Security Agreement


     This Security  Agreement (the "Security  Agreement") is made as of June 12,
2007, between Security National Life Insurance Company, a Utah corporation,  the
"Borrower"  under a Loan Agreement with Lender of the same date of this Security
Agreement, and Security National Financial Corporation, a Utah corporation,  the
"Guarantor" under that Loan Agreement (collectively, "Grantor"), and Zions First
National  Bank  ("Lender"),  pursuant to a Loan  Agreement of even date herewith
between Borrower and Lender (the "Loan Agreement").

     For  good  and   valuable   consideration,   receipt  of  which  is  hereby
acknowledged, Grantors and Lender hereby agree as follows:

     1. Definitions.  Except as otherwise provided herein,  terms defined in the
Loan Agreement  shall have the same meanings when used herein.  Terms defined in
the singular shall have the same meaning when used in the plural and vice versa.
Terms  defined in the Uniform  Commercial  Code which are used herein shall have
the  meanings  set forth in the Uniform  Commercial  Code,  except as  expressly
defined otherwise. As used herein, the term:

     "Collateral" means the collateral described in Section 2, Grant of Security
Interest, below.

     "Default  Rate" means the default  interest rate provided in the Promissory
Note.

     "Financial Obligations Collateral" means all Underlying Notes, instruments,
deeds of trust, mortgages,  guarantees, and security agreements that are part of
the Collateral.

     "Liquidation  Costs" means the reasonable  costs and out of pocket expenses
incurred by Lender in obtaining  possession  of any  Collateral,  in storage and
preparation for sale, lease or other disposition of any Collateral, in the sale,
lease, or other  disposition of any or all of the Collateral,  and/or  otherwise
incurred in foreclosing on any of the Collateral, including, without limitation,
(a) reasonable attorneys fees and legal expenses, (b) transportation and storage
costs, (c) advertising  costs, (d) sale  commissions,  (e) sales tax and license
fees, (f) costs for improving or repairing any of the Collateral,  and (g) costs
for preservation and protection of any of the Collateral.

     "Permitted  Encumbrances" means liens for taxes and assessments not yet due
and  payable or, if due and  payable,  those  being  contested  in good faith by
appropriate  proceedings  and for which  appropriate  reserves  are  maintained,
security  interests  and  liens  created  by the Loan  Documents,  and  security
interests and liens authorized in writing by Lender.

     "Uniform  Commercial Code" means the Uniform Commercial Code as adopted now
or in the future in the State of Utah or any other state in which the Collateral
is located.

     2. Grant of Security  Interest.  Grantors hereby grant to Lender a security
interest in the following personal property of Grantors (the "Collateral"):

          a. Any and all Underlying Notes and instruments payable to or owing to
     Security  National Life Insurance Company or held by Security National Life
     Insurance Company;

          b. Any and all Underlying Notes and instruments payable to or owing to
     Security  National  Mortgage Company that have been assigned to or are held
     by Security  National  Life  Insurance  Company  and which also  qualify as
     Underlying Notes under the Loan Agreement of the same date herewith between
     Lender and Borrower;

          c. Any and all deeds of trust,  mortgages,  and  security  agreements,
     collateral that secure any of the foregoing obligations;

          d. All guarantees and supporting  obligations  that are related to any
     of the foregoing obligations; and

          e. All amendments, modifications,  renewals, extensions, replacements,
     additions, and accessions to the foregoing and all proceeds thereof.

     Grantors  and Lender  acknowledge  their  mutual  intent that all  security
interests  contemplated  herein are given as a contemporaneous  exchange for new
value to Grantors,  regardless of when advances to Grantors are actually made or
when the Collateral is acquired.

     3. Debts Secured.  The security interest granted by this Security Agreement
shall secure the following  debts,  obligations and liabilities of Grantors,  to
Lender,  including,  without limitation,  (a) the Promissory Note of Borrower in
favor of Lender of even date herewith in the original  principal amount of Forty
Million Dollars  ($40,000,000.00)  (the  "Promissory  Note"),  and all renewals,
extensions, modifications and replacements thereof (including any which increase
the original  principal  amount),  (b) all  obligations of Borrower or Guarantor
arising from or relating to the Loan Documents,  including,  without limitation,
this Security  Agreement,  (c) advances of the same kind and quality or relating
to  this  transaction,  and  (d)  all  overdrafts  on any  account  of  Grantors
maintained with Lender, now existing or hereafter arising.

