UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC   20549FORM 10-QQUARTERLY REPORTPursuant to Section 13 or 15(d) of the Securities Exchange Act
				of 1934For the Quarterly Period Ended June 30, 2007Commission File Number: 0-1999KENTUCKY INVESTORS, INC.(Exact Name of Registrant as Specified in Charter)KENTUCKY(State of Other Jurisdiction of Incorporation or Organization)61-6030333(IRS Employer Identification No.)200 Capital Avenue, P. O. Box 717Frankfort, Kentucky   40602(Address of Principal Executive Offices)Registrant's Telephone Number - (502) 223-2361Securities registered pursuant to Section 13(g) of the Act:Common Capital Stock par value $1.00 per share(Title of Class)Number of outstanding shares as of August 10, 2007 -
				1,113,402.720Indicate by
				check mark whether the registrant (1) has filed all reports
				required to be filed by Section 13 or 15(d) of the Securities
				Exchange Act of 1934 during the preceding 12 months (or for such
				shorter period that the registrant was required to file such
				reports), and (2) has been subject to such filing requirements
				for the past 90 days. Yes X NoIndicate by
				check mark whether the registrant is a large accelerated filer,
				an accelerated filer, or a non-accelerated filer. See definition
				of "accelerated filer and large accelerated filer" in Rule 12b-2
				of the Exchange Act. Large accelerated filer
				Accelerated filer Non-accelerated filer XIndicate by check mark whether the
				registrant is a shell company (as defined in Rule 12b-2 of the
				Exchange Act). Yes  No X
 
  CONTENTS  PART I --
	FINANCIAL INFORMATION PageITEM 1.
				Condensed Consolidated Financial Statements
				3ITEM 2.
				Management's Discussion and Analysis of
				Financial Condition and Results of Operations
				13ITEM 3.
				Quantitative and Qualitative Disclosures
				about Market Risk
				20ITEM 4.
				Controls and Procedures
				20
  PART II -- OTHER INFORMATION ITEM 1.
				Legal Proceedings
				21ITEM1A.
				Risk Factors
				21ITEM 2.
				Unregistered Sales of Equity Securities and
				Use of Proceeds
				21ITEM 3.
				Defaults Upon Senior Securities
				21ITEM 4.
				Submission of Matters to a Vote of Security
				Holders
				21ITEM 5.
				Other Information
				22ITEM 6.
				Exhibits
				22SIGNATURES
				
				23EXHIBIT 31.1
				
				24EXHIBIT 31.2
				
				26EXHIBIT 32
				
				28
   
  PART I -- FINANCIAL INFORMATION  ITEM 1. Condensed Consolidated Financial
				Statements KENTUCKY INVESTORS, INC.Condensed Consolidated Balance Sheets (Unaudited)
  June 30, 2007
				December 31, 2006AssetsInvestmentsSecurities available for sale, at fair
				value:Fixed maturities (amortized cost:$280,809,037and $281,277,592)
				$278,199,668
				$284,005,322Equity securities (cost:$3,156,664 and $3,141,053)
				3,899,673
				3,790,179Mortgage loans on real estate
				25,672,334
				24,629,380Policy loans
				7,076,904
				7,283,917Other long term investments
				1,011,413
				1,438,921Short term investments
				365,000
				390,000Total investments
				316,224,992
				321,537,719Cash and cash equivalents
				1,397,229
				1,776,491Accrued investment income
				4,582,008
				4,564,086Due premiums
				3,758,381
				3,854,233Deferred acquisition costs
				21,524,187
				21,494,408Present value of future profits
				162,177
				207,969Leased property under capital leases
				243,978
				350,093Property and equipment, net
				1,730,458
				1,666,402Collateral on securities loaned
				17,367,823
				-Cash value of company-owned life
				insurance
				6,163,852
				6,117,814Other assets
				300,553
				243,912Amounts recoverable from reinsurers
				52,726,941
				53,415,921Total assets
				$426,182,579
				$415,229,048
    June 30, 2007
				December 31, 2006Liabilities and stockholders' equityLiabilitiesPolicy liabilitiesBenefit reserves
				$340,435,676
				$341,173,043Unearned premium reserves
				13,171,445
				13,525,803Policy claims
				1,499,148
				1,567,922Liability for deposit-type contracts
				2,626,716
				2,652,003Reserves for dividends andendowments and other
				596,267
				601,815Total policy liabilities
				358,329,252
				359,520,586Federal income taxes
				2,132,147
				3,730,671Obligations under capital leases
				245,420
				349,166Notes payable
				4,964,425
				5,725,751Obligations to return collateral undersecurities loan agreement
				17,367,823
				-Accrued pension liability
				2,633,611
				2,847,193Other liabilities
				2,261,308
				1,885,288Total liabilities
				$387,933,986
				$374,058,655Stockholders'
				equityCommon stock (shares issued:1,113,403 and 1,113,104)
				$    1,113,403
				$    1,113,104Paid-in surplus
				8,606,117
				8,603,902Accumulated other comprehensiveloss
				(3,284,336)
				(114,520)Retained earnings
				31,813,409
				31,567,907Total stockholders' equity
				$  38,248,593
				$  41,170,393Total liabilities and stockholders'equity
				$426,182,579
				$415,229,048See accompanying notes.
    KENTUCKY INVESTORS, INC.Condensed Consolidated Income Statements (Unaudited)
  Three Months Ended June 302007
				2006RevenuePremiums and other considerations
				$11,694,675
				$11,928,628Premiums ceded
				(3,598,513)
				(3,544,952)Net premiums earned
				8,096,162
				8,383,676Investment income, net of expenses
				4,462,353
				4,527,945Realized gain on investments, net
				1,142
				71,073Other income
				351,585
				268,806Total revenue
				12,911,242
				13,251,500Benefits and expensesDeath and other benefits
				7,873,173
				7,861,876Guaranteed annual endowments
				163,694
				170,193Dividends to policyholders
				150,409
				150,137Increase in benefit reservesand unearned premiums
				1,065,432
				1,309,277Acquisition costs deferred
				(1,213,162)
				(1,261,506)Amortization of deferred acquisition
				costs
				1,421,547
				1,514,427Commissions
				510,112
				529,230Other insurance expenses
				2,552,175
				2,534,406Total benefits and expenses
				12,523,380
				12,808,040Income before
				federal income taxes
				387,862
				443,460Provision for federal income taxes:Current
				46,206
				73,054Deferred
				22,492
				7,124Total provision for federal income
				taxes
				68,698
				80,178Net income
				$     319,164
				$     363,282Basic and diluted earnings per share
				$           0.29
				$           0.33Dividends per share
				$                -
				$                -See accompanying notes.
    KENTUCKY INVESTORS, INC.Condensed Consolidated Income Statements (Unaudited)
  Six Months Ended June 302007
				2006RevenuePremiums and other considerations
				$22,686,747
				$24,015,397Premiums
				ceded
				(6,348,622)
				(6,584,683)Net premiums earned
				16,338,125
				17,430,714Investment income, net of expenses
				8,989,752
				9,027,774Realized gain (loss) on investments, net
				601
				(58,644)Other income
				639,662
				516,704Total revenue
				25,968,140
				26,916,548Benefits and expensesDeath and other benefits
				16,751,434
				16,785,153Guaranteed annual endowments
				310,300
				325,410Dividends to policyholders
				283,768
				293,254Increase in benefit reservesand unearned premiums
				1,372,363
				2,681,838Acquisition costs deferred
				(2,465,086)
				(2,521,486)Amortization of deferred acquisition
				costs
				2,843,210
				2,981,094Commissions
				1,035,900
				1,127,645Other insurance expenses
				5,030,470
				4,865,969Total benefits and expenses
				25,162,359
				26,538,877Income from operations before provisionfor federal
				income taxes
				805,781
				377,671Provision (benefit) for federal income
				taxes:Current
				53,112
				148,066Deferred
				89,607
				(79,783)Total provision for federal income taxes
				142,719
				68,283Net income
				$     663,062
				$     309,388Basic and diluted earnings per share
				$           0.60
				$           0.28Dividends per share
				$           0.38
				$           0.38See accompanying notes.


