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                                                                EXHIBIT 10.11(b)

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT ("Agreement") is made as of the 1st day of
October, 2004, by CITIZENS INSURANCE COMPANY OF AMERICA, a Colorado insurance
corporation ("CICA"), in favor of REGIONS BANK, an Alabama banking corporation
("Bank").

                                   BACKGROUND.

      Pursuant to the Loan Agreement, Borrower will receive a loan from Bank in
the principal amount of $30,000,000 and will use the proceeds of such loan to
purchase a surplus debenture issued by CICA in the original principal amount of
$30,000,000. CICA will use the proceeds of such surplus debenture to pay a
portion of the purchase price for all of the authorized, issued and outstanding
capital stock of SPLIC. Upon the acquisition of such stock, SPLIC shall be a
wholly-owned Subsidiary of CICA. CICA is a wholly-owned Subsidiary of Borrower.
It is a condition precedent to the making of the loan by Bank to Borrower that
CICA execute and deliver this Agreement.

                                   AGREEMENT.

      For value received, CICA hereby agrees with Secured Party as follows:

      1. DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings indicated below:

            (a)   The term "Borrower" shall mean Citizens, Inc., a Colorado
            corporation.

            (b)   The term "Code" shall mean the Uniform Commercial Code as in
      effect in the State of Texas on the date of this Agreement or as it may
      hereafter be amended from time to time.

            (c)   The term "Collateral" shall mean all of the following property
      of CICA, whether now owned or hereafter acquired: (a) any and all shares
      of capital stock and other equity interest of SPLIC (including but not
      limited to the capital stock described on Schedule A), which shall be not
      less than 100% of issued and outstanding capital stock or other equity
      interests of SPLIC, (b) all certificates, instruments and/or other
      documents evidencing the foregoing, (c) all renewals, replacements and
      substitutions of all of the foregoing, (d) all Additional Property (as
      hereinafter defined), and (e) all products and proceeds of all of the
      foregoing. The designation of proceeds does not authorize CICA to sell,
      transfer or otherwise convey any of the foregoing property. The delivery
      at any time by CICA to Secured Party of any property as a pledge to secure
      payment or performance of any indebtedness or obligation whatsoever shall
      also constitute a pledge of such property as Collateral hereunder.

            (d)   The term "CICA" shall mean Citizens Insurance Company of
      America, a Colorado insurance corporation.

            (e)   The term "Indebtedness" shall mean all indebtedness,
      obligations and liabilities of Borrower to Secured Party of any kind or
      character, now existing or

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      hereafter arising, whether direct, indirect, related, unrelated, fixed,
      contingent, liquidated, unliquidated, joint, several or joint and several,
      and regardless of whether such indebtedness, obligations and liabilities
      may, prior to their acquisition by Secured Party, be or have been payable
      to or in favor of a third party and subsequently acquired by Secured Party
      (it being contemplated that Secured Party may make such acquisitions from
      third parties), including without limitation all indebtedness, obligations
      and liabilities of Borrower to Secured Party now existing or hereafter
      arising by note, draft, acceptance, guaranty, endorsement, letter of
      credit, assignment, purchase, overdraft, discount, indemnity agreement or
      otherwise, including without limitation that certain promissory note of
      Borrower, dated as of March 22, 2004, payable to the order of Secured
      Party in the original principal amount of $30,000,000, and any and all
      amendments, renewals, extensions, modifications, supplements and
      restatements thereof, (ii) all accrued but unpaid interest on any of the
      indebtedness described in (i) above, (iii) all obligations of Borrower to
      Secured Party under any documents evidencing, securing, governing and/or
      pertaining to all or any part of the indebtedness described in (i) and
      (ii) above, (iv) all costs and expenses incurred by Secured Party in
      connection with the collection and administration of all or any part of
      the indebtedness and obligations described in (i), (ii) and (iii) above or
      the protection or preservation of, or realization upon, the collateral
      securing all or any part of such indebtedness and obligations, including
      without limitation all reasonable attorneys' fees, (v) all renewals,
      extensions, modifications and rearrangements of the indebtedness and
      obligations described in (i), (ii), (iii) and (iv) above, and all amounts
      that would be owed by Borrower under any Loan Document but for the fact
      that such amounts are unenforceable or not allowable due to the existence
      of a proceeding pursuant to any CICA Relief Law (as defined in the Loan
      Agreement) involving CICA or any Person (including all such amounts that
      would become due or would be secured but for the filing of any petition,
      or the commencement of any proceeding, under CICA Relief Laws.

            (f)   The term "Loan Agreement" shall mean that certain Loan
      Agreement between Borrower, as the borrower, and Secured Party, as the
      lender, dated as of March 22, 2004, and any and all amendments, renewals,
      extensions, modifications, supplements and restatements thereof.

            (g)   The term "Loan Documents" shall mean all instruments and
      documents evidencing, securing, governing, guaranteeing and/or pertaining
      to the Indebtedness, as such instruments and documents may be amended,
      renewed, extended, modified, supplemented, or restated from time to time.

            (h)   The term "Obligated Party" shall mean any party other than
      CICA who secures, guarantees and/or is otherwise obligated to pay all or
      any portion of the Indebtedness.

            (i)   The term "Secured Party" shall mean Bank, its successors and
      assigns, including without limitation, any party to whom Bank, or its
      successors or assigns, may assign its rights and interests under this
      Agreement.

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            (j)   The term "SPLIC" means Security Plan Life Insurance Company, a
      Louisiana insurance corporation.

All words and phrases used herein which are expressly defined in Section 1.201,
Chapter 8 or Chapter 9 of the Code shall have the meaning provided for therein.
Other words and phrases defined elsewhere in the Code shall have the meaning
specified therein except to the extent such meaning is inconsistent with a
definition in Section 1.201, Chapter 8 or Chapter 9 of the Code.