     Grantors and Lender  expressly  acknowledge  their  mutual  intent that the
security  interest created by this Security  Agreement secure any and all future
debts,  obligations,  and liabilities of Grantors to Lender only upon the mutual
agreement  of the  parties at the time  Lender  extends  such  future  credit to
Grantors.

     4. Location of Grantors and  Collateral.  Grantors  represents and warrants
that:

          a. Borrower and Guarantor are corporations incorporated under the laws
     of the State of Utah.

          b. The complete and exact name of Borrower is Security  National  Life
     Insurance  Company.  The  complete  and exact name of Guarantor is Security
     National Financial Corporation.

          c.  During  the five (5)  years  preceding  the date of this  Security
     Agreement:

               i. Grantors has not been known by nor used any legal,  fictitious
          or trade name;

               ii. Grantors has not changed its name in any respect;

               iii.  Grantors has not been the  surviving  entity of a merger or
          consolidation;

          d. Grantors' chief executive office and principal place of business is
     located at 5300 South 360 West, Salt Lake City, Utah, 84157.

          e. Grantors' place of business is located at 5300 South 360 West, Salt
     Lake City, Utah, 84157.

          f.  During  the five (5)  years  preceding  the date of this  Security
     Agreement, there has not been any change in any of the above locations.

     Grantors agrees that they will not change its state of organization,  name,
or any of the above  locations  or create  any new  locations  for such  matters
without giving Lender at least thirty (30) days prior written notice thereof.

     5. Representations and Warranties Concerning Collateral. Grantors represent
and warrant that:

          a. Grantors are the sole owner of the Collateral.

          b. The Collateral is not subject to any security interest, lien, prior
     assignment,  or other encumbrance of any nature whatsoever except Permitted
     Encumbrances.

          c. The Financial Obligations Collateral,  if any, are each a bona fide
     obligation of the obligor  identified  therein for the amount identified in
     the records of Grantors,  except for normal and  customary  disputes  which
     arise in the ordinary course of business and which do not affect a material
     portion of the Financial Obligations Collateral.

          d. There are no  defenses  or  setoffs  to  payment  of the  Financial
     Obligations Collateral,  if any, which can be asserted by way of defense or
     counterclaim  against  Grantors or Lender,  except for normal and customary
     disputes  which arise in the  ordinary  course of business and which do not
     affect a material portion of the Financial Obligations Collateral.

          e. Grantors have no knowledge of any fact or circumstance  which would
     materially  impair the ability of any obligor on the Financial  Obligations
     Collateral,  if any, to timely perform its obligations  thereunder,  except
     those  which  arise in the  ordinary  course of  business  and which do not
     affect a material portion of the Financial Obligations Collateral.

          f. Any services  performed or goods sold giving rise to the  Financial
     Obligations  Collateral,  if any,  have been rendered or sold in compliance
     with  applicable  laws,  ordinances,  rules,  and  regulations  and  in the
     ordinary course of Grantors' business.

     6. Covenants Concerning Collateral. Grantors covenant that:

          a.  Grantors  will keep the  Collateral  free and clear of any and all
     security  interests,  liens,  assignments  or  other  encumbrances,  except
     Permitted Encumbrances.

