| **SECURITIESAND EXCHANGE COMMISSION**                                                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **WASHINGTON,DC**                                                                                                                                                                                                                                                                                                                                                                                                 |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **FORM10-Q**                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| QUARTERLYREPORT                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| Under Section 13or 15(d) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| **FOR THREEMONTHS ENDED**                                                                                                                                                                                                                                                                                                                                                                                         |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **SEPTEMBER 30,2002**                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| **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'sTelephone 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, 2002 -1,138,558.72**                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| 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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| ** **

**PART I -CONSOLIDATED FINANCIAL STATEMENTS **                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **ITEM 1**. Thefollowing condensed consolidated financial statements have beenprepared by management in accordance with accounting principlesgenerally accepted in the United States (GAAP). In management'sopinion, all adjustments and certain reclassifications necessaryfor a fair statement of financial position at September 30, 2002and December 31, 2001 and the results of operations for the threemonth and nine month periods ended September 30, 2002 and December31, 2001 have been made. |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |

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|                                                                          | ** **                                                     |
|-------------------------------------------------------------------------------|----------------------------------------------------------------|
|                                                                          | **KENTUCKYINVESTORS, INC.**                                    |
|                                                                          | ** **                                                     |
|                                                                          | **CondensedConsolidated Balance Sheets**                       |
|                                                                          |                                                           |
|                                                                          | (Unaudited)                                                    |  |
|                                                                               | September 30,2002                                              | December 31,2001 |
| Assets                                                                        |                                                                |  |
|    Investments                                                 |                                                                |  |
|      Fixed maturitiesavailable for sale at           |                                                                |  |
|        fair value(amortized cost           |                                                                |  |
|        2002-$252,206,960- 2001 -           |                                                                |  |
|        $235,124,000                        | $277,817,684                                              | $243,831,823  |
|    Investment inaffiliate                                      | 4,000,000                                                 | -  |
|    Mortgageloans on real estate                                | 23,493,112                                                | 24,710,790  |
|    Other longterm investments                                  | 938,311                                                   | 409,658  |
|    Short terminvestments                                       | 820,000                                                   | 837,560  |
|    Otherinvestments                                            |       9,629,403             |      9,515,569  |
|                                                                               |                                                                |  |
|        Totalinvestments                    | $316,698,510                                              | $279,305,400  |
|                                                                               |                                                                |  |
|    Cash and cashequivalents                                    | 7,597,057                                                 | 6,432,594  |
|    Due anddeferred premiums                                    | 4,895,289                                                 | 4,544,329  |
|    Deferredacquisition costs                                   | 24,218,870                                                | 24,930,081  |
|    Present valueof future profits                              | 458,866                                                   | 514,585  |
|    Leasedproperty under capital leases                         | 323,287                                                   | 449,033  |
|    Goodwill                                                    | -                                                         | 970,862  |
|    Otherassets                                                 | 6,615,676                                                 | 6,926,941  |
|    Amountsrecoverable from reinsurers                          |     64,205,589                        |     66,704,355  |
|                                                                               |                                                                |  |
|                                                                               | $425,013,144                                              | $390,778,180  |
|                                                                               |                                                                |  |
| Liabilities and Stockholders'Equity                                           |                                                                |  |
|    Liabilities                                                 |                                                                |  |
|      Policyliabilities                               |                                                                |  |
|        Benefitreserves                     | $321,382,500                                              | $306,419,302  |
|        Unearnedpremium reserves            | 20,007,840                                                | 21,550,803  |
|        Otherpolicyholders' funds           |      4,070,082                   |      4,648,807  |
