SECURITIES AND EX
CHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 1998

                          OR

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

For the transition period from            to 

Commission file number 33-46620

FORTIS BENEFITS INSURANCE COMPANY            
(Exact name of registrant as specified in its charter)


MINNESOTA      
(State or other jurisdiction of 
 incorporation or organization)

81-0170040
(IRS Identification No.)


500 BIELENBERG DRIVE, WOODBURY, MN           55125      
       
(Address of principal executive offices)     (Zip code)

Registrant's telephone number, including area code: 651-
738-4000

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   X    No <PAGE>
     
FORTIS BENEFITS INSURANCE COMPANY
BALANCE SHEETS
(In thousands, except per share amounts)

<TABLE>

<S>                                               <C>            <C>
                                                September 30,    December 31,
                                                   1998            1997
                                                 (unaudited)
ASSETS
Investments
Fixed maturities, at fair value (amortized
  cost 1998--$2,265,578; 1997--$2,325,589)         $2,383,784    $2,415,915
Equity securities, at fair value (cost 
  1998--$129,946; 1997--$88,719)                      128,789       109,832
Mortgage loans on real estate, less allowance
 for possible losses (1998 and 1997--$11,085)         619,615       602,064
Policy loans                                           74,729        68,566
Short-term investments                                 78,831        70,537
Real estate and other investments                      77,499        55,035
                                                    3,363,247     3,321,949


Cash and cash equivalents                             (26,411)        9,901

Receivables:
  Uncollected premium                                  77,354        74,220
  Reinsurance recoverable on paid and 
    unpaid losses                                      16,888        13,852
  Due from affiliates                                   1,028            -
  Other                                                15,529        19,762
                                                      110,799       107,834


Accrued investment income                              45,695       47,376
Deferred policy acquisition costs                     312,639       291,742
Property and equipment, at cost, less
  accumulated depreciation                             33,060        42,773
Deferred federal income taxes                          15,595        15,037
Other assets                                            6,073         4,250 
Assets held in separate accounts                    3,200,004      2,978,622
TOTAL ASSETS                                       $7,060,701    $6,819,484

See accompanying notes.

<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
RESERVES, LIABILITIES AND SHAREHOLDER'S EQUITY
(In thousands, except per share amounts)
                                                  September 30,  December 31,
                                                        1998        1997
                                                    (unaudited)
POLICY RESERVES AND LIABILITIES:
Future policy benefit reserves:
  Life insurance                                    $  449,846   $ 449,017
  Interest sensitive and investment products         1,243,434    1,264,227
  Accident and health                                   835,469     792,249
                                                      2,528,749   2,505,493
Unearned premiums                                       11,132       10,653
Other policy claims and benefits payable               252,506      260,596
Policyholder dividends payable                            8,374       8,197
                                                     2,800,761    2,784,939

Debt                                                    45,672       26,433
Accrued expenses                                        50,070       49,909
Current income taxes payable                             3,762       10,549
Other liabilities                                       84,226      113,222
Due to affiliates                                            - 6,925Liabilities related to separate accounts
          3,169,728  2,947,401
Total policy reserves and liabilities                6,154,219    5,939,378



SHAREHOLDER'S EQUITY:
Common stock, $5 par value: 
  Authorized, issued and outstanding shares--
     1,000,000                                           5,000        5,000
Additional paid-in capital                              468,000     468,000
Retained earnings                                       360,219     332,723
Unrealized gain on available-for-sale
  securities (net of deferred taxes 1998--
  $39,843; 1997--$38,463)                               71,276       68,981
Unrealized gain on assets held in separate
  accounts (net of deferred taxes 1998--$(535);
 1997--$1,345                                             1,987       5,402
Total Shareholder's equity                             906,482      880,106
Total policy reserves, liabilities & 
  Shareholder's equity                               $7,060,701  $6,819,484

See accompanying notes.
<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

                                                    Nine months ended
                                                       September 30,
                                                    1998          1997

REVENUES
Insurance operations:
  Life insurance premiums                           $193,002    $197,599
  Interest sensitive and investment product
   policy charges                                     63,533      56,750
  Accident and health premiums                       705,467     664,882
     Total Insurance Revenue                         962,002     919,231
Net investment income                                176,177     169,227
Net realized gains on investments                     46,136      29,678
Other income                                          33,742      26,529
TOTAL REVENUES                                     1,218,057    1,144,665

