INVESTMENT ADVISORY CONTRACT


THIS  AGREEMENT,  made this 1st day of November 1999,  between  SECURITY  INCOME
FUND, a Kansas corporation (hereinafter referred to as the "Fund"), and SECURITY
MANAGEMENT  COMPANY,  LLC,  a  Kansas  limited  liability  company  (hereinafter
referred to as the "Management Company"),

                                   WITNESSETH:

WHEREAS,  the Fund is engaged in business as an open-end  management  investment
company registered under the Federal Investment Company Act of 1940; and

WHEREAS,  the Fund is  authorized  to issue shares of capital  stock in separate
Series, with each such Series representing  interests in a separate portfolio of
securities and other assets; and

WHEREAS, the Fund currently offers shares in five separate series, including the
Corporate Bond Series,  the U.S.  Government  Series, the High Yield Series, and
the Limited  Maturity  Bond Series,  such series  together with all other series
subsequently  established  by the Fund with respect to which the Fund desires to
retain the Management  Company to render investment  advisory services hereunder
and with  respect to which the  Management  Company  is willing so to do,  being
herein collectively referred to as the "Series", and

WHEREAS,  the Management Company is willing to provide  investment  research and
advice to the Fund on the terms and conditions hereinafter set forth;

NOW,  THEREFORE,  in  consideration  of the premises and mutual  agreements made
herein, the parties hereto agree as follows:

1.  EMPLOYMENT OF MANAGEMENT  COMPANY.  The Fund hereby  employs the  Management
    Company to act as investment adviser to each Series of the Fund with respect
    to the  investment of its assets,  and to supervise and arrange the purchase
    of securities  for and the sale of securities  held in the portfolios of the
    Series  of the  Fund,  subject  always  to the  supervision  of the Board of
    Directors  of the Fund,  during the period and upon and subject to the terms
    and conditions herein set forth. The Management  Company hereby accepts such
    employment and agrees to perform the services required by this Agreement for
    the compensation herein provided.

    In the event the Fund establishes additional series with respect to which it
    desires  to retain the  Management  Company  to render  investment  advisory
    services  hereunder,  it shall notify the Management Company in writing.  If
    the  Management  Company is willing to render such  services it shall notify
    the Fund in writing,  whereupon such series shall become a Series subject to
    the  terms and  conditions  hereunder,  and to such  amended  or  additional
    provisions as shall be specifically agreed to by the Fund and the Management
    Company in accordance with applicable law.

2.  INVESTMENT ADVISORY DUTIES.

    (a)  The Management  Company shall regularly provide each Series of the Fund
         with investment research, advice and supervision,  continuously furnish
         an investment  program and recommend that securities shall be purchased
         and sold and what  portion of the assets of each  Series  shall be held
         uninvested  and shall arrange for the purchase of securities  and other
         investments for and the sale of securities and other  investments  held
         in the portfolio of each Series. All investment advice furnished by the
         Management  Company to each  Series  under this  Section 2 shall at all
         times  conform to any  requirements  imposed by the  provisions  of the
         Fund's Articles of Incorporation and Bylaws, the Investment Company Act
         of 1940 and the rules and regulations promulgated thereunder, any other
         applicable  provisions  of  law,  and  the  terms  of the  registration
         statements  of the  Fund  under  the  Securities  Act of  1933  and the
         Investment  Company Act of 1940, all as from time to time amended.  The
         Management Company shall advise and assist the officers or other agents
         of the Fund in taking such steps as are  necessary  or  appropriate  to
         carry out the decisions of the Fund's Board of Directors  (and any duly
         appointed  committee  thereof) with regard to the foregoing matters and
         the general conduct of the Fund's business.

