CNA INSURANCE COMPANIES
[LETTERHEAD]






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Continental Casualty Company
[LETTERHEAD]

                                                   Policy Number,    SR-83099599

Application is hereby made to the Continental  Casualty  Company for a policy of
group  disability  income  insurance  based  on  the  following  statements  and
representations:

1.    Employer: The Morgan Group, Inc.

      Address:      2746 US 20 West

      City: Elkhart                       State: IN            Zip Code: 46514

      Nature of Business: Transportation Services

2.    What period of time must elapse before an employee is eligible
      for this coverage?

      Present Employees: 0 days                      New Employees: 0 days

      The following group or groups of employees are eligible:

                        DESCRIPTION OF ELIGIBLE EMPLOYEES

      Class 1:  All active, full-time* Officers and Management.

      Class II: All active, full-time* Employees excluding Truck Drivers,
                Warehouse Employees, Officers and Management.


        *"Active, full-time" means an employee works at least 30 hours per week.
        Part-time, temporary or seasonal employees are not eligible.

3.      Total Number of Employees on Payroll: 341 Total Number Eligible: 341

4.      Insured Employee  Occupation Period:  Class 1: To the end of the Maximum
                                                       Period Payable.

                                              Class 11: 24 months

5.    Premium is calculated by: SEE ADDENDUM 1.

6.    Premium is payable in the following manner: SEE ADDENDUM 1.

7.    What percent of the premium is to be paid by the Employer? 100%

8. This policy shall be made effective at 12:01 A.M., Standard Time at the above
address of the Employer on January 1, 1998.

The insurance of Employees who become  eligible after the effective date of this
policy  shall  become  effective  on the first day of the month that falls on or
next follows the date the employee becomes eligible for this insurance.





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9.      Schedule of  Benefits  MONTHLY  BENEFIT  67% of the  Insured  Employee's
        salary  (1) or $10,000,  whichever  is the  lesser  amount,  minus the
        reductions in (2) below.

           60% of the Insured Employee's salary (1) or $4,000,  whichever is the
lesser amount, minus the reductions in (2) below.

      MAXIMUM PERIOD PAYABLE

           See Addendum 3.

      ELIMINATION PERIOD

           180 days

      Includes Features Checked
      [ ]       PARTIAL DISABILITY BENEFIT - REDUCTION.

      [ ]       REHABILITATIVE EMPLOYMENT BENEFIT - REDUCTION:

      [X]       RESIDUAL DISABILITY BENEFIT

      [X]       SURVIVOR INCOME BENEFIT - MAXIMUM PERIOD PAYABLE: 6 MONTHS

      [ ]       COST OF LIVING ADJUSTMENT BENEFIT

      (1)    See Addendum 2

      (2)    See Addendum 2

             AGENT OR BROKER                   EMPLOYER

             Name of Firm: Financial           Name:  Lyle C. Haws
                           Partners, Inc.            ----------------------
                                                       (please print)
             Name of agent or
             broker (please print):            Title: VP-Human Resources
             Melvin Jacobson

             Signature: /s/ Melvin Jacobson    Signature: /s/ Lyle C. Haws
                                                          -------------------
             Date: March 30, 1998              Date: March 9, 1998


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                  ADDENDUM 1                            SR-83099599

                                                        Policy Number

                  The Morgan Group, Inc.                January 1, 1998
                  Employer                              Effective Date



5.    Premium is calculated by:

Multiplying  the total insured  salary by .0033.  Do not include  salary for any
individual in excess of per month in the premium calculation.

         Class  I: $15,000
         Class II: $ 6,667

6.    Premium is payable in the following manner:

The policy is issued in  consideration  of the payment in arrears of the monthly
premium.  The monthly  premium is  calculated  at the premium rate stated above.
Such payment shall be made within 20 days after the end of each monthly  premium
accounting period and shall be accompanied by a premium adjustment report.

If an addition,  termination or change in insurance  takes place other than on a
regular due date, any premium adjustment will take effect on the next due date.

