UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2012
	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 0-16867

	UTG, INC.
	(Exact name of registrant as specified in its charter)
Delaware		20-2907892
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

5250 South Sixth Street, Springfield, IL		62703
(Address of principal executive offices)		(Zip code)

Registrant's telephone number, including area code: (217) 241-6300

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each exchange on which registered
None	None

Securities registered pursuant to Section 12(g) of the Act:

Title of class

Common Stock, stated value $.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations 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).

Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10- K. [ ]

Indicate by check mark whether the registrant is large accelerated filer, an accelerator filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	[ ]	Accelerated Filer	[ ]
Non Accelerated Filer	[ ]	Smaller Reporting Company	[X]

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes [ ] No [X]

As of June 30, 2012, shares of the Registrant's common stock held by non-affiliates (based upon the price of the last sale of $13.25 per share), had an aggregate market value of approximately $18,154,912.

At February 1, 2013 the Registrant had 3,797,391 outstanding shares of Common Stock, stated value $.001 per share.

Documents incorporated by reference: None

UTG, Inc.

Form 10-K

Year Ended December 31, 2012

TABLE OF CONTENTS

PART I	4
Item 1. Business	4
Item 1A. Risk Factors	9
Item 1B. Unresolved Staff Comments	9
Item 2. Properties	9
Item 3. Legal Proceedings	9
Item 4. Mine Safety Disclosures	9
PART II	10
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6. Selected Financial Data	11
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	19
Item 8. Financial Statements and Supplementary Data	19
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	47
Item 9A. Controls and Procedures	47
Item 9B. Other Information	48
PART III	49
Item 10. Directors, Executive Officers and Corporate Governance	49
Item 11. Executive Compensation	53
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
Item 13. Certain Relationships and Related Transactions, and Director Independence	58
Item 14. Principal Accounting Fees and Services	59
PART IV	60
Item 15. Exhibits and Financial Statement Schedules	60

Forward-Looking Statements

This report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. We have based our forward-looking statements on our current expectations and projections about future events. Our forward-looking statements include information about possible or assumed future results of operations. All statements, other than statements of historical facts, included or incorporated by reference in this report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as the growth of our business and operations, our business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward-looking statements. Also, when we use words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "probably," or similar expressions, we are making forward-looking statements.

Numerous risks and uncertainties may impact the matters addressed by our forward-looking statements, any of which could negatively and materially affect our future financial results and performance.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. In light of these risks, uncertainties and assumptions, any forward-looking event discussed in this report may not occur. Our forward-looking statements speak only as of the date made, and we undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments, unless the securities laws require us to do so.

PART I

Item 1. Business

Business Overview

UTG, Inc. (the "Registrant", "Company" or "UTG") is an insurance holding company incorporated in the state of Delaware in 2005. Its primary direct subsidiary is Universal Guaranty Life Insurance Company ("UG"). The Registrant and its primary subsidiary have only one significant segment, insurance. The Company's dominant business is individual life insurance, which includes the servicing of existing insurance business in force, the acquisition of other companies in the insurance business, and the administration processing of life insurance business for other entities.

The holding company has no significant business operations of its own and relies on fees, dividends and other distributions from its operating subsidiary as the principal source of cash flows to meet its obligations. Additional information regarding the cash flow and liquidity needs of the holding company can be found in the Liquidity and Capital Resources section of the Management's Discussion and Analysis of Financial Conditions and Results of Operations.

UG has several wholly-owned and majority-owned subsidiaries. The subsidiaries were formed to hold certain real estate investments. The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

This document at times will refer to the Registrant's largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll. Mr. Correll holds a majority ownership of First Southern Funding LLC, a Kentucky corporation, ("FSF") and First Southern Bancorp, Inc. ("FSBI"), a financial services holding company. FSBI operates through its 100% owned subsidiary bank, First Southern National Bank ("FSNB"). Banking activities are conducted through multiple locations within south-central and western Kentucky. Mr. Correll is Chief Executive Officer and Chairman of the Board of Directors of UTG and is currently UTG's largest shareholder through his ownership control of FSF, FSBI and affiliates. At December 31, 2012, Mr. Correll owns or controls directly and indirectly approximately 55.66% of UTG's outstanding stock.

UTG's website is: www.utgins.com. Information regarding the Company, including recent filings with the Securities and Exchange Commission, are accessible via this website.

Insurance

UG's product portfolio consists of a limited number of life insurance product offerings. All of the products are individual life insurance products, with design variations from each other to provide choices to the customer. These variations generally center around the length of the premium paying period, length of the coverage period and whether the product accumulates cash value or not.

While the Company does not actively sell any new policies today, it has the following products available for issue:

Ten Pay Whole Life – This traditional insurance product has a level face amount and level premium is payable for the first ten policy years. This product is available for issue ages 0-65, and has a minimum face amount of $10,000. This policy can be used in conversion situations, where it is available up to age 75 at a minimum face amount of $5,000. There is no policy fee associated with this product.

Tradition – The Tradition policy is a fixed premium whole life insurance policy. Premiums are level and payable for life. Issue ages are 0-80. The minimum face amount is the greater of $10,000 or the amount of coverage provided by a $100 annual premium. There is a $30 annual policy fee associated with this product.

Kid Kare – The Kid Kare product is a single premium level term policy to age 21. The product is sold in units, with one unit equal to a face amount of $5,000 for a single premium of $250. The policy is issued from ages 0-15 and has conversion privileges at age 21. There is no policy fee associated with this product.

Full Circle – The Full Circle product is a decreasing term product available in 10, 15, 20, 25, or 30 year terms. The product is generally issued to ages 20-65, with a minimum face amount of $10,000.

Sentinel – The Sentinel product is a 10 year level term product. The product is generally issued to ages 18-65, with a minimum face amount of $25,000.

Reinsurance

As is customary in the insurance industry, the insurance subsidiary cedes insurance to, and assumes insurance from, other insurance companies under reinsurance agreements. Reinsurance agreements are intended to limit a life insurer's maximum loss on a large or unusually hazardous risk or to obtain a greater diversification of risk. The ceding insurance company remains primarily liable with respect to ceded insurance should any reinsurer be unable to meet the obligations assumed by it. However, it is the practice of insurers to reduce their exposure to loss to the extent that they have been reinsured with other insurance companies. The Company sets a limit on the amount of insurance retained on the life of any one person. The Company will not retain more than $125,000, including accidental death benefits, on any one life.

The Company's reinsured business is ceded to numerous reinsurers. The Company monitors the solvency of its reinsurers in seeking to minimize the risk of loss in the event of a failure by one of the parties. The Company is primarily liable to the insureds even if the reinsurers are unable to meet their obligations. The primary reinsurers of the Company are large, well-capitalized entities. See Note 4 – Reinsurance in the Notes to the Consolidated Financial Statements for additional information regarding the Company's reinsurance activities.

Underwriting

The underwriting procedures of the insurance subsidiary are established by Management. Insurance policies are issued by the Company based upon underwriting practices established for each market in which the Company operates. Most policies are individually underwritten. Applications for insurance are reviewed to determine additional information required to make an underwriting decision, which depends on the amount of insurance applied for and the applicant's age and medical history. Additional information may include inspection reports, medical examinations, and statements from doctors who have treated the applicant in the past and, where indicated, special medical tests. After reviewing the information collected, the Company either issues the policy as applied for, issues with an extra premium charge because of unfavorable factors, or rejects the application. Substandard risks may be referred to reinsurers for full or partial reinsurance of the substandard risk.

Reserves

The applicable insurance laws under which the insurance subsidiary operates require that the insurance company report policy reserves as liabilities to meet future obligations on the policies in force. These reserves are the amounts which, with the additional premiums to be received and interest thereon compounded annually at certain assumed rates, are calculated in accordance with applicable laws to be sufficient to meet the various policy and contract obligations as they mature. These laws specify that the reserves shall not be less than reserves calculated using certain mortality tables and interest rates.

The liabilities for traditional life insurance and accident and health insurance policy benefits are computed using a net level method. These liabilities include assumptions as to investment yields, mortality, withdrawals, and other assumptions based on the life insurance subsidiary's experience adjusted to reflect anticipated trends and to include provisions for possible unfavorable deviations. The Company makes these assumptions at the time the contract is issued or, in the case of contracts acquired by purchase, at the purchase date. Future policy benefits for individual life insurance and annuity policies are computed using interest rates ranging from 2% to 6% for life insurance and 2.5% to 9.25% for annuities. Benefit reserves for traditional life insurance policies include certain deferred profits on limited-payment policies that are being recognized in income over the policy term. Policy benefit claims are charged to expense in the period that the claims are incurred. Current mortality rate assumptions are based on 1975-80 select and ultimate tables. Withdrawal rate assumptions are based upon Linton B or Linton C, which are industry standard actuarial tables for forecasting assumed policy lapse rates.

Benefit reserves for universal life insurance and interest sensitive life insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims in excess of related policy account balances.

Investments

Investments are subject to applicable state insurance laws and regulations, which limit the concentration of investments in any one category or class and further limit the investment in any one issuer. Generally, these limitations are imposed as a percentage of statutory assets or percentage of statutory capital and surplus of each company.

The following table summarizes the Company's fixed maturities distribution at December 31, 2012 and 2011 by ratings category as issued by Standard and Poor's, a leading ratings analyst.

Fixed Maturities

	% of Portfolio

Rating	2012	2011
Investment Grade
AAA	1%	27%
AA	25%	57%
A	17%	3%
BBB	47%	11%
Below Investment Grade	10%	2%
	100%	100%

The following table shows the composition, average maturity and yield of the Company's investment portfolio at December 31, 2012.

		Average
		Carrying	Average	Average
Investments		Value	Maturity	Yield

Fixed maturities held for sale	$	155,955,231	8.5 years	4.80%
Equity securities		23,902,271	Not applicable	5.92%
Trading securities		11,268,762	Not applicable	3.20%
Mortgage loans		13,472,237	1 year	7.59%
Discounted mortgage loans		26,902,436	3 years	15.56%
Investment real estate		65,433,194	Not applicable	2.16%
Policy loans		12,951,901	Not applicable	6.25%
Short-term investments and Cash and cash equivalents		6,268,320	On demand	0.12%
Total Investments and Cash and cash equivalents	$	316,154,352		6.01%

The Company, from time to time, acquires mortgage loans through participation agreements with FSNB. FSNB has been able to provide the Company with additional expertise and experience in underwriting commercial and residential mortgage loans, which provide more attractive yields than the traditional bond market. The Company is able to receive participations from FSNB for three primary reasons: 1) FSNB has already reached its maximum lending limit to a single borrower, but the borrower is still considered a suitable risk; 2) the interest rate on a particular loan may be fixed for a long period that is more suitable for UG given its asset-liability structure; and 3) FSNB's loan growth might at times outpace its deposit growth, resulting in FSNB participating such excess loan growth rather than turning customers away. For originated loans, the Company's Management is responsible for the final approval of such loans after evaluation. Before a new loan is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control. These criteria include, but are not limited to, a credit report, personal financial information such as outstanding debt, sources of income, and personal equity. Once the loan is approved, the Company directly funds the loan to the borrower. The Company bears all risk of loss associated with the terms of the mortgage with the borrower.

The Company began purchasing discounted commercial mortgage loans in 2009. Management has extensive background and experience in the analysis and valuation of commercial real estate. The discounted loans are available through the FDIC's sale of assets of closed banks and from banks wanting to reduce their loan portfolios. The loans are available on a loan by loan bid process. Once a loan has been acquired, contact is made with the appropriate individuals to begin a dialog with a goal of determining the borrower's willingness to work together. There are generally three paths a discounted loan will take: the borrowers pay as required; a settlement is reached with the loan being paid off at a discounted value; or the loan is foreclosed.

During 2012 and 2011, the Company acquired approximately $22.2 million and $11.2 million in mortgage loans, respectively, including both regular participation mortgage loans as well as discounted mortgage loans. FSNB services the mortgage loan portfolio of the Company. The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan amount to cover costs incurred by FSNB relating to the processing and establishment of the loan.

Most mortgage loans are first position loans. Loans issued are generally limited to no more than 80% of the appraised value of the property.

The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent. Management is provided with a monthly listing of loans that are 60 days or more past due along with a brief description of what steps are being taken to resolve the delinquency. All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans. Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified. Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact.

Management has conservatively decided to place the loans in the discounted mortgage loan portfolio on a non-accrual status, due to the instability of the borrowers. The Company additionally only recognizes any discount once the Company's entire basis in a loan has been recovered.

On the remainder of the mortgage loan portfolio, interest accruals are analyzed based on the likelihood of repayment. In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on Management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value. The Company acquired the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary. The loan portfolio since purchase is performing very well with a majority of the loans currently paying. Those not currently paying are being vigorously worked by Management. The current discounted commercial mortgage loan portfolio has an average price of 36.1% of face value and Management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased. The mortgage loan reserve was $0 at December 31, 2012 and 2011.

The following table shows a distribution of the Company's mortgage loans and discounted mortgage loans by type:

Mortgage Loans		Amount	% of Total

Commercial – all other	$	42,956,851	98%
Residential – all other		1,051,656	2%
Total	$	44,008,507	100%

The following table shows a geographic distribution of the Company's mortgage loan portfolio including discounted mortgage loans and investment real estate:

	Mortgage Loans	Real Estate

Alabama	2%	0%
Arizona	19%	8%
California	2%	1%
Colorado	0%	4%
Florida	21%	23%
Georgia	13%	8%
Indiana	0%	1%
Kentucky	19%	15%
Maryland	1%	0%
Minnesota	4%	0%
Nevada	4%	0%
North Carolina	2%	0%
Ohio	3%	1%
Pennsylvania	1%	0%
South Carolina	1%	3%
Tennessee	1%	6%
Texas	3%	26%
Utah	0%	1%
West Virginia	4%	3%
Total	100%	100%

See Note 2 – Investments in the Notes to the Consolidated Financial Statements and Management's Discussion and Analysis for additional information regarding the Company's investments.

