EMPLOYMENT AGREEMENT
                         THIS AGREEMENT ["Agreement"] is
          made and  entered  into this 1ST day of APRIL,  1997,  by and  between
          AMVESTORS   FINANCIAL   CORPORATION   [hereinafter   referred   to  as
          "AmVestors"],   AMERICAN  INVESTORS  LIFE  INSURANCE   COMPANY,   INC.
          [hereinafter  referred to as "American"],  AMVESTORS INVESTMENT GROUP,
          INC. and AMERICAN INVESTORS SALES GROUP, INC., all Kansas corporations
          [the latter three hereinafter collective referred to as "Affiliates"],
          parties of the first part  [hereinafter  referred to as  "Companies"],
          and  MARK  V.  HEITZ  [hereinafter  referred  to as "Mr.  Heitz"],  an
          individual, party of the second part.
                                   WITNESSETH:
                                              WHEREAS, Mr. Heitz has been
          employed for many years by AmVestors and its  affiliates  and has been
          employed  since 1986 as President and General  Counsel of the Board of
          AmVestors and as Chairman and General  Counsel of American since 1988;
          and
                                              WHEREAS, Mr. Heitz has also
          been employed by, associated with or has acted as a consultant to, and
          may in the  future,  at the  request of  AmVestors,  be  employed  by,
          associated  with  or  act  as  a  consultant  to,  the  affiliates  of
          AmVestors; and
                                               WHEREAS, AmVestors desires to
          continue to have the benefit of Mr.  Heitz's  knowledge and experience
          and considers  such a vital  element in  protecting  and enhancing the
          best  interests of  AmVestors  and its  shareholders  and in providing
          management for AmVestors.
57<PAGE>
                               NOW, THEREFORE, in
          consideration  of  the  mutual  agreements  and  conditions  contained
          herein, the parties hereto agree as follows:
                                              1. FULL-TIME EMPLOYMENT OF
          EXECUTIVE.
                              a. DUTIES AND STATUS.
                                              (1) AmVestors hereby employs
          Mr. Heitz as its  President  and General  Counsel and American  hereby
          employs  Mr.  Heitz as its  Chairman  and  General  Counsel to provide
          certain  services  set  forth  herein  and to  provide  certain  other
          employment services to affiliates for the employment period as defined
          in paragraph 3(a), and Mr. Heitz accepts such employment, on the terms
          and  conditions  set forth in this  Agreement.  During the  employment
          period,   Mr.  Heitz  shall   perform  such   managerial   duties  and
          responsibilities  for AmVestors  and  affiliates as may be assigned to
          him in accordance with the bylaws,  which duties and  responsibilities
          shall be substantially  the same character as or equivalent  character
          to those required by his assigned offices and functions during 1996.
                                              (2) During the employment
          period, Mr. Heitz shall devote his full time and efforts to the
          business of AmVestors and its affiliates and shall not engage in
          consulting work or any trade or business for his own account or for
          or on behalf of any other person, firm or corporation which
          competes, conflicts or interferes with the performance of his
          duties hereunder in any way. Mr. Heitz shall be entitled to
          reasonable vacations and to such personal and sick leave as may be
          established by AmVestors' and affiliates corporate policies. Mr.
          Heitz shall perform his
58<PAGE>
                    duties  while  employed  in good  faith  and  shall  observe
          faithfully the covenants and agreements made by him herein.
                                              b. COMPENSATION AND GENERAL
          BENEFITS.
                                              (1) During the employment
          period,  AmVestors shall pay Mr. Heitz a base salary to be established
          annually  by  the  Boards  of  Directors,  payable  in  twice  monthly
          installments  (or on such other basis as may be mutually agreed upon).
          The salary  shall be  reviewed  annually  by the  respective  Board of
          Directors  and  may be  increased,  but  not  diminished,  during  the
          employment period.
                                              (2) In addition to the salary
          provided by  subparagraph  (1) of this paragraph  1(b),  AmVestors and
          affiliates  shall provide  benefits and other  perquisites  reasonably
          comparable to, and no less favorable than, those provided by AmVestors
          and its  affiliates  to Mr.  Heitz  during  1996,  including,  but not
          limited to, an  automobile  suitable for the business and personal use
          of Mr. Heitz.
                                              2. COMPETITION; CONFIDENTIAL
          INFORMATION.
                                              The parties recognize that, due
          to the nature of Mr. Heitz's prior  association with the Companies and
          of his engagement hereunder,  and as a consequence of his relationship
          to  Companies,  both in the past and in the future , Mr. Heitz has had
          access to and has  acquired,  and has  assisted  in and may  assist in
          developing  confidential and proprietary  information  relating to the
          business
                              and operations of the
          Companies. Mr. Heitz recognizes
                                              that such information has been
          and will continue
                                              to be of central importance to
          the business of
                                              the Companies and that
          disclosure of such
59<PAGE>

