SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                 For the fiscal year ended December 31, 2003, 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 2-35669

                    Southern Security Life Insurance Company
             (Exact name of registrant as specified in its Charter)

       FLORIDA                                59-1231733
    -------------                           -------------
(State or other jurisdiction                (I.R.S. Employer
 of incorporation or organization)       Identification Number)

755 Rinehart Road, Lake Mary, Florida                 32746
-------------------------------------                 -----
     (Address of principal executive offices)     (Zip Code)

Registrant's telephone number, including area code:    (407)  321-7113
                                                       ---------------

Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act:

    Title of each Class             Name of each exchange on which registered
 ----------------------------       ------------------------------------------
 Common Stock, $1.00 Par Value                Nasdaq National Market

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 the  filing
requirements for the past 90 days.

                                  X      Yes               No
                                -------             -----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Company's  knowledge,  in  definitive  proxy or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant as of the last business day of Registrant's  most recently  completed
second fiscal quarter was $7,137,000, based on the closing price on that date on
the Nasdaq National  Market.  There were 2,103,600 shares of voting common stock
outstanding at March 25, 2004.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  definitive  Proxy  Statement for the  Registrant's  2004 Annual
Meeting of Stockholders are incorporated by reference into Part III hereof.

===============================================================================


<PAGE>


                                     PART I


Item 1.  Business.
-----------------

Southern Security Life Insurance Company (the "Company") is a legal reserve life
insurance  company  authorized  to  transact  business in the states of Alabama,
Florida,  Georgia, Hawaii, Indiana,  Illinois,  Kentucky,  Louisiana,  Michigan,
Missouri,  Oklahoma,  South Carolina,  Tennessee and Texas. It was  incorporated
under  Florida  law in 1966 and was  licensed  and  commenced  business in 1969.
During  2003  approximately  43% of the  premium  income of the Company was from
business in force in Florida, its state of domicile. The Company's only industry
segment is the ordinary life, accident and health, and annuity business.

Effective December 17, 1998, Security National Financial  Corporation  ("SNFC"),
an SEC  registrant,  acquired  through  its  wholly  owned  subsidiary  Security
National Life Insurance Company, 100% of the assets of Consolidare  Enterprises,
Inc.  ("Consolidare"),  which  owned  57.4%  of the  outstanding  shares  of the
Company.  During March 1999,  SNFC changed  Consolidare's  name to SSLIC Holding
Company, Inc. Subsequent to the acquisition, SNFC has increased its ownership of
the Company to 77%.

The Company at present sells  traditional  life and annuity  policies as well as
universal life policies with various  companion riders.  The Company's  accident
and  health  insurance  business  has never  been a  significant  portion of the
Company's  business.  It does not presently sell  industrial  life or group life
insurance  other  than  through  its   participation   as  a  reinsurer  in  the
Servicemen's Group Life Insurance Program ("SGLI").

The major  product  currently  sold in the  Company's  traditional  line of life
insurance is 10-Pay Whole Life with an Annuity Rider.  The savings aspect of the
Annuity  Rider is marketed  as a tool for parents to help fund their  children's
higher education.  The product is offered to parents who have children under the
age of 25. This represented 77% and 64% of the first year premiums  collected in
2003 and 2002, respectively.

The Company introduced in 1996 a new series of products designed for the seniors
market.  This new series targets the needs of senior citizens especially as they
plan for their final expenses. These new policies are traditional endowment type
policies.  Because  they are  written to a senior  market  they are  designed to
accommodate adverse health conditions.  Because of the size of the policies they
are usually  issued with only limited  underwriting.  The  coverage  size of the
policy is roughly  equivalent to the insured's  anticipated  funeral costs. This
new series  represented 12% and 29% of the first year premiums collected in 2003
and 2002, respectively.

The Company  introduced  its first  universal life product in 1986 and currently
has two  principal  universal  life  products  in force.  These  universal  life
products  offer  flexibility  to the  client  as  well as tax  advantages,  both
currently and upon the death of the insured. These products allow the Company to
better compete in the current market environment.  In excess of 6% and 3% of the
first year  premiums  collected  by the Company in 2003 and 2002,  respectively,
were universal life products.


The following table provides  information (on a statutory basis)  concerning the
amount and  percentage of premium income  resulting from the principal  lines of
insurance written by the Company during the periods indicated:
<TABLE>
<CAPTION>

                                     2003                            2002                            2001
                                     ----                            ----                            ----
                              Amount     Percentage          Amount      Percentage          Amount      Percentage
Life Insurance-
<S>                    <C>                  <C>      <C>                    <C>     <C>                    <C>
Ordinary (1)           $7,561,359            158%     $7,882,752             94%     $7,873,378             98
   Plus Reinsurance
    Assumed                50,392              1          70,483              1         125,137              1
   Less Reinsurance
    Ceded(2)           (4,431,483)           (92)       (794,539)           (10)       (831,358)           (10)

Individual
Annuities (1)             666,740             14         396,352              5         149,424              2

Life Insurance-
Group (SGLI)              835,162             17         735,987              9         589,779              7

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                     2003                            2002                            2001
                                     ----                            ----                            ----
                              Amount     Percentage          Amount      Percentage          Amount      Percentage
     <S>                   <C>                <C>       <C>                 <C>       <C>                   <C>
     Other -
     Accident & Health          110,606         2           123,042            1            145,134           2
                           ------------         -      ------------            -      -------------           -

     Total Premium Income  $4,792,776         100%       $8,414,077          100%        $8,051,494         100%
                           ==========         ===        ==========          ===         ==========         ===
</TABLE>

     (1)  A portion of each of the deposit term policies  previously sold by the
          Company represents  ordinary life insurance and the balance represents
          an individual annuity.

     (2)  Includes  ceded  premiums  paid to Security  National  Life  Insurance
          Company in the amount of $3,656,949  for 2003 and to other  companies,
          including  Mega  Life,  in the  amounts  of  $429,799,  $491,002,  and
          $549,886 for 2003, 2002 and 2001, respectively.

The  following  table  gives  information  according  to  accounting  principles
generally accepted in the United States of America  concerning  operating ratios
of the Company for the years indicated:


                                          2003         2002           2001
                                          ----        ----            ----
Total Net Insurance Revenues           $7,334,707   $7,075,257    $6,736,027

Benefit Costs Paid or Provided:
   Amount                              $5,599,434   $5,343,573    $4,482,588
   Ratio to Net Insurance Revenue            76.3%        75.5%         66.6%

Amortization of Deferred Policy
 Acquisition Costs:
   Amount                              $2,039,459   $1,969,966    $2,197,399
   Ratio to Net Insurance Revenue            27.8%        27.8%         32.6%
General Insurance Expenses:
   Amount                              $3,871,302   $3,678,920    $3,835,165
   Ratio to Net Insurance Revenue            52.8%        52.0%         56.9%

Income (loss) before Income Taxes:
   Amount                               $(170,359)    $(82,820)      $87,841
   Ratio to Net Insurance Revenue            (2.3)%       (1.2)%         1.3%
   Ratio to Total Revenue and
   Investment Income                         (1.5)%        (.8)%          .8%
   Ratio to Equity                           (1.0)%        (.5)%          .5%


<PAGE>





The following table provides information about the Company concerning changes in
life  insurance in force during the periods  indicated  (exclusive of accidental
death benefits):

                                           2003         2002             2001
                                           ----         ----             ----
                                          (In thousands except lapse ratios)
Total life insurance in force
at beginning of period:
  Ordinary Whole Life and
   Endowment-Participating                 $2,205         $180             $30
  Ordinary Whole Life and
   Endowment-Non-Participating            659,718      708,789         732,433
 Term                                      69,135       72,752          78,770
  Reinsurance Assumed                     795,720      786,273         558,575
                                      -----------   ----------     -----------
    Total                              $1,526,778   $1,567,994      $1,369,808
                                      -----------   ----------     -----------
Additions (including reinsurance
assumed):
  Ordinary Whole Life and
   Endowment-Participating             $    --     $     --         $    --
  Ordinary Whole Life and
   Endowment-Non-Participating             62,004       52,633          55,785
  Term                                      3,208        1,390           2,487
  Reinsurance Assumed                       6,008       10,352         250,240
                                      -----------  -----------     -----------
    Total                                 $71,220      $64,375        $308,512
                                      -----------  -----------     -----------

Terminations:
  Death                                    $3,642       $3,550          $2,822
  Lapse and Expiry                         17,777       17,888          21,875
  Surrender                                70,897       83,064          97,483
  Other                                     4,147        1,089         (11,854)
                                      -----------  -----------     -----------
  Total                                   $96,463     $105,591        $110,326
                                      -----------  -----------     -----------

Life Insurance in force at end of period:
  Ordinary Whole Life and
   Endowment-Participating                   $679       $2,205            $180
  Ordinary Whole Life and
   Endowment-Non-Participating            633,620      659,718         708,789
  Term                                     66,813       69,135          72,752
  Reinsurance Assumed                     800,423      795,720         786,273
                                      -----------  -----------     -----------
  Total                                 1,501,535    1,526,778       1,567,994
Reinsurance Ceded                        (401,148)    (164,248)       (179,242)
                                      -----------  -----------     -----------
Total after Reinsurance Ceded          $1,100,387   $1,362,530      $1,388,752
                                      ===========  ===========     ===========
Lapse Ratio (Reflecting termina-
tion by surrender and lapse;
ordinary life insurance only):               10.7%        11.9%           13.8%

     The Company  invests  and  reinvests  portions of its funds in  securities,
     which are permitted investments under the laws of the State of Florida, and
     part of its  revenue is derived  from this  source.  Generally,  securities
     comprising permitted investments include obligations of Federal,  state and
     local  governments;  corporate bonds and preferred and common stocks;  real
     estate mortgages and certain leases. The following table summarizes certain
     information regarding the Company's investment activities:

                   Average           Gross           Net
     Fiscal       Investment        Investment     Investment         Net
      Year         Assets (1)       Income(2)      Income (3)      Yield (4)
      -----      ----------        ----------     ----------       --------
      2003       $52,794,223       $4,012,470     $4,005,129          7.59%
      2002       $51,758,382       $3,846,090     $3,835,420          7.41%
      2001       $50,560,334       $3,876,422     $3,866,966          7.65%


<PAGE>


(1)  Computed by summing the beginning and ending  investment  and cash balances
     and dividing by 2.
(2)  Excludes investment gains and losses.
(3)  Net of investment expense and before income taxes.
(4)  Computed on an annualized basis.  Represents ratio of net investment income
     to average invested assets.

The Company  continues its  activities  as a qualified  lender under the Federal
Family Educational Loan Program.  Through this program the Company makes various
types of student  and parent  loans  available.  All  student  loans made by the
Company are  guaranteed by the Federal  Government.  As it has in the past,  the
Company  sells  these  student  loans on a periodic  basis to the  Student  Loan
Marketing Association ("SLMA") thereby keeping these funds liquid.

The Company  presently  sells its policies on a general  agency basis  through a
field force consisting of approximately 256 agents. All such agents are licensed
as agents of, and sell for, the Company and are independent  contractors who are
paid exclusively on a commission basis for sales of the Company's policies. Some
of the Company's agents are part-time  insurance  agents.  Most of the Company's
agents are associated with Insuradyne Corporation,  a wholly-owned subsidiary of
Security National Financial Corporation.  See "Certain Relationships and Related
Transactions" in item 13, Part III of this Report.

Effective January 1, 1999, the Company entered into an  Administrative  Services
Agreement with its ultimate parent SNFC.  Under the terms of the  Administrative
Services  Agreement,  all of the Company's  employees  became employees of SNFC.
Administrative  functions  previously  performed  by the  Company  are now being
furnished to the Company  under this  Agreement.  The Company pays SNFC $250,000
per month or $3 million per year for the Administrative services.

Section 624.408 of the Florida Statutes  requires a stock life insurance company
to maintain minimum surplus on a statutory basis at the greater of $1,500,000 or
four percent of total  liabilities.  The Company's  required  statutory  minimum
surplus calculated in accordance with this section is approximately  $1,799,000.
If the capital and  surplus of the  Company  computed on such basis  should fall
below that amount,  then the Company's license to transact insurance business in
the State of Florida,  the Company's most significant  market,  could be revoked
unless the  deficiency  is promptly  corrected.  As of December  31,  2003,  the
Company had statutory  capital and surplus of $11,443,488  well in excess of the
required minimum.

The  Risk-Based  Capital for Life and/or Health  Insurers  Model Act (the "Model
Act") was adopted by the National Association of Insurance  Commissioners (NAIC)
in 1992.  The main  purpose of the Model Act is to provide a tool for  insurance
regulators  to  evaluate  the  capital  resources  of insurers as related to the
specific risks,  which they have incurred and is used to determine whether there
is a need for possible  corrective action. The Model Act or similar  regulations
may have been or may be enacted by the various states.

The Model Act provides for four different levels of regulatory  action,  each of
which may be  triggered if an insurer's  Total  Adjusted  Capital is less than a
corresponding "level" of Risk-Based Capital ("RBC").

          The "Company Action Level" is triggered if an insurer's Total Adjusted
          Capital is less than 200% of its  "Authorized  Control  Level RBC" (as
          defined in the Model Act), or less than 250% of its Authorized Control
          Level RBC and the insurer has a negative  trend ("the  Company  Action
          Level").  At the  Company  Action  Level,  the  insurer  must submit a
          comprehensive  plan  to  the  regulatory  authority  of its  state  of
          domicile,  which discusses proposed  corrective actions to improve its
          capital position.

          The  "Regulatory  Action  Level" is triggered  if an  insurer's  Total
          Adjusted  Capital is less than 150% of its  Authorized  Control  Level
          RBC. At the Regulatory  Action Level,  the  regulatory  authority will
          perform  a  special  examination  of the  insurer  and  issue an order
          specifying corrective actions that must be followed.

          The  "Authorized  Control  Level" is triggered  if an insurer's  Total
          Adjusted  Capital is less than 100% of its  Authorized  Control  Level
          RBC,  and  at  that  level  the  regulatory  authority  is  authorized
          (although not mandated) to take regulatory control of the insurer.

          The  "Mandatory  Control  Level" is triggered  if an  insurer's  Total
          Adjusted Capital is less than 70% of its Authorized Control level RBC,
          and at that  level  the  regulatory  authority  must  take  regulatory
          control of the insurer.  Regulatory control may lead to rehabilitation
          or liquidation of an insurer.


<PAGE>


Based on  calculations  using the NAIC  formula as of  December  31,  2003,  the
Company was well in excess of all four of the control levels listed.

The industry in which the Company is engaged is highly competitive. There are in
excess of 544 life insurance companies licensed in Florida,  where a substantial
amount of the Company's  premium  income is produced,  and there are  comparable
numbers of insurance companies licensed in Alabama,  Georgia,  Hawaii, Illinois,
Indiana,  Kentucky,  Louisiana,  Michigan,  Missouri,  Oklahoma, South Carolina,
Tennessee and Texas. Many of the Company's competitors have been in business for
longer periods of time, have substantially  greater financial resources,  larger
sales organizations,  and have broader  diversification of risks. A large number
of the  Company's  competitors  engage in business in many states and  advertise
nationally  while the Company  conducts  its business on a regional  basis.  The
Company is not a significant  factor in the life insurance business in any state
where the Company does business.

The states of Alabama,  Florida, Georgia, Hawaii, Illinois,  Indiana,  Kentucky,
Louisiana,  Michigan,  Missouri,  Oklahoma, South Carolina,  Tennessee and Texas
require that insurers  secure and retain a license or a certificate of authority
based on compliance with established  standards of solvency and demonstration of
managerial  competence.  The Company,  like other life  insurers,  is subject to
extensive regulation and supervision by state insurance regulatory  authorities.
Such regulation relates generally to such matters as minimum capitalization, the
nature of and  limitations on  investments,  the licensing of insurers and their
agents,  deposits of securities for the benefit and protection of policyholders,
the  approval of policy forms and premium  rates,  periodic  examination  of the
affairs of insurance  companies,  the  requirement of filing annual reports on a
specified form and the provision for various reserves and accounting standards.

The  Company  reinsures  or places a portion  of its  insured  risks  with other
insurers.  Reinsurance  reduces the amount of risk  retained  on any  particular
policy  and,  correspondingly,  reduces  the risk of loss to the  Company,  thus
giving it greater financial  stability.  Reinsurance also enables the Company to
write more  policies  and  policies in larger  amounts  than it would  otherwise
consider prudent. On the other hand,  reinsurance  potentially reduces earnings,
since a portion of the premiums  received must be paid to the insurers  assuming
the reinsured portion of the risk.

The Company  currently  cedes its new  reinsurance  to  Businessmen's  Assurance
Company  ("BMA")  and the  Reinsurance  Company of  Hannover,  both of which are
unaffiliated  reinsurers.  Under the terms of the  reinsurance  agreements,  the
Company cedes all risks in excess of the Company's current retention limits.

