| **SECURITIESAND EXCHANGE COMMISSION**               |
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| Washington, D.C. 20549                              |
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| **FORM10-K**                                        |
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| ANNUAL REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIESEXCHANGE ACT OF 1934                      |
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| FOR THE FISCALYEAR ENDED DECEMBER 31, 2001          |
| COMMISSION FILENUMBER 0-1999                        |
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| **KENTUCKYINVESTORS, INC.**                         |
| (Exact name ofregistrant as specified in Charter)   |
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| KENTUCKY                       | 61-6030333            |
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| (State or OtherJurisdiction of | (IRSEmployer          |
| Incorporation orOrganization)  | IdentificationNumber) |
| 200 CapitalAvenue, Frankfort, Kentucky 40601                                                                                                                                                                                                                                                                                                                   |
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| (Address ofPrincipal Executive Offices)                                                                                                                                                                                                                                                                                                                        |
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| Registrant'stelephone number, including area code 502 223-2361                                                                                                                                                                                                                                                                                                 |
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| Securitiesregistered pursuant to Section 12(b) of the Act:                                                                                                                                                                                                                                                                                                     |
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| Title of EachClass                                                                                                                                                                                                                                                                                                                                             |
| Common $1 ParValue                                                                                                                                                                                                                                                                                                                                             |
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| Name of EachExchange on Which Registered                                                                                                                                                                                                                                                                                                                       |
| OTC BULLETINBOARD                                                                                                                                                                                                                                                                                                                                              |
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| Securitiesregistered pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                                                                     |
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| Common CapitalStock Par Value $1.00 Per Share                                                                                                                                                                                                                                                                                                                  |
| (Title ofClass)                                                                                                                                                                                                                                                                                                                                                |
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| Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90days.             |
| YES  (X)         NO                                                                                                                                                                                                                                                                                     |
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| Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of RegulationS-K (229.405 of this chapter) is not contained herein, and will notbe contained, to the best of registrant's knowledge, in definitiveproxy or information statements incorporated by reference in PartIII of this form 10-K or any amendments to this Form 10-K.(X) |
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| State the aggregate marketvalue of the voting stock held by nonaffiliates of the registrant$15,925,260.85 as of December 31, 2001                                                                                                                                                                                                                              |
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| Indicate the number of sharesoutstanding of each of the registrant's classes of common stock, asof the latest practicable date.                                                                                                                                                                                                                                |
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| Class                                                                                                                                                                                                                                                                                                                                                          |
| Common CapitalStock                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                |
| Outstanding atDecember 31, 2001                                                                                                                                                                                                                                                                                                                                |
| 1,132,959.72                                                                                                                                                                                                                                                                                                                                                   |
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| Documents Incorporated byReference:                                                                                                                                                                                                                                                                                                                            |
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| (1) Portions of the AnnualReport to the Stockholders for the year ended December 31, 2001(form 10-K, Items 1, 5a, 6, 7, 7a and 8)                                                                                                                                                                                                                              |
| (2) Portions of the ProxyStatement dated April 12, 2002, for the Annual Meeting ofStockholders to be held May 9, 2002 (form 10-K, items 10, 11, 12and 13.)                                                                                                                                                                                                     |
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CONTENTS

PARTI
|         |                                                                                                                                                                 | Page        |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
| ITEM 1. | BUSINESS                                                                                                                                                        | 4           |
|         | (a) BusinessOverview

(b) Financial Information AboutIndustry Segments

(c) Narrative Description ofBusiness

(d) Financial Information AboutGeographical Areas | 4

5

6

13 |
| ITEM 2. | PROPERTIES                                                                                                                                                      | 15          |
| ITEM 3. | LEGAL PROCEEDINGS                                                                                                                                               | 15          |
| ITEM 4. | SUBMISSION OF MATTERS TO A VOTEOF SECURITY HOLDERS                                                                                                              | 15          |

PARTII
| ITEM 5.  | MARKET FOR THE REGISTRANT'SCOMMON STOCK AND RELATED SECURITY MATTERS                | 15 |
|----------|-------------------------------------------------------------------------------------|----|
| ITEM 6.  | SELECTED FINANCIALDATA                                                              | 15 |
| ITEM 7.  | MANAGEMENT'S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS | 16 |
| ITEM 7a. | QUANTITATIVE AND QUALITATIVEDISCLOSURES ABOUT MARKET RISK                           | 16 |
| ITEM 8.  | FINANCIAL STATEMENTS ANDSUPPLEMENTARY DATA                                          | 16 |
| ITEM 9.  | CHANGES IN AND DISAGREEMENTSWITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 16 |

PARTIII
| ITEM 10. | DIRECTORS AND EXECUTIVEOFFICERS OF THE REGISTRANT             | 16 |
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| ITEM 11. | EXECUTIVECOMPENSATION                                         | 17 |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT | 18 |
| ITEM 13. | CERTAIN RELATIONSHIPS ANDRELATED TRANSACTIONS                 | 18 |

PARTIV
| ITEM 14.          | EXHIBITS, FINANCIAL STATEMENTSCHEDULES AND REPORTS ON FORM 8-K | 18 |
|-------------------|----------------------------------------------------------------|----|
| INDEX TO EXHIBITS |                                                                | 18 |
| SIGNATURES        |                                                                | 20 |

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| PARTI                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Item 1. Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (a) BusinessOverview                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| The business of KentuckyInvestors, Inc. is the holder of 100% of the outstanding commonstock of a life insurance company, a printing company and aninsurance marketing company. Effective December 31, 1999, KentuckyInvestors acquired 100% of the outstanding common stock ofInvestors Heritage Life Insurance Company pursuant to a shareexchange agreement between Kentucky Investors and InvestorsHeritage. As a result of the share exchange each Investors Heritagestockholder received 1.24 shares of Kentucky Investors common stockin exchange for each share of Investors Heritage common stock. TheShare Exchange did not have the effect of changing control ofInvestors Heritage since Kentucky Investors owned 74% of theoutstanding common stock of Investors Heritage prior to theeffective date of the transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| The acquisition of theremaining 26% of the Investors Heritage common stock from itsminority stockholders was accounted for as a purchase. (Please seeNote B to the Kentucky Investors' Consolidated Financial Statementsfor additional information regarding the share exchange.) Thecorporate management structure of Investors Heritage and KentuckyInvestors did not change as a result of the share exchange.Investors Heritage continues to be an authorized Kentucky lifedomestic insurance company and will continue to operate as it hasin the past. There were no changes in the officers or directors ofeither Investors Heritage or Kentucky Investors as a result of theshare exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Kentucky Investors owns 100% ofInvestors Heritage, Investors Heritage Printing, Inc. and InvestorsHeritage Financial Services Group, Inc. We will be referring toInvestors Heritage Printing and Investors Heritage FinancialServices Group as the "Non-insurance subsidiaries". We will bereferring to Investors Heritage, Investors Heritage Printing andInvestors Heritage Financial Services Group as the "Subsidiaries".We will also be referring to Kentucky Investors and itssubsidiaries as the "Company".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| Investors Heritage owns 96% ofInvestors Underwriters, Inc., an investment holding company. Whilethe Non-insurance Subsidiaries continue to expand, less than 1% ofthe Kentucky Investors' total operations were generated by theNon-insurance Subsidiaries for the year ended December 31, 2001.The Non-insurance Subsidiaries' total assets and stockholder equitycomprised less than 1% in the aggregate of the Kentucky Investors'reported total assets and stockholder equity as of December 31,2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| Investors Heritage FinancialServices Group, a wholly-owned insurance and financial servicemarketing company markets Investors Heritage's credit insurance andmortgage redemption products and also markets a variety of productsto financial institutions for a number of other unaffiliatedcompanies.