Competition

The insurance business is a highly competitive industry and there are a number of other companies, both stock and mutual, doing business in areas where the Company operates. Many of these competing insurers are larger, have more diversified and established lines of insurance coverage, have substantially greater financial resources and brand recognition, as well as a greater number of agents. Other significant competitive factors in the insurance industry include policyholder benefits, service to policyholders, and premium rates.

In recent years, the Company has not placed an emphasis on new business production. Costs associated with supporting new business can be significant. Current sales primarily represent sales to existing customers through additional insurance needs or conservation efforts. The Company currently encourages policy retention as opposed to new sales in an attempt to maintain or improve current persistency levels.

The Company performs administrative work as a third party administrator (TPA) for unaffiliated life insurance companies. The Company intends to continue to pursue other TPA arrangements. The Company provides TPA services to insurance companies seeking business process outsourcing solutions. Management believes the Company is positioned to generate additional revenues by utilizing the Company's current excess capacity and administrative services.

Regulation

Holding Company - States have enacted legislation requiring registration and periodic reporting by insurance companies domiciled within their respective jurisdictions that control or are controlled by other corporations so as to constitute a holding company system. Insurance holding company system statutes and regulations impose various limitations on investments in subsidiaries, and may require prior regulatory approval for material transactions between insurers and affiliates and for the payment of certain dividends and other distributions.

Insurance - Insurance companies are subject to regulation and supervision in the states in which they do business. Generally the state supervisory agencies have broad administrative powers relating to granting and revoking licenses to transact business, licensing agents, approving policy forms, regulating trade practices, approving certain premium rates, setting minimum reserve and loss ratio requirements, determining the form and content of required financial statements, and prescribing the type and amount of investments permitted. Insurance companies are also required to file detailed annual reports with supervisory agencies, and records of their business are subject to examination at any time. Under the rules of the National Association of Insurance Commissioners ("NAIC"), insurance companies are examined periodically by one or more of the supervisory agencies.

Risk-Based Capital - The NAIC requires a risk-based capital formula be applied to all life and health insurers. The risk-based capital formula is a threshold formula rather than a target capital formula. It is designed only to identify companies that require regulatory attention and is not to be used to rate or rank companies that are adequately capitalized. UTG's insurance subsidiary, UG, is more than adequately capitalized under the risk-based capital formula.

Guaranty Assessments – State guaranty laws provide for assessments from insurance companies to be placed into a fund which is used, in the event of failure or insolvency of an insurance company, to fulfill the obligations of that company to its policyholders. The amount which a company is assessed is determined according to the extent of these unsatisfied obligations in each state. Assessments are recoverable to a great extent as offsets against state premium taxes.

Personnel

At December 31, 2012, UTG and its subsidiaries had 67 full-time employees. UTG's operations are headquartered in Springfield, Illinois.

Item 1A. Risk Factors

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, the Company has elected to comply with certain scaled disclosure reporting obligations, and therefore does not have to provide the information required by this item.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

The Company owns an office complex in Springfield, Illinois, which houses the primary insurance operations. The office buildings in this complex contain 57,000 square feet of office and warehouse space.

Item 3. Legal Proceedings

In the normal course of business the Company is involved, from time to time, in various legal actions and other state and federal proceedings. Management is of the opinion that the ultimate disposition of these matters will not have a material adverse effect on the Company's results of operations or financial position.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Registrant is a public company whose common stock is traded in the over-the-counter market. Over-the-counter quotations can be obtained using the UTGN.OB stock symbol.

The following table shows the high and low closing prices for each quarterly period during the past two years, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. The quotations below were acquired from the NASDAQ web site, which also provides quotes for over-the-counter traded securities such as UTG.

	2012		2011

Period	High	Low	High	Low

First quarter	12.75	12.00	10.75	9.00
Second quarter	12.94	12.45	11.75	10.75
Third quarter	14.00	12.50	12.50	11.40
Fourth quarter	13.50	13.05	13.10	11.80

UTG has not declared or paid any dividends on its common stock in the past two fiscal years, and has no current plans to pay dividends on its common stock as it intends to retain all earnings for investment in and growth of the Company's business. See Note 9 – Shareholders' Equity in the Notes to the Consolidated Financial Statements for information regarding dividend restrictions, including applicable restrictions on the ability of the Company's life insurance subsidiary to pay dividends.

As of February 1, 2013 there were 7,068 record holders of UTG common stock.

Purchases of Equity Securities

The following table provides information with respect to purchases we made of our common stock during the three months ended December 31, 2012 and total repurchases:

	Total Number of Shares Purchased		Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares That May Yet Be Purchased Under the Program		Approximate Dollar Value That May Yet Be Purchased Under the Program
Oct. 1 through Oct. 31, 2012	2,834	$	13.47	2,834	N/A	$	1,497,916
Nov. 1 through Nov. 30, 2012	1,826	$	13.18	1,826	N/A	$	1,473,848
Dec. 1 through Dec. 31, 2012	6,456	$	13.25	6,456	N/A	$	1,388,304
Total	11,116			11,116

The Board of Directors of UTG authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock. During September 2012, the Board of Directors approved a resolution to increase the repurchase amount by $1 million, for a total repurchase of $6 million. Repurchased shares are available for future issuance for general corporate purposes. This program can be terminated at any time. Open market purchases are made based on the last available market price and are generally limited to a maximum per share price of the most recent reported per share GAAP equity book value of the Company. Through December 31, 2012, UTG has spent $4,611,696 in the acquisition of 562,690 shares under this program.

Stock Performance Graph

Item 6. Selected Financial Data

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is Management's discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the "Company") for the years ended December 31, 2012 and 2011. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report.

Cautionary Statement Regarding Forward-Looking Statements

Numerous risks and uncertainties may impact the matters addressed by our forward-looking statements, any of which could negatively and materially affect our future financial results and performance.

Overview

UTG, Inc., a Delaware corporation, is a life insurance holding company. The Company's dominant business is individual life insurance, which includes the servicing of existing insurance policies in force, the acquisition of other companies in the life insurance business and the administration and processing of life insurance business for other entities. The Company's focus for the future includes growing the administrative portion of the business.

Critical Accounting Policies

We have identified the accounting policies below as critical to the understanding of our results of operations and our financial condition. The application of these critical accounting policies in preparing our consolidated financial statements requires Management to use significant judgments and estimates concerning future results or other developments including the likelihood, timing or amount of one or more future transactions or amounts. Actual results may differ from these estimates under different assumptions or conditions. On an on-going basis, we evaluate our estimates, assumptions and judgments based upon historical experience and various other information that we believe to be reasonable under the circumstances. For a detailed discussion of other significant accounting policies, see Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

Future Policy Benefits – Because of the long-term nature of insurance contracts, the insurance company is liable for policy benefit payments that will be made in the future. The liability for future policy benefits is determined by standard actuarial procedures common to the life insurance industry. The accounting policies for determining this liability are disclosed in Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

DAC and Cost of Insurance Acquired – Deferred acquisition costs are commissions, premium taxes and other costs that vary with and are primarily related to the acquisition of new and renewal business and are generally deferred and amortized. The deferred amounts are recorded as an asset and amortized to expense in a systematic manner. Additionally, the costs of acquiring blocks of insurance from other companies or through the acquisition of other companies are also deferred and recorded as deferred acquisition costs as indicated in Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

Valuation of Securities – The Company's investment portfolio consists of fixed maturities, equity securities, trading securities, mortgage loans and real estate to provide funding of future policy contractual obligations. The Company's fixed maturities and equity securities are classified as available-for-sale. Available-for-sale investments are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income in the Consolidated Balance Sheets.

The Company's trading securities are carried at fair value with unrealized gains and losses reported in income in the Consolidated Statements of Operations. Fair value is the price that the Company would expect to receive upon sale of the asset in an orderly transaction.

Mortgage loans on real estate are carried at their unpaid principal balances, adjusted for amortization of premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected.

Discounted mortgage loans consist of non-performing loans that were purchased at a deep discount through an auction process led by the Federal Government. In general, the discounted mortgage loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company. Accordingly, the Company records its investment in the discounted mortgage loans at its original purchase price.

Investment real estate held for sale is reported at the lower of cost or fair value less cost to sell. Expenses to maintain the property are expensed as incurred.

While the available-for-sale securities are generally expected to be held to maturity, they are classified as available-for-sale and are sold periodically to manage risk. Although a majority of the investment portfolio is classified as available-for-sale, the Company has the ability and intent to hold the securities until maturity. See Note 2 – Investments in the Notes to the Consolidated Financial Statements for detailed disclosures regarding the Company's investment portfolio.

Impairment of Investments – The Company continually monitors the investment portfolio for investments that have become impaired in value, where fair value has declined below carrying value. While the value of the investments in the Company's portfolio continuously fluctuate due to market conditions, an other-than-temporary impairment charge is recorded only when a security has experienced a decline in fair market value which is deemed to be other than temporary. The policies and procedures the Company uses to evaluate and account for impairments of investments are disclosed in Note 1 – Summary of Significant Accounting Policies and Note 2 – Investments in the Notes to the Consolidated Financial Statements. The Company makes every effort to appropriately assess the status and value of the securities with the information available regarding an other-than-temporary impairment. However, it is difficult to predict the future prospects of a distressed or impaired security.

Deferred Income Taxes – The provision for deferred income taxes is based on the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized by applying enacted statutory tax rates to temporary differences between amounts reported in the Consolidated Financial Statements and the tax basis of existing assets and liabilities. A valuation allowance is recognized for the portion of deferred tax assets that, in Management's judgment, is not likely to be realized. The effect on deferred income taxes of a change in tax rates or laws is recognized in income tax expense in the period that includes the enactment date.

Refer to Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements for detailed information regarding the Company's significant accounting policies.

Results of Operations

On a consolidated basis, the Company had net income attributable to common shareholders of $9.3 and $6.3 million in 2012 and 2011, respectively. In 2012, income before income taxes was $15.4 million compared to $7.8 million in 2011. The increase in income during 2012 was primarily attributable to an increase in investment income.

One-time events, primarily reflected in realized gains, comprise a substantial portion of net income of the Company during 2012 and 2011. Future earnings will be significantly negatively impacted should earnings from these one-time items not be realizable in a future period. While Management believes there remain additional investments with such one-time earnings, when or if realized remains uncertain.

Total revenue was $44.8 million in 2012 and $35 million in 2011. The increase in revenues is primarily attributable to an increase in net investment income and realized gains on investments. The magnitude of realized investment gains and losses in a given year is a function of the timing of trades of investments relative to the markets themselves as well as the recognition of any impairments on investments.

Total benefits and other expenses paid in 2012 were $29.4 million compared to $27.2 million in 2011.

Revenues

Premiums and policy fee revenues, net of reinsurance premiums and policy fees, decreased approximately 2% when comparing 2012 to 2011. The Company writes very little new business. Unless the Company acquires a new company or a block of in-force business, Management expects premium revenue to continue to decline on the existing block of business at a rate consistent with prior experience. The Company's average persistency rate for all policies in-force for 2012 and 2011 was approximately 96.2% and 95.8%, respectively. Persistency is a measure of insurance in-force retained in relation to the previous year.

The following table reflects net investment income of the Company for the years ended December 31:

		2012		2011

Fixed maturities available for sale	$	7,490,812	$	4,277,019
Equity securities		1,745,375		971,008
Trading securities		2,565,518		(2,342,085)
Mortgage loans		1,022,895		645,838
Discounted mortgage loans		4,186,155		8,231,832
Real estate		8,384,417		6,820,847
Policy loans		809,885		807,389
Short-term investments		0		156,527
Cash and cash equivalents		7,647		8,396
Total consolidated investment income		26,212,704		19,576,771
Investment expenses		(7,693,447)		(8,378,606)
Consolidated net investment income	$	18,519,257	$	11,198,165

Net investment income increased approximately 65% in 2012 compared to 2011. The increase in the current year net investment income, in comparison to the prior year results, is attributable to favorable results in the fixed maturities, trading securities and real estate investment portfolios.

Income from the fixed maturities portfolio increased approximately 75% or $3.2 million when comparing 2012 and 2011 results. In the first half of 2012, the Company invested a significant portion of its excess cash balances in fixed maturity investments, mainly BB and BBB rated corporate securities, which produced higher yields. Interest spreads on these investments are higher than historic trends and Management believes this is an opportunity to enhance yield and provide more recurring investment income. Lower rated bonds are viewed by the marketplace to inherently hold more default risk. The trade-off on this risk is a higher interest yield. Each investment is analyzed prior to acquisition to determine if Management is comfortable with the increased risk relative to the yield. Management believes there are opportunities currently available in this area where certain corporate bond issues have been more harshly impacted by the marketplace than may really be justified.

The fixed maturity portfolio was also impacted by a reinsurance agreement that was fully recaptured during the third quarter of 2012. At the time the reinsurance was repaid, the reserves were recaptured through the elimination of reinsurance recoverable in exchange for assets received equal to the recaptured reserves. The Company received approximately $27.7 million of investment grade debt securities. See Note 12 – Other Cash Flow Disclosures in the Notes to the Consolidated Financial Statements for further information regarding the repayment of the reinsurance. The receipt of the debt securities increased the fixed maturities balance, therefore enhancing investment yields.

During 2012, the Company reported income of approximately $2.6 million in the trading securities portfolio compared to a loss of approximately $2.3 million during 2011. The 2011 losses primarily resulted from holdings relating to market volatility and options relating to U.S. Treasury securities. The losses mainly occurred during the third quarter 2011 when the investment market took a sudden sharp decline as a result of the U.S. debt rating being lowered and concerns of the European nations' debt and potential defaults. During 2012, the Company has seen a positive turn in earnings from the trading securities portfolio. Volatility as well as possible losses should be expected in the trading securities portfolio. Management's target return on the trading securities portfolio is 6% to 8%.

Income from the discounted mortgage loan portfolio decreased approximately 49% when comparing 2012 and 2011 results. Income from discounted mortgage loans represented 16% of the consolidated investment income reported by the Company during 2012. The income from the discounted mortgage loan portfolio is mainly the result of one-time events.