The  Company  currently  retains a maximum of $75,000 on any one life and lesser
amounts on substandard risks.

Reinsurance  for policy amounts in excess of the Company's  retention  limits is
ceded on a renewable  term  basis,  under  which the amount  reinsured  normally
decreases annually by the amount of increase in the policy reserve. In addition,
the  Company has  coinsurance  agreements  with  several  insurers,  under which
premiums are shared based upon the share of the risk assumed.

The Company remains directly liable to policyholders  for the full amount of all
insurance  directly  written by it,  even though all or a portion of the risk is
reinsured.  Reinsurers,  however, are obligated to reimburse the Company for the
reinsured  portion of any claims paid.  Consequently,  if any reinsurer  becomes
insolvent or is otherwise unable to make such  reimbursement,  the Company would
suffer an unexpected  loss. The Company has no reason to believe that any of its
reinsurers  will  be  unable  to  perform  their   obligations   under  existing
reinsurance agreements.

On  December  31,  1992,  the Company  entered  into a  Coinsurance  Reinsurance
Agreement with United Group Insurance Company  ("UGIC"),  now Mega Life. In this
agreement,  UGIC agreed to indemnify and the Company  agreed to transfer risk to
UGIC in the amount of 18% of all  universal  life premium  paying  polices which
were in force on December 31, 1992.  Mega Life is an A- rated  company with A.M.
Best and is an authorized reinsurer in the State of Florida.

As a result of the 1992 agreement,  the Company will continue to pay reinsurance
premiums  to Mega Life  while  receiving  ceding  commissions.  As a part of the
coinsurance  agreement,  Mega  Life  agreed  to share in the  expenses  of death
claims, surrenders, commissions, taxes and the funding of policy loans.


<PAGE>


On December 26, 2003,  the Company  entered into a partially  Coinsurance  and a
partially  Modified  Coinsurance  Agreement  (CoModco  Agreement)  with Security
National Life Insurance Company (Security National Life) effective September 30,
2003.  The Company ceded 50% of certain blocks of its universal life business to
Security  National  Life. The total  liabilities  reinsured for this business on
October 1, 2003 were $22,195,259.  The Company received a ceding commission from
Security  National  Life of  $3,200,000  and will pay a risk  charge to Security
National Life of 1% of the  outstanding  Coinsurance per calendar  quarter.  The
Company  put  into  a  bank  trust  investment  grade  bonds,  which  equal  the
outstanding  liabilities ceded to Security National Life. Security National Life
is named as a beneficiary  of the trust and the terms of the trust are such that
the  Company  will  maintain  investment  grade  bonds in the trust to equal the
outstanding  liabilities  ceded to  Security  National  Life.  Under the CoModco
Agreement the  Coinsurance  and the decrease in reserves are equal.  Under U. S.
GAAP the  Coinsurance  and the  reserve  decreases  are netted  since  these are
non-cash items, and the Company expects to recapture the Coinsurance from future
profits of the  reinsured  business.  The Company has the right to recapture the
business at any time after September 30, 2004 upon 90 days advance notice. As of
December 31, 2003 the outstanding Coinsurance amount was $3,075,137. The Company
recorded as an expense the risk charge of $32,000 for the fourth quarter.

The Company does not assume any  reinsurance  at the present time other than its
minor  participation  in  Servicemembers'  Group Life  Insurance and other small
blocks of business.

For  reporting  to state  regulatory  authorities  the  Company is  required  to
establish  policy  benefit and other  reserves that are calculated in accordance
with statutory  requirements and standards of actuarial practice and established
at amounts  which,  with  additions  from  premiums to be  received  and assumed
interest on policy reserves compounded  annually,  are believed to be sufficient
to meet policy  obligations  as they mature.  Life  reserves for the Company are
based  upon  the  Commissioner's  1958  and  1980  Standard  Ordinary  Table  of
Mortality,  with  interest on policies  computed at 3%, 3 1/2%,  4 1/2%,  or 5%.
Annuity  reserves are based on the 1983 and 2000  Individual  Annuity  Mortality
Tables,  with interest on policies  computed at 6 1/2%, 6 3/4%, 7%, 7 3/4%, or 8
1/4%. Reserves on the annuity portion of the Company's deposit term policies are
computed on the accumulation method. Reserves for universal life policies, which
comprise most of the Company's insurance in force, have been valued by using the
CRVM method.

In preparing  financial  statements in accordance with U.S.  generally  accepted
accounting  principles,  the cost of  insurance,  expense  charges and surrender
charges on universal  life  products  are  recognized  as revenue.  For "Annuity
Contracts"  with flexible terms,  amounts  received from  policyholders  are not
recognized  as revenue  but are  recorded  as  deposits  in a manner  similar to
interest-bearing instruments.  Accumulations on these universal life and annuity
contracts are held as "Policyholders'  Account Balances." For all other policies
(primarily  whole-life)  premiums  are  recorded  as revenue  and  reserves  are
calculated  using the net level premium  method.  Accumulation  values for these
types of policies are held as benefit reserves.  See "Future Policy Benefits" in
Note 1 of the Notes to Financial Statements included in this report.

The Company maintains its own policy files,  prepares its own policy forms (with
the assistance of its consulting actuaries), selects risks, calculates premiums,
prepares premium notices,  preauthorized checks and commission  statements,  and
maintains all of its accounting records.

The Company is not affected by Federal,  state or local  provisions  relating to
discharge  of  materials  into the  environment.  The  Company  has not  spent a
material  amount of money  during the last three  fiscal  years on research  and
development  activities.  The  business of the Company is not seasonal in nature
and is not  dependent  on the sources and  availability  of raw  materials.  The
business  of the  Company  is not  dependent  upon a  single  customer  or a few
customers,  and no  material  portion of the  Company's  business  is subject to
renegotiation of profits or termination at the election of the Government.

Item 2.  Properties.
-------------------

The Company's  corporate  headquarters is located in a two story office building
in Lake  Mary,  Florida,  which is  owned by the  Company.  The  Company  and an
affiliated company occupy the second floor of the building.  One hundred percent
of the remaining rentable space was leased as of December 31, 2003.

Item 3.  Legal Proceedings.
--------------------------

An action was  brought  against  Southern  Security  Life  Insurance  Company by
National Group Underwriters,  Inc. ("NGU") in state court in the State of Texas.
The case was removed by the Company to the United States  District Court for the
Northern District of Texas, Fort Worth Division,  with Civil No.  4:01-CV-403-E.
An amended complaint was filed on or about July

<PAGE>



18,  2001.  The  amended  complaint  asserted  that NGU had a contract  with the
Company wherein NGU would submit  applications for certain policies of insurance
to be issued by the Company. It is alleged that disputes have arisen between NGU
and  the  Company  with  regard  to  the  calculation  and  payment  of  certain
commissions as well as certain production bonuses.

NGU  alleged  that it had been  damaged  far in  excess of the  $75,000  minimum
jurisdictional  limits of the federal court. NGU also sought attorney's fees and
costs  as well as  prejudgment  and  postjudgment  interest.  A  second  amended
complaint  and a third amended  complaint,  which  included a fraud claim,  were
filed. A motion was filed by the Company to dismiss the third amended complaint,
including   the  fraud  claim.   The  court  denied  the  motion.   The  Company
counterclaimed for what it claimed to be a debit balance owing to it pursuant to
the  relationship  between  the  parties  (the amount  subject to  reduction  as
premiums are received).  The Company also sought to recover  attorney's fees and
costs, as well as punitive damages on three of its causes of action.

Certain discovery took place. The federal case was dismissed by stipulation. The
matter was refiled in Texas state court, Tarrant County, Case No. 348 195490 02.
The  claims  of the  respective  parties  are  essentially  the same as those in
federal court, which claims include fraudulent  inducement  relative to entering
into a contract,  fraud,  breach of  contract,  breach of duty of good faith and
fair  dealing,  attorney's  fees and  exemplary  damages  as well as  seeking an
accounting and contesting the interest  charges.  Certain  depositions have been
taken  since  the  filing  again  in  state  court  and  further   discovery  is
anticipated.  The  Company  filed a motion for  partial  summary  judgment  with
respect to certain  items.  The court has yet to rule on the motion.  A trial is
presently set for October  2004.  The Company  intends to vigorously  defend the
matter as well as prosecute its counterclaim.

The Company is not a party to any other legal  proceedings  outside the ordinary
course of the Company's  business or to any other legal  proceedings,  which, if
adversely determined, would have a material adverse effect on the Company or its
business.

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

No matters were  submitted to a vote of the  Company's  shareholders  during the
quarter ended December 31, 2003.

                                     PART II

Item 5.  Market for the Company's Common Stock and Related Stockholder Matters.
------------------------------------------------------------------------------

     (a) Principal  Market and Stock Price.  The  principal  market on which the
Company's  common  stock  is  traded  is the  over-the-counter  market.  Trading
information  with  respect to the  Company's  shares is  available  through  the
National  Association of Securities Dealers Automated  Quotation (Nasdaq) System
under the symbol SSLI.

The table below presents the high and low market closed prices for the Company's
common  stock during the calendar  quarters  indicated,  as quoted in the Nasdaq
system. The quotations represent prices between dealers in securities and do not
include  retail  markups,  markdowns  or  commissions  and  do  not  necessarily
represent actual transactions.

Period (Calendar Year)                           Price Range
                                               High      Low
2002
     First Quarter                             3.50      3.01
     Second Quarter                            3.30      3.15
     Third Quarter                             3.65      3.19
     Fourth Quarter                            4.25      3.21
2003
     First Quarter                             6.50      3.48
     Second Quarter                            4.47      3.41
     Third Quarter                             3.70      3.10
     Fourth Quarter                            4.70      3.11
2004
     First Quarter (through March 25, 2004)    4.75      3.22

The above prices have been adjusted for the effect of annual stock dividends.


<PAGE>


Approximate  Number of Holders  of Common  Stock.  There  were 1,254  holders of
record of the Company's common stock at December 31, 2003.

     (b)  Dividends.  The Company  has paid no cash  dividends  to  stockholders
during the past two years,  and it is not  anticipated  that any cash  dividends
will be paid at any time in the foreseeable  future. The payment of dividends by
the Company is subject to the  regulation of the State of Florida  Department of
Insurance. Under such regulation an insurance company may pay dividends, without
prior approval of the State of Florida Department of Insurance, equal to or less
than the  greater  of (a) 10% of its  accumulated  capital  gains  (losses)  and
accumulated  operating income (losses) (i.e.  unassigned surplus) or (b) certain
net  operating  profits  (losses) and  realized  capital  gains  (losses) of the
Company, as defined in the applicable  insurance  statutes.  In no case can such
dividends  be paid if the  Company  will  have  less  than  115% of the  minimum
required  statutory surplus as to policyholders  after the dividend is paid. The
maximum amount that the Company could pay as a dividend  during 2004 pursuant to
such regulation is $376,000.



<PAGE>


Item 6.  Selected Financial Data.
--------------------------------

The  following  table  presents  selected  financial  data  (on  a  GAAP  basis)
concerning the Company and its financial results during the periods indicated.
<TABLE>
<CAPTION>

                                                                YEARS ENDED DECEMBER 31,

                                        2003             2002                 2001            2000                 1999
                                        ----             ----                ------          ------               ------
Revenues:
<S>                             <C>                <C>                <C>                <C>               <C>
Net insurance revenues          $     7,334,707    $     7,075,257    $     6,736,027    $     6,698,869   $     6,901,546

Net investment income                 4,005,129          3,835,420          3,866,966          3,935,607         3,909,373
Realized gain (loss)
 on investments                              --             (1,038)                --                 --                --
Other revenue, net                           --                 --                 --                 --           715,128
                                ---------------    ---------------    ---------------   ---------------    ---------------

Total Revenue                        11,339,836         10,909,639         10,602,993         10,634,476        11,526,047

Benefits, Losses & Expenses:
 Insurance living benefits            1,909,198          2,144,629          2,186,664          2,243,331         2,614,754
 Insurance death benefits             2,928,436          2,583,062          2,360,265          1,549,116         1,917,134
 Increase (decrease)
    in policy reserves                  761,800            615,882            (64,341)         1,316,964           (78,324)
 Amortization of deferred
     policy acquisition costs         2,039,459          1,969,966          2,197,399          1,797,320         3,029,223
Operating expenses                    3,871,302          3,678,920          3,835,165          3,529,380         3,261,134
                                ---------------    ---------------    ---------------   ---------------    ---------------

Total expenses                       11,510,195         10,992,459         10,515,152         10,436,111        10,743,921
Income (loss) before income
    Taxes                              (170,359)           (82,820)            87,841            198,365           782,126
Income tax expense (benefit)            (74,488)           (12,254)            16,865             38,105           150,168
                                ---------------    ---------------    ---------------   ---------------    ---------------

Net Income (loss)               $       (95,871)   $       (70,566)   $        70,976    $       160,260   $       631,958
                                ===============    ===============    ===============   ===============    ===============

Weighted average number of
    shares outstanding
    (basic and diluted)               2,078,548          1,979,291          1,907,989          1,907,989         1,907,989
                                ---------------    ---------------    ---------------    ---------------    ---------------

Basic income (loss)
    per common share                      $.05)              $(.04)              $.04               $.08              $.33
                                          ======             =====               ====               ====              ====

Diluted income (loss)
    per common share                      $(.05)             $(.04)              $.04               $.08               $.33
                                          =====              =====               ====               ====               ====

Shareholders' Equity            $    17,014,486    $    17,145,770    $    16,903,270    $    16,198,535   $    15,637,320
                                ===============    ===============    ===============    ===============   ===============

Shareholders' equity per
    common share                          $8.09              $8.56              $8.86             $8.49              $8.20
                                          =====              =====              =====             =====              =====

Assets                       $       77,664,439 $       77,264,997    $    77,479,328   $    77,125,931    $    77,208,941
                                ---------------    ---------------    ---------------   ---------------    ---------------
Life Insurance:
    Insurance in force          $ 1,501,535,000    $ 1,526,778,000    $ 1,567,994,000    $ 1,369,808,000   $ 1,455,417,000
                                ---------------    ---------------    ---------------   ---------------    ---------------

Individual insurance
    issued during current
    year                        $    65,212,000    $    54,023,000    $    58,272,000    $    60,589,000   $    66,591,000
                                ---------------    ---------------    ---------------   ---------------    ---------------
Long term obligation            $     1,000,000    $     1,000,000    $     1,000,000    $     1,000,000   $     1,000,000
                                ---------------    ---------------    ---------------   ---------------    ---------------

Cash dividends declared per
    common share                           $.00               $.00               $.00              $.00              $.00
                                           ====               ====               ====              ====              ====
</TABLE>

<PAGE>


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operation.

Overview

This  analysis of the  results of  operations  and  financial  condition  of the
Company  should be read in  conjunction  with the  Selected  Financial  Data and
Financial  Statements  and Notes to the  Financial  Statements  included in this
report.

The Company has primarily issued three types of insurance products: 10-Pay Whole
Life with an Annuity  Rider,  final expense  products,  and universal  life. The
10-Pay  Whole Life with an Annuity  Rider  product  is  designed  for the higher
education market.  The savings aspect of the Annuity Rider is marketed as a tool
for  parents to help fund their  children's  higher  education.  The  product is
offered to parents who have children under the age of 25.

Final expense products are traditional endowment type insurance policies written
for the senior market.  Because the products are written to a senior market they
are designed to accommodate  adverse health  conditions.  Because of the size of
the policies,  the products are usually  issued with only limited  underwriting.
The  coverage  size  of the  policy  is  roughly  equivalent  to  the  insured's
anticipated funeral costs.

Universal  life  provides  insurance  coverage with  flexible  premiums,  within
limits,  which allow  policyholders  to accumulate cash values.  The accumulated
cash values are credited with tax-deferred  interest, as adjusted by the Company
on a periodic basis.  Deducted from the cash  accumulations  are  administrative
charges and mortality  costs.  Should a policy surrender in its early years, the
Company assesses a surrender fee against the cash value accumulations based on a
graded formula.

In connection with its higher education  sales,  the Company  established a lead
generation program that has been coupled with a recruiting program for new sales
agents to help generate new business.

An additional source of income to the Company is investment  income. The Company
invests those funds deposited by  policyholders  in debt and equity  securities,
mortgage loans, and warehouse mortgage loans in accordance with the requirements
and laws  governing  life  insurance  companies,  in order to earn  interest and
dividend  income,  a portion  of which is  credited  back to the  policyholders.
Interest  rates and  maturities of the Company's  investment  portfolio  play an
important part in determining the interest rates credited to policyholders.

