<PAGE>

                       UNITED STATES
            SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.

                         FORM 10-Q

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended September 30, 1998   Commission File 
                                       Number: 0-9341    
      


          SECURITY NATIONAL FINANCIAL CORPORATION
                 Exact Name of Registrant.


           UTAH                              87-0345941   
(State or other jurisdiction             IRS Identification
of incorporation or organization)        Number

5300 South 360 West, Salt Lake City, Utah        84123
(Address of principal executive offices)      (Zip Code)



Registrant's telephone number,
   including Area Code                       (801) 264-1060


Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                   YES  XX         NO

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.


Class A Common Stock, $2.00 par value         3,737,477    
-------------------------------------   ------------------
      Title of Class                    Number of Shares
                                        Outstanding as of
                                        September 30, 1998

Class C Common Stock, $.20 par value          5,131,004    
------------------------------------    ------------------
      Title of Class                    Number of Shares
                                        Outstanding as of
                                        September 30, 1998

<PAGE>

 SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
                         FORM 10Q

             QUARTER ENDED SEPTEMBER 30, 1998

                     TABLE OF CONTENTS


              PART I - FINANCIAL INFORMATION


<TABLE>
<CAPTION>

Item 1. Financial Statements                       Page No.
      <S>                                             <C>

      Consolidated Statements of Earnings - Three and
      nine months ended September 30, 1998 and 1997 . . 3

      Consolidated Balance Sheets - September 30, 1998
      and December 31, 1997 . . . . . . . . . . . . . 4-5

      Consolidated Statements of Cash Flow -
      Nine months ended September 30, 1998 and 1997 . 6-7

      Notes to Consolidated Financial
      Statements. . . . . . . . . . . . . . . . . . . 8-9


Item 2 Management's Discussion and Analysis . . . . 10-14

                PART II - OTHER INFORMATION
  
      Other Information . . . . . . . . . . . . . . 15-16

      Signature Page. . . . . . . . . . . . . . . . . .17

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                   SECURITY NATIONAL FINANCIAL CORPORATION
                            AND SUBSIDIARIES

                     Consolidated Statements of Earnings

                      Nine Months Ended               Three Months Ended
                          September 30,                  September 30, 
                      1998             1997           1998           1997
                  (Unaudited)       (Unaudited)    (Unaudited)    (Unaudited)
Revenues:
---------
<S>               <C>               <C>           <C>             <C>
Insurance premiums and
  other 
  considerations   $ 4,522,461       $ 4,532,608   $1,507,587     $1,549,314 
Net investment
   income            5,587,104         5,165,284    1,874,925      1,699,216 
Net mortuary 
  and cemetery sales 6,966,139         7,019,648    2,093,755      2,246,972 
Realized gains
 on investments
  and other assets     102,991           254,170        4,892        (15,405)
Mortgage fee income  6,687,379         4,148,672    2,503,984      1,260,725 
Other                   51,555            28,182       13,035          5,972 
                   -----------       -----------   ----------     ----------
  Total revenue    $23,917,629       $21,148,564   $7,998,178     $6,746,794 

Benefits and expenses:
Death benefits     $ 1,785,148       $ 1,704,951   $  663,101     $  493,843 
Surrenders and 
other policy
  benefits             791,529           987,117      250,818         212,508 
Increase in future
 policy benefits     2,481,246         2,132,961      756,575         834,897 
Amortization of
 deferred policy
  acquisition costs
  and cost ofinsurance
   acquired            994,389         1,033,053      401,335         393,698 
General and
 administrative expenses:
  Commissions        5,091,565         3,462,737    1,848,048       1,064,957 
  Salaries           3,950,062         3,733,669    1,329,798       1,298,302 
  Other              4,904,959         4,293,988    1,632,379       1,344,620 
Interest expense       682,513           798,358      262,784         260,507 
Cost of goods and
 services sold
  of the mortuaries
  and cemeteries     2,264,090        2,101,222       721,470         650,124 
                   -----------       ----------    ----------      ----------
  Total benefits
    and expenses   $22,945,501       $20,248,056   $7,866,308      $6,553,456 
                   -----------       -----------   ----------      ----------
Earnings before
 income taxes      $   972,128       $   900,508   $  131,870      $  193,338 
Income tax expense    (224,615)         (208,184)     (30,284)        (43,072)
                   -----------       -----------   ----------      ----------
  Net earnings     $   747,513       $   692,324   $  101,586      $  150,266 
                   ===========       ===========   ==========      ==========
Net earnings per
 common share            $0.18             $0.17        $0.02           $0.04 
                         =====             =====        =====           =====
  Weighted average 
    outstanding 
     common shares   4,220,488         3,970,860    4,249,563       3,971,233 
                    ==========       ===========   ==========     ===========
Net earnings per
  common share-
   assuming dilution     $0.18             $0.17        $0.02           $0.04 
                         =====             =====        =====           =====
  Weighted average
   outstanding common
    shares-assuming
     dilution        4,220,488         4,000,563    4,249,563       4,000,867 
                   ===========        ==========   ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                   SECURITY NATIONAL FINANCIAL CORPORATION
                              AND SUBSIDIARIES

