10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

___________________________

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

For the quarterly period ended June 30, 2013

or

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

For the transition period from  _____ to _____

Commission File Number:  000-16509

CITIZENS, INC.

(Exact name of registrant as specified in its charter)

Colorado	84-0755371
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
400 East Anderson Lane, Austin, TX	78752
(Address of principal executive offices)	(Zip Code)

(512) 837-7100

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  (Check one):
Large accelerated filer ¨	Accelerated filer x	Non-accelerated filer ¨	Smaller reporting company ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of August 2, 2013, the Registrant had 49,080,114 shares of Class A common stock, no par value, outstanding and 1,001,714 shares of Class B common stock outstanding.

THIS PAGE INTENTIONALLY LEFT BLANK

TABLE OF CONTENTS

			Page Number
Part I.	Financial Information
	Item 1.	Financial Statements
		Consolidated Statements of Financial Position, June 30, 2013 (Unaudited) and December 31, 2012	2
		Consolidated Statements of Comprehensive Income, Three Months Ended June 30, 2013 and 2012 (Unaudited)	4
		Consolidated Statements of Comprehensive Income, Six Months Ended June 30, 2013 and 2012 (Unaudited)	5
		Consolidated Statements of Cash Flows, Six Months Ended June 30, 2013 and 2012 (Unaudited)	6
		Notes to Consolidated Financial Statements	8
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
	Item 4.	Controls and Procedures	49
Part II.	Other Information
	Item 1.	Legal Proceedings	50
	Item 1A.	Risk Factors	50
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
	Item 3.	Defaults Upon Senior Securities	51
	Item 4.	Mine Safety Disclosures	51
	Item 5.	Other Information	51
	Item 6.	Exhibits	52

1

PART I.  FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Financial Position (In thousands)
	June 30, 2013		December 31, 2012
Assets	(Unaudited)
Investments:
Fixed maturities available-for-sale, at fair value (cost: $630,177 and $559,736 in 2013 and 2012, respectively)	$	649,109	604,520
Fixed maturities held-to-maturity, at amortized cost (fair value: $161,012 and $193,739 in 2013 and 2012, respectively)	159,208		187,008
Equity securities available-for-sale, at fair value (cost: $52,392 and $52,744 in 2013 and 2012, respectively)	52,699		53,741
Mortgage loans on real estate	687		1,509
Policy loans	45,824		42,993
Real estate held for investment (less $1,357 and $1,287 accumulated depreciation in 2013 and 2012, respectively)	8,509		8,496
Other long-term investments	56		57
Short-term investments	—		2,340
Total investments	916,092		900,664
Cash and cash equivalents	41,013		56,299
Accrued investment income	11,378		10,304
Reinsurance recoverable	6,673		9,651
Deferred policy acquisition costs	140,787		135,569
Cost of customer relationships acquired	24,474		25,116
Goodwill	17,160		17,160
Other intangible assets	865		879
Federal income tax receivable	224		270
Property and equipment, net	7,138		7,383
Due premiums, net (less $1,346 and $1,345 allowance for doubtful accounts in 2013 and 2012, respectively)	10,443		10,527
Prepaid expenses	1,335		344
Other assets	962		782
Total assets	$	1,178,544	1,174,948

(Continued)

See accompanying notes to consolidated financial statements.

2

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Financial Position (In thousands, except share amounts)
	June 30, 2013			December 31, 2012
Liabilities and Stockholders' Equity	(Unaudited)
Liabilities:
Policy liabilities:
Future policy benefit reserves:
Life insurance	$	795,886		762,319
Annuities	53,223			51,750
Accident and health	2,712			5,491
Dividend accumulations	12,821			11,962
Premiums paid in advance	29,811			27,455
Policy claims payable	8,809			11,015
Other policyholders' funds	8,010			9,440
Total policy liabilities	911,272			879,432
Commissions payable	2,195			2,606
Deferred federal income tax	6,796			17,301
Payable for securities in process of settlement	179			2,358
Other liabilities	9,457			10,143
Total liabilities	929,899			911,840
Commitments and contingencies (Note 7)
Stockholders' equity:
Class A, no par value, 100,000,000 shares authorized, 52,215,852 shares issued and outstanding in 2013 and 2012, including shares in treasury of 3,135,738 in 2013 and 2012	259,383			259,383
Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2013 and 2012	3,184			3,184
Accumulated deficit	(15,172		)	(17,335	)
Accumulated other comprehensive income:
Unrealized gains on securities, net of tax	12,261			28,887
Treasury stock, at cost	(11,011		)	(11,011	)
Total stockholders' equity	248,645			263,108
Total liabilities and stockholders' equity	$	1,178,544		1,174,948

See accompanying notes to consolidated financial statements.

3

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Comprehensive Income Three Months Ended June 30, (In thousands, except per share amounts) (Unaudited)
	2013					2012
Revenues:
Premiums:
Life insurance			$	42,223			39,945
Accident and health insurance			406				417
Property insurance			1,205				1,234
Net investment income			9,265				7,612
Realized investment gains, net			82				246
Decrease in fair value of warrants			—				37
Other income			427				111
Total revenues			53,608				49,602
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders			16,660				16,109
Increase in future policy benefit reserves			17,896				16,751
Policyholders' dividends			2,235				2,281
Total insurance benefits paid or provided			36,791				35,141
Commissions			10,429				9,731
Other general expenses			7,342				6,342
Capitalization of deferred policy acquisition costs			(7,672		)		(7,044	)
Amortization of deferred policy acquisition costs			4,363				4,433
Amortization of cost of customer relationships acquired			560				660
Total benefits and expenses			51,813				49,263
Income before federal income tax			1,795				339
Federal income tax expense (benefit)			488				(64	)
Net income			1,307				403
Per Share Amounts:
Basic earnings per share of Class A common stock	$	0.03				0.01
Basic earnings per share of Class B common stock	0.01					—
Diluted earnings per share of Class A common stock	0.03					0.01
Diluted earnings per share of Class B common stock	0.01					—
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during period			(25,544		)		6,003
Reclassification adjustment for gains included in net income			(73		)		(121	)
Unrealized gains (losses) on available-for-sale securities, net			(25,617		)		5,882
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities			(8,953		)		2,063
Other comprehensive income (loss)			(16,664		)		3,819
Comprehensive income (loss)			$	(15,357	)		4,222

See accompanying notes to consolidated financial statements.

4

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Comprehensive Income Six Months Ended June 30, (In thousands, except per share amounts) (Unaudited)
	2013					2012
Revenues:
Premiums:
Life insurance			$	81,637			77,351
Accident and health insurance			755				830
Property insurance			2,382				2,511
Net investment income			17,654				15,189
Realized investment gains, net			113				344
Decrease in fair value of warrants			—				73
Other income			613				209
Total revenues			103,154				96,507
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders			31,466				30,863
Increase in future policy benefit reserves			34,855				30,892
Policyholders' dividends			4,309				4,155
Total insurance benefits paid or provided			70,630				65,910
Commissions			19,487				18,395
Other general expenses			14,041				12,958
Capitalization of deferred policy acquisition costs			(14,034		)		(12,983	)
Amortization of deferred policy acquisition costs			8,989				8,559
Amortization of cost of customer relationships acquired			1,138				1,236
Total benefits and expenses			100,251				94,075
Income before federal income tax			2,903				2,432
Federal income tax expense			740				517
Net income			2,163				1,915
Per Share Amounts:
Basic earnings per share of Class A common stock	$	0.05				0.04
Basic earnings per share of Class B common stock	0.02					0.02
Diluted earnings per share of Class A common stock	0.05					0.04
Diluted earnings per share of Class B common stock	0.02					0.02
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during period			(25,448		)		8,564
Reclassification adjustment for gains included in net income			(104		)		(207	)
Unrealized gains (losses) on available-for-sale securities, net			(25,552		)		8,357
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities			(8,926		)		2,959
Other comprehensive income (loss)			(16,626		)		5,398
Comprehensive income (loss)			$	(14,463	)		7,313

See accompanying notes to consolidated financial statements.

5

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Cash Flows Six Months Ended June 30, (In thousands) (Unaudited)
	2013			2012
Cash flows from operating activities:
Net income	$	2,163		1,915
Adjustments to reconcile net income to net cash provided by operating activities:
Realized gains on sale of investments and other assets	(113		)	(344	)
Net deferred policy acquisition costs	(5,045		)	(4,424	)
Amortization of cost of customer relationships acquired	1,138			1,236
Decrease in fair value of warrants	—			(73	)
Depreciation	637			607
Amortization of premiums and discounts on investments	4,256			2,438
Deferred federal income tax benefit	(1,579		)	(1,679	)
Change in:
Accrued investment income	(1,074		)	(899	)
Reinsurance recoverable	2,978			476
Due premiums	84			399
Future policy benefit reserves	32,049			30,685
Other policyholders' liabilities	(421		)	1,925
Federal income tax receivable	46			820
Commissions payable and other liabilities	(1,097		)	(1,417	)
Other, net	(1,008		)	(1,515	)
Net cash provided by operating activities	33,014			30,150
Cash flows from investing activities:
Sale of fixed maturities, available-for-sale	58			503
Maturities and calls of fixed maturities, available-for-sale	33,943			105,077
Maturities and calls of fixed maturities, held-to-maturity	26,465			115,630
Purchase of fixed maturities, available-for-sale	(109,596		)	(118,558	)
Purchase of fixed maturities, held-to-maturity	—			(94,276	)
Calls of equity securities, available-for-sale	400			420
Principal payments on mortgage loans	822			22
Increase in policy loans, net	(2,831		)	(2,024	)
Sale of other long-term investments	1			4
Purchase of other long-term investments	(83		)	(94	)
Purchase of property and equipment	(321		)	(350	)
Maturity of short-term investments	2,841			—
Purchase of short-term investments	(531		)	(2,378	)
Net cash provided by (used in) investing activities	(48,832		)	3,976

6

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Consolidated Statements of Cash Flows, Continued Six Months Ended June 30, (In thousands) (Unaudited)
	2013			2012
Cash flows from financing activities:
Warrants exercised	$	—		68
Annuity deposits	2,815			3,425
Annuity withdrawals	(2,283		)	(1,958	)
Net cash provided by financing activities	532			1,535
Net increase (decrease) in cash and cash equivalents	(15,286		)	35,661
Cash and cash equivalents at beginning of year	56,299			33,255
Cash and cash equivalents at end of period	$	41,013		68,916
Supplemental disclosures of operating activities:
Cash paid during the period for income taxes, net	$	2,273		1,377

Supplemental Disclosures of Non-Cash Investing Activities:

None.

See accompanying notes to consolidated financial statements.

7

Table of Contents

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2013

(Unaudited)

(1) Financial Statements

Basis of Presentation and Consolidation

The accompanying consolidated financial statements of Citizens, Inc. and its wholly-owned subsidiaries have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP").

The consolidated financial statements include the accounts and operations of Citizens, Inc. ("Citizens"), a Colorado corporation, and its wholly-owned subsidiaries, CICA Life Insurance Company of America ("CICA"), Security Plan Life Insurance Company ("SPLIC"), Security Plan Fire Insurance Company ("SPFIC"), Citizens National Life Insurance Company ("CNLIC"), Computing Technology, Inc. ("CTI") and Insurance Investors, Inc. ("III").  Citizens and its wholly-owned subsidiaries are collectively referred to as "the Company," "we," "us" or "our."

The consolidated statements of financial position for June 30, 2013, and the consolidated statements of comprehensive income and cash flows for the three and six-month periods ended June 30, 2013 and 2012, have been prepared by the Company without audit.  In the opinion of management, all adjustments to present fairly the financial position, results of operations, and changes in cash flows at June 30, 2013 and for comparative periods have been made.  The consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”).  Accordingly, the financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2012.  Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

We provide primarily life insurance and a small amount of health insurance policies through our insurance subsidiaries:  CICA, SPLIC, and CNLIC.  CICA and CNLIC issue ordinary whole-life policies, credit life and disability, burial insurance, pre-need policies, and accident and health related policies, throughout the Midwest and southern United States.  CICA also issues ordinary whole-life policies to non-U.S. residents.  SPLIC offers final expense and home service life insurance in Louisiana, Arkansas and Mississippi and SPFIC, a wholly-owned subsidiary of SPLIC, writes a limited amount of property insurance in Louisiana.

CTI provides data processing systems and services, as well as furniture and equipment, to the Company.  III provides aviation transportation to the Company.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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.

The most significant estimates include those used in the evaluation of other-than-temporary impairments on debt and equity securities and valuation allowances on investments, actuarially determined assets and liabilities and assumptions, goodwill impairment, valuation allowance on deferred tax assets, and contingencies relating to litigation and regulatory matters.  Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements.

Reclassification

Reclassifications have been made in the current year related to certain prior year reported amounts to provide consistent presentation.

8

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

Significant Accounting Policies

For a description of significant accounting policies, see Note 1 of the Notes to Consolidated Financial Statements included in our 2012 Form 10-K Annual Report, which should be read in conjunction with these accompanying Consolidated Financial Statements.

(2) Accounting Pronouncements

Accounting Standards Recently Adopted

In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”), which requires enhanced reporting of such amounts either on the face of the financial statements or in the notes to the financial statements.  Under ASU 2013-02, the type of reclassification out of accumulated other comprehensive income, as defined under current GAAP, will dictate whether the disclosure must provide the effect of the reclassification on the respective financial statement line items or whether cross-referencing to other disclosures that provide additional detail about the reclassification will be required.  The amendments in ASU 2013-02 are effective prospectively for reporting periods beginning after December 15, 2012.  We have included the enhanced disclosures in the financial statements.

9

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

(3) Segment Information

The Company has three reportable segments:  Life Insurance, Home Service Insurance, and Other Non-Insurance Enterprises.  The accounting policies of the segments are in accordance with U.S. GAAP and are the same as those used in the preparation of the consolidated financial statements.  The Company evaluates profit and loss performance based on U.S. GAAP income before federal income taxes for its three reportable segments.

The Company has no reportable differences between segments and consolidated operations.

	Three Months Ended
	June 30, 2013
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	32,850		10,984		—		43,834
Net investment income	5,584			3,341		340		9,265
Realized investment gains, net	81			1		—		82
Other income	351			46		30		427
Total revenue	38,866			14,372		370		53,608
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	11,429			5,231		—		16,660
Increase in future policy benefit reserves	17,047			849		—		17,896
Policyholders' dividends	2,216			19		—		2,235
Total insurance benefits paid or provided	30,692			6,099		—		36,791
Commissions	6,697			3,732		—		10,429
Other general expenses	2,928			3,225		1,189		7,342
Capitalization of deferred policy acquisition costs	(6,170		)	(1,502	)	—		(7,672	)
Amortization of deferred policy acquisition costs	3,870			493		—		4,363
Amortization of cost of customer relationships acquired	154			406		—		560
Total benefits and expenses	38,171			12,453		1,189		51,813
Income (loss) before income tax expense	$	695		1,919		(819	)	1,795

10

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

	Six Months Ended
	June 30, 2013
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	62,967		21,807		—		84,774
Net investment income	10,488			6,521		645		17,654
Realized investment gains, net	81			31		1		113
Other income	414			136		63		613
Total revenue	73,950			28,495		709		103,154
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	20,767			10,699		—		31,466
Increase in future policy benefit reserves	33,089			1,766		—		34,855
Policyholders' dividends	4,275			34		—		4,309
Total insurance benefits paid or provided	58,131			12,499		—		70,630
Commissions	12,276			7,211		—		19,487
Other general expenses	5,780			6,491		1,770		14,041
Capitalization of deferred policy acquisition costs	(11,256		)	(2,778	)	—		(14,034	)
Amortization of deferred policy acquisition costs	7,855			1,134		—		8,989
Amortization of cost of customer relationships acquired	321			817		—		1,138
Total benefits and expenses	73,107			25,374		1,770		100,251
Income (loss) before income tax expense	$	843		3,121		(1,061	)	2,903

11

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

	Three Months Ended
	June 30, 2012
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	30,601		10,995		—		41,596
Net investment income	4,253			3,075		284		7,612
Realized investment gains, net	187			40		19		246
Decrease in fair value of warrants	—			—		37		37
Other income	75			6		30		111
Total revenue	35,116			14,116		370		49,602
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	10,772			5,337		—		16,109
Increase in future policy benefit reserves	16,201			550		—		16,751
Policyholders' dividends	2,268			13		—		2,281
Total insurance benefits paid or provided	29,241			5,900		—		35,141
Commissions	5,990			3,741		—		9,731
Other general expenses	2,411			3,006		925		6,342
Capitalization of deferred policy acquisition costs	(5,507		)	(1,537	)	—		(7,044	)
Amortization of deferred policy acquisition costs	3,749			684		—		4,433
Amortization of cost of customer relationships acquired	184			476		—		660
Total benefits and expenses	36,068			12,270		925		49,263
Income (loss) before income tax expense	$	(952	)	1,846		(555	)	339

12

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

	Six Months Ended
	June 30, 2012
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	58,770		21,922		—		80,692
Net investment income	8,411			6,230		548		15,189
Realized investment gains, net	189			127		28		344
Decrease in fair value of warrants	—			—		73		73
Other income	132			12		65		209
Total revenue	67,502			28,291		714		96,507
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	20,699			10,164		—		30,863
Increase in future policy benefit reserves	29,419			1,473		—		30,892
Policyholders' dividends	4,130			25		—		4,155
Total insurance benefits paid or provided	54,248			11,662		—		65,910
Commissions	11,012			7,383		—		18,395
Other general expenses	5,331			5,970		1,657		12,958
Capitalization of deferred policy acquisition costs	(10,019		)	(2,964	)	—		(12,983	)
Amortization of deferred policy acquisition costs	7,400			1,159		—		8,559
Amortization of cost of customer relationships acquired	393			843		—		1,236
Total benefits and expenses	68,365			24,053		1,657		94,075
Income (loss) before income tax expense	$	(863	)	4,238		(943	)	2,432

13

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

(4) Earnings Per Share

The following tables set forth the computation of basic and diluted earnings per share.

	Three Months Ended
	June 30, 2013		June 30, 2012
	(In thousands, except per share amounts)
Basic and diluted earnings per share:
Numerator:
Net income	$	1,307	403
Net income allocated to Class A common stock	$	1,293	399
Net income allocated to Class B common stock	14		4
Net income	$	1,307	403
Denominator:
Weighted average shares of Class A outstanding - basic	49,080		48,963
Weighted average shares of Class A outstanding - diluted	49,080		48,989
Weighted average shares of Class B outstanding - basic and diluted	1,002		1,002
Basic earnings per share of Class A common stock	$	0.03	0.01
Basic earnings per share of Class B common stock	0.01		—
Diluted earnings per share of Class A common stock	0.03		0.01
Diluted earnings per share of Class B common stock	0.01		—

	Six Months Ended
	June 30, 2013		June 30, 2012
	(In thousands, except per share amounts)
Basic and diluted earnings per share:
Numerator:
Net income	$	2,163	1,915
Net income allocated to Class A common stock	$	2,141	1,895
Net income allocated to Class B common stock	22		20
Net income	$	2,163	1,915
Denominator:
Weighted average shares of Class A outstanding - basic	49,080		48,961
Weighted average shares of Class A outstanding - diluted	49,080		48,997
Weighted average shares of Class B outstanding - basic and diluted	1,002		1,002
Basic earnings per share of Class A common stock	$	0.05	0.04
Basic earnings per share of Class B common stock	0.02		0.02
Diluted earnings per share of Class A common stock	0.05		0.04
Diluted earnings per share of Class B common stock	0.02		0.02

14

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

(5) Investments

The Company invests primarily in fixed maturity securities, which totaled 84.4% of total investments and cash and cash equivalents at June 30, 2013.

	June 30, 2013				December 31, 2012
	Carrying Value		% of Total Carrying Value		Carrying Value		% of Total Carrying Value
	(In thousands)				(In thousands)
Fixed maturity securities	$	808,317	84.4	%	$	791,528	82.7	%
Equity securities	52,699		5.5	%	53,741		5.6	%
Mortgage loans	687		0.1	%	1,509		0.2	%
Policy loans	45,824		4.8	%	42,993		4.5	%
Real estate and other long-term investments	8,565		0.9	%	8,553		0.9	%
Short-term investments	—		—	%	2,340		0.2	%
Cash and cash equivalents	41,013		4.3	%	56,299		5.9	%
Total cash, cash equivalents and investments	$	957,105	100.0	%	$	956,963	100.0	%

15

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

The following tables represent the cost, gross unrealized gains and losses and fair value for fixed maturities and equity securities as of the periods indicated.

	June 30, 2013
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale:
U.S. Treasury securities	$	10,139	2,856	—	12,995
U.S. Government-sponsored enterprises	63,300		2,069	97	65,272
States and political subdivisions	347,580		10,582	9,170	348,992
Foreign governments	104		29	—	133
Corporate	204,613		13,729	1,394	216,948
Commercial mortgage-backed	349		13	—	362
Residential mortgage-backed	4,092		317	2	4,407
Total available-for-sale securities	630,177		29,595	10,663	649,109
Held-to-maturity securities:
U.S. Government-sponsored enterprises	10,446		248	5	10,689
States and political subdivisions	118,327		2,801	1,764	119,364
Corporate	30,435		606	82	30,959
Total held-to-maturity securities	159,208		3,655	1,851	161,012
Total fixed maturities	$	789,385	33,250	12,514	810,121
Equity securities:
Stock mutual funds	$	10,463	719	—	11,182
Bond mutual funds	41,505		15	732	40,788
Common stock	17		—	4	13
Preferred stock	407		309	—	716
Total equity securities	$	52,392	1,043	736	52,699

16

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

	December 31, 2012
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	10,170	3,773	—	13,943
U.S. Government-sponsored enterprises	81,788		3,815	22	85,581
States and political subdivisions	265,812		17,227	777	282,262
Foreign governments	105		36	—	141
Corporate	195,755		20,536	286	216,005
Commercial mortgage-backed	481		17	2	496
Residential mortgage-backed	5,625		469	2	6,092
Total available-for-sale securities	559,736		45,873	1,089	604,520
Held-to-maturity securities:
U.S. Government-sponsored enterprises	28,632		514	—	29,146
States and political subdivisions	125,634		5,435	378	130,691
Corporate	32,742		1,160	—	33,902
Total held-to-maturity securities	187,008		7,109	378	193,739
Total fixed maturity securities	$	746,744	52,982	1,467	798,259
Equity securities:
Stock mutual funds	$	10,463	250	28	10,685
Bond mutual funds	41,504		541	129	41,916
Common stock	17		—	2	15
Preferred stock	760		365	—	1,125
Total equity securities	$	52,744	1,156	159	53,741

At June 30, 2013, the Company had $4.4 million of mortgage-backed security holdings based on amortized cost, of which $4.1 million, or 93.2%, were residential U.S. Government-sponsored issues.  Mortgage-backed securities are also referred to as securities not due at a single maturity date throughout this report.  The majority of the Company's equity securities are diversified stock and bond mutual funds.

Valuation of Investments in Fixed Maturity and Equity Securities

Held-to-maturity securities are reported in the financial statements at amortized cost and available-for-sale securities are reported at fair value.