Product  profitability  is  affected  by  several  different  factors,  such  as
mortality  experience  (actual versus  expected),  interest rate spreads (excess
interest earned over interest credited to policyholders)  and controlling policy
acquisition costs and other costs of operation. The results of any one reporting
period  may be  significantly  affected  by the  level of death  claims or other
policyholder benefits incurred due to the Company's relatively small size.

Significant Accounting Policies and Estimates

The following is a brief summary of our  significant  accounting  policies and a
review of our most critical accounting estimates.  For a complete description of
our significant accounting policies, see Note 1 to our financial statements.

In accordance with accounting principles generally accepted in the United States
(GAAP),  premiums and  considerations  received for interest  sensitive products
such as  universal  life  insurance  and  ordinary  annuities  are  reflected as
increases in liabilities for policyholder  account balances and not as revenues.
Revenues  reported for these products  consist of policy charges for the cost of
insurance,  administration  charges,  amortization of policy initiation fees and
surrender  charges assessed against  policyholder  account  balances.  Surrender
benefits  paid  relating  to  these  products  are  reflected  as  decreases  in
liabilities for policyholder  account balances and not as expenses.  The Company
receives  investment  income  earned  from  the  funds  deposited  into  account
balances,  a portion of which is passed through to the policyholders in the form
of interest  credited.  Interest  credited to policyholder  account balances and
benefit  claims in excess of  policyholder  account  balances  are  reported  as
expenses in the financial statements.


<PAGE>


Premium revenues reported for traditional life insurance products are recognized
as revenues when due. Future policy benefits are recognized as expenses over the
life of the policy by means of the provision for future policy benefits.

The costs related to acquiring new business,  including certain costs of issuing
policies and other variable selling expenses (principally commissions),  defined
as deferred  policy  acquisition  costs,  are  capitalized  and  amortized  into
expense.  For  traditional  life  products,  these costs are amortized  over the
premium-paying  period of the related  policies,  in  proportion to the ratio of
annual premium revenues to total anticipated premium revenues.  Such anticipated
premium  revenues are  estimated  using the same  assumption  used for computing
liabilities for future policy benefits and are generally "locked in" at the date
the  policies  are issued.  For  interest  sensitive  products,  these costs are
amortized  generally in  proportion  to expected  gross  profits from  surrender
charges and  investment,  mortality and expense  margins.  This  amortization is
adjusted  when the  Company  revises  the  estimate  of current or future  gross
profits or margins. For example, deferred policy acquisition costs are amortized
earlier  than  originally  estimated  when policy  terminations  are higher than
originally  estimated  or when  investments  backing  the  related  policyholder
liabilities are sold at a gain prior to their anticipated maturity.

Death and other  policyholder  benefits  reflect  exposure to mortality risk and
fluctuate  from  year to year on the level of claims  incurred  under  insurance
retention  limits.  The  profitability  of the Company is primarily  affected by
fluctuations in mortality, other policyholder benefits, expense levels, interest
spreads  (i.e.,  the  difference  between  interest  earned on  investments  and
interest credited to policyholders) and persistency. The Company has the ability
to mitigate adverse fluctuations through adjustments to credited interest rates,
policyholder dividends or cost of insurance charges.

The  preparation of financial  statements in conformity  with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities,  revenues and expenses and the  disclosure  of  contingent
assets and liabilities.  It is reasonably  possible that actual experience could
differ from the estimates and  assumptions  utilized which could have a material
impact  on  the  financial  statements.  The  following  is  a  summary  of  our
significant accounting estimates, and critical issues that impact them:

Fixed Maturities Available for Sale

Securities available-for-sale are carried at fair value, with unrealized holding
gains and losses  reported in accumulated  other  comprehensive  income which is
included in stockholders'  equity after adjustment for deferred income taxes and
deferred acquisition costs related to universal life products.

The Company uses fair market values based on National  Association  of Insurance
Commissioners  (NAIC) values,  versus values  associated  with normal  marketing
pricing services. The Company considers the difference to be immaterial.

The Company is required to exercise  judgment to determine when a decline in the
value of a  security  is other  than  temporary.  When the  value of a  security
declines and the decline is determined to be other than temporary,  the carrying
value of the  investment  is reduced  to its fair  value and a realized  loss is
recorded to the extent of the decline.

Deferred Acquisition Costs

Amortization  of  deferred  policy  acquisition  costs  for  interest  sensitive
products is dependent  upon  estimates  of current and future  gross  profits or
margins on this business. Key assumptions used include the following:

     o    Yield on investments  supporting the  liabilities
     o    Amount of interest or  dividends  credited to the policies
     o    Amount of policy fees and charges
     o    Amount of expenses necessary to maintain the policies, and
     o    Amount  of death and  surrender  benefits  and the  length of time the
          policies will stay in force.

These estimates, which are revised periodically, are based on historical results
and our best estimate of future expenses.


<PAGE>


Future Policy Benefits

Reserves for future policy  benefits for  traditional  life  insurance  products
requires the use of many  assumptions,  including  the duration of the policies,
mortality experience,  expenses, investment yield, lapse rates, surrender rates,
and dividend crediting rates.

These assumptions are made based upon historical experience,  industry standards
and a best  estimate of future  results  and,  for  traditional  life  products,
include a provision for adverse deviation. For traditional life insurance,  once
established for a particular series of products, these assumptions are generally
held constant.

Unearned Revenue

The universal life products the Company sells have significant policy initiation
fees  (front-end  load),  which are  deferred  and  amortized  into  revenues in
proportion to the estimated  expected gross profits from  surrender  charges and
investment,  mortality and expense  margins.  The same  assumptions  that impact
deferred acquisition costs would apply to unearned revenue.

Results of Operations

2003 Compared to 2002

Total revenues  increased by $430,000,  or 3.9%, to $11,340,000  for fiscal year
2003 from  $10,910,000  for fiscal  year 2002.  Increases  occurred  in both net
insurance revenues and net investment income.

Net insurance revenues increased by $260,000, or 3.7%, to $7,335,000, for fiscal
year 2003 from $7,075,000 for fiscal year 2002. This increase was primarily the
result of an increase in traditional life sales.

Net investment  income increased by $170,000,  or 4.4%, to $4,005,000 for fiscal
year 2003 from  $3,835,000 for fiscal year 2002.  Investment  yield increased to
7.59% in fiscal year 2003 from 7.41%, in 2002.

Benefits and claims  increased by $255,000,  or 4.8%, to  $5,599,000  for fiscal
year 2003 from  $5,344,000 for the  comparable  period in 2002. The increase was
primarily due to an increase in traditional life reserves and death claims.

The amortization of deferred policy  acquisition costs increased by $69,000,  or
3.5%, to $2,039,000  for fiscal year 2003,  from  $1,970,000  for the comparable
period in 2002. The increase in amortization  expense was in line with actuarial
assumptions.

Operating expenses increased by $192,000, or 5.2%, to $3,871,000 for fiscal year
2003 from $3,679,000 for the same period in 2002. The increase was primarily due
to increased marketing expenses offset by a reduction of legal expenses.

2002 Compared to 2001

Total revenues  increased by $307,000,  or 2.9%, to $10,910,000  for fiscal year
2002 from  $10,603,000 for fiscal year 2001.  Offsetting some of the increase in
total revenues was a $32,000 reduction in net investment income.

Net insurance revenues increased by $339,000, or 5.0%, to $7,075,000 for fiscal
year 2002 from $6,736,000 for fiscal year 2001. This increase was primarily the
result of an increase in traditional life sales.

Net  investment  income  decreased by $32,000,  or .8%, to $3,835,000 for fiscal
year 2002 from  $3,867,000 for fiscal year 2001.  Investment  yield decreased to
7.41% in fiscal year 2002 from 7.65% in fiscal year 2001.

Benefits and claims  increased by $861,000,  or 19.2%,  to $5,344,000 for fiscal
year 2002 from  $4,483,000 for the  comparable  period in 2001. The increase was
primarily due to an increase in traditional life reserves and death claims.

The amortization of deferred policy acquisition costs decreased by $227,000,  or
10.3%,  to $1,970,000  for fiscal year 2002 from  $2,197,000  for the comparable
period in 2001. The decrease in amortization  expense was in line with actuarial
assumptions.

Operating expenses decreased by $156,000, or 4.1%, to $3,679,000 for fiscal year
2002 from $3,835,000 for the same period in 2001. The decrease was primarily due
to a reduction in general office expenses.

<PAGE>

Liquidity and Capital Resources

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

The Company invests predominantly in fixed maturity securities,  mortgage loans,
and warehouse  mortgage loans on a short-term  basis before selling the loans to
investors in accordance with the  requirements and laws governing life insurance
companies. Bonds owned by the Company amounted to $17,904,000 as of December 31,
2003 as compared to $22,412,000 as of December 31, 2002. This  represents  38.8%
and 45.5% of the total  investments  as of December  31, 2003 and  December  31,
2002,  respectively.  Generally, all bonds owned by the Company are rated by the
National Association of Insurance Commissioners. Under this rating system, there
are nine categories used for rating bonds. At December 31, 2003, and at December
31,  2002,  the  Company had  investments  in bonds in rating  categories  three
through six, which are considered non-investment grade of $488,000 and $485,000,
respectively.

If market conditions were to cause interest rates to change, the market value of
the fixed income portfolio  (approximately  $20.454 million) could change by the
following  amounts  based on the  respective  basis  point  swing (the change in
market values were calculated using a modeling technique):

(in millions of dollars)      -200bps    -100bps      +100bps       +200bps
------------------------      -------    -------      -------       -------

Change in Market Value         $1.127    $.543        $(.504)       $(.974)

The  Company  has no  other  financial  instruments  that  would  be  materially
susceptible to market risk.

The Company's insurance operations have historically  provided adequate positive
cash flow enabling the Company to continue to meet operational  needs as well as
increase  its  investment-grade  securities  to  provide  ample  protection  for
policyholders.

The Company has classified  certain of its fixed income  securities as available
for  sale,  with the  remainder  classified  as held to  maturity.  However,  in
accordance with Company policy, any such securities purchased in the future will
be classified as held to maturity. Business conditions,  however, may develop in
the future  which may  indicate a need for a higher  level of  liquidity  in the
investment  portfolio.  In  that  event  the  Company  believes  it  could  sell
short-term  investment  grade  securities  before  liquidating   higher-yielding
longer-term securities.

The Company is subject to risk based capital guidelines established by statutory
regulators  requiring  minimum  capital  levels based on the  perceived  risk of
assets, liabilities,  disintermediation, and business risk. At December 31, 2003
and December 31, 2002, the Company exceeded the regulatory criteria.

Lapse  rates  measure the amount of  insurance  terminated  during a  particular
period.  The  Company's  lapse  rate for  life  insurance  in 2003 was  10.7% as
compared to a rate of 11.9% for 2002.

Effective December 17, 1998, the Company entered into an Administrative Services
Agreement with Security National Financial Corporation ("SNFC"). Under the terms
of the  agreement,  SNFC has agreed to provide the Company with certain  defined
administrative and financial services,  including accounting services, financial
reports and statements,  actuarial,  policyholder services,  underwriting,  data
processing,   legal,  building  management,   marketing  advisory  services  and
investment  services.  In consideration  for the services  provided by SNFC, the
Company  pays  SNFC  an  administrative  services  fee of  $250,000  per  month,
provided,  however,  that such fee shall be  reduced  to zero for so long as the
capital and surplus of the Company is less than or equal to  $6,000,000,  unless
the Company and SNFC  otherwise  agree in writing and such agreement is approved
by the Florida Department of Insurance.


<PAGE>


The administrative services fee may be increased,  beginning on January 1, 2001,
to reflect  increases in the Consumer  Price Index,  over the index amount as of
January 1, 2000. The  Administrative  Services  Agreement shall remain in effect
for an initial term expiring on December 16, 2003. The term of the agreement may
be  automatically  extended for  additional  one-year  terms  unless  either the
Company or SNFC shall deliver a written notice on or before September 30, of any
year  stating to the other its  desire not to extend the term of the  agreement.
However, in no event can the agreement be terminated prior to December 16, 2003.

Student loans are a service the Company has  historically  made available to the
public as well as an  investment.  While the Company  anticipates  the  seasonal
demand  for  student  loan  funds and the  subsequent  sale of such loans to the
Student Loan Marketing Association (SLMA), there are times when additional funds
are  required  to meet  demand  for  student  loans  until such time as the sale
thereof to SLMA can be completed.  In 1997,  the Company  renewed its $5,000,000
line of credit  with SLMA until 2007 in order to meet these  seasonal  borrowing
requirements.  The Company  made no draws  against  this line of credit  through
December 31, 2003.

The Company began a new association with USA Group, CAP Program in 1996, for the
purpose of making more student loan funds available  without  increased costs to
the Company. This association aided in eliminating borrowings for 2003 and 2002.

The Company has leased  approximately  100% of the available rental space in its
principal   office  building  and  does  not  anticipate   significant   capital
expenditures to the rental space.

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for  forward-looking  statements to encourage  companies to provide  prospective
information  about their businesses  without fear of litigation so long as those
statements are identified as  forward-looking  and are accompanied by meaningful
cautionary  statements  identifying  important  factors  that could cause actual
results  to differ  materially  from those  projected  in such  statements.  The
Company desires to take advantage of the "safe harbor" provisions of the act.

This Annual Report of Form 10-K contains  forward-looking  statements,  together
with related  data and  projections,  about the  Company's  projected  financial
results and its future plans and strategies.  However,  actual results and needs
of  the  Company  may  vary  materially  from  forward-looking   statements  and
projections  made from time to time by the Company on the basis of  management's
then-current expectations. The business in which the Company is engaged involves
changing and competitive  markets,  which may involve a high degree of risk, and
there can be no assurance that  forward-looking  statements and projections will
prove accurate.

Factors that may cause the Company's  actual results to differ  materially  from
those contemplated or projected, forecast, estimated or budgeted in such forward
looking  statements  include among  others,  the  following  possibilities:  (i)
heightened competition,  including the intensification of price competition, the
entry  of new  competitors,  and the  introduction  of new  products  by new and
existing competitors;  (ii) adverse state and federal legislation or regulation,
including  decreases  in rates,  limitations  on premium  levels,  increases  in
minimum capital and reserve requirements,  benefit mandates and tax treatment of
insurance products;  (iii) fluctuations in interest rates causing a reduction of
investment  income or increase in  interest  expense and in the market  value of
interest rate sensitive investment;  (iv) failure to obtain new customer, retain
existing customers or reductions in policies in force by existing customers; (v)
higher  service,  administrative,  or  general  expense  due  to  the  need  for
additional  advertising,  marketing,  administrative  or management  information
systems  expenditures;  (vi) loss or retirement of key  executives or employees;
(vii) increases in medical costs;  (viii) changes in the Company's liquidity due
to changes in asset and  liability  matching;  (ix)  restrictions  on  insurance
underwriting based on genetic testing and other criteria; (x) adverse changes in
the ratings obtained by independent  rating  agencies;  (xi) failure to maintain
adequate  reinsurance;  (xii) possible  claims  relating to sales  practices for
insurance  products and claim denials and (xiii) adverse trends in mortality and
morbidity.

Off-Balance Sheet Arrangements

The Company has not entered into any off-balance sheet arrangements that have or
are  reasonably  likely to have a  current  or  future  effect on its  financial
condition,  changes in financial  condition,  revenues or  expenses,  results of
operations,  liquidity,  capital  expenditures,  or capital  resources  that are
material to investors.