                        Consolidated Balance Sheets


                                  September 30, 1998           December 31,
                                      (Unaudited)                  1997
                                  -------------------          -------------
Assets:
-------
<S>                               <C>                         <C>
Insurance-related investments:
Fixed maturity securities
 held to maturity, at
 amortized cost                     $ 42,717,838                 $ 49,784,898 
Equity securities available for sale,
   at market                           4,586,611                    4,831,813 
Mortgage loans on real estate         10,320,956                    8,307,237 
Real estate, net of accumulated
  depreciation                         7,973,940                   7,559,725 
Policy loans                           2,971,987                    2,882,711 
Other loans                               71,092                       84,147 
Short-term investments                 2,632,812                    3,698,941 
                                    ------------                 ------------
   Total insurance-related
    investments                       71,275,236                   77,149,472 
Restricted assets of cemeteries
 and mortuaries                        4,070,986                    3,889,785 
Cash                                   1,065,299                    3,408,179 
Receivables:
 Trade contracts                       4,120,895                    4,323,011 
 Mortgage loans sold to investors     21,221,975                   11,398,432 
 Receivable from agents                  869,313                      816,657 
 Other                                 2,006,721                      364,782 
                                     -----------                  -----------
   Total receivables                  28,218,904                   16,902,882 
 Allowance for doubtful accounts      (1,643,521)                  (1,679,090)
                                    ------------                  -----------
 Net receivables                      26,575,383                   15,223,792 
Land and improvements held for sale    8,544,158                    8,466,886 
Accrued investment income                916,295                    1,001,998 
Deferred policy acquisition costs      4,714,483                    4,433,841 
Property, plant and equipment, net     6,987,711                    6,641,562 
Cost of insurance acquired             3,130,848                    3,370,018 
Excess of cost over net assets
 of acquired subsidiaries              1,442,304                    1,554,505 
Other                                    904,473                      311,841 
                                    ------------                 ------------
   Total assets                     $129,627,176                 $125,451,879 
                                    ============                 ============
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                       SECURITY NATIONAL FINANCIAL CORPORATION
                                 AND SUBSIDIARIES
                       Consolidated Balance Sheets (Continued)

                                September 30, 1998            December 31,
                                    (Unaudited)                   1997
                                -------------------           ------------
Liabilities:
------------
<S>                               <C>                         <C>
Future life, annuity, and other
 policy benefits                    $ 79,213,888                 $ 77,890,080 
Line of credit for financing
 of mortgage loans                     1,686,011                      100,000 
Bank loans payable                     5,745,549                    6,097,351 
Notes and contracts payable            3,574,980                    3,783,566 
Estimated future costs of 
   pre-need sales                      6,304,680                    5,994,241 
Payable to endowment care fund           374,361                      121,370 
Accounts payable                         998,286                    1,204,029 
Other liabilities and accrued
  expenses                             2,035,224                    1,632,897 
Income taxes                           3,456,698                    3,233,415 
                                    ------------                 ------------
   Total liabilities                 103,389,677                  100,056,949 