KENTUCKY INVESTORS, INC.Condensed Consolidated Statements of Stockholders' Equity
				(Unaudited)
  AccumulatedOther
			
			
			
			TotalCommon
			
			Paid-in
			
			Comprehensive
			
			Retained
			
			Stockholders'Stock
			
			Surplus
			
			Income (Loss)
			
			Earnings
			
			EquityBALANCE, JANUARY 1, 2006
			
			$    1,104,773
			
			$    8,578,978
			
			$         3,954,841
			
			$  30,624,112
			
			$      44,262,704Comprehensive income (loss):Net income
			
			-
			
			-
			
			-
			
			309,388
			
			309,388Change in net unrealized appreciation onavailable-for-sale securities, net of tax
			
			-
			
			-
			
			(6,581,353)
			
			-
			
			(6,581,353)Change in fair value of hedging instrument
			
			-
			
			-
			
			18,236
			
			-
			
			18,236Total comprehensive loss
			
			
			
			
			
			
			
			
			
			(6,253,729)Cash dividends paid ($0.38 per share)
			
			-
			
			-
			
			-
			
			(455,604)
			
			(455,604)Issuances of common stock, net
			
			3,671
			
			12,738
			
			-
			
			71,878
			
			88,287BALANCE, JUNE 30, 2006
			
			$  1,108,444
			
			$    8,591,716
			
			$        (2,608,276)
			
			$  30,549,774
			
			$     37,641,658BALANCE, JANUARY 1, 2007
			
			$    1,113,104
			
			$    8,603,902
			
			$         (114,520)
			
			$  31,567,907
			
			$      41,170,393Comprehensive income (loss):Net income
			
			-
			
			-
			
			-
			
			663,062
			
			663,062Change in net unrealized depreciation onavailable-for-sale securities, net of tax
			
			-
			
			-
			
			(3,234,209)
			
			-
			
			(3,234,209)Amortization of unrecognized net actuarial losson pension plan, net of tax
			
			-
			
			-
			
			59,072
			
			-
			
			59,072Change in fair value of hedging instrument
			
			-
			
			-
			
			5,321
			
			-
			
			5,321Total comprehensive loss
			
			
			
			
			
			
			
			
			
			(2,506,754)Cash dividends paid ($0.38 per share)
			
			-
			
			-
			
			-
			
			(423,062)
			
			(423,062)Issuances of common stock, net
			
			299
			
			2,215
			
			-
			
			5,502
			
			8,016BALANCE, JUNE 30, 2007
			
			$  1,113,403
			
			$    8,606,117
			
			$        (3,284,336)
			
			$  31,813,409
			
			$     38,248,593  See
				accompanying notes.