If notice of  termination  or change is received  more than six months after the
termination or change became effective,  We are not required to give a refund or
credit for the period in excess of six months.

"Salary" as used in  Statements  5 and 6 shall mean the  monthly  wage or salary
paid to the Insured  Employee by the Employer  excluding  commissions,  overtime
earnings, incentive pay, bonuses or other compensation.



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                  ADDENDUM 2                                     SR-83099599
                                                                 Policy Number

                  The Morgan Group, Inc.                         January 1, 1998
                  Employer                                       Effective Date


(1)     "Salary" means the monthly wage or salary that the Insured  Employee was
        receiving  from  the  Employer  on the  date the  Disability  began.  It
        excludes commissions, overtime earnings, incentive pay, bonuses or other
        compensation.

(2)     The Monthly Benefit under this policy shall be reduced by:

         1.       Disability  benefits  paid,  payable,  or for which there is a
                  right under:

                  a.       The Social  Security  Act,  including any amounts for
                           which the Insured  Employee's  dependents may qualify
                           because of the Insured Employee's Disability,

                  b.       Any Workers  Compensation or Occupational Disease Act
                           or Law, or any other law which provides  compensation
                           for an occupational injury or sickness, or

                  c.       Any State Disability Benefit Law:

         2.       Disability benefits paid under:

                  a.       Any group  insurance  plan provided by or through the
                           Employer:

                  b.       Any formal sick leave plan provided by the Employer;

                  c.       Any Retirement Plan provided by the Employer; or

         3.       Retirement   benefits  paid  under  the  Social  Security  Act
                  including  any  amounts  for  which  the  Insured   Employee's
                  dependents  may  qualify  because  of the  Insured  Employee's
                  retirement;

         4.       Retirement  benefits paid under a Retirement  Plan provided by
                  the Employer  except for amounts  attributable  to the Insured
                  Employee's contributions.

         If any  benefit  described  above  is  paid  in a  single  sum  through
         compromise settlement or as an advance on future liability,  the amount
         which pertains to the Insured Employee's  Disability will be divided by
         the  number of months  from the date of its  receipt  to the end of the
         benefit period applicable to the Insured Employee.  The result shall be
         deducted from the Insured Employee's Monthly Benefit.

         The Monthly  Benefit,  after the reductions  stated above, if any, will
         not be further  reduced for subsequent  cost-of-living  increases which
         are  paid,  payable,  or for  which  there is a right  under  any other
         benefit described above.

         "Retirement  Plan" means a plan which provides  retirement  benefits to
         employees and is not funded wholly by employee  contributions.  It does
         not include:  1) a profit sharing plan, a thrift or savings plan; 2) an
         individual  retirement account (IRA); 3) a tax sheltered annuity (TSA);
         4) a stock ownership plan; or 5) a deferred compensation plan.

         In no event will the Monthly Benefit payable for Total  Disability (but
         not for Residual  Disability)  be reduced to less than $100 or 10% of
         the Insured  Employee's  Monthly Benefit prior to the reductions stated
         above, whichever is greater.



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ADDENDUM 3


The Morgan Group, Inc.
Employer

Applicable to Class 1:

      MAXIMUM PERIOD PAYABLE

      Age on Date
      Disability Commences

      61 years or younger

      62 years

      63 years

      64 years

      65 years

      66 years

      67 years

      68 years

      69 years or older

Applicable to Class II:

      65 years

      66 years

      67 years

      68 years

      69 years or older

SR-83099599
Policy Number

January 1, 1998
Effective Date





To the Insured Employee's 65th birthday

42 months

36 months

30 months

24 months

21 months

18 months

15 months

12 months

24 months

21 months

18 months

15 months

12 months



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                  ADDENDUM 4                                  SR-83099599
                                                              Policy Number

                  The Morgan Group, Inc.                      January 1, 1998
                  Employer                                    Effective Date



Listed below are the Subsidiaries and/or Affiliates insured under this policy:



Morgan Drive Away

Interstate Indemnity

Transfer Drivers, Inc. (T.D.I.)

Morgan Financial, Inc.