| SECURITIES ANDEXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                                                                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| WASHINGTON,DC                                                                                                                                                                                                                                                                                                                                                                                                     |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **FORM10-Q**                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| QUARTERLYREPORT                                                                                                                                                                                                                                                                                                                                                                                                   |
| Under Section 13or 15(d) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| **FOR THREE ANDNINE MONTHS ENDED**                                                                                                                                                                                                                                                                                                                                                                                |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| SEPTEMBER 30,2003                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| **CommissionFile: 0-1999**                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| **KENTUCKYINVESTORS, INC.**                                                                                                                                                                                                                                                                                                                                                                                       |
| (Exact Name ofregistrant as specified in Charter)                                                                                                                                                                                                                                                                                                                                                                 |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **KENTUCKY **                                                                                                                                                                                                                                                                                                                                                                                                |
| (State of OtherJurisdiction of Incorporation or Organization)                                                                                                                                                                                                                                                                                                                                                     |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **61-6030333**                                                                                                                                                                                                                                                                                                                                                                                                    |
| (IRS EmployerIdentification Number)                                                                                                                                                                                                                                                                                                                                                                               |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **200 CapitalAvenue, P. O. Box 717**                                                                                                                                                                                                                                                                                                                                                                              |
| **Frankfort,Kentucky 40602**                                                                                                                                                                                                                                                                                                                                                                                      |
| (Address ofPrincipal Executive Offices)                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Registrant’s Telephone Number - (502)223-2361**                                                                                                                                                                                                                                                                                                                                                           |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| Securitiesregistered pursuant to Section 13(g) of the Act:                                                                                                                                                                                                                                                                                                                                                        |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **CommonCapital Stock par value $1.00 per share**                                                                                                                                                                                                                                                                                                                                                                 |
| (Title ofClass)                                                                                                                                                                                                                                                                                                                                                                                                   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Number ofoutstanding shares as of September 30, 2003 –1,152,814.72**                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes  X   No      |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate by check mark whetherthe registrant is an accelerated filer (as defined in Rule 12b-2 ofthe Exchange Act). Yes       No  X                                                                                                                                                                                                                                  |

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# **CONTENTS**

****

****

# **PART I – FINANCIALINFORMATION**

|         |                                                                                           | Page |
|---------|-------------------------------------------------------------------------------------------|------|
| ITEM 1. | Consolidated FinancialStatements                                                          | 3    |
| ITEM 2. | Management’s Discussionand Analysis of Financial Condition and Results ofOperations | 12   |
| ITEM 3. | Quantitative and QualitativeDisclosures about Market Risk                                 | 20   |
| ITEM 4. | Controls andProcedures                                                                    | 20   |

# ****

# ****

# **PART II – OTHERINFORMATION**

| ITEM 1.    | Legal Proceedings                                  | 21 |
|------------|----------------------------------------------------|----|
| ITEM 2.    | Changes in Securities and Useof Proceeds           | 21 |
| ITEM 3.    | Defaults Upon SeniorSecurities                     | 21 |
| ITEM 4.    | Submission of Matters to a Voteof Security Holders | 21 |
| ITEM 5.    | Other Information                                  | 22 |
| ITEM 6.    | Exhibits and Reports on Form8-K                    | 22 |
|       |                                                    |    |   |
| SIGNATURES |                                                    | 22 |   |
|       |                                                    |    |   |
| EXHIBIT 31 |                                                    | 23 |   |
| EXHIBIT 32 |                                                    | 26 |   |

----

| ** **

**PART I – FINANCIALINFORMATION** |
|-----------------------------------------------------|
| ** **                                          |
| **ITEM 1**.**Consolidated Financial Statements**    |

----

|  | ** **                               |  |
|--|------------------------------------------|--|
|  | **KENTUCKYINVESTORS, INC.**              |  |
|  | ** **                               |  |
|  | **CondensedConsolidated Balance Sheets** |  |

|                                                                          |                                                |
|-------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                          | (Unaudited)                                         |  |
|                                                                               | September 30,2003                                   | December 31,2002 |
| Assets                                                                        |                                                     |  |
|    Investments                                                 |                                                     |  |
|      Fixed maturitiesavailable for sale at           |                                                     |  |
|        fair value(amortized cost           |                                                     |  |
|        2003-$265,381,184- 2002 -           |                                                     |  |
|        $254,389,964)                       | $288,676,437                                   | $278,944,643  |
|    Investment inaffiliate                                      | 4,000,000                                      | 4,000,000  |
|    Mortgageloans on real estate                                | 25,023,212                                     | 24,020,718  |
|    Other longterm investments                                  | 544,220                                        | 769,847  |
|    Short terminvestments                                       | 822,998                                        | 920,000  |
|    Otherinvestments                                            |      9,805,213        |     10,346,730  |
|                                                                               |                                                     |  |
|        Totalinvestments                    | $328,872,080                                   | $319,001,938  |
|                                                                               |                                                     |  |
|    Cash and cashequivalents                                    | 6,283,353                                      | 7,773,597  |
|    Due anddeferred premiums                                    | 4,546,037                                      | 4,753,111  |
|    Deferredacquisition costs                                   | 23,617,382                                     | 24,271,942  |
|    Present valueof future profits                              | 505,617                                        | 574,305  |
|    Leasedproperty under capital leases                         | 247,049                                        | 315,332  |
|    Otherassets                                                 | 7,115,161                                      | 7,340,333  |
|    Amountsrecoverable from reinsurers                          |     60,561,158             |     63,010,331  |
| Total assets                                                                  | $431,747,837                                   | $427,040,889  |
|                                                                               |                                                     |  |
|                                                                               |                                                     |  |
| Liabilities andStockholders’ Equity                                     |                                                     |  |
|    Liabilities                                                 |                                                     |  |
|      Policyliabilities                               |                                                     |  |
|        Benefitreserves                     | $333,323,472                                   | $325,336,298  |
|        Unearnedpremium reserves            | 17,695,363                                     | 18,968,936  |
|        Otherpolicyholders’ funds     |       3,768,899  |       4,007,740  |
|          Totalpolicy liabilities | $354,787,734                                   | $348,312,974  |
|        Federalincome taxes                 | 11,016,436                                     | 11,356,823  |
|        Obligationsunder capital leases     | 244,590                                        | 315,346  |
|        Notespayable                        | 5,974,954                                      | 6,386,638  |
|        Otherliabilities                    |       6,831,318  |       7,041,358  |
|                                                                               |                                                     |  |
|        Totalliabilities                    | $378,855,032                                   | $373,413,139  |
|                                                                               |                                                     |  |
| Stockholders’Equity                                                     |                                                     |  |
|    Common Stock(shares issued:                                 |                                                     |  |
|      2003 – 1,152,815,2002 - 1,143,390)        | $    1,152,815             | $    1,143,390  |
|    Paid-insurplus                                              | 8,549,970                                      | 8,495,833  |
|    Accumulatedother comprehensive                              |                                                     |  |
|      Income                                          | 14,748,026                                     | 15,432,098  |
|    Retainedearnings                                            |     28,441,994             |     28,556,429  |
|                                                                               |                                                     |  |
|        Totalstockholders’ equity     | $  52,892,805                        | $  53,627,750  |
|                                                                               |                                                     |  |
| Total liabilities andstockholders’ equity                               | $431,747,837                                   | $427,040,889  |
|                                                                               |                                                     |  |
| See accompanyingnotes.                                                        |                                                |

