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, 1998


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 at July 13, 1998
Common Stock, $2.50 par value           6,192,525 shares
                         Page 1
Kansas City Life Insurance Company
Quarter ended June 30, 1998


Part I

Item 1. Financial Statements 

Incorporated  by reference from the Quarterly  Report to  Stockholders  (pages 4
through 7). See the attached exhibit.  These interim financial statements should
be read in conjunction with the Company's 1997 Annual Report to Stockholders.


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

Results of Operations

Earnings were much improved in the second quarter.  Operating earnings per share
rose 33  percent  in the  quarter  to $1.85 and 4 percent  for the six months to
$3.16.  Including realized investment gains, which increased nearly $1.0 million
in the  second  quarter,  net  income per share rose 37 percent to $2.11 for the
quarter  and rose 5 percent  for the six months to total  $3.68 per share.  This
increase was the result of improved mortality at all three insurance  companies.
These results for 1998 include a block of business acquired in the third quarter
of 1997.  Therefore,  where appropriate,  the block's results have been excluded
from the following analysis in order to provide more valid comparisons.

Sales Performance

Marketing  momentum  remained  strong in the second  quarter.  Consolidated  new
annualized premiums rose 52 percent in the second quarter and 48 percent for the
six months. As in the first quarter, the variable products continued to lead the
sales growth  providing  $34.1  million in new  premiums for the six months,  an
increase of $24.3  million over 1997.  Non-variable  universal  life  annualized
premiums  grew 12  percent  in the second  quarter  and 19  percent  for the six
months.  Flexible  annuity  premiums  were  flat for the six  months  but grew 7
percent in the quarter.  Only traditional life and group product sales declined.
Variable  products  comprised  50  percent  of new sales in the  quarter  and 47
percent for the six months.  Life  insurance  in-force  totaled $26.4 billion at
June 30, 1998, a 2 percent annualized decline from last year end.





Insurance Revenues

Total  insurance  revenues grew 13 percent for the six months as reported on the
attached  earnings  statement.  However,  excluding the effects of the purchased
block, life insurance  premiums declined slightly in the second quarter although
they remained up 4 percent for the six months. Insurance revenues rose 4 percent
for the six months as did life  insurance  premiums.  Revenues  associated  with
contract  charges on interest  sensitive  products were up 6 percent for the six
months.  Accident and health premiums  declined 3 percent for the first half due
to decreases in group dental and stop/loss products premiums.

Investment Revenues

Net investment  income rose 11 percent for the quarter and 7 percent for the six
months.  However,  excluding the purchased block,  net investment  income fell 3
percent.  The net yield on the investment  portfolio declined 19 basis points as
yields  available in the  marketplace  were below the overall  portfolio  yield.
Realized  gains from the investment  portfolio were nearly $1.0 million  greater
than the prior year. These gains vary at management's discretion in managing the
portfolio's overall return.

Benefits

Excluding the purchased block, total benefits rose 3 percent for the first half,
the same as the first  quarter and equaled 61.9  percent of  operating  revenues
compared  with 60.9 percent last year.  Death  benefits  were flat compared with
last year and  improved at each of the  insurance  companies  compared  with the
first quarter.  Surrenders of traditional  life insurance rose 18 percent in the
first half, but were little changed as a percent of cash values  available to be
surrendered.  Group claims ratios deteriorated in the stop loss and dental lines
in the second quarter.  Claims in home health care deteriorated  somewhat in the
second quarter but are still in line with the first quarter.

Other Expenses

Home office  operating  expenses  increased 3 percent in the first half of 1998.
This expense  growth  results from  continued  emphasis on individual  and group
marketing  efforts.  This expense  increase  compares  favorably to a 23 percent
growth in direct statutory premiums for the six months.

Liquidity and Capital Resources

Statements  made in the  Company's  1997 Annual  Report to  Stockholders  remain
pertinent.