(b) Financial InformationAbout Industry Segments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| InvestorsHeritage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| The business segments ofInvestors Heritage are identified and discussed on Schedule III,Supplementary Insurance Information and on pages 40-41 of theAnnual Report to Stockholders for the year ended December 31, 2001and are incorporated herein by reference. Investors Heritage offersa portfolio of the standard forms of participating,non-participating, whole life, limited pay, endowments,split-funding, interest-sensitive whole life, guaranteed issuewhole life, universal life, term and group life. In addition,Investors Heritage writes credit life and credit accident andhealth insurance (collectively "Credit Insurance') on a groupbasis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| OrdinaryProduction. Investors Heritage is working diligently toincrease ordinary product sales. The largest increase in this areahas been the final expense and prearranged funeral sales. Finalexpense sales include the sale of lower face amount ordinary lifeinsurance products, the purpose of which is to pay the insured'sfinal expenses. Prearranged funeral sales include the sale of modalpremium and single premium ordinary life policies which are sold tofund a specific prearranged funeral contract.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Since 1993 Investors Heritagehas continued to expand its marketing capability in this area. As aresult, Investors Heritage steadily increased sales of preneedproducts. Since 1997 Investors Heritage continued to increase itsmarketing operations and to expand into new states, including butnot limited to, Tennessee, Indiana, Illinois, Kansas, SouthCarolina and Georgia and continues to experience growth in premiumproduction from these states.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| During 2001, the Companyfocused on increasing its market share in existing states andexpanding into some new areas. Overall ordinary premium productionincreased 9% from $34,576,542 in 2000 to $37,658,249 in 2001.Single premium growth was anticipated to be 10%, however, actualgrowth was 7% due primarily to a temporary decrease in sales for6-8 weeks following the events of September 11. Single premiumproduction for these preneed lines of business was $26,890,491 for2001 compared to $25,188,426 for 2000 and Investors Heritageanticipates continued growth in this segment of approximately 8-10%during 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| Credit Insurance.Investors Heritage has marketed Credit Insurance since 1966. Since1996 Investors Heritage Financial Services Group has marketedInvestors Heritage's Credit Insurance products and will continue todo so in 2002. All of the risk on all Credit Insurance policiessold by Investors Heritage has been and will continue to bereinsured with larger, highly rated companies. Currently InvestorsHeritage has reinsurance agreements with Munich AmericanReassurance Company ("Munich") and The Canada Life AssuranceCompany ("Canada Life"). For the last several years InvestorsHeritage Financial Services Group has been marketing products forseveral unaffiliated companies to financial institutions. During2001 Investors Heritage Financial Services Group continued toexplore marketing opportunities for products of unaffiliatedinsurance companies, and entered into marketing relationships withtwo unaffiliated companies to market larger face amount termproducts, cancer, accident and second-to-die products. Appointmentswith five other unaffiliated companies are pending. Theserelationships will allow Investors Heritage Financial ServicesGroup to provide more products and better serve our existingaccounts thereby allowing us to further strengthen these agencyrelationships. |
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| Investors Heritage FinancialServices Group has also entered into a strategic marketingpartnership with an unaffiliated insurance/marketing company todistribute Investors Heritage products. To date this relationshiphas brought new financial institution accounts in Tennessee,Georgia, South Carolina and Louisiana.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Management anticipates steadygrowth in this segment during 2002 due to Investors HeritageFinancial Services Group's efforts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| Premium production increased by$800,600 to $2,928,650 in 2001 for the credit ordinary segment.This was a 27% increase over 2000 and Investors Heritage FinancialServices Group exceeded its production goal by over$500,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| (c) Narrative Description ofBusiness                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Ordinary Life.Ordinary Life sales are under the direct supervision of the homeoffice using a regionally supervised agency system. The method offield operation involves independent contractual agents workingwith district and regional managers. These managers contract withand train agents who work under them. The regional managers mayhave several district managers under their supervision. As a resultof Investors Heritage's growth in the preneed area, agencyrelationships have also been entered into directly with numerousfuneral home owners. Management anticipates this trend to continueand, depending on the size of the funeral home and state law,preneed counselors will also become part of the agency force.Investors Heritage also sells business through general agents orbrokers who may represent one or more companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| Approximately 35% of totalinsurance in force is Ordinary Life. The Ordinary Life sales arebuilt around a standard portfolio of life insurance policies withsome of the contributions to in-force business being aparticipating ordinary life insurance policy, a guaranteed issuewhole life policy and non-participating life policies. In addition,Investors Heritage also offers term insurance products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| Some of the participatingpolicies provide for payment of guaranteed annual endowments offixed amounts beginning at the end of the second policy year andcontinuing through the premium-paying period. These policies alsohave an annual guaranteed benefit. As of December 31, 2001, 7% ofthe total ordinary insurance in force was comprised ofparticipating policies and approximately 4% of those policiesprovide some guaranteed benefit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| Another block of participatingpolicies provides for the payment of a dividend which will purchaseadditional insurance equal to 5% of the previous year's total deathbenefit, including any additional insurance purchased in prioryears. The dividend is not guaranteed. As of December 31, 2001, 3%of the total ordinary insurance in force was comprised ofparticipating policies with non-guaranteed benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Non-participating lifeinsurance policies represented 93% of the total ordinary insurancein force.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Investors Heritage also issuestwo non-participating interest-sensitive single premium whole lifepolicies based on simplified underwriting. These policies providefor payment of the full face amount at the death of the insured andfor increasing death benefits on a non-guaranteed basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| Investors Heritage providesproducts designed for the prearranged funeral market. Theseproducts are single premium and modal premium non-participatingwhole life policies. Single premium policies are sold on aguaranteed issue basis and modal premium policies are fullyunderwritten. Both single and modal premium policies provide fornon-guaranteed increasing death benefits and have a maximum faceamount of $25,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| Investors Heritage alsoprovides group life products designed for the prearranged funeralmarket. These products are now in the fourth generation of change.Some of these products provide for the payment of the full faceamount at the death of the insured and some provide graded deathbenefits during the first year. All of the products provide forincreasing death benefits on a non-guaranteed basis. During 1998Investors Heritage introduced a new generation of both individualand group life products designed for the prearranged funeralmarket. These products differ from prior products by offeringsimplified underwriting for the multi-pay policies and shorterreduced benefit policies. These new products, called the "Legacy2000 Series" were implemented throughout the last two quarters of1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| Investors Heritage introduced anew series of final expense whole life insurance policies during2001. These new products are non-participating whole life insuranceissued with simplified underwriting. These products are offeredoutside of the preneed market and  replace the level benefitpolicies that were included in the Legacy 2000 series. The HeritageFinal Expense product has been well received in ourmarkets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Investors Heritage alsoprovides term insurance products, both on a decreasing and a levelbasis. During 2001, we introduced a new Term to 95 product thatwill replace our Level Term product. We will continue to provideour decreasing term policy that is primarily sold through financialinstitutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Credit Insurance.Credit Insurance is generally sold through banks, finance companiesand automobile dealerships and is offered in connection with theextension of credit by financial institutions. The amount of theinsurance is designed  to cover the amount of the loan withthe financial institution being the beneficiary of the insurancepolicy to the extent of the unpaid balance of the loan. CreditInsurance production is dependent on consumer debt. In times of lowunemployment, reasonable interest rates and a steadily improvingeconomy, consumer debt increases; therefore, Credit Insurance salesincrease. When the economy slows, consumer debt slows and thereforeCredit Insurance sales decrease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| Investors Heritage FinancialServices Group initiated discussions with unaffiliated companiesregarding a transaction where the Credit Insurance business wouldbe written by Investors Heritage and all of the risk insured wouldbe immediately reinsured to the unaffiliated company. In additionto receiving a retention fee, Investors Heritage also receives afee for administration and claims processing services. InvestorsHeritage Financial Services Group is able to generate revenues inthe form of commissions from the sale of Investors Heritage'sCredit Insurance products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Initially, Investors Heritageentered into a reinsurance agreement with The Connecticut GeneralLife Insurance Company, Bloomfield, Connecticut ("ConnecticutGeneral") under the terms of which Investors Heritage cedes toConnecticut General 100% of the risk on all Credit Insurancepolicies sold by Investors Heritage. All Credit business wasreinsured with Connecticut General from January 1, 1996 untilDecember 31, 1998 when Connecticut General exited the market as areinsurer of Credit Insurance products. Therefore, during the 4thQuarter 1998, Investors Heritage and Investors Heritage FinancialServices Group negotiated new reinsurance agreements withMunich  and ReliaStar Life Insurance Company, Minneapolis,Minnesota ("ReliaStar") whereby effective January 1, 1999 InvestorsHeritage continued to reinsure 100% of the risk on all CreditInsurance policies to Munich and ReliaStar until July 1, 2001 atwhich time ReliaStar exited the credit reinsurance market.Investors Heritage has entered into a new reinsurance agreementwith Canada Life to replace ReliaStar. Approximately 19% of thetotal life insurance in force is Credit Insurance, all of which waswritten directly by Investors Heritage.                                                                                 |
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| Management believes there willcontinue to be opportunities to administer Credit Insurancebusiness in Kentucky for non-domestic insurers. Investors Heritagehas entered into reinsurance agreements with four unaffiliatedcompanies, Life Investors Insurance Company of America, BankersLife Insurance Company, Universal Guaranty Life Insurance Companyand American United Life Insurance Company. Pursuant to thoseagreements, our Credit Insurance products sold by Life Investors',Bankers Life's, Universal Guaranty and AUL's agents are reinsuredto Life Investors, Bankers Life, Universal Guaranty and AUL,respectively. Investors Heritage and Investors Heritage FinancialServices Group are paid a retention fee and a marketing fee forservices provided. The agreement with Bankers Life was canceledeffective January 31, 2001 with respect to new business. InvestorsHeritage Financial Services Group will continue to seek contractsto operate as an administrator for other companies that sell CreditInsurance.                                                                                                                                                                                                                                                                                        |
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| Investors Heritage FinancialServices Group will continue to call on banks, finance companiesand selected automobile dealerships to market the Credit Insuranceproducts for Investors Heritage. As anticipated, more than 10% ofInvestors Heritage Financial Service Group's revenues for 2001 werederived from the sale of Investors Heritage's Credit Insuranceproducts. Credit Insurance gross written premiums were lower thananticipated in 2001 due to decreased loan demand. InvestorsHeritage anticipates 2002 Credit Insurance gross written premiumsto exceed $13 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| In addition to selling CreditInsurance, Investors Heritage bank agents may obtain an ordinarylife license enabling them to sell mortgage life insurance thatmight be required in excess of the statutory credit life limitationenacted by each state where our Credit Insurance products are sold.The mortgage life insurance sales operations will continue to beconducted through Investors Heritage Financial Services Group.Further, Investors Heritage Financial Services Group is licensedwith other unaffiliated insurance companies to provide productsthat Investors Heritage does not offer to the financialinstitutions and other agents. These products include cancer,accident, second-to-die, large face amount term insurance, shortterm and long term disability and annuities. Management anticipatesthese relationships to generate additional fee income during2002.                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Group Life. Grouplife accounts for the remaining 46% of total in-force business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Investors Heritage participatesin the Federal Employee Group Life Insurance ("FEGLI") Program,which is administered by Metropolitan Life Insurance Company and inthe Servicemen's Group Life Insurance ("SEGLI") Program which isadministered by Prudential Insurance Company of America. As ofyear-end 2001 the total amount of insurance in force from the FEGLIand SEGLI programs were $475,076,000 and $914,065,000,respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Since 1997 the majority ofbusiness written by Investors Heritage has been group insuranceproducts sold in the preneed market. The Legacy 2000 Seriesintroduced during 1998 is also a group product in many states as isthe new Heritage Final Expense product that replaced the Legacy2000 Series in the second and third quarter of 2001. Therefore,group life premiums and in-force business remain at higher levelsthan individual premiums and in-force business. Group life premiumsduring 2001 were $19,571,638 as compared to $17,834,751 in 2000representing an increase of 10%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Risk. In manycases Investors Heritage requires evidence of insurability beforeissuing individual life policies including, in some cases, amedical examination or a statement by an attending physician. Homeoffice underwriters review the evidence of insurability requiredand approve the issuance of the policy in accordance with theapplication if the risk is acceptable. Some applicants who aresubstandard risks are rejected, but many are offered policies withhigher premiums, restricted coverages or reduced benefits duringthe first or second policy years. The majority of the singlepremium business is written through the prearranged funeral marketwithout evidence of insurability, relying on safeguards such asproduct design, limits on the amount of coverage, and premiumswhich recognize the resultant higher level of claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Investors Heritage obtainsreinsurance with respect to amounts in excess of its retentionlimits. Currently the maximum limit of retention by InvestorsHeritage on its standard contract for any one life is $100,000 plusthe amount of the return of premium benefits, if any. The maximumis reduced for sub-standard classes of risk. The maximum retentionon Credit Life is also $100,000 per life. Excess coverages arereinsured externally to unaffiliated reinsurers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Management is continuallyreviewing its reinsurance programs and considering reducingretention amounts to provide more level profit streams and provideadditional protection against unusual claims. During 2001,Investors Heritage entered into two reinsurance agreements infurtherance of these goals. The first is with Munich whichreinsures the Heritage Final Expense products on an 80/20 quotashare basis with Investors Heritage retaining 20% of the risk oneach life. The second is with Lincoln National Reinsurance Companywhich reinsures the new Term to 95 product on an 80/20 quota sharebasis with Investors Heritage retaining 20% of the risk on eachlife.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| As of December 31, 2001,approximately $783,567,000, or 24% of total life insurance in forcewas reinsured with non-affiliated well-established insurancecompanies. Investors Heritage would become liable for the reinsuredrisks if the reinsurers could not meet their obligations. InvestorsHeritage has not experienced a reinsurer default under any of thereinsurance agreements to which Investors Heritage is a party.Further, Investors Heritage has no knowledge of and does notanticipate any material default in any existing reinsuranceobligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| Investors Heritage is party toreinsurance and coinsurance agreements with twenty non-affiliatedcompanies. The reinsurers for Investors Heritage and amounts ofinsurance in force that are reinsured are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Reinsurance | Percent |
| Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Amount | OfTotal |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |
| American United Life InsuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $  33,460,000 | 4.27% |
| Bankers Life InsuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 83,471,000 | 10.65% |
| Business Men's AssuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 4,463,000 | 0.57% |
| Canada Life AssuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 73,713,000 | 9.41% |
| Connecticut General LifeInsurance Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 41,901,000 | 5.35% |
| Key Life InsuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 830,000 | 0.10% |
| Life Investors InsuranceCompany of America                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 7,995,000 | 1.02% |
| Lincoln National ReinsuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 78,928,000 | 10.07% |
| Munich American ReassuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 220,818,000 | 28.18% |
| Optimum Re InsuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 4,359,000 | 0.55% |
| ReliaStar Life InsuranceCompany                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 175,326,000 | 22.38% |
