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 Quarter Period Ended:  MARCH 31, 1997 
                                              --------------
                       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 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    .


          7,431,769 SHARES OF COMMON STOCK, $1.00 PAR VALUE         
-------------------------------------------------------------------------
             Common Stock outstanding as of May 6, 1997
<PAGE>
                
                INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES

                                    INDEX




PART 1 - FINANCIAL INFORMATION                         PAGE NO.
------------------------------                         --------
  Consolidated Balance Sheets -
   March 31, 1997 (unaudited) and December 31, 1996.          2
 
  Consolidated Statements of Operations -
   Three Months Ended March 31, 1997 
   and 1996 (unaudited).............................          3

  Consolidated Statements of Cash Flows -
   Three Months Ended March 31, 1997 
   and 1996 (unaudited).............................          4

  Notes to Consolidated Financial Statements
   (unaudited)......................................     5 -  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


                                 1
<PAGE>


INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS                         MARCH 31,   DECEMBER 31,
                                                      1997          1996     
----------------------------------------------------------------------------
                                                  (UNAUDITED)             
ASSETS:
  Cash and cash equivalents......................$  2,224,000   $ 10,361,000
   Short-term investments........................  11,626,000     10,316,000
   Securities purchased under agreements 
    to resell....................................  21,471,000     36,542,000
   Fixed maturities (Note 3)..................... 174,646,000    165,040,000
   Equity securities (Note 3)....................   8,769,000      4,427,000
   Other investments.............................  36,449,000     32,683,000
                                                  -----------    -----------
  Total investments.............................. 252,961,000    249,008,000
  Deferred insurance acquisition costs...........  11,458,000     11,221,000
  Due and unpaid premiums........................   5,803,000      5,122,000
  Due from reinsurers............................  57,332,000     50,877,000
  Due from brokers...............................     813,000          -    
  Notes and other receivables....................   3,958,000      4,205,000
  Other assets...................................   6,419,000      5,607,000
                                                  -----------    -----------
      TOTAL ASSETS...............................$340,968,000   $336,401,000
                                                  ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
 LIABILITIES:
  Future policy benefits.........................$123,282,000   $115,594,000
  Unearned premiums..............................  13,438,000     11,654,000
  Funds on deposit...............................  67,856,000     68,915,000
  Insurance policy claims........................   3,690,000      3,914,000
  Other policyholders' funds.....................   2,263,000      2,201,000
  Financial instruments sold, but not yet
   purchased (Note 3)............................      14,000        539,000
  Due to brokers.................................  21,064,000     19,740,000
  Due to reinsurers..............................   6,150,000      6,764,000
  Accounts payable, accruals and other
   liabilities...................................  15,950,000     18,653,000 
  Liability for business transferred.............   7,905,000      7,905,000
  Income taxes (Note 5)..........................   3,666,000      3,666,000
                                                  -----------    -----------
      TOTAL LIABILITIES.......................... 265,278,000    259,545,000
                                                  -----------    -----------
STOCKHOLDERS' EQUITY:                      
Preferred Stock (none issued)....................       -              -
Common stock, 7,431,769 shares issued and 
 outstanding, net of 2,188,950 shares in
 treasury........................................   7,432,000      7,432,000
Paid-in capital..................................  76,068,000     76,068,000
Unrealized gains (losses) on investments, net....  (4,892,000)    (1,466,000)
Accumulated deficit..............................  (2,918,000)    (5,178,000)
                                                  -----------    -----------
      TOTAL STOCKHOLDERS' EQUITY.................  75,690,000     76,856,000
                                                  -----------    -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.$340,968,000   $336,401,000
                                                  ===========    ===========

        See Accompanying Notes to Consolidated Financial Statements.

