FORM 10-Q
                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

              QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                OF THE SECURITIES EXCHANGE ACT OF 1934



        For the Quarterly Period Ended:  SEPTEMBER 30, 1998
                                         ------------------
                  Commission File Number: 0-10306
                                          -------

                        INDEPENDENCE HOLDING COMPANY
          ----------------------------------------------------- 
          (Exact name of Registrant as specified in its charter)



         DELAWARE                             58-1407235
-----------------------------------------------------------------
(State of Incorporation)      (I.R.S. Employer Identification No.)


         96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT         06902
----------------------------------------------------------------------
           (Address of principal executive offices)         (Zip Code)


    Registrant's telephone number, including area code: (203)358-8000
                                     
                                     
                             NOT APPLICABLE
---------------------------------------------------------------------
Former  name, former address and former fiscal year, if changed since
last report.


Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and(2)has been
subject to such filing requirements for the past 90 days. Yes X.  No .


          7,378,469 SHARES OF COMMON STOCK, $1.00 PAR VALUE
----------------------------------------------------------------------
          Common stock outstanding as of November 10, 1998
                                     
                                     
                                     
<PAGE>                                     
                                     
               INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

                              INDEX
                                     




     PART I - FINANCIAL INFORMATION                      PAGE NO.
     ------------------------------                      --------
     Consolidated Balance Sheets -
     September 30, 1998(unaudited)
     and December 31, 1997............................       3

     Consolidated Statements of Operations -
     Three Months and Nine Months ended
     September 30, 1998 and 1997 (unaudited).........        4

     Consolidated Statements of Cash Flows -
     Nine Months Ended September 30, 1998
     and 1997(unaudited).............................        5

     Notes to Consolidated Financial Statements
     (unaudited)......................................  6 - 10

     Management's Discussion and Analysis of Results
     of Operations and Financial Condition............ 11 - 19

     PART II - OTHER INFORMATION
     ---------------------------
     Item 6 - Exhibits and Reports on Form 8-K........      20

     Signatures.......................................      21






                                2
<PAGE>    

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS                 SEPTEMBER 30,  DECEMBER 31,
                                                1998          1997
-----------------------------------------------------------------------
ASSETS:                                      (UNAUDITED)
 Cash and cash equivalents..................$ 21,671,000  $ 23,028,000
 Investments:
  Short-term investments....................  16,369,000    18,265,000
  Securities purchased under
   agreements to resell.....................   4,443,000    25,469,000
  Fixed maturities.......................... 235,750,000   201,324,000
  Equity securities.........................  15,013,000    13,496,000
  Other investments(Note 3).................  52,205,000    50,459,000
                                             -----------   -----------
     Total investments...................... 323,780,000   309,013,000
 Deferred policy acquisition costs..........  20,079,000    13,611,000
 Due and unpaid premiums....................   7,775,000     6,448,000
 Due from reinsurers........................ 109,152,000    92,990,000
 Due from brokers...........................     246,000         -
 Notes and other receivables................   4,684,000     3,292,000
 Other assets...............................   8,516,000     6,356,000
                                             -----------   -----------
     TOTAL ASSETS...........................$495,903,000  $454,738,000
                                             ===========   ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
 LIABILITIES:
 Future policy liabilities..................$223,815,000  $169,082,000
 Unearned premiums..........................  21,905,000    27,893,000
 Funds on deposit...........................  65,070,000    72,187,000
 Insurance policy claims....................   5,829,000     6,279,000
 Other policyholders' funds.................   3,553,000     2,651,000
 Financial instruments sold, but
  not yet purchased.........................     608,000         -
 Due to brokers.............................  29,155,000    43,356,000
 Due to reinsurers..........................  10,270,000     4,349,000
 Accounts payable, accruals and
  other liabilities.........................  18,429,000    23,516,000
 Liability for business transferred (Note 2)       -         7,905,000
 Income taxes...............................   8,036,000     6,515,000
                                             -----------   -----------
     TOTAL LIABILITIES...................... 386,670,000   363,733,000
                                             -----------   -----------
STOCKHOLDERS' EQUITY:
 Preferred stock (none issued)..............       -             -
 Common stock, 7,388,469 and 7,430,169
  shares issued and outstanding, net
  of 2,236,050 and 2,188,950 shares
  in treasury, respectively.................   7,388,000     7,430,000
 Paid-in capital............................  83,443,000    76,046,000
 Accumulated other comprehensive income:
  Unrealized gains on investments,
   net of taxes (Notes 5 and 6).............   4,639,000     1,892,000
 Retained earnings .........................  13,763,000     5,637,000
                                             -----------   -----------
     TOTAL STOCKHOLDERS' EQUITY............. 109,233,000    91,005,000
                                             -----------   -----------
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY..................$495,903,000  $454,738,000
                                             ===========   ===========

       See Accompanying Notes to Consolidated Financial Statements.