<PAGE>

Recent Accounting Pronouncements

In April 2002,  FASB issued SFAS No. 145,  "Rescission of FASB Statements No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13, and  Technical  Corrections".
Under   historical   guidance,   all  gains  and  losses   resulting   from  the
extinguishment  of  debt  were  required  to be  aggregated  and,  if  material,
classified as an extraordinary  item, net of related income tax effect. SFAS No.
145  rescinds   that   guidance   and  requires   that  gains  and  losses  from
extinguishments  of debt be classified as  extraordinary  items only if they are
both unusual and infrequent in occurrence. SFAS No. 145 also amends SFAS No. 13,
"Accounting for Leases" for the required  accounting  treatment of certain lease
modifications that have economic effects similar to sale-leaseback transactions.
SFAS No. 145 requires  that those lease  modifications  be accounted  for in the
same  manner as  sale-leaseback  transactions.  The  provisions  of SFAS No. 145
related to SFAS No. 13 are effective for  transactions  occurring  after May 15,
2002.  Adoption of the provisions of SFAS No. 145 related to SFAS No. 13 did not
have a  material  impact on the  Company's  financial  condition  or  results of
operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities",  which  addresses  financial  accounting and
reporting for costs  associated  with exit or disposal  activities and nullifies
EITF Issue No. 94-3,  "Liability  Recognition for Certain  Employee  Termination
Benefits and Other Costs to Exit an Action (including  Certain Costs Incurred in
a Restructuring)"  ("Issue 94-3"). The principal difference between SFAS No. 146
and  Issue  94-3 is that  SFAS No.  146  requires  that a  liability  for a cost
associated with an exit or disposal activity be recognized when the liability is
incurred,  rather  than at the date of an entity's  commitment  to an exit plan.
SFAS No. 146 is effective  for exit or disposal  activities  after  December 31,
2002.  The  adoption  of SFAS No.  146 did not  have a  material  impact  on the
Company's financial condition or results of operations.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of Others" ("FIN 45").  FIN 45 requires  certain  guarantees to be
recorded at fair value and also  requires a guarantor  to make new  disclosures,
even when the likelihood of making  payments  under the guarantee is remote.  In
general, the interpretation  applies to contracts or indemnification  agreements
that contingently require the guarantor to make payments to the guaranteed party
based on changes in an underlying that is related to an asset,  liability, or an
equity security of the guaranteed  party.  The recognition  provisions of FIN 45
are effective on a prospective  basis for  guarantees  issued or modified  after
December 31, 2002.  The  disclosure  requirements  are  effective  for financial
statements of interim and annual  periods  ending after  December 15, 2002.  The
adoption  of FIN 45 did not have a material  impact on the  Company's  financial
condition or results of operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation - Transition  and Disclosure and Amendment to FASB No. 123",  which
provides  three  optional   transition  methods  for  entities  that  decide  to
voluntarily  adopt  the fair  value  recognition  principles  of SFAS  No.  123,
"Accounting  for  Stock  Issued  to  Employees",  and  modifies  the  disclosure
requirements  of that  Statement.  Under  the  prospective  method,  stock-based
compensation expense is recognized for awards granted after the beginning of the
fiscal  year in which  the  change  is made.  The  modified  prospective  method
recognizes  stock-based  compensation expense related to new and unvested awards
in the year of change  equal to that which would have been  recognized  had SFAS
No. 123 been adopted as of its effective  date, for fiscal years beginning after
December  15,  1994.  The  retrospective  restatement  method  recognizes  stock
compensation costs for the year of change and restates financial  statements for
all prior periods presented as though the fair value  recognition  provisions of
SFAS No. 123 had been adopted as of its effective  date.  Since the Company does
not intend to voluntarily  adopt the fair value provisions of FASB 123, adoption
of SFAS 148 did not have a material effect on the financial condition or results
of operations of the Company.  However,  pro forma disclosures  required by SFAS
148 are included in the Company's interim financial statements, as required.

In April  2003,  the FASB issued SFAS No. 149,  Amendment  of  Statement  133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts  (collectively referred to as
derivatives)  and for  hedging  activities  under SFAS No. 133,  Accounting  for
Derivative  Instruments and Hedging Activities.  This Statement is effective for
contracts entered into or modified after June 30, 2003, with certain exceptions,
and for hedging relationships  designated after September 30, 2003. The adoption
of SFAS No.  149 did not have a  material  effect on the  Company's  results  of
operations and financial position.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
requires that certain financial  instruments,  which under previous guidance may
have been accounted for as equity,  must now be accounted for as liabilities (or
an asset in some circumstances). The financial

<PAGE>

instruments  affected include  mandatory  redeemable  stock,  certain  financial
instruments  that  require  or may  require  the  issuer to buy back some of its
shares in exchange for cash or other assets and certain  obligations that can be
settled with shares of stock. This Statement is effective for all such financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective at the beginning of the first interim period  beginning after June 15,
2003.  The  adoption  of SFAS No.  150 did not  have a  material  effect  on the
Company's financial position or results of operations.

Effective  December 31,  2003,  the Company  adopted  EITF Issue No.  03-1,  The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments  ("EITF  03-1").  EITF  03-1  provides  guidance  on the  disclosure
requirements for other-than-temporary  Impairments of debt and marketable equity
investments  that are  accounted  for under  Statement of  Financial  Accounting
Standards  ("SFAS")  No. 115,  Accounting  for Certain  Investments  in Debt and
Equity  Securities.  The  adoption of EITF 03-1  requires the Company to include
certain quantitative and qualitative  disclosures for debt and marketable equity
securities classified as  available-for-sale or held-to-maturity  under SFAS 115
that   are   impaired   at  the   balance   sheet   date   but  for   which   an
other-than-temporary  impairment has not been  recognized.  The adoption of EITF
03-1 did not have a  material  impact on the  Company's  financial  position  or
results of operations.

In April 2003,  the FASB cleared  Statement  133  Implementation  Issue No. B36,
Embedded  Derivatives:  Modified  Coinsurance  Arrangements and Debt Instruments
That  Incorporate  Credit Risk  Exposures  That Are Unrelated or Only  Partially
Related to the  Creditworthiness  of the Obligor under Those Instruments ("Issue
B36").  Issue B36 concluded that (i) a company's  funds withheld  payable and/or
receivable under certain  reinsurance  arrangements,  and (ii) a debt instrument
that  incorporates  credit risk  exposures  that are unrelated or only partially
related to the  creditworthiness  of the obligor include an embedded  derivative
feature that is not clearly and closely related to the host contract. Therefore,
the  embedded  derivative  feature must be measured at fair value on the balance
sheet and changes in fair value reported in income.  Issue B36 became  effective
on October 1, 2003. The adoption of Issue No. B36 did not have a material impact
on the Company's financial position or results of operations.

In  January  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation  No.  46,   "Consolidation  of  Variable  Interest  Entities,  an
Interpretation  of ARB No.  51",  and  subsequently  issued a  revision  to this
Interpretation in December 2003. This Interpretation addresses the consolidation
by  business  enterprises  of  variable  interest  entities  as  defined  in the
Interpretation.  The Interpretation  applies to those variable interest entities
considered to be  special-purpose  entities no later than December 31, 2003. The
Interpretation  must also be applied to all other variable  interest entities no
later than March 31, 2004. The adoption of Interpretation  No. 46 did not have a
material  effect on the  financial  position  or  results of  operations  of the
Company because no variable interest entities were required to be consolidated.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

The Company has no activities in derivative financial or commodity  instruments.
The  Company's  exposure to market  risks  (i.e.,  interest  rate risk,  foreign
currency  exchange  rate risk and equity  price risk)  through  other  financial
instruments,  including  cash  equivalents,  accounts  receivable  and  lines of
credit, is not material.


<PAGE>



Item  8.  Financial Statements and Supplementary Data.

The following  financial  statements of Southern Security Life Insurance Company
are included in Part II, Item 8:


                                                                  Page
                                                                 Number

Independent Auditors' Report........................................19

Balance Sheet-December 31, 2003 and 2002............................20

Statement of Operations - years ended
December 31, 2003, 2002 and 2001....................................22

Statement of Shareholders' Equity-years
ended December 31, 2003, 2002 and 2001..............................23

Statement of Cash Flows - years ended
December 31, 2003, 2002 and 2001....................................24

Notes to Financial Statements.......................................26


<PAGE>


                         Report of Independent Auditors













Board of Directors and Shareholders
Southern Security Life Insurance Company




We have  audited  the  accompanying  balance  sheet of  Southern  Security  Life
Insurance Company as of December 31, 2003 and 2002 and the related statements of
operations,  shareholders'  equity,  and cash  flows for the three  years in the
period ended  December 31, 2003. In connection  with our audits of the financial
statements, we have also audited the amounts included in the financial statement
schedules as listed in the accompanying  index under Item 15(a). These financial
statements  and  financial  statement  schedules are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Southern  Security  Life
Insurance  Company as of  December  31,  2003 and 2002,  and the  results of its
operations  and its cash flows for the three years in the period ended  December
31, 2003, in conformity with  accounting  principles  generally  accepted in the
United States of America.  Also in our opinion,  the related financial statement
schedules,  when considered in relation to the basic financial  statements taken
as a whole, present fairly, in all material respects,  the information set forth
therein.

/s/ Tanner + Co.

Salt Lake City, Utah
March 19, 2004


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                  Balance Sheet

                           December 31, 2003 and 2002

Assets                                        2003         2002
------                                        ----         ----
Investments (note 3):
    Fixed maturities held-to-maturity
     (fair value, $4,029,488 and
      $4,167,028 at December 31,
      2003 and 2002, respectively)      $ 3,691,064   $ 3,971,539
    Securities available-for-sale,
      at fair value:
      Fixed maturities (cost of
        $13,157,337 at December 31,
        2003 and $17,078,241 at
        December 31, 2002)               14,213,317    18,439,961
      Equity securities
        (cost, $316,293 and
        $316,293 at December 31,
        2003 and 2002, respectively)        424,165       309,218
    Mortgage loans                        2,211,183     2,244,597
    Policy and student loans              8,131,980     8,027,736
    Short-term investments (note 11)     17,497,249    16,283,759
                                        -----------   -----------
        Total Investments                46,168,958    49,276,810
                                        -----------   -----------

Cash and cash equivalents (note 3)        7,075,394     3,067,284
Accrued investment income                   462,846       473,789
Deferred policy acquisition costs
    (note 4)                             13,624,107    13,391,535
Policyholders' account balances on
    deposit with reinsurer (note 7)       6,795,983     6,955,691
Reinsurance receivable (note 7)             442,574       279,090
Receivables:
    Agent balances, net                     461,133       776,244
    Other                                   320,325       614,150
Property and equipment, net,
    at cost (note 5)                      2,313,119     2,430,404
                                        -----------   -----------
    Total Assets                        $77,664,439   $77,264,997
                                        ===========   ===========















See accompanying notes to financial statements.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                            Balance Sheet (continued)

                           December 31, 2003 and 2002



Liabilities and Shareholders' Equity                     2003          2002
------------------------------------                     ----          ----
Liabilities:
    Future policy benefits (note 6)                  $ 4,279,281   $ 3,517,481
    Policyholders' account balances                   46,887,592    47,222,857
    Unearned revenue                                   4,334,299     4,551,265
    Other policy claims and benefits payable             798,050       701,312
    Other policyholders' funds, dividend
      and endowment accumulations                         98,071        78,811
    Funds held related to reinsurance
      treaties (note 7)                                1,294,589     1,334,963
    Notes payable to related parties
      (note 9)                                         1,433,100     1,000,000
    Due to affiliated insurance
      agency (note 11)                                    57,065        83,941
    General expenses accrued                              81,942        98,480
    Unearned investment income                           355,650       355,529
    Other liabilities                                     62,798       111,786
    Income taxes (note 10)                               967,516     1,062,802
                                                     -----------   -----------

        Total liabilities                             60,649,953    60,119,227
                                                     -----------   -----------

Commitments and contingencies
    (notes 7 and 15)                                     --             --

Shareholders' equity (notes 2,3 and 12):
    Common stock, $1 par, authorized
      3,000,000 shares; issued and out-
      standing, 2,103,600 shares in 2003
      and 2,003,388 in 2002                            2,103,600     2,003,388
    Capital in excess of par                           4,614,925     4,267,189
    Accumulated other comprehensive
        income                                           835,784       871,197
    Retained earnings                                  9,460,177    10,003,996
                                                     -----------   -----------

        Total shareholders' equity                    17,014,486    17,145,770
                                                     -----------   -----------

        Total liabilities and shareholders' equity   $77,664,439   $77,264,997
                                                     ===========   ===========









See accompanying notes to financial statements.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Statement of Operations

                  Years ended December 31, 2003, 2002 and 2001


                                             2003         2002          2001
                                             ----         ----          ----
Revenues:
    Net insurance revenues             $  7,334,707  $  7,075,257  $  6,736,027
    Net investment income
       (notes 3 and 11)                   4,005,129     3,835,420     3,866,966

    Realized loss on investments                 --        (1,038)        --
                                       ------------  ------------  ------------

       Total revenues                    11,339,836    10,909,639    10,602,993
                                       ------------  ------------  ------------

Benefits, claims and expenses:
    Benefits and claims                   5,599,434     5,343,573     4,482,588
    Amortization of deferred
      policy acquisition costs (note 4)   2,039,459     1,969,966     2,197,399
    Operating expenses                    3,871,302     3,678,920     3,835,165
                                       ------------  ------------  ------------

    Total benefits, claims and expenses  11,510,195    10,992,459    10,515,152
                                       ------------  ------------  ------------

 Income (loss) before
    income taxes                           (170,359)      (82,820)       87,841

Income tax (benefit) expense (note 10)      (74,488)      (12,254)       16,865
                                       ------------  ------------  ------------

Net income (loss)                      $    (95,871) $    (70,566) $     70,976
                                       ============  ============  ============

Basic and diluted net  income
    (loss) per share
    of common stock (note 12)                 $(.05)        $(.04)         $.04
                                               =====        =====         =====



















See accompanying notes to financial statements.


<PAGE>
<TABLE>
<CAPTION>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                        Statement of Shareholders' Equity

                  Years ended December 31, 2003, 2002 and 2001


                                                                                Accumulated
                                                                    Capital        other
                                      Common         Stock         in excess    comprehensive     Retained
                                      Shares        Amount          of par      income (loss)     earnings                Total
                                     ---------     ----------      ---------    -------------     --------                -----

<S>                               <C>             <C>           <C>            <C>             <C>                   <C>
Balances, January 1, 2001            1,907,989    $  1,907,989   $  4,011,519   $    (75,628)   $ 10,354,655          $ 16,198,535
                                  ------------    ------------    ------------  -------------   -------------         ------------

Comprehensive Income (loss):
     Net income for the year              --              --             --             --            70,976                70,976
     Unrealized appreciation of
       securities available  for sale     --              --             --          633,759                               633,759
                                   -----------    ------------   ------------   ------------    ------------          ------------
Total comprehensive income                                                                                                 704,735
                                                                                                                      ------------

Balances, December 31, 2001          1,907,989       1,907,989      4,011,519        558,131      10,425,631            16,903,270
                                  ------------    ------------    ------------    -----------   ------------          ------------

Comprehensive Income (loss):
     Net loss for the year               --              --             --             --            (70,566)             (70,566)
     Unrealized appreciation of
       securities available  for sale    --              --             --           313,066         --                    313,066
                                  ------------    ------------    ------------    ----------    ------------          ------------
Total comprehensive income                                                                                                 242,500
                                                                                                                      ------------

Stock Dividend                          95,399          95,399        255,670             --        (351,069)               --
                                  ------------    ------------    -------------   -----------   ------------          ------------

Balances, December 31, 2002          2,003,388       2,003,388      4,267,189        871,197      10,003,996            17,145,770
                                  ------------    ------------    ------------    ----------    ------------          ------------

Comprehensive Income (loss):
     Net (loss) for the year             --              --             --             --            (95,871)             (95,871)
     Unrealized depreciation of
       securities available for sale     --              --             --           (35,413)          --                 (35,413)
                                  ------------    ------------    -----------     ----------    -------------           ----------
Total comprehensive loss                                                                                                 (131,284)
                                                                                                                       -----------
Stock dividend                         100,212         100,212        347,736             --        (447,948)               --
                                  ------------    ------------    ------------    -----------   ------------          ------------

Balances, December 31, 2003          2,103,600    $  2,103,600   $  4,614,925   $    835,784    $  9,460,177          $ 17,014,486
                                  ============    ============    ============    ==========    ============          ============
</TABLE>


See accompanying notes to financial statements.