            2.    SECURITY INTEREST. As security for the Indebtedness, CICA, for
value received, hereby grants to Secured Party a continuing security interest in
the Collateral.

            3.    ADDITIONAL PROPERTY. Collateral shall also include the
following property (collectively, the "Additional Property") which CICA becomes
entitled to receive or shall receive in connection with any Collateral: (a) any
stock certificate including without limitation, any certificate representing a
stock dividend or any certificate in connection with any recapitalization,
reclassification, merger, consolidation, conversion, combination of shares,
stock split or spin-off; (b) any option, warrant, subscription or right, whether
as an addition to or in substitution of any Collateral; (c) any dividends or
distributions of any kind whatsoever, whether distributable in cash, stock or
other property; (d) any interest or principal payments; and (e) any conversion
or redemption proceeds; provided, however, that until the occurrence of an Event
of Default (as hereinafter defined), CICA shall be entitled to all cash
dividends and all principal and interest paid on the Collateral free of the
security interest created under this Agreement. All Additional Property received
by CICA shall be received in trust for the benefit of Secured Party. All
Additional Property and all certificates or other written instruments or
documents evidencing and/or representing the Additional Property that is
received by CICA, together with such instruments of transfer as Secured Party
may request, shall immediately be delivered to or deposited with Secured Party
and held by Secured Party as Collateral under the terms of this Agreement. If
the Additional Property received by CICA shall be shares of stock or other
securities, such shares of stock or other securities shall be duly endorsed in
blank or accompanied by proper instruments of transfer and assignment duly
executed in blank with, if requested by Secured Party, signatures guaranteed by
a bank or member firm of the New York Stock Exchange, all in form and substance
satisfactory to Secured Party. Secured Party shall be deemed to have possession
of any Collateral in transit to Secured Party or its agent.

            4.    VOTING RIGHTS. As long as no Event of Default shall have
occurred hereunder and subject to Section 11(i), any voting rights incident to
any stock or other securities pledged as Collateral may be exercised by CICA;
provided, however, that CICA will not exercise, or cause to be exercised, any
such voting rights, without the prior written consent of Secured Party, if the
direct or indirect effect of such vote will result in an Event of Default
hereunder.

            5.    MAINTENANCE OF COLLATERAL. Other than the exercise of
reasonable care to assure the safe custody of any Collateral in Secured Party's
possession from time to time, Secured Party does not have any obligation, duty
or responsibility with respect to the Collateral. Without limiting the
generality of the foregoing, Secured Party shall not have any obligation, duty
or responsibility to do any of the following: (a) ascertain any maturities,
calls, conversions, exchanges, offers, tenders or similar matters relating to
the Collateral or informing CICA with respect to any such matters; (b) fix,
preserve or exercise any right, privilege or option (whether

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conversion, redemption or otherwise) with respect to the Collateral unless (i)
CICA makes written demand to Secured Party to do so, (ii) such written demand is
received by Secured Party in sufficient time to permit Secured Party to take the
action demanded in the ordinary course of its business, and (iii) CICA provides
additional collateral, acceptable to Secured Party in its sole discretion; (c)
collect any amounts payable in respect of the Collateral (Secured Party being
liable to account to CICA only for what Secured Party may actually receive or
collect thereon); (d) sell all or any portion of the Collateral to avoid market
loss; (e) sell all or any portion of the Collateral unless and until (i) CICA
makes written demand upon Secured Party to sell the Collateral, and (ii) CICA
provides additional collateral, acceptable to Secured Party in its sole
discretion; or (f) hold the Collateral for or on behalf of any party other than
CICA.

      6.    REPRESENTATIONS AND WARRANTIES. CICA hereby represents and warrants
the following to Secured Party:

            (a)   Due Authorization. The execution, delivery and performance of
      this Agreement and all of the other Loan Documents by CICA have been duly
      authorized by all necessary corporate action of CICA, to the extent CICA
      is a corporation, or by all necessary partnership action, to the extent
      CICA is a partnership.

            (b)   Enforceability. This Agreement and the other Loan Documents
      constitute legal, valid and binding obligations of CICA, enforceable in
      accordance with their respective terms, except as limited as to
      enforcement of remedies by bankruptcy, insolvency or similar laws of
      general application relating to the enforcement of creditors' rights and
      except to the extent specific remedies may generally be limited by
      equitable principles.

            (c)   Ownership and Liens. CICA has good and marketable title to the
      Collateral free and clear of all liens, security interests, encumbrances
      or adverse claims, except for the security interest created by this
      Agreement. No dispute, right of setoff, counterclaim or defense exists
      with respect to all or any part of the Collateral. CICA has not executed
      any other security agreement currently affecting the Collateral and no
      financing statement or other instrument similar in effect covering all or
      any part of the Collateral is on file in any recording office except as
      may have been executed or filed in favor of Secured Party.

            (d)   No Conflicts or Consents. Neither the ownership, the intended
      use of the Collateral by CICA, the grant of the security interest by CICA
      to Secured Party herein nor the exercise by Secured Party of its rights or
      remedies hereunder, will (i) conflict with any provision of (A) any
      domestic or foreign law, statute, rule or regulation, (B) the articles or
      certificate of incorporation, charter, bylaws or partnership agreement, as
      the case may be, of CICA, or (C) any agreement, judgment, license, order
      or permit applicable to or binding upon CICA or otherwise affecting the
      Collateral, or (ii) result in or require the creation of any lien, charge
      or encumbrance upon any assets or properties of CICA or of any person
      except as may be expressly contemplated in the Loan Documents. Except as
      expressly contemplated in the Loan Documents, no consent, approval,
      authorization or order of, and no notice to or filing with, any court,
      governmental authority or third party is required in connection with the
      grant by CICA of

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      the security interest herein or the exercise by Secured Party of its
      rights and remedies hereunder.

