THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT.  THE ISSUE PRICE AND
DATE,  AMOUNT OF ORIGINAL  ISSUE DISCOUNT AND YIELD TO MATURITY OF THIS NOTE MAY
BE OBTAINED UPON WRITTEN  REQUEST  DIRECTED TO GARY JENKINS,  VICE PRESIDENT AND
CHIEF  FINANCIAL  OFFICER,  AMERICO  LIFE,  INC.,  1055  BROADWAY,  KANSAS CITY,
MISSOURI 64105.

                                            AMERICO LIFE, INC.


NO. VNO-1-R                                                          $5,211,805


                                 6 1/2% SENIOR SUBORDINATED NOTE DUE 2010


         For value received,  AMERICO LIFE,  INC., a Missouri  corporation  (the
"Company"),  hereby promises to pay to VICTORY  FINANCIAL GROUP,  INC., a Nevada
corporation  ("Seller"),  or its registered  assigns,  the principal sum of FIVE
MILLION TWO HUNDRED  ELEVEN  THOUSAND EIGHT HUNDRED FIVE  ($5,211,805)  together
with interest on the unpaid principal portion thereof, at the rate of 6 1/2% per
annum  from June 1,  1998,  in  twenty-four  (24)  semi-annual  installments  of
principal and interest,  commencing December 1, 1998 and thereafter on each June
1 and December 1 until June 1, 2010,  each of such  semi-annual  installments of
principal and interest being in an aggregate amount of $316,090.30.

         Interest  hereunder  shall be calculated  for the actual number of days
elapsed on the basis of a year consisting of 365 days.

         Such  principal  and interest  payments  shall be made to the person in
whose name this Note is registered (the "Holder") on the register  maintained by
the Secretary of the Company  ("Note  Register") at the close of business on the
"Regular Record Date" for such principal and interest installment.  Such Regular
Record Date shall be May 15 or November 15 (whether or not a business  day),  as
the case may be, next preceding such principal and interest payment date.

         Payment of the  principal  of and interest on this Note will be made to
the Holder at the  principal  executive  office of the  Company in Kansas  City,
Missouri,  in such coin or  currency  of the United  States of America as at the
time of  payment  is legal  tender for  payment  of public  and  private  debts;
provided,  however,  that at the option of the  Company  payment  may be made by
check  mailed to the address of the Holder as such  address  shall appear in the
Company's Note Register.



<PAGE>



                                                       -17-
598933.2
         This Note is  designated  as the  Company's 6 1/2% Senior  Subordinated
Note, No. VNO-1-R, Due 2010 (the "Note"). As provided in Section 10 hereof, this
Note is  subordinated  to "Senior  Indebtedness"  as defined in Section 1 and is
pari passu in right of payment with the Company's "Senior  Subordinated  Notes",
"6 1/2% Senior  Subordinated  Set-Off Note" and "6 1/2% Senior Subordinated Note
No.  VNO-2"  as such  terms  are  defined  in  Section  1, and  with  any  other
indebtedness that the Company may create,  incur,  assume or guarantee after the
date of this  Note,  which  Indebtedness  by its terms is pari passu in right of
payment with this Note.

         The Company issued this Note to replace its 6 1/2% Senior  Subordinated
Note No. VNO-1 (the "Original Note"). The Original Note was issued pursuant to a
Stock Purchase  Agreement  dated March 3, 1995, as amended (the "Stock  Purchase
Agreement")  between  the Company  and the  Seller,  who is the  initial  Holder
hereof.  A copy of the Stock  Purchase  Agreement  is available to a Holder upon
written application to the Secretary of the Company.

         The initial  principal amount of the Original Note was $6,000,000.  The
initial principal amount of this Note is the same as the unpaid principal amount
of the Original Note on the date the Holder  surrendered  it, as contemplated by
the Stock Purchase Agreement, for reissue without a legend referring to transfer
restrictions.


Section 1Certain Definitions.

                  As used in this Note:

                  "Affiliate"  means (i) with respect to any  specified  Person,
any Person  directly or indirectly  controlling or controlled by or under direct
or indirect  common  control with such  specified  Person (except in cases where
substantially  all of the control that would ordinarily be exercisable by virtue
of ownership of stock, other than the election of directors, has been eliminated
by  applicable  regulatory  authorities).   For  purposes  of  this  definition,
"control"  when used with  respect to any  specified  Person  means the power to
direct the  management  and  policies of such  Person,  directly or  indirectly,
whether through the ownership of voting stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
Notwithstanding  the foregoing,  none of Argus Health Systems,  Inc., a Delaware
corporation,  GSSW Limited Partnership, a Texas limited partnership,  or College
Insurance Group,  Inc., a Missouri  corporation,  will be deemed an Affiliate of
the  Company so long as (i) it is not a  Subsidiary  of the Company and (ii) the
Company and its  Affiliates do not have the right or power to elect or name more
than 50% of such entity's governing body.

                  "Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking  institutions  in the City of New
York, New York are authorized or obligated by law or executive order to close.


