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:  MARCH 31, 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 .

            7,435,669 SHARES OF COMMON STOCK, $1.00 PAR VALUE
-------------------------------------------------------------------------
                Common stock outstanding as of May 4, 1998

<PAGE>

          INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

                              INDEX
                                     


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

 Consolidated Statements of Operations -
  Three Months Ended March 31, 1998
  and 1997(unaudited).............................       4

 Consolidated Statements of Cash Flows -
  Three Months Ended March 31, 1998
  and 1997(unaudited).............................       5

 Notes to Consolidated Financial Statements
 (unaudited)......................................   6 - 9

 Management's Discussion and Analysis of Results
  of Operations and Financial Condition........... 10 - 14

PART II - OTHER INFORMATION
---------------------------
 Item 6 - Exhibits and Reports on Form 8-K........      15

 Signatures.......................................      16


                                 2
<PAGE>


INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS                   MARCH 31,   DECEMBER 31,
                                                1998          1997
----------------------------------------------------------------------
ASSETS:                                      (UNAUDITED)
 Cash and cash equivalents..................$    650,000  $ 23,028,000
 Investments:
  Short-term investments....................  21,914,000    18,265,000
  Securities purchased under
   agreements to resell.....................  11,542,000    25,469,000
  Fixed maturities.......................... 201,581,000   201,324,000
  Equity securities.........................  20,235,000    13,496,000
  Other investments.........................  50,659,000    50,459,000
                                             -----------   -----------
     Total investments...................... 305,931,000   309,013,000
 Deferred policy acquisition costs..........  12,979,000    13,611,000
 Due and unpaid premiums....................  13,031,000     6,448,000
 Due from reinsurers........................ 105,828,000    92,990,000
 Notes and other receivables................   2,935,000     3,292,000
 Other assets...............................   7,036,000     6,356,000
                                             -----------   -----------
     TOTAL ASSETS...........................$448,390,000  $454,738,000
                                             ===========   ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
 LIABILITIES:
 Future policy liabilities..................$183,006,000  $169,082,000
 Unearned premiums..........................  27,387,000    27,893,000
 Funds on deposit...........................  69,167,000    72,187,000
 Insurance policy claims....................   6,117,000     6,279,000
 Other policyholders' funds.................   2,513,000     2,651,000
 Financial instruments sold, but
  not yet purchased.........................      90,000             -
 Due to brokers.............................  19,672,000    43,356,000
 Due to reinsurers..........................  11,477,000     4,349,000
 Accounts payable, accruals and
  other liabilities.........................  20,587,000    23,516,000
 Liability for business transferred.........   7,905,000     7,905,000
 Income taxes...............................   6,783,000     6,515,000
                                             -----------   -----------
     TOTAL LIABILITIES...................... 354,704,000   363,733,000
                                             -----------   -----------
STOCKHOLDERS' EQUITY:
 Preferred stock (none issued)..............           -             -
 Common stock, 7,430,669 and 7,430,169
  shares issued and outstanding, net
  of 2,188,950 shares in treasury...........   7,431,000     7,430,000
 Paid-in capital............................  76,051,000    76,046,000
 Accumulated other comprehensive income:
  Unrealized gains on investments,
   net of taxes (Notes 5 and 7).............   2,076,000     1,892,000
 Retained earnings .........................   8,128,000     5,637,000
                                             -----------   -----------
     TOTAL STOCKHOLDERS' EQUITY.............  93,686,000    91,005,000
                                             -----------   -----------
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY..................$448,390,000  $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 MARCH 31,               1998         1997
----------------------------------------------------------------
REVENUES:
 Insurance premiums..................$ 21,059,000   $ 18,749,000
 Net investment income...............   5,921,000      4,182,000
 Net realized and unrealized gains...     213,000        143,000
 Equity (loss) income................     (67,000)        77,000
 Other income........................   1,152,000      1,253,000
                                      -----------    -----------
                                       28,278,000     24,404,000
                                      -----------    -----------
EXPENSES:
 Insurance benefits, claims and
  reserves...........................  16,387,000     14,064,000
 Amortization of deferred policy
  acquisition costs..................   1,192,000        711,000
 Selling, general and administrative
  expenses...........................   7,605,000      7,067,000
                                      -----------    -----------
                                       25,184,000     21,842,000
                                      -----------    -----------
 Operating income before
  income taxes.......................   3,094,000      2,562,000
 Income tax expense..................     603,000        302,000
                                      -----------    -----------
Net income...........................$  2,491,000   $  2,260,000
                                      ===========    ===========
BASIC INCOME PER COMMON SHARE........$        .34   $        .30
                                      ===========    ===========
WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING.........................   7,430,000      7,432,000
                                      ===========    ===========
DILUTED INCOME PER COMMON SHARE......$        .33   $        .30
                                      ===========    ===========
WEIGHTED AVERAGE DILUTED SHARES
 OUTSTANDING.........................   7,553,000      7,475,000
                                      ===========    ===========

   See Accompanying Notes to Consolidated Financial Statements.