Discounted mortgage loans have become more difficult to purchase as result of an increase in market competition. Management expects the discounted mortgage loan portfolio to continue to shrink as a result of the market competition and mortgage loan pay offs. While Management believes the discounted loans will continue to have favorable earnings and outcomes as they are worked through, there can be no assurance this will remain true in future periods. Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers' ability to pay or refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.

During 2012, income from real estate investing activities represented 32% of the consolidated investment income reported by the Company. Income from real estate investing activities increased approximately 23% when comparing 2012 to 2011 results. Income generated by HPG Acquisitions, LLC ("HPG"), a majority owned subsidiary of UG, represents 82% or approximately $6.9 million of the real estate income reported. HPG's income increased approximately 11% in comparison to the prior year. HPG owns office buildings in Midland, Texas. The increase in income is a result of increased building occupancy and an increase in rent charged.

The following table reflects net realized investment gains (losses) for the years ended December 31:

		2012		2011

Fixed maturities available for sale	$	9,406,270	$	8,913,987
Equity securities		566,894		(126,193)
Real estate		4,519,553		7,321,059
Mortgage loans		0		(203,440)
Fixed maturities available for sale – OTTI		(12,680)		0
Real estate – OTTI		(174,725)		(3,360,430)
Mortgage loans – OTTI		0		(982,354)
Consolidated net realized investment gains	$	14,305,312	$	11,562,629

The Company's net realized investment gains increased approximately 24% when comparing 2012 to 2011. The increase in net investment gains is mainly attributable to realized gains from fixed maturities and a decrease in other-than-temporary impairments recognized in the current year. Realized gains from fixed maturities increased approximately 6% in comparison to the prior year. The gains are mainly attributable to the Company selling a portion of its U.S. Treasury holdings to take advantage of the unusually high price spreads. The majority of the gains from the real estate portfolio are attributable to the sale of three pieces of real estate and are considered one-time events.

Realized gains from real estate decreased approximately 38% or $2.8 million when comparing 2012 and 2011 results. Real estate gains are the result of one-time events and are expected to vary from year to year based upon the Company's real estate sales. The 2011 real estate gains are mainly attributable to the sale of timber from Cumberland Woodlands, LLC, a wholly owned subsidiary of UG.

During 2012, realized gains were offset by other-than-temporary impairments of $187,405. The other-than-temporary impairments were taken as a result of Management's assessment and consideration of the length of time the securities have remained in an unrealized loss position. During 2011, other-than-temporary impairments of $4.3 million were taken as a result of appraisal valuations and Management's analysis of discounted mortgage loans and real estate. The mortgage loans and real estate were written down to better reflect current expected market values.

Other Income

In recent periods, Management's focus has been directed towards promoting and growing TPA services to unaffiliated life insurance companies. The Company receives monthly fees based on policy in force counts and certain other activity indicators, such as number of premium collections performed, or services performed. For the years ended 2012 and 2011, the Company received $2.1 million and $2 million for this work, respectively. These TPA revenue fees are included in the line item "other income" on the Company's consolidated statements of operations. During 2010, the Company obtained an additional contract for these services, which provides approximately $300,000 of additional revenues annually. Administration for this block of business began in the first quarter of 2011. The Company intends to continue to pursue other TPA arrangements as well. The Company provides TPA services to insurance companies seeking business process outsourcing solutions. Management believes the Company is positioned to generate additional revenues by utilizing the Company's current excess capacity and administrative services.

In summary, the Company's basis for future revenue growth is expected to come from the following primary sources: expansion of TPA revenues, conservation of business currently in force, the maximization of investment earnings and the acquisition of other companies or policy blocks in the life insurance business. Management has placed a significant emphasis on the development of these revenue sources to enhance these opportunities.

Expenses

Benefits, claims and settlement expenses, net of reinsurance benefits, increased approximately 3% in 2012 compared to 2011. The increase primarily relates to changes in the Company's death claim experience. Policy claims vary from year to year and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Changes in policyholder reserves, or future policy benefits, also impact this line item. Reserves are calculated on an individual policy basis and generally increase over the life of the policy as a result of additional premium payments and acknowledgement of increased risk as the insured continues to age.

The short-term impact of policy surrenders is negligible since a reserve for future policy benefits payable is held which is, at a minimum, equal to and generally greater than the cash surrender value of a policy. The benefit of fewer policy surrenders is primarily received over a longer time period through the retention of the Company's asset base.

Net amortization of cost of insurance acquired decreased approximately 7% in 2012 compared to 2011. Cost of insurance acquired is established when an insurance company is acquired or when the Company acquires a block of in-force business. The Company assigns a portion of its cost to the right to receive future profits from insurance contracts existing at the date of the acquisition. Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates may vary due to risk analysis performed at the time of acquisition on the business acquired. The Company utilizes a 12% discount rate on the remaining unamortized business. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised. Amortization of cost of insurance acquired is particularly sensitive to changes in interest rate spreads and persistency of certain blocks of insurance in-force. This expense is expected to decrease, unless the Company acquires a new block of business.

Operating expenses increased approximately 14% in 2012 compared to 2011. The increase in 2012 expenses, in comparison to 2011, is primarily attributable to an increase in legal expenses, charitable contributions and information technology expenses.

The Company's legal expenses increased approximately 73% or $125,000 when comparing 2012 to 2011. The increase in legal expenses is primarily attributable to the merger of American Capitol and the ACAP dissenters' lawsuit. See Note 8 – Commitments and Contingencies in the Notes to the Consolidated Financial Statements for additional information regarding the ACAP dissenters' lawsuit.

The Company's charitable contributions increased approximately 50% or $322,000 when comparing 2012 to 2011. Charitable contributions are expected to vary from year to year depending on the earnings of the Company.

The Company's information technology expenses increased approximately 33% or $283,000 when comparing 2012 to 2011. During 2012, the Company invested in new software to assist in increasing operating efficiencies and to meet regulatory requirements.

Management continues to place significant emphasis on expense monitoring and cost containment. Maintaining administrative efficiencies directly impacts net income.

Financial Condition

Investment Information

Investments are the largest asset group of the Company. The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

The following table reflects, by investment category, the investments held by the Company as of December 31:

		2012	As a % of Total Investments		As a % of Total Assets

Fixed maturities	$	187,327,285	52	%	42	%
Equity securities		30,504,914	8	%	7	%
Trading securities		14,018,460	4	%	3	%
Mortgage loans		17,671,554	5	%	4	%
Discounted mortgage loans		26,336,953	7	%	6	%
Real estate		68,165,013	19	%	15	%
Policy loans		12,591,572	3	%	3	%
Short term investments		6,268,320	2	%	1	%
Total investments	$	362,884,071	100	%	81	%

		2011	As a % of Total Investments		As a % of Total Assets

Fixed maturities	$	124,583,177	47	%	29	%
Equity securities		17,299,628	7	%	4	%
Trading securities		8,519,064	3	%	2	%
Mortgage loans		9,272,919	4	%	2	%
Discounted mortgage loans		27,467,920	10	%	6	%
Real estate		62,701,375	24	%	14	%
Policy loans		13,312,229	5	%	3	%
Total investments	$	263,156,312	100	%	60	%

The Company's investments are generally managed to match related insurance and policyholder liabilities. The comparison of investment return with insurance or investment product crediting rates establishes an interest spread. Interest crediting rates on adjustable rate policies have been reduced to their guaranteed minimum rates, and as such, cannot be lowered any further. Policy interest crediting rate changes and expense load changes become effective on an individual policy basis on the next policy anniversary. Therefore, it takes a full year from the time the change was determined for the full impact of such change to be realized. If interest rates decline in the future, the Company will not be able to lower rates and both net investment income and net income will be impacted negatively.

Management continues to view the Company's investment portfolio with utmost priority. Significant time has been spent internally researching the Company's risk and communicating with outside investment advisors about the current investment environment and ways to ensure preservation of capital and mitigate losses. Management has put extensive efforts into evaluating the investment holdings. Additionally, members of the Company's board of directors and investment committee have been solicited for advice and provided with information. Management reviews the Company's entire portfolio on a security level basis to be sure all understand our holdings, potential risks and underlying credit supporting the investments. Management intends to continue its close monitoring of its bond holdings and other investments for additional deterioration or market condition changes. Future events may result in Management's determination that certain current investment holdings may need to be sold which could result in gains or losses in future periods. Such future events could also result in other than temporary declines in value that could result in future period impairment losses.

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if impairment is other-than-temporary. These risks and uncertainties related to Management's assessment of other-than-temporary declines in value include but are not limited to: the risk that Company's assessment of an issuer's ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; the risk that fraudulent information could be provided to the Company's investment professionals who determine the fair value estimates.

Liquidity

Liquidity provides the Company with the ability to meet on demand the cash commitments required by its business operations and financial obligations. The Company's liquidity is primarily derived from positive cash flows from operations, a portfolio of marketable securities and line of credit facilities. The primary cash needs of the Company are for the payment of claims and operating expenses, maintaining adequate statutory capital and surplus levels and meeting debt service requirements.

Parent Company Liquidity

UTG is a holding company that has no day-to-day operations of its own. Cash flows from UTG's insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and the servicing of its debt. UTG's cash flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances. As of December 31, 2012 and 2011, substantially all of the consolidated shareholders equity represents net assets of its subsidiaries. In 2012, the Parent received $3.3 million in dividends from its insurance subsidiary and $3.5 million in 2011. The dividends were mainly used to pay debt obligations of the Parent company. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company. For further information regarding the restrictions on the payment of dividends by the insurance subsidiary, see Note 9 – Shareholders' Equity in the Notes to the Consolidated Financial Statements. Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.

Insurance Subsidiary Liquidity

Sources of cash flows for the insurance subsidiary primarily consist of premium and investment income. Cash outflows from operations include policy benefit payments, commissions, administrative expenses, taxes and dividends to the Parent company.

Short-Term Borrowings

An additional source of liquidity to the Parent company and its subsidiaries is the line of credit facilities extended to them that allow borrowings of up to $28 million. As of December 31, 2012, the Company and its subsidiaries had available $21.3 million in line of credit facilities. As of December 31, 2011, the Company and its subsidiaries had available $14 million in line of credit facilities. For additional information regarding the line of credit facilities, see Note 7 – Credit Arrangements in the Notes to the Consolidated Financial Statements.

The Company expects to have readily available funds for 2013 and the foreseeable future to conduct its operations and to maintain target capital ratios in the insurance subsidiary through internally generated cash flow and the credit facility. In the unlikely event that more liquidity is needed, the Company could generate additional funds through such sources as a short-term credit facility and intercompany borrowing.

Consolidated Liquidity

Cash used in operating activities was $10.6 million and $10.5 million in 2012 and 2011, respectively. Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments. Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses. The Company has not marketed any significant new products for several years. As such, premium revenues continue to decline. Management anticipates future cash flows from operations to remain similar to historic trends.

During 2012, the Company used net cash of $56 million for investing activities. During 2011, the investing activities provided net cash of $78.9 million. Proceeds from investments sold decreased approximately 42% or $109 million when comparing 2012 to 2011. Investment purchases increased approximately 15% or $26.5 million. The net cash provided by and used in investing activities is expected to vary from year to year depending on market conditions and management's ability to find and negotiate favorable investment contracts.

Net cash provided by financing activities was $7 million during 2012 and net cash used by financing activities was $3.9 million during 2011. Proceeds from notes payable increased by approximately $8.4 million in 2012 compared to 2011. During 2012, a majority owned subsidiary of UG, HPG Acquisitions, LLC ("HPG") obtained a $12 million note, which represents a substantial portion of the proceeds from notes payable reported by the Company. Net cash provided by financing activities was further enhanced in 2012 by $2.5 million in cash received from the reinsurance recapture. See Note 12 – Other Cash Flow Disclosures in the Notes to the Consolidated Financial Statements for further information regarding the reinsurance recapture.

The Company had cash and cash equivalents of $23.3 million and $83 million as of December 31, 2012 and 2011, respectively. The Company has a portfolio of marketable fixed and equity securities that are available for sale, if an unexpected event were to occur. These securities had a fair value of approximately $218 million at December 31, 2012. However, the strong cash flows from investing activities, investment maturities and the availability of the line of credit facilities make it unlikely that the Company would need to sell securities for liquidity purposes. See Note 2 – Investments in the Notes to the Consolidated Financial Statements for detailed disclosures regarding the Company's investment portfolio.

Management believes the overall sources of liquidity available will be sufficient to satisfy its financial obligations.

Capital Resources

The Company's capital structure consists of short-term debt, long-term debt and shareholders' equity. A complete analysis and description of the short-term and long-term debt issues outstanding as of December 31, 2012 and 2011 are presented in Note 7 – Credit Arrangements in the Notes to the Consolidated Financial Statements.

The Company had outstanding debt of $18.9 million as of December 31, 2012. Approximately $1.6 million of this debt is related to the acquisition of ACAP Corporation. Approximately $12.2 million of this debt is related to a note extended to a majority owned subsidiary of UTG, HPG Acquisitions, LLC ("HPG"), during 2012. HPG borrowed money to return capital to its investors. UTG Avalon, LLC, a wholly owned subsidiary of UG, has an outstanding line of credit in the amount of $5 million. See Note 7 – Credit Arrangements in the Notes to the Consolidated Financial Statements for detailed disclosures regarding the Company's notes payable.

The NAIC's risk-based capital requirements require insurance companies to calculate and report information under a risk-based capital formula. The risk-based capital (RBC) formula measures the adequacy of statutory capital and surplus in relation to investment and insurance risks such as asset quality, mortality and morbidity, asset and liability matching and other business factors. The RBC formula is used by state insurance regulators as an early warning tool to identify, for the purpose of initiating regulatory action, insurance companies that potentially are inadequately capitalized.

At December 31, 2012, UG has a ratio of approximately 3.41, which is 341% of the authorized control level. Accordingly, the Company meets the RBC requirements.