    (b)  Subject to the  provisions of the  Investment  Company Act of 1940 (the
         "1940  Act") and any  applicable  exemptions  thereto,  the  Management
         Company  is  authorized,  but is under  no  obligation,  to enter  into
         sub-advisory  agreements (the  "Sub-Advisory  Agreements")  with one or
         more sub-advisers (each a "Sub-adviser") to provide investment advisory
         services  to any  Series  of the  Fund.  Each  Sub-adviser  shall  have
         investment discretion with respect to the assets of the Series assigned
         to that Sub-adviser by the Management  Company.  The Management Company
         shall not be  responsible  or liable  with  respect  to any  investment
         decision made by a  Sub-adviser,  whether such decision be to purchase,
         sell or hold such  investment.  Consistent  with the  provisions of the
         1940 Act and any applicable  exemption thereto,  the Investment Manager
         may enter into Sub-Advisory Agreements or amend Sub-Advisory Agreements
         without the approval of the shareholders of the affected Series.

3.  PORTFOLIO TRANSACTIONS AND BROKERAGE.

    (a)  Transactions  in  portfolio   securities   shall  be  effected  by  the
         Management  Company,  through  brokers  or  otherwise,  in  the  manner
         permitted  in this  Section  3 and in  such  manner  as the  Management
         Company  shall  deem to be in the  best  interests  of the  Fund  after
         consideration is given to all relevant factors.

    (b)  In  reaching a judgment  relative to the  qualification  of a broker to
         obtain the best execution of a particular  transaction,  the Management
         Company may take into account all relevant  factors and  circumstances,
         including the size of any  contemporaneous  market in such  securities;
         the  importance  to the  Fund of speed  and  efficiency  of  execution;
         whether the particular  transaction is part of a larger intended change
         in  portfolio   position  in  the  same   securities;   the   execution
         capabilities   required  by  the   circumstances   of  the   particular
         transaction;  the  capital  required  by the  transaction;  the overall
         capital strength of the broker;  the broker's apparent  knowledge of or
         familiarity  with  sources  from  or to  whom  such  securities  may be
         purchased  or  sold;  as  well  as  the  efficiency,   reliability  and
         confidentiality  with which the broker has  handled  the  execution  of
         prior similar transactions.

    (c)  Subject  to any  statements  concerning  the  allocation  of  brokerage
         contained  in  the  Fund's   prospectus   or  statement  of  additional
         information,  the  Management  Company  is  authorized  to  direct  the
         execution of portfolio transactions for the Fund to brokers who furnish
         investment  information or research service to the Management  Company.
         Such  allocation  shall  be in  such  amounts  and  proportions  as the
         Management  Company may determine.  If the transaction is directed to a
         broker  providing  brokerage  and research  services to the  Management
         Company,  the commission paid for such  transaction may be in excess of
         the  commission  another  broker would have charged for effecting  that
         transaction,  if the Management  Company shall have  determined in good
         faith that the commission is reasonable in relation to the value of the
         brokerage  and research  services  provided,  viewed in terms of either
         that  particular  transaction  or the overall  responsibilities  of the
         Management  Company  with respect to all accounts as to which it now or
         hereafter  exercises  investment   discretion.   For  purposes  of  the
         immediately  preceding  sentence,  "providing  brokerage  and  research
         services" shall have the meaning  generally given such terms or similar
         terms under Section 28(e)(3) of the Securities Exchange Act of 1934, as
         amended.

    (d)  In the selection of a broker for the execution of any  transaction  not
         subject to fixed commission rates, the Management Company shall have no
         duty or  obligation  to seek advance  competitive  bidding for the most
         favorable   negotiated   commission  rate  to  be  applicable  to  such
         transaction,  or to  select  any  broker  solely  on the  basis  of its
         purported or "posted" commission rates.

    (e)  In  connection  with  transactions  on markets  other than  national or
         regional  securities  exchanges,  the Fund will deal  directly with the
         selling  principal or market maker  without  incurring  charges for the
         services of a broker on its behalf unless,  in the best judgment of the
         Management  Company,  better  price or  execution  can be  obtained  in
         utilizing the services of a broker.

4.  ALLOCATION  OF EXPENSES AND CHARGES.  The  Management  Company shall provide
    investment  advisory,  statistical and research  facilities and all clerical
    services  relating to research,  statistical and investment  work, and shall
    provide for the  compilation  and  maintenance  of such records  relating to
    these functions as shall be required under  applicable law and the rules and
    regulations  of the  Securities  and  Exchange  Commission.  The  Management
    Company  will also  provide  the Fund with a  president,  a chief  financial
    officer, and a secretary, subject to the approval of the Board of Directors,
    and will pay the salaries and expenses of such  officers of the Fund who are
    also directors, officer or employees of the Management Company.