|          Totalpolicy liabilities | $345,460,422                                              | $332,618,912  |
|        Federalincome taxes                 | 12,018,124                                                | 6,233,425  |
|        Obligationsunder capital leases     | 323,619                                                   | 443,544  |
|        Notespayable                        | 6,529,017                                                 | 2,244,074  |
|        Otherliabilities                    |      7,164,310                   |      6,310,572  |
|                                                                               |                                                                |  |
|        Totalliabilities                    | $371,495,492                                              | $347,850,527  |
|                                                                               |                                                                |  |
| Stockholders' Equity                                                          |                                                                |  |
|    Common Stock(shares issued:                                 |                                                                |  |
|      2002 - 1,138,559, 2001 -1,132,960               | $    1,138,559                        | $    1,132,960  |
|    Paid-insurplus                                              | 8,458,341                                                 | 8,413,332  |
|    Accumulatedother comprehensive                              |                                                                |  |
|      income                                          | 16,061,335                                                | 5,737,351  |
|    Retainedearnings                                            |     27,859,417                        |     27,644,010  |
|                                                                               |                                                                |  |
|        Totalstockholders' equity           | $  53,517,652                                   | $  42,927,653  |
|                                                                               |                                                                |  |
|                                                                               | $425,013,144                                              | $390,778,180  |
| See accompanyingnotes.                                                        |                                                           |
|                                                                               |                                                           |
| **KENTUCKYINVESTORS, INC.**                                                   |                                                           |
|                                                                          |                                                           |
| **CondensedConsolidated Income Statements (Unaudited)**                       |                                                           |
|                                                                          |                                                                |  |
|                                                                          |                                                                | Three MonthsEnded September 30 |
|                                                                          |                                                                |            2002 |             2001 |
|                                                                          | REVENUES                                                       |  |  |
|                                                                          |                                                                |  |  |
|                                                                          |    Premiums andother considerations             | $12,945,156  | $12,723,215  |
|                                                                          |    Investmentincome, net of expenses            | 4,795,397  | 4,595,800  |
|                                                                          |    Realized gainon investments, net             | 97,719  | 408,112  |
|                                                                          |    Otherincome                                  |       266,748  |       309,880  |
|                                                                          |                                                                |  |  |
|                                                                          |       Totalrevenues              | $18,105,020  | $18,037,007  |
|                                                                          |                                                                |  |  |
|                                                                          | BENEFITS ANDEXPENSES                                           |  |  |
|                                                                          |                                                                |  |  |
|                                                                          |    Death andother policyholder benefits         | $  8,238,988  | $  7,250,746  |
|                                                                          |    Guaranteedannual endowments                  | 157,572  | 163,317  |
|                                                                          |    Dividends topolicyholders                    | 168,099  | 175,827  |
|                                                                          |    Increase inbenefit reserves and unearned     |  |  |
|                                                                          |      premiums                         | 4,784,484  | 5,140,765  |
|                                                                          |    Amortizationof deferred acquisition          |  |  |
|                                                                          |      costs, net                       | 154,463  | (263,258) |
|                                                                          |    Commissions                                  | 1,270,716  | 1,575,621  |
|                                                                          |    Otherinsurance expenses                      |     2,657,353  |     2,577,456  |
|                                                                          |                                                                |  |  |
|                                                                          |       Total benefits andexpenses | $17,431,675  | $16,620,474  |
|                                                                          |                                                                |  |  |
|                                                                          | Income from operations beforefederal                           |  |  |
|                                                                          |    incometax                                    | $     673,345  | $  1,416,533  |
|                                                                          |                                                 |  |  |
|                                                                          |                                                 |  |  |
