   251,140        253,619      255,595    259,559     244,695

  Investment income, net               202,374        207,135      207,682    202,402     197,345
  Other                                 13,923         16,024       13,956     14,671       9,998
    Operating revenues                 467,437        476,778      477,233    476,632     452,038
  Realized investment gains (losses)   (15,748)        (3,871)       2,860     11,426      14,505
    Total revenues                 $   451,689        472,907      480,093    488,058     466,543

Net income                         $    29,922         49,083       45,045     48,512      44,861

Per common share:
  Net income, basic and diluted    $      2.49           4.08         3.66       3.92        3.63

  Cash dividends                   $      1.08           1.00          .96        .90         .88

  Stockholders' equity             $     47.04          44.28        40.86      46.58       42.84

Assets                             $ 3,764,589      3,646,261    3,621,284  3,577,414   3,439,452
Net return on invested assets             7.34  %        7.56         7.52       7.34        7.56
Life insurance in force            $26,644,910     26,938,904   26,747,316 26,641,664  26,595,709

The above is not covered by the Reports of Independent Auditors.
Per share data has been adjusted for a two-for-one stock split in June 1999.

Old American Insurance Company

        Old American sells final expense policies to the senior market through a Planned Production Agency distribution channel. This marketing concept offers exclusive sales territories, sales lead financing and proprietary products to the sales agents and has generated a core of dedicated agents. However, Old American faces two principal challenges: to grow this agency force and to compete effectively in an intensely competitive marketplace. The Company strengthened its underwriting efforts four years ago. This improved earnings, but also dampened sales growth over this period. Old American generates 7 percent of consolidated sales and one-fourth of consolidated insurance revenues and net income.

        Sales declined slightly over the past two years and total insurance revenues declined 2 percent over this period. While the recruitment and development of new agencies continues to be a significant challenge, this year the recruitment of new agents reached its highest level in five years.

        Old American's net income rose by more than half over the past two years. Improved mortality experience, increased operating efficiency and realized investment gains contributed to the rising earnings.

Market and Interest Rate Risk Analysis

        Kansas City Life holds a diversified portfolio of investments that includes cash, bonds, preferred stocks, mortgage-backed securities, commercial mortgages and real estate. Each of these investments is subject, in varying degree, to market risks that can affect their ability to earn a competitive return and the return affects their fair value. The majority of these assets are debt instruments of corporations or U.S. Government Sponsored Enterprises (GSE) and are considered fixed income investments. Thus the primary market risks affecting the Company are interest rate and credit risks.

        Coupon and dividend income represents the greatest portion of an investment's total return for most fixed income instruments. As interest rates fall, the coupon and dividend streams of older, higher-paying investments become relatively more valuable than newer, lower-yielding opportunities. Therefore the market value of the older, high-paying investments increases. The opposite effect occurs when interest rates rise. The fair market price of such investments is inversely related to market interest rates.

        Interest rates fell during 2001, causing Kansas City Life's investment portfolio to increase in value. Early this year the Federal Reserve Open Market Committee began lowering short-term interest rates to stimulate the economy, which in turn helped the valuations of short-term bonds. However, long-term interest rates (10 years and beyond) remained high, finishing the year at levels almost identical to those prevailing at the beginning of the year. Last year end, the book value of the securities exceeded its market value by $71.0 million. With the decline in short-term rates, book value exceeded market value by $38.4 million at year's end.

        Due to the complex nature of interest rate movements and their uneven effects on the value of fixed income investments, the Company uses sophisticated computer programs to help predict changes in the value of the portfolio. Assuming that changes occur equally over the entire term structure of interest rates or yield curve, it is estimated that a 100 basis point increase in rates would translate to a $90.7 million loss of market value for the $2.2 billion securities portfolio. Conversely, a 100 basis point rate decrease translates to a $88.1 million increase in market value. This relationship is generally termed duration, a mathematical measurement of the sensitivity of investment cash flow to small changes in market rates. Convexity, a term that applies to the skew in the securities' value changes for similar changes, both positive and negative, in interest rates, decreased slightly from last year and is now relatively flat. This is due to an increased concentration in mortgage-backed securities.

        Market changes rarely follow a linear pattern in one direction for any length of time. Within any diversified portfolio, an investor will likely find embedded options, both puts and calls, that change the structure of the cash flow stream. Mortgage-backed securities are particularly sensitive to interest rate changes. As long-term interest rates fall, homeowners become more likely to refinance their mortgage or move up to a larger home, causing a prepayment of the outstanding mortgage principal, which must then be reinvested at a lower rate. Should interest rates rise suddenly, prepayments expected by investors may cease, extending the maturity of a mortgage pool by many years. This represents a further interest rate risk to investors.

        The table on the next page details the nature of expected cash flows from the securities portfolio, including the cash flows from mortgage-backed securities pools and callable corporate bonds, and commercial mortgages. Calls and prepayments represent the principal amount expected to return to the Company if all options embedded in the portfolio are economically exercised, based on spot interest rates prevailing on December 31, 2001. Total principal equals invested cash scheduled to return in each year, including maturities, calls, sinking funds and prepayments.

        The majority of the Company's investments are exposed to varying degrees of credit risk--the risk that the value of the investment may decline due to deterioration in the financial strength of the issuer, and that the timely payment of principal or interest might not occur.

        Over the past three years, credit defaults in the marketplace have increased significantly. The increase in the default rate may be attributed to several factors, including the economic slowdown experienced by the U.S. economy the past two years, the increased use of leverage by corporate issuers, fraud, and adverse legal judgments against corporations, among others. A default by a rated issuer usually involves some loss of principal to the investor. Such loss can be mitigated by timely sales of affected securities or by active involvement in a restructuring process, which preserves the value of the underlying entity. However, there can be no assurance that the efforts of an investor will lead to favorable outcomes in a bankruptcy or restructuring.

        The Company mitigates this risk by diversifying the investment portfolio across a broad range of issuers, investment sectors and security types, by limiting the amount that it invests in any particular entity and by investing substantial amounts of the portfolio in instruments carrying a security lien against tangible asset collateral. Pledged collateral that retains its value increases bondholder recovery amounts in the case of bankruptcy or restructuring. With the exception of certain GSE's, there is no exposure to any single issuer in an amount greater than 0.7 percent of assets on a book value basis. Further, no single issuer represents more than 0.5 percent of assets unless that issuer collateralizes its securities with liens against tangible property.

        Kansas City Life currently owns $117.0 million of foreign bonds. Since these are denominated in U.S. dollars, there is no direct exposure to foreign currency risk. There is an indirect exposure to exchange markets to the extent that the issuers of these securities can obtain dollars to fully fund their obligations. There is no material foreign exposure in the Company's mortgage or real estate holdings.

        As interest rates rise, policyholders become more likely to surrender policies or to borrow against cash values, often to meet sudden needs in an inflationary environment or to invest in higher yielding opportunities elsewhere. This risk of disintermediation may force the Company to liquidate parts of its portfolio at a time when the fair market value of fixed income investments is falling. If interest rates fall, the Company may also be forced to invest new cash receipts at levels below the minimum guaranteed rates payable to policyholders, eroding profit margins. Due to its strong cash flow, the Company can usually adapt to small sudden changes in interest rates, or even large changes that occur over longer periods of time. Extreme sudden market volatility, however, poses the greatest risk and a number of steps are taken to quantify and mitigate this risk.

EXPECTED CASH FLOWS
(Millions)

                                                                                        There-  Total     Fair
                                           2002     2003    2004     2005       2006    after  Principal  Value

Corporate bonds currently callable       $    2       6        1        8          9       45      71     70
  Average interest rate                   12.53 % 10.54     9.77     7.61      11.84     6.98    8.06
Mortgage-backed securities and CMO's        166      43       37       29         22      133     430    422
  Average interest rate                    6.99 %  7.04     6.93     6.89       6.83     6.83    6.92
All other securities                        140     157       70      122         64      996   1 549  1 521
  Average interest rate                    5.12 %  7.07     8.05     8.25       7.51     7.32    7.30       
     Securities                             308     206      108      159         95    1 174   2 050  2 013

Average interest rate                      6.18 %  7.17     7.69     7.97       7.78     7.26    7.25

Commercial mortgages                         77      32       23       28         32      251     443    435
  Average interest rate                    8.42 %  8.08     7.70     7.84       7.90     7.84    7.87       
     Total                                $ 385     238      131      187        127    1 425   2 493  2 448
       Average interest rate               6.63 %  7.29     7.69     7.95       7.81     7.39    7.36       

The table shows expected cash flows from principal repayments of bonds in the form of maturities, calls, sinking funds and prepayments as well as principal repayments of commercial mortgages.

        Although the Company has rarely used derivatives due to a number of factors, including pricing, liquidity, and the net value to the Company’s business position, corporate policy would permit the purchase or sale of certain derivatives contracts, mainly in the form of caps, floors, swaps or options. Such contracts would work mainly as volatility insurance, to provide value in periods of extreme interest rate movement. Thus their value is largely a function of the likelihood of a rapid, dramatic market change. Kansas City Life conducts numerous probability-based computer simulations to test the effects on profitability of these market shifts, and to determine the value of derivatives hedging. As a policy, the Company does not trade such instruments for speculative purposes, and only enters into derivatives contracts to hedge a specific, identifiable risk for a specific period of time under specific conditions.

Changes in Accounting Standards

        FAS No. 141, "Business Combinations," and FAS No. 142, "Goodwill and Other Intangible Assets," will be adopted by the Company on January 1, 2002, and are not anticipated to have a significant impact on Kansas City Life's reported results. These Standards impact companies' accounting for business combinations and for the purchased goodwill and other intangible assets that arise from those combinations or are acquired otherwise. The purchase method of accounting is mandated and positive goodwill is no longer amortized annually. Instead it is tested for impairment annually and written off only to the extent it is determined to be impaired. Unallocated negative goodwill is to be recognized as an extraordinary gain.

Critical Accounting Policies

        The calculation of life insurance policy reserves is dependent upon estimates of future mortality experience. These estimates require judgments based upon the Company's past experience. If the actual mortality experience in a period varies from that assumed, the cushioning impact of the reserves released in relation to the death claims incurred will vary and may negatively impact the period's earnings. Much of the volatility in the Company's earnings over time is normally due to changes in mortality experience.

