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:  JUNE 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 .


               7,435,569 SHARES OF COMMON STOCK, $1.00 PAR VALUE
------------------------------------------------------------------------
                Common stock outstanding as of August 10, 1998
<PAGE>


           INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

                              INDEX
                                




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

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

 Consolidated Statements of Cash Flows -
  Six Months Ended June 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 4 - Submission of Matters to a Vote
  of Security Holders.............................      20

 Item 6 - Exhibits and Reports on Form 8-K........      20

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



                                    2
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS                   JUNE 30,    DECEMBER 31,
                                                1998          1997
----------------------------------------------------------------------
ASSETS:                                      (UNAUDITED)
 Cash and cash equivalents..................$  3,514,000  $ 23,028,000
 Investments:
  Short-term investments....................  13,335,000    18,265,000
  Securities purchased under
   agreements to resell.....................   5,884,000    25,469,000
  Fixed maturities.......................... 208,623,000   201,324,000
  Equity securities.........................  23,296,000    13,496,000
  Other investments(Note 3).................  78,942,000    50,459,000
                                             -----------   -----------
     Total investments...................... 330,080,000   309,013,000
 Deferred policy acquisition costs..........  20,779,000    13,611,000
 Due and unpaid premiums....................  10,327,000     6,448,000
 Due from reinsurers........................ 110,730,000    92,990,000
 Due from brokers...........................   7,458,000         -
 Notes and other receivables................   3,853,000     3,292,000
 Other assets...............................   8,993,000     6,356,000
                                             -----------   -----------
     TOTAL ASSETS...........................$495,734,000  $454,738,000
                                             ===========   ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
 LIABILITIES:
 Future policy liabilities..................$225,740,000  $169,082,000
 Unearned premiums..........................  24,600,000    27,893,000
 Funds on deposit...........................  67,015,000    72,187,000
 Insurance policy claims....................   6,655,000     6,279,000
 Other policyholders' funds.................   3,495,000     2,651,000
 Financial instruments sold, but
  not yet purchased.........................     221,000         -
 Due to brokers.............................  18,025,000    43,356,000
 Due to reinsurers..........................  12,393,000     4,349,000
 Accounts payable, accruals and
  other liabilities.........................  25,945,000    23,516,000
 Liability for business transferred (Note 2)   7,905,000     7,905,000
 Income taxes...............................   6,435,000     6,515,000
                                             -----------   -----------
     TOTAL LIABILITIES...................... 398,429,000   363,733,000
                                             -----------   -----------
STOCKHOLDERS' EQUITY:
 Preferred stock (none issued)..............       -             -
 Common stock, 7,435,569 and 7,430,169
  shares issued and outstanding, net
  of 2,188,950 shares in treasury...........   7,436,000     7,430,000
 Paid-in capital............................  76,094,000    76,046,000
 Accumulated other comprehensive income:
  Unrealized gains on investments,
   net of taxes (Notes 5 and 6).............   2,700,000     1,892,000
 Retained earnings .........................  11,075,000     5,637,000
                                             -----------   -----------
     TOTAL STOCKHOLDERS' EQUITY.............  97,305,000    91,005,000
                                             -----------   -----------
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY..................$495,734,000  $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           SIX MONTHS ENDED
                                JUNE 30,                    JUNE 30,
                           1998         1997           1998         1997
----------------------------------------------------------------------------
REVENUES:
 Premiums earned.......$ 19,839,000 $ 20,073,000   $ 40,898,000 $ 38,822,000
 Net investment income.   6,331,000    5,535,000     12,252,000    9,717,000
 Net realized and
  unrealized gains
  (losses).............     200,000     (294,000)       413,000     (151,000)
 Equity income (loss)..      30,000        2,000        (37,000)      79,000
 Other income (loss)...   1,827,000     (389,000)     2,979,000      864,000
                        -----------  -----------    -----------  ----------- 
                         28,227,000   24,927,000     56,505,000   49,331,000
                        -----------  -----------    -----------  ----------- 