          b. Grantors  agree to furnish Lender with any  information  reasonably
     needed  to  identify  Collateral  that  Lender  wishes to  describe  in its
     financing  statement  promptly  upon  request.  Grantors  will  execute and
     deliver  any  documents  (properly  endorsed,   if  necessary)   reasonably
     requested by Lender for perfection or enforcement of any security  interest
     or lien, give good faith,  diligent cooperation to Lender, and perform such
     other acts reasonably requested by Lender for perfection and enforcement of
     any security interest or lien,  including,  without  limitation,  obtaining
     control for purposes of perfection with respect to Collateral consisting of
     investment property, letter-of-credit rights, and electronic chattel paper.
     Lender is authorized to file,  record,  or otherwise utilize such documents
     as it deems  necessary to perfect and/or  enforce any security  interest or
     lien in the Collateral.  Grantors acknowledges that they are not authorized
     to file any financing statement or amendment or termination  statement with
     respect to any financing  statement  without the prior  written  consent of
     Lender and agrees that it will not do so without the prior written  consent
     of Lender,  subject to Grantors'  rights under U.C.A.  ss. 70A-9-509 of the
     Utah  Uniform   Commercial  Code  or  equivalent  section  of  the  Uniform
     Commercial  Code in any other  jurisdiction.  Grantors will pay the cost of
     recording and filing the same in all public offices  wherever  recording or
     filing is deemed by Lender to be necessary or desirable.

          c. Borrower  shall submit to Lender reports as to the  Collateral,  at
     such times and in such form as Lender may reasonably request. Grantors will
     at all times keep accurate and complete  records of the Collateral.  Lender
     or its  representatives  may, at any time and from time to time,  enter any
     premises  where  the  Collateral  and/or  the  records  pertaining  to  the
     Collateral  are located and inspect,  inventory,  audit,  check,  copy, and
     otherwise review the Collateral and the records concerning the Collateral.

          d.  Upon the  occurrence  of an Event of  Default  and when  Lender so
     requests, all collections and other proceeds from the Financial Obligations
     Collateral, if any, shall be deposited into an account designated by Lender
     (the "Cash Collateral Account"),  which account shall be under the sole and
     exclusive  control of Lender.  Such proceeds and  collections  shall not be
     commingled  with any  other  funds  and  shall  be  promptly  and  directly
     deposited into such account in the form in which received by Grantors. Such
     proceeds and  collections  shall not be deposited in any other  account and
     said  Cash  Collateral  Account  shall  contain  no funds  other  than such
     proceeds  and  collections.  All or any  portion of the funds on deposit in
     said Cash  Collateral  Account may, in the sole  discretion  of Lender,  be
     applied  from  time to time as  Lender  elects to  payment  of  obligations
     secured  by this  Security  Agreement  or Lender  may elect to turn over to
     Grantors, from time to time, all or any portion of such funds.

          e.  Grantors  agree to use diligent and good faith  efforts to collect
     the Financial Obligations Collateral, if any. Until written notice is given
     by Lender,  Grantors are  authorized to collect the  Financial  Obligations
     Collateral in a commercially  reasonable manner. Lender, in its discretion,
     may terminate such authority at any time whereupon  Lender is authorized by
     Grantors,  without  further act, to notify any and all account  debtors and
     obligors to make payment thereon directly to Lender, and to take possession
     of all proceeds from the Financial Obligations Collateral,  and to take any
     action  which  Grantors  might  or  could  take to  collect  the  Financial
     Obligations  Collateral,  including  the  right  to  make  any  compromise,
     discharge, or extension.  Lender may exercise such collection rights at any
     time,  when either  Grantor is in default under this Security  Agreement or
     the Loan Documents.  Upon request of Lender,  Grantors agree to execute and
     deliver to Lender a notice to the account debtors and obligors  instructing
     said account debtors and obligors to pay Lender.  Grantors further agree to
     execute  and  deliver to Lender all other  notices  and  similar  documents
     requested by Lender to facilitate  collection of the Financial  Obligations
     Collateral.

          f. All costs of collection of the Financial Obligations Collateral, if
     any, including attorneys fees and legal expenses,  shall be borne solely by
     Grantors,  whether such costs are incurred by or for Grantors or Lender. In
     the event Lender  elects to undertake  direct  collection  of the Financial
     Obligations  Collateral,  Grantors  agree  to  deliver  to  Lender,  if  so
     requested,  all books,  records,  and documents in Grantors'  possession or
     under its control as may relate to the Financial Obligations  Collateral or
     as may be helpful  to  facilitate  such  collection.  Lender  shall have no
     obligation  to cause an  attorneys  demand  letter to be sent,  to file any
     lawsuit,  or to take any other legal action in  collection of the Financial
     Obligations  Collateral.  It is agreed  that  collection  of the  Financial
     Obligations Collateral in a commercially reasonable manner does not require
     that any such legal action be taken.

