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 ended March 31, 1998
Commission File Number 2-39729


                     COTTON STATES LIFE INSURANCE COMPANY
              ---------------------------------------------------
             (Exact name of registrant as specified in its charter)


          GEORGIA                                  58-0830929
-----------------------------      -------------------------------------
(State or other jurisdiction       (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
incorporation or organization)

244 Perimeter Center Parkway, N.E., Atlanta, Georgia           30346
--------------------------------------------               ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                   (ZIP CODE)

Registrant's telephone number, including  (770) 391-8600

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 twelve months (or for such shorter period
that the Registrant was required to file such reports) and (2) has been
subject to the filing requirements for at least the past 90 days.


YES    XNO

The Registrant, as of March 31, 1998, has 6,402,875 shares of common stock
outstanding.  All shares and per share amounts have been retroactively 
restated to reflect the January 20, 1998 three for two stock split.



                 PART I - CONSOLIDATED FINANCIAL STATEMENTS

The following consolidated statements have been prepared by
management.  In management's opinion, all adjustments and certain
reclassifications necessary for a fair statement of financial position at
March 31, 1998 and December 31, 1997 and the results of operations for
the three months ended March 31, 1998 and 1997 have been made.

                      COTTON STATES LIFE INSURANCE COMPANY
                      Unaudited Consolidated Condensed Balance Sheets
                      March 31, 1998 and December 31, 1997

ASSETS                                                    1998          1997
Investments
    Fixed maturities, held for investment, at amortized
       cost (market value $17,609,734 in 1998 and
       $18,608,644 in 1997)                           $17,100,757   $18,104,440
    Fixed maturities, available for sale, at market
       (amortized cost $91,041,757 in 1998 and
       $89,538,221 in 1997)                            93,251,754    91,891,271
    First mortgage loans on real estate                	4,118,464     4,215,962
    Policy loans                              	         8,016,881     7,976,103
    Short-term investments                       	      6,917,971     3,755,294

        Total investments                      	      129,405,827   125,943,070

Cash                                                   	  426,112     1,303,739
Accrued investment income                        	      1,895,777     1,928,498
Accounts receivable, principally premiums        	      2,804,010     3,242,432
Amount due from reinsurers                             	2,326,600     2,376,473
Deferred policy acquisition costs                      30,562,951    29,842,783
Other assets                                           	  553,832       700,314
                                              	      $167,975,109  $165,337,309

LIABILITIES AND STOCKHOLDERS' EQUITY

Policy liabilities and accruals:
    Future policy benefits                    	     $106,257,471  $104,269,283
    Policy and contract claims                        	1,250,561     1,356,308
Federal income taxes                               	   4,410,002     3,920,376
Other liabilities                                     	6,152,347     6,395,329

        Total liabilities                     	      118,070,381   115,941,296

Stockholders' Equity:
    Common Stock                                      	6,754,504     6,754,504
    Additional paid-in capital                        	1,283,265     1,283,745
    Accumulated other comprehensive
       income                                         	  995,267     1,285,556
    Retained earnings                                 42,505,025    41,204,889
    Unearned compensation-restricted stock            	 (507,052)            0
    Less treasury stock, at cost, (351,629 shares in
       1998 and 353,629 in 1997)                      (1,126,281)   (1,132,681)

        Total stockholders' equity                    49,904,728    49,396,013

                                              	     $167,975,109  $165,337,309



                      COTTON STATES LIFE INSURANCE COMPANY
                      Unaudited Consolidated Summary of Earnings


                                                   Three months ended
                                                        March 31,
                                                  1998          1997

Income:
    Premium income                              $2,167,228    $1,778,758
    Mortality and expense charges earned         2,464,809     2,317,145
    Investment income                            2,120,844     1,943,397
    Realized investment gains                       64,515             0
    Brokerage and other income                     724,295       377,797

        Total income                             7,541,691     6,417,097


Benefits and expenses:
    Life benefits and claims                     2,857,073     2,481,072
    A & H benefits and claims                      162,112        79,596
    Amortization of policy acquisition costs       579,483       638,805
    Operating expenses                           1,706,390     1,406,990

        Total benefits and expenses              5,305,058     4,606,463


Earnings before income tax expense               2,236,633     1,810,634

Federal income taxes:
    Current tax expense                            383,058       267,829
    Deferred tax expense                           297,324       111,505
        Total Federal income taxes                 680,382       379,334


Net Earnings                                    $1,556,251    $1,431,300


Basic earnings per share of common stock              $.25          $.22  

Diluted earnings per share of common stock            $.24          $.22

Weighted average number of shares
    used in computing basic earnings per share   6,401,375     6,400,639

Per share amounts for the three months ended March 31, 1997 have been adjusted 
for the three for two stock split.




