Amounts in thousands, except share data, or as otherwise noted

Kansas City Life Insurance Company

Consolidated Balance Sheets

	December 31
	2015			2014
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: 2015 - $2,486,338; 2014 - $2,553,416)	$	2,580,845		$	2,726,731
Equity securities available for sale, at fair value (amortized cost: 2015 - $24,067; 2014 - $23,576)		25,325			24,881
Mortgage loans		589,960			541,180
Real estate		168,097			181,082
Policy loans		81,392			83,553
Short-term investments		22,474			39,107
Other investments		380			462
Total investments		3,468,473			3,596,996

Cash		7,851			11,011
Accrued investment income		33,023			33,078
Deferred acquisition costs		267,936			249,195
Reinsurance recoverables		198,834			194,425
Property and equipment		16,580			17,527
Other assets		56,252			63,134
Separate account assets		372,924			406,501
Total assets	$	4,421,873		$	4,571,867

LIABILITIES
Future policy benefits	$	926,385		$	930,761
Policyholder account balances		2,056,126			2,072,041
Policy and contract claims		37,959			37,452
Other policyholder funds		174,353			165,062
Other liabilities		190,295			217,291
Separate account liabilities		372,924			406,501
Total liabilities		3,758,042			3,829,108

STOCKHOLDERS' EQUITY
Common stock, par value $1.25 per share
Authorized 36,000,000 shares, issued 18,496,680 shares		23,121			23,121
Additional paid in capital		41,025			41,007
Retained earnings		856,196			838,508
Accumulated other comprehensive income (loss)		(15,210	)		23,040
Treasury stock, at cost (2015 - 8,813,266 shares; 2014 - 7,671,475 shares)		(241,301	)		(182,917	)
Total stockholders' equity		663,831			742,759
Total liabilities and stockholders' equity	$	4,421,873		$	4,571,867

See accompanying Notes to Consolidated Financial Statements

Kansas City Life Insurance Company

Consolidated Statements of Comprehensive Income

	Year Ended December 31
	2015			2014			2013
REVENUES
Insurance revenues:
Net premiums	$	160,175		$	165,548		$	186,530
Contract charges		112,030			118,649			113,454
Total insurance revenues		272,205			284,197			299,984
Investment revenues:
Net investment income		157,150			164,968			169,740
Net realized investment gains, excluding other-than-temporary impairment losses		6,248			4,902			5,005
Net impairment losses recognized in earnings:
Total other-than-temporary impairment losses		(2,189	)		(2,176	)		(1,032	)
Portion of impairment losses recognized in other comprehensive income (loss)		(292	)		643			(101)
Net other-than-temporary impairment losses recognized in earnings		(2,481	)		(1,533	)		(1,133	)
Total investment revenues		160,917			168,337			173,612
Other revenues		7,729			12,485			9,997
Total revenues		440,851			465,019			483,593

BENEFITS AND EXPENSES
Policyholder benefits		198,721			202,946			211,994
Interest credited to policyholder account balances		74,326			76,463			79,294
Amortization of deferred acquisition costs		28,348			40,888			37,228
Operating expenses		97,260			101,738			110,622
Total benefits and expenses		398,655			422,035			439,138
Income before income tax expense		42,196			42,984			44,455
Income tax expense		12,970			12,994			14,392

NET INCOME	$	29,226		$	29,990		$	30,063

COMPREHENSIVE INCOME (LOSS), NET OF TAXES
Change in net unrealized gains on securities available for sale, net of DAC, VOBA, and DRL	$	(43,803	)	$	31,641		$	(63,538	)
Change in future policy benefits		4,913			(6,928	)		8,421
Change in policyholder account balances		276			(242)			408
Change in benefit plan obligations		364			(15,601	)		14,785
Other comprehensive income (loss)		(38,250	)		8,870			(39,924	)

COMPREHENSIVE INCOME (LOSS)	$	(9,024	)	$	38,860		$	(9,861	)

Basic and diluted earnings per share:
Net income	$	2.75		$	2.74		$	2.73

See accompanying Notes to Consolidated Financial Statements

Kansas City Life Insurance Company

Consolidated Statements of Stockholders' Equity

	Year Ended December 31
	2015			2014			2013

COMMON STOCK, beginning and end of year	$	23,121		$	23,121		$	23,121

ADDITIONAL PAID IN CAPITAL
Beginning of year		41,007			40,989			40,969
Excess of proceeds over cost of treasury stock sold		18			18			20
End of year		41,025			41,007			40,989

RETAINED EARNINGS
Beginning of year		838,508			820,327			802,153
Net income		29,226			29,990			30,063
Stockholder dividends of $1.08 per share (2014 - $1.08; 2013 - $1.08)		(11,538	)		(11,809	)		(11,889	)
End of year		856,196			838,508			820,327

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Beginning of year		23,040			14,170			54,094
Other comprehensive income (loss)		(38,250	)		8,870			(39,924	)
End of year		(15,210	)		23,040			14,170

TREASURY STOCK, at cost
Beginning of year		(182,917	)		(176,284	)		(173,513	)
Cost of 1,142,351 shares acquired (2014 - 144,188 shares; 2013 - 64,792 shares)		(58,392	)		(6,641	)		(2,782	)
Cost of 560 shares sold (2014 - 554 shares; 2013 - 774 shares)		8			8			11
End of year		(241,301	)		(182,917	)		(176,284	)

TOTAL STOCKHOLDERS' EQUITY	$	663,831		$	742,759		$	722,323

See accompanying Notes to Consolidated Financial Statements

Kansas City Life Insurance Company

Consolidated Statements of Cash Flows

	Year Ended December 31
	2015			2014			2013
OPERATING ACTIVITIES
Net income	$	29,226		$	29,990		$	30,063
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of investment premium and discount		4,257			4,388			5,447
Depreciation		5,368			4,698			4,279
Acquisition costs capitalized		(37,714	)		(36,170	)		(36,709	)
Amortization of deferred acquisition costs		28,348			40,888			37,228
Realized investment gains		(3,767)			(3,369)			(3,872	)
Changes in assets and liabilities:
Reinsurance recoverables		(4,409	)		(3,370	)		(442	)
Future policy benefits		3,182			9,875			33,497
Policyholder account balances		(20,222	)		(16,284	)		(24,161	)
Income taxes payable and deferred		7,216			4,237			7,093
Other, net		4,207			3,316			3,338
Net cash provided		15,692			38,199			55,761

INVESTING ACTIVITIES
Purchases:
Fixed maturity securities		(235,767	)		(280,686	)		(261,006	)
Equity securities		(38	)		(89	)		(12,711	)
Mortgage loans		(141,184	)		(48,195	)		(72,656	)
Real estate		(8,253	)		(41,201	)		(24,435	)
Policy loans		(8,638	)		(8,975	)		(10,517	)
Other investments		(280	)		—			—
Sales or maturities, calls, and principal paydowns:
Fixed maturity securities		298,913			219,738			282,742
Equity securities		33			15			1,459
Mortgage loans		91,096			127,071			116,680
Real estate		20,000			2,915			370
Policy loans		10,799			8,941			13,078
Other investments		419			11,121			181
Net sales (purchases) of short-term investments		16,633			1,605			(15,810	)
Acquisition of property and equipment		(683	)		(1,669	)		(830	)
Reinsurance transaction		—			—			(34,279	)
Net cash provided (used)		43,050			(9,409	)		(17,734	)

FINANCING ACTIVITIES
Deposits on policyholder account balances	$	217,929		$	238,751		$	239,501
Withdrawals from policyholder account balances		(222,907	)		(257,745	)		(276,327	)
Net transfers from separate accounts		9,026			8,534			5,962
Change in other deposits		3,954			2,908			8,648
Cash dividends to stockholders		(11,538	)		(11,809	)		(11,889	)
Net change in treasury stock		(58,366	)		(6,615	)		(2,751	)
Net cash used		(61,902	)		(25,976	)		(36,856	)

Kansas City Life Insurance Company

Consolidated Statements of Cash Flows (Continued)

	Year Ended December 31
	2015			2014		2013

Increase (decrease) in cash		(3,160	)		2,814		1,171
Cash at beginning of year		11,011			8,197		7,026
Cash at end of year	$	7,851		$	11,011	$	8,197

See accompanying Notes to Consolidated Financial Statements

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements

1. Nature of Operations and Significant Accounting Policies

Business

Kansas City Life Insurance Company is a Missouri domiciled stock life insurance company which, with its subsidiaries, is licensed to sell insurance products in 49 states and the District of Columbia. Kansas City Life Insurance Company (Kansas City Life) is the parent company. Sunset Life Insurance Company of America (Sunset Life) and Old American Insurance Company (Old American) are wholly-owned subsidiaries. The Company also has several non-insurance subsidiaries that individually and collectively are not material. The consolidated entity (the Company) offers a diversified portfolio of individual insurance, annuity, and group products through three life insurance companies.

Basis of Presentation

The consolidated financial statements and the accompanying notes to the consolidated financial statements have been prepared on the basis of U.S. generally accepted accounting principles (GAAP) and include the accounts of Kansas City Life and its subsidiaries, principally Sunset Life and Old American. Significant intercompany transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform with the current period's presentation.

Business Changes

In December 2015, the Company completed a reverse/forward stock-split transaction. This transaction occurred as part of a 1-for-250 reverse stock split of the Company's common stock. The Company purchased approximately 906,500 shares or 9% of the outstanding shares valued at $52.50 per share for $47.6 million. The Company subsequently completed a 250-for-1 forward stock split for each one share of its common stock (including each fractional share of such class of stock in excess of one share). The purpose of the transaction was to allow the Company to deregister from the Securities and Exchange Commission (SEC) and to delist its common stock from the NASDAQ Capital Market. These activities were effective as of December 16, 2015. Effective January 4, 2016, the Company began trading on the OTCQX ® Market. Please refer to www.kclife.com for more information on the specific transactions identified above.

In 2014, the Company completed a divestiture of certain non-proprietary agent relationships related to Sunset Financial Services (SFS) with Securities America (SAI). Under this agreement SFS transferred the servicing of certain accounts primarily related to non-proprietary broker-dealer and registered investment advisory accounts to SAI. SFS will continue as a wholly-owned wholesale broker-dealer subsidiary of Kansas City Life to provide support for Kansas City Life's proprietary products and those variable products specifically associated with the American Family Insurance Company (American Family) transaction (see Reinsurance Transaction below). This transaction resulted in $3.3 million of revenue from the sale of these assets at SFS, which is reported as other revenue in the 2014 Consolidated Statements of Comprehensive Income. This transaction does not represent a strategic shift that will have a major effect on the consolidated entity's financial results nor does the Company believe that there is any material impact to the consolidated entity's financial position.

Reinsurance Transaction

In April 2013, the Company acquired a closed block of variable life insurance policies and variable annuity contracts through reinsurance and servicing agreements from American Family. Under the reinsurance agreement, the Company assumed 100% of the separate account liabilities on a modified coinsurance basis and 100% of the general account liabilities on a coinsurance basis. The transaction also involved an ongoing servicing arrangement for this business. This block is included as a component of the Individual Insurance segment.

The Company receives fees based upon both specific transactions and the fund value of the block of policies, as provided under modified coinsurance transactions. Also, as required under modified coinsurance transaction accounting, the separate account fund balances are not recorded as separate accounts on the Company's financial statements. The coinsurance portion of the transaction, which is invested in the Company's fixed funds, is included in future policy benefits. The Company records these fixed fund accounts as a separate block under its general accounts. The Company receives fees on both the separate accounts and the fixed fund accounts.

Use of Estimates

The preparation of the consolidated financial statements requires management of the Company to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. These estimates are inherently subject to change and actual results could differ from these estimates. Significant estimates required in the preparation of the consolidated financial statements include the fair value of certain invested assets, deferred acquisition costs (DAC), deferred income taxes, value of business acquired (VOBA), deferred revenue liability (DRL), future policy benefits, policy and contract claim liabilities, and pension and other postemployment benefits.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Significant Accounting Policies

Investments

Valuation of Investments and Other-than-Temporary Impairments

The Company's principal investments are in fixed maturity securities, mortgage loans, and real estate; all of which are exposed to at least three primary sources of investment risk, including: credit, interest rate, and liquidity. The fixed maturity and equity securities, which are all classified as available for sale, are carried at fair value in the Company's Consolidated Balance Sheets, with unrealized gains or losses recorded in accumulated other comprehensive income (loss). The unrealized gains or losses are recorded net of the adjustment to policyholder account balances, future policy benefits, DAC, VOBA, and DRL to reflect what would have been earned had those gains or losses been realized and the proceeds reinvested. The adjustments to DAC, VOBA, and DRL represent changes in the amortization that would have been required as a charge or credit to income had such unrealized amounts been realized. The adjustments to policyholder account balances and future policy benefits represent the increase from using a discount rate that would have been required if such unrealized gains or losses had been realized and the proceeds reinvested at current market interest rates, which were lower or higher than the then-current effective portfolio rate. The amortized cost of a security is adjusted for declines in value that are other than temporary. Other than temporary impairment losses are reported as a component of investment revenues in the Consolidated Statements of Comprehensive Income, which also presents the amount of non-credit impairment losses for certain fixed maturity securities that is reported in accumulated other comprehensive income (loss). See Note 3 - Investments for additional discussion of the Company's considerations related to other than temporary impairments. For additional information regarding fair value, please see Note 4 - Fair Value Measurements.

Mortgage loans are stated at cost, adjusted for amortization of premium and accrual of discount, less an allowance for loan losses. A loan is considered impaired if it is probable that all contractual amounts due will not be collected. The allowance for loan losses is maintained at a level believed by management to be adequate to absorb potential future incurred credit losses. Management's periodic evaluation and assessment of the adequacy of the allowance is based on known and inherent risks in the portfolio, historical and industry data, current economic conditions, and other relevant factors, along with specific risks related to specific loans. Loans in foreclosure, loans considered to be impaired, and loans past due 90 days or more are placed on a non-accrual status.

Real estate consists of directly owned investments and real estate joint ventures. Real estate that is directly owned is carried at depreciated cost. Real estate joint ventures consist primarily of office buildings, industrial warehouses, unimproved land for future development, and low income housing tax credit (LIHTC) investments. Real estate joint ventures are consolidated when required. The initial cost of the non-consolidated LIHTC investments is amortized in proportion to the tax credits and other tax benefits received and the net investment performance is recognized in the Consolidated Statements of Comprehensive Income as a component of income tax expense. The investments in other non-consolidated real estate joint ventures are recorded using the equity method of accounting, in which the initial cost of the investment is adjusted for the Company's earnings and cash contributions or distributions.

Policy loans are carried at the outstanding principal amount. Short-term investments are stated at cost, adjusted for amortization of premium and accrual of discount.

Investment Income

Investment income is recognized when earned. Premiums and discounts on fixed maturity securities are amortized over the life of the related security as an adjustment to yield using the effective interest method. Realized gains and losses on the sale of investments are determined on the basis of specific security identification recorded on the trade date.

Future Policy Benefits

The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, immediate annuities with life contingencies, supplementary contracts with life contingencies, and accident and health insurance. These liabilities originate from new premiums and conversions from other products and are generally payable over an extended period of time.

Liabilities for future policy benefits of traditional life insurance have been computed by a net level premium method based upon estimates at the time of issue for investment yields, mortality, and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on Company experience expressed as a percentage of standard mortality tables. The 2008 Valuation Basic Table, the 2001 Valuation Basic Table, and the 1975-1980 Select and Ultimate Basic Table serve as the bases for most mortality assumptions.

Liabilities for future policy benefits of immediate annuities and supplementary contracts with life contingencies are computed by calculating an actuarial present value of future policy benefits, based upon estimates for investment yields and mortality at the time of issue. The 2012 Individual Annuity Reserving Table, the Annuity 2000 Table, the 1983 Individual Annuity Mortality Table, and

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

the 1971 Individual Annuity Mortality Table serve as the bases for most immediate annuity and supplementary contract mortality assumptions.

Liabilities for future policy benefits of accident and health insurance represent estimates of payments to be made on reported insurance claims, as well as claims incurred but not yet reported. These liabilities are estimated using actuarial analyses and case basis evaluations that are based upon past claims experience, claim trends, and industry experience.

The following table provides detail about the composition of future policy benefits at December 31.

	2015		2014
Life insurance	$	628,274	$	622,350
Immediate annuities and supplementary contracts with life contingencies		263,437		271,088
Accident and health insurance		34,674		37,323
Total future policy benefits	$	926,385	$	930,761

Policyholder Account Balances

Policyholder account balances include universal life insurance, fixed deferred annuity contracts, and investment-type contracts. Liabilities for policyholder account balances are included without reduction for potential surrender charges. These liabilities originate from new deposits and conversions from other products. Policyholder account balances are equal to cumulative deposits, less contract charges and withdrawals, plus interest credited. Deferred front-end contract charges reduce policyholder account balance liabilities and increase the other policyholder funds liability, and are amortized over the term of the policies in a manner similar to DAC, as discussed below. Interest on policyholder account balances is credited as earned.

On an ongoing basis, the Company performs testing and analysis on its blocks of business to ensure the assumptions made remain viable. The Company also periodically performs sensitivity testing on these blocks of business to ensure it maintains the capacity to meet an increase in policyholder benefits, namely increased surrenders, policy loans, or other policyholder elective withdrawals.

Crediting rates for universal life insurance and fixed deferred annuity products ranged from 1.00% to 5.50% in 2015, 2014, and 2013.

The following table provides detail about the composition of policyholder account balances at December 31.

	2015		2014
Universal life insurance	$	928,398	$	936,770
Fixed deferred annuities		1,073,592		1,080,322
Immediate annuities and supplementary contracts with life contingencies		54,136		54,949
Policyholder account balances	$	2,056,126	$	2,072,041

Deferred Acquisition Costs (DAC)

DAC, principally agent commissions and other selling, selection, and issue costs, which are related directly to the successful acquisition of new or renewal insurance contracts, are capitalized as incurred. At least annually, the Company reviews its DAC capitalization policy and the specific items which are capitalized with existing guidance. These costs for life insurance products are generally deferred and amortized over the premium paying period. Assumptions related to DAC on traditional life insurance products are typically determined at inception and remain unchanged with any future premium deficiency recorded first as a reduction of DAC.

Policy acquisition costs that relate to interest sensitive and variable insurance products are deferred and amortized in relation to the estimated gross profits to be realized over the lives of the contracts. Estimated gross profits for interest sensitive and variable insurance products are projected using assumptions as to net interest income, net realized investment gains and losses, fees, surrender charges, expenses, and mortality gains and losses, net of reinsurance. At the issuance of policies, projections of estimated gross profits are made. These projections are then replaced by actual gross profits over the lives of the policies. In addition to other factors, emerging experience may lead to a revised outlook for the remaining estimated gross profits. Accordingly, DAC may be recalculated (unlocked) using these new assumptions and any resulting adjustment is included in income in the period such an unlocking is deemed appropriate. See Unlocking and Refinements in Estimates section below.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The DAC asset is adjusted to reflect the impact of realized and unrealized gains and losses on fixed maturity securities available for sale, as described in the Investments section of Note 1 - Nature of Operations and Significant Accounting Policies.

The following table provides information about DAC at December 31.

	2015			2014			2013
Balance at beginning of year	$	249,195		$	256,386		$	176,275
Capitalization of commissions, sales, issue expenses and reinsurance transaction		37,714			36,170			85,929
Gross amortization		(41,832	)		(54,531	)		(50,923	)
Accrual of interest		13,484			13,643			13,695
Amortization due to realized investment (gains) losses		(18	)		(49	)		(66	)
Change in DAC due to the change in unrealized investment gains		9,393			(2,424	)		31,476
Balance at end of year	$	267,936		$	249,195		$	256,386

Value of Business Acquired (VOBA)

Prior to the adoption of ASC No. 805, Business Combinations, a portion of the purchase price was allocated to a separately identifiable intangible asset, VOBA, when a new block of business was acquired or when an insurance company was purchased. VOBA is established as the actuarially determined present value of future gross profits of the business acquired and is amortized with interest in proportion to future premium revenues or the expected future profits, depending on the type of business acquired. VOBA is reported as a component of other assets with related amortization included in operating expenses. Amortization of VOBA occurs with interest over the anticipated lives of the underlying business to which it relates, initially 15 to 30 years. The assumptions regarding future experience on interest sensitive business can affect the carrying value of VOBA, similar to DAC. These assumptions include interest spreads, mortality, expense margins, and policy and premium persistency experience.

The VOBA asset is adjusted to reflect the impact of realized and unrealized gains and losses on fixed maturity securities available for sale, as described in the Investments section of Note 1. The concept of VOBA is no longer applied to business combinations. Rather, under current guidance for business combinations, all assets and liabilities are reported at fair value at acquisition and an intangible asset (liability) may result due to differences between fair value and consideration paid.

The following table provides information about VOBA at December 31.

	2015			2014			2013
Balance at beginning of year	$	24,655		$	28,542		$	21,165
Gross amortization		(5,679	)		(4,643	)		(7,566	)
Accrual of interest		1,795			1,938			2,220
Amortization due to realized investment (gains) losses		(5	)		(100	)		(58	)
Change in VOBA due to the change in unrealized investment gains		3,517			(1,082	)		12,781
Balance at end of year	$	24,283		$	24,655		$	28,542

Interest accrued on the VOBA of one block was at the rates of 4.2% on the interest sensitive life block and 5.3% on the traditional life block. The VOBA on a separate acquired block of business used a 7.0% interest rate on the traditional life portion and a 5.4% interest rate on the interest sensitive portion. The interest rates used in the calculation of VOBA are based on rates appropriate at the time of acquisition.

Deferred Revenue Liabilities (DRL)

Deferred revenue liabilities represent the capitalization of revenues received from contracts as compensation for services to be provided by the Company in future periods. Such loads and charges are reported as unearned revenue in the period received and are subsequently recognized as income over the policy benefit period, using the same assumptions and factors used to amortize DAC. Similar to DAC, these amounts are amortized in relation to estimated gross profits for interest sensitive and variable insurance products. However, unlike DAC, the amortization of the DRL results in a recognition of revenue rather than expense. The DRL could be impacted by unlocking and refinements in estimates, as discussed below.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Unlocking and Refinements in Estimates

DAC and VOBA are reviewed on an ongoing basis to evaluate whether the unamortized portion exceeds the expected recoverable amounts. If it is determined from emerging experience that the premium margins or expected gross profits are insufficient to amortize DAC and VOBA, then the asset will be adjusted downward with the adjustment recorded as an expense in the current period. Similarly, if future projections of estimated gross profits indicate improvements, the amortization of DAC and VOBA may be reduced and the balance adjusted.

At least annually, a review is performed of the models and the assumptions used to develop expected gross profits for interest sensitive and variable insurance products based upon management's current view of future events. Management's view primarily reflects Company experience but can also reflect emerging trends within the industry. Short-term deviations in experience affect the amortization of DAC, DRL, and VOBA in the period, but do not necessarily indicate that a change to the long-term assumptions of future experience is warranted. If it is determined that it is appropriate to change the assumptions related to future experience, then an unlocking adjustment is recognized retrospectively for the block of business being evaluated. Certain assumptions, such as interest spreads and surrender rates, may be interrelated. As such, unlocking adjustments often reflect revisions to multiple assumptions. The DAC, DRL, or VOBA balance is immediately impacted by any assumption changes, with the change reflected through the income statement as an unlocking adjustment. These adjustments can be positive or negative, and adjustments increasing the DAC asset are limited to amounts previously deferred plus interest accrued through the date of the adjustment.

The Company may also consider refinements in estimates due to improved capabilities resulting from administrative or actuarial system enhancements. The Company considers such enhancements to determine whether and to what extent they are associated with prior periods or simply improvements in the projection of future expected gross profits due to improved functionality. To the extent they represent such improvements, these items are applied to DAC, VOBA, and DRL in a manner similar to unlocking adjustments.

The following table summarizes the effects of the refinements in estimates on all products and unlocking of assumptions on interest sensitive products in the Consolidated Statements of Comprehensive Income for the years ended December 31.

	DAC			VOBA			DRL			Total
2015:
Unlocking	$	6,380		$	(862	)	$	(2,344	)	$	3,174
Refinement in estimate		—			—			—			—
	$	6,380		$	(862	)	$	(2,344	)	$	3,174
2014:
Unlocking	$	(1,723	)	$	1,486		$	1,764		$	1,527
Refinement in estimate		(1,566	)		—			—			(1,566	)
	$	(3,289	)	$	1,486		$	1,764		$	(39	)
2013:
Unlocking	$	(155	)	$	(877	)	$	1,141		$	109
Refinement in estimate		(291	)		(306	)		—			(597	)
	$	(446	)	$	(1,183	)	$	1,141		$	(488	)

Pensions and Other Postemployment Benefits (OPEB)

The measurement of pension and other postemployment benefit obligations and costs depends on a variety of assumptions. Changes in the valuation of pension obligations and assets supporting this obligation can significantly impact the funded status. Assumptions are made regarding the discount rate, expected long-term rate of return on plan assets, health care claim costs, health care cost trends, retirement rates, and mortality. Generally, the discount rate, expected return on plan assets, and mortality tables have the most significant impact on the cost. See Note 13 - Pensions and Other Postemployment Benefits for further details.

Separate Accounts and Guaranteed Minimum Withdrawal Benefits (GMWB)

Separate account assets and liabilities arise from the sale of variable universal life insurance and variable annuity products. The separate account represents funds segregated for the benefit of certain policyholders who bear the investment risk. The assets are legally segregated and are not subject to claims which may arise from any other business of the Company. The separate account assets and liabilities, which are equal, are recorded at fair value based upon net asset value (NAV) of the underlying investment holdings as derived from closing prices on a national exchange or as provided by the issuer. Policyholder account deposits and

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

withdrawals, investment income, and realized investment gains and losses are excluded from the amounts reported in the Consolidated Statements of Comprehensive Income. Revenues to the Company from separate accounts consist principally of contract charges, which include maintenance charges, administrative fees, and mortality and expense charges.

The Company has a GMWB rider for variable annuity contracts that is considered to be a financial derivative and, as such, is accounted for at fair value. The Company determines the fair value of the GMWB rider using a risk-neutral valuation method. The value of the riders will fluctuate depending on market conditions, but is principally impacted by stock market volatility, interest rates, and equity market returns. The change in value can have a material impact on earnings. See further discussion in Note 4.

Reinsurance

Consistent with the general practice of the life insurance industry, the Company enters into traditional agreements of indemnity reinsurance with other insurance companies to support sales of new products and the in force business. The reinsurance arrangements have taken various forms over the years. The Company cedes reinsurance in force on all of the following bases: automatic and facultative; yearly renewable term (YRT) and coinsurance; and excess and quota share basis. For additional information pertaining to the Company's significant reinsurers, along with additional information pertaining to reinsurance, please see Note 15 - Reinsurance.

Future policy benefits and other related assets are not reduced for reinsurance in the Consolidated Balance Sheets. A reinsurance recoverable is established for these items. Reinsurance recoverables include amounts related to paid benefits and estimated amounts related to unpaid policy and contract claims, future policy benefits, and policyholder account balances. All insurance related revenues, benefits, and expenses are reported net of reinsurance ceded in the Consolidated Statements of Comprehensive Income.

Policies and contracts assumed are accounted for in a manner similar to that followed for direct business.

Recognition of Insurance Revenues

Premiums

Premiums for traditional life insurance products are reported as revenue when due. Premiums for immediate annuities with life contingencies are reported as revenue when received. Premiums on accident and health, disability, and dental insurance are reported as earned ratably over the contract period in proportion to the amount of insurance protection provided.

Deposits

Deposits related to universal life, fixed deferred annuity contracts, and investment-type products are credited to policyholder account balances. Deposits are not recorded as revenue and are shown as a Financing Activity in the Consolidated Statements of Cash Flows. Revenues from such contracts consist of amounts assessed against policyholder account balances for mortality, policy administration, and surrender charges, and are recognized in the period in which the benefits and services are provided as contract charges in the Consolidated Statements of Comprehensive Income.

Contract Charges

Contract charges consist of cost of insurance, expense loads, the amortization of unearned revenues, and surrender charges on policyholder account balances. Cost of insurance relates to charges for mortality. These charges are applied to the excess of the mortality benefit over the account value for universal life policies. Expense loads are amounts that are assessed against the policyholder balance as consideration for origination and maintenance of the contract. Surrender charges are fees on policyholder account balances upon cancellation or withdrawal of policyholder account balances consistent with policy terms.

An additional component of contract charges is the recognition over time of the DRL for certain fixed and variable universal life policies. This liability arises from front-end loads on such policies and is recognized into the Consolidated Statements of Comprehensive Income in a manner similar to the amortization of DAC. If it is determined that it is appropriate to change the assumptions of future experience, then an unlocking adjustment is recognized for the block of business being evaluated. Certain assumptions, such as interest spreads and surrender rates, may be interrelated, and unlocking adjustments often reflect revisions to multiple assumptions. In addition, the Company may also consider refinements in estimates for other unusual or one-time occurrences, such as administrative or actuarial system upgrades. These items are applied to the appropriate financial statement line items, similar to unlocking adjustments.

Realized Gains (Losses)

The Company realizes investment gains and losses from several sources, including write-downs of investment securities and mortgage loans, the change in the mortgage loan loss allowance, and sales of investment securities and real estate.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Interest Credited to Policyholder Account Balances

Interest is credited to policyholder account balances according to terms of the policies or contracts. Interest sensitive life and annuity contracts provide for the payment of interest credited to policyholder account balances, subject to contractual minimum guaranteed rates. Amounts in excess of guarantees are credited at the discretion of the Company and reflect competitive, economic, investment and product considerations. Accordingly, the Company reviews and adjusts crediting rates as necessary and appropriate within contractual terms. Amounts credited are a function of account balances and current period crediting rates. As account balances fluctuate, so will the amount of interest credited to policyholder account balances.

Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return that includes both life insurance companies and non-life insurance companies.

Deferred income taxes are recorded based on the differences between the tax bases of assets and liabilities and the amounts at which they are reported in the consolidated financial statements. Recorded amounts are adjusted to reflect changes in income tax rates and other tax law provisions as they become enacted.

Deferred income tax assets are subject to ongoing evaluation of whether such assets will be realized. The ultimate realization of deferred income tax assets generally depends on the reversal of deferred tax liabilities and the generation of future taxable income and realized gains during the periods in which temporary differences become deductible. Deferred income taxes include future deductible differences relating to unrealized losses on investment securities. The Company evaluates the character and timing of unrealized gains and losses to determine whether future taxable amounts are sufficient to offset future deductible amounts. A valuation allowance against deferred income tax assets may be required if future taxable income of an appropriate amount and character is not expected.

2. New Accounting Pronouncements

Accounting Pronouncements Issued, Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (FASB) issued guidance regarding accounting for revenue recognition that identifies the accounting treatment for an entity's contracts with customers. Certain contracts, including insurance contracts, are specifically excluded from this guidance. However, certain other types of contracts may impact the financial statements of insurance providers. In August 2015, the FASB deferred the effective date of this guidance for public entities to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating this guidance.

In August 2014, the FASB issued guidance that requires management to evaluate whether there are concerns or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued. Disclosures are required when certain criteria are met. This guidance is effective for annual periods ending after December 15, 2016. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

In January 2015, the FASB issued guidance that eliminated the concept of extraordinary items. While the requirement for entities to consider whether an underlying event or transaction is extraordinary was eliminated, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently was retained and was expanded to include items that are both unusual in nature and occur infrequently. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

In February 2015, the FASB issued guidance regarding the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. Under this guidance, previous consolidation conclusions may change and additional disclosures may be required. This guidance is effective for public entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2015. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

In April 2015, the FASB issued guidance regarding a customer's accounting for fees paid in a cloud computing arrangement and whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, a customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, a customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer's accounting for service contracts. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

In May 2015, the FASB issued guidance targeted to improve disclosures related to short-duration contracts. Additional disclosures will be required about insurance liabilities to provide information regarding the nature, amount, timing, and uncertainty of future cash flows related to insurance liabilities and the effect of those cash flows on the statement of comprehensive income. This guidance is effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

In July 2015, the FASB issued guidance regarding employee benefit accounting. The guidance is divided into three parts. First, the guidance requires a pension plan to use contract value as the only required measure for fully benefit-responsive investment contracts. Second, the guidance simplifies and increases the effectiveness of the investment disclosure requirements for employee benefit plans. Third, the guidance provides benefit plans with a measurement date practical expedient. This guidance is effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

In January 2016, the FASB issued guidance regarding accounting for recognition and measurement of financial assets and financial liabilities. The new standard significantly revises an entity's accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption allowed. The Company is currently evaluating this guidance, but it does not believe that there will be a material impact to the consolidated financial statements.

All other new accounting standards and updates of existing standards issued through the date of this filing were considered by management and did not relate to accounting policies and procedures pertinent to the Company at this time or were not expected to have a material impact to the consolidated financial statements.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

3. Investments

Fixed Maturity and Equity Securities Available for Sale

Securities by Asset Class

The following table provides amortized cost and fair value of securities by asset class at December 31, 2015.

			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury securities and obligations of U.S. Government	$	148,930	$	7,397	$	202	$	156,125
Federal agencies ¹		19,782		1,415		—		21,197
Federal agency issued residential mortgage-backed securities ¹		34,015		3,545		1		37,559
Subtotal		202,727		12,357		203		214,881
Corporate obligations:
Industrial		532,880		22,283		10,654		544,509
Energy		231,639		6,768		11,388		227,019
Communications and technology		233,063		11,538		2,368		242,233
Financial		210,142		12,764		1,409		221,497
Consumer		534,073		18,133		2,905		549,301
Public utilities		223,172		17,368		241		240,299
Subtotal		1,964,969		88,854		28,965		2,024,858
Corporate private-labeled residential mortgage-backed securities		70,761		3,436		20		74,177
Municipal securities		134,079		18,844		74		152,849
Other		96,365		2,926		2,859		96,432
Redeemable preferred stocks		17,437		310		99		17,648
Fixed maturity securities		2,486,338		126,727		32,220		2,580,845
Equity securities		24,067		1,832		574		25,325
Total	$	2,510,405	$	128,559	$	32,794	$	2,606,170

¹ Federal agency securities are not backed by the full faith and credit of the U.S. Government.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides amortized cost and fair value of securities by asset class at December 31, 2014.