Commitments and contingencies

Stockholders' Equity:
---------------------
Common stock:
   Class A: $2 par value, authorized
      10,000,000 shares,
      issued 4,397,470 shares in
      1998 and 4,326,588 shares
      in 1997                         8,794,940                    8,653,176 
   Class C: $0.20 par value, authorized
      7,500,000 shares, issued 5,187,221
      shares in 1998 and 5,200,811 shares
      in 1997                         1,037,444                    1,040,162 
                                    -----------                   ----------
Total common stock                    9,832,384                    9,693,338 
Additional paid-in capital            9,258,574                    9,133,454 
Unrealized appreciation of investments,
 net of deferred taxes                  662,069                      830,939 
Retained earnings                     8,280,532                    7,533,259 
Treasury stock at cost (659,993 Class
   A shares and 56,217 Class C shares
   in 1998 and 1997 held by affiliated
   companies)                        (1,796,060)                  (1,796,060)
                                   ------------                 ------------
Total stockholders' equity           26,237,499                   25,394,930 
                                   ------------                 ------------
 Total liabilities and 
   stockholders' equity            $129,627,176                 $125,451,879 
                                   ============                 ============
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                      SECURITY NATIONAL FINANCIAL CORPORATION
                                 AND SUBSIDIARIES

                       Consolidated Statements of Cash Flow

                                 Nine Months Ended September 30,
                                 1998                      1997
                              (Unaudited)              (Unaudited)
                              ----------               ----------
<S>                        <C>                        <C>
Cash flows from operating activities:
   Net earnings             $    747,513               $   692,324 
   Adjustments to reconcile
    net earnings to net cash
    (used in) provided by 
      operating activities:
    Realized gains on investments and
      other assets              (103,421)                 (254,171)
    Depreciation                 678,836                   590,517 
    Provision for losses on
      accounts and loans
      receivable                (35,569)                 (169,447)
    Amortization of goodwill,
    premiums, and discounts      74,958                     9,396 
    Provision for income taxes  223,284                   206,796 
    Policy acquisition costs
     deferred                (1,035,861)                 (695,875)
    Policy acquisition costs
     amortized                  755,219                   793,763 
    Cost of insurance
     acquired amortized         239,170                   239,290 
    Change in assets and liabilities net of
    effects from purchases and disposals of
    subsidiaries:
     Land and improvements
       held for sale            (77,272)                  (25,307)
     Future life and other
       benefits               1,964,694                 1,875,664 
     Receivables for
      mortgage loans sold    (9,823,543)                  811,270 
     Other operating assets
      and liabilities          (975,470)                   80,550 
                            -----------              ------------
         Net cash provided
      by operating
      activities             (7,367,462)                4,154,770 
Cash flows from investing activities:
  Securities held to maturity:
     Purchase - fixed maturity
       securities              (524,563)               (6,412,063)
     Calls and maturities -
      fixed maturity
      securities              7,661,157                 6,232,281 
Securities available for sale:
     Purchases - equity 
      securities                (22,183)                 (169,605)
     Sales - equity
      securities                165,085                   501,847 
Purchases of short-term
     investments             (8,536,330)               (3,951,926)
Sales of short-term
    investments               9,602,460                 1,711,632 
Purchases of restricted
    assets                     (181,201)                 (338,014)
Mortgage, policy, and
   other loans made          (4,913,800)                 (362,837)
Payments received for
   mortgage, policy, and
   other loans                2,853,682                 2,576,559 
Purchases of property,
   plant, and equipment        (779,647)                 (249,237)
Purchases of real estate       (684,815)                  (46,145)
                           ------------              ------------
      Net cash provided by
       investing activities   4,639,845                  (507,508)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
               SECURITY NATIONAL FINANCIAL CORPORATION
                           AND SUBSIDIARIES

            Consolidated Statements of Cash Flow (Continued)

                                      Nine Months Ended September 30,
                                      1998                     1997
                                   (Unaudited)             (Unaudited)
                                   ----------            ------------
<S>                                 <C>                 <C>
Cash flows from financing activities:
   Annuity receipts                   1,980,007            1,911,600 
   Annuity withdrawal                (2,620,893)          (3,231,904)
   Repayment of bank loans and
       notes and contracts payable     (560,388)          (1,580,063)
   Purchase of treasury stock             -0-                (38,948)
   Net change in line of credit
       for financing of 
       mortgage loans                 1,586,011           (1,211,890)
                                    -----------          -----------
   Net cash provided by (used in) 
       financing activities             384,737           (4,151,205)
                                    -----------          -----------
Net change in cash                   (2,342,880)            (503,943)
Cash at beginning of period           3,408,179            3,301,084 
                                    -----------          -----------
Cash at end of period               $ 1,065,299          $ 2,797,141 
                                    ===========          ===========

See accompanying notes to the financial statements.
</TABLE>

<PAGE>

SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
        Notes to Consolidated Financial Statements
                    September 30, 1998
                        (Unaudited)

1.  Basis of Presentation
    ---------------------
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. 
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Operating
results for the nine months ended September 30, 1998, are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1998.  For further information, refer to
the consolidated financial statements and footnotes thereto for the
year ended December 31, 1997, included in the Company's Annual
Report on Form 10-K (file number 0-9341).