        Policy acquisition costs, principally agent commissions and other selling, selection and issue costs, are capitalized as incurred and amortized against earnings over the expected future profits of the business. Profit expectations are based upon estimates of future interest spreads, mortality margins, operating expenses and surrender experience. These estimates involve judgment and are compared to actual experience on an ongoing basis. If it is determined that the assumptions should be revised as to the profit expectations for the business, the assumptions are unlocked, or changed, with the impact of the change flowing through the current period's earnings.

        The review process to determine other than temporary declines in the value of the investment portfolio has been discussed previously.

Liquidity and Capital Resources

        Kansas City Life generated strong cash flows over the past three years. Funds provided by operations averaged $54.8 million annually and the Company funded $2.4 billion in new investments over the same period. Assets and liabilities' maturities and yields are matched and cash flow testing is performed to ensure funds will be available as needed to meet future policyholder obligations.

        The above excludes net proceeds from the variable line of business since these proceeds are largely partitioned into separate accounts and are not held in the Company's general investments. These separate accounts equaled $305.3 million this year end.

        Funds were borrowed over the three years but these were primarily in support of investment strategies. The Company maintains a number of short-term credit lines with the capacity to borrow additional capital for liquidity purposes. The Company also has agreements with banks to borrow additional funds under reverse repurchase agreements. Kansas City Life has additional borrowing capacity through its membership affiliation with the Federal Home Loan Bank. At year's end, outstanding balances under this agreement totaled $95.0 million, an amount that funds a portfolio of mortgage-backed securities. The Company currently has the capacity to add $84.7 million in borrowings with no additional capital commitment.

        Kansas City Life's statutory equity exceeds the minimum capital deemed necessary to support its insurance business, as determined by the risk based capital calculations and guidelines established by the National Association of Insurance Commissioners. The maximum stockholder dividends that can be paid in 2002 without prior approval of the Missouri Director of Insurance is $42.1 million.

        Stockholder equity per share, or book value, equaled $47.04 this year end, a 6 percent increase for the year. Book value, excluding the volatile effects of unrealized investment gains and losses, equaled $49.04 a share, 2 percent above a year ago. This January the Board of Directors extended the stock repurchase program through 2002 to potentially purchase up to one million of the Company's shares on the open market. This would represent 8 percent of the shares outstanding. No shares were purchased under this program this year.

CONSOLIDATED INCOME STATEMENT
(Thousands, except per share data and parenthetical comments)

                                                     2001        2000       1999


REVENUES
Insurance revenues:
  Premiums:
    Life insurance                            $     97,959      99,195     104,086
    Accident and health                             45,811      44,641      42,636
  Contract charges                                 107,370     109,783     108,873
Investment revenues:
  Investment income, net                           202,374     207,135     207,682
  Realized investment gains (losses), net          (15,748)     (3,871)      2,860
Other                                               13,923      16,024      13,956

      TOTAL REVENUES                               451,689     472,907     480,093


BENEFITS AND EXPENSES
Policyholder benefits                              275 645     276 840     281 172
Amortization of deferred acquisition costs          27,765      26 828      31 261
Insurance operating expenses                       116,739     100,735     103,597

TOTAL BENEFITS AND EXPENSES                        420,149     404,403     416,030

Income before Federal income taxes                  31,540      68,504      64,063

Federal income taxes:
  Current                                            9,116      15,633      21,172
  Deferred                                          (7,498)      3,788      (2,154)

                                                     1,618      19,421      19,018

NET INCOME                                    $     29,922      49,083      45,045

Basic and diluted earnings per share:

  Net income                                         $2.49        4.08        3.66

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEET

                                                                                  2001         2000
ASSETS
Investments:
  Fixed maturities:
    Available for sale, at fair value (amortized cost $2,098,175,000;
     $1,998,319,000 - 2000)                                                $    2,062,193    1,934,157
    Held to maturity, at amortized cost (fair value $80,463,000)                        -       80,572
  Equity securities available for sale, at fair value
     (cost $70,159,000; $100,866,000 - 2000)                                       67,759       94,269
  Mortgage loans, net                                                             433,095      396,731
  Real estate, net                                                                 61,777       44,443
  Real estate joint ventures                                                       33,320       34,185
  Policy loans                                                                    112,995      116,024
  Short-term investments                                                          127,984       54,171
  Other investments                                                                10,999            -

    TOTAL INVESTMENTS                                                           2,910,122    2,754,552
Cash                                                                                4,365       13,391
Accrued investment income                                                          37,457       41,028
Receivables, net                                                                    4,532        3,688
Property and equipment, net                                                        19,013       20,701
Deferred acquisition costs                                                        243,606      244,960
Value of purchased insurance in force                                              80,361       87,833
Reinsurance recoverables                                                          141,141      135,378
Deferred income taxes                                                               7,591        8,870
Other assets                                                                       11,118       10,712
Separate account assets                                                           305,283      325,148
                                                                           $    3,764,589    3,646,261
LIABILITIES AND STOCKHOLDERS' EQUITY
Future policy benefits:
  Life insurance                                                           $      772,224      775,381
  Accident and health                                                              43,725       45,905
Accumulated contract values                                                     1,640,081    1,619,887
Policy and contract claims                                                         34,969       34,083
Other policyholders' funds:
  Dividend and coupon accumulations                                                61,579       61,354
  Other                                                                            68,309       88,195
Notes payable                                                                      96,779       41,520
Current income taxes payable                                                       11,652        6,383
Other liabilities                                                                 164,304      116,151
Separate account liabilities                                                      305,283      325,148
     TOTAL LIABILITIES                                                          3,198,905    3,114,007
Stockholders' equity:
  Common stock, par value $1.25 per share
    Authorized 36,000,000 shares, issued 18,496,680 shares                         23,121       23,121
  Paid in capital                                                                  21,744       20,109
  Retained earnings                                                               668,255      651,324
  Accumulated other comprehensive loss, net of tax                                (38,806)     (55,280)
  Less treasury stock, at cost (6,470,052 shares; 6,475,203 shares - 2000)       (108,630)    (107,020)
     TOTAL STOCKHOLDERS' EQUITY                                                   565,684      532,254
                                                                           $    3,764,589    3,646,261

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                                                 2001      2000      1999


COMMON STOCK, beginning and end of year                 $       23,121    23,121     23,121

PAID IN CAPITAL:
  Beginning of year                                             20,109    18,498     17,633
  Excess of proceeds over cost of treasury stock sold            1,635     1 611        865

  End of year                                                   21,744    20,109     18,498

RETAINED EARNINGS:
  Beginning of year                                            651,324   614,278    581,074
  Net income                                                    29,922    49,083     45,045
  Other comprehensive income (loss):
    Unrealized gains (losses) on securities                     19,679     9,581   (104,921)
    Decrease (increase) in unfunded pension liability           (3,205)   (5 766)       360
  Comprehensive income (loss)                                   46,396    52,898    (59,516)
  Transfer other comprehensive (income) loss to
    accumulated other comprehensive income                     (16,474)   (3,815)   104,561
  Stockholder dividends of $1.08 per share
    ($1.00 - 2000 and $.96 - 1999)                             (12,991)  (12,037)   (11,841)

  End of year                                                  668,255   651,324    614,278

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
  Beginning of year                                            (55,280)  (59,095)    45,466
  Other comprehensive income (loss)                             16,474     3,815   (104,561)

  End of year                                                  (38,806)  (55,280)   (59,095)

TREASURY STOCK, at cost:
  Beginning of year                                           (107,020) (102,997)   (89,361)
  Cost of 71,054 shares acquired
    (174,550 shares - 2000 and 349,087 shares - 1999)           (2,692)   (5,600)   (14,094)
  Cost of 76,205 shares sold
    (111,085 shares - 2000 and 32,243 shares - 1999)             1,082     1 577        458

  End of year                                                 (108,630) (107,020)  (102,997)

  TOTAL STOCKHOLDERS' EQUITY                            $      565,684   532,254    493,805

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

                                                             2001             2000             1999

OPERATING ACTIVITIES
Net income                                           $       29,922          49,083            45,045
Adjustments to reconcile net income to
  net cash from operating activities:
    Amortization of investment premium, net                     601           4,867             2,061
    Depreciation                                              5,181           6,093             5,265
    Policy acquisition costs capitalized                    (27,916)        (35,775)          (39,553)
    Amortization of deferred acquisition costs               27,765          26,828            31,261
    Amortization of the value of purchased
     insurance in force                                       7,472           7,803             8,695
    Realized investment (gains) losses                       15,748           3,871            (2,860)
    Changes in assets and liabilities:
     Future policy benefits                                  (1,337)         (8,270)           12,375
     Accumulated contract values                              1,986          (8,246)          (10,182)
     Other policy liabilities                                (4,784)            351            (1,983)
     Income taxes payable and deferred                         (950)          8,147           (14,748)
    Other, net                                               (4,236)         11,668            13,099
    NET CASH PROVIDED                                        49,452          66,420            48,475
INVESTING ACTIVITIES
Purchases of investments:
  Fixed maturities available for sale                      (884,654)       (415,189)         (654,943)
  Fixed maturities held to maturity                               -          (3,304)           (3,354)
  Equity securities available for sale                       (5,116)        (22,134)          (43,130)
Sale of available for sale securities                       678,423         393,934           428,943
Maturities and principal paydowns
  of security investments:
    Fixed maturities available for sale                     187,673         115,557           173,990
    Fixed maturities held to maturity                             -          24,539            10,913
    Equity securities available for sale                     16,088          19,251               486
Purchases of other investments                             (187,270)       (138,947)          (36,300)
Sales, maturities and principal
  paydowns of other investments                              51,215          53,990            59,655
Disposition of group insurance blocks, net cash paid         (4,000)              -            (5,162)
    NET CASH PROVIDED (USED)                               (147,641)         27,697           (68,902)
FINANCING ACTIVITIES
Proceeds from borrowings                                    102,589          58,445            95,850
Repayment of borrowings                                     (47,330)        (86,425)          (26,350)
Policyholder contract deposits                              148,930         137,901           148,993
Withdrawals of policyholder contract deposits              (130,722)       (198,474)         (181,367)
Change in other deposits                                     28,662             (79)           13,505
Cash dividends to stockholders                              (12,991)        (12,037)          (11,841)
Disposition (acquisition) of treasury stock, net                 25          (2,412)          (12,771)
    NET CASH PROVIDED (USED)                                 89,163        (103,081)           26,019
Increase (decrease) in cash                                  (9,026)         (8,964)            5,592
Cash at beginning of year                                    13,391          22,355            16,763
         CASH AT END OF YEAR                         $        4,365          13,391            22,355

See accompanying Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables are generally stated in thousands, except per share data)

SIGNIFICANT ACCOUNTING POLICIES

Organization
Kansas City Life Insurance Company is a Missouri domiciled stock life insurance company which, with its affiliates, is licensed to sell insurance products in 49 states and the District of Columbia. The Company offers a diversified portfolio of individual insurance, annuity and group products distributed primarily through numerous general agencies. The Company's new business activities have been concentrated in interest sensitive and variable products in recent years.