| Scottish Annuity and LifeInsurance Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 52,623,000 | 6.72% |
| Swiss Re Life & HealthAmerica Insurance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 700,000 | 0.09% |
| Universal Guaranty LifeInsurance Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 4,148,000 | 0.53% |
| Other Companies (6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |         832,000 |     0.11% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $783,567,000 | 100.00% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| From 1999 to July 2001,Investors Heritage reinsured all of the risk on the CreditInsurance products sold by its agents to Munich and ReliaStar.Effective July 1, 2001 ReliaStar terminated the reinsuranceagreement with respect to new issues. Therefore, Investors Heritageentered into a reinsurance agreement with Canada Life to replaceReliaStar. As explained above, some of these credit insurance riskshave been and will be reinsured to Life Investors, Bankers Life,Universal Guaranty and AUL.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| Regulation ofInsurance. Investors Heritage's business is subject toregulation and supervision by the insurance regulatory authority ofeach state in which Investors Heritage is licensed to do business.Such regulators grant licenses to transact business; regulate tradepractices; approve policy forms; license agents; approve certainpremium rates; establish minimum reserve and loss ratiorequirements; review form and content of required financialstatements; prescribe types and amounts or investments permitted;and assure that capital, surplus and solvency requirements are met.Insurance companies can also be required under the solvency orguaranty laws of most states in which they do business to payassessments up to prescribed limits to fund policyholder losses orliabilities of insolvent insurance companies. They are alsorequired to file detailed annual reports with supervisory agencies,and records of their business are subject to examination at anytime. Under the rules of the National Association of InsuranceCommissioners (the "NAIC"), a self-regulatory organization of stateinsurance commissioners, insurance companies are examinedperiodically by one or more of the regulatory authorities.                                                                                                            |
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| Domiciled in the Commonwealthof Kentucky, Investors Heritage is licensed by the KentuckyDepartment of Insurance and is subject to its examination andregulations. The triennial audit was completed during 1998 for thethree years ending December 31, 1997. The Examination Reportcontains no specific recommendations and no material adjustmentswere made to the statutory financial statements. The triennialaudit for 1998-2000 by the Kentucky Department of Insurance iscurrently in progress.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| In December of 1992, the NAICadopted a "Risk Based Capital for Life and/or Health Insurers ModelAct" (the "Model Act") which was designed to identify inadequatelycapitalized life and health insurers. The Model Act defines two keymeasures: (i) adjusted capital, which equals an insurer's statutorycapital and surplus plus its asset valuation reserve, plus one-halfits liability for policyholder dividends ("Adjusted Capital") and(ii) authorized control level risk based capital ("RBC"). RBC isdetermined by a complex formula which is intended to take intoaccount the various risks assumed by an insurer. Should aninsurer's Adjusted Capital fall below certain prescribed levels(defined in terms of its RBC), the Model Act provides for variouslevels of regulatory attention.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Since the Adjusted Capitallevels of Investors Heritage currently exceed all of the regulatoryaction levels as defined by the NAIC's Model Act, the Model Actcurrently has no negative impact on the Company's operations orfinancial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Statutory restrictions alsolimit the amount of dividends that may be paid by InvestorsHeritage. Generally, dividends during any year may not be paid,without prior regulatory approval, in excess of the lesser of (a)10 percent of statutory stockholders' equity as of the precedingDecember 31, or (b) statutory net income for the preceding year. Inaddition, dividends are limited to the amount of unassigned surplusreported for statutory purposes, which was $8,993,615 at December31, 2001. Dividend income from Investors Heritage for 2001 amountedto $566,819.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| Competition. Thelife insurance business is highly competitive. With theintroduction of universal life and other interest sensitiveproducts in recent years, competition with other financialinstitutions has increased. The industry includes both stock andmutual companies, including some of the largest financialinstitutions in the United States. While Investors Heritage isresponsive to the current economic environment, the life insurancemarket is relatively volatile, and Investors Heritage's operatingresults may vary as a result of those conditions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Investors Heritagedifferentiates itself through its marketing techniques, productfeatures, customer service and reputation. Investors Heritagemaintains its competitive position by its focus on areas which havehistorically proven profitable. Those areas include single premiumpreneed products, modal premium final expense products, traditionalwhole life products, mortgage protection products and level termproducts. Investors Heritage's competitive position is maintainedby its ability to provide quality customer service throughout thedistribution system. Other competitive strengths include InvestorsHeritage's asset/liability management system, a quality investmentportfolio which provides liquidity and Investors Heritage'snon-leveraged financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| The business of InvestorsHeritage is not seasonal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| OtherSubsidiaries. Investors Heritage Printing does jobprinting for Investors Heritage as well as numerous unaffiliatedsources. This includes the printing of the application forms andother office forms required by Investors Heritage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| While the income from InvestorsHeritage Printing is not a significant factor in our overallbusiness, Investors Heritage Printing will continue to work toimprove profitability during 2002. Revenues from Investors HeritagePrinting continued to be less than one percent of our total revenuefor 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| As anticipated the formationand operation of Investors Heritage Financial Services Groupgenerated additional revenue to Kentucky Investors. Although thisadditional revenue is not a significant factor in our overallbusiness, Investors Heritage Financial Services Group remainssteady in its operations with revenues of $526,525 in 2001 comparedto $538,796 in 2000. Revenues from Investors Heritage FinancialServices Group continue to account for less than one percent of ourtotal revenue for 2001. See Schedule II.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Dividend income from the OtherSubsidiaries for 2001 amounted to approximately$343,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| Additionally, KentuckyInvestors earns fees for other services performed for itssubsidiaries. The fees pay for the necessary supervision andcoordination required to provide a common policy for all thecompanies. The supervision results in a coordination of contractswith the various independent agents, common sales brochures, and asavings to each company in the area of printing and purchasing.Kentucky Investors purchases director and officer liabilitycoverage to include the directors and officers of each subsidiaryand also purchases blanket fidelity bonds to include employees ofeach subsidiary at a savings when compared to purchases made byindividual companies. The group life, hospitalization, and theretirement programs for the various companies are also administeredby Kentucky Investors. These fees are not significant to KentuckyInvestors total revenue. Kentucky Investors also has revenue fromother investments, but it is not a significant factor in ourbusiness.                                                                                                                                                                                                                                                                                                                                              |
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| Employees.Kentucky Investors does not have any employees. Kentucky Investorsofficers perform various functions described in item 10; however,they are not paid a salary by Kentucky Investors for performingsuch functions. The number of persons employed by InvestorsHeritage is 108. The number of active independent contractualagents of Investors Heritage is 2,160.   There are nounions organized nor are there any collective bargaining agreementswith the employees or agents.  Management of InvestorsHeritage considers its relationship with the employees and agentsto be satisfactory.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| (d) Financial InformationAbout Geographic Areas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| The principal markets forInvestors Heritage's products are in the Commonwealths of Kentuckyand Virginia, and the States of North Carolina, South Carolina,Georgia, Ohio, Indiana, Florida, Tennessee, Illinois, WestVirginia, Arizona, Michigan, Mississippi and Texas. InvestorsHeritage has licensed ordinary agents and regional managersthroughout these states and credit life agents in over 329 banksand automobile dealerships.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Investors Heritage is alsolicensed in fourteen other states: Alabama, Arkansas and Louisianain the South and Southeast; Colorado, Missouri, New Mexico, NorthDakota, South Dakota, Oklahoma, Montana, Nebraska, Kansas and Utahin the West; and Pennsylvania in the North. The business in thesestates is written mostly through general agents. During 2001Investors Heritage expanded its preneed operation into several ofthese states, specifically, Mississippi, Michigan, Louisiana andAlabama. Management anticipates continued growth in those statesduring 2002 and also anticipates approval to transact business inthe state of Maryland during 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Forward LookingInformation. The Company cautions readers regardingcertain forward-looking statements contained in this report and inany other statements made by, or an behalf of, the Company, whetheror not in future filings with the Securities and ExchangeCommission (the "SEC"). Forward-looking statements are statementsnot based on historical information and which relate to futureoperations, strategies, financial results, or other developments.Statements using verbs such as "expect," "anticipate," "believe" orwords of similar import generally involve forward-lookingstatements. Without limiting the foregoing, forward-lookingstatements include statements which represent the Company's beliefsconcerning future levels of sales and redemptions of the Company'sproducts, investment spreads and yields, or the earnings andprofitability of the Company's activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Forward looking statements arenecessarily based on estimates and assumptions that are inherentlysubject to significant business, economic and competitiveuncertainties and contingencies, many of which are beyond theCompany's control and many of which are subject to change. Theseuncertainties and contingencies could cause actual results todiffer materially from those expressed in any forward-lookingstatements made by, or on behalf of, the Company. Whether or notactual results differ materially from forward-looking statementsmay depend on numerous foreseeable and unforeseeable factors anddevelopments. Some of these may be national in scope, such asgeneral economic conditions, changes in tax law and changes ininterest rates. Some may be related to the insurance industrygenerally, such as pricing competition, regulatory developments,industry consolidation and the effects of competition in theinsurance business from other insurance companies and otherfinancial institutions operating in the Company's market area andelsewhere. Others may relate to the Company specifically, such ascredit, volatility and other risks associated with the Company'sinvestment portfolio. The Company cautions that such factors arenot exclusive. The Company disclaims any obligation to updateforward-looking information. |
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| Item 2. Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| The physical property of theCompany consists of the home office building and grounds, owned infee, at 200 Capital Avenue, Frankfort, Kentucky. Adjacent to thehome office, the Company owns additional property on Second Streetand on Shelby Street in Frankfort, Kentucky. One building is usedfor agency and company meetings; one building is a print shop usedby Investors Heritage Printing, one building is used for suppliesand additional storage; and one building is leased to a commercialtenant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Item 3. LegalProceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| There are no legal proceedingsto which Kentucky Investors is a party. There are no legalproceedings to which Investors Heritage is a party that arematerial to the overall financial condition or results ofoperations of Kentucky Investors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Item 4. Submission of Mattersto a Vote of Security Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| PARTII                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Item 5. Market for theRegistrant's Common Stock and Related Security Matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (a) The information relative tothe market value of the Company's stock appears on the inside backcover in the Annual Report to the Stockholders for the year endedDecember 31, 2001, and is incorporated herein byreference.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (b) Approximate Number ofEquity Security Holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (B) |
| Title ofClass                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Number ofHolders of Record 3-22-2002 |
| CommonStock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 5,057 |
| (c) Dividends                                                                                                                                                                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                  |
| Kentucky Investors, Inc., paiddividends totaling $544,023 to stockholders in 2001 representing$.38 per share. The 2002 cash dividend to be paid April 5, 2002, tostockholders of record March 22, 2002 is $.38 per share.        |
|                                                                                                                                                                                                                                  |
| Item 6. Selected FinancialData                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                  |
| Selected financial data for thepast five years appears on page 25 in the Annual Report to theStockholders for the year ended December 31, 2001, and isincorporated herein by reference.                                          |
|                                                                                                                                                                                                                                  |
| Item 7. Management's Discussionand Analysis of Financial Condition and Results ofOperations                                                                                                                                      |
|                                                                                                                                                                                                                                  |
| Management's Discussion andAnalysis of financial condition and results of operations appearson pages 13-24 in the Annual Report to the Stockholders for theyear ended December 31, 2001, and is incorporated herein byreference. |
|                                                                                                                                                                                                                                  |
| Item 7a. Quantitative andQualitative Disclosures About Market Risk                                                                                                                                                               |
|                                                                                                                                                                                                                                  |
| Information appearing under thecaption "Market Risk Exposures" appears on pages 22-23 in theAnnual Report to the Stockholders for the year ended December 31,2001, and is incorporated herein by reference.                      |
|                                                                                                                                                                                                                                  |
| Item 8. Financial Statementsand Supplementary Data                                                                                                                                                                               |
|                                                                                                                                                                                                                                  |
| The financial statements andnotes appear on pages 26-42 in the Annual Report to theStockholders for the year ended December 31, 2001 and areincorporated herein by reference. See Part IV, Item 14.                              |
|                                                                                                                                                                                                                                  |
| Item 9. Changes in andDisagreements with Accountants on Accounting and FinancialDisclosure                                                                                                                                       |
|                                                                                                                                                                                                                                  |
| None.                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                  |
| PARTIII                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                  |
| Item 10. Directors andExecutive Officers of the Registrant                                                                                                                                                                       |
|                                                                                                                                                                                                                                  |
| (a) The Executive officers anddirectors of the Company are:                                                                                                                                                                      |
|                                                                                                                                                                                                                                  |
| Name,