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

The estimates susceptible to significant change are those used in
determining the liability for future policy benefits and claims,
those used in determining valuation allowances for mortgage loans on
real estate, and those used in determining the estimated future
costs for pre-need sales.  Although some variability is inherent in
these estimates, management believes the amounts provided are
adequate.

2. Comprehensive Income
   --------------------
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income.  Statement 130 establishes new rules for the
reporting and display of comprehensive income and its components;
however, the adoption of this Statement had no impact on the
Company's net income or stockholders' equity.  Statement 130
requires unrealized gains or losses on the Company's available-for-
sale securities, which prior to adoption were reported separately in
stockholders' equity, to be included in other comprehensive income. 

For the three months ended September 30, 1998 and 1997 total
comprehensive income (loss) amounted to $(91,019) and $633,374,
respectively.  For the nine months ended September 30, 1998 and
1997, total comprehensive income amounted to $578,643 and $1,092,102
respectively.

3. Capital Stock
   -------------
In accordance with SFAS 128, the basic and diluted earnings per
share amounts were calculated as follows:

<TABLE>
<CAPTION>
                     Nine Months Ended September 30,
                        1998                   1997
                        ----                   ----
<S>                  <C>                     <C>
Numerator:
   Net income         $747,513                $692,324
                      ========                ========
Denominator:
   Denominator for
     basic earnings per
     share-- weighted-
     average shares  4,220,488               3,970,860

  Effect of 
     dilutive securities:
     Employee stock
      options            --                     18,096
     Stock appreciation
      rights             --                     11,607
                     ----------             ----------
   Dilutive potential
     common shares       --                     29,703
                    -----------             ----------
   Denominator
     for diluted 
     earnings per
     share-adjusted 
     weighted-average
     shares and 
     assumed
     conversions     4,220,488               4,000,563
                    ==========              ==========
   Basic earnings 
     per share           $0.18                   $0.17
                         =====                   =====
   Diluted earnings 
     per share           $0.18                   $0.17
                         =====                   =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                        Three Months Ended September 30,
                        1998                       1997
                        ----                       ----
<S>                  <C>                     <C>
Numerator:
   Net income         $101,586                $150,266

Denominator:
   Denominator for
     basic earnings per
     share-- weighted-
     average shares  4,249,563               3,971,233

   Effect of 
     dilutive securities:
     Employee stock
      options            --                     18,559
     Stock appreciation
      rights             --                     11,075
                     ----------             ----------
   Dilutive potential
     common shares       --                     29,634
                     ----------             ----------
   Denominator
     for diluted 
     earnings per
     share-adjusted 
     weighted-average
     shares and 
     assumed
     conversions     4,249,563               4,000,867
                    ==========              ==========
   Basic earnings 
     per share           $0.02                   $0.04
                         =====                   =====
   Diluted earnings 
     per share           $0.02                   $0.04
                         =====                   =====
</TABLE>

There are no dilutive effects on net income for purpose of this
calculation.

<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS

Overview

The Company's operations over the last several years generally
reflect three trends or events which the Company expects to
continue:  (i) increased attention to "niche" insurance products,
such as the Company's funeral plan policies, annuities, and limited
pay accident policies; (ii) emphasis on high margin cemetery and
mortuary business; and (iii) capitalizing on the strong economy in
the intermountain west by originating and refinancing mortgage
loans.

Results of Operations

Third Quarter of 1998 Compared to Third Quarter of 1997

Total revenues increased by $1,251,000, or 18.5%, to $7,998,000 for
the three months ended September 30, 1998, from $6,747,000 for the
three months ended September 30, 1997.  Contributing to this
increase in total revenues was a $1,243,000 increase in mortgage fee
income and a $176,000 increase in net investment income.  These
increases were partially offset by a $41,000 decrease in insurance
premiums and other considerations, and a $153,000 decrease in net
mortuary and cemetery sales.

Insurance premiums and other considerations decreased by $41,000, or 
2.7%, to $1,508,000 for the three months ended September 30, 1998,
from $1,549,000 for the comparable period in 1997.  This decrease
was primarily due to a reduction in policies in force.

