10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

For the quarterly period ended June 30, 2020

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 No. 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.)
	205 NORTH DEPOT STREET
	STANFORD, KY 40484
	(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 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 ⌧  No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ⌧ No □

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

Large accelerated filer □	Accelerated filer □
Non-accelerated filer □	Smaller reporting company ⌧
	Emerging growth company □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes □    No ⌧

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

The number of shares outstanding of the registrant’s common stock as of July 31, 2020 was 3,268,386.

UTG, Inc.

(The “Company”)

TABLE OF CONTENTS

PART I.   Financial Information	3
Item 1.  Financial Statements	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Income (Loss)	5
Condensed Consolidated Statements of Shareholders' Equity	6
Condensed Consolidated Statements of Cash Flows	8
Notes to Condensed Consolidated Financial Statements	9
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 4.  Controls and Procedures	26
PART II.  Other Information	27
Item 1.  Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.  Defaults Upon Senior Securities	27
Item 4.  Mine Safety Disclosures	27
Item 5.  Other Information	27
Item 6.  Exhibits	27
Signatures	28

Part 1.   Financial Information.

Item 1.  Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

	June 30, 2020		December 31, 2019*
ASSETS
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost $157,032,450 and $159,959,855)	$	176,585,699	$	171,629,373
Equity securities, at fair value (cost $31,796,340 and $32,578,862)		66,141,108		78,661,793
Equity securities, at cost		14,417,247		10,919,247
Mortgage loans on real estate at amortized cost		13,097,827		8,223,286
Investment real estate		40,725,963		44,344,236
Notes receivable		19,654,162		19,487,458
Policy loans		8,709,100		8,803,876
Short-term investments		12,435,481		10,442,173
Total investments		351,766,587		352,511,442
Cash and cash equivalents		29,317,455		28,787,629
Accrued investment income		1,528,217		1,679,783
Reinsurance receivables:
Future policy benefits		25,437,203		25,655,161
Policy claims and other benefits		3,713,563		4,142,142
Cost of insurance acquired		4,473,896		4,846,321
Property and equipment, net of accumulated depreciation		387,828		427,736
Other assets		686,497		695,517
Total assets	$	417,311,246	$	418,745,731
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits	$	246,166,152	$	249,264,308
Policy claims and benefits payable		3,438,766		3,631,666
Other policyholder funds		409,612		404,177
Dividend and endowment accumulations		14,705,726		14,626,475
Income taxes payable		785,981		313,662
Deferred income taxes		11,552,261		13,222,604
Other liabilities		6,081,601		5,785,933
Total liabilities		283,140,099		287,248,825
Shareholders' equity:
Common stock - no par value, stated value $0.001 per share.  Authorized 7,000,000 shares - 3,270,515 and 3,277,830 shares outstanding		3,272		3,279
Additional paid-in capital		35,780,640		36,012,401
Retained earnings		82,712,737		85,979,678
Accumulated other comprehensive income		15,085,110		8,977,914
Total UTG shareholders' equity		133,581,759		130,973,272
Noncontrolling interests		589,388		523,634
Total shareholders' equity		134,171,147		131,496,906
Total liabilities and shareholders' equity	$	417,311,246	$	418,745,731

* Balance sheet audited at December 31, 2019.

See accompanying notes.

3

UTG, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2020			2019			2020			2019
Revenue:
Premiums and policy fees	$	2,379,976		$	2,431,489		$	4,735,731		$	4,934,694
Ceded reinsurance premiums and policy fees		(690,036	)		(813,256	)		(1,370,476	)		(1,330,311	)
Net investment income		3,021,654			2,701,709			5,851,840			5,813,733
Other income		93,772			95,919			152,814			159,757
Revenue before net investment gains (losses)		4,805,366			4,415,861			9,369,909			9,577,873
Net investment gains (losses):
Other realized investment gains, net		1,779,333			5,301,778			8,953,840			6,415,476
Change in fair value of equity securities		12,946,281			97,148			(11,738,163	)		14,884,779
Total net investment gains (losses)		14,725,614			5,398,926			(2,784,323	)		21,300,255
Total revenue		19,530,980			9,814,787			6,585,586			30,878,128
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		3,422,177			4,590,885			6,962,538			8,018,085
Ceded reinsurance benefits and claims		(353,168	)		(607,539	)		(988,111	)		(1,082,161	)
Annuity		259,049			307,369			491,537			505,039
Dividends to policyholders		92,005			96,053			186,320			199,652
Commissions and amortization of deferred policy acquisition costs		(28,559	)		(38,577	)		(63,676	)		(63,119	)
Amortization of cost of insurance acquired		186,212			193,976			372,425			387,953
Operating expenses		1,703,606			1,789,951			3,690,298			3,934,340
Total benefits and other expenses		5,281,322			6,332,118			10,651,331			11,899,789
Income (loss) before income taxes		14,249,658			3,482,669			(4,065,745	)		18,978,339
Income tax (benefit) expense		2,504,024			662,831			(864,558	)		4,359,889
Net income (loss)		11,745,634			2,819,838			(3,201,187	)		14,618,450
Net income attributable to noncontrolling interests		(33,514	)		(107,780	)		(65,754	)		(261,513	)
Net income (loss) attributable to common shareholders	$	11,712,120		$	2,712,058		$	(3,266,941	)	$	14,356,937
Amounts attributable to common shareholders
Basic income (loss) per share	$	3.58		$	0.82		$	(1.00	)	$	4.36
Diluted income (loss) per share	$	3.58		$	0.82		$	(1.00	)	$	4.36
Basic weighted average shares outstanding		3,272,715			3,290,617			3,273,395			3,293,940
Diluted weighted average shares outstanding		3,272,715			3,290,617			3,273,395			3,293,940

See accompanying notes.

4

UTG, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2020			2019			2020			2019
Net income (loss)	$	11,745,634		$	2,819,838		$	(3,201,187	)	$	14,618,450
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax		6,595,986			3,925,070			8,068,851			8,859,921
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		(1,385,157	)		(824,264	)		(1,694,459	)		(1,860,583	)
Unrealized holding gains (losses) arising during period, net of tax		5,210,829			3,100,806			6,374,392			6,999,338
Less reclassification adjustment for (gains) losses included in net income		53,260			9,826			(338,223	)		(5,229	)
Tax expense (benefit) for gains included in net income (loss)		(11,185	)		(2,064	)		71,027			1,098
Reclassification adjustment for (gains) losses included in net income, net of tax		42,075			7,762			(267,196	)		(4,131	)
Subtotal:  Other comprehensive income (loss), net of tax		5,252,904			3,108,568			6,107,196			6,995,207
Comprehensive income (loss)		16,998,538			5,928,406			2,906,009			21,613,657
Less comprehensive income attributable to noncontrolling interests		(33,514	)		(107,780	)		(65,754	)		(261,513	)
Comprehensive income (loss) attributable to UTG, Inc.	$	16,965,024		$	5,820,626		$	2,840,255		$	21,352,144

See accompanying notes.

5

UTG, Inc.

Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

Three Months Ended June 30, 2020	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at March 31, 2020	$	3,276		$	35,903,350		$	71,000,617	$	9,832,206	$	555,874	$	117,295,323
Common stock issued during year		1			16,739			-		-		-		16,740
Treasury shares acquired		(5	)		(139,449	)		-		-		-		(139,454	)
Net income (loss) attributable to common shareholders		-			-			11,712,120		-		-		11,712,120
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-		5,252,904		-		5,252,904
Contributions		-			-			-		-		-		-
Distributions		-			-			-		-		-		-
Gain attributable to noncontrolling interest		-			-			-		-		33,514		33,514
Balance at June 30, 2020	$	3,272		$	35,780,640		$	82,712,737	$	15,085,110	$	589,388	$	134,171,147

Six Months Ended June 30, 2020	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at December 31, 2019	$	3,279		$	36,012,401		$	85,979,678		$	8,977,914	$	523,634	$	131,496,906
Common stock issued during year		7			218,282			-			-		-		218,289
Treasury shares acquired		(14	)		(450,043	)		-			-		-		(450,057	)
Net income (loss) attributable to common shareholders		-			-			(3,266,941	)		-		-		(3,266,941	)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-			6,107,196		-		6,107,196
Contributions		-			-			-			-		-		-
Distributions		-			-			-			-		-		-
Gain attributable to noncontrolling interest		-			-			-			-		65,754		65,754
Balance at June 30, 2020	$	3,272		$	35,780,640		$	82,712,737		$	15,085,110	$	589,388	$	134,171,147

See accompanying notes.

6

UTG, Inc.

Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

Three Months Ended June 30, 2019	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at March 31, 2019	$	3,297		$	36,585,277		$	81,353,780	$	3,949,134	$	642,136	$	122,533,624
Common stock issued during year		1			16,735			-		-		-		16,736
Treasury shares acquired		(12	)		(348,945	)		-		-		-		(348,957	)
Net income attributable to common shareholders		-			-			2,712,058		-		-		2,712,058
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-		3,108,568		-		3,108,568
Contributions		-			-			-		-		-		-
Distributions		-			-			-		-		-		-
Gain attributable to noncontrolling interest		-			-			-		-		107,780		107,780
Balance at June 30, 2019	$	3,286		$	36,253,067		$	84,065,838	$	7,057,702	$	749,916	$	128,129,809

Six Months Ended June 30, 2019	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest			Total Shareholders' Equity
Balance at December 31, 2018	$	3,296		$	36,567,865		$	69,708,901	$	62,495	$	734,153		$	107,076,710
Common stock issued during year		7			246,527			-		-		-			246,534
Treasury shares acquired		(17	)		(561,325	)		-		-		-			(561,342	)
Net income attributable to common shareholders		-			-			14,356,937		-		-			14,356,937
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		-			-			-		6,995,207		-			6,995,207
Contributions		-			-			-		-		-			-
Distributions		-			-			-		-		(245,750	)		(245,750	)
Gain attributable to noncontrolling interest		-			-			-		-		261,513			261,513
Balance at June 30, 2019	$	3,286		$	36,253,067		$	84,065,838	$	7,057,702	$	749,916		$	128,129,809

See accompanying notes.