The Company monitors all debt and equity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews.  The assessment of whether impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value.  The Company determines other-than-temporary impairment by reviewing relevant evidence related to the specific security issuer as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

When an other-than-temporary impairment has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis.  If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is recognized in earnings equal to the

17

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

entire difference between the investment's cost and its fair value at the balance sheet date.  If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is separated into the following: (a) the amount representing the credit loss; and (b) the amount related to all other factors.  The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings.  The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes.  The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment.  The new amortized cost basis is not adjusted for subsequent recoveries in fair value.

The Company evaluates whether a credit impairment exists for debt securities by considering primarily the following factors: (a) changes in the financial condition of the security's underlying collateral; (b) whether the issuer is current on contractually obligated interest and principal payments; (c) changes in the financial condition, credit rating and near-term prospects of the issuer; (d) the length of time to which the fair value has been less than the amortized cost of the security; and (e) the payment structure of the security.  The Company's best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process.  Quantitative review includes information received from third party sources such as financial statements, pricing and rating changes, liquidity and other statistical information.  Qualitative factors include judgments related to business strategies, economic impacts on the issuer and overall judgment related to estimates and industry factors.  The Company's best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates.  These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries, which may include estimating the underlying collateral value.  In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer.

The primary factors considered in evaluating whether an impairment exists for an equity security include, but are not limited to: (a) the length of time and the extent to which the fair value has been less than the cost of the security; (b) changes in the financial condition, credit rating and near-term prospects of the issuer; (c) whether the issuer is current on contractually obligated payments; and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery.

The Company did not recognize any other-than-temporary impairments ("OTTI") during the six months ended June 30, 2013 and 2012.

18

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

The following tables present the fair values and gross unrealized losses of fixed maturities and equity securities that have remained in a continuous unrealized loss position for the periods indicated.

	June 30, 2013
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
U.S. Government-sponsored enterprises	$	8,676	97	7	—	—	—	8,676	97	7
States and political subdivisions	192,682		8,438	214	7,875	732	8	200,557	9,170	222
Corporate	44,184		1,394	30	—	—	—	44,184	1,394	30
Residential mortgage-backed	3		—	1	48	2	1	51	2	2
Total available-for-sale securities	245,545		9,929	252	7,923	734	9	253,468	10,663	261
Held-to-maturity securities:
U.S. Government-sponsored enterprises	3,908		5	2	—	—	—	3,908	5	2
States and political subdivisions	53,296		1,764	47	—	—	—	53,296	1,764	47
Corporate	5,496		82	4	—	—	—	5,496	82	4
Total held-to-maturity securities	62,700		1,851	53	—	—	—	62,700	1,851	53
Total fixed maturities	$	308,245	11,780	305	7,923	734	9	316,168	12,514	314
Equity securities:
Bond mutual funds	$	34,028	607	5	2,875	125	1	36,903	732	6
Common stocks	—		—	—	13	4	1	13	4	1
Total equities	$	34,028	607	5	2,888	129	2	36,916	736	7

As of June 30, 2013, the Company had 9 fixed maturity available-for-sale securities and no held-to-maturity securities that were in an unrealized loss position for greater than 12 months.  These securities consisted of municipals and mortgage-backed securities. There is 1 bond mutual fund that is now in a loss position for greater than 12 months. This is a diversified U.S. Government bond fund that has a large percentage of mortgage exposure in Pass Thru and CMO security types which have refinanced in the current interest rate environment. The fund is comprised of only U.S. Government bond assets.

19

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

	December 31, 2012
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
U.S. Government-sponsored enterprises	$	10,603	22	9	—	—	—	10,603	22	9
States and political subdivisions	54,115		443	61	5,099	334	2	59,214	777	63
Corporate	22,316		286	16	—	—	—	22,316	286	16
Commercial mortgage-backed	94		2	1	—	—	—	94	2	1
Residential mortgage-backed	—		—	—	52	2	1	52	2	1
Total available-for-sale securities	87,128		753	87	5,151	336	3	92,279	1,089	90
Held-to-maturity securities:
States and political subdivisions	40,611		378	32	—	—	—	40,611	378	32
Total held-to-maturity securities	40,611		378	32	—	—	—	40,611	378	32
Total fixed maturities	$	127,739	1,131	119	5,151	336	3	132,890	1,467	122
Equity securities:
Stock mutual funds	$	—	—	—	972	28	1	972	28	1
Bond mutual funds	3,335		88	1	2,959	41	2	6,294	129	3
Common stock	15		2	1	—	—	—	15	2	1
Total equities	$	3,350	90	2	3,931	69	3	7,281	159	5

We have reviewed these securities for the periods ended June 30, 2013 and December 31, 2012 and determined that no other-than-temporary impairment exists based on our evaluation of the credit worthiness of the issuers and the fact that we do not intend to sell the investments nor is it likely that we will be required to sell the securities before recovery of their amortized cost bases which may be maturity.  We continue to monitor all securities on an on-going basis, and future information may become available which could result in impairments being recorded.

20

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

The amortized cost and fair value of fixed maturity securities at June 30, 2013 by contractual maturity are shown in the table below.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2013
	Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	236,253	242,160
Due after one year through five years	103,078		109,314
Due after five years through ten years	119,601		123,041
Due after ten years	166,804		169,825
Securities not due at a single maturity date	4,441		4,769
Total available-for-sale securities	630,177		649,109
Held-to-maturity securities:
Due in one year or less	11,206		10,854
Due after one year through five years	41,795		42,539
Due after five years through ten years	38,399		39,499
Due after ten years	67,808		68,120
Total held-to-maturity securities	159,208		161,012
Total fixed maturities	$	789,385	810,121

The securities not due at a single maturity date are primarily mortgage-backed obligations of U.S. Government-sponsored enterprises and corporate securities.

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.  Proceeds and gross realized gains from sales of securities for the three and six months ended June 30, 2013 and 2012 are summarized as follows.

	Fixed Maturities Available-for-Sale					Equity Securities
	Three Months Ended June 30,			Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2013		2012	2013	2012	2013	2012	2013	2012
	(In thousands)
Proceeds	$	—	—	58	503	—	—	—	—
Gross realized gains	$	—	—	1	4	—	—	—	—
Gross realized losses	$	—	—	—	3	—	—	—	—

During the six months ended June 30, 2013, one fixed maturity security was sold which resulted in a minimal realized gain. There were no securities sold at a loss during the three or six month periods ended June 30, 2013 or 2012. There were no securities sold from the held-to-maturity portfolio for the six months ended June 30, 2013 or 2012.

21

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

(6) Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  We hold available-for-sale fixed maturity securities and equity securities, which are carried at fair value.

Fair value measurements are generally based upon observable and unobservable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.  We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.  All assets and liabilities carried at fair value are required to be classified and disclosed in one of the following three categories:

• Level 1 - Quoted prices for identical instruments in active markets.

• Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or whose significant value drivers are observable.

• Level 3 - Instruments whose significant value drivers are unobservable.

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as U.S. Treasury securities and actively traded mutual fund and stock investments.

Level 2 includes those financial instruments that are valued by independent pricing services or broker quotes.  These models are primarily industry-standard models that consider various inputs, such as interest rates, credit spreads and foreign exchange rates for the underlying financial instruments.  All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace.  Financial instruments in this category primarily include corporate securities, U.S. Government-sponsored enterprise securities, municipal securities and certain mortgage and asset-backed securities.

Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker prices utilizing significant inputs not based on or corroborated by readily available market information.  This category consists of two private placement mortgage-backed securities.

22

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

The following tables set forth our assets and liabilities that are measured at fair value on a recurring basis as of the dates indicated.

	June 30, 2013
Available-for-sale investments	Level 1		Level 2	Level 3	Total Fair Value
	(In thousands)
Financial assets:
Fixed maturities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	12,995	65,272	—	78,267
States and political subdivisions	—		348,992	—	348,992
Corporate	—		216,948	—	216,948
Commercial mortgage-backed	—		14	348	362
Residential mortgage-backed	—		4,407	—	4,407
Foreign governments	—		133	—	133
Total fixed maturities	12,995		635,766	348	649,109
Equity securities:
Stock mutual funds	11,182		—	—	11,182
Bond mutual funds	40,788		—	—	40,788
Common stock	13		—	—	13
Preferred stock	716		—	—	716
Total equity securities	52,699		—	—	52,699
Total financial assets	$	65,694	635,766	348	701,808

	December 31, 2012
Available-for-sale investments	Level 1		Level 2	Level 3	Total Fair Value
	(In thousands)
Financial assets:
Fixed maturities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	13,943	85,581	—	99,524
States and political subdivisions	—		282,262	—	282,262
Corporate	—		216,005	—	216,005
Commercial mortgage-backed	—		109	387	496
Residential mortgage-backed	—		6,092	—	6,092
Foreign governments	—		141	—	141
Total fixed maturities	13,943		590,190	387	604,520
Equity securities:
Stock mutual funds	10,685		—	—	10,685
Bond mutual funds	41,916		—	—	41,916
Common stock	15		—	—	15
Preferred stock	1,125		—	—	1,125
Total equity securities	53,741		—	—	53,741
Total financial assets	$	67,684	590,190	387	658,261

23

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

Financial Instruments Valuation

Fixed maturity securities, available-for-sale.  At June 30, 2013, our fixed maturity securities, valued using a third-party pricing source, totaled $635.8 million for Level 2 assets and comprised 90.6% of total reported fair value of our financial assets.  The Level 1 and Level 2 valuations are reviewed and updated quarterly through random testing by comparisons to separate pricing models, other third-party pricing services, and back tested to recent trades.  In addition, we obtain information relative to the third-party pricing models and review model parameters for reasonableness.  Fair values for Level 3 assets are based upon unadjusted broker quotes that are non-binding, and consist of two private placement mortgage-backed securities with a total value of $0.3 million.  Our Level 3 assets are current relative to principal and interest payments and are considered immaterial to our financial statements.  For the six months ended June 30, 2013, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third party prices were changed from the values received.

Equity securities, available-for-sale.  Our available-for-sale equity securities are classified as Level 1 assets as their fair values are based upon quoted market prices.

The following table presents additional information about fixed maturity securities measured at fair value on a recurring basis that are classified as Level 3 assets and for which we have utilized significant unobservable inputs to determine fair value.

	June 30, 2013			December 31, 2012
	(In thousands)
Balance at beginning of period	$	387		459
Total realized and unrealized gains (losses)
Included in net income	—			—
Included in other comprehensive income	(4		)	(6	)
Principal paydowns	(35		)	(66	)
Transfer in and (out) of Level 3	—			—
Balance at end of period	$	348		387

We review the fair value hierarchy classifications each reporting period.  Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets.  Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. There were no transfers in or out of Level 1 or 2.

Financial Instruments not Carried at Fair Value

Estimates of fair values are made at a specific point in time, based on relevant market prices and information about the financial instruments.  The estimated fair values of financial instruments presented below are not necessarily indicative of the amounts the Company might realize in actual market transactions.

24

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

The carrying amount and fair value for the financial assets and liabilities on the consolidated balance sheets not otherwise disclosed for the periods indicated are as follows:

	June 30, 2013			December 31, 2012
	Carrying Value		Fair Value	Carrying Value	Fair Value
	(In thousands)
Financial assets:
Fixed maturities, held-to-maturity	$	159,208	161,012	187,008	193,739
Mortgage loans	687		712	1,509	1,503
Policy loans	45,824		45,824	42,993	42,993
Short-term investments	—		—	2,340	2,340
Cash and cash equivalents	41,013		41,013	56,299	56,299
Financial liabilities:
Annuity benefit reserves	53,223		58,233	51,750	54,981

Fair values for fixed income securities, which are characterized as Level 2 assets in the fair value hierarchy, are based on quoted market prices for the same or similar securities.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other assumptions, including a discount rate and estimates of future cash flows.

Mortgage loans are secured principally by residential and commercial properties.  Weighted average interest rates for these loans were approximately 6.5% and 6.6% as of June 30, 2013 and December 31, 2012, respectively, with maturities ranging from 1 to 30 years.  Management estimated the fair value using an annual interest rate of 6.25% at June 30, 2013.  Our mortgage loans are considered Level 3 assets in the fair value hierarchy.

Policy loans had a weighted average annual interest rate of 7.7% as of June 30, 2013 and December 31, 2012, and no specified maturity dates.  The aggregate fair value of policy loans approximates the carrying value reflected on the consolidated balance sheets.  These loans typically carry an interest rate that is tied to the crediting rate applied to the related policy and contract reserves.  Policy loans are an integral part of the life insurance policies we have in force, cannot be valued separately and are not marketable.  Therefore, the fair value of policy loans approximates the carrying value and policy loans are considered Level 3 assets in the fair value hierarchy.

The fair value of short-term investments approximate carrying value due to their short-term nature.  Our short-term investments are considered Level 2 assets in the fair value hierarchy.

The fair value of cash and cash equivalents approximate carrying value and are characterized as Level 1 assets in the fair value hierarchy.

The fair value of the Company's liabilities under annuity contract policies, which are considered Level 3 assets, was estimated at June 30, 2013 using discounted cash flows based upon a swap rate curve with interest rates ranging from 0.35% to 3.63% based upon swap rates adjusted for various risk adjustments. The fair value of liabilities under all insurance contracts are taken into consideration in the overall management of interest rate risk, which seeks to minimize exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

(7) Commitments and Contingencies

We are a defendant in a lawsuit filed on August 6, 1999, in the Texas District Court, Austin, Texas, now styled Delia Bolanos Andrade, et al., Plaintiffs, v. Citizens Insurance Company of America, et al., Defendants in which a class was originally certified by the trial court and reversed by the Texas Supreme Court in 2007 with an order to the trial court to conduct further proceedings

25

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued

June 30, 2013

(Unaudited)

consistent with its ruling.  The underlying lawsuit alleged that certain life insurance policies CICA made available to non-U.S. residents, when combined with a policy feature that allowed certain cash benefits to be assigned to two non-U.S. trusts for the purpose of accumulating ownership of our Class A common stock, along with allowing the policyholders to make additional contributions to the trusts, were actually offers and sales of securities that occurred in Texas by unregistered dealers in violation of the Texas securities laws.  The remedy sought was rescission and return of the insurance premium payments.  On December 9, 2009, the trial court denied the recertification of the class after conducting additional proceedings in accordance with the Texas Supreme Court's ruling.  The remaining plaintiffs must now proceed individually, and not as a class, if they intend to pursue their claims against us.  Since the December 9, 2009 trial court ruling, no individual cases have been further pursued by the plaintiffs.  The probability of the plaintiffs further pursuing their cases individually remains unknown.  An estimate of any possible loss or range of losses cannot be made at this time in regard to individuals pursuing claims.  However, should the plaintiffs further pursue their claims individually, we intend to vigorously defend any proceedings.

In 2007 and in the aftermath of Hurricane Katrina, the Attorney General for the State of Louisiana filed suit against SPFIC and every other homeowner insurer doing business in the State of Louisiana, on behalf of the State of Louisiana and certain Road Home fund recipients.  In April 2013, SPFIC and the State of Louisiana reached a settlement agreement resolving all claims against SPFIC in the Road Home matter for approximately $183,000. This amount has been accrued in the June 30, 2013 financial statements and did not have a material impact on the consolidated financials.

The Company is currently performing an internal audit related to unclaimed property for all legal reporting entities. By letter dated July 2, 2013, the Company was informed that the Louisiana Department of Treasury has authorized an audit of Citizens, Inc. and its affiliates for compliance with unclaimed property laws. This audit is being conducted by Verus Financial LLC on behalf of the state.

These internal and external audits may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, interest, and changes to the Company's procedures for the identification and escheatment of abandoned property.  At this time, the Company is not able to estimate any of these possible amounts, but such costs could be substantial for a company our size.

(8) Income Taxes

The effective tax rate was 27.2% and (18.9)% for the second quarter and 25.5% and 21.3% for the six months ended June 30, 2013 and 2012, respectively.   In periods where our effective tax rate is lower than the statutory tax rate of 35%, the difference is primarily due to tax-exempt interest from state and local bonds. The effective tax rate is lower in 2012 compared to 2013 primarily due to 2012 pretax income being lower than in 2013 with tax-exempt income remaining relatively flat.

(9) Related Party Transactions

The Company has various routine related party transactions in conjunction with our holding company structure, such as a management service agreement related to costs incurred, a tax sharing agreement between entities, and inter-company dividends and capital contributions.  There were no changes related to these relationships during the six months ended June 30, 2013.  See our Annual Report on Form 10-K as of December 31, 2012 for a comprehensive discussion of related party transactions.

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the "Act"), including, without limitation, statements specifically identified as forward-looking statements within this document.  Many of these statements contain risk factors as well.  In addition, certain statements in future filings by the Company with the Securities and Exchange Commission, in press releases, and in oral and written statements made by us or with the approval of the Company, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Act.  Examples of forward-looking statements include, but are not limited to:  (i) projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure, and other financial items, (ii) statements of our plans and objectives by our management or Board of Directors, including those relating to products or services, (iii) statements of future economic performance and (iv) statements of assumptions underlying such statements.  Words such as "believes," "anticipates," "assumes," "estimates," "plans," "projects," "could," "expects," "intends," "targeted," "may," "will" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those contemplated by the forward-looking statements.  Factors that could cause the Company's future results to differ materially from expected results include, but are not limited to:

• Changes in foreign and U.S. general economic, market, and political conditions, including the performance of financial markets and interest rates;

• Changes in consumer behavior, which may affect the Company's ability to sell its products and retain business;

• The timely development of and acceptance of new products of the Company and perceived overall value of these products and services by existing and potential customers;

• Fluctuations in experience regarding current mortality, morbidity, persistency and interest rates relative to expected amounts used in pricing and actuarial valuation of the Company's products;

• The performance of our investment portfolio, which may be adversely affected by changes in interest rates, adverse developments and ratings of issuers whose debt securities we may hold, and other adverse macroeconomic events;

• Results of litigation we may be involved in;

• Changes in assumptions related to deferred acquisition costs and the value of any businesses we may acquire;

• Regulatory, accounting or tax changes that may affect the cost of, or the demand for, the Company's products or services;

• Our concentration of business from persons residing in Latin America and the Pacific Rim;

• Changes in tax laws;

• Effects of acquisitions and restructuring, including possible difficulties in integrating and realizing the projected results of acquisitions;

• Changes in statutory or U.S. GAAP accounting principles, policies or practices; and

• Our success at managing risks involved in the foregoing;

• The risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 under the heading "Part II. - Item 1A - Risk Factors."

Such forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

We make available, free of charge, through our Internet website (http://www.citizensinc.com), our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Section 16 Reports filed by officers and directors, news

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releases, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission.  We are not including any of the information contained on our website as part of, or incorporating it by reference into, this Quarterly Report on Form 10-Q.

Overview

Citizens is an insurance holding company serving the life insurance needs of individuals in the United States since 1969 and internationally since 1975.  Through our insurance subsidiaries, we pursue a strategy of offering traditional insurance products in niche markets where we believe we are able to achieve competitive advantages.  As of June 30, 2013, we had approximately $1.2 billion of total assets and approximately $5.0 billion of insurance in force.  Our core insurance operations include issuing and servicing:

• U.S. Dollar-denominated ordinary whole life insurance and endowment policies predominantly to high net worth, high income foreign residents, principally in Latin America and the Pacific Rim through independent marketing consultants;

• ordinary whole life insurance policies to middle income households concentrated in the Midwest and southern United States through independent marketing consultants; and

• final expense and limited liability property policies to middle and lower income households in Louisiana, Arkansas and Mississippi through employee and independent agents in our home service distribution channel.

We were formed in 1969 by our Chairman, Harold E. Riley.  Prior to our formation, Mr. Riley had many years of experience in the international and domestic life insurance business.  Our Company has experienced significant growth through acquisitions in the domestic market and through market expansion in the international market.  We seek to capitalize on the experience of our management team in marketing and operations as we strive to generate bottom line return using knowledge of our niche markets and our well-established distribution channels.  We believe our underwriting processes, policy terms, pricing practices and proprietary administrative systems enable us to be competitive in our current markets, while protecting our shareholders and servicing our policyholders.

Current Financial Highlights

Financial highlights for the three and six month periods ended June 30, 2013, compared to the same periods in 2012 were:

• Insurance premiums rose for the three and six month periods ended June 30, 2013 to $43.8 million and $84.8 million in 2013 from $41.6 million and $80.7 million in 2012, an increase of 5.4% and 5.1% driven by increased sales and renewal premiums in our life insurance segment.

• Net investment income increased 21.7% and 16.2% for the three and six month periods ended June 30, 2013 compared to 2012.  The average yield on the consolidated portfolio increased to an annualized rate of 4.03%, up from 3.77% for the same period in 2012, as prevailing interest rates rose modestly.  In addition, the increase in the invested assets due to premium revenue growth contributed to the growth in investment income.

• Claims and surrenders expense increased 3.4% and 2.0% for the three and six months ended June 30, 2013 compared to 2012, primarily driven by surrender benefits. Claims reported in the life segment were lower in the current year and claims experience in the home service segment was relatively level.

• Changes in reserves resulted in liability increases due to the increased sales of endowment products that build up reserves at a faster pace than whole life longer-term mortality based products. Additionally, the sustained low interest rate environment also results in a higher reserve development due to the lower interest yield assumptions in the current period.

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Our Operating Segments

Our business is comprised of three operating business segments, as detailed below.

• Life Insurance

• Home Service Insurance

• Other Non-Insurance Enterprises

Our insurance operations are the primary focus of the Company, as those operations generate the majority of our income.  See the discussion under Segment Operations for detailed analysis.  The amount of insurance, number of policies, and average face amounts of ordinary life policies issued during the periods indicated are shown below.

	Six Months Ended June 30,
	2013					2012
	Amount of Insurance Issued		Number of Policies Issued	Average Policy Face Amount Issued		Amount of Insurance Issued		Number of Policies Issued	Average Policy Face Amount Issued
Life	$	171,646,782	2,840	$	60,439	$	150,810,098	2,669	$	56,504
Home Service	98,310,532		14,330	6,873		107,567,079		15,390	6,989

Note:  All discussions of results of operations below compare or state results for the three and six-month periods ended June 30, 2013 compared to the three and six-month periods ended June 30, 2012.

Consolidated Results of Operations

A discussion of consolidated results is presented below, followed by a discussion of segment operations and financial results by segment.

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Revenues

Revenues are generated primarily by insurance premiums and investment income on invested assets.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013	2012
	(In thousands)
Revenues:
Premiums:
Life insurance	$	42,223	39,945		81,637	77,351
Accident and health insurance	406		417		755	830
Property insurance	1,205		1,234		2,382	2,511
Net investment income	9,265		7,612		17,654	15,189
Realized investment gains, net	82		246		113	344
Decrease in fair value of warrants	—		37		—	73
Other income	427		111		613	209
Total revenues	53,608		49,602		103,154	96,507
Exclude fair value adjustments of warrants	—		(37	)	—	(73	)
Total revenues excluding fair value adjustments	$	53,608	49,565		103,154	96,434

Premium Income.  Premium income derived from life, accident and health, and property insurance sales increased 5.4% and 5.1% for the three and six months ended June 30, 2013 compared to the same periods ending June 30, 2012, primarily because of growth in the life segment as discussed under Segment Operations.

Net investment income performance is summarized as follows.