<PAGE>


                  "Capital Lease" means any lease of property, real or personal,
in respect of which the present value of the minimum rental  commitment would be
capitalized  on a balance  sheet of the  lessee  in  accordance  with  generally
accepted accounting principles.

                  "Capital  Stock"  of any  Person  means  any and  all  shares,
interests, participations or other equivalents (however designated) of corporate
stock of such Person.

                  "Cash   Equivalents"  shall  mean  (i)  securities  issued  or
directly and fully  guaranteed  or insured by the United States or any agency or
instrumentally thereof, (ii) U.S. dollar denominated time deposits, certificates
of deposit,  eurodollar time deposits,  eurodollar  certificates of deposit, and
bankers  acceptances  of any domestic  commercial  bank of  recognized  standing
having  capital and surplus in excess of  $100,000,000  (iii)  commercial  paper
having a  rating  from S&P of at least  A-2 or the  equivalent  thereof  or from
Moody's  of at least P-2 or the  equivalent  thereof or from Duff & Phelps of at
least  D-2 or the  equivalent  thereof,  with  maturities  of not more than nine
months from the date of  acquisition,  (iv)  repurchase  agreements  relating to
securities  described  in (i) with  issuers of  securities  described in (ii) or
(iii), and (v) tax-exempt commercial paper of United States municipal,  state or
local  governments  rated at least A-2 or the  equivalent  thereof  by S&P or at
least P-2 or the equivalent thereof by Moody's or at least D-2 or the equivalent
thereof by Duff & Phelps  and  maturing  within  nine  months  after the date of
acquisition.

         "Duff & Phelps" means Duff & Phelps Inc.

         "Indebtedness" of any Person means (i) any liability of such Person (a)
for borrowed  money,  (b) evidenced by a note,  debenture or similar  instrument
(including a purchase money obligation or deferred payment  obligation) given in
connection with the acquisition of any property or assets (other than inventory,
other accrued current  liabilities or similar property  acquired in the ordinary
course of business),  including  securities  (but excluding  reverse  repurchase
agreements entered into in the ordinary course of business), (c) for the payment
of a  Capital  Lease  obligation  of such  person  or (d)  with  respect  to the
reimbursement  of any letter of credit,  banker's  acceptance or similar  credit
transaction (other than trade letters of credit issued in the ordinary course of
business;  provided,  that  failure to make  prompt  reimbursement  of any trade
letter of credit shall be deemed to be the incurrence of Indebtedness); (ii) any
guarantee  by such Person of any  liability  of others  described  in clause (i)
above or any  obligation  of such Person with respect to any liability of others
described  in  clause  (i)  above;   and  (iii)  all  Interest  Rate  Protection
Obligations of such Person.  Indebtedness  shall not include  operating  leases,
trade  accounts  payable  or  agent  accounts  payable,   or  obligations  under
insurance,  reinsurance  or  retrocession  contracts  entered  into the ordinary
course of business or any guaranty of any of the foregoing.



<PAGE>


         "Indenture"  means the  Indenture  dated as of May 26,  1993  among the
Company and  Commerce  Bank of Kansas City,  N.A.,  as Trustee,  respecting  the
Company's Senior  Subordinated  Notes, as originally  executed or as it may from
time to time be supplemented  or amended by one or more indentures  supplemental
thereto entered into pursuant to the applicable  provisions thereof,  including,
for all purposes of such  instrument and any such  supplemental  indenture,  the
provisions of the Trust Indenture Act of 1939, as amended, that are deemed to be
part  of and  govern  such  instrument  and  any  such  supplemental  indenture,
respectively.

         "Interest Rate  Protection  Obligations"  means the  obligations of any
Person  pursuant to any arrangement  with any other Person whereby,  directly or
indirectly,  such  Person is  entitled  to  receive  from time to time  periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional  amount in exchange for periodic  payments made by such Person
calculated  by  applying  a fixed or a  floating  rate of  interest  on the same
notional amount and shall include without limitation, interest rate swaps, caps,
floors, collars and similar agreements.

         "Moody's" means Moody's Investors Service, Inc.

         "pari passu," when used with respect to the ranking of any indebtedness
of any Person in relation to other Indebtedness of such Person,  means that each
such  indebtedness (a) either (i) is not subordinated in right of payment to any
other  Indebtedness of such Person or (ii) is subordinate in right of payment to
the same  Indebtedness  of such Person as is the other and is so  subordinate to
the same extent,  and (b) is not subordinate in right of payment to the other or
to any Indebtedness of such Person as to which the other is not so subordinate.

         "Person" means an individual, corporation,  partnership, joint venture,
trust,   unincorporated  organization  or  government  or  agency  or  political
subdivision thereof.

         "S&P" means the Standard & Poor's Corporation.