                    information  to  others  or its use by  others  could  cause
          substantial irreparable loss to the Companies. Mr. Heitz and Companies
          also recognize that an important part of Mr. Heitz's duties will be to
          develop good will for the Companies  through his personal contact with
          others having  business  relationships  with  Companies and within the
          insurance industry,  and that there is a danger that this good will, a
          proprietary  asset of the  Companies,  may  follow him if and when his
          relationship  with the Companies is terminated.  Mr. Heitz accordingly
          agrees as follows:
                                              a. NON-COMPETITION DURING
          EMPLOYMENT  PERIOD.  During the employment period he will not directly
          or  indirectly,  either  individually  or as  owner,  partner,  agent,
          employee,  consultant or  otherwise,  except for the account of and on
          behalf of  Companies,  engage  in any  activity  competitive  with the
          business of Companies,  nor will he be in competition  with Companies,
          solicit or otherwise  attempt to establish any business  relationships
          with any person, firm or corporation which was, at any time during the
          employment  period,  a customer  or supplier  of  Companies.  However,
          nothing  in this  Section 2 shall be  construed  to  prevent  him from
          owning, as an investment,  up to one percent (1%) of a class of equity
          securities issued by any competitor of Companies.
                                              b. NON-COMPETITION AFTER PERIOD
          OF EMPLOYMENT.
                                              Mr. Heitz agrees that during
          the term of this Agreement,
                                              and as long as required
          payments are being made under
                                              the provisions of paragraphs
          3(c) and (f) (24 months),
                                              he will not, without the
          Companies prior written
                                              permission, attempt to entice
          away from
60<PAGE>

                    the Companies or affiliates or subsidiaries on behalf of any
          party  whatsoever,  or employ or otherwise  engage,  contract  with or
          retain  directly or  indirectly,  any  employee  then  employed by the
          Companies,  affiliates or subsidiaries or employed by them at any time
          during the  previous  two (2) years.  Mr.  Heitz  further  agrees that
          during such period he will not do anything to impair the  Companies or
          their  affiliates  or  subsidiaries'  prospects  of sales or  business
          retention,  and shall not solicit for any reason any of the  Companies
          or its  employees,  agency  personnel,  insureds  or  applicants,  nor
          knowingly  accept  commissions  directly or  indirectly  on any policy
          written  in  replacement  of any  policy  produced  or  written by the
          Companies or any of their  affiliates  or  subsidiaries  nor shall Mr.
          Heitz in any way derogate the Companies, its products or personnel.
                                              c. CONFIDENTIAL INFORMATION.
          Mr. Heitz will not disclose any confidential  information of Companies
          which is now known to him or which  hereafter  may become known to him
          as a result of his employment or association  with Companies and shall
          not at any time directly or indirectly  disclose any such  information
          to any person,  firm or corporation,  or use the same in any way other
          than in  connection  with the business of  Companies  and at all times
          after the expiration of the employment period.
                                              d. COMPANIES' REMEDIES FOR
          BREACH. It is
                                              recognized that damages in the
          event of breach of
                                              this Section 2 by Mr. Heitz
          would be difficult, if
                                              not impossible, to ascertain
          and it is, therefore,
                                              agreed that Companies, in
          addition to and without
                                              limiting any other remedy or
          right it may have, shall have
61<PAGE>
                    the right to an injunction or other equitable  relief in any
          court of competent  jurisdiction,  enjoining any such breach,  and Mr.
          Heitz hereby  waives any and all defenses he may have on the ground of
          lack of  jurisdiction  or  competence  of the  court to grant  such an
          injunction  or other  equitable  relief.  The  existence of this right
          shall not  preclude  Companies  from  pursuing  any other  rights  and
          remedies at law or in equity which Companies may have.
                              3. EMPLOYMENT PERIOD.
                           a. DURATION. The employment
          period  shall  commence  on April 1, 1997 and  shall be  automatically
          renewed  for  successive   two  (2)  year  periods  unless   otherwise
          terminated  as  provided  in  this   Agreement  or  unless  notice  of
          non-renewal  is  provided  Mr.  Heitz  sixty  days  (60)  prior to the
          expiration of any contract period.
                                              b. PERFORMANCE AND TERMINATION.
          Subject to the  performance  of the covenants and  agreements  made by
          Companies  herein,  Mr.  Heitz  shall  perform  his duties  during the
          employment  period  in good  faith  and will  observe  faithfully  the
          covenants and  agreements  made by him herein.  Mr. Heitz shall not be
          discharged  during the  employment  period except for cause  involving
          dishonesty,  moral  turpitude,  or  material  breach of any express or
          implied condition under this Agreement. The discharge of Mr. Heitz for
          reasons other than those specified in the preceding  sentence shall be
          deemed to be a discharge without cause.
                                              c. MR. HEITZ'S REMEDIES. If the
          Companies
                                              shall take any action with
          respect to Mr. Heitz's
                                              employment as set forth in
          paragraph 3(d) and
                                              (e) thereby entitling him to
          terminate
62<PAGE>