<PAGE>
<TABLE>
<CAPTION>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Statement of Cash Flows

                  Years ended December 31, 2003, 2002 and 2001



                                                               2003           2002            2001
                                                               ----           ----            ----
Cash flows provided by (used in)
operating activities:
<S>                                                      <C>            <C>            <C>
      Net income (loss)                                  $   (95,871)   $   (70,566)   $    70,976
      Adjustments to reconcile net income
            (loss) to net cash provided by
            operating activities:
      Depreciation and amortization                          165,905        196,497        270,792
      Net realized loss                                        --             1,038          --
      Deferred income taxes (benefit)                        (93,073)       (16,500)        22,623
      Amortization of deferred
            policy acquisition costs                       2,039,459      1,969,966      2,197,399
      Acquisition costs deferred                          (1,935,573)    (2,129,428)    (1,898,971)
      Change in assets and liabilities
            affecting cash provided by operations:
            Accrued investment income                         10,943        139,491         (2,806)
            Accounts receivable                              608,936        337,216       (239,665)
            Reinsurance receivable                          (163,484)       290,073       (244,370)
            Other policy claims and
                  future benefits payable                    858,538        169,791        502,866
            Policyholders' account balances                1,976,831      2,107,681      2,119,312
            Funds held under reinsurance                     (40,374)       (44,677)       (37,576)
            Unearned premiums                               (418,840)      (297,910)      (291,269)
            Dividend and endowment accumulations              19,260         14,766         (8,845)
            Payable to affiliated insurance agent            (26,876)      (109,748)        47,894
            Income taxes payable                              18,585             --        (57,470)
            Other liabilities                                367,695       (132,625)       182,378
                                                         -----------    -----------    -----------

      Net cash provided by operating activities          $ 3,292,061    $ 2,425,065    $ 2,633,268
                                                         -----------    -----------    -----------

Cash flows provided by (used in) investing activities:
      Purchase of investments:
      Purchase of investments held-to-maturity           $    --        $(1,784,283)   $     --
      Proceeds from maturity of
         held-to maturity securities                         302,185        983,820      2,220,802
      Proceeds from maturity of
         available-for-sale securities                     3,860,000      3,300,000      2,814,816
      Proceeds from sale of available-
         for-sale securities (equity and
         fixed maturity)                                          --        782,048        794,356
      Repayment of mortgage loans                             33,414         23,695         29,871
      Net change in short-term investments                (1,213,490)    (2,423,225)    (6,045,721)
      Net change in policy and student loans                (104,244)       153,487         39,513
      Acquisition of property and equipment                   (9,428)       (68,672)       (78,009)
                                                         -----------    -----------    -----------

      Net cash provided by (used in)
           investing activities                          $ 2,868,437    $   966,870    $  (224,372)
                                                         -----------    -----------    -----------
</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                             Statement of Cash Flows

                  Years ended December 31, 2003, 2002 and 2001



                                                                  2003                    2002                  2001
                                                                  ----                    ----                  ----
<S>                                                      <C>            <C>            <C>
Cash flows from financing activities:
      Receipts from universal life and
            certain annuity policies
            credited to policyholder
            account balances                             $ 4,425,663    $ 4,816,639    $5,037,521
      Return of policyholder account
            balances on universal life
            and certain annuity policies                  (6,578,051)    (7,110,345)   (7,991,030)
                                                        ------------    -----------   ------------

Net cash used in financing
      Activities                                         $(2,152,388)   $(2,293,706)   $ (2,953,509)
                                                         -----------    -----------    ------------

Increase (decrease) in cash and
      cash equivalents                                     4,008,110      1,098,229        (544,613)

Cash and cash equivalents at
      beginning of year                                    3,067,284      1,969,055       2,513,668
                                                        ------------    -----------     -----------
Cash and cash equivalents at
      end of year                                        $ 7,075,394    $ 3,067,284    $ 1,969,055
                                                         ===========    ===========    ===========

Supplemental schedule of cash flow information:
      Interest paid during the  year                     $    90,000    $    90,000    $    97,240
                                                         ===========    ===========    ===========

      Income taxes paid during the year                  $       785    $     4,246    $    57,470
                                                         ===========    ===========    ===========

Change in market value adjustments- investments
available-for-sale:
      Fixed maturities                                   $  (305,741)   $    456,823   $    956,773
      Equity securities                                      114,947         (62,965)        24,632

Change in deferred acquisition costs                         336,457         257,686         61,405
Change in premium deposit funds                             (201,874)       (154,613)       (36,843)
Deferred income tax asset (liability)                         20,798        (183,865)      (372,208)
                                                      --------------    ------------    -----------

Accumulated comprehensive income
Net change in unrealized appreciation
      (depreciation)                                   $     (35,413)   $     313,066   $   633,759
                                                       =============    =============   ===========




</TABLE>

See accompanying notes to financial statements.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                          Notes to Financial Statements
                        December 31, 2003, 2002 and 2001

1. Nature of business and summary of significant accounting policies:

       (a)     Nature of business

               The primary business of Southern  Security Life Insurance Company
               (the  "Company") is the issuance of long duration  universal life
               insurance  contracts.  The majority of the Company's  business is
               conducted  in the states of Alabama  (10%),  Florida  (43%),  and
               Georgia (12%).  None of the remaining  eleven states in which the
               Company is  licensed  to conduct  business  account  for over 10%
               individually of the Company's total business.

               Prior to  December  17,  1998,  certain  executive  officers  and
               directors of the Company were  shareholders of  approximately  60
               percent of the shares of SSLIC Holding Company,  Inc.,  (formerly
               Consolidare Enterprises,  Inc.). SSLIC Holding Company, Inc. owns
               77% of the Company's voting securities at December 31, 2003.

               Effective  December 17,  1998,  100% of the common stock of SSLIC
               Holding  Company,  Inc.  was acquired by Security  National  Life
               Insurance Company ("SNLIC"). Accordingly, from December 17, 1998,
               the Company is a 77.0% owned, indirect subsidiary of SNLIC.

               The  following is a  description  of the most  significant  risks
               facing life and health  insurers  and how the  Company  mitigates
               those risks:

               Legal/regulatory  risk is the risk that  changes  in the legal or
               regulatory  environment in which the Company operates will create
               additional expenses not anticipated by the Company in pricing its
               products.  That is,  regulatory  initiatives  designed  to reduce
               insurer  profits,  new  legal  theories,   or  insurance  company
               insolvencies through guaranty fund assessments,  may create costs
               for  the  Company   beyond  those   recorded  in  the   financial
               statements.  The  Company  seeks to  mitigate  this risk  through
               geographic marketing of these insurance products.

               Credit risk is the risk that issuers of  securities  owned by the
               Company will default or that other parties, including reinsurers,
               which owe the Company money,  will not pay. The Company  attempts
               to mitigate  this risk by adhering to a  conservative  investment
               strategy,  by maintaining  sound reinsurance and by providing for
               any amounts deemed uncollectible.

               Interest  rate risk is the risk that  interest  rates will change
               and cause a decrease in the value of the  Company's  investments.
               This  change  in  rates  may  cause  certain   interest-sensitive
               products to become uncompetitive, may cause disintermediation, or
               may cause the Company to not achieve its target interest  margins
               between interest earned on invested assets and interest  required
               to be  credited to  policyholder  account  balances.  The Company
               mitigates  this risk by  charging  fees for  nonconformance  with
               certain  policy  provisions,  by offering  products that transfer
               this risk to the  purchaser,  and/or by  attempting  to match the
               maturity  schedule of its assets with the expected payouts of its
               liabilities. To the extent that liabilities come due more quickly
               than assets  mature,  the Company would have to sell assets prior
               to maturity and potentially recognize a gain or loss.

       (b)     Basis of financial statements

               The  presentation  of financial  statements have been prepared in
               conformity with U.S.  generally  accepted  accounting  principles
               ("GAAP"),  which  vary from  reporting  practices  prescribed  or
               permitted by regulatory authorities.

               The  accompanying  financial  statements have been prepared using
               the  historic  cost basis of  accounting  and do not  reflect any
               adjustments  related to allocation  of the purchase  price of the
               Company's  parent,   SSLIC  Holding  (Formerly   Consolidare)  by
               Security National Life Insurance Company at December 17, 1998.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (Continued)



       (c)     Use of estimates

               In preparing the financial statements,  management is required to
               make estimates and assumptions  that affect the reported  amounts
               of  assets  and   liabilities.   Actual   results   could  differ
               significantly from those estimates.

               The estimates susceptible to significant change are those used in
               determining  the liability for future policy benefits and claims,
               deferred  income taxes and  deferred  policy  acquisition  costs.
               Although  some   variability  is  inherent  in  these  estimates,
               management believes that the amounts provided are adequate.

       (d)     Investments

               Investments in all debt  securities  and those equity  securities
               with readily  determinable  market values are classified into one
               of    three    categories:    held-to-maturity,     trading    or
               available-for-sale.  Classification  of investments is based upon
               management's current intent. Debt securities which management has
               a  positive  intent  and  ability  to  hold  until  maturity  are
               classified  as  securities  held-to-maturity  and are  carried at
               amortized cost. Unrealized holding gains and losses on securities
               held-to-maturity  are not reflected in the financial  statements.
               Debt and equity  securities  that are  purchased  for  short-term
               resale  would  be  classified  as  trading  securities.   Trading
               securities  would  be  carried  at fair  value,  with  unrealized
               holding gains and losses included in earnings; the Company has no
               securities  classified as trading securities.  All other debt and
               equity  securities  not included in the above two  categories are
               classified   as   securities    available-for-sale.    Securities
               available-for-sale  are  carried at fair value,  with  unrealized
               holding   gains  and  losses   reported  in   accumulated   other
               comprehensive  income which is included in  shareholders'  equity
               after   adjustment   for  deferred   income  taxes  and  deferred
               acquisition costs related to universal life products.

               The   Company's   carrying   value   for   investments   in   the
               held-to-maturity and available-for-sale  categories is reduced to
               its estimated  realizable  value if a decline in the market value
               is deemed  other than  temporary.  Such  reductions  in  carrying
               values are recognized as realized losses and charged to income.

               Interest  on  fixed  maturities  and  short-term  investments  is
               recognized  to  income as it  accrues  on the  principal  amounts
               outstanding  adjusted for  amortization of premiums and discounts
               computed  by  the  scientific   method  which   approximates  the
               effective yield method.  Realized gains and losses on disposition
               of  investments   are  included  in  net  income.   The  cost  of
               investments  sold is  determined  on the specific  identification
               method.  Dividends  are  recorded  as income  on the  ex-dividend
               dates.

               Mortgage  loans on real estate and  mortgage  loans held as short
               term investments are reported at the unpaid  principal  balances,
               adjusted  for  amortization  of premium or accretion of discount,
               less allowance for possible losses.

               Policy  loans  and  student  loans  are  carried  at  the  unpaid
               principal  balance,  less any amounts deemed to be uncollectible.
               The  Company's  policy  is that  policy  loans  are not  made for
               amounts  in excess  of the cash  surrender  value of the  related
               policy. Accordingly, policy loans are fully collateralized by the
               related  liability  for future  policy  benefits for  traditional
               insurance policies and by the policyholders'  account balance for
               interest sensitive policies.

         (e)   Cash and cash equivalents

               For  purposes  of the  statements  of  cash  flows,  the  Company
               considers all highly liquid debt  instruments  purchased  with an
               original maturity of three months or less to be cash equivalents.



<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (Continued)



         (f)   Deferred policy acquisition costs

               The  costs of  acquiring  new  business,  net of the  effects  of
               reinsurance,   principally  commissions  and  those  home  office
               expenses that tend to vary with and are primarily  related to the
               production  of new  business,  have been  deferred  to the extent
               recoverable   from  future  profit   margins.   Deferred   policy
               acquisition  costs  applicable to  traditional  life policies are
               being  amortized  over the  premium-paying  period of the related
               policies in a manner that will charge each year's  operations  in
               direct  proportion to the estimated premium revenue over the life
               of the  policies.  Premium  revenue  estimates are made using the
               same interest,  mortality and withdrawal  assumptions as are used
               for computing liabilities for future policy benefits. Acquisition
               costs relating to universal life policies are being  amortized in
               relation to the incidence of expected gross profits over the life
               of the  policies.  Gross  profits for  universal  life  contracts
               consist of revenue  representing  policy  charges for the cost of
               insurance,  administration of the contracts and surrender charges
               plus  investment  income less  expenses for interest  credited to
               policyholder account balances, policy administrative expenses and
               expected benefit  payments in excess of policy account  balances.
               Deferred  policy  acquisition  costs are  adjusted to reflect the
               impact  of  unrealized   gains  and  losses  on  fixed   maturity
               securities available for sale.

               The Company has performed tests concerning the  recoverability of
               deferred acquisition costs. These methods include those typically
               used by many companies in the life insurance  industry.  Further,
               the Company  conducts a sensitivity  analysis of its  assumptions
               that are used to  estimate  the future  expected  gross  profits,
               which management has used to determine the future  recoverability
               of the deferred acquisition costs.

         (g)   Property and equipment

               Property and  equipment  are recorded at cost,  less  accumulated
               depreciation. Depreciation and amortization on capital leases and
               property and equipment  are  determined  using the  straight-line
               method over the estimated  useful lives of the assets or terms of
               the lease.  Expenditures for maintenance and repairs are expensed
               when incurred and betterments are  capitalized.  Gains and losses
               on sale of property and equipment are reflected in operations.

         (h)   Future policy benefits

               The  liability for future policy  benefits for  traditional  life
               policies  has been  provided on a net level  premium  basis based
               upon  estimated  investment  yields,  withdrawals,  mortality and
               other  assumptions that were appropriate at the time the policies
               were issued.  Such estimates are based upon industry data and the
               Company's  past  experience  as adjusted to provide for  possible
               adverse deviation from the estimates.

         (i)   Policyholders' account balances

               Insurance  reserves for universal  life  policies are  determined
               following the retrospective  deposit method and consist of policy
               values that accrue to the benefit of the policyholder,  unreduced
               by surrender charges.

         (j)   Recognition of premium revenue and related costs

               Premiums are recognized as revenue as follows:


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



               Universal  life policies - premiums  received from  policyholders
               are   reported   as   deposits.   Cost   of   insurance,   policy
               administration  and surrender  charges which are charged  against
               the   policyholder   account  balance  during  the  period,   are
               recognized  as revenue as earned.  Amounts  assessed  against the
               policyholder  account balance that represent  compensation to the
               Company  for  services  to be  provided  in  future  periods  are
               reported as unearned  revenue and  recognized in income using the
               same assumptions and factors used to amortize  acquisition  costs
               capitalized.

               Annuity  contracts with flexible  terms - premiums  received from
               policyholders are reported as deposits.

               All other  policies  -  recognized  as revenue  over the  premium
               paying period.

         (k)   Income taxes

               Deferred tax assets and liabilities are recognized for the future
               tax   consequences   attributable  to  differences   between  the
               financial  statement  carrying  amounts  of  existing  assets and
               liabilities and their  respective tax bases.  Deferred tax assets
               and  liabilities are measured using enacted tax rates expected to
               apply to  taxable  income in the years in which  those  temporary
               differences  are expected to be recovered or settled.  The effect
               on deferred tax assets and  liabilities  of a change in tax rates
               is recognized in income in the period that includes the enactment
               date.

         (l)   Impairment of long-lived assets

               The Company reviews its long-lived assets for impairment whenever
               events or changes in  circumstances  indicate  that the  carrying
               amount of the assets may not be recoverable through  undiscounted
               future cash flows.  If it is determined  that an impairment  loss
               has  occurred  based  on  expected  cash  flows,   such  loss  is
               recognized in the statement of operations.

         (m)   Earnings (loss) per common share

               The  computation  of basic  earnings  (loss) per common  share is
               based on the weighted average number of shares outstanding during
               each year.

               The computation of diluted  earnings per common share is based on
               the  weighted  average  number of shares  outstanding  during the
               year, plus the common stock equivalents that would arise from the
               exercise of stock options  outstanding,  using the treasury stock
               method and the average  market  price per share  during the year.
               There were no common  stock  equivalents  outstanding  during the
               years  ended  December  31,  2003,  2002 and 2001.  Common  stock
               equivalents  are not included in the diluted  earnings (loss) per
               share calculation when their effect is antidilutive.

         (n)   Stock-based compensation

               The   Company   measures   expense   for   stock-based   employee
               compensation  using  the  intrinsic  value  method  and  provides
               pro-forma  disclosures of net income (loss) and net income (loss)
               per common  share as if the fair value method had been applied in
               measuring  compensation expense. For the years ended December 31,
               2003,  2002,  and  2001,   there  was  no  stock-based   employee
               compensation expense or pro-forma expense.

         (o)   Concentration of credit risk

               The Company maintains its cash in bank deposit accounts, which at
               times may exceed  federally  insured limits.  The Company has not
               experienced  any losses in such  accounts  and believes it is not
               exposed  to  any  significant   credit  risk  on  cash  and  cash
               equivalents.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


         (p)   Reclassification

               Certain  amounts   presented  in  the  2002  and  2001  financial
               statements  have  been   reclassified  to  conform  to  the  2003
               presentation.

         (q)   Recent accounting pronouncements

               In April 2002,  FASB issued  SFAS No.  145,  "Rescission  of FASB
               Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
               and Technical Corrections".  Under historical guidance, all gains
               and  losses  resulting  from  the  extinguishment  of  debt  were
               required to be  aggregated  and, if  material,  classified  as an
               extraordinary  item, net of related  income tax effect.  SFAS No.
               145 rescinds  that  guidance  and requires  that gains and losses
               from extinguishments of debt be classified as extraordinary items
               only if they are both unusual and infrequent in occurrence.  SFAS
               No. 145 also amends SFAS No. 13,  "Accounting for Leases" for the
               required accounting treatment of certain lease modifications that
               have economic  effects  similar to  sale-leaseback  transactions.
               SFAS No. 145 requires that those lease modifications be accounted
               for  in the  same  manner  as  sale-leaseback  transactions.  The
               provisions  of SFAS No. 145 related to SFAS No. 13 are  effective
               for  transactions  occurring after May 15, 2002.  Adoption of the
               provisions  of SFAS No. 145 related to SFAS No. 13 did not have a
               material impact on the Company's  financial  condition or results
               of operations.