---



KENTUCKY INVESTORS, INC.Condensed Consolidated Statements of Cash Flows (Unaudited)




Six
			Months Ended June 302007
			2006Net cash provided by operating activities
			$  1,896,361
			$   3,955,676Investing activitiesSecurities available-for-sale:Purchases
			(7,543,619)
			(25,914,023)Sales and maturities
			7,806,852
			27,442,552Other investments:Cost of acquisition
			(2,964,057)
			(1,221,357)Sales and maturities
			2,580,623
			2,543,991Net additions to property and equipment
			(153,348)
			(106,610)Net cash provided by (used in)investing activities
			(273,549)
			2,744,553Financing activitiesReceipts from universal life policiescredited to policyholder accountbalances
			4,912,364
			4,546,490Return of policyholder account balanceson universal life policies
			(5,738,066)
			(5,174,313)Payments on notes payable
			(2,946,659)
			(4,352,828)Proceeds from notes payable
			2,185,333
			3,480,876Issuances of common stock
			8,016
			88,287Dividends paid
			(423,062)
			(455,604)Net cash used in financing activities
			(2,002,074)
			(1,867,092)Increase (decrease) in cash andcash equivalents
			(379,262)
			4,833,137Cash and cash equivalents at beginning of
			period
			1,776,491
			1,994,032Cash and cash equivalents at end of period
			$  1,397,229
			$   6,827,169See
			accompanying notes.




---



KENTUCKY
INVESTORS, INC.



NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2007

(Unaudited)



NOTE A - Nature of Operations:Kentucky Investors, Inc. is the holding company of Investors
Heritage Life Insurance Company; Investors Heritage Printing, Inc., a printing
company; Investors Heritage Financial Services Group, Inc., an insurance
marketing company; and is the sole member of At Need Funding, LLC, a limited
liability company that provides advance funding of funerals in exchange for the
irrevocable assignment of life insurance policies from other nonaffiliated
companies. These entities are collectively hereinafter referred to as the
"Company". Approximately 99% of Kentucky Investors' consolidated revenue is
generated by Investors Heritage Life.



Our operations involve the sale and
administration of various insurance and annuity products, including, but not
limited to, participating and non-participating whole life, limited pay life,
universal life, annuity contracts, credit life, credit accident and health and
group insurance policies. The principal markets for the Company's products are
in the commonwealths of Kentucky and Virginia, and the states of North Carolina,
South Carolina, Ohio, Indiana, Florida, Tennessee, Georgia, and Michigan.



NOTE B - Basis of Presentation:The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by U.S. generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six months ended
June 30, 2007 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2007. For further information, refer to the
consolidated financial statements and footnotes thereto for the year ended
December 31, 2006, as included in our Annual Report on Form 10-K.



The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.



NOTE C - Earnings per Share and
Stock-Based Compensation:Earnings per share of common
stock were computed based on the weighted average number of common shares
outstanding during each period. The weighted average number of shares
outstanding for the three months ended June 30, 2007 and 2006 were 1,113,336 and
1,107,153, respectively. The weighted average number of shares outstanding for
the six months ended June 30, 2007 and 2006 were 1,113,296 and 1,105,969,
respectively.



We account for our stock-based incentive
program under Statement of Financial Accounting Standard ("SFAS") No. 123(R), "Share-Based Payment," which requires all share-based payments to employees
to be recognized as compensation expense in the consolidated income statement.
We adopted the provisions of SFAS No. 123(R) using the modified prospective
method in which compensation expense is recognized based on the requirements of
SFAS No. 123, "Accounting for Stock-Based Compensation," for all awards
granted to employees prior to January 1, 2006. Under this method, our
stock-based compensation is reported in the balance sheets as a liability based
on the intrinsic value of the compensation, and compensation expense is measured
as the change in intrinsic value.



The Company's only outstanding stock
options and stock appreciation rights were issued in 1999. Under our stock
option and stock appreciation rights plan, there were 61,125 outstanding
options, having an exercise price of $23.00 per share, as of June 30, 2007 and
2006. We reduced compensation expense relative to the outstanding options by
$9,169 and $97,800, respectively, for the three and six month periods ended June
30, 2007. We recognized an increase of $36,675 and $42,788, respectively, in
compensation expense associated with such options for the three month and six
month periods ended June 30, 2006. These changes in compensation expense were
based on changes in the market value of the Company's stock compared to the
exercise price of the options as of those dates.



NOTE D - Segment Data:
We operate 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 the applicable segment. Net investment income
is generally allocated to the insurance and the corporate segments in proportion
to policy liabilities and stockholders' equity, respectively. Corporate and
Other segment results include results for the parent company, Investors Heritage
Printing, Inc., Investors Heritage Financial Services Group, Inc. and At Need
Funding LLC, after elimination of intercompany amounts.



