# Securities
and Exchange Commission

Washington,
D.C. 20549

# Form 10-Q

# Quarterly
Report Under Section 13 or 15 (d) of the

Securities
Exchange Act of 1934

# For the
Quarter ended March 31, 2003

# Commission
File No. 2-40764

# Kansas City
Life Insurance Company

3520 Broadway

Kansas City,
Missouri 64111-2565

# Phone: (816) 753-7000

# IRS Number:
44-0308260

# Incorporated
in the State of Missouri

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, and (2) has been subject to
such filing requirements for the past 90 days.

`Yes    X                       No______`

Indicate the number of
shares outstanding of each of the issuers classes of common stock, as of
the most recent date available.

`Class                                  Outstanding April 28, 2003
Common Stock, $1.25 par value                       11,937,970 shares`

## Part I
Financial Information
Item 1. Financial Statements

All financial statements
are presented in thousands, except per share data.

Consolidated
Income Statement (Unaudited)

---

`Quarter ended
                                                            March 31
                                                        2003        2002
Revenues
Insurance revenues:
    Premiums and contract charges                   $   73,176      70,713
    Reinsurance ceded                                  (10,267)    (10,488)
       Net insurance revenues                           62,909      60,225
Investment revenues:
    Investment income, net                              47,340      48,955
    Realized losses, net                               (21,774)     (3,079)
Other                                                    2,632       5,000
       Total revenues                                   91,107     111,101

Benefits and expenses
Policyholder benefits (net of reinsurance ceded:
    $13,144 - 2003, $11,256 - 2002)                     70,342      67,936
Amortization of deferred acquisition costs               9,009       7,914
Insurance operating expenses (net of commissions ceded:
    $949 - 2003, $1,126 - 2002)                         26,012      26,549
       Total benefits and expenses                     105,363     102,399

Pretax income (loss)                                   (14,256)      8,702

Federal income taxes:
    Current                                              1,289      (1,209)
    Deferred                                            (8,087)      3,394

                                                        (6,798)      2,185

Net income (loss)                                   $   (7,458)      6,517

Per common share:
    Net income (loss), basic and diluted            $    (0.62)       0.54

    Cash dividends                                  $     0.27        0.27`

See accompanying Notes to Consolidated Financial Statements.

Consolidated
Balance Sheet

---

`March 31      December 31
                                             2003           2002
                                         (Unaudited)
Assets
Investments:
    Fixed maturities securities
      available for sale, at fair value $  2,130,967      2,141,439
    Equity securities available
      for sale, at fair value                 51,667         57,587
    Mortgage loans, net                      456,814        463,150
    Short-term investments                   288,401        186,770
    Other investments                        209,139        206,043

      Total investments                    3,136,988      3,054,989

Cash                                          10,233          2,532
Deferred acquisition costs                   242,639        246,286
Other assets                                 301,992        306,578
Separate account assets                      238,177        244,862
                                        $  3,930,029      3,855,247

Liabilities and equity
Future policy benefits                  $    816,962        811,634
Accumulated contract values                1,820,805      1,784,635
Notes payable                                 96,201         97,241
Current income taxes payable                     989          1,902
Other liabilities                            347,852        317,476
Separate account liabilities                 238,177        244,862

      Total liabilities                    3,320,986      3,257,750

Stockholders' equity:
    Common stock                              23,121         23,121
    Paid in capital                           22,757         22,605
    Retained earnings                        676,151        686,847
    Accumulated other comprehensive
      loss, net of tax                          (835)       (24,437)
    Less treasury stock                     (112,151)      (110,639)

      Total stockholders' equity             609,043        597,497

                                        $  3,930,029      3,855,247`

See accompanying Notes to Consolidated Financial Statements.

Consolidated
Statement of Cash Flows (Unaudited)

---

`Quarter ended
                                                        March 31
                                                    2003        2002

Operating activities
Net cash provided                              $    34,112         471

Investing activities
Purchases of security investments available for sale:
    Fixed maturities                              (188,009)   (200,716)
    Equity securities                                 (839)     (3,697)
Sales of security investments available for sale    65,824     119,549
Maturities and principal paydowns
    of security investments available for sale:
    Fixed maturities                               152,673      72,842
    Equity securities                                2,807       5,607
Purchases of other investments                     (21,969)    (10,076)
Sales, maturities and principal
    paydowns of other investments                   24,694      22,684
Net (purchase) sale of short-term investments     (101,631)      4,793
    Net cash provided (used)                       (66,450)     10,986

Financing activities
Policyholder contract deposits                      57,325      45,817
Withdrawals of policyholder
    contract deposits                              (20,577)    (27,228)
Change in other deposits                             8,929       2,609
Dividends paid to stockholders                      (3,238)     (3,245)
Proceeds from borrowings                                 -       1,444
Repayment of borrowings                             (1,040)          -
Other, net                                          (1,360)     (1,803)
Net cash provided                                   40,039      17,594

Increase in cash                                     7,701      29,051
Cash at beginning of year                            2,532       4,365

Cash at end of period                          $    10,233      33,416`

See accompanying Notes to Consolidated Financial Statements.