    Other  than  as  specifically  indicated  in the  preceding  sentences,  the
    Management  Company  shall not be required to pay any  expenses of the Fund,
    and in particular, but without limiting the generality of the foregoing, the
    Management  Company  shall not be required  to pay office  rental or general
    administrative  expenses;  Board of  Directors'  fees;  legal,  auditing and
    accounting expenses;  insurance premiums;  broker's  commissions;  taxes and
    governmental  fees and any  membership  dues;  fees of  custodian,  transfer
    agent,  registrar  and  dividend  disbursing  agent  (if any);  expenses  of
    obtaining  quotations on the Fund's portfolio  securities and pricing of the
    Fund's shares;  cost of stock certificates and any other expenses (including
    clerical expenses) of issue, sale, repurchase or redemption of shares of the
    Fund's capital stock; costs and expenses in connection with the registration
    of  the  Fund's   capital  stock  under  the  Securities  Act  of  1933  and
    qualification  of the Fund's  capital  stock  under the Blue Sky laws of the
    states where such stock is offered;  costs and expenses in  connection  with
    the  registration  of the Fund under the Investment  Company Act of 1940 and
    all periodic and other reports required  thereunder;  expenses of preparing,
    printing  and  distributing   reports,   proxy   statements,   prospectuses,
    statements  or  additional   information,   notices  and   distributions  to
    stockholders;  costs of stationery; costs of stockholder and other meetings;
    expenses  of  maintaining   the  Fund's   corporate   existence;   and  such
    nonrecurring  expenses as may arise including  litigation affecting the Fund
    and the legal  obligations  the Fund may have to indemnify  its officers and
    directors.

5.  COMPENSATION OF MANAGEMENT COMPANY.

    (a)  As  compensation  for the  services to be  rendered  by the  Management
         Company as provided for herein, for each of the years this Agreement is
         in  effect,  the Fund  shall pay the  Management  Company an annual fee
         equal to .60  percent of the  average  daily  closing  value of the net
         assets of High Yield Series of the Fund, and .50 percent of the average
         daily closing value of the net assets of Corporate Bond Series, Limited
         Maturity Bond Series, and U.S.  Government Series of the Fund, computed
         on a daily basis.  Such fee shall be adjusted and payable  monthly.  If
         this  Agreement  shall be effective for only a portion of a year,  then
         the Management  Company's  compensation for said year shall be prorated
         for such portion.  For purposes of this Section 5, the value of the net
         assets of each such Series  shall be computed in the same manner at the
         end of the  business day as the value of such net assets is computed in
         connection with the  determination of the net asset value of the Fund's
         shares as described in the Fund's prospectus.

    (b)  For each of the Fund's  full  fiscal  years this  Agreement  remains in
         force, the Management  Company agrees that if the total annual expenses
         of  each  Series  of  the  Fund,   exclusive  of  interest  and  taxes,
         extraordinary expenses (such as litigation), and distribution fees paid
         under the  Fund's  Class B  Distribution  Plan,  but  inclusive  of the
         Management  Company's  compensation,   exceed  any  expense  limitation
         imposed by state  securities  law or  regulation  in any state in which
         shares of the Fund are then qualified for sale, as such regulations may
         be amended from time to time, the Management Company will contribute to
         such  Series  such  funds or waive such  portion  of its fee,  adjusted
         monthly as may be  requisite to insure that such annual  expenses  will
         not exceed any such limitation. If this Contract shall be effective for
         only a portion of one of the  Series'  fiscal  years,  then the maximum
         annual expenses shall be prorated for such portion.  Brokerage fees and
         commissions  incurred in  connection  with the  purchase or sale of any
         securities  by a Series  shall not be deemed  to be  expenses  with the
         meaning of this paragraph (b).