         "Senior Indebtedness" means the principal of, premium, if any, interest
on (including  interest  that,  but for the filing of a petition  initiating any
proceeding  pursuant to any  bankruptcy  law with respect to such Person,  would
accrue  on such  obligations,  whether  or not  such  claim is  allowed  in such
bankruptcy  proceeding),  and fees and other  amounts  owing in  respect  of any
Indebtedness  of  the  Company  (other  than  as  otherwise   provided  in  this
definition),  whether  outstanding  on the date  hereof or  thereafter  created,
incurred or assumed,  unless,  in the case of any particular  Indebtedness,  the
instrument  creating  or  evidencing  the same or  pursuant to which the same is
outstanding  expressly  provides that such  Indebtedness  shall not be senior in
right  of  payment  to  this  Note.   Notwithstanding  the  foregoing,   "Senior
Indebtedness"  shall not include (i) Indebtedness  evidenced by this Note or the
Company's Senior Subordinated Notes, 6 1/2% Senior Subordinated  Set-Off Note or
6 1/2% Senior  Subordinated  Note No. VNO-2, (ii) Indebtedness that is expressly
subordinate  or junior in right of payment to any  Indebtedness  of the Company,
(iii)  Indebtedness  that is  represented  by  redeemable  Capital  Stock,  (iv)
Indebtedness  of  the  Company  to an  Affiliate  of the  Company  and  (v)  any
Indebtedness that is incurred in violation of the Indenture.


<PAGE>


         "Senior Non-Payment Default" means any event or condition (other than a
Senior Payment  Default) the occurrence of which entitles one or more Persons to
accelerate  the  maturity  of any  Senior  Indebtedness.  For  purposes  of this
definition, a Senior Non-Payment Default shall be deemed to exist on the date of
occurrence of such event or condition and any required notice shall be deemed to
have been given and any applicable  grace period shall be deemed to have expired
on such date.

         "Senior Payment  Default" means any failure to pay when due, whether by
acceleration or otherwise,  any principal of, premium or interest on, or fees or
other amounts in respect to any Senior Indebtedness.

         "Senior   Subordinated   Notes"  means  the  Company's   9-1/4%  Senior
Subordinated  Notes  due 2005 in the  aggregate  original  principal  amount  of
$100,000,000.

         "6 1/2% Senior  Subordinated Note No. VNO-2" means the Company's 6 1/2%
Senior  Subordinated Note No. VNO-2 due 2010 in the original principal amount of
$6,000,000,  delivered  pursuant to the Stock  Purchase  Agreement  and any note
issued in exchange or replacement thereof pursuant to the terms of such note.

         "6 1/2% Senior  Subordinated  Set-Off  Note" means the Company's 6 1/2%
Senior Subordinated Set-Off Note due 2015 in the principal amount of $5,000,000,
delivered  pursuant  to the  Stock  Purchase  Agreement  and any note  issued in
exchange or replacement thereof pursuant to the terms of such note.

         "Stated  Maturity",  when  used with  respect  to any  security  or any
installment  of interest  thereon,  means the date specified in such security as
the fixed date on which the  principal of such security or such  installment  of
interest is due and payable.

         "Subsidiary"  means a  corporation  more  than  50% of the  outstanding
Voting Stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries.

         "Voting  Stock" of any Person means  Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar  functions)  of such Person,  whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.


Section 2Limitation on Issuance of Other Subordinated Indebtedness.  Except when
it may do so  without  violating  the  Indenture,  the  Company  will not issue,
assume,  guarantee or otherwise become liable,  directly or indirectly,  for any
Indebtedness  which is  subordinate  or junior in ranking in any  respect of any
Senior Indebtedness but senior in right of payment to this Note. Section 1.

<PAGE>




Section 3Events of Default. "Event of Default",  wherever used herein, means any
one of the following  events  (whatever the reason for such Event of Default and
whether it shall be occasioned  by the  provisions of Section 10 or be voluntary
or  involuntary  or be effected by operation of law or pursuant to any judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
administrative or governmental body):

(1)    default in the payment of any interest upon this Note when it becomes due
       and payable, and continuance of such default for a period of 30 days; or

(2)    default in the payment of the principal of this Note when due and
       payable; or

(3)    default in the  performance,  or breach,  of any covenant or agreement of
       the Company under the Note (other than a default in the  performance,  or
       breach,  of a  covenant  or  agreement  that is  specifically  dealt with
       elsewhere in this  paragraph),  and continuance of such default or breach
       for a period of 60 days after  there has been  given,  by  registered  or
       certified mail, to the Company by the Holder a written notice  specifying
       such  default  or breach  and  stating  that such  notice is a "Notice of
       Default"; or

(4)    (1) an event of default  shall have occurred  under any  mortgage,  bond,
       indenture,  loan  agreement  or other  document  evidencing  any issue of
       Indebtedness of the Company or any Subsidiary for money  borrowed,  which
       issue  has an  aggregate  outstanding  principal  amount of not less than
       $5,000,000,  and such default shall result in such Indebtedness becoming,
       whether by declaration or otherwise, due and payable prior to the date on
       which it would  otherwise  become due and payable or (2) a default in any
       payment  when  due at final  Stated  Maturity  of any  such  Indebtedness
       outstanding in an aggregate  principal amount of not less than $5,000,000
       and, in each case,  20 Business  Days shall have elapsed after such event
       during  which period such event shall not have been cured or rescinded or
       such indebtedness shall not have been satisfied; or