# Kansas City
Life Insurance Company

Notes to
Consolidated Financial Statements

## Note 1 -
Significant Accounting Policies

## Basis of Presentation

The unaudited consolidated
financial statements, the accompanying notes to these financial statements and
the accompanying Managements Discussion and Analysis of Operations of
Kansas City Life Insurance Company include the accounts of the Company and its
subsidiaries, principally Sunset Life Insurance Company of America (Sunset Life)
and Old American Insurance Company (Old American). These items have been
prepared in accordance with accounting principles generally accepted in the
United States (GAAP) for interim financial reporting and with the instructions
to Form 10-Q of Regulation S-X. Accordingly, they do not include all of the
disclosures required by GAAP for complete financial statements and as such,
these unaudited interim financial statements should be read in conjunction with
the Companys 2002 Form 10-K and the 2002 Annual Report to Stockholders.
Management believes that the disclosures are adequate to make the information
presented not misleading and all normal and recurring adjustments necessary to
present fairly the financial position at March 31, 2003, and the results of its
operations for all periods presented have been made. The results of operations
for any interim period are not necessarily indicative of the Companys
operating results for a full year.

Significant intercompany
transactions have been eliminated in consolidation and certain reclassifications
have been made to the prior year results to conform with the current years
presentation.

## Critical Accounting Policies and Estimates

These critical accounting
policies and estimates should be read in conjunction with statements and
disclosures made in the Companys 2002 Form 10-K as filed with the
Securities and Exchange Commission.

GAAP requires management to
make certain estimates and assumptions, which affect amounts reported in the
financial statements and accompanying notes. As such, the Company combines its
actual experience with selected estimates in the preparation of its financial
statements. The calculations used to estimate various components in the
financial statements are necessarily complex and involve large amounts of data.
Assumptions and estimates involve judgment and by their nature can be subject to
revision over time.

The calculation of life
insurance policy reserves is dependent upon estimates of future events. These
estimates require judgments based upon the Companys past experience and
estimates and assumptions about future mortality, persistency and interest
rates. At any given time, earnings variability may result from changes in actual
experience such as mortality or persistency, as well as changes in estimates of
future experience.

Deferred acquisition costs,
principally agent commissions and other selling, selection and issue costs which
vary with and are directly related to the production of insurance revenue, are
capitalized as incurred and amortized over future premium payments or the
expected future profits of the business, depending on the type of products.
Profit expectations are based upon estimates of future interest spreads,
mortality margins, operating expenses and surrender experience. These estimates
involve judgment, are reviewed not less than annually and are compared to actual
experience on an ongoing basis. If it is determined that the assumptions related
to interest sensitive and variable products should be revised as to the profit
expectations for the business, the assumptions are unlocked, or changed, with
the impact of the change flowing through the current periods earnings.

The Company maintains a
diversified securities portfolio. The Companys securities available for
sale are carried at fair market value in the Companys balance sheet. The
Company receives fair values for its securities portfolio from a variety of
external sources. Various measures have been taken to manage the
portfolios credit and interest rate risks as discussed in the
Companys 2002 Annual Report to Stockholders. The Company performs a
rigorous review of its securities fair values on an ongoing basis to
determine changes in the value of the portfolio. Several factors are analyzed in
evaluating these securities, including an analysis of the company, its industry,
valuation levels and subsequent developments. Based upon these inputs, the
Company establishes its securities values in accordance with GAAP.

## Comprehensive Income

Comprehensive income is
comprised of net income and other comprehensive income, which includes
unrealized gains or losses on securities available for sale and unfunded pension
liabilities. Comprehensive income equaled $16.1 million for first quarter versus
a comprehensive loss of $2.9 million for last years first quarter. For the
periods presented, comprehensive income varies from net income solely due to
changes in unrealized gains and losses on securities, net of applicable taxes.

## Earnings Per Share

Due to the Companys
capital structure and lack of other potentially dilutive securities, there is no
difference between basic and diluted earnings per common share for any of the
periods reported. The weighted average numbers of shares outstanding were
11,977,317 and 12,010,103 for the first quarters ended March 31, 2003 and 2002,
respectively.

## Federal Income Taxes

Income taxes have been
provided using the liability method. Under that method, deferred tax assets and
liabilities are determined based on the differences between their financial
reporting and their tax bases and are measured using the Federal income tax
rate. The effective tax rate was a benefit of 47.7 percent for this years
first quarter versus an expense of 25.1 percent last year. Actual tax rates
differ from the enacted rates primarily due to tax credits received from
affordable housing investments and a reversal of taxes accrued in prior years.

