SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                  FORM 10-Q


[*]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                OF THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998 or

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934


Commission file number: 0-20882

     STANDARD MANAGEMENT CORPORATION
            (Exact name of registrant as specified in its charter)


           Indiana                                 No. 35-1773567
(State or other jurisdiction            (I.R.S. Employer Identification No.)
of incorporation or organization)

9100 Keystone Crossing, Indianapolis, Indiana           46240
(Address of principal executive offices)             (Zip Code)

                            (317) 574-6200
         (Registrant's telephone number, including area code)

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 [*]  No [  ]

As  of  August 1, 1998, the Registrant had 7,227,158 shares  of  Common  Stock
outstanding.

<PAGE>
                        STANDARD MANAGEMENT CORPORATION

                                     INDEX

                                                                    PAGE NUMBER

Part I.    FINANCIAL INFORMATION:

Item 1.    Financial Statements

           Consolidated Balance Sheets --
           June 30, 1998  (Unaudited) and December  31, 1997 (Audited)     3

           Consolidated Statements of Income --
           For the Three and Six Months Ended June 30, 1998 and 1997 
           (Unaudited)                                                     4

           Consolidated Statements of Shareholders' Equity --
           For  the  Six  Months  Ended  June  30,  1998  and  1997 
           (Unaudited)                                                     5

           Consolidated Statements of Cash Flows --
           For  the  Six  Months  Ended  June  30,  1998  and  1997 
           (Unaudited)                                                     6

           Notes to Consolidated Financial Statements (Unaudited)        7 - 11

Item 2.    Management's Discussion and Analysis of Financial Condition
           and Results of Operation                                     12 - 21

Part II.   OTHER INFORMATION:

Item 6.    Exhibits and Reports on Form 8-K                               22

           SIGNATURES                                                     23
<PAGE>
                        PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                         JUNE 30,                    DECEMBER 31,
<S>                                                                                          <C>                          <C>
                                                                                                 1998                         1997
                                                                                        (UNAUDITED)                    (AUDITED)
                                   ASSETS
Investments:
    Securities available for sale:
          Fixed maturity securities, at fair value (amortized cost: $416,874 in 1998
            and $367,372 in 1997)                                                            $424,609                     $372,576
          Equity securities, at fair value (cost: $2,745 in 1998 and $55 in 1997)               2,759                           52
   Mortgage loans on real estate                                                                7,427                          375
   Policy loans                                                                                 9,213                        9,495
   Real estate                                                                                  4,763                        2,163
   Other invested assets                                                                          775                          779
   Short-term investments                                                                      24,760                       13,342
            Total investments                                                                 474,306                      398,782
Cash                                                                                            7,326                        4,165
Accrued investment income                                                                       7,262                        6,512
Amounts due and recoverable from reinsurers                                                    63,593                       61,596
Deferred policy acquisition costs                                                              24,543                       21,435
Present value of future profits                                                                26,937                       20,537
Excess of acquisition cost over net assets acquired                                             4,885                        2,445
Federal income tax recoverable                                                                    259                        1,854
Other assets                                                                                    4,889                        3,602
Assets held in separate accounts                                                              181,034                      148,064
            Total assets                                                                     $795,034                     $668,992
                LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Insurance policy liabilities                                                              $509,370                     $439,390
   Accounts payable and accrued expenses                                                        5,870                        6,208
   Obligations under capital lease                                                                 --                          141
   Notes payable                                                                               30,000                       26,000
   Deferred federal income taxes                                                                6,634                        4,488
   Excess of net assets acquired over acquisition cost                                            694                        1,388
   Liabilities related to separate accounts                                                   181,034                      148,064
            Total liabilities                                                                 733,602                      625,679
Series  A  Convertible Redeemable Preferred Stock, par value $100 per share;
      Authorized 130,000; none issued and outstanding                                              --                           --
Shareholders' Equity:
   Preferred Stock, no par value:
          Authorized 870,000 shares; none issued and outstanding                                   --                           --
   Common Stock, no par value:
          Authorized 20,000,000 shares; issued 8,105,860 in 1998 and 5,752,499 in              55,938                   40,646
1997
   Treasury stock, at cost, 859,802 shares in 1998 and 876,009 shares in 1997                 (4,571)           (4,572)
(deduction)
   Accumulated other comprehensive income:
          Unrealized gain on securities available for sale                                      3,359                        2,171
          Foreign currency translation adjustment                                               (829)                        (473)
   Retained earnings                                                                            7,535                        5,541
            Total shareholders' equity                                                         61,432                       43,313
Total liabilities and shareholders' equity                                                   $795,034                     $668,992
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME
          (UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED                       SIX MONTHS ENDED
<S>                                                 <C>                   <C>                 <C>               <C>           
                                                                 JUNE 30,                                JUNE 30,
                                                    1998                  1997                1998              1997
Revenues:
   Premium income - life                            $1,928                $1,665              $3,908            $3,562
     Premium income - health                        5,992                   --                5,992               --

   Net investment income                            8,463                 7,147               15,849            14,346
   Net realized investment gains                    25                    32                  46                206
   Policy charges                                   1,794                 1,344               3,152             2,783
   Amortization of excess of net assets acquired
over                                                347                   347                 694               694
          acquisition cost
   Fees from separate accounts                      590                   367                 1,152             838
   Other income                                     1,167                 390                 1,458             881
          Total revenue                             20,306                11,292              32,251            23,310
Benefits and expenses:
   Benefits and claims - life                       2,065                 1,979               3,946             4,368
     Benefits and claims - health                   4,821                  --                 4,821              --

   Interest credited on interest-sensitive
annuities and other                                 4,646                 4,172               8,865             8,166
          financial products
   Salaries and wages                               1,702                 1,453               3,140             2,904
   Amortization                                     1,213                 752                 2,224             1,577
   Other operating expenses                         2,139                 1,441               3,732             3,317
     Commission expense - health                    784                    --                 784                --

   Interest expense and financing costs             772                   548                 1,429             1,078
          Total benefits and expenses               18,142                10,345              28,941            21,410
Income before federal income taxes and preferred
stock dividends                                     2,164                 947                 3,310             1,900
Federal income tax expense                          871                   265                 1,269             575
Net income                                          1,293                 682                 2,041             1,325
Preferred stock dividends                            --                   41                   --               83
Earnings available to common shareholders           $1,293                $641                $2,041            $1,242
Earnings per share:
   Net income                                       $.18                  $.13                $.33              $.25
    Preferred stock dividends                        --                    .01                  --               .01
   Earnings available to common shareholders        $.18                  $.12                $.33              $.24
Earnings per share - assuming dilution:
   Net income                                       $.16                  $.12                $.30              $.23
   Preferred stock dividends                         --                     --                  --                --
   Earnings available to common shareholders        $.16                  $.12                $.30              $.23
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                       (UNAUDITED, DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                       Accumulated
                                                                                                          Other
                                                                    Common           Treasury         Comprehensive       Retained
                                                    Total            Stock             Stock             Income           Earnings
<S>                                             <C>               <C>               <C>              <C>                 <C>
Balance at January 1, 1997                      $39,919           $40,481           $(3,528)         $(55)               $3,021
Comprehensive income, net of tax:
  Net income                                    1,325                                                                    1,325
  Other comprehensive income:
          Change in unrealized gain (loss) on
          securities                            (89)                                                 (89)
            available for sale, net
          Change in foreign currency            (692)                                                (692)
          translation adjustment
            Other comprehensive income          (781)
              Comprehensive income              544
   Treasury stock acquired                      (132)                               (132)
   Preferred stock dividend                     (83)                                                                     (83)
Balance at June 30, 1997                        $40,248           $40,481           $(3,660)         $(836)              $4,263
Balance at January 1, 1998                      $43,313           $40,646           $(4,572)         $1,698              $5,541
Comprehensive income, net of tax:
   Net income                                   2,041                                                                    2,041
   Other comprehensive income
          Change in unrealized gain (loss) on
          securities                            1,188                                                1,188
            available for sale, net
          Change in foreign currency            (356)                                                (356)
          translation adjustment
            Other comprehensive income          832
              Comprehensive income              2,873
   Issuance of Common Stock for Savers Life     15,024            15,024
   acquisition
   Issuance of Common Stock warrants            30                30
   Issuance of Common Stock in connection with
          exercise of stock warrants            233                      234                                             (1)
   Treasury stock acquired                      (50)                                (50)
   Conversion of preferred stock into           4                 4
   Common Stock
   Reissuance of treasury stock in connection
   with                                         5                                    51                                   (46)
          exercise of stock options
Balance at June 30, 1998                        $61,432           $55,938           $(4,571)         $2,530              $7,535
</TABLE>