7

UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended
	June 30,			June 30,
	2020			2019
Cash flows from operating activities:
Net income (loss)	$	(3,201,187	)	$	14,618,450
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments		(58,394	)		(32,084	)
Realized investment gains, net		(8,953,840	)		(6,415,476	)
Change in fair value of equity securities		11,738,163			(14,884,779	)
Amortization of cost of insurance acquired		372,425			387,953
Depreciation		239,510			594,399
Stock-based compensation		218,289			246,534
Charges for mortality and administration of universal life and annuity products		(3,164,512	)		(3,235,159	)
Interest credited to account balances		2,012,606			2,052,343
Change in accrued investment income		151,566			140,588
Change in reinsurance receivables		646,537			338,491
Change in policy liabilities and accruals		(2,219,077	)		(1,317,789	)
Change in income taxes receivable (payable)		472,319			(25,242	)
Change in other assets and liabilities, net		(3,142,189	)		2,842,382
Net cash used in operating activities		(4,887,784	)		(4,689,389	)
Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		12,253,350			4,566,651
Equity securities		16,186,805			4,939,893
Mortgage loans		230,116			4,381,319
Real estate		3,418,671			10,687,242
Notes receivable		3,333,296			1,827,987
Policy loans		713,241			930,639
Short-term investments		6,000,000			-
Total proceeds from investments sold and matured		42,135,479			27,333,731
Cost of investments acquired:
Fixed maturities available for sale		(9,038,928	)		(2,507,805	)
Equity securities		(10,286,666	)		(115,013	)
Trading securities		-			(132,518	)
Mortgage loans		(5,098,138	)		(4,014,455	)
Real estate		-			(1,408,021	)
Notes receivable		(3,500,000	)		(7,528,188	)
Policy loans		(618,465	)		(705,906	)
Short-term investments		(7,890,228	)		-
Total cost of investments acquired		(36,432,425	)		(16,411,906	)
Net cash provided by investing activities		5,703,054			10,921,825
Cash flows from financing activities:
Policyholder contract deposits		2,283,017			2,410,517
Policyholder contract withdrawals		(2,118,404	)		(2,756,026	)
Purchase of treasury stock		(450,057	)		(561,342	)
Non controlling contributions (distributions) of consolidated subsidiary		-			(245,750	)
Net cash used in financing activities		(285,444	)		(1,152,601	)
Net increase in cash and cash equivalents		529,826			5,079,835
Cash and cash equivalents at beginning of period		28,787,629			20,150,162
Cash and cash equivalents at end of period	$	29,317,455		$	25,229,997

See accompanying notes.

8

UTG, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  The Company’s results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources but such impact could be material.

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 (“FSF”), a Kentucky corporation, 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 June 30, 2020, Mr. Correll owns or controls directly and indirectly approximately 65.78% of UTG’s outstanding stock.

UTG’s life insurance subsidiary, Universal Guaranty Life Insurance Company (“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.

Certain amounts in prior periods have been reclassified to conform with the current period presentation.

Note 2 – Recently Issued Accounting Standards

During the six months ended June 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

9

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

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.

Investments in available for sale securities are summarized as follows:

June 30, 2020	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,793,626	$	1,614,309	$	-	$	46,407,935
U.S. special revenue and assessments		14,361,765		1,524,448		-		15,886,213
All other corporate bonds		97,877,059		16,414,492		-		114,291,551
	$	157,032,450	$	19,553,249	$	-	$	176,585,699

December 31, 2019	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529	)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		-			15,203,363
All other corporate bonds		109,827,152		10,470,115		-			120,297,267
	$	159,959,855	$	11,705,047	$	(35,529	)	$	171,629,373

The amortized cost and estimated market value of debt securities at June 30, 2020, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale June 30, 2020	Amortized Cost		Fair Value
Due in one year or less	$	23,776,809	$	24,205,154
Due after one year through five years		46,399,814		49,609,973
Due after five years through ten years		34,654,588		39,465,754
Due after ten years		25,468,466		30,241,655
Fixed maturities with no single maturity date		26,732,773		33,063,163
Total	$	157,032,450	$	176,585,699

10

The fair value of investments with sustained gross unrealized losses at June 30, 2020 and December 31, 2019 are as follows:

June 30, 2020

Less than 12 months

12 months or longer

Total

Fair value

Unrealized losses

Fair value

Unrealized losses

Fair value

Unrealized losses

All other corporate bonds

$

-

-

-

-

-

$

-

Total fixed maturities

$

-

-

-

-

-

$

-

December 31, 2019	Less than 12 months					12 months or longer				Total
	Fair value		Unrealized losses			Fair value		Unrealized losses		Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,059,380		(35,529	)		-		-		6,059,380	$	(35,529	)
Total fixed maturities	$	6,059,380		(35,529	)		-		-		6,059,380	$	(35,529	)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of June 30, 2020
Fixed maturities	-	-	-
As of December 31, 2019
Fixed maturities	3	-	3

Substantially all of the unrealized losses on fixed maturities at December 31, 2019 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  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  June 30, 2020 and December 31, 2019.

11

Net Investment Gains (Losses)

The following table presents net investment gains (losses) and the change in net unrealized gains (losses) on investments. 

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Realized gains:
Sales of fixed maturities	$	11,732		$	101,633		$	403,215		$	116,688
Sales of equity securities		1,832,593			2,765,915			8,615,617			2,765,915
Sales of real estate		-			2,678,207			-			3,776,850
Other		-			-			-			-
Total realized gains		1,844,325			5,545,755			9,018,832			6,659,453
Realized losses:
Sales of fixed maturities		(64,992	)		(111,459	)		(64,992	)		(111,459	)
Sales of equity securities		-			-			-			-
Sales of real estate		-			-			-			-
Other-than-temporary impairments		-			-			-			-
Other		-			(132,518	)		-			(132,518	)
Total realized losses		(64,992	)		(243,977	)		(64,992	)		(243,977	)
Net realized investment gains (losses)		1,779,333			5,301,778			8,953,840			6,415,476
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		12,946,281			97,148			(11,738,163	)		14,884,779
Change in fair value of equity securities		12,946,281			97,148			(11,738,163	)		14,884,779
Net investment gains (losses)	$	14,725,614		$	5,398,926		$	(2,784,323	)	$	21,300,255
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921
Net increase (decrease)	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921

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 Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

The Company did not recognize any other-than-temporary impairments during the six month periods ended June 30, 2020 or 2019.

12

Cost Method Investments

The Company held equity investments with an aggregate cost of $14,417,247 and $10,919,247 at June 30, 2020 and December 31, 2019, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.  Based on Management's evaluation of the expected cash flow of the investments, and the Company's ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at June 30, 2020.

Mortgage Loans

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.

During the six months ended June 30, 2020 and 2019, the Company acquired $5,098,138 and $4,014,455 in mortgage loans, respectively.  FSNB services the majority of the Company’s mortgage loan portfolio.  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 cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.82%
Residential Loans	5.50%	5.50%	8.00%	8.00%

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

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.

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 to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  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.

13

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 mortgage loan reserve was $0 at June 30, 2020 and December 31, 2019.

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

	June 30, 2020		December 31, 2019
In good standing	$	13,097,827	$	8,223,286
Total mortgage loans	$	13,097,827	$	8,223,286

Investment Real Estate

Investment real estate held for sale is reported at the lower of cost or fair value less cost to sell. Investment 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 Consolidated Statements of Operations. 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.

The Company's investment real estate portfolio includes ownerships in oil and gas royalties. As of June 30, 2020 and December 31, 2019, investments in oil and gas royalties represented 45% and 44%, respectively, of the total investment real estate portfolio.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the six months ended June 30, 2020 and 2019, the Company acquired $0 and $1,408,021 of investment real estate, respectively.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of  June 30, 2020 and December 31, 2019 was $0. Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the six months ended June 30, 2020 and 2019 the Company acquired  $3,500,000 and $7,528,188 of notes receivable, respectively.

Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

Similar to the mortgage loans, FSNB services several of the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note.  The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. 

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

Dung the six months ended June 30, 2020 and 2019, the Company acquired $6,000,000 and $0, respectively, in short-term investments.

14

Note 4 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value on a recurring basis utilizing valuation techniques based upon observable and unobservable inputs. 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.  Observable inputs reflect market data obtained from independent sources and unobservable inputs reflect the Company’s expectations. The levels of the hierarchy are defined as follows:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or 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.

Recurring Measurements

The following table presents the fair value measurements of the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of June 30, 2020 and December 31, 2019.

June 30, 2020	Level 1		Level 2		Level 3		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	46,407,935	$	-	$	-	$	46,407,935
U.S. special revenue and assessments		-		15,886,213		-		15,886,213
Corporate securities		-		114,291,551		-		114,291,551
Total fixed maturities		46,407,935		130,177,764		-		176,585,699
Equity securities:
Common stocks		23,092,530		16,041,865		27,006,713		66,141,108
Total equity securities		23,092,530		16,041,865		27,006,713		66,141,108
Total financial assets	$	69,500,465	$	146,219,629	$	27,006,713	$	242,726,807

December 31, 2019	Level 1		Level 2		Level 3		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	36,128,743	$	-	$	-	$	36,128,743
U.S. special revenue and assessments		-		15,203,363		-		15,203,363
Corporate securities		-		120,297,267		-		120,297,267
Total fixed maturities		36,128,743		135,500,630		-		171,629,373
Equity securities:
Common stocks		29,888,281		14,258,750		34,514,762		78,661,793
Total equity securities		29,888,281		14,258,750		34,514,762		78,661,793
Total financial assets	$	66,017,024	$	149,759,380	$	34,514,762	$	250,291,166

15

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. The Company had no liabilities measured and reported at fair value as of June 30, 2020 and December 31, 2019.  There have been no significant changes in the valuation techniques utilized by the Company for the six months ended June 30, 2020.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standard generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common and preferred stocks mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon Management's assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

The Level 3 securities include certain equity securities with unobservable inputs. The Company computed fair value of Level 3 equity investments based on a review of current financial information, earnings trends and similar companies in the same industries.

Level 3 Reconciliation

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			Total
Balance at December 31, 2019	$	-	$	34,514,762		$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(139,588	)		(139,588	)
Included in other comprehensive income		-		-			-
Purchases		-		3,082,007			3,082,007
Sales		-		(10,450,468	)		(10,450,468	)
Balance at June 30, 2020	$	-	$	27,006,713		$	27,006,713

	June 30, 2020			December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held	$	(139,588	)	$	6,461,670

16

Nonrecurring Measurements

Certain assets are not carried at fair value on a recurring basis. 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.

	Carrying		Estimated
June 30, 2020	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	14,417,247		14,417,247		-		-		14,417,247
Mortgage loans on real estate		13,097,827		12,934,172		-		-		12,934,172
Investment real estate		40,725,963		85,158,424		-		-		85,158,424
Notes receivable		19,654,162		23,313,608		-		-		23,313,608
Policy loans		8,709,100		8,709,100		-		-		8,709,100
Short term investments		12,435,481		12,435,481		12,435,481		-		-
Cash and cash equivalents		29,317,455		29,317,455		29,317,455		-		-

	Carrying		Estimated
December 31, 2019	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	10,919,247		10,919,247		-		-		10,919,247
Mortgage loans on real estate		8,223,286		7,531,094		-		-		7,531,094
Investment real estate		44,344,236		85,158,424		-		-		85,158,424
Notes receivable		19,487,458		19,332,472		-		-		19,332,472
Policy loans		8,803,876		8,803,876		-		-		8,803,876
Short term investments		10,442,173		10,442,173		10,442,173		-		-
Cash and cash equivalents		28,787,629		28,787,629		28,787,629		-		-

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 inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has historically purchased 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.  The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

17

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.  The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate 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 inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

The carrying amount of cash and cash equivalents in the Condensed Consolidated Balance Sheets approximates fair value given the highly liquid nature of the instruments.  The inputs used to measure the fair value of our cash and cash equivalents are classified as Level 1 within the fair value hierarchy.

The carrying amount of short term investments in the Condensed Consolidated Balance Sheets approximates fair value.  The inputs used to measure the fair value of our short term investments are classified as Level 3 within the fair value hierarchy.