Position &Year Became Officer/Director                                                                                                                                                                                | Age | Family

Relationship |
|                                                                                                                                                                                                                                  |  |  |
| Harry Lee WaterfieldII                                                                                                                                                                                                           |  |  |
| Chairman of the Board,President/1963                                                                                                                                                                                             | 58 |  |
|                                                                                                                                                                                                                                  |  |  |
| Jimmy R. McIver,Treasurer/2000                                                                                                                                                                                                   | 50 |  |
|                                                                                                                                                                                                                                  |  |  |
| Nancy WaterfieldWalton                                                                                                                                                                                                           |  |  |
| First VicePresident/1988                                                                                                                                                                                                         | 62 | Sister of Harry Lee WaterfieldII |
|                                                                                                                                                                                                                                  |  |  |
| Robert M. Hardy, Jr.                                                                                                                                                                                                             |  |  |
| Director, Vice President andGeneral                                                                                                                                                                                              |  |  |
| Counsel/1988                                                                                                                                                                                                                     | 44 | Nephew of Harry Lee WaterfieldII |
|                                                                                                                                                                                                                                  |  |  |
| Howard L. Graham, VicePresident-Corporate Services/1989                                                                                                                                                                          | 67 |  |
|                                                                                                                                                                                                                                  |  |  |
| Wilma Yeary,Secretary/1989                                                                                                                                                                                                       | 70 |  |
|                                                                                                                                                                                                                                  |  |  |
| Jane S. Jackson, AssistantSecreatry/1989                                                                                                                                                                                         | 47 |  |
|                                                                                                                                                                                                                                  |  |  |
| Helen S. Wagner,Director/1986                                                                                                                                                                                                    | 65 |  |
|                                                                                                                                                                                                                                  |  |  |
| Gordon Duke,Director/1991                                                                                                                                                                                                        | 56 |  |
|                                                                                                                                                                                                                                  |  |  |
| Harold G. Doran,Director/2001                                                                                                                                                                                                    | 49 |  |
|                                                                                                                                                                                                                                  |  |  |
| Jerry F. Howell, Jr.,Director/1983                                                                                                                                                                                               | 60 | Son of Jerry F.Howell |
|                                                                                                                                                                                                                                  |  |  |
| David W. Reed,Director/1982                                                                                                                                                                                                      | 48 |  |
| (b) Each of the Directors hasoccupied the position indicated for a period of more than fiveyears unless otherwise stated in the information regarding thebusiness experience of the Directors who are not officers of theCompany which is shown on pages 2-3 of the Proxy Statement of theAnnual Meeting of Shareholders to be held on May 9, 2002, and isincorporated herein by reference. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                             |
| There have been no events underany bankruptcy act, no criminal proceedings and no judgments orinjunctions material to the evaluation of the ability and integrityof any Director or Executive Officer during the past fiveyears.                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Officers are appointed annuallyby the Board of Directors at the Board meeting immediatelyfollowing the Annual Meeting of Shareholders. There are noarrangements or any understandings between any officer and anyother person pursuant to which the office was selected.                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Item 11. ExecutiveCompensation                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Information regardingcompensation of executive officers and transactions with executiveofficers and directors is shown on pages 6 and 7 of the ProxyStatement for the Annual Meeting of Shareholders to be held May 9,2002, and is incorporated herein by reference.                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Item 12. Security Ownership ofCertain Beneficial Owners and Management                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Security ownership by Officers,Directors, and management is shown on pages 3 and 4 of the ProxyStatement for the Annual Meeting of Stockholders to be held May 9,2002, and is incorporated herein by reference.                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Item 13. Certain Relationshipsand Related Transactions                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Certain relationships andrelated transactions are shown on page 10 of the Proxy Statementfor the Annual Meeting of Stockholders to be held May 9, 2002, andare incorporated herein by reference.                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| PARTIV                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Item 14. Exhibits, FinancialStatement Schedules And Reports On Form 8-K                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| (a)1. The following financialStatements incorporated herein by reference in Item 8 to theCompany's Annual Report to Stockholders for the year ended December31, 2001 (pages 20-23) filed as Exhibit 1 thereto:                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    Report ofIndependent Auditors*                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    ConsolidatedBalance Sheets as of December 31, 2001 and 2000                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    For each ofthe three years in the period ended December 31, 2001:                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|       ConsolidatedStatements of Income                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|       ConsolidatedStatements of Stockholders' Equity                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|       ConsolidatedStatements of Cash Flows                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|       Notes toConsolidated Financial Statements                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| (a)2. Consolidated FinancialStatement Schedules                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    Schedule I --Summary of Investments -- Other Than Investments in RelatedParties                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    Schedule II-- Condensed Financial Information of Registrant                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    Schedule III-- Supplementary Insurance Information                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                             |
|    Schedule IV-- Reinsurance                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| All other schedules have beenomitted as not applicable, not required, or the requiredinformation has been included in the financial statements or notesthereto.                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| **INDEX TOEXHIBITS**                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| (a)3. Listing ofExhibits                                                                                                                                                                                                                                                                                                                                                                    |
| Exhibit |                                                                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  | Descriptionof Exhibits                                                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                        |
| 3.1     | Articles of Incorporation ofthe Company, as amended is incorporated by reference as Exhibit 3.1to the Company's registration statement on Form S-4 filed on10-7-1999 (File No. 333-87947).*                                                                                            |
|         |                                                                                                                                                                                                                                                                                        |
| 3.2     | By-Laws of the Company, asamended is incorporated by reference as Exhibit 3.2 to theCompany's registration statement on Form S-4 filed on 10-7-1999(File No. 333-87947).*                                                                                                              |
|         |                                                                                                                                                                                                                                                                                        |
| 11      | Statements re: computation ofPer Share Earnings is contained in Note A to the ConsolidatedFinancial Statements, "Common Stock and Earnings per Share", onpage 32 of the Annual Report to the Stockholders for the year endedDecember 31, 2001, and is incorporated herein byreference. |
|         |                                                                                                                                                                                                                                                                                        |
| 13      | Annual Report to theStockholders for the year ended December 31, 2001 is attachedhereto as Exhibit 1 and is incorporated hereby byreference.                                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                        |  |
| 23      | Consent of IndependentAuditors.                                                                                                                                                                                                                                                        |  |