|                                                                          | Provision for federal incometaxes:                             |  |  |
|                                                                          |    Current                                      | $     140,045  | $    224,772  |
|                                                                          |    Deferred                                     |        115,381  |       243,000  |
|                                                                          |                                                                |  |  |
|                                                                          |                                                                | $     255,426  | $    467,772  |
|                                                                          |                                                                |  |  |
|                                                                          | Net income                                                     | $     417,919  | $    948,761  |
|                                                                          |                                                                |  |  |
|                                                                          | Earnings per share                                             | $           0.37  | $          0.79  |
|                                                                          |                                                                |  |  |
|                                                                          | Dividends per share                                            | $                 -  | $                -  |
|                                                                          | See accompayingnotes.                                          |
|                                                                          |                                                                |

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|                                                         |
|---------------------------------------------------------|
| **KENTUCKYINVESTORS, INC.**                             |
|                                                    |
| **CondensedConsolidated Income Statements (Unaudited)** |
|                                                    |  |  |   |
|                                                    |  | Nine MonthsEnded September 30 |   |
|                                                    |  | 2002 | 2001 |   |
|                                                    | REVENUES |  |  |   |
|                                                    |  |  |  |   |
|                                                    |    Premiums andother considerations | $40,500,050  | $37,941,069  |   |
|                                                    |    Investmentincome, net of expenses | 13,779,881  | 13,674,023  |   |
|                                                    |    Realized gainon investments, net | 788,981  | 573,667  |   |
|                                                    |    Otherincome |       827,638  |       836,170  |   |
|                                                    |  |  |  |   |
|                                                    |       Totalrevenues | $55,896,550  | $53,024,929  |   |
|                                                    |  |  |  |   |
|                                                    | BENEFITS ANDEXPENSES |  |  |   |
|                                                    |  |  |  |   |
|                                                    |    Death andother policyholder benefits | $ 24,392,909  | $22,359,435  |   |
|                                                    |    Guaranteedannual endowments | 534,832  | 555,814  |   |
|                                                    |    Dividends topolicyholders | 536,747  | 550,045  |   |
|                                                    |    Increase inbenefit reserves and unearned |  |  |   |
|                                                    |      premiums | 16,114,605  | 14,654,785  |   |
|                                                    |    Amortizationof deferred acquisition |  |  |   |
|                                                    |      costs, net | (443,099) | (987,590) |   |
|                                                    |    Commissions | 4,203,012  | 4,573,497  |   |
|                                                    |    Otherinsurance expenses |     8,198,303  |     7,647,756  |   |
|                                                    |  |  |  |   |
|                                                    |       Total benefits andexpenses | $53,537,309  | $49,353,742  |   |
|                                                    |  |  |  |   |
|                                                    | Income from operations beforefederal |  |  |   |
|                                                    |    income taxand cumulative effect of |  |  |   |
|                                                    |    change inaccounting principle | $  2,359,241  | $  3,671,187  |   |
|                                                    |     |  |  |   |
|                                                    | Provision for federal incometaxes: |  |  |   |
|                                                    |    Current | $     291,101  | $     374,435  |   |
|                                                    |    Deferred |        468,353  |        861,000  |   |
|                                                    |  |  |  |   |
|                                                    |  | $     759,454  | $  1,235,435  |   |
|                                                    |  |  |  |   |
|                                                    | Income before cumulative effectof change |  |  |   |
|                                                    |    in accountingprinciple | $  1,599,787  | $  2,435,752  |   |
|                                                    |  |  |  |   |
|                                                    | Cumulative effect of changein |  |  |   |
|                                                    |    accountingprinciple | $   (970,862) | $                0  |   |
|                                                    |  |  |  |   |
|                                                    | Net income | $     628,925  | $  2,435,752  |   |
|                                                    |  |  |  |   |
|                                                    | Earnings per share: |  |  |   |
|                                                    |    Beforecumulative effect of change in |  |  |   |
|                                                    |       accountingprinciple | $           1.41  | $           2.04  |   |
|                                                    |    Cumulativeeffect of change in |  |  |   |
|                                                    |       accountingprinciple | $         (0.86) | $           0.00  |   |
|                                                    |  |  |  |   |
|                                                    | Earnings per share | $           0.55  | $           2.04  |   |
|                                                    |  |  |  |   |
|                                                    | 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 |
|                                                                | 2002 | 2001 |
|                                                           |  |  |