Three Months EndedJune 30, 2007
			June 30, 2006Revenue:Preneed and Burial Products
			$   9,148,158
			$   9,886,413Traditional and Universal
			Life Products
			3,316,503
			2,886,868Credit Insurance Products
			andAdministrative Services
			74,612
			54,388Corporate and Other
			371,969
			423,831$ 12,911,242
			$  13,251,500Income from operations before
			federalincome taxes:Preneed and Burial Products
			$      117,279
			$       59,569Traditional and Universal Life Products
			46,500
			160,511Credit Insurance Products
			andAdministrative Services
			18,563
			10,582Corporate and Other
			205,520
			212,798$       387,862
			$      443,460Six Months EndedJune 30, 2007
			June 30, 2006Revenue:Preneed and Burial Products
			$ 18,910,219
			$ 20,414,678Traditional and Universal
			Life Products
			6,173,916
			5,759,421Credit Insurance Products
			andAdministrative Services
			128,549
			91,384Corporate and Other
			755,456
			651,065$ 25,968,140
			$ 26,916,548Income (loss) from operations
			before federalincome taxes:Preneed and Burial Products
			$       (23,398)
			$     (74,654)Traditional and Universal Life Products
			287,551
			213,758Credit Insurance Products
			andAdministrative Services
			45,745
			38,356Corporate and Other
			495,883
			200,211$      805,781
			$      377,671




NOTE E - Federal Income Taxes:The provision (benefit) for federal income taxes is based on
the estimated effective annual tax rate. Deferred taxes reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes. At June 30, 2007 and December 31, 2006, the Company's deferred tax
liability as recorded on the balance sheet was $2,303,548 and $3,784,625,
respectively. Income before federal income taxes differs from taxable income
principally due to the dividends-received deduction, the 404(k) dividend
deduction and the small life insurance company tax deduction.



The Financial
Accounting Standards Board ("FASB") issued Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109"
("FIN 48"), in June 2006. FIN 48 clarifies the accounting for uncertainty in
income taxes by defining criteria that a tax position on an individual matter
must meet before that position is recognized in the financial
statements.  Additionally, FIN 48 provides guidance on measurement,
derecognition, classification, interest and penalties, interim period
accounting, disclosures and transition. We adopted the provisions of FIN 48 on
January 1, 2007. The adoption of FIN 48 did not have a material impact on our
financial condition or results of operations.



We file U.S.
federal income tax returns and income tax returns in various state
jurisdictions. Our 2003, 2004 and 2005 U.S. federal tax years remain subject to
income tax examination by tax authorities.  We have no known uncertain tax
benefits within our provision for income taxes. In addition, we do not believe
the Company will be subject to any penalties or interest relative to any open
tax years and, therefore, have not accrued any such amounts.  However, it is our
policy to classify any interest and penalties (if applicable) as income tax
expense in the financial statements.



NOTE F - Comprehensive Loss:The components of comprehensive loss, net of related federal
income taxes, are as follows:



Three Months EndedJune 30, 2007
			June 30, 2006Net income
			$         319,164
			$       363,282Change in fair value of hedging instrument
			7,308
			7,709Amortization of unrecognized net actuarial losson pension plan, net of tax
			29,536
			-Net unrealized losses on available-for-salesecurities, net of federal income taxes
			(3,669,718)
			(2,749,530)Comprehensive loss
			$    (3,313,710)
			$    (2,378,539)Six Months EndedJune 30, 2007
			June 30, 2006Net income
			$         663,062
			$      309,388Change in fair value of hedging instrument
			5,321
			18,236Amortization of unrecognized net actuarial losson pension plan, net of tax
			59,072
			-Net unrealized losses on available-for-salesecurities, net of federal income taxes
			(3,234,209)
			(6,581,353)Comprehensive loss
			$   (2,506,754)
			$     (6,253,729)




NOTE G - Employee Benefit
Plans:We sponsor a noncontributory defined benefit retirement plan which
covers substantially all employees. Benefits are based on years of service and
the highest consecutive 60 months average earnings within the last 120 months of
credited service. Benefits are funded based on actuarially-determined amounts.



The following table provides the
components of our net periodic benefit cost:





Three Months EndedJune 30, 2007
			June 30, 2006Service cost
			$   86,075
			$   77,688Interest cost
			183,238
			173,947Expected return on plan assets
			(212,874)
			(182,198)Amortization of net actuarial loss
			44,752
			54,200Net periodic benefit cost
			$ 101,191
			$ 123,637Six Months EndedJune 30, 2007
			June 30, 2006Service cost
			$ 172,150
			$ 155,376Interest cost
			366,476
			347,894Expected return on plan assets
			(425,748)
			(364,396)Amortization of net actuarial loss
			89,504
			108,400Net periodic benefit cost
			$ 202,382
			$ 247,274




We previously disclosed in our
financial statements for the year ended December 31, 2006 that we expected to
contribute $652,920 to our pension plan in 2007. As of June 30, 2007, $326,460
had been contributed. We presently anticipate contributing an additional
$326,460 to fund our pension plan in 2007.



NOTE H - Investments:We
participate in a securities lending program, primarily for investment yield
enhancement purposes, with third parties, mostly large brokerage firms.
Securities loaned are treated as financing arrangements and the unrestricted
collateral received is recorded as an asset, with an offsetting liability
recorded for our obligation to return the collateral, both reported at fair
value. We obtain collateral in an amount equal to 102% of the fair value of
domestic securities loaned, monitor the market value of securities loaned on a
daily basis and obtain additional collateral as necessary. At June 30, 2007,
fixed income securities with a carrying value of $16,854,565 were on loan under
this agreement, with associated collateral held of $17,367,823. At December 31,
2006, there were no securities on loan under this agreement. Income earned
relative to this program was $6,812 and $9,317, respectively, for the three
month and six month periods ended June 30, 2007. Income earned relative to this
program was $6,349 and $13,099, respectively, for the three month and six month
periods ended June 30, 2006.



NOTE I - Notes Payable:
During the second quarter of 2007, the Company renewed the Kentucky Investors
Line of Credit and the At Need Funding Line of Credit. The terms of the lines of
credit remain substantially the same as the terms previously in place. The
Kentucky Investors Line of Credit matures May 30, 2008 and the At Need Funding
Line of Credit matures June 30, 2008.



