| SECURITIES ANDEXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                                                                 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| WASHINGTON,DC                                                                                                                                                                                                                                                                                                                                                                                                     |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **FORM10-Q**                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **QUARTERLYREPORT**                                                                                                                                                                                                                                                                                                                                                                                               |
| **Under Section13 or 15(d) of the Securities Exchange Act of 1934**                                                                                                                                                                                                                                                                                                                                               |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **FOR THREEMONTHS ENDED**                                                                                                                                                                                                                                                                                                                                                                                         |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| MARCH 31,2003                                                                                                                                                                                                                                                                                                                                                                                                     |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **CommissionFile: 0-1999**                                                                                                                                                                                                                                                                                                                                                                                        |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **KENTUCKYINVESTORS, INC.**                                                                                                                                                                                                                                                                                                                                                                                       |
| (Exact Name ofregistrant as specified in Charter)                                                                                                                                                                                                                                                                                                                                                                 |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **KENTUCKY**                                                                                                                                                                                                                                                                                                                                                                                                      |
| (State of OtherJurisdiction of Incorporation or Organization)                                                                                                                                                                                                                                                                                                                                                     |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **61-6030333**                                                                                                                                                                                                                                                                                                                                                                                                    |
| (IRS EmployerIdentification Number)                                                                                                                                                                                                                                                                                                                                                                               |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **200 CapitalAvenue, P. O. Box 717**                                                                                                                                                                                                                                                                                                                                                                              |
| **Frankfort,Kentucky 40602**                                                                                                                                                                                                                                                                                                                                                                                      |
| (Address ofPrincipal Executive Offices)                                                                                                                                                                                                                                                                                                                                                                           |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                        |
| **Registrant'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 March 31, 2003 –1,147,651.72**                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes  X   No      |
|                                                                                                                                                                                                                                                                                                                                                                                                              |
| Indicate by check mark whetherthe registrant is an accelerated filer (as defined in Rule 12b-2 ofthe Exchange Act). Yes       No  X                                                                                                                                                                                                                                  |

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| CONTENTS

PART I –FINANCIAL INFORMATION |
|-----------------------------------------------|
|                                          |  | Page |
| ITEM 1.                                       | Consolidated FinancialStatements | 3 |
| ITEM 2.                                       | Management’s Discussionand Analysis of Financial Condition and Results ofOperations | 10 |
| ITEM 3.                                       | Quantitative and QualitativeDisclosures about Market Risk | 16 |
| ITEM 4.                                       | Controls andProcedures | 17 |
|                                          |  |  |
|                                          |  |  |
| PART II –OTHER INFORMATION              |
|                                          |  |  |
| ITEM 1.                                       | Legal Proceedings | 17 |
| ITEM 2.                                       | Changes in Securities and Useof Proceeds | 18 |
| ITEM 3.                                       | Defaults Upon SeniorSecurities | 18 |
| ITEM 4.                                       | Submission of Matters to a Voteof Security Holders | 18 |
| ITEM 5.                                       | Other Information | 18 |
| ITEM 6.                                       | Exhibits and Reports on Form8-K | 18 |
|                                          |  |  |
| SIGNATURES                                    |  | 19 |