                            COTTON STATES LIFE INSURANCE COMPANY
                      Unaudited Consolidated Statements of Cash Flows
                         Three months ended March 31, 1998 and 1997



                                                	  1998        1997
Cash flows from operating activities:
   Net Earnings                                     $1,556,251    $1,431,300
   Adjustments to reconcile net earnings to net
     cash provided from operating activities:
      Increase in policy liabilities and accruals    1,375,389     1,226,872 
      Increase in deferred policy acquisition costs   (915,846)     (638,843) 
      Change in Federal income taxes           	       704,724        97,379
      Decrease in accounts receivable and
        amounts due from reinsurers            	       488,295       187,180
      Other, net                                      (157,609)       27,161

    Net cash provided from operating activities      3,051,204     2,331,049

Cash flows from investing activities:
    Purchase of fixed maturities available for      (4,040,707)   (3,011,444)
    Sale of fixed maturities available for sale      1,490,739             0
    Proceeds from maturity and redemption of fixed
         maturities held for investment              1,000,000       100,000
    Proceeds from maturity and redemption of fixed
         maturities available for sale               1,029,181     1,576,838
    Principal collected on first mortgage loan          97,498       145,821
    Policy Loans                                       (40,778)     (163,911)
    Other, net                                         (51,892)      (48,498)

    Net cash used in investing activities             (515,959)   (1,401,194)

Cash flows from financing activities:
    Cash dividends paid                               (256,115)     (170,677)
    Proceeds from exercise of stock options              5,920             0

    Net cash used in financing activities             (250,195)     (170,677)

Net increase in cash and cash equivalents:          $2,285,050      $759,178

Cash and cash equivalents:
    Beginning of period                              5,059,033     2,530,293

    End of period                                   $7,344,083    $3,289,471



                            COTTON STATES LIFE INSURANCE COMPANY
                   Unaudited Consolidated Statements of Comprehensive Income

                                                            Three months ended
                                                                  March 31,
                                                       	     1998          1997

Net earnings                                           	$1,556,251   $1,431,300
Other comprehensive income (loss), before tax:

   Unrealized gains (losses) on securities available
	    for sale	                                			         (274,412)  (1,463,386)
   Reclassification adjustment for realized (gains) 
     losses included in net earnings                  	   (64,515)       -

       Total other comprehensive income (loss)
          before taxes                                 	  (338,927)  (1,463,386)

    Income tax expense (benefit) related
        to items of other comprehensive income         	   (48,638)    (571,745)

        Other comprehensive income (loss), net         	  (290,289)    (891,641)


                 Total comprehensive income            	$1,265,962     $539,659




           MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

               Liquidity and Capital Resources

Premiums, mortality and expense charges and investment income are
the Company's major sources of cash flow used to meet its
short-term and long-term cash requirements.

The Company's short-term obligations consist primarily of
operating expenses and policyholder benefits.  The Company has
been able to meet these funding requirements out of operating cash
and cash equivalents.  The Company does not anticipate that it
will become necessary to sell long-term investments to meet short-
term obligations.

The Company's principal long-term obligations are fixed
contractual obligations incurred in the sale of its life insurance
products.  The premium charged for these products are based on
conservative and actuarially sound assumptions as to mortality,
persistency and interest.  The Company believes these assumptions
will produce revenues sufficient to meet its future contractual
benefit obligations and operating expenses, and provide an
adequate profit margin to finance future growth without a major
entry into the debt or equity markets.

Investments
Since December 31, 1997, there has not been a material change in
mix or credit quality of the Company's investment portfolio.  All
purchases have been fixed maturities available for sale and over
95% of the holdings at March 31, 1998 and December 31, 1997 are
rated "A" or better.

Mortgage Loans
The Company's mortgage loan policy stipulates that the Company
will lend no more than 80% of the value on residential loans and
no more than 75% on commercial loans.  The Company grants loans
only to employees (excluding officers and directors), agents,
agents' relatives, employees of Gold Kist, Inc. (a related party),
and current mortgagees.

The geographic distribution of the loan portfolio as of March 31,
1998 and December 31, 1997 is:


    No. Of Loans                                Book Value
03/31/98      12/31/97      State         03/31/98      12/31/97
    5             5         Alabama        253,250       259,155
    6             6         Florida        411,307       418,326
   68            70         Georgia      3,453,908     3,538,481
   79            81                      4,118,465     4,215,962


The Company has a large concentration of loans in Georgia. Because
the loan-to- value ratio on delinquent loans is 41%, the Company
does not anticipate any loss should it choose to foreclose.  The
Company has foreclosed on only one loan since 1985 and incurred no
loss on the sale of the underlying collateral.