            (e)   Security Interest. CICA has and will have at all times full
      right, power and authority to grant a security interest in the Collateral
      to Secured Party in the manner provided herein, free and clear of any
      lien, security interest or other charge or encumbrance. This Agreement
      creates a legal, valid and binding security interest in favor of Secured
      Party in the Collateral.

            (f)   Location/Identity. CICA's residence or chief executive office,
      as the case may be, and the office where the records concerning the
      Collateral are kept is located at its address set forth on the signature
      page hereof. CICA's exact legal name, entity type, state of organization,
      federal taxpayer identification number and organizational number issued by
      the appropriate authority of the State of Colorado (the "Organizational
      Information") are as set forth on the signature page hereof. CICA is not
      organized in more than one jurisdiction. Except as specified herein, the
      Organizational Information shall not change. During the five years
      preceding the date of this Agreement, CICA has not had or operated under
      any name other than its name as stated on the signature page of this
      Agreement, has not been organized under the laws of any jurisdiction other
      than Colorado, has not been organized as a type of entity other than an
      insurance corporation and the chief executive office of CICA has not been
      located at any address other than as set forth on the signature page
      hereof.

            (g)   Solvency of CICA. As of the date hereof, and after giving
      effect to this Agreement and the completion of all other transactions
      contemplated by CICA at the time of the execution of this Agreement, (i)
      CICA is and will be solvent, (ii) the fair saleable value of CICA's assets
      exceeds and will continue to exceed CICA's liabilities (both fixed and
      contingent), (iii) CICA is and will continue to be able to pay its debts
      as they mature, and (iv) if CICA is not an individual, CICA has and will
      have sufficient capital to carry on CICA's businesses and all businesses
      in which CICA is about to engage.

            (h)   Nature of Ownership. CICA is the registered owner of the
      securities pledged as Collateral and a certificate has been issued in
      CICA's name to evidence CICA's ownership in such securities.

            (i)   Securities. Any certificates evidencing securities pledged as
      Collateral are valid and genuine and have not been altered. All securities
      pledged as Collateral have been duly authorized and validly issued, are
      fully paid and non-assessable, and were not issued in violation of the
      preemptive rights of any party or of any agreement by which CICA or the
      issuer thereof is bound. No restrictions or conditions exist with respect
      to the transfer or voting of any securities pledged as Collateral, except
      as has been disclosed to Secured Party in writing. No issuer of such
      securities has any outstanding stock rights, rights to subscribe, options,
      warrants or convertible securities outstanding or any other rights
      outstanding entitling any party to have issued to such party capital stock
      of such issuer, except as has been disclosed to Secured Party in writing.
      Schedule A contains a complete and correct description of each certificate
      or other instrument included in or

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      evidencing Collateral. Schedule B is a complete and correct list of the
      exact name of the issuer of all Collateral described on Schedule A, its
      jurisdiction of organization, its federal taxpayer identification number,
      and the authorized, issued and outstanding capital stock of such issuer.
      CICA's interest in such issuer is as stated on Schedule A.

            (j)   Benefit. This Agreement may reasonably be expected to benefit,
      directly or indirectly, CICA, and the Board of Directors of CICA has
      determined that this Agreement may reasonably be expected to benefit,
      directly or indirectly, CICA. CICA is familiar with, and has independently
      reviewed the books and records regarding, the financial condition of
      Borrower and is familiar with the value of any and all collateral intended
      to be security for the payment of all or any part of the Indebtedness;
      provided, however, CICA is not relying on such financial condition or
      collateral as an inducement to enter into this Agreement.

      7.    AFFIRMATIVE COVENANTS. CICA will comply with the covenants contained
in this Section at all times during the period of time this Agreement is
effective unless Secured Party shall otherwise consent in writing.

            (a)   Ownership and Liens. CICA will maintain good and marketable
      title to all Collateral free and clear of all liens, security interests,
      encumbrances or adverse claims, except for the security interest created
      by this Agreement and the security interests and other encumbrances
      expressly permitted by the other Loan Documents. CICA will not permit any
      dispute, right of setoff, counterclaim or defense to exist with respect to
      all or any part of the Collateral. CICA will cause any financing statement
      or other security instrument with respect to the Collateral to be
      terminated, except as may exist or as may have been filed in favor of
      Secured Party. CICA will defend at its expense Secured Party's right,
      title and security interest in and to the Collateral against the claims of
      any third party.

            (b)   Inspection of Books and Records. CICA will keep adequate
      records concerning the Collateral and will permit Secured Party and all
      representatives and agents appointed by Secured Party to inspect CICA's
      books and records of or relating to the Collateral at any time during
      normal business hours, to make and take away photocopies, photographs and
      printouts thereof and to write down and record any such information.

            (c)   Adverse Claim. CICA covenants and agrees to promptly notify
      Secured Party of any claim, action or proceeding affecting title to the
      Collateral, or any part thereof, or the security interest created
      hereunder and, at CICA's expense, defend Secured Party's security interest
      in the Collateral against the claims of any third party. CICA also
      covenants and agrees to promptly deliver to Secured Party a copy of all
      written notices received by CICA with respect to the Collateral, including
      without limitation, notices received from the issuer of any securities
      pledged hereunder as Collateral.

            (d)   Delivery of Instruments and/or Certificates. Contemporaneously
      herewith, CICA covenants and agrees to deliver to Secured Party any
      certificates, documents or instruments representing or evidencing the
      Collateral, together with

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      CICA's endorsement thereon and/or accompanied by proper instruments of
      transfer and assignment duly executed in blank with, if requested by
      Secured Party, signatures guaranteed by a bank or member firm of the New
      York Stock Exchange, all in form and substance satisfactory to Secured
      Party. If required by Secured Party, CICA also covenants and agrees to
      cooperate with Secured Party in registering the pledge of the securities
      pledged as Collateral with the issuer of such securities.