----

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

----

|                                                                          | ** **                                    |
|-------------------------------------------------------------------------------|-----------------------------------------------|
|                                                                          | **KENTUCKYINVESTORS, INC.**                   |
|                                                                          | ** **                                    |
|                                                                          | **CondensedConsolidated Balance Sheets**      |
|                                                                          |                                          |
|                                                                          | (Unaudited)                                   |  |
|                                                                               | March 31,2003                                 | December 31,2002 |
| Assets                                                                        |                                               |  |
|    Investments                                                 |                                               |  |
|      Fixed maturitiesavailable for sale at           |                                               |  |
|        fair value(amortized cost           |                                               |  |
|        2003-$260,194,649- 2002 -           |                                               |  |
|        $254,389,964)                       | $283,334,340                                  | $278,944,643 |
|    Investment inaffiliate                                      | 4,000,000                                     | 4,000,000 |
|    Mortgageloans on real estate                                | 24,981,314                                    | 24,020,718 |
|    Other longterm investments                                  | 620,383                                       | 769,847 |
|    Short terminvestments                                       | 923,000                                       | 920,000 |
|    Otherinvestments                                            |       9,776,896 |     10,346,730 |
|                                                                               |                                               |  |
|        Totalinvestments                    | $323,635,933                                  | $319,001,938 |
|                                                                               |                                               |  |
|    Cash and cashequivalents                                    | 4,348,023                                     | 7,773,597 |
|    Due anddeferred premiums                                    | 4,517,643                                     | 4,753,111 |
|    Deferredacquisition costs                                   | 24,149,612                                    | 24,271,942 |
|    Present valueof future profits                              | 551,409                                       | 574,305 |
|    Leasedproperty under capital leases                         | 289,904                                       | 315,332 |
|    Otherassets                                                 | 6,846,785                                     | 7,340,333 |
|    Amountsrecoverable from reinsurers                          |     62,000,403            |     63,010,331 |
|                                                                               | $426,339,712                                  | $427,040,889 |
|                                                                               |                                               |  |
|                                                                               |                                               |  |
| Liabilities and Stockholders'Equity                                           |                                               |  |
|    Liabilities                                                 |                                               |  |
|      Policyliabilities                               |                                               |  |
|        Benefitreserves                     | $326,884,132                                  | $325,336,298 |
|        Unearnedpremium reserves            | 18,402,028                                    | 18,968,936 |
|        Otherpolicyholders' funds           |       3,898,732 |       4,007,740 |
|          Totalpolicy liabilities | $349,184,892                                  | $348,312,974 |
|        Federalincome taxes                 | 11,243,483                                    | 11,356,823 |
|        Obligationsunder capital leases     | 289,905                                       | 315,346 |
|        Notespayable                        | 6,138,221                                     | 6,386,638 |
|        Otherliabilities                    |       6,310,038 |       7,041,358 |
|                                                                               |                                               |  |
|        Totalliabilities                    | $373,166,539                                  | $373,413,139 |
|                                                                               |                                               |  |
| Stockholders' Equity                                                          |                                               |  |
|    Common Stock(shares issued:                                 |                                               |  |
|      2003 – 1,147,652,2002 - 1,143,390)        | $    1,147,652            | $    1,143,390 |
|    Paid-insurplus                                              | 8,504,231                                     | 8,495,833 |
|    Accumulatedother comprehensive                              |                                               |  |
|      income                                          | 15,056,650                                    | 15,432,098 |
|    Retainedearnings                                            |     28,464,640            |     28,556,429 |
|                                                                               |                                               |  |
|        Totalstockholders' equity           | $  53,173,173                       | $  53,627,750 |
|                                                                               |                                               |  |
|                                                                               | $426,339,712                                  | $427,040,889 |
|                                                                               |                                               |  |
| See accompanyingnotes.                                                        |                                          |

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|                                                         |                                                           |
|---------------------------------------------------------|----------------------------------------------------------------|
| **KENTUCKYINVESTORS, INC.**                             |                                                           |
|                                                    |                                                           |
| **CondensedConsolidated Income Statements (Unaudited)** |                                                           |
|                                                    |                                                                |  |
|                                                    |                                                                | Three MonthsEnded March 31 |
|                                                    |                                                                |            2003 |             2002 |
|                                                    | REVENUES                                                       |  |  |
|                                                    |                                                                |  |  |
|                                                    |    Premiums andother considerations             | $10,475,024 | $13,894,768  |
|                                                    |    Investmentincome, net of expenses            | 4,640,260 | 4,474,213  |
|                                                    |    Realized gainon investments, net             | 129,673 | 331,728  |
|                                                    |    Otherincome                                  |        231,994 |        226,777  |
|                                                    |                                                                |  |  |
|                                                    |       Totalrevenues              | $15,476,951 | $18,927,486  |
|                                                    |                                                                |  |  |
|                                                    | BENEFITS ANDEXPENSES                                           |  |  |
|                                                    |                                                                |  |  |
|                                                    |    Death andother policyholder benefits         | $  9,194,753 | $  8,408,700  |
|                                                    |    Guaranteedannual endowments                  | 169,078 | 174,376  |
|                                                    |    Dividends topolicyholders                    | 169,395 | 172,615  |
|                                                    |    Increase inbenefit reserves and unearned     |  |  |
|                                                    |      premiums                         | 1,645,215 | 5,689,408  |
|                                                    |    Amortizationof deferred acquisition          |  |  |
|                                                    |      costs, net                       | 158,479 | (527,928) |
|                                                    |    Commissions                                  | 959,214 | 1,508,569  |
|                                                    |    Otherinsurance expenses                      |     2,735,190 |     2,678,474  |
|                                                    |                                                                |  |  |
|                                                    |       Total benefits andexpenses | $15,031,324 | $18,104,214  |
|                                                    |                                                                |  |  |
|                                                    | Income from operations beforefederal                           |  |  |
|                                                    |    incometax                                    | $     445,627 | $     823,272  |
|                                                    |                                                 |  |  |
|                                                    |                                                 |  |  |
|                                                    | Provision for federal incometaxes:                             |  |  |
|                                                    |    Current                                      | $       77,149 | $     160,516  |
|                                                    |    Deferred                                     |         30,000 |          12,000  |
|                                                    |                                                                |  |  |
|                                                    |                                                                | $     107,149 | $     172,516  |
|                                                    |                                                                |  |  |
|                                                    | Income before cumulative effectof change                       |  |  |
|                                                    |    in accountingprinciple                       | $     338,478 | $     650,756  |
|                                                    |                                                                |  |  |
|                                                    | Cumulative effect of changein                                  |  |  |
|                                                    |    accountingprinciple                          | $                 - | $  (970,862) |
|                                                    |                                                                |  |  |
|                                                    | Net income                                                     | $     338,478 | $  (320,106) |
|                                                    |                                                                |  |  |
|                                                    | Earnings per share:                                            |  |  |
|                                                    |    Beforecumulative effect of change in         |  |  |
|                                                    |      Accountingprinciple              | $           0.30 | $          0.57  |
|                                                    |    Cumulativeeffect of change in                |  |  |
|                                                    |      Accountingprinciple              | $                 - | $        (0.85) |
|                                                    |                                                                |  |  |
|                                                    | Earnings per share                                             | $           0.30 | $        (0.28) |
|                                                    |                                                                |  |  |
|                                                    | Dividends per share                                            | $           0.38 | $          0.38  |
|                                                    |                                                                |
|                                                    | See accompanyingnotes.                                         |
|                                                    |                                                                |