			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
U.S. Treasury securities and obligations of U.S. Government	$	154,937	$	9,939	$	83	$	164,793
Federal agencies ¹		19,769		2,182		—		21,951
Federal agency issued residential mortgage-backed securities ¹		44,287		4,457		2		48,742
Subtotal		218,993		16,578		85		235,486
Corporate obligations:
Industrial		527,269		33,400		1,292		559,377
Energy		219,518		14,147		3,575		230,090
Communications and technology		226,442		16,705		242		242,905
Financial		276,586		18,826		1,083		294,329
Consumer		517,050		28,290		1,261		544,079
Public utilities		225,375		24,932		228		250,079
Subtotal		1,992,240		136,300		7,681		2,120,859
Corporate private-labeled residential mortgage-backed securities		90,819		4,463		—		95,282
Municipal securities		135,518		22,974		—		158,492
Other		98,373		3,818		2,718		99,473
Redeemable preferred stocks		17,473		379		713		17,139
Fixed maturity securities		2,553,416		184,512		11,197		2,726,731
Equity securities		23,576		1,895		590		24,881
Total	$	2,576,992	$	186,407	$	11,787	$	2,751,612

¹ Federal agency securities are not backed by the full faith and credit of the U.S. Government.

Contractual Maturities

The following table provides the distribution of maturities for fixed maturity securities available for sale. Expected maturities may differ from these contractual maturities since borrowers may have the right to call or prepay obligations.

	December 31, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	115,294	$	117,145	$	165,955	$	168,913
Due after one year through five years		735,559		779,402		694,809		757,397
Due after five years through ten years		1,117,414		1,126,585		1,045,557		1,087,891
Due after ten years		349,789		378,861		438,719		490,976
Securities with variable principal payments		150,844		161,204		190,903		204,415
Redeemable preferred stocks		17,438		17,648		17,473		17,139
Total	$	2,486,338	$	2,580,845	$	2,553,416	$	2,726,731

No material derivative financial instruments were held during December 31, 2015, 2014, or 2013.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Unrealized Losses on Investments

At the end of each quarter, all securities are reviewed to determine whether impairments exist and whether other-than-temporary impairments should be recorded. This quarterly process includes an assessment of the credit quality of each investment in the entire securities portfolio. Additional reporting and review procedures are conducted for those securities where fair value is less than 90% of amortized cost. The Company prepares a formal review document no less often than quarterly of all investments where fair value is less than 80% of amortized cost for six months or more and selected investments that have changed significantly from a previous period and that have a decline in fair value greater than 10% of amortized cost.

The Company considers relevant facts and circumstances in evaluating whether the impairment of a security is other-than-temporary. Relevant facts and circumstances considered include but are not limited to:

•	The current fair value of the security as compared to amortized cost;

•	The credit rating of the security;

•	The extent and the length of time the fair value has been below amortized cost;

•	The financial position of the issuer, including the current and future impact of any specific events, material declines in the issuer's revenues, margins, cash positions, liquidity issues, asset quality, debt levels, and income results;

•	Significant management or organizational changes;

•	Significant uncertainty regarding the issuer's industry;

•	Violation of financial covenants;

•	Consideration of information or evidence that supports timely recovery;

•	The Company's intent and ability to hold an equity security until it recovers in value;

•	Whether the Company intends to sell a debt security and whether it is more likely than not that the Company will be required to sell a debt security before recovery of the amortized cost basis; and

•	Other business factors related to the issuer's industry.

To the extent the Company determines that a fixed maturity security is deemed to be other-than-temporarily impaired, the portion of the impairment that is deemed to be due to credit is charged to earnings in the Consolidated Statements of Comprehensive Income and the cost basis of the underlying investment is reduced. The portion of such impairment that is determined to be non-credit-related is reflected in other comprehensive income (loss) and accumulated other comprehensive income (loss).

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments, determining if an impairment is other-than-temporary, and determining the portion of an other-than-temporary impairment that is due to credit. These risks and uncertainties include but are not limited to:

•	The risk that the Company's assessment of an issuer's ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer;

•	The risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated;

•	The risk that the performance of the underlying collateral for securities could deteriorate in the future and the Company's credit enhancement levels and recovery values do not provide sufficient protection to the Company's contractual principal and interest;

•	The risk that fraudulent, inaccurate, or misleading information could be provided to the Company's credit, investment, and accounting professionals who determine the fair value estimates and accounting treatment for securities;

•	The risk that actions of trustees, custodians, or other parties with interests in the security may have an unforeseen adverse impact on the Company's investments;

•	The risk that new information obtained by the Company or changes in other facts and circumstances may lead the Company to change its intent to sell the security before it recovers in value;

•	The risk that facts and circumstances change such that it becomes more likely than not that the Company will be required to sell the investment before recovery of the amortized cost basis; and

•	The risk that the methodology or assumptions used to develop estimates of the portion of impairments due to credit prove, over time, to be inaccurate or insufficient.

Any of these situations could result in a charge to income in a future period.

Once a security is determined to have met certain of the criteria for consideration as being other-than-temporarily impaired, further information is gathered and evaluated pertaining to the particular security. If the security is an unsecured obligation, the additional research is a top-down approach with particular emphasis on the likelihood of the issuer to meet the contractual terms of the obligation. If the security is secured by an asset or guaranteed by another party, the value of the underlying secured asset or the financial ability of the third-party guarantor is evaluated as a secondary source of repayment. Such research is based upon a top-

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

down approach, narrowing to the specific estimates of value and cash flow of the underlying secured asset or guarantor. If the security is a collateralized obligation, such as a mortgage-backed or other asset-backed instrument, research is also conducted to obtain and analyze the performance of the collateral relative to expectations at the time of acquisition and with regard to projections for the future. Such analyses are based upon historical results, trends, comparisons to collateral performance of similar securities, and analyses performed by third parties. This information is used to develop projected cash flows that are compared to the amortized cost of the security.

The Company may selectively determine that it no longer intends to hold a specific issue to its maturity. If the Company makes this determination and the fair value is less than the cost basis, the investment is written down to the fair value and an other-than-temporary impairment is recorded on this particular position. Subsequently, the Company seeks to obtain the best possible outcome available for this specific issue and records an investment gain or loss at the disposal date.

A discounted future cash flow calculation typically becomes the primary determinant of whether any portion and to what extent an unrealized loss is due to credit on loan-backed and similar asset-backed securities with significant indications of potential other-than-temporary impairment. Such indications typically include below investment grade ratings and significant unrealized losses for an extended period of time, among other factors. The Company identified 21 and 22 non-U.S. agency mortgage-backed securities that were determined to have such indications at December 31, 2015 and December 31, 2014, respectively. A discounted future cash flow analysis was performed for each of these securities to determine if any portion of the impairment was due to credit and deemed to be other-than-temporary. This amount is recognized as a realized loss in the Company's Consolidated Statements of Comprehensive Income and the carrying value of the security is written down by the same amount. The portion of an impairment that is determined not to be due to credit is recorded as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. The discount rate used in calculating the present value of future cash flows was the investment yield at the time of purchase for each security. The initial default rates were assumed to remain constant or grade down over time, reflecting the Company's estimate of stabilized collateral performance in the future for such securities.

Significant unrealized losses on securities can continue for extended periods of time, particularly for certain individual securities. While this can be an indication of potential credit impairments, it can also be an indication of illiquidity in a particular sector or security. In addition, the fair value of an individual security can be heavily influenced by the complexities of varying market sentiment or uncertainty regarding the prospects for an individual security. Based upon the process described above, the Company is best able to determine if and to what extent credit impairment may exist in these securities by performing present value calculations of projected future cash flows at the conclusion of each reporting period. By reviewing the most recent data available regarding the security and other relevant industry and market factors, the Company can modify assumptions used in the cash flow projections and determine the best estimate of the portion of any impairment that is due to credit at the conclusion of each period.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides information regarding fixed maturity and equity security investments available for sale with unrealized losses by length of time at December 31, 2015.

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government	$	19,447	$	202	$	—	$	—	$	19,447	$	202
Federal agency issued residential mortgage-backed securities ¹		47		—		291		1		338		1
Subtotal		19,494		202		291		1		19,785		203
Corporate obligations:
Industrial		153,258		10,151		2,492		503		155,750		10,654
Energy		76,838		5,638		34,313		5,750		111,151		11,388
Communications and technology		53,751		2,368		—		—		53,751		2,368
Financial		18,040		927		1,421		482		19,461		1,409
Consumer		121,261		2,573		7,192		332		128,453		2,905
Public utilities		15,983		241		—		—		15,983		241
Subtotal		439,131		21,898		45,418		7,067		484,549		28,965
Corporate private-labeled residential mortgage-backed securities		3,734		20		—		—		3,734		20
Municipal securities		3,118		74		—		—		3,118		74
Other		15,742		386		33,366		2,473		49,108		2,859
Redeemable preferred stocks		—		—		6,925		99		6,925		99
Fixed maturity securities		481,219		22,580		86,000		9,640		567,219		32,220
Equity securities		2,156		574		—		—		2,156		574
Total	$	483,375	$	23,154	$	86,000	$	9,640	$	569,375	$	32,794

¹ Federal agency securities are not backed by the full faith and credit of the U.S. Government.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides information regarding fixed maturity and equity security investments available for sale with unrealized losses by length of time at December 31, 2014.

	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. Government	$	468	$	—	$	4,944	$	83	$	5,412	$	83
Federal agency issued residential mortgage-backed securities ¹		60		2		281		—		341		2
Subtotal		528		2		5,225		83		5,753		85
Corporate obligations:
Industrial		15,289		184		42,830		1,108		58,119		1,292
Energy		40,493		1,962		36,789		1,613		77,282		3,575
Communications and technology		5,061		33		9,676		209		14,737		242
Financial		14,831		165		4,963		918		19,794		1,083
Consumer		10,991		165		40,185		1,096		51,176		1,261
Public utilities		—		—		6,768		228		6,768		228
Subtotal		86,665		2,509		141,211		5,172		227,876		7,681
Other		12,567		396		30,210		2,322		42,777		2,718
Redeemable preferred stocks		—		—		9,404		713		9,404		713
Fixed maturity securities		99,760		2,907		186,050		8,290		285,810		11,197
Equity securities		—		—		11,515		590		11,515		590
Total	$	99,760	$	2,907	$	197,565	$	8,880	$	297,325	$	11,787

¹ Federal agency securities are not backed by the full faith and credit of the U.S. Government.

At December 31, 2015, the Company had 207 issues in its investment portfolio of fixed maturity and equity securities with unrealized losses. Included in this total, 179 security issues were below cost for less than one year; 19 security issues were below cost for one year or more and less than three years; and nine security issues were below cost for three years or more. At December 31, 2014, the Company had 96 issues in its investment portfolio of fixed maturity and equity securities with unrealized losses. Included in this total, 40 security issues were below cost for less than one year; 50 security issues were below cost for one year or more and less than three years; and six security issues were below cost for three years or more.

The Company does not consider these unrealized losses to be credit-related. The unrealized losses at December 31, 2015 primarily relate to changes in interest rates and market spreads subsequent to purchase. A substantial portion of investment securities that have unrealized losses are either corporate debt issued with investment grade credit ratings or other investment securities. Other investment securities include residential mortgage-backed securities, commercial mortgage-backed securities, and asset-backed securities, for which a discounted cash flow calculation is typically performed to determine any credit-related losses.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table summarizes the Company's investments in fixed maturity and equity securities available for sale with unrealized losses at December 31, 2015.

	Amortized Cost		Fair Value		Gross Unrealized Losses
Securities owned without realized impairment:
Unrealized losses of 10% or less	$	511,941	$	496,587	$	15,354
Unrealized losses of 20% or less and greater than 10%		57,124		48,447		8,677
Subtotal		569,065		545,034		24,031
Unrealized losses greater than 20%:
Investment grade:
Less than twelve months		18,096		12,944		5,152
Twelve months or greater		908		596		312
Total investment grade		19,004		13,540		5,464
Below investment grade:
Less than twelve months		5,893		2,743		3,150
Twelve months or greater		—		—		—
Total below investment grade		5,893		2,743		3,150
Unrealized losses greater than 20%		24,897		16,283		8,614
Subtotal		593,962		561,317		32,645

Securities owned with realized impairment:
Unrealized losses of 10% or less		8,097		8,013		84
Unrealized losses of 20% or less and greater than 10%		—		—		—
Subtotal		8,097		8,013		84
Unrealized losses greater than 20%:
Investment grade:
Less than twelve months		110		45		65
Twelve months or greater		—		—		—
Total investment grade		110		45		65
Below investment grade:
Less than twelve months		—		—		—
Twelve months or greater		—		—		—
Total below investment grade		—		—		—
Unrealized losses greater than 20%		110		45		65
Subtotal		8,207		8,058		149
Total	$	602,169	$	569,375	$	32,794

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table summarizes the Company's investments in securities available for sale with unrealized losses at December 31, 2014.

	Amortized Cost		Fair Value		Gross Unrealized Losses
Securities owned without realized impairment:
Unrealized losses of 10% or less	$	295,543	$	286,130	$	9,413
Unrealized losses of 20% or less and greater than 10%		8,973		7,874		1,099
Subtotal		304,516		294,004		10,512
Unrealized losses greater than 20%:
Investment grade:
Less than twelve months		—		—		—
Twelve months or greater		908		663		245
Total investment grade		908		663		245
Below investment grade:
Less than twelve months		—		—		—
Twelve months or greater		—		—		—
Total below investment grade		—		—		—
Unrealized losses greater than 20%		908		663		245
Subtotal		305,424		294,667		10,757

Securities owned with realized impairment:
Unrealized losses of 10% or less		—		—		—
Unrealized losses of 20% or less and greater than 10%		—		—		—
Subtotal		—		—		—
Unrealized losses greater than 20%:
Investment grade:
Less than twelve months		3,688		2,658		1,030
Twelve months or greater		—		—		—
Total investment grade		3,688		2,658		1,030
Below investment grade:
Less than twelve months		—		—		—
Twelve months or greater		—		—		—
Total below investment grade		—		—		—
Unrealized losses greater than 20%		3,688		2,658		1,030
Subtotal		3,688		2,658		1,030
Total	$	309,112	$	297,325	$	11,787

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides information on fixed maturity securities with gross unrealized losses by actual or equivalent Standard & Poor's rating at December 31, 2015.

	Fair Value		% of Total		Gross Unrealized Losses		% of Total
AAA	$	10,050	2	%	$	198	1	%
AA	79,448		14	%	2,570		8	%
A	161,483		28	%	4,928		15	%
BBB	280,178		50	%	20,569		64	%
Total investment grade	531,159		94	%	28,265		88	%
BB	25,465		4	%	3,798		12	%
B and below	10,595		2	%	157		—	%
Total below investment grade	36,060		6	%	3,955		12	%
	$	567,219	100	%	$	32,220	100	%

The following table provides information on fixed maturity securities with gross unrealized losses by actual or equivalent Standard & Poor's rating at December 31, 2014.

	Fair Value		% of Total		Gross Unrealized Losses		% of Total
AAA	$	7,953	3	%	$	47	—	%
AA	37,702		13	%	1,670		15	%
A	91,299		32	%	2,840		26	%
BBB	132,230		46	%	4,580		41	%
Total investment grade	269,184		94	%	9,137		82	%
BB	13,969		5	%	1,031		9	%
B and below	2,657		1	%	1,029		9	%
Total below investment grade	16,626		6	%	2,060		18	%
	$	285,810	100	%	$	11,197	100	%

The Company's residential mortgage-backed securities, commercial mortgage-backed securities, and asset-backed securities that were rated below investment grade were 41% and 40% of the below investment grade total at December 31, 2015 and December 31, 2014, respectively.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides the distribution of maturities for fixed maturity securities available for sale with unrealized losses at December 31. Expected maturities may differ from these contractual maturities since borrowers may have the right to call or prepay obligations.

	December 31, 2015				December 31, 2014
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturity securities available for sale:
Due in one year or less	$	—	$	—	$	5,052	$	115
Due after one year through five years		68,757		1,548		21,033		960
Due after five years through ten years		421,519		26,164		202,240		5,772
Due after ten years		65,939		4,388		47,740		3,635
Total		556,215		32,100		276,065		10,482
Securities with variable principal payments		4,079		21		341		2
Redeemable preferred stocks		6,925		99		9,404		713
Total	$	567,219	$	32,220	$	285,810	$	11,197

The Company held one non-income producing security with a carrying value of $0.6 million at December 31, 2015, compared to three securities with a carrying value of $0.8 million at December 31, 2014. These securities were previously written down due to other-than-temporary impairments and placed on non-accrual status.

The Company did not hold securities of any corporation and its affiliates that exceeded 10% of stockholders' equity at December 31, 2015 or 2014.

The Company recognized other-than-temporary impairments of $2.2 million, $2.2 million, and $1.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. Included in these total impairments, $2.5 million, $1.5 million, and $1.1 million were recorded in earnings for the years ended December 31, 2015, 2014, and 2013, respectively. The differences represented the non-credit portion of current or prior other-than-temporary impairment that were recorded in other comprehensive income (loss). Corporate private-labeled residential mortgage-backed and other securities had impairments recorded in earnings of $0.3 million, $0.6 million, and $0.6 million for the years ended December 31, 2015, 2014, and 2013, respectively. The Company determined the other-than-temporary impairments recorded in earnings based upon the present value of projected future cash flows.

One corporate obligation had an impairment recorded in earnings of $2.0 million during 2015. This is a debt obligation of a company within the oil exploration and production sector that is challenged by reduced oil prices and lower demand for exploration equipment. In addition, one other-type security was written down by $0.2 million during 2015 due to an increase in projected future losses on the underlying collateral. One equity security had an impairment of less than $0.1 million during 2015. Two corporate obligations had a impairments recorded in earnings of $0.7 million during 2014. The first was written down $0.7 million and was an oil industry debt obligation that was challenged by reduced oil prices. The second was a utility debt obligation that was written down less than $0.1 million. In addition, an other-type security was written down by $0.1 million due to an increase in projected future losses on the underlying collateral. There were two equity securities with impairments recorded of $0.1 million during 2014. One other-type security was written down by $0.5 million during 2013 due to an increase in projected future losses on the underlying collateral. There were no impairments on equity securities during 2013.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following tables present the range of significant assumptions used in projecting the future cash flows of the Company's residential mortgage-backed securities, commercial mortgage-backed securities, and asset-backed securities. The Company believes that the assumptions below are reasonable and they are based largely upon the actual historical results of the underlying security collateral.

	December 31, 2015
	Initial Default Rate				Initial Severity Rate				Prepayment Speed
Vintage	Low		High		Low		High		Low		High
2003	0.8	%	1.0	%	30	%	35	%	12.0	%	16.0	%
2004	0.8	%	9.2	%	35	%	72	%	10.0	%	16.0	%
2005	4.9	%	10.5	%	35	%	74	%	6.0	%	20.0	%
2006	9.3	%	9.3	%	80	%	80	%	8.0	%	8.0	%
2007	10.0	%	10.0	%	62	%	62	%	10.0	%	10.0	%

	December 31, 2014
	Initial Default Rate				Initial Severity Rate				Prepayment Speed
Vintage	Low		High		Low		High		Low		High
2003	0.8	%	1.0	%	30	%	35	%	12.0	%	16.0	%
2004	0.8	%	7.0	%	35	%	65	%	8.0	%	18.0	%
2005	4.8	%	12.6	%	35	%	71	%	6.0	%	18.0	%
2006	5.7	%	8.4	%	35	%	85	%	8.0	%	16.0	%
2007	11.0	%	11.0	%	59	%	59	%	8.0	%	8.0	%

The Company also monitors structured securities through a combination of an analysis of vintage, credit ratings, and other factors. Structured securities include asset-backed, residential mortgage-backed securities, along with collateralized debt obligations, and other collateralized obligations.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following tables divide these investment types among vintage and credit ratings.

	December 31, 2015
	Fair Value		Amortized Cost		Unrealized Gains (Losses)
Residential & non-agency MBS: ¹
Investment Grade:
Vintage 2003 and earlier	$	4,478	$	4,313	$	165
2004		5,203		4,980		223
2005		2,670		2,659		11
Total investment grade		12,351		11,952		399
Below Investment Grade:
Vintage 2003 and earlier		2,233		2,137		96
2004		22,011		21,055		956
2005		41,966		40,223		1,743
2006		1,873		817		1,056
2007		2,883		2,700		183
Total below investment grade		70,966		66,932		4,034
Other structured securities:
Investment grade		56,601		57,416		(815	)
Below investment grade		14,714		15,585		(871	)
Total other		71,315		73,001		(1,686	)
Total structured securities	$	154,632	$	151,885	$	2,747

¹This table accounts for all vintages owned by the Company.

	December 31, 2014
	Fair Value		Amortized Cost		Unrealized Gains (Losses)
Residential & non-agency MBS: ¹
Investment grade:
Vintage 2003 and earlier	$	8,249	$	7,910	$	339
2004		6,459		6,177		282
Total investment grade		14,708		14,087		621
Below investment grade:
2004		29,647		28,080		1,567
2005		55,806		53,741		2,065
2006		3,528		2,406		1,122
2007		3,386		3,164		222
Total below investment grade		92,367		87,391		4,976
Other structured securities:
Investment grade		57,672		57,658		14
Below investment grade		14,728		16,073		(1,345	)
Total other		72,400		73,731		(1,331	)
Total structured securities	$	179,475	$	175,209	$	4,266

¹This table accounts for all vintages owned by the Company.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides a reconciliation of credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the other-than-temporary impairment loss was recognized in other comprehensive income (loss) for the years ended December 31.

	2015			2014			2013
Credit losses on securities held at beginning of the period	$	17,889		$	16,375			15,260
Additions for credit losses not previously recognized in other-than-temporary impairment		—			808			27
Additions for increases in the credit loss for which an other-than-temporary impairment was previously recognized when there was no intent to sell the security before recovery of its amortized cost basis		2,481			725			1,106
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security		(20	)		(19	)		(18	)
Credit losses on securities held at the end of the period	$	20,350		$	17,889		$	16,375

The following table provides the net unrealized gains (losses) reported in accumulated other comprehensive income (loss) on the Company's investments in securities available for sale, at December 31.

	2015			2014			2013
Net unrealized gains	$	95,765		$	174,620		$	124,427
Amounts resulting from:
DAC, VOBA, and DRL		(17,030	)		(28,495	)		(26,979	)
Future policy benefits		(19,219	)		(26,778	)		(16,119	)
Policyholder account balances		(454	)		(879	)		(507	)
Deferred income taxes		(20,670	)		(41,462	)		(28,287	)
Total	$	38,392		$	77,006		$	52,535

Investment Revenues

The following table provides investment revenues by major category for the years ended December 31.

	2015			2014			2013
Gross investment income:
Fixed maturity securities	$	116,713		$	121,137		$	122,448
Equity securities		1,023			1,037			1,953
Mortgage loans		31,662			37,452			40,605
Real estate		17,059			11,756			10,652
Policy loans		5,774			5,848			5,753
Short-term investments		8			4			5
Other		177			535			357
Total		172,416			177,769			181,773
Less investment expenses		(15,266	)		(12,801	)		(12,033	)
Net investment income	$	157,150		$	164,968		$	169,740

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Realized Gains (Losses)

The following table provides net realized investment gains (losses) by major category for the years ended December 31.

	2015			2014			2013
Realized investment gains (losses):
Fixed maturity securities	$	569		$	2,576		$	3,464
Equity securities		49			403			626
Real estate		4,228			642			(69	)
Mortgage loans		(1,041	)		(105	)		(49	)
Amortization of DAC, VOBA, and DRL		(38	)		(147	)		(100	)
Net realized investment gains	$	3,767		$	3,369		$	3,872

The following table provides detail concerning realized investment gains and losses for the three years ended December 31.

	2015			2014			2013
Gross gains resulting from:
Sales of investment securities	$	360		$	3,199		$	261
Investment securities called and other		3,354			3,084			5,627
Real estate		4,228			864			20
Total gross gains		7,942			7,147			5,908
Gross losses resulting from:
Sales of investment securities		(403	)		(1,352	)		(5	)
Investment securities called and other		(212	)		(419	)		(660	)
Sale of real estate and joint venture		—			(222	)		(89	)
Mortgage loans		(296	)		(1,442	)		(144	)
Total gross losses		(911	)		(3,435	)		(898	)
Change in allowance for loan losses		(745	)		1,337			95
Amortization of DAC, VOBA, and DRL		(38	)		(147	)		(100	)
Net realized investment gains, excluding other-than-temporary impairment losses		6,248			4,902			5,005

Net impairment losses recognized in earnings:
Other-than-temporary impairment losses on fixed maturity and equity securities		(2,189	)		(2,176	)		(1,032	)
Portion of loss recognized in other comprehensive income (loss)		(292	)		643			(101	)
Net other-than-temporary impairment losses recognized in earnings		(2,481	)		(1,533	)		(1,133	)
Net realized investment gains	$	3,767		$	3,369		$	3,872

Proceeds From Sales of Investment Securities

The table below details proceeds from the sale of fixed maturity and equity securities, excluding maturities and calls, for the three years ended December 31.

		2015				2014				2013
Proceeds		$	39,954			$	38,527			$	12,292

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Mortgage Loans

Investments in mortgage loans totaled $590.0 million at December 31, 2015, compared to $541.2 million at December 31, 2014. The Company's mortgage loans are mostly secured by commercial real estate and are stated at cost, adjusted for amortization of premium and accrual of discount, less an allowance for loan losses. This allowance is maintained at a level believed by management to be adequate to absorb estimated credit losses and was $2.7 million at December 31, 2015 and $1.9 million at December 31, 2014. Management's periodic evaluation and assessment of the adequacy of the allowance is based on known and inherent risks in the portfolio, historical and industry data, current economic conditions, and other relevant factors. Please see Note 5 - Financing Receivables for additional information. The Company does not hold mortgage loans to any single borrower that exceed 5% of stockholders' equity.

The Company had 17% of its invested assets in commercial mortgage loans at December 31, 2015, compared to 15% at December 31, 2014. New commercial loans, including refinanced loans, were $164.0 million and $61.2 million for 2015 and 2014, respectively. The level of new commercial mortgage loans in any year is influenced by market conditions, as the Company responds to changes in interest rates, available spreads, borrower demand, and opportunities to acquire loans that meet the Company's yield and quality thresholds.

In addition to the subject collateral underlying the mortgage, the Company typically requires some amount of recourse from borrowers as another potential source of repayment. The recourse requirement is determined as part of the underwriting requirements of each loan. The Company added 70 new loans to the portfolio during 2015, and 96% of these loans had some amount of recourse requirement. No new loans were purchased from institutional lenders during 2015. The average loan-to-value ratio for the overall portfolio was 47% at December 31, 2015, up from 46% at December 31, 2014. These ratios are based upon the current balance of loans relative to the appraisal of value at the time the loan was originated or acquired. The average loan balance was $1.6 million at December 31, 2015 and $1.5 million at December 31, 2014. The Company has certain mortgage loans that have an unamortized premium, totaling $0.4 million as of December 31, 2015, compared to $1.0 million at December 31, 2014.

The following table identifies the gross mortgage loan principal outstanding and the allowance for loan losses at December 31.

	2015			2014
Principal outstanding	$	592,619		$	543,094
Allowance for loan losses		(2,659	)		(1,914	)
Carrying value	$	589,960		$	541,180

The following table summarizes the amount of mortgage loans held by the Company at December 31, 2015 and 2014, segregated by year of origination. Purchased loans are shown in the year acquired by the Company, although the individual loans may have been initially originated in prior years.

	2015		% of Total	2014		% of Total
Prior to 2006	$	25,799	4%	$	47,843	9%
2006	10,438		2%	16,280		3%
2007	17,722		3%	19,991		4%
2008	21,440		4%	22,938		4%
2009	11,544		2%	20,754		4%
2010	38,002		6%	51,205		9%
2011	81,357		14%	91,943		17%
2012	104,775		18%	133,912		25%
2013	62,808		10%	77,784		14%
2014	57,100		10%	60,444		11%
2015	161,634		27%	—		—%
Principal outstanding	$	592,619	100%	$	543,094	100%

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table identifies mortgage loans by geographic location at December 31.

	2015		% of Total	2014		% of Total
Pacific	$	129,108	22%	$	131,109	25%
West south central	112,093		19%	94,122		17%
West north central	84,210		14%	78,027		14%
Mountain	67,526		11%	68,961		13%
South Atlantic	71,599		12%	60,557		11%
East north central	71,178		12%	64,013		12%
Middle Atlantic	30,141		5%	21,877		4%
East south central	26,764		5%	24,428		4%
Principal outstanding	$	592,619	100%	$	543,094	100%

The following table identifies the concentration of mortgage loans by state greater than 5% of total at December 31.

	2015		% of Total	2014		% of Total
California	$	111,050	19%	$	108,683	20%
Texas	108,104		18%	89,923		16%
Minnesota	58,841		10%	55,916		10%
Ohio	39,410		7%	30,432		6%
Florida	30,753		5%	26,452		5%
All others	244,461		41%	231,688		43%
Principal outstanding	$	592,619	100%	$	543,094	100%

The following table identifies mortgage loans by property type at December 31. The Other category consists principally of apartments and retail properties.

	2015		% of Total	2014		% of Total
Industrial	$	312,458	53%	$	281,671	51%
Office	181,912		30%	165,859		31%
Medical	28,042		5%	25,617		5%
Other	70,207		12%	69,947		13%
Principal outstanding	$	592,619	100%	$	543,094	100%

The table below identifies mortgage loans by maturity at December 31.

	2015		% of Total	2014		% of Total
Due in one year or less	$	18,560	3%	$	27,607	5%
Due after one year through five years	107,219		18%	145,530		27%
Due after five years through ten years	129,232		22%	143,382		26%
Due after ten years	337,608		57%	226,575		42%
Principal outstanding	$	592,619	100%	$	543,094	100%

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The table below identifies the commercial mortgage portfolio by current loan balance at years ending December 31.

	2015		% of Total	2014		% of Total
$5 million or greater	$	88,656	15%	$	69,237	13%
$4 million to less than $5 million	31,025		5%	27,189		5%
$3 million to less than $4 million	57,735		10%	47,718		9%
$2 million to less than $3 million	130,397		22%	130,026		24%
$1 million to less than $2 million	195,604		33%	178,862		33%
Less than $1 million	89,202		15%	90,062		16%
Principal outstanding	$	592,619	100%	$	543,094	100%

The table below identifies the commercial mortgage portfolio by current loan balance as a percentage of the value at the time of origination at December 31.

	2015		% of Total	2014		% of Total
70% or greater	$	66,330	11%	$	33,113	6%
50% to 69%	301,901		51%	297,001		55%
Less than 50%	224,388		38%	212,980		39%
Principal outstanding	$	592,619	100%	$	543,094	100%

The concentration in California, along with other states included in the pacific region, exposes the Company to potential losses from a regional economic downturn and certain catastrophes, such as earthquakes and fires, that may affect certain areas of the region. The Company requires borrowers to maintain fire insurance coverage to provide reimbursement for any losses due to fire. The Company diversifies its commercial mortgage loan portfolio both geographically and by property type to reduce certain catastrophic and economic exposure. However, diversification may not always sufficiently mitigate the risk of such losses. Historically, the delinquency rate of the Company's pacific region commercial mortgage loans has been substantially below the industry average and consistent with the Company's experience in other regions. The Company does not require earthquake insurance for properties on which it makes commercial mortgage loans. However, the Company does consider structural information specific to each property, as well as the potential for earthquake loss if the property lies within areas believed by the Company to be seismically active submarkets. The Company does not expect catastrophe or earthquake damage or economic downturn in the pacific region that may occur to have a material adverse effect on its business, financial position, results of operations, or cash flows. However, the Company cannot provide assurance that such risks could not have such material adverse effects.

Under the laws of certain states, environmental contamination of a property may result in a lien on the property to secure recovery of the costs of cleanup. In some states, such a lien has priority over the lien of an existing mortgage against such property. As a commercial mortgage lender, the Company customarily conducts environmental assessments prior to making commercial mortgage loans secured by real estate and before taking title on real estate. Based on the Company's environmental assessments, the Company believes that any compliance costs associated with environmental laws and regulations or any remediation of affected properties would not have a material adverse effect on the Company's business, financial position, results of operations, or cash flows. However, the Company cannot provide assurance that material compliance costs will not be incurred.

The Company may refinance commercial mortgage loans prior to contractual maturity as a means of originating new loans that meet the Company's underwriting and pricing parameters. The Company refinanced loans with outstanding balances of $22.8 million and $13.0 million during the years ended December 31, 2015 and December 31, 2014, respectively.

In the normal course of business, the Company commits to fund commercial mortgage loans generally up to 120 days in advance. These commitments typically have fixed expiration dates. A small percentage of commitments expire due to the borrower's failure to deliver the requirements of the commitment by the expiration date. In these cases, the Company retains the commitment fee. For additional information, please see Note 21 - Commitments, Contingent Liabilities, Guarantees, and Indemnifications.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Real Estate

Investments in real estate totaled $168.1 million at December 31, 2015, compared to $181.1 million at December 31, 2014. The table below provides information concerning the Company's real estate investments by major category at December 31.

