Note 5 – Credit Arrangements

At June 30, 2015 and December 31, 2014, the Company had the following outstanding debt:

			Outstanding Principal Balance
Instrument	Issue Date	Maturity Date		June 30, 2015	December 31, 2014
Promissory Note:
UTG Avalon	12/29/2014	4/1/2018		2,400,000	4,400,000

Instrument	Issue Date	Maturity Date		Revolving Credit Limit		December 31, 2014	Borrowings	Repayments		June 30, 2015
Lines of Credit:
UTG	2013-11-20	2015-11-20	$	8,000,000	$	0	0	0	$	0
UG	2015-06-02	2016-05-19		10,000,000		0	0	0		0

The UTG Avalon promissory note issued on December 29, 2014 carries interest at a rate of 3.5 % with interest payable quarterly beginning in July of 2015. The interest is a variable rate that is equal to the lowest of the U.S. Prime Rates as published in the money section of the Wall Street Journal. The interest rate is subject to change monthly and any change in interest rate is effective the first day of the month following the rate change. Principal is due upon maturity of the note. During the second and third quarters of 2015, UTG Avalon repaid $2,000,000 and $1,500,000, respectively, of the outstanding principal balance on the promissory note. The principal payments were paid by UTG and as a result of the payment, intercompany promissory notes receivable/payable were established.

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"). .

During June of 2015, the Federal Home Loan Bank approved UG's Cash Management Advance Application ("CMA"). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity.

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

Year		Amount

2015	$	0
2016		0
2017		0
2018		2,400,000
2019		0