## Note 2 - Notes
Payable

The Company borrows
short-term funds through its membership with the Federal Home Loan Bank (FHLB)
and reinvests those funds at higher rates, thereby earning an interest spread on
those funds. These activities also contribute significantly to the
Companys liquidity position by providing established lines of credit for
borrowing and by adding high quality liquid securities that could be sold if
liquidity is needed. As a member of the FHLB with a capital investment of $9.0
million, the Company has the ability to borrow up to twenty times its capital
investment, or $179.7 million, from the FHLB when collateralized. As of March
31, 2003, the Company had short-term borrowings with the FHLB totaling $95.0
million with various maturities and a weighted average interest rate of 1.96
percent. These borrowings are secured by mortgage-backed securities totaling
$107.0 million. The Company has a $0.7 million real estate loan due December
2010, with an interest rate of 7.50 percent, secured by the property. Finally,
the Company has a $0.5 million construction loan related to an investment
property due July 2003 with an interest rate of 8.00 percent. This note will be
forgiven in total if certain construction terms are met by that date. Total
borrowings equaled $96.2 million at quarter end.

## Note 3 -
Business Segments

Company operations have
been classified and summarized into four reportable segments. The segments,
generally classified along company lines, are based upon distribution method,
product portfolio and target market. The Parent Company is divided into two
segments. The Kansas City Life - Individual segment consists of sales of
variable life and annuities, interest sensitive products and traditional life
insurance products by an agency sales force to individuals. The Kansas City Life
 Group segment consists of sales of group life, disability and dental
products and administrative services only (ASO) by the Companys agency
sales force and appointed group agents. The Sunset Life segment consists of
sales of interest sensitive and traditional products by an agency sales force.
The Old American segment markets whole life final expense products primarily to
seniors through an agency sales force.

Separate investment
portfolios are maintained for each of the companies. However, investments are
allocated to the group segment based upon its cash flows. Its investment income
is modeled using the year of investment method. Home office functions are fully
integrated for the three companies in order to maximize economies of scale.
Therefore, operating expenses are allocated to the segments based upon internal
cost studies, which are consistent with industry cost methodologies.

The following schedule
addresses, in thousands, the financial performance of each of the Companys
four reportable operating segments for the first quarter of 2003 and 2002.

`Kansas City Life        Sunset      Old
                                  Individual         Group       Life     American    Total

Net insurance revenues:
                          2003      $29,768        11,423        4,299    17,419      62,909
                          2002       23,876        13,857        4,726    17,766      60,225

Investment income, net:
                          2003      $35,902            80        7,602     3,756      47,340
                          2002       36,461           113        8,297     4,084      48,955

Net income (loss):
                          2003     $ (5,424)         (985)         (63)     (986)     (7,458)
                          2002        3,905           108        1,234     1,270       6,517`

Intersegment revenues are
not material and there has been no significant change in segment assets from
last year-end. The Company operates solely in the United States and no
individual customer accounts for 10 percent or more of the Companys
revenue.

## Note 4 -
Commitments and Contingencies

Under state insurance
guaranty fund laws, insurance companies may be assessed up to prescribed limits
for policyholder losses that result from insolvent or rehabilitated companies.
Mandatory assessments may be partially recovered through a reduction of future
premium taxes in some states. The Company does not believe that such assessments
will be materially different from amounts already provided for in the financial
statement.

A contingent liability
exists with respect to reinsurance, which may become a liability of the Company
in the unlikely event that the reinsurers should be unable to meet obligations
assumed under existing reinsurance contracts. Reinsurers solvency is
reviewed periodically.

In recent years, the life
insurance industry, including the Company and its subsidiaries, has been subject
to an increase in litigation pursued on behalf of purported classes of insurance
purchasers questioning the conduct of insurers in the marketing of their
products. In addition, the Company and its subsidiaries are defendants in, or
subject to other claims or legal actions. Some of these claims and legal actions
are in jurisdictions where juries are given substantial latitude in assessing
damages, including punitive damages. Although no assurances can be given and no
determinations can be made at this time, management believes that the ultimate
liability, if any, with respect to these other claims and legal actions, would
have no material effect on the Companys business, results of operations
and financial position.

The Company had open
purchase commitments for the funding of $21.2 million in mortgage loans, $0.6
million in joint ventures and $4.6 million in affordable housing as of March 31,
2003.

## Note 5 -
Subsequent Event

On March 31, 2003, the
Company filed an 8-K announcing that it had signed a definitive Stock Purchase
Agreement under which the Company would buy all of the issued and outstanding
shares of common stock of GuideOne Life Insurance Company for approximately $78
million. Funds will be derived from cash that has been accumulated for
acquisition purposes. The sale is subject to, among other things, the approval
of the Iowa and Missouri Insurance Departments. Closing is expected in the
second quarter of 2003.