Basis of Presentation
The accompanying consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States (GAAP) and include the accounts of Kansas City Life Insurance Company and its subsidiaries, principally Sunset Life Insurance Company of America (Sunset Life) and Old American Insurance Company (Old American). Significant intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to prior year results to conform with the current year's presentation. GAAP requires management to make certain estimates and assumptions which affect amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Recognition of Revenues
Traditional life insurance products include whole life insurance, term life insurance and certain annuities. Premiums for these products are recognized as revenues when due. Accident and health insurance premiums are recognized as revenues over the terms of the policies. Revenues for universal life and flexible annuity products are amounts assessed against contract values for cost of insurance, policy administration and surrenders, as well as amortization of deferred front-end contract charges.

Future Policy Benefits and
Accumulated Contract Values
Traditional life insurance reserves have been computed by a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than actually expected. Investment yield assumptions for new issues are graded down and range from 7.25 percent to 5.25 percent. Mortality assumptions are based on Company experience expressed as a percentage of standard mortality tables. The 1975-1980 Select and Ultimate Basic Table is used for new business.

Accident and health reserves represent estimates of payments to be made on reported insurance claims as well as claims incurred but not yet reported. These estimates are based upon past claims experience, claim trends and industry experience.

The liability for unpaid accident and health claims is included with "policy and contract claims" on the Consolidated Balance Sheet. Claim adjustment expenditures are expensed as incurred and were not material in any year presented. Activity was as follows.

                                  2001      2000       1999

Gross liability at
  beginning of year                $ 9,983    10,744    11,726
Less reinsurance recoverable         4,678     5,523     5,486
Net liability at beginning of year   5,305     5,221     6,240

Incurred benefits related to:
  Current year                      32,528    30,232    29,330
  Prior years                          307      (241)     (850)
Total incurred benefits             32,835    29,991    28,480

Paid benefits related to:
  Current year                      26,315    24,497    23,617
  Prior years                        5,822     5,410     5,882
Total paid benefits                 32,137    29,907    29,499

Net liability at end of year         6,003     5,305     5,221
Plus reinsurance recoverable         2,772     4,678     5,523
Gross liability at end of year  $    8,775     9,983    10,744

Liabilities for universal life and flexible annuity products represent accumulated contract values, without reduction for potential surrender charges, and deferred front-end contract charges which are amortized over the term of the policies. Benefits and claims are charged to expense in the period incurred net of related accumulated contract values. Interest on accumulated contract values is credited to contracts as earned. Crediting rates for universal life insurance and flexible annuity products ranged from 3.00 percent to 7.25 percent (4.00 percent to 6.75 percent - 2000 and 3.85 percent to 6.50 percent - 1999).

Withdrawal assumptions for all products are based on corporate experience.

Policy Acquisition Costs
The costs of acquiring new business, principally commissions, certain policy issue and underwriting expenses and certain variable agency expenses, are deferred. For traditional life products, deferred acquisition costs are amortized in proportion to premium revenues over the premium-paying period of related policies, using assumptions consistent with those used in computing benefit reserves. Acquisition costs for interest sensitive and variable products are amortized over a period not exceeding 30 years in proportion to estimated gross profits arising from interest spreads and charges for mortality, expenses and surrenders that are expected to be realized over the term of the contracts. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a block of business are revised. This asset is also adjusted for the impact on estimated gross profits of net unrealized gains and losses on securities.

Value of Purchased Insurance in Force
The value of purchased insurance in force arising from the acquisition of a life insurance subsidiary and a block of life insurance business is being amortized in proportion to projected future premium revenues or estimated gross profits. Such amortization is included in insurance operating expenses. If these projections should change, the amortization is adjusted prospectively. This asset was increased $7,796,000 ($8,523,000 - 2000 and $9,313,000 - 1999) for accrual of interest and reduced $15,268,000 ($16,326,000 - 2000 and $18,008,000 - 1999) for amortization. The increase for accrual of interest for the life insurance subsidiary was calculated using a 13.0 percent interest rate for the life block and a 7.0 percent rate for the accident and health block and, on the acquired block, a 7.0 percent interest rate on the traditional life portion and a 5.4 percent rate on the interest sensitive portion. Total accumulated accrual of interest and amortization equal $70,738,000 and $113,209,000, respectively. The value of purchased insurance in force is adjusted for the impact on estimated gross profits of net unrealized gains and losses on securities. Based upon current conditions and assumptions as to future events, the Company expects that the amortization will be between 6 and 9 percent of the asset’s current carrying amount in each of the next five years.

Separate Accounts
These accounts arise from the sale of variable life insurance and annuity products. Their assets are legally segregated and are not subject to the claims which may arise from any other business of the Company. These assets are reported at fair value since the underlying investment risks are assumed by the policyholders. Therefore the related liabilities are recorded at amounts equal to the underlying assets. Investment income and gains or losses arising from separate accounts accrue directly to the policyholders and are, therefore, not included in investment earnings in the accompanying consolidated income statement. Revenues to the Company from separate accounts consist principally of contract maintenance charges, administrative fees and mortality and risk charges.

Participating Policies
Participating business at year end approximates 11 percent of the consolidated life insurance in force. The amount of dividends to be paid is determined annually by the Board of Directors. Provision has been made in the liability for future policy benefits to allocate amounts to participating policyholders on the basis of dividend scales contemplated at the time the policies were issued. Additional provisions have been made for policyholder dividends in excess of the original scale which have been declared by the Board of Directors.

Investments
Securities held to maturity and short-term investments are stated at cost adjusted for amortization of premium and accrual of discount. Securities available for sale are stated at fair value. Unrealized gains and losses on securities available for sale are reduced by deferred income taxes and related adjustments to deferred acquisition costs and the value of purchased insurance in force, and are included in accumulated other comprehensive income. The Company reviews and analyzes its securities on an ongoing basis. Based upon these analyses, specific securities’ values are written down to expected realizable values through earnings as a realized investment loss if the security’s impairment in value is considered to be other than temporary.

Mortgage loans are stated at cost adjusted for amortization of premium and accrual of discount less an allowance for probable losses. A loan is considered impaired if it is probable that contractual amounts due will not be collected. An allowance for probable impairment losses is based upon the loan’s market price, or the fair value of the underlying collateral on a net realizable basis. Loans in foreclosure and loans considered to be impaired are placed on a non-accrual status. Real estate is carried at depreciated cost. Real estate joint ventures are valued at cost adjusted for the Company’s equity in earnings since acquisition. Policy loans are carried at cost less payments received. Premiums and discounts on fixed maturity securities are amortized over the life of the related security as an adjustment to yield using the effective interest method. Realized gains and losses on disposals of investments, determined by the specific identification method, are included in investment revenues.

Federal Income Taxes
Income taxes have been provided using the liability method. Under that method, deferred tax assets and liabilities are determined based on the differences between their financial reporting and their tax bases and are measured using the enacted tax rates.

Income Per Share
Due to the Company’s capital structure and lack of other potentially dilutive securities, there is no difference between basic and diluted earnings per common share for any of the years or periods reported. The weighted average number of shares outstanding during the year was 12,027,241 shares (12,033,725 shares - 2000 and 12,316,220 shares - 1999). The number of shares outstanding at year end was 12,026,628 (12,021,477 - 2000).

Statutory Information and
Stockholder Dividends Restrictions
The Company’s earnings, unassigned surplus (retained earnings) and capital and surplus (equity), on the statutory basis used to report to regulatory authorities, follow.

                                2001      2000     1999


Net gain from operations    $  42,097    45,730    41,902
Net income                     23,476    42,265    42,012
Unassigned surplus
    at December 31            329,972   311,804   281,254
Capital and surplus
    at December 31            266,208   248,014   219,875

Stockholder dividends may not exceed statutory unassigned surplus. Additionally, under Missouri law, the Company must have the prior approval of the Missouri Director of Insurance in order to pay a dividend exceeding the greater of statutory net gain from operations for the preceding year or 10 percent of capital and surplus at the end of the preceding year. The maximum dividend payable in 2002 without prior approval is $42,097,000. The Company believes these statutory limitations impose no practical restrictions on its dividend payment plans.

The National Association of Insurance Commissioners’ comprehensive new guidelines to statutory accounting principles and practices for the life insurance industry took effect January 1, 2001, and caused the Company’s capital and surplus to decrease $1.7 million.

The Company is required to deposit a defined amount of assets with state regulatory authorities. Such assets had an aggregate carrying value of $18,000,000 ($18,000,000 - 2000 and $21,000,000 - 1999).

Comprehensive Income (Loss)
Comprehensive income is comprised of net income and other comprehensive income which includes unrealized gains or losses on securities available for sale and unfunded pension liabilities, as shown at the right.