|  |
|--|
|  | ****

**KENTUCKYINVESTORS, INC.** |  |
|  |   |  |
|  | **CondensedConsolidated Income Statements (Unaudited)** |  |

|                                                                       |                                                                                                                |
|-----------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                       | Three MonthsEnded September 30                                                                                 |
|                                                                       |            2003                                         |             2002 |
| REVENUES                                                              |                                                                                                                |  |
|                                                                       |                                                                                                                |  |
|    Premiums andother considerations                    | $10,699,479                                                                                               | $12,945,156  |
|    Investmentincome, net of expenses                   | 4,386,931                                                                                                 | 4,795,397  |
|    Realized gainon investments, net                    | 343,948                                                                                                   | 97,719  |
|    Otherincome                                         |        243,853                                                         |        266,748  |
|                                                                       |                                                                                                                |  |
|       Totalrevenues                     | $15,674,211                                                                                               | $18,105,020  |
|                                                                       |                                                                                                                |  |
| BENEFITS ANDEXPENSES                                                  |                                                                                                                |  |
|                                                                       |                                                                                                                |  |
|    Death andother policyholder benefits                | $  8,092,330                                                                                    | $  8,238,988  |
|    Guaranteedannual endowments                         | 153,555                                                                                                   | 157,572  |
|    Dividends topolicyholders                           | 170,111                                                                                                   | 168,099  |
|    Increase inbenefit reserves and unearned            |                                                                                                                |  |
|      premiums                                | 3,445,070                                                                                                 | 4,784,484  |
|    Amortizationof deferred acquisition                 |                                                                                                                |  |
|      costs, net                              | 365,997                                                                                                   | 154,463  |
|    Commissions                                         | 820,692                                                                                                   | 1,270,716  |
|    Otherinsurance expenses                             |     2,909,933                                                                         |     2,657,353  |
|                                                                       |                                                                                                                |  |
|       Total benefits andexpenses        | $15,957,688                                                                                               | $17,431,675  |
|                                                                       |                                                                                                                |  |
| Income (loss) from operationsbefore                                   |                                                                                                                |  |
|      federal income tax andcumulative        |                                                                                                                |  |
|      effect of change inaccounting principle | $   (283,477)                                                                                   | $     673,345  |
|                                                        |                                                                                                                |  |
|                                                        |                                                                                                                |  |
| Provision (benefit) for incometaxes:                                  |                                                                                                                |  |
|    Current                                             | $   (178,081)                                                                                   | $     140,045  |
|    Deferred                                            |        102,000                                                         |       115,381  |
|                                                                       |                                                                                                                |  |
|                                                                       | $     (76,081)                                                                        | $     255,426  |
|                                                                       |                                                                                                                |  |
| Net income (loss)                                                     | $   (207,396)                                                                                   | $     417,919  |
| Earnings per share                                                    | $         (0.18)                                                  | $           0.37  |
|                                                                       |                                                                                                                |  |
| Dividends per share                                                   | $                 -  | $                 -  |
|                                                                       |
| See accompanyingnotes.                                                |
|                                                                       |

