DRAFT                                                              EXHIBIT 10.2



                      SPLIT DOLLAR LIFE INSURANCE AGREEMENT



                  This Split Dollar Life Insurance  Agreement  ("Agreement")  is
made, as of ____________,  199__, by and between Sierra Health Services, Inc., a
Nevada corporation (the "Company"),  _______________(the  "Executive"),  and any
other  person,  in his or her capacity as trustee of a trust  designated  by the
Executive, as may from time to time agree to be bound by this Agreement.


                                    RECITALS

                  The  Executive  desires  to  insure  his or her  life  for the
benefit and protection of his or her family or designated  beneficiary under the
Policy (as defined below);

                  The  Company  desires to help the  Executive  provide  certain
insurance  for the benefit  and  protection  of his or her family or  designated
beneficiary by providing  funds from time to time to pay the premiums due on the
Policy, subject to reimbursement; and

                  The Executive  desires the Executive or a trust  designated by
Executive  to become the owner of the Policy  and to assign  certain  rights and
interests  in the Policy to the  Company,  to the  extent  provided  herein,  as
security  for  reimbursement  of certain  funds  provided by the Company for the
acquisition and/or maintenance of the Policy.


                                    AGREEMENT

                  NOW,  THEREFORE,  in consideration  of the foregoing,  and the
mutual  agreements and covenants set forth below,  the parties to this Agreement
agree as follows:

     1.  DEFINITIONS.  For purposes of this Agreement,  unless otherwise clearly
apparent  from the  context,  the  following  phrases  or terms  shall  have the
following indicated meanings:

                           (a)  "Aggregate  Premiums  Paid" shall  mean,  at any
         time,  an  amount  equal  to (i) the  cumulative  premiums  paid by the
         Company on the  Policy,  less (ii) any policy  loans to the Company and
         accrued and unpaid interest  thereon  (excluding any loan under Section
         6(e)(ii)),  and less (iii) any amounts received by the Company from the
         Executive for life insurance  coverage  provided under this  Agreement.
         Despite the foregoing,  Aggregate Premiums Paid shall not include extra
         benefit riders or  agreements,  other than those  providing  additional
         life insurance coverage on the insured,  and shall not include premiums
         waived  pursuant  to the  terms of any  disability  waiver of a premium
         rider. In addition, no interest shall be deemed to be accrued on and no
         present value adjustment to the cumulative premiums paid by the Company
         shall be made in calculating Aggregate Premiums Paid.

                           (b)  "Base  Annual   Compensation"   shall  mean  the
         Executive's   annual   salary  plus  an  amount  of  annual   incentive
         compensation  payable by the Company and its subsidiaries  equal to 50%
         of such annual  salary for  employment  services  in a specified  year,
         before reduction for compensation  deferred  pursuant to all qualified,
         non-qualified  and Code Section 125 plans of the  Company.  Base Annual
         Compensation  excludes  amounts  payable in connection  with  long-term
         incentive  awards   (including   compensation   resulting  from  option
         exercises),   perquisites,   other  annual  compensation  not  properly
         categorized as salary or annual incentive  compensation,  reimbursement
         of expenses,  and employee  benefits.  For purposes of determining  the
         Executive's Base Annual Compensation as of the Benefit Measurement Date
         or any other date, the Executive's  Base Annual  Compensation as of the
         most  recent  preceding  July 1 will  be used  (which  means  that  the
         Executive's  Base Annual  Compensation  will be  increased or decreased
         under this Agreement only once a year).




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Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement


     (c)  "Benefit  Measurement  Date" shall mean the date on which the first of
any of the following events occurs:

     (i) The Executive's Termination of Employment;

     (ii) Termination of this Agreement in accordance with ` Section 9 below;

                                    (iii)   The Executive's Retirement; or

                                    (iv)    The Executive's death.

                           (d) "Cash Surrender  Value" shall mean an amount that
         equals,  at any specified  time, the cash surrender value of the Policy
         as determined under the terms of the Policy.

                           (e)  "Change  in  Control"  shall  mean the  earliest
         transaction or event  occurring after the effective date of the Plan in
         which  (i) the  Company  shall  merge or  consolidate  with  any  other
         corporation  and  shall  not be the  surviving  corporation;  (ii)  the
         Company shall  transfer all or  substantially  all of its assets to any
         other  person;  or (iii) any person  shall have  become the  beneficial
         owner  of more  than 50% of the  voting  power  of  outstanding  voting
         securities of the Company.

                           (f) "Code" means the  Internal  Revenue Code of 1986,
         as amended  from time to time,  including  regulations  thereunder  and
         successor provisions and regulations.

                           (g) "Collateral  Assignment" shall mean an assignment
         of the  Policy  made  by the  Executive  or a trust  designated  by the
         Executive,  as owner of the  Policy,  in favor of the Company in a form
         mutually  agreed  to by the  Company  and the  Executive  and any trust
         designated by the Executive and accepted by the Insurer.

     (h) "Collateral  Interest" shall mean the Company's rights and interests in
the Policy, as set forth in Section 6 below.