                    his  employment as provided in  paragraphs  3(d) and (e), or
          discharges  him without  cause then Mr.  Heitz shall be entitled to be
          paid a sum equal to two (2) years  salary based on the salary level in
          effect on the date of termination or discharge. Payments shall be made
          bimonthly in 48 equal installments and shall commence on the effective
          date of discharge or termination. The parties agree that, the payments
          provided  hereunder  shall be deemed  to  constitute  payment  for the
          non-compete  provisions  contained in paragraph 2(b) and not a penalty
          for breach by Companies and  Companies  agree that Mr. Heitz shall not
          be required to mitigate his damages.  This paragraph shall  constitute
          Mr.  Heitz's sole remedy for  compensation  upon the  cessation of his
          employment and/or breach of this Agreement.
                                              In the event Mr. Heitz
          materially violates the non-compete provisions of paragraph 2(b) after
          his employment has ceased then Companies shall have the right to cease
          all payments required under the provisions of paragraph 3(c) and (f).
                                              d. TERMINATION FOR GOOD REASON.
          Mr.  Heitz shall be  entitled to  terminate  his  employment  for good
          reason.   Any   termination   of   employment   under  the   following
          circumstances  shall be for good  reason  and  shall be deemed to be a
          breach of this Agreement by the Companies:
                                              (1) Without the express written
          consent of Mr.
                                              Heitz, he is assigned any
          duties inconsistent with his positions, duties, responsibilities
          and status with
                                              the Companies since March 1997,
          or his reporting responsibilities, titles or offices as in effect
                                              during the period of this
          Agreement are changed or he is
63<PAGE>

                    removed  from or not  reelected  to any of  such  positions,
          except in connection with the termination of his employment for cause,
          or as a result of his substantial disability or death;
                                              (2) The annual base salary of
          Mr. Heitz as in effect on the date of this Agreement, as the same
          hereafter may be increased from time to time, is reduced;
                                              (3) Companies' principal
          executive  offices are moved to a location  outside Topeka,  Kansas or
          any of the  Companies  require Mr. Heitz  without his  agreement to be
          based anywhere other than the principle  executive  offices except for
          required  travel on  Companies'  business  to an extent  substantially
          consistent with his business travel  obligations in effect immediately
          prior to the date of this Agreement; or
                              e. CHANGE IN CONTROL.
          Notwithstanding  Mr.  Heitz's  right to  terminate  for good reason in
          paragraph  3(d),  Mr.  Heitz shall also be entitled to  terminate  his
          employment  within 13 months  following  any "change in  control"  (as
          hereafter  defined  below) of  AmVestors  for any reason by  providing
          notice  in  writing  to  AmVestors  of his  intent  to  terminate  his
          employment  effective  as of a date not earlier  than thirty (30) days
          from  the date of  notice.  In such  event  Mr.  Heitz  shall be fully
          entitled to two years of salary  payments set forth in paragraph  3(c)
          as consideration for the non-compete  provision contained in paragraph
          2(b).
                                              The term "change in control" as
          used herein shall
                                              mean a change in control of a
          nature that would be
                                              required to be reported in
          response to Item 5(f) of
                                              Schedule 14A of Regulation 14A
          promulgated under
                                              the Securities Exchange Act of
          1934 (the
64<PAGE>