	June 30,			December 31,		June 30,
	2013			2012		2012
	(In thousands, except for %)
Net investment income, annualized	$	35,309		31,725		30,378
Average invested assets, at amortized cost	875,868			832,552		806,835
Annualized yield on average invested assets	4.03		%	3.81	%	3.77	%

Yields on invested assets vary between segment operations due to different portfolio mixes in the segments.  

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Investment income from debt securities accounted for approximately 84.7% of total investment income for the three months ended June 30, 2013.   In addition, our equity securities portfolio is invested primarily in short duration bond mutual funds as these securities offer a competitive yield.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
	(In thousands)
Gross investment income:
Fixed maturity securities	$	8,240		6,657		15,696		13,199
Equity securities	481			451		925		1,009
Mortgage loans	28			18		48		45
Policy loans	882			803		1,704		1,613
Long-term investments	53			56		110		121
Other investment income	19			37		38		57
Total investment income	9,703			8,022		18,521		16,044
Investment expenses	(438		)	(410	)	(867	)	(855	)
Net investment income	$	9,265		7,612		17,654		15,189

We have reduced bond holdings of U.S. Government-sponsored enterprises, such as Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”), which comprised 9.3% of the total fixed maturity portfolio based on amortized cost at June 30, 2013 compared to 14.8% at December 31, 2012, due to the low yields in the current environment.  We have increased our investment purchases of corporate and municipal securities over the past several quarters, focusing on utility service sectors in corporate securities.  As a percent of the total, state and political subdivision holdings at June 30, 2013 increased to 59.0% and corporate holdings totaled 29.8% based upon amortized cost compared to 52.4% and 30.6% at December 31, 2012, respectively. In addition, the increase in policy loans, which represents policyholders utilizing their accumulated policy cash value, contributed to the improvement in investment income.

Change in Fair Value of Warrants.  Prior to 2013, the Company adjusted the liability related to its outstanding warrants to purchase shares of Class A common stock at each reporting date to reflect the current fair value of the warrants computed based on the Class A common stock value calculated using the Black-Scholes option pricing model.  As the Class A common stock value increased and decreased, the change in the warrant liability also would increase and decrease in inverse order.  The adjustment to fair value was recorded as an increase or decrease in the fair value of the warrants in the consolidated statement of operations.  The remaining warrants were the subject of a cashless exercise transaction whereby the Company issued 12,487 Class A shares on October 6, 2012. There were no warrants outstanding during 2013.

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Benefits and Expenses

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
	(In thousands)
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	$	16,660		16,109		31,466		30,863
Increase in future policy benefit reserves	17,896			16,751		34,855		30,892
Policyholders' dividends	2,235			2,281		4,309		4,155
Total insurance benefits paid or provided	36,791			35,141		70,630		65,910
Commissions	10,429			9,731		19,487		18,395
Other general expenses	7,342			6,342		14,041		12,958
Capitalization of deferred policy acquisition costs	(7,672		)	(7,044	)	(14,034	)	(12,983	)
Amortization of deferred policy acquisition costs	4,363			4,433		8,989		8,559
Amortization of cost of customer relationships  acquired	560			660		1,138		1,236
Total benefits and expenses	$	51,813		49,263		100,251		94,075

Claims and Surrenders.  A detail of claims and surrender benefits is provided below.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
Death claims	$	5,390	5,752	10,924	11,477
Surrender benefits	5,941		5,034	10,497	9,667
Endowments	3,999		4,153	7,588	7,633
Property claims	418		499	969	863
Accident and health benefits	119		63	167	138
Other policy benefits	793		608	1,321	1,085
Total claims and surrenders	$	16,660	16,109	31,466	30,863

Increase in Future Policy Benefit Reserves.  The increase in future policy benefit reserves for the three and six months ended June 30, 2013, was influenced by higher reserves for policies issued as we continue to experience growth in new sales of endowment products, which require higher initial reserve levels than whole life products. Internationally, endowment sales have outpaced our whole life products for the past several years. We are experiencing a compounding of reserve increases as these policies build up reserves faster because of the shorter terms when compared to whole life products that build reserves over the expected mortality period.

Policyholder Dividends. The majority of our international policies are participating, and the dividends are factored into the premium rates charged.  As policy provisioned dividend rates generally increase each year that a policy is in force, dividend expense is expected to increase as this block of insurance becomes more seasoned.

Commissions.  Commission expense is directly related to new and renewal insurance premium fluctuations and production levels by agents and associates. Commission expense for the three and six months ended June 30, 2013 increased due to higher first year premiums in the life segment compared to premium levels for the same periods ended June 30, 2012.  

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Capitalized and Amortized Deferred Policy Acquisition Costs.  Costs capitalized under current accounting guidance include certain commissions, policy issuance costs, and underwriting and agency expenses that relate to successful sales efforts for insurance contracts.  The increase for the three and six months ended June 30, 2013, compared to the same periods in 2012 was the result of an increase in first year premium production in the current year, which increased capitalized amounts.  Though premium revenue increased for the first six months of 2013, it was primarily related to an increase in renewal premiums compared to the prior year.  Commissions paid on renewal premiums are significantly lower than those paid on first year business.

Amortization for the six months ended June 30, 2013, increased approximately $0.4 million compared to the same period in 2012. Amortization of deferred policy acquisition costs is impacted by persistency and may fluctuate from year to year.

Other General Expenses.  Expenses rose for the three and six months ended June 30, 2013, compared to the same period in 2012 as overall expenses increased because of higher employee health claims, as we are self-insured, and costs for temporary employees assisting on operations projects.

Federal Income Tax.  The effective tax rate for the three and six month periods ended June 30, 2013, were 27.2% and 25.5% versus (18.9)% and 21.3% in 2012, respectively.  Differences between our effective tax rate and the statutory tax rate result from income and expense items that are treated differently for financial reporting and tax purposes.  See Note 8 - Income Taxes in the consolidated financial statements for further discussion.

Segment Operations

The Company has three reportable segments:  Life Insurance, Home Service Insurance and Other Non-Insurance Enterprises.  These segments are reported in accordance with U.S. GAAP.  The Company evaluates profit and loss performance of its segments based on net income or loss before income taxes.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
	(In thousands)
Life Insurance	$	695		(952	)	843		(863	)
Home Service Insurance	1,919			1,846		3,121		4,238
Other Non-Insurance Enterprises	(819		)	(555	)	(1,061	)	(943	)
Total	$	1,795		339		2,903		2,432

Life Insurance

Our Life Insurance segment issues ordinary whole life insurance domestically and U.S. Dollar-denominated ordinary whole-life policies to foreign residents.  These contracts are designed to provide a fixed amount of insurance coverage over the life of the insured.  Additionally, the Company issues endowment contracts, which are principally accumulation contracts that incorporate an element of life insurance protection.  For the majority of our business, we retain only the first $100,000 of risk on any one life.  We operate this segment through CICA and CNLIC insurance subsidiaries.

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International Sales

We focus our sales of U.S. Dollar-denominated ordinary whole life insurance and endowment policies to high net worth, high income residents in Latin America and the Pacific Rim.  We have successfully participated in the foreign marketplace since 1975, and we continue to seek opportunities for expansion of our foreign operations.  We believe positive attributes of our international insurance business include:

• larger face amount policies typically issued when compared to our U.S. operations, which results in lower underwriting and administrative costs per unit of coverage;

• premiums typically paid annually rather than monthly or quarterly, which reduces our administrative expenses, accelerates cash flow and results in lower policy lapse rates than premiums with more frequently scheduled payments; and

• comparable persistency levels and mortality rates as experienced with U.S. policies.

International Products

We offer several ordinary whole life insurance and endowment products designed to meet the needs of our non-U.S. policyowners.  These policies have been structured to provide:

• U.S. Dollar-denominated cash values that accumulate, beginning in the first policy year, to a policyholder during his or her lifetime;

• premium rates that are competitive with or better than most foreign local companies;

• a hedge against local currency inflation;

• protection against devaluation of foreign currency;

• capital investment in the United States’ more secure economic environment; and

• lifetime income guarantees for an insured or for surviving beneficiaries.

Our international products have living benefit features.  Every policy contains guaranteed cash values and most are participating (i.e., provides for cash dividends as apportioned by the board of directors).  Once a policyowner pays the annual premium and the policy is issued, we immediately pay the owner a cash dividend as well as an annual guaranteed endowment, if elected.  The policyowner has several options with regard to the dividend and annual guaranteed endowments, including the right to assign policy values to our stock investment plan, registered under the Securities Act of 1933 (the "Securities Act") and administered in the United States by our unaffiliated transfer agent.

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The following table sets forth, by country, our direct premiums from our international life insurance business for the periods indicated.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
Country
Venezuela	$	7,374	6,453	13,773	11,511
Columbia	5,634		5,622	11,617	11,215
Taiwan	3,715		3,530	7,589	7,351
Ecuador	3,823		3,650	7,205	6,823
Argentina	2,359		2,306	4,190	4,212
Other Non-U.S.	8,179		7,431	15,483	14,125
Total	$	31,084	28,992	59,857	55,237

We continue to report increased sales in top producing countries as noted above. Our international business and premium collections could be impacted by future changes relative to laws, regulations or economic events in the countries from which we accept applications. In particular, there are recent law changes in Colombia that may impede the activities of our independent consultants. See "Item 1A. Risk Factors" for additional information.

Domestic Sales

In the Midwest and the southern United States, we seek to serve middle income households through the sale of cash accumulation ordinary whole life insurance products.  The majority of our inforce business results from blocks of business of insurance companies we have acquired over the past fifteen years.

Domestic Products

Our domestic life insurance products focus primarily on living needs and provide benefits focused toward accumulating money for living benefits while providing a modest death benefit for the policyowner.  The features of our domestic life insurance products include:

• cash accumulation/living benefits;

• tax-deferred annuity interest earnings;

• guaranteed lifetime income or monthly income options for the policyowner or surviving family members;

• accidental death benefit coverage options; and

• an option to waive premium payments in the event of disability.

Our life insurance products are principally designed to address the insured's concern about outliving his or her monthly income, while at the same time providing death benefits.  The primary purpose of our product portfolio is to help the insured create capital for needs such as retirement income, children's higher education funds, business opportunities, emergencies and extraordinary health care needs.

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The following table sets forth our direct premiums by state for the periods indicated.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
State
Texas	$	694	1,113	1,338	2,354
Indiana	332		388	698	808
Mississippi	225		279	453	471
Missouri	143		189	285	351
Louisiana	133		91	255	219
Other States	855		705	1,190	1,475
Total	$	2,382	2,765	4,219	5,678

A number of domestic life insurance companies we acquired had blocks of accident and health insurance policies, which we did not consider to be a core part of our business.  We have ceded this business to Puritan Life Insurance Company ("Puritan"), an unaffiliated insurance company under a coinsurance agreement, under which it assumes substantially all of our accident and health policies.  The premium amounts ceded under the coinsurance agreement for the six months ended June 30, 2013 and 2012 were $0.5 million and $2.0 million, respectively. The coinsurance agreement allows for full assumption by Puritan of this business upon approval by state insurance authorities. The decrease in premiums for the six months ended June 30, 2013 is due to the fact that Puritan received state approval in several states and intends to complete full assumption in 2013.

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The results of operations for the life insurance segment for the periods indicated are as follows.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
	(In thousands)
Revenue:
Premiums	$	32,850		30,601		62,967		58,770
Net investment income	5,584			4,253		10,488		8,411
Realized investment gains, net	81			187		81		189
Other income	351			75		414		132
Total revenue	38,866			35,116		73,950		67,502
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	11,429			10,772		20,767		20,699
Increase in future policy benefit reserves	17,047			16,201		33,089		29,419
Policyholders' dividends	2,216			2,268		4,275		4,130
Total insurance benefits paid or provided	30,692			29,241		58,131		54,248
Commissions	6,697			5,990		12,276		11,012
Other general expenses	2,928			2,411		5,780		5,331
Capitalization of deferred policy acquisition costs	(6,170		)	(5,507	)	(11,256	)	(10,019	)
Amortization of deferred policy acquisition costs	3,870			3,749		7,855		7,400
Amortization of cost of customer relationships acquired	154			184		321		393
Total benefits and expenses	38,171			36,068		73,107		68,365
Income (loss) before income tax expense	$	695		(952	)	843		(863	)

Premiums.  Premium revenues increased for the three and six month periods ended June 30, 2013, compared to the same period in 2012 . Growth in international renewal business, which is experiencing strong persistency as it ages accounted for 5.5% of the increase in each period. Higher first year premium revenues for the three and six months ended June 30, 2013, increased 18.7% and 18.4% driven by sales internationally with endowment to age sixty-five and the twenty-year endowment products being the top performers.

Life insurance premium breakout is detailed below.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
Premiums:
First year	$	5,095	4,293	9,033	7,632
Renewal	27,755		26,308	53,934	51,138
Total premiums	$	32,850	30,601	62,967	58,770

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Net Investment Income.  Net investment income increased as the impact of the sustained low interest rate environment has leveled and yields are beginning to rise modestly.

	Six Months Ended			Year Ended		Six Months Ended
	June 30,			December 31,		June 30,
	2013			2012		2012
	(In thousands, except for %)
Net investment income, annualized	$	20,976		17,828		16,822
Average invested assets, at amortized cost	$	530,678		494,289		474,530
Annualized yield on average invested assets	3.95		%	3.61	%	3.55	%

Claims and Surrenders.  These amounts fluctuate from period to period but were within anticipated ranges based upon management's expectations.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
Death claims	$	1,485	1,786	2,714	3,766
Surrender benefits	5,217		4,305	9,267	8,343
Endowment benefits	3,994		4,147	7,579	7,620
Accident and health benefits	64		51	110	106
Other policy benefits	669		483	1,097	864
Total claims and surrenders	$	11,429	10,772	20,767	20,699

• Death claims expense was lower for the three and six months ended June 30, 2013 due to fewer reported claims. Mortality experience is closely monitored by the Company as a key performance indicator and these amounts were within expected levels.

• The majority of policy surrender benefits paid is attributable to our international business and was related to policies that have been in force over twenty years, where surrender charges are no longer applicable.

• Endowment benefit expense primarily results from the election by policyholders of a product feature providing an annual guaranteed benefit.  This is a fixed benefit over the life of the contract, thus this expense will increase with new sales and improved persistency.

• Other policy benefits resulted primarily from interest paid on premium deposits and policy benefit accumulations and increased as these policy liabilities also increased.

Increase in Future Policy Benefit Reserves.   Policy benefit reserves increased for the three and six months ended June 30, 2013 compared to the same period in 2012, from the effect of the current low interest rate environment on reserve development for policies issued and because we continue to experience growth in new sales of endowment products, which require higher initial reserve levels than whole life products. Endowment sales have become more popular with our international clients in the past few years, representing approximately 77% and 79% of total new first year premium in the six months ended June 30,2013 and 2012, respectively.

Commissions.  Commission expense increased for the three and six months ended June 30, 2013, compared to the same periods in 2012.  This expense fluctuates directly with new premium revenues, which were higher for the periods in 2013 compared to 2012.  Commission rates paid to associates are higher on first year premium sales, which were up as noted above for the three and six months ended June 30, 2013, compared to 2012.  Renewal premiums for the three and six months, for which we pay commissions at lower rates, also rose.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Other General Expenses.  The expenses are allocated by segment, based upon an annual expense study performed by the Company, and were up for the three and six months ended June 30, 2013, compared to the same period in 2012 as overall expenses increased related to employee health claims, as we are self-insured, and costs for temporary employees assisting on operations projects.

Capitalization of Deferred Policy Acquisition Costs ("DAC").  Capitalized costs increased for the three and six months ended June 30, 2013, due to higher first year premiums and an increase in renewal commissions paid compared to 2012 as discussed above.  DAC capitalization is directly correlated to fluctuations in first year commissions.

Amortization of Deferred Policy Acquisition Costs.  Amortization for 2013 increased and is impacted by overall persistency related to this segment. As previously noted, persistency is monitored closely by the Company and was within expectations.

Home Service Insurance

We operate in the Home Service market through our subsidiaries Security Plan Life Insurance Company ("SPLIC") and Security Plan Fire Insurance Company ("SPFIC"), and focus on the life insurance needs of the middle and lower income markets, primarily in Louisiana, Mississippi and Arkansas.  Our policies are sold and serviced through a home service marketing distribution system of employee-agents who work full time on a route system and through funeral homes that sell policies, collect premiums and service policyholders.

The following table sets forth our direct premiums by state for the periods indicated.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
State
Louisiana	$	10,482	10,486	20,856	20,812
Arkansas	425		438	861	965
Mississippi	122		111	240	221
Other States	229		226	437	464
Total	$	11,258	11,261	22,394	22,462

Home Service Insurance Products

Our home service insurance products consist primarily of small face amount ordinary whole life and pre-need policies, which are designed to fund final expenses for the insured, primarily consisting of funeral and burial costs.  To a much lesser extent, our home service insurance segment sells limited-liability, named-peril property policies covering dwellings and contents.  We provide $30,000 maximum coverage on any one dwelling and contents, while content only coverage and dwelling only coverage is limited to $20,000, respectively.

We provide final expense ordinary life insurance and annuity products primarily to middle and lower income individuals primarily in Louisiana, Mississippi and Arkansas.  New products were approved for sale in Mississippi in 2012 and we expect to increase sales as we expand our marketing force in this state.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

The results of operations for the home service insurance segment for the periods indicated are as follows.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
	(In thousands)
Revenue:
Premiums	$	10,984		10,995		21,807		21,922
Net investment income	3,341			3,075		6,521		6,230
Realized investment gains, net	1			40		31		127
Other income	46			6		136		12
Total revenue	14,372			14,116		28,495		28,291
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	5,231			5,337		10,699		10,164
Increase in future policy benefit reserves	849			550		1,766		1,473
Policyholders' dividends	19			13		34		25
Total insurance benefits paid or provided	6,099			5,900		12,499		11,662
Commissions	3,732			3,741		7,211		7,383
Other general expenses	3,225			3,006		6,491		5,970
Capitalization of deferred policy acquisition costs	(1,502		)	(1,537	)	(2,778	)	(2,964	)
Amortization of deferred policy acquisition costs	493			684		1,134		1,159
Amortization of cost of customer relationships acquired	406			476		817		843
Total benefits and expenses	12,453			12,270		25,374		24,053
Income before income tax expense	$	1,919		1,846		3,121		4,238

Premiums.  Premiums were essentially flat for the three and six month periods ended June 30, 2013, as new business for this segment was offset by higher lapses in the current year compared to the same period in 2012.

Net Investment Income.  Net investment income for our home service insurance segment was as follows.

	Six Months Ended			Year Ended		Six Months Ended
	June 30,			December 31,		June 30,
	2013			2012		2012
	(In thousands, except for %)
Net investment income, annualized	$	13,042		12,724		12,460
Average invested assets, at amortized cost	294,073			291,229		289,373
Annualized yield on average invested assets	4.43		%	4.37	%	4.31	%

Realized Investment Gains, Net.  Net realized gains for the three and six months ended June 30, 2013 and 2012, were due to calls of debt securities.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Claims and Surrenders.  Claims and surrenders decreased slightly for the three months and increased for the six months ended June 30, 2013, compared to the same periods in 2012, as reported claims levels fluctuated compared to the prior year, but were within expected ranges.

	Three Months Ended			Six Months Ended
	June 30,			June 30,
	2013		2012	2013	2012
	(In thousands)
Death claims	$	3,905	3,966	8,210	7,711
Surrender benefits	724		729	1,230	1,324
Endowment benefits	5		6	9	13
Property claims	418		499	969	863
Accident and health benefits	55		12	57	32
Other policy benefits	124		125	224	221
Total claims and surrenders	$	5,231	5,337	10,699	10,164

• Death claims expense increased for the six months in 2013, largely reflecting the release of $0.5 million of incurred but unreported death claims liability by the Company during the three months ended March 31, 2012. Mortality experience is closely monitored by the Company as a key performance indicator and amounts were within expected levels.

• Property claims increased 12.3% for the six months ended June 30, 2013 related to an increase in weather related claims reported in the first three months of 2013 compared to 2012.

Increase in Future Policy Benefit Reserves.  The increase in future policy benefit reserves for the three and six months ended June 30, 2013 was higher than the same period of 2012 due to an approximately $0.2 million decrease in reserves recorded in 2012 related to ungrouping of certain plans for reserve modeling assumptions.

Commissions.  Commission expense fluctuates based upon sales and premium volume and decreased slightly during 2013 compared to 2012 based upon premium levels reported.

Other General Expenses.  The expenses are allocated by segment based upon an annual expense study performed by the Company and increased between 2013 and 2012, as overall consolidated expenses increased related to employee health claims, as we are self-insured, and employee costs related to temporary employees assisting on operations projects.

Capitalization of Deferred Policy Acquisition Costs ("DAC").  Capitalized costs decreased slightly for the three and six months ended June 30, 2013, as commissions expense also decreased slightly during the period.  DAC capitalization is directly correlated to fluctuations in new business and commissions.

Amortization of Deferred Policy Acquisition Costs.  Amortization for the three and six months ended in the current year decreased compared to the prior year as a change was made in 2012 relative to ungrouping certain plans for developing actuarial derived values which had an impact of increasing amortization for the six months ended by $0.4 million.

Other Non-Insurance Enterprises

This segment represents the administrative support entities to the insurance operations whose revenues are primarily intercompany and have been eliminated in consolidation under GAAP, which typically results in a segment loss.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Investments

The administration of our investment portfolios is handled by our management, pursuant to board-approved investment guidelines, with all trading activity approved by a committee of the respective boards of directors of our insurance company subsidiaries.  The guidelines used require that fixed maturities, both government and corporate, are investment grade and comprise a majority of the investment portfolio.  State insurance statutes prescribe the quality and percentage of the various types of investments that may be made by insurance companies and generally permit investment in qualified state, municipal, federal and foreign government obligations, high quality corporate bonds, preferred and common stock, mortgage loans and real estate within certain specified percentages.  The assets are intended to mature in accordance with the average maturity of the insurance products and to provide the cash flow for our insurance company subsidiaries to meet their respective policyholder obligations.

The following table shows the carrying value of our investments by investment category and cash and cash equivalents, and the percentage of each to total invested cash, cash equivalents and investments.

	June 30, 2013			December 31, 2012
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	(In thousands)			(In thousands)
Marketable securities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	88,713	9.3	$	128,156	13.4
States and political subdivisions	467,319		48.8	407,896		42.6
Corporate	247,383		25.8	248,747		26.0
Mortgage-backed (1)	4,769		0.5	6,588		0.7
Foreign governments	133		—	141		—
Short-term investments	—		—	2,340		0.2
Total marketable securities	808,317		84.4	793,868		82.9
Cash and cash equivalents	41,013		4.3	56,299		5.9
Other investments:
Policy loans	45,824		4.8	42,993		4.5
Equity securities	52,699		5.5	53,741		5.6
Mortgage loans	687		0.1	1,509		0.2
Real estate	8,509		0.9	8,496		0.9
Other long-term investments	56		—	57		—
Total cash, cash equivalents and investments	$	957,105	100.0	$	956,963	100.0

⁽¹⁾ Includes $4.4 million and $6.1 million of U.S. Government-sponsored enterprises at June 30, 2013, and December 31, 2012, respectively.