                           (i)  "Executive's  Death  Benefit" shall mean (i), in
         the event of the  Executive's  death while employed by the Company or a
         subsidiary,  an amount  that is equal to the  Executive's  Base  Annual
         Compensation, determined as of the date of his or her death, multiplied
         by  three,   less  (A)  the  amount  of  death   benefits   payable  to
         beneficiaries of the Executive under any group life insurance policy or
         program of the Company or a subsidiary (other than this Plan), and less
         (B)  the  Benefit  Reduction  Amount  (but  in  no  event  shall  these
         reductions result in a negative number),  and (ii), in the event of the
         Executive's  death at a time the Executive is no longer employed by the
         Company or a subsidiary  but not later than the Rollout Date, an amount
         that is equal to the Executive's Base Annual  Compensation,  determined
         as of the Benefit  Measurement  Date,  multiplied  by 1.5, less (A) the
         amount of death  benefits  payable to  beneficiaries  of the  Executive
         under any group life  insurance  policy or program of the  Company or a
         subsidiary  (other than this Plan), and less (B) the Benefit  Reduction
         Amount  (but in no event shall  these  reductions  result in a negative
         number).  For  purposes  of this  definition,  the  "Benefit  Reduction
         Amount" shall mean the amount by which the Aggregate Premiums Paid plus
         Executive's  Death  Benefit,  calculated  without regard to the Benefit
         Reduction  Amount,  exceeds the death proceeds payable under the Policy
         assuming the maximum  cumulative  increases in the death proceeds under
         the Policy permitted by the Insurer,  over and above the death proceeds
         initially  payable under the Policy,  without requiring new evidence of
         insurability of the Executive. The foregoing notwithstanding, the death
         proceeds  initially  payable under the Policy shall be sufficient  such
         that the  Benefit  Reduction  Amount  in the  initial  year  that  this
         Agreement is in effect shall be zero.

     (j) "Insurer" shall mean Metropolitan Life Insurance Company.


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Sierra Health Services, Inc.                                               DRAFT
Split Dollar Life Insurance Agreement


                           (k) "Minimum  Retirement  Cash Value" shall mean,  on
         the  Rollout  Date,  the amount of Cash  Surrender  Value of the Policy
         payable to the Executive  (I.E.,  exclusive of portions  payable to the
         Company  under  Section  6(a))  equal to (i) the amount  sufficient  to
         maintain  a  death  benefit  that is  equal  to 1.5  multiplied  by the
         Executive's  Base  Annual  Compensation,   determined  on  the  Benefit
         Measurement  Date,  assuming  that  the  Policy  will be  held  without
         surrender,  withdrawal or loan by the Executive for 20 years  following
         the  Benefit  Measurement  Date and  using the  Insurer's  then-current
         interest  rate and  expense  loads  under the Policy as of the  Rollout
         Date, multiplied by (ii) 1.6667.

                           (l)  "Permanently  Disabled" shall mean the Executive
         is unable to perform the usual  assigned  duties of his or her position
         (i) due to a disability  which  qualifies the Executive for  disability
         benefits under the Company's  long-term  disability  plan,  (ii) if the
         Executive  does not  participate  in such a plan,  due to a  disability
         which would have qualified the Executive for disability  benefits under
         such a plan had the  Executive  been a  participant  in such a plan, or
         (iii), if the Company does not sponsor a long-term disability plan, due
         to a physical or mental disease, injury or infirmity, of long duration,
         as determined by the Committee in its sole discretion.

     (m) "Plan" shall mean the plan described in Section 8(a) below.

     (n) "Policy" shall mean the following policy or policies on the life of the
Executive that are issued by the Insurer:

                           POLICY NUMBER    TYPE OF POLICY

                           ------------     ---------------

                           ------------     ---------------

                           (o)  "Retirement"  or "Retire"  shall mean  severance
         from  employment  from  the  Company  for  any  reason  other  than  an
         authorized  leave of  absence  or death on or after the  earlier of the
         attainment of (i) age 65 ("Normal  Retirement")  or (ii) age 55 and ten
         Years of Service  ("Early  Retirement").  In addition,  a person who is
         Permanently  Disabled  (regardless of his or her employment status with
         the Company) and who reaches age 55 shall be treated as having  reached
         Retirement under this Agreement. For purposes of the foregoing,  "Years
         of  Service"  shall  mean the total  number of full  years in which the
         Executive  has been  employed  by the  Company.  For  purposes  of this
         definition,  a year of employment shall be a 365-day period (or 366-day
         period in the case of a leap year) commencing on the date of hiring and
         each  anniversary  thereof  (subject to  adjustment  to reflect  unpaid
         leaves of absence of more than 90 days). A Participant's  paid leave of
         absence or unpaid leave of absence for 90 days or less shall constitute
         employment for purposes of this definition,  but a Participant's unpaid
         leave of absence for more than 90 days shall not constitute  employment
         for purposes of this definition.

                           (p)  "Rollout  Date"  shall  mean  the  later  of the
         Benefit  Measurement  Date or the fifteenth  anniversary of the date of
         this Agreement,  but in no event later than the death of the Executive;
         provided,  however, that the Company may accelerate the Rollout Date to
         a date  specified  by the  Company,  but in no event  earlier  than the
         Benefit  Measurement  Date,  and only if at such  Rollout Date the Cash
         Surrender Value equals or exceeds the Minimum Retirement Cash Value.