               In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
               Associated  with Exit or Disposal  Activities",  which  addresses
               financial accounting and reporting for costs associated with exit
               or  disposal  activities  and  nullifies  EITF  Issue  No.  94-3,
               "Liability  Recognition for Certain Employee Termination Benefits
               and  Other  Costs  to Exit an  Action  (including  Certain  Costs
               Incurred  in a  Restructuring)"  ("Issue  94-3").  The  principal
               difference  between  SFAS No. 146 and Issue 94-3 is that SFAS No.
               146 requires that a liability for a cost  associated with an exit
               or  disposal   activity  be  recognized  when  the  liability  is
               incurred, rather than at the date of an entity's commitment to an
               exit  plan.  SFAS  No.  146 is  effective  for  exit or  disposal
               activities  after December 31, 2002. The adoption of SFAS No. 146
               did  not  have  a  material  impact  on the  Company's  financial
               condition or results of operations.

               In  November  2002,  the  FASB  issued   Interpretation  No.  45,
               "Guarantor's   Accounting   and   Disclosure   Requirements   for
               Guarantees,  Including  Indirect  Guarantees of  Indebtedness  of
               Others"  ("FIN 45").  FIN 45 requires  certain  guarantees  to be
               recorded at fair value and also  requires a guarantor to make new
               disclosures,  even when the  likelihood of making  payments under
               the guarantee is remote. In general,  the Interpretation  applies
               to  contracts or  indemnification  agreements  that  contingently
               require the  guarantor to make payments to the  guaranteed  party
               based on  changes in an  underlying  that is related to an asset,
               liability,  or an equity  security of the guaranteed  party.  The
               recognition  provisions  of FIN 45 are effective on a prospective
               basis for guarantees  issued or modified after December 31, 2002.
               The   disclosure   requirements   are   effective  for  financial
               statements of interim and annual  periods  ending after  December
               15, 2002.  The adoption of FIN 45 did not have a material  impact
               on the Company's financial condition or results of operations.

               In December 2002, the FASB issued SFAS No. 148,  "Accounting  for
               Stock-Based   Compensation   --  Transition  and  Disclosure  and
               Amendment  to  FASB  No.  123",  which  provides  three  optional
               transition  methods for entities that decide to voluntarily adopt
               the  fair  value   recognition   principles   of  SFAS  No.  123,
               "Accounting  for Stock  Issued to  Employees",  and  modifies the
               disclosure requirements of that Statement.  Under the prospective
               method, stock-based compensation expense is recognized for awards
               granted  after  the  beginning  of the  fiscal  year in which the
               change  is  made.  The  modified  prospective  method  recognizes
               stock-based  compensation  expense  related  to new and  unvested
               awards in the year of change  equal to that which would have been
               recognized  had SFAS No.  123 been  adopted  as of its  effective
               date,  for fiscal years  beginning  after  December 15, 1994. The
               retrospective  restatement  method recognizes stock  compensation
               costs for the year of change and  restates  financial  statements
               for  all  prior  periods  presented  as  though  the  fair  value
               recognition provisions of SFAS No. 123 had been adopted as of its
               effective date. Since the Company does not
<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


               intend to  voluntarily  adopt the fair value  provisions  of FASB
               123,  adoption of SFAS 148 did not have a material  effect on the
               financial  condition  or results of  operations  of the  Company.
               However,  pro forma disclosures required by SFAS 148 are included
               in the Company's interim financial statements, as required.

               In  April  2003,  the FASB  issued  SFAS No.  149,  Amendment  of
               Statement 133 on Derivative  Instruments and Hedging  Activities.
               SFAS No.  149  amends  and  clarifies  financial  accounting  and
               reporting   for   derivative   instruments,   including   certain
               derivative instruments embedded in other contracts  (collectively
               referred to as derivatives) and for hedging activities under SFAS
               No.  133,  Accounting  for  Derivative  Instruments  and  Hedging
               Activities.  This  Statement is effective for  contracts  entered
               into or modified  after June 30, 2003,  with certain  exceptions,
               and for hedging  relationships  designated  after  September  30,
               2003. The adoption of SFAS No. 149 did not have a material effect
               on the Company's results of operations and financial position.

               In May  2003,  the FASB  issued  SFAS No.  150,  "Accounting  for
               Certain  Financial   Instruments  with  Characteristics  of  both
               Liabilities  and  Equity."  SFAS No. 150  requires  that  certain
               financial  instruments,  which under  previous  guidance may have
               been  accounted  for as  equity,  must  now be  accounted  for as
               liabilities  (or an asset in some  circumstances).  The financial
               instruments  affected include mandatory redeemable stock, certain
               financial  instruments  that require or may require the issuer to
               buy back some of its shares in exchange  for cash or other assets
               and certain obligations that can be settled with shares of stock.
               This  Statement is effective for all such  financial  instruments
               entered  into or modified  after May 31, 2003,  and  otherwise is
               effective at the beginning of the first interim period  beginning
               after June 15, 2003.  The adoption of SFAS No. 150 did not have a
               material effect on the Company's financial position or results of
               operations.

               Effective  December 31, 2003, the Company  adopted EITF Issue No.
               03-1,  The  Meaning of  Other-Than-Temporary  Impairment  and Its
               Application  to  Certain  Investments  ("EITF  03-1").  EITF 03-1
               provides   guidance   on   the   disclosure    requirements   for
               other-than-temporary  Impairments of debt and  marketable  equity
               investments  that are accounted for under  Statement of Financial
               Accounting  Standards  ("SFAS") No. 115,  Accounting  for Certain
               Investments in Debt and Equity  Securities.  The adoption of EITF
               03-1  requires the Company to include  certain  quantitative  and
               qualitative disclosures for debt and marketable equity securities
               classified as available-for-sale  or held-to-maturity  under SFAS
               115 that are impaired at the balance  sheet date but for which an
               other-than-temporary  impairment  has not  been  recognized.  The
               adoption  of EITF  03-1 did not  have a  material  impact  on the
               Company's financial position or results of operations.

               In April 2003,  the FASB  cleared  Statement  133  Implementation
               Issue  No.  B36,  Embedded   Derivatives:   Modified  Coinsurance
               Arrangements and Debt  Instruments  That Incorporate  Credit Risk
               Exposures  That Are  Unrelated or Only  Partially  Related to the
               Creditworthiness  of the Obligor under Those Instruments  ("Issue
               B36").  Issue B36 concluded  that (i) a company's  funds withheld
               payable and/or receivable under certain reinsurance arrangements,
               and  (ii)  a  debt  instrument  that  incorporates   credit  risk
               exposures  that are  unrelated or only  partially  related to the
               creditworthiness  of the obligor  include an embedded  derivative
               feature  that is not  clearly  and  closely  related  to the host
               contract.  Therefore,  the  embedded  derivative  feature must be
               measured at fair value on the  balance  sheet and changes in fair
               value reported in income.  Issue B36 became  effective on October
               1, 2003.  The  adoption  of Issue No. B36 did not have a material
               impact  on  the  Company's   financial  position  or  results  of
               operations.

               In January 2003, the Financial  Accounting Standards Board (FASB)
               issued Interpretation No. 46, "Consolidation of Variable Interest
               Entities,  an  Interpretation  of ARB No. 51",  and  subsequently
               issued a revision to this  Interpretation  in December 2003. This
               Interpretation    addresses   the   consolidation   by   business
               enterprises  of  variable  interest  entities  as  defined in the
               Interpretation.  The  Interpretation  applies  to those  variable
               interest entities  considered to be  special-purpose  entities no
               later than  December 31, 2003.  The  Interpretation  must also be
               applied to all other  variable  interest  entities  no later than
               March 31,  2004.  The adoption of  Interpretation  No. 46 did not
               have a material  effect on the  financial  position or results of
               operations of the Company because no variable  interest  entities
               were required to be consolidated.



<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


2. Basis of financial statements

The more significant U.S.  generally accepted  accounting  principles applied in
the  preparation  of  financial  statements  that  differ  from  life  insurance
statutory accounting practices prescribed or permitted by regulatory authorities
are as follows:

a.   Costs of acquiring  new business  are deferred and  amortized,  rather than
     being charged to operations as incurred.

b.   The  liability  for  future  policy  benefits  and  expenses  is  based  on
     reasonable   estimates   of  expected   mortality,   morbidity,   interest,
     withdrawals and future maintenance and settlement expenses,  rather than on
     statutory rates for mortality and interest.

c.             The liability for policyholder funds associated with universal
               life and certain annuity contracts is based on the provisions of
               Statement of Financial Accounting Standards No. 97, rather than
               on the statutory rates for mortality and interest.

d.   Investments in securities  are reported as described in Note 1.(d),  rather
     than in accordance with valuations  established by the National Association
     of Insurance  Commissioners  ("NAIC").  Pursuant to NAIC valuations,  bonds
     eligible for amortization are reported at amortized value; other securities
     are carried at values prescribed by or deemed acceptable by NAIC.

e.   Deferred  income  taxes,  if  applicable,  are  recognized  for  future tax
     consequences  attributable to differences  between the financial  statement
     carrying  amounts of existing assets and  liabilities and their  respective
     tax bases.

f.   The  statutory  liabilities  for the asset  valuation  reserve and interest
     maintenance reserve have not been provided in the financial statements.

g.   Certain  assets,  principally  receivables  from agents and equipment,  are
     reported as assets rather than being charged directly to surplus.

h.   Costs  attributable  to the public  offering of the common shares have been
     reclassified from accumulated surplus to capital in excess of par.

i.   Realized  gains  or  losses  on the sale or  maturity  of  investments  are
     included  in the  statement  of income  and not  recorded  net of taxes and
     amounts  transferred  to the  interest  maintenance  reserve as required by
     statutory accounting practices.

j.   Certain  proceeds  from a  note  payable  (note  9)  that  are  treated  as
     shareholders'  equity for  statutory  purposes  are  treated as a liability
     under U.S. generally accepted accounting principles.

Reinsurance  assets and  liabilities  are  reported on a gross basis rather than
shown on a net basis as permitted by statutory accounting practices.


<PAGE>
<TABLE>
<CAPTION>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


A  reconciliation  of net income  (loss) for the years ended  December 31, 2003,
2002, 2001 and shareholders' equity as of December 31, 2003 and 2002 between the
amounts  reported on a statutory basis and the related amounts  presented on the
basis of U.S. generally accepted accounting principles is as follows:

                                                 Net Income (loss)                      Shareholders' Equity
                                             Years Ended December 31,                      December 31,
                                             ------------------------                     --------------
                                     2003             2002               2001        2003                 2002
                                     ----             ----               ----        ----                 ----
As reported on a
Statutory basis                 $  2,431,499    $   (427,439)   $   (429,143)   $ 11,443,488    $  8,582,968
                                ------------    ------------    ------------    ------------    ------------
Adjustments:
<S>                               <C>              <C>            <C>            <C>            <C>
  Deferred policy acquisition
     costs, net                      (83,886)        159,459        (298,428)     13,624,107      13,391,535
Future policy benefits, un-
     earned premiums
     and policyholders' funds     (2,460,967)        291,503       1,191,046      (7,727,500)     (5,064,659)
 Deferred  income taxes              246,309          16,500        (159,189)       (751,620)       (878,152)
 Asset valuation reserve                  --              --              --         431,305         471,993
 Interest maintenance
      reserve                        (42,006)        (34,476)        (34,017)        388,601         430,606
 Non-admitted assets                      --              --        (100,000)        617,221         859,361
 Unrealized gains
     -SFAS 115                            --              --              --         580,481         795,097
Capital and surplus note                  --              --              --      (1,000,000)     (1,000,000)
 Other adjustments, net             (186,820)        (76,113)        (99,293)       (591,597)       (442,979)
                                ------------    ------------    ------------    ------------    ------------
 Net difference                   (2,527,370)        356,873         500,119       5,570,998       8,562,802
                                ------------    ------------    ------------    ------------    ------------
As reported on a
     GAAP basis                 $    (95,871)   $    (70,566)   $     70,976    $ 17,014,486    $ 17,145,770
                                ============    ============    ============    ============    ============
</TABLE>

Under  applicable  laws and  regulations,  the  Company is  required to maintain
minimum  surplus as to  policyholders,  determined in accordance with regulatory
accounting practices, in the aggregate amount of approximately $1,799,000.

The  payment of  dividends  by the Company is subject to the  regulation  of the
State of Florida Department of Insurance.

The Insurance  Commissioner's  approval is not required if the dividend is equal
to or  less  than  the  greater  of:  (a)  10% of the  Company's  surplus  as to
policyholders'  derived from realized net operating  profits on its business and
net realized  capital gains; or (b) the Company's  entire net operating  profits
and realized net capital gains derived during the immediately preceding calendar
year, if the Company will have surplus as to policyholders equal to or exceeding
115% of the minimum required  statutory  surplus as to  policyholders  after the
dividend is declared  and paid.  As a result of such  restrictions,  the maximum
dividend,  which may be paid by the Company during 2004 without prior  approval,
is approximately  $376,000.  Accordingly,  GAAP excess earnings over a statutory
basis are not available for dividends.

The Risk-Based  Capital  ("RBC") for Life and/or Health  Insurers Model Act (the
"Model Act") was adopted by the National Association of Insurance  Commissioners
(NAIC) in 1992.  The main  purpose  of the  Model  Act is to  provide a tool for
insurance regulators to evaluate the capital of insurers.  Based on calculations
using the appropriate NAIC formula, the Company exceeded the RBC requirements at
December 31, 2003.



<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



3.   Investments

    (a) Equity securities and fixed maturities

     Equity securities  consist of $424,165 and $309,218 of common stock at fair
     value at December 31, 2003 and 2002 respectively.

     Unrealized (depreciation)  appreciation in investments in equity securities
     for the  years  ended  December  31,  2003,  2002,  and  2001 is  $114,947,
     $(62,965) and $24,632, respectively.

     At December 31, 2003, investments in debt securities at fair value and cash
     totaling  $21,983,142  were  restricted  under the  terms of a  reinsurance
     agreement with Security National Life Insurance Company. See note 7.

     The  amortized  cost and  estimated  fair  values  of  investments  in debt
     securities are as follows:
<TABLE>
<CAPTION>

                                                    Gross          Gross       Estimated
                                   Amortized     Unrealized      Unrealized      Fair
                                      Cost          Gains          Losses        Value
                                   ---------      ----------     ----------     ---------
<S>                              <C>            <C>              <C>          <C>
December 31, 2003:
     Held-to-maturity:
       U.S. Treasury securities
       and obligations of U.S.
       government corporations
       and agencies (guaranteed)  $     --       $     --      $     --      $     --

     Corporate securities            3,691,064       348,794        10,370     4,029,488

     Mortgage-backed securities         --            --            --            --
                                   -----------   -----------   -----------   -----------
                                     3,691,064       348,794        10,370     4,029,488
                                   -----------   -----------   -----------   -----------

     Available-for-sale:
       U.S. Treasury securities
       and obligations of U.S.
       government corporations
       and agencies (guaranteed)       596,430        81,604            --       678,034

     Corporate securities           12,560,907       974,376            --    13,535,283

     Mortgage-backed securities             --            --            --            --
                                   -----------   -----------   -----------   -----------
                                    13,157,337     1,055,980            --    14,213,317
                                   -----------   -----------   -----------   -----------
                                   $16,848,401   $ 1,404.774   $    10,370   $18,242,805
                                   ===========   ===========   ===========   ===========
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


                                                     Gross         Gross         Estimated
                                      Amortized    Unrealized    Unrealized       Fair
                                        Cost         Gains         Losses         Value
                                      --------     ---------     ----------     ---------
<S>                              <C>             <C>           <C>            <C>
December 31, 2002:
     Held-to-maturity:
       U.S. Treasury securities
       and obligations of U.S.
       government corporations
       and agencies (guaranteed)  $         --  $         --   $        --    $    --

     Corporate securities            3,690,569       201,213        12,837     3,878,945

     Mortgage-backed securities        280,970         7,113            --       288,083
                                   -----------   -----------   -----------   -----------
                                     3,971,539       208,326        12,837     4,167,028
                                   -----------   -----------   -----------   -----------

     Available-for-sale:
       U.S. Treasury securities
       and obligations of U.S.
       government corporations
       and agencies (guaranteed)       595,993       103,697           --        699,690

     Corporate securities           16,482,248     1,258,023           --     17,740,271

    Mortgage-backed securities             --            --            --          --
                                   -----------   -----------   -----------   -----------
                                    17,078,241     1,361,720            --    18,439,961
                                   -----------   -----------   -----------   -----------
                                   $21,049,780   $ 1,570,046   $    12,837   $22,606,989
                                   ===========   ===========   ===========   ===========
</TABLE>


     Fair values reflected in available-for-sale and held-to-maturity categories
     are based on NAIC  values,  versus  values  associated  with normal  market
     pricing  services.   The  estimated  difference  for  both  categories  was
     immaterial for all years presented.