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| **KENTUCKYINVESTORS, INC.**                                    |
|----------------------------------------------------------------|
|                                                           |
| **CondensedConsolidated Statements of Cash Flow (Unaudited)**  |
|                                                           |  |
|                                                                | Three MonthsEnded March 31 |
|                                                                | 2003 | 2002 |
|                                                           |  |  |
| Net cash provided by operatingactivities                       | $    2,179,274  | $    4,761,751  |
|                                                                |  |  |
| Investing activities                                           |  |  |
|    Securitiesavailable-for-sale:                |  |  |
|      Purchases                        | $(13,198,718) | $(14,115,000) |
|      Sales andmaturities              | 8,957,411  | 7,147,120  |
|    Otherinvestments:                            |  |  |
|      Cost ofacquisition               | (2,100,529) | (48,630) |
|      Sales andmaturities              | 1,290,473  | 894,206  |
|    Otherinvesting activities                    |          (32,258) |         (75,044) |
|                                                                |  |  |
| Net cash used by investingactivities                           | $  (5,083,621) | $  (6,197,348) |
|                                                                |  |  |
| Financing activities                                           |  |  |
|    Receipts fromuniversal life policies         |  |  |
|      credited topolicyholders account |  |  |
|      balances                         | $    1,857,150  | $   1,916,477  |
|    Return ofpolicyholder account balances       |  |  |
|      on universal lifepolicies        | (1,718,137) | (2,071,973) |
|    Net proceedsfrom notes payable               | (248,417) | (60,147) |
|    Otherfinancing activities                    |        (411,823) |       (470,008) |
|                                                                |  |  |
| Net cash used byfinancing                                      |  |  |
|    activities                                   | $     (521,227) | $    (685,651) |
|                                                                |  |  |
| Decrease in cash and cashequivalents                           | $  (3,425,574) | $ (2,121,248) |
|                                                                |  |  |
| Cash and cash equivalents atbeginning                          |  |  |
|     ofperiod                               |       7,773,597  |      6,432,594  |
|                                                                |  |  |
| Cash and cash equivalents atend of period                      | $    4,348,023  | $   4,311,346  |
|                                                                |
| See accompanyingnotes.                                         |
|                                                                |

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****

| **KENTUCKYINVESTORS, INC.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **NOTES TO CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **March 31,2003**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **(Unaudited)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **NOTE A - Natureof Operations:**KentuckyInvestors, Inc. (Kentucky Investors) is the holding company ofInvestors Heritage Life Insurance Company (Investors HeritageLife), Investors Heritage Printing, Inc., a printing company,Investors Heritage Financial Services Group, Inc., an insurancemarketing company, and Family Assignment Services, LLC, a limitedliability company that provides advance funding of funerals inexchange for the irrevocable assignment of life insurance policiesfrom other nonaffiliated companies. These entities are collectivelyhereinafter referred to as the “Company”. Theoperations of Kentucky Investors are principally that of its lifeinsurance company, Investors Heritage Life. The operations of thenon-insurance subsidiaries of Kentucky Investors account for lessthan 1% of the Company’s total operations.                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| TheCompany’s operations involve the sale and administration ofvarious insurance and annuity products, including, but not limitedto, participating, non-participating, whole life, limited pay,universal life, annuity contracts, credit life, credit accident andhealth and group insurance policies. The principal markets for theCompany’s products are in the Commonwealths of Kentucky andVirginia, and the states of North Carolina, South Carolina, Ohio,Indiana, Florida, Tennessee, Illinois, Georgia, West Virginia,Arizona, Michigan, Mississippi and Texas.                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **NOTE B - Basisof Presentation:**Theaccompanying unaudited condensed consolidated financial statementsof the Company have been prepared in accordance with accountingprinciples generally accepted in the United States for interimfinancial information and the instructions to Form 10-Q and Article10 of Regulation S-X. Accordingly, they do not include all of theinformation and footnotes required by accounting principlesgenerally accepted in the United States for complete financialstatements. In the opinion of management, all adjustments(consisting of normal recurring accruals) considered necessary fora fair presentation have been included. Operating results for thethree months ended March 31, 2003, are not necessarily indicativeof the results that may be expected for the year ending December31, 2003. For further information, refer to the consolidatedfinancial statements and footnotes thereto for the year endedDecember 31, 2002, included in the Company’s Annual Report onForm 10-K. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The preparation offinancial statements in conformity with accounting principlesgenerally accepted in the United States requires management to makeestimates and assumptions that affect the amounts reported in thefinancial statements and accompanying notes. Actual results coulddiffer from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Certain priorperiod amounts have been reclassified to conform to the currentperiod presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **NOTE C -Earnings per Share:**Earnings per share of common stock were computed basedon the weighted average number of common shares outstanding duringeach period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