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| **KENTUCKYINVESTORS, INC.**                             |                                                           |
|---------------------------------------------------------|----------------------------------------------------------------|
|                                                    |                                                           |
| **CondensedConsolidated Income Statements (Unaudited)** |                                                           |
|                                                    |                                                                |  |
|                                                    |                                                                | Nine MonthsEnded September 30 |
|                                                    |                                                                |            2003 |             2002 |
|                                                    | REVENUES                                                       |  |  |
|                                                    |                                                                |  |  |
|                                                    |    Premiums andother considerations             | $31,932,317  | $40,500,050  |
|                                                    |    Investmentincome, net of expenses            | 13,617,978  | 13,779,881  |
|                                                    |    Realized gainon investments, net             | 869,028  | 788,981  |
|                                                    |    Otherincome                                  |       802,574  |       827,638  |
|                                                    |                                                                |  |  |
|                                                    |       Totalrevenues              | $47,221,897  | $55,896,550  |
|                                                    |                                                                |  |  |
|                                                    | BENEFITS ANDEXPENSES                                           |  |  |
|                                                    |                                                                |  |  |
|                                                    |    Death andother policyholder benefits         | $24,971,581  | $24,392,909  |
|                                                    |    Guaranteedannual endowments                  | 518,703  | 534,832  |
|                                                    |    Dividends topolicyholders                    | 535,485  | 536,747  |
|                                                    |    Increase inbenefit reserves and unearned     |  |  |
|                                                    |      premiums                         | 8,775,856  | 16,114,605  |
|                                                    |    Amortizationof deferred                      |  |  |
|                                                    |      acquisition costs,net            | 763,588  | (443,099) |
|                                                    |    Commissions                                  | 2,655,419  | 4,203,012  |
|                                                    |    Otherinsurance expenses                      |     8,650,792  |     8,198,303  |
|                                                    |                                                                |  |  |
|                                                    |       Total benefits andexpenses | $46,871,424  | $53,537,309  |
|                                                    |                                                                |  |  |
|                                                    | Income from operations beforefederal                           |  |  |
|                                                    |    income taxand cumulative effect of           |  |  |
|                                                    |    change inaccounting principle                | $     350,473  | $  2,359,241  |
|                                                    |                                                 |  |  |
|                                                    | Provision for incometaxes:                                     |  |  |
|                                                    |    Current                                      | $       44,077  | $     291,101  |
|                                                    |    Deferred                                     |          41,000  |        468,353  |
|                                                    |                                                                |  |  |
|                                                    |                                                                | $       85,077  | $     759,454  |
|                                                    |                                                                |  |  |
|                                                    | Income before cumulative effectof change                       |  |  |
|                                                    |    in accountingprinciple                       | $     265,396  | $  1,599,787  |
|                                                    |                                                                |  |  |
|                                                    | Cumulative effect of changein                                  |  |  |
|                                                    |    accountingprinciple                          | $                 -  | $   (970,862) |
|                                                    |                                                                |  |  |
|                                                    | Net income                                                     | $     265,396  | $     628,925  |
|                                                    |                                                                |  |  |
|                                                    | Earnings per share:                                            |  |  |
|                                                    |    Beforecumulative effect of change in         |  |  |
|                                                    |       accountingprinciple        | $           0.23  | $           1.41  |
|                                                    |    Cumulativeeffect of change in                |  |  |
|                                                    |       accountingprinciple        | $                 -  | $         (0.86) |
|                                                    |                                                                |  |  |
|                                                    | Earnings per share                                             | $           0.23  | $           0.55  |
|                                                    |                                                                |  |  |
|                                                    | Dividends per share                                            | $           0.38  | $           0.38  |
|                                                    |                                                                |  |  |
|                                                    | See accompanyingnotes.                                         |

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| **KENTUCKYINVESTORS, INC.**                                   |
|---------------------------------------------------------------|
|                                                          |
| **CondensedConsolidated Statements of Cash Flow (Unaudited)** |
|                                                          |  |
|                                                               | Nine MonthsEnded September 30 |
|                                                               | 2003 | 2002 |
|                                                          |  |  |
| Net cash provided by operatingactivities                      | $    9,552,300  | $   17,900,537  |
|                                                               |  |  |
| Investing activities                                          |  |  |
|    Securitiesavailable-for-sale:               |  |  |
|      Purchases                       | $(63,780,653) | $ (57,951,396) |
|      Sales andmaturities             | 54,081,908  | 37,650,781  |
|    Otherinvestments:                           |  |  |
|      Cost ofacquisition              | (3,688,420) | (2,302,777) |
|      Sales andmaturities             | 3,215,695  | 2,786,863  |
|    Otherinvesting activities                   |        (256,012) |         (326,966) |
|                                                               |  |  |
| Net cash used by investingactivities                          | $(10,427,482) | $ (20,143,495) |
|                                                               |  |  |
| Financing activities                                          |  |  |
|    Receipts fromuniversal life policies        |  |  |
|      credited to policyholderaccount |  |  |
|      balances                        | $    5,873,353  | $     5,238,987  |
|    Return ofpolicyholder account balances      |  |  |
|      on universal lifepolicies       | (5,773,247) | (5,783,807) |
|    Net proceedsfrom (payments on)              |  |  |
|      notes payable                   | (411,684) | 4,284,943  |
|    Otherfinancing activities                   |        (303,484) |        (332,702) |
|                                                               |  |  |
| Net cash provided (used) byfinancing                          |  |  |
|    activities                                  | $     (615,062) | $     3,407,421  |
|                                                               |  |  |
| Increase (decrease) in cash andcash                           |  |  |
|      equivalents                     | $  (1,490,244) | $     1,164,463  |
|                                                               |  |  |
| Cash and cash equivalents atbeginning                         |  |  |
|     ofperiod                              |       7,773,597  |       6,432,594  |
|                                                               |  |  |
| Cash and cash equivalents atend of period                     | $    6,283,353  | $     7,597,057  |
|                                                               |
| See accompanyingnotes.                                        |
|                                                               |