     Unrealized appreciation (depreciation) of fixed maturities for years ending
     December 31, 2003, 2002 and 2001 is $(162,806),  $558,067,  and $1,152,189,
     respectively.

     The amortized cost and estimated fair value of fixed maturities at December
     31,  2003,  by  contractual   maturity,   are  summarized  below.  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.

Fixed maturity securities held-to-maturity:
                                                                Estimatd
                                              Amortized Cost   Fair Value
             Due in 2004                     $         --   $         --
             Due in 2005 through 2008            1,101,703      1,240,126
             Due in 2009 through 2013            2,043,405      2,241,130
             Due after 2013                        545,956        548,232

             Mortgage-backed securities              --             --
                                                ----------     ----------
                                                $3,691,064     $4,029,488
                                                ==========     ==========
Fixed maturity securities available-for-sale:

             Due in 2004                       $ 2,668,412    $ 2,734,176
             Due in 2005 through 2008            9,242,775     10,044,656
             Due in 2009 through 2013            1,148,267      1,320,516
             Due after 2013                         97,883        113,969

Mortgage-backed securities                           --              --
                                               -----------    -----------
                                               $13,157,337    $14,213,317
                                               ===========    ===========

<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


Proceeds from the sale of equity  securities and fixed maturities  available for
sale and the related realized gains and losses are summarized as follows:

                                        2003            2002            2001
                                     ----------      ----------     ----------
Proceeds from sale of
    equity securities                $       --     $   782,048      $  794,356
                                    ===========     ===========      ==========
Proceeds from sale of
    fixed maturities
    available-for-sale              $ 3,860,000     $ 3,300,000     $ 2,814,816
                                    ===========     ===========     ===========
Realized gains (losses)
Fixed maturities:
Gross realized gains                 $       --   $          --    $     --
Gross realized (losses)                      --              --          --
Equity securities:
Gross realized gains                         --              --          --
Gross realized (losses)                      --          (1,038)         --
                                    -----------     -----------    -----------
                                    $        --     $    (1,038)   $     --
                                    ===========     ===========    ===========

There were no realized gains and losses for fixed maturity securities classified
as  available-for-sale  and  held-to-maturity  that were called  during the year
ended December 31, 2003, 2002 and 2001.

Investments,  aggregated  by issuer,  in excess of 10% of  shareholders'  equity
(before net  unrealized  gains and losses on  available-for-sale  securities) at
December 31, 2003 and 2002, other than  investments  issued or guaranteed by the
United States government are as follows:

      2003                               Carrying Amount
      ----                               ---------------
        Dean Witter Discover                $4,023,115
        Philip Morris, Inc.                  2,021,684

      2002
      ----
         Dean Witter Discover               $4,049,379
         Philip Morris Inc.                  5,529,454

      (b) Concentrations of credit risk

          At  December  31,  2003 and  2002,  the  Company  owned  $488,000  and
          $485,000,  respectively,  of less-than-investment grade corporate debt
          securities.  The Company also invests in subsidized  and  unsubsidized
          student loans totaling $320,746,  and $97,671 at December 31, 2003 and
          2002,  respectively,  which  are  guaranteed  by the U.S.  government.
          Subsequent to December 31, 2003, all of these loans were sold at their
          unpaid principal balance.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


      (c)   Investment income

          Net investment income for the years ended December 31, 2003, 2002, and
          2001 consists of the following:

                                              2003         2002          2001
                                              ----         ----          ----
Interest:
Fixed maturities                          $1,429,502    $1,526,706    $1,790,992
Policy and student loans                     496,142       515,141       468,904
Short-term investments                     1,538,540     1,235,823     1,105,434
Mortgage loans                               170,982       179,193       206,212
Rental income                                376,613       388,843       304,879

Dividends on equity securities
      common  stock, including
      mutual fund                                691           384         --
                                          ----------    ----------    ----------
                                           4,012,470     3,846,090     3,876,421
Less investment expenses                       7,341        10,670         9,455
                                          ----------    ----------    ----------
                                          $4,005,129    $3,835,420    $3,866,966
                                          ==========    ==========    ==========

      (d)   Investments on deposit

          In order to comply with  statutory  regulations,  investments  were on
          deposit with the Insurance Departments of certain states as follows:

                                        2003            2002             2001
                                        ----            ----             ----

Florida                             $1,703,992       $1,702,867       $1,707,042
Alabama                                100,526          100,634          100,737
South Carolina                         301,577          301,903          302,210
Georgia                                251,488          252,233          252,933
Indiana                                216,096          201,787          202,347
                                    ----------       ----------       ----------
                                    $2,573,679       $2,559,424       $2,565,269
                                    ==========       ==========       ==========

          Certain of these assets,  totaling  approximately $850,000 for each of
          the years ended  December 31, 2003 and 2002,  are  restricted  for the
          future benefit of policyholders in a particular state.

4. Deferred policy acquisition costs

Deferred policy acquisition costs at December 31, 2003, 2002 and 2001 consist of
the following:

                                         2003            2002           2001
                                         ----            ----           ----
Deferred policy acquisition
     costs at beginning of year      $ 13,391,535    $ 12,974,390  $ 13,211,413
                                     ------------    ------------  ------------
Policy acquisition costs deferred:
Commissions                             1,339,106       1,544,860     1,249,453
Underwriting & issue costs                422,744         242,162       269,070
Other                                     173,724         342,403       380,448
Change in unrealized appreciation
     (depreciation)                       336,457         257,686        61,405
                                     ------------    ------------  ------------
                                        2,272,031       2,387,111     1,960,376
Amortization of deferred policy
     acquisition costs                 (2,039,459)     (1,969,966)   (2,197,399)
                                     ------------    ------------  ------------
Deferred policy acquisition
     Costs at end of year            $ 13,624,107    $ 13,391,535  $ 12,974,390
                                     ============    ============  ============

<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)




5.    Property and equipment

      Property and equipment consists of the following:

                                                 December 31,      December 31,
                                                      2003            2002
                                                -------------     -----------
Land                                             $   982,027       $   982,027
Building and improvements                          2,445,931         2,441,849
Furniture and equipment                              954,954           968,761
                                                 -----------       -----------
                                                   4,382,912         4,392,637
Less accumulated depreciation                     (2,069,793)       (1,962,233)
                                                 -----------       -----------
                                                 $ 2,313,119       $ 2,430,404
                                                 ===========       ===========

Depreciation  expense for the years ended December 31, 2003,  2002, 2001 totaled
$126,712, $129,330, and $129,330, respectively.

6.    Future policy benefits

At December 31, 2003 and 2002,  future policy  benefits,  exclusive of universal
life and flexible term annuities consist of the following:

                                                 December 31,      December 31,
                                                      2003            2002
                                                -------------     -----------
Life insurance                                     $4,006,528       $3,291,275
Annuities                                              68,357           64,738
Accident & health insurance                           204,396          161,468
                                                   ----------       ----------
Total life & health
 future policy benefits                            $4,279,281       $3,517,481
                                                   ==========       ==========

Life insurance  in-force  aggregated  approximately $1.5 billion at December 31,
2003,  and  2002.  Mortality  and  withdrawal  assumptions  are  based  upon the
Company's  experience  and  actuarial  judgment  with an allowance  for possible
unfavorable deviations from the expected experience.

The mortality tables used in calculating benefit reserves for non universal life
contracts are the 1975-1980 Basic Tables and the 1980 U.S. Population  mortality
table modified for company expected experience.

For the principal  non-universal  life  policies an interest  rate  beginning at
6.75% net of investment expenses was used. For universal life policies,  spreads
between  1.25%  and  1.50%  were  used in  developing  the  FAS 97  amortization
schedules.

7.   Reinsurance

     The Company routinely cedes and, to a limited extent,  assumes  reinsurance
     to limit its  exposure to loss on any single  insured.  Ceded  insurance is
     treated as a risk and liability of the assuming companies.

     As of December 31, 2003,  ordinary  insurance coverage in excess of $75,000
     is  reinsured;  however  for some  policies  previously  issued,  the first
     $30,000,  $40,000  or  $50,000  was  retained  and the  excess  ceded.  The
     retention limit for some substandard risks is less than $75,000.  Reinsured
     risks  would give rise to  liability  to the  Company in the event that the
     reinsuring company was unable to meet its obligations under the reinsurance
     agreement  in force,  as the  Company  remains  primarily  liable  for such
     obligations.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)




     Under  reinsurance  agreements  exclusive of the MEGA and SNLIC  agreements
     discussed below, the Company has ceded premium of $344,736,  $303,536,  and
     $278,828 included in reinsurance premiums ceded, and received recoveries of
     $663,595,  $286,817  and  $624,314,  included in  annuity,  death and other
     benefits for the years ended December 31, 2003, 2002, 2001, respectively.

     On December 31, 1992, the Company entered into a reinsurance agreement with
     The MEGA Life and Health Insurance Company ("MEGA"), ceding an 18% share of
     all  universal  life policies in force at December 31, 1992 as a measure to
     manage the future  needs of the  Company.  The  reinsurance  agreement is a
     co-insurance  treaty  entitling  the assuming  company to 18% of all future
     premiums,  while making them  responsible  for 18% of all future claims and
     policyholder loans relating to the ceded policies. In addition, the Company
     receives certain commission and expense reimbursements.

     For the years ended  December  31,  2003,  2002,  2001,  the Company  ceded
     premiums  to  MEGA  of  $311,623,   $344,981  and  $365,247,   included  in
     reinsurance  ceded,  and  received  recoveries  of  $530,063,  $496,751 and
     $494,683, included in annuity, death and other benefits,  respectively. The
     funds held related to reinsurance  treaties of  $1,294,589,  and $1,334,963
     represent  the 18% share of policy loans ceded to the reinsurer at December
     31, 2003 and 2002, respectively.

     On December 26, 2003, the Company entered into a partially  Coinsurance and
     a  partially  Modified  Coinsurance   Agreement  (CoModco  Agreement)  with
     Security National Life Insurance Company (Security National Life) effective
     September  30,  2003.  The  Company  ceded  50% of  certain  blocks  of its
     universal life business to Security  National  Life. The total  liabilities
     reinsured  for this  business  on  October  1, 2003 were  $22,195,259.  The
     Company  received  a  ceding  commission  from  Security  National  Life of
     $3,200,000  and will pay a risk charge to Security  National  Life of 1% of
     the outstanding  Coinsurance per calendar  quarter.  The Company put into a
     bank trust investment grade bonds, which equal the outstanding  liabilities
     ceded to  Security  National  Life.  Security  National  Life is named as a
     beneficiary  of the  trust  and the  terms of the  trust  are such that the
     Company  will  maintain  investment  grade  bonds in the trust to equal the
     outstanding  liabilities ceded to Security National Life. Under the CoModco
     Agreement the Coinsurance and the decrease in reserves are equal.  Under U.
     S. GAAP the  Coinsurance  and the reserve  decreases are netted since these
     are non-cash  items,  and the Company  expects to recapture the Coinsurance
     from future profits of the reinsured business. The Company has the right to
     recapture  the business at any time after  September  30, 2004 upon 90 days
     advance notice. As of December 31, 2003 the outstanding  Coinsurance amount
     was  $3,075,137.  The  Company  recorded  as an expense  the risk charge of
     $32,000 for the fourth quarter.

8.   Notes payable

     As of  December  31,  2003,  the  Company  had an unused  line of credit of
     $5,000,000,  which is secured by student loans  equaling 115% of the unpaid
     principal balance. The facility bears interest at a variable rate per annum
     payable monthly and expires on April 30, 2007.

9. Notes payable to related parties

     A note payable to a related party  consists of $1,000,000  due on demand to
     Security   National  Life   Insurance   Company.   The  note  qualifies  as
     shareholders'  equity for statutory  accounting purposes in accordance with
     Section 628.401 of the Florida Statutes. At December 31, 2003 and 2002, the
     note bears  interest at 9.0%  (payable  monthly);  principal  repayment  is
     contingent  upon the  Company  maintaining  statutory  surplus in excess of
     $1,799,000 and obtaining  approval in advance by the Florida  Department of
     Insurance.  Interest expense relating to the balance of the note payable to
     the related party during 2003, 2002, and 2001 aggregated $90,000,  $90,000,
     and $97,000,  respectively.  Also,  at December 31, 2003,  the Company owed
     $433,100  as  a  short-term  borrowing  from  Security  National  Financial
     Corporation.

<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)


10.    Income taxes

     The Company's income tax liability at December 31 is summarized as follows:

                                                    2003               2002
                                                    ----               ----

Current                                          $   18,585               --
Deferred                                            948,931           1,062,802
                                                 ----------          ----------
Total                                            $  967,516          $1,062,802
                                                 ==========          ==========

     Total  income  taxes,  including  taxes  on  the  change  in the  value  of
     investments  for the years ended December 31, 2003,  2002, and 2001 were as
     follows:

                                                 2003         2002        2001
                                                 ----         ----        ----

Tax expense (benefit)  in operations         $ (74,488)   $ (12,254)   $  16,865
Tax on unrealized appreciation
    (depreciation) of  investments             (20,798)     183,865      372,208
                                             ---------    ---------    ---------
                                             $ (95,286)   $ 171,611    $ 389,073
                                             =========    =========    =========

     Income tax expense  (benefit) for the years ended December 31, 2003,  2002,
     2001 is summarized as follows:

                                     2003               2002             2001
                                     ----               ----             ----

Current:
Federal                            $  8,923          $  4,246          $ (5,758)
State                                 9,662                --                --
                                   --------          --------          --------

                                     18,585             4,246            (5,758)
                                   --------          --------          --------
Deferred:
 Federal                            (79,680)          (14,678)           20,691
 State                              (13,393)           (1,822)            1,932
                                   --------          --------          --------

                                    (93,073)          (16,500)           22,623
                                   --------          --------          --------

                                   $(74,488)         $(12,254)         $ 16,865
                                   ========          ========          ========

     Income tax expense  (benefit) for the years ended December 31, 2003,  2002,
     2001 differs from  "expected"  tax  (computed by applying the U.S.  federal
     income tax rate to pretax income) as a result of the following:

                                                2003        2002        2001
                                                ----        ----        ----
Computed "expected" tax expense
   (benefit)                                 $(59,351)   $(28,158)   $ 29,866
Increase (reduction) in income
   taxes resulting from:
     Small life insurance
          company deduction                    30,523      17,107      (7,162)
     Changes in the valuation allowance
           for deferred tax assets,
           allocated to
           income tax expense                  (41,929)       --       (7,115)
     State taxes, net of federal
     income tax benefit                         (3,731)    (1,203)      1,276
                                             ---------   --------    --------
                                             $(74,488)   $(12,254)   $ 16,865
                                             ========    ========    ========


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



Under tax laws in effect prior to 1984, a portion of a life insurance  company's
gain from operations was not currently taxed but was accumulated in a memorandum
"Policyholders' Surplus Account." As a result of the Tax Reform Act of 1984, the
balance of the Policyholders' Surplus Account has been frozen as of December 31,
1983 and no additional  amounts will be  accumulated  in this account.  However,
distributions from the account will continue to be taxed, as under previous law,
if any of the following conditions occur:

     a.   The  Policyholders'  Surplus  exceeds  a  prescribed  maximum,  or;
     b.   Distributions, other than stock dividends, are made to shareholders in
          excess of Shareholders' Surplus, as defined by prior law, or;
     c.   The entity ceases to qualify for taxation as a life insurance company,
          or;
     d.   The  tax-deferred  status of the  Policyholder's  Surplus  Account  is
          modified by future tax legislation.

At  December  31,  2003,  the  balance  of the  Policyholders'  Surplus  account
aggregated  approximately $236,000. The Company has not recorded deferred income
taxes totaling  approximately  $80,000 relating to this amount as it has no plan
to distribute the amounts in Policyholders'  Surplus in the foreseeable  future.
The Tax Reform Act of 1986 enacted a new separate  parallel tax system  referred
to as the  Alternative  Minimum  Tax (AMT)  system.  AMT is based on a flat rate
applied to a broader  tax base.  It is  calculated  separately  from the regular
federal  income tax and the  higher of the two taxes is paid.  The excess of the
AMT over regular tax is a tax credit,  which can be carried forward indefinitely
to reduce regular tax  liabilities  of future years.  In 2003,  2002,  2001, AMT
exceeded regular tax by $8,758,  $-0-, and $-0-,  respectively.  At December 31,
2003,  the AMT tax  credit  available  to  reduce  future  regular  tax  totaled
$227,714.