EXPENSES:
 Insurance benefits,
  claims and reserves..  14,760,000   12,998,000     31,147,000   27,062,000
 Amortization of
  deferred policy
  acquisition costs....   1,284,000      743,000      2,476,000    1,454,000
 Selling, general and
  administrative
  expenses.............   8,328,000    7,841,000     15,933,000   14,908,000
                        -----------  -----------    -----------  ----------- 
                         24,372,000   21,582,000     49,556,000   43,424,000
                        -----------  -----------    -----------  -----------
 Operating income
  before income taxes..   3,855,000    3,345,000      6,949,000    5,907,000
 Income tax expense
  (Note 5).............     908,000      154,000      1,511,000      456,000
                        -----------  -----------    -----------  -----------
NET INCOME.............$  2,947,000 $  3,191,000   $  5,438,000 $  5,451,000
                        ===========  ===========    ===========  ===========
BASIC INCOME PER
 COMMON SHARE..........$        .40 $        .43   $        .73 $        .73
                        ===========  ===========    ===========  ===========
WEIGHTED AVERAGE
 BASIC COMMON SHARES
 OUTSTANDING...........   7,435,000    7,432,000      7,433,000    7,432,000
                        ===========  ===========    ===========  =========== 
DILUTED INCOME
 PER COMMON SHARE......$        .39 $        .43   $        .72 $        .73
                        ===========  ===========    ===========  ===========
WEIGHTED AVERAGE
 DILUTED COMMON SHARES
 OUTSTANDING...........   7,576,000    7,497,000      7,565,000    7,486,000
                        ===========  ===========    ===========  =========== 
                                       
         See Accompanying Notes to Consolidated Financial Statements.

                                    4
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30,                      1998            1997
----------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income...............................$  5,438,000    $  5,451,000
 Adjustments to reconcile net income to
  net cash provided by operating activities:
  Amortization of deferred policy
   acquisition costs......................   2,476,000       1,454,000
  Realized (gains) losses on sales of
   investments............................    (334,000)         59,000
  Unrealized (gains) losses on trading
   securities.............................     (79,000)         92,000
  Equity loss (income)....................      37,000         (79,000)
  Depreciation............................     241,000         198,000
  Deferred tax expense....................     528,000         248,000
  Other...................................     (50,000)       (961,000)
 Changes in assets and liabilities:
  Net purchases of trading securities.....    (277,000)     (1,947,000)
  Increase in future policy liabilities,
   claims and other policy liabilities....  50,279,000      15,579,000
  Additions to deferred policy
   acquisition costs......................  (9,644,000)     (1,467,000)
  Change in net amounts due from and to
   reinsurers.............................  (9,696,000)    (10,391,000)
  Change in income tax liability..........  (1,023,000)       (249,000)
  Change in due and unpaid premiums.......  (3,879,000)     (1,790,000)
  Other...................................     (62,000)     (1,725,000)
                                           -----------     -----------
     Net cash provided by operating
       activities.........................  33,955,000       4,472,000
                                           -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Change in net amount due from and to
  brokers................................. (32,789,000)    (10,256,000)
 Sales and maturities of short-term
  investments.............................  49,046,000      22,226,000
 Purchases of short-term investments...... (44,067,000)    (25,250,000)
 Net sales of resale agreements...........  19,586,000      19,519,000
 Sales and maturities of fixed maturities.  62,813,000      57,584,000
 Purchases of fixed maturities............ (69,389,000)    (62,213,000)
 Sales of equity securities...............  15,046,000      15,348,000
 Purchases of equity securities........... (23,375,000)    (19,874,000)
 Proceeds on sales of other investments...   6,205,000       2,559,000
 Additional investments in other
  investments, net of distributions....... (34,726,000)     (6,100,000)
 Other....................................    (633,000)       (818,000)
                                           -----------     -----------
     Net cash used by investing
       activities......................... (52,283,000)     (7,275,000)
                                           -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Exercise of common stock options.........      55,000           -
 Repurchase of common stock...............      (1,000)          -
 Payments of investment-type insurance
  contracts...............................    (868,000)       (947,000)
 Dividends paid...........................    (372,000)       (372,000)
                                           -----------     -----------
     Net cash used by financing
        activities........................  (1,186,000)     (1,319,000)
                                           -----------     -----------
 Decrease in cash and cash equivalents.... (19,514,000)     (4,122,000)
 Cash and cash equivalents, beginning
  of year.................................  23,028,000      10,361,000
                                           -----------     -----------
 Cash and cash equivalents, end of period.$  3,514,000    $  6,239,000
                                           ===========     ===========
                                     