                                  4
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,                   1998           1997
---------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income...............................$  2,491,000   $  2,260,000
 Adjustments to reconcile net income to
  net cash used by operating activities:
  Amortization of deferred policy
   acquisition costs......................   1,192,000        711,000
  Realized gains on sales of investments..     (18,000)      (322,000)
  Unrealized (gains) losses on trading
   securities.............................    (195,000)       179,000
  Equity loss (income)....................      67,000        (77,000)
  Depreciation............................     110,000        100,000
  Deferred tax expense....................     103,000         13,000
  Other...................................       4,000         20,000
 Changes in assets and liabilities:
  Net purchases of trading securities.....    (171,000)    (2,148,000)
  Increase in future policy liabilities,
   claims and other policy liabilities....  10,367,000      8,519,000
  Additions to deferred policy
   acquisition costs......................    (560,000)      (948,000)
  Change in net amounts due from and to
   reinsurers.............................  (5,710,000)    (7,069,000)
  Change in income tax liability..........      61,000         25,000
  Change in due and unpaid premiums.......  (6,583,000)      (681,000)
  Other...................................  (3,570,000)    (3,060,000)
                                           -----------    -----------
      Net cash used by operating
       activities.........................  (2,412,000)    (2,478,000)
                                           -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Change in net amount due from and to
  brokers................................. (23,637,000)       512,000
 Sales and maturities of short-term
  investments.............................  22,159,000     10,453,000
 Purchases of short-term investments...... (25,776,000)   (11,752,000)
 Net sales of resale agreements...........  13,928,000     15,072,000
 Sales and maturities of fixed maturities.  39,547,000      6,476,000
 Purchases of fixed maturities............ (39,998,000)   (19,443,000)
 Sales of equity securities...............   6,979,000      5,659,000
 Purchases of equity securities........... (12,767,000)    (8,352,000)
 Proceeds on sales of other investments...   3,807,000        530,000
 Additional investments in other
  investments, net of distributions.......  (4,073,000)    (4,219,000)
 Other....................................     499,000         45,000
                                           -----------    -----------
      Net cash used by investing
       activities......................... (19,332,000)    (5,019,000)
                                           -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Exercise of common stock options.........       6,000              -
 Payments of investment-type insurance
  contracts...............................    (268,000)      (268,000)
 Dividends paid...........................    (372,000)      (372,000)
                                           -----------    -----------
       Net cash used by financing
        activities........................    (634,000)      (640,000)
                                           -----------    -----------
 Decrease in cash and cash equivalents.... (22,378,000)    (8,137,000)
 Cash and cash equivalents, beginning
  of year.................................  23,028,000     10,361,000
                                           -----------    -----------
 Cash and cash equivalents, end of period.$    650,000   $  2,224,000
                                           ===========    ===========

         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 ended March 31,  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 has guaranteed $10,000,000
of  subordinated debt of Zimmerman.  Accordingly, the  credit  to
stockholders'  equity  of $7,905,000, or $1.06  per  share,  that
would have been recorded upon consummation of the distribution of
Zimmerman  has been deferred until such time as the  subordinated
debt is repaid or the guarantee is eliminated.

NOTE 3.  OTHER INVESTMENTS

      The  Company  had invested $16,710,000 and  $15,848,000  at
March  31,  1998  and  1997,  respectively,  in  Dolphin  Limited
Partnership-A ("Dolphin"), a limited partnership which invests in
relatively  "market neutral" strategies, such as risk  arbitrage,
convertible  arbitrage and distressed situations.  The  condensed
statements  of operations for Dolphin for the three months  ended
March 31, 1998 and 1997 are as follows:

                                             1998         1997
                                             ------------------
                                               (IN THOUSANDS)

Revenues..................................$  2,168     $  1,720
Net income................................$  1,501     $  1,191

IHC's share of
 net income...............................$    653     $    457

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 123,000 and 43,000 shares  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
earnings per share because the warrants' strike price was greater
than  the  average market price of the common shares  during  the
first quarter of 1998 and 1997.

