SURPLUS DEBENTURE NO 7.DOC                                          $28,158,000


                        UNITED FIDELITY LIFE INSURANCE COMPANY
                                  SURPLUS DEBENTURE

           Originally dated July 10, 1995, amended and restated as of January 1,
1999 and January 1, 2002


                  EXPRESSLY CONDITIONED UPON, SUBJECT TO AND contingent upon the
terms, conditions, limitations, contingencies and provisions as hereinafter set
forth in this Debenture, FOR VALUE RECEIVED, United Fidelity Life Insurance
Company, a corporation organized and existing under the laws of the State of
Texas (hereinafter called "UFL"), does hereby agree to pay to Americo Life, Inc.
("Americo"), or its order, from the surplus funds identified below, the sum of
TWENTY-EIGHT MILLION ONE HUNDRED FIFTY-EIGHTY THOUSAND DOLLARS ($28,158,000),
being the unpaid principal amount of this suplus debenture as of January 1,
2002, with interest on the unpaid principal balance thereof from January 15,
2002 until paid, both principal and interest payable at Dallas County, Texas,
only as hereinafter provided. This Debenture, both principal and interest,
shall, except as otherwise provided herein, be payable only out of the available
surplus of UFL in excess of $22,000,000, to be determined as herein provided.
Terms not otherwise defined herein are defined in paragraph 8 hereof.

                  Interest on the principal balance hereof from time to time
remaining unpaid shall be payable in advance at a rate of 9 1/4% per annum,
hereinafter referred to as "the Rate".

                  Subject to, conditioned upon and as provided in paragraph (2)
below, interest shall be payable annually in advance on the first day of each
Interest Period. Subject to, conditioned upon and as provided in paragraph (4)
below, principal payments shall be made annually each January 15, beginning
January 15, 2002, based on the following schedule:
<TABLE>

          <S>               <C>                    <C>            <C>
           2002              $    746,000          2011                     0
           2003                   795,000          2012                     0
           2004                   848,000          2013                     0
           2005                15,904,000          2014                     0
           2006                   964,000          2015            $5,000,000
           2007                 1,027,000
</TABLE>

                    (1) On the first day of each Interest Period, the Board of
  Directors of UFL, or its Executive Committee acting in the absence of the
  Board of Directors, shall calculate the surplus of UFL as of the end of the
  immediately preceding calendar quarter in accordance with accounting practices
  required or permitted by the Texas Department of Insurance.


                    (2) Subject to the conditions and provisions in paragraphs
  (5) and (6) hereof, and provided the surplus of UFL exceeds $22,000,000 as of
  the end of the immediately preceding calendar quarter as determined by the
  calculation required in paragraph (1) above, UFL shall have a liability to
  Americo for and shall, on each date specified in Paragraph (1) hereof, pay to
  Americo, as interest hereon, an amount equal to the lesser of (i) the interest
  due on such date under this Surplus Debenture, or (ii) the amount by which the
  surplus of UFL exceeds $22,000,000 as of such calculation date.

                     (3) Subject to the conditions and provisions in paragraph
  (6) hereof, and if, at the time the calculation required in paragraph (1)
  above is made, the surplus of UFL does not exceed $22,000,000 by an additional
  amount sufficient to pay all of the interest due under this Surplus Debenture,
  after making the partial payment as provided in paragraph (2) above, the
  amount of remaining due but unpaid interest shall not be a liability of UFL,
  but shall bear interest at the Rate then in effect and shall be carried
  forward and paid on the next interest payment date as provided herein.

                    (4) Subject to the conditions and provisions in paragraphs
  (5) and (6) hereof, and provided the surplus of UFL exceeds the sum of
  $22,000,000, plus an amount equal to all interest due hereon as of the date
  for which the calculation required in Paragraph (1) above is made, UFL shall
  have a liability to Americo for, and shall, on the dates specified in
  paragraph (1) hereof, pay to Americo an annual installment of principal equal
  to the lesser of (i) the amount specified in the principal schedule in the
  third paragraph hereof, or (ii) the amount by which the surplus of UFL, after
  the payment of interest due hereon, exceeds $22,000,000, all as of such
  calculation date. Each annual installment of principal becoming due and
  payable hereunder shall be either the amount specified in the principal
  schedule in the third paragraph hereof or such lesser amount as may be paid
  hereunder in accordance with the provisions hereof and paragraph (5) below.
<page>
                    (5) Subject to the conditions and provisions in paragraph
  (6) hereof, if, at the time the calculation required in paragraph (1) above is
  made, the surplus of UFL does not exceed $22,000,000 by an additional amount
  sufficient to pay all interest due hereon, plus the full amount of the annual
  installment of principal payable on such date, UFL shall only have a liability
  for and shall only make such partial payment of such lesser amount as will not
  reduce its surplus below $22,000,000 with such partial payment of such lesser
  amount being applied first to interest due hereon, and the remainder thereof,
  if any, being applied to principal payment. The unpaid portion of such
  installment of principal payment shall not be a liability of UFL, but shall be
  carried forward until the next principal payment date on which such unpaid
  principal may be paid without reducing the surplus of UFL below $22,000,000 as
  provided herein.