BENEFITS AND EXPENSES
Benefits to policyholders:
  Life insurance                                     141,304     157,152
  Interest sensitive and investment products          71,118      77,004
  Accident and health                                584,640     518,497
                                                     797,062     752,653
Policyholder dividends                                 2,835       1,931
Amortization of deferred policy acquisition 
  costs                                               30,883      30,099
Insurance commissions                                 80,040      75,119
General and administrative expenses                  226,475     193,981
TOTAL BENEFITS AND EXPENSES                        1,137,295   1,053,783

INCOME BEFORE INCOME TAXES                            80,762      90,882

INCOME TAX EXPENSE (BENEFITS) 
Current                                               28,325      37,974
Deferred                                                 (58)     (6,165)
                                                      28,267      31,809 
NET INCOME                                            52,495      59,073

OTHER COMPREHENSIVE LOSS:
Unrealized loss on investments                        (1,120)     19,073
COMPREHENSIVE INCOME                                $ 51,375   $ 78,146

See accompanying notes.<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

                                                      Three months ended
                                                        September 30,
                                                         1998        1997
REVENUES
Insurance operations:
  Life insurance premiums                              $ 64,941    $67,138
  Interest sensitive and investment product
    policy charges                                       20,631     18,919
  Accident and health premiums                          241,434    222,971
     Total Insurance Revenue                            327,006    309,028
Net investment income                                    57,064     57,269
Net realized gains on investments                         5,117     12,585
Other income                                             11,210      9,777
TOTAL REVENUES                                          400,397    388,659

BENEFITS AND EXPENSES
Benefits to policyholders:
  Life insurance                                         46,278     52,985
  Interest sensitive and investment products             23,236     25,068
  Accident and health                                   200,771    170,117
                                                        270,285    248,170
Policyholder dividends                                      801       (283)
Amortization of deferred policy acquisition 
  costs                                                   4,987      10,769
Insurance commissions                                    28,350      24,267
General and administrative expenses                      74,170      67,952
TOTAL BENEFITS AND EXPENSES                             378,593     350,875

INCOME BEFORE INCOME TAXES                               21,804      37,784

INCOME TAX EXPENSE (BENEFITS) 
Current                                                   4,221      13,540
Deferred                                                  3,393                            (316)
                                                          7,614      13,224
NET INCOME                                               14,190      24,560

OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gain (loss) on investments                     6,984      29,328
COMPREHENSIVE INCOME                                   $ 21,174    $ 53,888

See accompanying notes.<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)

                                                      Nine months ended
                                                       September 30,
                                                         1998      1997

OPERATING ACTIVITIES
Net income                                            $  52,495  $ 59,073
Adjustments to reconcile net income to net
  cash provided by operating activities:
  Increase in future policy benefit reserves             64,625     41,325   
   Increase (decrease)in other policy claims, 
  benefits and policyholder dividends payable            (7,434)    21,659
  Provision for deferred federal income taxes                      (58) (14,937)
  Increase (decrease) in income taxes payable           (6,787)      1,807
  Amortization of policy acquisition costs               30,883     30,099
 Policy acquisition costs deferred                     (53,706)    (52,527)
  Provision for depreciation                            14,924       11,473  
  Amortization of investment premiums(discounts), net   (2,757)        110
  Change in uncollected premiums, accrued investment
   income, reinsurance recoverable, other receivables,
   other assets, debt, accrued expenses, and other 
  liabilities                                          (38,816)     14,905
  Realized gains on investments                        (46,132)    (29,678)
  Other                                                       -       (113)
NET CASH PROVIDED BY OPERATING ACTIVITIES                 7,237     83,196

INVESTING ACTIVITIES
Purchases of fixed maturity investments              (1,655,160) (3,153,125)
Sales or maturities of fixed maturity investments     1,745,599   3,023,857
Decrease (increase) in short-term investments            (8,295)  1,997,592
Purchase of other investments                          (340,244) (2,190,370)
Sales or maturities of other investments                268,056     153,380
Purchase of property and equipment                         (164)     (5,327)
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES          9,792    (173,993)

FINANCING ACTIVITIES
Activities related to investment products:
  Considerations received                               152,413     159,741
 Surrenders and death benefits                         (243,419)  (129,279)
  Interest credited to policyholders                     37,665      39,861
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES       (53,341)      70,323
INCREASE IN CASH                                        (36,312)   (20,474)
Cash and cash equivalents at beginning of period          9,901     20,474
CASH AND CASH EQUIVALENTS AT END OF PERIOD            $(26,411)    $     0

See accompanying notes.
/TABLE
<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
Notes to Financial Statements
September 30, 1998
(unaudited)

General:  The accompanying unaudited financial statements of Fortis
Benefits Insurance Company contain all adjustments necessary to
present fairly the balance sheet as of September 30, 1998 and the
related statement of income for the nine months ended September 30,
1998 and 1997, and cash flows for the nine months ended September
30, 1998 and 1997.