<PAGE>


(5)    final  judgments  or orders  are  rendered  against  the  Company  or any
       Subsidiary  by a court or  regulatory  agency of  competent  jurisdiction
       which  require  the  payment  in  money,  either  individually  or  in an
       aggregate  amount,  that is more than $5,000,000 (other than any judgment
       as to which a reputable  insurance  company has accepted full  liability)
       and such  judgment  or order shall not be  discharged  and either (1) any
       creditor  shall  have  commenced  an  enforcement  proceeding  upon  such
       judgment  or order,  which  enforcement  proceeding  shall have  remained
       unstayed for a period of 10 days, or (2) a period of 60 days during which
       a stay of enforcement shall not be in effect shall have elapsed following
       the date on which any period for appeal has expired; or

(6)    a decree  or order is  entered  by a court  having  jurisdiction  (1) for
       relief in respect of the Company or any Subsidiary in an involuntary case
       or proceeding  under the Federal  Bankruptcy Code or any other federal or
       state  bankruptcy,  insolvency,  reorganization  or  similar  law  or (2)
       adjudging  the  Company or any  Subsidiary  a bankrupt or  insolvent,  or
       seeking reorganization,  arrangement,  adjustment or composition of or in
       respect of the Company or any  Subsidiary  under the  Federal  Bankruptcy
       Code or any other  applicable  federal  or state  law,  or  appointing  a
       custodian,  receiver,  liquidator,  assignee,  trustee,  sequestrator (or
       other  similar  official)  of the  Company  or any  Subsidiary  or of any
       substantial part of any of their  properties,  or ordering the winding up
       or  liquidation  of any of their  affairs,  and any such  decree or order
       remains unstayed and in effect for a period of 60 consecutive days; or

(7)    the Company or any  Subsidiary  institutes a voluntary case or proceeding
       under the  Federal  Bankruptcy  Code or any other  applicable  federal or
       state law or any other case or  proceedings  to be adjudicated a bankrupt
       or insolvent, or the Company or any Subsidiary consents to the entry of a
       decree or order for relief in respect of the Company or any Subsidiary in
       any involuntary case or proceeding  under the Federal  Bankruptcy Code or
       any  other  applicable  federal  or state  law or to the  institution  of
       bankruptcy  or  insolvency   proceedings   against  the  Company  or  any
       Subsidiary,  or the Company or any Subsidiary  files a petition or answer
       or consent seeking  reorganization or relief under the Federal Bankruptcy
       Code or any other  applicable  federal or state law,  or  consents to the
       filing of any such petition or to the appointment of or taking possession
       by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or
       other similar official) of any of the Company or any Subsidiary or of any
       substantial part of its property,  or makes an assignment for the benefit
       of  creditors,  or  admits  in  writing  its  inability  to pay its debts
       generally as they become due or takes corporate  action in furtherance of
       any such action.

then,  in the case of an event  described  in (f) or (g) above,  this Note shall
immediately become due and payable, together with interest accrued hereon or, in
the case of any other event described  above, the Holder of the Note may declare
this Note,  together with all interest accrued hereon to be due and payable and,
upon such declaration,  this Note shall be due and payable on the date specified
in the declaration,  in each case without presentment,  demand, protest or other
notice of any kind, all of which are hereby waived by the Company. The holder of
this Note may also,  subject to the provisions of Section 10 hereof,  proceed to
protect and enforce its rights either by suit in equity and/or by action at law,
or by other  appropriate  proceedings,  or may,  subject  to the  provisions  of
Section 10 hereof, proceed to enforce the payment of this Note or to enforce any
other legal or equitable right of the Holder of this Note.



<PAGE>


Section  4Registration of Transfers.  The Company shall register the transfer of
this Note upon records to be maintained  by the Company for that  purpose,  upon
surrender of this Note, with the Form of Assignment  attached hereto duly filled
in and  signed,  to the  Secretary  of the  Company at the  Company's  principal
executive  offices  in Kansas  City,  Missouri.  Upon any such  registration  of
transfer, a new Note, in substantially the form of this Note evidencing the Note
so transferred shall be issued to the transferee.


Section  5Payment of Taxes.  The Company shall not be required to pay any tax in
respect of the transfer of the Note.


Section 6Redemption. The Note is subject to redemption upon not less than 30 nor
more than 60 days' notice by mail,  at any time,  as a whole or in part,  at the
election of the  Company at a  redemption  price equal to 100% of the  principal
amount to be redeemed,  together in the case of any such redemption with accrued
interest on the portion of the Note to be redeemed to the redemption date.

              The  Note  does  not  have  the  benefit  of  any   sinking   fund
obligations.