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



General



Kentucky Investors is
incorporated under the laws of the Commonwealth of Kentucky and wholly owns
Investors Heritage Life Insurance Company, a life insurance company also
incorporated under the laws of the Commonwealth of Kentucky. Kentucky Investors
also wholly owns Investors Heritage Financial Services Group, Inc., a Kentucky
insurance marketing company, Investors Heritage Printing, Inc., a Kentucky
printing company that provides printing to Investors Heritage Life and other
unaffiliated parties, and is the sole member of At Need Funding, LLC, a Kentucky
limited liability company that provides advance funding of funerals in exchange
for the irrevocable assignment of life insurance policies from other
nonaffiliated companies.



Investors
Heritage Life offers a full line of life insurance products including, but not
limited to, whole life, term life, single premium life, multi-pay life and
annuities. Investors Heritage Life's primary lines of business are insurance
policies and annuities utilized to fund preneed funeral contracts, credit life
and credit disability insurance, and term life and reducing term life sold
through financial institutions.



The Legacy Protector and Legacy
Preferred life insurance and annuity products are marketed exclusively in
conjunction with pre-arranged funerals. These products allow for competitive
commissions and death benefit growth to provide adequate proceeds to cover
funeral expenses while allowing individuals to purchase affordable benefits that
meet their personal needs. Underwritten and guaranteed issue options are
available.



The Heritage Final Expense
product is sold in the final expense markets. It is reinsured on an 80% quota
share basis. This reinsurance arrangement has helped to reduce first year
statutory surplus strain associated with new sales, as well as provide a stable
profit stream for the future.



Investors Heritage Life also
provides term insurance products, both on a decreasing and a level basis. The
Term to 95 product provides level coverage. Our decreasing term policy is
primarily sold through financial institutions.



While we continue to expand the
operations of Investors Heritage Financial, Investors Heritage Printing and At
Need Funding, approximately 1% of our consolidated revenues were generated by
those subsidiaries. Approximately 11% of Investors Heritage Financial's revenues
for the six month period ended June 30, 2007 were derived from the sale of
Investors Heritage Life's credit insurance products. During the first six months
of 2007, Kentucky Investors received dividends from Investors Heritage Financial
totaling $216,000 and received distributions from At Need Funding of $40,000. We
anticipate further dividend payments from Investors Heritage Financial and
distributions from At Need Funding during the remainder of 2007.



Our primary uses
of cash are ongoing operating expenses, debt service and dividend payments, and
our principal sources of cash are the dividends paid to us by Investors Heritage
Life and Investors Heritage Financial. Investors Heritage Life's principal
sources of cash are proceeds received from the sale of life insurance policies,
administrative service fees and investment income, including realized gains
(losses), less interest credited and benefits to policyholders and expenses.



Critical Accounting Policies and Estimates



The discussion and analysis of
our financial condition and results of operations is based on our consolidated
financial statements, which have been prepared in accordance with U.S. generally
accepted accounting principles. Preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. On a continuing basis, we evaluate
our estimates, including those related to investments, deferred acquisition
costs, present value of future profits, policy liabilities, income taxes,
accrued pension liabilities, regulatory requirements, contingencies and
litigation. We base such estimates on historical experience and other
assumptions believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions. We
believe the following accounting policies, judgments and estimates are the most
critical to the preparation of our consolidated financial statements.



Investments in Fixed Maturities, Equity Securities
and Mortgage Loans



We hold fixed maturities and
equity interests in a variety of companies. Additionally, we originate,
underwrite and manage mortgage loans. We continuously evaluate all of our
investments based on current economic conditions, credit loss experience and
other developments. We evaluate the difference between the cost/amortized cost
and estimated fair value of our investments to determine whether any decline in
value is other-than-temporary in nature. This determination involves some degree
of uncertainty. If a decline in the fair value of a security is determined to be
temporary, the decline is recorded as an unrealized loss in stockholders'
equity. If a decline in a security's fair value is considered to be
other-than-temporary, the security is written down to the estimated fair value
with a corresponding realized loss recognized in the consolidated income
statement.



The assessment of whether a
decline in fair value is considered temporary or other-than-temporary includes
our judgment as to the financial position and future prospects of the entity
issuing the security. It is not possible to accurately predict when it may be
determined that a specific security will become impaired. Future adverse changes
in market conditions, poor operating results of underlying investments and
defaults on mortgage loan payments could result in losses or an inability to
recover the current carrying value of the investments, thereby possibly
requiring an impairment charge in the future. Likewise, a change in our ability
or intent to hold temporarily impaired securities until maturity or recovery in
value could result in a future impairment charge.



Deferred Acquisition Costs



At June 30, 2007, the balance of
our deferred acquisition costs was approximately $21,524,000 compared to
$21,494,000 at December 31, 2006. The recovery of these costs is dependent on
the future profitability of the related business. Each reporting period, we
evaluate the recoverability of the unamortized balance of the deferred
acquisition costs. We consider estimated future gross profits or future
premiums, expected mortality or morbidity, interest earned and credited rates,
persistency and expenses in determining whether the balance is recoverable. If
we determine a portion of the unamortized balance is not recoverable, it is
immediately charged to amortization expense. The assumptions we use to amortize
and evaluate the recoverability of the deferred acquisition costs involve
significant judgment. A revision to these assumptions may impact future
financial results.