Shareholders' equity was $79.7 million and $75.8 million as of December 31, 2012 and 2011, respectively. Total shareholders' equity increased approximately 5% in 2012 compared to 2011. This increase is primarily due to the Company's current year earnings of $9.3 million.

The Company's investments are predominantly in fixed maturity investments such as bonds, which provide sufficient return to cover future obligations. The Company carries all of its fixed maturity holdings as available for sale which are reported in the consolidated financial statements at their market value.

Other Items

During 2012, the Company received approval from the states of Ohio and Texas to merge its two insurance companies. Effective January 1, 2012, American Capitol Insurance Company was merged into Universal Guaranty Life Insurance Company.

New Accounting Pronouncements

See Note 1 – Summary of Significant Account Policies in the Notes to the Consolidated Financial Statements for information regarding new accounting pronouncements.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements, financing activities or other relationships with unconsolidated entities or other persons.

Contractual Obligations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

	Page No.
UTG, Inc. and Consolidated Subsidiaries
Report of Independent Registered Public Accounting Firm	20
Consolidated Balance Sheets	21
Consolidated Statements of Operations	22
Consolidated Statements of Comprehensive Income	23
Consolidated Statements of Shareholders' Equity	24
Consolidated Statements of Cash Flows	25
Notes to Consolidated Financial Statements	26

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Shareholders of UTG, Inc. and Subsidiaries

Springfield, Illinois

We have audited the accompanying consolidated balance sheets of UTG, Inc. (a Delaware corporation, the "Company") and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of UTG, Inc. and subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their consolidated cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Brown Smith Wallace, LLC

St. Louis, Missouri

March 22, 2013

UTG, Inc.
Consolidated Balance Sheets
As of December 31, 2012 and 2011




ASSETS

				2012		2011
Investments:
	Investments available for sale:
	Fixed maturities, at fair value (amortized cost $173,526,717 and $107,514,400)		$	187,327,285	$	124,583,177
	Equity securities, at fair value (cost $29,497,001 and $16,200,043)			30,504,914		17,299,628
	Trading securities, at fair value (cost $14,714,333 and $9,147,237)			14,018,460		8,519,064
	Mortgage loans on real estate at amortized cost			17,671,554		9,272,919
	Discounted mortgage loans on real estate at amortized cost			26,336,953		27,467,920
	Investment real estate			68,165,013		62,701,375
	Policy loans			12,591,572		13,312,229
	Short-term investments			6,268,320		0
		Total investments		362,884,071		263,156,312

Cash and cash equivalents				23,321,246		82,925,675
Accrued investment income				2,444,790		1,136,741
Reinsurance receivables:
	Future policy benefits			29,318,018		64,693,384
	Policy claims and other benefits			4,492,430		4,029,412
Cost of insurance acquired				11,700,765		12,846,266
Deferred policy acquisition costs				426,218		488,266
Property and equipment, net of accumulated depreciation				1,344,851		1,527,285
Income taxes receivable				20,035		281,636
Other assets				5,381,969		2,636,280
		Total assets	$	441,334,393	$	433,721,257


LIABILITIES AND SHAREHOLDERS' EQUITY
Policy liabilities and accruals:
	Future policy benefits		$	293,800,162	$	301,393,689
	Policy claims and benefits payable			3,371,767		3,016,866
	Other policyholder funds			477,948		636,319
	Dividend and endowment accumulations			14,072,513		14,176,151
Income taxes payable				2,042,786		0
Deferred income taxes				12,301,577		13,745,751
Notes payable				18,857,954		9,531,645
Trading securities, at fair value (proceeds $8,094,787 and $6,288,562)				7,552,704		5,471,475
Other liabilities				9,202,354		9,964,313
		Total liabilities		361,679,765		357,936,209

Shareholders' equity:
Common stock - no par value, stated value $.001 per share.
	Authorized 7,000,000 shares - 3,798,871 and 3,854,610 shares issued
	and outstanding			3,799		3,855
Additional paid-in capital				44,337,743		45,051,608
Retained earnings				21,917,318		12,651,687
Accumulated other comprehensive income				9,664,466		11,792,214
Total UTG shareholders' equity				75,923,326		69,499,364
Noncontrolling interest				3,731,302		6,285,684
		Total shareholders' equity		79,654,628		75,785,048
		Total liabilities and shareholders' equity	$	441,334,393	$	433,721,257

See accompanying notes.

UTG, Inc.
Consolidated Statements of Operations
For the Years Ended December 31, 2012 and 2011


				2012		2011

Revenues:

	Premiums and policy fees		$	13,276,880	$	14,082,400
	Reinsurance premiums and policy fees			(3,365,796)		(3,935,191)
	Net investment income			18,519,257		11,198,165
	Other income			2,098,642		2,055,502
		Revenues before realized gains (losses)		30,528,983		23,400,876
	Realized investment gains (losses), net:
	Other-than-temporary impairments			(187,405)		(4,342,784)
		Other realized investment gains, net		14,492,717		15,905,413
		Total realized investment gains, net		14,305,312		11,562,629
		Total revenues		44,834,295		34,963,505


Benefits and other expenses:

	Benefits, claims and settlement expenses:
		Life		21,436,471		20,539,432
		Reinsurance benefits and claims		(4,223,621)		(3,843,351)
		Annuity		1,074,622		1,044,455
		Dividends to policyholders		501,070		514,268
	Commissions and amortization of deferred
		policy acquisition costs		(443,102)		(941,581)
	Amortization of cost of insurance acquired			1,145,501		1,231,015
	Operating expenses			9,604,668		8,389,781
	Interest expense			296,868		260,540
		Total benefits and other expenses		29,392,477		27,194,559

Income before income taxes				15,441,818		7,768,946
Income tax expense				(5,494,382)		(1,265,662)

Net income				9,947,436		6,503,284

Net income attributable to noncontrolling interest				(681,805)		(186,669)

Net income attributable to common shareholders			$	9,265,631	$	6,316,615

Amounts attributable to common shareholders:

	Basic income per share		$	2.43	$	1.65

	Diluted income per share		$	2.43	$	1.65

	Basic weighted average shares outstanding			3,809,639		3,824,444

	Diluted weighted average shares outstanding			3,809,639		3,824,444

See accompanying notes.

UTG, Inc.
Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2012 and 2011



			2012		2011

Net Income		$	9,947,436	$	6,503,284

Other comprehensive income (loss), net of tax:

	Unrealized holding gains arising during period		3,978,086		14,578,037
	Less reclassification adjustment for gains included in net income		(6,105,834)		(5,794,092)
	Subtotal: Other comprehensive income (loss), net of tax		(2,127,748)		8,783,945

Comprehensive income			7,819,688		15,287,229

Less comprehensive income attributable to noncontrolling interests			(681,805)		(858,084)

Comprehensive income attributable to UTG, Inc.		$	7,137,883	$	14,429,145

See accompanying notes.

UTG, Inc.
Consolidated Statements of Shareholders' Equity



Year ended December 31, 2012		Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at January 1, 2012	$	3,855	$	45,051,608	$	12,651,687	$	11,792,214	$	6,285,684	$	75,785,048
Common stock issued during year		16		214,965		0		0		0		214,981
Treasury shares acquired and retired		(72)		(928,830)		0		0		0		(928,902)
Net income attributable to common shareholders		0		0		9,265,631		0		0		9,265,631
Unrealized holding loss on securities net of noncontrolling interest and reclassification adjustment and taxes		0		0		0		(2,127,748)		0		(2,127,748)
Distributions		0		0		0		0		(3,236,187)		(3,236,187)
Gain attributable to noncontrolling interest		0		0		0		0		681,805		681,805
Balance at December 31, 2012	$	3,799	$	44,337,743	$	21,917,318	$	9,664,466	$	3,731,302	$	79,654,628

Year ended December 31, 2011
Balance at January 1, 2011	$	3,848	$	41,432,636	$	6,335,072	$	3,679,684	$	13,676,517	$	65,127,757
Common stock issued during year		50		4,094,476		0		0		0		4,094,526
Treasury shares acquired and retired		(43)		(475,504)		0		0		0		(475,547)
Net income attributable to common shareholders		0		0		6,316,615		0		0		6,316,615
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		0		0		0		8,112,530		0		8,112,530
Distributions		0		0		0		0		(3,131,271)		(3,131,271)
Mergers		0		0		0		0		(6,895,546)		(6,895,546)
Acquisitions		0		0		0		0		1,777,900		1,777,900
Gain attributable to noncontrolling interest		0		0		0		0		858,084		858,084
Balance at December 31, 2011	$	3,855	$	45,051,608	$	12,651,687	$	11,792,214	$	6,285,684	$	75,785,048

See accompanying notes.

UTG, INC.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2012 and 2011


			2012		2011

Cash flows from operating activities:
Net income attributable to common shares		$	9,265,631	$	6,316,615
Adjustments to reconcile net income to net cash
used in operating activities net of changes in assets and liabilities
resulting from the sales and purchases of subsidiaries:
	Accretion of investments		(998,853)		(3,964,398)
	Realized investment gains, net		(14,305,312)		(11,562,629)
	Unrealized trading losses included in income		352,761		1,604,757
	Realized trading (gains) losses included in income		(2,462,205)		3,714,513
	Amortization of deferred policy acquisition costs		62,048		68,692
	Amortization of cost of insurance acquired		1,145,501		1,231,015
	Depreciation		1,242,149		1,412,661
	Net income attributable to noncontrolling interest		681,805		186,669
	Charges for mortality and administration
	of universal life and annuity products		(7,067,717)		(7,353,389)
	Interest credited to account balances		5,192,370		5,152,218
	Change in accrued investment income		(1,308,049)		472,684
	Change in reinsurance receivables		3,756,502		2,757,683
	Change in policy liabilities and accruals		(4,987,472)		(5,037,087)
	Change in income taxes payable		2,082,289		(4,535,859)
	Change in other assets and liabilities, net		(3,292,668)		(951,349)
Net cash used in operating activities			(10,641,220)		(10,487,204)

Cash flows from investing activities:
Proceeds from investments sold and matured:
	Fixed maturities available for sale		98,640,115		173,221,329
	Equity securities available for sale		1,953,434		3,572,456
	Trading securities		15,299,053		29,733,306
	Mortgage loans		7,546,798		3,139,903
	Discounted mortgage loans		6,533,313		15,032,186
	Real estate		16,411,306		29,621,068
	Policy loans		3,678,795		4,299,197
Total proceeds from investments sold and matured			150,062,814		258,619,445
Cost of investments acquired:
	Fixed maturities available for sale		(128,314,307)		(128,598,767)
	Equity securities available for sale		(13,834,829)		(727,258)
	Trading securities		(16,597,713)		(19,626,789)
	Mortgage loans		(15,945,433)		(1,235)
	Discounted mortgage loans		(6,299,298)		(11,122,151)
	Real estate		(15,829,535)		(15,842,681)
	Policy loans		(2,958,138)		(3,635,407)
	Short-term investments		(6,268,320)		0
Total cost of investments acquired			(206,047,573)		(179,554,288)
Disposal (purchase) of property and equipment			17,440		(214,475)
Net cash provided by (used in) investing activities			(55,967,319)		78,850,682

Cash flows from financing activities:
	Policyholder contract deposits		6,006,858		6,213,174
	Policyholder contract withdrawals		(6,644,674)		(5,851,344)
	Proceeds from notes payable/line of credit		16,321,035		7,943,000
	Payments of principal on notes payable/line of credit		(6,994,726)		(8,783,594)
	Purchase of treasury stock		(928,902)		(475,547)
	Proceeds from sale of subsidiary		0		164,327
	Non controlling distributions of consolidated subsidiary		(3,236,187)		(3,131,271)
	Cash received in reinsurance recapture		2,480,706		0
Net cash provided by (used in) financing activities			7,004,110		(3,921,255)

Net increase (decrease) in cash and cash equivalents			(59,604,429)		64,442,223
Cash and cash equivalents at beginning of year			82,925,675		18,483,452
Cash and cash equivalents at end of year		$	23,321,246	$	82,925,675

See accompanying notes.

UTG, Inc.

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Business – UTG, Inc. is an insurance holding company. The Company's dominant business is individual life insurance, which includes the servicing of existing insurance in-force and the acquisition of other companies in the life insurance business. UTG and its subsidiaries are collectively referred to as the "Company".

UTG's life insurance subsidiary has several wholly-owned and majority-owned subsidiaries. The subsidiaries were formed to hold certain real estate investments. The real estate investments were placed into the limited liability companies and partnerships to provided additional protection to the policyholders and to UG.

Basis of Presentation – The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), under guidance issued by the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amounts of 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.

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Registrant and its wholly and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated during consolidation.

Business Segments – The Company has only one business segment – life insurance.

Investments – The Company reports its investments as follows:

Fixed Maturity Investments – The Company classifies its fixed maturity investments, which include bonds, as available for sale. Investments classified as available for sale are carried at fair value with unrealized gains and losses, net of deferred taxes, reflected directly in accumulated other comprehensive income. Premiums and discounts on debt securities purchased at other than par value are amortized and accreted, respectively, to interest income in the Consolidated Statements of Operations, using the constant yield method over the period to maturity. Net realized gains and losses on sales of available for sale securities, and unrealized losses considered to be other-than-temporary, are recorded to net realized investment gains (losses) in the Consolidated Statements of Operations.

Equity Securities – Investments in equity securities, which include common and preferred stocks, are reported at fair value with unrealized gains and losses, net of deferred taxes, reflected directly in accumulated other comprehensive income.

Trading Securities – Trading security investments are reported at fair value with gains and losses resulting from changes in fair value recognized in earnings. Trading securities include bonds, exchange traded equities, exchange traded options and exchange traded futures.

Mortgage Loans on Real Estate – Mortgage loans on real estate are reported at their unpaid principal balances, adjusted for amortization of premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected.