                           (q)  "Tax  Limitation  Date"  shall  mean the date on
         which the  Policy  will no longer be  subject  to those  provisions  of
         Section  7702(f)(7)  of the Code that would cause any  distribution  or
         surrender  from or under the Policy to be taxed under that  Section (or
         Section 72 of the Code by reason of that Section).

                           (r)  "Termination  of  Employment"   shall  mean  the
         ceasing of Executive's employment with the Company for any reason other
         than Retirement,  death, a Permanent Disability, or an authorized leave
         of absence.


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Split Dollar Life Insurance Agreement


                  2.       ACQUISITION OF POLICY; OWNERSHIP OF INSURANCE.

     (a) Cooperation  With Respect to the Policy.  The parties to this Agreement
shall cooperate in applying for,  obtaining,  and maintaining the Policy, and in
obtaining any increase in coverage of the Policy.

                           (b)  Ownership  of the  Policy.  The Policy  shall be
         issued to the  Executive or to a trust  designated  by the Executive in
         accordance  with this Section 2(b). If the Policy is originally  issued
         to the  Executive,  the  Executive  may  transfer the Policy to a trust
         designated  by the  Executive,  if such  transfer  is  approved  by the
         Company.  The  trustee,  on behalf  of a trust to which  the  Policy is
         issued or transferred,  must execute a copy of this Agreement and agree
         to be bound by the terms  hereof.  The  Executive  or the  trustee,  on
         behalf of such a  designated  trust,  as the case may be,  shall be the
         sole and  exclusive  owner of the  Policy,  subject  to the  rights and
         interests granted to the Company, as provided in this Agreement and the
         Collateral  Assignment.  The Executive and any such trustee acknowledge
         and agree that the Company and its agents have not provided advice with
         respect to Executive's estate planning.

                  3.       PREMIUM PAYMENTS ON POLICY.

                           (a)  Payments  and   Reimbursements.   Prior  to  the
         occurrence of the Rollout  Date,  the Company shall pay to the Insurer,
         on or before each applicable premium due date, all applicable  premiums
         for the Policy.  In the event that the  Company  fails to make any such
         payment, the Executive or any trust which then owns the Policy may make
         (but is not required to make) any such  payment,  and the Company shall
         immediately  reimburse  the  Executive  or such trust for any amount so
         paid.  All  such  premium  payments  made  by the  Company  under  this
         Agreement shall constitute advances by the Company to the Executive for
         which the  Executive  or any trust  then  owning  the  policy  shall be
         responsible  for  reimbursement  in  accordance  with the terms of this
         Agreement,  but only up to an amount equal to the Company's  Collateral
         Interest.  The Company does not  guarantee the Policy or the payment of
         any death benefit or other amount thereunder to the Executive or his or
         her  Beneficiaries,  nor is the Company  otherwise  obligated to pay or
         provide any benefit to the Executive by virtue of this Agreement except
         for the payment of  premiums on the terms and subject to  reimbursement
         as specified in this Agreement.

                           (b) Prefunding Upon a Change in Control. In the event
         of a Change in Control, the Company shall, not later than 45 days after
         such  event,  pay to the  Insurer  an amount  sufficient  to prepay all
         premiums  for the  Policy  through  the  earlier  of the  date on which
         Executive  will be eligible for Normal  Retirement or the date one year
         after the Change in Control.  The Company  will arrange for the Insurer
         to apply such  prefunding  payments to premiums or hold such prefunding
         payments in a premium reserve  account,  which shall be  non-refundable
         (without regard to whether Executive's  employment  terminates prior to
         the end of the period covered by such prefunding).

                           (c) Additional Compensation.  Each calendar year, the
         Executive shall be considered to have taxable  compensation  income for
         that  portion  of the  premiums  paid by the  Company  that is equal in
         amount to the value of the "economic  benefit" derived by the Executive
         from the Policy's life insurance protection,  as determined for Federal
         income tax purposes under Revenue  Rulings  64-328 and 66-110,  and may
         have other taxable income under other  applicable tax  regulations  and
         authorities.  The Company  shall  withhold  from the  Executive's  Base
         Annual Compensation,  or other compensation paid to the Executive, in a
         manner  determined by the Company,  the  Executive's  share of FICA and
         other  employment  and  income  taxes  required  to be  withheld  under
         applicable tax regulations and authorities.

                  4.       COMPANY'S RIGHTS.

     (a)  Generally.  The  Company's  rights and  interests in and to the Policy
shall be


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Split Dollar Life Insurance Agreement


         specifically  limited  to (i)  the  right  to be  paid  its  Collateral
         Interest in accordance with Section 6 below,  (ii) the rights specified
         in the Collateral Assignment,  (iii) the Company's rights under Section
         4(b) and (iv) the right to obtain one or more loans or  advances on the
         Policy,  provided,  however,  that any such  loans  shall  not,  in the
         aggregate,  result in the  Aggregate  Premiums Paid becoming a negative
         amount  at any  specified  date  without  the  written  consent  of the
         Executive,  and  provided  further,  that prior to any Rollout date the
         Company shall repay any such loans, including accrued interest thereon,
         to the extent  necessary so that the Aggregate  Premiums Paid shall not
         be a negative amount at the Rollout Date.

