12/31/96 FORM 10-K/A


ITEM 7.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations

Financial Condition

The Corporation is primarily engaged in the life insurance business which 
historically has provided a positive cash flow.  By statute, the Life Company 
is required to invest in high quality securities which provide ample 
protection for its policyholders.  Policy liabilities of the Life Company are 
predominately long-term in nature and are supported by long and 
intermediate-term fixed maturity investments and mortgage loans on real 
estate.

In May 1993 the Financial Accounting Standards Boards (FASB) issued Statement 
of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain 
Investments in Debt and Equity Securities," effective for fiscal years 
beginning after December 15, 1993.  Under the new rules, debt securities that 
the Corporation has both the positive intent and ability to hold-to-maturity 
are carried at amortized cost.  Debt securities that the Corporation does not 
have the positive intent or ability to hold-to-maturity and all marketable 
equity securities are classified as available-for-sale or trading and carried 
at fair value.  Unrealized holding gains and losses on securities classified 
as available-for-sale are carried as a separate component of stockholders' 
equity.  Unrealized holding gains and losses on securities classified as 
trading are reported in earnings.  The Corporation adopted the provisions of 
SFAS No. 115 as of January 1, 1994 and placed its entire fixed maturity and 
equity securities portfolio in the available-for-sale classification.  The 
Corporation believes it has the ability to hold all fixed income investments 
until maturity; however, securities may be sold to take advantage of 
investment opportunities generated by changing interest rates, prepayments or 
income tax considerations, as a part of the Corporation's asset/liability 
strategy, or for similar factors.  Due to increasing interest rates during 
1996, a $15.1 million net unrealized loss (net of deferred income tax benefit) 
on fixed maturities was charged against stockholders' equity at December 31, 
1996.  Declining interest rates during 1995 produced a $50.7 million net 
unrealized gain (net of deferred income taxes) which was credited to 
stockholders' equity at December 31, 1995.

In May 1993, the FASB issued SFAS No. 114, "Accounting for Creditors for 
Impairment of a Loan".  SFAS No. 114 requires that impaired loans be valued at 
the present value of expected future cash flows discounted at the loan's 
effective interest rate or, as a practical expedient, at the loan's observable 
market price, or the fair market value of the collateral if the loan is 
collateral dependent.  The Corporation adopted the provisions of SFAS No. 114 
as of January 1, 1995.  Adoption of this Standard does not have any effect on 
the financial condition or results of operations of the Corporation.

Assets totaled $1.4 billion at December 31, 1996 with investment assets 
totaling $1.3 billion or 90% of total assets.  Growth in investment assets for 
1996 was affected by reduced market value adjustments to fixed maturities as a 
result of increasing interest rates during 1996 and the use of internal funds 
to repurchase $9.3 million of the Corporation's common stock.

The capital resources of the Corporation are dependent upon the ability of its 
subsidiaries to pay dividends to the Corporation.  As disclosed in Note 7 of 
Notes to the Consolidated Financial Statements, $157 million of consolidated 
stockholders' equity represents net assets of the Life Company that cannot be 
transferred in the form of dividends, loans or advances to the Corporation.  
These restrictions on the Life Company have not affected the ability of the 
Corporation to meet its financial obligations in the past, nor does management 
expect them to in the future.  For the year ended December 31, 1996, the Life 
Company could pay the Corporation dividends in the amount of $29 million 
without prior approval by state regulators.

The Life Company continually matches the investment portfolio to the cash flow 
demands of the types of insurance being written and maintains adequate cash 
and short-term investments to meet current cash requirements for policy loans, 
mortgage loan investment commitments, and voluntary policy terminations.  Cash 
and invested assets exceeded total liabilities by 47% at December 31, 1996 and 
1995.

To properly match assets and liabilities, the Life Company primarily invests 
in intermediate term fixed maturity securities and structures certain mortgage 
loans to include call provisions.  Collectively, these assets accounted for 
90% of the Corporation's invested assets for both 1996 and 1995.  At December 
31, 1996 and 1995, respectively, 92% and 93% of the Life Company's fixed 
maturity securities had maturities of ten years or less.  For these same 
periods, more than 98% of the Life Company's fixed maturity security portfolio 
was rated "1", the highest quality category by the National Association of 
Insurance Commissions.  These investment grade securities are deemed to be 
associated with superior debt paying ability.  At December 31, 1996 and 1995, 
there were no principal and interest payments past due on fixed maturities.

The Life Company's average length to maturity for residential loans and 
commercial and other loans is 20 years and 13 years, respectively.  To provide 
for its cash flow needs, the Life Company structures substantially all of its 
commercial mortgage loans with a maturity  or a call provision of 10 years and 
all residential mortgage loans with amortization schedules in excess of 15 
years with 10 year call provisions.  At December 31, 1996 and 1995 over 99% of 
the Corporation's mortgage loans were current as to principal and interest.  
No mortgage loans were restructured during the year.  The Corporation has no 
debt or material long-term lease commitments.  Mortgage loan commitments at 
December 31, 1996 were approximately $14 million.

Cash flow from operations continues to provide the principal source of the 
Corporation's liquidity.  For each of the three years ended December 31, 1996, 
1995 and 1994, cash provided by operating activities has exceeded $45 
million.  The Corporation has no plans which would significantly affect these 
trends and thus believes that it can meet both its short- and long-term 
capital needs.