*The material included in thisReport shall not be deemed to be "filed" with the Commission orotherwise subject to the liabilities of Section 18 of the Act,except to the extent that this registrant specifically incorporatesit in its Annual Report on this Form 10-K by reference.
|                                                                                                                              |
|------------------------------------------------------------------------------------------------------------------------------|
| (b) Reports on Form8-K.                                                                                                      |
|                                                                                                                              |
| None.                                                                                                                        |
|                                                                                                                              |
| (c) See Item 14(a)3above.                                                                                                    |
|                                                                                                                              |
| (d) Financial StatementSchedules - The response to this portion of Item 14 is submitted asa separate section of this report. |
|                                                                                                                              |
| SIGNATURES                                                                                                                                                                                                       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| Pursuant to the requirements ofSection 13 or 15(d) of the Securities Exchange Act of 1934, theRegistrant has duly caused this Form 10-K to be signed on itsbehalf by the undersigned, thereunto duly authorized. |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  | KENTUCKY INVESTORS,INC. |
|                                                                                                                                                                                                                  |  |
| March 28, 2002                                                                                                                                                                                                   | /s/ |
| DATE                                                                                                                                                                                                             | BY: Harry Lee WaterfieldII |
|                                                                                                                                                                                                                  | ITS: Chairman of the Board andPresident |
|                                                                                                                                                                                                                  |  |
| Pursuant to the requirements ofthe Securities Exchange Act of 1934, this report is signed below bythe following persons on behalf of the Registrant and in thecapacities and on the dates indicated.             |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Harry Lee WaterfieldII                                                                                                                                                                                           |
| Chairman of the Board andPresident                                                                                                                                                                               |
| Principal ExecutiveOfficer                                                                                                                                                                                       |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Robert M. Hardy, Jr.                                                                                                                                                                                             |
| Vice President, General Counseland Director                                                                                                                                                                      |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Jimmy McIver                                                                                                                                                                                                     |
| Treasurer                                                                                                                                                                                                        |
| Principal FinancialOfficer                                                                                                                                                                                       |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Howard L. Graham                                                                                                                                                                                                 |
| Vice President - CorporateServices                                                                                                                                                                               |
| Principal AccountingOfficer                                                                                                                                                                                      |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Gordon Duke                                                                                                                                                                                                      |
| Director                                                                                                                                                                                                         |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Helen S. Wagner                                                                                                                                                                                                  |
| Director                                                                                                                                                                                                         |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Harold G. Doran                                                                                                                                                                                                  |
| Director                                                                                                                                                                                                         |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| David W. Reed                                                                                                                                                                                                    |
| Director                                                                                                                                                                                                         |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                  |
| /s/                                                                                                                                                                                                              |
| Jerry F. Howell, Jr.                                                                                                                                                                                             |
| Director                                                                                                                                                                                                         |
| March 14, 2002                                                                                                                                                                                                   |
|                                                                                                                                                                                                                  |
| REPORT OF INDEPENDENTAUDITORS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Board of Directors andStockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Kentucky Investors,Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| We have audited theaccompanying consolidated balance sheets of Kentucky Investors,Inc. as of December 31, 2001 and 2000, and the related consolidatedstatements of income, shareholders' equity, and cash flows for eachof the three years in the period ended December 31, 2001. Ouraudits also included the financial statement schedules listed inthe Index at Item 14(a). These financial statements and schedulesare the responsibility of the Company's management. Ourresponsibility is to express an opinion on these financialstatements and schedules based on our audits.                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| We conducted our audits inaccordance with auditing standards generally accepted in the UnitedStates. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide areasonable basis for our opinion. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| In our opinion, the financialstatements referred to above present fairly, in all materialrespects, the consolidated financial position of KentuckyInvestors, Inc. at December 31, 2001 and 2000, and the consolidatedresults of their operations and their cash flows for each of thethree years in the period ended December 31, 2001, in conformitywith accounting principles generally accepted in the United States.Also, in our opinion, the related financial statement schedules,when considered in relation to the basic financial statements takenas a whole, present fairly in all material respects the informationset forth therein.     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | /s/ Ernst &Young |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |
| Cincinnati, Ohio                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |
| March 14, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |
| EXHIBIT 23                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| CONSENT OF INDEPENDENTAUDITORS                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| We consent to the incorporationby reference in the Registration Statement (Form S-8 NO.33-46722-01) pertaining to the Kentucky Investors, Inc. andAffiliated Companies 401(k) Savings Plan and Trust Agreement and inthe related prospectus of our report dated March 14, 2002 withrespect to the consolidated financial statements and schedules ofKentucky Investors, Inc. included in the Annual Report (Form 10-K)for the year ended December 31, 2001. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             | /s/ |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Ernst & YoungLLP |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |
| Cincinnati, Ohio