          g.  Grantors do hereby make,  constitute,  and appoint  Lender and its
     designees as Grantors' true and lawful attorney in fact, with full power of
     substitution,  such power to be exercised in the following manner: (1) upon
     occurrence of an Event of Default,  Lender may institute procedures whereby
     payments and other proceeds of the Financial  Obligations  Collateral shall
     be paid under a remittance  account or lock box arrangement with Lender, or
     Lender's  agent,  and pursuant to which  Lender shall  receive and open all
     mail  addressed  to  Grantors  and remove  therefrom  any  payments  of the
     Financial Obligations  Collateral,  if any; (2) upon occurrence of an Event
     of Default,  Lender may cause mail  relating to the  Financial  Obligations
     Collateral  to be delivered to a designated  address of Lender where Lender
     may open all such mail and remove  therefrom  any payments of the Financial
     Obligations Collateral;  (3) upon occurrence of an Event of Default, Lender
     may endorse Grantors' names upon notes, checks, acceptances,  drafts, money
     orders, or other forms of payment of the Financial Obligations  Collateral;
     (4) upon  occurrence  of an Event of  Default,  Lender may settle or adjust
     disputes or claims in respect to the Financial  Obligations  Collateral for
     amounts  and  upon  such  terms  as  Lender,  in good  faith,  deems  to be
     advisable,  in such case crediting Grantors with only the proceeds received
     and  collected  by Lender  after  deduction  of Lender's  costs,  including
     reasonable attorneys fees and legal expenses; and (5) Lender may do any and
     all other things  necessary or proper to perfect and, upon occurrence of an
     Event of Default,  to protect the liens and rights of Lender  created under
     this Security Agreement.

          h.  Prior to the  advancing  of any funds  under  the Loan  Agreement,
     Grantors shall deliver to Lender the original of any of such instruments or
     notes that are  secured by  Commercial  Property or  Construction  Property
     under the Loan  Agreement that are being used as part of the Borrowing Base
     as set forth in the Loan Agreement. For all other instruments or notes that
     are  secured by  Underlying  Property  that is not  Commercial  Property or
     Construction  Property,  Grantors may retain the original document or note.
     Lender  grants  Grantors a revocable  license to receive  payments or rents
     under all instruments or notes.  Lender may revoke such license at any time
     upon an  occurrence  of default under the Note,  the Loan  Agreement,  this
     Security  Agreement.  Upon such a revocation,  Grantors  shall  immediately
     endorse  and  deliver  all  instruments  or notes to Lender as  required by
     Lender, along with all profits,  payments,  rents, or other monies received
     by  Grantors  pursuant  to  such  instruments  or  notes.  For  such  other
     instruments  retained in original form by Grantors,  Grantors may also sell
     or assign such  instruments or notes in the ordinary  course of business as
     long as Grantors are not in default under this Security Agreement, the Loan
     Agreement, or the Promissory Note. In such instances, Lender will cooperate
     with  Grantors in allowing for the security  interest in any such  specific
     instruments  or  chattel  that are being sold to a bona fide  purchaser  to
     terminate.

          i. Grantors  shall,  immediately  upon  obtaining  knowledge  thereof,
     report to Lender in writing any material  claim or dispute  asserted by any
     obligor on any item of that Collateral, and any other material matters that
     may affect  the  value,  enforceability  or  collectability  of any of that
     Collateral.  Grantors shall also immediately report to Lender (which may be
     accomplished in any meetings with Lender to report on Collateral  under the
     Loan Agreement) any default on any item of Financial Obligations Collateral
     under  which   Grantors  shall  take  such  action  as  foreclosing  on  or
     repossessing any such Collateral.

          j. Grantors shall not,  without  Lender's  written  consent,  make any
     material  settlement,  compromise  or  adjustment  of any item of Financial
     Obligations  Collateral  or  grant  any  material  discounts,   extensions,
     allowances or credits  thereon.  Grantors,  however,  may take such actions
     that are  customary  and  normal in its  ordinary  course and  practice  of
     business without the Lender's written consent,  such as granting extensions
     of time for up to one year  consistent  with the Loan Agreement or imposing
     default rates of interest in the event of default.