Policy Liabilities



Establishing liabilities for our
long-duration insurance contracts requires various assumptions, including
policyholder persistency, mortality rates, investment yields, discretionary
benefit increases, new business pricing, and operating expense levels. We
evaluate historical experience for these factors when assessing the need for
changing current assumptions. However, since many of these factors are
interdependent and subject to short-term volatility during the long-duration
contract period, substantial estimates and judgments are required. Actual
experience may emerge differently from that assumed. Any such difference would
be recognized in the current period's consolidated income statement.



Income Taxes



We evaluate our deferred income
tax assets, which partially offset our deferred tax liabilities, for any
necessary valuation allowances. In doing so, we consider our ability and
potential for recovering income taxes associated with such assets, which involve
significant judgment. Revisions to the assumptions associated with any necessary
valuation allowances would be recognized in the financial statements in the
period in which such revisions are made.



Accrued Pension Liabilities



We maintain a defined benefit
retirement plan on behalf of our employees. Measurement of the future benefit
obligations associated with this plan involves significant judgment,
particularly in regard to the expected long-term rate of return on plan assets,
rate of compensation increases and the current discount rate used to calculate
the present value of future obligations. Changes in these assumptions can
significantly impact the accrued pension liability required to be recorded in
the financial statements.



Investments, Liquidity and Capital Resources



Investments



Investors
Heritage Life has maintained a sound, conservative investment strategy. At June
30, 2007, 88.0% of invested assets consisted of fixed income public bonds
compared to 88.3% at December 31, 2006. Fixed income assets are managed by
Conning Asset Management Company, an independent portfolio manager.



We recognized no
other-than-temporary impairment losses during the six months ended June 30, 2007
or the corresponding period in 2006. We believe that we will recover the cost
basis in the securities held with unrealized losses as we have both the intent
and ability to hold the securities until they mature or recover in value.



We participate in a securities
lending program, primarily for investment yield enhancement purposes, with third
parties, mostly large brokerage firms. Securities loaned are treated as
financing arrangements and the unrestricted collateral received is recorded as
an asset, with an offsetting liability recorded for our obligation to return the
collateral.



Additionally,
Investors Heritage Life engages in commercial and residential mortgage lending,
with approximately 99.8% of these investments being in commercial properties.
All mortgage loans are originated in-house and all loans are secured by first
mortgages on the real estate. At June 30, 2007, 8.1% of invested assets
consisted of mortgage loans compared to 7.7% at December 31, 2006. We anticipate
funding several new mortgage loan investments during the remainder of 2007 to
maintain a similar to slightly higher percentage of mortgage loans to total
invested assets. As of June 30, 2007, Investors Heritage Life had no
non-performing mortgage loans, which would include loans past due 90 days or
more, loans in process of foreclosure, restructured loans and real estate
acquired through foreclosure.



Liquidity and Capital
Resources



Premiums, which include
mortality and expense charges, and investment income are Investors Heritage
Life's primary sources of cash flow used to meet short-term and long-term cash
requirements.



Investors Heritage Life's
short-term obligations consist primarily of policyholder benefits and operating
expenses. Investors Heritage Life has historically been able to meet these
obligations out of operating cash, premiums and investment income.



Investors Heritage Life's
principal long-term obligations are fixed contractual obligations incurred in
the sale of its life insurance products. The premiums charged for these products
are based on conservative and actuarially sound assumptions as to mortality,
persistency and interest. We believe these assumptions will produce revenues
sufficient to meet our future contractual benefit obligations and operating
expenses, and provide an adequate profit margin.



Investors Heritage Life's
conservative approach in the product development area and the strength and
stability of its fixed income and mortgage loan portfolios provide adequate
liquidity both in the short-term and the long-term. At June 30, 2007 and
December 31, 2006, Investors Heritage Life's fixed income investments were 100%
investment grade as rated by Standard & Poor's. None of Investors Heritage
Life's fixed income assets are in default and there has been no material change
in the distribution of its fixed income portfolio.



Kentucky
Investors principal sources of cash flow are rental income and dividends from
its subsidiaries. Kentucky Investors principal long-term obligations are
payments on long-term debt.



We assess our compliance with
prescribed debt covenant requirements as outlined in the terms of each debt
agreement at least annually, if not otherwise required in the debt agreement. 
Management has assessed our position and as of June 30, 2007, we are in
compliance with all debt covenant requirements.



We are not aware of any
commitments or unusual events that could materially affect capital resources. We
have the option to prepay certain notes payable at our discretion prior to their
maturity dates.



We will continue
to explore various opportunities including mergers and acquisitions and
purchasing blocks of business from other companies, which may dictate a need for
either long-term or short-term debt.  There are no restrictions as to use of
funds except the restriction on Investors Heritage Life as to the payment of
cash dividends to Kentucky Investors.



Results of Operations



Overview



Premiums earned (net of
reinsurance) were $8,096,162 for the second quarter of 2007 (a decrease of 3.4%
compared to the second quarter of 2006) and $16,338,125 for the first six months
of 2007 (a decrease of 6.3% compared to the same period in 2006). The decrease
was primarily due to lower sales in the preneed and burial segment. Net
investment income was $4,462,353 for the second quarter of 2007 (a decrease of
1.4% compared to the second quarter of 2006) and $8,989,752 for the first six
months of 2007 (a decrease of 0.4% compared to the same period in 2006). Total
revenue was $12,911,242 for the second quarter of 2007 (a decrease of 2.6%
compared to the second quarter of 2006) and $25,968,140 for the first six months
of 2007 (a decrease of 3.5% compared to the same period in 2006). This decrease
is primarily due to the previously described lower sales in the preneed and
burial segment.