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****

| **KENTUCKYINVESTORS, INC.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **September 30,2003**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **(Unaudited)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **NOTE A - Natureof Operations:**KentuckyInvestors, Inc. (Kentucky Investors) is the holding company ofInvestors Heritage Life Insurance Company (Investors HeritageLife), Investors Heritage Printing, Inc., a printing company,Investors Heritage Financial Services Group, Inc., an insurancemarketing company, and Family Assignment Services, LLC, a limitedliability company that provides advance funding of funerals inexchange for the irrevocable assignment of life insurance policiesfrom other nonaffiliated companies. These entities are collectivelyhereinafter referred to as the “Company”. Theoperations of Kentucky Investors are principally that of its lifeinsurance company, Investors Heritage Life. The operations of thenon-insurance subsidiaries of Kentucky Investors account for lessthan 1% of the Company’s total operations.                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| TheCompany’s operations involve the sale and administration ofvarious insurance and annuity products, including, but not limitedto, participating, non-participating, whole life, limited pay,universal life, annuity contracts, credit life, credit accident andhealth and group insurance policies. The principal markets for theCompany’s products are in the Commonwealths of Kentucky andVirginia, and the states of North Carolina, South Carolina, Ohio,Indiana, Florida, Tennessee, Illinois, Georgia, West Virginia,Arizona, Michigan, Mississippi and Texas.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **NOTE B - Basisof Presentation:**Theaccompanying unaudited condensed consolidated financial statementsof the Company have been prepared in accordance with accountingprinciples generally accepted in the United States for interimfinancial information and the instructions to Form 10-Q and Article10 of Regulation S-X. Accordingly, they do not include all of theinformation and footnotes required by accounting principlesgenerally accepted in the United States for complete financialstatements. In the opinion of management, all adjustments(consisting of normal recurring accruals) considered necessary fora fair presentation have been included. Operating results for thenine months ended September 30, 2003, are not necessarilyindicative of the results that may be expected for the year endingDecember 31, 2003. For further information, refer to theconsolidated financial statements and footnotes thereto for theyear ended December 31, 2002, included in the Company’sAnnual Report on Form 10-K. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| The preparation offinancial statements in conformity with accounting principlesgenerally accepted in the United States requires management to makeestimates and assumptions that affect the amounts reported in thefinancial statements and accompanying notes. Actual results coulddiffer from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Certain priorperiod amounts have been reclassified to conform to the currentperiod presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **NOTE C -Earnings per Share:**Earnings per share of common stock were computed basedon the weighted average number of common shares outstanding duringeach period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **Income** | **Shares** | **PerShare** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  | **Amount** |
| **Three monthsended September 30, 2003**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |
| *BasicEPS*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |  |
| Net income(loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $ (207,396) |   1,148,510  | $      (0.18) |
| Dilutive effect ofcommon equivalent shares of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |  |  |
|    stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                  -  |          2,162  |                -  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| *DilutedEP*S                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |
| Net income(loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $(207,396) |   1,150,672  | $      (0.18) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| **Three monthsended September 30, 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |  |
| *BasicE*PS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |  |
| Netincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $   417,919  |   1,135,375  | $       0.37  |
| Dilutive effect ofcommon equivalent shares of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |  |  |
|    stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                  -  |                 -  |                -  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| *DilutedEPS*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |
| Net income(loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | $   417,919  |   1,135,375  | $       0.37  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| **Nine monthsended September 30, 2003**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |  |
| *BasicEPS*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |  |
| Netincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $   265,396  |   1,148,510  | $       0.23  |
| Dilutive effect ofcommon equivalent shares of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |  |  |
|    stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                  -  |          9,778  |                -  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| *DilutedEP*S                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |
| Netincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $   265,396  |   1,158,288  | $       0.23  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| **Nine monthsended September 30, 2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |  |
| *BasicE*PS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |  |  |
| Netincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $   628,925  |   1,135,375  | $       0.55  |
| Dilutive effect ofcommon equivalent shares of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |  |  |
|    stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                  -  |                 -  |                -  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |
| *DilutedEPS*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |
| Netincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $   628,925  |   1,135,375  | $       0.55  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **NOTE D -Segment Data:**TheCompany operates in four segments as shown in the following table.All segments include both individual and group insurance.Identifiable revenues and expenses are assigned directly to theapplicable segment. Net investment income is generally allocated tothe insurance and the corporate segments in proportion to policyliabilities and stockholders’ equity, respectively. Corporatesegment results for the parent company, Investors HeritagePrinting, Inc., Investors Heritage Financial Services Group, Inc.and Family Assignment Services LLC, after elimination ofintercompany amounts, are presented.                                                                                                                                                                                                                                                                                                                                                                                     |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **Three MonthsEnded** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | September 30,2003 | September 30,2002 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |
| Revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $12,004,079  | $13,952,924  |
|    Traditional& Universal Life Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2,746,014  | 3,373,288  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 78,474  | 51,206  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |     845,644  |        727,602  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $15,674,211  | $18,105,020  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |
| Pre-Tax Income (Loss) fromOperations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $   (397,587) | $     326,993  |
|    Traditional & Universal LifeProducts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | (184,079) | 72,671  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 6,218  | 319  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       291,971  |        273,362  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $   (283,477) | $     673,345  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **Nine MonthsEnded** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | September 30,2003 | September 30,2002 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |
| Revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $35,412,122  | $43,219,130  |
|    Traditional& Universal Life Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 8,987,969  | 9,943,036  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 235,343  | 167,911  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |     2,586,463  |     2,566,473  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $47,221,897  | $55,896,550  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |
| Pre-Tax Income (Loss) fromOperations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $   (713,445) | $      292,498 |
|    Traditional & Universal LifeProducts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 199,748  | 823,802  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 22,542  | 6,955  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |       841,628  |     1,235,986  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $    350,473  | $  2,359,241  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |
| **NOTE E -Federal Income Taxes:**Current taxes are provided based on estimates of theprojected effective annual tax rate. Deferred taxes reflect the nettax effects of temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and theamounts used for income tax purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **NOTE F –Comprehensive Income:**The components of comprehensive income, net of relatedtax, are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **Three MonthsEnded** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | September 30,2003 | September 30,2002 |
| Net income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $    (207,396) | $      417,919 |
| Net unrealizedgains (losses) on                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |
|   available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |    (3,590,451) |      7,918,626 |
| Comprehensiveincome (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $ (3,797,847) | $   8,336,545 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **Nine MonthsEnded** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | September 30,2003 | September 30,2002 |
| Net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $      265,396  | $      628,925 |
| Net unrealizedgains (losses) on                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |
|   available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |       (684,072) |    10,323,984 |
| Comprehensiveincome (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $    (418,676) | $ 10,952,909 |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **NOTE G – NotesPayable:** On June 28, 2002, the Company entered into along term debt agreement with Cherokee National in the amount of$4,000,000, with interest to be paid quarterly, at a rate equal tothe prime rate, and due on June 28, 2007. The funds were used topurchase 400,000 shares of Cherokee National common stock valued at$4,000,000. In December 2002, the 400,000 shares of common stockwere exchanged for 400,000 shares of Series A preferred stock. Theinterest rate was 4.00% at September 30, 2003. Interest expense andinterest paid on this note was $125,000 in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| On September 30, 2002, FamilyAssignment entered into a renewable long-term debt agreement withFarmers Bank and Capital Trust Co., Frankfort, Kentucky, byestablishing a line of credit in the amount of $2,000,000 withinterest to be paid monthly at a rate equal to the prime rate andwith an original due date of September 30, 2003. On September 30,2003 the note was renewed with a new maturity date of September 30,2004. At September 30, 2003, $140,000 was outstanding on this note.The purpose of this line of credit is to provide advance fundingfor funerals in exchange for an irrevocable assignment of lifeinsurance policies from other unaffiliated insurance companies. Theinterest rate was 4.00% at September 30, 2003. Interest expense andinterest paid on the note was $6,672 in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| On December 27, 2000, theCompany entered into a long-term debt agreement with Fifth ThirdBank in the amount of $2,000,000, at an initial interest rate of8.5%, due on December 27, 2005. The funds were used to retire notespayable and to issue a surplus note to its subsidiary, InvestorsHeritage Life. On May 1, 2001, the Company borrowed an additional$400,000 on the note and the interest rate was adjusted to 1% underthe prime rate. The interest rate was 3.00% at September 30, 2003.Interest expense and interest paid on the note was $45,979 in2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **NOTE H – NewAccounting Pronouncements:** In January 2003, theFinancial Accounting Standards Board (FASB) issued InterpretationNo. 46, Consolidation of Variable Interest Entities, anInterpretation of Accounting Research Bulletin (ARB) No. 51, whichstates certain criteria for use in consolidating another entity.The provisions of Interpretation No. 46 had no impact on thefinancial statements of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| In May 2003, the FinancialAccounting Standards Board issued Statement of Financial AccountingStandards No. 150, Accounting for Certain Financial Instrumentswith Characteristics of Both Liabilities and Equity (FAS 150),effective for interim reporting periods beginning after June 15,2003. Under the new rules, certain financial instruments classifiedas equity will be required to be presented as liabilities. Theprovisions of FAS 150 had no impact on the financial statements ofthe Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **ITEM 2. Management’sDiscussion and Analysis of Financial Condition and Results ofOperations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |
| **General**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Kentucky Investors isincorporated under the laws of the Commonwealth of Kentucky andwholly owns Investors Heritage Life Insurance Company, a lifeinsurance company also incorporated under the laws of theCommonwealth of Kentucky. Kentucky Investors also wholly ownsInvestors Heritage Financial Services Group, Inc., a Kentuckyinsurance marketing company which was formed in 1994, InvestorsHeritage Printing, Inc., a Kentucky printing company that providesprinting to Investors Heritage Life and other unaffiliated parties,and Family Assignment Services, LLC, a Kentucky limited liabilitycompany that provides advance funding of funerals in exchange forthe irrevocable assignment of life insurance policies from othernonaffiliated companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage Life offersa full line of life insurance products including, but not limitedto, whole life, term life, single premium life, multi-pay life andannuities. Investors Heritage Life’s primary lines ofbusiness are insurance policies and annuities utilized to fundpreneed funeral contracts, credit life and credit disabilityinsurance, and term life and reducing term life sold throughfinancial institutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage Lifeintroduced a new product series during the first quarter of 2003,the Legacy Protector and Legacy Preferred pre-need product series,which replaced the Legacy 2000 series. These new plans weredesigned to help combat a challenging economic environment andincreased mortality anti-selection. In general, commissions areslightly lower, guaranteed benefits have been moved further fromissue, reserves have been adjusted to better reflect experience,and an underwritten plan has been added.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage Life’sfinal expense product is the Heritage Final Expense, which wasintroduced during the third quarter of 2001 and replaced the Legacy2000 Final Expense series. This product is being marketed throughfuneral homes and independent agencies. Investors Heritage Lifeentered into a reinsurance agreement with Munich AmericanReassurance Company with regard to this product to help reduce theinitial surplus strain and minimize fluctuations in futureprofits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage Life alsoprovides term insurance products, both on a decreasing and a levelbasis. The Term to 95 product provides level coverage. We willcontinue to provide our decreasing term policy that is primarilysold through financial institutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The Company’s operatingearnings are derived primarily from revenues generated from thesale of insurance products by Investors Heritage Life, plus theCompany’s investment results, including realized gains(losses), less interest credited to policyholders, benefits topolicyholders and expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| While the Company continues toexpand the operations of Investors Heritage Financial, InvestorsHeritage Printing and Family Assignment Services, less than 1% ofthe Company’s total operations were generated by thosesubsidiaries. As expected, more than 10% of Investors HeritageFinancial’s revenues during the third quarter 2003 werederived from the sale of Investors Heritage Life’s creditinsurance products. During the third quarter of 2003, the Companyreceived dividends from Investors Heritage Financial and InvestorsHeritage Printing in the amount of $85,000 and $15,000respectively. The Company anticipates dividend payments fromInvestors Heritage Financial and Investors Heritage Printing duringthe fourth quarter in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| The Company’s primaryuses of cash are operating expenses, debt service and dividendpayments, and the Company’s principal sources of cash are thedividends paid to it by Investors Heritage Life, Investors HeritageFinancial and Investors Heritage Printing. Investors HeritageLife’s principal sources of cash are from the sale of lifeinsurance policies and investment income, including realized gains(losses), less benefits to policyholders and expenses. Therefore,the remainder of the discussion will deal with the financialcondition and results of operations of Investors HeritageLife.