                           (b)  Investment  Decisions.  Until  such  time as the
         Company's  Collateral Interest has been settled under Section 6(b), the
         Company  shall have the  exclusive  right to  exercise  the  investment
         discretion,  if any,  under the Policy  that the Policy may confer upon
         the  Executive or any other person.  After  settlement of the Company's
         Collateral  Interest,  the  Executive  or any other owner of the Policy
         shall have the right to exercise such  investment  discretion (if any),
         without consultation with or participation by the Company.

                  5.  EXECUTIVE'S  RIGHTS  AND  RIGHTS  OF  TRUSTEE  AS OWNER OF
POLICY.  Subject to the terms of this  Agreement and the  Collateral  Assignment
(and any  agreement or deed of trust between the Executive and any trustee which
may become the owner of the Policy in trust),  the Executive or the trustee of a
trust designated under Section 2(b) shall be the owner of the Policy,  and shall
be entitled to exercise all rights in the Policy while the Collateral Assignment
is in  effect,  except  for  the  following,  which  may be  exercised  only  in
accordance with Section 6:

                           (a)      To borrow against or pledge the Policy;

                           (b)      To surrender, cancel or assign the Policy;

     (c) To take a distribution or withdrawal from the Policy; or

     (d) To exercise investment  discretion under the Policy, except as provided
in Section 4(b).

                  6.       COLLATERAL INTEREST.

                           (a) On the Rollout Date,  the  Company's  interest in
         the Policy  (the  "Collateral  Interest")  shall be  determined  in the
         following manner:

                                    (i) If the Benefit Measurement Date occurred
                  due to the  Executive's  Retirement or due to a termination of
                  this Agreement by the Company  subject to Section  9(b)(i) and
                  the Rollout Date did not occur due to Executive's  death,  the
                  Company  shall be entitled to receive from the  Policy's  Cash
                  Surrender  Value (or otherwise,  as specified in Section 6(b))
                  at the Rollout  Date an amount  equal to the lesser of (i) the
                  Aggregate Premiums Paid or (ii) the Cash Surrender Value minus
                  the Minimum Retirement Cash Value (if this calculation results
                  in a negative number, the Company's  Collateral Interest shall
                  be zero).

                                    (ii)  If  the   Benefit   Measurement   Date
                  occurred due to the  Executive's  Termination of Employment or
                  the  termination  of this Agreement by either party subject to
                  Section  9(b)(ii) below and the Rollout Date did not occur due
                  to Executive's death, the Company shall be entitled to receive
                  from the  Policy's  Cash  Surrender  Value (or  otherwise,  as
                  specified in Section 6(b)) at the Benefit  Measurement Date an
                  amount equal to that portion of the  Policy's  Cash  Surrender
                  Value up to but not exceeding the Aggregate Premiums Paid.

                                    (iii)  If the  Benefit  Measurement  Date or
                  Rollout Date occurred due to the death of the  Executive,  the
                  Company  shall be  entitled  to that  portion of the  Policy's
                  death  proceeds that exceeds the  Executive's  Death  Benefit,
                  except as provided in Section 6(a)(iv)


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Split Dollar Life Insurance Agreement


                  below.

                                    (iv)  If the  Benefit  Measurement  Date  or
                  Rollout Date occurred due to the suicide of the Executive, and
                  the death  proceeds  from the Policy  are  limited by either a
                  suicide or contestability provision under the Policy such that
                  the amount  payable to the  Company  under  Section  6(a)(iii)
                  would be less than the Aggregate Premiums Paid with respect to
                  the Policy or the  portion  thereof so  limited,  the  Company
                  shall be entitled to that portion of the Cash Surrender  Value
                  and/or  death  proceeds  resulting  from the Policy or portion
                  thereof so limited that does not exceed the Aggregate Premiums
                  Paid with respect to the Policy or portion thereof so limited.

                           (b) If the Benefit  Measurement Date and Rollout Date
         are each on a date other than the date of the  Executive's  death,  the
         Company's  Collateral  Interest in the Policy, as determined in Section
         6(a)(i)  and (ii)  above,  shall be paid to the  Company  in one of the
         following  ways, as elected by the Executive or the trustee then owning
         the  Policy  in trust  (if the  power to make  this  election  has been
         transferred to such owner by the Executive),  in writing within 30 days
         after the date the Company first notifies the Executive or such trustee
         in writing of the  occurrence of the Rollout  Date,  if the  Collateral
         Interest  is  determined   under  Section   6(a)(i),   or  the  Benefit
         Measurement  Date,  if the  Collateral  Interest  is  determined  under
         Section 6(a)(ii):

                                    (i) By the  Executive's  or  such  trustee's
                  surrender or partial  surrender  of, or withdrawal  from,  the
                  Policy  in  an  amount  equal  to  the  Company's   Collateral
                  Interest,  and the payment of the cash proceeds thereof to the
                  Company;

                                    (ii) By the Executive or such trustee taking
                  a loan out on the Policy in an amount  equal to the  Company's
                  Collateral  Interest,  and payment of the loan proceeds to the
                  Company,  provided that the Company  shall not be  responsible
                  for repayment of any principal of or interest accruing on such
                  loan;

                                    (iii) By the  Executive's  or such trustee's
                  payment to the  Company,  from other  funds  available  to the
                  Executive or such  trustee,  an amount equal to the  Company's
                  Collateral Interest; or

                                    (iv) By the  Executive's  or such  trustee's
                  transfer  of the  ownership  of the  Policy,  and  all  rights
                  thereunder,  to the Company,  provided that the Cash Surrender
                  Value  of the  Policy  is at  least  equal  to  the  Company's
                  Collateral Interest at the time of the transfer.