                          Unrealized    Unfunded
                          Gain (Loss)   Pension
                         on Securities  Liability   Total

2001:
Unrealized holding gains
  arising during the year    $  13,972              13,972
Less:  Realized losses included
            in net income      (18,404)            (18,404)
Net unrealized gains            32,376              32,376
Increase in unfunded
  pension liability                  -    (4,931)   (4,931)
Effect on deferred
  acquisition costs             (2,113)             (2,113)
Deferred income taxes          (10,584)    1,726    (8,858)
Other comprehensive
  income (loss)              $  19,679    (3,205)   16,474


2000:
Unrealized holding gains
  arising during the year    $   9,422               9,422
Less:  Realized losses included
            in net income       (6,467)             (6,467)
Net unrealized gains            15,889              15,889
Increase in unfunded
  pension liability                  -    (8,871)   (8,871)
Effect on deferred
  acquisition costs             (1,145)             (1,145)
Deferred income taxes           (5,163)    3,105    (2,058)
Other comprehensive
  income (loss)               $  9,581    (5,766)    3,815

1999:
Unrealized holding losses
  arising during the year    $(172,801)           (172,801)
Less:  Realized losses included
            in net income       (2,527)             (2,527)
Net unrealized losses         (170,274)           (170,274)
Decrease in unfunded
  pension liability                  -       554       554
Effect on deferred
  acquisition costs               8,858               8,858
Deferred income taxes            56,495     (194)    56,301
Other comprehensive
  income (loss)              $ (104,921)     360   (104,561)

The accumulated balances related to each component of accumulated other comprehensive income follow.

                                        Increase  in
                            Unrealized     Unfunded
                             Gain (Loss)   Pension
                            on Securities  Liability  Total


December 31, 1999           $ (53,379)    (5,716)   (59,095)
Other comprehensive
   income (loss) for 2000       9,581     (5,766)     3,815

December 31, 2000             (43,798)   (11,482)   (55,280)
Other comprehensive
   income (loss) for 2001      19,679     (3,205)    16,474

December 31, 2001           $ (24,119)   (14,687)   (38,806)

REINSURANCE

                                 2001      2000      1999

Life insurance in force (in millions):
    Direct                    $  24,019   24,120    23,616
    Ceded                        (7,144)  (6,514)   (5,483)
    Assumed                       2,626    2,818     3,131

        Net                   $  19,501   20,424    21,264

Premiums:
Life insurance:
    Direct                    $ 128,746  120,908   127,805
    Ceded                       (35,721) (27,818)  (29,255)
    Assumed                       4,934    6,105     5,536

        Net                   $  97,959   99,195   104,086

 Accident and health:
    Direct                    $  51,238   54,769    56,723
    Ceded                        (5,427) (10,128)  (14,087)

        Net                   $  45,811   44,641    42,636

Contract charges arise generally from directly issued business. However contract charges also arise from a block of business assumed during 1997 as described below. Ceded benefit recoveries were $44,200,000 ($49,883,000 - 2000 and $49,687,000 - 1999).

Old American has two coinsurance agreements. One agreement reinsures certain whole life policies issued by Old American prior to December 1, 1986. These policies had a face value of $94.3 million as of this year end. The reserve for future policy benefits ceded under this agreement was $41,785,000 ($44,331,000 - 2000). The second agreement ceded $10.4 million of home health care reserves in 1998.

Kansas City Life acquired a block of traditional life and universal life-type products in 1997. As of this year end, the block had $2.6 billion of life insurance in force ($2.8 billion - 2000). The block generated life insurance premiums of $4,628,000 ($5,544,000 - 2000). The Company ceded its group long-term disability reserves, totaling $5.2 million in 1999 and also $5.6 million of group life waiver of premium reserves in 2001.

Sunset Life entered into a yearly renewable term reinsurance agreement, effective January 1, 2002, whereby it ceded 80 percent of its retained mortality risk on traditional and universal life policies. The insurance in force ceded under this agreement approximates $3.1 billion.

The maximum retention on any one life is $350,000 for ordinary life plans and $100,000 for group coverage. A contingent liability exists with respect to reinsurance, which may become a liability of the Company in the unlikely event that the reinsurers should be unable to meet obligations assumed under reinsurance contracts. Reinsurers’ solvency is reviewed annually.

PROPERTY AND EQUIPMENT

                                       2001       2000


Land                               $     766        766
Home office complex                   20,252     21,444
Furniture and equipment               35,110     34,741

                                      56,128     56,951
Less accumulated depreciation        (37,115)   (36,250)

                                   $  19,013     20,701

Property and equipment are stated at cost and depreciated using the straight-line method. The home office is depreciated over 25 to 50 years and furniture and equipment over 3 to 10 years, their estimated useful lives.

NOTES PAYABLE

                                          2001      2000

Federal Home Loan Bank loans with
  various maturities and a weighted
  average variable interest rate,
  currently 2.43 percent, secured
  by mortgage-backed securities
  totaling $111,581,000                $  95,000   41,520

Overnight federal funds, with a
  daily maturity, an interest rate
  of 1.85 percent, secured by
  specified securities                     1,049        -

Real estate loan due December 2010,
  with an interest rate of 7.50 percent,
  secured by the property                    730        -

                                       $  96,779   41,520

As a member of the Federal Home Loan Bank with a capital investment of $8,983,000, the Company has the ability to borrow up to twenty times its capital investment, or $179,656,000, from the bank when collateralized. The Company earned a 4.54 percent average rate on the capital investment in the bank for 2001.

The Company has unsecured revolving credit loan agreements with banks providing a $60,000,000 line of credit with a variable interest rate, currently 2.00 percent.

With the exception of the real estate loan, all borrowing is used to enhance investment strategies. Interest paid on all borrowings equaled $3,975,000 ($2,146,000 - 2000 and $1,135,000 - 1999).

FAIR VALUE OF
FINANCIAL INSTRUMENTS

The carrying amounts for cash, short-term investments and policy loans as reported in the accompanying balance sheet approximate their fair values. The fair values for securities are based on quoted market prices, where available. For those securities not actively traded, fair values are estimated using values obtained from independent pricing services or, in the case of private placements, are estimated by discounting expected future cash flows using a current market rate applicable to the yield, credit quality and maturity of the investments. Fair values for mortgage loans are based upon discounted cash flow analyses using an interest rate assumption 2 percent above the comparable U.S. Treasury rate.

Fair values for the Company's liabilities under investment-type insurance contracts, included with accumulated contract values for flexible annuities and with other policyholder funds for supplementary contracts without life contingencies, are estimated to be their cash surrender values.

Fair values for the Company’s insurance contracts other than investment contracts are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, which minimizes exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

The carrying amounts and fair values of the financial instruments follow.

                         2001                 2000

                Carrying      Fair      Carrying    Fair
                 Amount      Value      Amount     Value

Investments:
  Securities available
    for sale    $2,129,952  2,129,952  2,028,426  2,028,426
  Securities held
    to maturity          -          -     80,572     80,463
  Mortgage loans   433,095    441,887    396,731    409,000
Liabilities:
  Individual and
    group annuities$677,597   662,116    668,233    652,898
  Supplementary
    contracts without
    life contingencies18,917   18,917     20,761     20,761

The following Investments Note provides further details regarding the investments above.

INVESTMENTS

Investment Revenues
Major categories of investment revenues are summarized as follows.

                              2001        2000       1999

Investment income:
    Fixed maturities      $  147,610    156,117     157,766
    Equity securities          7,533      9,678       9,378
    Mortgage loans            33,343     29,478      27,608
    Real estate               10,735     10,563       9,907
    Policy loans               7,818      7,852       7,959
    Short-term                 4,649      3,025       3,639
    Other                      5,883      3,914       3,709
                             217,571    220,627     219,966
Less investment expenses     (15,197)   (13,492)    (12,284)

                          $  202,374    207,135     207,682

Realized gains (losses):
    Fixed maturities      $  (15,956)   (12,614)     (2,714)
    Equity securities         (2,448)       517         126
    Mortgage loans               -        2,970       1,500
    Real estate                2,048      4,316       3,684
    Other                        608        940         264

                          $  (15,748)    (3,871)      2,860

Unrealized Gains and Losses
Unrealized gains (losses) on the Company's securities follow.

                              2001        2000       1999

Available for sale:
  End of year             $  (38,382)   (70,758)    (86,647)
  Effect on deferred
    acquisition costs          1,268      3,381       4,526
  Deferred income taxes       12,995     23,579      28,742

                          $  (24,119)   (43,798)    (53,379)
  Increase (decrease) in
    net unrealized gains
    during the year:
      Fixed maturities    $   17,129      9,697     (99,595)
      Equity securities        2,550       (116)     (5,326)

                          $   19,679      9,581    (104,921)
Held to maturity:
  End of year             $        -       (109)        (36)

  Increase (decrease) in
    net unrealized gains
    during the year       $      109        (73)     (8,047)

Securities
The amortized cost and fair value of investments in securities at this year end follow.

                                      Gross
                     Amortized      Unrealized        Fair
                        Cost     Gains     Losses     Value

Available for sale:
Bonds:
  U.S. government  $    47,991    2,935      161     50,765
  Public utility       290,670    4,765   10,051    285,384
  Corporate          1,198,505   18,564   55,078  1,161,991
  Mortgage-backed      532,978   11,308    8,677    535,609
  Other                 22,847      440       86     23,201
Redeemable
   preferred stocks      5,184       63        4      5,243

Fixed maturities     2,098,175   38,075   74,057  2,062,193
Equity securities       70,159      778    3,178     67,759

                   $ 2,168,334   38,853   77,235  2,129,952

The amortized cost and fair value of investments in securities at last year end follow.

                                      Gross
                      Amortized     Unrealized       Fair
                         Cost     Gains   Losses     Value

Available for sale:
Bonds:
  U.S. government  $    45,050    1,539      221     46,368
  Public utility       290,415    2,143   10,726    281,832
  Corporate          1,233,304   11,359   72,392  1,172,271
  Mortgage-backed      381,224    5,138    2,051    384,311
  Other                 47,581    1,109       60     48,630
Redeemable
   preferred stocks        745        8        8        745

Fixed maturities     1,998,319   21,296   85,458  1,934,157
Equity securities      100,866    2,141    8,738     94,269

                     2,099,185   23,437   94,196  2,028,426


Bonds held to maturity:
Public utility          12,474      817       18     13,273
Corporate               62,947    1,123    2,308     61,762
Other                    5,151      277        -      5,428

                        80,572    2,217    2,326     80,463

                   $ 2,179,757   25,654   96,522  2,108,889

The Company holds one non-income producing fixed maturity with a par value of $9,600,000.