The Company increased holdings in investment grade municipal securities during the six months of 2013 while reducing holdings in U.S. Treasury and U.S. Government-sponsored enterprises due to the very low yield environment.  Cash and cash equivalents decreased as of June 30, 2013 due to timing of cash inflows and investment into marketable securities. Mortgage loans decreased during the quarter ended June 30, 2013, because one loan totaling approximately $0.7 million was paid off.

The held-to-maturity portfolio as of June 30, 2013, represented 19.7% of the total fixed maturity securities owned based upon carrying values, with the remaining 80.3% classified as available-for-sale.  Held-to-maturity securities are reported in the financial statements at amortized cost and available-for-sale securities are reported at fair value.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

The following table sets forth the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of June 30, 2013 and December 31, 2012.

	June 30, 2013			December 31, 2012
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	(In thousands)			(In thousands)
AAA	$	58,848	7.3	$	60,752	7.7
AA	365,634		45.2	375,926		47.5
A	239,833		29.7	199,302		25.2
BBB	126,337		15.6	134,119		16.9
BB and other	17,665		2.2	21,429		2.7
Totals	$	808,317	100.0	$	791,528	100.0

During the first six months of 2013 the Company made new investments primarily in A rated state municipals and corporate bonds, primarily public utility issues.

Credit ratings reported for the periods indicated are assigned by a Nationally Recognized Statistical Rating Organization (“NRSRO”) such as Moody’s Investors Service, Standard & Poor’s or Fitch Ratings.  A credit rating assigned by an NRSRO is a quality based rating, with AAA representing the highest quality and D the lowest, with BBB and above being considered investment grade.  In addition, the Company may use credit ratings of the National Association of Insurance Commissioners (“NAIC”) Securities Valuation Office (“SVO”) as assigned, if there is no NRSRO rating.  Securities rated by the SVO are grouped in the equivalent NRSRO category as stated by the SVO and securities that are not rated by an NRSRO are included in the “other” category.

The Company has no direct sovereign European debt exposure as of June 30, 2013.  We do have indirect exposure in one bond mutual fund holding, but the amount is deemed immaterial to the current investment holdings and consolidated financials.

As of June 30, 2013, the Company held municipal securities that include third party guarantees.  Detailed below is a presentation by NRSRO rating of our municipal holdings by funding type.

Municipals shown including third party guarantees

	June 30, 2013
	General Obligation			Special Revenue		Other		Total		% Based on
	Fair Value		Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Amortized Cost
	(In thousands)
AAA	$	29,179	27,623	14,896	14,485	—	—	44,075	42,108	9.0
AA	96,206		95,553	152,045	149,191	11,424	11,124	259,675	255,868	54.9
A	36,157		37,399	104,181	105,707	8,025	8,348	148,363	151,454	32.5
BBB	1,736		1,775	13,663	13,904	—	—	15,399	15,679	3.4
BB and other	—		—	844	798	—	—	844	798	0.2
Total	$	163,278	162,350	285,629	284,085	19,449	19,472	468,356	465,907	100.0

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Municipals shown excluding third party guarantees

	June 30, 2013
	General Obligation			Special Revenue		Other		Total		% Based on
	Fair Value		Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Amortized Cost
	(In thousands)
AAA	$	29,179	27,623	14,896	14,485	11,424	11,124	55,499	53,232	11.4
AA	88,998		88,150	115,908	113,830	7,010	7,307	211,916	209,287	44.9
A	42,617		44,056	131,391	131,898	1,015	1,041	175,023	176,995	38.0
BBB	1,736		1,775	21,668	22,053	—	—	23,404	23,828	5.1
BB and other	748		746	1,766	1,819	—	—	2,514	2,565	0.6
Total	$	163,278	162,350	285,629	284,085	19,449	19,472	468,356	465,907	100.0

The Company held investments in special revenue bonds that had a greater than 10% exposure based upon activity as noted in the table below.

	Fair Value		Amortized Cost	% of Total Fair Value
	(In thousands)
Utilities	$	101,349	101,407	21.6

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

The tables below represent the Company's exposure of municipal holdings in Louisiana and Texas, which exceed 10% of the total municipal portfolio as of June 30, 2013.

	June 30, 2013
	General Obligation			Special Revenue		Other		Total
	Fair Value		Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost
	(In thousands)
Louisiana securities including third party guarantees
AA	$	8,298	7,829	24,480	24,466	—	—	32,778	32,295
A	6,070		6,199	19,276	18,957	1,016	1,041	26,362	26,197
BBB	1,736		1,775	—	—	—	—	1,736	1,775
BB and other	—		—	844	798	—	—	844	798
Total	$	16,104	15,803	44,600	44,221	1,016	1,041	61,720	61,065
Louisiana securities excluding third party guarantees
AA	$	8,298	7,829	16,671	16,949	—	—	24,969	24,778
A	6,070		6,199	21,246	20,436	—	—	27,316	26,635
BBB	1,736		1,775	4,917	5,018	1,016	1,041	7,669	7,834
BB and other	—		—	1,766	1,818	—	—	1,766	1,818
Total	$	16,104	15,803	44,600	44,221	1,016	1,041	61,720	61,065
Texas securities including third party guarantees
AAA	$	29,179	27,623	8,743	8,448	—	—	37,922	36,071
AA	21,696		22,124	13,432	13,279	—	—	35,128	35,403
A	1,350		1,386	11,485	11,497	—	—	12,835	12,883
BBB	—		—	10,203	10,289	—	—	10,203	10,289
BB and other	—		—	—	—	—	—	—	—
Total	$	52,225	51,133	43,863	43,513	—	—	96,088	94,646
Texas securities excluding third party guarantees
AAA	$	29,179	27,623	8,743	8,448	—	—	37,922	36,071
AA	18,188		18,535	10,533	10,331	—	—	28,721	28,866
A	4,110		4,229	14,384	14,444	—	—	18,494	18,673
BBB	—		—	10,203	10,290	—	—	10,203	10,290
BB and other	748		746	—	—	—	—	748	746
Total	$	52,225	51,133	43,863	43,513	—	—	96,088	94,646

The Company invests in municipal securities of issuers in the state of Louisiana and receives a credit that reduces its premium tax liability in that state.  At June 30, 2013, total holdings of municipal securities in Louisiana represented 13.2% of all municipal holdings based upon fair value.  The Company also holds 20.5% of its municipal holdings in Texas issuers.  There were no other states or individual issuer holdings that represented or exceeded 10% of the total municipal portfolio as of June 30, 2013.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Valuation of Investments

We evaluate the carrying value of our fixed maturity and equity securities at least quarterly.  The Company monitors all debt and equity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews.  The assessment of whether impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value.  The Company determines other-than-temporary impairment by reviewing all relevant evidence related to the specific security issuer as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

When an other-than-temporary impairment has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis.  If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is recognized in earnings equal to the entire difference between the investment's cost and its fair value at the balance sheet date.  If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is separated into the following:  a) the amount representing the credit loss; and b) the amount related to all other factors.  The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings.  The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes.  The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment.  The new amortized cost basis is not adjusted for subsequent recoveries in fair value.

The Company did not recognize any other-than-temporary impairments for the three and six months ended June 30, 2013 or 2012.

Liquidity and Capital Resources

Liquidity refers to a company's ability to generate sufficient cash flows to meet the needs of its operations.  Liquidity is managed on insurance operations and seeks to ensure stable and reliable sources of cash flows to meet obligations provided by a variety of sources.

Liquidity requirements of the Company are met primarily by funds provided from operations.  Premium deposits and revenues, investment income and investment maturities are the primary sources of funds, while investment purchases, policy benefits, and operating expenses are the primary uses of funds.  We historically have not had to liquidate investments relative to our insurance operations to provide cash flow and did not do so during the first six months of 2013.  Our investments as of June 30, 2013, consist of 70.9% of marketable debt securities classified as available-for-sale that could be readily converted to cash for liquidity needs.

A primary liquidity concern is the risk of an extraordinary level of early policyholder withdrawals.  We include provisions within our insurance policies, such as surrender charges, that help limit and discourage early withdrawals.  Since these contractual withdrawals, as well as the level of surrenders experienced, were largely consistent with our assumptions in asset liability management, our associated cash outflows have, to date, not had an adverse impact on our overall liquidity.  Individual life insurance policies are less susceptible to withdrawal than annuity reserves and deposit liabilities because policyholders may incur surrender charges and undergo a new underwriting process in order to obtain a new insurance policy.  Cash flow projections and cash flow tests under various market interest rate scenarios are also performed annually to assist in evaluating liquidity needs and adequacy.  We currently anticipate that available liquidity sources and future cash flows will be adequate to meet our needs for funds.

Cash flows from our insurance operations have been sufficient to meet current needs.  Cash flows from operating activities were $33.0 million and $30.2 million for the six months ended June 30, 2013 and 2012, respectively.  We have traditionally also had significant cash flows from both scheduled and unscheduled investment security maturities, redemptions, and prepayments.  These cash flows, for the most part, are reinvested in fixed income securities.  Net cash outflows from investing activities totaled $48.8 million for the six months ended June 30, 2013 compared to net cash inflows of $4.0 million for the six months ended June 30,

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

2012. The investing activities fluctuate from period to period due to timing of securities activities such as calls and maturities and reinvestment of those funds. 

The NAIC has established minimum capital requirements in the form of Risk-Based Capital ("RBC").  RBC factors the type of business written by an insurance company, the quality of its assets, and various other aspects of an insurance company's business to develop a minimum level of capital called "authorized control level risk-based capital" and compares this level to adjusted statutory capital that includes capital and surplus as reported under statutory accounting principles, plus certain investment reserves.  Should the ratio of adjusted statutory capital to control level RBC fall below 200%, a series of remedial actions by the affected company would be required.

All insurance subsidiaries were above the RBC minimums at December 31, 2012.  The ratios of adjusted statutory capital to control level RBC are shown below.

	December 31,
	2012
CICA	551	%
CNLIC	2,380	%
SPFIC	421	%
SPLIC	1,282	%

Contractual Obligations and Off-balance Sheet Arrangements

There have been no material changes in contractual obligations from those reported in the Company's Form 10-K for the year ended December 31, 2012.  The Company does not have off-balance sheet arrangements at June 30, 2013, and does not expect any future effects on the Company's financial condition related to any such arrangements.  We do not utilize special purpose entities as investment vehicles, nor are there any such entities in which we have an investment that engage in speculative activities of any nature, and we do not use such investments to hedge our investment positions.

Parent Company Liquidity and Capital Resources

Citizens is a holding company and has had minimal operations of its own.  Its assets consist primarily of the capital stock of its subsidiaries, cash, fixed income securities, mutual funds and investment real estate.  Accordingly, Citizens' cash flows depend upon the availability of statutorily permissible payments, primarily payments under management agreements from its two primary life insurance subsidiaries, CICA and SPLIC.  The ability to make payments is limited by applicable laws and regulations of Colorado, CICA's state of domicile, and Louisiana, SPLIC's state of domicile, which subject insurance operations to significant regulatory restriction.  These laws and regulations require, among other things, that these insurance subsidiaries maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay to the holding company.  Citizens historically has not relied upon dividends from subsidiaries for its cash flow needs.  However, CICA and SPLIC do dividend available funds from time to time in relation to new acquisition target strategies.

Critical Accounting Policies

We have prepared a current assessment of our critical accounting policies and estimates in connection with preparing our interim unaudited consolidated financial statements as of and for the three and six months ended June 30, 2013 and 2012. We believe that the accounting policies set forth in the Notes to our Consolidated Financial Statements and “Critical Accounting Policies and Estimates” in the Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2012 continue to describe the significant judgments and estimates used in the preparation of our consolidated financial statements except as specifically noted below.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

The nature of our business exposes us to market risk relative to our invested assets and policy liabilities.  Market risk is the risk of loss that may occur when changes in interest rates and public equity prices adversely affect the value of our invested assets.  Interest rate risk is our primary market risk exposure.  Substantial and sustained increases and decreases in market interest rates can affect the fair value of our investments.  The fair value of our fixed maturity portfolio generally increases when interest rates decrease and decreases when interest rates increase. For additional information regarding market risks to which we are subject, see "Item 1 Financial Statements - Note 5. Investments - Valuation of Investments in Fixed Maturity and Equity Securities" above.

The following table summarizes net unrealized gains and losses as of the dates indicated.

	June 30, 2013				December 31, 2012
	Amortized Cost		Fair Value	Net Unrealized Gains (Losses)	Amortized Cost	Fair Value	Net Unrealized Gains (Losses)
	(In thousands)
Fixed maturities, available-for-sale	$	630,177	649,109	18,932	559,736	604,520	44,784
Fixed maturities, held-to-maturity	159,208		161,012	1,804	187,008	193,739	6,731
Total fixed maturities	$	789,385	810,121	20,736	746,744	798,259	51,515
Total equity securities	$	52,392	52,699	307	52,744	53,741	997

Market Risk Related to Interest Rates

Our exposure to interest rate changes results from our significant holdings of fixed maturity investments, which comprised 88.2% of our investment portfolio based on carrying value as of June 30, 2013.  These investments are mainly exposed to changes in U.S. Treasury rates.  Our fixed maturities investments include U.S. Government-sponsored enterprises, U.S. Government bonds, securities issued by government agencies, municipal bonds and corporate bonds.  

To manage interest rate risk, we perform periodic projections of asset and liability cash flows to evaluate the potential sensitivity of our investments and liabilities.  We assess interest rate sensitivity annually with respect to our available-for-sale fixed maturities investments using hypothetical test scenarios that assume either upward or downward shifts in the prevailing interest rates.  The changes in fair values of our debt and equity securities as of June 30, 2013, were within the expected range of this analysis.

Changes in interest rates typically have a sizable effect on the fair values of our debt and equity securities.  The interest rate of the ten-year U.S. Treasury bond increased to 2.5% during the quarter ended June 30, 2013, from 1.8% at December 31, 2012.  Net unrealized gains on fixed maturity securities totaled $20.8 million at June 30, 2013, compared to $51.5 million at December 31, 2012.

The fixed maturity portfolio is exposed to call risk, as a significant portion of the current bond holdings are callable.  A decreasing interest rate environment can result in increased call activity as experienced over the past several years, and an increasing rate environment will likely result in securities being paid at their stated maturity.

There are no fixed maturities or other investments classified as trading instruments.  Approximately 80.1% of fixed maturities were held in available-for-sale and 19.9% in held-to-maturity based upon fair value at June 30, 2013.  At June 30, 2013, and December 31, 2012, we had no investments in derivative instruments, nor did we have any subprime or collateralized debt obligation risk.

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CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Market Risk Related to Equity Prices

Changes in the level or volatility of equity prices affect the value of equity securities we hold as investments.  Our equity investments portfolio represented 5.8% of our total investments at June 30, 2013, with 98.6% invested in diversified equity and bond mutual funds.  We believe that significant decreases in the equity markets would not have a material adverse impact on our total investment portfolio.

Item 4. CONTROLS AND PROCEDURES

We have established disclosure controls and procedures to ensure, among other things, that material information relating to our Company, including its consolidated subsidiaries, is made known to our officers who certify our financial reports and to the other members of our senior management and the Board of Directors.

Our Chief Executive Officer, Vice Chairman and Chief Financial Officer are responsible for establishing and maintaining our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")).  Based upon an evaluation at the end of the period, the Chief Executive Officer, Vice Chairman and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

During the three months ended June 30, 2013, there were no changes in the Company's internal controls over financial reporting that have materially affected or are reasonably likely to materially affect, the Company's internal controls over financial reporting (as defined in rules 13a-15(f) and 15d-15(f) under the Exchange Act).

49

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

PART II.  OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are a defendant in a lawsuit filed on August 6, 1999, in the Texas District Court, Austin, Texas, now styled Delia Bolanos Andrade, et al., Plaintiffs, v. Citizens Insurance Company of America, et al., Defendants in which a class was originally certified by the trial court and reversed by the Texas Supreme Court in 2007 with an order to the trial court to conduct further proceedings consistent with its ruling.  The underlying lawsuit alleged that certain life insurance policies CICA made available to non-U.S. residents, when combined with a policy feature that allowed certain cash benefits to be assigned to two non-U.S. trusts for the purpose of accumulating ownership of our Class A common stock, along with allowing the policyholders to make additional contributions to the trusts, were actually offers and sales of securities that occurred in Texas by unregistered dealers in violation of the Texas securities laws.  The remedy sought was rescission and return of the insurance premium payments.  On December 9, 2009, the trial court denied the recertification of the class after conducting additional proceedings in accordance with the Texas Supreme Court's ruling.  The remaining plaintiffs must now proceed individually, and not as a class, if they intend to pursue their claims against us.  Since the December 9, 2009 trial court ruling, no individual cases have been further pursued by the plaintiffs.  The probability of the plaintiffs further pursuing their cases individually remains unknown.  An estimate of any possible loss or range of losses cannot be made at this time in regard to individuals pursuing claims.  However, should the plaintiffs further pursue their claims individually, we intend to vigorously defend any proceedings.

In 2007 and in the aftermath of Hurricane Katrina, the Attorney General for the State of Louisiana filed suit against SPFIC and every other homeowner insurer doing business in the State of Louisiana, on behalf of the State of Louisiana and certain Road Home fund recipients.  In April 2013, SPFIC and the State of Louisiana reached a settlement agreement resolving all claims against SPFIC in the Road Home matter for approximately $183,000. This amount has been accrued in the June 30, 2013 financial statements and did not have a material impact on the consolidated financials.

Item 1A. RISK FACTORS

There are no updates to our risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012 except as noted below.

We are a defendant in lawsuits, which may adversely affect our financial condition and detract from the time our management is able to devote to our business, and we are subject to risks related to litigation and regulatory matters.

The Company is currently performing an internal audit that began in 2012 related to unclaimed property for all legal reporting entities. By letter dated July 2, 2013 the Company was informed that the Louisiana Department of Treasury has authorized an audit of Citizens Inc. and its affiliates for compliance with unclaimed property laws. This audit is being conducted by Verus Financial LLC on behalf of the state.

Our internal audit and the external audit performed on behalf of Louisiana may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, interest, and changes to the Company's procedures for the identification and escheatment of abandoned property.  At this time, the Company is not able to estimate any of these possible amounts, but such costs could be substantial for a company our size.

Recent changes in Columbian law may impede the activities of our independent consultants in Colombia.

Our independent consultants are contractually obligated to comply with the laws and regulations of the jurisdictions in which they operate. Certain independent consultants in Colombia have indicated new laws that became effective in July 2013 could impede their routine activities relative to introducing new clients to company product offerings and facilitating renewal premium collections. We are unable to quantify the effect of the Colombian  law changes upon our business, but believe they could have an adverse impact upon the Colombian portion of our business. For the six months ended June 30, 2013, approximately 19% of our direct premiums from international clients was generated through our Colombian consultants See “Managements Discussion and Analysis of Financial Condition and Results of Operations - Segment Operations - Life Insurance - International Products.”

50

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

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

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

On August 6, 2013, the Company issued a news release (the "Release") reporting, among things, results of operations for its second quarter of 2013.  A copy of the Release is furnished as Exhibit 99.1 to this Quarterly Report on Form 10-Q.  Citizens also announced that it would hold a conference call to discuss its financial results at 10:00 a.m. Central Daylight Time on Wednesday, August 7, 2013.

51

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

June 30, 2013

Item 6. EXHIBITS

Exhibit Number	The following exhibits are filed herewith:
11	Statement re:  Computation of per share earnings (see financial statements)
31.1	Certification of Chief Executive Officer and Vice Chairman pursuant to Section 302 of the Sarbanes-Oxley Act*
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act*
32.1	Certification of Chief Executive Officer and Vice Chairman pursuant to Section 906 of the Sarbanes-Oxley Act*
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act*
99.1	News Release reporting second quarter and six months results issued on August 6, 2013 (furnished herewith)
101.INS	XBRL Instance Document (furnished herewith)
101.SCH	XBRL Taxonomy Extension Schema (furnished herewith)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase (furnished herewith)
101.DEF	XBRL Taxonomy Extension Definition Linkbase (furnished herewith)
101.LAB	XBRL Taxonomy Extension Label Linkbase (furnished herewith)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase (furnished herewith)
	__________________

* Filed herewith.

52

SIGNATURES

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

		CITIZENS, INC.
		By:	/s/ Harold E. Riley
			Harold E. Riley
			Chairman and Chief Executive Officer
		By:	/s/ Rick D. Riley
			Rick D. Riley
			Vice Chairman and President
		By:	/s/ Kay E. Osbourn
			Kay E. Osbourn
			Executive Vice President, Chief Financial Officer and Treasurer
Date:	August 6, 2013

53

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer Under

Section 302 of the Sarbanes-Oxley Act of 2002

We, Harold E. Riley, Chairman and Chief Executive Officer and Rick D. Riley, Vice Chairman and President of Citizens, Inc., certify that:

1. We have reviewed this Quarterly Report on Form 10-Q of Citizens, Inc. ("registrant");

2. Based on our knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on our knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and us are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and us have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

54

		By:	/s/ Harold E. Riley
			Harold E. Riley
			Chairman and Chief Executive Officer
Date:	August 6, 2013
		By:	/s/ Rick D. Riley
			Rick D. Riley
			Vice Chairman and President
Date:	August 6, 2013

55

EX-31.2

EXHIBIT 31.2

Certification of Chief Executive Officer Under

Section 302 of the Sarbanes-Oxley Act of 2002

I, Kay E. Osbourn, Executive Vice President, Chief Financial Officer and Treasurer of Citizens, Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Citizens, Inc. ("registrant");

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

		By:	/s/ Kay E. Osbourn
			Kay E. Osbourn
			Exec. Vice President, Chief Financial Officer and Treasurer
Date:	August 6, 2013

56

EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officerof Citizens, Inc. Pursuant to 18 U.S.C. §1350

We, Harold E. Riley and Rick D. Riley, certify that:

In connection with the Quarterly Report on Form 10-Q of Citizens, Inc. (the "Company") for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Harold E. Riley, Chairman and Chief Executive Officer and Rick D. Riley, Vice Chairman and President of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Harold E. Riley
Name:	Harold E. Riley
Title:	Chairman and Chief Executive Officer
Date:	August 6, 2013
	/s/ Rick D. Riley
Name:	Rick D. Riley
Title:	Vice Chairman and President
Date:	August 6, 2013

57

EX-32.2

EXHIBIT 32.2

Certification of Chief Financial Officer of Citizens, Inc. Pursuant to 18 U.S.C. §1350

I, Kay E. Osbourn, certify that:

In connection with the Quarterly Report on Form 10-Q of Citizens, Inc. (the "Company") for the period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kay E. Osbourn, Executive Vice President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Kay E. Osbourn
Name:	Kay E. Osbourn
Title:	Executive Vice President, Chief Financial Officer and Treasurer
Date:	August 6, 2013

58

EX-99.1

EXHIBIT 99.1

FOR FURTHER INFORMATION CONTACT:

Kay Osbourn

Chief Financial Officer

(512) 837-7100

PR@citizensinc.com

FOR IMMEDIATE RELEASE

August 6, 2013

Citizens, Inc. Reports Second Quarter and Six Months 2013 Results

Investor Conference Call Scheduled for August 7, 2013, at 10:00 a.m. CDT

AUSTIN, TEXAS (August 6, 2013) – Citizens, Inc. (NYSE: CIA) reported results today for the second quarter and six months ended June 30, 2013.