|                                          |
|-----------------------------------------------|
|                                               | Income | Shares | Per Share |
|                                               |  |  | Amount |
| March 31, 2003                                |  |  |  |
| *Basic EPS*                                   |  |  |  |
| Net income                                    | $   338,478  |   1,144,208 | $       0.30  |
| Dilutive effect of commonequivalent shares of |  |  |  |
|    stockoptions                |                  -  |          1,541 |                -  |
|                                               |  |  |  |
| *Diluted EP*S                                 |  |  |  |
| Net income                                    | $   338,478  |   1,145,749 | $       0.30  |
|                                               |  |  |  |
| March 31, 2002                                |  |  |  |
| *Basic E*PS                                   |  |  |  |
| Net income (loss)                             | $ (320,106) |   1,132,843 | $     (0.28) |
| Dilutive effect of commonequivalent shares of |  |  |  |
|    stockoptions                |                 -  |                 -  |                -  |
|                                               |  |  |  |
| *Diluted EPS*                                 |  |  |  |
| Net income (loss)                             | $ (320,106) |   1,132,843 | $     (0.28) |
|                                               |  |  |  |
| December 31, 2002                             |  |  |  |
| *Basic EPS*                                   |  |  |  |
| Net income                                    | $1,256,809  |   1,136,512 | $       1.11  |
| Dilutive effect of commonequivalent shares of |  |  |  |
|    stockoptions                |                 -  |          1,560 |                -  |
|                                               |  |  |  |
| *Diluted EPS*                                 |  |  |  |
| Net income                                    | $1,256,809 |   1,138,072 | $       1.10  |
|                                               |  |  |  |
|                                               |  |  |  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **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                                       |
|------------------------------------------------------------|---------------------------------------------------------|
|                                                            | March 31,2003                                           | March 31,2002 |
|                                                            |                                                         |  |
| Revenues:                                                  |                                                         |  |
|    Preneed &Burial Products             | $11,606,784                                        | $14,828,410  |
|    Traditional& Universal Life Products | 3,106,203                                          | 3,203,616  |
|    CreditInsurance Products &           |                                                         |  |
|       AdministrativeServices | 74,263                                             | 57,469  |
|    Corporate& Other                     |        689,701  |        837,991  |
|                                                            | $15,476,951                                        | $18,927,486  |
|                                                            |                                                         |  |
| Pre-Tax Income (Loss) fromOperations:                      |                                                         |  |
|    Preneed &Burial Products             | $   (131,340)                            | $     (72,352) |
|    Traditional& Universal Life Products | 373,865                                            | 498,581  |
|    CreditInsurance Products &           |                                                         |  |
|       AdministrativeServices | 14,825                                             | (4,545) |
|    Corporate& Other                     |       188,277        |        401,588  |
|                                                            | $    445,627                   | $     823,272  |
|                                                            |                                                         |