GuideOne Life is an Iowa
corporation directly owned by The GuideOne Financial Group, Inc., a holding
company owned by GuideOne Mutual Insurance Co. and GuideOne Specialty Mutual
Insurance Co. GuideOne is licensed in 40 states selling life insurance and
annuities through captive and independent multiple-line agents associated with
the parent Company in West Des Moines, Iowa.

## Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

## Cautionary
Forward-Looking Statements

This filing contains
forward-looking statements and information that are based on managements
current expectations as of the date of this document within the meaning of the
Securities Litigation Reform Act of 1995. The words anticipate,
believe, estimate and expect, and similar
expressions, are intended to identify forward-looking statements which are
subject to risks, uncertainties, assumptions and other factors that may cause
the actual results of the Company to be materially different from those
reflected in such forward-looking statements. Factors that could cause the
Companys future results to differ materially from expectations include:

| | (1) | General economic and business conditions;                                                                                                      
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Changes in interest rates;                                                                                                                     
| | (3) | The performance of the stock market;                                                                                                           
| | (4) | Increased competition in the sale of insurance and annuities;                                                                                  
| | (5) | Customer response to new products, distribution channels and marketing initiatives;                                                            
| | (6) | Changes in the Federal income tax laws and regulations which may affect the relative tax advantages of some of the Company's
         products;
| | (7) | Insurance regulatory changes or actions; and                                                                                                   
| | (8) | Ratings assigned to the Company and its subsidiaries by independent rating organizations.                                                      

There can be no assurance
that other factors not currently anticipated by management will not also
materially and adversely affect the Company. The Company does not intend to
update these forward-looking statements prior to its next required filing with
the Securities and Exchange Commission.

## Results of
Operations

Kansas City Lifes
basic and diluted net loss per share in the first quarter equaled $0.62. This is
a decline from last years net income per share of $0.54. The decline in
earnings can primarily be attributed to a substantial increase in realized
investment losses, which rose $12.2 million, net of applicable taxes, versus
last year. The Company had sizeable investments in the highly distressed airline
industry, primarily including airline equipment trust securities with aircraft
leased or owned by various airline carriers and manufacturers. United Airlines,
American Airlines and Delta Airlines were among the airlines whose leased or
owned aircraft provide the collateral for the debt securities that primarily
made up the Companys realized losses during the first quarter of 2003.
Approximately 94 percent of the first quarters investment losses resulted
from the sale or write down of securities in this sector. Additionally, the weak
economy continued to contribute to depressed market yields, making it difficult
for already troubled companies and sectors to recover as well as difficult for
new favorable yields to be achieved.

Total insurance revenues
rose 4 percent in the first quarter. Gross life premiums increased 17 percent,
largely due to strong immediate annuity sales as consumers continue to seek the
safety of fixed return products. Conversely, accident and health premiums
declined 17 percent, primarily attributable to a decline in group dental
premiums.

Net investment income
declined 3 percent versus a year ago. Factors contributing to this decline were
the historically low market yields, the volatile financial markets and an
increase in the Companys short-term position.

Following is a table that
details, in thousands, gross realized investment gains and losses for the first
quarter of 2003 and 2002.

`Quarter ended
                                                                  March 31
                                                            2003           2002

     Gross gains resulting from:
        Sales of securities                             $    1,606        2,904
        Securities called or matured                           371          238
        Sales of real estate and joint ventures                166            -
           Total gross gains                                 2,143        3,142


     Gross losses resulting from:
        Sales of securities                                (4,880)      (1,095)
        Adjustment in book value of securities            (18,859)      (4,721)
        Securities called or matured                         (174)        (438)
           Total gross losses                             (23,913)      (6,254)

     Related deferred policy acquisition costs                 (4)          33
     Net realized losses                                $ (21,774)      (3,079)`

The Company regularly
evaluates the quality of its investment portfolio. From time-to-time, in a
diversified portfolio, certain investments suffer market price deterioration due
to a wide variety of factors. The Company performs an extensive evaluation
process no less often than quarterly. Distressed securities are placed onto
watch lists that are then further analyzed to identify any specific securities
that the Company believes have experienced other than temporary declines in
market value. To the extent that the Company believes that these fluctuations
represent an other than temporary decline in value or when the Company believes
that it is more likely than not that it will not receive all of its contractual
cash flows from an investment made by the Company, the investments value
is adjusted by charging off the loss against income. The Companys first
quarter analysis identified $18.9 million in other than temporary declines in
value in the first quarter, all resulting from investments in the airline
industry.

Policyholder benefits rose
4 percent versus last year. This increase is primarily the result of increased
sales of immediate annuities with life contengencies, which
by their nature, rise nearly as much as the premiums received.