            (e)   Further Assurances. CICA will from time to time at its expense
      promptly execute and deliver all further instruments and documents and
      take all further action necessary or appropriate or that Secured Party may
      request in order (i) to perfect and protect the security interest created
      or purported to be created hereby and the first priority of such security
      interest, (ii) to enable Secured Party to exercise and enforce its rights
      and remedies hereunder in respect of the Collateral, and (iii) to
      otherwise effect the purposes of this Agreement, including without
      limitation, executing and filing such financing or continuation
      statements, or any amendments thereto.

      8.    NEGATIVE COVENANTS. CICA will comply with the covenants contained in
this Section at all times during the period of time this Agreement is effective,
unless Secured Party shall otherwise consent in writing.

            (a)   Transfer or Encumbrance. CICA will not (i) sell, assign (by
      operation of law or otherwise) or transfer CICA's rights in any of the
      Collateral, (ii) grant a lien or security interest in or execute, file or
      record any financing statement or other security instrument with respect
      to the Collateral to any party other than Secured Party, or (iii) deliver
      actual or constructive possession of any certificate, instrument or
      document evidencing and/or representing any of the Collateral to any party
      other than Secured Party.

            (b)   Impairment of Security Interest. CICA will not take or fail to
      take any action which would in any manner impair the value or
      enforceability of Secured Party's security interest in any Collateral.

            (c)   Dilution of Ownership. As to any securities pledged as
      Collateral, CICA will not consent to or approve of the issuance of (i) any
      additional shares of any class of securities of such issuer (unless
      immediately upon issuance additional securities are pledged and delivered
      to Secured Party pursuant to the terms hereof to the extent necessary to
      give Secured Party a security interest after such issuance in at least the
      same percentage of such issuer's outstanding securities as Secured Party
      had before such issuance), (ii) any instrument convertible voluntarily by
      the holder thereof or automatically upon the occurrence or non-occurrence
      of any event or condition into, or exchangeable for, any such securities,
      or (iii) any warrants, options, contracts or other commitments entitling
      any third party to purchase or otherwise acquire any such securities.

            (d)   Restrictions on Securities. CICA will not enter into any
      agreement creating, or otherwise permit to exist, any restriction or
      condition upon the transfer,

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      voting or control of any securities pledged as Collateral, except as
      consented to in writing by Secured Party.

      9.    RIGHTS OF SECURED PARTY. Secured Party shall have the rights
contained in this Section at all times during the period of time this Agreement
is effective.

            (a)   Power of Attorney. CICA hereby irrevocably appoints Secured
      Party as CICA's attorney-in-fact, such power of attorney being coupled
      with an interest, with full authority in the place and stead of CICA and
      in the name of CICA or otherwise, to take any action and to execute any
      instrument which Secured Party may from time to time in Secured Party's
      discretion deem necessary or appropriate to accomplish the purposes of
      this Agreement (subject to Section 11(i)), including without limitation,
      the following action: (i) transfer any securities, instruments, documents
      or certificates pledged as Collateral in the name of Secured Party or its
      nominee; (ii) use any interest, premium or principal payments, conversion
      or redemption proceeds or other cash proceeds received in connection with
      any Collateral to reduce any of the Indebtedness; (iii) exchange any of
      the securities pledged as Collateral for any other property upon any
      merger, consolidation, reorganization, recapitalization or other
      readjustment of the issuer thereof, and, in connection therewith, to
      deposit and deliver any and all of such securities with any committee,
      depository, transfer agent, registrar or other designated agent upon such
      terms and conditions as Secured Party may deem necessary or appropriate;
      (iv) exercise or comply with any conversion, exchange, redemption,
      subscription or any other right, privilege or option pertaining to any
      securities pledged as Collateral; provided, however, except as provided
      herein, Secured Party shall not have a duty to exercise or comply with any
      such right, privilege or option (whether conversion, redemption or
      otherwise) and shall not be responsible for any delay or failure to do so;
      and (v) file any claims or take any action or institute any proceedings
      which Secured Party may deem necessary or appropriate for the collection
      and/or preservation of the Collateral or otherwise to enforce the rights
      of Secured Party with respect to the Collateral.

            (b)   Performance by Secured Party. If CICA fails to perform any
      agreement or obligation provided herein, Secured Party may itself perform,
      or cause performance of, such agreement or obligation, and the expenses of
      Secured Party incurred in connection therewith shall be a part of the
      Indebtedness, secured by the Collateral and payable by CICA on demand.

Notwithstanding any other provision herein to the contrary, Secured Party does
not have any duty to exercise or continue to exercise any of the foregoing
rights and shall not be responsible for any failure to do so or for any delay in
doing so.

      10.   EVENTS OF DEFAULT. Each of the following constitutes an "Event of
Default" under this Agreement:

            (a)   Failure to Pay Indebtedness. The failure, refusal or neglect
      of Borrower to make any payment of principal or interest on the
      Indebtedness, any other amounts due under the Loan Documents, or any
      portion thereof, as the same shall become due and payable; or

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            (b)   Non-Performance of Covenants. The failure of Borrower or any
      Obligated Party to punctually and properly perform, observe, or comply
      with any covenant, agreement, warranty or condition required herein or in
      any of the other Loan Documents; or

            (c)   Default Under other Loan Documents. The occurrence of a
      default or an event of default under the Loan Agreement or any of the
      other Loan Documents; or

            (d)   Misrepresentation. Any representation contained herein or in
      any of the other Loan Documents made by Borrower or any Obligated Party is
      false, misleading or erroneous in any material respect; or

            (e)   Default to Third Party. The occurrence of any event which
      permits the acceleration of the maturity of any indebtedness owing by
      Borrower or any Obligated Party to any third party under any agreement or
      undertaking; or