The distribution of the fixed maturity securities' contractual maturities at this year end follows. However, expected maturities may differ from these contractual maturities since borrowers may have the right to call or prepay obligations.

                                      Amortized         Fair
                                        Cost            Value

Available for sale:
Due in one year or less             $    52,617      52,401
Due after one year through five years   337,641     346,570
Due after five years through ten years  321,438     315,641
Due after ten years                     853,501     811,972
Mortgage-backed bonds                   532,978     535,609

                                    $ 2,098,175   2,062,193

Sales of investments in securities available for sale, excluding normal maturities and calls, follow.

                                 2001      2000      1999


Proceeds                      $ 678,423   393,934   428,943
Gross realized gains             17,971     7,292     9,482
Gross realized losses            16,132    13,541    10,371

The Company does not hold securities of any corporation and its affiliates which exceeded 10 percent of stockholders' equity.

No derivative financial instruments are employed.

Mortgage Loans
All mortgage loans are income producing, as they were last year. Mortgage loans are carried net of a valuation reserve of $4,030,000, unchanged from the previous year.

The mortgage portfolio is diversified geographically and by property type as follows.

                               2001                      2000

                     Carrying      Fair       Carrying     Fair
                      Amount      Value        Amount      Value

Geographic region:
  East north central $  34,011      33,169      28,139    28,612
  Mountain              75,771      77,646      79,430    81,995
  Pacific              153,791     156,678     137,559   141,781
  West south central    66,811      69,535      58,847    61,521
  West north central    75,667      77,580      71,921    73,799
  Other                 31,074      31,309      24,865    25,322
  Valuation reserve     (4,030)     (4,030)     (4,030)   (4,030)
                     $ 433,095     441,887     396,731   409,000
Property type:
  Industrial         $ 281,786     285,614     258,195   265,770
  Retail                15,566      16,422      18,699    19,436
  Office               121,056     124,458     107,534   111,024
  Other                 18,717      19,423      16,333    16,800
  Valuation reserve     (4,030)     (4,030)     (4,030)   (4,030)
                      $433,095     441,887     396,731   409,000

The Company has commitments which expire in 2002 to originate mortgage loans of $6,460,000.

No mortgage loans were foreclosed upon and transferred to real estate investments during the year (none - 2000 and 1999).

One mortgage loan was acquired in the sale of real estate during the year for $875,000 (none - 2000 and 1999).

Real Estate
Detail concerning the Company's real estate investments follows.

                                         2001        2000

Penntower office building, at cost:
    Land                              $   1,106      1,106
    Building                             18,741     18,649
    Less accumulated depreciation       (12,027)   (11,477)
Foreclosed real estate, at lower of
    cost or net realizable value          1,900      2,090
Other investment properties, at cost:
    Land                                 15,449     11,050
    Buildings                            51,965     37,958
    Less accumulated depreciation       (15,357)   (14,933)

                                      $  61,777     44,443

Investment real estate, other than foreclosed properties, is depreciated on a straight-line basis. Penntower office building is depreciated over 60 years and all other properties from 10 to 35 years. Foreclosed real estate is carried net of a valuation allowance, if necessary, to reflect net realizable value. No such allowance was needed at year end 2001 ($625,000 - 2000).

The Company held non-income producing real estate equaling $9,735,000 ($5,236,000 - 2000).

PENSIONS AND OTHER
POSTRETIREMENT BENEFITS

The Company has pension and other postretirement benefit plans covering substantially all its employees. The defined benefits pension plan covers employees who were age 55 or over with at least 15 years of vested service at December 31, 1997. This plan’s benefits are based on years of service and the employee’s compensation during the last five years of employment. Employees have a cash balance account consisting of credits to the account based upon an employee’s years of service and compensation and interest credits. The postretirement medical plans for the employees, full-time agents, and their dependents are contributory with contributions adjusted annually. The Company pays these medical costs as due and the plan incorporates cost-sharing features. The postretirement life insurance plan is noncontributory with level annual payments over the participants’ expected service periods. The plan covers only those employees with at least one year of service as of December 31, 1997. The benefits in this plan are frozen using the employees’ years of service and compensation as of December 31, 1997. The tables at the right outline the plans’ funded status and their impact on the financial statements.

Noncontributory defined contribution retirement plans for general agents and eligible sales agents provide supplemental payments based upon earned agency first year individual life and annuity commissions. Contributions to these plans were $162,000 ($143,000 - 2000 and 1999). Noncontributory deferred compensation plans for eligible agents based upon earned first year commissions is also offered. Contributions to these plans were $639,000 ($583,000 - 2000 and $609,000 - 1999).

Savings plans for eligible employees and agents match employee contributions up to 6 percent of salary and agent contributions up to 2.5 percent of prior year paid commissions. Contributions expensed to the plan were $1,459,000 ($1,425,000 - 2000 and $1,468,000 - 1999). The Company may contribute an additional profit sharing amount up to 4 percent of salary depending upon corporate profits. The Company made no profit sharing contribution for 2001 ($1,098,000 - 2000 and none - 1999).

A noncontributory trusteed employee stock ownership plan covers substantially all salaried employees. No contributions have been made to this plan since 1992.

                                                   Pension Benefits           Other Benefits
                                                  2001           2000         2001         2000


Accumulated benefit obligation                 $ 103,655          98,273         -             -

Change in plan assets:
Fair value of plan assets at beginning of year $  87,441          85,240     1,436         1,403
Return on plan assets                              3,814           4,033        77            74
Company contributions                              2,605           4,000         -             -
Benefits paid                                     (6,164)         (5,832)      (56)          (41)

  Fair value of plan assets at end of year     $  87,696          87,441     1,457         1,436

Change in projected benefit obligation:
Benefit obligation at beginning of year        $ 102,089          98,351    16,326        16,942
Service cost                                       1,940           1,913       708           530
Interest cost                                      7,442           7,365     1,345         1,144
Net (gain) loss from past experience               2,365             395     1,762        (1,641)
Benefits paid                                     (6,164)         (5,935)     (582)         (649)

  Benefit obligation at end of year            $ 107,672         102,089    19,559        16,326

Plan underfunding                              $ (19,976)        (14,648)  (18,102)      (14,890)
Unrecognized net (gain) loss                      32,570          28,291       408        (1,020)
Unrecognized prior service cost                   (5,852)         (6,500)        -             -
Unrecognized net transition asset                   (105)           (311)        -             -

  Prepaid (accrued) benefit cost               $   6,637           6,832   (17,694)      (15,910)

Amounts recognized in the
  consolidated balance sheet:
Accrued benefit liability                      $ (15,959)        (10,833)  (17,694)      (15,910)
Accumulated other comprehensive income            22,596          17,665         -             -

  Net amount recognized                        $   6,637           6,832   (17,694)      (15,910)

Weighted average assumptions:
Discount rate                                       7.25 %          7.50      7.25          7.50
Expected return on plan assets                      8.50            8.75      5.50          5.50
Rate of compensation increase                       4.50            4.50         -             -

The assumed growth rate of health care costs has a significant effect on the amounts reported as the table below demonstrates.

                                           One Percentage Point
                                              Change in the Growth Rate
                                             Increase        Decrease


Service and interest cost components       $      446           (340)
Postretirement benefit obligation               3,599         (2,815)

The components of the net periodic benefits cost follow.

                                              Pension Benefits                   Other Benefits
                                        2001      2000       1999         2001      2000       1999


Service cost                         $ 1,940     1,912      2,760           708       530       626
Interest cost                          7,442     7,365      7,673         1,345     1,144     1,200
Expected return on plan assets        (7,252)   (7,211)    (9,067)          (79)      (78)      (88)
Amortization of:
  Unrecognized net (gain) loss         1,523     1,687      1,014           (24)      (20)       52
  Unrecognized prior service cost       (647)     (647)      (647)            -         -         -
  Unrecognized net transition asset     (206)     (206)      (206)            -         -         -
Net periodic benefits cost           $ 2,800     2,900      1,527         1,950     1,576     1,790

For measurement purposes, a 9.5 percent annual increase in the per capita cost of covered health care benefits was assumed to decrease gradually to 5 percent in 2010 and thereafter.

SEGMENT INFORMATION

                                               Kansas City Life          Sunset         Old
                                            Individual     Group           Life       American      Total

2001:
Revenues from external customers          $   109,700      57,389        25,101        72,873      265,063
Investment income, net                        151,800         510        33,343        16,721      202,374
Segment income (loss)                          22,991        (692)       (1,501)        9,124       29,922
Other significant noncash items:
  Increase in policy reserves                  50,675         469        17,692         5,855       74,691
  Amortization of deferred
    acquisition costs                          17,034           -           247        10,484       27,765
  Amortization of the value of
    purchased insurance in force                4,104           -             -         3,368        7,472
Interest expense                                3,254           -             -           782        4,036
Income tax expense (benefit)                    3,322        (296)       (3,672)        2,264        1,618

Segment assets                              2,775,280       6,993       547,145       435,171    3,764,589
Expenditures for other long-lived assets        2,004          65             -            30        2,099

2000:
Revenues from external customers          $   110,339      56,267         28,272       74,765      269,643
Investment income, net                        155,420         767         34,456       16,492      207,135
Segment income                                 32,403         831          8,868        6,981       49,083
Other significant noncash items:
  Increase (decrease) in policy reserves       49,560        (389)        17,721        6,924       73,816
  Amortization of deferred
    acquisition costs                          11,437           -          5,138       10,253       26,828
  Amortization of the value of
    purchased insurance in force                4,305           -              -        3,498        7,803
Interest expense                                2,177           -              1            5        2,183
Income tax expense                             12,172         356          3,751        3,142       19,421

Segment assets                              2,696,884      10,948        531,393      407,036    3,646,261
Expenditures for other long-lived assets        2,640          40              -           15        2,695

1999:
Revenues from external customers          $   113,399      53,311         26,750       76,091      269,551
Investment income, net                        158,017       1,083         33,617       14,965      207,682
Segment income (loss)                          31,408        (898)         8,893        5,642       45,045
Other significant noncash items:
  Increase in policy reserves                  60,072         681         16,411        8,042       85,206
  Amortization of deferred
    acquisition costs                          12,443           -          7,765       11,053       31,261
  Amortization of the value of
    purchased insurance in force                5,128           -              -        3,567        8,695
Interest expense                                1,148           -              -            -        1,148
Income tax expense (benefit)                   12,931        (385)         3,898        2,574       19,018

