FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: MARCH 31, 2002

Commission File Number: 0-10306

INDEPENDENCE HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Delaware	58-1407235
(State of Incorporation)	(I.R.S. Employer Identification No.)

96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT       06902

(Address of principal executive offices)                                              (Zip Code)

Registrant's telephone number, including area code: (203)358-8000

NOT APPLICABLE

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. Yes X. No.

7,786,367 SHARES OF COMMON STOCK, $1.00 PAR VALUE

Common stock outstanding as of May 13, 2002

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

INDEX

PART I - FINANCIAL INFORMATION			PAGE NO.
	Consolidated Balance Sheets -
		March 31, 2002 (unaudited) and December 31, 2001					3
	Consolidated Statements of Operations -
		Three Months Ended March 31, 2002 and 2001 (unaudited)					4
	Consolidated Statements of Cash Flows -
		Three Months Ended March 31, 2002 and 2001 (unaudited)						5
	Notes to Consolidated Financial Statements (unaudited)				6 - 9
	Management's Discussion and Analysis of Results of Operations and
		Financial Condition		10 - 13
PART II - OTHER INFORMATION
	Item 6 - Exhibits and Reports on Form 8-K					14
	Signatures					15

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS							MARCH 31,		DECEMBER 31,
							2002		2001
							(UNAUDITED)
ASSETS
	Investments:
		Short-term investments					$	5,410,000	$	3,705,000
		Securities purchased under agreements
					to resell		9,181,000		7,156,000
		Fixed maturities					424,218,000		423,745,000
		Equity securities					24,025,000		26,042,000
		Other investments						79,694,000		76,442,000
					Total investments		542,528,000		537,090,000
	Cash and cash equivalents						9,202,000		10,395,000
	Due from brokers						76,000		2,650,000
	Deferred acquisition costs						27,607,000		25,751,000
	Due and unpaid premiums						6,772,000		7,500,000
	Due from reinsurers						126,096,000		122,354,000
	Notes and other receivables						5,131,000		5,255,000
	Other assets							19,291,000		14,801,000
							$	736,703,000	$	725,796,000
LIABILITIES AND STOCKHOLDERS' EQUITY
	LIABILITIES
	Future insurance policy benefits						$	301,830,000	$	294,812,000
	Funds on deposit						190,541,000		189,791,000
	Unearned premiums						17,793,000		16,067,000
	Policy claims						7,828,000		7,771,000
	Other policyholders' funds						4,565,000		4,783,000
	Due to brokers						40,913,000		41,461,000
	Due to reinsurers						4,630,000		4,498,000
	Accounts payable, accruals and other
			liabilities				18,507,000		15,001,000
	Income taxes						(83,000)		1,876,000
	Long-term debt							12,188,000		12,188,000
				TOTAL LIABILITIES				598,712,000		588,248,000
STOCKHOLDERS' EQUITY
	Preferred stock (none issued)						-		-
	Common stock, 7,786,367 and 7,789,667
		shares issued and outstanding, respectively
		net of 1,998,289 and 1,994,487 shares
		in treasury, respectively					7,786,000		7,790,000
	Paid-in-capital						78,300,000		78,352,000
	Accumulated other comprehensive (loss) income:
		income:
		Unrealized (losses) gains on investments, net net					(3,356,000)		94,000
	Retained earnings							55,261,000		51,312,000
		TOTAL STOCKHOLDERS' EQUITY						137,991,000		137,548,000
				TOTAL LIABILITIES AND
						STOCKHOLDERS' EQUITY	$	736,703,000	$	725,796,000

See Accompanying Notes to Consolidated Financial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

THREE MONTHS ENDED MARCH 31,			2002		2001
REVENUES
	Premiums earned		$	28,655,000	$	25,172,000
	Net investment income		9,595,000		9,563,000
	Net realized and unrealized gains		184,000		1,643,000
	Other income			1,494,000		1,159,000
				39,928,000		37,537,000
EXPENSES
	Insurance benefits, claims and reserves		22,222,000		20,848,000
	Amortization of deferred acquisition costs		1,327,000		1,461,000
	Selling, general and administrative
	expenses			10,224,000		8,581,000
	Interest expense on long-term debt			103,000		291,000
				33,876,000		31,181,000
	Income from operations before
		income taxes	6,052,000		6,356,000
	Income tax expense			2,103,000			2,295,000
NET INCOME			$	3,949,000			4,061,000
Basic income per common share			$	.51	$		.52
WEIGHTED AVERAGE COMMON SHARES
	OUTSTANDING			7,790,000			7,878,000
Diluted income per common share			$	.49	$		.51
WEIGHTED AVERAGE DILUTIVE SHARES
	OUTSTANDING			7,989,000			8,002,000