            (f)   Execution on Collateral. The Collateral or any portion thereof
      is taken on execution or other process of law in any action against CICA;
      or

            (g)   Abandonment. CICA abandons the Collateral or any portion
      thereof; or

            (h)   Action by Other Lienholder. The holder of any lien or security
      interest on any of the assets of CICA, including without limitation, the
      Collateral (without hereby implying the consent of Secured Party to the
      existence or creation of any such lien or security interest on the
      Collateral), declares a default thereunder or institutes foreclosure or
      other proceedings for the enforcement of its remedies thereunder; or

            (i)   Liquidation, Death and Related Events. If CICA or any
      Obligated Party is an entity, the liquidation, dissolution, merger or
      consolidation of any such entity or, if CICA or any Obligated Party is an
      individual, the death or legal incapacity of any such individual; or

            (j)   Dilution of Ownership. The issuer of any securities
      constituting Collateral hereafter issues any shares of any class of
      capital stock (unless immediately upon issuance, additional securities are
      pledged and delivered to Secured Party pursuant to the terms hereof to the
      extent necessary to give Secured Party a security interest after such
      issuance in at least the same percentage of such issuer's outstanding
      securities as Secured Party had before such issuance) or any options,
      warrants or other rights to purchase any such capital stock; or

            (k)   Bankruptcy of CICA or Issuer. (i) The issuer of any securities
      constituting Collateral or CICA files a petition for relief under any CICA
      Relief Law or it or any of its property is the subject of a
      conservatorship, receivership or similar proceeding, (ii) an involuntary
      petition for relief is filed against any such issuer or CICA under any
      CICA Relief Law and such involuntary petition is not dismissed within
      thirty (30) days after the filing thereof, or (iii) an order for relief
      naming any such issuer or CICA is entered under any CICA Relief Law.

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      11.   REMEDIES AND RELATED RIGHTS. If an Event of Default shall have
occurred, and without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to Secured Party,
Secured Party may exercise one or more of the rights and remedies provided in
this Section.

            (a)   Remedies. Secured Party may from time to time at its
      discretion, without limitation and without notice except as expressly
      provided in any of the Loan Documents:

                  (i)   exercise in respect of the Collateral all the rights and
            remedies of a secured party under the Code (whether or not the Code
            applies to the affected Collateral);

                  (ii)  reduce its claim to judgment or foreclose or otherwise
            enforce, in whole or in part, the security interest granted
            hereunder by any available judicial procedure;

                  (iii) sell or otherwise dispose of, at its office, on the
            premises of CICA or elsewhere, the Collateral, as a unit or in
            parcels, by public or private proceedings, and by way of one or more
            contracts (it being agreed that the sale or other disposition of any
            part of the Collateral shall not exhaust Secured Party's power of
            sale, but sales or other dispositions may be made from time to time
            until all of the Collateral has been sold or disposed of or until
            the Indebtedness has been paid and performed in full), and at any
            such sale or other disposition it shall not be necessary to exhibit
            any of the Collateral;

                  (iv)  buy the Collateral, or any portion thereof, at any
            public sale;

                  (v)   buy the Collateral, or any portion thereof, at any
            private sale if the Collateral is of a type customarily sold in a
            recognized market or is of a type which is the subject of widely
            distributed standard price quotations;

                  (vi)  apply for the appointment of a receiver for the
            Collateral, and CICA hereby consents to any such appointment; and

                  (vii) at its option, retain the Collateral in satisfaction of
            the Indebtedness whenever the circumstances are such that Secured
            Party is entitled to do so under the Code or otherwise.

      CICA agrees that in the event CICA is entitled to receive any notice under
      the Uniform Commercial Code, as it exists in the state governing any such
      notice, of the sale or other disposition of any Collateral, reasonable
      notice shall be deemed given when such notice is deposited in a depository
      receptacle under the care and custody of the United States Postal Service,
      postage prepaid, at CICA's address set forth on the signature page hereof,
      five (5) days prior to the date of any public sale, or after which a
      private sale, of any of such Collateral is to be held. Secured Party shall
      not be obligated to make any sale of Collateral regardless of notice of
      sale having been given. Secured Party may adjourn any public or private
      sale from time to time by announcement at the time and place fixed

                                     Page 10
<PAGE>

      therefor, and such sale may, without further notice, be made at the time
      and place to which it was so adjourned. CICA further acknowledges and
      agrees that the redemption by Secured Party of any certificate of deposit
      pledged as Collateral shall be deemed to be a commercially reasonable
      disposition under Section 9.627(b) of the Code.

            (b)   Private Sale of Securities. CICA recognizes that Secured Party
      may be unable to effect a public sale of all or any part of the securities
      pledged as Collateral because of restrictions in applicable federal and
      state securities or insurance laws and that Secured Party may, therefore,
      determine to make one or more private sales of any such securities to a
      restricted group of purchasers who will be obligated to agree, among other
      things, to acquire such securities for their own account, for investment
      and not with a view to the distribution or resale thereof. CICA
      acknowledges that each any such private sale may be at prices and other
      terms less favorable then what might have been obtained at a public sale
      and, notwithstanding the foregoing, agrees that each such private sale
      shall be deemed to have been made in a commercially reasonable manner and
      that Secured Party shall have no obligation to delay the sale of any such
      securities for the period of time necessary to permit the issuer to
      register such securities for public sale under any federal or state
      securities laws. CICA further acknowledges and agrees that any offer to
      sell such securities which has been made privately in the manner described
      above to not less than five (5) bona fide offerees shall be deemed to
      "commercially reasonable" for the purposes of Section 9.627(b) of the
      Code, notwithstanding that such sale may not constitute a "public
      offering" under any federal or state securities laws and that Secured
      Party may, in such event, bid for the purchase of such securities.