## Segment Results

The following section
addresses the financial performance of each of the Companys four
reportable operating segments.

The following schedule
addresses, in thousands, key supplemental financial information for each of the
Companys four reportable operating segments for the first quarter of 2003
and 2002 and is reconciled to the financial statements contained herein:

`Kansas City Life      Sunset       Old
                                             Individual      Group      Life      American      Total

2003:
Premiums:
  Life                                        $12,189         3,737     1,671       18,124       35,721
  Accident and Health                           1,423         8,968         5          944       11,340
Contract Charges                               20,355             -     5,760            -       26,115
Reinsurance Ceded                              (4,199)       (1,282)   (3,137)      (1,649)     (10,267)
     Net Insurance Revenues                    29,768        11,423     4,299       17,419       62,909

Policy Benefits:
  Death Benefits                               12,416         1,661       649       11,402       26,128
  Surrenders of Life Insurance                  1,917             -       239        1,037        3,194
  Other Benefits                                7,746         6,613       741          211       15,311
  Benefit and Contract Reserve Increase        20,021            92     4,684          913       25,710
     Net Policyholder Benefits                $42,100         8,366     6,313       13,563       70,342


2002:
Premiums:
  Life                                        $ 6,502         3,876     1,561       18,561       30,500
  Accident and Health                           1,414        11,206         5        1,071       13,696
Contract Charges                               20,185             -     6,332            -       26,517
Reinsurance Ceded                              (4,225)       (1,225)   (3,171)      (1,867)     (10,488)
     Net Insurance Revenues                    23,876        13,857     4,727       17,765       60,225

Policy Benefits:
  Death Benefits                               14,425         1,354       796       11,523       28,098
  Surrenders of Life Insurance                  2,207             -       240          905        3,352
  Other Benefits                                7,754         8,220       742          256       16,972
  Benefit and Contract Reserve Increase        13,344            (7)    4,910        1,267       19,514
     Net Policyholder Benefits                $37,730         9,567     6,688       13,951       67,936`

Kansas
   City Life - Individual

Total insurance revenues
for this segment rose 25 percent in the first quarter. Life premiums rose 87 percent,
largely due to increased immediate annuity sales as discussed earlier. Also
contributing to the increase in insurance revenues, contract charges rose 1
percent and reinsurance ceded premiums declined slightly. This segment provided
47 percent of consolidated insurance revenues, up from 40 percent last year,
reflecting the immediate annuity sales growth.

Policyholder benefits rose
12 percent year-to-year. The largest factor in this increase was a 50 percent
increase in benefit and contract reserve increase. This can largely be
attributed to the increase in immediate annuity sales. Partially offsetting
this, surrenders of life insurance declined 13 percent and other policyholder
benefits remained flat.

This segment incurred a net
loss of $5.4 million in the first quarter versus $3.9 million in net income a
year ago. As previously mentioned, the major factor in this decline was the
increase in net realized investment losses, which rose from $2.1 million last
year to $16.3 million this year.

## Kansas City Life - Group

Total insurance revenues
for the Group segment declined 18 percent in the first quarter, primarily in the
dental line. A major factor in the decline in dental revenues was the loss of a
block of dental business in late 2002. This segment provided 18 percent of
consolidated insurance revenues, down from 23 percent a year ago.

Policyholder benefits
declined 13 percent versus last year. This decline is primarily attributable to
the dental line whose benefit payments significantly declined. This decline is
also attributable to the loss of the group mentioned above. However, the claims
ratio for this segment deteriorated, resulting in poorer benefit performance.

This segment incurred a
$1.0 million net loss in the first quarter compared to $0.1 million in net
income last year.

## Sunset Life

Life insurance premiums
rose 7 percent, reflecting improved immediate annuity sales in this segment.
However, total insurance revenues declined 9 percent as contract charges on
interest sensitive products declined 9 percent. Reduced contract charges
primarily resulted from a decline in surrender charges. This segment contributed
7 percent of consolidated insurance revenues versus 8 percent last year.

Total policyholder benefits
declined 6 percent, in part reflecting favorable mortality in the first quarter.

Sunset Life incurred a net
loss of $0.1 million in the first quarter compared to $1.2 million in net income last
year. Net realized investment losses totaled $3.5 million in the first quarter
versus $0.4 million a year ago. Investment income declined 8 percent, reflecting
lower interest rates and the difficult market environment. Insurance operating
expenses declined $1.3 million, partially offsetting these items.

## Old American

Total insurance revenues
declined 2 percent in the first quarter as accident and health premiums
decreased 12 percent. This was partially offset by a 12 percent decrease in
reinsurance ceded. Policyholder benefits decreased 3 percent versus the prior
year, partially reflecting favorable mortality in the first quarter.