| Net cash provided by operatingactivities                       | $    17,900,537  | $     17,108,452  |
|                                                                |  |  |
| Investing activities                                           |  |  |
|    Securitiesavailable-for-sale:                |  |  |
|      Purchases                        | $(57,951,396) | $  (36,455,935) |
|      Sales andmaturities              | 37,650,781  | 24,842,678  |
|    Otherinvestments:                            |  |  |
|      Cost ofacquisition               | (2,302,777) | (3,617,822) |
|      Sales andmaturities              | 2,786,863  | 4,061,114  |
|    Otherinvesting activities                    |        (326,966) |               1,409  |
|                                                                |  |  |
| Net cash used by investingactivities                           | $(20,143,495) | $  (11,168,556) |
|                                                                |  |  |
| Financing activities                                           |  |  |
|    Receipts fromuniversal life policies         |  |  |
|      credited topolicyholders account |  |  |
|      balances                         | $   5,238,987  | $     2,597,870  |
|    Return ofpolicyholder account balances       |  |  |
|      on universal lifepolicies        | (5,783,807) | (6,036,723) |
|    Net proceedsfrom notes payable               | 4,284,943  | 307,663  |
|    Otherfinancing activities                    |       (332,702) |        (840,322) |
|                                                                |  |  |
| Net cash provided (used) byfinancing                           |  |  |
|    activities                                   | $   3,407,421  | $   (3,971,512) |
|                                                                |  |  |
| Increase in cash and cashequivalents                           | $   1,164,463  | $     1,968,384  |
|                                                                |  |  |
| Cash and cash equivalents atbeginning                          |  |  |
|     ofperiod                               |      6,432,594  |        3,324,447  |
|                                                                |  |  |
| Cash and cash equivalents atend of period                      | $   7,597,057  | $     5,292,831  |
|                                                                |
|                                                                |
| See accompanyingnotes.                                         |

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****
| **KENTUCKYINVESTORS, INC.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **September 30,2002**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **(Unaudited)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **NOTE A - Natureof Operations:**KentuckyInvestors, Inc. (Kentucky Investors) is the holding company ofInvestors Heritage Life Insurance Company (Investors Heritage),Investors Heritage Printing, Inc., a printing company, InvestorsHeritage Financial Services Group, Inc., an insurance marketingcompany, and Family Assignment Services, LLC, a limited liabilitycompany that provides advance funding of funerals in exchange forthe irrevocable assignment of life insurance policies from othernonaffiliated companies. These entities are collectivelyhereinafter referred to as the “Company”. Theoperations of Kentucky Investors are principally that of its lifeinsurance company, Investors Heritage. 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, 2002, are not necessarilyindicative of the results that may be expected for the year endingDecember 31, 2002. For further information, refer to theconsolidated financial statements and footnotes thereto for theyear ended December 31, 2001, 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. The number of shares used in this computation for theCompany is 1,135,375 and 1,194,322 for September 30, 2002 and 2001,respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **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 30,2002 | September 30,2001 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |
| Revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $13,952,924  | $13,593,375  |
|    Traditional& Universal Life Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 3,373,288  | 3,296,266  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 51,206  | 209,027  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        727,602  |        938,339  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $18,105,020  | $18,037,007  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |
| Pre-Tax Income (Loss) fromOperations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $      326,993  | $     465,461  |
|    Traditional & Universal LifeProducts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 72,671  | 340,441  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 319  | (27,372) |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        273,362  |        638,003  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $     673,345  | $  1,416,533  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Nine MonthsEnded |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | September 30,2002 | September 30,2001 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |
| Revenues:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $43,219,130  | $40,657,394  |
|    Traditional& Universal Life Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 9,943,036  | 9,905,023  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 167,911  | 318,677  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |     2,566,473  |     2,143,835  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $55,896,550  | $53,024,929  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |
| Pre-Tax Income fromOperations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |
|    Preneed &Burial Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | $     292,498  | $  1,570,952  |
|    Traditional & Universal LifeProducts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 823,802  | 1,061,646  |
|    CreditInsurance Products &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |  |
|       AdministrativeServices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 6,955  | 74,460  |
|    Corporate& Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |      1,235,986  |       964,129  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | $  2,359,241  | $  3,671,187  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |
| **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 30,2002 | September 30,2001 |
| Net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $      417,919  | $       948,761  |
| Net unrealizedgains on                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |
|   available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |      7,918,626  |    4,516,925  |
| Comprehensiveincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $   8,336,545  | $    5,465,686  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Nine MonthsEnded |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | September 30,2002 | September 30,2001 |
| Net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $      628,925  | $    2,435,752  |
| Net unrealizedgains on                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |
|   available-for-sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |    10,323,984  |       5,489,414  |
| Comprehensiveincome                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $ 10,952,909  | $    7,925,166  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |
| **NOTE G –New Accounting Pronouncements:**In June 2001, the Financial Accounting Standards Board(FASB) issued Statements of Financial Accounting Standards (SFAS)No. 141, “Business Combinations”, which eliminates thepooling-of-interest method of accounting for business combinationsand requires the use of the purchase method. In addition, SFAS 141requires the reassessment of intangible assets to determine if theyare appropriately classified either separately or within goodwill.SFAS 141 is effective for business combinations initiated afterJune 30, 2001. The Company adopted SFAS 141 on January 1, 2002,with no material impact on the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| In June 2001, theFASB also issued SFAS 142, “Goodwill and Other IntangibleAssets,” which eliminates the amortization of goodwill andother acquired intangible assets with indefinite economic usefullives. SFAS 142 requires, at least annually, an impairment test ofgoodwill and other intangible assets with indefinite useful lives.The Company adopted SFAS 142 on January 1, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| In accordance withthe provisions of SFAS 142, the Company ceased amortization ofgoodwill and all intangible assets with indefinite useful lives.The Company has performed the requisite transitional impairmenttests for these assets as of January 1, 2002 and $970,862 ofgoodwill, associated with the 1981 acquisition of InvestorsHeritage of the South and the 1982 acquisition of CommercialTravelers Life Insurance Company, was recorded as a cumulativeeffect of a change in accounting principle in the first quarter of2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| A reconciliationof the previously reported 2001 statement of income information topro forma amounts that reflect the elimination of amortization ofgoodwill is presented below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Three MonthsEnded |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | September 30,2001 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Amount | PerShare |   |
| Net income, asreported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $     948,761  | $       0.79  |   |
| Amortization ofgoodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |         12,136  |         0.01  |   |
| Pro forma net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $     960,897  | $       0.80  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Nine MonthsEnded |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | September 30,2001 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Amount | PerShare |   |
| Net income, asreported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $  2,435,752  | $       2.04  |   |
| Amortization ofgoodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |         36,408  |         0.03  |   |
| Pro forma net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $  2,472,160  | $       2.07  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |  |   |
| **NOTE H – NotesPayable:** On June 28, 2002, Kentucky Investors enteredinto long                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| term debt with CherokeeNational Life Insurance Company (Cherokee) of Macon, Georgia, inthe amount of $4,000,000, with interest to be paid quarterly, at arate equal to the prime rate, and due on June 28, 2007. The fundswere used to purchase 400,000 shares of Cherokee common stockvalued at $4,000,000. No interest has been paid on this note in2002. At September 30, 2002, interest payable on this note was$47,500. The Company has guaranteed a $2,000,000 line-of-creditnote with a financial institution, with interest to be paid monthlyat a rate equal to the prime rate and due September 30, 2003. AtSeptember 2002, $466,423 was outstanding on this note. The purposeof this line of credit is to provide advance funding for funeralsin exchange for an assignment of life insurance policies from otherunaffiliated companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **ITEM 2. Management'sDiscussion and Analysis of Financial Condition and              Resultsof Operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |
| **General**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Kentucky Investors, Inc. 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 and other unaffiliated parties, andFamily 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 offers afull line of life insurance products including, but not limited to,whole life, term life, single premium life, multi-pay life andannuities. Investors Heritage's primary lines of business isinsurance policies and annuities utilized to fund preneed funeralcontracts, credit life and credit disability insurance, and termlife and reducing term life sold through financialinstitutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage introduced anew whole life final expense product during the third quarter of2001. The new product, Heritage Final Expense replaced the Legacy2000 Final Expense series and is being marketed through funeralhomes and independent agencies. Investors Heritage entered into areinsurance agreement with Munich American Reassurance Company withregard to this new product to help reduce the initial surplusstrain and minimize fluctuations in future profits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage alsoprovides term insurance products, both on a decreasing and a levelbasis. During 2001 a new Term to 95 product was introduced thatreplaced the Level Best Term product. We will continue to provideour decreasing term policy that is primarily sold through financialinstitutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The Company's operatingearnings are derived primarily from revenues generated from thesale of insurance products by Investors Heritage, plus theCompany's investment results, including realized gains (losses),less interest credited, benefits to policyholders andexpenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| While the Company continues toexpand the operations of Financial Services Group, HeritagePrinting and Family Assignment Services, less than 1% of theCompany's total operations were generated by those subsidiaries. Asexpected, more than 10% of Financial Services Group's revenuesduring the third quarter 2002 were derived from the sale ofInvestors Heritage's credit insurance products. During the firstnine months of 2002, the Company received dividends from FinancialServices Group and Heritage Printing in the amount of $281,000 and$20,000, respectively. The Company anticipates another dividendpayment from Financial Services Group during the fourth quarter in2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The Company's primary uses ofcash are operating expenses, debt service and dividend payments,and the Company's principal sources of cash are the dividends paidto it by Investors Heritage, Financial Services Group and HeritagePrinting. Investors Heritage's principal sources of cash are fromthe sale of life insurance policies and investment income,including realized gains (losses), less benefits to policyholdersand expenses. Therefore, the remainder of the discussion will dealwith the financial condition and results of operations of InvestorsHeritage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **Investments, Liquidity andCapital Resources**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Premiums, which includemortality and expense charges, and investment income are InvestorsHeritage's primary sources of cash flow used to meet short-term andlong-term cash requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage's short-termobligations consist primarily of policyholder benefits andoperating expenses. Investors Heritage has historically been ableto meet these obligations out of operating cash, premiums andinvestment income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Management is not aware of anycommitments or unusual events that could materially affect capitalresources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 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 and $1,800,000 was loaned toInvestors Heritage in exchange for a surplus note. The note callsfor Investors Heritage to pay, on or before the first day of eachquarter, interest at an 8.5% annual rate, upon prior approval bythe Kentucky Department of Insurance. Such interest may be paid outof Investors Heritage's earned surplus, operating income, orpaid-in and contributed surplus. In the second quarter of 2002 theCompany 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 $466,423 wasoutstanding at September 30, 2002. The purpose of this line ofcredit is to provide advance funding for funerals in exchange foran assignment of life insurance policies from other unaffiliatedcompanies. |
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| The Company and InvestorsHeritage will continue to explore various opportunities includingcorporate reorganizations, acquisitions and purchasing blocks ofbusiness from other companies, which may dictate an additional needfor either long-term or short-term debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| During the first quarter 2002,the Board of Directors directed that there be submitted to theshareholders at the annual meeting a proposed amendment to theArticles of Incorporation to authorize the issuance of 8,000,000shares of a new class of undesignated, non-voting preferred stock.On May 9, 2002, at the Annual Meeting of Shareholders, theshareholders approved the proposed amendment. The Board ofDirectors will establish and designate different series within thenew class of preferred stock and fix and determine the relativerights and preferences of each new series. To date no shares havebeen issued and the Company has no current plans to issue suchshares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Investors Heritage hasmaintained a sound, conservative investment strategy. At September30, 2002, 87.7% of invested assets consisted of fixed income publicbonds compared to 87.3% at December 31, 2001. Fixed income assetsare managed by Conning Asset Management Company, an independentportfolio manager.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Additionally, InvestorsHeritage also engages in commercial and residential mortgagelending with approximately 97% 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, 2002, 7.4% of invested assets consisted of mortgageloans compared to 8.8% at December 31, 2001. Management anticipatesfunding several new mortgage loan investments during the remainderof 2002 to maintain a similar to slightly higher percentage ofmortgage loans to total invested assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| Investors Heritage'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, 2002 Investors Heritage's fixedincome investments were 100% investment grade as rated by Standard& Poor's, compared to 99.6% at December 31, 2001. None ofInvestors Heritage's fixed income assets are in default and therehas been no material change in the distribution of its fixed incomeportfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Investors Heritage's principallong-term obligations are fixed contractual obligations incurred inthe sale of its life insurance products. The premiums charged forthese products are based on conservative and actuarially soundassumptions as to mortality, persistency and interest. InvestorsHeritage believes these assumptions will produce revenuessufficient to meet its future contractual benefit obligations andoperating expenses, and provide an adequate profitmargin.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| **Results ofOperations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Total premium income (net ofreinsurance) for the third quarter 2002 increased 1.7% whencompared to the third quarter of 2001 and increased 6.7% for thefirst nine months of 2002 when compared to the same period in 2001,due primarily to increases in pre-need sales. Net investment incomefor the third quarter 2002 compared to the third quarter of 2001increased 4.3% and increased less than 1% for the first nine monthsof 2002 when compared to the same period in 2001. The increase isprimarily due to a larger asset base, however lower yield rates onnew asset purchases, and the change in the amortization schedulesof mortgage-backed securities due to higher than anticipatedpre-payments has impacted the rate of return on our investmentportfolio. Overall revenue for the third quarter 2002 increasedless than 1.0% when compared to the third quarter of 2001 andincreased 5.4% for the first nine months of 2002 when compared tothe same period in 2001.                                                                                                                                                                                                                                                                                                                                                                                  |
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| Total Benefits and Expenseswere 4.9% higher in the third quarter of 2002 when compared to thesame quarter of 2001 and 8.5% higher for the first nine months of2002 when compared to the same period in 2001 primarily due tohigher premium production in pre-need sales and higher claimsoverall. After providing for federal income taxes, the Company'sNet Income was $417,919 with Earnings per share of $0.37 for thethird quarter of 2002 as compared to Net Income of $948,761 andEarnings per share of $0.73 for the same period in 2001. TheCompany’s Net Income (before cumulative effect of change inaccounting principle) was $1,599,787 with Earnings per share of$1.41 for the first nine months of 2002 as compared to Net Incomeof $2,435,752 and Earnings per share of $2.04 for the first ninemonths of the same period in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| SFAS No. 142 "Goodwill andOther Intangible Assets" was adopted during the first quarter of2002. This resulted in an after-tax charge of $970,862 during thefirst quarter of 2002 related to the impairment of goodwill. Theimpaired goodwill was associated with the 1981 and 1982acquisitions of Investors Heritage Life Insurance Company of theSouth and Commercial Travelers Life Insurance Company,respectively. The charge is reported separately in theCompany’s Consolidated Statements of Income as a "CumulativeEffect of Change in Accounting Principle". After the charge, thegoodwill balance at September 30, 2002 is $-0-. Under the newaccounting standards, there will no longer be a charge for normalamortization of goodwill.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| A dividend of $0.38 per sharewas paid April 5, 2002, to shareholders of record on March 22,2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **BusinessSegments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Management internally evaluatesthe performance of Investors Heritage operations by the followingbusiness 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 2.6% higher for the third quarter of 2002 whencompared to the same period of 2001 and 6.3% higher in the firstnine months of 2002 when compared to the same period of 2001. Theincrease is due to a significant increase in sales from InvestorsHeritage's Legacy 2000 Series of Preneed Products used in thepreneed funeral market. Pre-Tax Income from Operations for thethird quarter 2002 was $326,993 compared to $465,461 for the sameperiod for 2001 and $292,498 for the first nine months of 2002compared to $1,570,952 for the same period for 2001. The decreasein 2002 compared to 2001 is due primarily to higher mortality,reduced investment income due to lower interest rates oninvestments in fixed maturities and higher state premium taxes dueto the increase in sales. Investors Heritage plans to continue itsexpansion of territory and recruitment of agents in the Preneed andBurial insurance market.                                                                                                                                                                                                                                                       |