                    (6) Notwithstanding any of the foregoing provisions to the
  contrary, if at the time the calculation required in paragraph (1) above is
  made, should the Board of Directors of UFL, or its Executive Committee acting
  in the absence of the Board of Directors, determine that the surplus of UFL
  exceeds $22,000,000, but that such surplus is not of a sufficient amount in
  excess of $22,000,000 so as to permit either an interest or principal payment
  hereon, either total or partial, without jeopardizing UFL's status as a
  licensed insurer or its right to transact business in Texas or elsewhere,
  because of the so-called "risk-based capital" requirements of the Texas
  Department of Insurance, or other state insurance regulating authority, or any
  similar financial regulatory requirement of UFL, the Board of Directors of
  UFL, or its Executive Committee acting in the absence of the Board of
  Directors, may, at its sole discretion, defer any such interest or principal
  payment, total or partial, in which event neither such interest nor such
  principal payment shall become a liability of UFL or be paid to Americo.

                    (7) Provided the surplus of UFL exceeds the sum of
  $22,000,000, plus an amount equal to all principal and interest due hereon as
  of the date for which the calculation required in Paragraph (1) above is made,
  UFL may on any of the dates specified in Paragraph (1) hereof prepay all or a
  portion of the unpaid principal amount hereof in an amount not to exceed the
  amount by which the surplus of UFL, after the payment of principal and
  interest due hereon, exceeds $22,000,000, all as of such calculation date. Any
  such prepayment shall be applied to the amounts specified on the principal
  schedule in the third paragraph hereof in the inverse order of maturity. No
  interest shall be paid in advance under paragraph 2 on any such date on the
  amount of principal that is prepaid on such date.

                  (8)  For purposes of this Surplus Debenture, the term
  "Interest Period" means a twelve month period commencing on January 15 and
  ending on the succeeding January 15 of the following year. The initial
  Interest Period hereunder shall commence January 15, 2002; and "surplus" means
  the sum
  of:

     (1)      "aggregate write-ins for special surplus funds;"

     (2)       "Special surplus funds";

     (3)       "Gross paid in and contributed debentures";

     (4)       "gross paid in and contributed surplus";

     (5)       "unassigned funds (surplus)";

     (6)       "aggregate write-ins for other than special surplus funds";

     (7)       any amounts required to be carried as liabilities with respect to
               outstanding surplus debentures of UFL; and

     (8)       any similar item or entry having the same effect as any of items
               (i)-(vii);

  as reflected in the Annual Statement of UFL filed with the Texas Department of
  Insurance of the State of Texas as of December 31 of each year, or the
  statutory quarterly financial statement form as adopted by the Texas
  Department of Insurance, whichever is appropriate to the particular payment
   hereunder.

                  (9) The obligation of UFL to pay this Surplus Debenture shall
  be strictly construed, and shall not be or constitute either a legal or
  financial statement liability of UFL or a claim against any of its assets,
  except as specifically provided for herein, and in no event shall this Surplus
  Debenture be considered or treated as a current or fixed liability or
  obligation of UFL as defined under the insurance laws and regulations of the
  State of Texas, except and only to the limited extent of each payment of
  interest or principal that becomes due and payable as provided hereunder.

<PAGE>
             (10) In the event of liquidation or receivership of UFL, the
unpaid principal balance of this Surplus Debenture, plus any unpaid interest
thereon, shall become immediately due and payable to Americo and shall be
superior to and in preference of the rights and claims of stockholders of UFL;
provided, however, that all obligations, rights, and claims hereunder are
expressly subordinated to the claim of any supervisor, conservator, or receiver
of UFL appointed by the Commissioner of Insurance of the State of Texas, and the
claims of all other creditors, other than stockholders of UFL.

                  (11) All payments made hereunder shall be credited first to
interest which may be due and unpaid, if any, and the balance of such payment
shall be credited to the principal amount hereof.

                  (12) Nothing herein contained shall be construed as
prohibiting UFL from merging or consolidating with another corporation or from
selling or reinsuring any part or all of its business, or from acquiring all or
any part of the assets of any other corporation. In the event UFL shall be
consolidated or merged into another corporation or shall sell substantially all
of its assets to any other corporation, the corporation into which UFL is
consolidated or merged or to which the assets of UFL are transferred, shall
expressly assume the liability of UFL hereunder.

                  (13) No recourse shall be had for the payment of the principal
of, or the interest of this Surplus Debenture, or for any claims based hereon or
otherwise in respect hereof, against any incorporator, stockholder, officer, or
director, past, present or future, of UFL; such liability, the acceptance of and
as a part of the consideration for the issuance hereof, being expressly
released.

                  (14) By acceptance and as part of the consideration for the
issuance hereof, the above-named payee and any holder hereof expressly
acknowledges that it has been informed and has knowledge that this Surplus
Debenture has not been registered under the Securities Act of 1933, as amended,
or the Securities Act or Blue Sky laws of any state, and that UFL has issued
this Surplus Debenture pursuant to exemptions from registration available under
such acts. The above-named payee and any holder hereof further expressly
acknowledges and agrees that it is acquiring this Surplus Debenture for
investment purposes and not with a view toward a public distribution hereof and
that this Surplus Debenture may not be sold or otherwise transferred in the
absence of an effective registration statement with respect hereto or an
exemption from registration under the Securities Act of 1933, as amended, or any
other applicable securities law.

                  (15) If this Surplus Debenture is collected through judicial
proceedings, UFL agrees, subject to conditions and restrictions contained
herein, to pay reasonable attorneys' fees to the holder with respect to legal
services performed in such collection.

                  Dated as of the 1st day of January, 2002.


                           UNITED FIDELITY LIFE INSURANCE
                           COMPANY


                           By: /s/ Mark K. Fallon
                               ------------------
                               Mark K. Fallon, Senior Vice President and
                               Chief Financial Officer
Attest:

/s/ Major W. Park, Jr.
--------------------------
Major W. Park, Jr.,  Secretary