	2015			2014
Land	$	29,157		$	28,767
Buildings		141,936			150,501
Less accumulated depreciation		(36,291	)		(33,217	)
Real estate, commercial		134,802			146,051
Real estate, joint ventures		33,295			35,031
Total	$	168,097		$	181,082

Investment real estate is depreciated on a straight-line basis over periods ranging from 3 years to 60 years. The Company had real estate sales of $20.0 million, $2.9 million, and $0.4 million during 2015, 2014, and 2013, respectively.

The Company had non-income producing real estate, consisting of vacant properties and properties under development, of $8.7 million at December 31, 2015, compared to $12.2 million at December 31, 2014.

4. Fair Value Measurements

Under GAAP, fair value represents the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. It is the Company's practice to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.

The Company categorizes its financial assets and liabilities measured at fair value in three levels, based on the inputs and assumptions used to determine the fair value. These levels are as follows:

Level 1 - Valuations are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 - Valuations are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Valuations are obtained from third-party pricing services or inputs that are observable or derived principally from or corroborated by observable market data.

Level 3 - Valuations are generated from techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company's assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models, spread-based models, and similar techniques, using the best information available in the circumstances.

Following is a description of valuation methodologies used for assets and liabilities recorded at fair value and for estimating fair value for financial instruments not recorded at fair value but for which fair value is disclosed.

Assets

Securities Available for Sale

Fixed maturity and equity securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon unadjusted quoted prices, if available, except as described in the subsequent paragraphs.

Cash and Short-Term Investments

Cash and short-term investments include cash and highly-liquid investments in institutional money market funds. The carrying value of cash and short-term investments approximates the fair value and are categorized as Level 1. Fair value is provided for disclosure purposes only.

Loans

The Company does not record loans at fair value. As such, valuation techniques discussed herein for loans are primarily for estimating fair value for purpose of disclosure.

Fair values of mortgage loans on real estate properties are calculated by discounting contractual cash flows, using discount rates based on current industry pricing or the Company's estimate of an appropriate risk-adjusted discount rate for loans of similar size,

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

type, remaining maturity, likelihood of prepayment, and repricing characteristics. Mortgage loans are categorized as Level 3 in the fair value hierarchy.

The Company also has loans made to policyholders. These loans cannot exceed the cash surrender value of the policy. Carrying value of policy loans approximates fair value. Policy loans are categorized as Level 3.

Separate Accounts

The separate account assets and liabilities, which are equal, are recorded at fair value based upon NAV of the underlying investment holdings as derived from closing prices on a national exchange or as provided by the issuer. This is the value at which a policyholder could transact with the issuer on the date. Separate accounts are categorized as Level 2.

Liabilities

Investment-Type Liabilities Included in Policyholder Account Balances and Other Policyholder Funds

The fair values of supplementary contracts and annuities without life contingencies are estimated to be the present value of payments at a market yield. The fair values of deposits with no stated maturity are estimated to be the amount payable on demand at the measurement date. These liabilities are categorized as Level 3. The Company has not estimated the fair value of the liabilities under contracts that involve significant mortality or morbidity risks, as these liabilities fall within the definition of insurance contracts. Insurance contracts are excluded from financial instruments that require disclosures of fair value.

Guaranteed Minimum Withdrawal Benefits (GMWB) Included in Other Policyholder Funds

The Company offers a GMWB rider that can be added to new or existing variable annuity contracts. The rider provides an enhanced withdrawal benefit that guarantees a stream of income payments to an owner or annuitant, regardless of the contract account value. Fair value for GMWB rider contracts is a Level 3 valuation, as it is based on models which utilize significant unobservable inputs. These models require actuarial and financial market assumptions, which reflect the assumptions market participants would use in pricing the contract, including adjustments for volatility, risk, and issuer non-performance.

Determination of Fair Value

The Company utilizes external third-party pricing services to determine the majority of its fair values on investment securities available for sale. At December 31, 2015, approximately 98% of the carrying value of these investments was from external pricing services, 1% was from brokers, and 1% was derived from internal matrices and calculations. At December 31, 2014, approximately 97% of the carrying value of these investments was from external pricing services, 1% was from brokers, and 2% was derived from internal matrices and calculations. In the event that the primary pricing service does not provide a price, the Company utilizes the price provided by a second pricing service. The Company reviews prices received from service providers for reasonableness and unusual fluctuations but generally accepts the price identified from the primary pricing service. In the event a price is not available from either third-party pricing service, the Company pursues external pricing from brokers. Generally, the Company pursues and utilizes only one broker quote per security. In doing so, the Company solicits only brokers which have previously demonstrated knowledge and experience of the subject security. If a broker price is not available, the Company determines a fair value through various valuation techniques that may include discounted cash flows, spread-based models, or similar techniques, depending upon the specific security to be priced. These techniques are primarily applied to private placement securities. The Company utilizes available market information, wherever possible, to identify inputs into the fair value determination, primarily prices and spreads on comparable securities.

Each quarter, the Company evaluates the prices received from third-party security pricing services and independent brokers to ensure that the prices represent a reasonable estimate of the fair value within the macro-economic environment, sector factors, and overall pricing trends and expectations. The Company corroborates and validates the primary pricing sources through a variety of procedures that include but are not limited to comparison to additional third-party pricing services or brokers, where possible; a review of third-party pricing service methodologies; back testing; in-depth specific analytics on randomly selected issues; and comparison of prices to actual trades for specific securities where observable data exists. In addition, the Company analyzes the primary third-party pricing service's methodologies and related inputs and also evaluates the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy. Finally, the Company also performs additional evaluations when individual prices fall outside tolerance levels when comparing prices received from third-party pricing services.

Fair value measurements for assets and liabilities where there exists limited or no observable market data are calculated using the Company's own estimates and are categorized as Level 3. These estimates are based on current interest rates, credit spreads, liquidity premium or discount, the economic and competitive environment, unique characteristics of the asset or liability, and other pertinent factors. Therefore, these estimates cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any valuation technique. Further, changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The Company's own estimates of fair value of fixed maturity and equity securities may be derived in a number of ways, including but not limited to: 1) pricing provided by brokers, where the price indicates reliability as to value; 2) fair values of comparable securities, incorporating a spread adjustment for maturity differences, collateralization, credit quality, liquidity, and other items, if applicable; 3) discounted cash flow models and margin spreads; 4) bond yield curves; 5) observable market prices and exchange transaction information not provided by external pricing services; and 6) statement values provided to the Company by fund managers.

The fair value of the GMWB embedded derivative is calculated using a discounted cash flow valuation model that projects future cash flows under multiple risk neutral stochastic equity scenarios. The risk neutral scenarios are generated using the current swap curve and projected equity volatilities and correlations. The equity correlations are based on historical price observations. For policyholder behavior assumptions, expected lapse and utilization assumptions are used and updated for actual experience. The mortality assumption uses the 2000 U.S. Annuity Basic Mortality Table. The present value of cash flows is determined using the discount rate curve, based upon London Interbank Offered Rate (LIBOR) plus a credit spread.

Categories Reported at Fair Value

The following tables present the Company's fair value hierarchy for those assets and liabilities reported at fair value on a recurring basis at December 31.

	2015
	Level 1			Level 2			Level 3			Total
Assets:
U.S. Treasury securities and obligations of U.S. Government	$	9,704		$	146,421		$	—		$	156,125
Federal agencies ¹		—			21,197			—			21,197
Federal agency issued residential mortgage-backed securities ¹		—			37,559			—			37,559
Subtotal		9,704			205,177			—			214,881
Corporate obligations:
Industrial		—			544,509			—			544,509
Energy		—			227,019			—			227,019
Communications and technology		—			242,233			—			242,233
Financial		—			221,497			—			221,497
Consumer		—			549,301			—			549,301
Public utilities		—			240,299			—			240,299
Subtotal		—			2,024,858			—			2,024,858
Corporate private-labeled residential mortgage-backed securities		—			74,177			—			74,177
Municipal securities		—			152,849			—			152,849
Other		—			95,855			577			96,432
Redeemable preferred stocks		—			17,648			—			17,648
Fixed maturity securities		9,704			2,570,564			577			2,580,845
Equity securities		5,166			20,159			—			25,325
Total	$	14,870		$	2,590,723		$	577		$	2,606,170

Percent of total		1	%		99	%		—	%		100	%

Liabilities:
Other policyholder funds
Guaranteed minimum withdrawal benefits	$	—		$	—		$	(2,778	)	$	(2,778	)
Total	$	—		$	—		$	(2,778	)	$	(2,778	)

¹ Federal agency securities are not backed by the full faith and credit of the U.S. Government.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

	2014
	Level 1			Level 2			Level 3			Total
Assets:
U.S. Treasury securities and obligations of U.S. Government	$	12,247		$	152,546		$	—		$	164,793
Federal agencies ¹		—			21,951			—			21,951
Federal agency issued residential mortgage-backed securities ¹		—			48,742			—			48,742
Subtotal		12,247			223,239			—			235,486
Corporate obligations:
Industrial		—			559,377			—			559,377
Energy		—			230,090			—			230,090
Communications and technology		—			242,905			—			242,905
Financial		—			294,329			—			294,329
Consumer		—			544,079			—			544,079
Public utilities		—			250,079			—			250,079
Subtotal		—			2,120,859			—			2,120,859
Corporate private-labeled residential mortgage-backed securities		—			95,282			—			95,282
Municipal securities		—			158,492			—			158,492
Other		—			98,714			759			99,473
Redeemable preferred stocks		—			17,139			—			17,139
Fixed maturity securities		12,247			2,713,725			759			2,726,731
Equity securities		5,347			19,534			—			24,881
Total	$	17,594		$	2,733,259		$	759		$	2,751,612

Percent of total		1	%		99	%		—	%		100	%

Liabilities:
Other policyholder funds
Guaranteed minimum withdrawal benefits	$	—		$	—		$	(1,094	)	$	(1,094	)
Total	$	—		$	—		$	(1,094	)	$	(1,094	)

¹ Federal agency securities are not backed by the full faith and credit of the U.S. Government.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31 are summarized below:

	2015
	Assets			Liabilities
	Fixed maturity securities available for sale			GMWB
Beginning balance	$	759		$	(1,094	)
Included in earnings		(193	)		(1,488	)
Included in other comprehensive income (loss)		306			—
Purchases, issuances, sales and other dispositions:
Purchases		—			—
Issuances		—			330
Sales		—			—
Other dispositions		(295	)		(526	)
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Ending balance	$	577		$	(2,778	)

	2014
	Assets			Liabilities
	Fixed maturity securities available for sale			GMWB
Beginning balance	$	1,433		$	(4,703	)
Included in earnings		(12	)		3,145
Included in other comprehensive income (loss)		(421	)		—
Purchases, issuances, sales and other dispositions:
Purchases		—			—
Issuances		—			592
Sales		—			—
Other dispositions		(241	)		(128	)
Transfers into Level 3		—			—
Transfers out of Level 3		—			—
Ending balance	$	759		$	(1,094	)

Depending upon the availability of Level 1 or Level 2 pricing, specific securities may transfer into or out of Level 3. The Company did not have any transfers between any levels at December 31, 2015 or 2014.

The Company's assets categorized as Level 3 instruments are primarily fixed maturity securities, totaling $0.6 million at December 31, 2015 and $0.8 million as of December 31, 2014. These assets are valued using discounted cash flow models for which the significant assumptions are not observable in the market.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table presents the valuation method for the financial instrument liability categorized as Level 3, as well as the unobservable inputs used in the valuation of those financial instruments at December 31, 2015.

	Fair Value			Valuation Technique	Unobservable Inputs	Range
Embedded Derivative - GMWB	$	(2,778	)	Actuarial cash flow model	Mortality	80% of U.S. Annuity Basic Table (2000)
					Lapse	0%-16% depending on product/duration/funded status of guarantee
					Benefit Utilization	0%-80% depending on age/duration/funded status of guarantee
					Nonperformance Risk	0.87%-1.73%

	Fair Value			Valuation Technique	Unobservable Inputs	Range
Embedded Derivative - GMWB	$	(1,094	)	Actuarial cash flow model	Mortality	80% of U.S. Annuity Basic Table (2000)
					Lapse	0%-16% depending on product/duration/funded status of guarantee
					Benefit Utilization	0%-80% depending on age/duration/funded status of guarantee
					Nonperformance Risk	0.73%-1.35%

The GMWB liability is sensitive to changes in observable and unobservable inputs. Observable inputs include risk-free rates, index returns, volatilities, and correlations. Increases in risk-free rates and equity returns reduce the liability, while increases in volatilities increase the liability. The Company's mortality, lapse, benefit utilization and nonperformance risk adjustment are unobservable. Increases in mortality, lapses and credit spreads used for nonperformance risk reduce the liability, while increases in benefit utilization increase the liability.

The Company estimates that the impact of unobservable inputs at December 31, 2015 was as follows: a 10% increase in the mortality assumption would reduce the liability less than $0.1 million; a 10% decrease in the lapse assumption would increase the liability $0.2 million; a 10% increase in the benefit utilization would increase the liability $0.7 million; and a 10 basis point increase in the credit spreads used for non-performance would decrease the liability $0.3 million.

The Company estimates that the impact of unobservable inputs at December 31, 2014 was as follows: a 10% increase in the mortality assumption would reduce the liability less than $0.1 million; a 10% decrease in the lapse assumption would increase the liability $0.3 million; a 10% increase in the benefit utilization would increase the liability $0.9 million; and a 10 basis point increase in the credit spreads used for non-performance would decrease the liability $0.4 million.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table presents a summary of fair value estimates at December 31 for financial instruments. The Company has not included assets and liabilities that are not financial instruments in this disclosure. The total of the fair value calculations presented below may not be indicative of the value that can be obtained.

	2015						2014
	Carrying Value			Fair Value			Carrying Value			Fair Value
Assets:
Investments:
Fixed maturity securities available for sale	$	2,580,845		$	2,580,845		$	2,726,731		$	2,726,731
Equity securities available for sale		25,325			25,325			24,881			24,881
Mortgage loans		589,960			606,708			541,180			567,435
Policy loans		81,392			81,392			83,553			83,553
Cash and short-term investments		30,325			30,325			50,118			50,118
Separate account assets		372,924			372,924			406,501			406,501

Liabilities:
Individual and group annuities		1,073,592			1,055,052			1,080,322			1,061,067
Supplementary contracts and annuities without life contingencies		54,136			52,636			54,949			53,744
Separate account liabilities		372,924			372,924			406,501			406,501
Other policyholder funds - GMWB		(2,778	)		(2,778	)		(1,094	)		(1,094	)

5. Financing Receivables

The Company has financing receivables that have both a specific maturity date, either on demand or on a fixed or determinable date, and are recognized as assets in the Consolidated Balance Sheets.

The table below identifies the Company's financing receivables by classification amount at December 31.

	2015		2014
Receivables:
Agent receivables, net (allowance $1,197; 2014 - $2,003)	$	1,602	$	1,727
Investment-related financing receivables:
Mortgage loans, net (allowance $2,659; 2014 - $1,914)		589,960		541,180
Total financing receivables	$	591,562	$	542,907

The following table details the activity of the allowance for doubtful accounts on agent receivables at December 31. Any recoveries are reflected as deductions.

	2015			2014
Beginning of year	$	2,003		$	2,245
Additions		128			306
Deductions		(934	)		(548	)
End of year	$	1,197		$	2,003

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table details the mortgage loan portfolio, as collectively or individually evaluated for impairment at December 31.

	2015			2014
Mortgage loans collectively evaluated for impairment	$	585,207		$	535,398
Mortgage loans individually evaluated for impairment		7,412			7,696
Allowance for loan losses		(2,659	)		(1,914	)
Carrying value	$	589,960		$	541,180

The following table details the activity of the allowance for mortgage loan losses at December 31. Any recoveries are reflected as deductions.

	2015		2014
Beginning of year	$	1,914	$	3,251
Provision		745		—
Deductions		—		(1,337	)
End of year	$	2,659	$	1,914

Agent Receivables

The Company has agent receivables that are classified as financing receivables and are reduced by an allowance for doubtful accounts. These trade receivables from agents are long-term in nature and are specifically assessed as to the collectibility of each receivable. The Company's gross agent receivables totaled $2.8 million at December 31, 2015 with an allowance for doubtful accounts totaling $1.2 million. Gross agent receivables totaled $3.7 million with an allowance for doubtful accounts of $2.0 million at December 31, 2014. The Company has two types of agent receivables including:

•	Agent specific loans. At both December 31, 2015 and December 31, 2014, these loans totaled $1.0 million and the allowance for doubtful accounts of $0.3 million.

•	Other agent receivables. Gross agent receivables in this category totaled $1.8 million, and the allowance for doubtful accounts was $0.9 million at December 31, 2015. Gross agent receivables totaled $2.7 million, and the allowance for doubtful accounts was $1.7 million at December 31, 2014.

Mortgage Loans

The Company considers its mortgage loan portfolio to be long-term financing receivables. Mortgage loans are stated at cost, adjusted for amortization of premium and accrual of discount, less an allowance for loan losses. Mortgage loan interest income is recognized on an accrual basis with any premium or discount amortized over the life of the loan. Prepayment and late fees are recorded on the date of collection. Loans in foreclosure, loans considered impaired, or loans past due 90 days or more are placed on non-accrual status. Payments received on loans on non-accrual status for these reasons are applied first to interest income not collected while on non-accrual status, followed by fees, accrued and past-due interest, and principal.

If a mortgage loan is determined to be on non-accrual status, the Company does not accrue interest income into its financial statements. The loan is independently monitored and evaluated as to potential impairment or foreclosure. This evaluation includes assessing the probability of receiving future cash flows, along with consideration of many of the factors described below. If delinquent payments are made and the loan is brought current, then the Company returns the loan to active status and accrues income accordingly.

Generally, the Company considers its mortgage loans to be a portfolio segment. The Company considers its primary class to be property type. The Company primarily uses loan-to-value as its credit risk quality indicator but also monitors additional secondary risk factors, such as geographic distribution both on a regional and specific state basis. The mortgage loan portfolio segment is presented by property type in a table in Note 3, as are geographic distributions by both region and state. These measures are also supplemented with various other analytics to provide additional information concerning potential impairment of mortgage loans and management's assessment of financing receivables.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table presents an aging schedule for delinquent payments for both principal and interest by property type.

			Amount of Payments Past Due
	Book Value		30-59 Days		60-89 Days		> 90 Days		Total
December 31, 2015
Industrial	$	—	$	—	$	—	$	—	$	—
Office		5,064		74		—		—		74
Medical		—		—		—		—		—
Other		—		—		—		—		—
Total	$	5,064	$	74	$	—	$	—	$	74

December 31, 2014
Industrial	$	—	$	—	$	—	$	—	$	—
Office		—		—		—		—		—
Medical		—		—		—		—		—
Other		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—

There was one mortgage loan that was 30 days past due at December 31, 2015. Subsequently, payment was received on this loan and it was brought current. No mortgage loans were past due at December 31, 2014. There were no loans in the process of foreclosure at December 31, 2015 or December 31, 2014.

The allowance for loan losses is monitored and evaluated at multiple levels with a process that includes, but is not limited to, the factors presented below. Generally, the Company establishes the allowance for loan losses using the collectively evaluated impairment methodology at an overall portfolio level and then specifically identifies an allowance for loan losses on loans that contain elevated risk profiles. If the Company determines through its evaluation that a loan has an elevated specific risk profile, it then individually assesses the loan's risk profile and assigns a specific allowance value based on many factors, including those identified below.

Macro-environmental and elevated risk profile considerations:

•	Current industry conditions that are affecting the market, including rental and vacancy rates;

•	Perceived market liquidity;

•	Analysis of the markets and sub-markets in which the Company has mortgage loans;

•	Analysis of industry historical loss and delinquency experience;

•	Other factors that the Company may perceive as important or critical given its portfolio; and

•	Analysis of the Company's loan portfolio based on loan size concentrations, geographic concentrations, property type concentrations, maturity concentrations, origination loan-to-value concentrations, and borrower concentrations.

Specific mortgage loan level considerations:

•	The payment history of each borrower;

•	Negative reports from property inspectors; and

•	Each loan's property financial statement including net operating income, debt service coverage, and occupancy level.

The Company has not acquired any mortgage loans with deteriorated credit quality during the years presented.

As part of the Company's process of monitoring impairments on loans, there are a number of significant risks and uncertainties inherent in this process. These risks include, but are not limited to:

•	The risk that the Company's assessment of a borrower to meet all of its contractual obligations will change based on changes in the credit characteristics of the borrower or property;

•	The risk that the economic outlook will be worse than expected or have more of an impact on the borrower than anticipated;

•	The risk that the performance of the underlying property could deteriorate in the future;

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

•	The risk that fraudulent, inaccurate, or misleading information could be provided to the Company;

•	The risk that the methodology or assumptions used to develop estimates of the portion of the impairment of the loan prove over time to be inaccurate; and

•	The risk that other facts and circumstances change such that it becomes more likely than not that the Company will not obtain all of the contractual payments.

The Company increased the allowance for mortgage loan losses $0.7 million in 2015, largely the result of the Company's view of credit trends under the current economic conditions. The Company reviews the portfolio's risk profile and expected ongoing performance at least quarterly.

To the extent the Company's review and valuation determines a loan is impaired, that amount is charged to the allowance for loan losses and the loan balance is reduced. In the event that a property is foreclosed upon, the carrying value is written down to the lesser of the current fair value or book value of the property with a charge to the allowance and a corresponding reduction to the mortgage loan asset. The property is then transferred to real estate where the Company has the ability and intent to manage these properties on an ongoing basis.

Over the past three years, the Company has had two mortgage loan defaults. Two loans were foreclosed in 2014 for a total impairment loss of $0.3 million. There were no foreclosures in 2015 or 2013. The Company had no troubled loans that were restructured or modified in 2015, 2014, or 2013.

6. Variable Interest Entities

The Company invests in certain affordable housing and real estate joint ventures which are considered to be variable interest entities (VIEs) and are included in Real Estate in the Consolidated Balance Sheets. The assets held in affordable housing real estate joint venture VIEs are primarily residential real estate properties that are restricted to provide affordable housing under federal or state programs for varying periods of time. The restrictions primarily apply to the rents that may be paid by tenants residing in the properties during the term of an agreement to remain in the affordable housing program. Investments in real estate joint ventures are equity interests in partnerships or limited liability companies that may or may not participate in profits or residual value. The Company's investments in these entities generate a return primarily through the realization of federal and state income tax credits and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. The Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the Consolidated Statements of Comprehensive Income as a component of income tax expense. The tax credits are recognized as a reduction of tax expense. The Company realized federal income tax credits related to these investments of $2.8 million, $2.8 million, and $2.9 million for the years ended December 31, 2015, 2014, and 2013, respectively. The Company also recognized $1.2 million, $1.1 million, and $1.6 million of amortization related to these investments for the years ended December 31, 2015, 2014, and 2013, respectively. The Company's investments in other real estate VIEs are recorded using the equity method. Cash distributions from the VIE and cash contributions to the VIE are recorded as decreases or increases, respectively, in the carrying value of the VIE. Certain other equity investments in VIEs, where permitted, are recorded on an amortized cost basis. The operating performance of investments in the VIE is recorded in the Consolidated Statements of Comprehensive Income as investment income or as a component of income tax expense, depending upon the nature and primary design of the investment. The Company evaluates the carrying value of VIEs for impairment on an ongoing basis to assess whether the carrying value is expected to be realized during the anticipated life of the investment. In certain cases, the Company may issue fixed-rate senior mortgage loan investments secured by properties controlled by VIEs. These investments are classified as mortgage loans in the Consolidated Balance Sheets, and the income received from such investments is recorded as investment income in the Consolidated Statements of Comprehensive Income.

Investments in the affordable housing and real estate joint ventures are interests that will absorb portions of the VIE's expected losses or receive portions of expected residual returns of the VIE's net assets exclusive of variable interests. The Company makes an assessment of whether it is the primary beneficiary of a VIE at the time of the initial investment and on an ongoing basis thereafter. The Company considers many factors when making this determination based upon a review of the underlying investment agreement and other information related to the specific investment. The first factor is whether the Company has the ability to direct the activities of a VIE that most significantly impact the VIE's economic performance. The power to direct the activities of the VIE is generally vested in the managing general partner or managing member of the VIE, which is not the position held by the Company in these investments. Other factors include the entity's equity investment at risk, decision-making abilities, obligations to absorb economic risks, the right to receive economic rewards of the entity, and the extent to which the Company shares in the VIE's expected losses and residual returns.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table presents the carrying amount and maximum exposure to loss relating to VIEs for which the Company holds a variable interest, but is not the primary beneficiary, and which had not been consolidated at December 31, 2015 and December 31, 2014. The table includes investments in five real estate joint ventures and 22 affordable housing real estate joint ventures at December 31, 2015 and investments in five real estate joint ventures and 23 affordable housing real estate joint ventures at December 31, 2014.

	2015				2014
	Carrying Amount		Maximum Exposure to Loss		Carrying Amount		Maximum Exposure to Loss
Real estate joint ventures	$	21,269	$	21,269	$	21,415	$	21,415
Affordable housing real estate joint ventures		11,542		51,686		13,153		54,028
Total	$	32,811	$	72,955	$	34,568	$	75,443

The maximum exposure to loss relating to the real estate joint ventures and affordable housing real estate joint ventures, as shown in the table above, is equal to the carrying amounts plus any unfunded equity commitments, exposure to potential recapture of tax credits, guarantees of debt, or other obligations of the VIE with recourse to the Company. Unfunded equity and loan commitments typically require financial or operating performance by other parties and have not yet become due or payable but which may become due in the future.

At December 31, 2015 and December 31, 2014, the Company had no mortgage loan or equity commitments outstanding to the real estate joint venture VIEs. The Company has contingent commitments to fund additional equity contributions for operating support to certain real estate joint venture VIEs, which could result in additional exposure to loss. However, the Company is not able to quantify the amount of these contingent commitments.

In addition, the maximum exposure to loss on affordable housing joint ventures at December 31, 2015 and 2014 included $28.6 million and $27.7 million, respectively, of losses which could be realized if the tax credits received by the VIEs were recaptured. Recapture events would cause the Company to reverse some or all of the benefit previously recognized by the Company or third parties to whom the tax credit interests were transferred. A recapture event can occur at any time during a 15-year required compliance period. The principal causes of recapture include financial default and non-compliance with affordable housing program requirements by the properties controlled by the VIE. The potential exposure due to recapture may be mitigated by guarantees from the managing member or managing partner in the VIE, insurance contracts, or changes in the residual value accruing to the Company's interests in the VIEs.

7. Property and Equipment

Property and equipment are stated at cost and depreciated over estimated useful lives using the straight-line method. The home office is depreciated over 25 years to 50 years and furniture and equipment is depreciated over 3 years to 10 years. The table below provides information at December 31.

	2015			2014
Land	$	766		$	766
Home office complex		21,518			21,249
Furniture and equipment		42,183			47,296
		64,467			69,311
Accumulated depreciation		(47,887	)		(51,784	)
Property and equipment	$	16,580		$	17,527

Depreciation expense totaled $1.6 million, $1.7 million, and $1.6 million in 2015, 2014, and 2013, respectively.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

8. Separate Accounts

The total separate account assets were $372.9 million at December 31, 2015 (2014 - $406.5 million). Variable universal life and variable annuity assets comprised 27% and 73% of this amount in 2015 compared to 28% and 72% of this amount in 2014.

The following table provides a reconciliation of activity within separate account liabilities at December 31.

	2015			2014			2013
Balance at beginning of year	$	406,501		$	393,416		$	340,093
Deposits on variable policyholder contracts		32,306			47,308			36,471
Transfers to general account		(5,726	)		(5,859	)		(4,349	)
Investment performance		(13,720	)		24,314			69,545
Policyholder benefits and withdrawals		(33,083	)		(39,177	)		(35,236	)
Contract charges		(13,354	)		(13,501	)		(13,108	)
Balance at end of year	$	372,924		$	406,501		$	393,416

The Company has a GMWB rider that can be added to new or existing variable annuity contracts. The rider provides an enhanced withdrawal benefit that guarantees a stream of income payments to an owner or annuitant, regardless of the contract account value. The value of the separate accounts with the GMWB rider was recorded at fair value of $118.0 million at December 31, 2015 (2014 - $132.3 million). The GMWB guarantee liability was $(2.8) million at December 31, 2015 (2014 - $(1.1) million). The change in this value is included in policyholder benefits in the Consolidated Statements of Comprehensive Income. The value of variable annuity separate accounts with the GMWB rider is recorded in separate account liabilities, and the value of the rider is included in other policyholder funds in the Consolidated Balance Sheets.

The Company has two blocks of variable universal life policies and variable annuity contracts from which the Company receives fees. The fees are based upon both specific transactions and the fund value of the blocks of policies. The Company has a direct block of ongoing business identified in the Consolidated Balance Sheets as separate account assets, totaling $372.9 million at December 31, 2015 and $406.5 million at December 31, 2014, and corresponding separate account liabilities of an equal amount. In addition, the Company has an assumed closed block of business that is recorded in the Company's financial statements in accordance with modified coinsurance accounting for variable insurance business. This block of separate account fund balances totaled $292.4 million at December 31, 2015 and $318.1 million at December 31, 2014. The Company also records separate accounts invested in the general account for the direct block of business. In accordance with coinsurance reinsurance transaction accounting, the Company also records the assumed block of fixed accounts under its general account. The future policy benefits for the direct block approximated $0.5 million and $0.4 million at December 31, 2015 and December 31, 2014, respectively. The future policy benefits for the assumed block approximated $0.6 million at both December 31, 2015 and December 31, 2014.

Guarantees are offered under variable universal life and variable annuity contracts: a guaranteed minimum death benefit (GMDB) rider is available on certain variable universal life contracts, and GMDB are provided on all variable annuities. The GMDB rider for variable universal life contracts guarantees the death benefit for specified periods of time, regardless of investment performance, provided cumulative premium requirements are met. The GMDB rider for variable annuity contracts guarantees the death benefit for specified periods of time, regardless of investment performance.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

At December 31, 2015 and 2014, separate account balances for variable annuity contracts were $270.7 million and $292.3 million, respectively. The total reserve held for variable annuity GMDB was $0.1 million at December 31, 2015 and less than $0.1 million at December 31, 2014. Additional information related to the GMDB and related separate account balances and net amount at risk (the amount by which the GMDB exceeds the account balance) as of December 31, 2015 and 2014 is provided below:

	2015						2014
	Separate Account Balance		Net Amount at Risk		Weighted Average Attained Age		Separate Account Balance		Net Amount at Risk		Weighted Average Attained Age
Return of net deposits	$	211,281	$	3,644		60.2	$	230,426	$	667		59.9
Return of the greater of the highest anniversary contract value or net deposits		8,161		758		67.5		8,594		102		67.3
Return of the greater of every fifth year highest anniversary contract value or net deposits		7,528		146		67.7		7,770		50		65.5
Return of the greater of net deposits accumulated annually at 5% or the highest anniversary contract value		43,686		6,419		62.2		45,466		2,173		61.6
Total	$	270,656	$	10,967		60.9	$	292,256	$	2,992		60.5

The following table presents the GMDB for the variable annuity incurred and paid death benefits for the three years ended December 31.

	2015		2014		2013
Variable annuity incurred death benefits	$	1,177	$	2,475	$	2,900
Variable annuity paid death benefits		1,237		2,289		3,744

The following table presents the aggregate fair value of assets by major investment asset category supporting the variable annuity separate accounts with guaranteed benefits at December 31.

	2015		2014
Money market	$	3,171	$	4,267
Fixed income		19,670		36,351
Balanced		85,346		60,726
International equity		12,039		22,057
Intermediate equity		127,968		139,609
Aggressive equity		22,462		29,246
Total	$	270,656	$	292,256

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

9. Unpaid Accident and Health Claims Liability

The liability for unpaid accident and health claims is included with policy and contract claims on the Consolidated Balance Sheets. Claim adjustment expenditures are expensed as incurred and were not material in any year presented. Activity in the liability follows.

	2015			2014			2013
Gross liability at beginning of year	$	34,691		$	33,888		$	36,219
Less reinsurance recoverable		(28,122	)		(27,567	)		(29,938	)
Net liability at beginning of year		6,569			6,321			6,281
Incurred benefits related to:
Current year		26,273			27,037			24,333
Prior years ¹		(450	)		(161	)		(937	)
Total incurred benefits		25,823			26,876			23,396
Paid benefits related to:
Current year		22,920			23,352			20,906
Prior years		3,091			3,276			2,450
Total paid benefits		26,011			26,628			23,356
Net liability at end of year		6,381			6,569			6,321
Reinsurance recoverable		26,791			28,122			27,567
Gross liability at end of year	$	33,172		$	34,691		$	33,888

¹ The incurred benefits related to prior years' unpaid accident and health claims reflect the change in these liabilities.

10. Participating Policies

The Company has some insurance contracts where the policyholder is entitled to share in the earnings through dividends, which reflect the difference between the premium charged and the actual experience. Participating business at year-end 2015 approximated 9% of statutory premiums and 12% of the life insurance in force, compared to 9% and 13% in 2014, respectively. The amount of dividends to be paid is determined annually by the Company's Board of Directors. Provision has been made in the liability for future policy benefits to allocate amounts to participating policyholders on the basis of dividend scales contemplated at the time the policies were issued, as well as for policyholder dividends having been declared by the Board of Directors in excess of the original scale.

11. Debt

The Company had no notes payable at December 31, 2015 or December 31, 2014.

As a member of the Federal Home Loan Bank of Des Moines (FHLB) with a capital investment of $4.9 million at December 31, 2015, the Company has the ability to borrow on a collateralized basis from the FHLB. The Company received an insignificant amount of dividends on the capital investment in 2015, 2014, and 2013.

