8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2006

CITIZENS, INC.

(Exact name of registrant as specified in its charter)

COLORADO	0-16509	84-0755371
(State or other jurisdiction of incorporation	(Commission File Number)	(IRS Employer Identification No.)

400 East Anderson Lane
Austin, Texas 78752
(Address of principal executive offices) (Zip Code)

512-837-7100
Registrant’s telephone number, including area code

Not Applicable (Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

 News Release

SECTION 2 — FINANCIAL INFORMATION

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 10, 2006, Citizens, Inc. (“Citizens”) issued a news release (the “Release”) reporting, among other things, results for the first quarter ended March 31, 2006. A copy of the Release is included as Exhibit 99.5 to this Current Report on Form 8-K and incorporated herein by reference.

The information in this report is being furnished, not filed, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and pursuant to Item 2.02 of Form 8-K will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

SECTION 9 — FINANCIAL STATEMENTS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

     (a) Financial Statements of businesses acquired:

Not applicable.

     (b) Pro Forma financial information:

Not applicable.

     (c) Exhibits:

The following exhibit is included with this Current Report on Form 8-K:

Exhibit No.	Description
99.5	News Release issued by Citizens, Inc. on May 10, 2006.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CITIZENS, INC
By:	/s/ Mark A. Oliver
	Mark A. Oliver, President

Date: May 11, 2006

EXHIBIT INDEX

Exhibit No.	Description
99.5	News Release issued by Citizens, Inc. on May 10, 2006.

EX-99.5

Exhibit 99.5

CITIZENS, INC. REPORTS FIRST QUARTER RESULTS

Austin, Texas — May 10, 2006 — Citizens, Inc. (NYSE: CIA) reported net income of $2.0 million or $0.04 per share for the quarter ended March 31, 2006, compared to net income of $2.4 million or $0.05 per share during the same period in 2005. An increase in filing of casualty claims related to Hurricanes Katrina and Rita coupled with increased casualty reinsurance costs amounted to more than $1.0 million during the first quarter of 2006 and caused the decrease in net income. The Company acquired Security Plan Life Insurance Company (Security Plan), a Louisiana life insurance company with significant marketing operations in Louisiana in October 2004. Security Plan owns a casualty insurer that provides dwelling and contents insurance in Louisiana.

Total revenues for the first three months of 2006 were $38.1 million compared to $34.3 million in 2005, an increase of 11.1%. Premiums for the first quarter of 2006 increased 10% to $30.2 million from $27.5 million in the first quarter of 2005. The 2006 increase is primarily attributable to increased first year issued and paid international life insurance premiums which grew 22.6% over the same period in 2005. The development of new markets in the Pacific Rim, particularly Taiwan, and the expansion of existing markets in Latin America are the primary contributors to this growth. Net investment income increased 2.7% during first quarter 2006 to $6.3 million compared to $6.1 million in first quarter 2005. Realized gains in 2006 were $1.1 million, compared to $69,000 in 2005, the gain resulting from the sale of certain zero coupon bonds acquired in the Security Plan transaction.

Death benefits decreased 7.6% from $6.3 million in first quarter 2005 to $5.8 million in first quarter 2006. Casualty claims increased more than 230% to $1.5 million in the first quarter of 2006 from $453,000 during the same time in 2005, the increase due to the late filing of new claims and mediation settlements of existing claims from Hurricanes Katrina and Rita.

Underwriting, acquisition and insurance expenses decreased 8.4% to $7.1 million in first quarter 2006 compared to $7.7 million in first quarter 2005, due to the economies of scale achieved since the 2004 acquisition of Security Plan.

Assets at March 31, 2006 totaled $670.9 million, compared to $661.9 million at December 31, 2005. Stockholders’ equity at March 31, 2006 was $132.0 million compared to $137.0 million at December 31, 2005. Unrealized losses on the Company’s bond portfolio, net of tax, as the result of higher interest rates, offset the income earned during the period.

About Citizens, Inc.

Citizens, Inc., parent of Citizens, Inc. Financial Group, a financial services investment company listed on the New York Stock Exchange, symbol CIA, plans to achieve $1 billion in assets, $250 million in revenues and $10 billion of life insurance in force by 2010, via the worldwide sale of U.S. dollar denominated whole life cash value insurance policies, coupled with the acquisition of other life insurance companies.

Citizens is included in the Russell 2000^® Index, which measures the performance of the largest companies, based on market capitalization, in the U.S. stock market. Citizens’ stock closed at $5.32 on May 9, 2006.

Additional information is available about the Company on its web site: www.citizensinc.com.

###

Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as “may,” “will,” “expect,” “anticipate” or “continue” or comparable words. In addition, all statements other than statements of historical facts that address activities that the Company expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-K for the fiscal year ended December 31, 2004 and its current reports on Form 8-K, for the meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in the Company’s expectations. The Company also disclaims any duty to comment upon or correct information that may be contained in reports published by the investment community.

CITIZENS, INC.
COMPARATIVE CONSOLIDATED FINANCIAL HIGHLIGHTS
OPERATING STATEMENTS

	(Unaudited)
	Three Months Ended
	March 31,
	2006			2005
Revenues
Premium income	$	30,243,110			27,496,908
Net investment income		6,269,713			6,106,012
Realized gains		1,053,055			69,127
Decrease in fair value of options and warrants		190,222			434,406
Other income		351,949			207,761
Total revenues		38,108,049			34,314,214
Benefits and Expenses
Insurance benefits paid or provided:
Increase in future policy benefit reserves		7,106,110			4,856,277
Policyholders’ dividends		1,022,280			870,168
Claims and surrenders		13,997,727			12,369,442
Total insurance benefits paid or provided		22,126,117			18,095,887
Commissions		8,796,529			7,046,446
Other underwriting, acquisition and insurance expenses		7,073,562			7,719,718
Capitalization of deferred policy acquisition costs		(6,325,783	)		(5,021,085	)
Amortization of deferred policy acquisition costs		2,621,978			1,971,100
Amortization of cost of customer relationships acquired and other intangibles		757,695			1,149,926
Total benefits and expenses		35,050,098			30,961,992
Income before Federal income tax		3,057,951			3,352,222
Federal income tax expense		1,009,169			992,736
Net income	$	2,048,782			2,359,486
Net income applicable to common stock	$	1,542,894			1,864,726
INCOME PER SHARE
Basic and diluted earnings
per share of common stock	$	0.04		$	0.05
Weighted average shares outstanding		41,168,238			41,055,811

BALANCE SHEETS

	(Unaudited)				(Unaudited)		(Unaudited)		(Unaudited)
	March 31,		December 31,		September 30,		June 30,		March 31,
	2006		2005		2005		2005		2005
Total assets	$	670,909,135		661,888,811		660,414,879		648,699,840		680,725,559
Total invested assets		492,028,241		484,811,023		473,122,665		462,623,378		462,766,647
Stockholders’ equity		131,972,934		136,963,090		137,012,163		141,234,652		134,405,978