                                7
<PAGE>

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

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.

      The income tax expense for the three months ended March 31,
1998  allocated to stockholders' equity for unrealized  gains  on
investment  securities was $104,000, representing the  change  in
deferred  tax  liability of $1,148,000 at  March  31,  1998  from
$1,044,000 at December 31, 1997.

NOTE 6.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

      Cash  payments for income taxes were $439,000 and  $271,000
for the three months ended March 31, 1998 and 1997, respectively.

NOTE 7.  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.
      Disclosures related to comprehensive income (loss) for  the
three months ended March 31, 1998 and 1997 are as follows:

                                               1998         1997
                                             -------------------
                                               (IN THOUSANDS)

(A)COMPREHENSIVE INCOME

Net income..................................$ 2,491     $  2,260
Unrealized gains (losses), on
 securities, net of reclassification........    184       (3,426)
                                             ------      -------
     Comprehensive income (loss)............$ 2,675     $ (1,166)
                                             ======      =======
(B)RECLASSIFICATION

Unrealized gains (losses) net...............$   379     $ (3,605)
Less: reclassification for unrealized
 gains (losses) included in net income......    195         (179)
                                             ------      -------
Net unrealized gains (losses)
 on investments.............................$   184     $ (3,426)
                                             ======      =======

                                  8
<PAGE>

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

                                               1998         1997
                                             -------------------
                                               (IN THOUSANDS)

(C)ACCUMULATED OTHER COMPREHENSIVE INCOME

Beginning balance...........................$ 1,892     $ (1,466)
Net unrealized gains (losses) on
 investments................................    184       (3,426)
                                             ------      -------
Ending balance..............................$ 2,076     $ (4,892)
                                             ======      =======
NOTE 8.  NEW ACCOUNTING PRONOUNCEMENTS

      In  June  1997,  the Financial Accounting  Standards  Board
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  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.
 
                                9
<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 MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1997
-----------------------------------------------------------------
      The  Company's operating income increased $.5  million,  or
20.7%,  to $3.1 million for the period ended March 31, 1998  from
$2.6  million for the same period in 1997.  The Company  had  net
realized  and  unrealized gains of $.2 million in  1998  and  $.1
million in 1997. Excluding net realized and unrealized gains, the
Company  had operating income of $2.9 million in 1998 as compared
to  $2.4  million in 1997.  Net income was $2.5 million, or  $.33
per share, diluted, for the quarter ended March 31, 1998 compared
to  $2.3  million, or $.30 per share, diluted,  for  the  quarter
ended  March  31,  1997.   Income tax expense  increased  to  $.6
million in 1998 from $.3 million in 1997 (see Capital Resources).

Insurance Group
---------------
       The  Insurance  Group's  operating  income  increased  $.2
million,  or 5.3%, to $3.1 million in 1998 from $2.9  million  in
1997. Operating income includes net realized and unrealized gains
of  $.2  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 (losses)  from  year  to  year.
Operating income excluding net realized and unrealized gains  was
$2.9 million in 1998 compared to $2.7 million in 1997.

      Premium revenues increased $2.3 million, or 12.3%, to $21.0
million  in 1998 from $18.7 million in 1997; premium revenues  at
Madison Life increased $3.0 million while Standard Life had a $.7
million  decrease in premiums.  The increase at Madison  Life  is
comprised  of:   a $2.6 million increase in the credit  lines  of
business primarily due to the acquisitions of two single  premium

                               10
<PAGE>

blocks of business, effective April 1 and October 1, 1997; a  $.1
million  increase in long-term disability premiums; a $.1 million
increase  in group term life premiums; a $.1 million increase  in
dental  premiums; and a $.1 million increase in  other  life  and
health  lines  of  business.  The  change  at  Standard  Life  is
comprised  of:  a  $.2 million increase in its DBL  line  due  to
acquisitions;  and a $.5 million increase in HMO  premiums;  such
increases  were  offset by: a $.4 million decrease  in  stop-loss
premiums,  due  to  decreased retention with respect  to  several
managing  general  underwriters; a $.6 million  decrease  in  the
closed  blocks of life, annuity and individual and group accident
and health lines of business; and a $.4 million decrease in point
of service premiums.