Segment assets                              2,679,521      16,107        528,708      396,948    3,621,284
Expenditures for other long-lived assets        3,742         214              3          298        4,257

Enterprise-Wide Disclosures

                                                        2001       2000       1999

Revenues from external customers by line of business:
  Variable life insurance and annuities             $  17,811     16,181     11,153
  Interest sensitive products                          89,559     93,602     97,720
  Traditional individual insurance products            91,330     92,078     97,616
  Group life and disability products                   52,440     51,758     49,106
  Group ASO services                                    4,949      4,509      4,205
  Other                                                 8,974     11,515      9,751
      Total                                         $ 265,063    269,643    269,551

Company operations have been classified and summarized into the four reportable segments at left. The segments, while generally classified along Company lines, are based upon distribution method, product portfolio and target market. The Parent Company was divided into two segments. The Kansas City Life - Individual segment consists of sales of variable life and annuities, interest sensitive products and traditional life insurance products by a career general agency sales force. The Kansas City Life - Group segment consists of sales of group life, disability and dental products and administrative services only (ASO) by the Company’s career general agency sales force and appointed group agents. The Sunset Life segment consists of sales of interest sensitive and traditional products by personal producing general agents. The Old American segment markets whole life final expense products to seniors through a general agency sales force.

Separate investment portfolios are maintained for each of the companies. However, investments are allocated to the group segment based upon its cash flows. Its investment income is modeled using the year of investment method. Home office functions are fully integrated for the three companies in order to maximize economies of scale. Therefore, operating expenses are allocated to the segments based upon internal cost studies which are consistent with industry cost methodologies.

The totals at left agree to the selected financial data which reconciles to the consolidated financial statements. Intersegment revenues are not material. The Company operates solely in the United States and no individual customer accounts for 10 percent or more of the Company’s revenue.

FEDERAL INCOME TAXES

A reconciliation of the Federal income tax rate and the actual tax rate experienced is shown below.

                                   2001    2000    1999

Federal income tax rate              35  %   35      35
Special tax credits                 (15)     (6)     (5)
Release excess income tax liability
  on years closed to IRS audit      (14)      -       -
Other permanent differences          (1)     (1)      -

Actual income tax rate                5  %   28      30

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below.

                                         2001     2000

Deferred tax assets:
  Basis differences between tax and
    GAAP accounting for investments  $   13,034   18,493
  Future policy benefits                 45,753   50,404
  Employee retirement benefits           16,826   14,579
  Other                                  10,695    7,670
Gross deferred tax assets                86,308   91,146

Deferred tax liabilities:
  Capitalization of policy acquisition
    costs, net of amortization           46,953   47,235
  Property and equipment, net             3,675    3,708
  Value of insurance in force            27,911   30,449
  Other                                     178      884
Gross deferred tax liabilities           78,717   82,276
  Net deferred tax asset             $    7,591    8,870

A valuation allowance must be established for any portion of the deferred tax asset which is believed not to be realizable. In management’s opinion, it is more likely than not that the Company will realize the benefit of the net deferred tax asset and, therefore, no valuation allowance has been established.

Federal income taxes were paid this year of $2,350,000 ($17,364,000 - 2000 and $17,884,000 - 1999).

Policyholders’ surplus, which is frozen under the Deficit Reduction Act of 1984, is $40,500,000 for Kansas City Life, $2,800,000 for Sunset Life and $13,700,000 for Old American. The Companies do not plan to distribute their policyholders’ surplus. Consequently, the possibility of such surplus becoming subject to tax is remote, and no provision has been made in the financial statements for taxes thereon. Should the balance in policyholders’ surplus become taxable, the tax computed at current rates would approximate $20,000,000.

Income taxed on a current basis is accumulated in shareholders’ surplus and can be distributed to stockholders without tax to the Company. Shareholders’ surplus equals $411,637,000 for Kansas City Life, $95,780,000 for Sunset Life and $76,740,000 for Old American.

The income tax expense (benefit) is recorded in various places in the Company's financial statements as detailed below.

                                       2001     2000     1999

Net income                         $   1,618   19,421   19,018
Stockholders' equity:
  Related to:
    Unrealized gains (losses), net    10,584    5,163  (56,495)
    Decrease (increase) in
      unfunded pension liability      (1,726)  (3,105)     194
Total income tax expense (benefit)
  included in financial statements $  10,476   21,479  (37,283)

QUARTERLY CONSOLIDATED
FINANCIAL DATA (unaudited)

                         First   Second    Third    Fourth

2001:
Total revenues      $   116,833  118,255  112,330  104,271

Net income                9,518   11,466    8,782      156

Per common share,
  basic and diluted         .79      .95      .73      .02

2000:
Total revenues      $   120,513  117,874  118,332  116,188

Net income               13,118   13,722   14,576    7,667

Per common share,
  basic and diluted        1.09     1.14     1.21      .64

CONTINGENT LIABILITIES

Over the past several years, life insurers have faced extensive claims, including class action lawsuits, alleging improper marketing practices. Sunset Life is the defendant in such a class action lawsuit regarding its sales practices. In connection with a preliminary settlement of this matter, the Company increased its reserves $16.3 million in 2001 based upon information currently available. A final hearing is scheduled for February 28, 2002. Given the uncertainties associated with estimating the reserve, it is reasonably possible that the final cost of any settlement could differ materially from the amounts presently estimated. This estimate will continue to be updated as more specific information is developed. However, based on information available at this time and the uncertainties associated with any settlement, additional costs related to this item cannot be estimated with precision.

In addition to the above, the Company and certain of its subsidiaries are defendants in, or subject to, other claims or legal actions that arose in the ordinary course of business. Some of these lawsuits arose in jurisdictions that permit punitive damages disproportinate to the actual damages alleged. Although no assurances can be given and no determinations can be made at this time as to the outcome of any of these lawsuits or proceedings, the Company and its subsidiaries believe that there are meritorious defenses for these claims and are defending them vigorously. In management's opinion the amounts ultimately paid in these suits, if any, would have no material effect on the Company's consolidated results of operations or financial position.

REPORTS OF
INDEPENDENT AUDITORS

To the Board of Directors and Stockholders
of Kansas City Life Insurance Company

        We have audited the accompanying consolidated balance sheet of Kansas City Life Insurance Company and subsidiaries (the Company) as of December 31, 2001 and 2000, and the related consolidated statements of income, stockholders' equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Kansas City Life Insurance Company and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/KPMG LLP
Kansas City, Missouri
January 25, 2002

To the Board of Directors and Stockholders
of Kansas City Life Insurance Company

        We have audited the accompanying consolidated statements of income, stockholders' equity, and cash flows of Kansas City Life Insurance Company and subsidiaries (the Company) for the year ended December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
        We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of the operations and cash flows of Kansas City Life Insurance Company and subsidiaries for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.

/s/Ernst & Young LLP
Kansas City, Missouri
January 24, 2000

STOCKHOLDER INFORMATION

CORPORATE HEADQUARTERS
        Kansas City Life Insurance Company
        3520 Broadway
        Post Office Box 219139
        Kansas City, Missouri 64121-9139
        Telephone: (816) 753-7000
        Fax: (816) 753-4902
        Internet: http://www.kclife.com
        E-mail: kclife@kclife.com

NOTICE OF ANNUAL MEETING
        The annual meeting of stockholders will be held at
        9 a.m. Thursday, April 18, 2002, at Kansas City Life's corporate headquarters.

TRANSFER AGENT
        Cheryl Keefer, Assistant Secretary
        Kansas City Life Insurance Company
        Post Office Box 219139
        Kansas City, Missouri 64121-9139

10-K REQUEST
        Stockholders may request a free copy of Kansas City Life's Form 10-K, as filed with the Securities and
        Exchange Commission, by writing to Secretary, Kansas City Life Insurance Company.

SECURITY HOLDERS
        As of February 11, 2002, Kansas City Life had approximately 670 security holders, including individual
        participants in security position listings.

STOCK AND DIVIDEND INFORMATION
        Stock Quotation Symbol
        Over-the-Counter--KCLI

                                    Bid           Dividend
                             High        Low         Paid

                                     (per share)
     2001:
     First quarter         $  40.25     34.38        $ .27
     Second quarter           39.63     34.84          .27
     Third quarter            39.80     34.50          .27
     Fourth quarter           37.46     35.05          .27
                                                     $1.08

     2000:
     First quarter         $  35.63     22.13        $ .25
     Second quarter           31.00     23.63          .25
     Third quarter            35.38     26.13          .25
     Fourth quarter           35.31     29.00          .25
                                                     $1.00

A quarterly dividend of $.27 per share was paid February 25, 2002.

Over-the-counter market quotations are compiled according to Company records and may reflect inter-dealer prices, without markup, markdown or commission and may not necessarily represent actual transactions.

EX-21

Exhibit 21, Form 10-K
Kansas City Life
Insurance Company

SUBSIDIARIES

Kansas City Life Insurance Company's significant insurance subsidiaries are:

1.	Sunset Life Insurance Company of America, a corporation organized under the laws of the State of Washington and redomesticated to the State of Missouri.
2.	Old American Insurance Company, a corporation organized under the laws of the State of Missouri.

The Company’s non-insurance subsidiaries are not significant individually or in the aggregate.

EX-23

Independent Auditors' Consent

The Board of Directors
Kansas City Life Insurance Company:

We consent to the incorporation by reference in the registration statement (No. 2-97351) on Form S-8 of Kansas City Life Insurance Company of our report dated January 25, 2002, with respect to the consolidated balance sheet of Kansas City Life Insurance Company and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, stockholders’ equity, and cash flows for the years then ended and all related financial statement schedules, which report is incorporated by reference in the December 31, 2001 annual report on Form 10-K of Kansas City Life Insurance Company.