6.  MANAGEMENT  COMPANY  NOT TO  RECEIVE  COMMISSIONS.  In  connection  with the
    purchase  or sale of  portfolio  securities  for the  account  of the  Fund,
    neither the Management Company nor any officer or director of the Management
    Company  shall act as  principal or receive any  compensation  from the Fund
    other than its  compensation  as  provided  for in  Section 5 above.  If the
    Management Company, or any "affiliated person" (as defined in the Investment
    Company Act of 1940) receives any cash, credits,  commissions or tender fees
    from any person in  connection  with  transactions  in the Fund's  portfolio
    securities  (including  but not  limited  to the tender or  delivery  of any
    securities  held in the Fund's  portfolio),  the  Management  company  shall
    immediately  pay such amount to the Fund in cash or as a credit  against any
    then  earned but unpaid  management  fees due by the Fund to the  Management
    Company.

7.  LIMITATION OF LIABILITY OF  MANAGEMENT  COMPANY.  So long as the  Management
    Company  shall give the Fund the benefit of its best  judgment and effort in
    rendering services hereunder, the Management Company shall not be liable for
    any  errors of  judgment  or mistake of law,  or for any loss  sustained  by
    reason of the adoption of any  investment  policy or the  purchase,  sale or
    retention  of  any  security  on its  recommendation,  whether  or not  such
    recommendation shall have been based upon its own investigation and research
    or upon  investigation  and research made by any other  individual,  firm or
    corporation,  if such  recommendation  shall  have been made and such  other
    individual,  firm or corporation  shall have been selected with due care and
    in good faith.  Nothing herein  contained  shall,  however,  be construed to
    protect the  Management  Company  against any  liability  to the Fund or its
    security  holders  by  reason  of  willful  misfeasance,  bad faith or gross
    negligence  in the  performance  of its duties or by reason of its  reckless
    disregard of its  obligations  and duties under this  Agreement.  As used in
    this Section 7, "Management  Company" shall include directors,  officers and
    employees  of the  Management  Company,  as well as the  Management  Company
    itself.

8.  OTHER ACTIVITIES NOT RESTRICTED. Nothing in this Agreement shall prevent the
    Management  Company or any officer thereof from acting as investment adviser
    for any other person, firm, or corporation, nor shall it in any way limit or
    restrict  the  Management  Company  or  any  of  its  directors,   officers,
    stockholders  or employees from buying,  selling,  or trading any securities
    for its own  accounts  or for the  accounts  of  others  for  whom it may be
    acting; provided,  however, that the Management Company expressly represents
    that it will undertake no activities  which, in its judgment,  will conflict
    with the  performance of its  obligations to the Fund under this  Agreement.
    The Fund acknowledges that the Management Company acts as investment adviser
    to other investment  companies,  and it expressly consents to the Management
    Company  acting as such;  provided,  however,  that if in the opinion of the
    Management Company, particular securities are consistent with the investment
    objectives  of, and are desirable  purchases or sales for the  portfolios of
    one or more  Series and one or more of such other  investment  companies  or
    series of such companies at  approximately  the same time, such purchases or
    sales  will  be  made  on a  proportionate  basis  if  feasible,  and if not
    feasible, then on a rotating or other equitable basis.

9.  DURATION AND TERMINATION OF AGREEMENT. This Agreement shall become effective
    on  November  1,  1999,  provided  that on or  before  that date it has been
    approved by the holders of a majority of the outstanding  voting  securities
    of each Series of the Fund.  This  Agreement  shall  continue in force until
    November 1, 2001, and for successive  12-month  periods  thereafter,  unless
    terminated, provided each such continuance is specifically approved at least
    annually by (a) the vote of a majority of the entire  Board of  Directors of
    the Fund,  and the vote of a majority of the  directors  of the Fund who are
    not  parties to this  Agreement  or  interested  persons  (as such terms are
    defined  in the  Investment  Company  Act of 1940) of any such party cast in
    person at a meeting of such directors  called for the purpose of voting upon
    such  approval,  or (b) by the  vote of the  holders  of a  majority  of the
    outstanding  voting securities of each series of the Fund (as defined in the
    Investment  Company Act of 1940). In the event a majority of the outstanding
    shares of one series vote for continuance of the Advisory Contract,  it will
    be  continued  for that  series  even  though the  Advisory  Contract is not
    approved by either a majority of the outstanding  shares of any other series
    or by a majority  of  outstanding  shares of the Fund.  Upon this  Agreement
    becoming  effective,  any  previous  agreement  between  the  Fund  and  the
    Management Company providing for investment advisory and management services
    shall concurrently terminate,  except that such termination shall not affect
    fees accrued and  guarantees of expenses with respect to any period prior to
    termination.