For the six months, cash provided from operating activities and net cash inflows
from contract  deposits  totaled $4.7 million.  However,  this is a decline from
prior periods due to two factors.  First,  an increasing  sizable portion of the
Company's  premiums are coming from  variable  products.  The variable  products
direct most of the investable  cash from these  products into separate  accounts
and thus are not available for general  investments.  Second,  flexible  annuity
outflows  have  increased  both in dollar  terms and as a  percentage  of values
available to be  surrendered.  Liquidity  needs are not a concern as the Company
made new  investments  totaling  $383.9  million  during the first half,  a $100
million increase versus last year.

Assets totaled $3.5 billion at June 30, 1998, a 4 percent  annualized  rate from
last year end. Book value per share improved 10 percent on an annualized  basis,
to $89.77 a share.  Excluding  the impact of changes  in  unrealized  investment
gains since the beginning of the year, book value grew at a 7 percent annualized
rate.

The Company remains on schedule to complete its year 2000 system  conversions in
a timely manner.  The Company has developed a  comprehensive  plan insuring that
all  systems  remain  viable.  The  schedule  is slated  to have all  conversion
completed  by the first  quarter of 1999,  at the latest.  Conversion  costs are
expensed as incurred and incremental costs in this regard are expected to remain
minor.

Changes in Reporting Regulations

Financial  Accounting  Standard  No.  131,  "Disclosures  About  Segments  of an
Enterprise and Related  Information,"  establishes  requirements  for annual and
interim  reporting  of segment  information  including  products  and  services,
geographic  areas and  major  customers.  Kansas  City  Life is  studying  these
requirements and will adopt this standard by year end 1998.

In June, 1998, the Financial Accounting Standards Board adopted Standard No. 133
"Accounting for Derivative  Instruments and Hedging  Activities,"  effective for
years beginning after June 15, 1999. This statement establishes the measurement,
recording and disclosure  requirements  for derivative  instruments  and hedging
activities.  At this time, the Company does not have any derivative  instruments
or hedging activities.



Part II:  Other Information
Item 6.

(a)  Exhibits:  None

(b) Reports on 8-K: There were no reports on Form 8-K filed for the three months
ended June 30, 1998.




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/ Richard L. Finn
Richard L. Finn
Senior Vice President, Finance


/s/ John K. Koetting
John K. Koetting
Vice President and Controller


/s/ C. John Malacarne
C. John Malacarne
Vice President, General Counsel and Secretary



Date:  August 12, 1998



KANSAS CITY LIFE INSURANCE COMPANY
Quarter ended June 30, 1998
EXHIBIT

Quarterly Report to Stockholders


Consolidated
Balance Sheet
(in thousands)

                                      June 30     December 31
                                        1998           1997
                                   -------------  -------------
Assets
Investments:
  Fixed maturities:
    Securities available for sale,
      at market                      $ 2,062,158      2,004,516
    Securities held to maturity,
      at amortized cost                  125,485        145,661
  Equity securities available
    for sale, at market                  114,616        114,986
  Mortgage loans                         296,198        270,054
  Real estate, net                        42,927         36,764
  Real estate joint ventures              42,755         43,347
  Policy loans                           121,774        123,186
  Short-term                              64,787         74,341
  Other                                    7,500          7,500
                                   -------------  -------------
                                       2,878,200      2,820,355

Deferred acquisition costs               217,232        209,826
Other assets                             299,612        351,291
Separate account assets                  106,146         57,980
                                   -------------  -------------

                                     $ 3,501,190      3,439,452
                                   =============  =============

Liabilities and equity
Future policy benefits               $   811,172        803,738
Accumulated contract values            1,732,994      1,755,133
Other liabilities                        295,000        292,007
Separate account liabilities             106,146         57,980
                                   -------------  -------------
  Total liabilities                    2,945,312      2,908,858