                                3
<PAGE> 

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
                           THREE MONTHS ENDED          NINE MONTHS ENDED
                             SEPTEMBER 30,                SEPTEMBER 30,
                           1998         1997         1998         1997
-------------------------------------------------------------------------
REVENUES:
 Premiums earned.......$19,366,000  $21,735,000  $60,264,000  $60,557,000
 Net investment income.  3,286,000    6,046,000   15,538,000   15,763,000
 Net realized and
  unrealized gains
  (losses).............  1,118,000       52,000    1,531,000      (99,000)
 Equity income (loss)..     23,000       72,000      (14,000)     151,000
 Other income..........  2,315,000    1,301,000    5,294,000    2,165,000
                        ----------   ----------   ----------   ----------
                        26,108,000   29,206,000   82,613,000   78,537,000
                        ----------   ----------   ----------   ----------
EXPENSES:
 Insurance benefits,
  claims and reserves.. 13,345,000   16,269,000   44,492,000   43,231,000
 Amortization of
  deferred policy
  acquisition costs....  1,305,000      741,000    3,781,000    2,195,000
 Selling, general and
  administrative
  expenses.............  7,742,000    8,691,000   23,675,000   23,699,000
                        ----------   ----------   ----------   ----------
                        22,392,000   25,701,000   71,948,000   69,125,000
                        ----------   ----------   ----------   ----------
 Operating income
  before income taxes..  3,716,000    3,505,000   10,665,000    9,412,000
 Income tax expense
  (Note 5).............  1,028,000      680,000    2,539,000    1,136,000
                        ----------   ----------   ----------   ----------
NET INCOME.............$ 2,688,000  $ 2,825,000  $ 8,126,000  $ 8,276,000
                        ==========   ==========   ==========   ==========
BASIC INCOME PER
 COMMON SHARE..........$       .36  $       .38  $      1.09  $      1.11
                        ==========   ==========   ==========   ==========
WEIGHTED AVERAGE
 BASIC COMMON SHARES
 OUTSTANDING...........  7,418,000    7,432,000    7,428,000    7,432,000
                        ==========   ==========   ==========   ==========  
DILUTED INCOME
 PER COMMON SHARE......$       .36  $       .37  $      1.08  $      1.10
                        ==========   ==========   ==========   ==========
WEIGHTED AVERAGE
 DILUTED COMMON SHARES
 OUTSTANDING...........  7,539,000    7,533,000    7,557,000    7,493,000
                        ==========   ==========   ==========   ==========

       See Accompanying Notes to Consolidated Financial Statements.

                                4
<PAGE>


INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,                1998            1997
----------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income................................$  8,126,000   $  8,276,000
 Adjustments to reconcile net income to
  net cash provided by operating activities:
  Amortization of deferred policy
   acquisition costs.......................   3,781,000      2,195,000
  Realized (gains) losses on sales of
   investments.............................  (1,815,000)        70,000
  Unrealized losses on trading
   securities..............................     284,000         30,000
  Equity loss (income).....................      14,000       (151,000)
  Depreciation.............................     388,000        308,000
  Deferred tax (benefit) expense...........    (420,000)       437,000
  Other....................................    (240,000)      (897,000)
 Changes in assets and liabilities:
  Net sales (purchases) of trading
   securities..............................     857,000     (2,031,000)
  Increase in insurance liabilities........  43,966,000     42,311,000
  Additions to deferred policy
   acquisition costs....................... (10,249,000)    (1,932,000)
  Change in net amounts due from and to
   reinsurers.............................. (10,240,000)   (33,774,000)
  Change in income tax liability...........     344,000         32,000
  Change in due and unpaid premiums........  (1,327,000)    (2,612,000)
  Other....................................  (6,958,000)      (856,000)
                                            -----------    -----------
     Net cash provided by operating
       activities..........................  26,511,000     11,406,000
                                            -----------    ----------- 
CASH FLOWS FROM INVESTING ACTIVITIES:
 Change in net amount due from and to
  brokers.................................. (14,446,000)    (5,625,000)
 Sales and maturities of short-term
  investments..............................  72,749,000     35,166,000
 Purchases of short-term investments....... (70,767,000)   (32,254,000)
 Net purchases of resale agreements........  21,026,000     18,402,000
 Sales and maturities of fixed maturities.. 141,028,000    121,589,000
 Purchases of fixed maturities.............(169,067,000)  (137,010,000)
 Sales of equity securities................  35,961,000     20,190,000
 Purchases of equity securities............ (38,014,000)   (27,159,000)
 Proceeds on sales of other investments....   6,275,000      3,081,000
 Other investments, net....................  (8,035,000)   (13,955,000)
 Other.....................................  (1,771,000)      (677,000)
                                            -----------    -----------
     Net cash used by investing
       activities.......................... (25,061,000)   (18,252,000)
                                            -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Exercise of common stock options..........      55,000          -
 Repurchase of common stock................    (605,000)         -
 Payments of investment-type insurance
  contracts................................  (1,885,000)    (1,818,000)
 Dividends paid............................    (372,000)      (372,000)
                                            -----------    -----------
     Net cash used by financing
        activities.........................  (2,807,000)    (2,190,000)
                                            -----------    ----------- 
 Decrease in cash and cash equivalents.....  (1,357,000)    (9,036,000)
 Cash and cash equivalents, beginning
  of year..................................  23,028,000     10,361,000
                                            -----------    -----------
 Cash and cash equivalents, end of period..$ 21,671,000   $  1,325,000
                                            ===========    ===========

       See Accompanying Notes to Consolidated Financial Statements.

                                5
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------------------------------
NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

     (A)  BUSINESS AND ORGANIZATION

      Independence  Holding Company ("IHC") is a holding  company
engaged  principally  in the life and health  insurance  business
through  its  wholly-owned subsidiaries, Standard  Security  Life
Insurance Company of New York ("Standard Life"), Madison National
Life  Insurance Company, Inc. ("Madison Life") and First Standard
Security   Insurance   Company  ("First  Standard")   and   their
subsidiaries (collectively, the "Insurance Group").  IHC and  its
subsidiaries  (including  the Insurance Group)  are  collectively
referred to as the "Company."
     Geneve Corporation, a diversified financial holding company,
and  its  affiliated  entities hold approximately  55%  of  IHC's
outstanding common stock.