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2019		Borrowings		Repayments		June 30, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000		-		-		-		-
UG	6/2/2015	5/7/2021		10,000,000		-		-		-		-

The UTG line of credit carries interest at a fixed rate of  4.040% 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.

During May of 2020, 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 Company has pledged bonds with a collateral lendable value of $12,549,410.

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock.  At a meeting of the Board of Directors in June of 2019, the Board of Directors of UTG authorized the repurchase of up to an additional $2.5 million of UTG's common stock, for a total  repurchase of up to $18.5 million of UTG's common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the six months endedJune 30, 2020, the Company repurchased 13,979shares through the stock repurchase program for $450,057. Through June 30, 2020, UTG has spent $15,223,153in the acquisition of 1,183,337shares under this program.

During 2020, the Company issued 6,664 shares of stock to management and employees as compensation at a cost of $218,289. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the six months ended June 30, 2020 and 2019, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

18

Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters.  Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages.  In some states, juries have substantial discretion in awarding punitive damages in these circumstances.  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 the matters will not have a materially adverse effect on the Company’s results of operations or financial position.

Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies.  Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer's financial strength.  Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the condensed consolidated financial statements, though the Company has no control over such assessments.

The following table represents the total funding commitments and the unfunded commitment as of June 30, 2020 related to certain investments:

	Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Macritchie Storage II, LP		7,000,750		2,100,407
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		2,296,875
Modern Distributors, Inc.		7,200,000		3,700,000

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

During 2018, the Company committed to invest in Sovereign’s Capital, LP Fund III (“Sovereign’s III”), which invests in companies in emerging markets. Sovereign’s III makes capital calls to investors as funds are needed.

During 2018, the Company committed to fund a mortgage loan for Macritchie Storage II, LP ("Macritchie"). Macritchie makes draw requests on the loan as funds are needed to fund the construction project.

During 2020, the Company committed to invest in Garden City Companies, LLC (“Garden City”), which invests primarily in companies in the healthcare, inspection/testing services and maintenance service arena. Garden City makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Carrizo Springs Music, LLC (“Carrizo”), which invests in music royalties.  Carrizo makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2020, the Company committed to fund a collateral loan for Modern Distributors, Inc. (“Modern Distributors”). Modern Distributors makes draw requests on the loan as funds are needed to fund a construction project.

19

Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

	Three Months Ended
	June 30,
	2020			2019
Interest		$	-		$	-
Federal income tax			2,110,000			1,106,000

	Six Months Ended
	June 30,
	2020			2019
Interest		$	-		$	-
Federal income tax			2,110,000			1,106,000

Note 9 – Concentrations of Credit Risk

The Company maintains cash balances in financial institutions that at times may exceed federally insured limits.  The Company maintains its primary operating cash accounts with First Southern National Bank, an affiliate of the largest shareholder of UTG, Mr. Jesse Correll, the Company’s CEO and Chairman.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Because UTG serves primarily individuals located in four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of June 30, 2020 and 2019 , approximately 55% of the Company’s total direct premium was collected from Illinois, Ohio, Texas and West Virginia. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life.  Life insurance ceded represented 20% and 21% of total life insurance in force at June 30, 2020 and  December 31, 2019, respectively.  Insurance ceded represented 36% and 34% of premium income for the six months ended June 30, 2020 and 2019, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 18% and 25% of the Company's total invested assets as of June 30, 2020 and December 31, 2019, respectively. The following table provides an allocation of the oil and gas investments by type.

	June 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	63,724,044	$	80,182,100
Transportation		-		3,812,565
Exploration		1,222,760		2,824,810
Total	$	64,946,804	$	86,819,475

20

Item 2.  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”).  The following discussion of the financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the related Notes thereto appearing in the Company’s annual report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission, and our unaudited Condensed Consolidated Financial Statements and related Notes thereto appearing elsewhere in this quarterly report.

Cautionary Statement Regarding Forward-Looking Statements

This report on Form 10-Q 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.

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, the acquisition of blocks of business and the administration and processing of life insurance business for other entities.

UTG has a strong philanthropic program.  The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor.  The Company also encourages its staff to be involved on a personal level through monetary giving, volunteerism, and use of their talents to assist those less fortunate than themselves. Through these efforts, the Company hopes to make a positive difference in the local community, state, nation and world.

21

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ significantly from those estimates.  The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability.  The Company’s critical accounting policies and the related estimates considered most significant by Management are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  Management has identified the accounting policies related to cost of insurance acquired, assumptions and judgments utilized in determining if declines in fair values of investments are other-than-temporary, and valuation methods for investments that are not actively traded as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company’s Condensed Consolidated Financial Statements and this Management’s Discussion and Analysis.

During the six months ended June 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

Results of Operations

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments reacted to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is expected to be temporary, there continues to be uncertainty around the duration or effects of resurgence of the virus. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources, but such impact could be material.

On a consolidated basis, the Company reported a net loss attributable to common shareholders’ of approximately $(3.3) million for the six-month period ended June 30, 2020 and net income attributable to common shareholders’ of approximately $11.7 million for the three-month period ended June 30, 2020.  The variance in the first and second quarter 2020 earnings are driven by the change in the unrealized gains (losses) reported by the Company. During the first quarter of 2020, the Company reported approximately $24.7 million of unrealized losses due to the change in the fair value of equity securities. During the second quarter of 2020, the Company experienced a partial rebound in the performance of its equity securities and recognized a change in the fair value of its equity securities of approximately $13 million.

For the six-month period ended June 30, 2019, the Company reported net income attributable to common shareholders’ of approximately $14.4 million and net income attributable to common shareholders’ of approximately $2.7 million for the three-month period ended June 30, 2019.

Revenues

The Company reported total revenues of approximately $6.6 million for the six months ended June 30, 2020, a decrease of approximately $24.3 million as compared to the same period in 2019. The variance in total revenues from the prior year to the current year is mainly attributable to the change in the fair value of equity securities between periods. The Company reported total revenues of approximately $19.5 million for the three months ended June 30, 2020, an increase of approximately $9.7 million as compared to the three-month period ended June 30, 2019.  For the quarter, the fluctuations are also largely related to the change in the fair value of equity securities between the periods that is reported as a component of total revenue on the Condensed Consolidated Statements of Operations.

The Company reported revenue before net investment gains of approximately $9.4 million and $9.6 million for the six months ended June 30, 2020 and 2019, respectively. Revenue before net investment gains decreased only slightly when comparing the current year and prior year results and is due to minor decreases in premium and policy fee revenue. For the three months ended June 30, 2020, the Company reported revenue before net investment gains and losses of $4.8 million, up from $4.4 million from the same period in 2019. The increase between periods is largely attributable to real estate investment income.

22

Premium and policy fee revenues, net of reinsurance, were comparable for the six-month periods ended June 30, 2020 and 2019. Premium and policy fee revenues, net of reinsurance, represented 36% and 38% of the Company’s revenues before net investment gains (losses) as of June 30, 2020 and 2019, respectively. The decline in premiums is not unusual as the Company is not actively marketing new business.

The Company reported total net investment gains (losses) of approximately $14.7 million and $(2.7) million for the three and six-month periods ended June 30, 2020, respectively.  For the three and six month periods ended June 30, 2020, the Company reported approximately $1.8 million and $9 million, respectively, in net realized investment gains comprised mainly from the sale of equity securities.Also, in the total net investment gains are unrealized gains (losses) related to the change in the fair value of equity securities. The Company reported unrealized equity gains (losses) of $12.9 million and $(11.7) million for the three and six-months ended June 30, 2020 and $97,000 and $14.9 million for the three and six-months ended June 30, 2019.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020				2019
Net investment income		$	3,021,654		$	2,701,709		$	5,851,840			$	5,813,733
Net investment gains (losses)		$	14,725,614		$	5,398,926		$	(2,784,323	)		$	21,300,255
Change in net unrealized investment gains (losses) on available-for-sale securities, pre-tax		$	6,595,986		$	3,925,070		$	8,068,851			$	8,859,921

The Company holds certain investments that have been negatively impacted by ongoing market reactions to the pandemic.  These investments primarily relate to marketable equity securities, particularly in the area of oil and gas.  The drop in the markets in March, resulted in estimated unrealized losses of approximately $(24.7) million for the three months ending March 31, 2020.  For the three months ended June 30, 2020, the Company experienced a partial rebound on these investments of approximately $13 million in unrealized gains.

The Company recognized and disclosed in prior filings that a pullback in the stock market, particularly in the oil and gas arena, could slow these gains or even result in future-period unrealized losses. Management believes these equity investments continue to be solid investments for the Company and have further growth potential. However, current market conditions remain volatile and Management anticipates the Company will experience significant fluctuations in this line item in future periods.

The following table reflects net investment income of the Company:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Fixed maturities available for sale	$	1,312,095		$	1,336,569		$	2,721,419		$	2,926,554
Equity securities		188,824			146,438			944,226			969,332
Trading securities		-			111,693			-			-
Mortgage loans		159,285			166,992			245,084			285,604
Real estate		1,635,847			629,888			2,242,504			1,259,634
Notes receivable		336,712			515,504			538,933			950,659
Policy loans		166,708			169,464			304,678			311,016
Short term		46,836			41,731			53,174			83,640
Cash and cash equivalents		4,132			4,767			103,080			4,222
Total consolidated investment income		3,850,439			3,123,046			7,153,098			6,790,661
Investment expenses		(828,785	)		(421,337	)		(1,301,258	)		(976,928	)
Consolidated net investment income	$	3,021,654		$	2,701,709		$	5,851,840		$	5,813,733

23

Net investment income represented 63% and 61% of the Company’s revenue before net investment gains (losses) as of June 30, 2020 and 2019, respectively.  The Company reported net investment income of approximately $5.9 million for the six-month period ended June 30, 2020, comparable to 2019 net investment income.For the three month period ended June 30, 2020, net investment income increased approximately 12%, compared to the same quarter in 2019. When comparing the three and six months ended June 30, 2020 and 2019, income from investing activities was comparable in the majority of the investment categories, with the largest variance being found in the real estate and notes receivable categories.

Earnings from the real estate portfolio are expected to vary depending on the activities of the subsidiaries and the potential distributions that will occur. For the six-months ended June 30, 2020, real estate earnings were up approximately 78% compared to the same period in 2019. The difference was attributable to a one-time earnings event that was received in second quarter 2020.  Excluding this one-time event in 2020, real estate income was comparable between periods.

For the six-months ended June 30, 2020, notes receivable income is down approximately 43% compared to June 30, 2019. The decrease is a result of fewer average outstanding notes receivable, and consequently, a reduction in interest income.

During 2019, the Company received an offer to purchase investments in certain music royalties held in the form of equity investments.  As a result of this event, the Company elected to change its valuation methodology from using discounted cash flow models to estimate fair value to marking the investment to the offer price to estimate the fair value. The change in methodology resulted in recording an unrealized gain on investment of approximately $3.3 million during the year ended December 31, 2019.  The investments were then sold during the first quarter of 2020. The Company recognized a gain of approximately $4.1 million on the sale. The 2020 net income is unaffected by the sale as the realized gain is offset by the unrealized gain reversal at the time of sale.