Total benefits
and expenses were $12,523,380 in the second quarter of 2007 (a decrease of 2.2%
compared to the second quarter of 2006) and $25,162,359 for the first six months
of 2007 (a decrease of 5.2% compared to the same period in 2006). The decrease
in benefits and expenses is primarily due to lower preneed production as well as
improved mortality in the preneed and traditional and universal segments in
comparison to the same prior year period. After providing for federal income
taxes, our net income was $319,164 with earnings per share of $0.29 for the
second quarter of 2007 as compared to $363,282 and earnings per share of $0.33
for the second quarter of 2006. Our net income was $663,062 with earnings per
share of $0.60 for the first six months of 2007 as compared to $309,388 and
earnings per share of $0.28 for the same period in 2006.



A dividend of $0.38 per share
was paid April 7, 2007, to shareholders of record on March 23, 2007.



Business Segments



We internally evaluate the
performance of our operations by the following business segments:



Preneed and Burial Products
include both life and annuity products sold by funeral directors or affiliated
agents to fund prearranged funerals. Revenues for this segment were $9,148,158
for the second quarter of 2007 (a decrease of 7.5% compared to the second
quarter of 2006) and $18,910,219 for the first six months of 2007 (a decrease of
7.4% compared to the same period of 2006). The decrease is due primarily to
decreased premium production from lower sales of the preneed and burial
products. Pre-tax income (loss) from operations was $117,279 for the second
quarter of 2007 compared to $59,569 for the same period for 2006 and $(23,398)
for the first six months of 2007 compared to $(74,654) for the same period for
2006. The improvement in pre-tax income was primarily driven by improved
mortality experience within the segment.



Traditional and
Universal Life Products include traditional life and group life insurance
products, annuities (primarily qualified) and universal life products. Revenues
for this segment were $3,316,503 for the second quarter of 2007 (an increase of
14.9% compared to the second quarter of 2006) and $6,173,916 for the first six
months of 2007 (an increase of 7.2% compared to the same period of 2006).
Revenues on this segment are primarily derived from the sale of term insurance
products through banks, for which demand has increased. Pre-tax income from
operations was $46,500 for the second quarter of 2007 compared to $160,511 for
the same period for 2006 and $287,551 for the first six months of 2007 compared
to $213,758 for the same period for 2006. Fluctuations in pre-tax income for
this segment are primarily due to variations in experience mortality for the
applicable periods.



Credit Insurance
Products and Administrative Services include the marketing and administration of
credit life and credit accident and health insurance products. All of the
related underwriting risk currently produced within this segment is being
reinsured 100% with highly-rated life companies. Accordingly, revenue is
generated primarily from servicing and administering the credit business for our
reinsurers. Because the revenue is fee-based, segment performance is in direct
relation to new and existing earned premium production. Revenues for this
segment were $74,612 for the second quarter of 2007 (an increase of 37.2%
compared to the second quarter of 2006) and $128,549 for the first six months of
2007 (an increase of 40.7% compared to the same period of 2006). Pre-tax income
from operations was $18,563 for the second quarter of 2007 compared to $10,582
for the same period for 2006 and $45,745 for the first six months of 2007
compared to $38,356 for the same period for 2006.



Corporate and Other consists of
corporate accounts measured primarily by stockholders' paid-in capital,
contributed surplus, earned surplus, property and equipment, and other minor
business lines which include group annuities and group and individual accident
and health products. Revenues for this segment were $371,969 for the second
quarter of 2007 (a decrease of 12.2% compared to the second quarter of 2006) and
$755,456 for the first six months of 2007 (an increase of 16.0% compared to the
same period of 2006). The decrease in revenues for the second quarter of 2007 in
comparison to the prior year period was due primarily to realized gains taken
during the second quarter of 2006 that increased revenue during that period. 
The increase in revenue for the first six months of 2007 was primarily due to a
reduction in realized losses taken in early 2006 that significantly reduced
revenue in that period coupled with a small increase in revenue generated by the
non-life subsidiaries of the Company. Pre-tax income from operations was
$205,520 for the second quarter of 2007 compared to $212,798 for the same period
of 2006 and $495,883 for the first six months of 2007 compared to $200,211 for
the same period for 2006. The increase in pre-tax income for the first six
months of 2007 is primarily due to reduced expenses during the period relative
to stock compensation expense and the adjustment to the actuarially determined
net periodic pension cost, along with the aforementioned revenue increases.



Federal Income Taxes



The provision (benefit) for
federal income taxes is based on the estimated effective annual tax rate.
Deferred taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Income before federal income taxes
differs from taxable income principally due to the dividends-received deduction,
the 404(k) dividend deduction and the small life insurance company tax
deduction. The effective tax rate was 17.7% for the six months ended June 30,
2007 compared to 18.1% for the six months ended June 30, 2006.



Off-Balance Sheet Arrangements



We have no off-balance sheet arrangements as of June 30,
2007.