This segment incurred a net
loss of $1.0 million compared to $1.3 million in net income last year. The
primary factor in this decline was an increase in net realized investment losses
of $1.4 million versus last year. This segment provided 28 percent of
consolidated insurance revenues versus 29 percent last year.

## Liquidity and
Capital Resources

Statements made in the
Companys 2002 Annual Report to Stockholders remain pertinent, as the
Companys liquidity position is materially unchanged from year-end.

Funds provided from
operations rose $33.6 million from last year due in part to the increase in the
sales of immediate annuities this year, the payment in 2002 of a legal
settlement and an increase in 2002 in ceded reinsurance premiums. Funds received
from the sales, maturities and principal pay downs of investments totaled $246.0
million, an 11 percent increase from last year. Funds received from financing
activities increased $22.4 million primarily reflecting a net increase in
policyholder contract deposits and other deposits.

The Company invests in a
variety of assets including bonds, preferred stocks, mortgage-backed securities,
commercial mortgage loans and real estate. Additionally, the Company borrows
short-term funds as a spread and liquidity strategy through its membership with
the FHLB. The Company borrows from the FHLB and reinvests those funds at higher
rates, thereby earning an interest spread on those funds. These activities also
contribute significantly to the Companys liquidity position by providing
established lines of credit for borrowing and by adding high quality liquid
securities that could be sold if liquidity is needed. At March 31, 2003, the
Company had short-term borrowings with the FHLB totaling $95.0 million and total
borrowings from all sources of $96.2 million. The Company believes that the
current level of cash, securities available for sale, and short-term investments
in combination with net cash from operations will be adequate to cover its
near-term cash obligations. Asset and liability maturities and yields are
monitored as an important consideration for each type of insurance product. The
Company, as an ongoing matter, monitors benefit and expense projections of
future cash requirements. As part of this process, the Company performs cash
flow testing under a variety of scenarios to ensure funds will be available as
needed to meet current and future policyholder obligations. The Companys
investment strategy is developed with these needs and requirements in mind.
Additionally, the Company takes these matters into account as it develops and
designs new products and as it enhances its existing product portfolio. There
can be no assurances, however, that future experiences will be similar to
historical experience due to factors such as the interest rate environment.

Funds available for
investment generated from variable products are segregated into separate
accounts and do not generate investment income for the Company. At March 31,
2003, separate account assets totaled $238.2 million, a 3 percent decline from
year-end 2002.

Stockholders equity
increased $11.5 million from year-end. Accumulated other comprehensive income
rose $23.6 million from year-end, due to an increase in net unrealized gains
associated with securities. The Companys securities are largely fixed
income securities whose values generally benefit from lower interest rates. Book
value per share equaled $50.92, a 2 percent increase from year-end.

As previously mentioned,
the Company has signed a definitive agreement to purchase GuideOne Life
Insurance Company for $78 million and the transaction is expected to be
completed in the second quarter of 2003. Cash and short-term investments are
adequate to fund this acquisition.

Consolidated insurance in
force totaled $26.3 billion, a 4 percent decrease on an annualized basis.

During the first quarter, the
Company did not purchase any of its shares under the stock repurchase program.
Under this program, the Company may purchase up to one million shares on the
open market during 2003.

The Board of Directors
declared a quarterly dividend of $0.27 per share, unchanged from last year, will
be paid May 27, 2003 to stockholders of record as of May 12, 2003.

Current legislative
activities are not expected to have a significant impact on the ongoing
operations of the Company.

## Item 3.
Quantitative and Qualitative Disclosures About Market Risk

Statements made in the 2002
Annual Report to Stockholders regarding the market and interest rate risk
analysis remain pertinent.

Kansas City Life holds a
diversified portfolio of investments that includes cash, bonds, preferred
stocks, mortgage-backed securities, commercial mortgages and real estate. Each
of these investments is subject, in varying degree, to market risks that can
affect their ability to earn a competitive return and the return affects their
fair value. Thus, the primary market risks affecting the Company are interest
rate and credit risks.

Interest rate risk arises
from the price sensitivity of fixed income securities to changes in interest
rates. Coupon and dividend income represents the greatest portion of an
investments total return for most fixed income instruments. As interest
rates fall, the coupon and dividend streams of older, higher-paying investments
become relatively more valuable than newer, lower-yielding opportunities.
Therefore the market value of the older, high-paying investments increases. The
opposite effect occurs when interest rates rise. The changes in fair market
price of such investments are inversely related to changes in market interest
rates.

The majority of the
Companys investments are exposed to varying degrees of credit risk, which
is the risk that the value of the investment may decline due to deterioration in
the financial strength of the issuer such that the timely payment of principal
or interest might not occur.