|                                                                                                                                                                                                                                                                                                                                  |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
| **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                      |
|------------------------------------------|----------------------------------------|
|                                          | March 31,2003                          | March 31,2002 |
| Net income                               | $    338,478  | $      (320,106) |
| Net unrealized losseson                  |                                        |  |
|   available-for-salesecurities |    (375,448)            |      (2,407,384) |
| Comprehensive income                     | $  (36,970)                  | $   (2,727,490) |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **NOTE G – NotesPayable:** On June 28, 2002, the Company entered into along term debt agreement with Cherokee National in the amount of$4,000,000, with interest to be paid quarterly, at a rate equal tothe prime rate, and due on June 28, 2007. The funds were used topurchase 400,000 shares of Cherokee National common stock valued at$4,000,000. In December 2002, the 400,000 shares of common stockwere exchanged for 400,000 shares of Series A preferred stock. Theinterest rate was 4.25% at March 31, 2003. Interest expense andinterest paid on this note was $42,500 in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| On September 30, 2002, FamilyAssignment entered into a long-term debt agreement with FarmersBank and Capital Trust Co., Frankfort, Kentucky, by establishing aline of credit in the amount of $2,000,000 with interest to be paidmonthly at a rate equal to the prime rate and due September 30,2003. At March 31, 2003, $203,500 was outstanding on this note. Thepurpose of this line of credit is to provide advance funding forfunerals in exchange for an irrevocable assignment of lifeinsurance policies from other unaffiliated insurance companies. Theinterest rate was 4.25% at March 31, 2003. Interest expense andinterest paid on the note was $3,087 in 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| On December 27, 2000, theCompany entered into a long-term debt agreement with Fifth ThirdBank in the amount of $2,000,000, at an interest rate of 8.5%, dueon December 27, 2005. The funds were used to retire notes payableand to issue a surplus note to its subsidiary, Investors HeritageLife. On May 1, 2001, the Company borrowed an additional $400,000on the note and the interest rate was adjusted to 1% under theprime rate. The interest rate was 3.25% at March 31, 2003. Interestexpense and interest paid on the note was $16,083 in2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| **ITEM 2. Management'sDiscussion and Analysis of Financial Condition and Results ofOperations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| **General**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| 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 Life and other unaffiliated parties,and Family Assignment Services, LLC, a Kentucky limited liabilitycompany that provides advance funding of funerals in exchange forthe irrevocable assignment of life insurance policies from othernonaffiliated companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| Investors Heritage Life offersa full line of life insurance products including, but not limitedto, whole life, term life, single premium life, multi-pay life andannuities. Investors Heritage Life's primary lines 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Investors Heritage Lifeintroduced a new product series during the first quarter of 2003.The Legacy Protector and Legacy Preferred product series wasdeveloped in 2002 to replace the Legacy 2000 series. These newplans were designed to help combat a challenging economicenvironment and increased mortality anti-selection. In general,commissions are slightly lower, guaranteed benefits have been movedfurther from issue, reserves have been adjusted to better reflectexperience, and an underwritten plan has been added.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Investors Heritage Lifeintroduced a new whole life final expense product during the thirdquarter of 2001. The new product, Heritage Final Expense replacedthe Legacy 2000 Final Expense series and is being marketed throughfuneral homes and independent agencies. Investors Heritage Lifeentered into a reinsurance agreement with Munich AmericanReassurance Company with regard to this new product to help reducethe initial surplus strain and minimize fluctuations in futureprofits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| Investors Heritage Life 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| The Company's operatingearnings are derived primarily from revenues generated from thesale of insurance products by Investors Heritage Life, plus theCompany's investment results, including realized gains (losses),less interest credited, benefits to policyholders andexpenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| While the Company continues toexpand the operations of Investors Heritage Financial, InvestorsHeritage Printing and Family Assignment Services, less than 1% ofthe Company's total operations were generated by thosesubsidiaries. As expected, more than 10% of Investors HeritageFinancial's revenues during the first quarter 2003 were derivedfrom the sale of Investors Heritage Life's credit insuranceproducts. During the first quarter of 2003, the Company receiveddividends from Investors Heritage Financial in the amount of$94,000. Investors Heritage Printing did not pay a dividend duringthe first quarter of 2003. The Company anticipates another dividendpayment from Investors Heritage Financial during the second quarterin 2003, and anticipates a dividend from Investors HeritagePrinting during the third quarter of 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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| 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 Life, Investors Heritage Financial andInvestors Heritage Printing. Investors Heritage Life's principalsources of cash are from the sale of life insurance policies andinvestment income, including realized gains (losses), less benefitsto policyholders and expenses. Therefore, the remainder of thediscussion will deal with the financial condition and results ofoperations of Investors Heritage Life.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| CRITICALACCOUNTING POLICIES AND ESTIMATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| The Company’s discussionand analysis of its financial condition and results of operationsare based on its consolidated financial statements, which have beenprepared in accordance with accounting principles generallyaccepted in the United States. Preparation of these financialstatements requires the Company to make estimates and judgmentsthat affect the reported amounts of assets, liabilities andrevenues and expenses. On an on-going basis, the Company evaluatesits estimates, including those related to investments, deferredacquisition costs, present value of future profits, policyliabilities, income taxes, regulatory requirements, contingenciesand litigation. The Company bases such estimates on historicalexperience and other assumptions believed to be reasonable underthe circumstances, the results of which form the basis for makingjudgments about the carrying values of assets and liabilities thatare not readily apparent from other sources. Actual results maydiffer from these estimates under different assumptions orconditions. The Company believes the following accounting policies,judgments and estimates are critical to the preparation of itsconsolidated financial statements.                                                                                                              |
