# 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 June 30, 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 July 31, 2003
Common Stock, $1.25 par value                       11,925,646 shares`

## Part I
Financial InformationItem 1. Financial Statements

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

Consolidated
Income Statement (Unaudited)

---

`Quarter ended                  Six Months ended
                                                                           June 30                          June 30
                                                                     2003            2002             2003            2002
Revenues
Insurance revenues:
     Premiums and contract charges                          $       79,406          71,584          152,573         142,297
     Reinsurance ceded                                             (11,144)        (11,505)         (21,410)        (21,993)
         Net insurance revenues                                     68,262          60,079          131,163         120,304
Investment revenues:
     Investment income, net                                         45,823          49,356           93,359          98,536
     Realized losses, net                                           (9,229)         (7,184)         (31,003)        (10,263)
Other                                                                2,154           3,357            4,546           8,357 
         Total revenues                                            107,010         105,608          198,065         216,934 

Benefits and expenses
Policyholder benefits (net of reinsurance ceded:
     quarter: $10,351 - 2003, $6,165 - 2002;
     six months: $23,495 - 2003, $17,421 - 2002)                    73,799          64,946          143,893         132,882
Amortization of deferred acquisition costs                           6,237           3,808           15,246          11,722
Insurance operating expenses (net of commissions ceded:
     quarter: $1,159 - 2003, $1,314 - 2002;
     six months: $2,108 - 2003, $2,440 - 2002)                      25,749          23,704           51,957          50,478 
         Total benefits and expenses                               105,785          92,458          211,096         195,082 

Pretax income (loss)                                                 1,225          13,150          (13,031)         21,852 

Federal income taxes:
     Current                                                         2,663            (352)           3,952          (1,561)
     Deferred                                                       (2,973)          3,765          (11,060)          7,159 

                                                                      (310)          3,413           (7,108)          5,598 

Net income (loss)                                           $        1,535           9,737           (5,923)         16,254 

Per common share:
     Net income (loss), basic and diluted                   $         0.13            0.81            (0.50)           1.35

     Cash dividends                                         $         0.27            0.27             0.54            0.54`

See accompanying Notes to Consolidated Financial Statements.

Consolidated
Balance Sheet

---

`June 30       December 31
                                                              2003            2002
                                                          (Unaudited)
Assets
Investments:
     Fixed maturity securities
         available for sale, at fair value            $      2,256,669       2,141,439
     Equity securities available
         for sale, at fair value                                49,518          57,587
     Mortgage loans, net                                       458,149         463,150
     Short-term investments                                    204,487         186,770
     Other investments                                         206,677         206,043 

         Total investments                                   3,175,500       3,054,989

Cash                                                            18,682           2,532
Deferred acquisition costs                                     240,396         246,286
Other assets                                                   361,130         306,578
Separate account assets                                        265,404         244,862 
                                                      $      4,061,112       3,855,247 

Liabilities and equity
Future policy benefits                                $        825,675         811,634
Accumulated contract values                                  1,860,600       1,784,635
Notes payable                                                   99,845          97,241
Current income taxes payable                                         -           1,902
Other liabilities                                              360,436         317,476
Separate account liabilities                                   265,404         244,862 

         Total liabilities                                   3,411,960       3,257,750 

Stockholders' equity:
     Common stock                                               23,121          23,121
     Paid in capital                                            22,907          22,605
     Retained earnings                                         674,462         686,847
     Accumulated other
         comprehensive income (loss), net of tax                42,130         (24,437)
     Less treasury stock                                      (113,468)       (110,639)

         Total stockholders' equity                            649,152         597,497 

                                                      $      4,061,112       3,855,247`

See accompanying Notes to Consolidated Financial Statements.