In recent years, credit
defaults in the marketplace have increased significantly. The increase in the
default rate may be attributed to several factors, including the economic
slowdown experienced by the U.S. economy, the increased use of leverage by
corporate issuers, fraud, and adverse legal judgments against corporations,
among others. A default by a rated issuer usually involves some loss of
principal to the investor. Such loss can be mitigated by timely sales of
affected securities or by active involvement in a restructuring process, which
preserves the value of the underlying entity. However, there can be no assurance
that the efforts of an investor will lead to favorable outcomes in a bankruptcy
or restructuring. The Company mitigates this risk by diversifying the investment
portfolio across a broad range of issuers, investment sectors and security types
and by investing substantial amounts of the portfolio in instruments carrying a
security lien against tangible asset collateral. Pledged collateral that retains
its value increases bondholder recovery amounts in the case of bankruptcy or
restructuring.

As market interest rates
fluctuate, so will the Companys investment portfolio and its
stockholders equity. At March 31, 2003, the Company had a net unrealized
investment gain of $25.0 million, net of related taxes and deferred policy
acquisition costs, compared to a $1.4 million at year-end 2002. This increase is
primarily the result of changes in the term structure of interest rates,
volatility in credit spreads within the corporate bond market, and the
realization of losses on certain securities. The Company continues its practice
of the limited use of derivatives as a form of risk mitigation.

The Company markets certain
variable products. The policyholder assumes essentially all the investment
earnings risk for the portion of the account balance invested in the separate
accounts. However, the Company assesses certain charges based on the policy
account values and changes to the account values can affect the Companys
earnings. The portion of the policyholders account balance invested in the
fixed general account, if any, is affected by the spreads between interest
yields on investments and rates credited to the policyholders accounts.

## Item 4.
Controls and Procedures

Based on their evaluation,
as of a date within 90 days of the filing of this Form 10-Q, the Companys
Chief Executive Officer and Chief Financial Officer have concluded the
Companys disclosure controls and procedures (as defined in Rules 13a-14
and 15d-14 under the Securities Exchange Act of 1934) are effective. There have
been no significant changes in internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

## Part II: Other
InformationItem 1: Legal Proceedings

In recent years, the life
insurance industry, including the Company and its subsidiaries, has been subject
to an increase in litigation pursued on behalf of purported classes of insurance
purchasers, questioning the conduct of insurers in the marketing of their
products. The Company believes that the action described below is part of this
trend.

In the case of Charles
R. Sullivan, etc., previously reported in the Companys Form 10-K
Report for the Year Ended December 31, 2002, a Motion for Certification of the
Class has been filed by the Plaintiff. Management believes that it is
administering and has responsibility for 326 of the policies involved in the
dispute.

There has been no material
change in the posture or status of any other litigation previously reported by
the Company as an ongoing or active case.

In addition to the above,
the Company and its subsidiaries are defendants in, or subject to other claims
or legal actions. Some of these claims and legal actions are in jurisdictions
where juries are given substantial latitude in assessing damages, including
punitive damages. Although no assurances can be given and no determinations can
be made at this time, management believes that the ultimate liability, if any,
with respect to these other claims and legal actions, would have no material
effect on the Companys business, results of operations or financial
position.

## Item 4:
Results of Votes of Security Holders

On April 24, 2003, the
Annual Stockholders Meeting was held at 3520 Broadway, Kansas City, Missouri. At
this meeting, there were 11,961,270 shares outstanding and eligible to vote, and
11,311,316 shares were represented at the meeting either in person or by proxy.

The following Directors
received the number of votes indicated and were elected for a three year term:

`J. R. Bixby                        10,849,420
         R. Philip Bixby                    10,713,269
         Warren J. Hunzicker                12,073,782
         Tracy W. Knapp                     10,822,552
         E. Larry Winn, Jr.                 11,947,797`

The following Directors continued
their term of office after this meeting:

`Walter E. Bixby                             Nancy Bixby Hudson
         Cecil R. Miller                             William R. Blessing
         Michael J. Ross                             Bruce W. Gordon
         Elizabeth T. Solberg                        William A. Schalekamp
         Daryl D. Jensen                             Webb R. Gilmore`

## Item 6:
Reports on 8-K

There was one report on
Form 8-K filed for the three months ended March 31, 2003. It announced the
signing of a definitive Stock Purchase Agreement for the acquisition of GuideOne
Life Insurance Company and was filed on March 31, 2003.

# Exhibit List

|(31)a | Rule 13a-14(a)/15d-14(a) Certifications.
|----- | ----------------------------------------
|(31)b | Rule 13a-14(a)/15d-14(a) Certifications.
|(99)  | Item 99 - Section 906 Certification.    

# 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.

# KANSAS CITY
LIFE INSURANCE COMPANY

`/s/R. Philip Bixby           
R. Philip Bixby
President, Chief Executive Officer,
and Vice Chairman of the Board




/s/Tracy W. Knapp            
Tracy W. Knapp
Senior Vice President, Finance`

Date:  May 9, 2003

Exhibit (31)a  Rule 13a-14(a)/15d-14(a) Certifications.