Effective December 31, 1993 the National Association of Insurance 
Commissioners adopted Risk-Based Capital (RBC) requirements for life/health 
insurance companies to evaluate the adequacy of statutory capital and surplus 
in relation to investment and insurance risks such as asset quality, mortality 
and morbidity, asset and liability matching, and other business factors.  The 
RBC formula will be used by states as an early warning tool to identify 
companies that potentially are inadequately capitalized for the purpose of 
initiating regulatory action.  The Life Company's statutory adjusted capital 
substantially exceeds the authorized control level of the RBC requirement.

On December 22, 1996 the Corporation's Board of Directors approved the merger 
of the Corporation with and into a wholly owned subsidiary of American General 
Corporation.  Subject to shareholder approval and regulatory consents, the 
transaction is expected to close during April of 1997.

Results of Operations

Premiums
                                         1996     1995    1994
               Individual premiums      $ 88.4  $ 86.1  $ 87.4
               Group premiums             29.2    27.9    28.7
               Total premiums           $117.6  $114.0  $116.1

Premium revenues increased $3.6 million or 3% in 1996 over 1995.  In 1995, 
premium revenues decreased $2.1 million or 2% compared to 1994.  Individual 
premiums increased $2.3 million or 2.6% in 1996 over 1995 reflecting increased 
sales in the second half of 1995 and in 1996.  The decrease in 1995 individual 
premiums compared to 1994 is primarily due to the fact that while 1995 sales 
were up over 1994, such sales were heavily weighted toward the second half of 
the year.  Group premiums were up $1.3 million in 1996 compared to 1995 which 
was down $0.8 million compared to 1994.  The increase in 1996 is due primarily 
to increased participation and growth in a large group life insurance program 
in which the Life Company participates as a reinsurer.  Premiums related to 
the Life Company's participation in this program increased from $18.1 million 
in 1995 to $23.0 million in 1996.  This increase offset a decrease in group 
accident and health premiums, which were down approximately $5 million for 
1996 compared to 1995 and 1994.  The decrease for 1996 resulted from the 
Corporation not recognizing accident and health premiums from its employee 
medical plan for 1996.  This medical plan is a trusteed plan with an 
independent claims administrator and all payments are charged directly to 
operating expenses with employee contributions credited against the expense.  
Non-recognition of these premiums has no effect on net income since accident 
and health benefits paid were decreased by the same amount.     Total accident 
and health premiums, including group and individual premiums, have 
historically accounted for less than 10% of premium revenues.  The decrease in 
group premiums for 1995 was primarily due to a decline in life premiums 
recognized from participation in a large group reinsurance contract. 

Other
Net investment income, excluding realized investment gains, amounted to $89.4 
million for 1996 compared to $88.1 million and $84.8 million for 1995 and 
1994, respectively.  The improvement for both 1996 and 1995 resulted from 
growth in investment assets.  Net investment income for 1994 was affected by a 
downward trend experienced in portfolio interest rates during 1993.  Also, 
during the period April,  1991 through  July, 1994, the Corporation used $34 
million of internally generated funds to repurchase 1.5 million shares of its 
common stock.  During  1996, the Corporation  used $9.3 million of internally 
generated funds to repurchase 0.4 million shares of its common stock.  
Realized investment gains and losses for 1995 and 1994 were insignificant.  
Realized investment gains of $6.9 million were recognized for 1996 and 
resulted primarily from the sale of equities.

Amortization of deferred policy acquisition costs increased $4.8 million for 
1996.  By comparison, 1995 declined $0.9 million from 1994 results.  Increased 
individual policy terminations along with increased deferred costs on 
increased production produced the increase for 1996.  Terminations of current 
year issues, prior year issues and second preceding year issues for 1996 
measured on the basis of present value of future premiums in force were 21.1%, 
30.4%, and 16.7% in 1996 compared to 18.2%, 27.4%, and 14.3% in 1995.  While 
persistency rates are influenced by many factors, management does not expect 
individual policy terminations to continue at the 1996 level.
Several factors contributed to the decrease in commission and related sales 
expenses in 1996 compared to 1995 and 1994.  A new rate book went into effect 
on January 1, 1996 which along with market factors contributed to a 
significantly higher percentage (28.4% in 1996 compared to 16.1% and 14.4% for 
1995 and 1994) of premiums on 1996 issues being direct bill premiums versus 
agency serviced business.  This resulted in an increased proportion of 
incurred commissions and related sales expenses that were deferred as compared 
to prior years.  Costs deferred meet the test of being related directly to and 
varying with the production  of new business and are recoverable from 
anticipated future premiums.

General expenses for 1996 increased $2.4 million or 9% when compared to 1995, 
returning to the 1994 level.  The $2.5 million decrease in 1995 resulted 
primarily from favorable claims experience in the retired employee health 
plan.  Although retiree health plan expense increased to approximately its 
1994 level for 1996, management expects the increased use of managed care 
techniques and other factors to have a favorable impact on retiree health plan 
costs in the future.
<PAGE>

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange 
Act of 1934 the Registrant has duly caused this Annual Report Amendment to be 
signed on its behalf by the undersigned, thereunto duly authorized:

HOME BENEFICIAL CORPORATION
Registrant

By: H. D. Garnett                                               
    H. D. Garnett, Vice President and Controller
<PAGE>