                                      2
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,                           1997           1996   
----------------------------------------------------------------------------
REVENUES:
 Insurance premiums..............................$ 18,749,000   $ 16,453,000
 Net investment income...........................   4,182,000      3,693,000
 Net realized and unrealized gains...............     143,000        167,000 
 Equity income...................................      77,000         97,000 
 Other income....................................   1,253,000      1,386,000 
                                                  -----------    -----------
                                                   24,404,000     21,796,000
                                                  -----------    -----------    
EXPENSES:
 Insurance benefits, claims and reserves.........  14,064,000     12,076,000
 Amortization of deferred insurance acquisition
  costs..........................................     711,000      1,072,000
 Interest expense................................       -            235,000
 Selling, general and administrative expenses....   7,067,000      7,035,000
                                                  -----------    -----------
                                                   21,842,000     20,418,000
                                                  -----------    -----------
Operating income before income taxes.............   2,562,000      1,378,000 
Income tax expense...............................     302,000         15,000 
                                                  -----------    -----------
Income from continuing operations, net...........   2,260,000      1,363,000

Income from discontinued operations..............       -            431,000
                                                  -----------    -----------
Net income.......................................$  2,260,000   $  1,794,000
                                                  ===========    ===========
INCOME PER COMMON SHARE:
Income from continuing operations................$        .30            .18
Income from discontinued operations, net.........       -                .06
                                                  -----------    -----------
Net income.......................................$        .30   $        .24
                                                  ===========    ===========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.......   7,474,000      7,465,000
                                                  ===========    ===========
                                                                            

        See Accompanying Notes to Consolidated Financial Statements.


                                      3
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,                          1997          1996    
----------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income.......................................$  2,260,000  $  1,794,000
 Adjustment to reconcile net income to net cash
  provided by operating activities:                         
 Amortization of deferred insurance acquisition
  costs...........................................     711,000     1,072,000
 Realized gains on sales of investment securities.    (322,000)     (143,000)
 Unrealized (gains) losses on trading securities..     179,000       (24,000)
 Equity income....................................     (77,000)      (97,000)
 Depreciation.....................................     100,000        71,000
 Deferred taxes...................................      13,000         7,000 
 Income from discontinued operations, net.........       -          (431,000)
 Other............................................    (689,000)     (789,000)
Change in assets and liabilities:
 Net purchases of trading securities..............  (2,148,000)     (637,000)
 Increase in future insurance policy 
  benefits, claims and other policy liabilities...   8,519,000       517,000 
 Additions to deferred insurance acquisition costs    (948,000)     (447,000)
 Change in net amounts due from and to reinsurers   (7,069,000)    3,349,000 
 Change in income tax liability...................      25,000        69,000 
 Other............................................  (3,741,000)   (1,221,000)
                                                   -----------   -----------
        Net cash (used) provided by 
         operating activities.....................  (3,187,000)    3,090,000 
                                                   -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Change in net amount due from and to brokers.....     512,000     3,070,000 
 Sales and maturities of short-term investments...  10,453,000     6,956,000
 Purchases of short-term investments.............. (11,752,000)   (5,968,000)
 Net purchases of resale and repurchase
  agreements......................................  15,072,000    (3,373,000)
 Sales and maturities of fixed maturities.........   6,476,000    49,347,000
 Purchases of fixed maturities.................... (19,443,000)  (67,340,000)
 Sales of equity securities.......................   5,659,000     6,839,000
 Purchases of equity securities...................  (8,352,000)   (8,373,000)
 Proceeds on sale of other investments............     530,000     3,200,000
 Other investments, net...........................  (3,510,000)   (6,921,000)
 Other............................................      45,000      (185,000) 
                                                   -----------   -----------
        Net cash used by investing activities.....  (4,310,000)  (22,748,000) 
                                                   -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Payments of investment-type insurance contracts..    (268,000)     (268,000)
 Dividends paid...................................    (372,000)     (297,000)
                                                   -----------   -----------
        Net cash used by financing activities.....    (640,000)     (565,000)
                                                   -----------   -----------
Decrease in cash and cash equivalents.............  (8,137,000)  (20,223,000)
Cash and cash equivalents, beginning of year......  10,361,000    26,860,000
                                                   -----------   -----------
Cash and cash equivalents, end of period..........$  2,224,000  $  6,637,000
                                                   ===========   ===========
        See Accompanying Notes to Consolidated Financial Statements.