The Company had unsecured revolving lines of credit of $70.0 million with two major commercial banks with no balances outstanding at December 31, 2015 and December 31, 2014. The lines of credit are at variable interest rates based upon short-term indices, and they will mature in June of 2016. The Company anticipates renewing these lines as they come due.

12. Income Taxes

The following table provides information about income taxes for the years ended December 31.

	2015		2014		2013
Current income tax expense	$	9,048	$	8,065	$	6,018
Deferred income tax expense		3,922		4,929		8,374
Total income tax expense	$	12,970	$	12,994	$	14,392

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides information about taxes paid for the years ended December 31.

	2015		2014		2013

Cash paid for income taxes		5,754		8,756		7,590

The following table provides a reconciliation of the federal income tax rate to the Company's effective income tax rate for the years ended December 31.

	2015		2014		2013
Federal income tax rate		35%		35%		35%
Tax credits, net of equity adjustment		(4)%		(4)%		(3)%
Permanent differences		—%		(1)%		—%
Effective income tax rate		31%		30%		32%

Presented below are tax effects of temporary differences that result in significant deferred tax assets and liabilities at December 31.

	2015			2014
Deferred tax assets:
Future policy benefits	$	21,257		$	24,335
Employee retirement benefits		31,293			34,422
Other		—			486
Deferred tax assets		52,550			59,243
Deferred tax liabilities:
Basis differences between tax and
GAAP accounting for investments		5,200			6,861
Unrealized investment gains		33,482			61,090
Capitalization of deferred acquisition costs, net of amortization		59,533			53,381
Value of business acquired		8,499			8,629
Property and equipment, net		4,970			5,159
Other		69			—
Deferred tax liabilities		111,753			135,120
Net deferred tax liability		59,203			75,877
Current tax asset		(529	)		(2,255	)
Income taxes payable	$	58,674		$	73,622

A valuation allowance must be established for any portion of the deferred tax asset which is believed not to be realizable. Management reviews the need for a valuation allowance based on the Company's anticipated future earnings, reversal of future taxable differences, the available carryback and carryforward periods, tax planning strategies that are prudent and feasible, and the ability and intent to hold securities until their recovery. In management's opinion, it is more likely than not that the Company will realize the benefit of its deferred taxes.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In general, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years prior to 2012. The Company is not currently under examination by the Internal Revenue Service.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Tax positions are evaluated at the reporting date to determine whether an unrecognized tax benefit should be recorded. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31 is as follows:

	2015		2014
Beginning of year	$	22	$	—
Additions based on tax positions related to the current year		94		22
Additions for tax positions of prior years		419		—
End of year	$	535	$	22

The Company's policy is to recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense. The Company recognized no tax penalty and interest expense in 2015 and $0.1 million of tax penalty and interest expense in 2014. The Company did not recognize any expense related to interest and penalties during 2013.

The Company had no material tax uncertainties requiring recognition in its consolidated financial statements as of December 31, 2015. The Company is no longer subject to income tax examinations by tax authorities for years prior to 2012.

The income tax expense is recorded in various places in the Company's financial statements, as detailed below, for the years ended December 31.

	2015			2014			2013
Income tax expense	$	12,970		$	12,994		$	14,392
Stockholders' equity:
Related to:
Change in net unrealized gains on securities available for sale		(27,600	)		17,568			(50,790	)
Effect on DAC, VOBA, and DRL		4,013			(530	)		16,577
Change in future policy benefits		2,646			(3,730	)		4,534
Change in policyholder account balances		149			(130	)		220
Change in benefit plan obligations		196			(8,400	)		7,961
Total income tax expense (benefit) included in financial statements	$	(7,626	)	$	17,772		$	(7,106	)

13. Pensions and Other Postemployment Benefits (OPEB)

The Company has pension and other postemployment benefit plans covering substantially all its employees for which the measurement date is annually on December 31.

The Kansas City Life Cash Balance Pension Plan (the Plan) was amended effective December 31, 2010 to provide that participants' accrued benefits will be frozen, and that no further benefits or accruals will be earned after December 31, 2010. Although participants will no longer accrue additional benefits under the Plan at December 31, 2010, participants will continue to earn years of service for vesting purposes under the Plan with respect to their benefits accrued through December 31, 2010. In addition, the cash balance account will continue to earn annual interest. Plan benefits are based on a cash balance account consisting of credits to the account based upon an employee's years of service, compensation and interest credits on account balances calculated using the greater of the average 30-year Treasury bond rate for November of each year or 5.5%. The benefits expected to be paid in each year from 2016 through 2020 are $11.0 million, $9.3 million, $10.6 million, $9.9 million, and $9.7 million, respectively. The aggregate benefits expected to be paid in the five years from 2021 through 2025 are $46.9 million. The expected benefits to be paid are based on the same assumptions used to measure the Company's benefit obligation at December 31, 2015 and are the actuarial present value of the vested benefits to which the employee is currently entitled but based upon the expected date of separation or retirement. The 2016 contribution for the plan has not been determined.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The asset allocation of the fair value of pension plan assets compared to the target allocation range at December 31 was:

	2015	2014	Target Allocation

Equity securities	38%	40%	33% - 43%
Asset allocation and alternative assets	29%	29%	23% - 33%
Debt securities	31%	30%	26% - 42%
Cash and cash equivalents	2%	1%	0% - 2%

Certain of the Company's pension plan assets consist of investments in pooled separate accounts. Net asset value (NAV) of the separate accounts is calculated in a manner consistent with GAAP for investment companies and is determinative of their fair value. Several of the separate accounts invest in publicly quoted mutual funds or actively managed stocks. The fair value of the underlying mutual funds or stock is used to determine the NAV of the separate account, which is not publicly quoted. Some of the separate accounts also invest in fixed income securities. The fair value of the underlying securities is based on quoted prices of similar assets and used to determine the NAV of the separate account. Sale of plan assets may be at values less than NAV. Certain redemption restrictions may apply to specific stock and bond funds, including written notices prior to the withdrawal of funds and a potential redemption fee on certain withdrawals.

Hedge fund investments are recorded at NAV. The Plan's hedge funds invest primarily in other investment funds. The valuation policies of the hedge funds provide that the value of investments in other investment funds be stated at fair value based on the NAV of the other investment funds and certain redemption restrictions may apply, including a forty-five day prior written notice to withdraw funds.

Plan fiduciaries set investment policies and strategies and oversee its investment allocation, which includes selecting investment managers, commissioning periodic asset-liability studies, and setting long-term strategic targets. Long-term strategic investment objectives include preserving the funded status of the plan and balancing risk and return. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range. The Plan does not expect to return any plan assets to the Company during 2016.

The current assumption for the expected long-term rate of return on plan assets is 7.50%. This assumption is determined by analyzing: 1) historical average returns achieved by asset allocation and active management; 2) historical data on the volatility of returns; 3) current yields available in the marketplace; 4) actual returns on plan assets; and 5) current and anticipated future allocation among asset classes. The asset classes used for this analysis are domestic and international equities, investment grade corporate bonds, alternative assets, and cash. The overall rate is derived as a weighted average of the estimated long-term returns on the asset classes represented in the investment portfolio of the plan.

The assumed discount rates used to determine the benefit obligation for pension benefits and postemployment benefits are 3.84% and 4.26%, respectively. The discount rates were determined by reference to the Citigroup Pension Liability Yield Curve on December 31, 2015. Specifically, the spot rate curve represents the rates on zero coupon securities of the quality and type included in the pension index at various maturities. By discounting benefit cash flows at these rates, a notional amount equal to the fair value of a cash flow defeasing portfolio of bonds was determined. The discount rate for benefits was calculated as a single rate giving the same discounted value as the notional amount.

The Company adopted the updated mortality tables issued by the Society of Actuaries (SOA) during 2015. The new tables, as issued by the SOA, were updated because of additional Social Security mortality information and reflect shorter life expectancy, which may result in a lower benefit obligation for certain pension plans. The result of the adoption of this updated table was a decrease of $3.2 million in the Plan's benefit obligation.

The postemployment medical plans for eligible employees, agents, and their dependents are contributory with contributions adjusted annually. The benefits expected to be paid in each year from 2016 through 2020 are $1.0 million, $1.1 million, $1.1 million, $1.2 million, and $1.2 million, respectively. The aggregate benefits expected to be paid in the five years from 2021 through 2025 are $7.8 million. The expected benefits to be paid are based on the same assumptions used to measure the Company's benefit obligation at December 31, 2015. Contributions to the plan in 2015 were $0.8 million. The 2016 contribution for the plan is estimated to be $1.0 million. The Company pays these medical costs as they become due and the plan incorporates cost-sharing features. The postemployment plan disclosures included herein do not include the potential impact from the Medicare Act (the Act) that became law in December 2003. The Act introduced a new federal subsidy to sponsors of certain retiree health care plans that provide a

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

benefit that is at least actuarially equivalent to Medicare. Since the Company does not provide benefits that are actuarially equivalent to Medicare, the Act did not impact the Company's disclosures.

Non-contributory defined contribution retirement plans for eligible general agents and sales agents provide supplemental payments based upon earned agency first year individual life and annuity commissions. Contributions to these plans in 2015 were $0.1 million (2014 - $0.1 million; 2013 - $0.1 million). Non-contributory deferred compensation plans for eligible agents based upon earned first year commissions are also offered. Contributions to these plans in 2015 were $0.3 million (2014 - $0.3 million; 2013- $0.3 million).

Savings plans for eligible employees and agents match employee and agent contributions up to 8% of salary and 2.5% of agents' prior year paid commissions, respectively. Contributions to the plans in 2015 were $2.1 million (2014 - $2.1 million; 2013 - $2.1 million). The Company may contribute an additional profit sharing amount up to 4% of salary for eligible employees, depending upon corporate profits. In 2014, the Company made a contribution to the plan under the profit sharing determination of 4% of salary for eligible employees, which totaled $1.3 million. The Company did not make a profit sharing contribution in 2015.

During 2015, the Company announced the termination of its employee stock ownership plan, which was a non-contributory trusteed employee stock ownership plan that covered substantially all salaried employees. No contributions have been made to this plan since 1992. The final valuation date for the assets held by the plan was September 30, 2015, and distribution of the plan's assets occurred in the fourth quarter of 2015.

The Company recognizes the funded status of its defined pension and postemployment plans, measured as the difference between plan assets at fair value and the projected benefit obligation, on the Consolidated Balance Sheets. Changes in the funded status that arise during the period, but are not recognized as components of net periodic benefit cost, are recognized within other comprehensive income (loss), net of taxes.

The following tables provide information regarding pension benefits and other benefits for the years ended December 31.

	Pension Benefits						OPEB
	2015			2014			2015			2014
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	157,713		$	146,000		$	36,456		$	31,179
Service cost		—			—			686			611
Interest cost		5,424			6,202			1,402			1,499
Plan participants' contributions		—			—			512			515
Actuarial (gain) loss		(8,860	)		15,465			(3,168	)		4,027
Benefits paid		(9,882	)		(9,954	)		(1,272	)		(1,375	)
Benefit obligation at end of year	$	144,395		$	157,713		$	34,616		$	36,456

Change in plan assets:
Fair value of plan assets at beginning of year	$	137,987		$	136,707		$	—		$	—
Return on plan assets		(3,275	)		5,154			—			—
Plan participants' contributions		—			—			512			515
Company contributions		6,028			6,080			760			860
Benefits paid		(9,882	)		(9,954	)		(1,272	)		(1,375	)
Fair value of net plan assets at end of year	$	130,858		$	137,987		$	—		$	—

Unfunded status at end of year	$	13,537		$	19,726		$	34,616		$	36,456

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

	Pension Benefits				OPEB
	2015		2014		2015			2014
Amounts recognized in accumulated other comprehensive income (loss):
Net loss	$	80,090	$	78,156	$	4,274		$	7,914
Prior service credit		—		—		(1,901	)		(3,048	)
Total accumulated other comprehensive income (loss)	$	80,090	$	78,156	$	2,373		$	4,866

	Pension Benefits						OPEB
	2015			2014			2015			2014
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Unrecognized actuarial net (gain) loss	$	4,334		$	20,633		$	(3,168	)	$	4,027
Amortization of net loss		(2,400	)		(1,718	)		(471	)		(87	)
Amortization of prior service credit		—			—			1,146			1,146
Total (gain) loss recognized in other comprehensive income (loss)	$	1,934		$	18,915		$	(2,493	)	$	5,086

	Pension Benefits						OPEB
	2015			2014			2015			2014
Plans with underfunded accumulated benefit obligation:
Projected benefit obligation	$	144,395		$	157,713		$	—		$	—
Accumulated benefit obligation		144,395			157,713			—			—
Fair value of plan assets		130,858			137,987			—			—

Weighted average assumptions used to determine benefit obligations at December 31:
Discount rate		3.84	%		3.57	%		4.26	%		3.90	%

Weighted average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate		3.57	%		4.42	%		3.90	%		4.88	%
Expected return on plan assets		7.50	%		7.70	%		—			—

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table presents the fair value of each major category of pension plan assets at December 31.

	Pension Plan
	2015		2014
Debt securities:
United States Government fixed maturity securities	$	2,071	$	2,179
Industrial and public utility fixed maturity securities		18,697		19,554
Investment funds:
Hedge funds		18,877		19,147
Stock and bond funds:
Domestic equity		23,362		30,621
International equity		20,787		19,060
Emerging markets		5,357		5,694
Global asset allocation		19,582		20,779
Fixed income		19,491		20,096
Other invested assets		32		50
Cash and cash equivalents		2,379		1,306
Receivables		245		229
Fair value of assets at end of year	$	130,880	$	138,715
Liabilities
Accrued liabilities	$	22	$	728
Total liabilities		22		728
Fair value of net plan assets at end of year	$	130,858	$	137,987

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following tables provide the fair value hierarchy, as described in Note 4, for pension plan assets at December 31.

	2015
	Level 1		Level 2		Level 3		Total
Debt securities:
United States Government fixed maturity securities	$	—	$	2,071	$	—	$	2,071
Industrial and public utility fixed maturity securities		—		18,697		—		18,697
Investment funds:
Hedge funds		—		18,877		—		18,877
Stock and bond funds		—		88,579		—		88,579
Other invested assets		—		—		32		32
Cash and cash equivalents		2,379		—		—		2,379
Receivables		245		—		—		245
Total	$	2,624	$	128,224	$	32	$	130,880

	2014
	Level 1		Level 2		Level 3		Total
Debt securities:
United States Government fixed maturity securities	$	—	$	2,179	$	—	$	2,179
Industrial and public utility fixed maturity securities		—		19,554		—		19,554
Investment funds:
Hedge funds		—		19,147		—		19,147
Stock and bond funds		—		96,250		—		96,250
Other invested assets		—		—		50		50
Cash and cash equivalents		1,306		—		—		1,306
Receivables		229		—		—		229
Total	$	1,535	$	137,130	$	50	$	138,715

The following table discloses the changes in Level 3 plan assets measured at fair value on a recurring basis for the years ended December 31.

	Pension Plan
	2015			2014
Beginning balance	$	50		$	53
Gains (losses) realized and unrealized		(18	)		16
Sales		—			(19	)
Ending balance	$	32		$	50

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides the components of net periodic benefit cost for the years ended December 31.

	Pension Benefits									OPEB
	2015			2014			2013			2015			2014			2013
Service cost	$	—		$	—		$	—		$	686		$	611		$	786
Interest cost		5,424			6,202			5,338			1,402			1,499			1,368
Expected return on plan assets		(9,919	)		(10,322	)		(9,227	)		—			—			—
Amortization of:
Unrecognized actuarial net loss		2,400			1,718			2,393			471			87			103
Unrecognized prior service cost (credit)		—			—			—			(1,146	)		(1,146	)		(752	)
Curtailment		—			—			—			—			—			(116	)
Net periodic benefit cost (credit)		(2,095	)		(2,402	)		(1,496	)		1,413			1,051			1,389
Total recognized in other comprehensive income (loss)		1,934			18,915			(17,231	)		(2,493	)		5,086			(5,515	)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(161	)	$	16,513		$	(18,727	)	$	(1,080	)	$	6,137		$	(4,126	)

The following table provides the estimated net loss and prior service credit for the pension plan and other postemployment plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2015.

	Pension Benefits		OPEB
Actuarial net loss	$	2,649	$	96
Prior service credit		—		(977	)

The assumed growth rate of health care costs has a significant effect on the benefit amounts reported, as the table below demonstrates.

	One Percentage Point Change in the Growth Rate
	Increase		Decrease

Service and interest cost components	$	400	$	(313	)
Postemployment benefit obligation		5,985		(4,783	)

For measurement purposes, the annual increase in the per capita cost of covered health care benefits was assumed to be 7.8%, decreasing gradually to 5.0% in 2027 and thereafter.

Included in the Company's OPEB is a medical insurance plan for retired agents. During the second quarter of 2013, the Company notified the participants that this benefit was being terminated effective December 31, 2013. This benefit termination required a re-valuation of the plan, which was performed effective June 10, 2013 and resulted in a plan curtailment. The curtailment resulted in the immediate recognition of reduced operating expenses of $0.1 million and a reduced liability of $4.4 million.

14. Share-Based Payment

The Company has a long-term incentive plan for senior management that provides a cash award to participants for the increase in the share price of the Company's common stock through units (phantom shares) assigned by the Board of Directors. The cash award is calculated over a three-year interval on a calendar year basis. At the conclusion of each three-year interval, participants will receive a cash award based on the increase in the share price during a defined measurement period, multiplied by the number of units attributable to each participant. The increase in the share price is determined based on the change in the share price from the beginning to the end of the three-year interval. Amounts representing dividends are accrued and paid at the end of each three-year interval to the extent that they exceed negative stock price appreciation. Plan payments are contingent on the continued employment

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

of the participant unless termination is due to a qualifying event such as death, disability, or retirement. In addition, all payments are lump sum with no deferrals allowed. The Company does not make payments in shares, warrants, or options.

The following table provides information about the outstanding three-year intervals at December 31, 2015.

Defined Measurement Period	Number of Units	Grant Price
2013-2015	212,734	$37.86
2014-2016	162,063	$48.06
2015-2017	186,962	$47.87
2016-2018*	203,355	$43.49

* Effective January 1, 2016

The plan made a payment of $3.8 million during 2015 for the three-year interval ended December 31, 2014 and a payment of $3.8 million during 2014 for the three-year interval ended December 31, 2013. The plan made a payment of $2.4 million during 2013 for the three-year interval ended December 31, 2012. The change in accrual for share-based compensation that reduced operating expense during 2015 was $0.1 million, net of tax. The cost of share-based compensation accrued as an operating expense during 2014 and 2013 was $1.4 million, and $3.5 million, net of tax, respectively.

15. Reinsurance

The table below provides information about reinsurance for the years ended December 31.

	2015			2014			2013
Life insurance in force (in millions) :
Direct	$	28,104		$	27,978		$	27,753
Ceded		(13,296	)		(13,546	)		(13,689	)
Assumed		3,666			4,006			4,271
Net	$	18,474		$	18,438		$	18,335

Premiums:
Life insurance:
Direct	$	159,692		$	162,110		$	186,358
Ceded		(46,262	)		(45,703	)		(45,061	)
Assumed		2,415			2,479			2,562
Net	$	115,845		$	118,886		$	143,859

Accident and health:
Direct	$	54,465		$	57,603		$	55,068
Ceded		(10,135	)		(10,941	)		(12,397	)
Net	$	44,330		$	46,662		$	42,671

Ceded Reinsurance Arrangements

Old American has a coinsurance agreement that reinsures certain whole life policies issued by Old American prior to December 1, 1986. These policies had a face value of $20.8 million at December 31, 2015 (2014 - $23.3 million). The reserve for future policy benefits ceded under this agreement at December 31, 2015 was $12.2 million (2014 - $13.5 million).

Sunset Life entered into a yearly renewable term reinsurance agreement January 1, 2002, whereby it ceded 80% of its retained mortality risk on traditional and universal life policies. In June 2012, Sunset Life recaptured approximately 9% of the outstanding bulk reinsurance agreement. At December 31, 2015, the insurance in force ceded approximated $0.9 billion (2014 - $1.0 billion) and premiums totaled $7.0 million (2014 - $7.3 million; 2013 - $7.4 million).

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Reinsurance recoverables were $198.8 million at year-end 2015, consisting of reserves ceded of $178.7 million and claims ceded of $20.1 million. Reinsurance recoverables were $194.4 million at year end 2014, consisting of reserves ceded of $181.5 million and claims ceded of $12.9 million.

The maximum retention on any one life during 2015 and 2014 was $0.5 million for ordinary life plans and $0.1 million for group coverage.

The following table reflects the Company's reinsurance partners whose reinsurance recoverable was 5% or greater of the Company's total reinsurance recoverable at December 31, 2015, along with their A.M. Best credit rating.

	A.M. Best Rating		Reinsurance Recoverable		% of Recoverable
TransAmerica Life Insurance Company		A+	$	53,942		27%
Security Life of Denver		A		25,782		13%
RGA Reinsurance Company		A+		20,975		11%
Union Security Insurance Company		A-		13,314		7%
Employers Reassurance Corporation		A-		12,542		6%
SCOR Global Life Americas Reinsurance Company		A		10,825		5%
Lewer Life Insurance Company		B		10,725		5%
Lincoln National Life Insurance Company		A+		9,340		5%
Other (22 Companies)				41,389		21%
Total			$	198,834		100%

A contingent liability exists with respect to reinsurance, which may become a liability of the Company in the unlikely event that the reinsurers should be unable to meet obligations assumed under reinsurance contracts. The solvency of reinsurers is reviewed annually.

The Company monitors several factors that it considers relevant to satisfy itself as to the ongoing ability of a reinsurer to meet the obligations of the reinsurance agreements. These factors include the credit rating of the reinsurer, significant changes or events of the reinsurer, and any other factors that the Company believes relevant. If the Company believes that any reinsurer would not be able to satisfy its obligations with the Company, a separate contingency reserve may be established. At year-end 2015 and 2014, no reinsurer met these conditions. In addition, the Company will review the credit rating and financial statements of a reinsurer before entering into any new agreements.

Assumed Reinsurance Arrangements

Kansas City Life acquired a block of traditional life and universal life products in 1997 through a 100% coinsurance and servicing arrangement. Investments equal to the statutory policy reserves are held in a trust to secure payment of the estimated liabilities relating to the policies. At December 31, 2015, the block had $0.9 billion of life insurance in force (2014 - $1.0 billion). The block generated life insurance premiums of $2.3 million in 2015 (2014 - $2.4 million; 2013 - $2.4 million).

The Company acquired a block of variable universal life insurance policies and variable annuity contracts from American Family in 2013. The transfer was comprised of a 100% modified coinsurance transaction on the separate account business and a 100% coinsurance transaction for the corresponding fixed account business. Included in the transaction are ongoing servicing arrangements for this business. At December 31, 2015, the block consisted of $292.4 million (2014 - $318.0 million) of separate account balances, which are included in the financial statements of American Family. At December 31, 2015, the block consisted of $0.6 million (2014 - $0.6 million) of future policy benefits and $26.5 million (2014 - $27.2 million) in fixed fund balances that are included in policyholder account balances in the Company's Consolidated Balance Sheets.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

16. Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) includes the unrealized investment gains or losses on securities available for sale (net of reclassifications for realized investment gains or losses), net of adjustments to DAC, VOBA, DRL, future policy benefits, and policyholder account balances (including DRL). In addition, other comprehensive income (loss) includes the change in the liability for benefit plan obligations. Other comprehensive income (loss) reflects these items net of tax.

The following tables provide information about comprehensive income (loss).

	Year Ended December 31, 2015
	Pre-Tax Amount			Tax Expense (Benefit)			Net-of-Tax Amount

Net unrealized gains (losses) arising during the year:
Fixed maturity securities	$	(78,242	)	$	(27,386	)	$	(50,856	)
Equity securities		(46	)		(16	)		(30	)
Less reclassification adjustments:
Net realized investment gains, excluding impairment losses		3,048			1,067			1,981
Other-than-temporary impairment losses recognized in earnings		(2,189	)		(766	)		(1,423	)
Other-than-temporary impairment gains recognized in other comprehensive income (loss)		(292	)		(103	)		(189	)
Net unrealized losses excluding impairment losses		(78,855	)		(27,600	)		(51,255	)
Change in benefit plan obligations		560			196			364
Effect on DAC, VOBA, and DRL		11,465			4,013			7,452
Future policy benefits		7,559			2,646			4,913
Policyholder account balances		425			149			276
Other comprehensive loss	$	(58,846	)	$	(20,596	)	$	(38,250	)
Net income								29,226
Comprehensive loss							$	(9,024	)

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

	Year Ended December 31, 2014
	Pre-Tax Amount			Tax Expense (Benefit)			Net-of-Tax Amount

Net unrealized gains (losses) arising during the year:
Fixed maturity securities	$	50,805		$	17,781		$	33,024
Equity securities		1,880			658			1,222
Less reclassification adjustments:
Net realized investment gains, excluding impairment losses		4,025			1,409			2,616
Other-than-temporary impairment losses recognized in earnings		(2,176	)		(762	)		(1,414	)
Other-than-temporary impairment losses recognized in other comprehensive income (loss)		643			225			418
Net unrealized gains excluding impairment losses		50,193			17,567			32,626
Change in benefit plan obligations		(24,001	)		(8,400	)		(15,601	)
Effect on DAC, VOBA, and DRL		(1,516	)		(531	)		(985	)
Future policy benefits		(10,659	)		(3,731	)		(6,928	)
Policyholder account balances		(372	)		(130	)		(242	)
Other comprehensive income	$	13,645		$	4,775		$	8,870
Net income								29,990
Comprehensive income							$	38,860

	Year Ended December 31, 2013
	Pre-Tax Amount			Tax Expense (Benefit)			Net-of-Tax Amount

Net unrealized gains (losses) arising during the year:
Fixed maturity securities	$	(139,206	)	$	(48,721	)	$	(90,485	)
Equity securities		(1,816	)		(636	)		(1,180	)
Less reclassification adjustments:
Net realized investment gains, excluding impairment losses		5,225			1,829			3,396
Other-than-temporary impairment losses recognized in earnings		(1,032	)		(361	)		(671	)
Other-than-temporary impairment losses recognized in other comprehensive income (loss)		(101	)		(35	)		(66	)
Net unrealized losses excluding impairment losses		(145,114	)		(50,790	)		(94,324	)
Change in benefit plan obligations		22,745			7,960			14,785
Effect on DAC, VOBA, and DRL¹		47,363			16,577			30,786
Future policy benefits		12,956			4,535			8,421
Policyholder account balances		628			220			408
Other comprehensive loss	$	(61,422	)	$	(21,498	)	$	(39,924	)
Net income								30,063
Comprehensive loss							$	(9,861	)

¹ The pre-tax amount includes $16.0 million for a one-time refinement in estimate and $5.6 million for the effect on the deferred revenue liability.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table provides accumulated balances related to each component of accumulated other comprehensive income (loss) at December 31, 2015, net of tax.

	Unrealized Gain (Loss) on Non-Impaired Securities			Unrealized Gain (Loss) on Impaired Securities			Benefit Plan Obligations			DAC/ VOBA/DRL Impact			Future Policy Benefits			Policyholder Account Balances			Total

Beginning of year		110,362			3,141			(53,964	)		(18,521	)		(17,406	)		(572	)		23,040
Other comprehensive income (loss) before reclassification		(53,180	)		1,556			364			7,477			4,913			276			(38,594	)
Amounts reclassified from accumulated other comprehensive income (loss)		1,981			(1,612	)		—			(25	)		—			—			344
Net current-period other comprehensive income (loss)		(51,199	)		(56	)		364			7,452			4,913			276			(38,250	)
End of year	$	59,163		$	3,085		$	(53,600	)	$	(11,069	)	$	(12,493	)	$	(296	)	$	(15,210	)

The following table provides accumulated balances related to each component of accumulated other comprehensive income (loss) at December 31, 2014, net of tax.

	Unrealized Gain (Loss) on Non-Impaired Securities		Unrealized Gain (Loss) on Impaired Securities			Benefit Plan Obligations			DAC/ VOBA/DRL Impact			Future Policy Benefits			Policyholder Account Balances			Total

Beginning of year		78,496		2,381			(38,363	)		(17,536	)		(10,478	)		(330	)		14,170
Other comprehensive income (loss) before reclassification		29,250		1,756			(15,601	)		(889	)		(6,928	)		(242	)		7,346
Amounts reclassified from accumulated other comprehensive income (loss)		2,616		(996	)		—			(96	)		—			—			1,524
Net current-period other comprehensive income (loss)		31,866		760			(15,601	)		(985	)		(6,928	)		(242	)		8,870
End of year	$	110,362	$	3,141		$	(53,964	)	$	(18,521	)	$	(17,406	)	$	(572	)	$	23,040

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following table presents the pre-tax and the related income tax expense (benefit) components of the amounts reclassified from the Company's accumulated other comprehensive income (loss) to the Company's Consolidated Statements of Comprehensive Income for the years ended December 31.

	2015			2014
Reclassification adjustments related to unrealized gains (losses) on investment securities:
Having impairments recognized in the Consolidated Statements of Comprehensive Income¹	$	3,048		$	4,025
Income tax expense ²		(1,067	)		(1,409	)
Net of taxes		1,981			2,616
Having no impairments recognized in the Consolidated Statements of Comprehensive Income¹		(2,481	)		(1,533	)
Income tax benefit ²		869			537
Net of taxes		(1,612	)		(996	)
Reclassification adjustment related to DAC, VOBA, and DRL¹		(38	)		(147	)
Income tax benefit ²		13			51
Net of taxes		(25	)		(96	)
Total pre-tax reclassifications		529			2,345
Total income tax expense		(185	)		(821	)
Total reclassification, net taxes	$	344		$	1,524

¹ (Increases) decreases net realized investment gains (losses) on the Consolidated Statements of Comprehensive Income.

² (Increases) decreases income tax expense on the Consolidated Statements of Comprehensive Income.

17. Earnings Per Share

Due to the Company's capital structure and the absence of other potentially dilutive securities, there is no difference between basic and diluted earnings per common share for any of the years reported. The average number of shares outstanding during 2015 was 10,614,068 shares (2014 - 10,927,705 shares; 2013 - 11,005,799 shares). The number of shares outstanding at year-end 2015 was 9,683,414 (2014 - 10,825,205).

18. Segment Information

The Company has three reportable business segments, which are defined based on the nature of the products and services offered: Individual Insurance, Group Insurance, and Old American. The Individual Insurance segment consists of individual insurance products for both Kansas City Life and Sunset Life and the assumed reinsurance transactions. The Group Insurance segment consists of sales of group life, dental, vision, and group disability products. The Old American segment consists of individual insurance products designed largely as final expense products.

Insurance revenues, as shown in the Consolidated Statements of Comprehensive Income, consist of premiums and contract charges, less reinsurance ceded. Insurance revenues are defined as "customer revenues" for segment reporting purposes. Separate investment portfolios are maintained for Kansas City Life, Sunset Life, and Old American for segment reporting purposes. However, investment assets and income are allocated to the Group Insurance segment based upon its cash flows and future policy benefit liabilities. Policyholder benefits are specifically identified to the respective segment. Most home office functions are fully integrated for all segments in order to maximize economies of scale. Therefore, operating expenses are allocated to the segments based upon internal cost studies, which are consistent with industry cost methodologies.

Inter-segment revenues are not material. The Company operates solely in the United States and no individual customer accounts for 10% or more of the Company's revenue.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

The following schedules provide selected financial statement items of each of the operating segments of the Company for the three years ended December 31.

	2015
	Individual Insurance		Group Insurance		Old American		Consolidated

Insurance revenues (customer revenues)	$	137,001	$	55,576	$	79,628	$	272,205
Interest credited to policyholder account balances		74,326		—		—		74,326
Amortization of deferred acquisition costs		13,411		—		14,937		28,348
Income tax expense		11,111		166		1,693		12,970
Segment net income		25,969		308		2,949		29,226
Segment assets		4,035,016		9,299		377,558		4,421,873
Interest expense		—		—		—		—

	2014
	Individual Insurance		Group Insurance		Old American		Consolidated

Insurance revenues (customer revenues)	$	150,523	$	57,852	$	75,822	$	284,197
Interest credited to policyholder account balances		76,463		—		—		76,463
Amortization of deferred acquisition costs		23,668		—		17,220		40,888
Income tax expense		11,632		282		1,080		12,994
Segment net income		27,649		523		1,818		29,990
Segment assets		4,184,516		9,688		377,663		4,571,867
Interest expense		—		—		—		—

	2013
	Individual Insurance		Group Insurance		Old American		Consolidated

Insurance revenues (customer revenues)	$	173,428	$	53,021	$	73,535	$	299,984
Interest credited to policyholder account balances		79,294		—		—		79,294
Amortization of deferred acquisition costs		20,440		—		16,788		37,228
Income tax expense		11,974		284		2,134		14,392
Segment net income		25,737		526		3,800		30,063
Segment assets		4,129,852		8,731		371,177		4,509,760

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Individual Insurance includes an adjustment to remove intercompany transactions for life and accident and health insurance that the Company purchases for its employees and agents. Insurance revenues from the Group Insurance segment and operating expenses from the Individual Insurance segment were eliminated to arrive at Consolidated Statements of Comprehensive Income. The adjustments were $414, $406, and $395 for the years ended December 31, 2015, 2014, and 2013, respectively.

The following table provides information about the Company's customer revenues, net of reinsurance, for the years ended December 31.