    This  Agreement  may be terminated at any time as to any series of the Fund,
    without  payment of any  penalty,  by vote of the Board of  Directors of the
    Fund or by vote of the  holders  of a  majority  of the  outstanding  voting
    securities of that series of the Fund, or by the Management Company, upon 60
    days' written notice to the other party.

    This  Agreement   shall   automatically   terminate  in  the  event  of  its
    "assignment" (as defined in the Investment Company Act of 1940).

IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be duly
executed by their respective  corporate  officers thereto duly authorized on the
day, month and year first above written.

                                                SECURITY INCOME FUND

                                            By: JOHN D. CLELAND
                                                --------------------------------
                                                John D. Cleland, President

ATTEST:

AMY J. LEE
------------------------------------
Amy J. Lee, Secretary

                                                SECURITY MANAGEMENT COMPANY, LLC

                                            By: JAMES R. SCHMANK
                                                --------------------------------
                                                James R. Schmank, President

ATTEST:

AMY J. LEE
------------------------------------
Amy J. Lee, Secretary

                    AMENDMENT TO INVESTMENT ADVISORY CONTRACT


WHEREAS,  Security Income Fund (the "Fund") and Security Management Company, LLC
(the "Management  Company") are parties to an Investment Advisory Contract dated
November  1,  1999,  as  amended  (the  "Advisory  Contract"),  under  which the
Management Company agrees to provide investment research, advice and supervision
and  business  management  services  to the Fund in return for the  compensation
specified in the Advisory Contract;

WHEREAS,  on February 4, 2000, the Board of Directors of the Fund authorized the
Fund to offer shares of the Diversified Income Series and High Yield Series in a
new class of shares designated as Class C shares; and

WHEREAS,  this  amendment  to the  Agreement  is subject to the  approval of the
initial  shareholder of the Class C shares of the Diversified  Income Series and
High Yield Series;

NOW,  THEREFORE  BE IT  RESOLVED,  that the Fund and SMC,  LLC hereby  amend the
Investment Advisory Contract, effective February 5, 2000, as follows:

Paragraph  4 shall be  deleted  in its  entirety  and the  following  paragraphs
inserted in lieu thereof:

4.  ALLOCATION  OF EXPENSES AND CHARGES.  The  Management  Company shall provide
    investment  advisory,  statistical and research  facilities and all clerical
    services  relating to research,  statistical and investment  work, and shall
    provide for the  compilation  and  maintenance  of such records  relating to
    these functions as shall be required under  applicable law and the rules and
    regulations  of the  Securities  and  Exchange  Commission.  The  Management
    Company  will also  provide  the Fund with a  president,  a chief  financial
    officer, and a secretary, subject to the approval of the Board of Directors,
    and will pay the salaries and expenses of such  officers of the Fund who are
    also directors, officer or employees of the Management Company.