See accompanying notes to consolidated financial statements.
<PAGE>
               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (UNAUDITED, DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                              Six Months Ended
<S>                                                                                        <C>                                <C>
                                                                                                  June 30,
                                                                                           1998                               1997
OPERATING ACTIVITIES
Net income                                                                               $2,041                             $1,325
Adjustments to reconcile net income to net cash provided by
operating activities:
   Amortization of deferred policy acquisition costs                                      1,217                                469
   Policy acquisition costs deferred                                                    (5,169)                            (3,598)
   Deferred federal income taxes                                                          1,274                                270
   Depreciation and amortization                                                            603                                728
   Insurance policy liabilities                                                           2,673                              5,539
   Net realized investment gains                                                           (46)                              (206)
   Accrued investment income                                                               (534)                             (327)  
   Other                                                                                  3,614                                190
          Net cash provided by operating activities                                       5,673                              4,390
FINANCING ACTIVITIES
Borrowings, net of debt issuance costs of $86 in 1998 and $-- in 1997                     3,914                              5,628
Repayments on long term debt and obligations under capital lease                          (153)                              (265)
Premiums received on interest-sensitive annuities and other financial
products                                                                                 30,082                             25,127
   credited to policyholder account balances, net of premiums ceded
Return of policyholder account balances on interest-sensitive annuities
and other                                                                              (21,661)                           (17,317)
   financial products, net of premiums ceded
Redemption of redeemable preferred stock                                                   --                                 (15)
Reissuance of treasury stock in connection with exercise of stock options                  233                                  4
and warrants
Purchase of Common Stock for treasury                                                      (50)                              (136)
          Net cash provided by financing activities                                      12,365                             13,026
INVESTING ACTIVITIES
Fixed maturity securities available for sale:
   Purchases                                                                          (138,942)                           (90,762)
   Sales                                                                                 85,105                             70,702
   Maturities, calls and redemptions                                                     12,230                             16,241
Short-term investments, net                                                              31,326                            (9,965)
Other investments, net                                                                  (2,427)                              1,078
Purchase of Savers Life Insurance Company, less cash acquired of $518                   (2,169)                                 --
          Net cash used by investing activities                                        (14,877)                           (12,706)
Net increase in cash                                                                      3,161                              4,710
Cash at beginning of period                                                               4,165                              5,113
Cash at end of period                                                                    $7,326                             $9,823
</TABLE>


See accompanying notes to consolidated financial statements.
<PAGE>

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 1 -- BASIS OF PRESENTATION

      The  accompanying  unaudited  consolidated financial statements have been
prepared in accordance with generally  accepted  accounting principles ("GAAP")
for interim financial information and with the instructions  to  Form  10-Q and
Article  10  of  Regulation  S-X.   Accordingly, they do not include all of the
information and footnotes required by  GAAP  for complete financial statements.
The results of operations for the interim periods  shown in this report are not
necessarily indicative of the results that may be expected for the fiscal year.
This  is  particularly  true  in the life insurance industry,  where  mortality
results in interim periods can  vary  substantially  from  such  results over a
longer period.  In the opinion of management, the information contained  herein
reflects  all  adjustments  necessary to make the results of operations for the
interim periods a fair statement  of such operations.  All such adjustments are
of  a  normal  recurring nature.  Certain  amounts  in  the  1997  Consolidated
Financial Statements  and Notes have been reclassified to conform with the 1998
presentation.  These reclassifications  had  no  effect  on previously reported
shareholders' equity or net income during the periods involved.

      The  nature of the insurance business of Standard Management  Corporation
("SMC") and  its  consolidated subsidiaries (the "Company") requires management
to make estimates and  assumptions  that  affect  the  amounts  reported in the
consolidated  financial  statements  and accompanying notes.  For example,  the
Company  uses significant estimates and  assumptions  in  calculating  deferred
policy acquisition  costs,  present  value  of future profits, goodwill, future
policy  benefits  and  deferred  federal  income  taxes.   Such  estimates  and
assumptions could change in the future as more information becomes known, which
could impact the amounts reported and disclosed herein.

      For further information, refer to the consolidated  financial  statements
and footnotes thereto included in the Annual Report on Form 10-K of SMC for the
year ended December 31, 1997.

NOTE 2 -- ACQUISITIONS

      On  March  12,  1998, SMC acquired Savers Life Insurance Company ("Savers
Life"), with Savers Life  surviving  as a wholly-owned subsidiary of SMC.  Each
of the 1,779,908 shares of Savers Life  Common  Stock outstanding was converted
into 1.2 shares of SMC Common Stock plus $1.50.   Each  holder  of  Savers Life
Common  Stock could elect to receive the $1.50 per share portion of the  merger
consideration in the form of additional shares of SMC Common Stock.  SMC issued
approximately  2.2 million shares with a value of approximately $14,937,000 and
paid $2,119,000  in  cash (excluding acquisition costs) to acquire Savers Life.
SMC increased the Amended  and Restated Revolving Line of Credit Agreement with
a bank (the "Amended Credit  Agreement") to an amount of $20,000,000 to finance
the acquisition of Savers Life.

      Savers  Life  underwrites,   markets   and  distributes  annuities,  life
insurance,  and  Medicare supplement health insurance  through  a  sales  force
consisting of approximately  4,000  independent brokers and is licensed to sell
products in North Carolina, South Carolina,  Virginia and Florida.  Savers Life
had  total  assets  of  $72,186,000  at  December  31,  1997  and  revenues  of
$43,047,000 for the year ended December 31, 1997.

      The  acquisition  of  Savers Life was accounted for  using  the  purchase
method of accounting and the  consolidated  financial  statements  include  the
results  of Savers Life from the date of acquisition. Under purchase  
accounting,  SMC  allocated  the total purchase price of Savers Life  to  the
assets  and  liabilities  acquired,  based   on   a  preliminary 
determination  of their values and recorded the excess of total purchase  price
over net assets  acquired  as  goodwill.  SMC may adjust this allocation when a
final determination of fair values  is made.  Any adjustment is not expected to
be material.

<PAGE>

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)


NOTE 2 -- ACQUISITIONS (CONTINUED)

      The following schedule summarizes the assets acquired and the liabilities
assumed with the Savers Life acquisition described above (in thousands):

    Assets acquired:
            Fixed maturity securities            $    7,061
            Equity securities                         2,840
            Mortgage loans on real estate             6,273
            Real estate                               1,750
            Policy loans                                  9
            Short term investments                   42,745
            Cash                                        518
            Present value of future profits           7,400
            Other assets                              7,378
                  Total assets acquired              75,974

         Liabilities assumed:
            Policy reserves                          57,889
            Deferred federal income taxes               516
            Other liabilities                         1,061
               Total liabilities assumed             59,466

         Net assets acquired                         16,508
         Excess of acquisition cost over net 
         assets acquired                              2,049
         Total purchase price                     $  18,557

   The following are supplemental unaudited pro forma consolidated  results  of
operations of the Company as if the acquisition of Savers Life and the transfer
of  the  major medical product line from Savers Life to World Insurance Company
("World")  through  a  reinsurance  agreement  whereby  World  assumed, through
coinsurance effective July 1, 1997, 100% of the product line, had  occurred  at
January  1,  1997  presented at the same purchase price, based on estimates and
assumptions considered appropriate (in thousands, except per share amounts).

                                              Six Months Ended
                                                  JUNE 30,
                                               1998      1997
          Revenues                           $41,108   $40,811
          Net income                           2,460     1,668
          Earnings per share                     .29       .23
          Earnings per share, assuming dilution  .27       .21


      The above amounts  are based upon certain assumptions and estimates which
the Company believes are reasonable and do not reflect any benefit from savings
which might be achieved from  combined  operations.  The  unaudited  pro  forma
results  do  not necessarily represent results which would have occurred if the
acquisition of  Savers  Life and the transfer of the major medical product line
had taken place on the basis  assumed  above,  nor  are  they indicative of the
results of future combined operations.

<PAGE>

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)


NOTE 3 -- NOTES PAYABLE

      Notes payable of the Company were as follows (in thousands):


<TABLE>
<CAPTION>
                                         Interest            June 30,           December 31,
                                           Rate                1998                 1997
<S>                                        <C>             <C>                 <C> 
Borrowings under revolving credit          9.24%{ (1)}     $20,000             $16,000
agreements
Senior subordinated convertible notes      10.00%           10,000              10,000
due 2004
                                                           $30,000             $26,000
</TABLE>
          (1) Current weighted average rate at June 30, 1998.

      In March 1998, SMC had borrowed an additional $4,000,000  under revolving
credit agreements to purchase Savers Life.

NOTE 4 -- NET UNREALIZED GAIN ON SECURITIES AVAILABLE FOR SALE

      The  components  of  the  balance  sheet  caption  "Unrealized  gain   on
securities  available  for  sale"  in  shareholders'  equity  are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
                                                                   June 30,                   December 31,
<S>                                                            <C>                         <C>
                                                               1998                        1997
Fair value of securities available for sale                    $427,368                    $372,628
Amortized cost of securities available for sale                419,619                     367,427
         Gross unrealized gain on securities available for     7,749                       5,201
sale
Adjustments for:
   Deferred policy acquisition costs                           (2,402)                     (1,727)
   Present value of future profits                             (388)                       (209)
   Deferred federal income tax liability                       (1,600)                     (1,094)
         Net unrealized gain on securities available for sale  $3,359                      $2,171
</TABLE>

NOTE 5 -- EARNINGS PER SHARE

  As  of  December  31,  1997,  the  Company  adopted  Statement  of  Financial
Accounting Standards ("SFAS")  No. 128, "Earnings per Share."  All earnings per
share  amounts  for all periods presented have been restated to conform to  the
SFAS No. 128 requirements.  SFAS No. 128 eliminates the presentation of primary
earnings per share  and  replaces  it  with  basic  earnings  per share.  Basic
earnings per share differs from primary earnings per share because common stock
equivalents  are not considered in computing basic earnings per  share.   Fully
diluted earnings  per  share  are  replaced  with  diluted  earnings per share.
Diluted  earnings  per  share is similar to fully diluted earnings  per  share,
except in determining the number of dilutive shares outstanding for options and
warrants, the proceeds that  would  be  received  upon  the  conversion  of all
dilutive  options  and  warrants  are  assumed  to  be  used  to repurchase the
Company's  common shares at the average market price of such stock  during  the
period.  For fully diluted earnings per share, the higher of the average market
price or ending market price was used.