       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 six months ended  June  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 has guaranteed $10,000,000
of  subordinated debt of Zimmerman (the "Guarantee"). At the time
of  distribution  of Zimmerman's common stock,  IHC's  management
determined that, due to the financial strength of Zimmerman,  the
probability of a payment under the Guarantee was remote.  In  its
first full year as a public corporation, Zimmerman had net income
of  $.51  per share, diluted; and in the first quarter  of  1998,
Zimmerman had net income of $.10 per share, diluted. In addition,
since  the  date of the spin-off from IHC, Zimmerman's  debt  has
been  reduced by $3,100,000 or 10%. Based upon the aforementioned
information,  management of IHC believes that the probability  of
payment under the Guarantee continues to be remote. IHC maintains
a  deferred credit of $7,905,000 or $1.06 per share in connection
with  the  spin-off  of  Zimmerman  that  will  be  reflected  in
stockholders' equity upon termination of the Guarantee.

NOTE 3.  OTHER INVESTMENTS

     The Company had invested $16,986,000 and $17,373,000 at June
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 six months ended June 30, 1998 and 1997
are as follows:

                                    7
<PAGE>
INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------------------------------
NOTE 3.  OTHER INVESTMENTS (CONTINUED)

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

Revenues........$   1,099    $  4,522       $   3,177   $  6,242
Net income......$     599    $  3,369       $   2,100   $  4,560

IHC's share of
 net income.....$     275    $  1,574       $     928   $  2,031

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 141,000 and 65,000 shares  for  the
three  months ended June 30, 1998 and 1997 and 132,000 and 54,000
shares  for the six months ended June 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 six months ended June 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
$2,022,000  and $458,000 for the six months ended June  30,  1998
and 1997, respectively.

      The  income tax expense for the six months ended  June  30,
1998  allocated to stockholders' equity for unrealized  gains  on
investment  securities was $414,000 representing  the  change  in
deferred  tax  liability of $1,458,000  at  June  30,  1998  from
$1,044,000 at December 31, 1997.

                                    8
<PAGE>

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

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

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

(A)COMPREHENSIVE INCOME

Net income..............$ 2,947   $ 3,191      $ 5,438   $ 5,451
Unrealized gains
 on securities, net
 of reclassification....    624     4,326          808       899
                          -----     -----        -----     -----
     Comprehensive
      income............$ 3,571   $ 7,517      $ 6,246   $ 6,350
                          =====     =====        =====     =====
(B) RECLASSIFICATION

Unrealized gains, net...$   508   $ 4,413      $   887   $   807
Less: reclassification
 for unrealized gains
 (losses) included in
 net income.............   (116)       87           79       (92)
                          -----     -----        -----     -----
Unrealized gains
 on securities, net.....$   624   $ 4,326      $   808   $   899
                          =====     =====        =====     =====

(C)ACCUMULATED OTHER COMPREHENSIVE INCOME

Beginning balance.......$ 2,076   $(4,892)     $ 1,892   $(1,465)
Unrealized gains
 on securities, net.....    624     4,326          808       899
                          -----     -----        -----     ----- 
Ending balance..........$ 2,700   $  (566)     $ 2,700   $  (566)
                          =====     =====        =====     =====

                                    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
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.