                                    4
<PAGE>


INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997   
(UNAUDITED)
----------------------------------------------------------------------------
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

      (A)  BUSINESS AND ORGANIZATION

      Independence Holding Company and subsidiaries ("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 (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 (collectively "Geneve") hold
approximately 55% of IHC's outstanding common stock.

      (B)  PRINCIPLES OF CONSOLIDATION

      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, 1997 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, 1996.  Certain amounts in prior year's
consolidated financial statements and notes thereto have been
restated to conform to the 1997 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. 

                                 5
<PAGE>
      

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

      On December 31, 1996, IHC consummated the distribution of the
common stock of 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.
      Since Zimmerman historically comprised all of IHC's
manufacturing segment, the Consolidated Financial Statements and
notes thereto of IHC present Zimmerman as discontinued operations.
      Income from discontinued operations for the three months
ended March 31, 1996 is summarized as follows:

                                                 1996            
                                        ----------------------         
                                        (DOLLARS IN THOUSANDS)

      Revenues.................................$ 10,163           
                                                =======
      Operating income from 
       discontinued operations,
       net of minority interest................$    698           
      Income taxes.............................     267          
                                                -------
      Net income from
       discontinued operations.................$    431       
                                                =======
NOTE 3. INVESTMENT SECURITIES         

      The cost (amortized cost with respect to certain fixed
maturities) and fair value of IHC's investment securities as of
March 31, 1997 and December 31, 1996 are as follows:

                                              MARCH 31, 1997                 
                           -------------------------------------------------
                                           GROSS          GROSS
                           AMORTIZED     UNREALIZED     UNREALIZED    FAIR
                             COST          GAINS         (LOSSES)    VALUE   
                           -------------------------------------------------  
                                         (DOLLARS IN THOUSANDS)              

FIXED MATURITIES
----------------
 AVAILABLE-FOR-SALE:
  Corporate securities......$ 28,739     $    357     $ (1,827)     $ 27,269 
   U.S. Government and
    agencies obligations....  35,712           31       (1,492)       34,251
   Government National
    Mortgage Association.... 113,800           29       (2,627)      111,202
   Obligations of states and
    political subdivisions..   1,976           53         (105)        1,924
                             -------      -------      -------       -------
Total fixed maturities      $180,227     $    470     $ (6,051)     $174,646
                             =======      =======      =======       =======

                                        6     
<PAGE>                                        


INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------------------------------
NOTE 3. INVESTMENT SECURITIES (CONTINUED)

                                              MARCH 31, 1997                 
                           -----------------------------------------------
                                           GROSS          GROSS
                           AMORTIZED     UNREALIZED     UNREALIZED    FAIR
                             COST          GAINS         (LOSSES)    VALUE   
                           -----------------------------------------------  
                                         (DOLLARS IN THOUSANDS)              

EQUITY SECURITIES
-----------------
 AVAILABLE-FOR-SALE:
  Common stock..............$  5,196     $    319     $   (334)     $  5,181
  Options...................      61           82            -           143 
  Preferred stock...........   1,440           90            -         1,530
                             -------      -------      -------       -------
                               6,697          491         (334)        6,854
 TRADING:                    -------      -------      -------       -------
  Common stock..............   2,022           37         (144)        1,915
                             -------      -------      -------       -------
Total equity securities     $  8,719     $    528     $   (478)     $  8,769
                             =======      =======      =======       =======
FINANCIAL INSTRUMENTS SOLD,
BUT NOT YET PURCHASED
---------------------------
TRADING:
  Options....................    (73)          59          -             (14)
Total financial instrument   -------      -------      -------       -------
 sold, but not yet 
 purchased..................$    (73)    $     59     $    -        $    (14)
                             =======      =======      =======       =======

                                           DECEMBER 31, 1996                 
                           -----------------------------------------------
                                           GROSS          GROSS
                           AMORTIZED     UNREALIZED     UNREALIZED    FAIR
                             COST          GAINS         (LOSSES)    VALUE   
                           -----------------------------------------------  
                                         (DOLLARS IN THOUSANDS)              