                 Results of Operations


Premium Income
Total premium income was up 22% when compared to the first quarter
of 1997.  The increase is attributable to strong sales of the
Company's guaranteed issue-simplified issue whole life policies.
The Company has contracted with over 1400 independent agents to
market these products through out the Southeast.  The Company also
continues its expansion in Kentucky and Tennessee with multi-line
exclusive agents. Individual accident and health premiums continue
to decline on this closed block of business.


Mortality and Expense Charges Earned
Universal life contract deposits increased 6% over the year
earlier quarter.  Mortality and expense charges earned on these
deposits also increased 6%.  The Company expects annual increases
in the 8% - 10% range.  Annuity contact deposits continue to
decrease as the Company does not actively solicit annuity
business.

Investment Income
Investment income was up 9% over the year earlier quarter.  Bond
interest was up 8% due to a larger investment portfolio and
generally favorable market conditions.  Policy loan interest was
up 11% as was the policy loan investment asset when compared to
March 1997.

Brokerage Income
Brokerage income was up 92% over March 31, 1997.  As discussed in
the Company's 1997 Form 10-K in January, 1997, one of the
Company's subsidiaries, CSI Brokerage Services, Inc., in
conjunction with the Company's property and casualty affiliate,
entered into a ten (10) year brokerage agreement to transfer
management of its affiliates multi-peril crop and crop hail
insurance to Blakely Crop Hail, a Kansas based company.  CSI
Brokerage receives an override commission based on premium volume
generated by sales of multi-peril crop and crop hail insurance by
the Company's multi- line exclusive agents.  As of March 31, 1997,
CSI Brokerage had not recognized any  override commissions under
this agreement as it was early in the first year of the contract
and the volume of business and details of administration were
still uncertain.  At March 31, 1998, CSI Brokerage recognized
approximately $210,000 of gross income having the benefit of one
full year of completion under the contract and having historical
knowledge of emergence of the annual override.


Exclusive of the above, brokerage income for CSI Brokerage
Services increased 19% and 17% for the Company's other brokerage
subsidiary, CS Marketing Resources, Inc.  Both companies receive
override commissions from other insurance carriers and their
revenues may fluctuate based on the inception date of the related
coverage.

Benefits and Operating Expenses
Ordinary benefits as a percentage of premium income and mortality
and expense charges earned were 1% higher than the year earlier
quarter.  Due to the Company's size, it is vulnerable to quarterly
fluctuations in mortality.  During the first quarter of 1998,
traditional life claims increased significantly, which was offset
by approximately $340,000 in mortality reserves released that the
Company had been carrying in anticipation of adverse mortality.


Individual accident and health benefits increased 103% over the
year earlier quarter due to one claim in this closed block of
business.  The Company has met its reinsurance deductible and all
future charges will be covered by reinsurance up to 250,000.

Expenses (including amortization of policy acquisition costs) as a
percentage of premium income, mortality and expense charge earned
and brokerage income decreased 3% from the year earlier quarter.
Without the effect of the brokerage commission previously
discussed, the percentage decrease was 2%.  The Company continues
to emphasize cost controls which enable this ratio to remain
relatively stable.

Federal Income Taxes
Current taxes are provided based on estimates of the projected
effective annual tax rate.  Deferred taxes are provided on the
basis of SFAS 109.  The effective tax rate at March 31, 1998 was
30% compared to 21% for the year earlier quarter.  The increase is
due to the taxation of CS Marketing Resources 1998 earnings at 34%
due to this subsidiary utilizing all of its net operating loss
carryforwards at December 1997 and the tax effect on the
previously discussed claim reserves.  The effective tax rate for
1998 without the effect of these two items would be 24% which is
in line with Company expectations.


        PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

The Company is a defendant in various actions incidental to the
conduct of its business.  The Company intends to vigorously defend
the litigation and while the ultimate outcome of these matters
cannot be estimated with certainty, management does not believe
the actions will result in any material loss to the Company.

Item 2.  Changes in Securities

NONE

Item 3.  Defaults Upon Senior Securities

NONE

Item 4.  Submission of Matters to a Vote of Security Holders

NONE

Item 5.  Other Information

NONE

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

NONE

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.

                               COTTON STATES LIFE INSURANCE COMPANY
    Registrant

Date:   05/14/98               Gary W. Meader
        ---------------        ----------------------------------
                               Chief Financial Officer/Treasurer


Date:   05/14/98               William J. Barlow
        ---------------        ----------------------------------
                               Vice President/Controller