In summary, the Company’s basis for future revenue growth is expected to come from the following primary sources: 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

The Company reported total benefits and other expenses of approximately $10.7 million for the six month period ended June 30, 2020, a decrease of approximately 11% from the same period in 2019.  For the three month period ended June 30, 2020, total benefits and other expenses decreased approximately 17%, compared to the same quarter in 2019.  Benefits, claims and settlement expenses represented approximately 65% and 62% of the Company’s total expenses for the three and six month periods ended June 30, 2020, respectively.  The other major expense category of the Company is operating expenses, which represented approximately 32% and 35% of the Company’s total expenses for the three and six month periods ended June 30, 2020, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims, decreased approximately 13% in the six month period ended June 30, 2020, compared to the same period in 2019.  For the three months ended June 30, 2020, life benefits, claims and settlement expenses, net of reinsurance benefits and claims, decreased approximately 22%, compared to the same quarter in 2019. The decrease is not considered unusual by Management as fluctuations in mortality are to be expected.

Net amortization of cost of insurance acquired decreased 4% during the three month and six month periods ended June 30, 2020 compared to the same period in 2019.  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 decreased by 5% for the three-month period ended June 30, 2020 compared to that of the same period in 2019. For the six-months ended June 30, 2020 operating expenses decreased by 6% compared to that of the same period in 2019. Overall, expenses were comparable in all of the major expense categories.

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

24

Financial Condition

Investment Information

Investments represent approximately 84% of total assets at June 30, 2020 and December 31, 2019. Accordingly, 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 that it is permitted to make and the amount of funds that may be used for any one type of investment.  In light of these statutes and regulations, the majority of the Company’s investment portfolio is invested in a diverse set of securities.

As of June 30, 2020, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders’ equity or results from operations.  To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available for sale".  Investments available for sale are carried at market, with changes in market value charged directly to shareholders' equity.Changes in the market value of available for sale securities resulted in net unrealized gains of $6.6 million and $8.1 million for the three and six-month periods ended June 30, 2020, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations and lower interest rates.

Capital Resources

Total shareholders’ equity increased by approximately 2% as of June 30, 2020 compared to December 31, 2019. The increase in total shareholders’ equity is a combination of the net loss reported for the period of $(3.3) million and an increase of $6.1 million of accumulated other comprehensive income.

The Company’s investments are predominately in fixed maturity investments such as bonds. The Company carries all of its fixed maturity holdings as available for sale, which are reported in the Condensed Consolidated Financial Statements at their market value.

Liquidity

The Company has two principal needs for cash - the insurance company’s contractual obligations to policyholders and the payment of operating expenses.  Cash and cash equivalents represented 7% of total assets as of June 30, 2020 and December 31, 2019.  Fixed maturities, as a percentage of total assets, were approximately 42% and 41% as of June 30, 2020 and December 31, 2019, respectively.

The Company currently has access to funds for operating liquidity.  UTG has an $8 million revolving credit note with Illinois National Bank.  At June 30, 2020, the Company had no outstanding borrowings against the UTG line of credit. UG has a $10 million line of credit with the Federal Home Loan Bank. At June 30, 2020, the Company had no outstanding borrowings against the UG line of credit.

Future policy benefits are primarily long-term in nature and therefore, the Company's investments are predominantly long-term and provide sufficient return to cover these obligations. Many of the Company's products contain surrender charges and other features that reward persistency and penalize the early withdrawal of funds.

Net cash used in operating activities was approximately $4.9 million and $4.7 million for the six-months ended June 30, 2020 and 2019, 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.

25

Net cash provided by investing activities was approximately $5.7 million and $10.9 million for the six-month period ended June 30, 2020 and 2019, respectively. The net cash provided by investing activities is expected to vary from quarter to quarter depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

UTG is a holding Company that has no day-to-day operations of its own.  Funds required to meet its expenses and general costs associated with maintaining the Company in good standing with states in which it does business are primarily provided by its subsidiaries.  On a parent only basis, 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.  At June 30, 2020, substantially all of the consolidated shareholders’ equity represented net assets of its subsidiary.  The Company's insurance subsidiary has maintained adequate statutory capital and surplus.  The payment of cash dividends to shareholders by UTG is not legally restricted.  However, the state insurance department regulates insurance Company dividend payments where the Company is domiciled.  No dividends were paid to shareholders in 2019 or the six months ended June 30, 2020.

UG is an Ohio domiciled insurance company, which requires notification within five business days to the insurance commissioner following the declaration of any ordinary dividend and at least ten calendar days prior to payment of such dividend.  Ordinary dividends are defined as the greater of:  a) prior year statutory net income or  b) 10% of statutory capital and surplus.  For the year ended December 31, 2019, UG had statutory net income of approximately $8.3 million.  At December 31, 2019 UG’s statutory capital and surplus amounted to approximately $66 million.  Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation.  During 2019, UG paid UTG ordinary dividends of $6 million.  During the second quarter of 2020, UG paid UTG an ordinary dividend of $1 million. UTG used the dividends received during 2019 and 2020 to purchase outstanding shares of UTG stock and for general operations of the Company.

ITEM 4.  CONTROLS AND PROCEDURES

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to Management, including the principal executive officer and principal financial officer, allowing timely decisions regarding required disclosure. Under the supervision and with the participation of our Management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

26

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

NONE

ITEM 1A.  RISK FACTORS

NONE

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

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4.  MINE SAFETY DISCLOSURES

NONE

ITEM 5.  OTHER INFORMATION

NONE

ITEM 6.  EXHIBITS

Exhibit Number	Description
*31.1	Certification 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	Certification 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
**101	Interactive Data File

* Filed herewith

27

SIGNATURES

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

UTG, INC.

(Registrant)

Date:	August 11, 2020	By	/s/ James P. Rousey
			James P. Rousey
			President and Director

Date:	August 11, 2020	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President and Chief Financial Officer

28

EX-31.1

Exhibit 31.1 CERTIFICATIONS
I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of UTG, Inc., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:	August 11, 2020	By:	/s/ Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-31.2

Exhibit 31.2 CERTIFICATIONS
I, Theodore C. Miller,  Senior Vice President, Corporate Secretary and Chief Financial Officer of UTG, Inc., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:	August 11, 2020	By:	/s/ Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

Date:	August 11, 2020	By:	/s/ Jesse T. Correll
			Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

Date:	August 11, 2020	By:	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Cover [Abstract]
Entity Registrant Name	UTG INC
Entity Central Index Key	0000832480
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		3,268,386
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Address, State or Province	KY

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Investments available for sale:
Fixed maturities, at fair value (amortized cost $157,032,450 and $159,959,855)	$ 176,585,699	$ 171,629,373	[1]
Equity securities, at fair value (cost $31,796,340 and $32,578,862)	66,141,108	78,661,793	[1]
Equity securities, at cost	14,417,247	10,919,247	[1]
Mortgage loans on real estate at amortized cost	13,097,827	8,223,286	[1]
Investment real estate	40,725,963	44,344,236	[1]
Notes receivable	19,654,162	19,487,458	[1]
Policy loans	8,709,100	8,803,876	[1]
Short-term investments	12,435,481	10,442,173
Total investments	351,766,587	352,511,442	[1]
Cash and cash equivalents	29,317,455	28,787,629	[1]
Accrued investment income	1,528,217	1,679,783	[1]
Reinsurance receivables:
Future policy benefits	25,437,203	25,655,161	[1]
Policy claims and other benefits	3,713,563	4,142,142	[1]
Cost of insurance acquired	4,473,896	4,846,321	[1]
Property and equipment, net of accumulated depreciation	387,828	427,736	[1]
Other assets	686,497	695,517	[1]
Total assets	417,311,246	418,745,731	[1]
Policy liabilities and accruals:
Future policyholder benefits	246,166,152	249,264,308	[1]
Policy claims and benefits payable	3,438,766	3,631,666	[1]
Other policyholder funds	409,612	404,177	[1]
Dividend and endowment accumulations	14,705,726	14,626,475	[1]
Income taxes payable	785,981	313,662	[1]
Deferred income taxes	11,552,261	13,222,604	[1]
Other liabilities	6,081,601	5,785,933	[1]
Total liabilities	283,140,099	287,248,825	[1]
Shareholders' equity:
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,270,515 and 3,277,830 shares outstanding	3,272	3,279	[1]
Additional paid-in capital	35,780,640	36,012,401	[1]
Retained earnings	82,712,737	85,979,678	[1]
Accumulated other comprehensive income	15,085,110	8,977,914	[1]
Total UTG shareholders' equity	133,581,759	130,973,272	[1]
Noncontrolling interests	589,388	523,634	[1]
Total shareholders' equity	134,171,147	131,496,906	[1]
Total liabilities and shareholders' equity	$ 417,311,246	$ 418,745,731	[1]

[1] Balance sheet audited at December 31, 2019.

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Investments available for sale:
Fixed maturities, amortized cost	$ 157,032,450	$ 159,959,855
Equity securities, cost	$ 31,796,340	$ 32,578,862
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, stated value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	7,000,000	7,000,000
Common stock, outstanding (in shares)	3,270,515	3,277,830

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue:
Premiums and policy fees	$ 2,379,976	$ 2,431,489	$ 4,735,731	$ 4,934,694
Ceded reinsurance premiums and policy fees	(690,036)	(813,256)	(1,370,476)	(1,330,311)
Net investment income	3,021,654	2,701,709	5,851,840	5,813,733
Other income	93,772	95,919	152,814	159,757
Revenue before net investment gains (losses)	4,805,366	4,415,861	9,369,909	9,577,873
Net investment gains (losses):
Other realized investment gains, net	1,779,333	5,301,778	8,953,840	6,415,476
Change in fair value of equity securities	12,946,281	97,148	(11,738,163)	14,884,779
Total net investment gains (losses)	14,725,614	5,398,926	(2,784,323)	21,300,255
Total revenue	19,530,980	9,814,787	6,585,586	30,878,128
Benefits, claims and settlement expenses:
Life	3,422,177	4,590,885	6,962,538	8,018,085
Ceded reinsurance benefits and claims	(353,168)	(607,539)	(988,111)	(1,082,161)
Annuity	259,049	307,369	491,537	505,039
Dividends to policyholders	92,005	96,053	186,320	199,652
Commissions and amortization of deferred policy acquisition costs	(28,559)	(38,577)	(63,676)	(63,119)
Amortization of cost of insurance acquired	186,212	193,976	372,425	387,953
Operating expenses	1,703,606	1,789,951	3,690,298	3,934,340
Total benefits and other expenses	5,281,322	6,332,118	10,651,331	11,899,789
Income (loss) before income taxes	14,249,658	3,482,669	(4,065,745)	18,978,339
Income tax (benefit) expense	2,504,024	662,831	(864,558)	4,359,889
Net income (loss)	11,745,634	2,819,838	(3,201,187)	14,618,450
Net income attributable to noncontrolling interests	(33,514)	(107,780)	(65,754)	(261,513)
Net income (loss) attributable to common shareholders	$ 11,712,120	$ 2,712,058	$ (3,266,941)	$ 14,356,937
Amounts attributable to common shareholders
Basic income (loss) per share (in dollars per share)	$ 3.58	$ 0.82	$ (1.00)	$ 4.36
Diluted income (loss) per share (in dollars per share)	$ 3.58	$ 0.82	$ (1.00)	$ 4.36
Basic weighted average shares outstanding (in shares)	3,272,715	3,290,617	3,273,395	3,293,940
Diluted weighted average shares outstanding (in shares)	3,272,715	3,290,617	3,273,395	3,293,940