FIXED MATURITIES
----------------
 AVAILABLE-FOR-SALE:
  Corporate securities.....$ 30,204     $    377     $ (1,311)     $ 29,270
  U.S. Government and
   agencies obligations....  28,832          180         (747)       28,265
  GNMA's................... 106,701           69         (844)      105,926
  Obligations of states                                                      
   and political                                                             
   subdivisions............   1,618           44          (83)        1,579  
                            -------      -------      -------       -------
 Total fixed maturities    $167,355     $    670     $ (2,985)     $165,040  
                            =======      =======      =======       =======

                                          7
<PAGE>


INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------------------------------
NOTE 3. INVESTMENT SECURITIES (CONTINUED)

                                           DECEMBER 31, 1996                 
                           -----------------------------------------------
                                           GROSS          GROSS
                           AMORTIZED     UNREALIZED     UNREALIZED    FAIR
                             COST          GAINS         (LOSSES)    VALUE   
                           -----------------------------------------------  
                                         (DOLLARS IN THOUSANDS)              

EQUITY SECURITIES
-----------------
 AVAILABLE-FOR-SALE:                                                     
  Common stock.............$  2,211     $    283     $    (31)     $  2,463
  Preferred stock..........   1,440          105         -            1,545
                            -------      -------      -------       -------  
                              3,651          388          (31)        4,008 
                            -------      -------      -------       -------
TRADING:
  Common stock.............     335           84         -              419
                            -------      -------      -------       -------
 Total equity securities   $  3,986     $    472     $    (31)     $  4,427  
                            =======      =======      =======       =======
FINANCIAL INSTRUMENTS SOLD,
BUT NOT YET PURCHASED         
---------------------------
 TRADING:
  Common stock............ $   (585)    $     46     $   -         $   (539)
                            -------      -------      -------       -------
 Total financial instruments
 sold, but not yet 
  purchased                $   (585)    $     46     $   -         $   (539)
                            =======      =======      =======       =======

      The amortized cost and fair value of fixed maturities at
March 31, 1997, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.               

                                             MARCH 31, 1997    
                                        ---------------------     
                                        AMORTIZED        FAIR 
                                          COST          VALUE 
                                        ---------       -----  
                                        (DOLLARS IN THOUSANDS)
                                              
      Due in one year or less.........$    574       $    605  
      Due after one year through 
       five years.....................   6,719          6,644 
      Due after five years through 
       ten years......................  38,460         36,872
      Due after ten years.............  20,674         19,323
                                       -------        -------
                                        66,427         63,444

      GNMA - 15 year..................  53,582         52,075
      GNMA - 30 year..................  60,218         59,127 
                                       -------        -------
      Totals..........................$180,227       $174,646
                                       =======        =======

                                       8
<PAGE>

INDEPENDENCE HOLDING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------------------------------
NOTE 4.  INCOME PER SHARE

      The computations of income per share were based upon the
weighted average number of common and dilutive common equivalent
shares outstanding of approximately 7,474,000 and 7,465,000 for
the three months ended March 31, 1997 and 1996, respectively. 
Dilutive common equivalent shares include 42,000 and 33,000 for
the quarters ended March 31, 1997 and 1996, respectively, from the
assumed exercise of options using the treasury stock method. 
Fully diluted earnings per share is not shown as the assumed
exercise of all other stock options and warrants is anti-dilutive.

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 and discontinued operations. 

      The income tax benefit for the quarter ended March 31, 1997
allocated to stockholders' equity for unrealized losses on
investment securities was $(39,000) representing the change in
deferred tax asset of $531,000 at March 31, 1997 from $492,000 at
December 31, 1996.

NOTE 6.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

                                               MARCH 31,    
                                          1997          1996  
                                        ----------------------
                                        (DOLLARS IN THOUSANDS)

      Cash payments for:
           Interest.....................$     -       $    179
           Income taxes.................$    271      $    214

NOTE 7.  NEW ACCOUNTING PRONOUNCEMENTS

      In February 1997, FASB issued SFAS No. 128, "Earnings per
Share" which changes the calculation of both primary and fully
diluted earnings per share.  The requirements of SFAS No. 128 are
effective for financial statements for periods ending after
December 15, 1997, and require the restatement of all prior
periods earnings per share calculations.  Earlier application is
not permitted. Under SFAS No. 128 the calculation of earnings per
share for IHC for the quarters ended March 31, 1997 and 1996 will
approximately equal primary earnings per share, and earnings per
share-assuming dilution will approximately equal earnings per
share. 