Consolidated
Statement of Cash Flows (Unaudited)

---

`Six Months ended
                                                                      June 30
                                                                2003           2002

Operating activities
Net cash provided                                        $       61,554         15,198 

Investing activities
Purchases of security investments available for sale:
     Fixed maturities                                          (497,408)      (395,990)
     Equity securities                                           (1,447)        (5,397)
Sales of security investments available for sale                118,193        213,212
Maturities and principal paydowns
     of security investments available for sale:
     Fixed maturities                                           345,309        163,599
     Equity securities                                            3,289         11,331
Purchases of other investments                                  (52,022)       (39,351)
Sales, maturities and principal
     paydowns of other investments                               56,085         41,219
Net purchase of short-term investments                          (17,958)       (22,435)
Acquisition of GuideOne Life Insurance Company                  (61,150)             - 
Net cash used                                                  (107,109)       (33,812)

Financing activities
Policyholder contract deposits                                  119,116         88,382
Withdrawals of policyholder
     contract deposits                                          (54,946)       (56,077)
Change in other deposits                                          3,920          2,912
Dividends paid to stockholders                                   (6,462)        (6,484)
Proceeds from borrowings                                          3,118            952
Repayment of borrowings                                            (514)             -
Other, net                                                       (2,527)        (1,345)
Net cash provided                                                61,705         28,340 

Increase in cash                                                 16,150          9,726
Cash at beginning of year                                         2,532          4,365 

Cash at end of period                                    $       18,682         14,091`

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), Old American Insurance Company (Old American) and GuideOne Life Insurance
Company. 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 June 30, 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 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.

## Accounting Developments

The Financial Accounting Standards Board (FASB) issued Financial Accounting Standard (FAS) No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," in December, 2002.  This Standard amends FAS No. 123 "Accounting for Stock-Based
Compensation," related to methods of accounting for stock-based employee compensation.  This Standard was adopted on January 1, 2003
with no material impact.

FAS No. 149,
Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, was issued in April 2003. This Standard amends and clarifies
financial accounting and reporting for derivative instruments and for hedging
activities under FAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. This FAS was adopted on July 1, 2003 with no material
impact.

FAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity, was issued in May 2003. This Statement establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. This FAS was
adopted on July 1, 2003 with no material impact.

Statement of Position (SOP)
03-01, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts, was
issued in July 2003. This Statement affects the treatment of variable annuity
contracts. This SOP will be adopted January 1, 2004, and it is anticipated that
there will be no material impact.

FIN 45,
Guarantors Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others, was issued
November 2002. This is an interpretation of FASB Statements No. 5, 57, and 107
and is a rescission of FASB interpretation No. 34. It requires certain guarantees
to be recorded at fair value instead of when a loss is probably and reasonably estimated.
  FASB 45 also requires disclosures even when the likelihood of making any payments
under the guarantee is remote.  Although liability recognition only applies to guarantees
issued or amended after January 1, 2003, disclosure requirements are presently effective.
 This interpretation was adopted January 1, 2003 and the Company is not aware of
any guarantees that would have a material effect on its financial statements.

FIN 46, Consolidation
of Variable Interest Entities, was issued January 2003. This is an
interpretation of ARB No. 51, Consolidated Financial Statements. It
concerns consolidating the assets, liabilities, and results of the activities of
variable interest entities if a controlling financial interest exists. This
interpretation will be adopted July 1, 2003 and the Company does not expect FIN46
 to have a material impact
to its financial statements.

## 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 $60.6 million and $33.6 million for
the first half 2003 and 2002. For the second quarter, comprehensive income was
$44.5 million and $36.5 million for 2003 and 2002, respectively. For the periods
presented, comprehensive income varied 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
11,959,345 and 12,003,889 for the six months ended June 30, 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 54.5 percent for this years
first half versus an expense of 25.6 percent last year. For the second quarter,
the effective tax rates were a benefit of 25.3 percent and an expense of 26.0
percent for 2003 and 2002, respectively. 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 June 30,
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 $108.8
million. The Company had a $0.7 million real estate loan due December 2010, with
an interest rate of 7.50 percent, secured by the property. The Company had a
$1.0 million real estate loan due March 2008, with an interest rate of 7.75
percent, secured by the property. The Company had overnight Federal fund
borrowings totaling $0.6 million with a daily maturity, an interest rate of 1.54
percent and secured by specific securities. The Company had a $2.0 million note
payable to GuideOne Financial Group, Inc. related to the purchase of GuideOne
Life Insurance Company. This note had a 4 percent interest rate at June 30, 2003
and is due on June 30, 2005. Finally, the Company had a $0.5 million
construction loan related to an investment property with an interest rate of
8.00 percent. The full amount of the note will be forgiven when the construction
is complete and a certificate of occupancy is issued. Total borrowings equaled
$99.8 million at June 30, 2003.