See Accompanying Notes to Consolidated Financial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

THREE MONTHS ENDED MARCH 31,											2002				2001
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income										$		3,949,000		$		4,061,000
				Adjustments to reconcile net income to net cash
						provided by operating activities:
				Amortization of deferred policy acquisition costs							1,327,000				1,461,000
				Realized gains on sales of investments							(184,000)				(1,607,000)
				Unrealized gains on trading securities							-				(36,000)
				Depreciation							196,000				303,000
				Deferred tax benefit							(54,000)				(588,000)
				Other							(48,000)				(275,000)
	Changes in assets and liabilities:
				Net sales of trading securities							9,000				(85,000)
				Change in insurance liabilities							9,440,000				(4,675,000)
				Additions to deferred acquisition costs							(1,360,000)				(392,000)
				Change in net amounts due from and to
						reinsurers					(3,611,000)				8,833,000
				Change in income tax liability							44,000				721,000
				Change in due and unpaid premiums							728,000				(283,000)
				Other									1,439,000				(2,941,000)
								Net cash provided by operating activities					11,875,000				4,497,000
CASH FLOWS FROM INVESTING ACTIVITIES
		Change in net amount due from and to brokers								2,026,000				6,773,000
		Sales and maturities of short-term investments								3,367,000				5,270,000
		Purchases of short-term investments								(5,138,000)				(6,396,000)
		Net (purchases) sales of resale agreements								(2,025,000)				14,394,000
		Sales of fixed maturities								344,162,000				317,969,000
		Purchases of fixed maturities								(351,369,000)				(347,706,000)
		Sales of equity securities								6,620,000				13,771,000
		Purchases of equity securities								(4,806,000)				(22,360,000)
		Proceeds on sale of other investments								982,000				3,000,000
		Additional investments in other investments, net
					of distributions					(4,040,000)				(5,985,000)
		Acquisition of companies								(2,125,000)				(1,756,000)
		Net change in notes receivable								(235,000)				10,698,000
		Other										64,000				(1,171,000)
							Net cash used by investing activities					(12,517,000)				(13,499,000)
CASH FLOWS FROM FINANCING ACTIVITIES
		Payments of investment-type insurance
					contracts					(107,000)				(268,000)
		Repurchase of common stock and warrants								(55,000)				(48,000)
		Dividends paid										(389,000)				(394,000)
									Net cash used by financing activities			(551,000)				(710,000)
					Decrease in cash and cash equivalents
			Cash and cash equivalents, beginning of year							(1,193,000)				(9,712,000)
			Cash and cash equivalents, end of period									10,395,000				18,024,000
										$		9,202,000		$		8,312,000

See Accompanying Notes to Consolidated Financial Statements.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

(A) BUSINESS AND ORGANIZATION

Independence Holding Company ("IHC") is a holding company engaged principally in the life and health insurance business through its wholly-owned subsidiaries, Standard Security Life Insurance Company of New York ("Standard Life"), Madison National Life Insurance Company, Inc. ("Madison Life"), First Standard Security Insurance Company ("First Standard") and IndependenceCare Holdings L.L.C. ("IndependenceCare") and their subsidiaries (collectively, the "Insurance Group"). IHC and its subsidiaries (including the Insurance Group) are collectively referred to as the "Company".

Geneve Corporation, a diversified financial holding company, and its affiliated entities (collectively, "Geneve") held approximately 58% of IHC's outstanding common stock at March 31, 2002.

(B) PRINCIPLES OF CONSOLIDATION AND PREPARATION OF FINANCIAL     STATEMENTS

The consolidated financial statements have been prepared in accordance with the requirements for quarterly reports on Form 10-Q. In the opinion of management, all adjustments (consisting only of normal recurring accruals) that are necessary for a fair presentation of the consolidated results of operations for the interim periods have been included. The consolidated results of operations for the three months ended March 31, 2002 are not necessarily indicative of the results to be anticipated for the entire year. The consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes included in IHC's Annual Report on Form 10-K for the year ended December 31, 2001. Certain amounts in the prior year's consolidated financial statements and have been reclassified to conform to the 2002 presentation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect: (i) the reported amounts of assets and liabilities; (ii) the disclosure of contingent assets and liabilities at the date of the financial statements; and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 2. INCOME PER COMMON SHARE

Included in the diluted earnings per share calculation for 2002 and 2001, respectively, are 199,000 and 124,000 shares from the assumed exercise of options using the treasury stock method. Net income does not change as a result of the assumed dilution of options.