	2015		2014		2013
Customer revenues by line of business:
Traditional individual insurance products, net	$	104,599	$	107,696	$	133,509
Interest sensitive products		83,013		88,181		86,618
Variable universal life insurance and annuities		29,017		30,468		26,836
Group life and accident and health products, net		55,576		57,852		53,021
Insurance revenues	$	272,205	$	284,197	$	299,984

19. Quarterly Consolidated Financial Data (unaudited)

The unaudited quarterly results of operations for the years ended December 31 are summarized in the table below.

	First		Second		Third		Fourth
2015:
Total revenues	$	110,805	$	108,873	$	112,261	$	108,912
Total benefits and expenses		101,283		93,317		104,101		99,954
Net income		6,778		10,899		5,435		6,114
Per common share,
basic and diluted		0.63		1.01		0.52		0.59

2014:
Total revenues	$	115,112	$	116,539	$	115,663	$	117,705
Total benefits and expenses		107,148		104,055		104,059		106,773
Net income		5,672		8,625		7,960		7,733
Per common share,
basic and diluted		0.52		0.78		0.73		0.71

20. Statutory Information and Stockholder Dividends Restriction

The table below provides Kansas City Life's net gain from operations, net income, and capital and surplus (stockholders' equity) on the statutory basis used to report to regulatory authorities for the years ended December 31.

	2015		2014		2013

Net gain from operations	$	27,390	$	27,167	$	535
Net income		29,149		26,697		335
Capital and surplus		297,612		338,422		330,599

The decrease in capital and surplus in 2015 was largely attributable to $58.4 million in stock purchases, including $47.6 million from the reverse/forward stock split transaction that occurred during the fourth quarter of 2015.

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

Kansas City Life recognizes its 100% ownership in Old American and Sunset Life under the equity method with subsidiary earnings recorded through surplus on a statutory accounting basis. Capital and surplus at December 31, 2015 in the above table includes capital and surplus of $22.1 million and $29.4 million for each of those entities, respectively.

Stockholder dividends may not exceed statutory unassigned surplus. Additionally, under Missouri law, the Company must have the prior approval of the Missouri Director of Insurance in order to pay dividends in any consecutive twelve-month period exceeding the greater of statutory net gain from operations for the preceding year or 10% of statutory stockholders' equity at the end of the preceding year. Kansas City Life, as the parent company, believes it has sufficient cash resources, independent of dividends paid by its affiliates, to satisfy its own stockholder dividend payments. In addition, the Company believes that individually each of the insurance enterprises has sufficient cash flows to satisfy the anticipated cash dividends that are expected to be declared.

The maximum stockholder dividends payable by Kansas City Life without prior approval in 2016 is $29.8 million, 10% of December 31, 2015 capital and surplus. The maximum stockholder dividends payable by Old American without prior approval in 2016 is $2.3 million, which is 10% of December 31, 2015 capital and surplus. The maximum stockholder dividends payable by Sunset Life without prior approval in 2016 is $3.3 million, the statutory net gain from operations for the preceding year. Each of the individual insurance enterprises believes that the statutory limitations impose no practical restrictions on any of its dividend payment plans.

Insurance companies are monitored and evaluated by state insurance departments as to the financial adequacy of statutory capital and surplus in relation to each company's risks. One such measure is through the risk-based capital (RBC) guidelines. RBC requirements are intended to be used by insurance regulators as an early warning tool to identify deteriorating or weakly capitalized insurance companies for the purpose of initiating regulatory action. RBC guidelines consist of target statutory surplus levels based on the relationship of statutory capital and surplus to the sum of weighted risk exposures. The RBC calculation determines both an authorized control level and a total adjusted capital prepared on the RBC basis. Generally, regulatory action is at 150% of the authorized control level. Each of the three insurance companies was within the range of approximately 600% to 800%, well in excess of the control level at December 31, 2015.

The Company is required to deposit a defined amount of assets with state regulatory authorities. Such assets had a statutory carrying value of $12.1 million at December 31, 2015 (2014 - $12.2 million; 2013 - $12.5 million).

21. Commitments, Contingent Liabilities, Guarantees, and Indemnifications

Commitments

In the normal course of business, the Company has open purchase and sale commitments. At December 31, 2015, the Company had purchase commitments to fund mortgage loans of $9.8 million.

Subsequent to December 31, 2015 the Company entered into commitments to fund additional mortgage loans of $20.0 million.

Contingent Liabilities

The Company and its subsidiaries are defendants in, or subject to, other claims or legal actions related to insurance and investment products. Some of these claims and legal actions are in jurisdictions where juries are given substantial latitude in assessing damages, including punitive damages.

The Company and its subsidiaries are involved in litigation from time to time both as a defendant and as a plaintiff, in the ordinary course of business. Although no assurances can be given and no determinations can be made at this time, management believes that the ultimate liability, if any, with respect to these legal actions and other claims would not have a material effect on the Company's business, results of operations, or financial position.

In accordance with applicable accounting guidelines, the Company establishes an accrued liability for litigation and regulatory matters, when those matters present loss contingencies that are both probable and estimable. As a litigation or regulatory matter develops, it is evaluated on an ongoing basis, often in conjunction with outside counsel, as to whether the matter presents a loss contingency that meets conditions indicating the need for accrual and/or disclosure. If and when a loss contingency related to litigation or regulatory matters is deemed to be both probable and estimable, the Company establishes an accrued liability. This accrued liability is then monitored for further developments that may affect the amount of the accrued liability.

Based on currently available information, the Company does not believe that any litigation, proceeding or other matter to which it is a party or otherwise involved will have a material adverse effect on its financial position, the results of its operations, or its cash flows.

The Company and its subsidiaries are subject to regular reviews and inspections by state and federal regulatory authorities. State insurance examiners - or independent audit firms engaged by such examiners - may, from time to time, conduct examinations or

Kansas City Life Insurance Company

Notes to Consolidated Financial Statements–(Continued)

investigations into industry practices and into customer complaints. The Company is currently subject to a regular financial examination by the Missouri Department of Insurance. A regulatory violation discovered during a review, inspection, or investigation could result in a wide range of remedies that could include the imposition of sanctions against the Company, its subsidiaries, or its employees, any of which could have a material adverse effect on the Company's financial condition or results of operations.

The life insurance industry has been the subject of significant regulatory and legal activities regarding the use of the U.S. Social Security Administration's Death Master File ("Death Master File") in the claims process. Certain states have proposed, and many other states are considering, new legislation and regulations related to unclaimed life insurance benefits and the use of the Death Master File in the claims process. Based on its analysis to date, the Company believes that it has adequately reserved for contingencies from a change in statute or regulation. Ongoing regulatory developments and other future requirements related to this matter may result in additional payments or costs that could be significant and could have a material adverse effect on the Company's financial condition or results of operations.

Guarantees and Indemnifications

The Company is subject to various indemnification obligations issued in conjunction with certain transactions, primarily assumption reinsurance agreements, stock purchase agreements, mortgage servicing agreements, tax credit assignment agreements, construction and lease guarantees, and borrowing agreements whose terms range in duration and often are not explicitly defined. Generally, a maximum obligation is not explicitly stated. Therefore, the overall maximum amount of the obligation under the indemnifications cannot be reasonably estimated. The Company is unable to estimate with certainty the ultimate legal and financial liability with respect to these indemnifications. The Company believes that the likelihood is remote that material payments would be required under such indemnifications and, therefore, such indemnifications would not result in a material adverse effect on the financial position or results of operations.

22. Subsequent Events

The Company has performed an evaluation of events that have occurred subsequent to December 31, 2015 through March 10, 2016, the date the consolidated financial statements were issued.

On January 25, 2016, the Kansas City Life Board of Directors declared a quarterly dividend of $0.27 per share, paid on February 10, 2016 to stockholders of record on February 4, 2016.

There have been no other subsequent events that have occurred during such period that would require disclosure in, or adjustment to, the consolidated financial statements as of and for the year ended December 31, 2015.

Independent Auditors' Report

The Audit Committeeand Stockholders

Kansas City Life Insurance Company:

We have audited the accompanying consolidated financial statements of Kansas City Life Insurance Company and subsidiaries, which comprise the consolidated balance sheets as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2015, and the related notes to the consolidated financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Kansas City Life Insurance Company and subsidiaries as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2015 in accordance with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Kansas City, Missouri

March 10, 2016

KANSAS CITY LIFE

VARIABLE ANNUITY

SEPARATE ACCOUNT

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2015 AND 2014

	TABLE OF CONTENTS

	Statement of Net Assets
	Statement of Operations
	Statements of Changes in Net Assets
	Notes to Financial Statements
	Report of Independent Registered Public Accounting Firm

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF NET ASSETS

DECEMBER 31, 2015

					Century II Variable Annuity				Century II Freedom Variable Annuity
Net Assets	Number of Shares		NAV		Number of Units		Unit Value		Number of Units		Unit Value		Fair Value		Cost
													(in thousands)
Federated Insurance Series
Managed Tail Risk Fund II - P		624,594	$	5.11		169,014	$	18.689		2,625	$	12.566	$	3,192	$	4,382
High Income Bond Fund II - P		678,994		6.36		146,494		26.283		22,202		21.088		4,318		4,614
Prime Money Fund II		3,171,039		1.00		231,437		12.097		39,099		9.495		3,171		3,171

MFS® Variable Insurance Trust
Research Series - Initial Class Shares		241,142		26.68		196,302		32.571		1,485		26.856		6,434		4,707
Growth Series - Initial Class Shares		223,665		40.17		236,085		37.798		1,919		31.852		8,985		6,224
Total Return Series - Initial Class Shares		302,752		22.60		187,271		32.224		42,918		18.818		6,842		6,148
Total Return Bond Series - Initial Class Shares		361,904		13.00		198,814		22.092		20,843		14.992		4,705		4,621
Utilities Series - Initial Class Shares		516,525		25.56		224,165		55.560		20,132		37.141		13,202		14,248

MFS® Variable Insurance Trust II
Strategic Income Portfolio - Initial Class Shares		225,331		9.25		100,317		19.089		10,909		15.521		2,084		2,323

American Century Variable Portfolios, Inc.
VP Capital Appreciation Fund - Class I		290,092		15.02		151,882		28.210		2,124		34.158		4,357		3,931
VP International Fund - Class I		590,205		10.02		246,191		23.664		4,195		21.000		5,914		5,117
VP Value Fund - Class I		730,151		8.85		395,939		15.784		8,836		24.018		6,462		5,168
VP Income & Growth Fund - Class I		160,934		8.57		116,302		11.269		3,062		22.404		1,379		1,200
VP Ultra® Fund - Class I		54,300		15.47		38,217		21.662		580		20.988		840		654
VP Mid Cap Value Fund - Class I		57,147		18.39		52,891		19.243		1,764		18.784		1,051		1,032

American Century Variable Portfolios II, Inc.
VP Inflation Protection Fund - Class II		220,838		9.94		157,164		12.838		14,315		12.441		2,195		2,406

Dreyfus Variable Investment Fund
Appreciation Portfolio - Initial Shares		85,579		45.23		164,160		23.550		227		21.228		3,871		3,222
Opportunistic Small Cap Portfolio - Initial Shares		123,117		46.02		272,126		20.687		1,956		18.562		5,666		4,491

Dreyfus Stock Index Fund, Inc. - Initial Shares		343,190		43.42		565,811		25.198		26,377		24.419		14,901		11,421

The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares		20,863		38.56		18,537		42.951		364		22.766		804		756

JPMorgan Insurance Trust
Insurance Trust U.S. Equity Portfolio - Class 1 Shares		60,105		25.50		56,305		26.324		2,014		25.061		1,533		1,316
Insurance Trust Small Cap Core Portfolio - Class 1 Shares		177,668		20.56		114,914		29.994		7,133		28.902		3,653		3,170
Insurance Trust Mid Cap Value Portfolio - Class 1 Shares		342,484		10.19		109,002		30.561		5,358		29.611		3,490		2,817

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF NET ASSETS (CONTINUED)

DECEMBER 31, 2015

					Century II Variable Annuity				Century II Freedom Variable Annuity
Net Assets	Number Shares		NAV		Number of Units		Unit Value		Number of Units		Unit Value		Fair Value		Cost
													(in thousands)
Franklin Templeton Variable Insurance Products Trust
Franklin Global Real Estate VIP Fund - Class 2		137,314		15.52		94,844		21.801		3,340		18.992		2,131		2,051
Franklin Small-Mid Cap Growth VIP Fund - Class 2		61,811		17.69		91,007		11.858		554		25.793		1,093		1,268
Templeton Developing Markets VIP Fund - Class 2		448,786		6.32		167,408		16.540		3,081		21.891		2,836		4,120
Templeton Foreign VIP Fund - Class 2		249,147		13.20		115,624		27.106		8,045		19.216		3,289		3,592

Calamos® Advisors Trust
Calamos Growth and Income Portfolio		1,050,785		14.07		605,032		23.862		17,141		20.268		14,785		14,814

AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
V.I. American Franchise Fund - Series I Shares		6,843		57.30		52,180		6.935		1,469		20.565		392		274
V.I. Technology Fund - Series I Shares		29,981		18.83		126,843		4.377		363		25.816		565		524
V.I. Core Equity Fund - Series I Shares		16,152		33.84		51,799		10.552		-		-		547		460

Columbia Funds Variable Series Trust II
Mid Cap Growth Fund (Class 2)		86,014		20.23		152,407		11.113		1,801		25.711		1,740		1,455
Seligman Global Technology Fund (Class 2)		85,018		26.98		132,073		16.378		3,167		41.260		2,294		1,968
Select Smaller-Cap Value Fund (Class 2)		51,422		18.74		34,589		27.196		872		26.350		964		742

Fidelity® Variable Insurance Products Contrafund® Portfolio
VIP Contrafund® Portfolio - Service Class 2		66,867		33.26		142,724		14.873		6,963		14.554		2,223		1,775

Fidelity® Variable Insurance Products
VIP Freedom Income Portfolio - Service Class 2		409,291		10.74		357,048		11.689		19,437		11.438		4,396		4,566
VIP Freedom 2010 Portfolio - Service Class 2		55,016		12.08		40,256		12.492		13,227		12.225		665		623
VIP Freedom 2015 Portfolio - Service Class 2		107,152		12.19		94,029		12.446		11,156		12.179		1,306		1,230
VIP Freedom 2020 Portfolio - Service Class 2		754,780		12.38		739,447		12.232		24,979		11.970		9,343		8,765
VIP Freedom 2025 Portfolio - Service Class 2		59,270		12.74		53,282		12.701		6,306		12.429		755		716
VIP Freedom 2030 Portfolio - Service Class 2		173,754		12.62		178,170		12.293		214		12.029		2,193		1,996
VIP Freedom 2035 Portfolio - Service Class 2		29,427		18.96		38,632		14.442		-		-		558		539
VIP Freedom 2040 Portfolio - Service Class 2		34,854		18.12		43,520		14.512		-		-		632		624
VIP Freedom 2045 Portfolio - Service Class 2		7,421		17.95		9,128		14.594		-		-		133		120
VIP Freedom 2050 Portfolio - Service Class 2		18,777		16.35		19,127		14.619		1,899		14.414		307		292

Northern Lights Variable Trust
TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares		1,296,664		10.68		1,297,507		10.381		36,783		10.287		13,848		14,803
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares		3,203,894		10.79		3,257,711		10.567		14,044		10.470		34,570		37,703
TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares		5,735,240		10.47		5,750,131		10.390		29,425		10.295		60,048		65,000
Total Net Assets													$	270,662	$	267,159

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Federated Insurance Series									MFS® Variable Insurance Trust															MFS® Variable Insurance Trust II
	Managed Tail Risk Fund II - P			High Income Bond Fund II - P			Prime Money Fund II			Research Series - Initial Class Shares			Growth Series - Initial Class Shares			Total Return Series - Initial Class Shares			Total Return Bond Series - Initial Class Shares			Utilities Series - Initial Class Shares			Strategic Income Portfolio - Initial Class Shares

Investment Income:
Income:
Dividend Distributions	$	57			263			-			49			13			187			168			641			127
Expenses:
Mortality and Expense Risk Fees and
Administrative Charges		48			66			58			94			122			102			117			218			48
Net Investment Income (Loss)		9			197			(58	)		(45	)		(109	)		85			51			423			79
Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss)		(146	)		(10	)		-			298			832			147			843			292			(113	)
Capital Gains Distributions		5			-			-			503			464			266			-			1,059			-
Unrealized Appreciation (Depreciation)		(135	)		(361	)		-			(798	)		(661	)		(624	)		(886	)		(4,270	)		10
Net Gain (Loss) on Investments		(276	)		(371	)		-			3			635			(211	)		(43	)		(2,919	)		(103	)

Change in Net Assets from Operations	$	(267	)		(174	)		(58	)		(42	)		526			(126	)		8			(2,496	)		(24	)

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	American Century Variable Portfolios, Inc.																		American Century Variable Portfolios II, Inc.			Dreyfus Variable Investment Fund
	VP Capital Appreciation Fund - Class I			VP International Fund - Class I			VP Value Fund - Class I			VP Income & Growth Fund - Class I			VP Ultra® Fund - Class I			VP Mid Cap Value Fund - Class I			VP Inflation Protection Fund - Class II			Appreciation Portfolio - Initial Shares			Opportunistic Small Cap Portfolio - Initial Shares

Investment Income:
Income:
Dividend Distributions	$	-			41			185			31			7			15			133			70			-
Expenses:
Mortality and Expense Risk Fees and
Administrative Charges		62			109			125			21			15			13			59			58			84
Net Investment Income (Loss)		(62	)		(68	)		60			10			(8	)		2			74			12			(84	)
Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss)		177			1,230			2,910			38			330			51			(368	)		111			272
Capital Gains Distributions		281			-			-			125			142			36			-			196			91
Unrealized Appreciation (Depreciation)		(373	)		(855	)		(3,240	)		(277	)		(390	)		(121	)		243			(477	)		(464	)
Net Gain (Loss) on Investments		85			375			(330	)		(114	)		82			(34	)		(125	)		(170	)		(101	)

Change in Net Assets from Operations	$	23			307			(270	)		(104	)		74			(32	)		(51	)		(158	)		(185	)

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

							JPMorgan Insurance Trust									Franklin Templeton Variable Insurance Products Trust
	Dreyfus Stock Index Fund, Inc. - Initial Shares			The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares			Insurance Trust U.S. Equity Portfolio - Class 1 Shares			Insurance Trust Small Cap Core Portfolio - Class 1 Shares			Insurance Trust Mid Cap Value Portfolio - Class 1 Shares			Franklin Global Real Estate VIP Fund - Class 2			Franklin Small-Mid Cap Growth VIP Fund - Class 2			Templeton Developing Markets VIP Fund - Class 2			Templeton Foreign VIP Fund - Class 2

Investment Income:
Income:
Dividend Distributions	$	311			9			14			5			32			70			-			68			110
Expenses:
Mortality and Expense Risk Fees and
Administrative Charges		249			12			18			64			60			38			15			52			65
Net Investment Income (Loss)		62			(3	)		(4	)		(59	)		(28	)		32			(15	)		16			45
Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss)		2,924			17			163			935			1,271			212			5			(215	)		506
Capital Gains Distributions		618			107			55			378			248			-			252			431			112
Unrealized Appreciation (Depreciation)		(3,470	)		(158	)		(217	)		(1,466	)		(1,563	)		(219	)		(287	)		(897	)		(612	)
Net Gain (Loss) on Investments		72			(34	)		1			(153	)		(44	)		(7	)		(30	)		(681	)		6

Change in Net Assets from Operations	$	134			(37	)		(3	)		(212	)		(72	)		25			(45	)		(665	)		51

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Calamos® Advisors Trust			AIM Variable Insurance Funds (Invesco Variable Insurance Funds)									Columbia Funds Variable Series Trust II									Fidelity® Variable Insurance Products Contrafund® Portfolio			Fidelity® Variable Insurance Products
	Calamos Growth and Income Portfolio			V.I. American Franchise Fund - Series I Shares			V.I. Technology Fund - Series I Shares			V.I. Core Equity Fund - Series I Shares			Mid Cap Growth Fund (Class 2)			Seligman Global Technology Fund (Class 2)			Select Smaller-Cap Value Fund (Class 2)			VIP Contrafund® Portfolio - Service Class 2			VIP Freedom Income Portfolio - Service Class 2

Investment Income:
Income:
Dividend Distributions	$	410			-			-			7			-			-			-			19			68
Expenses:
Mortality and Expense Risk Fees and
Administrative Charges		213			6			8			9			37			30			16			42			46
Net Investment Income (Loss)		197			(6	)		(8	)		(2	)		(37	)		(30	)		(16	)		(23	)		22
Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss)		112			33			15			47			572			225			93			740			(3	)
Capital Gains Distributions		583			2			56			66			-			335			-			377			5
Unrealized Appreciation (Depreciation)		(926	)		(16	)		(35	)		(156	)		(288	)		(356	)		(127	)		(1,041	)		(181	)
Net Gain (Loss) on Investments		(231	)		19			36			(43	)		284			204			(34	)		76			(179	)

Change in Net Assets from Operations	$	(34	)		13			28			(45	)		247			174			(50	)		53			(157	)

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Fidelity® Variable Insurance Products
	VIP Freedom 2010 Portfolio - Service Class 2			VIP Freedom 2015 Portfolio - Service Class 2			VIP Freedom 2020 Portfolio - Service Class 2			VIP Freedom 2025 Portfolio - Service Class 2			VIP Freedom 2030 Portfolio - Service Class 2			VIP Freedom 2035 Portfolio - Service Class 2			VIP Freedom 2040 Portfolio - Service Class 2			VIP Freedom 2045 Portfolio - Service Class 2			VIP Freedom 2050 Portfolio - Service Class 2

Investment Income:
Income:
Dividend Distributions	$	11			21			153			12			33			8			9			2			5
Expenses:
Mortality and Expense Risk Fees and
Administrative Charges		11			19			127			11			31			8			8			2			4
Net Investment Income (Loss)		-			2			26			1			2			-			1			-			1
Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss)		14			9			174			7			15			1			2			-			2
Capital Gains Distributions		2			7			40			4			12			3			4			1			2
Unrealized Appreciation (Depreciation)		(32	)		(44	)		(501	)		(27	)		(78	)		(16	)		(20	)		(4	)		(11	)
Net Gain (Loss) on Investments		(16	)		(28	)		(287	)		(16	)		(51	)		(12	)		(14	)		(3	)		(7	)

Change in Net Assets from Operations	$	(16	)		(26	)		(261	)		(15	)		(49	)		(12	)		(13	)		(3	)		(6	)

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENT OF OPERATIONS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Northern Lights Variable Trust
	TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares			TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares			TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares			Total

Investment Income:
Income:
Dividend Distributions	$	174			477			951		$	4,966
Expenses:
Mortality and Expense Risk Fees and
Administrative Charges		173			415			831			4,039
Net Investment Income (Loss)		1			62			120			927
Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss)		30			5			(15	)		14,790
Capital Gains Distributions		329			770			290			8,257
Unrealized Appreciation (Depreciation)		(1,371	)		(4,221	)		(7,999	)		(40,018	)
Net Gain (Loss) on Investments		(1,012	)		(3,446	)		(7,724	)		(16,971	)

Change in Net Assets from Operations	$	(1,011	)		(3,384	)		(7,604	)	$	(16,044	)

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Federated Insurance Series									MFS® Variable Insurance Trust															MFS® Variable Insurance Trust II
	Managed Tail Risk Fund II - P			High Income Bond Fund II - P			Prime Money Fund II			Research Series - Initial Class Shares			Growth Series - Initial Class Shares			Total Return Series - Initial Class Shares			Total Return Bond Series - Initial Class Shares			Utilities Series - Initial Class Shares			Strategic Income Portfolio - Initial Class Shares

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	9			197			(58	)		(45	)		(109	)		85			51			423			79
Net Realized Gain (Loss) and Capital Gains Distributions		(141	)		(10	)		-			801			1,296			413			843			1,351			(113	)
Unrealized Appreciation (Depreciation)		(135	)		(361	)		-			(798	)		(661	)		(624	)		(886	)		(4,270	)		10
Change in Net Assets from Operations		(267	)		(174	)		(58	)		(42	)		526			(126	)		8			(2,496	)		(24	)

Deposits		136			140			14,134			181			305			150			150			497			59

Payments and Withdrawals:
Death Benefits		14			23			-			24			26			38			15			104			-
Withdrawals		270			445			355			466			726			758			899			1,421			244
Administrative Fees		2			3			17			4			8			4			36			11			13
Net Transfers to (from) Fixed Account		(92	)		(62	)		14,800			122			(335	)		(187	)		9,935			(553	)		3,547
Payments and Withdrawals		194			409			15,172			616			425			613			10,885			983			3,804

Net Assets:
Net Increase (Decrease)		(325	)		(443	)		(1,096	)		(477	)		406			(589	)		(10,727	)		(2,982	)		(3,769	)
Beginning of Year		3,517			4,761			4,267			6,911			8,579			7,431			15,432			16,184			5,853

End of Year	$	3,192			4,318			3,171			6,434			8,985			6,842			4,705			13,202			2,084

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	American Century Variable Portfolios, Inc.																		American Century Variable Portfolios II, Inc.			Dreyfus Variable Investment Fund
	VP Capital Appreciation Fund - Class I			VP International Fund - Class I			VP Value Fund - Class I			VP Income & Growth Fund - Class I			VP Ultra® Fund - Class I			VP Mid Cap Value Fund - Class I			VP Inflation Protection Fund - Class II			Appreciation Portfolio - Initial Shares			Opportunistic Small Cap Portfolio - Initial Shares

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	(62	)		(68	)		60			10			(8	)		2			74			12			(84	)
Net Realized Gain (Loss) and Capital Gains Distributions		458			1,230			2,910			163			472			87			(368	)		307			363
Unrealized Appreciation (Depreciation)		(373	)		(855	)		(3,240	)		(277	)		(390	)		(121	)		243			(477	)		(464	)
Change in Net Assets from Operations		23			307			(270	)		(104	)		74			(32	)		(51	)		(158	)		(185	)

Deposits		151			282			291			29			23			127			73			99			191

Payments and Withdrawals:
Death Benefits		5			20			18			1			4			-			11			6			7
Withdrawals		295			531			954			137			96			111			462			281			453
Administrative Fees		5			22			29			1			3			2			19			3			5
Net Transfers to (from) Fixed Account		(264	)		4,739			6,282			(56	)		644			(263	)		5,052			88			129
Payments and Withdrawals		41			5,312			7,283			83			747			(150	)		5,544			378			594

Net Assets:
Net Increase (Decrease)		133			(4,723	)		(7,262	)		(158	)		(650	)		245			(5,522	)		(437	)		(588	)
Beginning of Year		4,224			10,637			13,724			1,537			1,490			806			7,717			4,308			6,254

End of Year	$	4,357			5,914			6,462			1,379			840			1,051			2,195			3,871			5,666

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

							JPMorgan Insurance Trust									Franklin Templeton Variable Insurance Products Trust
	Dreyfus Stock Index Fund, Inc. - Initial Shares			The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares			Insurance Trust U.S. Equity Portfolio - Class 1 Shares			Insurance Trust Small Cap Core Portfolio - Class 1 Shares			Insurance Trust Mid Cap Value Portfolio - Class 1 Shares			Franklin Global Real Estate VIP Fund - Class 2			Franklin Small-Mid Cap Growth VIP Fund - Class 2			Templeton Developing Markets VIP Fund - Class 2			Templeton Foreign VIP Fund - Class 2

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	62			(3	)		(4	)		(59	)		(28	)		32			(15	)		16			45
Net Realized Gain (Loss) and Capital Gains Distributions		3,542			124			218			1,313			1,519			212			257			216			618
Unrealized Appreciation (Depreciation)		(3,470	)		(158	)		(217	)		(1,466	)		(1,563	)		(219	)		(287	)		(897	)		(612	)
Change in Net Assets from Operations		134			(37	)		(3	)		(212	)		(72	)		25			(45	)		(665	)		51

Deposits		544			33			22			249			126			68			97			142			177

Payments and Withdrawals:
Death Benefits		59			5			6			11			9			7			7			6			16
Withdrawals		1,700			77			108			435			373			449			88			375			330
Administrative Fees		32			1			1			10			11			7			1			9			15
Net Transfers to (from) Fixed Account		6,542			(160	)		(420	)		1,995			2,314			1,315			(69	)		961			3,289
Payments and Withdrawals		8,333			(77	)		(305	)		2,451			2,707			1,778			27			1,351			3,650

Net Assets:
Net Increase (Decrease)		(7,655	)		73			324			(2,414	)		(2,653	)		(1,685	)		25			(1,874	)		(3,422	)
Beginning of Year		22,556			731			1,209			6,067			6,143			3,816			1,068			4,710			6,711

End of Year	$	14,901			804			1,533			3,653			3,490			2,131			1,093			2,836			3,289

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Calamos® Advisors Trust			AIM Variable Insurance Funds (Invesco Variable Insurance Funds)									Columbia Funds Variable Series Trust II									Fidelity® Variable Insurance Products Contrafund® Portfolio			Fidelity® Variable Insurance Products
	Calamos Growth and Income Portfolio			V.I. American Franchise Fund - Series I Shares			V.I. Technology Fund - Series I Shares			V.I. Core Equity Fund - Series I Shares			Mid Cap Growth Fund (Class 2)			Seligman Global Technology Fund (Class 2)			Select Smaller-Cap Value Fund (Class 2)			VIP Contrafund® Portfolio - Service Class 2			VIP Freedom Income Portfolio - Service Class 2

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	197			(6	)		(8	)		(2	)		(37	)		(30	)		(16	)		(23	)		22
Net Realized Gain (Loss) and Capital Gains Distributions		695			35			71			113			572			560			93			1,117			2
Unrealized Appreciation (Depreciation)		(926	)		(16	)		(35	)		(156	)		(288	)		(356	)		(127	)		(1,041	)		(181	)
Change in Net Assets from Operations		(34	)		13			28			(45	)		247			174			(50	)		53			(157	)

Deposits		769			14			26			17			53			139			55			141			61

Payments and Withdrawals:
Death Benefits		43			20			-			1			9			35			-			5			-
Withdrawals		900			50			56			132			204			237			133			244			480
Administrative Fees		28			-			1			-			9			4			2			10			32
Net Transfers to (from) Fixed Account		370			(19	)		(52	)		5			2,540			(327	)		75			2,081			(4,478	)
Payments and Withdrawals		1,341			51			5			138			2,762			(51	)		210			2,340			(3,966	)

Net Assets:
Net Increase (Decrease)		(606	)		(24	)		49			(166	)		(2,462	)		364			(205	)		(2,146	)		3,870
Beginning of Year		15,391			416			516			713			4,202			1,930			1,169			4,369			526

End of Year	$	14,785			392			565			547			1,740			2,294			964			2,223			4,396

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Fidelity® Variable Insurance Products
	VIP Freedom 2010 Portfolio - Service Class 2			VIP Freedom 2015 Portfolio - Service Class 2			VIP Freedom 2020 Portfolio - Service Class 2			VIP Freedom 2025 Portfolio - Service Class 2			VIP Freedom 2030 Portfolio - Service Class 2			VIP Freedom 2035 Portfolio - Service Class 2			VIP Freedom 2040 Portfolio - Service Class 2			VIP Freedom 2045 Portfolio - Service Class 2			VIP Freedom 2050 Portfolio - Service Class 2

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	-			2			26			1			2			-			1			-			1
Net Realized Gain (Loss) and Capital Gains Distributions		16			16			214			11			27			4			6			1			4
Unrealized Appreciation (Depreciation)		(32	)		(44	)		(501	)		(27	)		(78	)		(16	)		(20	)		(4	)		(11	)
Change in Net Assets from Operations		(16	)		(26	)		(261	)		(15	)		(49	)		(12	)		(13	)		(3	)		(6	)

Deposits		2			25			109			52			270			33			51			9			48

Payments and Withdrawals:
Death Benefits		-			-			6			-			-			-			-			-			-
Withdrawals		68			72			964			48			76			2			19			-			12
Administrative Fees		2			5			59			1			2			1			1			-			1
Net Transfers to (from) Fixed Account		(18	)		(54	)		(3,026	)		(41	)		(92	)		(110	)		(109	)		(22	)		3
Payments and Withdrawals		52			23			(1,997	)		8			(14	)		(107	)		(89	)		(22	)		16

Net Assets:
Net Increase (Decrease)		(66	)		(24	)		1,845			29			235			128			127			28			26
Beginning of Year		731			1,330			7,498			726			1,958			430			505			105			281

End of Year	$	665			1,306			9,343			755			2,193			558			632			133			307

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2015

(in thousands)

	Northern Lights Variable Trust
	TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares			TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares			TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares			Total

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	1			62			120		$	927
Net Realized Gain (Loss) and Capital Gains Distributions		359			775			275			23,047
Unrealized Appreciation (Depreciation)		(1,371	)		(4,221	)		(7,999	)		(40,018	)
Change in Net Assets from Operations		(1,011	)		(3,384	)		(7,604	)		(16,044	)

Deposits		530			1,496			727			23,103

Payments and Withdrawals:
Death Benefits		-			320			99			980
Withdrawals		1,167			2,115			2,208			22,026
Administrative Fees		124			296			625			1,477
Net Transfers to (from) Fixed Account		(7,496	)		(22,449	)		(21,904	)		4,170
Payments and Withdrawals		(6,205	)		(19,718	)		(18,972	)		28,653

Net Assets:
Net Increase (Decrease)		5,724			17,830			12,095			(21,594	)
Beginning of Year		8,124			16,740			47,953			292,256

End of Year	$	13,848			34,570			60,048		$	270,662

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Federated Insurance Series									MFS® Variable Insurance Trust															MFS® Variable Insurance Trust II
	Managed Tail Risk Fund II - P			High Income Bond Fund II - P			Prime Money Fund II			Research Series - Initial Class Shares			Growth Series - Initial Class Shares			Total Return Series - Initial Class Shares			Research Bond Series - Initial Class Shares			Utilities Series - Initial Class Shares			Strategic Income Portfolio - Initial Class Shares