## 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 allocated to the group business segment based upon their contribution to cash
flow. 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.

`Kansas City Life          Sunset       Old
                                                 Individual       Group         Life      American      Total

Net insurance revenues:
           Six months:            2003             $65,667        23,087        7,708       34,701      131,163
                                  2002              48,323        27,910        8,656       35,415      120,304
           Second quarter:        2003              35,900        11,663        3,417       17,282       68,262
                                  2002              24,448        14,053        3,928       17,650       60,079

Investment income, net:
           Six months:            2003             $70,951           154       15,093        7,161       93,359
                                  2002              73,585           217       16,455        8,279       98,536
           Second quarter:        2003              34,853            74        7,491        3,405       45,823
                                  2002              36,899           104        8,158        4,195       49,356

Net income (loss):
           Six months:            2003             $(5,092)       (1,651)       1,124         (304)      (5,923)
                                  2002               8,609          (814)       5,840        2,619       16,254
           Second quarter:        2003                 332          (666)       1,187          682        1,535
                                  2002               4,704          (922)       4,606        1,349        9,737`

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 $7.3 million in mortgage loans, $38.3
million in bonds and $4.2 million in affordable housing as of June 30, 2003.

## Note 5 -
Insurance Company Acquisition

On June 30, 2003, Kansas
City Life Insurance Company acquired all of the issued and outstanding stock of
GuideOne Life Insurance Company from GuideOne Financial Group, Inc. and GuideOne
Mutual Insurance Company. The purchase price, according to the terms of the
Stock Purchase Agreement, was $61.2 million. This acquisition was funded with
$59.2 million in cash and a $2.0 million note payable due June 30, 2005.

GuideOne Life Insurance
Company has previously reported its financial position on a statutory basis
using the accounting practices permitted or prescribed by the Iowa Insurance
Division; therefore, financial statements using Generally Accepted Accounting
Principles are not available. As such, the Company has recorded the estimated
net effect of $61.2 million for the GuideOne Life Insurance Company acquisition
in other assets. Once financial statements using Generally Accepted Accounting
Principles are available, the acquisition will be recorded at gross assets and
liabilities. The Company does not expect the purchase entry to materially impact
the Companys balance sheet.

## Note 6 - Guarantees and Indemnifications

The Company is subject to various indemnification obligations issued in conjunction with certain transactions, primarily assumption
reinsurance agreements, stock purchase agreements, mortgage servicing agreements and borrowing agreements whose terms range in
duration and often are not explicitly defined.  Generally, a maximum obligation is not explicitly stated; therefore, the overall
maximum amount of the obligation under the indemnifications cannot be reasonably estimated.  While we are unable to estimate with
certainty the ultimate legal and financial liability with respect to these indemnifications, we believe the likelihood is remote that
material payments would be required under such indemnifications and therefore such indemnifications would not result in a material
adverse effect on our business, financial position or results of operations.

## 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 income per share declined 84 percent in the second quarter
to equal $0.13. For the first half of the year 2003, the Company incurred a net
loss per share of $0.50 versus net income per share of $1.35 last year for the
same period. The decline in earnings can primarily be attributed to a
substantial increase in realized investment losses. These losses totaled $31.0
million for the six months, an increase of $20.7 million over last year.
Two-thirds of these losses occurred in the first quarter, primarily the result
of the highly distressed airline industry. Net realized losses in the second
quarter totaled $9.2 million, a $2.0 million increase over last year. Losses
continued in the airline industry, as well as certain companies in other
industries.