       (B)   PRINCIPLES  OF  CONSOLIDATION  AND  PREPARATION   OF
FINANCIAL STATEMENTS

      The consolidated financial statements have been prepared in
accordance with the requirements for quarterly reports on Form 10-
Q. In the opinion of management, all adjustments (consisting only
of  normal  recurring  accruals) that are necessary  for  a  fair
presentation  of the consolidated results of operations  for  the
interim  periods have been included. The consolidated results  of
operations  for the three months and nine months ended  September
30,  1998  are  not necessarily indicative of the results  to  be
anticipated  for  the  entire  year. The  consolidated  financial
statements  should be read in conjunction with  the  consolidated
financial  statements  and  the notes included  in  IHC's  Annual
Report on Form 10-K for the year ended December 31, 1997. Certain
amounts in the prior year's consolidated financial statements and
notes  thereto  have  been  restated  to  conform  to  the   1998
presentation.
      The  preparation of financial statements in conformity with
generally  accepted accounting principles requires management  to
make  estimates  and  assumptions that  affect:(i)  the  reported
amounts   of  assets  and  liabilities;(ii)  the  disclosure   of
contingent  assets and liabilities at the date of  the  financial
statements;  and  (iii)  the reported  amounts  of  revenues  and
expenses during the reporting period. Actual results could differ
from those estimates.

                                6
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------------------------------
NOTE 2.  DISCONTINUED OPERATIONS

      On  December 31, 1996, IHC consummated the distribution  of
the common stock of Zimmerman Sign Company ("Zimmerman") on a pro
rata  basis  to  holders of record of IHC's common  stock  as  of
December  20,  1996.  In  connection  with  the  distribution  of
Zimmerman, a subsidiary of the Company guaranteed $10,000,000  of
subordinated  debt of Zimmerman (the "Guarantee").  On  September
30,  1998, the Guarantee was terminated; accordingly, a  deferred
credit  (which  was incurred in connection with the  spin-off  of
Zimmerman)  of  $7,905,000, or $1.06 per share, was  credited  to
stockholders' equity as of September 30, 1998.

NOTE 3.  OTHER INVESTMENTS

      The  Company  had invested $16,618,000 and  $18,449,000  at
September  30,  1998 and 1997, respectively, in  Dolphin  Limited
Partnership-A  ("Dolphin"), a private  limited  partnership  that
invests   principally  in relatively "market neutral"  strategies
which  are  less affected by general movements in the equity  and
fixed  income  markets  than traditional  investments,  including
"risk/merger arbitrage" and "convertible arbitrage." "Risk/merger
arbitrage" is an investment approach designed to profit from  the
successful  completion  of  proposed mergers,  takeovers,  tender
offers,  leveraged  buy-outs,  recapitalizations  and  spin-offs.
"Convertible  arbitrage"  is a strategy principally  designed  to
capitalize   on  discrepancies  in  the  pricing  of  convertible
securities   and   their  underlying  common  stocks   or   stock
equivalents.  To  a  lesser  extent,  Dolphin  also  invests   in
"distressed  situations" which principally means  entities  which
are  in  bankruptcy  proceedings  or  are  otherwise  financially
distressed.  The condensed statements of operations  for  Dolphin
for the three months and nine months ended September 30, 1998 and
1997 are as follows:

                   THREE MONTHS ENDED         NINE MONTHS ENDED
                   1998          1997        1998          1997
                   ------------------        ------------------ 
                     (IN THOUSANDS)            (IN THOUSANDS)

Revenues...........$  (659)  $  2,949        $  2,518  $  9,191
Net (loss) income..$  (787)  $  2,213        $  1,313  $  6,774

IHC's share of
 net (loss) income.$  (367)  $  1,076        $    561  $  3,107

                                 7
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
----------------------------------------------------------------
NOTE 4.  INCOME PER COMMON SHARE

     In December 1997, the Company adopted Statement of Financial
Accounting  Standards  ("SFAS") No. 128,  "Earnings  per  Share."
SFAS  No.  128 establishes standards for computing and presenting
earnings  per share.  Accordingly, all prior earnings  per  share
calculations  have  been restated to reflect  the  new  standard.
Included in the  diluted earnings per share  calculation for 1998
and  1997, respectively, are 121,000 and 101,000 shares  for  the
three  months ended September 30, 1998 and 1997 and  129,000  and
61,000  shares for the nine months ended September 30,  1998  and
1997  from  the  assumed exercise of options using  the  treasury
stock  method.  Net income does not change as  a  result  of  the
assumed  dilution  of  options. Warrants  to  purchase  1,965,697
shares  of common stock at $16.37 per share were not included  in
the  computation of diluted income per share because  the  strike
price  of the warrants was greater than the average market  price
of  the  common  shares during the three months and  nine  months
ended September 30, 1998 and 1997.