         The  Company's  Collateral  Interest in the Policy shall be paid to the
         Company as soon as is reasonably practical after the Rollout Date.

                           (c) If the Benefit  Measurement  Date or Rollout Date
         is the date of the Executive's death, the Company's Collateral Interest
         in the Policy, as determined in Section 6(a)(iii) above,  shall be paid
         to the Company  from the  Policy's  proceeds  as soon as is  reasonably
         practicable after the Executive's death.

                           (d)  Despite  Section  6(b)  above and  Section  6(e)
         below, if, at the time the Company's Collateral Interest is determined,
         the Tax  Limitation  Date has not occurred,  (i) the Company shall have
         the right,  in its sole  discretion,  to require the  Executive  or the
         trustee  then owning the Policy in trust to elect to pay the  Company's
         Collateral Interest in accordance with Section 6(b)(ii) above, and (ii)
         the  Company's  rights under  Section 6(e) shall be limited to taking a
         loan in accordance with Section 6(e)(ii) below.

                           (e) If the  Executive  or the trustee then owning the
         Policy in trust fails to exercise any of the options under Section 6(b)
         above, by delivering  written notice of such election to the Company no
         later  than 30 days  after  the date the  Company  first  notifies  the
         Executive or such trustee in writing of


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Split Dollar Life Insurance Agreement


         the  occurrence of an event whereby the Company's  Collateral  Interest
         has been determined, the Company shall be entitled to: (i) exercise the
         right  to  surrender  the  Policy  and to  receive  the  Policy's  Cash
         Surrender Value, to the extent of the Company's Collateral Interest, or
         (ii) take out a loan on the Policy in an amount equal to the  Company's
         Collateral Interest, with the loan proceeds paid to the Company and the
         Company not  responsible  for  repayment  of  principal  of or interest
         accruing  on  such  loan,  or  (iii)  transfer  the  ownership  of  and
         beneficial interest in the Policy to the Company. In the case of (i) or
         (iii) above, the Company shall pay to the Executive,  if he or she then
         owns the Policy,  or to the trustee of the trust then owning the Policy
         in trust,  the Cash Surrender Value or death proceeds that remain after
         the Company has been paid its Collateral Interest.

                           (f) The Company agrees to keep records of its premium
         payments and to furnish the Insurer with a statement of its  Collateral
         Interest  (with a copy to the  Executive and to the trustee then owning
         the Policy in trust) whenever the Insurer requires such statement.

                           (g)  Concurrent  with the signing of this  Agreement,
         the  Executive  or the  trustee  which  owns or will own the  Policy in
         trust, will collaterally  assign the Policy to the Company, in the form
         of the  Collateral  Assignment,  as  security  for the  payment  of the
         Collateral  Interest,  which assignment shall not be altered or changed
         without the written consent of the Company, the Executive, and any such
         trustee.

                           (h) Promptly  following the  Executive's  death,  the
         Company and the  Executive's  designated  beneficiary  under the Policy
         shall take all steps  necessary  to collect  the death  proceeds of the
         Policy by  submitting  the  proper  claims  forms to the  Insurer.  The
         Company shall notify the Insurer of the amount of the Executive's Death
         Benefit  (subject to  adjustment  if the Policy's  proceeds are limited
         because  of  the  Executive's  death  by  suicide)  and  the  Company's
         Collateral  Interest  in the  Policy  at the time of such  death.  Such
         amounts shall be paid, respectively,  by the Insurer to the Executive's
         designated beneficiary and the Company.

                           (i) If the  Executive  or the trustee of a trust then
         owning  the  Policy  elects to retain  the  Policy in  accordance  with
         Section  6(b)  above,  the  Company  shall (i)  assign  its  Collateral
         Interest in the Policy to the  Executive or such  trustee,  as the case
         may be, (ii) execute and file with the Insurer an  appropriate  release
         of the  Company's  Collateral  Interest in the Policy and (iii) have no
         further  interest in the Policy;  provided that, in all instances,  the
         Company  receives  payment in full for its  Collateral  Interest in the
         Policy.  Further,  the Executive hereby  acknowledges,  understands and
         agrees that, upon the release of the Company's Collateral Interest, the
         Company shall not have any responsibility for the future performance of
         the Policy and shall have no obligation to make any additional  premium
         payments.

                           (j) If the  Executive  or the trustee of a trust then
         owning the Policy elects to transfer the Policy to the Company,  or the
         Company  makes such an election in  accordance  with Section  6(e)(iii)
         above, the Executive or such trustee shall sign all documents necessary
         to transfer the Policy to the Company, and the Executive, such trustee,
         and any  beneficiary  designated  by Executive or  beneficiary  of such
         trust or other party (other than the Company)  with a right or interest
         in the Policy from or through the Executive or such trust shall have no
         further right or interest in and to the Policy.

                           (k) Upon  payment to the  Company  of its  Collateral
         Interest in  accordance  with this Section 6, this  Agreement,  and the
         Executive's  participation in the Plan,  shall terminate,  and no party
         shall have any further rights or obligations under the Agreement or the
         Plan.