Income tax payments for the nine months ended September 30,1998 and
September 30, 1997 were $35,112,000 and $44,955,000, respectively.

The classification of fixed maturity investments is to be made at
the time of purchase and, prospectively, that classification is
expected to be reevaluated as of each balance sheet date.  At
September 1998, all fixed maturity and equity securities are
classified as available-for-sale and carried at fair value.

The amortized cost and fair values of investments available-for-
sale were as follows at September 30, 1998 (in thousands):
<TABLE>

<S>                    <C>              <C>          <C>          <C>
                                          Gross        Gross
                       Amortized        Unrealized   Unrealized   Fair
                         Cost             Gain         Loss       Value
Fixed Income Securities:
  Governments        $  277,560         $ 15,937      $    -   $  293,497
  Public Utilities      172,861           8,505        2,069      179,297
  Industrial and 
    miscellaneous     1,735,949          96,813        3,984    1,828,778
  Other                  79,208           3,004            -       82,212
Total                 2,265,578         124,259       6,053     2,383,784
Equity Securities       129,946           8,353        9,510      128,789
                      $2,395,524        $132,612     $15,563  $2,512,573
</TABLE>

<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
Notes to Financial Statements
September 30, 1998
(unaudited)

The amortized cost and fair value of fixed maturities at September
30, 1998, by contractual maturity, are shown below (in thousands).
Expected maturities will differ from  contractual maturities
because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.

<TABLE>

<S>                                 <C>                    <C>
                                         Amortized           Fair
                                           Cost                   
  Value

Due in one year or less             $  127,172           $ 
128,115
Due after one year through 
  five years                           834,212             
859,918
Due after five years through 
  ten years                            563,635             
599,596
Due after ten years                    740,559             
796,155
                                         $2,265,578     
$2,383,784
</TABLE>

Proceeds from sales and maturities of investments in fixed
maturities in the nine month period ended September 30,1998 were
$1,745,599,000, and $20,033,000 respectively. Gross gains of
$34,118,000 and $24,806,000 and gross losses of $6,438,000 and
$16,539,000 were realized on the sales during the nine month period
ended September 30, 1998 and 1997, respectively.

Mortgage Loans: The Company has issued commercial mortgage loans on
properties located throughout the country.  Currently,
approximately 36% of outstanding principal is concentrated in the
states of Florida, California and New York.  The Company has a
diversified loan portfolio with a small average size, which greatly
reduces any loss exposure. The Company has established a reserve
for mortgage loans.






<PAGE>
FORTIS BENEFITS INSURANCE COMPANY
Notes to Financial Statements
September 30, 1998
(unaudited)

Net Investment Income and Realized Gains (Losses) on Investments:
Major categories of net investment income and realized gains and
losses on investments for the first nine months of each year were
as follows (in thousands):

<TABLE>


<S>                           <C>                       <C>
                                   Investment                    
Realized Gain (Loss)
                                    Income                         on
Investments
                                  1998       1997                  
1998    1997
Fixed maturities         $120,421   $118,995            $27,680  $
8,267
Preferred stocks               88        233           14           
622
Common stocks               6,811      6,837              8,985       
20,735
Mortgage loans on 
  real estate              43,143     40,187               (198)      
  (8)
Policy loans                3,444      3,116                  -        
    -
Short-term investments      1,451      2,088                  -       
- 
Real estate and other
   investments              5,680      3,265              9,655      
62
                               181,038    174,721                
$46,136   $29,678 
Expenses                    4,861      5,494
                         $176,177   $169,227
</TABLE>   
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations September 30, 1998
Compared to September 30, 1997

Revenues
The Company's major products are group medical, group
disability and dental, group life, and annuity and
individual life insurance coverages sold through a
network of independent agents and brokers.  Nine months
total group disability and dental, group medical, group
life, and annuity and individual life premiums
represented 38%, 35%, 19% and 8% respectively of total
premium in 1998 and 34%, 38%, 21% and 7% respectively in
1997. Strong group sales over the last three quarters of
1997 and first three quarters of 1998, in both the long
term disability and dental products is the primary reason
for the increase in group disability and dental premium.
Additionally, short term disability products had a larger
than usual upswing in sales during the second and third
quarter of 1998.  The decrease in group medical premium
is the result of a decision in 1996 to discontinue new
sales of certain medical products coupled with higher
than normal lapses of current medical business.