              In the event of  redemption  of this Note in part only, a new Note
of like tenor and maturity for the unredeemed  portion hereof,  with appropriate
changes in the scheduled payments to reflect the reduced principal amount,  will
be issued in the name of the Holder hereof upon the cancellation hereof.


Section  7Mutilated  or Missing  Note.  If this Note shall be  mutilated,  lost,
stolen or destroyed,  upon request by the Holder hereof, the Company will issue,
in exchange for and upon  cancellation of the mutilated Note, or in substitution
for the lost, stolen or destroyed Note, a new Note, in substantially the form of
this Note, of like tenor and maturity and representing the equivalent  principal
amount,  but, in the case of loss,  theft or  destruction,  only upon receipt of
evidence  satisfactory to the Company of such loss, theft or destruction of this
Note and, if requested by the Company, indemnity reasonably satisfactory to it.


Section 8Restriction on Transfer.

              (a) [Deleted]

              (b) [Deleted]



<PAGE>


              (c) This Note and each Note issued upon transfer or exchange shall
bear a legend  required  under the Internal  Revenue  Code of 1986,  as amended,
relating to original issue discount.


Section  9Financial  Information.  Until this Note is paid in full,  the Company
agrees to furnish to the registered Holder, at the address specified in the Note
Register,  within one hundred  twenty (120) days after the end of the  Company's
fiscal year,  a copy of the  Company's  annual  audited  consolidated  financial
statements.


Section 1Ranking and Subordination.

(1)    Note  Subordinate  to Senior  Indebtedness  and pari  passu  with  Senior
       Subordinated  Notes, 6 1/2% Senior  Subordinated  Set-Off Note and 6 1/2%
       Senior Subordinated Note No. VNO-2.

              The Company covenants and agrees,  and each Holder of the Note, by
his acceptance  thereof,  likewise  covenants and agrees,  that the Note is pari
passu in right of payment with the Company's Senior  Subordinated  Notes, 6 1/2%
Senior Subordinated  Set-Off Note, 6 1/2% Senior Subordinated Note No. VNO-2 and
any other Indebtedness that the Company may create,  incur,  assume or guarantee
after the date of this Note,  which  Indebtedness  by its terms is pari passu in
right of  payment  with this  Note,  and that,  to the  extent and in the manner
hereinafter  set forth in this Section 10, the  indebtedness  represented by the
Note and the  payment of the  principal  of and  interest on the Note are hereby
expressly made  subordinate and subject in right of payment to the prior payment
in full of all Senior  Indebtedness,  whether  outstanding on the date hereof or
thereafter created, incurred, assumed or guaranteed.

(2)           Payment Over of Proceeds Upon Dissolution, Etc.
---------     -----------------------------------------------



<PAGE>


              In the event of (i)  insolvency or bankruptcy  case or proceeding,
or any  receivership,  liquidation,  reorganization  or  other  similar  case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets,  or (ii)  reorganization,  liquidation,  dissolution,
winding up or other similar  proceeding  related to the Company or its property,
whether  voluntary  or  involuntary,  partial or  complete,  and  whether or not
involving  insolvency,  receivership or bankruptcy,  or (iii) assignment for the
benefit of creditors or any other  marshalling of assets and  liabilities of the
Company, then and in any such event specified in (i), (ii), or (iii) above (each
such event, if any, herein sometimes  referred to as a "Proceeding") the holders
of Senior  Indebtedness  shall be  entitled  to  receive  payment in full of all
principal of, premium, if any, interest on, and fees and other amounts due or to
become  due on or in  respect of all  Senior  Indebtedness,  including  interest
accruing subsequent to a bankruptcy or insolvency event at the rate provided for
in the  documents  governing  such  Senior  Indebtedness,  whether  or not  such
interest is an allowed claim enforceable against the debtor in a bankruptcy case
under Title 11 of the United  States Code,  or provision  shall be made for such
payment in cash or Cash Equivalents or otherwise in a manner satisfactory to the
holder of Senior  Indebtedness,  before  the Holder of the Note is  entitled  to
receive any payment or distribution  of any kind or character,  whether in cash,
property  or  securities  (including  any payment or  distribution  which may be
payable or deliverable by reason of the payment of any other Indebtedness of the
Company  subordinated  to the payment of the Note,  such payment or distribution
being hereinafter referred to as a "Junior Subordinated  Payment") on account of
principal of or interest on or other  amounts  payable in respect of the Note or
on account of any  purchase or other  acquisition  of any portion of the Note by
the Company or any Subsidiary of the Company (all such payments,  distributions,
purchases and acquisitions herein referred to, individually and collectively,  a
"Note  Payment"),  and to that end the holders of Senior  Indebtedness  shall be
entitled to receive,  for application to the payment  thereof,  any Note Payment
which  may be  payable  or  deliverable  in  respect  of the  Note  in any  such
Proceeding.