Discounted Mortgage Loans on Real Estate – Discounted mortgage loans on real estate are non-performing loans that the Company purchased at a deep discount through an auction process led by the Federal Government. In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company. Accordingly, the Company records its investment in the discounted loans at its original purchase price. Management works with the borrower to reach a settlement on the loan or they foreclose on the underlying collateral which is primarily commercial real estate. For cash payments received during the work out process, the Company records these payments to interest income on a cash basis. For loan settlements reached, the Company records the amount in excess of the carrying amount of the loan as a discount accretion to investment income at the closing date. Management reviews the discount loan portfolio regularly for impairment. If an impairment is identified (after consideration of the underlying collateral), the Company records an impairment to earnings in the period the information becomes known.

Investment Real Estate – Investment real estate held for sale is reported at the lower of cost or fair value less cost to sell. Expenses to maintain the property are expensed as incurred.

Policy Loans – Policy loans are reported at their unpaid balances, including accumulated interest, but not in excess of the cash surrender value of the related policy.

Short-Term Investments – Short-term investments are reported at amortized cost, which approximates fair value.

Gains and Losses – Realized gains and losses include sales of investments and investment impairments. If any, other-than-temporary impairments in fair value are recognized in net income on the specific identification basis.

Fair Value – Fair values for cash, short-term investments, short-term debt, receivables and payables approximate carrying value. Fair values for fixed maturities, equity securities and certain other assets are determined in accordance with specific accounting guidance. Fair values are based on quoted market prices, where available. Otherwise, fair values are based on quoted market prices of comparable instruments in active markets, quotes in inactive markets, or other observable criteria. Mortgage loans on real estate are valued using discounted cash flow analyses. Discounted mortgage loans on real estate are reported at original purchase price, which Management believes reflects fair value. For more specific information regarding the Company's measurements and procedures in valuing financial instruments, see Note 3 – Fair Value Measurements.

Impairment of Investments – The Company evaluates its investment portfolio for other-than-temporary impairments as described in Note 2 – Investments. If a security is deemed to be other-than-temporarily impaired, the cost basis of the security is written down to fair value and is treated as a realized loss.

Current accounting guidance states that if an entity intends to sell or if it is more likely than not that it will be required to sell an impaired security prior to recovery of its cost basis, the security is to be considered other-than-temporarily impaired and the full amount of impairment must be charged to earnings. Otherwise, losses on fixed maturities which are other-than-temporarily impaired are separated into two categories, the portion of the loss which is considered credit loss and the portion of the loss which is due to other factors. The credit loss portion is charged to earnings while the loss due to other factors is charged to other comprehensive income.

Cash Equivalents – The Company considers certificates of deposit and other short-term instruments with an original purchased maturity of three months or less to be cash equivalents.

Cash – Cash consists of balances on hand and on deposit in banks and financial institutions.

Reinsurance - In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance enterprises or reinsurers under excess coverage and coinsurance contracts. The Company retains a maximum of $125,000 of coverage per individual life.

Reinsurance receivables are recognized in a manner consistent with the liabilities relating to the underlying reinsured contracts. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies.

Cost of Insurance Acquired - When an insurance company is acquired, the Company assigns a portion of its cost to the right to receive future cash flows from insurance contracts existing at the date of the acquisition. The cost of policies purchased represents the actuarially determined present value of the projected future profits from the acquired policies. Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.

Deferred Policy Acquisitions Costs - Commissions and other costs (salaries of certain employees involved in the underwriting and policy issue functions and medical and inspection fees) of acquiring life insurance products that vary with and are primarily related to the production of new business have been deferred. Deferred acquisition costs are amortized in a systematic manner which matches these costs with the associated revenues.

Property and Equipment - Company-occupied property, data processing equipment and furniture and office equipment are stated at cost less accumulated depreciation of $3,399,309 and $3,235,642 at December 31, 2012 and 2011, respectively. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of three to thirty years. Depreciation expense was $168,442 and $162,941 for the years ended December 31, 2012 and 2011, respectively.

Future Policy Benefits and Expenses - The liabilities for traditional life insurance and accident and health insurance policy benefits are computed using a net level method. These liabilities include assumptions as to investment yields, mortality, withdrawals, and other assumptions based on the life insurance subsidiary's experience adjusted to reflect anticipated trends and to include provisions for possible unfavorable deviations. The Company makes these assumptions at the time the contract is issued or, in the case of contracts acquired by purchase, at the purchase date. Future policy benefits for individual life insurance and annuity policies are computed using interest rates ranging from 2% to 6% for life insurance and 2.5% to 9.25% for annuities. Benefit reserves for traditional life insurance policies include certain deferred profits on limited-payment policies that are being recognized in income over the policy term. Policy benefit claims are charged to expense in the period that the claims are incurred. Current mortality rate assumptions are based on 1975-80 select and ultimate tables. Withdrawal rate assumptions are based upon Linton B or C, which are industry standard actuarial tables for forecasting assumed policy lapse rates.

Policy Claims and Benefits Payable - Policy and contract claims include provisions for reported claims in process of settlement, valued in accordance with the terms of the policies and contracts, as well as provisions for claims incurred and unreported. The estimate of incurred and unreported claims is based on prior experience. The Company makes an estimate after careful evaluation of all information available to the Company. There is no certainty the stated liability for policy claims and benefits payable, including the estimate for incurred but unreported claims, will be the Company's ultimate obligation.

Income Taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement book values and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. More information concerning income taxes is provided in Note 6 – Income Taxes.

Earnings Per Share – The objective of both basic earnings per share ("EPS") and diluted EPS is to measure the performance of an entity over the reporting period. The Company presents basic and diluted EPS on the face of the Consolidated Statements of Operations. Basic EPS is computed by dividing income available to common shareholders by the weighted average common shares outstanding for the period. Diluted EPS is calculated by adding to shares outstanding the additional net effect of potentially dilutive securities or contracts, such as stock options, which could be exercised or converted into common shares.

Recognition of Revenues and Related Expenses - Premiums for traditional life insurance products, which include those products with fixed and guaranteed premiums and benefits, consist principally of whole life insurance policies, and certain annuities with life contingencies are recognized as revenues when due. Limited payment life insurance policies defer gross premiums received in excess of net premiums, which is then recognized in income in a constant relationship with insurance in force. Accident and health insurance premiums are recognized as revenue pro rata over the terms of the policies. Benefits and related expenses associated with the premiums earned are charged to expense proportionately over the lives of the policies through a provision for future policy benefit liabilities and through deferral and amortization of deferred policy acquisition costs. For universal life and investment products, generally there is no requirement for payment of premium other than to maintain account values at a level sufficient to pay mortality and expense charges. Consequently, premiums for universal life policies and investment products are not reported as revenue, but as deposits. Policy fee revenue for universal life policies and investment products consists of charges for the cost of insurance and policy administration fees assessed during the period. Expenses include interest credited to policy account balances and benefit claims incurred in excess of policy account balances.

Recently Issued Accounting Standards

Intangibles-Goodwill and Other – In July 2012, the Financial Accounting Standards Board ("FASB") issued guidance on the testing of indefinite-lived intangible assets for impairment, which is intended to reduce the cost and complexity of the impairment test for indefinite-lived intangible assets by providing an entity with the option to first assess qualitatively whether it is necessary to perform the impairment test that is currently in place. An entity would not be required to quantitatively calculate the fair value of an indefinite-lived intangible asset unless the entity determines that it is more likely than not that its fair value is less than its carrying value. This guidance is effective for interim and annual impairment tests beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company's consolidated financial statements.

Comprehensive Income - In June and December 2011, the FASB issued guidance that requires all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. For public entities, the amendments were effective for fiscal years and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively. This standard only affected the Company's presentation of comprehensive income.

Fair Value Measurement - In May 2011, the FASB issued guidance to achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. Some of the amendments in this update clarify the FASB's intent about the application of certain existing fair value measurement requirements and other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. None of the amendments in this update require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting. For public entities, this guidance was effective during interim and annual periods beginning after December 15, 2011. The adoption of this guidance, effective January 1, 2012, did not have a material effect on the Company's consolidated financial statements.

Note 2 – Investments

Available for Sale Securities – Fixed Maturity and Equity Securities

The following tables provide a summary of fixed maturities available for sale and equity securities by original or amortized cost and estimated fair value:

December 31, 2012		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	33,430,165	$	5,457,009	$	0	$	38,887,174
States, municipalities and political subdivisions		160,000		6,637		0		166,637
U.S. special revenue and assessments		2,150,070		153,545		0		2,303,615
Collateralized mortgage obligations		2,241,384		183,409		(8)		2,424,785
Public utilities		399,900		63,662		0		463,562
All other corporate bonds		135,145,198		9,747,565		(1,811,251)		143,081,512
		173,526,717		15,611,827		(1,811,259)		187,327,285
Equity securities		29,497,001		1,303,328		(295,415)		30,504,914
Total	$	203,023,718	$	16,915,155	$	(2,106,674)	$	217,832,199

December 31, 2011		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	56,794,363	$	13,805,565	$	0	$	70,599,928
States, municipalities and political subdivisions		235,000		6,317		0		241,317
Collateralized mortgage obligations		750,944		11,756		(2,973)		759,727
Public utilities		399,887		62,188		0		462,075
All other corporate bonds		49,334,206		4,901,684		(1,715,760)		52,520,130
		107,514,400		18,787,510		(1,718,733)		124,583,177
Equity securities		16,200,043		1,216,286		(116,701)		17,299,628
Total	$	123,714,443	$	20,003,796	$	(1,835,434)	$	141,882,805

The following table provides a summary of fixed maturities by contractual maturity as of December 31, 2012. Actual maturities could differ from contractual maturities due to call or prepayment provisions:

Fixed Maturities Available for Sale December 31, 2012		Amortized Cost		Estimated Fair Value

Due in one year or less	$	4,067,722	$	4,116,580
Due after one year through five years		22,420,385		24,718,707
Due after five years through ten years		105,150,475		113,890,802
Due after ten years		39,643,584		42,173,173
Collateralized mortgage obligations		2,244,551		2,428,023
Total	$	173,526,717	$	187,327,285

By insurance statute, the majority of the Company's investment portfolio is invested in investment grade securities to provide ample protection for policyholders.

Below investment grade debt securities generally provide higher yields and involve greater risks than investment grade debt securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers. In addition, the trading market for these securities is usually more limited than for investment grade debt securities. Debt securities classified as below-investment grade are those that receive a Standard & Poor's rating of BB or below.

The Company held, below investment grade investments with an amortized cost of $19,080,167 and $1,843,314 as of December 31, 2012 and 2011, respectively. The investments are all classified as "All other corporate bonds".

The fair value of investments with sustained gross unrealized losses at December 31, 2012 and 2011 are as follows:

December 31, 2012		Less than 12 months			12 months or longer			Total

		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	4,513	(8)	$	0	0	$	4,513	(8)
All other corporate bonds		13,776,705	(245,846)		385,823	(1,565,405)		14,162,528	(1,811,251)
Total fixed maturities	$	13,781,218	(245,854)	$	385,823	(1,565,405)	$	14,167,041	(1,811,259)

Equity securities	$	594,081	(295,415)	$	0	0	$	594,081	(295,415)

December 31, 2011		Less than 12 months			12 months or longer			Total

		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	7,008	(36)	$	97,868	(2,937)	$	104,876	(2,973)
All other corporate bonds		3,915,393	(17,574)		1,268,583	(1,698,186)		5,183,976	(1,715,760)
Total fixed maturities	$	3,922,401	(17,610)	$	1,366,451	(1,701,123)	$	5,288,852	(1,718,733)

Equity securities	$	848,032	(55,141)	$	292,441	(61,560)	$	1,140,473	(116,701)

The following table provides additional information regarding the number of securities that were in an unrealized loss position for greater than or less than twelve months:

	Less than 12 months	12 months or longer	Total
As of December 31, 2012
Fixed maturities	8	3	11
Equity securities	9	0	9
As of December 31, 2011
Fixed maturities	5	6	11
Equity securities	2	1	3

Substantially all of the unrealized losses on fixed maturities available for sale at December 31, 2012 and 2011 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. The unrealized losses on equity investments were primarily attributable to normal market fluctuations. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company's expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company's evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of December 31, 2012 and 2011.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Consolidated Statements of Operations. Trading securities include bonds, exchange traded equities, exchange traded options and exchange traded futures. Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2012 was $6,745,528 and ($6,050,344), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2011 was $3,217,420 and $(4,187,885), respectively. The derivatives held by the Company are for income generation purposes only.

Earnings from trading securities are classified in cash flows from operating activities.

The following table reflects trading securities revenue charged to net investment income for the periods ended December 31:

		2012		2011

Net unrealized gains (losses)	$	(352,761)	$	(1,604,757)
Net realized gains (losses)		2,918,279		(737,328)
Net unrealized and realized gains (losses)	$	2,565,518	$	(2,342,085)

Mortgage Loans and Discounted Mortgage Loans on Real Estate

During 2012 and 2011, the Company acquired $22,244,731 and $11,123,386 in mortgage loans, respectively, including both regular participation mortgage loans as well as discounted mortgage loans. FSNB services the mortgage loan portfolio of the Company. The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan amount to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2012 and 2011, the maximum and minimum lending rates for mortgage loans were:

	2012		2011
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Commercial Loans	10.00%	3.21%	18.00%	3.24%
Residential Loans	8.00%	6.00%	8.00%	7.00%

Most mortgage loans are first position loans. Loans issued are generally limited to no more than 80% of the appraised value of the property.

A mortgage loan reserve is established and adjusted based on Management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value. The Company acquired the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary. Those not currently paying are being vigorously worked by Management. The current discounted commercial mortgage loan portfolio has an average price of 36.1% of face value and Management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased. The mortgage loan reserve was $0 at December 31, 2012 and 2011.