                                    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 JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED
JUNE 30, 1997
-----------------------------------------------------------------
     The Company's operating income increased $.5 million to $3.9
million for the period ended June 30, 1998 from $3.3 million  for
the same period in 1997. Net income was $2.9 million, or $.39 per
share,  diluted, for the quarter ended June 30, 1998 compared  to
$3.2  million, or $.43 per share, diluted, for the quarter  ended
June  30, 1997. The Company had net realized and unrealized gains
of  $.2  million  in  1998 and losses of  $.3  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 gain, the Company had operating income  of
$3.7  million  in 1998 as compared to $2.6 million  in  1997,  an
increase of 41.0%, which approximately consists of:  acquisitions
at  Madison  Life, 119%; and all other lines of business,  (19%).
Income  tax  expense increased to $.9 million in  1998  from  $.2
million in 1997 (see Capital Resources).

Insurance Group
---------------
      The  Insurance  Group's  operating  income  increased  $1.7
million  to  $3.9  million in 1998 from  $2.2  million  in  1997.
Operating  income includes net realized and unrealized  gains  of
$.2  million in 1998 compared to losses of $.3 million  in  1997.
Decisions  to  sell  securities are based  on  cash  flow  needs,

                                    11
<PAGE>

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 and
losses)  was  $3.7 million in 1998 compared to  $2.5  million  in
1997, an increase of 50.0%.

      Premiums  earned decreased $.2 million to $19.8 million  in
1998  from $20.1 million in 1997; premiums earned at Madison Life
increased  $2.0  million while Standard Life had a  $2.2  million
decrease  in  premiums earned. The increase at  Madison  Life  is
comprised  of:   a $1.6 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  $.2
million  increase in long-term disability premiums; a $.1 million
increase  in group term life premiums; and a $.1 million increase
in  other  life  and  health lines of  business.  The  change  at
Standard Life is comprised of: a $.5 million decrease in its  DBL
line  due to a higher lapse rate in 1998; a $1.1 million decrease
in  HMO  premiums due to a reinsurance adjustment on  an  assumed
block of business; a $.3 million decrease in the closed blocks of
life,  annuity and individual and group accident and health lines
of  business;  and  a $.5 million decrease in  point  of  service
premiums  due  to  the  loss  of one large  case  in  1998;  such
decreases  were  offset  by a $.2 million increase  in  stop-loss
premiums.

     Total net investment income increased $1.1 million primarily
due  to  an  increase  in  assets  at  Madison  Life  related  to
acquisitions, partially offset by the lower return on investments
in   the  second  quarter  of  1998.  The  annualized  return  on
investments of the Insurance Group in the second quarter of  1998
was 7.5% compared to 8.1% in the second quarter of 1997.

      Other  income increased $3.2 million. Madison Life  had  an
increase of $1.1 million due to fee income earned by the managing
general  underwriter  ("MGU") of which Madison  Life  acquired  a
controlling interest effective December 31, 1997. Other income at
Standard  Life  increased  $2.1  million  from  an  increase   in
coinsurance  reserves, due to 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.  Equity
income from partnerships remained constant.

      Insurance  benefits,  claims and  reserves  increased  $1.8
million  reflecting an increase of $2.1 million at  Madison  Life
and  a  $.3  million decrease at Standard Life.   Madison  Life's
increase  resulted from: a $1.0 million increase  in  the  credit
line  of  business due to the acquisition of a block of  business
and  due  to  new  accounts; a $.5 million increase  in  interest
credited  to  universal life and annuity products; a $.3  million

                                    12
<PAGE>

increase  in  long-term  disability claims;  and  a  $.3  million
increase  in group term life claims. The change at Standard  Life
is comprised of: a $.8 million decrease in HMO reserves due to  a
reinsurance  adjustment on an assumed block of  business;  a  $.8
million  decrease in additional DBL claims and  reserves  due  to
improved   experience  ($.7  million)  and  lower  premium   ($.1
million); a $.5 million decrease in stop-loss reserves; and a $.3
million decrease in point of service claims and reserves  due  to
the loss of one large case in 1998; such increases were offset by
a $2.1 million increase in reserves in the closed blocks of life,
annuity  and  individual and group accident and health  lines  of
business due to the surrender by the large group of policyholders
in 1997.