                    "Exchange  Act") as in effect on the date of this  Agreement
          or, if Item 5(f) is no longer in effect, any regulations issued by the
          Securities and Exchange  Commission pursuant to the Exchange Act which
          serve similar  purposes;  provided that,  without  limitation,  such a
          "change in control"  shall be deemed to have  occurred if and when (A)
          any "person" (as such term is used in Sections  3(a)(9),  13(d)(3) and
          14(d)(2)  of the  Exchange  Act) is or  becomes  a  beneficial  owner,
          directly or  indirectly,  of securities of AmVestors  representing  25
          percent  (25%)  or more  of the  combined  voting  power  of the  then
          outstanding securities of AmVestors or American, (B) a tender offer or
          exchange  offer is made  whereby  the  effect of such offer is to take
          over and control  AmVestors or American and such offer is  consummated
          for the ownership of securities of AmVestors or American  representing
          25  percent  (25%) or more of the  combined  voting  power of the then
          outstanding voting securities of AmVestors or American,  (C) AmVestors
          or American is merged or consolidated with another corporation or as a
          result of such merger or  consolidation  less than 75 percent (75%) of
          the then outstanding  voting  securities of the surviving or resulting
          corporation  shall  then  be  owned  in the  aggregate  by the  former
          stockholders of AmVestors or American,  other than  affiliates  within
          the  meaning  of the  Exchange  Act or any  party  to such  merger  or
          consolidation,  (D)  individuals  who  were  members  of the  Board of
          Directors of AmVestors or American  immediately  prior to a meeting of
          the shareholders of AmVestors or American involving a contest
                    for the election of directors shall not constitute a
          majority of such Board of Directors following such
65<PAGE>
                    election,  or (E) AmVestors  transfers  substantially all of
          its  assets  to  another  corporation  which  is  not a  wholly  owned
          subsidiary of AmVestors or American.
                                              f. SALARY CONTINUATION IN THE
          EVENT OF  NON-RENEWAL.  In the event of non-renewal of this Employment
          Agreement by AmVestors  and/or its affiliates and in  consideration of
          Mr.  Heitz's  service  to  Companies  and  in   consideration  of  the
          non-compete provisions of this Agreement,  Mr. Heitz shall be entitled
          to be paid a sum equal to two (2) years of continuance salary based on
          the same  salary  level he was  receiving  on the  date of  notice  of
          non-renewal. Payments shall be made bimonthly in 48 equal installments
          and shall  commence  thirty (30) days  following the expiration of the
          employment  period.  Mr. Heitz agrees that he will faithfully  observe
          the  continuing  covenants  of this  Agreement  for a period  in which
          payments  under this paragraph are being made and will comply with the
          provisions of paragraph 2(b).
                                              4. DEATH OR DISABILITY.
                                              a. In the event Mr. Heitz shall
          become so disabled during the term of this Agreement that he is unable
          to  reasonably  perform  his duties for a period of ninety  (90) days,
          either Mr. Heitz or AmVestors and its Affiliates  shall have the right
          to terminate  this  Agreement  upon written notice given at the end of
          such ninety (90) days period;  provided  that, at the time of delivery
          of such notice, such disability shall be continuing. In the event of a
          disagreement between Companies and/or Mr. Heitz
                                              regarding the question of
          whether Mr. Heitz is
                                              disabled as defined herein, the
          question shall
                                              be referred to the Companies
          physician
66<PAGE>

                    whose decision will be conclusive and binding.  In the event
          of termination for disability,  Mr. Heitz shall be entitled to receive
          as a settlement  of this  contract,  an annual sum equal to the annual
          base salary as such may be increased from time to time wh
ich       shall be payable semimonthly, for a period of three (3) years from the
          date  of  termination.  If Mr.  Heitz  dies  during  the  term of this
          Agreement,  and his  employment  has been  terminated  as a result  of
          disability  his estate or  beneficiary  shall  receive  the  remaining
          payments under this paragraph payable  semimonthly.  There shall be no
          further obligations on the part of the Companies under this Agreement.
                                              5. GOVERNING LAW. This
          Agreement shall be governed by the laws of the State of Kansas.
                                              6. BINDING EFFECT. This
          Agreement shall be binding upon the parties hereto,  their successors,
          assigns, heirs, legatees and personal representatives.
                                              7. ASSIGNABILITY. This
          Agreement shall not be assignable by the Companies, nor may his
          duties hereunder be delegated by Mr. Heitz.
                                              8. NOTICES. Any notice required
          or desired to be given under this Agreement shall be sent by certified
          mail to Mr.  Heitz's  residence in Topeka,  Kansas and to AmVestors or
          its affiliates at their principal place of business in Topeka, Kansas.
                                              9. ENTIRE AGREEMENT. This
          Agreement constitutes the entire agreement of the parties hereto
          with respect
                                              to the subject matter hereof,
          and supersedes
                                              all prior agreements, proposals
          and
67<PAGE>