NOTE 5.  INCOME TAXES

      The  provision  for income taxes shown in the  consolidated
statements  of  operations was computed based  on  the  Company's
estimate of the effective tax rates expected to be applicable for
the  current  year,  including the expected  tax  impact  of  the
life/nonlife consolidation. Cash payments for income  taxes  were
$2,632,000  and $676,000 for the nine months ended September  30,
1998 and 1997, respectively.
      The  income tax expense for the nine months ended September
30,  1998 allocated to stockholders' equity for unrealized  gains
on  investment securities was $1,597,000 representing the  change
in  deferred  tax liability of $2,641,000 at September  30,  1998
from  $1,044,000 at December 31, 1997.

NOTE 6.  COMPREHENSIVE INCOME

      The  Company adopted SFAS No. 130, "Reporting Comprehensive
Income,"  effective  January 1, 1998. SFAS  No.  130  establishes
standards  for the reporting and display of comprehensive  income
and  its  components.  The  components  of  comprehensive  income
include  net  income  and  certain  amounts  previously  reported
directly in equity.

                                8
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------------------------------
NOTE 6.  COMPREHENSIVE INCOME (CONTINUED)

      Disclosures related to comprehensive income for  the  three
months  and nine months ended September 30, 1998 and 1997 are  as
follows:

                       THREE MONTHS ENDED      NINE MONTHS ENDED
                       1998          1997     1998           1997
                       ------------------     -------------------
                         (IN THOUSANDS)         (IN THOUSANDS)

(A) COMPREHENSIVE INCOME

Net income................$ 2,688   $ 2,825    $ 8,126   $ 8,276
Unrealized gains
 on securities, net
 of reclassification......  1,939     2,146      2,747     3,046
                           ------    ------     ------    ------
     Comprehensive
      income..............$ 4,627   $ 4,971    $10,873   $11,322
                           ======    ======     ======    ======
(B) RECLASSIFICATION

Unrealized gains, net.....$ 1,576   $ 2,208    $ 2,463   $ 3,016
Less: reclassification
 for unrealized (losses)
 gains included in net
 income...................   (363)       62       (284)      (30)
                           ------    ------     ------    ------
Unrealized gains
 on securities, net.......$ 1,939   $ 2,146    $ 2,747   $ 3,046
                           ======    ======     ======    ======

(C) ACCUMULATED OTHER COMPREHENSIVE INCOME

Beginning balance.........$ 2,700   $  (566)   $ 1,892   $(1,466)
Unrealized gains
 on securities, net.......  1,939     2,146      2,747     3,046
                           ------    ------     ------    ------
Ending balance............$ 4,639   $ 1,580    $ 4,639   $ 1,580
                           ======    ======     ======    ======

                                9
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------------------------------

NOTE 7.  NEW ACCOUNTING PRONOUNCEMENTS

      In  June  1997,  the Financial Accounting  Standards  Board
("FASB") issued SFAS No. 131, "Disclosures about Segments  of  an
Enterprise  and Related Information." The requirements  for  SFAS
No. 131 are effective for financial statements for periods ending
after  December  15,  1997 but need not  be  applied  to  interim
financial statements in the initial year of its application.  The
Company is currently evaluating the impact of SFAS No. 131 on the
disclosures   required  to  be  made  concerning  its   operating
segments.
      In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative  Instruments and Hedging Activities." The requirements
for  SFAS  No.  133  are effective for financial  statements  for
periods ending after June 15, 1999. The Company is evaluating the
Statement but does not expect it to have a material impact on the
Company.
       In   January  1998,  the  Company  adopted  the  remaining
provisions  of  SFAS  No.  125,  "Accounting  for  Transfers  and
Servicing   of   Financial   Assets   and   Extinguishments    of
Liabilities,"  as  deferred by SFAS  No.  127  "Deferral  of  the
Effective Date of Certain Provisions of FASB Statement No.  125."
The  adoption of the remaining provisions of SFAS No. 125 had  no
material impact on the Company.

                                10
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------
       Independence  Holding  Company,  a  Delaware   corporation
("IHC"), is a holding company engaged principally in the life and
health  insurance business through its wholly-owned subsidiaries,
Standard  Security Life Insurance Company of New York  ("Standard
Life"),  Madison National Life Insurance Company, Inc.  ("Madison
Life")  and  First  Standard Security Insurance  Company  ("First
Standard")  and their subsidiaries (collectively, the  "Insurance
Group"). IHC and its subsidiaries (including the Insurance Group)
are  collectively  referred to as the  "Company."  All  remaining
income,  principally income from parent company liquidity  (cash,
cash  equivalents, resale agreements, marketable  securities  and
partnership  investments),  and  expense  items  associated  with
parent  company activities, the Company's remaining  real  estate
holdings  and  certain  other investments  of  the  Company,  are
included in Corporate.

                      RESULTS OF OPERATIONS
                      --------------------- 
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 1997
--------------------------------------------------------------
     The Company's operating income increased $.2 million to $3.7
million for the period ended September 30, 1998 from $3.5 million
for the same period in 1997. Net income was $2.7 million, or $.36
per  share,  diluted, for the quarter ended  September  30,  1998
compared  to  $2.8 million, or $.37 per share, diluted,  for  the
quarter  ended September 30, 1997. The Company had  net  realized
and  unrealized gains of $1.1 million in 1998 and $.1 million  in
1997. Excluding net realized and unrealized gains or losses,  the
Company  had operating income of $2.6 million in 1998 as compared
to $3.5 million in 1997, a decrease of 24.8%, which approximately
consists  of: the decrease in yields on investable assets,  ($3.1
million),  and a decrease in acquisitions at Madison  Life,  ($.2
million),  offset  by  an increase due  to  all  other  lines  of
business,  $2.4  million. Income tax expense  increased  to  $1.0
million in 1998 from $.7 million in 1997 (see Capital Resources).