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| Investment inDebt and Equity Securities and Mortgage Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| The Company holds debt andequity interests in a variety of companies. Additionally, theCompany originates, underwrites and manages mortgage loans. TheCompany records an investment impairment charge when it believes aninvestment has experienced a decline in value that is other thantemporary. Future adverse changes in market conditions, pooroperating results of underlying investments and defaults onmortgage loan payments could result in losses or an inability torecover the current carrying value of the investments, therebypossibly requiring an impairment charge in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| DeferredAcquisition Costs and Present Value of Future Profits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| At December 31, 2002, thecombined balance of our deferred acquisition costs and presentvalue of future profits (“PVFP”) was $24,846,247. Therecovery of these costs is dependent on the future profitability ofthe related business. Each year, we evaluate the recoverability ofthe unamortized balance of the deferred acquisition costs and PVFP.We consider estimated future gross profits or future premiums,expected mortality or morbidity, interest earned and creditedrates, persistency and expenses in determining whether the balanceis recoverable. If we determine a portion of the unamortizedbalance is not recoverable, it is charged to amortization expense.The assumptions we use to amortize and evaluate the recoverabilityof the deferred acquisition costs and PVFP involve significantjudgment. A significant revision to these assumptions will impactfuture financial results.                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| PolicyLiabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Establishing liabilities (andrelated intangible assets) for the Company’s long-durationinsurance contracts requires making various assumptions, includingpolicyholder persistency, mortality rates, investment yields,discretionary benefit increases, new business pricing, andoperating expense levels. The Company evaluates historicalexperience for these factors when assessing the need for changingcurrent assumptions. However, since many of these factors areinterdependent and subject to short-term volatility during thelong-duration contract period, substantial estimates and judgmentare required. Accordingly, if actual experience emerges differentlyfrom that assumed, material financial statement adjustments couldbe required.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| **Investments, Liquidity andCapital Resources**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| Premiums, which includemortality and expense charges, and investment income are InvestorsHeritage Life's primary sources of cash flow used to meetshort-term and long-term cash requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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| Investors Heritage Life'sshort-term obligations consist primarily of policyholder benefitsand operating expenses. Investors Heritage Life has historicallybeen able to meet these obligations out of operating cash, premiumsand investment income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Management is not aware of anycommitments or unusual events that could materially affect capitalresources.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| During the fourth quarter of2000 Kentucky Investors borrowed $2,000,000 on a long-term basis,and an additional $400,000 was borrowed during the second quarterof 2001. Kentucky Investors utilized $200,000 of the loan amount toreduce debt to Investors Heritage Life and $1,800,000 was loaned toInvestors Heritage Life in exchange for a surplus note. The notecalls for Investors Heritage Life to pay, on or before the firstday of each quarter, interest at an 8.5% annual rate, upon priorapproval by the Kentucky Department of Insurance. Such interest maybe paid out of Investors Heritage Life's earned surplus, operatingincome, or paid-in and contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| In the second quarter of 2002the Company acquired 400,000 shares of common stock of CherokeeNational Life Insurance Company (Cherokee) in exchange for theCompany’s promissory note in the amount of $4,000,000.Interest will be paid quarterly at a rate equal to the prime rateand the note is due June 28, 2007. The Company has also guaranteedanother $2,000,000 line-of-credit note with a financial institutionon behalf of Family Assignment Services, of which $203,500 wasoutstanding at March 31, 2003. The purpose of this line of creditis to provide advance funding for funerals in exchange for anassignment of life insurance policies from other unaffiliatedcompanies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| The Company and InvestorsHeritage Life will continue to explore various opportunitiesincluding corporate reorganizations, acquisitions and purchasingblocks of business from other companies, which may dictate anadditional need for either long-term or short-term debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| Investors Heritage Life hasmaintained a sound, conservative investment strategy. At March 31,2003, 87.5% of invested assets consisted of fixed income publicbonds compared to 87.4% at December 31, 2002. Fixed income assetsare managed by Conning Asset Management Company, an independentportfolio manager.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| Additionally, InvestorsHeritage Life also engages in commercial and residential mortgagelending with approximately 95.5% of these investments being incommercial properties. All mortgage loans are originated in-houseand all loans are secured by first mortgages on the real estate. AtMarch 31, 2003, 7.7% of invested assets consisted of mortgage loanscompared to 7.5% at December 31, 2002. Management anticipatesfunding several new mortgage loan investments during the remainderof 2003 to maintain a similar to slightly higher percentage ofmortgage loans to total invested assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Investors Heritage Life'sconservative approach in the product development area and thestrength and stability of its fixed income and mortgage loanportfolios provide adequate liquidity both in the short-term andthe long-term. At March 31, 2003 Investors Heritage Life's fixedincome investments were 100% investment grade as rated by Standard& Poor's, compared to 100% at December 31, 2002. None ofInvestors Heritage Life's fixed income assets are in default andthere has been no material change in the distribution of its fixedincome portfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Investors Heritage Life'sprincipal long-term obligations are fixed contractual obligationsincurred in the sale of its life insurance products. The premiumscharged for these products are based on conservative andactuarially sound assumptions as to mortality, persistency andinterest. Management believes these assumptions will producerevenues sufficient to meet its future contractual benefitobligations and operating expenses, and provide an adequate profitmargin.