Stockholders' equity:
  Capital stock                           23,121         23,121
  Paid in capital                         16,804         16,256
  Accumulated other
    comprehensive income                  44,542         36,448
  Retained earnings                      560,953        543,715
  Less treasury stock                    (89,542)       (88,946)
                                   -------------  -------------
                                         555,878        530,594
                                   -------------  -------------

                                     $ 3,501,190      3,439,452
                                   =============  =============

Notes:
*  Comprehensive  income equals  $30,908,000 and  $21,815,000,  net of taxes for
   1998 and 1997,  respectively,  and $17,076,000 and $31,748,000 for the 
   quarter in 1998 and 1997,  respectively.  Unrealized  gains or  losses on
   securities generate the difference compared to net income above.

*  These  financial  statements  are  unaudited  but, in  management's  opinion,
   provide a fair presentation of the results.

*  Income per common share is based upon the weighted  average  number of shares
   outstanding during the quarter, 6,194,797 shares (6,189,331 shares - 1997).

*  These interim  financial  statements should be read in conjunction with the
   Company's 1997 Annual Report to Stockholders. The results of operations for
   any  interim  period  are  not  necessarily  indicative  of  the  Company's
   operating results for a full year.

*  Certain  amounts  from  the  prior  year's  financial  statements  have  been
   reclassified to conform with the current year's presentation.

Consolidated
Income Statement
(in thousands, except per share data)
                                              Quarter ended   Six Months ended
                                                  June 30          June 30
                                              1998     1997     1998     1997
                                            -------  -------  -------  -------
Revenues
Insurance revenues:
  Premiums:
    Life insurance                         $ 25,637   25,990   52,866   50,637
    Accident and health                      10,705   11,022   21,073   21,754
  Contract charges                           26,747   20,429   54,027   40,885
Investment revenues:
  Investment income, net                     51,152   46,233  100,194   93,277
  Realized gains                              2,434    1,472    4,961    4,295
Other                                         4,950    3,690    7,289    6,367
                                            -------  -------  -------  -------
    Total revenues                          121,625  108,836  240,410  217,215
                                            -------  -------  -------  -------
Benefits and expenses Policy benefits:
  Death benefits                             26,055   27,012   58,062   50,817
  Surrenders of life insurance                4,716    3,420    9,479    7,063
  Other benefits                             20,086   16,537   36,990   32,566
  Increase in benefit and contract reserve   20,852   19,831   40,978   39,249
Amortization of policy acquisition costs      8,600    7,966   17,117   16,632
Insurance operating expenses                 22,707   21,367   45,954   41,438
                                            -------  -------  -------  -------
    Total benefits and expenses             103,016   96,133  208,580  187,765
                                            -------  -------  -------  -------

Pretax income                                18,609   12,703   31,830   29,450
                                            -------  -------  -------  -------
Federal income taxes:
  Current                                     4,899    4,427    9,663   11,667
  Deferred                                      637   (1,229)    (647)  (3,856)
                                            -------  -------  -------  -------
                                              5,536    3,198    9,016    7,811
                                            -------  -------  -------  -------

Net income                                $  13,073    9,505   22,814   21,639
                                            =======  =======  =======  =======

Per common share
  Operating income                           $ 1.85     1.39     3.16     3.05
  Realized gains, net                          0.26     0.15     0.52     0.45
                                            -------  -------  -------  -------

  Net income                                 $ 2.11     1.54     3.68     3.50
                                            =======  =======  =======  =======







     CONSOLIDATED
STATEMENT OF CASH FLOWS
    (in thousands)
                                                             Six Months ended
                                                                  June 30
                                                             1998         1997
 Operating activities
   Net cash provided (used)                                 ($3,842)     11,698