                  7.       INSURER.

                           (a) The  Insurer  is not a party  to this  Agreement,
         shall in no way be bound by or charged with notice of its terms, and is
         expressly  authorized to act only in  accordance  with the terms of the
         Policy.


                                                         7

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Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement


                           (b) The  signature(s)  required  for the  Insurer  to
         recognize  the  exercise of a right under the Policy shall be specified
         in the Collateral Assignment.

                  8.       PLAN; NAMED FIDUCIARY; CLAIMS PROCEDURE.

                           (a)  This   Agreement   is  part  of  the   Company's
         Split-Dollar  Life  Insurance  Plan,  which  consists of all  Company's
         Split-Dollar   Life  Insurance   Agreements  that  so  reference  their
         association with the Plan.

                           (b) The  Company is the named  fiduciary  of the Plan
         for  purposes of this  Agreement.  The Plan is  administered  by a Plan
         Administrator  which  consists  of the  Compensation  Committee  of the
         Company's  Board of  Directors  or such  committee  as the Board  shall
         appoint.

                           (c) The following  claims procedure shall be followed
         in handling any benefit claim under this Agreement and the Plan:

                                    (i) The Executive,  the trustee of the trust
                  then owning the Policy,  or any  beneficiary  of  Executive if
                  Executive  is dead (the  "Claimant"),  may deliver to the Plan
                  Administrator a written claim for a determination with respect
                  to the benefits  distributable to such Claimant hereunder.  If
                  such a claim  relates to the contents of a notice  received by
                  the Claimant, the claim must be made within 60 days after such
                  notice was received by the Claimant. The claim must state with
                  particularity the determination  desired by the Claimant.  All
                  other claims must be made within 180 days of the date on which
                  the event that caused the claim to arise  occurred.  The claim
                  must state with particularity the determination desired by the
                  Claimant.

                                    (ii) The Plan Administrator shall consider a
                  Claimant's  claim within a reasonable  time,  and shall notify
                  the Claimant in writing:

     (A) that the Claimant's requested determination has been made, and that the
claim has been allowed in full; or

                                            (B) that the Plan  Administrator has
                           reached a conclusion  contrary,  in whole or in part,
                           to the Claimant's requested  determination,  and such
                           notice  must set forth in a manner  calculated  to be
                           understood by the Claimant:

     (1) the specific reason(s) for the denial of the claim, or any part of it;

     (2) specific  reference(s)  to pertinent  provisions of the Plan upon which
such denial was based;

     (3) a description of any additional  material or information  necessary for
the Claimant to perfect the claim,  and an  explanation  of why such material or
information is necessary; and

     (4) an explanation of the claim review procedure set forth below.

     (iii) Within 60 days after  receiving a notice from the Plan  Administrator
that a claim has been denied, in whole or in part, a Claimant (or the Claimant's
duly authorized  representative)  may file with the Plan Administrator a written
request for a review of the denial of the claim. Thereafter,  but not later than
30 days after the review  procedure  began, the Claimant (or the Claimant's duly
authorized representative):


                                                         8

<PAGE>


Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement


     (A) may review pertinent documents;

     (B) may submit written comments or other documents; and/or

     (C) may  request  a  hearing,  which  the Plan  Administrator,  in its sole
discretion, may grant.

     (iv) The Plan  Administrator  shall render its decision on review promptly,
and not later than 60 days after the filing of a written  request  for review of
the  denial,  unless a hearing is held or other  special  circumstances  require
additional  time,  in  which  case  the Plan  Administrator's  decision  must be
rendered  within 120 days after such date.  Such  decision  must be written in a
manner calculated to be understood by the Claimant, and it must contain:

     (A) specific reasons for the decision;

     (B) specific  reference(s)  to the pertinent Plan provisions upon which the
decision was based; and

     (C) such other matters as the Plan Administrator deems relevant.

     (v) A Claimant's  compliance with the foregoing  provisions of this Section
8(c) is a mandatory  prerequisite  to a  Claimant's  right to commence any legal
action with respect to any claim for benefits under this Agreement.

     (d) In no event shall the Company's  liability under this Agreement  exceed
the amount of proceeds from the Policy.

                  9.       AMENDMENT OF AGREEMENT; TERMINATION.

                           (a) This  Agreement  shall not be modified or amended
         except by a writing signed by the Company,  the Executive,  and, if any
         rights or  obligations of the trustee of a trust then owning the Policy
         are affected, by such trustee.

                           (b) The  Company  or  Executive  may  terminate  this
         Agreement,  and  Executive's  participation  in the Plan,  at any time,
         subject to the  requirement  that each such party fully  perform its or
         his  or  her  obligations  under  the  Agreement,  and  subject  to the
         following:

                                    (i) If the Company  terminates the Agreement
                  at a time that the Executive's termination of employment would
                  qualify as a "Retirement," the Company's  Collateral  Interest
                  shall be determined under Section 6(a)(i); and

                                    (ii) If the Company terminates the Agreement
                  in circumstances other than those described in (i) above or if
                  the  Executive   terminates  the   Agreement,   the  Company's
                  Collateral   Interest   shall  be  determined   under  Section
                  6(a)(ii).