<PAGE>

               STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)


NOTE 5 -- EARNINGS PER SHARE (CONTINUED)

  A reconciliation  of  the numerator and denominator of the earnings per share
computation is as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                            Six Months Ended
<S>                                                          <C>                          <C>
                                                                                June 30,
                                                             1998                         1997
Numerator:
Net income                                                   $2,041                       $1,325
Preferred stock dividends                                     --                          83
Numerator for basic earnings per share -
 Income  available  to  common  shareholders                 2,041                        1,242
Effect of dilutive securities:
Preferred stock dividends                                     --                          83
     Interest on  subordinated  convertible debt             500                          --

Numerator for diluted earnings per share -
 Income  available  to  common  shareholders  after  assumed $2,541                       $1,325
conversions

Denominator:
Denominator for basic earnings per share - weighted -average 6,229,581                    5,019,136
shares
Effect of dilutive securities:
 Stock options                                               297,561                       90,054
 Stock warrants                                              252,562                      177,516
 Convertible preferred stock                                  --                          393,701
     Subordinated convertible debt                           1,740,038                       --

           Dilutive potential common shares                  2,290,161                    661,271
Denominator  for  diluted  earnings  per  share  -  adjusted
weighted -average                                            8,519,742                    5,680,407 
shares and assumed conversions
</TABLE>

      The senior  subordinated convertible notes were not included
in the computation  of  diluted  earnings per share because the effect would be
antidilutive.



NOTE 6 -- REDEEMABLE PREFERRED STOCK

      The Board of Directors has authorized  the  issuance  of  up  to  130,000
shares  of  preferred  stock  designated  as  Series  A  Convertible Redeemable
Preferred Stock, $100 par value per share.  The Series  A  Preferred  Stock  is
redeemable  on  July  1,  2005,  has  a  7  3/4  % annual dividend payable on a
quarterly basis, and is convertible into 11.7647 shares of SMC common stock for
each Series A Preferred Stock share (convertible into SMC common stock based on
a conversion price of $8.50 for each SMC common stock share).  SMC may 
voluntarily  redeem  the Series A Preferred  Stock  after  July  1, 1999 and 
it may redeem the Series A Preferred Stock prior to July 1, 1999 under  
certain limited circumstances.  During July, 1998, SMC issued 37,300 shares 
of the  Series A Preferred Stock receiving gross proceeds  of $3,730,000.  
SMC, during July,  1998,  used  $3,000,000  of  these proceeds to  pay  down 
$3,000,000 on its $20,000,000 Amended Revolving Line of Credit Agreement.













NOTE 7 -- DISPOSAL OF MEDICARE SUPPLEMENT BUSINESS.

      The Company has accepted  a  non-binding  letter of intent to sell Savers
Life's  Medicare supplement business, which represents substantially all of the 
Company's health business.  The proposed  sale  would  be  effective July 1, 
1998 and is subject to executing definitive agreements, the approval of
the Company's and purchaser's Board of Directors and regulatory approvals.  The
consumation  of  this  transaction  would  result  in  the Company exiting from
Medicare supplement business it acquired with the Savers Life acquisition.



NOTE 8 -- PENDING ACQUISITION

      The Company has entered into a Stock Purchase Agreement  dated as of June
4, 1998, as amended, to purchase Midwestern National Life Insurance  Company of
Ohio   ("Midwestern  National  Life").   The  Company  will  pay  approximately
$15,011,000  plus  acquisition  costs for Midwestern National Life.  Midwestern
National Life reported total revenues of $11,759,000 and a net loss of $240,000
for the ten months ended December  31,  1997  and  it  reported total assets of
$133,384,000  at December 31, 1997.  For the six months ended  June  30,  1998,
Midwestern National  Life reported total revenues of $4,123,000  and a net loss
of $1,426,000 and it reported  total  assets  of $125,467,000 at June 30, 1998.
The proposed acquisition is subject to normal closing  conditions including SMC
and   seller  shareholder  approval  and  approval  by  applicable   regulatory
authorities.



NOTE 9 -- RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      As  of  January  1,  1998,  the  Company adopted SFAS No. 130, "Reporting
Comprehensive Income."  SFAS No. 130 establishes  new  rules  for the reporting
and display of comprehensive income and its components; however,  the  adoption
of  SFAS  No.  130  had  no impact on the Company's net income or shareholders'
equity.  SFAS No. 130 requires  unrealized  gains  or  losses  on the Company's
securities  available  for  sale  and foreign currency translation adjustments,
which prior to adoption were reported separately in shareholders' equity, to be
included in other comprehensive income.   Prior  year financial statements have
been reclassified to conform to the requirements of  SFAS No. 130.  

      In  June  1997,  the Financial Accounting Standards Board ("FASB") issued
SFAS  No.  131, "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information."   SFAS  No.  131  supersedes SFAS No. 14 "Financial Reporting for
Segments  of  a Business Enterprise"  and  defines  financial  and  descriptive
information about  a  company's  operating  segments that is to be disclosed in
financial  statements.   SFAS  No. 131 is effective  for  financial  statements
issued for fiscal years beginning  after  December 15, 1997 and will be adopted
by the Company in 1998.  Currently, the Company  considers  its  life insurance
operations to be its only material operating segment.  The Company  is  in  the
process  of  defining  additional  business  segments and developing allocation
methods to assess their performance.  Once the process is completed, additional
disclosures will be provided in accordance with SFAS No. 131.
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        ___________________

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION

GENERAL

                                  The  following   discussion   highlights  the
material  factors  affecting  the  results  of  operations  and the significant
changes in balance sheet items of the Company on a consolidated  basis  for the
periods listed as well as the Company's liquidable and capital resources.  This
discussion  should  be  read  in  conjunction  with  the consolidated financial
statements  and  notes  thereto  included  in this document,  as  well  as  the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.

RESULTS OF OPERATION

THREE MONTHS ENDED JUNE 30, 1998 AND 1997

                                  OPERATING INCOME.  The income from operations
(before net realized investment gains) was $1,277,000 for the second quarter of
1998, an increase of $616,000 or 93%, compared  to  $661,000 for the comparable
period  in  1997.   The  increase resulted primarily from  increased  operating
earnings from domestic operations  of  $775,000  compared  to  $192,000 for the
second  quarter  of  1998  and  1997  respectively.    The  increased  domestic
operating gains resulted primarily from increased spread revenues and from  
favorable mortality experience  during the  second  quarter  of 1998 and the 
inclusion of Savers Life in the Company's operating results from March 12, 
1998, the acquisition date of Savers Life.

                                  PREMIUM   INCOME.    Premium  income-life  is
composed  of premiums, including renewal premiums, received  on  ordinary  life
insurance policies.   The Company's new product sales are composed primarily of
annuity products.  Under  GAAP,  deposits from interest-sensitive annuities and
other financial products are not recorded  as  revenues.   GAAP premium income-
life for the second quarter of 1998 was $1,928,000 an increase  of  $263,000 or
16%  from $1,665,000 for the second quarter of 1997.  Premium income-health  of
$5,992,000  for  the  second  quarter  of  1998 is premium received on Medicare
supplement insurance obtained as part of the  Savers  Life  acquisition.   This
premium  income  is  included in the Company's operating results from March 12,
1998, the acquisition date of Savers Life.

                                  Net  domestic  premium deposits received from
the sales of interest-sensitive annuities and other  financial  products (which
are not recorded as revenues) were $15,860,000 compared to $13,553,000  for the
second quarter of 1998 and 1997, respectively.  Gross domestic premium deposits
received   from   interest-sensitive  annuities  and  financial  products  were
$17,524,000 for the  second  quarter  of  1998  compared to $16,098,000 for the
second  quarter  of  1997.   Annuity  sales  increased   in  1998  due  to  the
introduction  of new competitive products and an increase in  the  agency  base
achieved through  the  recruitment  of  high  volume agents and larger managing
general  agencies  and continued expansion of geographical  concentration  into
such areas as California.   Since the Company's operating income is primarily a
function of its investment spreads,  persistency  of annuity in force business,
mortality  experience,  and  operating expenses, a change  in  annuity  premium
deposits in a single period does not directly cause operating income to change,
although continued increases or  decreases  in  annuity premiums may affect the
growth rate of total assets on which investment spreads are earned.