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) [Abstract]
Net income (loss)	$ 11,745,634	$ 2,819,838	$ (3,201,187)	$ 14,618,450
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax	6,595,986	3,925,070	8,068,851	8,859,921
Tax (expense) benefit on unrealized holding gains (losses) arising during the period	(1,385,157)	(824,264)	(1,694,459)	(1,860,583)
Unrealized holding gains (losses) arising during period, net of tax	5,210,829	3,100,806	6,374,392	6,999,338
Less reclassification adjustment for (gains) losses included in net income	53,260	9,826	(338,223)	(5,229)
Tax expense (benefit) for gains included in net income (loss)	(11,185)	(2,064)	71,027	1,098
Reclassification adjustment for (gains) losses included in net income, net of tax	42,075	7,762	(267,196)	(4,131)
Subtotal: Other comprehensive income (loss), net of tax	5,252,904	3,108,568	6,107,196	6,995,207
Comprehensive income (loss)	16,998,538	5,928,406	2,906,009	21,613,657
Less comprehensive income attributable to noncontrolling interests	(33,514)	(107,780)	(65,754)	(261,513)
Comprehensive income (loss) attributable to UTG, Inc.	$ 16,965,024	$ 5,820,626	$ 2,840,255	$ 21,352,144

XML

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2018	$ 3,296	$ 36,567,865	$ 69,708,901	$ 62,495	$ 734,153	$ 107,076,710
Common stock issued during year	7	246,527	0	0	0	246,534
Treasury shares acquired	(17)	(561,325)	0	0	0	(561,342)
Net income (loss) attributable to common shareholders	0	0	14,356,937	0	0	14,356,937
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	6,995,207	0	6,995,207
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	(245,750)	(245,750)
Gain attributable to noncontrolling interest	0	0	0	0	261,513	261,513
Balance at Jun. 30, 2019	3,286	36,253,067	84,065,838	7,057,702	749,916	128,129,809
Balance at Mar. 31, 2019	3,297	36,585,277	81,353,780	3,949,134	642,136	122,533,624
Common stock issued during year	1	16,735	0	0	0	16,736
Treasury shares acquired	(12)	(348,945)	0	0	0	(348,957)
Net income (loss) attributable to common shareholders	0	0	2,712,058	0	0	2,712,058
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	3,108,568	0	3,108,568
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	0	0
Gain attributable to noncontrolling interest	0	0	0	0	107,780	107,780
Balance at Jun. 30, 2019	3,286	36,253,067	84,065,838	7,057,702	749,916	128,129,809
Balance at Dec. 31, 2019	3,279	36,012,401	85,979,678	8,977,914	523,634	131,496,906	[1]
Common stock issued during year	7	218,282	0	0	0	218,289
Treasury shares acquired	(14)	(450,043)	0	0	0	(450,057)
Net income (loss) attributable to common shareholders	0	0	(3,266,941)	0	0	(3,266,941)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	6,107,196	0	6,107,196
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	0	0
Gain attributable to noncontrolling interest	0	0	0	0	65,754	65,754
Balance at Jun. 30, 2020	3,272	35,780,640	82,712,737	15,085,110	589,388	134,171,147
Balance at Mar. 31, 2020	3,276	35,903,350	71,000,617	9,832,206	555,874	117,295,323
Common stock issued during year	1	16,739	0	0	0	16,740
Treasury shares acquired	(5)	(139,449)	0	0	0	(139,454)
Net income (loss) attributable to common shareholders	0	0	11,712,120	0	0	11,712,120
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	5,252,904	0	5,252,904
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	0	0
Gain attributable to noncontrolling interest	0	0	0	0	33,514	33,514
Balance at Jun. 30, 2020	$ 3,272	$ 35,780,640	$ 82,712,737	$ 15,085,110	$ 589,388	$ 134,171,147

[1] Balance sheet audited at December 31, 2019.

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (3,201,187)	$ 14,618,450
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments	(58,394)	(32,084)
Realized investment gains, net	(8,953,840)	(6,415,476)
Change in fair value of equity securities	11,738,163	(14,884,779)
Amortization of cost of insurance acquired	372,425	387,953
Depreciation	239,510	594,399
Stock-based compensation	218,289	246,534
Charges for mortality and administration of universal life and annuity products	(3,164,512)	(3,235,159)
Interest credited to account balances	2,012,606	2,052,343
Change in accrued investment income	151,566	140,588
Change in reinsurance receivables	646,537	338,491
Change in policy liabilities and accruals	(2,219,077)	(1,317,789)
Change in income taxes receivable (payable)	472,319	(25,242)
Change in other assets and liabilities, net	(3,142,189)	2,842,382
Net cash used in operating activities	(4,887,784)	(4,689,389)
Proceeds from investments sold and matured:
Fixed maturities available for sale	12,253,350	4,566,651
Equity securities	16,186,805	4,939,893
Mortgage loans	230,116	4,381,319
Real estate	3,418,671	10,687,242
Notes receivable	3,333,296	1,827,987
Policy loans	713,241	930,639
Short-term investments	6,000,000	0
Total proceeds from investments sold and matured	42,135,479	27,333,731
Cost of investments acquired:
Fixed maturities available for sale	(9,038,928)	(2,507,805)
Equity securities	(10,286,666)	(115,013)
Trading securities	0	(132,518)
Mortgage loans	(5,098,138)	(4,014,455)
Real estate	0	(1,408,021)
Notes receivable	(3,500,000)	(7,528,188)
Policy loans	(618,465)	(705,906)
Short-term investments	(7,890,228)	0
Total cost of investments acquired	(36,432,425)	(16,411,906)
Net cash provided by investing activities	5,703,054	10,921,825
Cash flows from financing activities:
Policyholder contract deposits	2,283,017	2,410,517
Policyholder contract withdrawals	(2,118,404)	(2,756,026)
Purchase of treasury stock	(450,057)	(561,342)
Non controlling contributions (distributions) of consolidated subsidiary	0	(245,750)
Net cash used in financing activities	(285,444)	(1,152,601)
Net increase in cash and cash equivalents	529,826	5,079,835
Cash and cash equivalents at beginning of period	28,787,629	20,150,162
Cash and cash equivalents at end of period	$ 29,317,455	$ 25,229,997

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2020

Basis of Presentation [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  The Company’s results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources but such impact could be material.

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 (“FSF”), a Kentucky corporation, 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 June 30, 2020, Mr. Correll owns or controls directly and indirectly approximately 65.78% of UTG’s outstanding stock.

UTG’s life insurance subsidiary, Universal Guaranty Life Insurance Company (“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.

Certain amounts in prior periods have been reclassified to conform with the current period presentation.

XML

Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2020

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

Note 2 – Recently Issued Accounting Standards

During the six months ended June 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

XML

Investments

6 Months Ended

Jun. 30, 2020

Investments [Abstract]

Investments

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

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.

Investments in available for sale securities are summarized as follows:

June 30, 2020	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,793,626	$	1,614,309	$	-	$	46,407,935
U.S. special revenue and assessments		14,361,765		1,524,448		-		15,886,213
All other corporate bonds		97,877,059		16,414,492		-		114,291,551
	$	157,032,450	$	19,553,249	$	-	$	176,585,699

December 31, 2019	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529	)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		-			15,203,363
All other corporate bonds		109,827,152		10,470,115		-			120,297,267
	$	159,959,855	$	11,705,047	$	(35,529	)	$	171,629,373

The amortized cost and estimated market value of debt securities at June 30, 2020, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale June 30, 2020	Amortized Cost		Fair Value
Due in one year or less	$	23,776,809	$	24,205,154
Due after one year through five years		46,399,814		49,609,973
Due after five years through ten years		34,654,588		39,465,754
Due after ten years		25,468,466		30,241,655
Fixed maturities with no single maturity date		26,732,773		33,063,163
Total	$	157,032,450	$	176,585,699

The fair value of investments with sustained gross unrealized losses at June 30, 2020 and December 31, 2019 are as follows:

June 30, 2020

Less than 12 months

12 months or longer

Total

Fair value

Unrealized losses

Fair value

Unrealized losses

Fair value

Unrealized losses

All other corporate bonds

$

-

-

-

-

-

$

-

Total fixed maturities

$

-

-

-

-

-

$

-

December 31, 2019	Less than 12 months					12 months or longer				Total
	Fair value		Unrealized losses			Fair value		Unrealized losses		Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,059,380		(35,529	)		-		-		6,059,380	$	(35,529	)
Total fixed maturities	$	6,059,380		(35,529	)		-		-		6,059,380	$	(35,529	)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of June 30, 2020
Fixed maturities	-	-	-
As of December 31, 2019
Fixed maturities	3	-	3

Substantially all of the unrealized losses on fixed maturities at December 31, 2019 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  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  June 30, 2020 and December 31, 2019.

Net Investment Gains (Losses)

The following table presents net investment gains (losses) and the change in net unrealized gains (losses) on investments. 

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Realized gains:
Sales of fixed maturities	$	11,732		$	101,633		$	403,215		$	116,688
Sales of equity securities		1,832,593			2,765,915			8,615,617			2,765,915
Sales of real estate		-			2,678,207			-			3,776,850
Other		-			-			-			-
Total realized gains		1,844,325			5,545,755			9,018,832			6,659,453
Realized losses:
Sales of fixed maturities		(64,992	)		(111,459	)		(64,992	)		(111,459	)
Sales of equity securities		-			-			-			-
Sales of real estate		-			-			-			-
Other-than-temporary impairments		-			-			-			-
Other		-			(132,518	)		-			(132,518	)
Total realized losses		(64,992	)		(243,977	)		(64,992	)		(243,977	)
Net realized investment gains (losses)		1,779,333			5,301,778			8,953,840			6,415,476
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		12,946,281			97,148			(11,738,163	)		14,884,779
Change in fair value of equity securities		12,946,281			97,148			(11,738,163	)		14,884,779
Net investment gains (losses)	$	14,725,614		$	5,398,926		$	(2,784,323	)	$	21,300,255
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921
Net increase (decrease)	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921

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 Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

The Company did not recognize any other-than-temporary impairments during the six month periods ended June 30, 2020 or 2019.

Cost Method Investments

The Company held equity investments with an aggregate cost of $14,417,247 and $10,919,247 at June 30, 2020 and December 31, 2019, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.  Based on Management's evaluation of the expected cash flow of the investments, and the Company's ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at June 30, 2020.

Mortgage Loans

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.

During the six months ended June 30, 2020 and 2019, the Company acquired $5,098,138 and $4,014,455 in mortgage loans, respectively.  FSNB services the majority of the Company’s mortgage loan portfolio.  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 cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.82%
Residential Loans	5.50%	5.50%	8.00%	8.00%

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

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.