The audits referred to in our report dated January 25, 2002, included the related financial statement schedules listed in Item 14(a)(2) as of December 31, 2001, and for each of the years in the two-year period ended December 31, 2001, included in this annual report on Form 10-K. These financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/KPMG LLP
Omaha, Nebraska
March 8, 2002

EX-23

Consent of Independent Auditors

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Kansas City Life Insurance Company (the Company) of our report dated January 24, 2000 with respect to the consolidated financial statements of the Company for the year ended December 31, 1999 included in the 2001 Annual Report to Shareholders of Kansas City Life Insurance Company.

Our audit also included the financial statements schedules of Kansas City Life Insurance Company for the year ended December 31, 1999 listed in Item 14(a). These schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audit. In our opinion, the financial statements schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also consent to the incorporation by reference in the Registration Statement (Form S-8 No. 2-97351) pertaining to the Savings and Profit Sharing Plan of Kansas City Life Insurance Company of our report dated January 24, 2000 with respect to the consolidated financial statements referred to above incorporated by reference and our report dated March 8, 2002 with respect to the financial statements schedules referred to above in the Annual Report (Form 10-K) for the year ended December 31, 2001.

Ernst & Young LLP

Kansas City, Missouri
March 8, 2002

EX-23

Independent Auditors'’ Consent

The Board of Directors
Kansas City Life Insurance Company:

We consent to incorporation by reference in the registration statement (No. 2-97351) on Form S-8 of Kansas City Life Insurance Company of our report dated February 26, 2002, relating to the financial statements and supplemental schedule of the Kansas City Life Insurance Company Savings and Profit Sharing Plan, which report appears in the December 31, 2001 annual report on Form 11-K of Kansas City Life Insurance Company.

/s/KPMG LLP
Omaha, Nebraska
March 8, 2002

EX-23

Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 2-97351) pertaining to the Kansas City Life Insurance Company Savings and Profit Sharing Plan of our report dated February 18, 2000 with respect to the statement of changes in net assets available for plan benefits of the Kansas City Life Insurance Company Savings and Profit Sharing Plan for the year ended December 31, 1999 included in this Annual Report (Form 11-K) for the year ended December 31, 2001.

Ernst & Young LLP

Kansas City, Missouri
March 8, 2002

EX-99

Exhibit 99(a), Form 10-K
Kansas City Life
Insurance Company

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 11-K

[ ]           ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 2001

OR

[ ]           TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to ___________

Commission File Number 2-40764

A.	Kansas City Life Insurance Company Savings and Profit Sharing Plan 3520 Broadway Kansas City, Missouri 64111-2565
B.	Kansas City Life Insurance Company 3520 Broadway Kansas City, Missouri 64111-2565

EX-99

Kansas City Life
Insurance Company
Savings and Profit Sharing Plan

Financial Statements

2001

Statement of Net Assets

Available for Plan Benefits...................1

Statement of Changes in Net Assets

Available for Plan Benefits...................2

Notes to Financial Statements..................3-9

Supplemental Schedules

Assets Held For Investment

Purposes at Year End ...........................10

Reportable Transactions.......................11

Report of Independent Auditors

Kansas City Life Insurance Company
Savings and Profit Sharing Plan
Statement of Net Assets Available for Plan Benefits
December 31, 2001 and 2000
(in thousands)

                                                        2001            2000   

Assets:
  Investments, at fair value:
    Participant directed:
      Mutual funds                                     $ 17,397          16,645
      Guaranteed interest contract                        5,132           4,192
      Kansas City Life Insurance Company common stock     2,666           3,859
    Non-participant directed:
      Kansas City Life Insurance Company common stock    26,094          23,166
      Participant loans                                   1,307           1,304


           Total investments                             52,596          49,166

  Cash                                                        6             228
  Employer's contributions receivable                        96           1,080
  Employees' contributions receivable                       128               -

           Net assets available for plan benefits      $ 52,826          50,474

See accompanying notes to financial statements.

Kansas City Life Insurance Company
Savings and Profit Sharing Plan
Statement of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2001, 2000 and 1999
(in thousands)

                                          2001                                2000                              1999
                            --------------------------------  -------------------------------- --------------------------------
                                            Non-                             Non-                            Non-
                            Participant  participant          Participant participant          Participant participant
                             directed     directed    Total    directed    directed    Total    directed   directed      Total
                            ------------ ----------- -------  ----------------------- -------- ---------   ----------  --------

Additions to net assets
   attributed to:
   Investment income:
    Interest income                $ 96           7     103         $ 370         16      386       402         13         415
    Dividend income                 685         772   1,457         1,491        667    2,158     1,721        713       2,434
    Gain on sale of
     investments                    571         517   1,088           703        218      921       675      2,466       3,141
    Net unrealized appreciation
     (depreciation) in fair
     value of investments        (1,600)        929    (671)       (2,964)      (554)  (3,518)      836     (7,285)     (6,449)
                            ------------ ----------- -------  ----------------------- -------- --------- ---------- -----------

        Net investment
         income (loss)             (248)      2,225   1,977          (400)       347      (53)    3,634     (4,093)       (459)
                            ------------ ----------- -------  ----------------------- -------- --------- ---------- -----------

   Contributions:
    Employees                     2,232           -   2,232         2,146          -    2,146     2,191          -       2,191
    Employer                          -       1,328   1,328             -      2,404    2,404         -      1,379       1,379
                            ------------ ----------- -------  ----------------------- -------- --------- ---------- -----------

        Total contributions      2,232       1,328   3,560         2,146      2,404    4,550     2,191      1,379       3,570
                            ------------ ----------- -------  ----------------------- -------- --------- ---------- -----------

        Total additions         1,984       3,553   5,537         1,746      2,751    4,497     5,825     (2,714)      3,111

Distributions to participants
    and beneficiaries            (1,473)     (1,712) (3,185)       (1,585)    (1,153)  (2,738)   (5,132)    (6,005)    (11,137)

Interfund transfers                  (3)          3       -           (75)        75        -        40        (40)          -
                            ------------ ----------- -------  ----------------------- -------- --------- ---------- -----------

      Net increase (decrease)      508       1,844   2,352            86      1,673    1,759       733     (8,759)     (8,026)

Net assets available for
   plan benefits:
   Beginning of year             24,821      25,653  50,474        24,734     23,981   48,715    24,001     32,740      56,741
                            ------------ ----------- -------  ----------------------- -------- --------- ---------- -----------

   End of year                 $ 25,329      27,497  52,826      $ 24,820     25,654   50,474    24,734     23,981      48,715
                            ============ =========== =======  ======================= ======== ========= ========== ===========

See accompanying notes to financial statements.

Kansas City Life Insurance Company
Savings and Profit Sharing Plan
Notes To Financial Statements

(1) DESCRIPTION OF PLAN

The following description of the Kansas City Life Insurance Company Savings Plan (the Plan) provides only general information. Participants should refer to the Plan Agreement for a more comprehensive description of the Plan’s provisions.

The Kansas City Life Insurance Company Savings and Profit Sharing Plan, is a defined contribution benefit plan sponsored by Kansas City Life Insurance Company (the Company) and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Management believes it is in compliance with such provisions. The Plan is administered by a committee appointed by the Executive Committee of the Company. The Plan has three trustees who are also officers of the Company.

Contributions

Participants may elect to contribute from 1 to 15 percent of their unreduced monthly base salary to the Plan. Contribution percentages can only be changed once in any six-month period. The maximum contribution for any participant who is classified as highly compensated is 6 percent. The maximum contribution for an individual participant was $10,500 in 2001, ($10,500 - 2000 and $10,000 - 1999). Participants are allowed to direct the investment of their accounts among the nine funds offered by the Plan.

The Company matches participant contributions, up to 6 percent of the participant’s salary, using current or accumulated earnings and profits. Matching contributions are made to the Plan as soon as practical after the end of each month. The Company’s contributions are made in common stock of the Company. The Company may also contribute a profit sharing amount of up to 4 percent of salary depending upon the Company’s profit performance.

The Company did not make a profit sharing contribution for 2001. A profit sharing contribution of 4 percent of salary (up to $170,000 per individual) was made for 2000 . No profit sharing contributions was made for 1999.

Eligibility

Each employee who is at least 21 years of age, has completed one year of employment, and has a minimum of 1,000 hours of employment from the date of hire is eligible to participate in the Plan.

Participant Accounts

Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined. Forfeited balances under the Plan are used to reduce the Company’s matching contributions. Forfeited balances were $46,000 for 2001, ($18,000 - 2000 and $52,000 - 1999). Each participant is entitled to the benefit that can be provided from the participant’s vested account.

Payment of Benefits

The Plan allows a participant to withdraw all or a part of the value of his or her account that was contributed prior to January 1, 1988. The value of a participant account attributable to contributions after that date may not be withdrawn except in cases of extreme financial hardship. Hardship withdrawals are subject to the approval of the Administrative Committee, and any such withdrawal will be limited to the amount of actual contributions made to the Plan. Gains associated with the contributions or any of the matching Fund III amounts may not be withdrawn for any reason. On termination of services due to death, disability or retirement a participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account, or annual installments over a stated period of time not to exceed life expectancy.

Participant Loans

Participants may request a loan from the 401(k) portion of their elective accounts under the terms and conditions established by the Administrative Committee. The amount that may be borrowed is limited in accordance with the Internal Revenue Code Section 72(p). Loans will be made for a period no longer than five years, except for loans used to acquire a primary residence, which may not exceed ten years. The loans are secured by the balance in the participant’s accounts and bear interest at current market rates. Principal and interest is paid ratably through payroll deductions.

Vesting

Company contributions vest to the participant 30 percent after three years of employment, 40 percent after four years and an additional 20 percent each year thereafter until the participant is fully vested in Company contributions after seven years. Non-vested balances of terminated participants are used to reduce the Company’s contributions.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting. Certain reclassifications have been made to prior year results to conform with the current year’s presentation.

Use of Estimates

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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Valuation of Investments and Income Recognition

The investments of the Plan in Funds I and V through X are reported at fair value based upon the net asset value of the mutual fund shares held. The investments in Funds II and III are reported at fair value based upon December’s average bid price. Investments in Fund IV are reported at the contract value as stated in the guaranteed interest contract, which approximates fair value (see Note 5). The cost of investments sold is determined on the average cost basis. Participant loans are valued at cost, which approximates fair value. Purchases and sales or securities are recorded on the trade date. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Expenses

With the exception of mutual fund administrative fees, costs associated with the administration of the Plan are borne by the Company.