NOTE 3. INCOME TAXES

The provision for income taxes shown in the consolidated statements of operations was computed based on the Company's estimate of the effective tax rates expected to be applicable for the current year.

The income tax expense for the three months ended March 31, 2002 allocated to stockholders' equity for unrealized gains on investment securities was $1,944,000, representing the change in the deferred tax asset of $1,945,000 at March 31, 2002 from $1,000 at December 31, 2001.

NOTE 4. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash payments for income taxes were $2,168,000 and $2,010,000 for the three months ended March 31, 2002 and 2001, respectively. Cash payments for interest were $69,000 and $299,000 for the three months ended March 31, 2002 and 2001, respectively.

NOTE 5. COMPREHENSIVE INCOME

The components of comprehensive income include net income and certain amounts reported directly in equity. Comprehensive income for the three months ended March 31, 2002 and 2001 is as follows:

		2002		2001
		(IN THOUSANDS)
Net income		$	3,949	$	4,061
Unrealized gains (losses), on
	available-for-sale securities		(3,450)		1,496
Comprehensive income		$	499	$	5,557

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2002, The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). Under SFAS 142, goodwill is no longer subject to amortization over its estimated useful life. Instead, SFAS 142 requires that goodwill be evaluated at least annually for impairment by applying a fair value based test and, if impairment occurs, the amount of impaired goodwill must be written off immediately. The Company will complete impairment testing of goodwill by June 30, 2002. In addition, The Company no longer amortizes goodwill as a reduction to earnings from operations. In the three months ended March 31, 2001, selling, general and administrative expenses include goodwill amortization of $147,000. Had SFAS 142 been applied at March 31, 2001, net income would have been $4,208,000 and both basic and diluted income per common share would have been $.53.

NOTE 7. SEGMENT REPORTING

The Insurance Group engages principally in the life and health insurance business. Interest expense, taxes, and general expenses associated with parent company activities are included in Corporate. Information by business segment for the three months ended March 31, 2002 and 2001 is as follows:

		2002		2001
		(IN THOUSANDS)
Revenues:
Medical Stop-Loss		$	10,760	$	6,441
DBL		5,049		5,144
Group Term Disability and Term Life
	and Annuities	6,364		5,737
Credit Life and Disability		3,069		3,218
Managed Health Care		3,353		2,995
Individual Life and Annuities		9,799		10,368
Other Business		1,080		1,525
Corporate			270		466
		39,744		35,894
Net Realized and Unrealized Gains			184		1,643
		$	39,928	$	37,537

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7. SEGMENT REPORTING (CONTINUED)

		2002		2001
		(IN THOUSANDS)
Operating Income (Loss):
Medical Stop-Loss		$	2,201	$	1,450
DBL		590		771
Group Term Disability and Term Life
	and Annuities	1,054		37
Credit Life and Disability		531		20
Managed Health Care		(6)		390
Individual Life and Annuities		2,055		2,131
Other Business		195		675
Corporate			(649)		(470)
		5,971		5,004
Interest Expense		(103)		(291)
Net Realized and Unrealized Gains			184		1,643
		$	6,052	$	6,356

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Independence Holding Company, a Delaware corporation ("IHC"), is a holding company engaged principally in the life and health insurance business through its wholly-owned subsidiaries, Standard Security Life Insurance Company of New York ("Standard Life"), Madison National Life Insurance Company, Inc. ("Madison Life"), First Standard Security Insurance Company ("First Standard") and IndependenceCare Holdings L.L.C. ("IndependenceCare") and their subsidiaries (collectively, the "Insurance Group"). IHC and its subsidiaries (including the Insurance Group) are collectively referred to as the "Company." All remaining expenses and income, principally income from parent company liquidity are included in Corporate.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

The Company's operating income was $6.1 million, for the period ended March 31, 2002 compared to $6.4 million for the same period of 2001. The Company had net realized and unrealized gains of $.2 million in 2002 and $1.6 million in 2001. Decisions to sell securities are based on cash flow needs, investment opportunities and economic and market conditions, thus creating fluctuations in gains (losses) from year to year. Excluding net realized and unrealized gains, operating income increased 25% to $5.9 million in 2002 from $4.8 million in 2001. Net income was $3.9 million, or $.49 per share, diluted, for the quarter ended March 31, 2002 versus $4.1 million, or $.51 per share, diluted, in 2001.