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	12			232			(77	)		(42	)		(111	)		36			230			111			107
Net Realized Gain (Loss) and Capital Gains Distributions		541			39			-			1,061			1,254			528			282			1,587			(24	)
Unrealized Appreciation (Depreciation)		(642	)		(201	)		-			(445	)		(532	)		(56	)		197			(45	)		39
Change in Net Assets from Operations		(89	)		70			(77	)		574			611			508			709			1,653			122

Deposits		77			224			26,002			170			348			308			402			906			138

Payments and Withdrawals:
Death Benefits		20			49			13			55			25			348			92			101			61
Withdrawals		432			508			774			1,036			1,096			945			1,577			2,473			611
Administrative Fees		2			3			35			4			6			4			109			9			39
Net Transfers to (from) Fixed Account		(178	)		198			25,607			134			38			(69	)		820			(989	)		75
Payments and Withdrawals		276			758			26,429			1,229			1,165			1,228			2,598			1,594			786

Net Assets:
Net Increase (Decrease)		(288	)		(464	)		(504	)		(485	)		(206	)		(412	)		(1,487	)		965			(526	)
Beginning of Year		3,805			5,225			4,771			7,396			8,785			7,843			16,919			15,219			6,379

End of Year	$	3,517			4,761			4,267			6,911			8,579			7,431			15,432			16,184			5,853

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	American Century Variable Portfolios, Inc.																		American Century Variable Portfolios II, Inc.			Dreyfus Variable Investment Fund
	VP Capital Appreciation Fund - Class I			VP International Fund - Class I			VP Value Fund - Class I			VP Income & Growth Fund - Class I			VP Ultra® Fund - Class I			VP Mid Cap Value Fund - Class I			VP Inflation Protection Fund - Class II			Appreciation Portfolio - Initial Shares			Opportunistic Small Cap Portfolio - Initial Shares

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	(58	)		32			19			10			(15	)		(1	)		(10	)		19			(86	)
Net Realized Gain (Loss) and Capital Gains Distributions		1,032			548			1,097			60			156			52			115			337			265
Unrealized Appreciation (Depreciation)		(700	)		(1,365	)		404			84			(17	)		27			68			(73	)		(172	)
Change in Net Assets from Operations		274			(785	)		1,520			154			124			78			173			283			7

Deposits		229			282			474			25			31			143			153			66			197

Payments and Withdrawals:
Death Benefits		54			24			25			7			-			14			15			24			18
Withdrawals		539			1,272			1,550			156			172			66			1,171			478			735
Administrative Fees		4			53			75			1			7			-			55			3			4
Net Transfers to (from) Fixed Account		(135	)		(434	)		914			(13	)		107			(231	)		154			136			(498	)
Payments and Withdrawals		462			915			2,564			151			286			(151	)		1,395			641			259

Net Assets:
Net Increase (Decrease)		41			(1,418	)		(570	)		28			(131	)		372			(1,069	)		(292	)		(55	)
Beginning of Year		4,183			12,055			14,294			1,509			1,621			434			8,786			4,600			6,309

End of Year	$	4,224			10,637			13,724			1,537			1,490			806			7,717			4,308			6,254

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2014

(in thousands)

							JPMorgan Insurance Trust									Franklin Templeton Variable Insurance Products Trust
	Dreyfus Stock Index Fund, Inc. - Initial Shares			The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares			Insurance Trust U.S. Equity Portfolio - Class 1 Shares			Insurance Trust Small Cap Core Portfolio - Class 1 Shares			Insurance Trust Mid Cap Value Portfolio - Class 1 Shares			Franklin Global Real Estate VIP Fund - Class 2			Franklin Small-Mid Cap Growth VIP Fund - Class 2			Templeton Developing Markets VIP Fund - Class 2			Templeton Foreign VIP Fund - Class 2

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	74			(3	)		(5	)		(71	)		(37	)		(38	)		(14	)		5			31
Net Realized Gain (Loss) and Capital Gains Distributions		1,797			77			100			870			888			18			233			(1	)		267
Unrealized Appreciation (Depreciation)		618			(1	)		37			(338	)		(92	)		511			(156	)		(496	)		(1,191	)
Change in Net Assets from Operations		2,489			73			132			461			759			491			63			(492	)		(893	)

Deposits		587			13			12			227			156			100			49			136			241

Payments and Withdrawals:
Death Benefits		65			1			3			5			4			5			1			2			32
Withdrawals		2,452			70			200			558			740			462			187			595			875
Administrative Fees		80			1			1			24			29			16			2			17			38
Net Transfers to (from) Fixed Account		1,030			(30	)		(121	)		(316	)		165			404			(140	)		(483	)		(816	)
Payments and Withdrawals		3,627			42			83			271			938			887			50			131			129

Net Assets:
Net Increase (Decrease)		(551	)		44			61			417			(23	)		(296	)		62			(487	)		(781	)
Beginning of Year		23,107			687			1,148			5,650			6,166			4,112			1,006			5,197			7,492

End of Year	$	22,556			731			1,209			6,067			6,143			3,816			1,068			4,710			6,711

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Calamos® Advisors Trust			AIM Variable Insurance Funds (Invesco Variable Insurance Funds)									Columbia Funds Variable Insurance Trust I			Columbia Funds Variable Series Trust II						Fidelity® Variable Insurance Products Contrafund® Portfolio			Fidelity® Variable Insurance Products
	Calamos Growth and Income Portfolio			V.I. American Franchise Fund - Series I Shares			V.I. Technology Fund - Series I Shares			V.I. Core Equity Fund - Series I Shares			Mid-Cap Growth Opportunity Fund (Class 2)			Seligman Global Technology Fund (Class 2)			Select Smaller-Cap Value Fund (Class 2)			VIP Contrafund® Portfolio - Service Class 2			VIP Freedom Income Portfolio - Service Class 2

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	(66	)		(6	)		(6	)		(4	)		(61	)		(24	)		(16	)		(29	)		(2	)
Net Realized Gain (Loss) and Capital Gains Distributions		1,905			17			57			110			117			377			80			516			15
Unrealized Appreciation (Depreciation)		(1,062	)		15			(7	)		(56	)		183			6			(21	)		(80	)		(2	)
Change in Net Assets from Operations		777			26			44			50			239			359			43			407			11

Deposits		347			21			29			16			83			161			32			118			54

Payments and Withdrawals:
Death Benefits		29			-			-			2			5			-			-			11			48
Withdrawals		1,844			33			24			219			554			400			202			598			28
Administrative Fees		26			-			1			-			25			2			2			23			3
Net Transfers to (from) Fixed Account		(459	)		(6	)		(48	)		43			188			(73	)		(72	)		(31	)		221
Payments and Withdrawals		1,440			27			(23	)		264			772			329			132			601			300

Net Assets:
Net Increase (Decrease)		(316	)		20			96			(198	)		(450	)		191			(57	)		(76	)		(235	)
Beginning of Year		15,707			396			420			911			4,652			1,739			1,226			4,445			761

End of Year	$	15,391			416			516			713			4,202			1,930			1,169			4,369			526

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Fidelity® Variable Insurance Products
	VIP Freedom 2010 Portfolio - Service Class 2			VIP Freedom 2015 Portfolio - Service Class 2			VIP Freedom 2020 Portfolio - Service Class 2			VIP Freedom 2025 Portfolio - Service Class 2			VIP Freedom 2030 Portfolio - Service Class 2			VIP Freedom 2035 Portfolio - Service Class 2			VIP Freedom 2040 Portfolio - Service Class 2			VIP Freedom 2045 Portfolio - Service Class 2		VIP Freedom 2050 Portfolio - Service Class 2

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	-			(1	)		(2	)		1			1			2			2			-		-
Net Realized Gain (Loss) and Capital Gains Distributions		32			44			327			18			64			5			13			2		6
Unrealized Appreciation (Depreciation)		(12	)		(1	)		(86	)		(3	)		(6	)		1			(2	)		1		2
Change in Net Assets from Operations		20			42			239			16			59			8			13			3		8

Deposits		10			15			408			78			122			36			111			12		44

Payments and Withdrawals:
Death Benefits		9			-			-			-			-			-			-			-		-
Withdrawals		70			155			575			44			63			4			32			-		12
Administrative Fees		2			5			41			1			2			-			1			-		1
Net Transfers to (from) Fixed Account		(278	)		(16	)		466			(142	)		(99	)		(196	)		(205	)		-		(24	)
Payments and Withdrawals		(197	)		144			1,082			(97	)		(34	)		(192	)		(172	)		-		(11	)

Net Assets:
Net Increase (Decrease)		227			(87	)		(435	)		191			215			236			296			15		63
Beginning of Year		504			1,417			7,933			535			1,743			194			209			90		218

End of Year	$	731			1,330			7,498			726			1,958			430			505			105		281

See accompanying Notes to Financial Statements

KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

YEAR ENDED DECEMBER 31, 2014

(in thousands)

	Northern Lights Variable Trust
	TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares			TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares			TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares			Total

Change in Net Assets from Operations:
Net Investment Income (Loss)	$	(31	)		(52	)		(172	)	$	(116	)
Net Realized Gain (Loss) and Capital Gains Distributions		188			373			368			17,813
Unrealized Appreciation (Depreciation)		(37	)		(142	)		(290	)		(6,136	)
Change in Net Assets from Operations		120			179			(94	)		11,561

Deposits		755			857			2,376			37,381

Payments and Withdrawals:
Death Benefits		9			481			261			1,918
Withdrawals		289			237			2,059			29,172
Administrative Fees		79			146			431			1,412
Net Transfers to (from) Fixed Account		(589	)		(2,947	)		(17,246	)		3,816
Payments and Withdrawals		(212	)		(2,083	)		(14,495	)		36,318

Net Assets:
Net Increase (Decrease)		1,087			3,119			16,777			12,624
Beginning of Year		7,037			13,621			31,176			279,632

End of Year	$	8,124			16,740			47,953		$	292,256

See accompanying Notes to Financial Statements

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements

1. Organization and Significant Accounting Policies

Organization

Kansas City Life Variable Annuity Separate Account (the Account) is a separate account of Kansas City Life Insurance Company (KCL). This account is marketed and presented herein as follows:

Century II Variable Annuity;

Century II Affinity Variable Annuity (presented herein with Century II Variable Annuity);

Century II Single Premium Affinity Variable Annuity (presented herein with Century II Variable Annuity); and,

Century II Freedom Variable Annuity.

All products are distributed by Sunset Financial Services, Inc. (SFS), a wholly-owned subsidiary of KCL. SFS has entered into a series of selling agreements with third-party broker-dealers that sell the contracts through their registered representatives who are licensed as insurance agents at KCL.

The Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, that follows the accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services Investment Companies. Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from KCL's other assets and liabilities. The portion of the Account's assets applicable to the variable annuity contracts is not available to service the liabilities arising out of any other business KCL may conduct. All deposits received by the Account have been directed by the contract owners into subaccounts that invest in 48 series-type mutual funds, as listed below with each fund's objective, or into KCL's Fixed Account. The underlying mutual fund options are not directly available to the general public. The underlying mutual funds are available as investment options in variable annuity contracts issued by KCL. The Fixed Account represents a portion of the general account assets of KCL and is not included in this report. KCL's Fixed Account may be charged with liabilities arising out of other business conducted by KCL.

Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

Series-Type Mutual Fund		Fund Investment Objective

Federated Insurance Series
Federated Managed Tail Risk Fund II - P		To seek capital appreciation by maintaining a diversified mix of investment exposure to various asset classes.

Federated High Income Bond Fund II - P		To seek high current income.

Federated Prime Money Fund II		To seek current income consistent with stability of principal and liquidity.

MFS® Variable Insurance Trust
MFS® Research Series – Initial Class Shares		To seek capital appreciation.

MFS® Growth Series – Initial Class Shares		To seek capital appreciation.

MFS® Total Return Series – Initial Class Shares		To seek total return.

MFS® Total Return Bond Series – Initial Class Shares		To seek total return with an emphasis on current income, but also considering capital appreciation.

MFS® Utilities Series – Initial Class Shares		To seek total return.

MFS® Variable Insurance Trust II
MFS® Strategic Income Portfolio – Initial Class Shares		To seek total return with an emphasis on high current income, but also considering capital appreciation.

American Century Variable Portfolios, Inc.
American Century VP Capital Appreciation Fund – Class I		To seek capital growth.

American Century VP International Fund – Class I		To seek capital growth.

American Century VP Value Fund – Class I		To seek long-term capital growth. The secondary objective is to seek income.

American Century VP Income & Growth Fund – Class I		To seek capital growth by investing in common stocks. The secondary objective is to seek income.

American Century VP Ultra® Fund – Class I		To seek long-term capital growth.

American Century VP Mid Cap Value Fund – Class I		To seek long-term capital growth. The secondary objective is to seek income.

American Century Variable Portfolios II, Inc.
American Century VP Inflation Protection Fund - Class II		To seek long-term total returns using a strategy to protect against U.S. inflation.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

Dreyfus Variable Investment Fund
Appreciation Portfolio – Initial Shares		To seek long-term capital growth consistent with the preservation of capital. The secondary objective is to seek current income.

Opportunistic Small Cap Portfolio – Initial Shares		To seek capital growth.

Dreyfus Stock Index Fund, Inc. – Initial Shares		To seek to match the total return of the Standard & Poor's® 500 Composite Stock Price Index (S&P 500® Index).

The Dreyfus Socially Responsible Growth Fund, Inc. – Initial Shares		To seek to provide capital growth, with current income as a secondary objective.

JPMorgan Insurance Trust
JPMorgan Insurance Trust U.S. Equity Portfolio – Class 1 Shares		To seek high total return from a portfolio of selected equity securities.

JPMorgan Insurance Trust Small Cap Core Portfolio – Class 1 Shares		To seek capital growth over the long term.

JPMorgan Insurance Trust Mid Cap Value Portfolio – Class 1 Shares		To seek capital appreciation with the secondary objective of achieving current income by investing primarily in equity securities.

Franklin Templeton Variable Insurance Products Trust
Franklin Global Real Estate VIP Fund - Class 2		To seek high total return.

Franklin Small-Mid Cap Growth VIP Fund - Class 2		To seek long-term capital growth.

Templeton Developing Markets VIP Fund - Class 2		To seek long-term capital appreciation.

Templeton Foreign VIP Fund - Class 2		To seek long-term capital growth.

Calamos® Advisors Trust
Calamos Growth and Income Portfolio		To seek high long-term total return through growth and current income.

AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
Invesco V.I. American Franchise Fund – Series I Shares		To seek capital growth.

Invesco V.I. Technology Fund – Series I Shares		To seek long-term growth of capital.

Invesco V.I. Core Equity Fund – Series I Shares		To seek long-term growth of capital.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

Columbia Funds Variable Series Trust II
Columbia Variable Portfolio – Mid Cap Growth Fund (Class 2)		To seek to provide shareholders with growth of capital.

Columbia Variable Portfolio – Seligman Global Technology Fund (Class 2)		To seek to provide shareholders with long-term capital appreciation.

Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)		To seek to provide shareholders with long-term capital growth.

Fidelity® Variable Insurance Products Contrafund® Portfolio
VIP Contrafund® Portfolio – Service Class 2		To seek long-term capital appreciation.

Fidelity® Variable Insurance Products
VIP Freedom Income Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation.

VIP Freedom 2010 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation beyond its target date.

VIP Freedom 2015 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2020 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2025 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2030 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2035 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2040 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2045 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

VIP Freedom 2050 Portfolio – Service Class 2		To seek high total return with a secondary objective of principal preservation as it approaches its target date and beyond.

Northern Lights Variable Trust
TOPS® Managed Risk Balanced ETF Portfolio – Class 2 Shares		To seek to provide income and capital appreciation with less volatility than the fixed income and equity markets as a whole.

TOPS® Managed Risk Moderate Growth ETF Portfolio – Class 2 Shares		To seek capital appreciation with less volatility than the equity markets as a whole.

TOPS® Managed Risk Growth ETF Portfolio – Class 2 Shares		To seek capital appreciation with less volatility than the equity markets as a whole.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

Fund Changes

During the year ended December 31, 2015, the following portfolios changed their names as summarized, with the effective date of the change, in the following table:

Prior Portfolio Name	Current Portfolio Name	Effective Date

MFS® Research Bond Series – Initial Class Shares	MFS® Total Return Bond Series – Initial Class Shares	April 30, 2015

Columbia Funds Variable Series Trust I	Columbia Funds Variable Series Trust II
Columbia Variable Portfolio – Mid Cap Growth Opportunity Fund (Class 2)	Columbia Variable Portfolio – Mid Cap Growth Fund (Class 2)	May 1, 2015

There were no funds that merged during the years ended December 31, 2015 and 2014.

Financial Statements

The preparation of financial statements on the basis of U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions related to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenue and expenses during the period. These estimates are inherently subject to change and actual results could differ from these estimates.

Risks and Uncertainties

Certain risks and uncertainties are inherent to the Account's day-to-day operations and to the process of preparing its financial statements. The more significant of those risks and uncertainties, as well as the Account's method for attempting to mitigate the risks, are presented below and throughout the notes to the financial statements.

Investments - The Account is exposed to risks that issuers of debt securities owned by the series-type mutual funds will default, or that interest rates will change and cause a decrease in the value of those investments. The market value of the investments and their investment performance, including the realization of gains or losses, may vary depending on economic, issuer, and market conditions. While such risks are borne by the contract holder, management attempts to mitigate these risks by offering the investor a variety of investment options, fund prospectuses, quarterly personal investment statements and annual financial statements.

Reinvestment of Dividends

Interest and dividend income and capital gain distributions paid by the mutual funds to the Account are reinvested in additional shares of each respective fund.

Federal Income Taxes

The Account is treated as part of KCL for federal income tax purposes. Under current interpretations of existing federal income tax law, no income taxes are payable on investment income or capital gain distributions received by the Account from the underlying funds. Any applicable taxes will be the responsibility of contract holders or beneficiaries upon termination or withdrawal.

Investment Valuation

Investments in mutual fund shares are reported in the statement of net assets at fair value using the quoted net asset values (NAV) as provided by the mutual fund sponsors at the end of each trading day. See Note 3 for additional fair value disclosures.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

Security Transactions

The average cost method is used to determine realized gains and losses. Transactions are recorded on a trade date basis.

Distributions Received

Income from dividends and capital gain distributions are recorded on the ex-dividend date.

Recently Issued Accounting Standards

In May 2014, the FASB issued guidance regarding accounting for revenue recognition that identifies the accounting treatment for an entity's contracts with customers. Certain contracts, including insurance contracts, are specifically excluded from this guidance. This guidance is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Account is currently evaluating this guidance.

In May 2015, the FASB issued guidance which will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at NAV per share or its equivalent using the practical expedient in the FASB's fair value measurement guidance. This guidance is effective for annual periods beginning after December 15, 2015, and interim periods within those fiscal years. The Account adopted this guidance as of January 1, 2016 with no material impact to the financial statements.

All other new accounting standards and updates of existing standards issued in 2015 and 2014 were considered by management and did not relate to accounting policies and procedures pertinent to the Account at this time or were not expected to have a material impact to the financial statements.

Subsequent Events

Subsequent events have been evaluated through April 22, 2016, the date that the financial statements have been issued.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

2. Cost of Purchases and Proceeds from Sales

The aggregate cost of purchases and proceeds from sales of investments for the years ended December 31 were as follows:

2015	Cost of Purchases		Proceeds from Sales
	(in thousands)

Federated Managed Tail Risk Fund II - P	$	423	$	467
Federated High Income Bond Fund II - P		985		1,057
Federated Prime Money Fund II		24,072		25,168
MFS® Research Series - Initial Class Shares		917		894
MFS® Growth Series - Initial Class Shares		2,510		2,275
MFS® Total Return Series - Initial Class Shares		870		982
MFS® Total Return Bond Series - Initial Class Shares		1,137		11,821
MFS® Utilities Series - Initial Class Shares		4,419		3,423
MFS® Strategic Income Portfolio - Initial Class Shares		490		4,156
American Century VP Capital Appreciation Fund - Class I		1,441		1,112
American Century VP International Fund - Class I		999		6,097
American Century VP Value Fund - Class I		2,627		9,559
American Century VP Income & Growth Fund - Class I		289		208
American Century VP Ultra® Fund - Class I		457		1,047
American Century VP Mid Cap Value Fund - Class I		940		625
American Century VP Inflation Protection Fund - Class II		681		6,078
Dreyfus Appreciation Portfolio - Initial Shares		449		520
Dreyfus Opportunistic Small Cap Portfolio - Initial Shares		614		1,010
Dreyfus Stock Index Fund, Inc. - Initial Shares		3,298		10,407
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares		394		180
JPMorgan Insurance Trust U.S. Equity Portfolio - Class 1 Shares		1,020		642
JPMorgan Insurance Trust Small Cap Core Portfolio - Class 1 Shares		1,188		3,071
JPMorgan Insurance Trust Mid Cap Value Portfolio - Class 1 Shares		1,188		3,549
Franklin Global Real Estate VIP Fund - Class 2		860		2,538
Franklin Small-Mid Cap Growth VIP Fund - Class 2		468		161
Templeton Developing Markets VIP Fund - Class 2		1,314		2,076
Templeton Foreign VIP Fund - Class 2		1,168		4,484
Calamos Growth and Income Portfolio		2,781		2,573
Invesco V.I. American Franchise Fund - Series I Shares		53		94
Invesco V.I. Technology Fund - Series I Shares		178		109
Invesco V.I. Core Equity Fund - Series I Shares		117		174
Columbia Variable Portfolio - Mid Cap Growth Fund (Class 2)		225		2,971
Columbia Variable Portfolio - Seligman Global Technology Fund (Class 2)		1,451		956
Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)		152		323
Fidelity® VIP Contrafund® Portfolio - Service Class 2		857		2,702
Fidelity® VIP Freedom Income Portfolio - Service Class 2		4,702		648
Fidelity® VIP Freedom 2010 Portfolio - Service Class 2		80		128
Fidelity® VIP Freedom 2015 Portfolio - Service Class 2		109		98
Fidelity® VIP Freedom 2020 Portfolio - Service Class 2		3,489		1,317
Fidelity® VIP Freedom 2025 Portfolio - Service Class 2		109		60
Fidelity® VIP Freedom 2030 Portfolio - Service Class 2		412		114
Fidelity® VIP Freedom 2035 Portfolio - Service Class 2		153		10
Fidelity® VIP Freedom 2040 Portfolio - Service Class 2		173		28
Fidelity® VIP Freedom 2045 Portfolio - Service Class 2		34		2
Fidelity® VIP Freedom 2050 Portfolio - Service Class 2		55		20
TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares		8,902		1,837
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares		26,274		4,228
TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares		33,947		13,837
Total	$	139,471	$	135,836

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

2014	Cost of Purchases		Proceeds from Sales
	( in thousands)

Federated Managed Tail Risk Fund II - P	$	1,135	$	620
Federated High Income Bond Fund II - P		987		1,289
Federated Prime Money Fund II		39,683		40,187
MFS® Research Series - Initial Class Shares		827		1,409
MFS® Growth Series - Initial Class Shares		1,290		1,645
MFS® Total Return Series - Initial Class Shares		1,208		1,886
MFS® Research Bond Series - Initial Class Shares		2,206		4,172
MFS® Utilities Series - Initial Class Shares		4,197		4,179
MFS® Strategic Income Portfolio - Initial Class Shares		852		1,393
American Century VP Capital Appreciation Fund - Class I		1,441		917
American Century VP International Fund - Class I		1,974		2,575
American Century VP Value Fund - Class I		1,518		3,589
American Century VP Income & Growth Fund - Class I		118		234
American Century VP Ultra® Fund - Class I		155		425
American Century VP Mid Cap Value Fund - Class I		433		111
American Century VP Inflation Protection Fund - Class II		1,170		2,216
Dreyfus Appreciation Portfolio - Initial Shares		432		867
Dreyfus Opportunistic Small Cap Portfolio - Initial Shares		922		1,070
Dreyfus Stock Index Fund, Inc. - Initial Shares		2,760		5,459
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares		125		110
JPMorgan Insurance Trust U.S. Equity Portfolio - Class 1 Shares		223		299
JPMorgan Insurance Trust Small Cap Core Portfolio - Class 1 Shares		1,575		1,229
JPMorgan Insurance Trust Mid Cap Value Portfolio - Class 1 Shares		1,100		1,593
Franklin Global Real Estate VIP Fund - Class 2		441		1,266
Franklin Small-Mid Cap Growth VIP Fund - Class 2		413		235
Templeton Developing Markets VIP Fund - Class 2		1,372		1,362
Templeton Foreign VIP Fund - Class 2		1,744		1,601
Calamos Growth and Income Portfolio		4,198		3,924
Invesco V.I. American Franchise Fund - Series I Shares		44		56
Invesco V.I. Technology Fund - Series I Shares		167		79
Invesco V.I. Core Equity Fund - Series I Shares		71		319
Columbia Variable Portfolio - Mid-Cap Growth Opportunity Fund (Class 2)		456		1,206
Columbia Variable Portfolio - Seligman Global Technology Fund (Class 2)		577		633
Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)		175		291
Fidelity® VIP Contrafund® Portfolio - Service Class 2		777		1,203
Fidelity® VIP Freedom Income Portfolio - Service Class 2		185		427
Fidelity® VIP Freedom 2010 Portfolio - Service Class 2		353		137
Fidelity® VIP Freedom 2015 Portfolio - Service Class 2		80		186
Fidelity® VIP Freedom 2020 Portfolio - Service Class 2		736		1,274
Fidelity® VIP Freedom 2025 Portfolio - Service Class 2		303		115
Fidelity® VIP Freedom 2030 Portfolio - Service Class 2		368		175
Fidelity® VIP Freedom 2035 Portfolio - Service Class 2		242		8
Fidelity® VIP Freedom 2040 Portfolio - Service Class 2		381		91
Fidelity® VIP Freedom 2045 Portfolio - Service Class 2		15		1
Fidelity® VIP Freedom 2050 Portfolio - Service Class 2		76		17
TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares		3,004		2,001
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares		5,145		2,072
TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares		21,149		4,450
Total	$	108,803	$	100,603

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

3. Fair Value Measurement

Under GAAP, fair value represents the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. It is the Account's practice to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.

The Account categorizes its financial assets and liabilities measured at fair value in three levels, based on the inputs and assumptions used to determine the fair value. These levels are as follows:

Level 1 – Valuations are based upon quoted prices for identical instruments traded in active markets.

Level 2 – Valuations are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Valuations are obtained from inputs that are observable or derived principally from or corroborated by observable market data.

Level 3 – Valuations are generated from techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Account's assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of discounted cash flow models, spread-based models, and similar techniques, using the best information available in the circumstances.

As of December 31, 2015 and 2014, all assets measured at fair value on a recurring basis totaling $270,662,000 and $292,256,000, respectively, were Level 2 assets. The Account did not have any transfers between Level 1, Level 2 or Level 3 during the years ended December 31, 2015 and 2014.

NAV of the investments in mutual funds are calculated in a manner consistent with GAAP for investment companies and is determinative of their fair value. The fair value of the underlying mutual funds or stocks is used to determine the NAV of the separate account, which is not publicly quoted. The fair values of the underlying securities are based on quoted prices for similar assets or other valuation methods using market observable inputs, and are used to determine the NAV of the investments in mutual funds. Sales of separate account assets may be at asset values less than NAV and certain redemption restrictions may apply.

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

4. Expenses and Deductions

Century II Variable Annuity

During 2015, $163,000 (2014 - $235,000) was assessed in surrender charges. Other fees and charges are primarily comprised of mortality and expense risk charges, administration fees and charges. In 2015, other fees and charges totaled $5,379,000 (2014 - $5,323,000) and the largest component was the mortality and expense risk charge. Contract charges are assessed based on the table below.

FEE TABLE
Fee	When Fee is Deducted	Amount Deducted
Sales Load on Premium Payments	No fee assessed	$0
Maximum Surrender Charge	When surrender occurs, declining over time	Century II – 7% - 0% in contract year 8 Affinity – 8% - 0% in contract year 9
Transfer Processing Fee	7th transfer in a contract year	$25 for each additional transfer after six transfers during a contract year
Mortality and Expense Risk Charge	Daily	Annual rate of 1.25% of the average daily net asset value of each subaccount
Asset-Based Administration Charge	Daily	Annual rate of 0.15%
Annual Administration Fee	Annually for contracts less than $50,000	$30 per contract year

Century II Freedom Annuity

During 2015, $137,000 (2014 - $132,000) was assessed in other contract charges composed of mortality and expense risk charges and administration charge. The largest component is the mortality and expense risk charge. Contract charges are assessed based on the table below.