The following table summarizes the number loans held in the discounted mortgage loan portfolio and the carrying value of the loans as of December 31, 2012:

Payment Frequency	Number of Loans		Carrying Value

No payments received	13	$	5,558,962
One-time payment received	3		0
Irregular payments received	17		7,681,387
Regular payments received	23		13,096,604
Total	56	$	26,336,953

The following table summarizes discounted mortgage loan holdings of the Company for the periods ended December 31:

		2012		2011
In good standing	$	3,945,701	$	6,657,971
Overdue interest over 90 days		3,368,750		5,907,192
Restructured		7,685,690		7,726,156
In process of foreclosure		11,336,812		7,176,601
Total discounted mortgage loans	$	26,336,953	$	27,467,920
Total foreclosed discounted mortgage loans during the year	$	2,603,017	$	21,059,386

Investment Real Estate

Real estate acquired through foreclosure, consisting of properties obtained through foreclosure proceedings or acceptance of a deed in lieu of foreclosure, is reported on an individual asset basis at the lower of cost or fair value, less disposal costs. Fair value is determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources. When properties are acquired through foreclosure, any excess of the loan balance at the time of foreclosure over the fair value of the real estate held as collateral is recognized and charged to the income statement. Based upon Management's evaluation of the real estate acquired through foreclosure, additional expense is recorded when necessary in an amount sufficient to reflect any declines in estimated fair value. Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the consolidated statements of income.

Analysis of Investment Operations

The following table reflects the Company's net investment income for the periods ended December 31:

		2012		2011

Fixed maturities	$	7,490,812	$	4,277,019
Equity securities		1,745,375		971,008
Trading securities		2,565,518		(2,342,085)
Mortgage loans		1,022,895		645,838
Discounted mortgage loans		4,186,155		8,231,832
Real estate		8,384,417		6,820,847
Policy loans		809,885		807,389
Short-term investments		0		156,527
Cash and cash equivalents		7,647		8,396
Total consolidated investment income		26,212,704		19,576,771
Investment expenses		(7,693,447)		(8,378,606)
Consolidated net investment income	$	18,519,257	$	11,198,165

The following table reflects the Company's net realized investments gains and losses for the periods ended December 31:

2012		Gross Realized Gains		Gross Realized (Losses)		Net Realized Gains (Losses)

Fixed maturities	$	9,816,015	$	(409,745)	$	9,406,270
Real estate		4,533,747		(14,194)		4,519,553
Common stock		566,894		0		566,894
Fixed maturities – OTTI		0		(12,680)		(12,680)
Common stock – OTTI		0		(174,725)		(174,725)
Total realized gains (losses)	$	14,916,656	$	(611,344)	$	14,305,312

2011		Gross Realized Gains		Gross Realized (Losses)		Net Realized Gains (Losses)

Fixed maturities	$	9,290,554	$	(376,567)	$	8,913,987
Equity securities		0		(126,193)		(126,193)
Real estate		7,371,693		(50,634)		7,321,059
Mortgage loans		0		(203,440)		(203,440)
Real estate – OTTI		0		(3,360,430)		(3,360,430)
Mortgage loans – OTTI		0		(982,354)		(982,354)
Total realized gains (losses)	$	16,662,247	$	(5,099,618)	$	11,562,629

Other-Than-Temporary Impairments

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary. The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company's intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates. If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Consolidated Statements of Operations.

Equity securities may experience other-than-temporary impairments in the future based on the prospects for full recovery in value in a reasonable period of time and the Company's ability and intent to hold the security to recovery. If a decline in fair value is judged by Management to be other-than-temporary or Management does not have the intent or ability to hold a security, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

Based on Management's review of the investment portfolio, the Company recorded the following losses for other-than-temporary impairments in the Consolidated Statements of Operations for the periods ended December 31:

		2012		2011

Other than temporary impairments:
Common stock	$	174,725	$	0
Discounted mortgage loans		0		982,354
Real estate		0		3,360,430
States, municipalities and political subdivisions		12,680		0
Total other than temporary impairments	$	187,405	$	4,342,784

The other-than-temporary impairments recognized during 2012 were due to Management's assessment and consideration of the length of time the securities have remained in an unrealized loss position.

The other-than-temporary impairments recognized during 2011 were due to appraisal valuations and Management's analysis of discounted mortgage loans and real estate. The mortgage loans and real estate were written down to better reflect current expected market values.

Investments on Deposit

The Company had investments with a fair value of $11,660,630 and $10,998,036 on deposit with various state insurance departments as of December 31, 2012 and 2011, respectively.

Note 3 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value in the Consolidated Balance Sheets based on the framework set forth in the GAAP fair value accounting guidance. The framework establishes a fair value hierarchy of three levels based upon the transparency of information used in measuring the fair value of assets or liabilities as of the measurement date. The fair value hierarchy prioritizes the inputs in the valuation techniques used to measure fair value into three categories.

Level 1 – Valuation is based upon quoted prices for identical assets or liabilities in active markets that the Company is able to access. Level 1 fair value is not subject to valuation adjustments.

Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active. In addition, the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company's own assumptions about the inputs that market participants would use in pricing the asset or liability.

The Company determines the existence of an active market for an asset or liability based on its judgment as to whether transactions for the asset or liability occur in such markets with sufficient frequency and volume to provide reliable pricing information. If the Company concludes that there has been a significant decrease in the volume and level of activity for an investment in relation to normal market activity for such investment, adjustments to transactions and quoted prices are made to estimate fair value.

The inputs used in the valuation techniques employed by the Company are provided by nationally recognized pricing services, external investment managers and internal resources. To assess these inputs, the Company's review process includes, but is not limited to, quantitative analysis including benchmarking, initial and ongoing evaluations of methodologies used by external parties to calculate fair value, and ongoing evaluations of fair value estimates based on the Company's knowledge and monitoring of market conditions.

The Company periodically reviews the pricing service provider's policies and procedures for valuing securities. The assumptions underlying the valuations from external service providers, including unobservable inputs, are generally not readily available as this information is often deemed proprietary. Accordingly, the Company is unable to obtain comprehensive information regarding these assumptions and methodologies.

The Company's investments in fixed maturity securities available for sale, equity securities available for sale and trading securities assets and liabilities are carried at fair value. The following are the Company's methodologies and valuation techniques for assets and liabilities measured at fair value.

Fixed maturities available for sale mainly consist of U.S. treasury securities and corporate debt securities. The Company employs a market approach to the valuation of securities where there are sufficient market transactions involving identical or comparable assets. If sufficient market data is not available for identical or comparable assets, the Company uses an income approach to valuation. The majority of the financial instruments included in fixed maturity securities available for sale are evaluated utilizing observable inputs; accordingly, they are categorized in either Level 1 or Level 2 of the fair value hierarchy. However, in instances where significant inputs utilized in valuation of the securities are unobservable, the securities are categorized in Level 3 of the fair value hierarchy.

Corporate securities primarily include fixed rate corporate bonds. Inputs utilized in connection with the Company's valuation techniques relating to this class of securities include recently executed transactions, market price quotations, benchmark yields and issuer spreads. Corporate securities are categorized in Level 2 of the fair value hierarchy.

U.S. treasury securities are based on quoted prices in active markets and are generally categorized in Level 1 of the fair value hierarchy.

Equity securities available for sale consist of common and preferred stocks mainly in private equity investments, financial institutions and insurance companies. Equity securities for which there is sufficient market data are categorized as Level 2 in the fair value hierarchy. For the equity securities in which quoted market prices are not available, the transaction price is used as the best estimate of fair value at inception. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected exit values. The Company performs ongoing reviews of the underlying investments. The reviews consist of the evaluations of expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Securities designated as trading securities consist of bonds, exchange traded equities, exchange traded options and exchange traded futures. These securities are primarily valued at quoted active market prices, and are therefore categorized as Level 1 in the fair value hierarchy. The exchange-traded bonds consist of corporate bonds and are classified as Level 2, consistent with the classification of the fixed maturity corporate bonds.

The following table presents the Company's assets and liabilities measured at fair value in the consolidated balance sheet on a recurring basis as of December 31, 2012.

		Level 1		Level 2		Level 3		Total

Assets
Fixed Maturities, available for sale	$	20,993,398	$	166,060,160	$	273,727	$	187,327,285
Equity Securities, available for sale		1,448,585		6,092,614		22,963,715		30,504,914
Trading Securities		13,903,148		115,312		0		14,018,460
Total	$	36,345,131	$	172,268,086	$	23,237,442	$	231,850,659

Liabilities
Trading Securities	$	7,552,704	$	0	$	0	$	7,552,704

The following table presents the Company's assets and liabilities measured at fair value in the consolidated balance sheet on a recurring basis as of December 31, 2011.

		Level 1		Level 2		Level 3		Total

Assets
Fixed Maturities, available for sale	$	59,735,100	$	64,632,760	$	215,317	$	124,583,177
Equity Securities, available for sale		0		7,344,260		9,955,368		17,299,628
Trading Securities		8,519,064		0		0		8,519,064
Total	$	68,254,164	$	71,977,020	$	10,170,685	$	150,401,869

Liabilities
Trading Securities	$	5,471,475	$	0	$	0	$	5,471,475

The following table provides reconciliations for Level 3 assets measured at fair value on a recurring basis. Transfers into and out of Level 3 are recognized as of the end of the quarter in which they occur.

		Fixed Maturities, Available for Sale		Equity Securities, Available for Sale		Total
Balance at December 31, 2011	$	215,317	$	9,955,368	$	10,170,685
Transfers in to Level 3		0		1,424,117		1,424,117
Total unrealized gain or losses:
Included in other comprehensive income		58,410		61,945		120,355
Purchases		0		11,522,285		11,522,285
Balance at December 31, 2012	$	273,727	$	22,963,715	$	23,237,442

The Level 3 securities include collateralized debt obligations of trust preferred securities issued by banks and insurance companies and certain equity securities with unobservable inputs. None of the collateral is subprime or Alt-A mortgages (loans for which the typical documentation was not provided by the borrower).

The following table presents transfers in and out of each of the valuation levels of fair value.

		2012
		In		Out		Net
Level 1	$	0	$	0	$	0
Level 2		0		(1,424,117)		(1,424,117)
Level 3		1,424,117		0		1,424,117

Transfers into Level 3 occur when there is a lack of observable market information. The transfers occurred at December 31, 2012.

Certain assets are not carried at fair value on a recurring basis, including investments such as mortgage loans and policy loans. Accordingly such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the consolidated financial statements.

The carrying values and estimated fair values of certain of the Company's financial instruments not recorded at fair value in the Consolidated Balance Sheets are shown below. Because the fair value for all consolidated balance sheet items are not required to be disclosed, the aggregate fair value amounts presented below are not reflective of the underlying value of the Company.

		December 31, 2012				December 31, 2011
Assets		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Mortgage loans on real estate	$	17,671,554	$	17,803,159	$	9,272,919	$	9,116,148
Discounted mortgage loans		26,336,953		26,336,953		27,467,920		27,467,920
Investment real estate		68,165,013		68,165,013		62,701,375		62,701,375
Policy loans		12,591,572		12,591,572		13,312,229		13,312,229
Cash and cash equivalents		23,321,246		23,321,246		82,925,675		82,925,675
Short term investments		6,268,320		6,268,320		0		0
Liabilities
Notes payable		18,857,954		18,857,954		9,531,645		9,519,300

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange. The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.

The Company has been purchasing non-performing discounted mortgage loans at a deep discount through an auction process led by the Federal Government. In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company. Accordingly, the Company records its investment in the discounted loans at its original purchase price, which Management believes approximates fair value.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell. The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management.

Policy loans are carried at the aggregate unpaid principal balances in the consolidated balance sheets which approximates fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.

The carrying amount of short term investments in the financial statements approximates fair value.

The carrying amount of cash and cash equivalents in the financial statements approximates fair value given the highly liquid nature of the instruments.

The carrying value is a reasonable estimate of fair value for notes payable subject to floating rates of interest. The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities.

Note 4 - Reinsurance

Most recently, UG utilized reinsurance agreements with Optimum Re Insurance Company ("Optimum"), and Swiss Re Life and Health America Incorporated ("SWISS RE"). Optimum and SWISS RE currently hold an "A-" (Excellent) and "A+" (Superior) rating, respectively, from A.M. Best, an industry rating company. The reinsurance agreements were effective December 1, 1993, and covered most new business of UG. Under the terms of the agreements, UG cedes risk amounts above its retention limit of $100,000 with a minimum cession of $25,000. Ceded amounts are shared equally between the two reinsurers on a yearly renewable term ("YRT") basis, a common industry method. The treaty is self-administered; meaning the Company records the reinsurance results and reports them to the reinsurers.

Also, Optimum is the reinsurer of 100% of the accidental death benefits ("ADB") in force of UG. This coverage is renewable annually at the Company's option. Optimum specializes in reinsurance agreements with small to mid-size carriers such as UG.

UG entered into a coinsurance agreement with Park Avenue Life Insurance Company ("PALIC") effective September 30, 1996. Under the terms of the agreement, UG ceded to PALIC substantially all of its then in-force paid-up life insurance policies. Paid-up life insurance generally refers to non-premium paying life insurance policies. Under the terms of the agreement, UG sold 100% of the future results of this block of business to PALIC through a coinsurance agreement. UG continues to administer the business for PALIC and receives a servicing fee through a commission allowance based on the remaining in-force policies each month. PALIC has the right to assumption reinsure the business, at its option, and transfer the administration. The Company is not aware of any such plans. PALIC and its ultimate parent, The Guardian Life Insurance Company of America ("Guardian"), currently hold an "A" (Excellent) and "A++" (Superior) rating, respectively, from A.M. Best. The PALIC agreement accounts for approximately 63% and 64% of UG's reinsurance reserve credit, as of December 31, 2012 and 2011, respectively.

At December 31, 1992, UG (formerly American Capitol) entered into a reinsurance agreement with Canada Life Assurance Company ("the Canada Life agreement") that fully reinsured virtually all of its traditional life insurance policies. The reinsurer's obligations under the Canada Life agreement were secured by assets withheld by UG representing policy loans and deferred and uncollected premiums related to the reinsured policies. UG continues to administer the reinsured policies. At December 31, 2012, the Canada Life agreement has insurance in-force of approximately $7,433,000, with no reserves being held on that amount. At December 31, 2011, the Canada Life agreement has insurance in-force of approximately $52,560,000, with reserves being held on that amount of approximately $34,193,000.