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| **Results ofOperations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| Total premium income (net ofreinsurance) for the first quarter 2003 decreased 24.6% whencompared to the first quarter of 2002.  The decrease wasexpected due to the introduction of our new Legacy Preneedprogram.  Other factors contributing to the decrease includepoor weather conditions in our marketing regions, the economicenvironment, and uncertainties regarding the war with Iraq. Netinvestment income for the first quarter 2003 compared to the firstquarter of 2002 increased 3.7%. The increase is primarily due to alarger asset base, however lower yield rates on new assetpurchases, and the change in the amortization schedules ofmortgage-backed securities due to higher than anticipatedpre-payments has impacted the rate of return on our investmentportfolio. Overall revenue for the first quarter 2003 decreased18.2% when compared to the first quarter of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| Total Benefits and Expenseswere 17% lower in the first quarter of 2003 when compared to thesame quarter of 2002 primarily due to lower premium production inpre-need sales. After providing for federal income taxes, theCompany's Net Income (before cumulative effect of change inaccounting principle) was $338,478 with Earnings per share of $0.30for the first three months of 2003 as compared to Net Income of$650,756 and Earnings per share of $0.57 for the same period in2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| A dividend of $0.38 per sharewas paid April 7, 2003, to shareholders of record on March 21,2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| **BusinessSegments**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| Management internally evaluatesthe performance of Investors Heritage Life operations by thefollowing business segments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Preneed & Burial Productsinclude both life and annuity products sold by funeral directors oraffiliated agents to fund prearranged funerals. Revenues for thissegment were 21.7% lower for the first quarter of 2003 whencompared to the same period of 2002. The decrease is due in part toa decrease in sales from Investors Heritage Life's Legacy 2000Series of Preneed Products which is being phased out in 2003 and isbeing replaced with our new Legacy Preferred product series. Thepoor weather conditions in our marketing regions, the economicenvironment, and uncertainties regarding the war with Iraq werealso contributing factors to the decline in revenues. Asanticipated, Pre-Tax Loss from Operations for the first quarter2003 was ($131,340) compared to ($72,352) for the same period for2002. The increased loss in 2003 compared to 2002 is due primarilyto the factors cited previously inasmuch as the profit margin onthis line of business is directly related to the decrease inrevenues. Investment income pressures from the low interest rateenvironment causing lower yields were also a factor this quarter onour loss. Investors Heritage Life plans to continue its expansionof territory and recruitment of agents in the Preneed and Burialinsurance 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 3.0% lower for the firstquarter of 2003 when compared to the first quarter of 2002.Revenues on this segment are primarily derived from the sales ofterm insurance products through banks. The sales are tied to loandemand, which has been fairly flat this year and has showninsignificant fluctuations. Pre-Tax Income from Operations for thefirst quarter 2003 was 25.0% lower than the first quarter of 2002primarily because of general insurance expenses associated with thesales, issuance and administration costs of these products as wellas the investment income pressures cited above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| Credit Insurance Products andAdministrative Services include the marketing and administration ofcredit life and credit accident & health insurance products.Revenues for 2003 were $74,263 for the first quarter compared to$57,469 for the same period for 2002. Pre-Tax Income (Loss) fromOperations was $14,825 for the first quarter of 2003 compared to($4,545) for the first quarter of 2002. The revenues and income onthe credit insurance line are directly affected by consumer loandemand. During 2002, because of economic uncertainties, there was alarge decrease in consumer loan demand, which has leveled off thisquarter. All of the related underwriting risk currently produced isbeing reinsured 100% 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 17.7% lower and Pre-Tax Income from Operations was53.0% lower for the first quarter of 2003 when compared to thefirst quarter 2002. The decreases for the first quarter in 2003 areprimarily due to a smaller realized gain on investment as comparedto first quarter 2002.  Another factor contributing to thedecrease in Pre-Tax Income from Operations would be the decisionthis quarter to assign more target surplus, through the allocationof net investment income and general expenses, to other lines ofbusiness because of the low interest rate environment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| **Federal IncomeTaxes**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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| Current taxes are providedbased on estimates of the projected effective annual tax rate.Deferred taxes reflect the net tax effects of temporary differencesbetween the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income taxpurposes. The effective tax rate was 24.0% at March 31, 2003compared to 21.0% for March 31, 2002. The increase in the effectivetax rate is due primarily to the deferred tax calculation,specifically, the temporary differences arising from reservecalculations for financial reporting purposes as opposed to incometax reporting purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| **Forward LookingInformation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| The Company cautions readersregarding certain forward-looking statements contained in thisreport and in any other statements made by, or on behalf of, theCompany, whether or not in future filings with the Securities andExchange Commission. Forward-looking statements are statements notbased on historical information and which relate to futureoperations, strategies, financial results, or other developments.Statements using verbs such as "expect", "anticipate", "believe" 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 Life's products, investment spreads and yields, or theearnings and profitability of the Company's or Investors HeritageLife's activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Forward-looking statements arenecessarily based on estimates and assumptions that are inherentlysubject to significant business, economic and competitiveuncertainties and contingencies, many of which are beyond theCompany's control and many of which are subject to change. 