                                 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 and marketable securities) and expense items
associated with parent company activities, the Company's remaining
real estate operations and certain other investments of the
Company, are included in Corporate.


                            RESULTS OF OPERATIONS
                            ---------------------

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1996
----------------------------------------------------------------
      The Company's operating income from continuing operations
increased $1.2 million, or 86%, to $2.6 million for the period
ended March 31, 1997 from $1.4 million for the same period in
1996. The Company had net realized and unrealized gains of $.1
million in 1997 and $.2 million in 1996. Excluding net realized
and unrealized gains, the Company had operating income from
continuing operations of $2.5 million in 1997 as compared to $1.2
million for 1996.  Income from continuing operations, net was $2.3
million or $.30 per share for the quarter ended March 31, 1997 as
compared to $1.4 million or $.18 per share for the quarter ended
March 31, 1996. Income tax expense increased to $.3 million in
1997.  

Insurance Group
---------------
      The Insurance Group's operating income increased 33% to $2.9
million in 1997 from $2.2 million in 1996.  Operating income
includes net realized and unrealized gains of $.1 million in 1997
compared to $.2 million in 1996.  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 $2.8 million in 1997 compared to
$2.0 million in 1996. 

                                10
<PAGE>


      Premium revenues increased $2.3 million or 14% to $18.7
million in 1997 from $16.4 million in 1996; premium revenues at
Madison Life increased $.8 million while Standard Life showed a
$1.5 million increase in premiums.  The increase at Madison Life
is comprised of:  a $.4 million increase in the credit lines of
business primarily due to new accounts added during 1996; a $.1
million increase in long-term disability premiums; a $.1 million
increase in the ordinary life and individual accident and health
lines of business; and a $.2 million increase in other life and
health lines of business.  The change at Standard Life is
comprised of the following:  $.4 million in additional stop-loss
premiums reflecting the continued growth in this line of business;
$1.0 million increase in its DBL line due to an acquisition of a
block of business effective January 1, 1997, and a $.1 million
increase in the closed blocks of life, annuity and individual and
group accident and health lines of business.
  
      Total net investment income increased $.6 million primarily
due to an increase in assets at Madison Life related to the
acquisition of the pre-need and interest-sensitive blocks of
business purchased effective January 1, 1996, and the infusion of
a $5.0 million surplus note in the fourth quarter of 1996.  The
annualized return on investments in the first quarter of 1997 was
6.9% compared to 7.6% for the first quarter of 1996.  Equity
income remained steady.

      Other income decreased $.1 million from 1996 to 1997
resulting from: a decrease of $.2 million in stop-loss recoveries
at Madison Life offset by an increase at Standard Life in stop-
loss fee income earned of $.1 million.

      Insurance benefits, claims and reserves increased $2.0
million, or 16%, reflecting an increase of $1.2 million at Madison
Life and $.8 million at Standard Life.  Madison Life's increase
resulted from the following:  a $.2 million increase in ordinary
life and individual accident and health claims and reserves; a $.1
million increase in long-term disability claims; a $.2 million
increase in claims and reserves in other life and health lines of
business; $.1 million in group term life reserves; a $.4 increase
in interest credited to universal life and annuity products
primarily as a result of the acquisition of the pre-need block of
business and the interest sensitive whole life block of business;
and a $.2 million increase in the credit line of business due to
new accounts.  The change at Standard Life is comprised of an
increase of $.4 million in stop-loss claims incurred as a result
of the increased premiums in this line of business and $.7 million
in additional DBL claims due to increased volume.  The foregoing
increases were offset by a $.3 million decrease in claims and
reserves due to the continuing runoff of the closed blocks of
life, annuity and individual and group accident and health lines
of business.  