Net investment income increased by $176,000, or 10.3%, to $1,875,000
for the three months ended September 30, 1998, from $1,699,000 for
the comparable period in 1997.  This increase was attributable to
the Company warehousing additional mortgage loans during the third
quarter of 1998 as compared to the third quarter of 1997.

Net mortuary and cemetery sales decreased by $153,000, or 6.8%, to
$2,094,000 for the three months ended September 30, 1998, from
$2,247,000 for the comparable period in 1997.  This decrease was the
result of a reduction in pre-need and at-need sales which decreased
22.4% and 6.7%, respectively, over the comparable period in 1997 and
is partially offset by a decrease in returns and allowances of 44.3%
over the prior period.

Mortgage fee income increased by $1,243,000, or 98.6%, to $2,504,000
for the three months ended September 30, 1998, from $1,261,000 for
the comparable period in 1997.  This increase was primarily
attributable to more loan originations during the third quarter of
1998 from the refinancing of residential loans brought about by
lower interest rates.

Total benefits and expenses were $7,866,000, or 98.4% of total
revenues for the three months ended September 30 1998, as compared
to $6,553,000, or 97.1% of total revenues for the three months ended
September 30, 1997.

Death benefits, surrenders and other policy benefits and increase in
future policy benefits increased by $129,000, or 8.4%, to $1,670.000
for the three months ended September 30, 1998, from $1,541,000 for
the comparable period in 1997. This increase was primarily the
result of accumulative interest on policyholder funds.
 
Amortization of deferred policy acquisition costs and cost of
insurance acquired increased by $8,000, or 1.9%, to $401,000, for
the three months ended September 30, 1998, from $394,000 for the
comparable period in 1997.  This decrease was in line with the
actuarial assumptions.
<PAGE>

General and administrative expenses increased by $1,102,000 or
29.7%, to $4,810,000 for the three months ended September 30, 1998,
from $3,708,000 for the comparable period in 1997.  This increase
primarily resulted from an increase in commissions and other
expenses due to additional mortgage loan originations having been
made by the Company's mortgage subsidiary during the third quarter
of 1998.

Interest expense increased by $2,000, or .9%, to $263,000 for the
three months ended September 30, 1998, from $261,000 for the
comparable period in 1997.  This increase was primarily due to the
use of the line of credit borrowings.
 
Cost of goods and services sold of the mortuaries and cemeteries
increased by $71,000, or 11.0%, to $721,000 for the three months
ended September 30, 1998, from $650,000 for the comparable period in
1997.  This increase was primarily related to an increase in pre-
need trust sales which have a higher cost of goods and services
charge than other non-trust pre-need sales.

Nine Months Ended September 30, 1998 Compared to Nine Months Ended
September 30, 1997

Total revenues increased by $2,769,000, or 13.1%, to $23,918,000 for
the nine months ended September 30, 1998, from $21,149,000 for the
nine months ended September 30, 1997.  Contributing to this increase
in total revenues was a $2,539,000 increase in mortgage fee income
and a $422,000 increase in net investment income.  These increases
were partially offset by a $151,000 decrease in realized gains on
investments and other assets, a $10,000 decrease in insurance
premiums and other considerations, and a $54,000 decrease in net
mortuary and cemetery sales.

Insurance premiums and other considerations decreased by $10,000, or 
 .2%, to $4,522,000 for the nine months ended September 30, 1998,
from $4,532,000 for the comparable period in 1997.  This decrease
was primarily due to a reduction in policies in force.

Net investment income increased by $422,000, or 8.2%, to $5,587,000
for the nine months ended September 30, 1998, from $5,165,000 for
the comparable period in 1997.  This increase was attributable to
the Company warehousing additional mortgage loans during the nine
months ended September 30, 1998 as compared to the nine months ended
September 30, 1997.

Net mortuary and cemetery sales decreased by $54,000 , or .8%, to
$6,966,000 for the nine months ended September 30, 1998, from
$7,020,000 for the comparable period in 1997.  This decrease is
primarily the result of an increase in returns and allowances of 24%
over the prior period, and is partially offset by an increase in
pre-need sales which increased 6.8% over the comparable period in
1997.

Mortgage fee income increased by $2,539,000, or 61.2%, to $6,687,000
for the nine months ended September 30, 1998, from $4,149,000 for
the comparable period in 1997.  This increase was primarily
attributable to more loan originations during the first nine months
of 1998 from the refinancing of residential loans brought about by
lower interest rates.