            (c)   Application of Proceeds. If any Event of Default shall have
      occurred, Secured Party may at its discretion apply or use any cash held
      by Secured Party as Collateral, and any cash proceeds received by Secured
      Party in respect of any sale or other disposition of, collection from, or
      other realization upon, all or any part of the Collateral as follows in
      such order and manner as Secured Party may elect:

                  (i)   to the repayment or reimbursement of the reasonable
            costs and expenses (including, without limitation, reasonable
            attorneys' fees and expenses) incurred by Secured Party in
            connection with (A) the administration of the Loan Documents, (B)
            the custody, preservation, use or operation of, or the sale of,
            collection from, or other realization upon, the Collateral, and (C)
            the exercise or enforcement of any of the rights and remedies of
            Secured Party hereunder;

                  (ii)  to the payment or other satisfaction of any liens and
            other encumbrances upon the Collateral;

                  (iii) to the satisfaction of the Indebtedness;

                  (iv)  by holding such cash and proceeds as Collateral;

                  (v)   to the payment of any other amounts required by
            applicable law (including without limitation, Section 9.615 of the
            Code or any other applicable statutory provision); and

                                     Page 11
<PAGE>

                  (vi)  by delivery to CICA or any other party lawfully entitled
            to receive such cash or proceeds whether by direction of a court of
            competent jurisdiction or otherwise.

            (d)   Deficiency. In the event that the proceeds of any sale of,
      collection from, or other realization upon, all or any part of the
      Collateral by Secured Party are insufficient to pay all amounts to which
      Secured Party is legally entitled, Borrower and any party who guaranteed
      or is otherwise obligated to pay all or any portion of the Indebtedness
      shall be liable for the deficiency, together with interest thereon as
      provided in the Loan Documents.

            (e)   Non-Judicial Remedies. In granting to Secured Party the power
      to enforce its rights hereunder without prior judicial process or judicial
      hearing, CICA expressly waives, renounces and knowingly relinquishes any
      legal right which might otherwise require Secured Party to enforce its
      rights by judicial process. CICA recognizes and concedes that non judicial
      remedies are consistent with the usage of trade, are responsive to
      commercial necessity and are the result of a bargain at arm's length.
      Nothing herein is intended to prevent Secured Party or CICA from resorting
      to judicial process at either party's option.

            (f)   Other Recourse. CICA waives any right to require Secured Party
      to proceed against any third party, exhaust any Collateral or other
      security for the Indebtedness, or to have any third party joined with CICA
      in any suit arising out of the Indebtedness or any of the Loan Documents,
      or pursue any other remedy available to Secured Party. CICA further waives
      any and all notice of acceptance of this Agreement and of the creation,
      modification, rearrangement, renewal or extension of the Indebtedness.
      CICA further waives any defense arising by reason of any disability or
      other defense of any third party or by reason of the cessation from any
      cause whatsoever of the liability of any third party. Until all of the
      Indebtedness shall have been paid in full, CICA shall have no right of
      subrogation and CICA waives the right to enforce any remedy which Secured
      Party has or may hereafter have against any third party, and waives any
      benefit of and any right to participate in any other security whatsoever
      now or hereafter held by Secured Party. CICA authorizes Secured Party, and
      without notice or demand and without any reservation of rights against
      CICA and without affecting CICA's liability hereunder or on the
      Indebtedness, to (i) take or hold any other property of any type from any
      third party as security for the Indebtedness, and exchange, enforce, waive
      and release any or all of such other property, (ii) apply such other
      property and direct the order or manner of sale thereof as Secured Party
      may in its discretion determine, (iii) renew, extend, accelerate, modify,
      compromise, settle or release any of the Indebtedness or other security
      for the Indebtedness, (iv) waive, enforce or modify any of the provisions
      of any of the Loan Documents executed by any third party, and (v) release
      or substitute any third party.

            (g)   Voting Rights. Upon the occurrence of an Event of Default,
      CICA will not exercise any voting rights with respect to securities
      pledged as Collateral. CICA hereby irrevocably appoints Secured Party as
      CICA's attorney-in-fact (such power of attorney being coupled with an
      interest) and proxy to exercise any voting rights with

                                     Page 12
<PAGE>

      respect to CICA's securities pledged as Collateral upon the occurrence of
      an Event of Default.

            (h)   Dividend Rights and Interest Payments. Upon the occurrence of
      an Event of Default:

                  (i)   all rights of CICA to receive and retain the dividends
            and interest payments which it would otherwise be authorized to
            receive and retain pursuant to Section 3 shall automatically cease,
            and all such rights shall thereupon become vested with Secured Party
            which shall thereafter have the sole right to receive, hold and
            apply as Collateral such dividends and interest payments; and

                  (ii)  all dividend and interest payments which are received by
            CICA contrary to the provisions of clause (i) of this Subsection
            shall be received in trust for the benefit of Secured Party, shall
            be segregated from other funds of CICA, and shall be forthwith paid
            over to Secured Party in the exact form received (properly endorsed
            or assigned if requested by Secured Party), to be held by Secured
            Party as Collateral.

            (i)   Insurance Holding Company Laws. Because of laws and
      regulations governing change of control of insurance companies that may be
      applicable (collectively, the "Insurance Holding Company Laws"), certain
      purchasers of the Collateral at foreclosure may be required to obtain
      regulatory approval prior to a final and binding acquisition of the
      Collateral. The CICA acknowledges that such laws and regulations may
      adversely affect the purchase price to be paid by a purchaser of the
      Collateral, or any part thereof, at a private or public foreclosure sale,
      and that the Secured Party may (and is hereby authorized by the CICA to)
      modify the notices, advertisements, terms and procedures of any
      foreclosure sale of the Collateral in order to comply with Insurance
      Holding Company Laws. Without limiting the foregoing, the CICA
      acknowledges that the Secured Party may accept bids at foreclosure sale on
      a provisional basis, pending receipt by the successful bidder of necessary
      regulatory approvals under the Insurance Holding Company Laws. In
      addition, the CICA acknowledges that the Secured Party may (but shall not
      be required to) limit bidding at foreclosure sales to those parties which
      have demonstrated an ability to comply with requirements of the Insurance
      Holding Company Laws. Moreover, the CICA acknowledges that the Secured
      Party may require the successful bidder at a foreclosure sale to execute a
      purchase agreement, deposit a portion of the purchase price, and take
      other actions reflecting the requirements of the Insurance Holding Company
      Laws and the resulting delay in consummating a foreclosure sale.