Insurance Group
---------------
     The Insurance Group's operating income increased $.5 million
to  $4.1  million  in 1998 from $3.6 million in  1997.  Operating
income includes net realized and unrealized gains of $1.1 million
in  1998  compared  to  $.1 million in 1997.  Decisions  to  sell
securities are based on cash flow needs, investment opportunities
and economic and market conditions, thus creating fluctuations in
gains from year to year. Operating income (excluding net realized
and  unrealized gains) was $3.0 million in 1998 compared to  $3.6
million in 1997, a decrease of 15.5%.

      Premiums earned decreased $2.4 million to $19.4 million  in
1998  from  $21.7 million in 1997; premiums earned decreased  $.8

                                11
<PAGE> 
million  at Madison Life and $1.6 million at Standard  Life.  The
decrease  at  Madison  Life  is comprised  of:   a  $1.2  million
decrease  in the credit lines of business primarily  due  to  the
recording of two quarters of activity on an acquired block in the
third  quarter  of  1997, followed by the  expected  decrease  in
activity  on that block in 1998; offset by a $.1 million increase
in  long-term disability premiums; and a $.3 million increase  in
ordinary  life  and  individual A & H  premiums.  The  change  at
Standard Life is comprised of: a $.4 million decrease in its  DBL
line  due  to a higher lapse rate in 1998; a $.3 million decrease
in  HMO  premiums due to a reinsurance adjustment on  an  assumed
block  of  business; a $.6 million decrease in point  of  service
premiums  due  to a retroactive adjustment and the  loss  of  one
large policy contract in 1998; and a $.3 million decrease in stop-
loss premiums.

     Total net investment income decreased $2.1 million primarily
due  to  lower  returns on certain hedged equity  and  distressed
situation  investments  in  the third quarter  of  1998  slightly
offset  by  an  increase  in assets at Madison  Life  related  to
acquisitions.  The  annualized  return  on  investments  of   the
Insurance Group in the third quarter of 1998 was 4.4% compared to
7.9% in the third quarter of 1997.

      Other  income increased $.7 million. Madison  Life  had  an
increase of $1.0 million due to fee income earned by the managing
general  underwriter  ("MGU") of which Madison  Life  acquired  a
controlling interest effective December 31, 1997. Such fee income
of  the MGU was offset by expenses described below in general and
administrative expenses. Other income at Standard Life  decreased
$.3  million  from a decrease in fee income. Equity  income  from
partnerships is approximately the same.

      Insurance  benefits,  claims and  reserves  decreased  $2.8
million reflecting a decrease of $.3 million at Madison Life  and
a  decrease  of  $2.5 million at Standard Life.   Madison  Life's
decrease  resulted  from: a $.5 million decrease  in  the  credit
lines  of  business  due  to the recording  of  two  quarters  of
activity  on  an  acquired block in the third  quarter  of  1997,
followed  by the expected decrease in activity on that  block  in
1998;  and  a  $.1  million decrease in group term  life  claims;
offset  by  a  $.2  million  increase  in  interest  credited  to
universal life and annuity products and a $.1 million increase in
long-term  disability  claims. The change  at  Standard  Life  is
comprised  of: a $.5 million decrease in HMO reserves  due  to  a
reinsurance  adjustment on an assumed block of business;  a  $1.0
million  decrease in additional DBL claims and  reserves  due  to
improved  experience  ($.6  million)  and  lower  premiums   ($.4
million);  a  $.3 million decrease in stop-loss reserves;  a  $.4
million decrease in point of service claims and reserves due to a
retroactive adjustment and the loss of one large policy  contract
in  1998;  and a $.6 million decrease in reserves in  the  closed
blocks  of  life, annuity and individual and group  accident  and

                                12
<PAGE>
health  lines of business; such decreases were offset  by  a  $.3
million increase in dividends to policyholders.

      Amortization  of  deferred  policy  acquisition  costs  and
general  and  administrative expenses  for  the  Insurance  Group
decreased  $.4  million.  Madison Life's expenses  increased  $.5
million  and Standard Life's expenses decreased $.9 million.  The
increase at Madison Life is primarily due to an increase in other
general  expenses of $1.1 million related to the MGU acquired  on
December  31,  1997  offset by a decrease in commissions  of  $.6
million  related to the acquisition of new blocks of business  in
1997.  The  decrease  at  Standard Life is  primarily  due  to  a
reduction  in  net commission expense of $.4 million attributable
to the increase in expense allowances received from reinsurers on
its  HMO  and special disability line of business as a result  of
the  increase  in  gross premiums and a $.5 million  decrease  in
general  expenses  from  the third party administrator  in  which
Standard Life sold its interest in December 1997.

Corporate
---------
      Operating  loss  for the quarter ended September  30,  1998
increased $.3 million to a loss of $.4 million as compared  to  a
loss  of  $.1 million for the quarter ended September  30,  1997.
Investment  income decreased $.6 million from 1997 due  to  lower
returns  from  certain hedged equity investments in  1998.  Other
income  increased  $.3 million as a result of fee  income  earned
from  the  termination of the guarantee of the debt of  Zimmerman
Sign  Company  ("Zimmerman"). Selling, general and administrative
expenses remained constant.