Net insurance revenues rose
14 percent in the second quarter and 9 percent in the first half. Gross life
premiums increased 33 percent in the second quarter and 25 percent in the six
months. These increases are largely attributable to strong immediate annuity
sales, reflecting a continuing consumer preference for fixed return products.
Immediate annuity premiums accounted for 26 percent of the total gross premiums
for the six months versus 5 percent last year and were six times larger than a
year ago. Of note, life premiums declined 2 percent in the first half versus the
same period last year. Conversely, accident and health premiums declined 16
percent in the second quarter and 17 percent versus a year ago, largely
resulting from a decline in group dental premiums.

Net investment income
declined 7 percent in the second quarter and 5 percent in the first half.
Factors contributing to this decline were the historically low market yields,
the volatile financial markets and an increase in the Companys short-term
investment position.

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

`Quarter ended            Six months ended
                                                                  June 30                     June 30
                                                             2003         2002           2003         2002

     Gross gains resulting from:
        Sales of securities                              $   3,104         3,039        4,710        5,943
        Securities called or matured                           572         1,486          943        1,724
        Sales of real estate and joint ventures                963             -        1,129            - 
           Total gross gains                                 4,639         4,525        6,782        7,667 


     Gross losses resulting from:
        Sales of securities                                 (5,607)       (2,492)     (10,487)      (3,587)
        Adjustment in book value of securities              (8,066)       (8,661)     (26,925)     (13,382)
        Securities called or matured                          (276)         (263)        (450)        (701)
        Sales of real estate and joint ventures                  -          (204)           -         (204)
           Total gross losses                              (13,949)      (11,620)     (37,862)     (17,874)
     Related deferred policy acquisition costs                  81           (89)          77          (56)
           Net realized losses                           $  (9,229)       (7,184)     (31,003)     (10,263)`

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 fair
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 second quarter
analysis identified $8.1 million in other than temporary declines in value.

Policyholder benefits
increased 14 percent in the second quarter and 8 percent in the first half. This
increase is largely attributable to the increased sales of immediate annuities
with life contingencies as benefits on these products can rise nearly as much as
the premiums.

Insurance operating
expenses rose 9 percent in the second quarter and 3 percent in the first half.
These increases can largely be attributed to an increase in pension expenses,
resulting from a combination of lower discount rate on plan liabilities and
reduced future earnings assumptions on plan assets.

## Segment Results

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

`Kansas City Life          Sunset        Old
                                                Individual       Group          Life       American      Total

2003:
Premiums:
  Life                                           $ 31,252         4,629         3,208       36,284       75,373
  Accident and Health                               2,929        20,999            10        1,896       25,834
Contract Charges                                   39,942             -        11,424            -       51,366
Reinsurance Ceded                                  (8,456)       (2,541)       (6,934)      (3,479)     (21,410)
     Net Insurance Revenues                      $ 65,667        23,087         7,708       34,701      131,163 

Policy Benefits:
  Death Benefits                                  $23,677         2,767         1,503       21,392       49,339
  Surrenders of Life Insurance                      4,328             -           410        2,133        6,871
  Other Benefits                                   17,145        13,610         1,027          339       32,121
  Benefit and Contract Reserve Increase            44,917           215         8,736        1,694       55,562 
     Net Policyholder Benefits                   $ 90,067        16,592        11,676       25,558      143,893 






                                                     Kansas City Life         Sunset         Old
                                                Individual       Group         Life        American      Total

2002:
Premiums:
  Life                                            $14,169         5,012         3,331       37,183       59,695
  Accident and Health                               2,841        25,330            10        2,151       30,332
Contract Charges                                   40,093             -        12,177            -       52,270
Reinsurance Ceded                                  (8,780)       (2,432)       (6,862)      (3,919)     (21,993)
     Net Insurance Revenues                      $ 48,323        27,910         8,656       35,415      120,304 