    Other  than  as  specifically  indicated  in the  preceding  sentences,  the
    Management  Company  shall not be required to pay any  expenses of the Fund,
    and in particular, but without limiting the generality of the foregoing, the
    Management  Company  shall not be required  to pay office  rental or general
    administrative  expenses;  Board of  Directors'  fees;  legal,  auditing and
    accounting expenses;  insurance premiums;  broker's  commissions;  taxes and
    governmental  fees and any  membership  dues;  fees of  custodian,  transfer
    agent,  registrar  and  dividend  disbursing  agent  (if any);  expenses  of
    obtaining  quotations on the Fund's portfolio  securities and pricing of the
    Fund's shares;  cost of stock certificates and any other expenses (including
    clerical expenses) of issue, sale, repurchase or redemption of shares of the
    Fund's capital stock; costs and expenses in connection with the registration
    of  the  Fund's   capital  stock  under  the  Securities  Act  of  1933  and
    qualification  of the Fund's  capital  stock  under the Blue Sky laws of the
    states where such stock is offered;  costs and expenses in  connection  with
    the  registration  of the Fund under the Investment  Company Act of 1940 and
    all periodic and other reports required  thereunder;  expenses of preparing,
    printing  and  distributing   reports,   proxy   statements,   prospectuses,
    statements  or  additional   information,   notices  and   distributions  to
    stockholders;  costs of stationery; costs of stockholder and other meetings;
    expenses  of  maintaining   the  Fund's   corporate   existence;   and  such
    nonrecurring  expenses as may arise including  litigation affecting the Fund
    and the legal  obligations  the Fund may have to indemnify  its officers and
    directors. Notwithstanding the foregoing, SMC shall pay all expenses related
    to the  initial  registration  and  qualification  of the  Class C shares of
    Diversified Income Series and High Yield Series,  under the Blue Sky laws of
    the states where such class of stock is offered.

IN WITNESS  WHEREOF,  the parties  hereto have  executed  this  Amendment to the
Investment Advisory Contract this 5th day of February, 2000.

                                            SECURITY INCOME FUND

                                            By: JOHN D. CLELAND
                                                --------------------------------
                                                John D. Cleland, President

ATTEST:

AMY J. LEE
----------------------------------
Amy J. Lee, Secretary

                                            SECURITY MANAGEMENT COMPANY, LLC

                                            By: JAMES R. SCHMANK
                                                --------------------------------
                                                James R. Schmank, President

ATTEST:

AMY J. LEE
----------------------------------
Amy J. Lee, Secretary

                    AMENDMENT TO INVESTMENT ADVISORY CONTRACT

       WHEREAS,  Security  Income  Fund (the  "Fund")  and  Security  Management
Company,  LLC (the "Management  Company") are parties to an Investment  Advisory
Contract  dated November 1, 1999, as amended (the  "Advisory  Contract"),  under
which the Management Company agrees to provide investment  research,  advice and
supervision  and  business  management  services  to the Fund in return  for the
compensation specified in the Advisory Contract;

       WHEREAS,  on July 21, 2000, the Board of Directors of the Fund authorized
the Fund to offer shares of the Diversified  Income Series and High Yield Series
in a new class of shares designated as Class S shares; and

       WHEREAS,  this  amendment to the  Agreement is subject to the approval of
the initial  shareholder of the Class S shares of the Diversified  Income Series
and High Yield Series;

       NOW,  THEREFORE BE IT RESOLVED,  that the Fund and the Management Company
hereby amend the  Investment  Advisory  Contract,  effective  July 21, 2000,  as
follows:

       Paragraph 4 shall be deleted in its entirety and the following paragraphs
inserted in lieu thereof:

       4.  ALLOCATION  OF EXPENSES AND CHARGES.  The  Management  Company  shall
           provide investment advisory,  statistical and research facilities and
           all  clerical   services   relating  to  research,   statistical  and
           investment   work,  and  shall  provide  for  the   compilation   and
           maintenance of such records  relating to these  functions as shall be
           required under  applicable  law and the rules and  regulations of the
           Securities and Exchange Commission.  The Management Company will also
           provide the Fund with a president,  a chief financial officer,  and a
           secretary,  subject to the  approval of the Board of  Directors,  and
           will pay the salaries  and expenses of such  officers of the Fund who
           are also directors, officer or employees of the Management Company.