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 to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  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 mortgage loan reserve was $0 at June 30, 2020 and December 31, 2019.

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

	June 30, 2020		December 31, 2019
In good standing	$	13,097,827	$	8,223,286
Total mortgage loans	$	13,097,827	$	8,223,286

Investment Real Estate

Investment real estate held for sale is reported at the lower of cost or fair value less cost to sell. Investment 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 Consolidated Statements of Operations. 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.

The Company's investment real estate portfolio includes ownerships in oil and gas royalties. As of June 30, 2020 and December 31, 2019, investments in oil and gas royalties represented 45% and 44%, respectively, of the total investment real estate portfolio.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the six months ended June 30, 2020 and 2019, the Company acquired $0 and $1,408,021 of investment real estate, respectively.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of  June 30, 2020 and December 31, 2019 was $0. Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the six months ended June 30, 2020 and 2019 the Company acquired  $3,500,000 and $7,528,188 of notes receivable, respectively.

Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

Similar to the mortgage loans, FSNB services several of the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note.  The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. 

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

Dung the six months ended June 30, 2020 and 2019, the Company acquired $6,000,000 and $0, respectively, in short-term investments.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair Value Measurements

The Company measures its assets and liabilities recorded at fair value on a recurring basis utilizing valuation techniques based upon observable and unobservable inputs. 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.  Observable inputs reflect market data obtained from independent sources and unobservable inputs reflect the Company’s expectations. The levels of the hierarchy are defined as follows:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or 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.

Recurring Measurements

The following table presents the fair value measurements of the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of June 30, 2020 and December 31, 2019.

June 30, 2020	Level 1		Level 2		Level 3		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	46,407,935	$	-	$	-	$	46,407,935
U.S. special revenue and assessments		-		15,886,213		-		15,886,213
Corporate securities		-		114,291,551		-		114,291,551
Total fixed maturities		46,407,935		130,177,764		-		176,585,699
Equity securities:
Common stocks		23,092,530		16,041,865		27,006,713		66,141,108
Total equity securities		23,092,530		16,041,865		27,006,713		66,141,108
Total financial assets	$	69,500,465	$	146,219,629	$	27,006,713	$	242,726,807

December 31, 2019	Level 1		Level 2		Level 3		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	36,128,743	$	-	$	-	$	36,128,743
U.S. special revenue and assessments		-		15,203,363		-		15,203,363
Corporate securities		-		120,297,267		-		120,297,267
Total fixed maturities		36,128,743		135,500,630		-		171,629,373
Equity securities:
Common stocks		29,888,281		14,258,750		34,514,762		78,661,793
Total equity securities		29,888,281		14,258,750		34,514,762		78,661,793
Total financial assets	$	66,017,024	$	149,759,380	$	34,514,762	$	250,291,166

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. The Company had no liabilities measured and reported at fair value as of June 30, 2020 and December 31, 2019.  There have been no significant changes in the valuation techniques utilized by the Company for the six months ended June 30, 2020.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standard generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common and preferred stocks mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon Management's assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

The Level 3 securities include certain equity securities with unobservable inputs. The Company computed fair value of Level 3 equity investments based on a review of current financial information, earnings trends and similar companies in the same industries.

Level 3 Reconciliation

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			Total
Balance at December 31, 2019	$	-	$	34,514,762		$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(139,588	)		(139,588	)
Included in other comprehensive income		-		-			-
Purchases		-		3,082,007			3,082,007
Sales		-		(10,450,468	)		(10,450,468	)
Balance at June 30, 2020	$	-	$	27,006,713		$	27,006,713

	June 30, 2020			December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held	$	(139,588	)	$	6,461,670

Nonrecurring Measurements

Certain assets are not carried at fair value on a recurring basis. 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.

	Carrying		Estimated
June 30, 2020	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	14,417,247		14,417,247		-		-		14,417,247
Mortgage loans on real estate		13,097,827		12,934,172		-		-		12,934,172
Investment real estate		40,725,963		85,158,424		-		-		85,158,424
Notes receivable		19,654,162		23,313,608		-		-		23,313,608
Policy loans		8,709,100		8,709,100		-		-		8,709,100
Short term investments		12,435,481		12,435,481		12,435,481		-		-
Cash and cash equivalents		29,317,455		29,317,455		29,317,455		-		-

	Carrying		Estimated
December 31, 2019	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	10,919,247		10,919,247		-		-		10,919,247
Mortgage loans on real estate		8,223,286		7,531,094		-		-		7,531,094
Investment real estate		44,344,236		85,158,424		-		-		85,158,424
Notes receivable		19,487,458		19,332,472		-		-		19,332,472
Policy loans		8,803,876		8,803,876		-		-		8,803,876
Short term investments		10,442,173		10,442,173		10,442,173		-		-
Cash and cash equivalents		28,787,629		28,787,629		28,787,629		-		-

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 inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has historically purchased 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.  The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

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.  The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate 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 inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

The carrying amount of cash and cash equivalents in the Condensed Consolidated Balance Sheets approximates fair value given the highly liquid nature of the instruments.  The inputs used to measure the fair value of our cash and cash equivalents are classified as Level 1 within the fair value hierarchy.

The carrying amount of short term investments in the Condensed Consolidated Balance Sheets approximates fair value.  The inputs used to measure the fair value of our short term investments are classified as Level 3 within the fair value hierarchy.

XML

Credit Arrangements

6 Months Ended

Jun. 30, 2020

Credit Arrangements [Abstract]

Credit Arrangements

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2019		Borrowings		Repayments		June 30, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000		-		-		-		-
UG	6/2/2015	5/7/2021		10,000,000		-		-		-		-

The UTG line of credit carries interest at a fixed rate of  4.040% 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.

During May of 2020, 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 Company has pledged bonds with a collateral lendable value of $12,549,410.

XML

Shareholders' Equity

6 Months Ended

Jun. 30, 2020

Shareholders' Equity [Abstract]

Shareholders' Equity

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock.  At a meeting of the Board of Directors in June of 2019, the Board of Directors of UTG authorized the repurchase of up to an additional $2.5 million of UTG's common stock, for a total  repurchase of up to $18.5 million of UTG's common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the six months endedJune 30, 2020, the Company repurchased 13,979shares through the stock repurchase program for $450,057. Through June 30, 2020, UTG has spent $15,223,153in the acquisition of 1,183,337shares under this program.

During 2020, the Company issued 6,664 shares of stock to management and employees as compensation at a cost of $218,289. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the six months ended June 30, 2020 and 2019, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters.  Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages.  In some states, juries have substantial discretion in awarding punitive damages in these circumstances.  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 the matters will not have a materially adverse effect on the Company’s results of operations or financial position.

Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies.  Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer's financial strength.  Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the condensed consolidated financial statements, though the Company has no control over such assessments.

The following table represents the total funding commitments and the unfunded commitment as of June 30, 2020 related to certain investments:

	Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Macritchie Storage II, LP		7,000,750		2,100,407
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		2,296,875
Modern Distributors, Inc.		7,200,000		3,700,000

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

During 2018, the Company committed to invest in Sovereign’s Capital, LP Fund III (“Sovereign’s III”), which invests in companies in emerging markets. Sovereign’s III makes capital calls to investors as funds are needed.

During 2018, the Company committed to fund a mortgage loan for Macritchie Storage II, LP ("Macritchie"). Macritchie makes draw requests on the loan as funds are needed to fund the construction project.

During 2020, the Company committed to invest in Garden City Companies, LLC (“Garden City”), which invests primarily in companies in the healthcare, inspection/testing services and maintenance service arena. Garden City makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Carrizo Springs Music, LLC (“Carrizo”), which invests in music royalties.  Carrizo makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2020, the Company committed to fund a collateral loan for Modern Distributors, Inc. (“Modern Distributors”). Modern Distributors makes draw requests on the loan as funds are needed to fund a construction project.

XML

Other Cash Flow Disclosures

6 Months Ended

Jun. 30, 2020

Other Cash Flow Disclosures [Abstract]

Other Cash Flow Disclosures

Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

	Three Months Ended
	June 30,
	2020			2019
Interest		$	-		$	-
Federal income tax			2,110,000			1,106,000

	Six Months Ended
	June 30,
	2020			2019
Interest		$	-		$	-
Federal income tax			2,110,000			1,106,000

XML

Concentrations of Credit Risk

6 Months Ended

Jun. 30, 2020

Concentrations of Credit Risk [Abstract]

Concentrations of Credit Risk

Note 9 – Concentrations of Credit Risk

The Company maintains cash balances in financial institutions that at times may exceed federally insured limits.  The Company maintains its primary operating cash accounts with First Southern National Bank, an affiliate of the largest shareholder of UTG, Mr. Jesse Correll, the Company’s CEO and Chairman.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Because UTG serves primarily individuals located in four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of June 30, 2020 and 2019 , approximately 55% of the Company’s total direct premium was collected from Illinois, Ohio, Texas and West Virginia. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life.  Life insurance ceded represented 20% and 21% of total life insurance in force at June 30, 2020 and  December 31, 2019, respectively.  Insurance ceded represented 36% and 34% of premium income for the six months ended June 30, 2020 and 2019, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 18% and 25% of the Company's total invested assets as of June 30, 2020 and December 31, 2019, respectively. The following table provides an allocation of the oil and gas investments by type.

	June 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	63,724,044	$	80,182,100
Transportation		-		3,812,565
Exploration		1,222,760		2,824,810
Total	$	64,946,804	$	86,819,475

XML

Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2020

Basis of Presentation [Abstract]

Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  The Company’s results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

XML

Recently Issued Accounting Standards (Policies)

6 Months Ended

Jun. 30, 2020

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

During the six months ended June 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

XML

Investments (Tables)

6 Months Ended

Jun. 30, 2020

Investments [Abstract]

Available for Sale Securities

Investments in available for sale securities are summarized as follows:

June 30, 2020	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,793,626	$	1,614,309	$	-	$	46,407,935
U.S. special revenue and assessments		14,361,765		1,524,448		-		15,886,213
All other corporate bonds		97,877,059		16,414,492		-		114,291,551
	$	157,032,450	$	19,553,249	$	-	$	176,585,699

December 31, 2019	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529	)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		-			15,203,363
All other corporate bonds		109,827,152		10,470,115		-			120,297,267
	$	159,959,855	$	11,705,047	$	(35,529	)	$	171,629,373

Debt Securities by Contractual Maturity

The amortized cost and estimated market value of debt securities at June 30, 2020, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale June 30, 2020	Amortized Cost		Fair Value
Due in one year or less	$	23,776,809	$	24,205,154
Due after one year through five years		46,399,814		49,609,973
Due after five years through ten years		34,654,588		39,465,754
Due after ten years		25,468,466		30,241,655
Fixed maturities with no single maturity date		26,732,773		33,063,163
Total	$	157,032,450	$	176,585,699

Fair Value of Investments with Sustained Gross Unrealized Losses

The fair value of investments with sustained gross unrealized losses at June 30, 2020 and December 31, 2019 are as follows:

June 30, 2020

Less than 12 months

12 months or longer

Total

Fair value

Unrealized losses

Fair value

Unrealized losses

Fair value

Unrealized losses

All other corporate bonds

$

-

-

-

-

-

$

-

Total fixed maturities

$

-

-

-

-

-

$

-

December 31, 2019	Less than 12 months					12 months or longer				Total
	Fair value		Unrealized losses			Fair value		Unrealized losses		Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,059,380		(35,529	)		-		-		6,059,380	$	(35,529	)
Total fixed maturities	$	6,059,380		(35,529	)		-		-		6,059,380	$	(35,529	)

Securities in Continuous Unrealized Loss Position

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of June 30, 2020
Fixed maturities	-	-	-
As of December 31, 2019
Fixed maturities	3	-	3

Net Investment Gains (Losses) and Change in Net Unrealized Gains on AFS Investments

The following table presents net investment gains (losses) and the change in net unrealized gains (losses) on investments. 