The Company continues to match investment portfolio
composition to liquidity needs and capital requirements.
Changes in interest rates during 1998 and 1997 resulted
in recognition of realized gains and losses.

Benefits
The total third quarter policyholder benefit to premium
ratio remained relatively flat at 82% from 1997 to 1998.
The group disability and dental, group medical, group
life, and annuity and individual life benefit to premium
ratios for the nine months ended September 30, were 81%,
85%, 74% and 106% respectively in 1998 and 81%, 75%, 80%
and 128% respectively in 1997. The group medical business
experienced a higher premium to benefit ratio due to
higher incurred benefits than anticipated.  Group life
experienced favorable year-to-date experience in 1998
compared to 1997.  The annuity and individual life
business also experienced lower mortality experience in
the first three quarters of 1998 compared to the same
period in 1997, in addition to higher interest crediting
on the Company's steadily increasing policy base of
interest sensitive and investment products.


<PAGE>
Expenses
The Company's general and administrative expense to
premium ratio has increased in the first nine months of
1998 to 24% from 21% during the same period in 1997.
Enabling the application systems to be Year 2000
compliant and increased efforts during 1997 to improve
administrative systems are the primary reasons for this
increase.  The first nine months of 1997 reflect lower
general expenses compared to the balance of 1997 due to
unusually low adminstrative expenses.

Commission rates have increased from the levels in 1997.
This is primarily due to changes in the mix of business
by product lines as well as the change in first year
versus renewal premiums.

Year 2000

The Year 2000 issue is the result of computer programs
having been written using two digits rather than four to
define a year.  Any programs that have time-sensitive
software may recognize a date using "00" as the year 1900
rather than 2000.  This could result in the failure of
major systems or miscalculations, which could have a
material impact on the operations of the Company and any
of its businesses or subsidiaries.  All of the Company's
major businesses are heavily dependent upon internal
computer systems, and many have significant interaction
with systems of third parties.

A comprehensive review of the Company's computer systems
and business processes has been conducted to identify the
major systems that could be affected by the Year 2000
issue.  Steps are being taken to resolve any potential
problems including modification to existing software and
the purchase of new software.  These measures are
scheduled to be completed and tested on a timely basis. 
The Company's goal is to complete internal remediation
and testing of each system by early 1999.

Factors that could influence the total costs to be
incurred by the Company in connection with the Year 2000
issue include the ability of the Company to successfully
identify systems containing two-digit year codes, the
nature and amount of programming required to fix the
affected programs, the related labor and consulting costs
for such remediation, and the ability of third parties
that interface with the Company to successfully address
their Year 2000 issues.

The Company is evaluating the Year 2000 readiness of
advisors and other third parties whose system failures
could have an impact on the Company's operations.  The
potential materiality of any such impact is not entirely
known at this time.  The Company is closely monitoring
these entities to avoid any unforseen circumstances.

Liquidity and Capital Resources

The market value of cash, short-term investments and
publicly traded bonds and stocks is at least equal to all
policyholder reserves and liabilities.  The Company's
portfolio is readily marketable and convertible to cash
to a degree sufficient to provide for short-term needs. 
The Company consistently monitors its liability durations
and invests assets accordingly.  The Company has no
material commitments or off-balance sheet financing
arrangements which would reduce sources of funds in the
upcoming year.

The National Association of Insurance Commissioners has
implemented risk-based capital standards to determine the
capital requirements of a life insurance company based
upon the risks inherent in its operations.  These
standards require the computation of risk-based capital
amount which is then compared to a company's actual total
adjusted capital.  Based upon current calculation using
these risk-based capital standards, the Company's
percentage of total adjusted capital is in excess of
ratios which would require regulatory attention.

The Company's fixed maturity investments consisted of 96%
investment grade bonds as of September 30, 1998 and the
Company does not expect this percentage to change
significantly in the future.


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

     None

Item 2.  Changes in Securities

     None

Item 3.  Defaults Upon Senior Securities

     None

<PAGE>
Item 4.  Submission of Matters to a Vote of Security
Holders

a.   None

b.   None 

Item 5.  Other Information

     None

Item 6.  Exhibits and Reports on Form 8-K

a.   None

b.   No Forms 8-K have been filed during the quarter for
     which this report is filed.

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.

Fortis Benefits Insurance Company  
(Registrant)
Date: November 13, 1998
/s/ Michael J. Peninger 
Senior Vice President, Controller and Treasurer (on
behalf of the Registrant and as its principal financial
and chief accounting officer)