FEE TABLE
Fee	When Fee is Deducted	Amount Deducted
Sales Load on Premium Payments	No fee assessed	$0
Maximum Surrender Charge	No fee assessed	$0
Transfer Processing Fee	7th transfer in a contract year	$25 for each additional transfer after six transfers during a contract year
Mortality and Expense Risk Charge	Daily	Annual rate of 1.40% of the average daily net asset value of each subaccount
Asset-Based Administration Charge	Daily	Annual rate of 0.25%

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

The Mortality and Expense Risk Fees for the year ended December 31 were as follows:

2015	Century II Variable Annuity		Century II Freedom Variable Annuity		Total Variable Annuity
	(in thousands)

Federated Managed Tail Risk Fund II - P	$	47	$	1	$	48
Federated High Income Bond Fund II - P		58		8		66
Federated Prime Money Fund II		54		4		58
MFS® Research Series - Initial Class Shares		93		1		94
MFS® Growth Series - Initial Class Shares		121		1		122
MFS® Total Return Series - Initial Class Shares		88		14		102
MFS® Total Return Bond Series - Initial Class Shares		111		6		117
MFS® Utilities Series - Initial Class Shares		203		15		218
MFS® Strategic Income Portfolio - Initial Class Shares		45		3		48
American Century VP Capital Appreciation Fund - Class I		61		1		62
American Century VP International Fund - Class I		107		2		109
American Century VP Value Fund - Class I		121		4		125
American Century VP Income & Growth Fund - Class I		20		1		21
American Century VP Ultra® Fund - Class I		15		-		15
American Century VP Mid Cap Value Fund - Class I		12		1		13
American Century VP Inflation Protection Fund - Class II		55		4		59
Dreyfus Appreciation Portfolio - Initial Shares		58		-		58
Dreyfus Opportunistic Small Cap Portfolio - Initial Shares		83		1		84
Dreyfus Stock Index Fund, Inc. - Initial Shares		237		12		249
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares		12		-		12
JPMorgan Insurance Trust U.S. Equity Portfolio - Class 1 Shares		17		1		18
JPMorgan Insurance Trust Small Cap Core Portfolio - Class 1 Shares		60		4		64
JPMorgan Insurance Trust Mid Cap Value Portfolio - Class 1 Shares		57		3		60
Franklin Global Real Estate VIP Fund - Class 2		37		1		38
Franklin Small-Mid Cap Growth VIP Fund - Class 2		15		-		15
Templeton Developing Markets VIP Fund - Class 2		51		1		52
Templeton Foreign VIP Fund - Class 2		62		3		65
Calamos Growth and Income Portfolio		208		5		213
Invesco V.I. American Franchise Fund - Series I Shares		6		-		6
Invesco V.I. Technology Fund - Series I Shares		8		-		8
Invesco V.I. Core Equity Fund - Series I Shares		9		-		9
Columbia Variable Portfolio - Mid Cap Growth Fund (Class 2)		36		1		37
Columbia Variable Portfolio - Seligman Global Technology Fund (Class 2)		28		2		30
Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)		16		-		16
Fidelity® VIP Contrafund® Portfolio - Service Class 2		40		2		42
Fidelity® VIP Freedom Income Portfolio - Service Class 2		43		3		46
Fidelity® VIP Freedom 2010 Portfolio - Service Class 2		8		3		11
Fidelity® VIP Freedom 2015 Portfolio - Service Class 2		17		2		19
Fidelity® VIP Freedom 2020 Portfolio - Service Class 2		123		4		127
Fidelity® VIP Freedom 2025 Portfolio - Service Class 2		10		1		11
Fidelity® VIP Freedom 2030 Portfolio - Service Class 2		31		-		31
Fidelity® VIP Freedom 2035 Portfolio - Service Class 2		8		-		8
Fidelity® VIP Freedom 2040 Portfolio - Service Class 2		8		-		8
Fidelity® VIP Freedom 2045 Portfolio - Service Class 2		2		-		2
Fidelity® VIP Freedom 2050 Portfolio - Service Class 2		4		-		4
TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares		168		5		173
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares		412		3		415
TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares		826		5		831
	$	3,911	$	128	$	4,039

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

5. Change in Units Outstanding

The changes in units outstanding for the year ended December 31 were as follows:

2015	Units Issued		Units Redeemed		Net Increase (Decrease)
			(in thousands)

Federated Managed Tail Risk Fund II - P		19		22		(3	)
Federated High Income Bond Fund II - P		26		35		(9	)
Federated Prime Money Fund II		1,994		2,077		(83	)
MFS® Research Series - Initial Class Shares		11		24		(13	)
MFS® Growth Series - Initial Class Shares		55		58		(3	)
MFS® Total Return Series - Initial Class Shares		13		29		(16	)
MFS® Total Return Bond Series - Initial Class Shares		44		519		(475	)
MFS® Utilities Series - Initial Class Shares		42		51		(9	)
MFS® Strategic Income Portfolio - Initial Class Shares		19		207		(188	)
American Century VP Capital Appreciation Fund - Class I		39		35		4
American Century VP International Fund - Class I		39		236		(197	)
American Century VP Value Fund - Class I		144		557		(413	)
American Century VP Income & Growth Fund - Class I		11		15		(4	)
American Century VP Ultra® Fund - Class I		14		47		(33	)
American Century VP Mid Cap Value Fund - Class I		44		30		14
American Century VP Inflation Protection Fund - Class II		41		449		(408	)
Dreyfus Appreciation Portfolio - Initial Shares		7		19		(12	)
Dreyfus Opportunistic Small Cap Portfolio - Initial Shares		25		42		(17	)
Dreyfus Stock Index Fund, Inc. - Initial Shares		94		395		(301	)
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares		6		3		3
JPMorgan Insurance Trust U.S. Equity Portfolio - Class 1 Shares		35		23		12
JPMorgan Insurance Trust Small Cap Core Portfolio - Class 1 Shares		25		92		(67	)
JPMorgan Insurance Trust Mid Cap Value Portfolio - Class 1 Shares		29		108		(79	)
Franklin Global Real Estate VIP Fund - Class 2		35		111		(76	)
Franklin Small-Mid Cap Growth VIP Fund - Class 2		17		11		6
Templeton Developing Markets VIP Fund - Class 2		42		97		(55	)
Templeton Foreign VIP Fund - Class 2		33		140		(107	)
Calamos Growth and Income Portfolio		76		99		(23	)
Invesco V.I. American Franchise Fund - Series I Shares		7		12		(5	)
Invesco V.I. Technology Fund - Series I Shares		28		23		5
Invesco V.I. Core Equity Fund - Series I Shares		4		15		(11	)
Columbia Variable Portfolio - Mid Cap Growth Fund (Class 2)		19		254		(235	)
Columbia Variable Portfolio - Seligman Global Technology Fund (Class 2)		69		57		12
Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)		5		11		(6	)
Fidelity® VIP Contrafund® Portfolio - Service Class 2		31		172		(141	)
Fidelity® VIP Freedom Income Portfolio - Service Class 2		382		50		332
Fidelity® VIP Freedom 2010 Portfolio - Service Class 2		5		10		(5	)
Fidelity® VIP Freedom 2015 Portfolio - Service Class 2		6		6		-
Fidelity® VIP Freedom 2020 Portfolio - Service Class 2		256		94		162
Fidelity® VIP Freedom 2025 Portfolio - Service Class 2		7		3		4
Fidelity® VIP Freedom 2030 Portfolio - Service Class 2		29		7		22
Fidelity® VIP Freedom 2035 Portfolio - Service Class 2		10		-		10
Fidelity® VIP Freedom 2040 Portfolio - Service Class 2		11		1		10
Fidelity® VIP Freedom 2045 Portfolio - Service Class 2		2		-		2
Fidelity® VIP Freedom 2050 Portfolio - Service Class 2		3		1		2
TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares		749		152		597
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares		2,148		339		1,809
TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares		2,748		1,103		1,645

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

2014:	Units Issued		Units Redeemed		Net Increase (Decrease)
			(in thousands)

Federated Managed Tail Risk Fund II - P		18		27		(9	)
Federated High Income Bond Fund II - P		25		45		(20	)
Federated Prime Money Fund II		3,244		3,279		(35	)
MFS® Research Series - Initial Class Shares		8		43		(35	)
MFS® Growth Series - Initial Class Shares		21		45		(24	)
MFS® Total Return Series - Initial Class Shares		35		64		(29	)
MFS® Research Bond Series - Initial Class Shares		81		182		(101	)
MFS® Utilities Series - Initial Class Shares		53		62		(9	)
MFS® Strategic Income Portfolio - Initial Class Shares		34		67		(33	)
American Century VP Capital Appreciation Fund - Class I		23		32		(9	)
American Century VP International Fund - Class I		72		97		(25	)
American Century VP Value Fund - Class I		82		214		(132	)
American Century VP Income & Growth Fund - Class I		5		18		(13	)
American Century VP Ultra® Fund - Class I		8		21		(13	)
American Century VP Mid Cap Value Fund - Class I		21		5		16
American Century VP Inflation Protection Fund - Class II		64		156		(92	)
Dreyfus Appreciation Portfolio - Initial Shares		10		34		(24	)
Dreyfus Opportunistic Small Cap Portfolio - Initial Shares		44		47		(3	)
Dreyfus Stock Index Fund, Inc. - Initial Shares		89		219		(130	)
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares		2		3		(1	)
JPMorgan Insurance Trust U.S. Equity Portfolio - Class 1 Shares		9		12		(3	)
JPMorgan Insurance Trust Small Cap Core Portfolio - Class 1 Shares		37		38		(1	)
JPMorgan Insurance Trust Mid Cap Value Portfolio - Class 1 Shares		25		52		(27	)
Franklin Global Real Estate VIP Fund - Class 2		20		59		(39	)
Franklin Small-Mid Cap Growth VIP Fund - Class 2		18		18		-
Templeton Developing Markets VIP Fund - Class 2		58		57		1
Templeton Foreign VIP Fund - Class 2		51		46		5
Calamos Growth and Income Portfolio		113		161		(48	)
Invesco V.I. American Franchise Fund - Series I Shares		4		8		(4	)
Invesco V.I. Technology Fund - Series I Shares		31		18		13
Invesco V.I. Core Equity Fund - Series I Shares		5		28		(23	)
Columbia Variable Portfolio - Mid-Cap Growth Opportunity Fund (Class 2)		44		110		(66	)
Columbia Variable Portfolio - Seligman Global Technology Fund (Class 2)		32		46		(14	)
Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)		6		10		(4	)
Fidelity® VIP Contrafund® Portfolio - Service Class 2		46		81		(35	)
Fidelity® VIP Freedom Income Portfolio - Service Class 2		15		36		(21	)
Fidelity® VIP Freedom 2010 Portfolio - Service Class 2		27		10		17
Fidelity® VIP Freedom 2015 Portfolio - Service Class 2		3		13		(10	)
Fidelity® VIP Freedom 2020 Portfolio - Service Class 2		40		95		(55	)
Fidelity® VIP Freedom 2025 Portfolio - Service Class 2		22		9		13
Fidelity® VIP Freedom 2030 Portfolio - Service Class 2		25		13		12
Fidelity® VIP Freedom 2035 Portfolio - Service Class 2		16		1		15
Fidelity® VIP Freedom 2040 Portfolio - Service Class 2		25		6		19
Fidelity® VIP Freedom 2045 Portfolio - Service Class 2		1		-		1
Fidelity® VIP Freedom 2050 Portfolio - Service Class 2		5		1		4
TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares		259		171		88
TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares		418		162		256
TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares		1,783		334		1,449

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

6. Financial Highlights

A summary of unit values and units outstanding for variable annuity contracts, net assets, investment income ratios, the expense ratios, and total return ratios, excluding expenses of the underlying funds and expenses charged through the redemption of units, for each of the periods or years in the five-year period ended December 31, 2015, follows:

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

Federated Managed Tail Risk Fund II - P
	2015	172	$	12.566	to	$	18.689	$	3,192	1.67	%	1.40	%	to	1.65	%	-7.81	%	to	-7.59	%
	2014	175	$	13.630	to	$	20.224	$	3,517	1.72	%	1.40	%	to	1.65	%	-2.58	%	to	-2.34	%
	2013	184	$	13.992	to	$	20.710	$	3,805	0.98	%	1.40	%	to	1.65	%	14.55	%	to	14.83	%
	2012	192	$	12.215	to	$	18.035	$	3,448	0.55	%	1.40	%	to	1.65	%	8.36	%	to	8.63	%
	2011	214	$	11.273	to	$	16.601	$	3,540	0.73	%	1.40	%	to	1.65	%	-6.84	%	to	-6.61	%


Federated High Income Bond Fund II - P
	2015	169	$	21.088	to	$	26.283	$	4,318	5.68	%	1.40	%	to	1.65	%	-4.17	%	to	-3.93	%
	2014	178	$	22.005	to	$	27.357	$	4,761	5.90	%	1.40	%	to	1.65	%	1.01	%	to	1.26	%
	2013	198	$	21.784	to	$	27.015	$	5,225	6.60	%	1.40	%	to	1.65	%	5.24	%	to	5.50	%
	2012	196	$	20.700	to	$	25.607	$	4,902	7.15	%	1.40	%	to	1.65	%	12.81	%	to	13.09	%
	2011	199	$	18.349	to	$	22.642	$	4,442	8.79	%	1.40	%	to	1.65	%	3.45	%	to	3.71	%

Federated Prime Money Fund II
	2015	271	$	9.495	to	$	12.097	$	3,171	0.00	%	1.40	%	to	1.65	%	-1.64	%	to	-1.39	%
	2014	354	$	9.653	to	$	12.268	$	4,267	0.00	%	1.40	%	to	1.65	%	-1.63	%	to	-1.39	%
	2013	389	$	9.813	to	$	12.441	$	4,771	0.00	%	1.40	%	to	1.65	%	-1.64	%	to	-1.39	%
	2012	433	$	9.977	to	$	12.616	$	5,408	0.00	%	1.40	%	to	1.65	%	-1.65	%	to	-1.40	%
	2011	425	$	10.143	to	$	12.795	$	5,325	0.00	%	1.40	%	to	1.65	%	-1.63	%	to	-1.39	%

MFS® Research Series - Initial Class Shares
	2015	198	$	26.856	to	$	32.571	$	6,434	0.73	%	1.40	%	to	1.65	%	-0.85	%	to	-0.60	%
	2014	211	$	27.085	to	$	32.767	$	6,911	0.81	%	1.40	%	to	1.65	%	8.40	%	to	8.67	%
	2013	246	$	24.986	to	$	30.153	$	7,396	0.33	%	1.40	%	to	1.65	%	30.12	%	to	30.45	%
	2012	283	$	19.202	to	$	23.115	$	6,521	0.79	%	1.40	%	to	1.65	%	15.34	%	to	15.63	%
	2011	333	$	16.648	to	$	19.990	$	6,635	0.85	%	1.40	%	to	1.65	%	-2.08	%	to	-1.83	%

MFS® Growth Series - Initial Class Shares
	2015	238	$	31.852	to	$	37.798	$	8,985	0.15	%	1.40	%	to	1.65	%	5.80	%	to	6.06	%
	2014	241	$	30.106	to	$	35.637	$	8,579	0.10	%	1.40	%	to	1.65	%	7.16	%	to	7.43	%
	2013	265	$	28.094	to	$	33.172	$	8,785	0.24	%	1.40	%	to	1.65	%	34.61	%	to	34.95	%
	2012	289	$	20.870	to	$	24.581	$	7,091	0.00	%	1.40	%	to	1.65	%	15.46	%	to	15.75	%
	2011	327	$	18.076	to	$	21.237	$	6,927	0.19	%	1.40	%	to	1.65	%	-1.95	%	to	-1.71	%

MFS® Total Return Series - Initial Class Shares
	2015	230	$	18.818	to	$	32.224	$	6,842	2.61	%	1.40	%	to	1.65	%	-2.00	%	to	-1.75	%
	2014	246	$	19.203	to	$	32.800	$	7,431	1.91	%	1.40	%	to	1.65	%	6.72	%	to	6.99	%
	2013	275	$	17.993	to	$	30.657	$	7,843	1.79	%	1.40	%	to	1.65	%	17.10	%	to	17.39	%
	2012	289	$	15.366	to	$	26.115	$	7,058	2.76	%	1.40	%	to	1.65	%	9.43	%	to	9.70	%
	2011	335	$	14.042	to	$	23.805	$	7,509	2.58	%	1.40	%	to	1.65	%	0.11	%	to	0.36	%

MFS® Total Return Bond Series - Initial Class Shares
	2015	220	$	14.992	to	$	22.092	$	4,705	2.03	%	1.40	%	to	1.65	%	-1.93	%	to	-1.69	%
	2014	695	$	15.287	to	$	22.472	$	15,432	2.83	%	1.40	%	to	1.65	%	4.12	%	to	4.37	%
	2013	796	$	14.683	to	$	21.530	$	16,919	1.17	%	1.40	%	to	1.65	%	-2.65	%	to	-2.41	%
	2012	823	$	15.083	to	$	22.061	$	17,885	2.73	%	1.40	%	to	1.65	%	5.58	%	to	5.85	%
	2011	904	$	14.286	to	$	20.842	$	18,574	2.68	%	1.40	%	to	1.65	%	5.00	%	to	5.27	%

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

MFS® Utilities Series - Initial Class Shares
	2015	244	$	37.141	to	$	55.560	$	13,202	4.17	%	1.40	%	to	1.65	%	-15.92	%	to	-15.71	%
	2014	253	$	44.172	to	$	65.913	$	16,184	2.10	%	1.40	%	to	1.65	%	10.89	%	to	11.17	%
	2013	262	$	39.835	to	$	59.293	$	15,219	2.31	%	1.40	%	to	1.65	%	18.55	%	to	18.84	%
	2012	297	$	33.603	to	$	49.892	$	14,617	6.76	%	1.40	%	to	1.65	%	11.62	%	to	11.90	%
	2011	340	$	30.105	to	$	44.587	$	14,995	3.13	%	1.40	%	to	1.65	%	5.04	%	to	5.30	%

MFS® Strategic Income Portfolio - Initial Class Shares
	2015	111	$	15.521	to	$	19.089	$	2,084	3.78	%	1.40	%	to	1.65	%	-3.46	%	to	-3.22	%
	2014	299	$	16.077	to	$	19.724	$	5,328	3.15	%	1.40	%	to	1.65	%	1.58	%	to	1.84	%
	2013	332	$	15.827	to	$	19.368	$	6,379	11.24	%	1.40	%	to	1.65	%	-0.16	%	to	0.09	%
	2012	344	$	15.852	to	$	19.351	$	6,599	5.86	%	1.40	%	to	1.65	%	9.04	%	to	9.32	%
	2011	379	$	14.538	to	$	17.702	$	6,622	5.30	%	1.40	%	to	1.65	%	3.03	%	to	3.28	%

American Century VP Capital Appreciation Fund - Class I
	2015	154	$	28.210	to	$	34.158	$	4,357	0.00	%	1.40	%	to	1.65	%	0.26	%	to	0.51	%
	2014	150	$	28.066	to	$	34.069	$	4,224	0.00	%	1.40	%	to	1.65	%	6.37	%	to	6.64	%
	2013	159	$	26.319	to	$	32.028	$	4,183	0.00	%	1.40	%	to	1.65	%	28.78	%	to	29.10	%
	2012	196	$	20.386	to	$	24.870	$	4,005	0.00	%	1.40	%	to	1.65	%	14.09	%	to	14.38	%
	2011	232	$	17.823	to	$	21.798	$	4,139	0.00	%	1.40	%	to	1.65	%	-8.03	%	to	-7.80	%

American Century VP International Fund - Class I
	2015	250	$	21.000	to	$	23.664	$	5,914	0.52	%	1.40	%	to	1.65	%	-0.89	%	to	-0.64	%
	2014	447	$	21.188	to	$	23.817	$	10,637	1.69	%	1.40	%	to	1.65	%	-7.05	%	to	-6.82	%
	2013	472	$	22.796	to	$	25.560	$	12,055	1.73	%	1.40	%	to	1.65	%	20.41	%	to	20.71	%
	2012	560	$	18.932	to	$	21.175	$	11,842	0.86	%	1.40	%	to	1.65	%	19.17	%	to	19.47	%
	2011	661	$	15.887	to	$	17.724	$	11,694	1.34	%	1.40	%	to	1.65	%	-13.48	%	to	-13.26	%

American Century VP Value Fund - Class I
	2015	405	$	15.784	to	$	24.018	$	6,462	2.09	%	1.40	%	to	1.65	%	-5.46	%	to	-5.22	%
	2014	818	$	16.654	to	$	25.404	$	13,724	1.54	%	1.40	%	to	1.65	%	11.23	%	to	11.51	%
	2013	950	$	14.935	to	$	22.839	$	14,294	1.63	%	1.40	%	to	1.65	%	29.57	%	to	29.90	%
	2012	1,175	$	11.498	to	$	17.627	$	13,600	1.89	%	1.40	%	to	1.65	%	12.69	%	to	12.97	%
	2011	1,476	$	10.177	to	$	15.642	$	15,152	2.04	%	1.40	%	to	1.65	%	-0.63	%	to	-0.39	%

American Century VP Income & Growth Fund - Class I
	2015	119	$	11.269	to	$	22.404	$	1,379	2.10	%	1.40	%	to	1.65	%	-7.17	%	to	-6.93	%
	2014	123	$	12.108	to	$	24.134	$	1,537	2.03	%	1.40	%	to	1.65	%	10.66	%	to	10.94	%
	2013	136	$	10.914	to	$	21.808	$	1,509	2.21	%	1.40	%	to	1.65	%	33.60	%	to	33.93	%
	2012	149	$	8.149	to	$	16.324	$	1,232	2.07	%	1.40	%	to	1.65	%	12.86	%	to	13.14	%
	2011	175	$	7.203	to	$	14.464	$	1,282	1.55	%	1.40	%	to	1.65	%	1.43	%	to	1.68	%

American Century VP Ultra® Fund - Class I
	2015	39	$	20.988	to	$	21.662	$	840	0.62	%	1.40	%	to	1.65	%	4.53	%	to	4.79	%
	2014	72	$	20.078	to	$	20.671	$	1,490	0.38	%	1.40	%	to	1.65	%	8.20	%	to	8.46	%
	2013	85	$	18.557	to	$	19.058	$	1,621	0.55	%	1.40	%	to	1.65	%	34.83	%	to	35.17	%
	2012	111	$	13.763	to	$	14.099	$	1,562	0.00	%	1.40	%	to	1.65	%	12.05	%	to	12.33	%
	2011	137	$	12.283	to	$	12.551	$	1,721	0.00	%	1.40	%	to	1.65	%	-0.58	%	to	-0.34	%

American Century VP Mid Cap Value Fund - Class I
	2015	55	$	18.784	to	$	19.243	$	1,051	1.59	%	1.40	%	to	1.65	%	-3.04	%	to	-2.81	%
	2014	41	$	19.374	to	$	19.798	$	806	1.21	%	1.40	%	to	1.65	%	14.52	%	to	14.81	%
	2013	25	$	16.918	to	$	17.245	$	434	1.20	%	1.40	%	to	1.65	%	27.99	%	to	28.31	%
	2012	28	$	13.218	to	$	13.441	$	372	2.08	%	1.40	%	to	1.65	%	14.41	%	to	14.70	%
	2011	28	$	11.553	to	$	11.718	$	333	1.36	%	1.40	%	to	1.65	%	-2.31	%	to	-2.07	%

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

American Century VP Inflation Protection Fund - Class II
	2015	171	$	12.441	to	$	12.838	$	2,195	3.23	%	1.40	%	to	1.65	%	-4.06	%	to	-3.83	%
	2014	579	$	12.968	to	$	13.349	$	7,717	1.27	%	1.40	%	to	1.65	%	1.61	%	to	1.86	%
	2013	671	$	12.763	to	$	13.105	$	8,786	1.62	%	1.40	%	to	1.65	%	-9.98	%	to	-9.75	%
	2012	703	$	14.177	to	$	14.521	$	10,199	2.45	%	1.40	%	to	1.65	%	5.62	%	to	5.88	%
	2011	698	$	13.423	to	$	13.714	$	9,556	4.06	%	1.40	%	to	1.65	%	9.92	%	to	10.20	%

Dreyfus Appreciation Portfolio - Initial Shares
	2015	164	$	21.228	to	$	23.550	$	3,871	1.70	%	1.40	%	to	1.65	%	-4.07	%	to	-3.82	%
	2014	176	$	22.127	to	$	24.486	$	4,308	1.83	%	1.40	%	to	1.65	%	6.32	%	to	6.59	%
	2013	200	$	20.812	to	$	22.972	$	4,600	1.91	%	1.40	%	to	1.65	%	19.12	%	to	19.42	%
	2012	240	$	17.471	to	$	19.237	$	4,605	3.64	%	1.40	%	to	1.65	%	8.61	%	to	8.89	%
	2011	286	$	16.085	to	$	17.667	$	5,050	1.73	%	1.40	%	to	1.65	%	7.23	%	to	7.50	%

Dreyfus Opportunistic Small Cap Portfolio - Initial Shares
	2015	274	$	18.562	to	$	20.687	$	5,666	0.00	%	1.40	%	to	1.65	%	-3.88	%	to	-3.64	%
	2014	291	$	19.311	to	$	21.468	$	6,254	0.00	%	1.40	%	to	1.65	%	-0.07	%	to	0.18	%
	2013	294	$	19.324	to	$	21.429	$	6,309	0.00	%	1.40	%	to	1.65	%	46.12	%	to	46.48	%
	2012	323	$	13.225	to	$	14.629	$	4,730	0.00	%	1.40	%	to	1.65	%	18.58	%	to	18.88	%
	2011	363	$	11.153	to	$	12.305	$	4,466	0.41	%	1.40	%	to	1.65	%	-15.25	%	to	-15.04	%

Dreyfus Stock Index Fund, Inc. - Initial Shares
	2015	592	$	24.419	to	$	25.198	$	14,901	1.76	%	1.40	%	to	1.65	%	-0.55	%	to	-0.30	%
	2014	893	$	24.553	to	$	25.273	$	22,556	1.74	%	1.40	%	to	1.65	%	11.57	%	to	11.85	%
	2013	1,023	$	22.007	to	$	22.596	$	23,107	1.82	%	1.40	%	to	1.65	%	29.87	%	to	30.19	%
	2012	1,193	$	16.946	to	$	17.356	$	20,688	1.98	%	1.40	%	to	1.65	%	13.83	%	to	14.12	%
	2011	1,499	$	14.886	to	$	15.208	$	22,781	1.85	%	1.40	%	to	1.65	%	0.21	%	to	0.46	%

The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares
	2015	19	$	22.766	to	$	42.951	$	804	1.01	%	1.40	%	to	1.65	%	-4.78	%	to	-4.54	%
	2014	16	$	23.908	to	$	44.994	$	731	1.06	%	1.40	%	to	1.65	%	11.60	%	to	11.87	%
	2013	17	$	21.424	to	$	40.218	$	687	1.22	%	1.40	%	to	1.65	%	32.15	%	to	32.48	%
	2012	17	$	16.212	to	$	30.358	$	517	0.78	%	1.40	%	to	1.65	%	10.13	%	to	10.41	%
	2011	18	$	14.721	to	$	27.496	$	494	0.94	%	1.40	%	to	1.65	%	-0.75	%	to	-0.50	%

JPMorgan Insurance Trust U.S. Equity Portfolio - Class 1 Shares
	2015	58	$	25.061	to	$	26.324	$	1,533	1.06	%	1.40	%	to	1.65	%	-0.79	%	to	-0.54	%
	2014	46	$	25.259	to	$	26.467	$	1,209	0.93	%	1.40	%	to	1.65	%	12.04	%	to	12.32	%
	2013	49	$	22.545	to	$	23.564	$	1,148	1.45	%	1.40	%	to	1.65	%	33.99	%	to	34.32	%
	2012	67	$	16.826	to	$	17.543	$	1,176	1.49	%	1.40	%	to	1.65	%	15.71	%	to	16.00	%
	2011	74	$	14.542	to	$	15.123	$	1,118	1.20	%	1.40	%	to	1.65	%	-3.47	%	to	-3.23	%

JPMorgan Insurance Trust Small Cap Core Portfolio - Class 1 Shares
	2015	122	$	28.902	to	$	29.994	$	3,653	0.12	%	1.40	%	to	1.65	%	-6.83	%	to	-6.60	%
	2014	189	$	31.021	to	$	32.112	$	6,067	0.14	%	1.40	%	to	1.65	%	7.80	%	to	8.07	%
	2013	190	$	28.776	to	$	29.714	$	5,650	0.58	%	1.40	%	to	1.65	%	39.97	%	to	40.32	%
	2012	252	$	20.559	to	$	21.176	$	5,329	0.21	%	1.40	%	to	1.65	%	17.76	%	to	18.05	%
	2011	316	$	17.459	to	$	17.938	$	5,673	0.12	%	1.40	%	to	1.65	%	-6.33	%	to	-6.09	%

JPMorgan Insurance Trust Mid Cap Value Portfolio - Class 1 Shares
	2015	114	$	29.611	to	$	30.561	$	3,490	0.76	%	1.40	%	to	1.65	%	-4.25	%	to	-4.01	%
	2014	193	$	30.925	to	$	31.838	$	6,143	0.79	%	1.40	%	to	1.65	%	13.22	%	to	13.51	%
	2013	220	$	27.313	to	$	28.049	$	6,166	1.07	%	1.40	%	to	1.65	%	30.14	%	to	30.46	%
	2012	295	$	20.988	to	$	21.500	$	6,338	1.11	%	1.40	%	to	1.65	%	18.40	%	to	18.69	%
	2011	395	$	17.727	to	$	18.113	$	7,147	1.25	%	1.40	%	to	1.65	%	0.49	%	to	0.74	%

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

Franklin Global Real Estate VIP Fund - Class 2
	2015	98	$	18.992	to	$	21.801	$	2,131	2.63	%	1.40	%	to	1.65	%	-1.07	%	to	-0.83	%
	2014	174	$	19.198	to	$	21.982	$	3,816	0.45	%	1.40	%	to	1.65	%	13.13	%	to	13.41	%
	2013	213	$	16.970	to	$	19.383	$	4,112	4.46	%	1.40	%	to	1.65	%	0.64	%	to	0.90	%
	2012	214	$	16.861	to	$	19.211	$	4,111	0.00	%	1.40	%	to	1.65	%	25.32	%	to	25.63	%
	2011	269	$	13.455	to	$	15.291	$	4,103	7.81	%	1.40	%	to	1.65	%	-7.19	%	to	-6.96	%

Franklin Small-Mid Cap Growth VIP Fund - Class 2
	2015	92	$	11.858	to	$	25.793	$	1,093	0.00	%	1.40	%	to	1.65	%	-4.25	%	to	-4.01	%
	2014	86	$	12.353	to	$	26.938	$	1,068	0.00	%	1.40	%	to	1.65	%	5.71	%	to	5.97	%
	2013	86	$	11.657	to	$	25.482	$	1,006	0.00	%	1.40	%	to	1.65	%	35.90	%	to	36.24	%
	2012	92	$	8.556	to	$	18.751	$	788	0.00	%	1.40	%	to	1.65	%	9.03	%	to	9.30	%
	2011	101	$	7.828	to	$	17.199	$	799	0.00	%	1.40	%	to	1.65	%	-6.38	%	to	-6.15	%

Templeton Developing Markets VIP Fund - Class 2
	2015	170	$	16.540	to	$	21.891	$	2,836	1.83	%	1.40	%	to	1.65	%	-20.92	%	to	-20.72	%
	2014	225	$	20.862	to	$	27.682	$	4,710	1.49	%	1.40	%	to	1.65	%	-9.89	%	to	-9.67	%
	2013	224	$	23.095	to	$	30.720	$	5,197	1.97	%	1.40	%	to	1.65	%	-2.54	%	to	-2.30	%
	2012	247	$	23.638	to	$	31.522	$	5,866	1.42	%	1.40	%	to	1.65	%	11.30	%	to	11.58	%
	2011	274	$	21.185	to	$	28.322	$	5,823	0.97	%	1.40	%	to	1.65	%	-17.23	%	to	-17.02	%

Templeton Foreign VIP Fund - Class 2
	2015	124	$	19.216	to	$	27.106	$	3,289	2.39	%	1.40	%	to	1.65	%	-8.02	%	to	-7.79	%
	2014	231	$	20.892	to	$	29.397	$	6,711	1.85	%	1.40	%	to	1.65	%	-12.59	%	to	-12.37	%
	2013	226	$	23.900	to	$	33.545	$	7,492	2.37	%	1.40	%	to	1.65	%	20.96	%	to	21.26	%
	2012	281	$	19.759	to	$	27.664	$	7,677	3.15	%	1.40	%	to	1.65	%	16.29	%	to	16.58	%
	2011	336	$	16.991	to	$	23.729	$	7,884	1.72	%	1.40	%	to	1.65	%	-12.09	%	to	-11.87	%

Calamos Growth and Income Portfolio
	2015	622	$	20.268	to	$	23.862	$	14,785	2.70	%	1.40	%	to	1.65	%	-0.53	%	to	-0.28	%
	2014	645	$	20.377	to	$	23.930	$	15,391	0.98	%	1.40	%	to	1.65	%	5.09	%	to	5.36	%
	2013	693	$	19.389	to	$	22.713	$	15,707	1.09	%	1.40	%	to	1.65	%	14.49	%	to	14.78	%
	2012	745	$	16.935	to	$	19.788	$	14,689	2.02	%	1.40	%	to	1.65	%	6.65	%	to	6.91	%
	2011	741	$	15.879	to	$	18.509	$	13,657	1.50	%	1.40	%	to	1.65	%	-3.48	%	to	-3.23	%

Invesco V.I. American Franchise Fund - Series I Shares
	2015	54	$	6.935	to	$	20.565	$	392	0.00	%	1.40	%	to	1.65	%	3.29	%	to	3.55	%
	2014	59	$	6.698	to	$	19.910	$	416	0.04	%	1.40	%	to	1.65	%	6.66	%	to	6.94	%
	2013	63	$	6.263	to	$	18.666	$	396	0.41	%	1.40	%	to	1.65	%	37.84	%	to	38.19	%
	2012	78	$	4.532	to	$	13.541	$	354	0.00	%	1.40	%	to	1.65	%	10.72	%	to	10.99	%
	2011	88	$	4.083	to	$	12.230	$	363	0.14	%	1.40	%	to	1.65	%	-9.41	%	to	-9.19	%

Invesco V.I. Technology Fund - Series I Shares
	2015	127	$	4.377	to	$	25.816	$	565	0.00	%	1.40	%	to	1.65	%	5.07	%	to	5.34	%
	2014	122	$	4.155	to	$	24.571	$	516	0.00	%	1.40	%	to	1.65	%	9.23	%	to	9.49	%
	2013	109	$	3.795	to	$	22.494	$	420	0.00	%	1.40	%	to	1.65	%	23.10	%	to	23.40	%
	2012	132	$	3.075	to	$	18.273	$	412	0.00	%	1.40	%	to	1.65	%	9.45	%	to	9.72	%
	2011	137	$	2.802	to	$	16.696	$	395	0.19	%	1.40	%	to	1.65	%	-6.60	%	to	-6.37	%

Invesco V.I. Core Equity Fund - Series I Shares
	2015	52	$	-	to	$	10.552	$	547	1.10	%	1.40	%	to	1.65	%	-7.08	%	to	0.00	%
	2014	63	$	11.356	to	$	22.869	$	713	0.83	%	1.40	%	to	1.65	%	6.38	%	to	6.65	%
	2013	86	$	10.648	to	$	21.498	$	911	1.37	%	1.40	%	to	1.65	%	27.13	%	to	27.45	%
	2012	120	$	8.355	to	$	16.910	$	1,002	0.99	%	1.40	%	to	1.65	%	12.01	%	to	12.29	%
	2011	142	$	7.440	to	$	15.097	$	1,053	0.92	%	1.40	%	to	1.65	%	-1.69	%	to	-1.45	%

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

Columbia Variable Portfolio - Mid Cap Growth Fund (Class 2)
	2015	154	$	11.113	to	$	25.711	$	1,740	0.00	%	1.40	%	to	1.65	%	3.64	%	to	3.90	%
	2014	389	$	10.696	to	$	24.808	$	4,202	0.00	%	1.40	%	to	1.65	%	5.39	%	to	5.65	%
	2013	455	$	10.124	to	$	23.539	$	4,652	0.00	%	1.40	%	to	1.65	%	28.74	%	to	29.06	%
	2012	581	$	7.844	to	$	18.284	$	4,597	0.00	%	1.40	%	to	1.65	%	9.38	%	to	9.66	%
	2011	685	$	7.153	to	$	16.716	$	4,945	0.00	%	1.40	%	to	1.65	%	-6.83	%	to	-6.60	%

Columbia Variable Portfolio - Seligman Global Technology Fund (Class 2)
	2015	135	$	16.378	to	$	41.260	$	2,294	0.00	%	1.40	%	to	1.65	%	8.02	%	to	8.29	%
	2014	123	$	15.125	to	$	38.197	$	1,930	0.00	%	1.40	%	to	1.65	%	23.07	%	to	23.38	%
	2013	137	$	12.259	to	$	31.037	$	1,739	0.00	%	1.40	%	to	1.65	%	23.43	%	to	23.74	%
	2012	185	$	9.907	to	$	25.146	$	1,881	0.00	%	1.40	%	to	1.65	%	5.27	%	to	5.53	%
	2011	225	$	9.388	to	$	23.887	$	2,165	0.00	%	1.40	%	to	1.65	%	-6.07	%	to	-5.83	%

Columbia Variable Portfolio - Select Smaller-Cap Value Fund (Class 2)
	2015	35	$	26.350	to	$	27.196	$	964	0.00	%	1.40	%	to	1.65	%	-4.89	%	to	-4.65	%
	2014	41	$	27.703	to	$	28.521	$	1,169	0.00	%	1.40	%	to	1.65	%	4.05	%	to	4.31	%
	2013	45	$	26.624	to	$	27.342	$	1,226	0.00	%	1.40	%	to	1.65	%	45.80	%	to	46.16	%
	2012	64	$	18.261	to	$	18.706	$	1,194	0.00	%	1.40	%	to	1.65	%	15.78	%	to	16.07	%
	2011	83	$	15.772	to	$	16.117	$	1,343	0.00	%	1.40	%	to	1.65	%	-10.52	%	to	-10.29	%