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Realized gains:
Sales of fixed maturities	$	11,732		$	101,633		$	403,215		$	116,688
Sales of equity securities		1,832,593			2,765,915			8,615,617			2,765,915
Sales of real estate		-			2,678,207			-			3,776,850
Other		-			-			-			-
Total realized gains		1,844,325			5,545,755			9,018,832			6,659,453
Realized losses:
Sales of fixed maturities		(64,992	)		(111,459	)		(64,992	)		(111,459	)
Sales of equity securities		-			-			-			-
Sales of real estate		-			-			-			-
Other-than-temporary impairments		-			-			-			-
Other		-			(132,518	)		-			(132,518	)
Total realized losses		(64,992	)		(243,977	)		(64,992	)		(243,977	)
Net realized investment gains (losses)		1,779,333			5,301,778			8,953,840			6,415,476
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		12,946,281			97,148			(11,738,163	)		14,884,779
Change in fair value of equity securities		12,946,281			97,148			(11,738,163	)		14,884,779
Net investment gains (losses)	$	14,725,614		$	5,398,926		$	(2,784,323	)	$	21,300,255
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921
Net increase (decrease)	$	6,595,986		$	3,925,070		$	8,068,851		$	8,859,921

Maximum and Minimum Lending Rates for Mortgage Loan

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.82%
Residential Loans	5.50%	5.50%	8.00%	8.00%

Mortgage Loan Holdings

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

	June 30, 2020		December 31, 2019
In good standing	$	13,097,827	$	8,223,286
Total mortgage loans	$	13,097,827	$	8,223,286

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Measurements [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the fair value measurements of the Company’s assets and liabilities measured at fair value in the Condensed Consolidated Balance Sheet on a recurring basis as of June 30, 2020 and December 31, 2019.

June 30, 2020	Level 1		Level 2		Level 3		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	46,407,935	$	-	$	-	$	46,407,935
U.S. special revenue and assessments		-		15,886,213		-		15,886,213
Corporate securities		-		114,291,551		-		114,291,551
Total fixed maturities		46,407,935		130,177,764		-		176,585,699
Equity securities:
Common stocks		23,092,530		16,041,865		27,006,713		66,141,108
Total equity securities		23,092,530		16,041,865		27,006,713		66,141,108
Total financial assets	$	69,500,465	$	146,219,629	$	27,006,713	$	242,726,807

December 31, 2019	Level 1		Level 2		Level 3		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	36,128,743	$	-	$	-	$	36,128,743
U.S. special revenue and assessments		-		15,203,363		-		15,203,363
Corporate securities		-		120,297,267		-		120,297,267
Total fixed maturities		36,128,743		135,500,630		-		171,629,373
Equity securities:
Common stocks		29,888,281		14,258,750		34,514,762		78,661,793
Total equity securities		29,888,281		14,258,750		34,514,762		78,661,793
Total financial assets	$	66,017,024	$	149,759,380	$	34,514,762	$	250,291,166

Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis

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			Total
Balance at December 31, 2019	$	-	$	34,514,762		$	34,514,762
Total unrealized gain or (losses):
Included in net income (loss)		-		(139,588	)		(139,588	)
Included in other comprehensive income		-		-			-
Purchases		-		3,082,007			3,082,007
Sales		-		(10,450,468	)		(10,450,468	)
Balance at June 30, 2020	$	-	$	27,006,713		$	27,006,713

	June 30, 2020			December 31, 2019
Change in fair value of equity securities included in net income (loss) relating to assets held	$	(139,588	)	$	6,461,670

Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value

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.

	Carrying		Estimated
June 30, 2020	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	14,417,247		14,417,247		-		-		14,417,247
Mortgage loans on real estate		13,097,827		12,934,172		-		-		12,934,172
Investment real estate		40,725,963		85,158,424		-		-		85,158,424
Notes receivable		19,654,162		23,313,608		-		-		23,313,608
Policy loans		8,709,100		8,709,100		-		-		8,709,100
Short term investments		12,435,481		12,435,481		12,435,481		-		-
Cash and cash equivalents		29,317,455		29,317,455		29,317,455		-		-

	Carrying		Estimated
December 31, 2019	Amount		Fair Value		Level 1		Level 2		Level 3
Equity securities, at cost	$	10,919,247		10,919,247		-		-		10,919,247
Mortgage loans on real estate		8,223,286		7,531,094		-		-		7,531,094
Investment real estate		44,344,236		85,158,424		-		-		85,158,424
Notes receivable		19,487,458		19,332,472		-		-		19,332,472
Policy loans		8,803,876		8,803,876		-		-		8,803,876
Short term investments		10,442,173		10,442,173		10,442,173		-		-
Cash and cash equivalents		28,787,629		28,787,629		28,787,629		-		-

XML

Credit Arrangements (Tables)

6 Months Ended

Jun. 30, 2020

Credit Arrangements [Abstract]

Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2019		Borrowings		Repayments		June 30, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000		-		-		-		-
UG	6/2/2015	5/7/2021		10,000,000		-		-		-		-

XML

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies [Abstract]

Total Funding Commitments and Unfunded Commitment

The following table represents the total funding commitments and the unfunded commitment as of June 30, 2020 related to certain investments:

	Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Macritchie Storage II, LP		7,000,750		2,100,407
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		2,296,875
Modern Distributors, Inc.		7,200,000		3,700,000

XML

Other Cash Flow Disclosures (Tables)

6 Months Ended

Jun. 30, 2020

Other Cash Flow Disclosures [Abstract]

Expenses Paid on a Cash Basis

On a cash basis, the Company paid the following expenses:

	Three Months Ended
	June 30,
	2020			2019
Interest		$	-		$	-
Federal income tax			2,110,000			1,106,000

	Six Months Ended
	June 30,
	2020			2019
Interest		$	-		$	-
Federal income tax			2,110,000			1,106,000

XML

Concentrations of Credit Risk (Tables)

6 Months Ended

Jun. 30, 2020

Concentrations of Credit Risk [Abstract]

Allocation of Oil and Gas Investments by Type

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 18% and 25% of the Company's total invested assets as of June 30, 2020 and December 31, 2019, respectively. The following table provides an allocation of the oil and gas investments by type.

	June 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	63,724,044	$	80,182,100
Transportation		-		3,812,565
Exploration		1,222,760		2,824,810
Total	$	64,946,804	$	86,819,475

XML

Basis of Presentation (Details)	Jun. 30, 2020
Chief Executive Officer and Chairman of the Board [Member]
Ownership Interest [Abstract]
Ownership interest percentage	65.78%
FSBI [Member] | FSNB [Member]
Ownership Interest [Abstract]
Ownership in subsidiary bank	100.00%

XML

Investments, Available for Sale Securities (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Fixed maturities [Abstract]
Original or amortized cost	$ 157,032,450	$ 159,959,855
Gross unrealized gains	19,553,249	11,705,047
Gross unrealized losses	0	(35,529)
Estimated fair value	176,585,699	171,629,373	[1]
Equity securities [Abstract]
Estimated fair value	66,141,108	78,661,793	[1]
U.S. Government and Govt. Agencies and Authorities [Member]
Fixed maturities [Abstract]
Original or amortized cost	44,793,626	35,761,440
Gross unrealized gains	1,614,309	402,832
Gross unrealized losses	0	(35,529)
Estimated fair value	46,407,935	36,128,743
U.S. Special Revenue and Assessments [Member]
Fixed maturities [Abstract]
Original or amortized cost	14,361,765	14,371,263
Gross unrealized gains	1,524,448	832,100
Gross unrealized losses	0	0
Estimated fair value	15,886,213	15,203,363
All Other Corporate Bonds [Member]
Fixed maturities [Abstract]
Original or amortized cost	97,877,059	109,827,152
Gross unrealized gains	16,414,492	10,470,115
Gross unrealized losses	0	0
Estimated fair value	$ 114,291,551	$ 120,297,267

[1] Balance sheet audited at December 31, 2019.

XML

Investments, Debt Securities by Contractual Maturity (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Amortized cost [Abstract]
Due in one year or less	$ 23,776,809
Due after one year through five years	46,399,814
Due after five years through ten years	34,654,588
Due after ten years	25,468,466
Fixed maturities with no single maturity date	26,732,773
Original or amortized cost	157,032,450	$ 159,959,855
Fair value [Abstract]
Due in one year or less	24,205,154
Due after one year through five years	49,609,973
Due after five years through ten years	39,465,754
Due after ten years	30,241,655
Fixed maturities with no single maturity date	33,063,163
Estimated fair value	$ 176,585,699	$ 171,629,373	[1]

[1] Balance sheet audited at December 31, 2019.

XML

Investments, Securities in Continuous Unrealized Loss Position (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
All Other Corporate Bonds [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 0
12 months or longer, fair value	0
Total fair value	0
Less than 12 months, unrealized losses	0
12 months or longer, unrealized losses	0
Total unrealized losses	0
U.S. Government and Govt. Agencies and Authorities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value		$ 6,059,380
12 months or longer, fair value		0
Total fair value		6,059,380
Less than 12 months, unrealized losses		(35,529)
12 months or longer, unrealized losses		0
Total unrealized losses		(35,529)
Fixed Maturities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	0	6,059,380
12 months or longer, fair value	0	0
Total fair value	0	6,059,380
Less than 12 months, unrealized losses	0	(35,529)
12 months or longer, unrealized losses	0	0
Total unrealized losses	$ 0	$ (35,529)

XML

Investments, Number of Securities in Unrealized Loss Position (Details) - Security	Jun. 30, 2020	Dec. 31, 2019
Fixed Maturities [Abstract]
Less than 12 months, number of securities	0	3
12 months or longer, number of securities	0	0
Total number of securities	0	3