Total benefits and expenses were $22,946,000, or 95.9% of total
revenues for the nine months ended September 30 1998, as compared to
$20,248,000, or 95.7% of total revenues for the nine months ended
September 30, 1997.

<PAGE>

Death benefits, surrenders and other policy benefits and increase in
future policy benefits increased by $233,000, or 4.8%, to $5,058,000
for the nine months ended September 30, 1998, from $4,825,000 for
the comparable period in 1997. This increase was primarily the
result of accumulative interest on policyholder funds.

Amortization of deferred policy acquisition costs and cost of
insurance acquired decreased by $39,000, or 3.7%, to $994,000, for
the nine months ended September 30, 1998, from $1,033,000 for the
comparable period in 1997.  This decrease was in line with the
actuarial assumptions.

General and administrative expenses increased by $2,456,000, or
21.4%, to $13,947,000 for the nine months ended September 30, 1998,
from $11,490,000 for the comparable period in 1997.  This increase
primarily resulted from an increase in commissions and other
expenses due to additional mortgage loan originations having been
made by the Company's mortgage subsidiary during the nine months
ended September 30, 1998.

Interest expense decreased by $115,000, or 14.5%, to $683,000 for
the nine months ended September 30, 1998, from $798,000 for the
comparable period in 1997.  This decrease was primarily due to the
reduction of long-term debt.
 
Cost of goods and services sold of the mortuaries and cemeteries
increased by $163,000 or 7.8%, to $2,264,000 for the nine months
ended September 30, 1998, from $2,101,000 for the comparable period
in 1997.  This increase was consistent with the increase in pre-need
mortuary and cemetery sales.

Liquidity and Capital Resources

The Company's life insurance subsidiary and cemetery and mortuary
subsidiaries realize cash flow from premiums, contract payments and
sales on personal services rendered for cemetery and mortuary
business, from interest and dividends on invested assets, and from
the proceeds from the maturity of held-to-maturity investments, or
sale of other  investments.  The mortgage subsidiary realizes cash
flow from fees generated by originating and refinancing mortgage
loans and interest earned on mortgages sold to investors.  The
Company considers these sources of cash flow to be adequate to fund
future policyholder and cemetery and mortuary liabilities, which
generally are long-term, and adequate to pay current policyholder
claims, annuity payments, expenses on the issuance of new policies,
the maintenance of existing policies, debt service, and operating
expenses.

The Company attempts to match the duration of invested assets with
its policyholder and cemetery and mortuary liabilities. The Company
may sell investments other than those held-to-maturity in the
portfolio to help in this timing; however, to date, that has not
been necessary.  The Company purchases short-term investments on a
temporary basis to meet the expectations of short-term requirements
of the Company's products.  The Company's investment philosophy is
intended to provide a rate of return which will persist during the
expected duration of policyholder and cemetery and mortuary
liabilities regardless of future interest rate movements.

The Company's investment policy is to invest predominantly in fixed
maturity securities, mortgage loans, and warehouse mortgage loans on
a short-term basis before selling the loans to investors in
accordance with the requirements and laws governing the life
insurance subsidiary.  Bonds owned by the life insurance subsidiary
amounted to $42,630,000 at amortized cost as of September 30, 1998
compared to $49,697,000 at amortized cost as of December 31, 1997.
This represents 61% and 64% of the total insurance-related investments
as of September 30, 1998 and December 31, 1997,
respectively.  Generally, all bonds owned by the life insurance
subsidiary are rated by the National Association of Insurance
Commissioners.  Under this rating system, there are six categories
used for rating bonds.  At September 30, 1998, 4.0% ($1,718,000) and
at December 31, 1997, 4.1% ($2,018,000) of the Company's total
investment in bonds were invested in bonds in rating categories
three through six, which are considered non-investment grade.

<PAGE>

The Company intends to hold its fixed income securities, including
high-yield securities, in its portfolio to maturity.  Business
conditions, however, may develop in the future which may indicate a
need for a higher level of liquidity in the investment portfolio. 
In that event the Company believes it could sell short-term
investment grade securities before liquidating high-yielding longer
term securities.

The Company is subject to risk based capital guidelines established
by statutory regulators requiring minimum capital levels based on
the perceived risk of assets, liabilities, disintermediation, and
business risk.  At September 30, 1998 and December 31, 1997, the
life insurance subsidiary exceeded the regulatory criteria.