 Investing activities 
  Investments called or matured:
   Decrease (increase) in short-term investments, net         9,540      (5,493)
   Fixed maturities available for sale                       98,259      60,592
   Fixed maturities held to maturity                         20,408      53,714
   Equity securities available for sale                      11,215      12,738
   Mortgage loans                                            11,634      26,148
   Other                                                      1,231       1,298
 Investments sold:
   Fixed maturities available for sale                      179,522     101,935
   Equity securities available for sale                       4,522         921
   Other                                                      3,748       1,687
 Investments made:
   Fixed maturities available for sale                     (318,881)   (202,342)
   Equity securities available for sale                     (16,219)    (19,526)
   Mortgage loans                                           (38,857)    (29,386)
   Real estate                                               (7,261)       (430)
   Real estate joint ventures                                (1,636)    (14,521)
   Other                                                     (1,018)     (6,385)
 Other, net                                                   4,261      (1,798)
   Net cash used                                            (39,532)    (20,848)

 Financing activities
 Policyowner contract deposits                              110,680      92,765
 Withdrawals of policyowner
   contract deposits                                       (102,059)    (79,079)
 Dividends paid to stockholders                              (5,576)     (5,445)
 Other, net                                                  (1,502)        126
   Net cash provided                                          1,543       8,367

 Decrease in cash                                           (41,831)       (783)
 Cash at beginning of year                                   50,927       4,577
   Cash at end of period                                     $9,096       3,794





Message from the President

Earnings  rebounded  in the second  quarter  as  mortality  experience  improved
significantly over the first quarter. Operating earnings per share equaled $1.85
for the  second  quarter  and $3.16 for the six  months,  an  improvement  of 33
percent for the quarter and 4 percent for the six months.  Net income per share,
which  includes  realized  investment  gains,  equaled $2.11 for the quarter and
$3.68 for the six months, an increase of 37 percent and 5 percent, respectively.

In the first quarter, the Company's mortality experience compared unfavorably to
the prior year at each of our life insurance companies. However, this experience
improved  considerably  at all three  companies  during the second  quarter  and
mortality experience for the six months was generally in line with last year.

Sales momentum  continues to build at Kansas City Life. New annualized  premiums
are 48  percent  ahead of a year ago with  sales  up 52  percent  in the  second
quarter alone. This growth was focused in the variable lines of business,  which
provided $34.1 million of new premiums in the six months. Sales growth in all of
the other individual lines at the parent company was offset by declines in sales
at the affiliates and in the group line of business.

Total insurance  revenues in the attached earnings statement grew 13 percent for
the six months. Excluding insurance revenues from the block of business which we
acquired in last year's third quarter,  revenues rose 4 percent.  Life insurance
premiums increased 4 percent due to single premium annuity growth.  Accident and
health premiums  declined 3 percent.  Contract charges generated by our variable
and interest sensitive products rose 6 percent.  Insurance in force totals $26.4
billion, down slightly from the first of the year.

Investment income grew 7 percent for the six months and 11 percent in the second
quarter. This growth reflects the acquisition noted above. Excluding the effects
of this  transaction,  investment  income  declined 5 percent for the six months
reflecting modest portfolio growth and a 19 basis point decline in the portfolio
yield. Narrowed interest margins on our interest sensitive products continued to
restrain earnings growth.

Home office operating expenses increased 3 percent  principally due to increased
expenditures in our individual and group marketing areas. This operating expense
growth compares  favorably to a 23 percent increase in direct statutory premiums
for the six months.

Cash provided from operations,  as shown in the  accompanying  statement of cash
flows,  turned  negative this quarter.  This reflects the sizable portion of our
business  which is coming  from the  variable  line and which is directed to the
separate account and not available for investment in the general account.

Book value equals  $89.77 a share,  a 10 percent  annualized  increase  from the
beginning of the year.  Excluding the impact of unrealized  investment  gains on
our investment portfolio, book value rose at a 7 percent annualized rate.

Kansas City Life will pay a quarterly dividend of $.45 a share
on August 24 to shareholders of record on August 10.  This
dividend is unchanged from last quarter.



                                          /s/ R. Philip Bixby