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| **CRITICAL ACCOUNTINGPOLICIES AND ESTIMATES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| The Company’s discussionand analysis of its financial condition and results of operationsare based on its consolidated financial statements, which have beenprepared in accordance with accounting principles generallyaccepted in the United States. Preparation of these financialstatements requires the Company to make estimates and judgmentsthat affect the reported amounts of assets, liabilities andrevenues and expenses. On an on-going basis, the Company evaluatesits estimates, including those related to investments, deferredacquisition costs, present value of future profits, policyliabilities, income taxes, regulatory requirements, contingenciesand litigation. The Company bases such estimates on historicalexperience and other assumptions believed to be reasonable underthe circumstances, the results of which form the basis for makingjudgments about the carrying values of assets and liabilities thatare not readily apparent from other sources. Actual results maydiffer from these estimates under different assumptions orconditions. The Company believes the following accounting policies,judgments and estimates are critical to the preparation of itsconsolidated financial statements.                                                                                                                                                                                        |
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| **Investment in Debt andEquity Securities and Mortgage Loans**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| The Company holds debt andequity interests in a variety of companies. Additionally, theCompany originates, underwrites and manages mortgage loans. TheCompany records an investment impairment charge when it believes aninvestment has experienced a decline in value that is other thantemporary. Future adverse changes in market conditions, pooroperating results of underlying investments and defaults onmortgage loan payments could result in losses or an inability torecover the current carrying value of the investments, therebypossibly requiring an impairment charge in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| **Deferred Acquisition Costsand Present Value of Future Profits**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| At September 30, 2003, thecombined balance of our deferred acquisition costs and presentvalue of future profits (“PVFP”) was $24,122,999compared to $24,846,247 at December 31, 2002. The recovery of thesecosts is dependent on the future profitability of the relatedbusiness. Each year, we evaluate the recoverability of theunamortized balance of the deferred acquisition costs and PVFP. Weconsider estimated future gross profits or future premiums,expected mortality or morbidity, interest earned and creditedrates, persistency and expenses in determining whether the balanceis recoverable. If we determine a portion of the unamortizedbalance is not recoverable, it is charged to amortization expense.The assumptions we use to amortize and evaluate the recoverabilityof the deferred acquisition costs and PVFP involve significantjudgment. A significant revision to these assumptions will impactfuture financial results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| **PolicyLiabilities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Establishing liabilities (andrelated intangible assets) for the Company’s long-durationinsurance contracts requires making various assumptions, includingpolicyholder persistency, mortality rates, investment yields,discretionary benefit increases, new business pricing, andoperating expense levels. The Company evaluates historicalexperience for these factors when assessing the need for changingcurrent assumptions. However, since many of these factors areinterdependent and subject to short-term volatility during thelong-duration contract period, substantial estimates and judgmentare required. Accordingly, if actual experience emerges differentlyfrom that assumed, material financial statement adjustments couldbe required.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| **Investments, Liquidity andCapital Resources**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| Premiums, which includemortality and expense charges, and investment income are InvestorsHeritage Life’s primary sources of cash flow used to meetshort-term and long-term cash requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| Investors Heritage Life’sshort-term obligations consist primarily of policyholder benefitsand operating expenses. Investors Heritage Life has historicallybeen able to meet these obligations out of operating cash, premiumsand investment income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Management is not aware of anycommitments or unusual events that could materially affect capitalresources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| During the fourth quarter of2000 Kentucky Investors borrowed $2,000,000 on a long-term basis,and an additional $400,000 was borrowed during the second quarterof 2001. Kentucky Investors utilized $200,000 of the loan amount toreduce debt to Investors Heritage Life and $1,800,000 was loaned toInvestors Heritage Life in exchange for a surplus note. The notecalls for Investors Heritage Life to pay, on or before the firstday of each quarter, interest at an 8.5% annual rate, upon priorapproval by the Kentucky Department of Insurance. Such interest maybe paid out of Investors Heritage Life’s earned surplus,operating income, or paid-in and contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| In the second quarter of 2002the Company acquired 400,000 shares of common stock of CherokeeNational Life Insurance Company (Cherokee) in exchange for theCompany’s promissory note in the amount of $4,000,000.Interest will be paid quarterly at a rate equal to the prime rateand the note is due June 28, 2007. The Company has also guaranteedanother $2,000,000 line-of-credit note with a financial institutionon behalf of Family Assignment Services, of which $140,000was outstanding at September 30, 2003. Thepurpose of this line of credit is to provide advance funding forfunerals in exchange for an assignment of life insurance policiesfrom other unaffiliated companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| The Company and InvestorsHeritage Life will continue to explore various opportunitiesincluding corporate reorganizations, acquisitions and purchasingblocks of business from other companies, which may dictate anadditional need for either long-term or short-term debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Investors Heritage Life hasmaintained a sound, conservative investment strategy. At September30, 2003, 87.6% of invested assets consisted of fixed income publicbonds compared to 87.4% at December 31, 2002. Fixed income assetsare managed by Conning Asset Management Company, an independentportfolio manager.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| Additionally, InvestorsHeritage Life also engages in commercial and residential mortgagelending with approximately 95.7 % of these investments being incommercial properties. All mortgage loans are originated in-houseand all loans are secured by first mortgages on the real estate. AtSeptember 30, 2003, 7.6% of invested assets consisted of mortgageloans compared to 7.5% at December 31, 2002. Management anticipatesfunding several new mortgage loan investments during the remainderof 2003 to maintain a similar to slightly higher percentage ofmortgage loans to total invested assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Investors Heritage Life’sconservative approach in the product development area and thestrength and stability of its fixed income and mortgage loanportfolios provide adequate liquidity both in the short-term andthe long-term. At September 30, 2003 and December 31, 2002,Investors Heritage Life’s fixed income investments were 100%investment grade as rated by Standard & Poor’s. None ofInvestors Heritage Life’s fixed income assets are in defaultand there has been no material change in the distribution of itsfixed income portfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| Investors Heritage Life’sprincipal long-term obligations are fixed contractual obligationsincurred in the sale of its life insurance products. The premiumscharged for these products are based on conservative andactuarially sound assumptions as to mortality, persistency andinterest. Management believes these assumptions will producerevenues sufficient to meet its future contractual benefitobligations and operating expenses, and provide an adequate profitmargin.