KANSAS CITY LIFE
INSURANCE COMPANY

SECTION 302
CERTIFICATION

                                                          First Quarter 2003

I, R. Philip Bixby, President, Chief Executive Officer, and Vice Chairman of the Board of Kansas City Life Insurance Company, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Kansas City Life Insurance Company;                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based on my  knowledge,  this quarterly  report does not contain any untrue  statement  of a material  fact or omit to state a material
    fact necessary to make the statements  made, in light of the  circumstances  under which such  statements were made, not misleading
    with respect to the period covered by this quarterly report;
|3. | Based on my knowledge,  the financial  statements,  and other financial  information included in this quarterly report,  fairly present
    in all material  respects the  financial  condition,  results of  operations  and cash flows of the  registrant as of, and for, the
    periods presented in this quarterly report;                 
|4. | The  registrant's  other  certifying  officer and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                         

| | a) | designed such disclosure controls and procedures to ensure that material information  relating to the registrant,  including its
        consolidated  subsidiaries,  is made known to us by others within those entities,  particularly during the period in which this
        quarterly report is being prepared;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the  effectiveness  of the  registrant's  disclosure  controls and procedures as of a date within 90 days prior to the
        filing date of this quarterly report (the "Evaluation Date"); and                                                                                                          
| | c) | presented in this quarterly report our conclusions about the  effectiveness of the disclosure  controls and procedures based on our
        evaluation as of the Evaluation Date;                                                                                                                                   

|5. | The  registrant's  other  certifying  officer  and I have  disclosed,  based on our most  recent  evaluation,  to the  registrant's
    auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant  deficiencies  in the design or operation of internal  controls which could  adversely  affect the  registrant's
        ability to record, process,  summarize and report financial data and have identified for the registrant's auditors any material
        weaknesses in internal controls; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | any fraud, whether or not material,  that involves management or other employees who have a significant role in the registrant's
        internal controls; and                                                                                                                                                      

|6. | The  registrant's  other  certifying  officer and I have  indicated  in this quarterly  report  whether or not there were  significant
    changes in internal controls or in other factors that could  significantly  affect internal controls  subsequent to the date of our
    most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:  May 9, 2003

`/s/R. Philip Bixby           
R. Philip Bixby
President, Chief Executive Officer,
and Vice Chairman of the Board`

Exhibit (31)b Rule 13a-14(a)/15d-14(a) Certifications.

KANSAS CITY LIFE
INSURANCE COMPANY

SECTION 302
CERTIFICATION

                                                          First Quarter 2003

I, Tracy W. Knapp, Senior Vice President, Finance of Kansas City Life Insurance Company, certify that:

|1. | I have reviewed this quarterly report on Form 10-Q of Kansas City Life Insurance Company;                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Based on my  knowledge,  this quarterly  report does not contain any untrue  statement  of a material  fact or omit to state a material
    fact necessary to make the statements  made, in light of the  circumstances  under which such  statements were made, not misleading
    with respect to the period covered by this quarterly report;
|3. | Based on my knowledge,  the financial  statements,  and other financial  information included in this quarterly report,  fairly present
    in all material  respects the  financial  condition,  results of  operations  and cash flows of the  registrant as of, and for, the
    periods presented in this quarterly report;                 
|4. | The  registrant's  other  certifying  officer and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                         

| | a) | designed such disclosure controls and procedures to ensure that material information  relating to the registrant,  including its
        consolidated  subsidiaries,  is made known to us by others within those entities,  particularly during the period in which this
        quarterly report is being prepared;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the  effectiveness  of the  registrant's  disclosure  controls and procedures as of a date within 90 days prior to the
        filing date of this quarterly report (the "Evaluation Date"); and                                                                                                          
| | c) | presented in this quarterly report our conclusions about the  effectiveness of the disclosure  controls and procedures based on our
        evaluation as of the Evaluation Date;                                                                                                                                   

|5. | The  registrant's  other  certifying  officer  and I have  disclosed,  based on our most  recent  evaluation,  to the  registrant's
    auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | a) | all significant  deficiencies  in the design or operation of internal  controls which could  adversely  affect the  registrant's
        ability to record, process,  summarize and report financial data and have identified for the registrant's auditors any material
        weaknesses in internal controls; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | any fraud, whether or not material,  that involves management or other employees who have a significant role in the registrant's
        internal controls; and                                                                                                                                                      

|6. | The  registrant's  other  certifying  officer and I have  indicated  in this quarterly  report  whether or not there were  significant
    changes in internal controls or in other factors that could  significantly  affect internal controls  subsequent to the date of our
    most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:  May 9, 2003

`/s/Tracy W. Knapp            
Tracy W. Knapp
Senior Vice President, Finance`