The Company's total capitalization of stockholders' equity and bank
debt and notes payable was $35,558,000 as of September 30, 1998 as
compared to $35,276,000 as of December 31, 1997.  Stockholders'
equity as a percent of capitalization increased to 74% as of
September 30, 1998 from 72% as of December 31, 1997 and as a percent
of assets was 20% for both periods.

Lapse rates measure the amount of insurance terminated during a
particular period.  The Company's lapse rate for life insurance in
1997 was 11.7% as compared to a rate of 12.0% for 1996.  The 1998
lapse rate is approximately the same as 1997.

At September 30, 1998, $11,676,000 of the Company's consolidated
stockholders' equity represents the statutory stockholders' equity
of the Company's life insurance subsidiary.  The life insurance
subsidiary cannot pay a dividend to its parent company without the
approval of insurance regulatory authorities.

Acquisitions

On April 27, 1998, the Company entered into an Acquisition Agreement
(the "Agreement") with Consolidare Enterprises, Inc., a Florida
corporation, ("Consolidare"), and certain shareholders of
Consolidare for the purchase of all of the outstanding shares of
common stock of Consolidare.  Consolidare owns approximately 57.4%
of the outstanding shares of common stock of Southern Security Life
Insurance Company, a Florida corporation ("SSLIC"), and all of the
outstanding shares of stock of Insuradyne Corp., a Florida
corporation ("Insuradyne").  SSLIC is a Florida domiciled insurance
company with total assets of approximately $82.1 million.  SSLIC is
currently licensed to transact business in 14 states.  SSLIC's total
revenues for the year ended December 31, 1997 were $11,696,000. 
SSLIC had a net income of $195,000 for fiscal 1997.

As consideration for the purchase of the shares of Consolidare, the
Company will pay to the holders of Consolidare common stock an aggregate
of $11,356,400 plus an amount equal to the current assets
of Consolidare as of the closing date.  For purposes of the purchase
consideration, current assets of Consolidare are defined as cash and
cash equivalents (with interest earned through the closing date) and
accrued commission due to Insuradyne from SSLIC.  To pay the
purchase consideration, the Company intends to obtain approximately
$6,500,000 from bank financing, with the balance of approximately
$4,856,400 to be obtained from funds currently held by the Company. 
In addition to the purchase consideration, the Company is required
to cause SSLIC to pay, on the closing date, $1,050,000 to George
Pihakis, who is currently President and Chief Executive Officer of
SSLIC, as a lump sum settlement of the executive compensation
agreement between SSLIC and Mr. Pihakis.

<PAGE>

The closing of the Agreement is contingent upon regulatory
approvals, including the approval of the Florida Department of
Insurance and the Utah Insurance Department, compliance or waiver of
compliance under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, approval of the Agreement by the affirmative vote of a
majority of the Consolidare shareholders, with no Consolidare
shareholders exercising their rights as dissenting shareholders
under Section 607.1320 of the Florida statutes, as well as the
satisfactory performance of certain covenants and the accuracy of
the parties' respective representations and warranties at closing. 
Following the closing of the Agreement, it is the intention of the
Company to merge a newly formed wholly-owned subsidiary of Security
National Life Insurance Company into Consolidare, with the result
that Security National Life Insurance Company will then own 57.4% of
the outstanding shares of common stock of SSLIC.  The Company
further intends to continue to operate SSLIC as a Florida domiciled
insurance company.

Year 2000 Issues

The Company is aware of the issues associated with the programming
code in existing computer systems as the millennium ("Year 2000")
approaches. The Year 2000 problem is pervasive and complex as
virtually every computer operation will be affected in some way by
the rollover of the two digit year value to 00. The issue is whether
computer systems will properly recognize data sensitive information
when the year changes to 2000.  Systems that do not properly
recognize such information could generate erroneous data or cause a
system to fail.

The Company's systems, which are presently in use, have been
purchased from third party vendors.  The Company is in the process of
converting to the latest versions for these systems which are Year
2000 compliant ("Version 2000").  The Company, as of September 1,
1998, implemented the Version 2000 for its life insurance subsidiary
and plans to have the Version 2000 installed and in use for its
cemetery and mortuary subsidiaries in the first quarter of 1999.  The
mortgage subsidiary is currently using a Version 2000 system.  The
total cost for the Version 2000 systems is approximately $50,000, of
which $45,000 has been spent as of September 30, 1998.