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| The Company continuouslyevaluates all of its investments based on current economicconditions, credit loss experience and other developments. TheCompany evaluates the difference between the cost/amortized costand estimated fair value of its investments to determine whether adecline in value is temporary or other than temporary in nature.This determination involves a degree of uncertainty. If a declinein the fair value of a security is determined to be temporary, thedecline is recorded as an unrealized loss in shareholders’equity. If a decline in a security’s fair value is consideredto be other than temporary, the security is written down to theestimated fair value with a corresponding realized loss recognizedin the consolidated statements of income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| The assessment of whether adecline in fair value is considered temporary or other thantemporary includes management’s judgment as to the financialposition and future prospects of the entity issuing the security.It is not possible to accurately predict when it may be determinedthat a specific security will become impaired. Future impairmentcharges could be material to the results of operations of theCompany. The amount of impairment charge before tax was -0- in thethird quarter of 2003, compared to $-0- in the third quarter of2002, and $300,000 and $-0- for the first nine months of 2003 and2002, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Management believes that itwill recover the cost basis in the securities held with unrealizedlosses as it has both the intent and ability to hold the securitiesuntil they mature or recover in value. Securities are sold toachieve management’s investment goals, which include thediversification of credit risk, the maintenance of adequateportfolio liquidity and the management of interest rate risk. Inorder to achieve these goals, sales of investments are based uponcurrent market conditions, liquidity needs and estimates of thefuture market value of the individual securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| **Results ofOperations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| Total premium income (net ofreinsurance) for the third quarter 2003 decreased 17.3% whencompared to the third quarter of 2002 and decreased 21.2% for thefirst nine months of 2003 when compared to the same period in 2002.The decrease was due to the introduction of our new Legacy Preneedprogram. Other factors contributing to the decrease include poorwinter weather conditions in our marketing regions, the economicenvironment, and uncertainties regarding the continuing conflictwith Iraq. Net investment income for the third quarter 2003compared to the third quarter of 2002 decreased 8.5% and decreased1.2%for the first nine months of 2003 whencompared to the same period in 2002. The decrease is primarily dueto lower yield rates on new asset purchases which have impacted therate of return on our investment portfolio. Overall revenue for thethird quarter 2003 decreased 13.4% when compared to the thirdquarter of 2002 and decreased 15.5% for the first nine months of2003 when compared to the same period in 2002.                                                                                                                                                                                                                                                                                                                                                                             |
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| Total Benefits and Expenseswere 8.5% lower in the third quarter of 2003 when compared to thesame quarter of 2002 and 12.5% lower for the first nine months of2003 when compared to the same period of 2002, primarily due tolower premium production in pre-need sales. After providing forfederal income taxes, the Company’s Net income (beforecumulative effect of change in accounting principle) was $265,396with Earnings per share of $0.23 for the first nine months of 2003as compared to Net income of $1,599,787 and Earnings per share of$1.41 for the same period in 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| A dividend of $0.38 per sharewas paid April 7, 2003, to shareholders of record on March 21,2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| **BusinessSegments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| Management internally evaluatesthe performance of Investors Heritage Life operations by thefollowing business segments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Preneed & Burial Productsinclude both life and annuity products sold by funeral directors oraffiliated agents to fund prearranged funerals. Revenues for thissegment were 14.0% lower for the third quarter of 2003 whencompared to the same period of 2002 and 18.1% lower in the firstnine months of 2003 when compared to the same period of 2002. Thedecrease is due primarily to the introduction of our new LegacyPreferred and Protector product series, and the phase-out of theprior series. The poor winter weather conditions in our marketingregions, the economic environment, and uncertainties regarding thecontinuing conflict with Iraq were also contributing factors to thedecline in revenues. Pre-Tax Income (Loss) from Operations for thethird quarter 2003 was ($397,587) compared to $326,993 for the sameperiod for 2002 and ($713,445)for thefirst nine months of 2003 compared to $292,498for the same period for 2002. The increased loss in2003 compared to 2002 is due primarily to the factors citedpreviously inasmuch as the profit margin on this line of businessis directly related to the decrease in revenues. Investment incomepressures from the low interest rate environment causing loweryields were also a factor this quarter on our loss. InvestorsHeritage Life plans to continue its expansion of territory andrecruitment of agents in the Preneed and Burial insurancemarket. |
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| Traditional & UniversalLife Products include traditional life and group life insuranceproducts, annuities (primarily qualified) and universal lifeproducts. Revenues for this segment were 18.6% lower for the thirdquarter of 2003 when compared to the third quarter of 2002 and 9.6%lower for the first nine months of 2003 when compared to the sameperiod in 2002. Revenues on this segment are primarily derived fromthe sales of term insurance products through banks. The sales aretied to loan demand, which has been fairly flat this year and hasshown insignificant fluctuations. Pre-Tax Income from Operationsfor the first nine months of 2003 was 76% lower than for the firstnine months of 2002 primarily because of general insurance expensesassociated with the sales, issuance and administration costs ofthese products as well as the investment income pressures citedabove.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| Credit Insurance Products andAdministrative Services include the marketing and administration ofcredit life and credit accident & health insurance products.Revenues for 2003 were $78,474 for the third quarter compared to$51,206 for the same period for 2002 and $235,343 for the firstnine months of 2003 compared to $167,911 for the same period in2002. Pre-Tax Income from Operations was $6,218 for the thirdquarter of 2003 compared to $319 for the third quarter of 2002 and$22,542 for the first nine months of 2003 compared to $6,955 forthe same period in 2002. The revenues and income on the creditinsurance line are directly affected by consumer loan demand.During 2002, because of economic uncertainties, there was a largedecrease in consumer loan demand, which has leveled off in 2003.All of the related underwriting risk currently produced is beingreinsured 100% with highly-rated life companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Corporate & Other consistsof corporate accounts measured primarily by stockholders’paid-in capital, contributed surplus, earned surplus, property andequipment, and other minor business lines which include groupannuities and group and individual accident and health products.Revenues were 16.2% higher and Pre-Tax Income from Operations was6.8% higherfor the third quarter of 2003when compared to the third quarter 2002. Revenues were 0.8% higherfor the first nine months of 2003 when compared to the same periodin 2002 and Pre-Tax Income from Operations was 31.9% lower for thefirst nine months of 2003 when compared to the same period in 2002.The decreases for the third quarter in 2003 are primarily due tothe decision last quarter to assign more target surplus, throughthe allocation of net investment income and general expenses, toother lines of business because of the low interest rateenvironment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| **Federal IncomeTaxes**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Current taxes are providedbased on estimates of the projected effective annual tax rate.Deferred taxes reflect the net tax effects of temporary differencesbetween the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income taxpurposes. The effective tax rate was 24.3% at September 30, 2003compared to 32.2% for September 30, 2002. The decrease in theeffective tax rate is due primarily to the deferred taxcalculation, specifically, the temporary differences arising fromreserve calculations for financial reporting purposes as opposed toincome tax reporting purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| **Forward LookingInformation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| The Company cautions readersregarding certain forward-looking statements contained in thisreport and in any other statements made by, or on behalf of, theCompany, whether or not in future filings with the Securities andExchange Commission. Forward-looking statements are statements notbased on historical information and which relate to futureoperations, strategies, financial results, or other developments.Statements using verbs such as “expect”,“anticipate”, “believe” or words of similarimport generally involve forward-looking statements. Withoutlimiting the foregoing, forward-looking statements includestatements which represent the Company’s beliefs concerningfuture levels of sales and redemptions of Investors HeritageLife’s products, investment spreads and yields, or theearnings and profitability of the Company’s or InvestorsHeritage Life’s activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Forward-looking statements arenecessarily based on estimates and assumptions that are inherentlysubject to significant business, economic and competitiveuncertainties and contingencies, many of which are beyond theCompany’s control and many of which are subject to change.These uncertainties and contingencies could cause actual results todiffer materially from those expressed in any forward-lookingstatements made by, or on behalf of, the Company. Whether or notactual results differ materially from forward-looking statementsmay depend on numerous foreseeable and unforeseeable factors anddevelopments. Some of these may be national in scope, such asgeneral economic conditions, changes in tax law and changes ininterest rates. Some may be related to the insurance industrygenerally, such as pricing competition, regulatory developments,industry consolidation and the effects of competition in theinsurance business from other insurance companies and otherfinancial institutions operating in the Company’s market areaand elsewhere. Others may relate to the Company specifically, suchas credit, volatility and other risks associated with theCompany’s investment portfolio. The Company cautions thatsuch factors are not exclusive. The Company disclaims anyobligation to update forward-looking information.                                                         |