      12.   MISCELLANEOUS.

            (a)   Entire Agreement. This Agreement contains the entire agreement
      of Secured Party and CICA with respect to the Collateral. If the parties
      hereto are parties to any prior agreement, either written or oral,
      relating to the Collateral, the terms of this Agreement shall amend and
      supersede the terms of such prior agreements as to transactions on or
      after the effective date of this Agreement, but all security agreements,

                                     Page 13
<PAGE>

      financing statements, guaranties, other contracts and notices for the
      benefit of Secured Party shall continue in full force and effect to secure
      the Indebtedness unless Secured Party specifically releases its rights
      thereunder by separate release.

            (b)   Amendment. No modification, consent or amendment of any
      provision of this Agreement or any of the other Loan Documents shall be
      valid or effective unless the same is in writing and signed by the party
      against whom it is sought to be enforced.

            (c)   Actions by Secured Party. The lien, security interest and
      other security rights of Secured Party hereunder shall not be impaired by
      (i) any renewal, extension, increase or modification with respect to the
      Indebtedness, (ii) any surrender, compromise, release, renewal, extension,
      exchange or substitution which Secured Party may grant with respect to the
      Collateral, or (iii) any release or indulgence granted to any endorser,
      guarantor or surety of the Indebtedness. The taking of additional security
      by Secured Party shall not release or impair the lien, security interest
      or other security rights of Secured Party hereunder or affect the
      obligations of CICA hereunder.

            (d)   Waiver by Secured Party. Secured Party may waive any Event of
      Default without waiving any other prior or subsequent Event of Default.
      Secured Party may remedy any default without waiving the Event of Default
      remedied. Neither the failure by Secured Party to exercise, nor the delay
      by Secured Party in exercising, any right or remedy upon any Event of
      Default shall be construed as a waiver of such Event of Default or as a
      waiver of the right to exercise any such right or remedy at a later date.
      No single or partial exercise by Secured Party of any right or remedy
      hereunder shall exhaust the same or shall preclude any other or further
      exercise thereof, and every such right or remedy hereunder may be
      exercised at any time. No waiver of any provision hereof or consent to any
      departure by CICA therefrom shall be effective unless the same shall be in
      writing and signed by Secured Party and then such waiver or consent shall
      be effective only in the specific instances, for the purpose for which
      given and to the extent therein specified. No notice to or demand on CICA
      in any case shall of itself entitle CICA to any other or further notice or
      demand in similar or other circumstances.

            (e)   Costs and Expenses. CICA will upon demand pay to Secured Party
      the amount of any and all costs and expenses (including without
      limitation, attorneys' fees and expenses), which Secured Party may incur
      in connection with (i) the preparation of this Agreement and the
      perfection and preservation of the security interests granted under the
      Loan Documents to which CICA is a party, (ii) the administration of the
      Loan Documents, (iii) the custody, preservation, use or operation of, or
      the sale of, collection from, or other realization upon, the Collateral,
      (iv) the exercise or enforcement of any of the rights of Secured Party
      under the Loan Documents, or (v) the failure by CICA to perform or observe
      any of the provisions hereof.

            (f)   GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE
      FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION
      OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER, IN

                                     Page 14
<PAGE>

      RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A
      JURISDICTION OTHER THAN THE STATE OF TEXAS.

            (g)   Choice of Forum: Service of Process and Jurisdiction. Any
      suit, action or proceeding against CICA with respect to the Loan Documents
      or any judgment entered by any court in respect thereof, may be brought in
      the courts of the State of Texas, County of Travis, or in the United
      States courts located in the State of Texas as Secured Party may elect and
      CICA hereby submits to the non-exclusive jurisdiction of such courts for
      the purpose of any such suit, action or proceeding. CICA hereby
      irrevocably consents to the service of process in any suit, action or
      proceeding in said court by the mailing thereof by Secured Party by
      registered or certified mail, return receipt requested, postage prepaid,
      to CICA's address set forth on the signature page of this Agreement or any
      other address provided by CICA to Secured Party in writing. CICA hereby
      irrevocably waives any objections which it may now or hereafter have to
      the laying of venue of any suit, action or proceeding arising out of or
      relating to the Loan Documents brought in the courts located in the State
      of Texas, County of Travis, and hereby further irrevocably waives any
      claim that any such suit, action or proceeding brought in any such court
      has been brought in any inconvenient forum.

            (h)   Severability. If any provision of this Agreement is held by a
      court of competent jurisdiction to be illegal, invalid or unenforceable
      under present or future laws, such provision shall be fully severable,
      shall not impair or invalidate the remainder of this Agreement and the
      effect thereof shall be confined to the provision held to be illegal,
      invalid or unenforceable.

            (i)   No Obligation. Nothing contained herein shall be construed as
      an obligation on the part of Secured Party to extend credit to CICA or
      continue to extend credit to Borrower.