Rick D. Riley, Vice Chairman and President, said, "This was a healthy quarter for Citizens. Total premiums rose 5.4% and 5.1% for the three and six month periods ending June 30, 2013. Our new life segment international insurance sales growth reflects continued interest in endowment products, which rose 18.7% and 18.4% for the same periods. We also experienced lower reported claims in our life segment in the current year compared to 2012."

Riley added, “New premium income drove invested asset growth and the consolidated investment yield improved to 4.03% compared to 3.81% for the full year of 2012. As a result, investment income rose 21.7% and 16.2% for the three and six month periods. Book value per share of Class A common stock was $4.96 at June 30, 2013, reflecting interest-rate driven mark-to-market adjustments."

FOR THE PERIODS ENDED JUNE 30,	Q2 2013		Q2 2012	YTD 2013	YTD 2012
(Unaudited, In thousands, except for per share amounts)
Premiums	$	43,834	41,596	84,774	80,692
Net investment income	9,265		7,612	17,654	15,189
Net realized investment gains	82		246	113	344
Change in fair value of warrants	—		37	—	73
Total revenue	53,608		49,602	103,154	96,507
Net income applicable to common stock	1,307		403	2,163	1,915
Net income per diluted share of Class A common stock	0.03		0.01	0.05	0.04
Diluted weighted average shares of Class A common stock	49,080		48,989	49,080	48,997
Operating income	$	1,254	206	2,090	1,618

"We are continuing to review potential acquisition targets and situations as they come to us", Riley noted "and are optimistic relative to the current market for new deals."

59

Reconciliation of Net Income to Operating Income (a non-GAAP measure)
FOR THE PERIODS ENDED JUNE 30,	Q2 2013			Q2 2012		YTD 2013		YTD 2012
(Unaudited,In thousands)
Net income	$	1,307		403		2,163		1,915
Items excluded in the calculation of operating income:
Net realized investment gains	(82		)	(246	)	(113	)	(344	)
Change in fair value of warrants	—			(37	)	—		(73	)
Pre-tax effect of exclusions	(82		)	(283	)	(113	)	(417	)
Tax effect at 35%	29			86		40		120
Operating income	$	1,254		206		2,090		1,618

Non-GAAP Financial Measures - The table above reconciles Net Income to Operating Income. Operating Income is a "Non-GAAP" financial measure that is widely used in our industry to evaluate the performance of underwriting operations. Operating Income excludes the Fair Value Changes of Warrants and the after-tax net effects of Net Realized Investment Gains and Losses. We believe it presents a useful view of the performance of our insurance operations. While we believe disclosure of certain Non-GAAP information is appropriate, you should not consider this information without also considering the information we present in accordance with GAAP.

INSURANCE OPERATIONS

t Life Insurance –Our Life Insurance segment primarily issues ordinary whole life insurance and endowments in U.S. Dollar-denominated amounts to foreign residents in approximately 30 countries through independent marketing consultants, and domestically through independent marketing firms and consultants across the United States.

o Premiums – Life insurance premium revenues increased for the three and six months of 2013, due to higher international renewal premiums, as we continue to experience strong persistency.  In addition, new sales increased 18.7% and 18.4% for the three and six months in 2013 compared to 2012. Endowment sales continue to be the preferred product internationally representing approximately 77% of first year premiums in the three months ended June 30, 2013. Top selling products were our endowment to age sixty-five and the twenty-year endowment offerings.

o Benefits and expenses – Total life insurance benefits and expenses rose in line with premium growth for the three and six months of 2013 compared to the same period in 2012. Future policy benefit reserves increased as endowment products accumulate higher reserve balances on the front end when compared to whole life products. We are also continuing to recognize the effect of the current low interest rate environment on reserves for policies issued. We have noted lower reported claims for the three and six months in 2013 compared to 2012 levels which is positively impacting earnings. Commission expense increased as first year sales expanded and renewal premium remained strong.

t Home Service – Our Home Service Insurance segment provides pre-need and final expense ordinary life insurance and annuities to middle and lower income individuals, primarily in Louisiana, Mississippi and Arkansas.  Our policies in this segment are sold and serviced through funeral homes and a home service marketing distribution system utilizing employees and independent agents.

o Premiums – Home service premiums remained flat for the three and six month periods ended in 2013 compared to 2012. We expect full-year 2013 sales levels for this business segment to be in line with the levels reported last year.

o Benefits and expenses – Claims and surrenders decreased 2.0% for the three months and increased by 5.3% for the six months of 2013. The six months ended June 30, 2013 increase is due to weather related property claims in the first quarter of this year. Further, last year's six month results included the release of an incurred but not reported liability of $0.5 million. In addition, this segment reported increased amortization of deferred acquisition costs in the current year as the 2012 results included an adjustment of $0.4 million that lowered amortization costs in that year.

Results for the non-insurance segment have fluctuated over the past several years due to the change in fair value of warrants. This segment represents the administrative support entities to the insurance operations whose revenues are primarily intercompany and have been eliminated in consolidation under GAAP. 

60

INVESTMENTS

t Invested assets – Total invested assets increased from year-end 2012 as new premium revenues were invested in bonds while policy loans also rose.

o Fixed maturity securities represented 88.2% of the investment portfolio at June 30, 2013, compared with 87.9% at year-end 2012.

o Equity security holdings decreased to $52.7 million at June 30, 2013 from $53.7 million at year-end 2012 due to decreases in fair value of equity bond mutual funds as interest rates rose.

o Cash and cash equivalents represented 4.3% of total cash, cash equivalents and invested assets at June 30, 2013, down from 5.9% at year-end 2012, reflecting the timing of calls of securities owned and of investment and reinvestment of new premium revenues and other available funds.

t Investment income – Net investment income increased 21.7% and 16.2% for the three and six months ended June 30, 2013 compared to the same period in 2012. This is primarily due to an increase in overall invested assets from premium collections received and invested in fixed maturity bonds, and the increase in the overall consolidated portfolio yield by 26 basis points compared to the six months ended in 2012.  The policy loan asset balance increased by 6.6% in 2013, resulting in an increase in policy loan income, a component of investment income.

o Yield – Average annualized yield was 4.03% for the six months of 2013 compared to 3.81% for the full year of 2012.

o Duration – The average maturity of the fixed income bond portfolio was 12 years with an estimated effective maturity of 7 years as of June 30, 2013.

CICA Life, Citizens' largest life insurance subsidiary, was named to the 2013 Ward's 50 Top Performing Life-Health Insurance Companies List. Ward Group is a trusted leader of benchmarking and practices services for the insurance industry. Based upon Ward's annual analysis of the life and health industry, CICA Life Insurance Company of America was recognized for achieving outstanding financial results in the areas of safety, consistency and performance over the five year period of 2005-2012 according to Ward's recent announcement (available at www.wardinc.com). This was CICA Life's second consecutive year to be named to this prestigious list and Ward's 23rd consecutive year conducting this independent analysis.

INVESTOR CONFERENCE CALL

On Wednesday, August 7, 2013, Citizens will host a conference call to discuss operating results at 10:00 a.m. Central Daylight Time.  The conference call will be hosted by Rick D. Riley, Vice Chairman and President, Kay Osbourn, Chief Financial Officer, and other members of the Company’s management team.  To participate, please dial 888-637-2456 and ask to join the Citizens, Inc. call.  We recommend accessing the call three to five minutes before the call is scheduled to begin.  A recording of the conference call will be available on Citizens' website at www.citizensinc.com in the Investor Information section under News Release & Publications following the call.

ABOUT CITIZENS, INC.

Citizens, Inc. is a financial services company listed on the New York Stock Exchange under the symbol CIA.  The Company utilizes a three-pronged strategy for growth based upon worldwide sales of U.S. Dollar-denominated whole life cash value insurance policies, life insurance product sales in the U.S. and the acquisition of other U.S. based life insurance companies.

SAFE HARBOR

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, 2012, its quarterly reports on Form 10-Q 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.

61

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In thousands, except per share amounts)

	Three Months Ended June 30,
	2013					2012
	(Unaudited)
Revenues:
Premiums:
Life insurance			$	42,223			39,945
Accident and health insurance			406				417
Property insurance			1,205				1,234
Net investment income			9,265				7,612
Realized investment gains, net			82				246
Decrease in fair value of warrants			—				37
Other income			427				111
Total revenues			53,608				49,602
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders			16,660				16,109
Increase in future policy benefit reserves			17,896				16,751
Policyholders' dividends			2,235				2,281
Total insurance benefits paid or provided			36,791				35,141
Commissions			10,429				9,731
Other general expenses			7,342				6,342
Capitalization of deferred policy acquisition costs			(7,672		)		(7,044	)
Amortization of deferred policy acquisition costs			4,363				4,433
Amortization of cost of customer relationships acquired			560				660
Total benefits and expenses			51,813				49,263
Income before federal income tax			1,795				339
Federal income tax expense (benefit)			488				(64	)
Net income			1,307				403
Per Share Amounts:
Basic earnings per share of Class A common stock	$	0.03				0.01
Basic earnings per share of Class B common stock	0.01					—
Diluted earnings per share of Class A common stock	0.03					0.01
Diluted earnings per share of Class B common stock	0.01					—
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during period			(25,544		)		6,003
Reclassification adjustment for gains included in net income			(73		)		(121	)
Unrealized gains (losses) on available-for-sale securities, net			(25,617		)		5,882
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities			(8,953		)		2,063
Other comprehensive income (loss)			(16,664		)		3,819
Comprehensive income (loss)			$	(15,357	)		4,222

62

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In thousands, except per share amounts)

	Six Months Ended June 30,
	2013					2012
	(Unaudited)
Revenues:
Premiums:
Life insurance			$	81,637			77,351
Accident and health insurance			755				830
Property insurance			2,382				2,511
Net investment income			17,654				15,189
Realized investment gains, net			113				344
Decrease in fair value of warrants			—				73
Other income			613				209
Total revenues			103,154				96,507
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders			31,466				30,863
Increase in future policy benefit reserves			34,855				30,892
Policyholders' dividends			4,309				4,155
Total insurance benefits paid or provided			70,630				65,910
Commissions			19,487				18,395
Other general expenses			14,041				12,958
Capitalization of deferred policy acquisition costs			(14,034		)		(12,983	)
Amortization of deferred policy acquisition costs			8,989				8,559
Amortization of cost of customer relationships acquired			1,138				1,236
Total benefits and expenses			100,251				94,075
Income before federal income tax			2,903				2,432
Federal income tax expense			740				517
Net income			2,163				1,915
Per Share Amounts:
Basic earnings per share of Class A common stock	$	0.05				0.04
Basic earnings per share of Class B common stock	0.02					0.02
Diluted earnings per share of Class A common stock	0.05					0.04
Diluted earnings per share of Class B common stock	0.02					0.02
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during period			(25,448		)		8,564
Reclassification adjustment for gains included in net income			(104		)		(207	)
Unrealized gains (losses) on available-for-sale securities, net			(25,552		)		8,357
Income tax expense (benefit) on unrealized gains (losses) on available-for-sale securities			(8,926		)		2,959
Other comprehensive income (loss)			(16,626		)		5,398
Comprehensive income (loss)			$	(14,463	)		7,313

63

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Financial Position

(In thousands)

	June 30,		December 31,
	2013		2012
	(Unaudited)
Assets:
Investments:
Fixed maturities available-for-sale, at fair value	$	649,109	604,520
Fixed maturities held-to-maturity, at amortized cost	159,208		187,008
Equity securities available-for-sale, at fair value	52,699		53,741
Mortgage loans on real estate	687		1,509
Policy loans	45,824		42,993
Real estate held for investment	8,509		8,496
Other long-term investments	56		57
Short-term investments	—		2,340
Total investments	916,092		900,664
Cash and cash equivalents	41,013		56,299
Accrued investment income	11,378		10,304
Reinsurance recoverable	6,673		9,651
Deferred policy acquisition costs	140,787		135,569
Cost of customer relationships acquired	24,474		25,116
Goodwill	17,160		17,160
Other intangible assets	865		879
Federal income tax receivable	224		270
Property and equipment, net	7,138		7,383
Due premiums, net	10,443		10,527
Prepaid expenses	1,335		344
Other assets	962		782
Total assets	$	1,178,544	1,174,948

(Continued)

64

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

(In thousands)

	June 30,			December 31,
	2013			2012
	(Unaudited)
Liabilities:
Policy liabilities:
Future policy benefit reserves:
Life insurance	$	795,886		762,319
Annuities	53,223			51,750
Accident and health	2,712			5,491
Dividend accumulations	12,821			11,962
Premiums paid in advance	29,811			27,455
Policy claims payable	8,809			11,015
Other policyholders' funds	8,010			9,440
Total policy liabilities	911,272			879,432
Commissions payable	2,195			2,606
Federal income tax payable	—			—
Deferred federal income tax	6,796			17,301
Payable for securities in process of settlement	179			2,358
Other liabilities	9,457			10,143
Total liabilities	929,899			911,840
Stockholders' equity:
Class A, common stock	259,383			259,383
Class B, common stock	3,184			3,184
Accumulated deficit	(15,172		)	(17,335	)
Accumulated other comprehensive income:
Unrealized gains on securities, net of tax	12,261			28,887
Treasury stock, at cost	(11,011		)	(11,011	)
Total stockholders’ equity	248,645			263,108
Total liabilities and stockholders’ equity	$	1,178,544		1,174,948

65

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following tables set forth the computation of basic and diluted earnings per share.

	Three Months Ended
	June 30, 2013		June 30, 2012
	(In thousands, except per share amounts)
Basic and diluted earnings per share:
Numerator:
Net income	$	1,307	403
Net income allocated to Class A common stock	$	1,293	399
Net income allocated to Class B common stock	14		4
Net income	$	1,307	403
Denominator:
Weighted average shares of Class A outstanding - basic	49,080		48,963
Weighted average shares of Class A outstanding - diluted	49,080		48,989
Weighted average shares of Class B outstanding - basic and diluted	1,002		1,002
Basic earnings per share of Class A common stock	$	0.03	0.01
Basic earnings per share of Class B common stock	0.01		—
Diluted earnings per share of Class A common stock	0.03		0.01
Diluted earnings per share of Class B common stock	0.01		—

	Six Months Ended
	June 30, 2013		June 30, 2012
	(In thousands, except per share amounts)
Basic and diluted earnings per share:
Numerator:
Net income	$	2,163	1,915
Net income allocated to Class A common stock	$	2,141	1,895
Net income allocated to Class B common stock	22		20
Net income	$	2,163	1,915
Denominator:
Weighted average shares of Class A outstanding - basic	49,080		48,961
Weighted average shares of Class A outstanding - diluted	49,080		48,997
Weighted average shares of Class B outstanding - basic and diluted	1,002		1,002
Basic earnings per share of Class A common stock	$	0.05	0.04
Basic earnings per share of Class B common stock	0.02		0.02
Diluted earnings per share of Class A common stock	0.05		0.04
Diluted earnings per share of Class B common stock	0.02		0.02

XML

Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Premiums:
Life insurance	$ 42,223	$ 39,945	$ 81,637	$ 77,351
Accident and health insurance	406	417	755	830
Property insurance	1,205	1,234	2,382	2,511
Net investment income	9,265	7,612	17,654	15,189
Realized investment gains, net	82	246	113	344
Decrease in fair value of warrants	0	37	0	73
Other income	427	111	613	209
Total revenue	53,608	49,602	103,154	96,507
Insurance benefits paid or provided:
Claims and surrenders	16,660	16,109	31,466	30,863
Increase in future policy benefit reserves	17,896	16,751	34,855	30,892
Policyholders' dividends	2,235	2,281	4,309	4,155
Total insurance benefits paid or provided	36,791	35,141	70,630	65,910
Commissions	10,429	9,731	19,487	18,395
Other general expenses	7,342	6,342	14,041	12,958
Capitalization of deferred policy acquisition costs	(7,672)	(7,044)	(14,034)	(12,983)
Amortization of deferred policy acquisition costs	4,363	4,433	8,989	8,559
Amortization of cost of customer relationships acquired	560	660	1,138	1,236
Total benefits and expenses	51,813	49,263	100,251	94,075
Income before federal income tax	1,795	339	2,903	2,432
Federal income tax expense (benefit)	488	(64)	740	517
Net income	1,307	403	2,163	1,915
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during period	(25,544)	6,003	(25,448)	8,564
Reclassification adjustments for gains included in net income	(73)	(121)	(104)	(207)
Unrealized gains (losses) on available-for-sale securities, net	(25,617)	5,882	(25,552)	8,357
Income tax expense (benefit) on unrealized gains on available-for-sale securities	(8,953)	2,063	(8,926)	2,959
Other comprehensive income (loss)	(16,664)	3,819	(16,626)	5,398
Comprehensive income (loss)	$ (15,357)	$ 4,222	$ (14,463)	$ 7,313
Common Stock Class A [Member]
Earnings Per Share [Abstract]
Basic earnings per share (in dollars per share)	$ 0.03	$ 0.01	$ 0.05	$ 0.04
Diluted earnings per share (in dollars per share)	$ 0.03	$ 0.01	$ 0.05	$ 0.04
Common Stock Class B [Member]
Earnings Per Share [Abstract]
Basic earnings per share (in dollars per share)	$ 0.01	$ 0.00	$ 0.02	$ 0.02
Diluted earnings per share (in dollars per share)	$ 0.01	$ 0.00	$ 0.02	$ 0.02

XML

Investments Debt And Equity Securities (Notes)

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Investments

The Company invests primarily in fixed maturity securities, which totaled 84.4% of total investments and cash and cash equivalents at June 30, 2013.

	June 30, 2013				December 31, 2012
	Carrying Value		% of Total Carrying Value		Carrying Value		% of Total Carrying Value
	(In thousands)				(In thousands)
Fixed maturity securities	$	808,317	84.4	%	$	791,528	82.7	%
Equity securities	52,699		5.5	%	53,741		5.6	%
Mortgage loans	687		0.1	%	1,509		0.2	%
Policy loans	45,824		4.8	%	42,993		4.5	%
Real estate and other long-term investments	8,565		0.9	%	8,553		0.9	%
Short-term investments	—		—	%	2,340		0.2	%
Cash and cash equivalents	41,013		4.3	%	56,299		5.9	%
Total cash, cash equivalents and investments	$	957,105	100.0	%	$	956,963	100.0	%

The following tables represent the cost, gross unrealized gains and losses and fair value for fixed maturities and equity securities as of the periods indicated.

	June 30, 2013
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale:
U.S. Treasury securities	$	10,139	2,856	—	12,995
U.S. Government-sponsored enterprises	63,300		2,069	97	65,272
States and political subdivisions	347,580		10,582	9,170	348,992
Foreign governments	104		29	—	133
Corporate	204,613		13,729	1,394	216,948
Commercial mortgage-backed	349		13	—	362
Residential mortgage-backed	4,092		317	2	4,407
Total available-for-sale securities	630,177		29,595	10,663	649,109
Held-to-maturity securities:
U.S. Government-sponsored enterprises	10,446		248	5	10,689
States and political subdivisions	118,327		2,801	1,764	119,364
Corporate	30,435		606	82	30,959
Total held-to-maturity securities	159,208		3,655	1,851	161,012
Total fixed maturities	$	789,385	33,250	12,514	810,121
Equity securities:
Stock mutual funds	$	10,463	719	—	11,182
Bond mutual funds	41,505		15	732	40,788
Common stock	17		—	4	13
Preferred stock	407		309	—	716
Total equity securities	$	52,392	1,043	736	52,699

	December 31, 2012
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	10,170	3,773	—	13,943
U.S. Government-sponsored enterprises	81,788		3,815	22	85,581
States and political subdivisions	265,812		17,227	777	282,262
Foreign governments	105		36	—	141
Corporate	195,755		20,536	286	216,005
Commercial mortgage-backed	481		17	2	496
Residential mortgage-backed	5,625		469	2	6,092
Total available-for-sale securities	559,736		45,873	1,089	604,520
Held-to-maturity securities:
U.S. Government-sponsored enterprises	28,632		514	—	29,146
States and political subdivisions	125,634		5,435	378	130,691
Corporate	32,742		1,160	—	33,902
Total held-to-maturity securities	187,008		7,109	378	193,739
Total fixed maturity securities	$	746,744	52,982	1,467	798,259
Equity securities:
Stock mutual funds	$	10,463	250	28	10,685
Bond mutual funds	41,504		541	129	41,916
Common stock	17		—	2	15
Preferred stock	760		365	—	1,125
Total equity securities	$	52,744	1,156	159	53,741

At June 30, 2013, the Company had $4.4 million of mortgage-backed security holdings based on amortized cost, of which $4.1 million, or 93.2%, were residential U.S. Government-sponsored issues.  Mortgage-backed securities are also referred to as securities not due at a single maturity date throughout this report.  The majority of the Company's equity securities are diversified stock and bond mutual funds.

Valuation of Investments in Fixed Maturity and Equity Securities

Held-to-maturity securities are reported in the financial statements at amortized cost and available-for-sale securities are reported at fair value.

The Company monitors all debt and equity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews.  The assessment of whether impairments have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value.  The Company determines other-than-temporary impairment by reviewing relevant evidence related to the specific security issuer as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

When an other-than-temporary impairment has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis.  If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is recognized in earnings equal to the entire difference between the investment's cost and its fair value at the balance sheet date.  If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis, the other-than-temporary impairment is separated into the following: (a) the amount representing the credit loss; and (b) the amount related to all other factors.  The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings.  The amount of the total other-than-temporary impairment related to other factors is recognized in other comprehensive income, net of applicable taxes.  The previous amortized cost basis less the other-than-temporary impairment recognized in earnings becomes the new amortized cost basis of the investment.  The new amortized cost basis is not adjusted for subsequent recoveries in fair value.

The Company evaluates whether a credit impairment exists for debt securities by considering primarily the following factors: (a) changes in the financial condition of the security's underlying collateral; (b) whether the issuer is current on contractually obligated interest and principal payments; (c) changes in the financial condition, credit rating and near-term prospects of the issuer; (d) the length of time to which the fair value has been less than the amortized cost of the security; and (e) the payment structure of the security.  The Company's best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process.  Quantitative review includes information received from third party sources such as financial statements, pricing and rating changes, liquidity and other statistical information.  Qualitative factors include judgments related to business strategies, economic impacts on the issuer and overall judgment related to estimates and industry factors.  The Company's best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates.  These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries, which may include estimating the underlying collateral value.  In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer.

The primary factors considered in evaluating whether an impairment exists for an equity security include, but are not limited to: (a) the length of time and the extent to which the fair value has been less than the cost of the security; (b) changes in the financial condition, credit rating and near-term prospects of the issuer; (c) whether the issuer is current on contractually obligated payments; and (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for recovery.

The Company did not recognize any other-than-temporary impairments ("OTTI") during the six months ended June 30, 2013 and 2012.

The following tables present the fair values and gross unrealized losses of fixed maturities and equity securities that have remained in a continuous unrealized loss position for the periods indicated.