Insurance Group

The Insurance Group's operating income decreased $.3 million to $6.8 million in 2002 from $7.1 million in 2001. Operating income includes net realized and unrealized gains of $.2 million in 2002 compared to $1.6 million in 2001. Operating income excluding net realized and unrealized gains increased to $6.6 million in 2002 compared to $5.5 million in 2001.

Premium revenues increased $3.5 million to $28.7 million in 2002 from $25.2 million in 2000; premium revenues decreased $.3 million at Madison Life and increased $3.8 million at Standard Life. The change at Madison Life is comprised of: a $.3 million increase in long-term disability ("LTD") premiums as a result of an increase in premiums written in 2002 offset by a $.6 million decrease in the ordinary life and individual accident and health lines of business, primarily due to the runoff of acquisitions. The increase at Standard Life is comprised of: a $3.8 million increase in stop-loss premiums due to higher retention ($2.7 million) and increased volume ($1.1 million) in 2002; a $.6 million increase in the provider excess line slightly offset by a $.6 million decrease in HMO reinsurance due to a decrease in volume.

Total net investment income increased $.3 million due to a slight increase in assets. The annualized return on investments of the Insurance Group was 7.4% in both the first quarter of 2002 and 2001.

Other income increased $.3 million due to a $.1 million increase at Standard Life and a $2 million increase in fee income at IndependenceCare due to growth and acquisitions.

Insurance benefits, claims and reserves increased $1.4 million, reflecting a decrease of $.6 million at Madison Life and an increase of $2.0 million at Standard Life. Madison Life's decrease resulted from: a $.2 million decrease in ordinary life surrenders; a $.1 million decrease in LTD claims and a $.3 million decrease in the credit line of business due to a decrease in loss ratios. The change at Standard Life is comprised of: a $1.5 million increase in stop-loss reserves due to the increase in premiums offset by lower loss ratios and a $.5 million increase in the provider excess line of business due to the increase in volume.

Amortization of deferred acquisition costs and general and administrative expenses for the Insurance Group increased $1.6 million. Madison Life's expenses decreased $.6 million due to a reduction in administrative fees and a decrease in expenses of its majority owned MGU. Standard Life's expenses increased $2.1 million due to a $1.1 million increase in commissions from the higher level of premiums; a $.7 million increase in general expenses due to higher employee benefit expense and administrative fees from the increase in volume and a $.3 million increase in state insurance taxes due to the increase in volume. IndependenceCare's expenses increased $.1 million.

Corporate

Operating loss for corporate remained at $.7 million for the quarter ended March 31, 2002 and March 31, 2001. Lower returns on partnership investments of $.2 million was offset by less interest expense of $.2 million due to the pay down of long-term debt and lower interest rates.

LIQUIDITY

Insurance Group

The Insurance Group normally provides cash flow from: (i) operations; (ii) the receipt of scheduled principal payments on its portfolio of fixed income securities; and (iii) earnings on investments. Such cash flow is used partially to finance liabilities for insurance policy benefits. These liabilities represent long-term and short-term obligations which are calculated using certain assumed interest rates.

In the first quarter of 2002, IndependenceCare purchased all of the assets of an employer stop-loss MGU in Austin, TX and opened a marketing office in California.

Asset Quality

The nature and quality of insurance company investments must comply with all applicable statutes and regulations which have been promulgated primarily for the protection of policyholders. Of the aggregate carrying value of the Insurance Group's investment assets, approximately 80% was invested in investment grade fixed income securities, resale agreements, policy loans and cash and cash equivalents at March 31, 2002. Also at such date, approximately 95.6% of the Insurance Group's fixed maturities were investment grade. These investments carry less risk and, therefore, lower interest rates than other types of fixed maturity investments. At March 31, 2002, approximately 4.4% of the carrying value of fixed maturities was invested in diversified non-investment grade fixed income securities (investments in such securities have different risks than investment grade securities, including greater risk of loss upon default, and thinner trading markets). Less than .1% of the carrying value of the Company's total investments was represented by real estate and mortgage loans. Less than 1% of the Company's total investments were in non-performing fixed maturities.