     7. Right to Perform for Grantors.  Lender may, in its sole  discretion  and
without  any duty to do so,  elect  to  discharge  taxes,  tax  liens,  security
interests,  or any other  encumbrance  upon the Collateral,  perform any duty or
obligation  of Grantors,  pay filing,  recording,  insurance  and other  charges
payable by Grantors, or provide insurance as provided herein if Grantors fail to
do so. Any such  payments  advanced by Lender  shall be repaid by Grantors  upon
demand,  together  with  interest  thereon  from the date of the  advance  until
repaid, both before and after judgment, at the Default Rate.

     8.  Default.  Time  is of the  essence  of  this  Security  Agreement.  The
occurrence  of any  Event of  Default  shall  constitute  a default  under  this
Security Agreement.

     No course of dealing or any delay or failure to assert any Event of Default
shall constitute a waiver of that Event of Default or of any prior or subsequent
Event of Default.

     9. Remedies.  Upon the occurrence of an Event of Default, Lender shall have
the following rights and remedies,  in addition to all other rights and remedies
existing at law, in equity, or by statute or provided in the Loan Documents:

          a. Lender shall have all the rights and remedies  available  under the
     Uniform Commercial Code;

          b. Lender  shall have the right to enter upon any  premises  where the
     Collateral  or  records  pertaining  to the  Collateral  may  be  and  take
     possession of the Collateral and such records;

          c. Upon request of Lender, Grantors shall, at the expense of Grantors,
     assemble the Collateral and records pertaining to the Collateral at a place
     designated by Lender and tender the  Collateral and such records to Lender;
     and

          d. Lender may sell,  lease or  otherwise  dispose of any or all of the
     Collateral and, after deducting the Liquidation  Costs, apply the remainder
     to pay, or to hold as a reserve  against,  the obligations  secured by this
     Security Agreement.

     Grantors  shall be liable  for all  deficiencies  owing on any  obligations
secured by this Security  Agreement after liquidation of the Collateral.  Lender
shall not have any  obligation to clean-up or otherwise  prepare any  Collateral
for sale, lease, or other disposition.

     The rights and remedies  herein  conferred are cumulative and not exclusive
of any other  rights and remedies and shall be in addition to every other right,
power and remedy herein  specifically  granted or hereafter  existing at law, in
equity,  or by statute which Lender might  otherwise  have, and any and all such
rights and remedies may be exercised  from time to time and as often and in such
order as Lender may deem expedient.  No delay or omission in the exercise of any
such right,  power or remedy or in the  pursuance of any remedy shall impair any
such right,  power or remedy or be  construed  to be a waiver  thereof or of any
default or to be an acquiescence therein.

     Upon the  occurrence  of any Event of  Default,  Grantors  agree to pay all
costs and expenses,  including  reasonable  attorneys  fees and legal  expenses,
incurred by or on behalf of Lender in  enforcing,  or  exercising  any  remedies
under, this Security Agreement, and any other rights and remedies. Additionally,
Grantors agree to pay all Liquidation  Costs. Any and all such costs,  expenses,
and  Liquidation  Costs shall be payable by Grantors upon demand,  together with
interest  thereon  from the date of the advance  until  repaid,  both before and
after judgment, at the Default Rate.

     Regardless of the occurrence of any Event of Default, Grantors agree to pay
all expenses,  including reasonable attorneys fees and legal expenses,  incurred
by Lender in any  bankruptcy  proceedings of any type  involving  Grantors,  the
Collateral, or this Security Agreement,  including, without limitation, expenses
incurred  in  modifying  or lifting the  automatic  stay,  determining  adequate
protection, use of cash collateral, or relating to any plan of reorganization.