                  10.  BINDING  AGREEMENT;  ASSIGNS.  This  Agreement  shall  be
binding upon the heirs,  administrators,  executors and permitted successors and
assigns of each party to this  Agreement.  The  Executive  and any  trustee of a
trust then owning the Policy  shall not assign his or her rights or  obligations
under this Agreement without the prior written consent of the Company.

     11.  GOVERNING LAW. This Agreement shall be subject to and be construed and
interpreted according to the internal laws of the State of Nevada without regard
to its conflicts of laws principles.

     12.  VALIDITY.  In case any provision of this Agreement shall be illegal or
invalid for any


                                                         9

<PAGE>


Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement


reason,  said  illegality or invalidity  shall not affect the remaining parts of
this  Agreement,  but this Agreement  shall be construed and enforced as if such
illegal or invalid provision had never been inserted herein.

                  13. NOT A CONTRACT OF EMPLOYMENT.  The terms and conditions of
this  Agreement  shall not be deemed to  constitute  a  contract  of  employment
between the Company and the Executive. Such employment is hereby acknowledged to
be an "at will" employment  relationship  that can be terminated at any time for
any  reason,  with or without  cause,  unless  expressly  provided in a separate
written employment agreement.  Nothing in this Agreement shall be deemed to give
the  Executive  the right to be  retained  in the  service of the  Company or to
interfere with the right of the Company to discipline or discharge the Executive
at any time.

     14.  NOTICE.  Any notice or filing  required or permitted to be given under
this Agreement to shall be sufficient if in writing and hand-delivered,  or sent
by registered or certified mail, to the address below:

                  :        Sierra Health Services, Inc.
                           2724 North Tenaya Way
                           Las Vegas, Nevada 89128
                           Attn.: Office of General Counsel

or to such  other  address  as may  furnished  to the  Executive  in  writing in
accordance  with  this  notice  provision.  Any  notice or  filing  required  or
permitted to be given to the Executive or the Executive's beneficiary under this
Agreement shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known  address of the  Executive.  Any notice  under this  Agreement
shall be deemed  given as of the date of  delivery  or, if  delivery  is made by
mail,  as of the date shown on the postmark on the receipt for  registration  or
certification.

                  15.  ENTIRE  AGREEMENT.   This  Agreement  together  with  the
Collateral  Assignment  constitutes  the entire  agreement  between  the parties
hereto with regard to the subject  matter of this  Agreement and  supersedes all
previous  negotiations,  agreements and commitments in respect thereto.  No oral
explanation or oral information by either of the parties to this Agreement shall
alter the meaning or interpretation of this Agreement.


                                                         10

<PAGE>


Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement


                  IN WITNESS  WHEREOF,  the  parties  hereto  have  signed  this
Agreement as of the date first written above.

                                  The "Company"

                                  Sierra Health Services, Inc.
                                  a Nevada corporation

                                                     By:
                                      Its:

                                 The "Executive"





     Trustee of a trust designated by the Executive under Section 2(b)





                                                         11

<PAGE>


Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement



                              COLLATERAL ASSIGNMENT

                  This Collateral  Assignment  (this  "Assignment")  is made and
entered  into as of  _________,  199__,  by and between  _________________  (the
"Executive"),  the insured under [a life insurance  policy,  No.  _______] [life
insurance  policies,  Nos. and ] (the  "Policy"),  issued by  ____________  (the
"Insurer"),  Sierra Health Services, Inc., a Nevada corporation (the "Company"),
and, if this  Assignment  has been  executed by the trustee of a trust which has
become the owner of the Policy,  such trustee (the "Trustee").  Executive or the
Trustee, as the owner of the Policy, is referred to herein as "Owner."


                                    RECITALS

                  The  Executive  desires  to  insure  his or her  life  for the
benefit and protection of his or her family or designated  beneficiary under the
Policy (as defined below);

                  The  Company  desires to help the  Executive  provide  certain
insurance  for the benefit  and  protection  of his or her family or  designated
beneficiary by providing  funds from time to time to pay the premiums due on the
Policy,  subject to  reimbursement,  as more  specifically  provided for in that
certain  Split  Dollar  Life  Insurance   Agreement  entered  into  between  the
Executive,  the  Trustee  (if any) and the  Company as of the date  hereof  (the
"Agreement"); and

                  In consideration of the Company agreeing to provide such funds
in accordance with the terms and conditions of the Agreement,  the Executive and
Trustee (if any) have agreed to grant to the Company a security  interest in the
Policy, to provide security for the payment of the Company's Collateral Interest
(as defined below).


                                    AGREEMENT

                  NOW,  THEREFORE,  in consideration  of the foregoing,  and the
mutual  agreements and covenants set forth below, the parties to this Assignment
agree as follows:

                  1.  ASSIGNMENT.  The Owner hereby assigns,  transfers and sets
over to the Company,  and its permitted  successors,  those  certain  rights and
interests  described in the Agreement  that are to be assigned to the Company in
accordance  with the Agreement.  Furthermore,  this  Assignment is made, and the
Policy is to be held as collateral  security for, any and all liabilities of the
Owner to the Company, either now existing, or that may hereafter arise, pursuant
to the terms of the Agreement.