                               11
<PAGE>

      Amortization of deferred acquisition costs and general and
administrative expenses for the Insurance Group remained steady. 
Madison Life's expenses increased $.1 million and Standard Life's
expenses decreased $.1 million.

Corporate
---------
      Operating losses for the quarter ended March 31, 1997
decreased by $.5 million from 1996.  Investment income and other
income combined decreased $.1 million from 1996. Interest expense
decreased $.2 million due to the repayment of all long term debt
during 1996. Selling, general and administrative expenses
decreased $.4 million due to a reduction in salaries and legal
fees.


                               LIQUIDITY
                               ---------

Insurance Group
---------------
      The Insurance Group normally provides cash flow from
operations, from the receipt of scheduled principal payments on
its portfolio of fixed income securities and from earnings on
short-term 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. 

      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 Company's investment assets,
approximately 83% was invested in investment grade fixed income
securities, resale agreements, policy loans and cash and cash
equivalents at March 31, 1997. Also at such date, approximately
96% of the Company'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, 1997,
approximately 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 1.4% of the
Company's total investments were in real estate, non-performing
fixed maturities and mortgage loans. 

      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.
                                      
                                 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 maintains a small portfolio of real estate
(carried at nominal value), the sale of which is actively being
pursued.  The sale of such real estate would have a non-recurring
positive impact on the Company's earnings; the effect thereof on
stockholders' equity would not be material.  

      Total corporate liquidity (cash, cash equivalents, resale
agreements and marketable securities) amounted to $14.5 million at
March 31, 1997. At the present time, the Company is not in need of
any additional long-term financing.

      Subsequent to March 31, 1997, the Board of Directors of IHC
approved the continuation of its share repurchase program and
authorized the acquisition in the open market of up to 750,000
shares of IHC's common stock (approximately 10% of the
outstanding). The timing and price of any purchases will be at the
sole discretion of IHC's management, and the program may be
discontinued or suspended at any time (since the initiation of
IHC's repurchase program in 1991, approximately 1,700,000 net
shares have been acquired at a cost of $8,300,000). 

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 as
amortized cost), as trading securities (carried at fair value) or
as available-for-sale (carried at fair value); the Company has
chosen to carry all of its debt securities as available-for-sale. 
Primarily as a result of the increase in interest rates, the
Company experienced a change in unrealized loss of $3.4 million,
net of deferred tax benefits, in total stockholders' equity,

                               13
<PAGE>

reflecting unrealized losses of $4.9 million at March 31, 1997
versus unrealized losses of $1.5 million at December 31, 1996.  

New Accounting Pronouncements
-----------------------------
      In June 1996, the Financial Accounting Standards Board
("FASB") issued SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." 
In December 1996 the FASB issued SFAS No. 127, "Deferral of the
Effective Date of Certain Provisions of FASB Statement No. 125."
The requirements of SFAS No. 125 have been deferred by SFAS No.
127 for those types of transactions that are entered into by the
Company and would be effective after December 31, 1997, and are to
be applied prospectively.  Earlier or retroactive application is
not permitted.  The Company is currently evaluating the Statement
but does not believe it will have a material impact on the
Company.

      In February 1997, FASB issued SFAS No. 128, "Earnings per
Share" which changes the calculation of both primary and fully
diluted earnings per share.  The requirements of SFAS No. 128 are
effective for financial statements for periods ending after
December 15, 1997, and require the restatement of all prior
periods earnings per share calculations.  Earlier application is
not permitted. Under SFAS No. 128 the calculation of earnings per
share for IHC for the quarters ended March 31, 1997 and 1996 will
approximately equal primary earnings per share, and earnings per
share-assuming dilution will approximately equal earnings per
share. 

                               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)    A report on Form 8-K was filed on January 10, 1997.


                               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 13, 1997             By: /s/Roy T.K. Thung            
                                    --------------------------
                                    Roy T. K. Thung
                                    Executive Vice President,
                                    Chief Financial Officer
                                    and Treasurer





Dated: May 13, 1997             By: /s/Teresa A. Herbert         
                                    --------------------------
                                    Teresa A. Herbert
                                    Vice President and
                                    Controller

 
                                 16