           Other than as specifically indicated in the preceding sentences,  the
           Management  Company  shall not be required to pay any expenses of the
           Fund, and in particular,  but without  limiting the generality of the
           foregoing, the Management Company shall not be required to pay office
           rental or general administrative  expenses; Board of Directors' fees;
           legal, auditing and accounting expenses; insurance premiums; broker's
           commissions;  taxes and  governmental  fees and any membership  dues;
           fees of custodian,  transfer agent, registrar and dividend disbursing
           agent  (if any);  expenses  of  obtaining  quotations  on the  Fund's
           portfolio  securities and pricing of the Fund's shares; cost of stock
           certificates and any other expenses  (including clerical expenses) of
           issue, sale, repurchase or redemption of shares of the Fund's capital
           stock;  costs and expenses in connection with the registration of the
           Fund's   capital  stock  under  the   Securities   Act  of  1933  and
           qualification  of the Fund's capital stock under the Blue Sky laws of
           the  states  where  such  stock is  offered;  costs and  expenses  in
           connection  with the  registration  of the Fund under the  Investment
           Company  Act of 1940 and all  periodic  and  other  reports  required
           thereunder; expenses of preparing, printing and distributing reports,
           proxy statements, prospectuses, statements or additional information,
           notices and distributions to stockholders; costs of stationery; costs
           of stockholder and other meetings; expenses of maintaining the Fund's
           corporate  existence;  and such  nonrecurring  expenses  as may arise
           including litigation affecting the Fund and the legal obligations the
           Fund   may   have  to   indemnify   its   officers   and   directors.
           Notwithstanding the foregoing,  SMC shall pay all expenses related to
           the initial registration and qualification of the Class C and Class S
           shares of Diversified Income Series and High Yield Series,  under the
           Blue Sky laws of the states where such class of stock is offered.

       Paragraph 5 shall be deleted in its entirety and the following paragraphs
inserted in lieu thereof:

       5.  COMPENSATION OF MANAGEMENT COMPANY.

       (a) As  compensation  for the  services to be rendered by the  Management
           Company as provided for herein,  for each of the years this Agreement
           is in effect, the Fund shall pay the Management Company an annual fee
           equal to .60 percent of the average  daily  closing  value of the net
           assets  of High  Yield  Series of the Fund,  and .35  percent  of the
           average daily closing value of the net assets of  Diversified  Income
           Series  of the Fund,  computed  on a daily  basis.  Such fee shall be
           adjusted and payable  monthly.  If this Agreement  shall be effective
           for  only  a  portion  of  a  year,  then  the  Management  Company's
           compensation  for said year shall be prorated for such  portion.  For
           purposes of this  Section 5, the value of the net assets of each such
           Series  shall  be  computed  in the  same  manner  at the  end of the
           business  day  as the  value  of  such  net  assets  is  computed  in
           connection  with  the  determination  of the net  asset  value of the
           Fund's shares as described in the Fund's prospectus.

       (b) For each of the Fund's full fiscal  years this  Agreement  remains in
           force,  the  Management  Company  agrees  that  if the  total  annual
           expenses of each Series of the Fund, exclusive of interest and taxes,
           extraordinary  expenses (such as litigation),  and distribution  fees
           paid  under the  Fund's  Class B,  Class C, and Class S  Distribution
           Plans, but inclusive of the Management Company's compensation, exceed
           any expense  limitation imposed by state securities law or regulation
           in any state in which shares of the Fund are then qualified for sale,
           as such  regulations may be amended from time to time, the Management
           Company  will  contribute  to such  Series  such  funds or waive such
           portion of its fee,  adjusted  monthly as may be  requisite to insure
           that such annual  expenses  will not exceed any such  limitation.  If
           this  Contract  shall be  effective  for only a portion of one of the
           Series'  fiscal  years,  then the maximum  annual  expenses  shall be
           prorated for such portion. Brokerage fees and commissions incurred in
           connection  with the purchase or sale of any  securities  by a Series
           shall not be deemed to be expenses with the meaning of this paragraph
           (b).

       IN WITNESS  WHEREOF,  the parties  hereto have executed this Amendment to
the Investment Advisory Contract this 21st day of July, 2000.

SECURITY INCOME FUND

By:    JAMES R. SCHMANK
       -----------------------------------------------------
       James R. Schmank, President

ATTEST:

AMY J. LEE
---------------------------------------------
Amy J. Lee, Secretary

SECURITY MANAGEMENT COMPANY, LLC

By:    JAMES R. SCHMANK
       -----------------------------------------------------
       James R. Schmank, President

ATTEST:

AMY J. LEE
---------------------------------------------
Amy J. Lee, Secretary