                                  NET INVESTMENT INCOME.  Net investment income
increased $1,316,000 or 18% to $8,463,000 for the  second  quarter of 1998 from
$7,147,000 for the comparable period of 1997.  The increase  primarily resulted
from  an increase in total invested assets (amortized cost) from  December  31,
1996 to  June  30,  1998,  of  $94,582,000  or  25%.   This  increase  included
$67,800,000  from the Savers Life acquisition.  The weighted average annualized
yield  of  the  Company's  investment  portfolio  (exclusive  of  realized  and
unrealized gains and losses) was 7.49% for the second quarter of 1998 and 1997,
respectively.  As  of  June  30, 1998, yields available on new investments were
declining.

                                  NET  REALIZED INVESTMENT GAINS.  Net realized
investment gains decreased $7,000 or 22% to $25,000 from $32,000 for the second
quarter  of  1998  and  1997,  respectively.   Net  realized  investment  gains
fluctuate from period to period  and arise when securities are sold in response
to  changes  in  the  investment environment  which  provide  opportunities  to
maximize return on the  investment  portfolio  without  adversely affecting the
quality  and  overall  yield  of  the  investment  portfolio.  The  pretax  net
unrealized gain on the Company's securities available  for  sale was $7,749,000
at June 30, 1998.  In the absence of decreases in interest rates,  the  Company
may  be  unable  to realize gains on its investment portfolio at the levels  of
prior years or could  recognize  losses  from  sales  of  securities  prior  to
maturity.   The  change  in  market  value  of  the  Company's  fixed  maturity
securities  is  not  expected  to  have  a  significant  effect  on  results of
operations because the Company has the present intent and practice to hold most
of  its available-for-sale fixed maturity securities to maturity, the Company's
asset/liability  management  activity is designed to monitor and adjust for the
effects of changes in market interest  rates,  and  the  Company's  focus is to
manage its net spread revenue.

                                  POLICY   CHARGES.    Policy   charges,  which
represent  the amounts assessed against policyholder account balances  for  the
cost of insurance,  policy administration and surrenders, increased $450,000 or
33% to $1,794,000 for the second quarter of 1998 compared to $1,344,000 for the
second quarter of 1997.  The increase in policy charges resulted primarily from
an increase in policy surrender charges on certain deferred annuity products in
1998 when compared to 1997 and from the inclusion of Savers Life in the results
of operations from March 12, 1998, the acquisition date of Savers Life.

                                  FEES   FROM  SEPARATE  ACCOUNTS.   Fees  from
separate accounts consist of the investment  management fees earned by Standard
Management  International  on  its  separate  account   assets  and  investment
contracts.  Management fees and similar income from separate accounts increased
$223,000 or 61% to $590,000 for the second quarter of 1998  from  $367,000  for
the  second  quarter  of 1997.  The increase is due primarily to an increase in
the value of assets held in separate accounts from $128,546,000 at December 31,
1996 to $181,034,000 at  June 30, 1998.  Net deposits from sales of unit-linked
products by Standard Management  International  were $12,379,000 and $2,325,000
for the second quarter of 1998 and 1997, respectively.   Such income fluctuates
in relationship to total separate account assets and the return  earned on such
assets.

                                  OTHER   INCOME.    Other   income   increased
$777,000  or  199%  to  $1,167,000  for the second quarter of 1998 compared  to
$390,000 for the comparable 1997 period.   The increase primarily resulted from
the inclusion of Savers Life in the Company's  operating results from March 12,
1998, the acquisition date of Savers Life.

                                  BENEFIT AND CLAIMS.  Benefits and claims-life
include life insurance and payout annuity benefits  paid  and changes in policy
reserves.  Benefits and claims-life increased  $86,000 or 4%  to $2,065,000 for
the  second  quarter  of 1998 from $1,979,000 for the second quarter  of  1997.
Benefits and claims-health  of  $4,821,000  for  the second quarter of 1998 are
benefits and claims incurred on Medicare supplement  insurance obtained as part
of the Savers Life acquisition.  These benefits and claims  are included in the
Company's operating results from March 12, 1998, the acquisition date of Savers
Life.   Throughout  the Company's history, it has experienced both  periods  of
higher and lower benefit  claims.   Such volatility is not uncommon in the life
insurance industry and, over extended periods of time, periods of higher claims
experience tend to be offset by periods of lower claims experience.

                                  INTEREST   CREDITED   ON   INTEREST-SENSITIVE
ANNUITIES    AND    OTHER    FINANCIAL    PRODUCTS.    Interest   credited   on
interest-sensitive annuities and other financial  products  was  $4,646,000 for
the second quarter of 1998, an increase of $474,000 or 11% from $4,172,000  for
the  comparable prior year period.  The increase resulted from the inclusion of
Savers Life interest credited in the Company's operating results from March 12,
1998,  the  acquisition  date of Savers Life.    At June 30, 1998, the weighted
average interest credited rate for Standard Life's currently marketed annuities
and other financial product liabilities was 5.45% compared to 5.54% at June 30,
1997.

                                  AMORTIZATION.  Amortization expense primarily
includes  charges  to  operations  for  the  amortization  of  deferred  policy
acquisition costs, the present  value  of future profits and the excess of cost
over net assets acquired.  Amortization  expense  increased  $461,000 or 61% to
$1,213,000 for the second quarter of 1998 from $752,000 for the  second quarter
of 1997.  The increase in current year amortization expense resulted  primarily
from  increased  amortization  of  deferred  policy  acquisition costs as gross
profits  from  business  sold  in recent years began to emerge,  and  increased
surrenders and a corresponding increase  in the amortization of deferred policy
acquisition  costs.  The current year increase  in  amortization  expense  also
includes $195,000  of  such expense from including Savers Life in the Company's
operating results from March 12, 1998, the acquisition date of Savers Life.

                                  OTHER  OPERATING  EXPENSES.   Other operating
expenses increased $698,000 or 48% to $2,139,000 for the second quarter of 1998
from  $1,441,000  for  the  second  quarter  of  1997.   The increase in  other
operating  expenses  resulted  primarily  from  including Savers  Life  in  the
Company's operating results from March 12, 1998, the acquisition date of Savers
Life.

                                  COMMISSION  EXPENSE   -  HEALTH.   Commission
expense  -  health  of  $784,000 for the second quarter of 1998  is  commission
expense on Medicare supplement  insurance  obtained  as part of the Savers Life
acquisition.   This commission expense is included in the  Company's  operating
results from March 12, 1998, the acquisition date of Savers Life.

                                  INTEREST   EXPENSE   AND   FINANCING   COSTS.
Interest  expense and financing costs increased $224,000 or 41% to $772,000  in
the second  quarter  of  1998 from $548,000 in the second quarter of 1997.  The
increase in interest expense  and  financing  costs  during  1998 resulted from
additional borrowings of $5,600,000 in June 1997 and $4,000,000 in March 1998.




SIX MONTHS ENDED JUNE 30, 1998 AND 1997

                                  OPERATING INCOME.  The income from operations
(before net realized investment gains) was $2,011,000 in the first  six  months
of  1998,  an  increase  of  $822,000  or  69%,  compared to $1,189,000 for the
comparable  period  in 1997.  The increase resulted  primarily  from  increased
operating earnings from  domestic  operations of $696,000 to $1,062,000 for the
first six months of 1998 compared to $366,000 for the first six months of 1997.
The  increased  domestic  operating gains  resulted  primarily  from increased 
spread revenues and from  favorable mortality experience during  the  first 
six months of 1998 and the inclusion of Savers  Life in the Company's 
operations  results  from  March  12,  1998,  the acquisition date of Savers 
Life.

                                  PREMIUM   INCOME.    Premium  income-life  is
composed  of premiums, including renewal premiums, received  on  ordinary  life
insurance policies.   The Company's new product sales are composed primarily of
annuity products.  Under  GAAP,  deposits from interest-sensitive annuities and
other financial products are not recorded  as  revenues.   GAAP premium income-
life for the first six months of 1998 was $3,908,000, an increase  of  $346,000
or 10% from $3,562,000 for the first six months of 1997.  Premium income-health
of $5,992,000 for the first six months of 1998 is premiums received on Medicare
supplement  insurance  obtained  as  part of the Savers Life acquisition.  This
premium income is included in the Company's  operating  results  from March 12,
1998, the acquisition date of Savers Life.

                                  Net  domestic premium deposits received  from
the sales of interest-sensitive annuities  and  other financial products (which
are not recorded as revenues) were $30,082,000 compared  to $26,355,000 for the
first  six  months  of  1998  and  1997, respectively.  Gross domestic  premium
deposits received from interest-sensitive annuities and financial products were
$34,684,000 for the six months ended  June 30, 1998 compared to $31,061,000 for
the six months ended June 30, 1997.  Annuity sales increased in 1998 due to the
introduction of new competitive products  and  an  increase  in the agency base
achieved  through  the  recruitment  of high volume agents and larger  managing
general agencies and continued expansion  of  geographical  concentration  into
such areas as California.  Since the Company's operating income is primarily  a
function  of  its investment spreads, persistency of annuity in force business,
mortality experience,  and  operating  expenses,  a  change  in annuity premium
deposits in a single period does not directly cause operating income to change,
although continued increases or decreases in annuity premiums  may  affect  the
growth rate of total assets on which investment spreads are earned.