Policy Benefits:
  Death Benefits                                  $25,044         2,528         1,377       21,950       50,899
  Surrenders of Life Insurance                      4,167             -           434        1,961        6,562
  Other Benefits                                   15,382        17,744         1,098          521       34,745
  Benefit and Contract Reserve Increase            27,535            39        10,633        2,469       40,676 
     Net Policyholder Benefits                   $ 72,128        20,311        13,542       26,901      132,882`

Kansas
   City Life - Individual

Net insurance revenues for
this segment rose 47 percent in the second quarter and 36 percent in the first
half. Life premiums more than doubled in both the second quarter and six months,
largely due to increased immediate annuity sales. Immediate annuity premiums
accounted for 52 percent of total gross premiums for the first half versus 15
percent last year and were 6 times larger than a year ago. Of note, life
premiums for the six months remained level with last year. This segment provided
50 percent of consolidated net insurance revenues, up from 40 percent last year,
reflecting the growth in immediate annuity sales.

Policyholder benefits
increased 39 percent in the second quarter and 25 percent in the first half.
These increases can primarily be attributed to greater benefit and contract
reserves, which rose 75 percent and 63 percent in the second quarter and first
half, respectively. This is largely the result of the increase in immediate
annuity sales. Death benefits rose 6 percent in the second quarter but declined
5 percent for the six months.

Net income for this segment
declined from $4.7 million in second quarter 2002 to $0.3 million in second
quarter 2003. This segment incurred a net loss of $5.1 million in the first half
versus $8.6 million in net income last year, primarily the result of the greater
realized losses on investments.

## Kansas City Life - Group

Net insurance revenues for
the Group segment declined 17 percent in both the second quarter and first half.
These declines were largely in the dental line. The major factor contributing to
the decline in dental revenues was the loss of a block of dental business in
late 2002. This segment provided 18 percent of consolidated net insurance
revenues, down from 23 percent a year ago.

Policyholder benefits
declined 23 percent in the second quarter and 18 percent in the six months.
These declines are also primarily attributable to the dental line, resulting
from the loss of the dental block mentioned above. However, the claims ratio for
this segment improved slightly versus last year.

This segment incurred net
losses of $0.7 million in the second quarter and $1.7 million in the first half
compared to losses of $0.9 million and $0.8 million in last years second
quarter and first half, respectively.

## Sunset Life

Net insurance revenues for
this segment declined 13 percent in the second quarter and 11 percent in the
first half. Life insurance premiums declined 13 percent in the second quarter
and 4 percent in the six months. Contract charges on interest sensitive products
declined 3 percent in the second quarter and 6 percent versus last year. The
reduced contract charges primarily resulted from a decline in surrender charges.
This segment contributed 6 percent of consolidated net insurance revenues
compared to 7 percent last year.

Total policyholder benefits
declined 18 percent in both the second quarter and 14 percent in the first half.
The primary factor in these decreases was a decline in benefit and contract
reserves in the traditional products. This decline can largely be attributed to
increases in the prior years benefit reserves.

Net income for this segment
was $1.2 million in the second quarter and $1.1 million in the first half versus
$4.6 million and $5.8 million, respectively last year. Net realized investment
losses totaled $4.9 million versus $0.9 million a year ago. Additionally,
investment income declined 8 percent, primarily reflecting the lower interest
rate environment.

## Old American

Net insurance revenues and
life premiums declined 2 percent in both the second quarter and first half. This
was partially offset by a decline in reinsurance ceded of 11 percent in both the
second quarter and six months. Policyholder benefits decreased 7 percent in the
second quarter and 5 percent versus last year, reflecting favorable mortality.