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. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **ITEM 3. Quantitative andQualitative Disclosures about Market Risk**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| There have been no significantor material changes in the Company's market risks since December31, 2002. Measuring market risk is a key function of ourasset/liability management process.  To test financial riskand investment strategy, the Company performs an asset adequacyanalysis each year.  Dynamic models of both assets andliabilities are created to project financial results under severalshifts in the current interest rate environment.  Results showthat the Company's exposure to a relative 10% increase or decreasein the interest rates prevalent at December 31, 2002 is a net lossof less than $500,000. This analysis is not performed on aquarterly basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Items taken into account on theasset side include prepayment and liquidity risks, assetdiversification and quality considerations.  On the liabilityside, interest crediting strategies and policyholder and agentbehavior (lapses, loans, withdrawals and premium flow) aredynamically modeled in relationship to the particular interest rateenvironment tested. Although the Company is careful to ensure thatthese assumptions are consistent with the best available data,interest-sensitive cash flows cannot be forecast with certainty andcan deviate significantly from the assumptions made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Because asset and liabilitydurations are continually changing as new policyholder contractsare issued and as new investments are added to the portfolio, theCompany manages its balance sheet on an ongoing basis and its netexposure to changes in interest rates may vary over time. Althoughthe asset adequacy analysis is not performed on a quarterly basis,management believes that the Company’s asset base issufficient to cover the minimal increases or decreases that wouldbe expected to occur during any particular year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| In addition to these dynamicmodeling techniques, the Company closely monitors its own businesssegments with respect to product performance and agent behavior. Tothat end, during 2002 we implemented a new system to assist inmonitoring these areas. This new tool allows management to quicklyisolate areas of strength and weakness and to take appropriate andtimely action to exploit the strengths and improve theweaknesses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **ITEM 4. Controls andProcedures**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Within the 90 days prior to thefiling date of this Form 10-Q, the Company performed an evaluation,under the supervision and with the participation of the Company'smanagement, including the Company's Chief Executive Officer andChief Financial Officer, of the effectiveness of the design andoperation of the Company's disclosure controls and procedures asdefined in Rule 13a-14 of the Securities Exchange Act of1934.  Based upon that evaluation, the Chief Executive Officerand Chief Financial Officer concluded that the Company's disclosurecontrols and procedures are effective in timely alerting them tomaterial 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 – OTHERINFORMATION** |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **ITEM 1. LegalProceedings**         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 | The Company is not involved inany legal proceedings. From time to time Investors Heritage Life isinvolved in litigation relating to claims arising out of itsoperations in the normal course of business. As of May 12, 2003,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 adverseeffect on Investors Heritage Life’s or the Company’sfinancial condition or results of operations.  |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 | **ITEM 2. Changes inSecurities and Use of Proceeds**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 | **ITEM 3. Defaults UponSenior Securities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 | **ITEM 4. Submission ofMatters to a Vote of Security Holders**                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                 | **ITEM 5. OtherInformation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                 | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                 | **ITEM 6. Exhibits andReports on Form 8-K**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                      | a) Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                      | No exhibits were filed for thequarter ended March 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                      | b) Reports on form8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                      | No reports on Form 8-K werefiled for the quarter ended March 31, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |

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****

| **SIGNATURES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Pursuant to the requirements ofthe Securities and Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersignedthereunto duly authorized.                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **KENTUCKY INVESTORS,INC.** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | BY: /s/Harry Lee WaterfieldII |
| DATE: May 12, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       President |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | BY: /s/Raymond L.Carr |
| DATE: May 12, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       Vice President -Chief Financial Officer |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|      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 12th day of May, 2003, that the Form 10-Qfor the Quarter ended March 31, 2003 fully complies with therequirements of Section 13(a) or 15(d) of the Securities ExchangeAct of 1934 and that the information contained in the Form 10-Qfairly presents, in all material respects, the financial conditionand results of operations of Kentucky Investors, Inc. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **KENTUCKY INVESTORS,INC.** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | BY: /s/Harry Lee WaterfieldII |
| DATE: May 12, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       President |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | BY: /s/Raymond L.Carr |
| DATE: May 12, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |       Vice President -Chief Financial Officer |

----

**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: May 12, 2003 | By: /s/ 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: May 12, 2003 | By: /s/ Raymond L.Carr                  |
|--------------------|-----------------------------------------|
|                    | Vice President - ChiefFinancial Officer |