March 25, 2002                                                                                                                                                                                                                                                                                                                                                                                                                            |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |
| KENTUCKYINVESTORS, INC.                                                                     |
|---------------------------------------------------------------------------------------------|
| SCHEDULE I --SUMMARY OF INVESTMENTS -- OTHER THAN INVESTMENT IN                             |
| RELATEDPARTIES                                                                              |
| DECEMBER 31,2001                                                                            |
|                                                                                             |
|                                                                                             |  |  | AMOUNT |
|                                                                                             |  |  | SHOWNIN |
|                                                                                             |  |  | BALANCE |
| TYPE OFINVESTMENT                                                                           | COST | VALUE | SHEET |
|                                                                                             |  |  |  |
|                                                                                             |  |  |  |
|   Fixedmaturities:                                                                     |  |  |  |
|                                                                                             |  |  |  |
|   Bonds:                                                                               |  |  |  |
|   United Statesand

 government   

  agencies andauthorities | $  27,470,643  | $  28,606,927  | $  28,606,927  |
|                                                                                             |  |  |  |
|   States andpolitical

  subdivisions                                             | 4,103,505  | 4,082,170  | 4,082,170  |
|                                                                                             |  |  |  |
|   Foreign                                                                              | 17,934,805  | 18,974,179  | 18,974,179  |
|                                                                                             |  |  |  |
|   Mortgage-backedsecurities                                                            | 63,438,248  | 65,547,362  | 65,547,362  |
|                                                                                             |  |  |  |
|   Corporate                                                                            | 121,865,455  | 126,307,385  | 126,307,385  |
|                                                                                             |  |  |  |
|   Redeemable preferredstock                                                            |          311,344  |          313,800  |          313,800  |
|                                                                                             |  |  |  |
| Total fixedmaturities                                                                       | $235,124,000  | $243,831,823  | $243,831,823  |
|                                                                                             |  |  |  |
| Equity securities:                                                                          |  |  |  |
|                                                                                             |  |  |  |
|   CommonStocks:                                                                        |  |  |  |
|   Banks, trusts &insurance

  companies                                       | $       490,767  | $    1,198,500  | $    1,198,500  |
|                                                                                             |  |  |  |
|   Industrial,miscellaneous and

  all other                                       | 318,284  | 375,288  | 375,288  |
|                                                                                             |  |  |  |
|   Nonredeemablepreferred