     10. Notices. All notices or demands by any party hereto shall be in writing
and shall be sent as provided in the Loan Agreement.

     11. Indemnification. Grantors shall indemnify Lender for any and all claims
and liabilities, and for damages which may be awarded or incurred by Lender, and
for all reasonable  attorneys  fees,  legal  expenses,  and other  out-of-pocket
expenses  incurred in  defending  such  claims,  arising  from or related in any
manner to the negotiation, execution, or performance by Grantors or by Lender in
good faith of this Security Agreement,  but excluding any such claims based upon
breach or default by Lender or gross negligence or willful misconduct of Lender.

     12.  General.  This  Security  Agreement is made for the sole and exclusive
benefit of Grantors  and Lender and is not  intended to benefit any third party.
No such third  party may claim any right or benefit or seek to enforce  any term
or provision of this Security Agreement.

     Lender and its officers, directors, employees, representatives, agents, and
attorneys,  shall not be liable to Grantors or any Guarantor  for  consequential
damages arising from or relating to any breach of contract, tort, or other wrong
in connection with or relating to this Security Agreement or the Collateral.

     If the  incurring  of any debt by  Grantors  or the payment of any money or
transfer of  property  to Lender by or on behalf of  Grantors  or any  Guarantor
should for any reason subsequently be determined to be "voidable" or "avoidable"
in whole or in part within the meaning of any state or federal law (collectively
"voidable transfers"),  including, without limitation, fraudulent conveyances or
preferential  transfers  under the United  States  Bankruptcy  Code or any other
federal or state law,  and Lender is required  to repay or restore any  voidable
transfers or the amount or any portion  thereof,  or upon the advice of Lender's
counsel is advised to do so, then,  as to any such amount or property  repaid or
restored, including all reasonable costs, expenses, and attorneys fees of Lender
related thereto, the liability of Grantors and Guarantor,  and each of them, and
this Security Agreement, shall automatically be revived, reinstated and restored
and shall exist as though the voidable transfers had never been made.

     This  Security  Agreement  shall be governed by and construed in accordance
with the laws of the State of Utah.

     Any   provision  of  this  Security   Agreement   which  is  prohibited  or
unenforceable  in any  jurisdiction  shall,  as to such  jurisdiction  only,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

     All  references in this Security  Agreement to the singular shall be deemed
to include the plural if the context so requires and vice versa.  References  in
the  collective or  conjunctive  shall also include the  disjunctive  unless the
context otherwise clearly requires a different interpretation.

     All agreements, representations,  warranties and covenants made by Grantors
shall survive the execution and delivery of this Security Agreement,  the filing
and consummation of any bankruptcy proceedings,  and shall continue in effect so
long as any  obligation to Lender  contemplated  by this  Security  Agreement is
outstanding  and  unpaid,  notwithstanding  any  termination  of  this  Security
Agreement.  All  agreements,  representations,  warranties and covenants in this
Security  Agreement  shall  bind the  party  making  the same and its  heirs and
successors,  and shall be to the benefit of and be enforceable by each party for
whom made and their respective heirs, successors and assigns.

     This Security Agreement,  together with the Loan Documents,  constitute the
entire agreement between Grantors and Lender as to the subject matter hereof and
may not be altered or amended except by written agreement signed by Grantors and
Lender.  All  other  prior and  contemporaneous  agreements,  arrangements,  and
understandings  between the parties  hereto as to the subject matter hereof are,
except as otherwise expressly provided herein, rescinded.



     IN WITNESS WHEREOF, Lender and Grantors have caused this Security Agreement
to be duly executed and delivered as of the date first above written.

                                     Lender:

                                     Zions First National Bank



                                     By: s/s Todd Harris
                                         ---------------
                                         Todd Harris
                                         Vice President



                                    Grantors:

                                    Security National Life Insurance Company,
                                    a Utah corporation



                                    By: s/s Scott M. Quist
                                        ------------------
                                        Scott M. Quist, President


                                    Security National Financial Corporation,
                                    a Utah corporation



                                    By:  s/s Scott M. Quist
                                         ------------------
                                         Scott M. Quist, President