                                  NET INVESTMENT INCOME.  Net investment income
increased  $1,503,000  or  10%  to $15,849,000 for the first six months of 1998
from $14,346,000 for the comparable  period  of  1997.   The increase primarily
resulted  from  an  increase  in  total invested assets (amortized  cost)  from
December  31, 1996 to June 30, 1998  of  $94,582,000  or  25%.   This  increase
included $67,800,000  from   the Savers Life acquisition.  The weighted average
annualized yield of the Company's  investment  portfolio (exclusive of realized
and unrealized gains and losses)  was 7.49% for  the  first  six months of 1998
and  1997,  respectively.   As  of  June  30,  1998,  yields available  on  new
investments were declining.

                                  NET REALIZED INVESTMENT  GAINS.  Net realized
investment  gains  decreased $160,000 or 78% to $46,000 from $206,000  for  the
first six months of 1998 and 1997, respectively.  Net realized investment gains
fluctuate from period  to period and arise when securities are sold in response
to  changes  in  the investment  environment  which  provide  opportunities  to
maximize return on  the  investment  portfolio  without adversely affecting the
quality  and  overall  yield  of  the  investment portfolio.   The  pretax  net
unrealized gain on the Company's securities  available  for sale was $7,749,000
at June 30, 1998.  In the absence of decreases in interest  rates,  the Company
may  be  unable  to realize gains on its investment portfolio at the levels  of
prior years or could  recognize  losses  from  sales  of  securities  prior  to
maturity.   The  change  in  market  value  of  the  Company's  fixed  maturity
securities  is  not  expected  to  have  a  significant  effect  on  results of
operations because the Company has the present intent and practice to hold most
of  its available-for-sale fixed maturity securities to maturity, the Company's
asset/liability  management  activity is designed to monitor and adjust for the
effects of changes in market interest  rates  and  the  Company's  focus  is to
manage its net spread revenue.

                                  POLICY   CHARGES.    Policy   charges,  which
represent  the amounts assessed against policyholder account balances  for  the
cost of insurance, policy administration and surrenders, increased  $369,000 or
13% to $3,152,000 for the six months ended June 30, 1998 compared to $2,783,000
for the six  months  ended  June  30,  1997.   The  increase  in policy charges
resulted  from  an  increase  in  policy surrender charges on certain  deferred
annuity products in 1998 when compared to 1997 and from the inclusion of Savers
Life  in  the  Company's  results  of  operations  from  March  12,  1998,  the
acquisition date of Savers Life.

                                  FEES  FROM   SEPARATE  ACCOUNTS.   Fees  from
separate accounts consist of the investment management  fees earned by Standard
Management  International  on  its  separate  account  assets  and   investment
contracts.  Management fees and similar income from separate accounts increased
$314,000  or  37%  to $1,152,000 for the first six months of 1998 from $838,000
for the first six months of 1997.  The increase is due primarily to an increase
in the value of assets  held in separate accounts from $128,546,000 at December
31, 1996 to $181,034,000  at  June  30, 1998.  Net deposits from sales of unit-
linked  products  by Standard Management  International  were  $20,065,000  and
$7,077,000 for the  six   months  ended  June  30, 1998 and 1997, respectively.
Such income fluctuates in relationship to total separate account assets and the
return earned on such assets.

                                  OTHER INCOME.  Other income increased 577,000
or 65% to $1,458,000 for the first six months of  1998 compared to $881,000 for
the comparable 1997 period.  The increase primarily resulted from the inclusion
of  Savers Life in the Company's operating results from  March  12,  1998,  the
acquisition date of Savers Life.

                                  BENEFIT AND CLAIMS.  Benefits and claims-life
include  life  insurance and payout annuity benefits paid and changes in policy
reserves.  Benefits and claims-life decreased $422,000 or 10% to $3,946,000 for
the first six months  of 1998 from $4,368,000 for the first six months of 1997.
The decrease in benefits  and claims-life resulted from a reduction in net life
insurance claim expense.   Benefits and claims-health of $4,821,000 for the six
months  ended June 30, 1998  are  benefits  and  claims  incurred  on  Medicare
supplement  insurance  obtained  as part of the Savers Life acquisition.  These
benefits and claims are included in  the Company's operating results from March
12,  1998,  the acquisition date of Savers  Life.    Throughout  the  Company's
history, it has  experienced  both  periods of higher and lower benefit claims.
Such  volatility  is not uncommon in the  life  insurance  industry  and,  over
extended periods of time, periods of higher claims experience tend to be offset
by periods of lower claims experience.

INTEREST  CREDITED    ON   INTEREST-SENSITIVE  ANNUITIES  AND  OTHER  FINANCIAL
PRODUCTS.   Interest  credited   on   interest-sensitive  annuities  and  other
financial products was $8,865,000 for the first six months of 1998, an increase
of $699,000 or 9% from $8,166,000 for the  comparable  prior  year period.  The
increase  resulted from the inclusion of Savers Life interest credited  in  the
Company's operating  results from March 12, 1998 the acquisition date of Savers
Life.  At June 30, 1998,  the  weighted  average  interest  credited  rate  for
Standard  Life's  currently  marketed  annuities  and  other  financial product
liabilities was 5.45% compared to 5.54% at June 30, 1997.

                                  AMORTIZATION.  Amortization expense primarily
includes  charges  to  operations  for  the  amortization  of  deferred  policy
acquisition costs, the present value of future profits and the excess  of  cost
over  net  assets  acquired.  Amortization expense increased $647,000 or 41% to
$2,224,000 for the first  six  months of 1998 from $1,577,000 for the first six
months of 1997.  The increase in  current  year  amortization  expense resulted
primarily from increased amortization of deferred policy acquisition  costs  as
gross profits from business sold in recent years began to emerge, and increased
surrenders  and a corresponding increase in the amortization of deferred policy
acquisition costs.   The  current  year  increase  in amortization expense also
includes $195,000 of such expense from including Savers  Life  in the Company's
operating results from March 12, 1998, the acquisition date of Savers Life.

                                  OTHER  OPERATING  EXPENSES.  Other  operating
expenses increased $415,000 or 13% to $3,732,000 for  the  first  six months of
1998 from $3,317,000 for the first six months of 1997.  The increase  in  other
operating  expenses  resulted  primarily  from  including Savers Life operating
expenses  in  the  Company's  operating  results  from   March  12,  1998,  the
acquisition date of Savers Life.

                                  COMMISSION  EXPENSE  -  HEALTH.    Commission
expense  -  health  of  $784,000  for  the  six  months  ended June 30, 1998 is
commission expense on Medicare supplement insurance obtained  as  part  of  the
Savers  Life acquisition.  This commission expense is included in the Company's
operating results from March 12, 1998, the acquisition date of Savers Life.

                                  INTEREST   EXPENSE   AND   FINANCING   COSTS.
Interest expense and financing costs increased $351,000 or 33% to $1,429,000 in
the six months ended June 30, 1998 from $1,078,000 in the six months ended June
30,  1997.   The  increase  in interest expense and financing costs during 1998
resulted from additional borrowings  of  $5,600,000 in June 1997 and $4,000,000
in March 1998.

LIQUIDITY AND CAPITAL RESOURCES

                                  SMC is an  international  financial  services
holding  company.   The  liquidity  requirements  of SMC are met primarily from
management  fees,  equipment rental fees and payments  for  other  charges  and
dividends and interest  on  Surplus Debentures received from SMC's subsidiaries
as well as SMC's working capital.   These  are SMC's primary source of funds to
pay  operating  expenses and meet debt service  obligations.   The  payment  of
dividends and interest  on  Surplus Debentures and management and other fees by
Standard Life Insurance Company  of Indiana ("Standard Life") to SMC is subject
to  restrictions  under  the  insurance   laws   of  Indiana,  Standard  Life's
jurisdiction  of  domicile.   Dixie  National  Life Insurance  Company  ("Dixie
National Life") is a subsidiary of Standard Life.   Accordingly,  any dividends
paid  by  Dixie  National  Life  to  Standard  Life may be paid to SMC only  if
Standard Life is entitled to pay dividends to SMC.   The  payment  of dividends
and management fees by Savers Life to SMC is subject to restrictions  under the
insurance  laws  of  North  Carolina,  Savers  Life's jurisdiction of domicile.
These  internal  sources of liquidity have been supplemented  in  the  past  by
external sources such  as  lines  of credit and revolving credit agreements and
long-term debt and equity financing in the capital markets.

                                  The  Company  reported on a consolidated GAAP
basis  net cash provided by operations of $7,764,000  and  $1,726,000  for  the
years ended  December  31,  1997  and  1996,  respectively.   Although deposits
received  on  the  Company's  interest-sensitive annuities and other  financial
products are not included in cash  flow  from operations under GAAP, such funds
are available for use by the Company. Cash  provided  by  operations  plus  net
deposits  received,  less  net  account  balances  returned to policyholders on
interest-sensitive annuities and other financial products, resulted in positive
cash flow of $19,649,500 and $26,717,000 for the years  ended December 31, 1997
and 1996, respectively.  Cash generated on a consolidated basis is available to
SMC only to the extent that it is generated at SMC level or is available to SMC
through   dividends,   interest,   management  fees  or  other  payments   from
subsidiaries.