                    other communications,  oral or written,  between the parties
          hereto relating to such subject matter.
                                              10. SEVERABILITY. If any term
          or  provision  of this  Agreement  or the  application  thereof to any
          circumstances shall, in any jurisdiction and to any extent, be invalid
          or  unenforceable,  such term of provision  shall be ineffective as to
          such jurisdiction to the extent of such invalidity or unenforceability
          without invalidating or rendering unenforceable any remaining terms or
          provisions  of this  Agreement  or the  application  of  such  term or
          provision to circumstances  other than those as to which it is invalid
          or  unenforceable.  To the extent  permitted  by  applicable  law, the
          parties hereto hereby waive any provision of law that renders any term
          or  provision  of  this  Agreement  invalid  or  unenforceable  in any
          respect.
                                              11. INTENT OF AGREEMENT. The
          Companies  intend by this  Agreement to provide for the  employment of
          Mr. Heitz. While this Agreement  provides for Mr. Heitz's  employment,
          this  Agreement  shall in no manner  ever be deemed  or  construed  as
          limiting the power of stockholders to elect Mr. Heitz as a director of
          Companies or limiting the power of the Companies to elect its Chairman
          or officer(s). In like manner, if stockholders or some future Board of
          Directors of the Companies  shall not reelect Mr. Heitz,  such failure
          to so elect Mr. Heitz shall not be deemed or considered as a condition
          precedent  to the  continued  obligation  of the  Companies to pay Mr.
          Heitz the compensation as provided for in this Agreement.
68<PAGE>
                                              12. RECOVERY OF LEGAL FEES,
          COSTS AND  EXPENSES.  In the event that Mr. Heitz is terminated by the
          Companies  and Mr. Heitz  retains  legal  counsel or  commences  legal
          action, the costs and expenses,  including legal fees shall be paid by
          the Companies or their  affiliates in the event Mr. Heitz  prevails in
          such  action  either by verdict or  judgment.  In the event Mr.  Heitz
          prevails as defined above,  the Companies or their affiliate shall pay
          the reasonable  attorney fees,  costs and expenses  within thirty (30)
          days after the conclusion of the litigation.
                                              IN WITNESS WHEREOF, the parties
          hereto have signed this
                                              Employment Agreement the day
          and year first above written.
                                       PARTY OF THE FIRST PART:
                         AMVESTORS FINANCIAL CORPORATION



                          By: /s/ Ralph W. Laster, Jr.
                                         Ralph W. Laster Jr.
                           Chief Executive Officer and
                              Chairman of the Board
        ATTEST:
        /s/ Lynn F. Hammes
        CORPORATE SECRETARY
                                            AMERICAN INVESTORS LIFE INSURANCE
                                            COMPANY, INC.



                                            By: /s/ Ralph W. Laster, Jr.
                                            Ralph W. Laster Jr., President
                                            and Chief Executive Officer
          ATTEST:
          /s/ Lynn F. Hammes
          CORPORATE SECRETARY
  69<PAGE>

                                            AMVESTORS INVESTMENT GROUP, INC.
                                            AMERICAN INVESTORS SALES GROUP INC.



                                             By: /s/ Ralph W. Laster, Jr.
                                             Ralph W. Laster Jr., Chief
                                Executive Officer



                                             COMPENSATION COMMITTEE--
                                             AMVESTORS FINANCIAL CORPORATION and
                                             AMERICAN INVESTORS LIFE INSURANCE
                                             COMPANY, INC.


                               By: /s/ R. Rex Lee
                              R. Rex Lee, Chairman




                                              PARTY OF THE SECOND PART:
                                /s/ Mark V. Heitz
                                  MARK V. HEITZ
70