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| **ITEM 3. Quantitative andQualitative Disclosures about Market Risk**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| There have been no significantor material changes in the Company’s market risks sinceDecember 31, 2002. Measuring market risk is a key function of ourasset/liability management process. To test financial risk andinvestment strategy, the Company performs an asset adequacyanalysis each year. Dynamic models of both assets and liabilitiesare created to project financial results under several shifts inthe current interest rate environment. Results show that theCompany’s exposure to a relative 10% increase or decrease inthe interest rates prevalent at December 31, 2002 is a net loss ofless than $500,000. This analysis is not performed on a quarterlybasis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Items taken into account on theasset side include prepayment and liquidity risks, assetdiversification and quality considerations. On the liability side,interest crediting strategies and policyholder and agent behavior(lapses, loans, withdrawals and premium flow) are dynamicallymodeled in relationship to the particular interest rate environmenttested. Although the Company is careful to ensure that theseassumptions are consistent with the best available data,interest-sensitive cash flows cannot be forecast with certainty andcan deviate significantly from the assumptions made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| Because asset and liabilitydurations are continually changing as new policyholder contractsare issued and as new investments are added to the portfolio, theCompany manages its balance sheet on an ongoing basis and its netexposure to changes in interest rates may vary over time. Althoughthe asset adequacy analysis is not performed on a quarterly basis,management believes that the Company’s asset base issufficient to cover the minimal increases or decreases that wouldbe expected to occur during any particular year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| In addition to these dynamicmodeling techniques, the Company closely monitors its own businesssegments with respect to product performance and agent behavior. Tothat end, during 2002 we implemented a new system to assist inmonitoring these areas. This new tool allows management to quicklyisolate areas of strength and weakness and to take appropriate andtimely action to exploit the strengths and improve theweaknesses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| **ITEM 4. Controls andProcedures**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| Within the 45 days prior to thefiling date of this Form 10-Q, the Company performed an evaluation,under the supervision and with the participation of theCompany’s management, including the Company’s ChiefExecutive Officer and Chief Financial Officer, of the effectivenessof the design and operation of the Company’s disclosurecontrols and procedures as defined in Rules 13a-15(e) and 15d-15(e)of the Securities Exchange Act of 1934. Based upon that evaluation,the Chief Executive Officer and Chief Financial Officer concludedthat the Company’s disclosure controls and procedures areeffective in timely alerting them to material information relatingto the Company (including its consolidated subsidiaries) requiredto be included in this Quarterly Report on Form 10-Q. There havebeen no significant changes in the Company’s internalcontrols or in other factors which could significantly affectinternal controls subsequent to the date the Company carried outits evaluation.                                                                                                                                                                                                                                                                                                                                                                                             |
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| **PART II– OTHER INFORMATION** |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **ITEM 1. LegalProceedings**         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|                                 | The Company is not involved inany legal proceedings. From time to time Investors Heritage Life isinvolved in litigation relating to claims arising out of itsoperations in the normal course of business. As of November 5,2003, Investors Heritage Life is not a party to any legalproceedings, the adverse outcome of which, in management’sopinion, individually or in the aggregate, would have a materialadverse effect on Investors Heritage Life’s or theCompany’s financial condition or results ofoperations.  |   |
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|                                 | **ITEM 2. Changes inSecurities and Use of Proceeds**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
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|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
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|                                 | **ITEM 3. Defaults Upon SeniorSecurities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|                                 | **ITEM 4. Submission ofMatters to a Vote of Security Holders**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
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|                                 | **ITEM 5. OtherInformation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
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|                                 | **ITEM 6. Exhibits and Reportson Form 8-K**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                      | a) Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                      | No exhibits were filed for thequarter ended September 30, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
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|                                      | b) Reports on form8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
|                                      | No reports on Form 8-K werefiled for the quarter ended September 30, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
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| **SIGNATURES**                                                                                                                                                                       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Pursuant to the requirements ofthe Securities and Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersignedthereunto duly authorized. |
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|                                                                                                                                                                                           | **KENTUCKY INVESTORS,INC.** |
|                                                                                                                                                                                      |  |
|                                                                                                                                                                                           | BY: /s/Harry Lee WaterfieldII |
| DATE: November 5,2003                                                                                                                                                                     |       President |
|                                                                                                                                                                                      |  |
|                                                                                                                                                                                           | BY: /s/Raymond L.Carr |
| DATE: November 5,2003                                                                                                                                                                     |       Vice President -Chief Financial Officer |
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