                                  In  April  1993,  SMC instituted a program to
repurchase Common Stock from time to time.  The purpose of the stock repurchase
program is to enhance shareholder value.  SMC had repurchased  1,160,256 shares
of Common Stock for $6,019,661 as of July 31, 1998.  At July 31,  1998, SMC was
authorized to purchase an additional 339,744 shares under this program.



                                  At July 31, 1998, SMC had "parent  company
 only" cash and short-term investments of $500,000.   In addition, SMC had
 $3,000,000 available for draw down at July 31, 1998 on its $20,000,000
 Amended Revolving Line of Credit Agreement. These funds are available to SMC
 for general corporate purposes.  During  July, 1998, SMC received gross
 proceeds of $3,730,000 from the sale of 37,300 shares of Series A 
 Convertible Redeemable Preferred Stock.   SMC,  during  July,  1998, used
 $3,000,000 of these proceeds  to  pay  down  $3,000,000  on its $20,000,000
 Amended Revolving Line of Credit Agreement.   SMC's  "parent  company  only"
operating expenses (not including interest  expense)  were $3,420,000 and
 $3,470,000 for the years ended December 31, 1997 and 1996, respectively.

                                  Pursuant to the management  services  
agreement  with SMC, Standard Life paid SMC a monthly fee of $167,000 (annual 
fee of $2,000,000) during 1997 and the first six months of 1998 for  certain 
management  services  related  to the production  of  business,  investment 
of assets and evaluation of acquisitions.  Pursuant to the management 
services agreement with Standard Life, Dixie National Life paid  monthly 
payments  of  $83,000  (annual fee of $1,000,000) to Standard Life in 1997 
and the first six months of 1998.  Both of these agreements provide that they 
may  be  modified or terminated by the Indiana and Mississippi Departments of 
Insurance in the event of financial hardship of Standard Life or Dixie
National Life.

                                  A management services agreement between SMC
and  Savers  Life  was  approved by the North Carolina Department of
Insurance on March 11, 1998.  The management services agreement calls for the 
payment of  $83,000  per month by Savers Life to SMC for financial and
regulatory reporting, investment of assets and the production of business. 
SMC has  agreed to receive no  fee,  nor  shall  Savers Life have an
obligation to pay such fee, unless the capital and surplus of Savers Life is
greater  than $7,000,000 after the acquisition of Savers Life.  In addition,
as a condition of the acquisition of Savers Life, SMC entered into an
agreement with the North  Carolina  Department  of  Insurance  to  maintain 
statutory capital and surplus of Savers Life of at least
$6,000,000.  The amount of capital and surplus of Savers Life at June 30,
1998 was $6,824,000.

                                  Pursuant to the management services  
agreement with SMC, Premier Life (Luxembourg), a wholly-owned subsidiary of
Standard Management International, paid SMC a management fee  of  $25,000 
per  quarter  during 1997 and the first six months of 1998 for certain 
management and administrative services.  The agreement provides that it may 
be modified or terminated by either SMC or Premier Life (Luxembourg).

                                  At April 1, 1995, SMC sold its property and
equipment to an unaffiliated leasing/financing company for $1,396,000 and 
subsequently entered into a capital lease obligation whereby SMC pays a
monthly rental amount of $45,000.  During the second quarter of 1998, the
lease was terminated and the property and equipment was repurchased for
$116,000.  SMC charges a monthly  equipment  rental  fee  to its subsidiaries
for this equipment and additional equipment purchased after April 1, 1995. 
The amount of the rental income received  from SMC's subsidiaries was
$525,000 and $1,145,000 for the six months ended June 30, 1998 and
year ended December 31, 1997, respectively.

                                  The Amended  Credit  Agreement permits SMC
to borrow up to $20,000,000 in the form of a seven-year reducing revolving
loan arrangement.  SMC has agreed to pay a non-use fee of .50% per annum on
the unused portion of the commitment. In connection with the original and 
Amended Credit Agreement,  SMC  issued  warrants to the bank to purchase
73,500 shares of Common Stock.  Borrowing under the Amended Credit Agreement
may be used for contributions to surplus of insurance subsidiaries,
acquisition financing, and repurchases of Common Stock.  The debt is secured
by a Pledge  Agreement  of all of the issued and outstanding shares of common 
stock  of  Standard  Life  and Standard Marketing.  Interest on the borrowing
under  the  Amended  Credit  Agreement  is determined, at the option of SMC,
to be:  (i)  a fluctuating rate of interest based on the corporate base rate
announced by the bank from time to time plus 1% per annum, or (ii) a rate  at 
LIBOR plus 3.25%.  Annual principal repayments of $3,333,000 begin in March
2000 and conclude in March 2005.  Indebtedness incurred under  the  Amended
Credit Agreement is subject to certain restrictions and covenants including,
among other things, certain minimum financial ratios, minimum  statutory 
surplus requirements for the insurance subsidiaries, minimum consolidated
equity requirements for SMC and certain investment  and  indebtedness 
limitations.   At June 30, 1998, SMC was in compliance with all restrictions
and covenants in the Amended Credit Agreement.  At June 30, 1998, SMC had
borrowed $20,000,000 under the Amended Credit Agreement at a weighted average 
interest rate of 9.24%.

                                  In  connection  with  the  acquisition  of  
Shelby  Life, the Company borrowed $4,000,000 from  an insurance company
pursuant to a subordinated convertible debt agreement which was due in 
December  2003.   At  June  30, 1997, this subordinated  convertible debt
agreement was amended to the principal amount of $4,372,000 which is due
July 2004 unless previously converted, and  requires  interest  payments  in 
cash on January 1 and July 1 of each year at 10% per annum.  At June 30,
1997, the Company borrowed an additional $5,628,000 from an insurance  
company  pursuant  to  another  subordinated convertible debt agreement
(collectively, the "Notes") which is due July 2004 unless previously
converted, and requires interest  payments in cash on January 1 and  July  1  
of  each  year at 10% per annum.  Proceeds from the additional borrowings 
were used for contributions to surplus of insurance subsidiaries of  
$2,400,000,  redemption  of Class S Preferred Stock of approximately
$1,840,000 and the balance for other general corporate purposes.  The Notes
are convertible at any time at the option of the note holder into Common
Stock at the rate of $5.747 per share.  The Notes may be prepaid in whole 
or in part at the option of the Company commencing on July 1, 2000 at
redemption prices equal to 102% of the principal amount
(plus accrued interest) and declining to 101% of  the principal amount 
(plus accrued interest).  The Notes may be prepaid prior to July 1, 2000 at a 
redemption price equal to 101% of the principal amount (plus accrued 
interest) under certain limited circumstances.  The subordinated convertible 
debt agreements contain  terms  and  financial covenants substantially 
similar to those in the Amended Credit Agreement.

                                  Assuming  the  current level of debt under
the Amended Credit Agreement and current interest rates at June 30, 1998
(weighted average rate of 9.24%)  SMC  annual  debt  service  in 1998 would
be approximately $2,850,000 in interest paid.

                                  From the funds borrowed by SMC pursuant to
the  Amended  Credit  Agreement  and  the  subordinated convertible  debt
agreements,  $13,000,000  was  loaned to Standard Life pursuant to an
Unsecured Surplus Debenture Agreement  (the "Surplus Debenture") which
requires Standard Life to make quarterly interest payments to SMC at a
variable corporate base rate (8.5% at June 30, 1998) plus 2% per annum, and
annual principal  payments of $1,000,000 per year beginning in 2007 and 
concluding in 2019.  The interest and principal payments are subject to
quarterly  approval  by  the  Indiana  Department  of  Insurance,  depending
upon satisfaction  of  certain  financial  tests  relating to levels of 
Standard Life's capital and surplus and general approval  of  the
Commissioner of the Indiana Department of Insurance.  SMC currently 
anticipates these quarterly approvals will be granted.  Assuming the
approvals are granted and the June 30, 1998  interest  rate  of  10.5% 
continues  in  1998, SMC will receive interest income of $1,365,000 from the
Surplus Debenture during 1998.

                                  Dividends from Standard Life to SMC are
limited by laws applicable  to insurance companies.  As an Indiana domiciled
insurance company, Standard Life may pay a dividend or distribution from its
surplus  profits,  without  the prior approval  of  the  Commissioner  of 
the  Indiana  Department of Insurance, if the dividend or distribution,
together with all other dividends and distributions paid within the preceding 
twelve months, does not exceed the greater of (i) net gain from operations or
(ii) 10% of surplus, in each case as shown in its preceding  annual 
statutory  financial  statements.  Also, regulatory approval is required  
when  dividends  to be paid exceed unassigned statutory surplus.  For the
year ended  December  31,  1997,  Standard  Life reported statutory net gain 
from operations before realized capital gains of $2,374,000 and statutory
surplus of $25,923,000, which includes unassigned surplus of  $1,693,000. 
Standard Life paid dividends of $1,600,000 in 1997.  During 1998, Standard
Life can pay dividends of approximately $2,500,000 without regulatory
approval.