              Any payment or  distribution  of assets of the Company of any kind
or character,  whether in cash, property or securities, by set-off or otherwise,
to which any Holder would be entitled except for the subordination provisions of
this Section 10 shall be paid by the Company or the liquidating trustee or agent
or other  Person  making  such  payment  or  distribution,  whether a trustee in
bankruptcy,  a receiver or a liquidating  trustee or otherwise,  directly to the
holders of Senior  Indebtedness  or their  representatives  or to the trustee or
trustees under any indenture under which any instruments  evidencing any of such
Senior  Indebtedness  may have been issued,  ratably  according to the aggregate
amounts  remaining  unpaid  on  account  of  the  Senior  Indebtedness  held  or
represented by each, to the extent  necessary to make payment in full in cash or
Cash Equivalents,  of all Senior  Indebtedness  remaining  unpaid,  after giving
effect to any concurrent  payment or distribution  or provision  therefor to the
holders of such Senior Indebtedness.

              In the event that,  notwithstanding  the  foregoing  provisions of
this Section,  the Holder shall have received any Note Payment before all Senior
Indebtedness  is paid in full or payment  thereof  provided  for in cash or cash
equivalents  or  otherwise  in a manner  satisfactory  to the  holders of Senior
Indebtedness,  and if such  fact  shall,  at or prior  to the time of such  Note
Payment,  have been made known to such Holder,  then and in such event such Note
Payment shall be paid over or delivered  forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or  distribution of assets of the Company for application to the payment
of all Senior Indebtedness  remaining unpaid, to the extent necessary to pay all
Senior  Indebtedness in full,  after giving effect to any concurrent  payment or
distribution to or for the holders of Senior Indebtedness.



<PAGE>


              For  purposes  of this  Section  only,  the words "any  payment or
distribution of any kind or character,  whether in cash, property or securities"
shall not be deemed to include a payment or  distribution of stock or securities
of the Company  provided for by a plan of  reorganization  or readjustment or of
any  other   corporation   provided  for  by  such  plan  of  reorganization  or
readjustment  authorized  by  an  order  or  decree  of  a  court  of  competent
jurisdiction in a reorganization  proceeding under any applicable bankruptcy law
which  stock or  securities  are  subordinated  in right of  payment to all then
outstanding Senior  Indebtedness to substantially the same extent as the Note is
so subordinated as provided in this Section.  The  consolidation  of the Company
with, or the merger of the Company into,  another  Person or the  liquidation or
dissolution  of the  Company  following  the  conveyance  or  transfer of all or
substantially  all of its properties and assets as an entirety to another Person
shall not be deemed a Proceeding  for the purposes of this Section if the Person
formed by such  consolidation  or into which the Company is merged or the Person
which  acquires by  conveyance  or  transfer  such  properties  and assets as an
entirety,  as the case may be, shall, as a part of such  consolidation,  merger,
conveyance  or transfer,  agree to assume the  obligations  of the Company under
this Note.

(3)            No Payment When Senior Indebtedness in Default.
               ----------------------------------------------

              In the event that any Senior  Payment  Default shall have occurred
and be  continuing,  then no Note  Payment  shall be made  unless and until such
Senior  Payment  Default shall have been cured or waived or shall have ceased to
exist or all  amounts  then due and  payable in  respect of Senior  Indebtedness
shall have been paid in full, or provision shall have been made for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Indebtedness.



<PAGE>


              In the  event  that any  Senior  Non-Payment  Default  shall  have
occurred and be continuing (or if a Senior Non-Payment Default would result upon
any payment with respect to the Note),  then, upon the receipt by the Company of
written  notice of such Senior  Non-Payment  Default from a holder or holders of
Senior  Indebtedness  as to which there is a Senior  Non-Payment  Default or the
representative or  representatives of such holder, no Note Payment shall be made
during the period (the "Payment Blockage Period") commencing on the date of such
receipt of such  written  notice and ending  (subject to any blockage of payment
that may be in effect in respect of a Senior  Payment  Default or Proceeding) on
the earlier of (i) the date of  acceleration of such Senior  Indebtedness,  (ii)
179 days after the Company's receipt of such written notice, (iii) the date such
Senior Non-Payment Default shall have been cured or waived, or shall have ceased
to exist, (iv) the date such Senior  Indebtedness  shall have been discharged or
paid in full,  or (v) the date such  Payment  Blockage  Period  shall  have been
terminated  by  written  notice  to  the  Company  from  the  holder  of  Senior
Indebtedness  (or its  representative)  initiating such Payment  Blockage Period
after which, in the case of clauses (ii),  (iii), (iv) and (v) the Company shall
resume  making any and all required  payments in respect of the Note,  including
any  missed  payments,  unless  the  provisions  described  in  the  immediately
preceding  paragraph are then applicable;  provided,  however,  that (i) no more
than one  Payment  Blockage  Period may be  commenced  with  respect to the Note
during any 360-day period,  (ii) a Payment Blockage Period may not extend beyond
179 days from the date of receipt by the Company of the Notice  initiating  such
Payment  Blockage  Period,  and  (iii)  there  shall be a period of at least 180
consecutive  days in each 360-day period when no Payment  Blockage  Period is in
effect. For all purposes of this paragraph,  no Senior Non-Payment  Default that
existed or was continuing on the date of  commencement  of any Payment  Blockage
Period with respect to the Senior Indebtedness  initiating such Payment Blockage
Period  shall be, or be made,  the basis for the  commencement  of a  subsequent
Payment   Blockage   Period  by   holders  of  Senior   Indebtedness   or  their
representatives  unless such Senior Non-Payment Default shall have been cured or
waived for a period of not less than 90 consecutive days.