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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 2.3% higher for the thirdquarter of 2002 when compared to the third quarter of 2001 and 0.4%higher for the first nine months of 2002 when compared to the sameperiod in 2001. 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 throughout each quarter. Pre-TaxIncome from Operations for the third quarter 2002 was 78.7% lowerthan the third quarter of 2001 and 22.4% lower in the first ninemonths of 2002 compared to the same period in 2001 primarilybecause of higher mortality and general insurance expensesassociated with the sales, issuance and administration costs ofthese products.                                                                                                                                                                                                                                                                                                                                                                                             |
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| Credit Insurance Products andAdministrative Services include the marketing and administration ofcredit life and credit accident & health insurance products.Revenues for 2002 were $51,206 for the third quarter compared to$209,027 for the same period for 2001 and $167,911 for the firstnine months of 2002 compared to $318,677 for the same period in2001. Pre-Tax Income (Loss) from Operations was $319 for the thirdquarter of 2002 compared to $(27,372) for the third quarter of 2001and $6,955 for the first nine months of 2002 compared to $74,460for the same period in 2001. The decreases are primarily due to thereduction in the need for credit insurance because of a decrease inconsumer loan demand. With less production there was a relatedreduction in service fee income for this segment. All of therelated underwriting risk currently produced is being reinsured100% with highly-rated life companies.                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Corporate & Other consistsof corporate accounts measured primarily by stockholders' paid-incapital, contributed surplus, earned surplus, property andequipment, and other minor business lines which include groupannuities and group and individual accident and health products.Revenues were 22.5% lower and Pre-Tax Income from Operations was57.2% lower for the third quarter of 2002 when compared to thethird quarter 2001. Revenues were 19.7% higher for the first ninemonths of 2002 when compared to the same period in 2001 and Pre-TaxIncome from Operations was 28.2% higher for the first nine monthsof 2002 when compared to the same period in 2001. The increases forthe nine months in 2002 are primarily due to higher realized gainsfrom the sale of investments. The decreases for the third quarterof 2002 when compared to the third quarter of 2001 are primarilydue to the timing of those realized gains.                                                                                                                                                                                                                                                                                                                                                                                                                            |
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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 32.2% at September 30, 2002compared to 33.7% for September 30, 2001. The decrease in theeffective tax rate is due primarily to the increased benefit of thesmall life insurance company deduction resulting from a decrease innet income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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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" orwords of similar import generally involve forward-lookingstatements. Without limiting the foregoing, forward-lookingstatements include statements which represent the Company's beliefsconcerning future levels of sales and redemptions of InvestorsHeritage's products, investment spreads and yields, or the earningsand profitability of the Company's or Investors Heritage'sactivities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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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. Theseuncertainties 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 area andelsewhere. Others may relate to the Company specifically, such ascredit, volatility and other risks associated with the Company'sinvestment portfolio. The Company cautions that such factors arenot exclusive. The Company disclaims any obligation to updateforward-looking information.           |
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| **ITEM 3. Quantitative andQualitative Disclosures about Market Risk**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| There have been no significantchanges in the Company's market risks since December 31, 2001.Refer to the Annual Report to the stockholders for the year endedDecember 31, 2001 for reference purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| **ITEM 4. Controls andProcedures**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| Within the 90 days prior to thefiling date of this Form 10-Q, the Company carried out anevaluation, under the supervision and with the participation of theCompany's management, including the Company's Chief ExecutiveOfficer and Chief Financial Officer, of the effectiveness of thedesign and operation of the Company's disclosure controls andprocedures as defined in Rule 13a-14 of the Securities Exchange Actof 1934.  Based upon that evaluation, the Chief ExecutiveOfficer and Chief Financial Officer concluded that the Company'sdisclosure controls and procedures are effective in timely alertingthem to material information relating to the Company (including itsconsolidated subsidiaries) required to be included in thisQuarterly Report on Form 10-Q. There have been no significantchanges in the Company's internal controls or in other factorswhich could significantly affect internal controls subsequent tothe date the Company carried out its 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 isinvolved in litigation relating to claims arising out of itsoperations in the normal course of business. As of November 8,2002, Investors Heritage is not a party to any legal proceedings,the adverse outcome of which, in management’s opinion,individually or in the aggregate, would have a material adverseeffect on Investors Heritage’s or the Company’sfinancial condition or results of operations.