Forward Looking Information



We caution readers regarding
certain forward-looking statements contained in this report and in any other
statements made by us or on our behalf, whether or not in future filings with
the Securities and Exchange Commission. Forward-looking statements are
statements not based on historical information and which relate to future
operations, strategies, financial results, or other developments. Statements
using verbs such as "expect", "anticipate", "believe" or words of similar import
generally involve forward-looking statements. Without limiting the foregoing,
forward-looking statements include statements which represent our beliefs
concerning future levels of sales and redemptions of Investors Heritage Life's
products, investment spreads and yields, or our earnings and profitability.



Forward-looking statements are
necessarily based on estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond our control and many of which are subject to change.
These uncertainties and contingencies could cause actual results to differ
materially from those expressed in any forward-looking statements made by us or
on our behalf. Whether or not actual results differ materially from
forward-looking statements may depend on numerous foreseeable and unforeseeable
factors and developments. Some of these may be national in scope, such as
general economic conditions, changes in tax law and changes in interest rates.
Some may be related to the insurance industry generally, such as pricing
competition, regulatory developments, industry consolidation and the effects of
competition in the insurance business from other insurance companies and other
financial institutions operating in our market area and elsewhere. Others may
relate to us specifically, such as credit, volatility and other risks associated
with our investment portfolio. We caution that such factors are not exclusive.
We disclaim any obligation to update forward-looking information.



ITEM 3. Quantitative and Qualitative Disclosures about
Market Risk



There have been no significant
or material changes in our market risks since December 31, 2006. Measuring
market risk is a key function of our asset/liability management process. To test
financial risk and investment strategy, we perform an asset adequacy analysis
each year. Dynamic models of both assets and liabilities are created to project
financial results under several shifts in the current interest rate environment.
Results show that our exposure to a relative 10% increase (decrease) in the
interest rates prevalent at December 31, 2006 is a net gain (loss) of less than
$500,000. This analysis is performed annually.



Items taken into account on the
asset side include prepayment and liquidity risks, asset diversification and
quality considerations. On the liability side, interest crediting strategies and
policyholder and agent behavior (lapses, loans, withdrawals and premium flow)
are dynamically modeled in relationship to the particular interest rate
environment tested. Although we are careful to ensure that these assumptions are
consistent with the best available data, interest-sensitive cash flows cannot be
forecast with certainty and can deviate significantly from the assumptions made.



Because asset and liability
durations are continually changing as new policyholder contracts are issued and
as new investments are added to the portfolio, we manage our balance sheet on an
ongoing basis and its net exposure to changes in interest rates may vary over
time. Although the asset adequacy analysis is not performed on a quarterly
basis, we believe that our asset base is sufficient to cover the minimal
increases or decreases that would be expected to occur during any particular
year.



ITEM 4. Controls and Procedures



As of the end of the period
covered by this Form 10-Q, we performed an evaluation, under the supervision and
with the participation of management, including our Company's Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in timely alerting
them to material information relating to the Company (including its consolidated
subsidiaries) required to be included in this Quarterly Report on Form 10-Q.
There have been no significant changes in our internal controls or in other
factors which could significantly affect internal controls over financial
reporting during this most recent quarter or subsequent to the date we carried
out our evaluation.








PART II - OTHER INFORMATION



ITEM 1. Legal Proceedings



Kentucky Investors is not involved in any legal
proceedings. From time to time Investors Heritage Life is involved in litigation
relating to claims arising out of its operations in the normal course of
business. As of August 10, 2007, Investors Heritage Life 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 adverse effect on our
financial condition or results of operations.



ITEM 1A.       Risk Factors



There have been no material
changes from risk factors as previously disclosed in our Annual Report on Form
10-K.



ITEM 2. Unregistered Sales of Equity Securities and Use
of Proceeds



No share repurchases were made
pursuant to a publicly announced plan or program. All share repurchases were
shares tendered by employees as part of our 401(k) plan.



ITEM 3. Defaults Upon Senior
Securities



None



ITEM 4. Submission of Matters
to a Vote of Security Holders



(a) The annual meeting of the
stockholders was held May 10, 2007 at 11:00 a.m.  The purpose of the meeting was
to elect directors.



(b) Three (3) directors were elected
to hold office for a term of three (3) years or until their successors are duly
elected and qualified.



The following individuals were
elected for a term of three (3) years and the number of votes cast were as
follows



Gordon C. Duke - Number of Votes
Cast FOR - 889,238.822; WITHHELD - 865.720; ABSTAIN - 58



Harry Lee Waterfield II - Number of
Votes Cast FOR - 888,032.366; WITHHELD - 2,072.740; ABSTAIN - 58



Michael F. Dudgeon, Jr. - Number of
Votes Cast FOR - 889,142.926; WITHHELD - 962.180; ABSTAIN - 58



The other directors whose terms will
continue after the meeting are:



Howard L. Graham, Jr.

Robert M. Hardy, Jr.

Jerry F. Howell, Jr.

Harold G. Doran, Jr.

Helen S. Wagner

David W. Reed



ITEM 5. Other Information



None



ITEM 6. Exhibits



31.1 & 31.2
			Certifications pursuant to Securities and
			Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
			Section 302 of the Sarbanes-Oxley Act of 2002.32.1
			Certifications Pursuant to 18 U.S.C. Section
			1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
			of 2002.




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SIGNATURES



Pursuant to the requirements of
the Securities and Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.





KENTUCKY INVESTORS, INC.BY:
			/s/Harry Lee Waterfield IIHarry Lee Waterfield IIDATE: August 10, 2007
			
			PresidentBY:
			/s/Raymond L. CarrRaymond L. CarrDATE: August 10, 2007
			
			Vice President - Chief Financial Officer




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