              If any  payment  or  distribution  of  assets  of the  Company  is
received by the Holder at a time when that payment or distribution is prohibited
as a result of the application of the provisions  described in the preceding two
paragraphs,  such payment or distribution will be received and held in trust for
and  will  be paid  over  and  delivered  forthwith  to the  holders  (or  their
representatives)  of  Senior  Indebtedness,  in trust  for  distribution  to the
holders of all Senior  Indebtedness  (pro rata as to each of such holders on the
basis of the respective amounts of Senior  Indebtedness which is due and payable
held by them) until all such Senior  Indebtedness  has been paid in full,  after
giving effect to any concurrent payment or distribution or provision therefor to
the holders of such Senior Indebtedness; provided that to the extent amounts are
not then due in respect of Senior  Indebtedness,  such amounts shall be promptly
returned  to the  Company  or  distributed  in such  other  manner as a court of
competent jurisdiction shall direct.

              The  provisions  of this  paragraph  shall  not  apply to any Note
Payment with respect to which paragraph (d) of this Section would be applicable.

(4)           Payment Permitted If No Default.

              Nothing  contained in this Section 10 or elsewhere in this Note or
in any of the  Securities  shall prevent the Company,  at any time except during
the pendency of any  Proceeding  referred to in paragraph (b) of this Section or
under the  conditions  described in paragraph (c) of this  Section,  from making
Note Payments.

(5)           Subrogation to Rights of Holders of Senior Indebtedness.
---------     -------------------------------------------------------



<PAGE>


              Subject to the payment in full of all amounts due or to become due
on or in respect of Senior  Indebtedness,  or the  provision for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior  Indebtedness,  the Holder of this Note shall be subrogated to the rights
of the holders of such Senior Indebtedness to receive payments and distributions
of cash, property and securities applicable to the Senior Indebtedness until the
principal  of and  interest on the Note shall be paid in full.  For  purposes of
such  subrogation,  no  payments or  distributions  to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holder of the Note
would be entitled  except for the  provisions of this  Section,  and no payments
over  pursuant  to the  provisions  of this  Section  to the  holders  of Senior
Indebtedness  by the  Holder  of the Note,  shall,  as among  the  Company,  its
creditors other than holders of Senior  Indebtedness and the Holder of the Note,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.

(6)           Provisions Solely to Define Relative Rights.
---------     -------------------------------------------

              The provisions of this Section are and are intended solely for the
purpose of defining  the  relative  rights of the Holder on the one hand and the
holders of Senior  Indebtedness  on the other hand.  Nothing  contained  in this
Section or elsewhere  in this Note is intended to or shall (i) impair,  as among
the Company,  its creditors  other than holders of Senior  Indebtedness  and the
Holder of the  Note,  the  obligation  of the  Company,  which is  absolute  and
unconditional  (and  which,  subject  to the rights  under  this  Section of the
holders of Senior  Indebtedness,  is  intended  to rank  equally  with all other
general  obligations  of the  Company)  to pay to the  Holder  of the  Note  the
principal  of and interest on the Note as and when the same shall become due and
payable in accordance with its terms; or (ii) affect the relative rights against
the Company of the Holder of the Note and  creditors  of the Company  other than
the  holders  of  Senior  Indebtedness;  or (iii)  the  Holder  of the Note from
exercising all remedies otherwise permitted by applicable law upon default under
this Note,  subject to the rights,  if any, under this Section of the holders of
Senior Indebtedness to receive cash,  property and securities  otherwise payable
or deliverable to such Holder.

(7)           Company to Effectuate Subordination.

              Each Holder of the Note by his acceptance  thereof  authorizes and
directs  the Company on his behalf to take such  action as may be  necessary  or
appropriate  to  effectuate  the  subordination  provided  in this  Section  and
appoints the Secretary of the Company his  attorney-in-fact for any and all such
purposes.

(8)           No Waiver of Subordination Provisions.

              No  right  of  any   present  or  future   holder  of  any  Senior
Indebtedness  to enforce  subordination  as herein provided shall at any time in
any way be  prejudiced  or  impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith,  by any such holder,
or by any noncompliance by the Company with the terms,  provisions and covenants
of this Note, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.