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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**                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|                                                           | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| **ITEM 4. Submission ofMatters to a Vote of Security Holders** |
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|                                                           | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
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| **ITEM 5. OtherInformation**                                   |
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|                                                           | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
| **ITEM 6. Exhibits and Reportson Form 8-K**                    |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                                | a) Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                                | No exhibits were filed for thequarter ended September 30, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                                | b) Reports on form8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                                | No reports on Form 8-K werefiled for the quarter ended September 30, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
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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.                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **KENTUCKY INVESTORS,INC.** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | /s/ Harry Lee WaterfieldII |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | BY: Harry Lee WaterfieldII |
| DATE: November 8,2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       President |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | /s/ Raymond L. Carr |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | BY: Raymond L. Carr |
| DATE: November 8,2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       Vice President -Chief Financial Officer |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|      Harry Lee Waterfield IIand Raymond L. Carr, being the President and Vice President, ChiefFinancial Officer, respectively, of Kentucky Investors, Inc.,hereby certify as of this 8th day of November, 2002, that the Form10-Q for the Quarter ended September 30, 2002 fully complies withthe requirements of Section 13(a) or 15(d) of the SecuritiesExchange Act of 1934 and that the information contained in the Form10-Q fairly presents, in all material respects, the financialcondition and results of operations of Kentucky Investors,Inc. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | **KENTUCKY INVESTORS,INC.** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | /s/ Harry Lee WaterfieldII |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | BY: Harry Lee WaterfieldII |
| DATE: November 8,2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       President |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | /s/ Raymond L. Carr |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | BY: Raymond L. Carr |
| DATE: November 8,2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |       Vice President -Chief Financial Officer |

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**CERTIFICATIONS**
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        | I, Harry Lee Waterfield II,certify that:                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 1.     | I have reviewed this quarterlyreport on Form 10-Q of Kentucky Investors, Inc.;                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 2.     | Based on my knowledge, thisquarterly report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the periodcovered by this quarterly report;                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.     | Based on my knowledge, thefinancial statements, and other financial information included inthis quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this quarterlyreport;                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 4.     | The registrant's othercertifying officers and I are responsible for establishing andmaintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-14 and 15d-14) for the registrant, and wehave:                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (a) Designed such disclosurecontrols and procedures to ensure that material informationrelating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities,particularly during the period in which this quarterly report isbeing prepared,                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (b) Evaluated the effectivenessof the registrant's disclosure controls and procedures as of a datewithin 90 days prior to the filing date of this quarterly report(the "Evaluation Date"), and                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (c) Presented in this quarterlyreport our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of theEvaluation Date;                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 5.     | The registrant's othercertifying officers and I have disclosed, based on our most recentevaluation, to the registrant's auditors and the audit committee ofthe registrant's board of directors:                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (a) All significantdeficiencies in the design or operation of internal controls whichcould adversely affect the registrant's ability to record, process,summarize, and report financial data and have identified for theregistrant's auditors any material weaknesses in internal controls;and,                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (b) Any fraud, whether or notmaterial, that involves management or other employees who have asignificant role in the registrant's internal controls;and,                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 6.     | The registrant's othercertifying officers and I have indicated in this quarterly reportwhether or not there were significant changes in internal controlsor in other factors that could significantly affect internalcontrols subsequent to the date of our most recent evaluation,including any corrective actions with regard to significantdeficiencies and material weaknesses. |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| Date: November 8,2002 | By: /s/ Harry Lee WaterfieldII |
|-----------------------|--------------------------------|
|                       | Harry Lee WaterfieldII         |
|                       | President                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | I, Raymond L. Carr, certifythat:                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 1.     | I have reviewed this quarterlyreport on Form 10-Q of Kentucky Investors, Inc.;                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 2.     | Based on my knowledge, thisquarterly report does not contain any untrue statement of amaterial fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the periodcovered by this quarterly report;                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 3.     | Based on my knowledge, thefinancial statements, and other financial information included inthis quarterly report, fairly present in all material respects thefinancial condition, results of operations and cash flows of theregistrant as of, and for, the periods presented in this quarterlyreport;                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 4.     | The registrant's othercertifying officers and I are responsible for establishing andmaintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-14 and 15d-14) for the registrant, and wehave:                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (a) Designed such disclosurecontrols and procedures to ensure that material informationrelating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities,particularly during the period in which this quarterly report isbeing prepared,                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (b) Evaluated the effectivenessof the registrant's disclosure controls and procedures as of a datewithin 90 days prior to the filing date of this quarterly report(the "Evaluation Date"), and                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (c) Presented in this quarterlyreport our conclusions about the effectiveness of the disclosurecontrols and procedures based on our evaluation as of theEvaluation Date;                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 5.     | The registrant's othercertifying officers and I have disclosed, based on our most recentevaluation, to the registrant's auditors and the audit committee ofthe registrant's board of directors:                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (a) All significantdeficiencies in the design or operation of internal controls whichcould adversely affect the registrant's ability to record, process,summarize, and report financial data and have identified for theregistrant's auditors any material weaknesses in internal controls;and,                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
|        | (b) Any fraud, whether or notmaterial, that involves management or other employees who have asignificant role in the registrant's internal controls;and,                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| 6.     | The registrant's othercertifying officers and I have indicated in this quarterly reportwhether or not there were significant changes in internal controlsor in other factors that could significantly affect internalcontrols subsequent to the date of our most recent evaluation,including any corrective actions with regard to significantdeficiencies and material weaknesses. |
|   |                                                                                                                                                                                                                                                                                                                                                                                     |
| Date: November 8,2002 | By: /s/ Raymond L.Carr                  |
|-----------------------|-----------------------------------------|
|                       | Raymond L. Carr                         |
|                       | Vice President - ChiefFinancial Officer |