	June 30, 2013
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
U.S. Government-sponsored enterprises	$	8,676	97	7	—	—	—	8,676	97	7
States and political subdivisions	192,682		8,438	214	7,875	732	8	200,557	9,170	222
Corporate	44,184		1,394	30	—	—	—	44,184	1,394	30
Residential mortgage-backed	3		—	1	48	2	1	51	2	2
Total available-for-sale securities	245,545		9,929	252	7,923	734	9	253,468	10,663	261
Held-to-maturity securities:
U.S. Government-sponsored enterprises	3,908		5	2	—	—	—	3,908	5	2
States and political subdivisions	53,296		1,764	47	—	—	—	53,296	1,764	47
Corporate	5,496		82	4	—	—	—	5,496	82	4
Total held-to-maturity securities	62,700		1,851	53	—	—	—	62,700	1,851	53
Total fixed maturities	$	308,245	11,780	305	7,923	734	9	316,168	12,514	314
Equity securities:
Bond mutual funds	$	34,028	607	5	2,875	125	1	36,903	732	6
Common stocks	—		—	—	13	4	1	13	4	1
Total equities	$	34,028	607	5	2,888	129	2	36,916	736	7

As of June 30, 2013, the Company had 9 fixed maturity available-for-sale securities and no held-to-maturity securities that were in an unrealized loss position for greater than 12 months.  These securities consisted of municipals and mortgage-backed securities. There is 1 bond mutual fund that is now in a loss position for greater than 12 months. This is a diversified U.S. Government bond fund that has a large percentage of mortgage exposure in Pass Thru and CMO security types which have refinanced in the current interest rate environment. The fund is comprised of only U.S. Government bond assets.

	December 31, 2012
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
U.S. Government-sponsored enterprises	$	10,603	22	9	—	—	—	10,603	22	9
States and political subdivisions	54,115		443	61	5,099	334	2	59,214	777	63
Corporate	22,316		286	16	—	—	—	22,316	286	16
Commercial mortgage-backed	94		2	1	—	—	—	94	2	1
Residential mortgage-backed	—		—	—	52	2	1	52	2	1
Total available-for-sale securities	87,128		753	87	5,151	336	3	92,279	1,089	90
Held-to-maturity securities:
States and political subdivisions	40,611		378	32	—	—	—	40,611	378	32
Total held-to-maturity securities	40,611		378	32	—	—	—	40,611	378	32
Total fixed maturities	$	127,739	1,131	119	5,151	336	3	132,890	1,467	122
Equity securities:
Stock mutual funds	$	—	—	—	972	28	1	972	28	1
Bond mutual funds	3,335		88	1	2,959	41	2	6,294	129	3
Common stock	15		2	1	—	—	—	15	2	1
Total equities	$	3,350	90	2	3,931	69	3	7,281	159	5

We have reviewed these securities for the periods ended June 30, 2013 and December 31, 2012 and determined that no other-than-temporary impairment exists based on our evaluation of the credit worthiness of the issuers and the fact that we do not intend to sell the investments nor is it likely that we will be required to sell the securities before recovery of their amortized cost bases which may be maturity.  We continue to monitor all securities on an on-going basis, and future information may become available which could result in impairments being recorded.

The amortized cost and fair value of fixed maturity securities at June 30, 2013 by contractual maturity are shown in the table below.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2013
	Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	236,253	242,160
Due after one year through five years	103,078		109,314
Due after five years through ten years	119,601		123,041
Due after ten years	166,804		169,825
Securities not due at a single maturity date	4,441		4,769
Total available-for-sale securities	630,177		649,109
Held-to-maturity securities:
Due in one year or less	11,206		10,854
Due after one year through five years	41,795		42,539
Due after five years through ten years	38,399		39,499
Due after ten years	67,808		68,120
Total held-to-maturity securities	159,208		161,012
Total fixed maturities	$	789,385	810,121

The securities not due at a single maturity date are primarily mortgage-backed obligations of U.S. Government-sponsored enterprises and corporate securities.

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.  Proceeds and gross realized gains from sales of securities for the three and six months ended June 30, 2013 and 2012 are summarized as follows.

	Fixed Maturities Available-for-Sale					Equity Securities
	Three Months Ended June 30,			Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2013		2012	2013	2012	2013	2012	2013	2012
	(In thousands)
Proceeds	$	—	—	58	503	—	—	—	—
Gross realized gains	$	—	—	1	4	—	—	—	—
Gross realized losses	$	—	—	—	3	—	—	—	—

During the six months ended June 30, 2013, one fixed maturity security was sold which resulted in a minimal realized gain. There were no securities sold at a loss during the three or six month periods ended June 30, 2013 or 2012. There were no securities sold from the held-to-maturity portfolio for the six months ended June 30, 2013 or 2012.

XML

Fair Value Measurements Schedule of Fair Value Unobservable Input Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract]
Balance at beginning of period	$ 387	$ 459
Total realized and unrealized gains (losses)
Included in net income	0	0
Included in other comprehensive income	(4)	(6)
Principal paydowns	(35)	(66)
Transfers in and (out) of Level 3	0	0
Balance at end of period	$ 348	$ 387

XML

Investments Debt And Equity Securities (Tables)

6 Months Ended

Jun. 30, 2013

Investments Including Short Term And Cash And Cash Equivalents [Abstract]

investments Including Short Term And Cash And Cash Equivalents [Table Text Block]

The Company invests primarily in fixed maturity securities, which totaled 84.4% of total investments and cash and cash equivalents at June 30, 2013.

	June 30, 2013				December 31, 2012
	Carrying Value		% of Total Carrying Value		Carrying Value		% of Total Carrying Value
	(In thousands)				(In thousands)
Fixed maturity securities	$	808,317	84.4	%	$	791,528	82.7	%
Equity securities	52,699		5.5	%	53,741		5.6	%
Mortgage loans	687		0.1	%	1,509		0.2	%
Policy loans	45,824		4.8	%	42,993		4.5	%
Real estate and other long-term investments	8,565		0.9	%	8,553		0.9	%
Short-term investments	—		—	%	2,340		0.2	%
Cash and cash equivalents	41,013		4.3	%	56,299		5.9	%
Total cash, cash equivalents and investments	$	957,105	100.0	%	$	956,963	100.0	%

Unrealized Gain (Loss) on Investments [Abstract]

Unrealized Gain (Loss) on Investments [Table Text Block]

The following tables represent the cost, gross unrealized gains and losses and fair value for fixed maturities and equity securities as of the periods indicated.

	June 30, 2013
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale:
U.S. Treasury securities	$	10,139	2,856	—	12,995
U.S. Government-sponsored enterprises	63,300		2,069	97	65,272
States and political subdivisions	347,580		10,582	9,170	348,992
Foreign governments	104		29	—	133
Corporate	204,613		13,729	1,394	216,948
Commercial mortgage-backed	349		13	—	362
Residential mortgage-backed	4,092		317	2	4,407
Total available-for-sale securities	630,177		29,595	10,663	649,109
Held-to-maturity securities:
U.S. Government-sponsored enterprises	10,446		248	5	10,689
States and political subdivisions	118,327		2,801	1,764	119,364
Corporate	30,435		606	82	30,959
Total held-to-maturity securities	159,208		3,655	1,851	161,012
Total fixed maturities	$	789,385	33,250	12,514	810,121
Equity securities:
Stock mutual funds	$	10,463	719	—	11,182
Bond mutual funds	41,505		15	732	40,788
Common stock	17		—	4	13
Preferred stock	407		309	—	716
Total equity securities	$	52,392	1,043	736	52,699

	December 31, 2012
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	10,170	3,773	—	13,943
U.S. Government-sponsored enterprises	81,788		3,815	22	85,581
States and political subdivisions	265,812		17,227	777	282,262
Foreign governments	105		36	—	141
Corporate	195,755		20,536	286	216,005
Commercial mortgage-backed	481		17	2	496
Residential mortgage-backed	5,625		469	2	6,092
Total available-for-sale securities	559,736		45,873	1,089	604,520
Held-to-maturity securities:
U.S. Government-sponsored enterprises	28,632		514	—	29,146
States and political subdivisions	125,634		5,435	378	130,691
Corporate	32,742		1,160	—	33,902
Total held-to-maturity securities	187,008		7,109	378	193,739
Total fixed maturity securities	$	746,744	52,982	1,467	798,259
Equity securities:
Stock mutual funds	$	10,463	250	28	10,685
Bond mutual funds	41,504		541	129	41,916
Common stock	17		—	2	15
Preferred stock	760		365	—	1,125
Total equity securities	$	52,744	1,156	159	53,741

Unrealized Continuous Losses on Investments [Abstract]

Schedule of Unrealized Loss on Investments [Table Text Block]

The following tables present the fair values and gross unrealized losses of fixed maturities and equity securities that have remained in a continuous unrealized loss position for the periods indicated.

	June 30, 2013
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
U.S. Government-sponsored enterprises	$	8,676	97	7	—	—	—	8,676	97	7
States and political subdivisions	192,682		8,438	214	7,875	732	8	200,557	9,170	222
Corporate	44,184		1,394	30	—	—	—	44,184	1,394	30
Residential mortgage-backed	3		—	1	48	2	1	51	2	2
Total available-for-sale securities	245,545		9,929	252	7,923	734	9	253,468	10,663	261
Held-to-maturity securities:
U.S. Government-sponsored enterprises	3,908		5	2	—	—	—	3,908	5	2
States and political subdivisions	53,296		1,764	47	—	—	—	53,296	1,764	47
Corporate	5,496		82	4	—	—	—	5,496	82	4
Total held-to-maturity securities	62,700		1,851	53	—	—	—	62,700	1,851	53
Total fixed maturities	$	308,245	11,780	305	7,923	734	9	316,168	12,514	314
Equity securities:
Bond mutual funds	$	34,028	607	5	2,875	125	1	36,903	732	6
Common stocks	—		—	—	13	4	1	13	4	1
Total equities	$	34,028	607	5	2,888	129	2	36,916	736	7

As of June 30, 2013, the Company had 9 fixed maturity available-for-sale securities and no held-to-maturity securities that were in an unrealized loss position for greater than 12 months.  These securities consisted of municipals and mortgage-backed securities. There is 1 bond mutual fund that is now in a loss position for greater than 12 months. This is a diversified U.S. Government bond fund that has a large percentage of mortgage exposure in Pass Thru and CMO security types which have refinanced in the current interest rate environment. The fund is comprised of only U.S. Government bond assets.

	December 31, 2012
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
U.S. Government-sponsored enterprises	$	10,603	22	9	—	—	—	10,603	22	9
States and political subdivisions	54,115		443	61	5,099	334	2	59,214	777	63
Corporate	22,316		286	16	—	—	—	22,316	286	16
Commercial mortgage-backed	94		2	1	—	—	—	94	2	1
Residential mortgage-backed	—		—	—	52	2	1	52	2	1
Total available-for-sale securities	87,128		753	87	5,151	336	3	92,279	1,089	90
Held-to-maturity securities:
States and political subdivisions	40,611		378	32	—	—	—	40,611	378	32
Total held-to-maturity securities	40,611		378	32	—	—	—	40,611	378	32
Total fixed maturities	$	127,739	1,131	119	5,151	336	3	132,890	1,467	122
Equity securities:
Stock mutual funds	$	—	—	—	972	28	1	972	28	1
Bond mutual funds	3,335		88	1	2,959	41	2	6,294	129	3
Common stock	15		2	1	—	—	—	15	2	1
Total equities	$	3,350	90	2	3,931	69	3	7,281	159	5

Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]

Schedule of Realized Gain (Loss) [Table Text Block]

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.  Proceeds and gross realized gains from sales of securities for the three and six months ended June 30, 2013 and 2012 are summarized as follows.

	Fixed Maturities Available-for-Sale					Equity Securities
	Three Months Ended June 30,			Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2013		2012	2013	2012	2013	2012	2013	2012
	(In thousands)
Proceeds	$	—	—	58	503	—	—	—	—
Gross realized gains	$	—	—	1	4	—	—	—	—
Gross realized losses	$	—	—	—	3	—	—	—	—

Schedule of Fixed Maturities [Abstract]

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost and fair value of fixed maturity securities at June 30, 2013 by contractual maturity are shown in the table below.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2013
	Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	236,253	242,160
Due after one year through five years	103,078		109,314
Due after five years through ten years	119,601		123,041
Due after ten years	166,804		169,825
Securities not due at a single maturity date	4,441		4,769
Total available-for-sale securities	630,177		649,109
Held-to-maturity securities:
Due in one year or less	11,206		10,854
Due after one year through five years	41,795		42,539
Due after five years through ten years	38,399		39,499
Due after ten years	67,808		68,120
Total held-to-maturity securities	159,208		161,012
Total fixed maturities	$	789,385	810,121

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Tax Disclosure [Abstract]
Effective Income Tax Rate	27.20%	(18.90%)	25.50%	21.30%
Federal Statutory Income Tax Rate			35.00%

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Commitments and Contingencies (Details) (USD $)	0 Months Ended		6 Months Ended
	Dec. 09, 2009	Aug. 06, 1999	Jun. 30, 2013 trusts
Legal Proceedings [Abstract]
Filing date for lawsuit		Aug. 06, 1999
Number of Non U.S. Trusts			2
Date of Court Ruling	Dec. 09, 2009
Accrued Settlement			$ 183,000

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Fair Value Measurements Financial Instruments not Carried at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage loans	$ 687	$ 1,509
Policy loans	45,824	42,993
Short-term investments	0	2,340
Cash and cash equivalents, at carrying value	41,013	56,299	68,916	33,255
Liability for future policy benefits individual and group annuities	53,223	51,750
Mortgage loans on real estate, interest rate	6.50%	6.60%
Mortgage loan maturity lower end range	1 year
Mortgage loan maturity higher end range	30 years
Mortgage loans interest rate used to estimate fair value	6.25%
Insurance policy loans interest rate	7.70%	7.70%
Fair value minimum interest rate of investment contract	0.35%
Fair value maximum rate of investment contract	3.63%
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturities held-to-maturity	159,208	187,008
Mortgage loans	687	1,509
Policy loans	45,824	42,993
Short-term investments	0	2,340
Cash and cash equivalents, at carrying value	41,013	56,299
Liability for future policy benefits individual and group annuities	53,223	51,750
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturities held-to-maturity	161,012	193,739
Mortgage loans	712	1,503
Policy loans	45,824	42,993
Short-term investments	0	2,340
Cash and cash equivalents, fair value disclosure	41,013	56,299
Liability for future policy benefits individual and group annuities	$ 58,233	$ 54,981

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Financial Statements

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Financial Statements

Basis of Presentation and Consolidation

The accompanying consolidated financial statements of Citizens, Inc. and its wholly-owned subsidiaries have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP").

The consolidated financial statements include the accounts and operations of Citizens, Inc. ("Citizens"), a Colorado corporation, and its wholly-owned subsidiaries, CICA Life Insurance Company of America ("CICA"), Security Plan Life Insurance Company ("SPLIC"), Security Plan Fire Insurance Company ("SPFIC"), Citizens National Life Insurance Company ("CNLIC"), Computing Technology, Inc. ("CTI") and Insurance Investors, Inc. ("III").  Citizens and its wholly-owned subsidiaries are collectively referred to as "the Company," "we," "us" or "our."

The consolidated statements of financial position for June 30, 2013, and the consolidated statements of comprehensive income and cash flows for the three and six-month periods ended June 30, 2013 and 2012, have been prepared by the Company without audit.  In the opinion of management, all adjustments to present fairly the financial position, results of operations, and changes in cash flows at June 30, 2013 and for comparative periods have been made.  The consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”).  Accordingly, the financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2012.  Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

We provide primarily life insurance and a small amount of health insurance policies through our insurance subsidiaries:  CICA, SPLIC, and CNLIC.  CICA and CNLIC issue ordinary whole-life policies, credit life and disability, burial insurance, pre-need policies, and accident and health related policies, throughout the Midwest and southern United States.  CICA also issues ordinary whole-life policies to non-U.S. residents.  SPLIC offers final expense and home service life insurance in Louisiana, Arkansas and Mississippi and SPFIC, a wholly-owned subsidiary of SPLIC, writes a limited amount of property insurance in Louisiana.

CTI provides data processing systems and services, as well as furniture and equipment, to the Company.  III provides aviation transportation to the Company.

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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.

The most significant estimates include those used in the evaluation of other-than-temporary impairments on debt and equity securities and valuation allowances on investments, actuarially determined assets and liabilities and assumptions, goodwill impairment, valuation allowance on deferred tax assets, and contingencies relating to litigation and regulatory matters.  Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements.

Reclassification

Reclassifications have been made in the current year related to certain prior year reported amounts to provide consistent presentation.

Significant Accounting Policies

For a description of significant accounting policies, see Note 1 of the Notes to Consolidated Financial Statements included in our 2012 Form 10-K Annual Report, which should be read in conjunction with these accompanying Consolidated Financial Statements.

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Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Segment Information

Segment Information

The Company has three reportable segments:  Life Insurance, Home Service Insurance, and Other Non-Insurance Enterprises.  The accounting policies of the segments are in accordance with U.S. GAAP and are the same as those used in the preparation of the consolidated financial statements.  The Company evaluates profit and loss performance based on U.S. GAAP income before federal income taxes for its three reportable segments.

The Company has no reportable differences between segments and consolidated operations.

	Three Months Ended
	June 30, 2013
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	32,850		10,984		—		43,834
Net investment income	5,584			3,341		340		9,265
Realized investment gains, net	81			1		—		82
Other income	351			46		30		427
Total revenue	38,866			14,372		370		53,608
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	11,429			5,231		—		16,660
Increase in future policy benefit reserves	17,047			849		—		17,896
Policyholders' dividends	2,216			19		—		2,235
Total insurance benefits paid or provided	30,692			6,099		—		36,791
Commissions	6,697			3,732		—		10,429
Other general expenses	2,928			3,225		1,189		7,342
Capitalization of deferred policy acquisition costs	(6,170		)	(1,502	)	—		(7,672	)
Amortization of deferred policy acquisition costs	3,870			493		—		4,363
Amortization of cost of customer relationships acquired	154			406		—		560
Total benefits and expenses	38,171			12,453		1,189		51,813
Income (loss) before income tax expense	$	695		1,919		(819	)	1,795

	Six Months Ended
	June 30, 2013
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	62,967		21,807		—		84,774
Net investment income	10,488			6,521		645		17,654
Realized investment gains, net	81			31		1		113
Other income	414			136		63		613
Total revenue	73,950			28,495		709		103,154
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	20,767			10,699		—		31,466
Increase in future policy benefit reserves	33,089			1,766		—		34,855
Policyholders' dividends	4,275			34		—		4,309
Total insurance benefits paid or provided	58,131			12,499		—		70,630
Commissions	12,276			7,211		—		19,487
Other general expenses	5,780			6,491		1,770		14,041
Capitalization of deferred policy acquisition costs	(11,256		)	(2,778	)	—		(14,034	)
Amortization of deferred policy acquisition costs	7,855			1,134		—		8,989
Amortization of cost of customer relationships acquired	321			817		—		1,138
Total benefits and expenses	73,107			25,374		1,770		100,251
Income (loss) before income tax expense	$	843		3,121		(1,061	)	2,903

	Three Months Ended
	June 30, 2012
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	30,601		10,995		—		41,596
Net investment income	4,253			3,075		284		7,612
Realized investment gains, net	187			40		19		246
Decrease in fair value of warrants	—			—		37		37
Other income	75			6		30		111
Total revenue	35,116			14,116		370		49,602
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	10,772			5,337		—		16,109
Increase in future policy benefit reserves	16,201			550		—		16,751
Policyholders' dividends	2,268			13		—		2,281
Total insurance benefits paid or provided	29,241			5,900		—		35,141
Commissions	5,990			3,741		—		9,731
Other general expenses	2,411			3,006		925		6,342
Capitalization of deferred policy acquisition costs	(5,507		)	(1,537	)	—		(7,044	)
Amortization of deferred policy acquisition costs	3,749			684		—		4,433
Amortization of cost of customer relationships acquired	184			476		—		660
Total benefits and expenses	36,068			12,270		925		49,263
Income (loss) before income tax expense	$	(952	)	1,846		(555	)	339

	Six Months Ended
	June 30, 2012
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	58,770		21,922		—		80,692
Net investment income	8,411			6,230		548		15,189
Realized investment gains, net	189			127		28		344
Decrease in fair value of warrants	—			—		73		73
Other income	132			12		65		209
Total revenue	67,502			28,291		714		96,507
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	20,699			10,164		—		30,863
Increase in future policy benefit reserves	29,419			1,473		—		30,892
Policyholders' dividends	4,130			25		—		4,155
Total insurance benefits paid or provided	54,248			11,662		—		65,910
Commissions	11,012			7,383		—		18,395
Other general expenses	5,331			5,970		1,657		12,958
Capitalization of deferred policy acquisition costs	(10,019		)	(2,964	)	—		(12,983	)
Amortization of deferred policy acquisition costs	7,400			1,159		—		8,559
Amortization of cost of customer relationships acquired	393			843		—		1,236
Total benefits and expenses	68,365			24,053		1,657		94,075
Income (loss) before income tax expense	$	(863	)	4,238		(943	)	2,432

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Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  We hold available-for-sale fixed maturity securities and equity securities, which are carried at fair value.

Fair value measurements are generally based upon observable and unobservable inputs.  Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.  We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.  All assets and liabilities carried at fair value are required to be classified and disclosed in one of the following three categories:

• Level 1 - Quoted prices for identical instruments in active markets.

• Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or whose significant value drivers are observable.

• Level 3 - Instruments whose significant value drivers are unobservable.

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as U.S. Treasury securities and actively traded mutual fund and stock investments.

Level 2 includes those financial instruments that are valued by independent pricing services or broker quotes.  These models are primarily industry-standard models that consider various inputs, such as interest rates, credit spreads and foreign exchange rates for the underlying financial instruments.  All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace.  Financial instruments in this category primarily include corporate securities, U.S. Government-sponsored enterprise securities, municipal securities and certain mortgage and asset-backed securities.

Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker prices utilizing significant inputs not based on or corroborated by readily available market information.  This category consists of two private placement mortgage-backed securities.

The following tables set forth our assets and liabilities that are measured at fair value on a recurring basis as of the dates indicated.