Once installed the Company believes that the Year 2000 problem will
not pose significant operational problems for the Company.  However,
if such conversions are not completed timely, the Year 2000 problem
may have a material impact on the operations of the Company.  Also,
the Company is in the process of confirming with its major vendors
and suppliers to determine their readiness for the Year 2000.

<PAGE>

                  Part II  Other Information:

Item 1.   Legal Proceedings

          NONE

Item 2.   Changes in Securities

          NONE

Item 3.   Defaults Upon Senior Securities

          NONE

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

          NONE

Item 5.   Other Information

          NONE

Item 6.   Exhibits and Reports on Form 8-K

  (a)     Exhibits

   3. A.  Articles of Restatement of Articles of Incorporation (8)
      B.  Bylaws (1)

   4. A.  Specimen Class A Stock Certificate (1)
      B.  Specimen Class C Stock Certificate (1)
      C.  Specimen Preferred Stock Certificate and Certificate of
          Designation of Preferred Stock (1)
  10. A.  Restated and Amended Employee Stock Ownership Plan and
          Trust Agreement (1)
      B.  Deferred Compensation Agreement with George R. Quist (2)
      C.  1993 Stock Option Plan (3)
      D.  Promissory Note with Key Bank of Utah (4)
      E.  Loan and Security Agreement with Key Bank of Utah (4)
      F.  General Pledge Agreement with Key Bank of Utah (4)
      G.  Deferred Compensation Agreement with William C. Sargent (9)
      H.  Note Secured by Purchase Price Deed of Trust and Assignment
          of Rents with the Carter Family Trust and the Leonard M.
          Smith Family Trust (5)
      I.  Deed of Trust and Assignment of Rents with the Carter
          Family Trust and the Leonard M. Smith Family Trust (5)
      J.  Promissory Note with Page and Patricia Greer (6)
      K.  Pledge Agreement with Page and Patricia Greer (6)
      L.  Stock Purchase Agreement with Civil Service Life Insurance
          Company and Civil Service Employees Insurance Company (7)
      M.  Promissory Note with Civil Service Employees Insurance
          Company (7)
      N.  Articles of Merger of Civil Service Employees Life
          Insurance Company into Capital Investors Life Insurance
          Company (7)
      O.  Agreement and Plan of Merger of Civil Service Employees
          Life Insurance Company into Capital Investors Life
          Insurance Company (7)
      P.  Employment Agreement with Scott M. Quist. (9)
      Q.  Acquisition Agreement with Consolidare 
          Enterprises, Inc.(10)
                                          

   (1)    Incorporated by reference from Registration Statement on
          Form S-1, as filed on June 29, 1987.
   (2)    Incorporated by reference from Annual Report on Form 10-K,
          as filed on March 31, 1989.
   (3)    Incorporated by reference from Annual Report on Form 10-K,
          as filed on March 31, 1994.
   (4)    Incorporated by reference from Report on Form 8-K, as filed
          on February 24, 1995.
   (5)    Incorporated by reference from Annual Report on Form 10K,
          as filed on March 31, 1995.
   (6)    Incorporated by reference from Report on Form 8-K, as filed
          on May 1, 1995.
   (7)    Incorporated by reference from Report on Form 8-K, as filed
          on January 16, 1996.
   (8)    Incorporated by reference from Annual Report on Form 10-K,
          as filed on March 31, 1997.
   (9)    Incorporated by reference from Annual Report on Form 10-K,
          as filed on March 31, 1998.
   (10)   Incorporated by reference from Report on Form 8-K, as filed
          on May 12, 1998.

   27.    Financial Data Schedule

(b) Reports on Form 8-K

      The Company filed a report on Form 8-K with the Securities and
      Exchange Commission on May 12, 1998.  The report supplied
      information under Item 2, thereof, captioned "Acquisition or
      Disposition of Assets", relating to the acquisition of
      Consolidare Enterprises, Inc.

<PAGE>
                          SIGNATURES

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


                        REGISTRANT
          SECURITY NATIONAL FINANCIAL CORPORATION
                        Registrant



DATED: November 15, 1998     By:   George R. Quist,
                                   ----------------
                                   Chairman of the Board,
                                   President and Chief
                                   Executive Officer
                                   (Principal Executive
                                   Officer)


DATED: November 15, 1998     By:   Scott M. Quist
                                   --------------
                                   First Vice President,
                                   General Counsel and
                                   Treasurer (Principal
                                   Financial and Accounting
                                   Officer)