                                  As  a  North  Carolina domiciled insurance
company, Savers Life may pay a dividend or distribution from its capital and
surplus, without the prior approval  of  the  North  Carolina  Commissioner 
of  Insurance,  if the dividend or distribution together with all other
dividends and distributions paid within the preceding twelve months, does not 
exceed the lesser of  (i)  net  gain  from  operations  or  (ii)  10%  of
capital and surplus, in each case as shown in its preceding annual statutory
financial statements.  Savers Life was not allowed to  pay  a  dividend  in 
1996 or 1997 without prior North Carolina Department of Insurance approval
due to its statutory net losses in 1995 and 1996.  Savers Life  will  not  be 
permitted to pay dividends in 1998 without such approval.

                                  SMC  anticipates  the  available  cash from
its existing working capital, plus anticipated 1998 dividends, management
fees, rental income and interest payments on its  Surplus  Debenture 
receivable will be more than adequate to meet its anticipated "parent company
only" cash requirements for 1998.

                                  SMC has a note receivable of $2,858,000 
from an affiliate and  a  note  payable of $2,858,000 to a different
affiliate.  This note receivable and note payable are eliminated in the
consolidated financial statements.

                                  U.S.  INSURANCE  OPERATIONS.   The 
principal  liquidity  requirements of Standard  Life  are  its contractual
obligations to policyholders, dividend, rent, management fee and Surplus
Debenture  payments  to SMC and other operating expenses.   The  primary 
source  of  funding for these obligations has been cash flow from premium
income, net  investment  income, investment sales and maturities and sales  
of  annuity  products.  These sources of liquidity for Standard Life 
significantly exceed scheduled uses.  Liquidity is also affected by 
unscheduled  benefit  payments  including  death  benefits and policy 
withdrawals and surrenders.  The amount of withdrawals and surrenders is 
affected by a variety of factors such as  renewal interest crediting rates,
interest rates for competing products, general economic conditions, Standard 
Life's A.M. Best Company,  Inc.  ("A.M.  Best")  rating 
(currently rated "B+") and events in the industry that affect policyholders' 
confidence.

                                  The policies and annuities issued by 
Standard Life contain provisions that allow policyholders to withdraw  or  
surrender their policies under defined circumstances.  These policies and 
annuities generally contain provisions which apply penalties  or  otherwise  
restrict the ability of policyholders to make such withdrawals or surrenders.  
Standard Life closely monitors the surrender and policy  loan activity of its 
insurance products and manages the composition of its investment portfolios,
including liquidity, in light of such activity.

                                  Changes in interest rates may affect the 
incidence of policy surrenders and other withdrawals.  In addition to the 
potential effect on  liquidity,  unanticipated  withdrawals  in a changing 
interest rate environment could adversely affect earnings if the Company were 
required to sell investments at reduced values  to  meet liquidity demands.  
The Company manages the asset and liability portfolios in order to minimize 
the adverse earnings effect of changing  market interest rates.  The Company
seeks assets that have duration characteristics similar to the liabilities 
that they support.  The  Company  also prepares cash flow projections and 
performs cash flow tests under various market interest rate scenarios to 
assist in evaluating  liquidity  needs  and adequacy.   The  Company's  U.S.  
insurance  subsidiaries  currently  expect available liquidity sources and 
future cash flows to be adequate to meet the demand for funds.

                                  Statutory surplus is computed according  to  
rules  prescribed  by  the  National  Association  of Insurance  
Commissioners  ("NAIC"),  as  modified  by  the  Indiana  Department  of  
Insurance, or the states in which the insurance subsidiaries  do business.  
Statutory accounting rules are different from GAAP and are  intended  to  
reflect  a  more  conservative perspective.  With  respect  to  new  
business,  statutory  accounting  practices  require  that:  (i)  acquisition 
costs (primarily commissions and policy issue costs) and (ii) reserves for 
future guaranteed principal payments and interest  in  excess of statutory
rates,  be expensed in the year the new business is written.  These items 
cause a reduction in statutory surplus ("surplus  strain") in the year  
written  for many insurance products.  The Company designs its products to 
minimize such first-year losses, but certain products continue to cause  a  
statutory  loss  in  the  year written.  For each product, the Company 
controls the amount of net new premiums written to manage the effect of such
surplus strain.   The Company's long-term growth goals contemplate continued 
growth in its insurance businesses.  To achieve these growth goals, the 
Company's  U.S. insurance subsidiaries will need to increase statutory
surplus.  Additional statutory surplus may be secured through various sources  
such  as  internally  generated  statutory  earnings, equity  sales,  
infusions  by the Company with funds generated through debt or equity 
offerings or mergers with other life insurance companies.  If additional 
capital  is  not  available  from  one or more of these sources, the Company 
believes that it could reduce surplus strain through the use of reinsurance 
or through reduced writing of new business.

                                  Commencing January 1, 1995,  Standard  Life  
began  to reinsure a portion of its annuity business.  This reinsurance 
agreement has allowed the Company to write volumes of business that it  would 
not otherwise have been able to write due to regulatory restrictions based on 
its ratio of surplus to liabilities as determined  by regulatory authorities 
in the State of Florida.  By reinsuring a portion of the annuity business, 
the liability growth is slowed, thereby  avoiding  the erosion of surplus
that occurs in periods of increasing sales.  If the Company's ratio of 
surplus to liabilities falls below 4%, the  State  of Florida could  prohibit  
the  Company  from  writing  new  business in Florida.  Standard Life's 
largest annuity reinsurer at June 30, 1998, Winterthur, is rated "A" 
("Excellent") by A.M.  Best.   From  January  1,  1995  to August 31, 1995, 
approximately 70% of certain of Standard Life's annuity business produced was 
ceded.  Standard Life decreased the  quota-share  portion  of business ceded 
to 50% at September  1,  1995  and  further reduced it to 25% effective April 
1, 1996 to reflect the reduced need for additional  capital  and increase 
current earnings potential.   This  reduction was possible since the surplus 
strain experienced by Standard Life was not as great as originally 
anticipated as a result of lower than expected sales in 1995 and the increase 
in surplus resulting from the sale of First International.  In addition, 
Standard  Life's  ability to retain business was further increased by the 
capital contribution of $2,400,000 in the second quarter of 1997.  Winterthur  
limits  dividends  and  other transfers by Standard Life to SMC in certain
circumstances.

                                  Management believes that operational cash 
flow of  Standard  Life  will  be sufficient to meet its anticipated  needs  
for  1998.   As  of  June 30, 1998, Standard Life had statutory capital and 
surplus for regulatory  purposes  of $26,874,000 compared to $25,923,000 at 
December 31, 1997.  Standard Life produced statutory net gain from operations 
of $734,000 and $2,374,000 for the six months ended June 30, 1998 and the year 
ended December 31, 1997, respectively.  SMC contributed $2,400,000 to
Standard Life in the second  quarter of 1997  to  facilitate  growth  in  new  
premiums  written.  As the life insurance and annuity business produced by 
Standard Life and Dixie National Life increases, Standard Life expects to 
continue to satisfy statutory capital and surplus requirements through 
statutory profits, through the continued reinsurance of a  portion of its 
new business, and through additional capital contributions by SMC.  Net cash 
flow from operations on a statutory basis  of  Standard  Life,  after  
payment of benefits  and  operating  expenses,  was  $19,588,000  and  
$17,921,000 for the years ended December 31, 1997 and December 31, 1996,
respectively.  If the need arises for cash which is not readily  available,  
additional liquidity could be obtained from the sale of invested assets.

                                  State insurance regulatory authorities 
impose  minimum  risk-based capital ("RBC") requirements on insurance 
enterprises that were developed by the NAIC. The formulas for determining 
the amount  of  RBC  specify  various  weighting factors  that  are  applied  
to  financial balances or various levels of activity based on the perceived 
degree of risk.  Regulatory compliance is determined by a ratio 
(the "RBC Ratio") of the enterprise's regulatory total adjusted capital, as 
defined by the NAIC, to its authorized control level RBC,  as  defined  by  
the  NAIC. Enterprises below specific trigger points or ratios are classified
within certain levels, each of which requires specified corrective  action.  
The RBC Ratio for Standard Life and Dixie National Life were in excess of 
400% of the minimum RBC requirements and Savers Life was in excess of 300%; 
accordingly, the subsidiaries meet the RBC requirements.

                                  Standard Life's acquisition of Shelby  
Life,  and  merger  of  Shelby  Life  into  Standard  Life, effective 
November 1, 1996 is anticipated to have a positive effect on Standard Life's 
liquidity and cash flows.  Shelby Life ceased writing  new  business  
effective  November  1,  1996, thus reducing the surplus strain normally 
associated with the issuance of new policies.  The anticipated profits from 
Shelby Life's book of business are expected to exceed the related interest 
expense connected with the $13,000,000 of Surplus Debentures issued by 
Standard Life in connection with the acquisition of Shelby Life.