	June 30, 2013
Available-for-sale investments	Level 1		Level 2	Level 3	Total Fair Value
	(In thousands)
Financial assets:
Fixed maturities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	12,995	65,272	—	78,267
States and political subdivisions	—		348,992	—	348,992
Corporate	—		216,948	—	216,948
Commercial mortgage-backed	—		14	348	362
Residential mortgage-backed	—		4,407	—	4,407
Foreign governments	—		133	—	133
Total fixed maturities	12,995		635,766	348	649,109
Equity securities:
Stock mutual funds	11,182		—	—	11,182
Bond mutual funds	40,788		—	—	40,788
Common stock	13		—	—	13
Preferred stock	716		—	—	716
Total equity securities	52,699		—	—	52,699
Total financial assets	$	65,694	635,766	348	701,808

	December 31, 2012
Available-for-sale investments	Level 1		Level 2	Level 3	Total Fair Value
	(In thousands)
Financial assets:
Fixed maturities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	13,943	85,581	—	99,524
States and political subdivisions	—		282,262	—	282,262
Corporate	—		216,005	—	216,005
Commercial mortgage-backed	—		109	387	496
Residential mortgage-backed	—		6,092	—	6,092
Foreign governments	—		141	—	141
Total fixed maturities	13,943		590,190	387	604,520
Equity securities:
Stock mutual funds	10,685		—	—	10,685
Bond mutual funds	41,916		—	—	41,916
Common stock	15		—	—	15
Preferred stock	1,125		—	—	1,125
Total equity securities	53,741		—	—	53,741
Total financial assets	$	67,684	590,190	387	658,261

Financial Instruments Valuation

Fixed maturity securities, available-for-sale.  At June 30, 2013, our fixed maturity securities, valued using a third-party pricing source, totaled $635.8 million for Level 2 assets and comprised 90.6% of total reported fair value of our financial assets.  The Level 1 and Level 2 valuations are reviewed and updated quarterly through random testing by comparisons to separate pricing models, other third-party pricing services, and back tested to recent trades.  In addition, we obtain information relative to the third-party pricing models and review model parameters for reasonableness.  Fair values for Level 3 assets are based upon unadjusted broker quotes that are non-binding, and consist of two private placement mortgage-backed securities with a total value of $0.3 million.  Our Level 3 assets are current relative to principal and interest payments and are considered immaterial to our financial statements.  For the six months ended June 30, 2013, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third party prices were changed from the values received.

Equity securities, available-for-sale.  Our available-for-sale equity securities are classified as Level 1 assets as their fair values are based upon quoted market prices.

The following table presents additional information about fixed maturity securities measured at fair value on a recurring basis that are classified as Level 3 assets and for which we have utilized significant unobservable inputs to determine fair value.

	June 30, 2013			December 31, 2012
	(In thousands)
Balance at beginning of period	$	387		459
Total realized and unrealized gains (losses)
Included in net income	—			—
Included in other comprehensive income	(4		)	(6	)
Principal paydowns	(35		)	(66	)
Transfer in and (out) of Level 3	—			—
Balance at end of period	$	348		387

We review the fair value hierarchy classifications each reporting period.  Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets.  Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. There were no transfers in or out of Level 1 or 2.

Financial Instruments not Carried at Fair Value

Estimates of fair values are made at a specific point in time, based on relevant market prices and information about the financial instruments.  The estimated fair values of financial instruments presented below are not necessarily indicative of the amounts the Company might realize in actual market transactions.

The carrying amount and fair value for the financial assets and liabilities on the consolidated balance sheets not otherwise disclosed for the periods indicated are as follows:

	June 30, 2013			December 31, 2012
	Carrying Value		Fair Value	Carrying Value	Fair Value
	(In thousands)
Financial assets:
Fixed maturities, held-to-maturity	$	159,208	161,012	187,008	193,739
Mortgage loans	687		712	1,509	1,503
Policy loans	45,824		45,824	42,993	42,993
Short-term investments	—		—	2,340	2,340
Cash and cash equivalents	41,013		41,013	56,299	56,299
Financial liabilities:
Annuity benefit reserves	53,223		58,233	51,750	54,981

Fair values for fixed income securities, which are characterized as Level 2 assets in the fair value hierarchy, are based on quoted market prices for the same or similar securities.  In cases where quoted market prices are not available, fair values are based on estimates using present value or other assumptions, including a discount rate and estimates of future cash flows.

Mortgage loans are secured principally by residential and commercial properties.  Weighted average interest rates for these loans were approximately 6.5% and 6.6% as of June 30, 2013 and December 31, 2012, respectively, with maturities ranging from 1 to 30 years.  Management estimated the fair value using an annual interest rate of 6.25% at June 30, 2013.  Our mortgage loans are considered Level 3 assets in the fair value hierarchy.

Policy loans had a weighted average annual interest rate of 7.7% as of June 30, 2013 and December 31, 2012, and no specified maturity dates.  The aggregate fair value of policy loans approximates the carrying value reflected on the consolidated balance sheets.  These loans typically carry an interest rate that is tied to the crediting rate applied to the related policy and contract reserves.  Policy loans are an integral part of the life insurance policies we have in force, cannot be valued separately and are not marketable.  Therefore, the fair value of policy loans approximates the carrying value and policy loans are considered Level 3 assets in the fair value hierarchy.

The fair value of short-term investments approximate carrying value due to their short-term nature.  Our short-term investments are considered Level 2 assets in the fair value hierarchy.

The fair value of cash and cash equivalents approximate carrying value and are characterized as Level 1 assets in the fair value hierarchy.

The fair value of the Company's liabilities under annuity contract policies, which are considered Level 3 assets, was estimated at June 30, 2013 using discounted cash flows based upon a swap rate curve with interest rates ranging from 0.35% to 3.63% based upon swap rates adjusted for various risk adjustments. The fair value of liabilities under all insurance contracts are taken into consideration in the overall management of interest rate risk, which seeks to minimize exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

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Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following tables set forth the computation of basic and diluted earnings per share.

	Three Months Ended
	June 30, 2013		June 30, 2012
	(In thousands, except per share amounts)
Basic and diluted earnings per share:
Numerator:
Net income	$	1,307	403
Net income allocated to Class A common stock	$	1,293	399
Net income allocated to Class B common stock	14		4
Net income	$	1,307	403
Denominator:
Weighted average shares of Class A outstanding - basic	49,080		48,963
Weighted average shares of Class A outstanding - diluted	49,080		48,989
Weighted average shares of Class B outstanding - basic and diluted	1,002		1,002
Basic earnings per share of Class A common stock	$	0.03	0.01
Basic earnings per share of Class B common stock	0.01		—
Diluted earnings per share of Class A common stock	0.03		0.01
Diluted earnings per share of Class B common stock	0.01		—

	Six Months Ended
	June 30, 2013		June 30, 2012
	(In thousands, except per share amounts)
Basic and diluted earnings per share:
Numerator:
Net income	$	2,163	1,915
Net income allocated to Class A common stock	$	2,141	1,895
Net income allocated to Class B common stock	22		20
Net income	$	2,163	1,915
Denominator:
Weighted average shares of Class A outstanding - basic	49,080		48,961
Weighted average shares of Class A outstanding - diluted	49,080		48,997
Weighted average shares of Class B outstanding - basic and diluted	1,002		1,002
Basic earnings per share of Class A common stock	$	0.05	0.04
Basic earnings per share of Class B common stock	0.02		0.02
Diluted earnings per share of Class A common stock	0.05		0.04
Diluted earnings per share of Class B common stock	0.02		0.02

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Consolidated Statements of Financial Position (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Investments:
Fixed maturities available-for-sale, amortized cost	$ 630,177	$ 559,736
Fixed maturities held-to-maturity, fair value	161,012	193,739
Available-for-sale equity securities, amortized cost	52,392	52,744
Real estate held for investment, accumulated depreciation	1,357	1,287
Due premiums, allowance for doubtful accounts	$ 1,346	$ 1,345
Common Stock Class A [Member]
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.00	$ 0.00
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	52,215,852	52,215,852
Common stock, shares in treasury (in shares)	3,135,738	3,135,738
Common Stock Class B [Member]
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.00	$ 0.00
Common stock, shares authorized (in shares)	2,000,000	2,000,000
Common stock, shares issued (in shares)	1,001,714	1,001,714
Common stock, shares outstanding (in shares)	1,001,714	1,001,714

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Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company has various routine related party transactions in conjunction with our holding company structure, such as a management service agreement related to costs incurred, a tax sharing agreement between entities, and inter-company dividends and capital contributions.  There were no changes related to these relationships during the six months ended June 30, 2013.  See our Annual Report on Form 10-K as of December 31, 2012 for a comprehensive discussion of related party transactions.

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income	$ 2,163	$ 1,915
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Realized gains on sale of investments and other assets	(113)	(344)
Net deferred policy acquisition costs	(5,045)	(4,424)
Amortization of cost of customer relationships acquired	1,138	1,236
Decrease in fair value of warrants	0	(73)
Depreciation	637	607
Amortization of premiums and discounts on investments	4,256	2,438
Deferred federal income tax benefit	(1,579)	(1,679)
Change in:
Accrued investment income	(1,074)	(899)
Reinsurance recoverable	2,978	476
Due premiums	84	399
Future policy benefit reserves	32,049	30,685
Other policyholders' liabilities	(421)	1,925
Federal income tax receivable	46	820
Commissions payable and other liabilities	(1,097)	(1,417)
Other, net	(1,008)	(1,515)
Net cash provided by operating activities	33,014	30,150
Cash flows from investing activities:
Sale of fixed maturities, available-for-sale	58	503
Maturities and calls of fixed maturities, available-for-sale	33,943	105,077
Maturities and calls of fixed maturities, held-to-maturity	26,465	115,630
Purchase of fixed maturities, available-for-sale	(109,596)	(118,558)
Purchase of fixed maturities, held-to-maturity	0	(94,276)
Calls of equity securities, available-for-sale	400	420
Principal payments on mortgage loans	822	22
Increase in policy loans, net	(2,831)	(2,024)
Sale of other long-term investments	1	4
Purchase of other long-term investments	(83)	(94)
Purchase of property and equipment	(321)	(350)
Maturity of short-term investments	2,841	0
Purchase of short-term investments	(531)	(2,378)
Net cash provided by (used in) investing activities	(48,832)	3,976
Cash flows from financing activities:
Warrants exercised	0	68
Annuity deposits	2,815	3,425
Annuity withdrawals	(2,283)	(1,958)
Net cash provided by financing activities	532	1,535
Net increase (decrease) in cash and cash equivalents	(15,286)	35,661
Cash and cash equivalents at beginning of year	56,299	33,255
Cash and cash equivalents at end of period	41,013	68,916
Supplemental Disclosures of Operation Activities
Cash paid during the period for income taxes, net	$ 2,273	$ 1,377

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Consolidated Statements of Financial Position (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Investments:
Fixed maturities available-for-sale, at fair value (cost: $630,177 and $559,736 in 2013 and 2012, respectively)	$ 649,109	$ 604,520
Fixed maturities held-to-maturity, at amortized cost (fair value: $161,012 and $193,739 in 2013 and 2012, respectively)	159,208	187,008
Equity securities available-for-sale, at fair value (cost: $52,392 and $52,744 in 2013 and 2012, respectively)	52,699	53,741
Mortgage loans on real estate	687	1,509
Policy loans	45,824	42,993
Real estate held for investment (less $1,357 and $1,287 accumulated depreciation in 2013 and 2012, respectively)	8,509	8,496
Other long-term investments	56	57
Short-term investments	0	2,340
Total investments	916,092	900,664
Cash and cash equivalents	41,013	56,299
Accrued investment income	11,378	10,304
Reinsurance recoverable	6,673	9,651
Deferred policy acquisition costs	140,787	135,569
Cost of customer relationships acquired	24,474	25,116
Goodwill	17,160	17,160
Other intangible assets	865	879
Federal income tax receivable	224	270
Property and equipment, net	7,138	7,383
Due premiums, net (less $1,346 and $1,345 allowance for doubtful accounts in 2013 and 2012, respectively)	10,443	10,527
Prepaid expenses	1,335	344
Other assets	962	782
Total assets	1,178,544	1,174,948
Future policy benefits reserves:
Life insurance	795,886	762,319
Annuities	53,223	51,750
Accident and health	2,712	5,491
Dividend accumulations	12,821	11,962
Premiums paid in advance	29,811	27,455
Policy claims payable	8,809	11,015
Other policyholders' funds	8,010	9,440
Total policy liabilities	911,272	879,432
Commissions payable	2,195	2,606
Deferred federal income tax	6,796	17,301
Payable for securities in process of settlement	179	2,358
Other liabilities	9,457	10,143
Total liabilities	929,899	911,840
Commitments and contingencies (Note 7)
Stockholders' equity:
Accumulated deficit	(15,172)	(17,335)
Accumulated other comprehensive income:
Unrealized gains on securities, net of tax	12,261	28,887
Treasury stock, at cost	(11,011)	(11,011)
Total stockholders' equity	248,645	263,108
Total liabilities and stockholders' equity	1,178,544	1,174,948
Common Stock Class A [Member]
Stockholders' equity:
Common Stock	259,383	259,383
Common Stock Class B [Member]
Stockholders' equity:
Common Stock	$ 3,184	$ 3,184

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	$ 701,808	$ 658,261
Percent of Level 2 Debt Maturity to Total Reported Fair Value of Financial Assets	90.60%
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	348	387	459
Number of Private Placement Mortgage Backed Debt Securities in Level 3	2
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	65,694	67,684
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	635,766	590,190
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	348	387
US Treasury and Government [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	78,267	99,524
US Treasury and Government [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	12,995	13,943
US Treasury and Government [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	65,272	85,581
US Treasury and Government [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
US States and Political Subdivisions Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	348,992	282,262
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	348,992	282,262
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	216,948	216,005
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	216,948	216,005
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	362	496
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	14	109
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	348	387
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	4,407	6,092
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	4,407	6,092
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Foreign Government Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	133	141
Foreign Government Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Foreign Government Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	133	141
Foreign Government Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	649,109	604,520
Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	12,995	13,943
Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	635,766	590,190
Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	348	387
Stock Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	11,182	10,685
Stock Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	11,182	10,685
Stock Mutual Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Stock Mutual Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Bond Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	40,788	41,916
Bond Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	40,788	41,916
Bond Mutual Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Bond Mutual Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	13	15
Common Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	13	15
Common Stock [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Common Stock [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	716	1,125
Preferred Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	716	1,125
Preferred Stock [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Preferred Stock [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	52,699	53,741
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	52,699	53,741
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	0	0
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities, Fair Value Disclosure	$ 0	$ 0

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate was 27.2% and (18.9)% for the second quarter and 25.5% and 21.3% for the six months ended June 30, 2013 and 2012, respectively.   In periods where our effective tax rate is lower than the statutory tax rate of 35%, the difference is primarily due to tax-exempt interest from state and local bonds. The effective tax rate is lower in 2012 compared to 2013 primarily due to 2012 pretax income being lower than in 2013 with tax-exempt income remaining relatively flat.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended
	June 30, 2013
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	32,850		10,984		—		43,834
Net investment income	5,584			3,341		340		9,265
Realized investment gains, net	81			1		—		82
Other income	351			46		30		427
Total revenue	38,866			14,372		370		53,608
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	11,429			5,231		—		16,660
Increase in future policy benefit reserves	17,047			849		—		17,896
Policyholders' dividends	2,216			19		—		2,235
Total insurance benefits paid or provided	30,692			6,099		—		36,791
Commissions	6,697			3,732		—		10,429
Other general expenses	2,928			3,225		1,189		7,342
Capitalization of deferred policy acquisition costs	(6,170		)	(1,502	)	—		(7,672	)
Amortization of deferred policy acquisition costs	3,870			493		—		4,363
Amortization of cost of customer relationships acquired	154			406		—		560
Total benefits and expenses	38,171			12,453		1,189		51,813
Income (loss) before income tax expense	$	695		1,919		(819	)	1,795

	Six Months Ended
	June 30, 2013
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	62,967		21,807		—		84,774
Net investment income	10,488			6,521		645		17,654
Realized investment gains, net	81			31		1		113
Other income	414			136		63		613
Total revenue	73,950			28,495		709		103,154
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	20,767			10,699		—		31,466
Increase in future policy benefit reserves	33,089			1,766		—		34,855
Policyholders' dividends	4,275			34		—		4,309
Total insurance benefits paid or provided	58,131			12,499		—		70,630
Commissions	12,276			7,211		—		19,487
Other general expenses	5,780			6,491		1,770		14,041
Capitalization of deferred policy acquisition costs	(11,256		)	(2,778	)	—		(14,034	)
Amortization of deferred policy acquisition costs	7,855			1,134		—		8,989
Amortization of cost of customer relationships acquired	321			817		—		1,138
Total benefits and expenses	73,107			25,374		1,770		100,251
Income (loss) before income tax expense	$	843		3,121		(1,061	)	2,903

	Three Months Ended
	June 30, 2012
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	30,601		10,995		—		41,596
Net investment income	4,253			3,075		284		7,612
Realized investment gains, net	187			40		19		246
Decrease in fair value of warrants	—			—		37		37
Other income	75			6		30		111
Total revenue	35,116			14,116		370		49,602
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	10,772			5,337		—		16,109
Increase in future policy benefit reserves	16,201			550		—		16,751
Policyholders' dividends	2,268			13		—		2,281
Total insurance benefits paid or provided	29,241			5,900		—		35,141
Commissions	5,990			3,741		—		9,731
Other general expenses	2,411			3,006		925		6,342
Capitalization of deferred policy acquisition costs	(5,507		)	(1,537	)	—		(7,044	)
Amortization of deferred policy acquisition costs	3,749			684		—		4,433
Amortization of cost of customer relationships acquired	184			476		—		660
Total benefits and expenses	36,068			12,270		925		49,263
Income (loss) before income tax expense	$	(952	)	1,846		(555	)	339

	Six Months Ended
	June 30, 2012
	Life Insurance			Home Service Insurance		Other Non-Insurance Enterprises		Consolidated
	(In thousands)
Revenues:
Premiums	$	58,770		21,922		—		80,692
Net investment income	8,411			6,230		548		15,189
Realized investment gains, net	189			127		28		344
Decrease in fair value of warrants	—			—		73		73
Other income	132			12		65		209
Total revenue	67,502			28,291		714		96,507
Benefits and expenses:
Insurance benefits paid or provided:
Claims and surrenders	20,699			10,164		—		30,863
Increase in future policy benefit reserves	29,419			1,473		—		30,892
Policyholders' dividends	4,130			25		—		4,155
Total insurance benefits paid or provided	54,248			11,662		—		65,910
Commissions	11,012			7,383		—		18,395
Other general expenses	5,331			5,970		1,657		12,958
Capitalization of deferred policy acquisition costs	(10,019		)	(2,964	)	—		(12,983	)
Amortization of deferred policy acquisition costs	7,400			1,159		—		8,559
Amortization of cost of customer relationships acquired	393			843		—		1,236
Total benefits and expenses	68,365			24,053		1,657		94,075
Income (loss) before income tax expense	$	(863	)	4,238		(943	)	2,432

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

We are a defendant in a lawsuit filed on August 6, 1999, in the Texas District Court, Austin, Texas, now styled Delia Bolanos Andrade, et al., Plaintiffs, v. Citizens Insurance Company of America, et al., Defendants in which a class was originally certified by the trial court and reversed by the Texas Supreme Court in 2007 with an order to the trial court to conduct further proceedings consistent with its ruling.  The underlying lawsuit alleged that certain life insurance policies CICA made available to non-U.S. residents, when combined with a policy feature that allowed certain cash benefits to be assigned to two non-U.S. trusts for the purpose of accumulating ownership of our Class A common stock, along with allowing the policyholders to make additional contributions to the trusts, were actually offers and sales of securities that occurred in Texas by unregistered dealers in violation of the Texas securities laws.  The remedy sought was rescission and return of the insurance premium payments.  On December 9, 2009, the trial court denied the recertification of the class after conducting additional proceedings in accordance with the Texas Supreme Court's ruling.  The remaining plaintiffs must now proceed individually, and not as a class, if they intend to pursue their claims against us.  Since the December 9, 2009 trial court ruling, no individual cases have been further pursued by the plaintiffs.  The probability of the plaintiffs further pursuing their cases individually remains unknown.  An estimate of any possible loss or range of losses cannot be made at this time in regard to individuals pursuing claims.  However, should the plaintiffs further pursue their claims individually, we intend to vigorously defend any proceedings.

In 2007 and in the aftermath of Hurricane Katrina, the Attorney General for the State of Louisiana filed suit against SPFIC and every other homeowner insurer doing business in the State of Louisiana, on behalf of the State of Louisiana and certain Road Home fund recipients.  In April 2013, SPFIC and the State of Louisiana reached a settlement agreement resolving all claims against SPFIC in the Road Home matter for approximately $183,000. This amount has been accrued in the June 30, 2013 financial statements and did not have a material impact on the consolidated financials.

The Company is currently performing an internal audit related to unclaimed property for all legal reporting entities. By letter dated July 2, 2013, the Company was informed that the Louisiana Department of Treasury has authorized an audit of Citizens, Inc. and its affiliates for compliance with unclaimed property laws. This audit is being conducted by Verus Financial LLC on behalf of the state.

These internal and external audits may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, interest, and changes to the Company's procedures for the identification and escheatment of abandoned property.  At this time, the Company is not able to estimate any of these possible amounts, but such costs could be substantial for a company our size.

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Accounting Pronouncements

6 Months Ended

Jun. 30, 2013

New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Accounting Pronouncements

Accounting Standards Recently Adopted

In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”), which requires enhanced reporting of such amounts either on the face of the financial statements or in the notes to the financial statements.  Under ASU 2013-02, the type of reclassification out of accumulated other comprehensive income, as defined under current GAAP, will dictate whether the disclosure must provide the effect of the reclassification on the respective financial statement line items or whether cross-referencing to other disclosures that provide additional detail about the reclassification will be required.  The amendments in ASU 2013-02 are effective prospectively for reporting periods beginning after December 15, 2012.  We have included the enhanced disclosures in the financial statements.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following tables set forth our assets and liabilities that are measured at fair value on a recurring basis as of the dates indicated.

	June 30, 2013
Available-for-sale investments	Level 1		Level 2	Level 3	Total Fair Value
	(In thousands)
Financial assets:
Fixed maturities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	12,995	65,272	—	78,267
States and political subdivisions	—		348,992	—	348,992
Corporate	—		216,948	—	216,948
Commercial mortgage-backed	—		14	348	362
Residential mortgage-backed	—		4,407	—	4,407
Foreign governments	—		133	—	133
Total fixed maturities	12,995		635,766	348	649,109
Equity securities:
Stock mutual funds	11,182		—	—	11,182
Bond mutual funds	40,788		—	—	40,788
Common stock	13		—	—	13
Preferred stock	716		—	—	716
Total equity securities	52,699		—	—	52,699
Total financial assets	$	65,694	635,766	348	701,808

	December 31, 2012
Available-for-sale investments	Level 1		Level 2	Level 3	Total Fair Value
	(In thousands)
Financial assets:
Fixed maturities:
U.S. Treasury and U.S. Government-sponsored enterprises	$	13,943	85,581	—	99,524
States and political subdivisions	—		282,262	—	282,262
Corporate	—		216,005	—	216,005
Commercial mortgage-backed	—		109	387	496
Residential mortgage-backed	—		6,092	—	6,092
Foreign governments	—		141	—	141
Total fixed maturities	13,943		590,190	387	604,520
Equity securities:
Stock mutual funds	10,685		—	—	10,685
Bond mutual funds	41,916		—	—	41,916
Common stock	15		—	—	15
Preferred stock	1,125		—	—	1,125
Total equity securities	53,741		—	—	53,741
Total financial assets	$	67,684	590,190	387	658,261

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table presents additional information about fixed maturity securities measured at fair value on a recurring basis that are classified as Level 3 assets and for which we have utilized significant unobservable inputs to determine fair value.