XML

Investments, Net Investment Gains (Losses) and Change in Net Unrealized Gains on Available-for-sale Investments (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Realized gains on available-for-sale investments [Abstract]
Total realized gains	$ 1,844,325	$ 5,545,755	$ 9,018,832	$ 6,659,453
Realized losses on available-for-sale investments [Abstract]
Other-than-temporary impairments	0	0	0	0
Total realized losses	(64,992)	(243,977)	(64,992)	(243,977)
Net realized investment gains (losses)	1,779,333	5,301,778	8,953,840	6,415,476
Change in fair value of equity securities [Abstract]
Change in fair value of equity securities held at the end of the period	12,946,281	97,148	(11,738,163)	14,884,779
Change in fair value of equity securities	12,946,281	97,148	(11,738,163)	14,884,779
Total net investment gains (losses)	14,725,614	5,398,926	(2,784,323)	21,300,255
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income	6,595,986	3,925,070	8,068,851	8,859,921
Fixed Maturities [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	11,732	101,633	403,215	116,688
Realized losses on available-for-sale investments [Abstract]
Total realized losses	(64,992)	(111,459)	(64,992)	(111,459)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income	6,595,986	3,925,070	8,068,851	8,859,921
Equity Securities [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	1,832,593	2,765,915	8,615,617	2,765,915
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	0	0	0
Real Estate [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	0	2,678,207	0	3,776,850
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	0	0	0
Other [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	0	0	0	0
Realized losses on available-for-sale investments [Abstract]
Total realized losses	$ 0	$ (132,518)	$ 0	$ (132,518)

XML

Investments, Mortgage Loans, Investment Real Estate, Notes Receivable, and Short-Term Investments (Details) - USD ($)	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Cost Method Investments [Abstract]
Equity Securities without Readily Determinable Fair Value, Amount	$ 14,417,247		$ 10,919,247	[1]
Mortgage Loans [Abstract]
Mortgage loans acquired, including discounted mortgage loans	$ 5,098,138		4,014,455
Servicing fee on loan	0.25%
Loan origination	0.50%
Loan limit threshold for appraised property value	80.00%
Mortgage loans reserve	$ 0		0
Mortgage loan holdings [Abstract]
In good standing	13,097,827		8,223,286
Total mortgage loans	$ 13,097,827		$ 8,223,286	[1]
Investment Real Estate [Abstract]
Investments in oil/gas royalties as a % of total investment real estate portfolio	45.00%		44.00%
Investment real estate acquired	$ 0	$ 1,408,021
Notes Receivable [Abstract]
Valuation allowance	0		$ 0
Notes receivable acquired	3,500,000	7,528,188
Short-Term Investments [Abstract]
Short-term investments acquired	$ 6,000,000	$ 0
Farm Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.00%		5.00%
Farm Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.00%		5.00%
Commercial Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	4.24%		4.82%
Commercial Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	7.50%		7.50%
Residential Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.50%		8.00%
Residential Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.50%		8.00%

[1] Balance sheet audited at December 31, 2019.

XML

Fair Value Measurements, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Assets [Abstract]
Fixed maturities available for sale	$ 176,585,699	$ 171,629,373	[1]
Equity securities	66,141,108	78,661,793	[1]
U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	46,407,935	36,128,743
Measured on a Recurring Basis [Member]
Assets [Abstract]
Fixed maturities available for sale	176,585,699	171,629,373
Equity securities	66,141,108	78,661,793
Total financial assets	242,726,807	250,291,166
Measured on a Recurring Basis [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	46,407,935	36,128,743
Measured on a Recurring Basis [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	15,886,213	15,203,363
Measured on a Recurring Basis [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	114,291,551	120,297,267
Measured on a Recurring Basis [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	66,141,108	78,661,793
Measured on a Recurring Basis [Member] | Level 1 [Member]
Assets [Abstract]
Fixed maturities available for sale	46,407,935	36,128,743
Equity securities	23,092,530	29,888,281
Total financial assets	69,500,465	66,017,024
Measured on a Recurring Basis [Member] | Level 1 [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	46,407,935	36,128,743
Measured on a Recurring Basis [Member] | Level 1 [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Level 1 [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Level 1 [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	23,092,530	29,888,281
Measured on a Recurring Basis [Member] | Level 2 [Member]
Assets [Abstract]
Fixed maturities available for sale	130,177,764	135,500,630
Equity securities	16,041,865	14,258,750
Total financial assets	146,219,629	149,759,380
Measured on a Recurring Basis [Member] | Level 2 [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Level 2 [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	15,886,213	15,203,363
Measured on a Recurring Basis [Member] | Level 2 [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	114,291,551	120,297,267
Measured on a Recurring Basis [Member] | Level 2 [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	16,041,865	14,258,750
Measured on a Recurring Basis [Member] | Level 3 [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Equity securities	27,006,713	34,514,762
Total financial assets	27,006,713	34,514,762
Measured on a Recurring Basis [Member] | Level 3 [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Level 3 [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Level 3 [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Level 3 [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	$ 27,006,713	$ 34,514,762

[1] Balance sheet audited at December 31, 2019.

XML

Fair Value Measurements, Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 34,514,762
Total unrealized gain or (losses) [Abstract]
Included in net income (loss)	(139,588)
Included in other comprehensive income	0
Purchases	3,082,007
Sales	(10,450,468)
Ending Balance	27,006,713	$ 34,514,762
Change in fair value of equity securities included in net income (loss) relating to assets held	(139,588)	6,461,670
Fixed Maturities, Available for Sale [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	0
Total unrealized gain or (losses) [Abstract]
Included in net income (loss)	0
Included in other comprehensive income	0
Purchases	0
Sales	0
Ending Balance	0	0
Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	34,514,762
Total unrealized gain or (losses) [Abstract]
Included in net income (loss)	(139,588)
Included in other comprehensive income	0
Purchases	3,082,007
Sales	(10,450,468)
Ending Balance	$ 27,006,713	$ 34,514,762

XML

Fair Value Measurements, Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Carrying Amount [Member]
Assets [Abstract]
Equity securities, at cost	$ 14,417,247	$ 10,919,247
Mortgage loans on real estate	13,097,827	8,223,286
Investment real estate	40,725,963	44,344,236
Notes receivable	19,654,162	19,487,458
Policy loans	8,709,100	8,803,876
Short term investments	12,435,481	10,442,173
Cash and cash equivalents	29,317,455	28,787,629
Estimated Fair Value [Member]
Assets [Abstract]
Equity securities, at cost	14,417,247	10,919,247
Mortgage loans on real estate	12,934,172	7,531,094
Investment real estate	85,158,424	85,158,424
Notes receivable	23,313,608	19,332,472
Policy loans	8,709,100	8,803,876
Short term investments	12,435,481	10,442,173
Cash and cash equivalents	29,317,455	28,787,629
Equity securities, at cost	$ 14,417,247	10,919,247	[1]
Minimum [Member]
Liabilities [Abstract]
Policy loan interest rate	4.00%
Maximum [Member]
Liabilities [Abstract]
Policy loan interest rate	8.00%
Level 1 [Member]
Assets [Abstract]
Equity securities, at cost	$ 0	0
Mortgage loans on real estate	0	0
Investment real estate	0	0
Notes receivable	0	0
Policy loans	0	0
Short term investments	12,435,481	10,442,173
Cash and cash equivalents	29,317,455	28,787,629
Level 2 [Member]
Assets [Abstract]
Equity securities, at cost	0	0
Mortgage loans on real estate	0	0
Investment real estate	0	0
Notes receivable	0	0
Policy loans	0	0
Short term investments	0	0
Cash and cash equivalents	0	0
Level 3 [Member]
Assets [Abstract]
Equity securities, at cost	14,417,247	10,919,247
Mortgage loans on real estate	12,934,172	7,531,094
Investment real estate	85,158,424	85,158,424
Notes receivable	23,313,608	19,332,472
Policy loans	8,709,100	8,803,876
Short term investments	0	0
Cash and cash equivalents	$ 0	$ 0

[1] Balance sheet audited at December 31, 2019.

XML

Credit Arrangements (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Line of Credit Facility [Abstract]
Pledged Bonds	$ 12,549,410
Variable Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Period of interest under CMA	90 days
Fixed Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Period of interest under CMA	30 days
UTG 2013-11-20 [Member]
Line of Credit Facility [Abstract]
Interest Rate	4.04%
Frequency of payments	monthly
Assets Pledged	common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.
UTG 2013-11-20 [Member] | UG [Member]
Line of Credit Facility [Abstract]
Issue Date	Nov. 20, 2013
Maturity Date	Nov. 20, 2020
Revolving Credit Limit	$ 8,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0
Percentage of common voting stock pledged	100.00%
UG Avalon 2015-06-02 [Member] | UG [Member]
Line of Credit Facility [Abstract]
Issue Date	Jun. 02, 2015
Maturity Date	May 07, 2021
Revolving Credit Limit	$ 10,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0

XML

Shareholders' Equity (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock Repurchase Program [Abstract]
Stock repurchase program, additional amount authorized	$ 2,500,000
Stock repurchase program authorized amount	$ 18,500,000		$ 18,500,000
Stock repurchased during period (in shares)		13,979
Amount paid to repurchase shares during the year		$ 450,057	$ 561,342
Amount of common stock repurchased		$ 15,223,153
Number of common stock acquired (in shares)		1,183,337
Number of shares issued (in shares)		6,664
Cost of shares issued		$ 218,289
Earnings Per Share Calculations [Abstract]
Dilutive instruments outstanding (in shares)		0	0

XML

Commitments and Contingencies (Details)	Jun. 30, 2020 USD ($)
RLF III, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	$ 4,000,000
Unfunded Commitment	398,120
Sovereign's Capital, LP Fund I [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	500,000
Unfunded Commitment	20,000
Sovereign's Capital, LP Fund II [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	1,000,000
Unfunded Commitment	158,596
Sovereign's Capital, LP Fund III [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	3,000,000
Unfunded Commitment	2,137,079
Macritchie Storage II, LP [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	7,000,750
Unfunded Commitment	2,100,407
Garden City Companies, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	2,000,000
Unfunded Commitment	1,956,688
Carrizo Springs Music, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	2,500,000
Unfunded Commitment	2,296,875
Modern Distributors, Inc [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	7,200,000
Unfunded Commitment	$ 3,700,000

XML

Other Cash Flow Disclosures (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Other Cash Flow Disclosures [Abstract]
Interest	$ 0	$ 0	$ 0	$ 0
Federal income tax	$ 2,110,000	$ 1,106,000	$ 2,110,000	$ 1,106,000

XML

Concentrations of Credit Risk (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($) State	Jun. 30, 2019	Dec. 31, 2019 USD ($)
Concentrations [Abstract]
Number of states by which entity primarily serves | State	4
Maximum retention limits per life	$ 125,000
Allocation of Oil and Gas Investments [Abstract]
Investment	351,766,587		$ 352,511,442	[1]
Oil and Gas Industry [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	64,946,804		86,819,475
Oil and Gas Industry [Member] | Land, Mineral, and Royalty Interests [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	63,724,044		80,182,100
Oil and Gas Industry [Member] | Transportation [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	0		3,812,565
Oil and Gas Industry [Member] | Exploration [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	$ 1,222,760		$ 2,824,810
Reinsurer Concentration Risk [Member] | Life Insurance Ceded [Member]
Concentrations [Abstract]
Percentage of gross insurance in force	20.00%		21.00%
Percentage of premium income	34.00%	36.00%
Direct Premium Collected [Member] | Geographic Concentration Risk [Member] | Illinois, Ohio, Texas and West Virginia [Member]
Concentrations [Abstract]
Concentration risk, percentage	55.00%	55.00%
Invested Assets [Member] | Customer Concentration Risk [Member] | Oil and Gas Industry [Member]
Concentrations [Abstract]
Concentration risk, percentage	18.00%		25.00%

[1] Balance sheet audited at December 31, 2019.