  stocks                                                |            36,684  |           32,100  |           32,100  |
|                              |                                                               |                                          |                                                               |
|------------------------------|---------------------------------------------------------------|------------------------------------------|---------------------------------------------------------------|
| Total equitysecurities       | $       845,735       | $    1,605,888  | $    1,605,888                       |
|                              |                                                               |                                          |                                                               |
|                              |                                                               |                                          |                                                               |
| Mortgage loans on realestate | 24,710,790                                               | XXXXXXXXXX                               | 24,710,790                                               |
|                              |                                                               |                                          |                                                               |
| Policy loans                 | 7,909,681                                                | XXXXXXXXXX                               | 7,909,681                                                |
|                              |                                                               |                                          |                                                               |
| Other long terminvestments   | 409,658                                                  | XXXXXXXXXX                               | 409,658                                                  |
|                              |                                                               |                                          |                                                               |
| Short-terminvestments        |         837,560  | XXXXXXXXXX                               |         837,560  |
|                              |                                                               |                                          |                                                               |
| Total investments            | $269,837,424                                             | XXXXXXXXXX                               | $279,305,400                                             |
|                              |                                                               |                                          |                                                               |
| SCHEDULE II -CONDENSED FINANCIAL INFORMATION OF REGISTRANT                                                        |
|-------------------------------------------------------------------------------------------------------------------|
| KENTUCKYINVESTORS, INC.                                                                                           |
| CONDENSEDBALANCE SHEET                                                                                            |
| FOR THE YEARSENDED DECEMBER 31, 2001and 2000                                                                      |
|                                                                                                                   |
|                                                                                                                   |
|                                                                                                                   | 2001 | 2000 |  |
|                                                                                                                   |  |  |  |
| Assets:                                                                                                           |  |  |  |
|  Cash and CashEquivalents                                                                                    | $     192,603  | $       76,768  |  |
|  Investment inSubsidiary                                                                                     | 43,129,135  | 37,306,859  |  |
|  Other Assets                                                                                                | 472,528  | 151,252  |  |
|  Other Long TermInvestments                                                                                  |     1,811,619  |     1,810,665  |  |
|                                                                                                                   |  |  |  |
|                                                                                                                   | $45,605,885  | $39,345,544  |  |
|                                                                                                                   |  |  |  |
|                                                                                                                   |  |  |  |
| Liabilities:                                                                                                      |  |  |  |
|  Notes Payable toSubsidiary                                                                                  | $                0  | $                0  |  |
|  Notes Payable                                                                                               | 2,244,074  | 2,000,000  |  |
|  OtherLiabilities                                                                                            | 420,304  | 91,226  |  |
|  Taxes Payable                                                                                               | 13,854  | 0  |  |
|                                                                                                                   |  |  |  |
| Stockholders'Equity:                                                                                              |  |  |  |
|  Common Stock                                                                                                | 1,132,960  | 1,151,323  |  |
|  Paid inSurplus                                                                                              | 8,413,332  | 8,399,106  |  |
|  Unrealized Appreciation  (depreciation) ofavailable-for-  sale-securities of Subsidiary | 5,737,351  | 3,001,407  |  |
|  RetainedEarnings                                                                                            |   27,644,010  |   24,702,482  |  |
|                                                                                                                   |  |  |  |
|                                                                                                                   |  |  |  |
| Total Stockholders'Equity                                                                                         | $42,927,653  | $37,254,318  |  |
|                                                                                                                   |  |  |  |
|                                                                                                                   |  |  |  |
|                                                                                                                   | $ 45,605,885 | $ 39,345,544 |  |
| SCHEDULE II -CONDENSED FINANCIAL INFORMATION OF REGISTRANT                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------|
| (CONTINUED)                                                                                                                      |
| KENTUCKYINVESTORS, INC.                                                                                                          |
| CONDENSEDSTATEMENTS OF INCOME                                                                                                    |
| FOR THE YEARSENDED DECEMBER 31, 2001, 2000 and 1999                                                                              |
|                                                                                                                                  |  |  |  |
|                                                                                                                                  | 2001 | 2000 | 1999 |
| Income                                                                                                                           |  |  |  |
|   From printing servicesto:                                                                                                 |  |  |  |
|   Affiliatedcompanies                                                                                             | $   302,612  | $  347,919  | $  336,687  |
|   Others                                                                                                               | 207,152  | 171,874  | 197,127  |
|                                                                                                                                  |  |  |  |
|   Realized Gain(Loss) on     Investments                                                           | 927  | (3,800) | (56,639) |
|   Other services tosubsidiary                                                                                          | 276,143  | 266,489  | 315,110  |
|   Dividends fromsubsidiary                                                                                             | 566,819  | 566,819  | 510,866  |
|   Interest and otherincome                                                                                             |     284,618  |     349,391  |     339,557  |
|                                                                                                                                  |  |  |  |
|                                                                                                                                  | $1,638,271  | $1,698,692  | $1,642,708  |
|                                                                                                                                  |  |  |  |
| Operating Expenses                                                                                                               | $   698,892  | $   759,318  | $   723,102  |
|                                                                                                                                  |  |  |  |
|   Operating incomebefore     equity in undistributed    earnings of subsidiary | $   939,379  | $   939,374  | $  919,606  |
|                                                                                                                                  |  |  |  |
|   Equity inundistributed     earnings of subsidiary for    the year            | $2,963,046  | $   687,130  | $1,652,766  |
|                                                                                                                                  |  |  |  |
|   Income beforeprovision for     income taxes                                                      | $3,902,425  | $1,626,504  | $2,572,372  |
|                                                                                                                                  |  |  |  |
|   Provision forIncome Taxes                                                                                            |  |  |  |
|     Current                                                                                                  | $   118,084  | $   120,137  | $   193,116  |
|     Deferred                                                                                                 |                  0 |                  0 |                 0  |
|                                                                                                                                  |  |  |  |
|                                                                                                                                  | $   118,084  | $   120,137  | $   193,116  |
|                                                                                                                                  |  |  |  |
| Net Income                                                                                                                       | $3,784,341  | $1,506,367  | $2,379,256  |
|                                                                                                                                  |  |  |  |
| Earnings Per Share                                                                                                               | $         3.33  | $         1.31  | $         2.79  |
| SCHEDULE II -CONDENSED FINANCIAL INFORMATION OF REGISTRANT                                                |
|-----------------------------------------------------------------------------------------------------------|
| (CONTINUED)                                                                                               |
| KENTUCKYINVESTORS, INC.                                                                                   |
| CONDENSEDSTATEMENTS OF CASH FLOWS                                                                         |
| FOR THE YEARSENDED DECEMBER 31, 2001, 2000, 1999                                                          |
|                                                                                                           |
|                                                                                                           | 2001 | 2000 | 1999 |
|                                                                                                           |  |  |  |
| NET CASH PROVIDED BY

  (USED IN)ACTIVITIES                                                          | $     842,947  | $     763,553  | $(4,456,914) |
|                                                                                                           |  |  |  |
| FINANCING ACTIVITIES                                                                                      |  |  |  |
|   Decrease in NotesPayable                                                                           | $               -0- | $   (293,277) | $   (137,758) |
|   Dividends                                                                                          | (544,023) | (547,081) | (439,945) |
|   Acquisition of TreasuryStock                                                                       | (426,209) | (58,518) | (67,252) |
|     Purchase ofMinority Interest

     ofAffiliated Stock    | -0-  | -0-  | 5,072,141  |
|   Proceeds from NotesPayable                                                                         | 244,074  | 2,000,000  | -0-  |
|   Notesreceivable                                                                                    | $          (954) | $(1,810,665) |                -0-  |
|                                                                                                           |  |  |  |
| CASH PROVIDED BY(USED

  IN) FINANCINGACTIVITES                                                      | $   (727,112) | $   (709,541) | $ 4,427,186  |
|   INCREASE (DECREASE)IN

  CASH                                                                 | $     115,835  | $       54,012  | $    (29,728) |
|                                                                                                           |  |  |  |
| Cash and Cash Equivalents atbeginning of year                                                             | $       76,768  | $       22,756  | $      52,484  |
|                                                                                                           |  |  |  |
| CASH AND CASH

  EQUIVALENTS AT ENDOF

  YEAR                                                   | $     192,603  | $       76,768  | $      22,756  |
| KENTUCKYINVESTORS, INC.             |
|-------------------------------------|
| SCHEDULEIII                         |
| SUPPLEMENTARYINSURANCE INFORMATION  |
| FOR THE YEARENDED DECEMBER 31, 2001 |
|                                     |
| SEGMENT                             |
|                                                           | Preneed BurialProducts                         | TraditionalUniversal Life Products                           | Credit InsuranceProducts and Admn. Services                  | Corporate andOther                                     | Total                        |
|-----------------------------------------------------------|------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------|------------------------------|
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Deferred Policy Acquisi-tionCosts                         | $  18,592,147                   | $ 6,328,722                                        | $       6,289        | $       2,923  | $ 24,930,081       |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Future Policy Benefits, Losses,Claims & Loss Expenses | $229,951,650                              | $67,225,464                                             | $  2,792,320                                  | $6,449,868                                        | $306,419,302            |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Un-earned Premium                                         | -0-                                       | $        2,866  | $21,532,831                                             | $     15,106             | $ 21,550,803       |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Other Policy Claims &Benefits Payable                 | $     1,311,256  | $ 2,088,313                                        | $ 1,033,038                                        | $   216,200                        | $  4,648,807  |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| PremiumRevenue                                            | $  40,661,736                   | $ 8,763,502                                        | $        9,102  | $   396,209                        | $49,830,549             |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Net Invest-ment Income (1) and(3)                         | $  12,681,222                   | $ 4,617,497                                        | $       1,116        | $ 2,126,589                                  | $19,426,424             |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Benefit claims, Losses &Settle-ment Expenses          | $ 23,702,419                         | $7,166,291                                              | $    22,205                         | $   778,184                        | $31,669,099             |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Amorti-zation of DeferredAcquisi-tion Costs               | $   5,600,439              | $1,785,819                                              | $      3,663              | $       1,774  | $  7,391,695  |
|                                                           |                                                |                                                              |                                                              |                                                        |                              |
| Other Operat-ing Expenses(2)                              | $   4,833,931              | $1,658,434                                              | $  307,534                                    | $   555,295                        | $  7,355,194  |

(1) Net investment income isallocated in proportion to policy liabilities and stockholders'equity for the subsidiary and to the corporate segment for theparent.

(2) Other operating expensesare assigned directly to the applicable segment for the subsidiaryand to the corporate segment for the parent.