NINE  MONTHS  ENDED SEPTEMBER 30, 1998 COMPARED  TO  NINE  MONTHS
ENDED SEPTEMBER 30, 1997
-----------------------------------------------------------------
      The  Company's operating income increased $1.3  million  to
$10.7  million for the period ended September 30, 1998 from  $9.4
million for the same period in 1997. Net income was $8.1 million,
or  $1.08 per share, diluted, for the nine months ended September
30,  1998  compared to $8.3 million, or $1.10 per share, diluted,
for the nine months ended September 30, 1997. The Company had net
realized and unrealized gains of $1.5 million in 1998 and  losses
of  $.1  million in 1997. Included in the 1997 results is a  non-
recurring  gain of $1.0 million or $.14 per share, diluted,  from
the  sale  of real estate carried by IHC at nominal value  (there
was no tax attributable to such gain). Excluding net realized and
unrealized gains or losses and the non-recurring real estate gain
in 1997, the Company had operating income of $9.1 million in 1998
as  compared to $8.5 million in 1997, an increase of 7.9%,  which
approximately  consists of: acquisitions of  blocks  of  business
made  at Madison Life, $1.6 million, the increase in other  lines
of  business, $2.2 million, offset by the decrease  in  yield  on
investable assets,($3.2 million). Income tax expense increased to
$2.5  million  in  1998 from $1.1 million in  1997  (see  Capital
Resources).

                                13
<PAGE>
Insurance Group
---------------
      The  Insurance  Group's  operating  income  increased  $2.3
million  to  $11.1  million in 1998 from $8.8  million  in  1997.
Operating  income includes net realized and unrealized  gains  of
$1.4  million in 1998 compared to losses of $.1 million in  1997.
Operating income (excluding net realized and unrealized gains  or
losses)  was  $9.7 million in 1998 compared to  $8.9  million  in
1997, an increase of 9.3%.

      Premiums  earned decreased $.3 million to $60.3 million  in
1998  from $60.6 million in 1997; premiums earned at Madison Life
increased  $4.3  million while Standard Life had a  $4.6  million
decrease  in  premiums earned.  The increase at Madison  Life  is
comprised  of:   a $3.1 million increase in the credit  lines  of
business primarily due to the acquisitions of two single  premium
blocks of business, effective April 1 and October 1, 1997; a  $.5
million  increase  in long-term disability premiums;  and  a  $.7
million increase in the ordinary life and individual accident and
health  lines  of  business.  The  change  at  Standard  Life  is
comprised  of:  a  $.7 million decrease in its DBL  line;  a  $.7
million  decrease in HMO premiums due to a reinsurance adjustment
on  an assumed block of business; a $.5 million decrease in stop-
loss  premiums; a $1.1 million decrease in the closed  blocks  of
life,  annuity and individual and group accident and health lines
of business due to the continued runoff of this line of business;
and  a $1.6 million decrease in point of service premiums due  to
the   loss  of  one  large  policy  contract  and  a  retroactive
adjustment in 1998.

      Total net investment income increased $.4 million primarily
due  to  an  increase  in  assets  at  Madison  Life  related  to
acquisitions offset by lower returns on certain hedged equity and
distressed  situation  investments.  The  annualized  return   on
investments  of the Insurance Group in the first nine  months  of
1998 was 6.3% compared to 7.6% in the first nine months of 1997.

      Other  income increased $3.9 million. Madison Life's income
increased  $2.3 million primarily from fee income earned  by  the
MGU acquired on December 31, 1997. Such fee income of the MGU was
offset  by expenses described below in general and administrative
expenses.  Other income at Standard Life increased  $1.6  million
due  to an increase in coinsurance reserves of $2.3 million, from
the  surrender by a large group of policyholders in a coinsurance
treaty  in  the second quarter of 1997, for which  there  was  no
similar  surrender in 1998. Such increase was  offset  by  a  $.7
million decrease in fee income from the third party administrator
in which Standard Life sold its interest in December 1997. Equity
income from partnerships decreased by $.2 million.

      Insurance  benefits,  claims and  reserves  increased  $1.3
million,  reflecting an increase of $4.2 million at Madison  Life
and  a  $2.9  million decrease at Standard Life.  Madison  Life's
increase  resulted from: a $2.0 million increase  in  the  credit

                               14
<PAGE>
line  of business and a $.8 million increase in interest credited
to  universal life and annuity products due to the acquisition of
blocks  of  business  and  due to new  accounts;  a  $.6  million
increase  in  ordinary life and individual A  &  H  reserves  and
claims  due  to surrenders on the new blocks of business;  a  $.3
million  increase  in  group  term life  claims;  a  $.4  million
increase  in  long-term disability claims due  to  the  increased
volume;  and  a  $.1 million increase in claims and  reserves  in
other  life and health lines of business. The change at  Standard
Life  is  comprised of: a $.9 million decrease in HMO reinsurance
reserves  due to a reinsurance adjustment on an assumed block  of
business; and a $1.9 million decrease in DBL claims and  reserves
due  to  improved experience ($1.3 million) and decreased  volume
($.6  million); a $.9 million decrease in stop-loss  reserves;  a
$.9  million decrease in point of service claims and reserves due
to  the  retroactive adjustment and the loss of one large  policy
contract in 1998; and a $.3 million decrease in the individual  A
&  H  line due to improved experience; such decreases were offset
by:  a $1.8 million increase in reserves in the closed blocks  of
life,  annuity and individual and group accident and health lines
of  business reserves due to the surrender by the large group  of
policyholders in 1997 and a $.2 million increase in dividends  to
policyholders.