	June 30, 2013			December 31, 2012
	(In thousands)
Balance at beginning of period	$	387		459
Total realized and unrealized gains (losses)
Included in net income	—			—
Included in other comprehensive income	(4		)	(6	)
Principal paydowns	(35		)	(66	)
Transfer in and (out) of Level 3	—			—
Balance at end of period	$	348		387

Fair Value, by Balance Sheet Grouping [Table Text Block]

The carrying amount and fair value for the financial assets and liabilities on the consolidated balance sheets not otherwise disclosed for the periods indicated are as follows:

	June 30, 2013			December 31, 2012
	Carrying Value		Fair Value	Carrying Value	Fair Value
	(In thousands)
Financial assets:
Fixed maturities, held-to-maturity	$	159,208	161,012	187,008	193,739
Mortgage loans	687		712	1,509	1,503
Policy loans	45,824		45,824	42,993	42,993
Short-term investments	—		—	2,340	2,340
Cash and cash equivalents	41,013		41,013	56,299	56,299
Financial liabilities:
Annuity benefit reserves	53,223		58,233	51,750	54,981

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Financial Statements (Policies)

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Consolidation [Policy Text Block]

Basis of Presentation and Consolidation

The accompanying consolidated financial statements of Citizens, Inc. and its wholly-owned subsidiaries have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP").

The consolidated financial statements include the accounts and operations of Citizens, Inc. ("Citizens"), a Colorado corporation, and its wholly-owned subsidiaries, CICA Life Insurance Company of America ("CICA"), Security Plan Life Insurance Company ("SPLIC"), Security Plan Fire Insurance Company ("SPFIC"), Citizens National Life Insurance Company ("CNLIC"), Computing Technology, Inc. ("CTI") and Insurance Investors, Inc. ("III").  Citizens and its wholly-owned subsidiaries are collectively referred to as "the Company," "we," "us" or "our."

The consolidated statements of financial position for June 30, 2013, and the consolidated statements of comprehensive income and cash flows for the three and six-month periods ended June 30, 2013 and 2012, have been prepared by the Company without audit.  In the opinion of management, all adjustments to present fairly the financial position, results of operations, and changes in cash flows at June 30, 2013 and for comparative periods have been made.  The consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q adopted by the Securities and Exchange Commission (“SEC”).  Accordingly, the financial statements do not include all of the information and footnotes required for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements, and notes thereto, for the year ended December 31, 2012.  Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

We provide primarily life insurance and a small amount of health insurance policies through our insurance subsidiaries:  CICA, SPLIC, and CNLIC.  CICA and CNLIC issue ordinary whole-life policies, credit life and disability, burial insurance, pre-need policies, and accident and health related policies, throughout the Midwest and southern United States.  CICA also issues ordinary whole-life policies to non-U.S. residents.  SPLIC offers final expense and home service life insurance in Louisiana, Arkansas and Mississippi and SPFIC, a wholly-owned subsidiary of SPLIC, writes a limited amount of property insurance in Louisiana.

CTI provides data processing systems and services, as well as furniture and equipment, to the Company.  III provides aviation transportation to the Company.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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.

The most significant estimates include those used in the evaluation of other-than-temporary impairments on debt and equity securities and valuation allowances on investments, actuarially determined assets and liabilities and assumptions, goodwill impairment, valuation allowance on deferred tax assets, and contingencies relating to litigation and regulatory matters.  Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Consolidated Financial Statements.

Reclassification, Policy [Policy Text Block]

Reclassification

Reclassifications have been made in the current year related to certain prior year reported amounts to provide consistent presentation.

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Investments Debt And Equity Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Dec. 31, 2011
Investments Including Short Term And Cash And Cash Equivalents [Abstract]
Fixed maturity securities	$ 808,317		$ 808,317		$ 791,528
Fixed maturity securities percent	84.40%		84.40%		82.70%
Equity securities	52,699		52,699		53,741
Equity securities percent	5.50%		5.50%		5.60%
Mortgage loans	687		687		1,509
Mortgage loans percent	0.10%		0.10%		0.20%
Policy loans	45,824		45,824		42,993
Policy loans percent	4.80%		4.80%		4.50%
Real estate and other long-term investments	8,565		8,565		8,553
Real estate and other long-term investments percent	0.90%		0.90%		0.90%
Short-term investments	0		0		2,340
Short-term investments percent	0.00%		0.00%		0.20%
Cash and cash equivalents	41,013	68,916	41,013	68,916	56,299	33,255
Cash and cash equivalents percent	4.30%		4.30%		5.90%
Total cash, cash equivalents and investments	957,105		957,105		956,963
Total cash, cash equivalents and investments percent	100.00%		100.00%		100.00%
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	630,177		630,177		559,736
Available-for-sale Equity Securities, Amortized Cost Basis	52,392		52,392		52,744
Available-for-sale Securities, Debt Securities, Amortized Cost Basis, Total	630,177		630,177		559,736
Available-for-sale Debt Securities, Gross Unrealized Gains, Total	29,595		29,595		45,873
Available-for-sale Debt Securities, Gross Unrealized Losses, Total	10,663		10,663		1,089
Available-for-sale Debt Securities, Fair Value	649,109		649,109		604,520
Held-to-maturity Securities, Debt Securities, Net Carrying Amount	159,208		159,208		187,008
Held-to-maturity Securities, Unrecognized Holding Gain	3,655		3,655		7,109
Held-to-maturity Securities, Unrecognized Holding Loss	1,851		1,851		378
Held-to-maturity Securities, Debt Securities, Fair Value	161,012		161,012		193,739
Total Fixed Maturity Securities, Amortized Cost	789,385		789,385
Total Fixed Maturity Securities, Fair Value	810,121		810,121
Unrealized Continuous Losses on Investments [Abstract]
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	261		261		90
Debt Securities In Continuous Loss Less Than 12 Months Fair Value	308,245		308,245		127,739
Debt Securities Continuous Loss Position Less Than 12 Months Unrealized Losses	11,780		11,780		1,131
Number of Debt Securities In Continuous Loss Less Than 12 Months	305		305		119
Debt Securities In Continuous Loss Position 12 Months Or Longer, Fair Value	7,923		7,923		5,151
Debt Securities In Continuous Loss Position 12 Months Or Longer, Unrealized Losses	734		734		336
Number of Debt Securities In Continuous Loss Position 12 Months or Longer	9		9		3
Debt Securities In Continuous Loss Position, Aggregate Fair Value	316,168		316,168		132,890
Debt Securities In Continuous Loss Position, Aggregate Unrealized Losses	12,514		12,514		1,467
Number of Debt Securities In Continuous Loss Position, Aggregate	314		314		122
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Proceeds from Sale of Available-for-sale Securities, Fixed Maturities	0	0	58	503
Proceeds from Sale of Available-for-sale Securities, Equity	0	0	0	0
Schedule of Fixed Maturities [Abstract]
Available-for-sale Securities, Debt Maturities, Due in One Year or Less, Amortized Cost Basis	236,253		236,253
Available-for-sale Securities, Debt Maturities, Due in One Year or Less, Fair Value	242,160		242,160
Available-for-sale Securities, Debt Maturities, Due After One Year Through Five Years, Amortized Cost Basis	103,078		103,078
Available-for-sale Securities, Debt Maturities, Due After One Year Through Five Years, Fair Value	109,314		109,314
Available-for-sale Securities, Debt Maturities, Due After Five Years Through Ten Years, Amortized Cost Basis	119,601		119,601
Available-for-sale Securities, Debt Maturities, Due After Five Years Through Ten Years, Fair Value	123,041		123,041
Available-for-sale Securities, Debt Maturities, Due After Ten Years, Amortized Cost Basis	166,804		166,804
Available-for-sale Securities, Debt Maturities, Due After Ten Years, Fair Value	169,825		169,825
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis	4,441		4,441
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value	4,769		4,769
Held-to-maturity Securities, Debt Maturities, Due in One Year or Less, Amortized Cost Basis	11,206		11,206
Held-to-maturity Securities, Debt Maturities, Due in One Year or Less, Fair Value	10,854		10,854
Held-to-maturity Securities, Debt Maturities, Due After One Year Through Five Years, Amortized Cost Basis	41,795		41,795
Held-to-maturity Securities, Debt Maturities, Due After One Year Through Five Years, Fair Value	42,539		42,539
Held-to-maturity Securities, Debt Maturities, Due After Five Years Through Ten Years, Amortized Cost Basis	38,399		38,399
Held-to-maturity Securities, Debt Maturities, Due After Five Years Through Ten Years, Fair Value	39,499		39,499
Held-to-maturity Securities, Debt Maturities, Due After Ten Years, Amortized Cost Basis	67,808		67,808
Held-to-maturity Securities, Debt Maturities, Due After Ten Years, Fair Value	68,120		68,120
Sale of bonds, number of transactions of fixed maturity securities sold			1
Sale of bonds, number of securities sold at a loss	0	0	0	0
Sale of bonds, number of held-to-maturity bonds sold			0	0
US Treasury Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	10,139		10,139		10,170
Available-for-sale Securities, Gross Unrealized Gains	2,856		2,856		3,773
Available-for-sale Securities, Gross Unrealized Losses	0		0		0
Available-for-sale Securities, Fair Value	12,995		12,995		13,943
US Government Agencies Debt Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	63,300		63,300		81,788
Available-for-sale Securities, Gross Unrealized Gains	2,069		2,069		3,815
Available-for-sale Securities, Gross Unrealized Losses	97		97		22
Available-for-sale Securities, Fair Value	65,272		65,272		85,581
Held-to-maturity Securities, Debt Securities, Net Carrying Amount	10,446		10,446		28,632
Held-to-maturity Securities, Unrecognized Holding Gain	248		248		514
Held-to-maturity Securities, Unrecognized Holding Loss	5		5		0
Held-to-maturity Securities, Debt Securities, Fair Value	10,689		10,689		29,146
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	8,676		8,676		10,603
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	97		97		22
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	7		7		9
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0		0		0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0		0		0
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	0		0		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	8,676		8,676		10,603
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	97		97		22
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	7		7		9
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	3,908		3,908
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	5		5
Number of Held-to-maturity Securities In Continuous Loss Position Less Than 12 Months	2		2
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0		0
Number of Held-to-maturity Securities In Continuous Loss Position 12 Months or Greater	0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	3,908		3,908
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses	5		5
Number of Held-to-maturity Securities In Continuous Loss Position Aggregate	2		2
US States and Political Subdivisions Debt Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	347,580		347,580		265,812
Available-for-sale Securities, Gross Unrealized Gains	10,582		10,582		17,227
Available-for-sale Securities, Gross Unrealized Losses	9,170		9,170		777
Available-for-sale Securities, Fair Value	348,992		348,992		282,262
Held-to-maturity Securities, Debt Securities, Net Carrying Amount	118,327		118,327		125,634
Held-to-maturity Securities, Unrecognized Holding Gain	2,801		2,801		5,435
Held-to-maturity Securities, Unrecognized Holding Loss	1,764		1,764		378
Held-to-maturity Securities, Debt Securities, Fair Value	119,364		119,364		130,691
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	192,682		192,682		54,115
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	8,438		8,438		443
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	214		214		61
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	7,875		7,875		5,099
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	732		732		334
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	8		8		2
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	200,557		200,557		59,214
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	9,170		9,170		777
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	222		222		63
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	53,296		53,296		40,611
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	1,764		1,764		378
Number of Held-to-maturity Securities In Continuous Loss Position Less Than 12 Months	47		47		32
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0		0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0		0		0
Number of Held-to-maturity Securities In Continuous Loss Position 12 Months or Greater	0		0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	53,296		53,296		40,611
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses	1,764		1,764		378
Number of Held-to-maturity Securities In Continuous Loss Position Aggregate	47		47		32
Foreign Government Debt Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	104		104		105
Available-for-sale Securities, Gross Unrealized Gains	29		29		36
Available-for-sale Securities, Gross Unrealized Losses	0		0		0
Available-for-sale Securities, Fair Value	133		133		141
Corporate Debt Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	204,613		204,613		195,755
Available-for-sale Securities, Gross Unrealized Gains	13,729		13,729		20,536
Available-for-sale Securities, Gross Unrealized Losses	1,394		1,394		286
Available-for-sale Securities, Fair Value	216,948		216,948		216,005
Held-to-maturity Securities, Debt Securities, Net Carrying Amount	30,435		30,435		32,742
Held-to-maturity Securities, Unrecognized Holding Gain	606		606		1,160
Held-to-maturity Securities, Unrecognized Holding Loss	82		82		0
Held-to-maturity Securities, Debt Securities, Fair Value	30,959		30,959		33,902
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	44,184		44,184		22,316
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	1,394		1,394		286
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	30		30		16
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0		0		0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0		0		0
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	0		0		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	44,184		44,184		22,316
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	1,394		1,394		286
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	30		30		16
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	5,496		5,496
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	82		82
Number of Held-to-maturity Securities In Continuous Loss Position Less Than 12 Months	4		4
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0		0
Number of Held-to-maturity Securities In Continuous Loss Position 12 Months or Greater	0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	5,496		5,496
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses	82		82
Number of Held-to-maturity Securities In Continuous Loss Position Aggregate	4		4
Collateralized Mortgage Backed Securities [Member]
Schedule of Fixed Maturities [Abstract]
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis	4,400		4,400
Commercial Mortgage Backed Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	349		349		481
Available-for-sale Securities, Gross Unrealized Gains	13		13		17
Available-for-sale Securities, Gross Unrealized Losses	0		0		2
Available-for-sale Securities, Fair Value	362		362		496
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value					94
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses					2
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months					1
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value					0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses					0
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater					0
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value					94
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses					2
Number of Available-for-sale Securities In Continuous Loss Position Aggregate					1
Residential Mortgage Backed Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Debt Securities, Amortized Cost Basis	4,092		4,092		5,625
Available-for-sale Securities, Gross Unrealized Gains	317		317		469
Available-for-sale Securities, Gross Unrealized Losses	2		2		2
Available-for-sale Securities, Fair Value	4,407		4,407		6,092
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	3		3		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	0		0		0
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	1		1		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	48		48		52
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	2		2		2
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	1		1		1
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	51		51		52
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	2		2		2
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	2		2		1
Debt Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Total Fixed Maturity Securities, Amortized Cost	789,385		789,385		746,744
Total Fixed Maturity Securities, Gross Unrealized Gains	33,250		33,250		52,982
Total Fixed Maturity Securities, Gross Unrealized Losses	12,514		12,514		1,467
Total Fixed Maturity Securities, Fair Value	810,121		810,121		798,259
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	245,545		245,545		87,128
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	9,929		9,929		753
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	252		252		87
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	7,923		7,923		5,151
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	734		734		336
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	9		9		3
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	253,468		253,468		92,279
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	10,663		10,663		1,089
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	62,700		62,700		40,611
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	1,851		1,851		378
Number of Held-to-maturity Securities In Continuous Loss Position Less Than 12 Months	53		53		32
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0		0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0		0		0
Number of Held-to-maturity Securities In Continuous Loss Position 12 Months or Greater	0		0		0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	62,700		62,700		40,611
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses	1,851		1,851		378
Number of Held-to-maturity Securities In Continuous Loss Position Aggregate	53		53		32
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Available-for-sale Securities, Gross Realized Gains	0	0	1	4
Available-for-sale Securities, Gross Realized Losses	0	0	0	3
Stock Mutual Funds [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Equity Securities, Amortized Cost Basis	10,463		10,463		10,463
Available-for-sale Securities, Gross Unrealized Gains	719		719		250
Available-for-sale Securities, Gross Unrealized Losses	0		0		28
Available-for-sale Securities, Fair Value	11,182		11,182		10,685
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value					0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses					0
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months					0
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value					972
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses					28
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater					1
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value					972
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses					28
Number of Available-for-sale Securities In Continuous Loss Position Aggregate					1
Bond Mutual Funds [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Equity Securities, Amortized Cost Basis	41,505		41,505		41,504
Available-for-sale Securities, Gross Unrealized Gains	15		15		541
Available-for-sale Securities, Gross Unrealized Losses	732		732		129
Available-for-sale Securities, Fair Value	40,788		40,788		41,916
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	34,028		34,028		3,335
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	607		607		88
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	5		5		1
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	2,875		2,875		2,959
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	125		125		41
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	1		1		2
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	36,903		36,903		6,294
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	732		732		129
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	6		6		3
Common Stock [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Equity Securities, Amortized Cost Basis	17		17		17
Available-for-sale Securities, Gross Unrealized Gains	0		0		0
Available-for-sale Securities, Gross Unrealized Losses	4		4		2
Available-for-sale Securities, Fair Value	13		13		15
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	0		0		15
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	0		0		2
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	0		0		1
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	13		13		0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	4		4		0
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	1		1		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	13		13		15
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	4		4		2
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	1		1		1
Preferred Stock [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Equity Securities, Amortized Cost Basis	407		407		760
Available-for-sale Securities, Gross Unrealized Gains	309		309		365
Available-for-sale Securities, Gross Unrealized Losses	0		0		0
Available-for-sale Securities, Fair Value	716		716		1,125
Equity Securities [Member]
Unrealized Gain (Loss) on Investments [Abstract]
Available-for-sale Equity Securities, Amortized Cost Basis	52,392		52,392		52,744
Available-for-sale Securities, Gross Unrealized Gains	1,043		1,043		1,156
Available-for-sale Securities, Gross Unrealized Losses	736		736		159
Available-for-sale Securities, Fair Value	52,699		52,699		53,741
Unrealized Continuous Losses on Investments [Abstract]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	34,028		34,028		3,350
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	607		607		90
Number of Available-for-sale Securities In Continuous Loss Position Less Than 12 Months	5		5		2
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	2,888		2,888		3,931
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	129		129		69
Number of Available-for-sale Securities In Continuous Loss Position For 12 months or Greater	2		2		3
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	36,916		36,916		7,281
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	736		736		159
Number of Available-for-sale Securities In Continuous Loss Position Aggregate	7		7		5
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
Available-for-sale Securities, Gross Realized Gains	0	0	0	0
Available-for-sale Securities, Gross Realized Losses	$ 0	$ 0	$ 0	$ 0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Schedule of Fixed Maturities [Abstract]
Percent of residential mortgage backed to securities	93.20%		93.20%

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Number of reportable segments			3
Segment reporting, measurement differences between segment and consolidated profit (loss)			The Company has no reportable differences between segments and consolidated operations.
Premiums	$ 43,834	$ 41,596	$ 84,774	$ 80,692
Net investment income	9,265	7,612	17,654	15,189
Realized investment gains, net	82	246	113	344
Decrease in fair value of warrants	0	37	0	73
Other income	427	111	613	209
Total revenue	53,608	49,602	103,154	96,507
Claims and surrenders	16,660	16,109	31,466	30,863
Increase in future policy benefit reserves	17,896	16,751	34,855	30,892
Policyholders' dividends	2,235	2,281	4,309	4,155
Total insurance benefits paid or provided	36,791	35,141	70,630	65,910
Commissions	10,429	9,731	19,487	18,395
Other general expenses	7,342	6,342	14,041	12,958
Capitalization of deferred policy acquisition costs	(7,672)	(7,044)	(14,034)	(12,983)
Amortization of deferred policy acquisition costs	4,363	4,433	8,989	8,559
Amortization of cost of customer relationships acquired	560	660	1,138	1,236
Total benefits and expenses	51,813	49,263	100,251	94,075
Income (loss) before income tax expense	1,795	339	2,903	2,432
Life Insurance Segment [Member]
Segment Reporting Information [Line Items]
Premiums	32,850	30,601	62,967	58,770
Net investment income	5,584	4,253	10,488	8,411
Realized investment gains, net	81	187	81	189
Decrease in fair value of warrants		0		0
Other income	351	75	414	132
Total revenue	38,866	35,116	73,950	67,502
Claims and surrenders	11,429	10,772	20,767	20,699
Increase in future policy benefit reserves	17,047	16,201	33,089	29,419
Policyholders' dividends	2,216	2,268	4,275	4,130
Total insurance benefits paid or provided	30,692	29,241	58,131	54,248
Commissions	6,697	5,990	12,276	11,012
Other general expenses	2,928	2,411	5,780	5,331
Capitalization of deferred policy acquisition costs	(6,170)	(5,507)	(11,256)	(10,019)
Amortization of deferred policy acquisition costs	3,870	3,749	7,855	7,400
Amortization of cost of customer relationships acquired	154	184	321	393
Total benefits and expenses	38,171	36,068	73,107	68,365
Income (loss) before income tax expense	695	(952)	843	(863)
Home Service Insurance Segment [Member]
Segment Reporting Information [Line Items]
Premiums	10,984	10,995	21,807	21,922
Net investment income	3,341	3,075	6,521	6,230
Realized investment gains, net	1	40	31	127
Decrease in fair value of warrants		0		0
Other income	46	6	136	12
Total revenue	14,372	14,116	28,495	28,291
Claims and surrenders	5,231	5,337	10,699	10,164
Increase in future policy benefit reserves	849	550	1,766	1,473
Policyholders' dividends	19	13	34	25
Total insurance benefits paid or provided	6,099	5,900	12,499	11,662
Commissions	3,732	3,741	7,211	7,383
Other general expenses	3,225	3,006	6,491	5,970
Capitalization of deferred policy acquisition costs	(1,502)	(1,537)	(2,778)	(2,964)
Amortization of deferred policy acquisition costs	493	684	1,134	1,159
Amortization of cost of customer relationships acquired	406	476	817	843
Total benefits and expenses	12,453	12,270	25,374	24,053
Income (loss) before income tax expense	1,919	1,846	3,121	4,238
Other Non-Insurance Enterprise Segment [Member]
Segment Reporting Information [Line Items]
Premiums	0	0	0	0
Net investment income	340	284	645	548
Realized investment gains, net	0	19	1	28
Decrease in fair value of warrants		37		73
Other income	30	30	63	65
Total revenue	370	370	709	714
Claims and surrenders	0	0	0	0
Increase in future policy benefit reserves	0	0	0	0
Policyholders' dividends	0	0	0	0
Total insurance benefits paid or provided	0	0	0	0
Commissions	0	0	0	0
Other general expenses	1,189	925	1,770	1,657
Capitalization of deferred policy acquisition costs	0	0	0	0
Amortization of deferred policy acquisition costs	0	0	0	0
Amortization of cost of customer relationships acquired	0	0	0	0
Total benefits and expenses	1,189	925	1,770	1,657
Income (loss) before income tax expense	$ (819)	$ (555)	$ (1,061)	$ (943)

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 02, 2013 Common Stock Class A [Member]	Aug. 02, 2013 Common Stock Class B [Member]
Entity Information [Line Items]
Entity Registrant Name	CITIZENS INC
Entity Central Index Key	0000024090
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		49,080,114	1,001,714

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income	$ 1,307	$ 403	$ 2,163	$ 1,915
Net Income Allocated to Class A Common Stock	1,293	399	2,141	1,895
Net Income Allocated to Class B Common Stock	$ 14	$ 4	$ 22	$ 20
Common Class A [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted Average Shares Outstanding, Basic	49,080	48,963	49,080	48,961
Weighted Average Shares Outstanding, Diluted	49,080	48,989	49,080	48,997
Basic earnings per share	$ 0.03	$ 0.01	$ 0.05	$ 0.04
Diluted earnings per share	$ 0.03	$ 0.01	$ 0.05	$ 0.04
Common Stock Class B [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted Average Shares Outstanding, Basic and Diluted	1,002	1,002	1,002	1,002
Basic earnings per share	$ 0.01	$ 0.00	$ 0.02	$ 0.02
Diluted earnings per share	$ 0.01	$ 0.00	$ 0.02	$ 0.02