Fidelity® VIP Contrafund® Portfolio - Service Class 2
	2015	150	$	14.554	to	$	14.873	$	2,223	0.63	%	1.40	%	to	1.65	%	-1.22	%	to	-0.98	%
	2014	291	$	14.734	to	$	15.020	$	4,369	0.73	%	1.40	%	to	1.65	%	9.83	%	to	10.10	%
	2013	326	$	13.416	to	$	13.642	$	4,445	0.74	%	1.40	%	to	1.65	%	28.81	%	to	29.13	%
	2012	452	$	10.415	to	$	10.564	$	4,769	1.01	%	1.40	%	to	1.65	%	14.23	%	to	14.52	%
	2011	568	$	9.118	to	$	9.225	$	5,238	0.80	%	1.40	%	to	1.65	%	-4.37	%	to	-4.13	%

Fidelity® VIP Freedom Income Portfolio - Service Class 2
	2015	376	$	11.438	to	$	11.689	$	4,396	2.06	%	1.40	%	to	1.65	%	-2.20	%	to	-1.95	%
	2014	44	$	11.695	to	$	11.922	$	526	1.13	%	1.40	%	to	1.65	%	1.85	%	to	2.10	%
	2013	65	$	11.483	to	$	11.676	$	761	1.48	%	1.40	%	to	1.65	%	3.49	%	to	3.75	%
	2012	56	$	11.096	to	$	11.255	$	634	1.09	%	1.40	%	to	1.65	%	4.51	%	to	4.77	%
	2011	63	$	10.617	to	$	10.742	$	681	1.43	%	1.40	%	to	1.65	%	-0.27	%	to	-0.02	%

Fidelity® VIP Freedom 2010 Portfolio - Service Class 2
	2015	53	$	12.225	to	$	12.492	$	665	1.49	%	1.40	%	to	1.65	%	-2.15	%	to	-1.92	%
	2014	58	$	12.494	to	$	12.736	$	731	1.54	%	1.40	%	to	1.65	%	2.50	%	to	2.76	%
	2013	41	$	12.189	to	$	12.394	$	504	1.58	%	1.40	%	to	1.65	%	11.34	%	to	11.62	%
	2012	50	$	10.947	to	$	11.103	$	550	1.39	%	1.40	%	to	1.65	%	9.75	%	to	10.02	%
	2011	66	$	9.975	to	$	10.092	$	663	1.85	%	1.40	%	to	1.65	%	-2.05	%	to	-1.81	%

Fidelity® VIP Freedom 2015 Portfolio - Service Class 2
	2015	105	$	12.179	to	$	12.446	$	1,306	1.60	%	1.40	%	to	1.65	%	-2.14	%	to	-1.89	%
	2014	105	$	12.445	to	$	12.686	$	1,330	1.31	%	1.40	%	to	1.65	%	2.75	%	to	3.00	%
	2013	115	$	12.112	to	$	12.316	$	1,417	1.47	%	1.40	%	to	1.65	%	12.24	%	to	12.52	%
	2012	120	$	10.792	to	$	10.946	$	1,317	1.46	%	1.40	%	to	1.65	%	10.06	%	to	10.34	%
	2011	148	$	9.805	to	$	9.920	$	1,466	1.87	%	1.40	%	to	1.65	%	-2.14	%	to	-1.90	%

Fidelity® VIP Freedom 2020 Portfolio - Service Class 2
	2015	764	$	11.970	to	$	12.232	$	9,343	1.69	%	1.40	%	to	1.65	%	-2.09	%	to	-1.85	%
	2014	602	$	12.225	to	$	12.462	$	7,498	1.37	%	1.40	%	to	1.65	%	2.88	%	to	3.15	%
	2013	657	$	11.883	to	$	12.082	$	7,933	1.53	%	1.40	%	to	1.65	%	13.74	%	to	14.03	%
	2012	709	$	10.447	to	$	10.596	$	7,506	1.78	%	1.40	%	to	1.65	%	11.21	%	to	11.49	%
	2011	774	$	9.394	to	$	9.504	$	7,357	1.82	%	1.40	%	to	1.65	%	-2.85	%	to	-2.61	%

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

Fidelity® VIP Freedom 2025 Portfolio - Service Class 2
	2015	60	$	12.429	to	$	12.701	$	755	1.66	%	1.40	%	to	1.65	%	-2.13	%	to	-1.89	%
	2014	56	$	12.699	to	$	12.945	$	726	1.67	%	1.40	%	to	1.65	%	3.14	%	to	3.40	%
	2013	43	$	12.313	to	$	12.520	$	535	1.96	%	1.40	%	to	1.65	%	17.76	%	to	18.05	%
	2012	31	$	10.456	to	$	10.606	$	329	1.49	%	1.40	%	to	1.65	%	12.91	%	to	13.19	%
	2011	34	$	9.261	to	$	9.370	$	322	1.99	%	1.40	%	to	1.65	%	-3.94	%	to	-3.70	%

Fidelity® VIP Freedom 2030 Portfolio - Service Class 2
	2015	178	$	12.029	to	$	12.293	$	2,193	1.51	%	1.40	%	to	1.65	%	-2.16	%	to	-1.91	%
	2014	156	$	12.294	to	$	12.532	$	1,958	1.43	%	1.40	%	to	1.65	%	3.03	%	to	3.28	%
	2013	144	$	11.933	to	$	12.134	$	1,743	1.54	%	1.40	%	to	1.65	%	19.42	%	to	19.72	%
	2012	138	$	9.992	to	$	10.135	$	1,396	1.99	%	1.40	%	to	1.65	%	13.29	%	to	13.57	%
	2011	131	$	8.820	to	$	8.924	$	1,169	1.92	%	1.40	%	to	1.65	%	-4.42	%	to	-4.18	%

Fidelity® VIP Freedom 2035 Portfolio - Service Class 2
	2015	39	$	-	to	$	14.442	$	558	1.48	%	1.40	%	to	1.65	%	-1.90	%	to	0.00	%
	2014	29	$	14.550	to	$	14.721	$	430	2.21	%	1.40	%	to	1.65	%	2.94	%	to	3.20	%
	2013	14	$	14.135	to	$	14.265	$	194	1.58	%	1.40	%	to	1.65	%	22.46	%	to	22.77	%
	2012	12	$	11.542	to	$	11.620	$	142	2.33	%	1.40	%	to	1.65	%	14.69	%	to	14.98	%
	2011	11	$	10.064	to	$	10.106	$	109	1.97	%	1.40	%	to	1.65	%	-5.81	%	to	-5.57	%

Fidelity® VIP Freedom 2040 Portfolio - Service Class 2
	2015	44	$	-	to	$	14.512	$	632	1.44	%	1.40	%	to	1.65	%	-1.87	%	to	0.00	%
	2014	34	$	14.617	to	$	14.789	$	505	1.93	%	1.40	%	to	1.65	%	2.98	%	to	3.24	%
	2013	15	$	14.194	to	$	14.325	$	209	1.72	%	1.40	%	to	1.65	%	22.94	%	to	23.25	%
	2012	5	$	11.545	to	$	11.622	$	58	2.21	%	1.40	%	to	1.65	%	14.73	%	to	15.01	%
	2011	3	$	10.063	to	$	10.105	$	34	2.29	%	1.40	%	to	1.65	%	-5.88	%	to	-5.64	%

Fidelity® VIP Freedom 2045 Portfolio - Service Class 2
	2015	9	$	-	to	$	14.594	$	133	1.77	%	1.40	%	to	1.65	%	-1.91	%	to	0.00	%
	2014	7	$	14.706	to	$	14.878	$	105	1.40	%	1.40	%	to	1.65	%	2.97	%	to	3.22	%
	2013	6	$	14.282	to	$	14.414	$	90	1.44	%	1.40	%	to	1.65	%	23.71	%	to	24.02	%
	2012	8	$	11.545	to	$	11.623	$	89	2.61	%	1.40	%	to	1.65	%	15.09	%	to	15.38	%
	2011	5	$	10.031	to	$	10.073	$	50	2.85	%	1.40	%	to	1.65	%	-6.20	%	to	-5.96	%

Fidelity® VIP Freedom 2050 Portfolio - Service Class 2
	2015	21	$	14.414	to	$	14.619	$	307	1.53	%	1.40	%	to	1.65	%	-2.20	%	to	-1.96	%
	2014	19	$	14.739	to	$	14.912	$	281	1.43	%	1.40	%	to	1.65	%	3.00	%	to	3.26	%
	2013	15	$	14.309	to	$	14.441	$	218	1.52	%	1.40	%	to	1.65	%	24.07	%	to	24.38	%
	2012	9	$	11.534	to	$	11.611	$	109	2.13	%	1.40	%	to	1.65	%	15.45	%	to	15.74	%
	2011	8	$	9.991	to	$	10.032	$	77	3.38	%	1.40	%	to	1.65	%	-6.70	%	to	-6.47	%

TOPS® Managed Risk Balanced ETF Portfolio - Class 2 Shares^d
	2015	1,334	$	10.287	to	$	10.381	$	13,848	1.42	%	1.40	%	to	1.65	%	-6.06	%	to	-5.83	%
	2014	737	$	10.950	to	$	11.024	$	8,124	1.03	%	1.40	%	to	1.65	%	1.37	%	to	1.63	%
	2013	649	$	10.802	to	$	10.847	$	7,037	0.84	%	1.40	%	to	1.65	%	6.16	%	to	6.43	%
	2012	470	$	10.175	to	$	10.192	$	4,789	0.06	%	1.40	%	to	1.65	%	1.75	%	to	1.92	%
	2011	-		-			-		-	-		-			-		-			-

TOPS® Managed Risk Moderate Growth ETF Portfolio - Class 2 Shares^d
	2015	3,272	$	10.470	to	$	10.567	$	34,570	1.60	%	1.40	%	to	1.65	%	-7.89	%	to	-7.66	%
	2014	1,463	$	11.367	to	$	11.443	$	16,740	1.07	%	1.40	%	to	1.65	%	1.12	%	to	1.38	%
	2013	1,207	$	11.241	to	$	11.288	$	13,621	0.86	%	1.40	%	to	1.65	%	10.55	%	to	10.83	%
	2012	645	$	10.168	to	$	10.185	$	6,571	0.13	%	1.40	%	to	1.65	%	1.68	%	to	1.85	%
	2011	-		-			-		-	-		-			-		-			-

Kansas City Life Variable Annuity Separate Account

Notes to Financial Statements (continued)

		Units (000's)	Unit Fair Value Lowest to Highest					Net Assets (000's)		Investment ^a Income Ratio		Expense Ratio ^b Lowest to Highest					Total Return ^c Lowest to Highest

TOPS® Managed Risk Growth ETF Portfolio - Class 2 Shares^d
	2015	5,780	$	10.295	to	$	10.390	$	60,048	1.60	%	1.40	%	to	1.65	%	-10.64	%	to	-10.41	%
	2014	4,135	$	11.520	to	$	11.597	$	47,953	0.98	%	1.40	%	to	1.65	%	-0.34	%	to	-0.10	%
	2013	2,686	$	11.560	to	$	11.609	$	31,176	1.06	%	1.40	%	to	1.65	%	14.06	%	to	14.34	%
	2012	1,234	$	10.135	to	$	10.152	$	12,524	0.08	%	1.40	%	to	1.65	%	1.35	%	to	1.52	%
	2011	-		-			-		-	-		-			-		-			-

^a The investment income ratio represents the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average daily net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

^bThese amounts represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund have been excluded.

^c These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. As the total return is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract total returns are not within the ranges presented.

^d This portfolio was added effective May 1, 2012.

Report of Independent Registered Public Accounting Firm

The Contract Owners

Kansas City Life Variable Annuity Separate Account

and

The Board of Directors and Stockholders

Kansas City Life Insurance Company:

We have audited the accompanying statement of net assets of Kansas City Life Variable Annuity Separate Account (the Account), including individual subaccounts as listed in note 1 to the financial statements, as of December 31, 2015, and the related statements of operations for the year or period then ended, the statements of changes in net assets for each of the years or periods in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the subaccounts of Kansas City Life Variable Annuity Separate Account as of December 31, 2015, the results of their operations, the changes in their net assets, and the financial highlights for each of the periods stated above, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Kansas City, Missouri

April 22, 2016

Street Address:	Send correspondence to:
3520 Broadway	Variable Administration
Kansas City, Missouri 64111-2565	P.O. Box 219364
Telephone (816) 753-7000	Kansas City, Missouri 64121-9364
	Telephone (800) 616-3670

DEFINITIONS	1
HIGHLIGHTS	3
THE CONTRACT	3
CHARGES AND DEDUCTIONS	5
ANNUITY PROVISIONS	6
FEDERAL TAX STATUS	6
FEE TABLE	7
OWNER TRANSACTION EXPENSES	7
PERIODIC CHARGES OTHER THAN PORTFOLIO EXPENSES	7
RANGE OF PORTFOLIO OPERATING EXPENSES	8
ANNUAL PORTFOLIO OPERATING EXPENSES	8
EXAMPLE OF CHARGES	15
CONDENSED FINANCIAL INFORMATION	17
KANSAS CITY LIFE, THE VARIABLE ACCOUNT AND THE FUNDS	17
KANSAS CITY LIFE INSURANCE COMPANY	17
KANSAS CITY LIFE VARIABLE ANNUITY SEPARATE ACCOUNT	17
THE FUNDS	17
RESOLVING MATERIAL CONFLICTS	24
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS	24
VOTING RIGHTS	24
DESCRIPTION OF THE CONTRACT	25
PURCHASING A CONTRACT	25
REPLACEMENT OF CONTRACTS	25
FREE-LOOK PERIOD	25
ALLOCATION OF PREMIUM	26
DETERMINATION OF CONTRACT VALUE	26
VARIABLE ACCOUNT VALUE	26
TRANSFER PRIVILEGE	28
DOLLAR COST AVERAGING PLAN	30
PORTFOLIO REBALANCING PLAN	30
PARTIAL AND FULL CASH SURRENDERS	30
CONTRACT TERMINATION	32
CONTRACT LOANS	32
DEATH BENEFIT BEFORE MATURITY DATE	33
PROCEEDS ON MATURITY DATE	35
PAYMENTS	36
UNCLAIMED PROPERTY LAWS	36
MODIFICATIONS	37
REPORTS TO CONTRACT OWNER	37
TELEPHONE, FACSIMILE, ELECTRONIC MAIL, AND INTERNET AUTHORIZATIONS	37
OPTIONAL RIDER	38
FIVE PLUS^SM GUARANTEED MINIMUM WITHDRAWAL BENEFIT	38
THE FIXED ACCOUNT	48
GUARANTEED AND CURRENT INTEREST RATES	48
CALCULATION OF FIXED ACCOUNT VALUE	49
TRANSFERS FROM FIXED ACCOUNT	49
DELAY OF PAYMENT	49
CHARGES AND DEDUCTIONS	50
SURRENDER CHARGE	50

Annuitant	The person on whose life the Contract's annuity benefit is based.

Beneficiary	The person you designate to receive any Proceeds payable under the Contract at your death or the death of the Annuitant.

Contract Anniversary	The same day and month as the Contract Date each year that the Contract remains in force.

Cash Surrender Value	The Contract Value less any applicable surrender charge, loan balance and premium taxes payable.

Contract Date	The date from which Contract months, Contract Years, and Contract Anniversaries are measured.

Contract Value	The sum of the Variable Account Value and the Fixed Account Value.

Contract Year	Any period of twelve months starting with the Contract Date or any Contract Anniversary.

Fixed Account	An account that is one option we offer for allocation of your premium. It is part of our general account and is not part of, or dependent on, the investment performance of the Variable Account.

Fixed Account Value	Measure of value accumulating in the Fixed Account.

Guaranteed Minimum Death Benefit Option	This Contract provides for a Base Guaranteed Minimum Death Benefit. In addition, there are two enhanced death benefit options available under the Contract. The two options provide different levels of death benefit guarantees. The two options have different issue requirements and expense charges associated with them. These Guaranteed Minimum Death Benefit Options are available only in the states where we have received regulatory approval.

Home Office	When the term "Home Office" is used in this Prospectus in connection with transactions under the Contract, it means our Variable Administration office. Transaction requests and other types of Written Notices should be sent to P.O. Box 219364, Kansas City, Missouri 64121-9364. The telephone number at our Variable Administration office is 800-616-3670.

Issue Age	The Annuitant's age on his/her last birthday as of or on the Contract Date.

Life Payment Option	A payment option based upon the life of the Annuitant.

Maturity Date	The date when the Contract terminates and we either pay the Proceeds under a payment option or pay you the Cash Surrender Value in a lump sum. The latest Maturity Date is the later of the Contract Anniversary following the Annuitant's 85th birthday and the tenth Contract Anniversary. (Certain states and Qualified Contracts may place additional restrictions on the maximum Maturity Date.)

Monthly Anniversary Day	The same day of each month as the Contract Date, or the last day of the month for those months not having such a day.

Non-Life Payment Option	A payment option that is not based upon the life of the Annuitant.

Non-Qualified Contract	A Contract that is not a "Qualified Contract."

Owner	The person entitled to exercise all rights and privileges provided in the Contract. The terms "you" and "your" refer to the Owner.

Proceeds	The total amount we are obligated to pay under the terms of the Contract.

Qualified Contract	A Contract issued in connection with plans that qualify for special federal income tax treatment under sections 401, 403, 408 or 408A of the Internal Revenue Code of 1986, as amended.

Redetermination Dates	The first Contract Anniversary and each subsequent Contract Anniversary, upon which the guaranteed interest rate for the Fixed Account will be redetermined. Redetermination Dates only apply to Contracts issued on or after May 31, 2011, if approved in your state.

Subaccount	The divisions of the Variable Account. The assets of each Subaccount are invested in a Portfolio of a designated Fund.

Valuation Day	Each day the New York Stock Exchange is open for business. Currently, the New York Stock Exchange is closed on the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The New York Stock Exchange and Kansas City Life recognize holidays that fall on a Saturday on the previous Friday. Kansas City Life will recognize holidays that fall on a Sunday on the following Monday.

Valuation Period	The interval of time beginning at the close of normal trading on the New York Stock Exchange on one Valuation Day and ending at the close of normal trading on the New York Stock Exchange on the next Valuation Day. Currently, the close of normal trading is 3:00 p.m. Central Time. The term "Valuation Period" is used in this Prospectus to specify, among other things, when a transaction order or request is deemed to be received by us at our Variable Administration office.

Variable Account Value	The Variable Account Value is equal to the sum of all Subaccount values of a Contract.

Written Notice/Written Request	A Written Notice or Written Request in a form satisfactory to us that is signed by the Owner and received at the Home Office. Under certain circumstances as described in this Prospectus, Written Notice/Written Request may be satisfied by telephone, facsimile, electronic mail and Internet.

Annual Administration Fee	$30 per Contract Year²
Loan Interest Charge	5.00%³
Variable Account Annual Expenses (as a % of average annual Variable Account Value during the accumulation period)
Under Standard Death Benefit: Mortality and Expense Risk Charge Asset-Based Administration Charge Total Variable Account Annual Expenses	1.25% 0.15% 1.40%
Optional Rider Charges
Guaranteed Minimum Death Benefit Expense Charge (as a percentage of average annual Variable Account Value)
Base Guaranteed Minimum Death Benefit Option	0.00%
Annual Ratchet Guaranteed Minimum Death Benefit Option (optional)	0.20%
Enhanced Combination Guaranteed Minimum Death Benefit Option (optional)	0.35%
FIVE Plus^SM Guaranteed Minimum Withdrawal Benefit	1.20% multiplied by Guaranteed Withdrawal Balance⁴ (0.10% monthly)

ADMINISTRATIVE CHARGES	51
MORTALITY AND EXPENSE RISK CHARGE	51
MONTHLY GUARANTEED MINIMUM DEATH BENEFIT EXPENSE CHARGE	51
GUARANTEED MINIMUM WITHDRAWAL BENEFIT CHARGE	52
PREMIUM TAXES	52
REDUCED CHARGES FOR ELIGIBLE GROUPS	52
OTHER TAXES	52
LOAN INTEREST CHARGE	52
INVESTMENT ADVISORY FEES AND OTHER EXPENSES OF THE FUNDS	52
PAYMENT OPTIONS	53
ELECTION OF OPTIONS	53
DESCRIPTION OF OPTIONS	53
YIELDS AND TOTAL RETURNS	54
YIELDS	54
TOTAL RETURNS	54
FEDERAL TAX STATUS	55
INTRODUCTION	55
TAXATION OF NON-QUALIFIED CONTRACTS	55
TAXATION OF QUALIFIED CONTRACTS	56
FEDERAL ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAXES	58
ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS	58
ANNUITY PURCHASES BY RESIDENTS OF PUERTO RICO	58
POSSIBLE TAX LAW CHANGES	58
FOREIGN TAX CREDITS	58
SALE OF THE CONTRACTS	58
LEGAL PROCEEDINGS	59
BUSINESS DISRUPTION AND CYBER SECURITY RISKS	59
COMPANY HOLIDAYS	60
CHANGE OF ADDRESS NOTIFICATION	60
FINANCIAL STATEMENTS	60
APPENDIX A - CONDENSED FINANCIAL INFORMATION	61
APPENDIX B - GMWB RIDER EXAMPLES	71
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS	78

Sales Load on Premium Payment	None
Maximum Surrender Charge (as a % of the premium payment withdrawn or Annuitized under a Non-Life Payment Option¹)	8%
Transfer Processing Fee	After the first 6 transfers in a Contract Year, we will charge $25 for each additional transfer during that Contract Year. There is no fee for the first 6 transfers during a Contract Year.

	Minimum		Maximum
Total Annual Portfolio Operating Expenses (total of all expenses that are deducted from Portfolio assets, including management fees, distribution or service fees (12b-1 fees), and other expenses-before any contractual waiver of fees and expenses)	0.27%		1.58%⁶

Portfolio	Management Fees	12b-1/ Service Fees	Other Expenses	Acquired Fund Fees and Expenses	Total Portfolio Annual Operating Expenses	Contractual Fee Waiver or Expense Reimbursement	Total Portfolio Annual Operating Expenses After Reimbursement
AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
Invesco V.I. American Franchise Fund – Series I Shares	0.67%	NA	0.29%	NA	0.96%	NA	NA
Invesco V.I. Core Equity Fund – Series I Shares	0.61%	NA	0.29%	0.01%	0.91%	0.01%⁸	0.90%
Invesco V.I. Technology Fund – Series I Shares	0.75%	NA	0.40%	NA	1.15%	NA	NA

1 year	3 years	5 years	10 years
$1,176.03	$2,001.92	$2,741.37	$4,608.83

If:	Then the GMWB rider:
the Covered Person is no longer alive	· Does not continue with respect to the Lifetime Income Amount, but continues with respect to the Guaranteed Withdrawal Amount if the death benefit or the Guaranteed Withdrawal Balance is greater than zero. We will automatically step-up the Guaranteed Withdrawal Balance to equal the death benefit on the date it is determined, if the death benefit on that date is greater than the Guaranteed Withdrawal Balance. · Enters the Settlement Phase if a withdrawal would reduce the Contract Value to zero, and the Guaranteed Withdrawal Balance is still greater than zero. · Continues to impose the GMWB rider charge. · Continues to be eligible for any remaining bonuses and step-ups. We will permit the spouse to opt out of the initial death benefit step-up, if any, and any future step-ups if we would increase the rate of the GMWB rider charge at that time.
the Covered Person is alive (e.g. if the Beneficiary is the Covered Person)	· Continues with respect to the Lifetime Income Amount for the Beneficiary. If the Lifetime Income Amount has not been determined prior to the payment of the death benefit, we will determine the initial Lifetime Income Amount on the first Contract Anniversary after the Covered Person has reached age 65. · Continues with respect to the Guaranteed Withdrawal Amount if the death benefit or the Guaranteed Withdrawal Balance is greater than zero. We will automatically step-up the Guaranteed Withdrawal Balance to equal the death benefit on the date it is determined, if the death benefit on that date is greater than the Guaranteed Withdrawal Balance. · Enters the Settlement Phase if a withdrawal would reduce the Contract Value to zero, and either the Lifetime Income Amount or the Guaranteed Withdrawal Balance is still greater than zero. · Continues to impose the GMWB rider charge. · Continues to be eligible for any remaining bonuses and step-ups. We will permit the spouse to opt out of the initial death benefit step-up, if any, and any future step-ups if we would increase the rate of the GMWB rider charge at that time.

During Contract Year
Year	1	2	3	4	5	6	7	8	9+
Percentage	8%	8%	7%	6%	5%	4%	3%	2%	0%

	No. of Units as of	Unit Value as of		No. of Units as of	Unit Value as of		No. of Units as of	Unit Value as of		No. of Units as of	Unit Value as of
	12-31-15	12-31-15	1-1-15	12-31-14	12-31-14	1-1-14	12-31-13	12-31-13	1-1-13	12-31-12	12-31-12	1-1-12
AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
Invesco V.I. American Franchise Fund – Series I Shares	52,180	6.94	6.69	57,700	6.70	6.22	62,456	6.26	4.65	77,357	4.53	4.16
Invesco V.I. Core Equity Fund – Series I Shares	51,799	10.55	11.32	62,781	11.36	10.53	85,564	10.65	8.51	119,951	8.36	7.59
Invesco V.I. Technology Fund – Series I Shares	126,843	4.38	4.16	121,338	4.16	3.76	108,561	3.79	3.17	131,681	3.08	2.84
American Century Variable Portfolios, Inc.
VP Capital Appreciation Fund – Class I	151,882	28.21	27.98	147,784	28.07	26.04	156,625	26.32	20.86	194,416	20.39	18.00
VP Income & Growth Fund – Class I	116,302	11.27	12.11	119,082	12.11	10.81	132,964	10.91	8.34	146,948	8.15	7.31
VP International Fund – Class I	246,191	23.66	23.74	441,355	23.82	25.25	466,466	25.56	21.58	554,210	21.18	18.18
VP Mid Cap Value Fund – Class I	52,891	19.24	19.80	38,758	19.80	17.07	23,807	17.25	13.73	27,252	13.44	11.83
VP Ultra^® Fund – Class I	38,217	21.66	20.62	71,270	20.67	18.90	84,189	19.06	14.45	109,794	14.10	12.76
VP Value Fund – Class I	395,939	15.78	16.67	806,660	16.65	14.79	937,507	14.93	11.76	1,159,357	11.50	10.33
American Century Variable Portfolios II, Inc.
VP Inflation Protection Fund – Class II	157,164	12.84	13.43	555,633	13.35	13.14	642,898	13.10	14.46	676,724	14.52	13.70

Contract Year	Guaranteed Withdrawal Amount	Lifetime Income Amount	Withdrawal Taken	Bonus	Guaranteed Withdrawal Balance
1	$5,000^A	N/A	$0	$5,000^B	$100,000^A
2	5,250	N/A	0	5,000	105,000^C
3	5,500	N/A	0	5,000	110,000
4	5,750	N/A	0	5,000	115,000
5	6,000	N/A	0	5,000	120,000
6	6,250	N/A	0	5,000	125,000
7	6,500	N/A	0	5,000	130,000
8	6,750	N/A	0	5,000	135,000
9	7,000	N/A	0	5,000	140,000
10	7,250	N/A	0	5,000	145,000
11	7,500	$7,500^D	7,500	0	150,000
12	7,500	7,500	7,500	0	142,500
13	7,500	7,500	7,500	0	135,000
14	7,500	7,500	7,500	0	127,500
15	7,500	7,500	7,500	0	120,000
20	7,500	7,500	7,500	0	82,500
25	7,500	7,500	7,500	0	45,000
30	7,500	7,500	7,500	0	7,500
31	0	7,500	7,500	0	0

ADDITIONAL CONTRACT PROVISIONS		1
	THE CONTRACT	1
	INCONTESTABILITY	1
	MISSTATEMENT OF AGE OR SEX	1
	NON-PARTICIPATION	1
	TAX STATUS OF THE CONTRACTS	1
CONTROL OF THE CONTRACT		2
	OWNERSHIP	2
	CHANGE OF OWNERSHIP	2
	ASSIGNMENT	2
	BENEFICIARY	2
	SIMULTANEOUS DEATH OF BENEFICIARY AND ANNUITANT	2
	SALE OF THE CONTRACTS	3
CALCULATION OF YIELDS AND TOTAL RETURNS		3
	FEDERATED GOVERNMENT MONEY FUND II SUBACCOUNT YIELDS	3
	OTHER SUBACCOUNT YIELDS	4
	STANDARD SUBACCOUNT AVERAGE ANNUAL TOTAL RETURNS	5
	OTHER TOTAL RETURNS	5
	EFFECT OF THE ANNUAL ADMINISTRATION FEE ON PERFORMANCE DATA	5
SAFEKEEPING OF ACCOUNT ASSETS		5
STATE REGULATION		6
RECORDS AND REPORTS		6
LEGAL MATTERS		6
EXPERTS		6
OTHER INFORMATION		6
FINANCIAL STATEMENTS		6

Pre-Effective Amendment No.

Post-Effective Amendment No. 7	X

To:	Kansas City Life Insurance Company
	Variable Administration Department
	P.O. Box 219364
	Kansas City, Missouri 64121-9364

Name:___________________________________________________________________________________________

Address:_________________________________________________________________________________________

City:_________________________________________	State:_________________________	Zip:_____________

Signature of Requestor:__________________________________________________________		Date:____________

Fiscal Year	Aggregate Amount of Commissions Paid to Sunset Financial*	Aggregate Amount of Commissions Retained by Sunset Financial After Payments to its Registered Persons and Other Broker-Dealers
2013	$1,853,606.00	$135,891.00
2014	$2,358,409.00	$106,643.00
2015	$135,174.86	$135,174.86

Name and Principal Business Address*	Position and Offices with Depositor
Kevin G. Barth	Director
R. Philip Bixby	President, CEO, Chairman of the Board and Director
Walter E. Bixby	Executive Vice President, Vice Chairman of the Board and Director
Nancy Bixby Hudson	Director
William R. Blessing	Director
Michael Braude	Director
James T. Carr	Director
John C. Cozad	Director
Richard L. Finn	Director
David S. Kimmel	Director
Tracy W. Knapp	Senior Vice President, Finance, CFO and Director
Paul J. Knoblauch	Assistant Vice President, Treasurer & Asst. Controller
Donald E. Krebs	Senior Vice President, Sales and Marketing
David A. Laird	Vice President and Controller
A. Craig Mason Jr.	Senior Vice President, General Counsel, Secretary and Director
Cecil R. Miller	Director
Mark A. Milton	Senior Vice President, Actuary and Director
Stephen E. Ropp	Senior Vice President, Operations
William A. Schalekamp	Director

Name	Jurisdiction	Percent of Voting Securities Owned
Sunset Life Insurance Company of America	Missouri	Ownership of all voting securities by depositor
Sunset Financial Services, Inc.	Washington	Ownership of all voting securities by Sunset Insurance Company of America
KCL Service Company	Missouri	Ownership of all voting securities by depositor
Old American Insurance Company	Missouri	Ownership of all voting securities by depositor
Kansas City Life Financial Group, Inc.	Missouri	Ownership of all voting securities by depositor

Name and Principal Business Address*	Positions and Offices with Sunset Financial Services, Inc.
R. Philip Bixby	Chairman of the Board and Director
Walter E. Bixby	Director
Janice L. Brandt	Assistant Vice President
Susanna J. Denney	Vice President
Tracy W. Knapp	Director
Donald E. Krebs	Director
David A. Laird	Treasurer
A. Craig Mason Jr.	Secretary and Director
Mark A. Milton	Director
Kelly T. Ullom	Executive Officer/Vice President

(1) Name of Principal Underwriter	(2) Net Underwriting Discounts and Commissions	(3) Compensation on Redemption	(4) Brokerage Commissions	(5) Other Compensation
Sunset Financial Services, Inc.	$135,174.86	None	N/A	N/A

	Kansas City Life Variable Annuity Separate Account
	(Registrant)


(SEAL)	By: /s/ R. Philip Bixby R. Philip Bixby, President, CEO, Chairman of the Board and Director


	Kansas City Life Insurance Company
	(Depositor)


Attest: /s/ A. Craig Mason Jr. A. Craig Mason Jr., Secretary and Director	By: /s/ R. Philip Bixby R. Philip Bixby, President, CEO, Chairman of the Board and Director

Signature	Title	Date

/s/ R. Philip Bixby R. Philip Bixby	President, CEO, Chairman of the Board and Director (Principal Executive Officer)	April 25,2016

/s/ Tracy W. Knapp Tracy W. Knapp	Senior Vice President, Finance, CFO and Director (Principal Financial Officer)	April 25,2016

/s/ David A. Laird David A. Laird	Vice President and Controller (Principal Accounting Officer)	April 25,2016

/s/ Walter E. Bixby Walter E. Bixby	Vice Chairman of the Board and Director	April 25,2016

/s/ A. Craig Mason Jr. A. Craig Mason Jr.	Secretary and Director	April 25,2016

/s/ Kevin G. Barth Kevin G. Barth	Director	April 25,2016

/s/ Nancy Bixby Hudson Nancy Bixby Hudson	Director	April 25,2016

/s/ William R. Blessing William R. Blessing	Director	April 25,2016

/s/ Michael Braude Michael Braude	Director	April 25,2016

/s/ James T. Carr James T. Carr	Director	April 25,2016

/s/ John C. Cozad John C. Cozad	Director	April 25,2016

/s/ Richard L. Finn Richard L. Finn	Director	April 25,2016

/s/ David S. Kimmel David S. Kimmel	Director	April 25,2016

/s/ Cecil R. Miller Cecil R. Miller	Director	April 25,2016

/s/ Mark A. Milton Mark A. Milton	Director	April 25,2016

/s/ William A. Schalekamp William A. Schalekamp	Director	April 25,2016