      Amortization  of  deferred  policy  acquisition  costs  and
general  and  administrative expenses  for  the  Insurance  Group
increased  $1.7  million. Madison Life's expenses increased  $3.8
million and Standard Life's expenses decreased $2.1 million.  The
increase  at  Madison  Life  is primarily  due  to  increases  in
commissions  of  $1.1 million and other general expenses  of  $.7
million  related  to  the  increase in premium  volume  from  the
acquisition of new blocks of business. In addition, Madison  Life
had  $2.0  million in general expenses from the MGU  acquired  on
December 31, 1997. The decrease at Standard Life is primarily due
to  a  reduction  in  net  commission  expense  of  $1.6  million
attributable to the increase in expense allowances received  from
reinsurers on its HMO and special disability lines of business as
a  result  of  the increase in gross premiums and a  $.5  million
decrease in general expenses.

Corporate
---------
      Operating loss for the nine months ended September 30, 1998
was $.4 million as compared to income of $.6 million for the nine
months  ended  September 30, 1997, a decrease  of  $1.0  million.
Included  in the nine months ended September 30, 1997 is  a  non-
recurring  gain of $1.0 million from the sale of IHC's  remaining
real  estate in Florida. Investment income decreased $.6  million
due  to  lower  returns  on  certain hedged  equity  investments.
Realized gains increased $.1 million. Other income, excluding the
non-recurring gain, increased by $.3 million in 1998 as a  result
of  fee  income earned from the termination of the  guarantee  of
certain  subordinated indebtedness of Zimmerman (see  Note  2  of

                                15
<PAGE>

Notes to Consolidated Financial Statements). Selling, general and
administrative expenses decreased by $.2 million.


                            LIQUIDITY
                            ---------
Insurance Group
---------------
      The  Insurance Group normally provides cash flow from:  (i)
operations;  (ii) the receipt of scheduled principal payments  on
its  portfolio of fixed income securities; and (iii) earnings  on
investments.  Such  cash  flow  is  used  partially  to   finance
liabilities  for  insurance  policy benefits.  These  liabilities
represent  long-term  obligations  which  are  calculated   using
certain assumed interest rates.

     Asset Quality

     The nature and quality of insurance company investments must
comply  with all applicable statutes and regulations  which  have
been  promulgated primarily for the protection of  policyholders.
Of   the  aggregate  carrying  value  of  the  Insurance  Group's
investment assets, approximately 80.7% was invested in investment
grade  fixed  income securities, resale agreements, policy  loans
and  cash and cash equivalents at  September 30, 1998.   Also  at
such  date,  approximately 97.8% of the Insurance  Group's  fixed
maturities  were investment grade. These investments  carry  less
risk  and,  therefore, lower interest rates than other  types  of
fixed  maturity investments. At September 30, 1998, approximately
2.2%  of  the carrying value of fixed maturities was invested  in
diversified   non-investment  grade   fixed   income   securities
(investments  in  such  securities  have  different  risks   than
investment grade securities, including greater risk of loss  upon
default,  and  thinner trading markets). Less  than  .1%  of  the
carrying  value of the Company's total investments  was  in  real
estate  and  mortgage  loans. The Company has  no  non-performing
fixed maturities.

       The  Company  monitors  its  investment  portfolio  on   a
continuous basis and believes that the liquidity of the Insurance
Group will not be adversely affected by its current investments.

      If  a  100  basis  point change in interest  rates  on  the
Insurance  Group's interest sensitive policies were to occur,  it
would  have  a  minimal overall financial effect on the  Company.
With  respect  to  its  liabilities, if interest  rates  were  to
increase,  the  risk  to the Company is that  policies  would  be
surrendered  and  assets would need to be sold.  This  is  not  a
material  exposure to the Company since a large  portion  of  the
Insurance Group's interest sensitive policies are burial policies
that  are not subject to the typical surrender patterns of  other
interest  sensitive policies, and many of the  Insurance  Group's
universal   life  and  annuity  policies  come  from   liquidated
companies  which tend to exhibit lower surrender rates than  such

                                16
<PAGE>

policies   of  continuing  companies.  Additionally,  there   are
surrender  charges to help offset the benefits being surrendered.
If  interest rates were to decrease, the risk to the  Company  is
that  its securities would be subject to early redemption.   This
is  not  a  material exposure to the Company since it would  have
additional  gains  in  its portfolio to help  offset  the  future
reduction  of investment income. With respect to its assets,  the
Company  employs investment strategies to mitigate interest  rate
and other market exposures from time to time as warranted.

     Balance Sheet

      The  decrease  in securities purchased under agreements  to
resell was offset by a decrease in due to brokers attributable to
the  settlement of a securities trade that was placed at the  end
of  December  1997, and settled in January 1998. The increase  in
due  from  and to reinsurers is attributable to the  increase  in
Standard  Life's  direct written special disability  business  of
which a large portion is reinsured. The increase in future policy
liabilities,   deferred  policy  acquisition  costs   and   fixed
maturities is due to the acquisition of two blocks of business by
Madison  Life.  The  first  block was  both  universal  life  and
traditional  ordinary  life policies, involved  the  transfer  of
$11.2  million in reserves and was effective June  1,  1998.  The
second  block  of  business  consisted  entirely  of  traditional
ordinary  life policies and had an effective date of  January  1,
1998. Assets were transferred on July 15, 1998 on this block  and
consisted of $30.1 million of reserves. The decrease in liability
for  business  transferred and corresponding credit  to  Paid-in-
Capital resulted from the termination of the guarantee of certain
subordinated indebtedness of Zimmerman on September 30, 1998 (see
Note 2 of Notes of Consolidated Financial Statements).

