Note 5 – Credit Arrangements

At March 31, 2014 and December 31, 2013, the Company had the following outstanding debt:

Outstanding Principal Balance

Instrument

Issue Date

Maturity Date

March 31, 2014

December 31, 2013

Promissory Note:

HPG Acquisitions

2012-12-27

2018-03-04

12,000,000

Instrument	Issue Date		Maturity Date		Revolving Credit Limit		December 31, 2013		Borrowings		Repayments		March 31, 2014
Lines of Credit:
UTG		2013-11-20		2014-11-20	$	8,000,000	$	2,097,534		0		1,655,035	$	2,097,534
UTG Avalon		2013-03-28		2015-03-28		5,000,000		5,000,000		0		0		5,000,000
UG		2010-12-28		2014-12-05		15,000,000		0		0		0		0

The HPG Acquisitions promissory note issued on December 27, 2012 is secured by real estate owned by HPG. The promissory note bears interest at a fixed rate of 4%. Interest is payable monthly. Principal is payable monthly beginning in the third year of the note.

The UTG line of credit carries interest at a fixed rate of 3.75% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company ("UG"). .In April 2014, the Company repaid $900,000 in principal on this line of credit.

The UTG Avalon line of credit issued on March 28, 2013 currently carries interest at a rate of 4.0% with monthly interest payments. The interest rate is a variable rate that will be 0.50% above the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal with a floor rate of 4%. The interest rate is subject to change monthly and changes in the interest rate will take effect on the first day of the month following the rate change. This line of credit was renewed on March 28, 2014.

UG is a member of the Federal Home Loan Bank ("FHLB"). This membership allows the Company access to additional credit up to a maximum of 50% of the total assets of UG. To be a member of the FHLB, the Company was required to purchase shares of common stock of FHLB. Borrowing capacity is based on 50 times each dollar of stock acquired in FHLB above the "base membership" amount.

The consolidated scheduled principal reductions on the notes payable for the next five years are as follows:

Year	Amount

2014	$	2,097,534
2015		5,345,459
2016		478,193
2017		499,278
2018		10,677,070