Payments of Benefits

Benefits are recorded when paid.

(3) INVESTMENT OPTIONS

Upon enrollment in the Plan, a participant may direct employee contributions in 1 percent increments and can redirect the investment mix or transfer balances between funds on a monthly basis in any of the following investment options:

Fund I	American Century Growth Stock Fund – This fund invests mostly in larger domestic companies that are growing at an accelerating pace.
Funds II and III	Kansas City Life Insurance Company Common Stock – The Company is a Missouri domiciled life insurance company and is the Plan sponsor. Employer matching contributions (which represent non-participant directed investments) are invested in Fund III. Employee contributions may be invested in Fund II at the direction of the employee.
Funds IV	MetLife Managed Guaranteed Interest Contract – MetLife guarantees both principal and a rate of interest. Refer to Note 5.
Funds V	Vanguard Bond Index Fund – Investment grade bonds are the primary investments for this fund. The objective of the fund is to duplicate the investment performance of the Lehman Aggregate Bond Index.
Funds VI	Templeton Foreign Fund – This fund seeks long-term capital growth by investing in stocks and bonds of foreign companies and governments.
Funds VII	Vanguard Balanced Index Fund – This fund’s assets are divided between stocks and bonds, with an average of 60 percent of the assets in stocks and 40 percent in bonds. The stock segment attempts to match the performance of the Wilshire 5000 Index. The bond segment attempts to match the performance of the Lehman Brothers Aggregate Bond Index.
Funds VIII	Fidelity Value Fund – This fund seeks capital appreciation by investing in domestic and foreign companies which possess valuable fixed assets or are undervalued relative to earnings or growth potential.
Funds IX	Vanguard Index Trust-Extended Market Fund – The fund’s objective is to match the performance of the Wilshire 4500, a broadly diversified index of medium and small domestic companies.
Funds X	Vanguard 500 Index Fund – The fund’s objective is to match the performance of the S&P 500 Index, consisting of medium to large capitalization stocks.

(4) INVESTMENTS

The fair value of individual investments that represent 5 percent or more of the Plan's participating employees' net assets available for plan benefits follow.

   Participant Directed Investments                                2001        2000       1999
                                                                   ----        ----       ----
                                                                            (in thousands)
American Century Growth Stock Fund,
     284,404 shares (258,145 shares -2000, 215,871 shares-1999)     $5,552      6,195      6,968
Kansas City Life Insurance Company common stock,
     74,638 shares (114,392 shares-2000, 92,329 shares-1999)         2,666      3,859      3,175
MetLife Managed Guaranteed Interest Contract                         5,108      4,192      3,850
Fidelity Value Fund,
     84,493 shares (76,160 shares-2000, 76,941 shares-1999)          4,352      3,530      3,371


Non-Participant Directed Investments

Kansas City Life Insurance Company common stock,
     730,556 shares (686,774 shares-2000, 661,366 shares-1999)     $26,094     23,166     22,744

The fair value of the Plan's investments has changed as follows.

                                    Net                             Net                             Net
                               Appreciation                    Appreciation                     Appreciation
                              (Depreciation)                  (Depreciation)                   (Depreciation)
              Fair Value       In Fair Value    Fair Value     In Fair Value    Fair Value     In Fair Value
              ----------       -------------    ----------     -------------    ----------     -------------
                                                       (in thousands)
                           2001                            2000                             1999
                           ----                            ----                             ----
Fund I             $5,552        (1,143)            6,195        (1,852)            6,968          1,066
Fund II             2,666           310             3,859           274             3,175           (671)
Fund III           26,094         1,446            23,166          (336)           22,744         (4,819)
Fund IV             5,108             -             4,192             -             3,850              -
Fund V              1,141            19             1,008            36               757            (55)
Fund VI             2,382          (278)            2,620          (231)            3,231            845
Fund VII            1,513           (95)            1,433           (77)            1,258            108
Fund VIII           4,352           392             3,530           197             3,371           (139)
Fund IX             2,169          (237)            1,859          (608)            2,119            357
Fund X                289             3                -              -                -               -
                  -------     ----------      -----------   ------------      -----------    ------------
Total             $51,266           417            47,862        (2,597)           47,473         (3,308)
                   ======           ===            ======        =======           ======         =======

(5) GUARANTEED INTEREST CONTRACT

In 1993, the Plan entered into a benefit-responsive guaranteed interest contract with MetLife Insurance Company (MetLife). MetLife maintains the contributions in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The contract is included in the financial statements at contract value as reported to the Plan from MetLife. Contract value represents contributions made under the contract plus earnings and less participant withdrawal and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The average yield and crediting interest rates were approximately 6 percent for 2001, 2000 and 1999. The crediting interest rate is based upon an agreed-upon formula with the issuer, but cannot be less than zero. Such interest rates are reviewed on a quarterly basis for resetting purposes.

(6) TAX STATUS

The Internal Revenue Service has issued a determination letter dated January 20, 2000 that, in form, the Plan and Trust forming a part thereof, meet the requirements of the Internal Revenue Code Section 401(a) as a qualified plan and trust. On December 28, 2001, the company filed an application with the Internal Revenue Service for another such determination letter. If the Plan qualifies in operation, the Trust’s earnings will be exempt from taxation, the Company’s contributions will be deductible, and each participant will incur no current tax liability on either the Company’s contributions or any earnings of the trust credited to the participant’s account prior to the time that such contributions or earnings are withdrawn or made available to the participant. At the time a distribution occurs, whether because of retirement, termination, death, disability or voluntary withdrawal of funds, any amounts distributed comprised of Company contributions, employee pretax contributions, and earnings on contributions of the Company or the participant shall be taxed to the participant at the tax rate then in effect. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Internal Revenue Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt.

(7) PLAN TERMINATION

Although the Company has not expressed any intent to terminate the Plan, it may do so at any time by adoption of a written resolution by the Company’s Board of Directors or the Executive Committee of the Board of Directors. Upon termination of the Plan, participants’ accounts would become fully vested and non-forfeitable and distributions would be made as promptly as possible.

(8) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The following reconciles net assets available for plan benefits per the financial statements to the Form 5500:

                                                        December 31
                                                         2001              2000
                                                               (in thousands)
         Net assets available for benefits per
               the financial statements                $52,826             50,224
         Amounts allocated to withdrawing
               participants                               (741)                 -
         Net assets available for benefits per
               the Form 5500                           $52,085             50,224

The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2001 to the Form 5500:

        Benefits paid to participants
               per the financial statements              $3,185
         Add: Amounts allocated to withdrawing
               participants at December 31, 2001            741
         Less: Amounts allocated to withdrawing
              participants at December 31, 2000               -
         Benefits paid to participants per
               Form 5500                                 $3,926

Amounts allocated to withdrawing participants are recorded on the Form 5500.

Kansas City Life Insurance Company
Savings and Profit Sharing Plan
Assets Held for Investment Purposes at Year End
December 31, 2001
(in thousands, except shares)

                                                Number of
                                                Shares or
         Description of Investment              Par Value       Cost     Fair Value

 Participant directed investments:

 Mutual funds:
 American Century Growth Stock Fund           284,404 shares   $ 6,292      5,552
 Kansas City Life Insurance Company *         74,638 shares      1,839      2,666
 Vanguard Bond Index Fund                     112,481 shares     1,116      1,140
 Templeton Foreign Fund                       257,461 shares     2,360      2,382
 Vanguard Balanced Index Fund                 84,723 shares      1,431      1,513
 Fidelity Value Fund                          84,493 shares      3,924      4,352
 Vanguard Index Trust-Extended Market Fund    93,931 shares      2,549      2,169
 Vanguard 500 Index Fund                      2,726 shares         285        289
     Total mutual funds                                         19,796     20,063

 Guaranteed interest contract:
 MetLife Managed Guaranteed Interest Contract $5,132 par value   5,132      5,132

      Total participant directed investments                  $ 24,928     25,195


 Non-participant directed investments:

 Common stock:
 Kansas City Life Insurance Company *         730,556 shares  $ 15,979     26,094

 Loans:
 Loans to participants (interest rates range from
   6.5 percent to 10.0 percent due January 2001 to
   February 2011)                                                1,307      1,307

      Total non-participant directed investments              $ 17,286     27,401

* Party-in-interest to the Plan.

See accompanying independent auditor's report.

Kansas City Life Insurance Company
Savings and Profit Sharing Plan
Reportable Transactions
Year ended December 31, 2001
(in thousands, except shares)

Party Involved and
Description of Asset Transactions  Shares    Cost   Consideration   Net Gain
- -------------------- -----------   -------   ----   -------------   --------

Category (iii)-series of securities transactions in excess of 5 percent of plan assets:

Kansas City Life
  Common stock*      13 purchases   74,161  $2,642          -           -

There were no category (i), (ii) or (iv) reportable transactions during 2001.

* Party-in-interest to the Plan.

See accompanying independent auditor’s report.

Independent Auditors’ Report

Board of Directors
Kansas City Life Insurance Company:

We have audited the statements of net assets available for plan benefits of Kansas City Life Insurance Company Savings and Profit Sharing Plan (Plan) as of December 31, 2001 and 2000, and the related statement of changes in net assets available for benefits for the years then ended and the supplemental schedule of assets held for investment purposes at year end for the years ended December 31, 2001 and 2000. These financial statements and supplemental schedule are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial status of the Plan as of December 31, 2001 and 2000, and the changes in its financial status for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes at year end is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/KPMG LLP
February 26, 2002
Omaha, Nebraska

Report of Independent Auditors

The Board of Trustees
Kansas City Life Insurance Company
    Savings and Profit Sharing Plan

We have audited the accompanying statement of changes in net assets available for plan benefits of the Kansas City Life Insurance Company Savings and Profit Sharing Plan (the Plan) for the year ended December 31, 1999. This financial statement is the responsibility of the Plan’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the changes in net assets available for plan benefits of the Plan for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.

Ernst & Young LLP

Kansas City, Missouri
February 18, 2000