(3) Includes realizedinvestment gains or losses.
| KENTUCKYINVESTORS, INC.                                   |
|-----------------------------------------------------------|
| SCHEDULEIII                                               |
| SUPPLEMENTARYINSURANCE INFORMATION                        |
| (CONTINUED)                                               |
| FOR THE YEARENDED DECEMBER 31, 2000                       |
|                                                           |
| SEGMENT                                                   |
|                                                           |
|                                                           | Preneed BurialProducts | TraditionalUniversal Life Products | Credit InsuranceProducts and Admn. Services | Corporate andOther | Total |
|                                                           |  |  |  |  |  |
| Deferred Policy Acquisi-tionCosts                         | $   17,140,527  | $ 6,807,465  | $         9,952  | $       4,697  | $  23,962,641  |
|                                                           |  |  |  |  |  |
| Future Policy Benefits, Losses,Claims & Loss Expenses | $214,848,917  | $66,266,553  | $  2,614,249  | $6,366,566  | $290,096,285  |
|                                                           |  |  |  |  |  |
| Un-earned Premium                                         | -0-  | $         3,732  | $23,782,200  | $     30,239  | $  23,816,171  |
|                                                           |  |  |  |  |  |
| Other Policy Claims &Benefits Payable                 | $    1,300,485  | $  1,948,740  | $  1,016,614  | $   190,447  | $    4,456,286  |
|                                                           |  |  |  |  |  |
| Premium Revenue                                           | $  39,116,730  | $  8,476,674  | $        31,251 | $   314,744  | $  47,939,399  |
|                                                           |  |  |  |  |  |
| Net Inves-tment Income (1) and(3)                         | $  11,319,414  | $  4,538,707  | $         2,788  | $  557,576  | $  16,418,485  |
|                                                           |  |  |  |  |  |
| Benefit claims, Losses &Settle-ment Expenses          | $ 20,573,913  | $  7,109,896  | $       15,732  | $  392,723  | $ 28,092,264  |
|                                                           |  |  |  |  |  |
| Amorti-zation of DeferredAcquisi-tion Costs               | $  5,444,515  | $  1,754,820  | $       11,111  | $      2,612  | $  7,213,058  |
|                                                           |  |  |  |  |  |
| Other Operat-ing Expenses(2)                              | $ 4,871,900  | $1,781,325  | $     316,093  | $  508,294  | $  7,477,612  |

(1) Net investment income isallocated in proportion to policy liabilities and stockholders'equity for the subsidiary and to the corporate segment for theparent.

(2) Other operating expensesare assigned directly to the applicable segment for the subsidiaryand to the corporate segment for the parent.

(3) Includes realizedinvestment gains or losses.
| KENTUCKYINVESTORS, INC.             |
|-------------------------------------|
| SCHEDULEIII                         |
| SUPPLEMENTARYINSURANCE INFORMATION  |
| (CONTINUED)                         |
| FOR THE YEARENDED DECEMBER 31, 1999 |
|                                     |
| SEGMENT                             |
|                                                           | Preneed BurialProducts                                         | TraditionalUniversal Life Products                           | Credit InsuranceProducts and Admn. Services                        | Corporate andOther                                     | Total                              |
|-----------------------------------------------------------|----------------------------------------------------------------|--------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------|------------------------------------|
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Deferred Policy Acquisi-tionCosts                         | $  15,891,977                                   | $  7,420,654                                  | $       21,107             | $       7,324  | $ 23,341,062             |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Future Policy Benefits, Losses,Claims & Loss Expenses | $152,100,065                                              | $66,368,953                                             | $  1,998,285                                        | $5,982,098                                        | $226,449,401                  |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Un-earned Premium                                         | -0-                                                       | $        5,499  | $24,120,945                                                   | $     37,250             | $  24,163,694       |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Other Policy Claims &Benefits Payable                 | $        474,792  | $  2,422,926                                  | $     924,369                        | $     20,913             | $   3,843,000  |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| PremiumRevenue                                            | $ 37,392,540                                         | $  9,161,460                                  | $     (79,949)                            | $   433,591                        | $ 46,907,642             |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Net Invest-ment Income (1) and(3)                         | $   9,754,620                              | $  4,409,948                                  | $         6,971  | $    733,150                  | $ 14,904,689             |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Benefit claims, Losses &Settle-ment Expenses          | $ 16,776,625                                         | $  7,189,434                                  | $       69,813             | $  301,600                              | $24,337,472                   |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Amorti-zation of DeferredAcquisi-tion Costs               | $  4,229,690                                    | $  2,047,929                                  | $      32,469                   | $    25,722                   | $  6,335,810        |
|                                                           |                                                                |                                                              |                                                                    |                                                        |                                    |
| Other Operat-ing Expenses(2)                              | $  4,438,510                                    | $  1,706,856                                  | $    339,320                              | $  574,281                              | $  7,058,967        |

(1) Net investment income isallocated in proportion to policy liabilities and stockholders'equity for the subsidiary and to the corporate segment for theparent.

(2) Other operating expensesare assigned directly to the applicable segment for the subsidiaryand to the corporate segment for the parent.

(3) Includes realizedinvestment gains or losses.
| KENTUCKYINVESTORS, INC.             |
|-------------------------------------|
| SCHEDULE IV -REINSURANCE            |
| FOR THE YEARENDED DECEMBER 31, 2001 |
|                                    | LifeInsurance

     inForce      | Premium,Life

Insuranceand

     Annuities    | Premium,

Accident andHealth   Insurance   | TOTALPREMIUMS     |
|------------------------------------|------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|----------------------------------------------------------------|-------------------|
|                                    |                                                                                    |                                                                                       |                                                                |                   |
| Gross Amount                       | $ 1,898,615,000                                                          | $59,817,687                                                                      | $4,889,191                                                | $64,706,878  |
|                                    |                                                                                    |                                                                                       |                                                                |                   |
| Ceded to otherCompanies            | 783,567,000                                                                   | 12,512,940                                                                       | 4,889,658                                                 | 17,402,598   |
|                                    |                                                                                    |                                                                                       |                                                                |                   |
| Assumed from otherCompanies        | 1,389,141,000                                                                 | 2,516,561                                                                        | 9,708                                                     | 2,526,269    |
|                                    |                                                                                    |                                                                                       |                                                                |                   |
| Net Amount                         | 2,504,189,000                                                                 | 49,821,308                                                                       | 9,241                                                     | 49,830,549   |
|                                    |                                                                                    |                                                                                       |                                                                |                   |
| Percentage of Amount Assumed toNet | 55%                                                                           | 5%                                                                               | 105%                                                      | 5%           |
| KENTUCKYINVESTORS, INC.             |
|-------------------------------------|
| SCHEDULE IV -REINSURANCE            |
| (CONTINUED)                         |
| FOR THE YEARENDED DECEMBER 31, 2000 |
|                                    | Life Insurance    inForce     | Premium,Life

Insuranceand

    Annuities    | Premium,

Accident andHealth   Insurance   | TOTALPREMIUMS     |
|------------------------------------|-----------------------------------------------------------------------|---------------------------------------------------------------------------------|----------------------------------------------------------------|-------------------|
|                                    |                                                                       |                                                                                 |                                                                |                   |
| Gross Amount                       | $1,913,771,000                                                   | $59,299,373                                                                | $5,637,282                                                | $64,936,655  |
|                                    |                                                                       |                                                                                 |                                                                |                   |
| Ceded to otherCompanies            | 834,725,000                                                      | 13,729,123                                                                 | 5,642,818                                                 | 19,371,941   |
|                                    |                                                                       |                                                                                 |                                                                |                   |
| Assumed from otherCompanies        | 1,003,059,000                                                    | 2,368,686                                                                  | 5,999                                                     | 2,374,685    |
|                                    |                                                                       |                                                                                 |                                                                |                   |
| Net Amount                         | 2,082,105,000                                                    | 47,938,936                                                                 | 463                                                       | 47,939,399   |
|                                    |                                                                       |                                                                                 |                                                                |                   |
| Percentage of Amount Assumed toNet | 48%                                                              | 5%                                                                         | 1296%                                                     | 5%           |
| KENTUCKYINVESTORS, INC.             |
|-------------------------------------|
| SCHEDULE IV -REINSURANCE            |
| (CONTINUED)                         |
| FOR THE YEARENDED DECEMBER 31, 1999 |
|                                    | Life Insurance    inForce     | Premium,Life

Insuranceand

    Annuities   | Premium,

Accident andHealth   Insurance    | TOTALPREMIUMS     |
|------------------------------------|-----------------------------------------------------------------------|---------------------------------------------------------------------------|---------------------------------------------------------------------------|-------------------|
|                                    |                                                                       |                                                                           |                                                                           |                   |
| Gross Amount                       | $1,801,020,000                                                   | $56,774,745                                                          | $7,294,395                                                           | $64,069,140  |
|                                    |                                                                       |                                                                           |                                                                           |                   |
| Ceded to otherCompanies            | 739,675,000                                                      | 12,575,026                                                           | 7,204,051                                                            | 19,779,077   |
|                                    |                                                                       |                                                                           |                                                                           |                   |
| Assumed from otherCompanies        | 954,909,000                                                      | 2,616,778                                                            | 801                                                                  | 2,617,579    |
|                                    |                                                                       |                                                                           |                                                                           |                   |
| Net Amount                         | 2,016,254,000                                                    | 46,816,497                                                           | 91,145                                                               | 46,907,642   |
|                                    |                                                                       |                                                                           |                                                                           |                   |
| Percentage of Amount Assumed toNet | 47%                                                              | 6%                                                                   | 1%                                                                   | 6%           |