      Amortization  of  deferred  policy  acquisition  costs  and
general  and  administrative expenses  for  the  Insurance  Group
increased  $1.1  million. Madison Life's expenses increased  $1.8
million  and Standard Life's expenses decreased $.7 million.  The
increase  at  Madison  Life  is primarily  due  to  increases  in
commissions  of  $.7 million related to the increase  in  premium
volume  and the acquisition of new blocks of business  and  other
general  expenses of $1.1 million related to the MGU acquired  on
December 31, 1997. 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.

Corporate
---------
      Operating  income for the quarter ended June 30,  1998  was
flat  as compared to income of $1.1 million for the quarter ended
June  30, 1997, a decrease of $1.1 million. Included in the  1997
second  quarter is a non-recurring gain of $1.0 million from  the
sale of IHC's remaining real estate in Florida. Investment income
decreased $.2 million from 1997 due to lower returns from certain
hedged   equity  investments  in  1998.  Selling,   general   and
administrative expenses decreased $.1 million.

SIX  MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE
30, 1997
-----------------------------------------------------------------
      The  Company's operating income increased $1.0  million  to
$6.9 million for the period ended June 30, 1998 from $5.9 million
for the same period in 1997. Net income was $5.4 million, or $.72
per  share,  diluted,  for the six months  ended  June  30,  1998
compared to $5.5 million, or $.73 per share, diluted, for the six
months  ended  June 30, 1997. The Company had  net  realized  and
unrealized gains of $.4 million in 1998 and losses of $.2 million
in  1997.  Excluding net realized and unrealized gains or  losses
and  the non-recurring real estate gain in 1997, the Company  had

                                    13
<PAGE>

operating  income  of $6.5 million in 1998 as  compared  to  $5.0
million  in  1997,  an  increase of  30.4%,  which  approximately
consists  of: acquisitions of blocks of business made at  Madison
Life, 114%; and all other, (14%). Income tax expense increased to
$1.5  million  in  1998  from $.5 million in  1997  (see  Capital
Resources).

Insurance Group
---------------
      The  Insurance  Group's  operating  income  increased  $1.9
million  to  $7.0  million in 1998 from  $5.1  million  in  1997.
Operating  income includes net realized and unrealized  gains  of
$.3  million in 1998 compared to losses of $.2 million  in  1997.
Operating income (excluding net realized and unrealized gains  or
losses)  was  $6.7 million in 1998 compared to  $5.3  million  in
1997, an increase of 26.0%.

      Premiums earned increased $2.1 million to $40.9 million  in
1998  from $38.8 million in 1997; premiums earned at Madison Life
increased  $5.0  million while Standard Life had a  $2.9  million
decrease  in  premiums earned.  The increase at Madison  Life  is
comprised  of:   a $4.2 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  $.3
million  increase in long-term disability premiums; a $.1 million
increase  in group term life premiums; and a $.4 million increase
in  the ordinary life and individual accident and health lines of
business.  The  change at Standard Life is comprised  of:  a  $.3
million decrease in its DBL line; a $.5 million decrease  in  HMO
premiums  due to a reinsurance adjustment on an assumed block  of
business;  a $.3 million decrease in stop-loss premiums;  a  $1.0
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 $.8 million
decrease  in  point of service premiums due to the  loss  of  one
large case in 1998.

     Total net investment income increased $2.5 million primarily
due  to  an  increase  in  assets  at  Madison  Life  related  to
acquisitions.  The  annualized  return  on  investments  of   the
Insurance Group in the first six months of 1998 was 7.6% compared
to 7.4% in the first six months of 1997.

      Other  income increased $3.1 million. Madison Life's income
increased  $1.2 million primarily from fee income earned  by  the
MGU  acquired on December 31, 1997. Other income at Standard Life
increased $1.9 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

                                    14
<PAGE> 
increase  was offset by a $.4 million decrease due to a reduction
in  fee  income  from  the  third party  administrator  in  which
Standard  Life sold its interest in December 1997. Equity  income
from partnerships decreased $.1 million from 1997 to 1998.