      The  Company had net receivables from reinsurers  of  $98.9
million  at September 30, 1998. Substantially all of the business
ceded  to  such  reinsurers is of short  duration.  All  of  such
receivables  are  current and are either due  from  highly  rated
companies  or  are adequately secured. Accordingly, no  allowance
for doubtful accounts was necessary at September 30, 1998.

Corporate
---------
      Corporate derives its funds principally from: (i) dividends
and  interest income from the Insurance Group; (ii) tax  payments
pursuant  to tax sharing agreements and management fees from  its
subsidiaries;   and  (iii)  investment  income   from   Corporate
liquidity.  Regulatory constraints historically have not affected
the  Company's  consolidated liquidity, although state  insurance
laws  have  provisions  relating to the  ability  of  the  parent
company  to  use cash generated by the Insurance  Group  to  fund
operating expenses and dividend payments at Corporate.

                                17
<PAGE>
      Total  corporate liquidity (cash, cash equivalents,  resale
agreements  and marketable securities) amounted to $17.9  million
at  September 30, 1998.  At the present time, the Company is  not
in need of any long-term financing.


Capital Resources
-----------------
      Due  to  its  superior capital ratios, broad licensing  and
excellent  asset  quality  and credit-worthiness,  the  Insurance
Group  remains  well  positioned to  increase  or  diversify  its
current activities, and to raise additional capital in the public
or  private  markets to the extent determined to be necessary  or
desirable,  in  order to pursue acquisitions or otherwise  expand
its operations.

      It  is  anticipated that future acquisitions will be funded
internally  from existing capital and surplus and parent  company
liquidity.  In  the event additional funds are  required,  it  is
expected that they would be borrowed. IHC currently has no  long-
term debt.

       In  accordance  with  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 115, the Company may carry its  portfolio
of fixed income securities either as held to maturity (carried at
amortized  cost), as trading securities (carried at  fair  market
value)  or as available-for-sale (carried at fair market  value);
the  Company  has chosen to carry all of its debt  securities  as
available-for-sale.   The  Company  experienced   a   change   in
unrealized gains of $2.7 million, net of deferred tax expense, in
total  stockholders' equity, reflecting unrealized gains of  $4.6
million at September 30, 1998 versus $1.9 million at December 31,
1997.  From  time  to  time, as warranted,  the  Company  employs
investment strategies to mitigate interest rate and other  market
exposures.

      The  results  of the first nine months of  1998  reflect  a
higher  effective tax rate than in the first nine months of  1997
due  to  reduced benefits associated with the utilization of  net
operating loss carryforwards. As previously reported, IHC expects
that its future results will reflect a higher effective tax rate.

      The  Company has continued and will continue  to  take  all
steps necessary to address Year 2000 compliance issues. Since the
Company  has updated and enhanced many of its primary systems  in
the  past  several years, it does not believe that the Year  2000
problem  will pose internal operational difficulties and  expects
that  all  internal systems will be Year 2000  compliant  by  the
first  quarter  of 1999. Given the recent large  expenditures  by
Standard Life and Madison Life to upgrade their systems, the cost
of  updating  the Company's remaining systems is not expected  to
exceed $100,000. The Company believes that its greatest Year 2000
exposure arises from the possibility of non-compliance by,  among
others,  its MGU's, managing general agents, HMOs, agents,  third

                                18
<PAGE>

party  administrators, producers, reinsurers, securities  brokers
and  bankers.  The Company has requested information  from  these
third  parties and is in the process of evaluating  any  possible
impact  on  the  Company. In the event that some of  these  third
parties are not Year 2000 compliant, the Company could experience
difficulties   in  claims  adjudication  and  obtaining   correct
underwriting  and  financial data, and could  suffer  a  loss  in
business as a result of these third parties consolidating,  going
out  of  business or suffering operational or financial problems.
The  Company  is  in  the  development stages  of  formulating  a
contingency plan with respect to this exposure.

       Some   of  the  statements  included  within  Management's
Discussion  and Analysis may be considered to be forward  looking
statements  which are subject to certain risks and uncertainties.
Factors which could cause the actual results to differ materially
from  those suggested by such statements are described from  time
to  time  in the Company's Annual Report on Form 10-K  and  other
filings with the Securities and Exchange Commission.

                               19
<PAGE>

PART II.  OTHER INFORMATION
---------------------------

Item 6.   Exhibits and Reports on Form 8-K
          --------------------------------
     a)   1)   Exhibit 11.  Statement re:  computation
               of per share earnings.

          2)   Exhibit 27.  Financial Data Schedule.

     b)   No report on Form 8-K was filed during the quarter
          ended September 30, 1998.

                                 20
<PAGE>

                           SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act
of  1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.

                             INDEPENDENCE HOLDING COMPANY
                             ----------------------------
                                   (THE REGISTRANT)


Dated:  November 13, 1998      By:/s/ Roy T.K. Thung
                                  ------------------------
                                  Roy T.K. Thung
                                  Executive Vice President,
                                  Chief Financial Officer
                                  and Treasurer


Dated:  November 13, 1998      By:/s/ Teresa A. Herbert
                                  -----------------------
                                  Teresa A. Herbert
                                  Vice President and
                                  Controller



                                
                                21