Risk Management

The Company manages interest rate risk by seeking to maintain a portfolio with a duration and average life that falls within the band of the duration and average life of the applicable liabilities, and may utilize options to modify the duration and average life of such assets.

The Company monitors its investment portfolio on a continuous basis and believes that the liquidity of the Insurance Group will not be adversely affected by its current investments. This monitoring includes the maintenance of an asset-liability model that matches current insurance liability cash flows with current investment cash flows.

The expected change in fair value of the Company's fixed income portfolio at March 31, 2001 given a 100 to 300 basis point rise or decline in interest rates is not materially different than the expected change at December 31, 2001. In the Company's analysis of the asset-liability model, a 100 to 300 basis point change in interest rates on the Insurance Group's liabilities would not be expected to have a material adverse effect on the Company. With respect to its liabilities, if interest rates were to increase, the risk to the Company is that policies would be surrendered and assets would need to be sold. This is not a material exposure to the Company since a large portion of the Insurance Group's interest sensitive policies are burial policies that are not subject to the typical surrender patterns of other interest sensitive policies, and many of the Insurance Group's universal life and annuity policies come from liquidated companies which tend to exhibit lower surrender rates than such policies of continuing companies. Additionally, there are charges to help offset the benefits being surrendered. If interest rates were to decrease substantially, the risk to the Company is that some of its investment assets would be subject to early redemption. This is not a material exposure because the Company would have additional gains in its portfolio to help offset the future reduction of investment income. With respect to its investments, the Company employs (from time to time as warranted) investment strategies to mitigate interest rate and other market exposures.

Balance Sheet

The increase in other assets is due to the acquisitions of an MGU at IndependenceCare. The increase in future insurance policy benefits is due to the growth in volume. The increase in unrealized losses is due to the increase in interest rates since December 31, 2001.

The Company had net receivables from reinsurers of $121.5 million at March 31, 2002. Substantially all of the business ceded to such reinsurers is of short duration. All of such receivables are either due from highly rated companies or are adequately secured. Accordingly, no allowance for doubtful accounts was necessary at March 31, 2002.

Corporate

Corporate derives its funds principally from: (i) dividends and interest income from the Insurance Group; (ii) management fees from its subsidiaries; and (iii) investment income from Corporate liquidity. Regulatory constraints historically have not affected the Company's consolidated liquidity, although state insurance laws have provisions relating to the ability of the parent company to use cash generated by the Insurance Group.

Total corporate liquidity (cash, cash equivalents, resale agreements and marketable securities) amounted to $6.4 million at March 31, 2002.

Capital Resources

Due to its good capital ratios, broad licensing and excellent asset quality and credit-worthiness, the Insurance Group remains well positioned to increase or diversify its current activities. It is anticipated that future acquisitions or other expansion of operations will be funded internally from existing capital and surplus and parent company liquidity. In the event additional funds are required, it is expected that they would be borrowed or raised in the public or private capital markets to the extent determined to be necessary or desirable.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, the Company may carry its portfolio of fixed income securities either as held to maturity (carried at amortized cost), as trading securities (carried at fair market value) or as available-for-sale (carried at fair market value); the Company has chosen to carry all of its debt securities as available-for-sale. The Company experienced an increase in unrealized losses of $3.5 million, net of deferred tax benefit and deferred policy acquisition costs, in accumulated other comprehensive income, reflecting unrealized losses of $3.4 million at March 31, 2002 versus gains of $.1 million at December 31, 2001. From time to time, as warranted, the Company employs investment strategies to mitigate interest rate and other market exposures.

Forward Looking Statements

Some of the statements included within Management's Discussion and Analysis may be considered to be forward looking statements which are subject to certain risks and uncertainties. Factors which could cause the actual results to differ materially from those suggested by such statements are described from time to time in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

                                 a) Exhibit 11. Statement re: computation of per share earnings.

                                 b) No report on Form 8-K was filed during the quarter ended March 31, 2002.

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.

                                                                                        INDEPENDENCE HOLDING COMPANY

                                                                                                       (THE REGISTRANT)

Dated: May 13, 2002                                                  By: /s/ Teresa A. Herbert

                                   Teresa A. Herbert

                                   Vice President and

                                   Chief Financial Officer