                                  SMC's acquisition  of  Savers  Life  at 
March 12, 1998 is anticipated to have a positive effect on SMC's liquidity 
and cash flows.  SMC anticipates that existing working capital,  unused  
proceeds  from borrowings under the Amended Credit Agreement and management 
fees by Savers Life will be adequate to cover debt service on the additional  
borrowings  under  the Amended Credit Agreement through 1998.

                                  INTERNATIONAL  OPERATIONS.   The  
consolidated  balance  sheet  of  the  Company at June 30, 1998, includes a 
$694,000 credit representing the negative goodwill on the purchase of 
Standard Management International  which  will  be amortized into future 
earnings.  This amortization is a non-cash credit to the Company statements 
of operations.

                                  Standard  Management  International  
dividends  are  limited  to  its accumulated earnings without regulatory 
approval.  Standard Management International and Premier Life (Luxembourg) 
were not permitted  to  pay  dividends in 1997 due to accumulated losses.  
Premier Life (Bermuda) did not pay dividends in 1997.  SMC does not 
anticipate any dividends  from these companies in 1998.

                                  Due  to  the  nature  of  unit-linked  
products issued by Standard Management International, which represent  over 
90% of Standard Management International portfolio's assets,  the  investment  
risk  rests  with  the  policyholder.  Investment risk for Standard 
Management International exists where Standard Management International makes 
investment decisions with respect to the remaining traditional business and 
for the assets backing certain actuarial and regulatory reserves.  The 
investments underlying these  liabilities  mostly  represent short-term 
investments and fixed maturity securities.  These short-term investments and 
fixed maturity securities are normally  bought  and/or  disposed  of  only 
on the advice of independent consulting actuaries who perform an annual 
analysis comparing anticipated cash flows on the insurance  portfolio  with 
the cash flows from the fixed maturity securities.   Any  resulting  material  
mismatches  are then covered by adjusting the securities  in  the  investment  
portfolio  as appropriate.





FACTORS THAT MAY AFFECT FUTURE RESULTS

                                  MERGERS,  ACQUISITIONS   AND  CONSOLIDATIONS.
The  U.S. insurance industry has experienced an increasing number  of  mergers,
acquisitions,  consolidations  and  sales  of  certain  business  lines.  These
consolidations  have been driven by a need to reduce costs of distribution  and
overhead and maintain  business in force.  Additionally, increased competition,
regulatory capital requirements  and  technology costs have also contributed to
the  level of consolidation in the industry.   These  forces  are  expected  to
continue as is the level of industry consolidation.

                                  FOREIGN  CURRENCY  RISK.  Standard Management
International policyholders invest in assets denominated  in  a  wide  range of
currencies.  Policyholders effectively bear the currency risk, if any, as these
investments   are   matched   by  policyholder  separate  account  liabilities.
Therefore, their investment and  currency risk is limited to premiums they have
paid.  Policyholders are not permitted to invest directly into options, futures
and  derivatives.   Standard  Management  International  could  be  exposed  to
currency  fluctuations  if  currencies   within   the  conventional  investment
portfolio  or  certain  actuarial  reserves  are mismatched.   The  assets  and
liabilities  of  this portfolio and the reserves  are  continually  matched  by
Standard Management  International  and at regular intervals by the independent
actuary.   In  addition,  Premier  Life (Luxembourg)  shareholders'  equity  is
denominated in Luxembourg francs.  Premier Life (Luxembourg) does not hedge its
translation risk because its shareholders'  equity  will  remain  in Luxembourg
francs for the foreseeable future and no significant realized foreign  exchange
gains or losses are anticipated.

                                  UNCERTAINTIES  REGARDING  INTANGIBLE  ASSETS.
Included  in the Company's financial statements as of June 30, 1998 are certain
assets that  are valued for financial statement purposes primarily on the basis
of assumptions  established  by the Company's management.  These assets include
deferred acquisition costs, present value of future profits, costs in excess of
net assets acquired and organization  and  deferred  debt  issuance costs.  The
total value of these assets reflected in the June 30, 1998 consolidated balance
sheet aggregated $56,172,000 or 7% of the Company's assets.   The  Company  has
established procedures to periodically review the assumptions utilized to value
these  assets  and determine the need to make any adjustments in such values in
the Company's consolidated  financial  statements.   The Company has determined
that  the assumptions utilized in the initial valuation  of  these  assets  are
consistent with the operations of the Company as of June 30, 1998.

                                  REGULATORY      ENVIRONMENT.       Currently,
prescribed  or  permitted  statutory  accounting  principles  ("SAP")  may vary
between  states and between companies.  The NAIC is in the process of codifying
SAP to promote  standardization  of  methods  utilized throughout the industry.
Completion  of  this project might result in changes  in  statutory  accounting
practices for the Company's insurance subsidiaries; however, it is not expected
that such changes would materially affect the Company's insurance subsidiaries'
statutory capital requirements.

                                  FINANCIAL  SERVICES DEREGULATION.  The United
States  Congress  is currently considering a number  of  legislative  proposals
intended to reduce  or  eliminate  restrictions on affiliations among financial
services organizations.  Proposals are extant which would allow banks to own or
affiliate with insurers and securities  firms.   An increased presence of banks
in the life insurance and annuity businesses may increase  competition in these
markets.   The  Company  cannot  predict the impact of these proposals  on  the
earnings of the Company.

<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        ___________________

                                  SAFE   HARBOR  PROVISIONS.   All  statements,
trend analyses, and other information contained  in  this  Quarterly  Report on
Form 10-Q or any document incorporated by reference herein relative to  markets
for  the Company's products and trends in the Company's operations or financial
results,  as  well  as  other  statements including words such as "anticipate,"
"believe," "plan,""estimate,""expect,""intend,"  and other similar expressions,
constitute forward-looking statements under the Private  Securities  Litigation
Reform Act of 1995.  These forward-looking statements are subject to known  and
unknown  risks,  uncertainties and other factors which may cause actual results
to be materially different  from  those  contemplated  by  the  forward-looking
statements.   Such  factors include, among other things:  (1) general  economic
conditions and other  factors, including prevailing interest rate levels, stock
market performance and  health  care inflation, which may affect the ability of
the Company to sell its products, the market value of the Company's investments
and  the  lapse rate and profitability  of  the  Company's  policies;  (2)  the
Company's ability  to achieve anticipated levels of operational efficiencies at
recently acquired companies,  as well as through other cost-saving initiatives;
(3)  customer response to new products,  distribution  channels  and  marketing
initiatives;  (4) mortality, morbidity, usage of health care services and other
factors which may affect the profitability of the Company's insurance products;
(5) changes in  the Federal income tax laws and regulation which may affect the
relative tax advantages  of  some  of  the  Company's  products; (6) increasing
competition  in the sale of the Company's products; (7) regulatory  changes  or
actions, including those relating to regulation of financial services affecting
(among  other things)  bank  sales  and  underwriting  of  insurance  products,
regulation  of  the  sale,  underwriting and pricing of insurance products, and
health care regulation affecting  the  Company's  supplemental health insurance
products; (8) the availability and terms of future  acquisitions;  and  (9) the
risk  factors  or  uncertainties  listed  from  time  to  time  in any document
incorporated by reference herein.
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        ___________________

                          PART II.  OTHER INFORMATION



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.

                                  At SMC's Annual Meeting of Stockholders  held
on  June  10,  1998,  the  following  individuals  were elected to the Board of
Directors:

                                     SHARES FOR              SHARES WITHHELD

RONALD D.HUNTER                      6,052,182                93,033
EDWARD T. STAHL                      6,051,558                93,657
JOHN J. DILLON                       6,054,707                90,508
JERRY E. FRANCIS                     6,039,211               106,004



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  EXHIBITS

    10.36             Management Services Agreement between Savers Life and 
                      SMC dated March 11, 1998.

    10.37             Indemnity Reinsurance Agreement between Standard Life 
                      and the Mercantile  and General Life Reassurance
                      Company of America dated March 30,  1998  and effective 
                      June 1, 1997.

    10.38             Certificate of Designations for Series A Convertible
                      Redeemable Preferred Stock.


    Exhibit 27        Financial Data Schedule, which is submitted 
                      electronically pursuant to Regulation S-K to
                      the  Securities  and  Exchange Commission 
                      (the "Commission") for information only and not filed.


(b)  REPORTS ON FORM 8-K

                                  A report on Form 8-K dated May 22,  1998, was
filed with the Commission to report under Item 7 the acquisition of Savers Life
effective March 12, 1998.
<PAGE>

         STANDARD MANAGEMENT CORPORATION AND SUBSIDIARIES

                        ___________________

                                  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.


Dated:   August 14, 1998


                                          STANDARD MANAGEMENT CORPORATION
                                                   (Registrant)

                                         By:     RONALD D. HUNTER
                                         Ronald D. Hunter
                                         Chairman of the Board, President and
                                         Chief Executive Officer
                                         (Principal Executive Officer)

                                         By:   GERALD R. HOCHGESANG
                                         Gerald R. Hochgesang
                                         Senior Vice President
                                         (Chief Accounting Officer)