      Insurance  benefits,  claims and  reserves  increased  $4.1
million,  reflecting an increase of $4.6 million at Madison  Life
and  a  $.5  million decrease at Standard Life.   Madison  Life's
increase  resulted from: a $2.5 million increase  in  the  credit
line  of business and a $.7 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  $.4
million  increase in group term life claims; and  a  $.4  million
increase in claims and reserves in other life and health lines of
business.  The  change at Standard Life is comprised  of:  a  $.3
million decrease in HMO reinsurance reserves due to a reinsurance
adjustment  on  an assumed block of business; and a  $.8  million
decrease  in  DBL claims and reserves due to improved  experience
($.6  million) and decreased volume ($.2 million); a $.5  million
decrease  in  stop-loss; such decreases were offset  by:  a  $1.1
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.

      Amortization  of  deferred  policy  acquisition  costs  and
general  and  administrative expenses  for  the  Insurance  Group
increased  $2.1  million. Madison Life's expenses increased  $3.3
million and Standard Life's expenses decreased $1.2 million.  The
increase  at  Madison  Life  is primarily  due  to  increases  in
commissions  of  $1.7 million and other general expenses  of  $.5
million  related  to  the  increase in  premium  volume  and  the
acquisition of new blocks of business. In addition, Madison  Life
had  $1.1  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  $1.2  million
attributable to the increase in expense allowances received  from
reinsurers  on  its  HMO line of business  as  a  result  of  the
increase in premiums.

Corporate
---------
      Operating loss for the six months ended June 30,  1998  was
$.1  million  as compared to income of $.8 million  for  the  six
months  ended June 30, 1997, a decrease of $.9 million.  Included
in  the six months ended June 30, 1997 is a non-recurring gain of
$1.0  million  from the sale of IHC's remaining  real  estate  in
Florida. Investment income remained constant while realized gains

                                    15
<PAGE>

increased   $.1  million.  Selling,  general  and  administrative
expenses also 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 76.8% was invested in investment
grade  fixed  income securities, resale agreements, policy  loans
and  cash and cash equivalents at  June 30, 1998.  Also  at  such
date,   approximately  97.6%  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 June 30, 1998, approximately  2.4%
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

                                    16
<PAGE>

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
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 assets would be called.  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 cash and cash equivalents 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 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 notes and other investments 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 not transferred
until  July 15, 1998 on this block and consisted of $30.1 million
of reserves.

      The  Company had net receivables from reinsurers  of  $98.3
million at June 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 June 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.  The

                                    17
<PAGE>

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 $19.5  million
at  June  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 $.8 million, net of deferred tax expense,  in
total  stockholders' equity, reflecting unrealized gains of  $2.7
million  at  June  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 six months of 1998 reflect a higher
effective  tax rate than in the first six 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  two  years, it does not believe  that  the  Year  2000

                                    18
<PAGE>

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,
reinsurers, securities brokers and bankers 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.

                                    19
<PAGE>

PART II.  OTHER INFORMATION
---------------------------
Item 4.   Submission of Matters to a Vote of Security Holders
          --------------------------------------------------- 
           At its Annual Meeting of Stockholders held on June 22,
1998,  the following seven nominees were re-elected for  one-year
terms on the Board of Directors:

          Harold E. Johnson, Allan C. Kirkman, Steven B. Lapin,
          Donald T. Netter, Edward Netter, Edward J. Scheider
          and Roy T.K. Thung

          The vote on the election of the above nominees was:

          For       At least 6,892,189 shares
          Withheld  No more than 6,580 shares

          There were no broker nonvotes.

           In  addition, at such meeting, the appointment of KPMG
Peat Marwick LLP as independent auditors for 1998 was ratified by
a  vote of 6,890,566 shares for, 4,912 shares against, and  3,291
shares abstaining. There were no broker nonvotes.

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


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

                                    21