     2. SIGNATURES. To facilitate the operation of this Assignment,  the parties
agree that the Insurer is hereby  notified  that the  following  signatures  are
sufficient, without the signature or consent of the other party, to exercise the
following rights under the Policy while the Assignment is in effect:

     (a) The  Company  may sign a request to take a loan or  partial  withdrawal
without the Executive's or Trustee's signature or consent;

                           (b) The Company  may sign a request to (i)  surrender
         or  partially  surrender  the  Policy  or (ii)  change  the  owner  and
         beneficiary  of  the  Policy  without  the   Executive's  or  Trustee's
         signature or consent, provided that the Company simultaneously delivers
         to the Insurer (with a copy to the  Executive  and Trustee,  if any) an
         affidavit  stating  that  the  Company  is  exercising  its  rights  in
         accordance with Section 6(e) of the Agreement;

                           (c)  The  Executive  or  the  Trustee  (if  any),  as
         authorized  under  the  Policy,  may  sign  a  request  to  change  the
         beneficiary  under the Policy  without the  signature or consent of the
         Company;


                                                         1

<PAGE>


Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement


     (d) The  Company  may  sign  any  election  or other  document  whereby  an
investment election is exercised under the Policy; and

                           (e) The  exercise of any other right under the Policy
         not  specifically set forth above shall be exercised with the signature
         of the  Company  and  either  Executive  or the  Trustee  (if any),  in
         accordance with the terms of the Policy.

                  3. POLICY PROCEEDS.  Any amount payable from the Policy during
the  Executive's  life or at death  shall  first be paid to the  Company  to the
extent of its  Collateral  Interest (as defined in the  Agreement).  Any balance
will  be  paid  to  the  Owner  during  the  Executive's  lifetime,  or,  at the
Executive's death, to the beneficiary  designated under the Policy. A settlement
option may be elected by the  recipient  of the  proceeds.  For purposes of this
Assignment,  the amount of the  Collateral  Interest  shall be determined by the
Company and set forth in an affidavit signed by the Company and delivered to the
Insurer (with a copy to the Executive and the Trustee,  if any), and the Insurer
shall be entitled to rely on the statements set forth in such affidavit.

                  4.  CUSTODY;  ENDORSEMENT.  The Company  shall hold the Policy
while this Assignment is operative and, upon request,  forward the Policy to the
Insurer,  without  unreasonable  delay,  for  endorsement of any  designation or
change of  beneficiary,  any  election of optional  mode of  settlement,  or the
exercise of any other right  reserved by the Executive or Trustee (if any) under
the Agreement or this Assignment.

                  5. INSURER.  The Insurer is hereby authorized to recognize the
Company's claims to rights hereunder  without  investigating  the reason for any
action taken by the Company, the validity or amount of any of the liabilities of
the  Executive  or Trustee  (if any) to the  Company  under the  Agreement,  the
existence of any default therein,  the giving of any notice required herein,  or
the  application  to be made by the  Company  of any  amounts  to be paid to the
Company or the transfer of the Policy to the Company.  The Insurer  shall not be
responsible  for the  sufficiency  or validity of this  Assignment  and is not a
party to the Agreement (or any other similar  split-dollar  or other  agreement)
among the Company, the Executive and the Trustee (if any).

                  6.  REASSIGNMENT.  Upon  the  full  payment  of the  Company's
Collateral  Interest  in  accordance  with  the  terms  and  conditions  of this
Assignment  and the Agreement,  the Company shall reassign to the Owner,  if the
Owner retains the Policy in accordance  with the  Agreement,  the Policy and all
specific rights included in this Assignment.

                  7. AMENDMENT OF ASSIGNMENT; TERMINATION. This Assignment shall
not be  modified,  amended  or  terminated,  except by a  writing  signed by the
Company,  the Executive and the Trustee (if any); provided,  however,  that this
Assignment  may be  terminated  by the  Company or the  Executive  if that Party
terminates  the Agreement in accordance  with Section 9 of the Agreement and the
obligations of the party  terminating  the Agreement are performed in full under
the Agreement.

                  8.  BINDING  AGREEMENT;  ASSIGNS.  This  Assignment  shall  be
binding upon the heirs,  administrators,  executors and permitted successors and
assigns of each party to this  Assignment.  The Executive and/or the Trustee (if
any) shall not assign his or her  rights or  obligations  under this  Assignment
without the prior written consent of the Company.

     9.  GOVERNING  LAW. This  Assignment  shall be subject to and construed and
interpreted under the internal laws of the State of Nevada without regard to its
conflicts of laws principles.

                  10.  VALIDITY.  In case any provision of this Assignment shall
be illegal or invalid for any reason,  said  illegality or invalidity  shall not
affect the remaining  parts of this  Assignment,  but this  Assignment  shall be
construed  and enforced as if such illegal or invalid  provision  had never been
inserted herein.

                  IN WITNESS WHEREOF,  the Executive and the Company have signed
this Assignment as of the date first written above.


                                                         2

<PAGE>


Sierra Health Services, Inc.                                              DRAFT
Split Dollar Life Insurance Agreement

                                  The "Company"

                                  Sierra Health Services, Inc.
                                  a Nevada corporation

                                  By:     /S/  ERIN E. MACDONALD
                                  Its:  PRESIDENT AND CHIEF OPERATING OFFICER




                                 The "Executive"




     Trustee of a trust  designated  by the Executive to become the Owner of the
Policy



Filed with the Insurer:

Date:

Insurer:



By:
  Its:


                                                         3