<PAGE>


              Without  in any  way  limiting  the  generality  of the  foregoing
paragraph,  the holders of Senior Indebtedness may, at any time and from time to
time,  without  the  consent  of or  notice to the  Holder of the Note,  without
incurring  responsibility  to the Holder of the Note and  without  impairing  or
releasing  the  subordination  provided  in  this  Section  or  the  obligations
hereunder  of the Holder of the Note to the holders of Senior  Indebtedness,  do
any one or more of the  following:  (i)  change  the  manner,  place or terms of
payment  or  extend  the  time  of  payment  of,  or  renew  or  alter,   Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any  instrument  evidencing  the same or any  agreement  under  which  Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release  any  Person  liable  in  any  manner  for  the   collection  of  Senior
Indebtedness;  and (iv) exercise or refrain from  exercising  any rights against
the Company and any other Person.

(9)           Notice to Company.

              The Company shall give prompt  written notice to the Holder of any
fact known to the  Company  which  would  prohibit  the making of any payment in
respect of the Note. Notwithstanding the provisions of this Section, the Company
shall not be charged with  knowledge  of the  existence of any facts which would
prohibit  the making of any payment to or by the Company in respect of the Note,
unless and until the Company shall have received  written  notice thereof from a
holder of Senior  Indebtedness or from any trustee  therefor;  and, prior to the
receipt of any such  written  notice,  the  Company,  shall be  entitled  in all
respects to assume that no such facts exist.

              The Company  shall be entitled to rely on the  delivery to it of a
written  notice  by a  Person  representing  himself  to be a holder  of  Senior
Indebtedness  (or a trustee  therefor)  to  establish  that such notice has been
given by a holder of Senior  Indebtedness (or a trustee therefor).  In the event
that the Company determines in good faith that further evidence is required with
respect  to the  right of any  Person  as a holder  of  Senior  Indebtedness  to
participate in any payment or distribution pursuant to this Section, the Company
may request such Person to furnish  evidence to the reasonable  satisfaction  of
the Company as to the amount of Senior  Indebtedness  held by such  Person,  the
extent to which  such  Person is  entitled  to  participate  in such  payment or
distribution  and any other facts  pertinent  to the rights of such Person under
this Section,  and if such evidence is not furnished,  the Company may defer any
payment to such Person pending  judicial  determination  as to the right of such
Person to receive such payment.

(10)          Reliance on Judicial Order or Certificate of Liquidating Agent.
---------     --------------------------------------------------------------



<PAGE>


              Upon any payment or distribution of assets of the Company referred
to in this  Section,  the Holder of the Note shall be  entitled to rely upon any
order or decree  entered by any court of  competent  jurisdiction  in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy,  receiver,
liquidating trustee, custodian,  assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Holder of the
Note,  for the purpose of  ascertaining  the Persons  entitled to participate in
such payment or distribution,  the holders of the Senior  Indebtedness and other
indebtedness of the Company,  the amount thereof or payable thereon,  the amount
or amounts paid or distributed  thereon and all other facts pertinent thereto or
to this Section.

(11)          Company Not Fiduciary for Holders of Senior Indebtedness.
---------     --------------------------------------------------------

              The Company shall not be deemed to owe any  fiduciary  duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith  mistakenly pay over or distribute to the Holder of the Note
or to any other  Person  cash,  property or  securities  to which any holders of
Senior Indebtedness shall be entitled by virtue of this Section or otherwise.

Section  1Notices.  All  notices,  requests,  demands  and other  communications
relating  to the Notes  shall be in  writing,  including  by telex,  telegram or
cable,  addressed,  if to the  registered  holder  hereof,  to it or them at the
address(es) furnished by said registered holder(s) to the Company, and if to the
Company, to it at 300 West 11th Street, Kansas City, Missouri 64105,  Attention:
President, or to such other address as any party shall notify the other party in
writing,  and shall be effective,  in the case of written  notice by mail,  upon
placement  into the mails (first  class,  postage  prepaid),  and in the case of
notice by telex, telegram or cable, on the day sent.

Section 1Binding  Effect.  This Note shall be binding upon and inure to the sole
and  exclusive  benefit of the Company,  its  successors  and  assigns,  and the
registered holder or holders from time to time of this Note.

Section  1Survival of Rights and Duties.  This Note shall terminate and be of no
further  force and  effect on the date the  principal  hereof  and all  interest
hereon shall have been paid in full.

Section 1Governing  Law. The Notes shall be construed in  accordance  with and 
governed by the internal laws of the State of Missouri.

              IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Note to be
executed under its corporate seal by its officers  thereunto duly  authorized on
___________ ____, 1998.
                               AMERICO LIFE, INC.

[CORPORATE SEAL]
                                                By:___________________________
                                                   Gary L. Muller,  President
ATTEST:

-------------------------------
Richard J. Juneau, Secretary


<PAGE>


                                            FORM OF ASSIGNMENT


         FOR VALUE  RECEIVED,  ____________________  hereby  sells,  assigns and
transfers to the  assignee set forth below all of the rights of the  undersigned
in and to this Note:


Name of Assignee           Address








                                 Name of Holder
                                 -----------------------------


Dated: _____________, 199__
                                           (By:)_________________________
                                           (Title:)______________________