            (j)   Notices. All notices, requests, demands or other
      communications required or permitted to be given pursuant to this
      Agreement shall be in writing and shall be deemed to have been given or
      made (a) when personally delivered, (b) if mailed, when sent by registered
      or certified mail, postage prepaid, (c) if sent by a nationally recognized
      overnight delivery service, on the next business day after delivery to
      such service specifying delivery on the next business day or (d) if
      transmitted by telex, telecopier or facsimile machine, on the day that
      such notice is transmitted and received. The address of each party for the
      purposes hereof is set forth on the signature page of this Agreement.

            (k)   Binding Effect and Assignment. This Agreement (i) creates a
      continuing security interest in the Collateral, (ii) shall be binding on
      CICA and the heirs, executors, administrators, personal representatives,
      successors and assigns of CICA, and (iii) shall inure to the benefit of
      Secured Party and its successors and assigns. Without limiting the
      generality of the foregoing, Secured Party may pledge, assign or otherwise
      transfer the Indebtedness and its rights under this Agreement and any of
      the other Loan Documents to any other party. CICA's rights and obligations
      hereunder may not be assigned or otherwise transferred without the prior
      written consent of Secured Party.

                                     Page 15
<PAGE>

            (l)   Termination. It is contemplated by the parties hereto that
      from time to time there may be no outstanding Indebtedness, but
      notwithstanding such occurrences, this Agreement shall remain valid and
      shall be in full force and effect as to subsequent outstanding
      Indebtedness. Upon (i) the satisfaction in full of the Indebtedness, (ii)
      the termination or expiration of any commitment of Secured Party to extend
      credit to Borrower, (iii) written request for the termination hereof
      delivered by to Secured Party, and (iv) written release delivered by
      Secured Party to CICA, this Agreement and the security interests created
      hereby shall terminate. Upon termination of this Agreement and CICA's
      written request, Secured Party will, at CICA's sole cost and expense,
      return to CICA such of the Collateral as shall not have been sold or
      otherwise disposed of or applied pursuant to the terms hereof and execute
      and deliver to CICA such documents as CICA shall reasonably request to
      evidence such termination.

            (m)   JURY TRIAL WAIVER. CICA AND SECURED PARTY EACH HEREBY WAIVE
      ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OR RELATING
      TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
      CONTEMPLATED HEREBY OR THEREBY.

            (n)   Cumulative Rights. All rights and remedies of Secured Party
      hereunder are cumulative of each other and of every other right or remedy
      which Secured Party may otherwise have at law or in equity or under any of
      the other Loan Documents, and the exercise of one or more of such rights
      or remedies shall not prejudice or impair the concurrent or subsequent
      exercise of any other rights or remedies.

            (o)   Gender and Number. Within this Agreement, words of any gender
      shall be held and construed to include the other gender, and words in the
      singular number shall be held and construed to include the plural and
      words in the plural number shall be held and construed to include the
      singular, unless in each instance the context requires otherwise.

            (p)   Descriptive Headings. The headings in this Agreement are for
      convenience only and shall in no way enlarge, limit or define the scope or
      meaning of the various and several provisions hereof.

            (q)   Financing Statements. By signing below, CICA authorizes
      Secured Party to authenticate and file financing statements and/or
      amendments thereto and continuations thereof under the provisions of the
      Code.

            (r)   Limitation. Notwithstanding anything in this Agreement to the
      contrary, the obligations of CICA under this Agreement shall be limited to
      a maximum aggregate amount equal to the largest amount that would not
      render CICA's obligations hereunder subject to avoidance as a fraudulent
      transfer or fraudulent conveyance under Section 548 of Title 11 of the
      United States Code or any applicable provisions of comparable law
      (collectively, the "Fraudulent Transfer Laws"), in each case after giving
      effect to all other liabilities of CICA, contingent or otherwise, that are
      relevant under the Fraudulent Transfer Laws and after giving effect as
      assets to the value (as determined under the

                                     Page 16
<PAGE>

      applicable provisions of the Fraudulent Transfer Laws) of any rights to
      subrogation, reimbursement or contribution of CICA pursuant to applicable
      law, or any agreement providing for rights of subrogation, reimbursement
      or contribution in favor of CICA, or for an equitable allocation among
      CICA, Borrower, any other Obligated Party, and any other Person of
      obligations arising under guaranties or grants of collateral by such
      Persons.

             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

                                     Page 17
<PAGE>

      EXECUTED as of the date first written above.

CICA's Address:                                 CICA:

Citizens Insurance Company of America           CITIZENS INSURANCE COMPANY OF
400 East Anderson Lane                          AMERICA,
Austin, Texas  78752                            a Colorado insurance corporation
Attention:  Mark A. Oliver, President

Federal taxpayer identification no.: ________   By:    /s/ Mark A. Oliver
Organizational identification no.: __________          -------------------------
                                                       Name:  Mark A. Oliver
                                                       Title: President

Secured Party's Address:

Regions Bank
4314 West Braker Lane, Suite 110
Austin, Texas  78759
Attention:  Todd A. Self

                                     Page 18
<PAGE>

                                  SCHEDULE A TO
                               SECURITY AGREEMENT
                              DATED OCTOBER 1, 2004

The following property is a part of the Collateral as defined in Subsection
1(c):

      10,000 shares of common stock of Security Plan Life Insurance Company, a
Louisiana insurance corporation, as evidenced by certificate no. 12 issued in
the name of Citizens Insurance Company of America.

      As of the date of this Agreement, such common stock represents all of the
authorized, issued and outstanding shares of common stock of Security Plan Life
Insurance Company.

<PAGE>

                                  SCHEDULE B TO
                               SECURITY AGREEMENT
                              DATED OCTOBER 1, 2004

Issuer Name:                      Security Plan Life Insurance Company

Jurisdiction of Incorporation:    Louisiana

Federal Taxpayer I.D. Number:     72-1308780

Authorized Capital Stock:         10,000 shares of common stock

Issued Capital Stock:             10,000 shares of common stock

Outstanding Capital Stock:        10,000 shares of common stock