On September 30, 1998, UG entered into a coinsurance agreement with The Independent Order of Vikings, (IOV) an Illinois fraternal benefit society. Under the terms of the agreement, UG agreed to assume, on a coinsurance basis, 25% of the reserves and liabilities arising from all in-force insurance contracts issued by the IOV to its members. At December 31, 2012, the IOV insurance in-force assumed by UG was approximately $1,579,000, with reserves being held on that amount of approximately $358,000. At December 31, 2011, the IOV insurance in-force assumed by UG was approximately $1,582,000, with reserves being held on that amount of approximately $365,000.

The Canada Life agreement was fully repaid in August 2012. With the reinsurance recaptured by the Company, a 15% profit share will continue to be paid to the reinsurer going forward relative to the block of business. As a result of the reinsurance being repaid, the Company recognized assets in exchange for reducing its reinsurance recoverable. See Note 12 – Other Cash Flow Disclosures for additional information regarding the reinsurance recapture.

The Company does not have any short-duration reinsurance contracts. The effect of the Company's long-duration reinsurance contracts on premiums earned in 2012 and 2011 were as follows:

		2012 Premiums Earned		2011 Premiums Earned

Direct	$	13,242,000	$	14,049,000
Assumed		35,000		33,000
Ceded		(3,366,000)		(3,935,000)
Net Premiums	$	9,911,000	$	10,147,000

Note 5 – Cost of Insurance Acquired

When an insurance company is acquired, the Company assigns a portion of its cost to the right to receive future cash flows from insurance contracts existing at the date of the acquisition. The cost of policies purchased represents the actuarially determined present value of the projected future profits from the acquired policies. Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates utilized may vary due to differences in the blocks of business. The interest rate utilized in the amortization calculation of the remaining cost of insurance acquired is 12%. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.

		2012		2011

Cost of insurance acquired, beginning of year	$	12,846,266	$	14,077,281

Interest accretion		1,564,162		1,711,885
Amortization		(2,709,663)		(2,942,900)
Net amortization		(1,145,501)		(1,231,015)
Cost of insurance acquired, end of year	$	11,700,765	$	12,846,266

Estimated net amortization expense of cost of insurance acquired for the next five years is as follows:

	Interest Accretion	Amortization	Net Amortization
2013	1,427,000	2,491,000	1,064,000
2014	1,299,000	2,285,000	986,000
2015	1,181,000	2,088,000	907,000
2016	1,072,000	1,945,000	873,000
2017	967,000	1,806,000	839,000

		2012		2011

Tax computed at statutory rate	$	5,404,636	$	2,719,131
Changes in taxes due to:
Non-controlling interest		(238,632)		(65,334)
Small company deduction		0		(623,767)
Other		328,378		(764,368)
Income tax expense (benefit)	$	5,494,382	$	1,265,662

		2012		2011

Investments	$	4,644,740	$	5,519,570
Cost of insurance acquired		4,095,268		4,496,193
Deferred policy acquisition costs		149,176		170,893
Management/consulting fees		(66,344)		(70,554)
Future policy benefits		2,137,835		2,447,327
Deferred gain on sale of subsidiary		2,312,483		2,312,483
Other liabilities		(63,967)		(120,039)
Federal tax DAC		(907,614)		(1,010,122)
Deferred tax liability	$	12,301,577	$	13,745,751

				Outstanding Principal Balance
Instrument	Issue Date	Maturity Date		December 31, 2012		December 31, 2011
Promissory Note:
UTG	2006-12-08	2012-12-07	$	0	$	3,291,411
HPG Acquisitions	2007-02-07	2017-11-07		202,919		240,234
HPG Acquisitions	2012-12-27	2018-03-04		12,000,000		0

Instrument	Issue Date	Maturity Date		Revolving Credit Limit		December 31, 2011	Borrowings	Repayments		December 31, 2012
Lines of Credit:
UTG	2011-07-14	2012-12-07	$	5,000,000	$	1,000,000	1,411,000	2,411,000	$	0
UTG	2012-11-20	2013-11-20		8,000,000		0	2,910,035	1,255,000		1,655,035
UTG Avalon	2011-12-28	2013-01-03		5,000,000		5,000,000	0	0		5,000,000
UG	2010-12-28	2013-12-06		15,000,000		0	0	0		0

		2012		2011

Current tax	$	5,716,480	$	5,296,407
Deferred tax		(222,098)		(4,030,745)
	$	5,494,382	$	1,265,662

Year		Amount

2013	$	1,686,621
2014		5,034,154
2015		382,395
2016		518,134
2017		542,470

		Total Funding		Unfunded
		Commitment		Commitment
RLF III, LLC	$	4,000,000	$	398,120
Llano Music, LLC		2,000,000		571,000
MM-Marcellus III, LP		1,250,000		393,750
Dew Learning, LLC		1,000,000		725,445
MM-Marcellus HBPI, LP		1,800,000		1,113,300
PBEX, LLC		5,625,000		2,818,750
Sovereign's Capital, LP		500,000		250,000

		2012		2011
Net income (loss)	$	6,868,111	$	(184,213)
Capital and surplus		32,243,089		33,167,222

		Assets Received

Bonds	$	27,651,746
Common Stock		1,023,394
Cash		2,480,706
Total	$	31,155,846

William W. Perry -	Committee Chairman
John S. Albin
Joseph A. Brinck, II

Name, Age	Position with the Company, Business Experience and Other Directorships
John S. Albin, 84	Director of UTG since 1984; farmer in Douglas and Edgar counties, Illinois, since 1951; Chairman of the Board of Longview State Bank from 1978 to 2005; President of the Longview Capitol Corporation, a bank holding company, since 1978; Chairman of First National Bank of Ogden, Illinois, from 1987 to 2005; Chairman of the State Bank of Chrisman from 1988 to 2005; Chairman of First National Bank in Georgetown from 1994 to 2005; Director of Illini Community Development Corporation since 1990; Commissioner of Illinois Student Assistance Commission from 1996 to 2002.
Randall L. Attkisson, 65	Director of UTG since 1999; Director of First Southern Bancorp, Inc., a bank holding company, since 1986; Board Chairman of Young Life Raceway Region (Kentucky/Indiana) from 2008 to 2011; Partner of Bluegrass Financial Holdings Subs/Affiliates since 2008; Advisory Director of Kentucky Christian Foundation since 2002; Board Chairman of Isaiah House from 2012 to present; Director of The River Foundation, Inc. from 1990 to 2011; President of Randall L. Attkisson & Associates from 1982 to 1986; Commissioner of Kentucky Department of Banking & Securities from 1980 to 1982; Self-employed Banking Consultant in Miami, FL from 1978 to 1980.
Joseph A. Brinck, II, 57	Director of UTG since 2003; CEO of Stelter & Brinck, LTD, a full service combustion engineering and manufacturing company from 1983 to present; Salesman at Stelter & Brinck, LTD from 1979 to 1983; President of Superior Thermal, LTD from 1990 to present; President of Sanctity of Life Foundation since 2001 and Vice President Woods of Ruah Ministry since 2011. Currently holds Professional Engineering Licenses in Kentucky.
Jesse T. Correll, 56	Chairman and CEO of UTG and Universal Guaranty Life Insurance Company since 2000; Director of UTG since 1999; Chairman, President, Director of First Southern Bancorp, Inc. since 1983; Manager of First Southern Funding, LLC since 1992; President, Director of The River Foundation since 1990; Director of Dew Learning since 2012; Board member of Crown Financial Ministries from 2004 to 2009; Friends of the Good Samaritans since 2005; Generous Giving from 2006 to 2009 and the National Christian Foundation since 2006. Mr. Correll and his wife Angela have 3 children and 4 grandchildren. Jesse Correll is the son of Ward and Regina Correll.
Ward F. Correll, 84	Director of UTG since 2000; President, Director of Tradeway, Inc. of Somerset, KY since 1973; President, Director of Cumberland Lake Shell, Inc. of Somerset, KY since 1971; President, Director of Tradewind Shopping Center, Inc. of Somerset, KY since 1966; Director of First Southern Bancorp since 1987; Director of First Southern Funding, LLC since 1991; Director of The River Foundation since 1990; and Director of First Southern Insurance Agency since 1987. Ward Correll is the father of Jesse Correll.
Thomas F. Darden,II, 58	Mr. Darden is the Chief Executive Officer of Cherokee Investment Partners, a private equity fund that invests in brownfields and environmental technologies. Cherokee made its first brownfield investment in 1990 and has since raised five funds with aggregate initial commitments of $2.2 billion. Beginning in 1984, Mr. Darden served for 16 years as the Chairman of Cherokee Sanford Group, a brick manufacturing and soil remediation company. From 1981 to 1983, he was a consultant with Bain & Company in Boston. From 1977 to 1978, he worked as an environmental planner for the Korea Institute of Science and Technology in Seoul, where he was a Henry Luce Foundation Scholar. Mr. Darden is on the Boards of Shaw University, the Institute for the Environment at the University of North Carolina and the Research Triangle Institute. Mr. Darden earned a Masters in Regional Planning from the University of North Carolina, a Juris Doctor from Yale Law School and a Bachelor of Arts from the University of North Carolina, where he was a Morehead Scholar. He and his wife, Jody, have three children.
Howard L. Dayton, Jr., 69	In 1985, Mr. Dayton founded Crown Ministries in Longwood, Florida. Crown Ministries merged with Christian Financial Concepts in September 2000 to form Crown Financial Ministries, the world's largest financial ministry. He served as Chief Executive Officer from 1985 to 2007 and in 2009 founded Compass - Finances God's Way. Mr. Dayton is a graduate of Cornell University. He developed The Caboose, a successful railroad-themed restaurant in Orlando, FL in 1969. In 1972 he began his commercial real estate development career, specializing in office development in the Central Florida area. He also is the author of five books, Your Money: Frustration or Freedom, Your Money Counts, Free and Clear, Your Money Map, Money and Marriage God's Way. He also has authored five popular small group studies including Crown's Small Group Studies and produced several video series. Mr. Dayton became a director of UTG, Inc. in December 2005.
Daryl J. Heald, 48	Mr. Heald started in commercial real estate with the Allen Morris Company and then spent four years at Triaxia Partners Consulting Firm, both in Atlanta, Georgia. He later began serving as an associate trustee and executive committee member of the Maclellan Foundation and Senior Vice President from 2008 to 2010. In 2000, Daryl helped launch Generous Giving, Inc. and served as its President until January 2008. Mr. Heald founded Giving Wisely in 2008. Giving Wisely seeks to serve families on their journey of generosity by helping to connect their needs and passions with knowledge, experiences, opportunities, and relationships. Daryl also serves on the boards of Crown Financial Ministries, ProVision Foundation, the Haggai Institute, Chattanooga Football Club, Dew Learning and is an elder at Lookout Mountain Presbyterian Church. Mr. Heald became a director of UTG, Inc. in September 2008. He holds a B.S. degree in economics from Westmont College. Daryl and his wife, Cathy, live in Lookout Mountain, Georgia with their six children.
Peter L. Ochs, 61	Mr. Ochs is founder of Capital III, a private equity investment firm located in Wichita, Kansas. Capital III provides impact investment capital and management with investments in manufacturing, real estate, energy, and education with a geographical focus on the US and Latin America. Prior to founding Capital III, Mr. Ochs spent 8 years in the commercial banking industry. Mr. Ochs graduated from the University of Kansas with a degree in business and finance. He currently serves on the boards of UTG, Inc., the American Independence Funds, and Trinity Academy. Mr. Ochs is married to Deborah and they have 2 children and 5 grandchildren.
William W. Perry, 56	W. Wesley Perry is the owner of S.E.S. Investments, Ltd., an oil & gas investments company and President of S.E.S. Energy, LLC. He has a BS degree in Engineering from University of Oklahoma and graduated in 1978. He and his wife, Roni, reside in Midland, Texas and have 3 children and 5 grandchildren. He is in his second term as the mayor of Midland elected in November 2007 after having served on the city council since 2002. He is a board member of the Abel-Hangar Foundation and President of the Milagros Foundation. He is also CEO of EGL Resources, Inc., an oil and gas company and a Director of Genie Energy (GNE on the NYSE). He has been a Director of UTG since 2001.
James P. Rousey, 54	President since September 2006, Director of UTG and Universal Guaranty Life Insurance Company since September 2001; Regional CEO and Director of First Southern National Bank from 1988 to 2001. Board Member with the Illinois Fellowship of Christian Athletes from 2001-2005; Board Member with Contact Ministries from 2007-2011; Board Member with Amigos En Cristo, Inc. from 2007-2009.

Jesse T. Correll	Chairman of the Board and Chief Executive Officer
James P. Rousey	President

Name, Age	Position with UTG and Business Experience
Theodore C. Miller, 50	Corporate Secretary since December 2000, Senior Vice President and Chief Financial Officer since July 1997; Vice President since October 1992 and Treasurer from October 1992 to December 2003; Vice President and Controller of certain affiliated companies from 1984 to 1992. Vice President and Treasurer of certain affiliated companies from 1992 to 1997; Senior Vice President and Chief Financial Officer of subsidiary companies since 1997; Corporate Secretary of subsidiary companies since 2000.
Douglas P. Ditto, 57	Vice President since June 2009; Chief Investment Officer from 2009 to 2012; Assistant Vice President from June 2003 to June 2009; Chief Executive Officer, and Executive Vice President of First Southern Bancorp since March 1985.