     Total net investment income increased $1.4 million primarily
due  to  an  increase  in  assets  at  Madison  Life  related  to
acquisitions,  and higher returns on certain equity  investments.
The  annualized return on investments of the Insurance  Group  in
the  first quarter of 1998 was 7.3% compared to 6.9% in the first
quarter of 1997.

      Other  income decreased $.1 million and equity income  from
partnerships decreased $.1 million from 1997 to 1998.

      Insurance  benefits,  claims and  reserves  increased  $2.3
million,  or  16.6%, reflecting an increase of  $2.5  million  at
Madison  Life  and  a  $.2  million decrease  at  Standard  Life.
Madison Life's increase resulted from: a $1.4 million increase in
the credit line of business due to the acquisition of a block  of
business  and  due  to  new accounts; a $.2 million  increase  in
interest credited to universal life and annuity products;  a  $.5
million  increase in ordinary life and individual A & H  reserves
and claims; a $.2 million increase in group term life claims; and
a  $.2 million increase in claims and reserves in other life  and
health  lines  of  business.  The  change  at  Standard  Life  is
comprised of: a $.5 million increase in HMO reinsurance reserves;
and  a $.1 million increase in additional DBL claims and reserves
due  to  increased volume; such increases were offset by:  a  $.4
million  decrease  in  reserves in the  closed  blocks  of  life,
annuity  and  individual and group accident and health  lines  of
business; a $.2 million decrease in stop-loss reserves; and a $.2
million decrease in point of service claims.

      Amortization of deferred acquisition costs and general  and
administrative  expenses for the Insurance Group  increased  $1.0
million.  Madison  Life's  expenses increased  $1.4  million  and
Standard  Life's expenses decreased $.4 million. The increase  at
Madison Life is primarily due to increases in commissions of $1.0
million and other general expenses of $.4 million related to  the
increase  in premium volume and the acquisition of new blocks  of
business.  The decrease at Standard Life is primarily  due  to  a
reduction in net commission expense attributable to the  increase
in expense allowances received from reinsurers on its HMO line of
business as a result of the increase in premiums.

                               11
<PAGE>

Corporate
---------
      Operating  income  for the quarter  ended  March  31,  1998
increased  by $.3 million from 1997.  Investment income increased
$.3  million from 1997 due to higher returns from certain  hedged
equity  investments  and  an increase in corporate  liquidity  in
1998.  Selling,  general  and  administrative  expenses  remained
constant.

                            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 81.0% was invested in investment
grade  fixed  income securities, resale agreements, policy  loans
and  cash and cash equivalents at  March 31, 1998.  Also at  such
date,   approximately  97.7%  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 March 31, 1998, approximately 2.3%
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.

      The  Company had net receivables from reinsurers  of  $94.4
million  at  March 31, 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 March 31, 1998.

                               12
<PAGE>

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.  The
Company  remains  contingently  liable  in  connection  with  the
guarantee  of  $10.0  million  of  subordinated  indebtedness  of
Zimmerman  Sign  Company  (see Note 2 of  Notes  of  Consolidated
Financial Statements).

      Total  corporate liquidity (cash, cash equivalents,  resale
agreements  and marketable securities) amounted to $18.9  million
at  March 31, 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.

       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 million, net of deferred tax expense,  in
total  stockholders' equity, reflecting unrealized gains of  $2.1
million  at  March 31, 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 1998 first quarter reflect  a  higher
effective tax rate than in the 1997 first quarter due to  reduced
benefits  associated with the utilization of net  operating  loss
carryforwards.  As  previously reported,  IHC  expects  that  its
future  results will continue to reflect a higher  effective  tax
rate.

                              13
<PAGE>

      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  two  years, it does not believe  that  the  Year  2000
problem  will pose operational difficulties. The cost of updating
the  Company's  remaining  systems is  not  expected  to  have  a
material effect on the Company or its results of operations,  and
is expected to be completed by the beginning of 1999. The Company
has  requested  information  from,  among  others,  its  managing
general  underwriters, managing general agents, HMOs, agents  and
reinsurers  regarding  the status of their Year  2000  compliance
programs, and is in the process of evaluating any possible impact
on the Company.

       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.

                             14
<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 March 31, 1998.

                              15
<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:  May 6, 1998            By:/s/ Roy T.K. Thung
                                  -------------------------
                                  Roy T.K. Thung
                                  Executive Vice President,
                                  Chief Financial Officer
                                  and Treasurer


Dated:  May 6, 1998            By:/s/ Teresa A. Herbert
                                  -------------------------
                                  Teresa A. Herbert
                                  Vice President and
                                  Controller


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