Net income for this segment
declined from $1.3 million in last years second quarter to $0.7 million
this year. This segment incurred a net loss of $0.3 million in the first half
compared to net income of $2.6 million last year. The primary factor in this
decline was an increase in net realized investment losses of $2.1 million versus
last year. This segment provided 26 percent of net consolidated insurance
revenues versus 30 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.

Net cash provided from
operating activities rose $46.4 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. Net cash
used for investing activities increased $73.3 million, largely due to the
acquisition of GuideOne Life Insurance Company. Funds received from the sales,
maturities and principal pay downs of investments totaled $522.9 million, a 22
percent increase from last year. Net cash provided from financing activities
increased $33.4 million, primarily reflecting a net increase in policyholder
contract deposits.

The Companys
consolidated assets topped the four billion dollar mark for the first time, as
of June 30, 2003. Total assets grew more than $200 million or 5 percent since
December 31, 2002, equaling $4.1 billion. The growth in assets was primarily
driven by the increased value of fixed income investments due to lower interest
rates and the sales growth in annuities and universal life insurance.

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 can be sold if liquidity is needed. At June 30, 2003, the
Company had short-term borrowings with the FHLB totaling $95.0 million and total
borrowings from all sources of $99.8 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 June 30,
2003, separate account assets totaled $265.4 million, an 8 percent increase from
year-end 2002.

Extraordinary dividends
totaling $75.0 million were paid to Kansas City Life from two of its affiliates
in June 2003. Sunset Life paid $55.0 million of this amount and Old American
paid $20.0 million of this amount. The appropriate state insurance department
approvals were received prior to each of these transactions.

Stockholders equity
increased $51.7 million from year-end. Accumulated other comprehensive income
rose $66.6 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.
Consolidated book value per share equaled $54.40 at June 30, 2003, a 9 percent
increase from year-end.

As previously mentioned,
the Company purchased GuideOne Life Insurance Company for $61.2 million. This
acquisition was funded with $59.2 million in cash and a $2.0 million note
payable due June 30, 2005.

Consolidated insurance in
force totaled $26.0 billion, a 4 percent decline on an annualized basis.

During the second 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.

On July 28, 2003, the Board
of Directors declared a quarterly dividend of $0.27 per share, unchanged from
last year, that will be paid August 25, 2003 to stockholders of record as of
August 11, 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 June 30, 2003, the Company had a net unrealized
investment gain of $68.0 million, net of related taxes and deferred policy
acquisition costs, compared to $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 5: Other
Events

On June 30, 2003, Kansas
City Life Insurance Company announced that it had completed the purchase of all
of the issued and outstanding stock of GuideOne Life Insurance Company from
GuideOne Financial Group, Inc. and GuideOne Mutual Insurance Company. The
purchase price determined at closing, according to the terms of the Stock
Purchase Agreement, was $61.2 million. This acquisition was funded with $59.2
million in cash and a $2.0 million note payable due June 30, 2005.

Approval of the purchase
had been given by the Iowa Department of Insurance on June 24, 2003 and by the
Missouri Department of Insurance on June 26, 2003.

Kansas City Life Insurance Co., founded in 1895, is a Missouri corporation with its Home Office in Kansas
City, Mo. The Companys major sales emphasis is life insurance and
annuities. Total revenues in 2002 were $440.2 million. Life insurance in force,
at the end of the year 2002, totaled $26.6 billion, while assets totaled $3.9
billion. The Company operates in 48 states and the District of Columbia.

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

In 2002 GuideOne Life
Insurance Companys total direct premiums and annuity considerations
totaled $58.4 million. Net income was $7.5 million in 2002 and total net
admitted assets as of December 31, 2002 were $347.7 million, both numbers based
on Statutory Accounting Principles since Generally Accepted Accounting Principle
numbers are unavailable.

# 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:  August 8, 2003

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

KANSAS CITY LIFE
INSURANCE COMPANY
SECTION 302 CERTIFICATION
                                                          Second 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:  August 8, 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
                                                          Second 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:  August 8, 2003

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