Name and Principal position	Year	Salary	Bonus	Stock Awards (7)	All Other Comp (1)		Total
Jesse T. Correll Chief Executive Officer	2012	161,752	75,000	74,995	6,740	(1)	318,487
	2011	150,000	50,000	0	6,000	(1)	206,000
James P. Rousey President	2012	155,000	50,000	49,992	9,585	(2)	264,577
	2011	145,000	35,000	0	7,615	(2)	187,615
Theodore C. Miller Secretary/Senior Vice President	2012	117,500	30,000	29,998	1,658	(3)	179,156
	2011	110,000	25,000	0	720	(3)	135,720
Douglas P. Ditto Vice President	2012	109,466	60,000	59,996	4,379	(6)	233,841
	2011	100,050	50,000	0	3,951	(6)	154,001
Douglas A. Dockter (5) Vice President	2012	100,000	12,000	0	2,820	(4)	114,820
	2011	100,000	6,500	0	2,820	(4)	109,320

(1)	All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan.
(2)	All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan of $1,890 and $1,269, group life insurance premiums of $720 and $720, and country club membership fees of $6,975 and $5,626 during 2012 and 2011, respectively.
(3)	All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan of $938 and $0, group life insurance premiums of $720 and $720 during 2012 and 2011, respectively.
(4)	All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan of $2,100 and $2,100 and group life insurance premiums of $720 and $720 during 2012 and 2011, respectively.
(5)	Mr. Douglas A. Dockter is not considered an executive officer of UTG, but is included in this table pursuant to compensation disclosure requirements.
(6)	All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan during 2012 and 2011, respectively.
(7)	Stock Awards were issued on December 27, 2012 at a price per share of $13.25, the current market value reported. The awards were issued based on 2012 results.

Name	Fees Earned or Paid in Cash	All Other Compensation	Total
Jesse Thomas Correll Chief Executive Officer	0		0
Randall Lanier Attkisson Director	3,300		3,300
James Patrick Rousey President	0		0
John Sanford Albin Director	2,700		2,700
Joseph Anthony Brinck, II Director	3,300		3,300
Ward Forrest Correll Director	2,700		2,700
William Wesley Perry Director (1)	3,600		3,600
Thomas Francis Darden, II Director (1)	3,600		3,600
Peter Loyd Ochs Director	3,600		3,600
Howard Lape Dayton Director	3,600	(2) 5,000	8,600
Daryl Jack Heald Director	3,000		3,000

Title		Amount	Percent
of	Name and Address	and Nature of	Of
Class	of Beneficial Owner (2)	Beneficial Ownership	Class (1)

Common	Jesse T. Correll	107,773	(3)	2.8%
Stock, no	First Southern Bancorp, Inc.	1,406,785	(3)(4)	37.0%
par value	First Southern Funding, LLC	341,997	(3)(4)	9.0%
	First Southern Holdings, LLC	1,201,876	(3)(4)	31.7%
	Ward F. Correll	268,906	(5)	7.1%
	WCorrell, Limited Partnership	72,750	(3)	1.9%
	Bluegrass Farms & Woodlands, LLC	11,055	(3)	0.3%
	Cumberland Lake Shell, Inc.	257,501	(5)	6.8%
	Eric L. Oliver	300,000	(7)	7.9%
	Total (6)	2,425,461		63%

(1)	The percentage of outstanding shares is based on 3,797,391 shares of common stock outstanding as of February 1, 2013.
(2)	The address for each of Jesse Correll, First Southern Bancorp, Inc. ("FSBI"), First Southern Funding, LLC ("FSF"), First Southern Holdings, LLC ("FSH"), Bluegrass Farms & Woodlands, LLC ("BGFW") and WCorrell, Limited Partnership ("WCorrell LP"), is P.O. Box 328, 99 Lancaster Street, Stanford, Kentucky 40484. The address for each of Ward Correll and Cumberland Lake Shell, Inc. ("CLS") is P.O. Box 430, 150 Railroad Drive, Somerset, Kentucky 42502.
(3)	The share ownership of Jesse Correll listed includes 23,968 shares of common stock owned by him individually. The share ownership of Mr. Correll also includes 72,750 shares of Common Stock held by WCorrell, Limited Partnership, a limited partnership in which Jesse Correll serves as managing general partner and 11,055 shares of common stock held by Bluegrass Farms & Woodlands, LLC, a limited liability company in which Jesse Correll serves as managing member and as such, has sole voting and dispositive power over the shares held by both entities.
	In addition, by virtue of his ownership of voting securities of FSF and FSBI, and in turn, their ownership of 100% of the outstanding membership interests of FSH, Jesse Correll may be deemed to beneficially own the total number of shares of common stock owned by FSH (as well as the shares owned by FSBI directly), and may be deemed to share with FSH (as well as FSBI) the right to vote and to dispose of such shares. Mr. Correll owns approximately 76.52% of the outstanding membership interests of FSF; he owns directly approximately 48.4%, companies he controls own approximately 13.0%, and he has the power to vote but does not own an additional 3% of the outstanding voting stock of FSBI. FSBI and FSF in turn own 99% and 1%, respectively, of the outstanding membership interests of FSH.
(4)	The share ownership of FSBI consists of 204,909 shares of common stock held by FSBI directly and 1,201,876 shares of common stock held by FSH of which FSBI is a 99% member and FSF is a 1% member, as further described below. As a result, FSBI may be deemed to share the voting and dispositive power over the shares held by FSH.
(5)	Includes 257,501 shares of common stock held by CLS, all of the outstanding voting shares of which are owned by Ward F. Correll.
(6)	According to the most recent Schedule 13D, as amended, filed jointly by each of the entities and persons listed above, Jesse Correll, FSBI, FSF and FSH, have agreed in principle to act together for the purpose of acquiring or holding equity securities of UTG. In addition, the Schedule 13D indicates that because of their relationships with Jesse Correll and these other entities, Ward Correll, CLS, Bluegrass Farms & Woodlands, LLC and WCorrell, Limited Partnership may also be deemed to be members of this group. Because the Schedule 13D indicates that for its purposes, each of these entities and persons may be deemed to have acquired beneficial ownership of the equity securities of UTG beneficially owned by the other entities and persons, each has been identified and listed in the above tabulation.
(7)	Shares held in entities controlled by Eric Oliver.

Title	Directors, Named Executive	Amount	Percent
of	Officers, & All Directors &	and Nature of	Of
Class	Executive Officers as a Group	Ownership	Class (1)

UTG's	John S. Albin	10,503	(4)	*
Common	Randall L. Attkisson	0	(2)	*
Stock, no	Joseph A. Brinck, II	12,225		*
par value	Jesse T. Correll	1,856,555	(3)	49.0%
	Ward F. Correll	268,906	(5)	7.1%
	Thomas F. Darden, II	60,465		1.6%
	Howard L. Dayton, Jr.	4,548		*
	Douglas P. Ditto	4,528		*
	Daryl J. Heald	21,739	(6)	*
	Theodore C. Miller	10,821		*
	Peter L. Ochs	2,000	(6)	*
	William W. Perry	120,000		3.2%
	James P. Rousey	3,773		*
	All directors and executive officers as a group (thirteen in number)	2,376,063		62.6%

(1)	The percentage of outstanding shares for UTG is based on 3,797,391 shares of common stock outstanding as of February 1, 2013.
(2)	Randall L. Attkisson holds minority ownership positions in certain of the companies listed as owning UTG common stock including First Southern Bancorp, Inc. Ownership of these shares is reflected in the ownership of Jesse T. Correll.
(3)	The share ownership of Mr. Jesse Correll includes 23,968 shares of UTG, Inc. common stock owned by him individually, 204,909 shares of UTG, Inc. common stock held by First Southern Bancorp, Inc. and 341,997 shares of UTG, Inc. common stock owned by First Southern Funding, LLC. The share ownership of Mr. Correll also includes 72,750 shares of UTG, Inc common stock held by WCorrell, Limited Partnership, a limited partnership in which Mr. Correll serves as managing general partner and 11,055 shares of UTG, Inc. common stock held by Bluegrass Farms & Woodlands, LLC in which Mr. Correll serves as managing member. Mr. Correll has sole voting and dispositive power over the shares held by both entities. In addition, by virtue of his ownership of voting securities of First Southern Funding, LLC and First Southern Bancorp, Inc., and in turn, their ownership of 100% of the outstanding membership interests of First Southern Holdings, LLC (the holder of 1,201,876 shares of UTG, Inc. common stock), Mr. Correll may be deemed to beneficially own the total number of shares of UTG, Inc common stock owned by First Southern Holdings, and may be deemed to share with First Southern Holdings the right to vote and to dispose of such shares. Mr. Correll owns approximately 76.52% of the outstanding membership interests of First Southern Funding; he owns directly approximately 48.4%, companies he controls own approximately 13.0%, and he has the power to vote but does not own an additional 3% of the outstanding voting stock of First Southern Bancorp. First Southern Bancorp and First Southern Funding in turn own 99% and 1%, respectively, of the outstanding membership interests of First Southern Holdings.
(4)	Includes 392 shares owned directly by Mr. Albin's spouse.
(5)	The share ownership of Mr. Ward Correll includes 11,405 shares of UTG, Inc. common stock owned by him individually. Cumberland Lake Shell, Inc. owns 257,501 shares of UTG Common Stock, all of the outstanding voting shares of which are owned by Ward F. Correll. Ward F. Correll is the father of Jesse T. Correll. There are 72,750 shares of UTG Common Stock owned by WCorrell Limited Partnership in which Jesse T. Correll serves as managing general partner and, as such, has sole voting and dispositive power over the shares of Common Stock held by it. The aforementioned 72,750 shares are deemed to be beneficially owned by and listed under Jesse T. Correll in this section.
(6)	Shares held in a trust for benefit of named individual

(1)	Financial Statements:
	See Item 8, Index to Financial Statements
(2)	Financial Statement Schedules
	NOTE: The financial statement schedules have been omitted as they are deemed inapplicable or not required by Regulation S-X.

Exhibit Number	Description
2.1	Agreement and Plan of Merger of United Trust Group, Inc., An Illinois Corporation with and into UTG, Inc., A Delaware Corporation dated as of July 1, 2005, including exhibits thereto. [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005.]
2.2	Stock Purchase Agreement, dated August 7, 2006, between UTG, Inc. and William F. Guest and John D. Cornett [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
2.3	Amendment No. 1, dated September 6, 2006, to the Stock Purchase Agreement, dated August 7, 2007, between UTG, Inc. and William F. Guest and John D. Cornett [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
2.4	Amendment No. 2, dated November 22, 2006, to the Stock Purchase Agreement, dated August 7, 2006, as amended, between UTG, Inc. and William F. Guest and John D. Cornett [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
3.1	Certificate of Incorporation of the Registrant and all amendments thereto [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005].
3.2	By-Laws for the Registrant and all amendments thereto [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005].
4.1	UTG's Agreement pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K with respect to long-term debt instruments [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.1	Promissory note dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
10.2	Revolving credit note dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
10.3	Change in Terms Agreement dated May 11, 2010 to the revolving credit note dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.4	Change in Terms Agreement dated July 14, 2011 to the revolving credit note dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2011].
10.5	Loan Agreement dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
10.6	Commercial pledge agreement dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
10.7	Negative pledge agreement dated December 8, 2006, between UTG, Inc. and First Tennessee Bank National Association [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
10.8	Line of Credit dated December 28, 2011, between UTG Avalon, LLC and First National Bank of Tennessee [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2011].
10.9	Administrative Services and Cost Sharing Agreement dated as of January 1, 2007 between UTG, Inc. and American Capitol Insurance Company [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2006].
10.10	Administrative Services and Cost Sharing Agreement dated as of January 1, 2007 between UTG, Inc. and Universal Guaranty Life Insurance Company [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2007].
10.11	Amendment to Reinsurance Agreement between Universal Guaranty Life Insurance Company and Optimum Re Insurance Company originally with Business Men's Assurance Company of America [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.12	Reinsurance Agreement between Universal Guaranty Life Insurance Company and Swiss RE originally with Life Reassurance Corporation of America [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.13	Assumption Reinsurance Agreement between Universal Guaranty Life Insurance Company and Park Avenue Life Insurance Company formerly known as First International Life Insurance Company [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.14	Aircraft Lease Agreement [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.15	Aircraft Joint Ownership Agreement [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2011].
10.16	General Agreement regarding Mortgage Loans by and between First Southern National Bank and Universal Guaranty Life Insurance Company [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.17	Loan Participation Agreement [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2010].
10.18	StoneRiver Master Agreement [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2011].
*10.19	Promissory Note dated November 20, 2012, between UTG, Inc. and Illinois National Bank.
*10.20	Commercial pledge agreement dated November 20, 2012, between UTG, Inc. and Illinois National Bank.
*10.21	Promissory Note dated March 4, 2013, between HPG Acquisitions, LLC and First National Bank of Tennessee
14.1	Code of Ethics and Business Conduct. [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005.]
14.2	Code of Ethical Conduct for Senior Financial Officers. [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005.]
*21.1	List of Subsidiaries of the Registrant.
*31.1	Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes Oxley Act of 2002
*32.2	Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes Oxley Act of 2002
99.1	Audit Committee Charter. [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005.]
99.2	Whistleblower Policy. [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2005.]
99.3	Compensation Committee Charter [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2011].
99.4	Investment Committee Charter [Incorporated by reference to the Registrant's Form 10-K, for the year ended December 31, 2011].
101	Interactive Data File

	UTG, Inc.


By:	/s/ Jesse T. Correll
	Jesse T. Correll
	Chairman and Chief Executive Officer and Director


By:	/s/ Theodore C. Miller
	Theodore C. Miller
	Senior Vice President, Chief Financial Officer and Secretary
	(principal financial and accounting officer)

By: /s/ John. S. Albin		By: /s/ Daryl J. Heald
John S. Albin Director		Daryl J. Heald Director

By: /s/ Randall L. Attkisson		By: /s/ Howard L. Dayton
Randall L. Attkisson Director		Howard L. Dayton Director

By: /s/ Joseph A. Brinck		By: /s/ Peter L. Ochs
Joseph A. Brinck Director		Peter L. Ochs Director

By: /s/ Jesse T. Correll		By: /s/ William W. Perry
Jesse T. Correll Chairman of the Board, Chief Executive Officer and Director		William W. Perry Director

By:		By: /s/ James P. Rousey
Ward F. Correll Director		James P. Rousey President and Director

By: /s/ Thomas F. Darden		By: /s/ Theodore C. Miller
Thomas F. Darden Director		Theodore C. Miller Corporate Secretary and Chief Financial Officer