The tax effect of temporary  differences that give rise to significant  portions
of the deferred tax assets and deferred tax liabilities at December 31, 2003 and
2002 are presented below:

                                                              2003    2002
                                                              ----    ----
Deferred tax assets:
Unearned revenue, due to deferral of
  "front-end" fee                                 $ 1,635,912    $ 1,717,492
Policy liabilities and accruals,
   principally due to adjustments to
   reserves for tax purposes                        2,107,516      1,718,852
Deferred policy acquisition costs
    related to unrealized
    appreciation (depreciation)                        89,609         89,390

Alternative minimum tax credit
   carry forwards                                     227,715        269,643
                                                  -----------    -----------

Total gross deferred tax assets                     4,060,752      3,795,377
Less valuation allowance                             (227,714)      (269,643)
                                                  -----------    -----------

Net deferred tax assets                             3,833,038      3,525,734
                                                  -----------    -----------

Deferred tax liabilities:
Deferred policy acquisition costs                  (4,756,712)    (4,544,629)
Other                                                 412,351        465,440
Unrealized (appreciation) depreciation
   of securities                                     (437,608)      (509,347)
                                                  -----------    -----------

Total gross deferred tax liabilities               (4,781,969)    (4,588,536)
                                                  -----------    -----------

Net deferred tax (liability)                      $  (948,931)   $(1,062,802)
                                                  ===========    ===========

The net change in the total valuation allowance for the years ended December 31,
2003 and 2002, was a (decrease) increase of $(41,929), and $-0-, respectively.


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



In assessing  the  realizability  of deferred tax assets,  management  considers
whether it is more likely than not that some  portion or all of the deferred tax
assets will not be realized.  The ultimate realization of deferred tax assets is
dependent  upon the  generation of future  taxable  income during the periods in
which those temporary  differences become deductible.  Management  considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
and tax planning  strategies in making this assessment.  Based upon the level of
historical  taxable  income and  projections  for future taxable income over the
periods which the deferred tax assets are deductible,  management believes it is
more likely than not the Company will  realize the benefits of these  deductible
differences, net of the existing valuation allowances at December 31, 2003.

11.  Related party transactions

     The Company's  general  agent,  Insuradyne  Corporation,  is a wholly-owned
     subsidiary of Security National Financial Corporation.  The balances due to
     an affiliated insurance agency reflected in the accompanying balance sheets
     principally  represent  earned  commission due to  Insuradyne.  The Company
     incurred commission expense to Insuradyne aggregating $97,124, $109,268 and
     $122,787, in 2003, 2002, and 2001, respectively. These amounts are included
     as  components  of  acquisition  costs  deferred and related  amortization.
     Insuradyne incurred  insurance-related  expenses aggregating $83, $206, and
     $77 in 2003,  2002,  2001,  respectively.  The amount due to  Insuradyne at
     December 31,2003 and 2002 was $57,065 and $83,941, respectively.

     Effective  December 31, 1998,  the Company  entered into an  Administrative
     Services  Agreement with its ultimate  parent Security  National  Financial
     Corporation  (Security  National).  Under the  terms of the  Administrative
     Services  Agreement,  all of the Company's  employees  became  employees of
     Security National.  Administrative  functions  previously  performed by the
     Company are now being  furnished to the Company  under the  Agreement.  The
     Company pays to Security National $250,000 per month or $3 million per year
     for these administrative services.

     On  December  28,  1998 the  Company  entered  into a Loan  Funding and Fee
     Agreement and Agency  Agreement (the  "Agreement")  with Security  National
     Mortgage Company  ("SNMC"),  a subsidiary of Security  National.  Under the
     terms of the Agreement,  SNMC assigns its interest in residential  mortgage
     loans that have been pre-sold to third party investors to the Company.  The
     Company  purchases  these  loans and holds them as  short-term  investments
     until it receives the proceeds from the third party investors.  The Company
     receives  interest  income  from  SNMC  based  upon how long the  loans are
     outstanding. At December 31, 2003 and 2002 the Company had outstanding loan
     purchases  of  $17,497,249,  and  $16,283,759,  respectively.  Included  in
     investment  income is  $1,478,281,  $1,130,231  and  $984,872 for the years
     ended December 31, 2003, 2002, and 2001, respectively.

     The Company  received for the years ended December 31, 2003, 2002 and 2001,
     $167,349,  $168,933,  and  $132,141,  respectively,  as rental  income from
     Security  National  for a lease of office space in the  Company's  building
     under the terms of the Administrative Services Agreement.

     The Company received for the years ended December 31, 2003, 2002, and 2001,
     $33,767,  $75,622,  and  $77,394,  respectively,  in  interest  income from
     Security  National for short-term  loans of which $28,091 and $113,707 were
     outstanding as of December 31, 2003 and 2002, respectively.

12. Earnings (loss) per share

     The  following  table  sets  forth the  computation  of basic  and  diluted
     earnings per share:

                                                2003        2002        2001
                                                ----        ----        ----
        Numerator for basic and diluted
        Earnings per share:
          Net income (loss)               $   (95,871)   (70,566)  $    70,976
        Denominator:
          Denominator for basic earnings
          per share weighted average shares  2,078,548  1,979,291    1,907,989

          Effective dilutive securities:
            Agent stock options                 --        --             --
<PAGE>

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)

                                               2003       2002         2001
                                               ----       ----         ----
     Dilutive potential common shares           --         --           --
     Denominator for diluted earnings
        per share weighted average
        shares and assumed conversions       2,078,548   1,979,291   1,907,989
     Basic earnings (loss) per share             $(.05)      $(.04)       $.04
     Diluted earnings (loss) per share           $(.05)      $(.04)       $.04

13. Agents' incentive stock bonus plan

     The Company has an incentive bonus plan for agents that was adopted January
     1, 1995 by the Company's Board of Directors and effective  through December
     31, 2001.  Agents that qualified  under the plan had the option to purchase
     shares of common stock. The number of shares of common stock was determined
     on the date of the award as the number of whole  shares  equal to the award
     based on the  applicable  stock  price on December 31 of the year the agent
     had  qualified for the bonus.  For each share of common stock  purchased by
     the agent,  the Company will  concurrently  award an  equivalent  number of
     shares (this is the Company's matching  contribution).  In 2003 the Company
     incurred $1,354 relating to the Company's matching number of shares.  There
     were no awards  granted  in 2003,  2002,  and 2001.  If the agent  does not
     purchase the shares within the designated  period,  then the agent forfeits
     their rights to purchase the shares of common stock as well as the matching
     number of shares to be contributed by the Company.

14. Disclosures about fair value of financial instruments

     Statement of Financial  Accounting Standards No. 107 Disclosures About Fair
     Value of Financial  Instruments (SFAS 107) requires the Company to disclose
     estimated fair value  information.  The following  methods and  assumptions
     were used by the Company in estimating fair values of financial instruments
     as disclosed herein:

     Cash and cash  equivalents,  short-term  investments and policy and student
     loans:  The  carrying  amounts  reported  in the  balance  sheet  for these
     instruments approximate their fair value.

     Investment securities  available-for-sale and held-to-maturity:  Fair value
     for fixed  maturity and equity  securities is based on quoted market prices
     at the reporting date for those or similar investments.

     Policyholders'  account balances:  The fair values for policyholder account
     balances are based on their approximate surrender values.

     The following table presents the carrying amounts and estimated fair values
     of financial instruments held at December 31, 2003 and 2002. The fair value
     of a financial  instrument is the amount at which the  instrument  could be
     exchanged in a current transaction between willing parties.
<TABLE>
<CAPTION>

                                                  2003                           2002
                                         ----------------------             ----------------
                                        Carrying        Estimated        Carrying        Estimated
                                         amount         fair value        amount        fair value
                                         -------        ----------       --------       ----------
<S>                                    <C>           <C>               <C>             <C>
Financial assets:
Fixed maturities  held-to-maturity
   (see note 3)                        $ 3,691,064   $ 4,029,488       $ 3,971,539     $ 4,167,028
Fixed maturities available-for-
   sale (see note 3)                    14,213,317    14,213,317        18,439,961      18,439,961
Equity securities available-for-sale       424,165       424,165           309,218         309,218
Mortgage loans                           2,211,183     2,211,183         2,244,597       2,244,597
Policy and student loans                 8,131,980     8,131,980         8,027,736       8,027,736
Short-term investments                  17,497,249    17,497,249        16,283,759      16,283,759
Cash and cash equivalents                7,075,394     7,075,394         3,067,284       3,067,284

Financial liabilities:
Policy liabilities policyholders'
    account balances                   $46,887,592   $44,348,824       $47,222,857     $44,593,662
</TABLE>


<PAGE>



                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
                    Notes to Financial Statements (continued)



15.  Legal proceedings

     An action was brought against Southern  Security Life Insurance  Company by
     National Group  Underwriters,  Inc.  ("NGU") in state court in the State of
     Texas.  The case was removed by the Company to the United  States  District
     Court for the Northern District of Texas,  Fort Worth Division,  with Civil
     No.  4:01-CV-403-E.  An  amended  complaint  was filed on or about July 18,
     2001.  The  amended  complaint  asserted  that NGU had a contract  with the
     Company  wherein NGU would  submit  applications  for  certain  policies of
     insurance to be issued by the Company.  It is alleged  that  disputes  have
     arisen  between NGU and the  Company  with  regard to the  calculation  and
     payment of certain commissions as well as certain production bonuses.

     NGU alleged that it had been  damaged far in excess of the $75,000  minimum
     jurisdictional limits of the federal court. NGU also sought attorney's fees
     and  costs as well as  prejudgment  and post  judgment  interest.  A second
     amended  complaint and a third amended  complaint,  which  included a fraud
     claim,  were filed.  A motion was filed by the Company to dismiss the third
     amended complaint,  including the fraud claim. The court denied the motion.
     The Company  counterclaimed for what it claimed to be a debit balance owing
     to it pursuant to the relationship  between the parties (the amount subject
     to reduction as premiums are received).  The Company also sought to recover
     attorney's  fees and  costs,  as well as  punitive  damages on three of its
     causes of action.

     Certain   discovery   took  place.   The  federal  case  was  dismissed  by
     stipulation.  The matter was refiled in Texas state court,  Tarrant County,
     Case  No.  348  195490  02.  The  claims  of  the  respective  parties  are
     essentially  the same as those  in  federal  court,  which  claims  include
     fraudulent  inducement relative to entering into a contract,  fraud, breach
     of contract, breach of duty of good faith and fair dealing, attorney's fees
     and exemplary  damages as well as seeking an accounting  and contesting the
     interest  charges.  Certain  depositions  have been taken  since the filing
     again in state  court and further  discovery  is  anticipated.  The Company
     filed a motion for partial summary  judgment with respect to certain items.
     The  court  has yet to rule on the  motion.  A trial is  presently  set for
     October 2004. The Company  intends to vigorously  defend the matter as well
     as prosecute its counterclaim.

     Lawsuits  against  the  Company  have  arisen in the  normal  course of the
     Company's business. However, contingent liabilities arising from litigation
     and other matters are not considered  material in relation to the financial
     position of the Company.

     To the best of the  Company's  knowledge,  it has no  potential  or pending
     contingent  liabilities  that might be material to the Company's  financial
     condition,  results of  operations  or  liquidity  pursuant  to product and
     environmental liabilities.

<PAGE>

<TABLE>
<CAPTION>

                                                                                                          Schedule I

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY
        Summary of Investments Other Than Investments in Related Parties
                                December 31, 2003


                                                              Number of shares or                         Amount at
                                                               units-principal                           which shown
                                                                  amounts of                   Fair        in the
Type of investment                                              bonds or notes     Cost        value     balance sheet
------------------                                             --------------      ----        -----     -------------
<S>                                                           <C>           <C>           <C>           <C>
Fixed maturities held to maturity:
   U.S. Government and government agencies and authorities              --   $        --   $        --   $    --
   Public utilities                                                     --            --            --        --
   Industrial and miscellaneous                                  3,684,773     3,691,064     4,029,488     3,691,064
   Special revenue and special assessment of agencies and
       authorities of governments and political subdivisions            --            --            --        --
                                                               -----------   -----------   -----------   -----------
   Total fixed maturities held to maturity                       3,684,773     3,691,064     4,029,488     3,691,064

Fixed maturities available-for-sale:
   U.S. Government and government agencies and authorities         600,000       596,430       678,034       678,034
   Public utilities                                                655,000       657,200       665,238       665,238
   Industrial and miscellaneous                                 11,700,000    11,903,707    12,870,045    12,870,045
   Special revenue and special assessment of agencies and
       authorities of governments and political subdivisions            --            --            --         --
                                                               -----------   -----------   -----------   -----------

   Total fixed maturities available for sale                    12,955,000    13,157,337    14,213,317    14,213,317
                                                               -----------   -----------   -----------   -----------
                                                                16,639,773   $16,848,401   $18,242,805   $17,904,381
                                                               ===========   -----------   ===========   -----------
Equity securities:
   Common, including investments in mutual funds                    44,602       316,293   $   424,165       424,165
                                                               ===========                 ===========

Mortgage loans                                                                 2,211,183                    2,211,183

Policy loans                                                                   7,811,234                    7,811,234

Student loans                                                                    320,746                      320,746

Short-term investments                                                        17,497,249                   17,497,249
                                                                             -----------                  -----------

   Total investments                                                         $45,005,106                  $46,168,958
                                                                             ===========                  ===========
</TABLE>

See accompanying auditors' report


<PAGE>
<TABLE>
<CAPTION>


                                                                                                              Schedule III
                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                       Supplementary Insurance Information

                          December 31, 2003, 2002, 2001


                                   Future policyn                                   Other
                    Deferred        benefits,          Policy-                      policy
                     policy         loss claims       holders'                     claims &                         Netr
                   acquisition      and loss           account      Unearned       benefits       Premium       investmentg
                       cost           expenses        balances      premiums        payable       revenue         incomes
                   -----------     -------------      --------      --------       --------       -------         -------

<S>           <C>           <C>           <C>           <C>          <C>          <C>           <C>           <C>

2003 Life
  and
  annuities   $13,624,107     4,279,281    46,887,592     4,334,299     798,050     7,334,707     4,005,129     5,599,434
              ===========   ===========   ===========   =========== ===========   ===========   ===========   ===========

2002 Life
  and
  annuities   $13,391,535     3,517,481    47,222,857     4,551,265     701,312     7,075,257     3,835,420     5,343,573
              ===========   ===========   ===========   =========== ===========   ===========   ===========   ===========

2001 Life
  and
  annuities   $12,974,390     2,901,599    47,601,259     4,694,563   1,147,403     6,736,027     3,866,966     4,482,588
              ===========   ===========   ===========   =========== ===========   ===========   ===========   ===========
</TABLE>












See accompanying auditors' report.



                                                            Schedule III

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                       Supplementary Insurance Information

                          December 31, 2003, 2002, 2001


                Benefits      Amortization
                 claims        of deferred
                losses &         policy          Other
               settlement      acquisition     operating
                expenses          costs        expenses
               -----------     -------------   --------

2003 Life
  and
  annuities     5,599,434     2,039,459          3,871,302
              ===========   ===========        ===========

2002 Life
  and
  annuities     5,343,573     1,969,966          3,678,920
              ===========   ===========        ===========

2001 Life
  and
  annuities     4,482,588     2,197,399          3,835,165
              ===========   ===========        ===========












See accompanying auditors' report.


<PAGE>
<TABLE>
<CAPTION>


                                                                  Schedule IV
                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   Reinsurance

                          December 31, 2003, 2002, 2001


                                                       Ceded to          Assumed                        Percentage
                                                         other          from other                      of amount
                                    Direct amount      companies        companies       Net amount     assumed to net
                                    -------------      ---------        ---------       ----------     --------------
<S>                               <C>               <C>              <C>              <C>                       <C>
December 31, 2003:
   Life insurance in force         $  675,447,000   $  401,148,000   $  826,088,000   $1,100,387,000               75%
                                   ==============   ==============   ==============   ==============               ==

   Premiums:
     Life insurance                $    7,013,496   $      656,359   $      867,200   $    7,224,337               12%
     Accident & health insurance          110,370               --               --          110,370               --
                                   --------------   --------------   --------------   --------------   --------------

   Total Premiums                  $    7,123,866   $      656,359   $      867,200   $    7,334,707               12%
                                   ==============   ==============   ==============   ==============   ==============

December 31, 2002:
   Life insurance in force         $  702,535,000   $  164,248,000   $  824,243,000   $1,362,530,000               60%
                                   ==============   ==============   ==============   ==============   ==============

   Premiums:
     Life insurance                $    6,812,419   $      648,517   $      789,453   $    6,953,355               11%
     Accident & health insurance          121,902               --               --          121,902               --
                                   --------------   --------------   --------------   --------------   --------------

   Total Premiums                  $    6,934,321   $      648,517   $      789,453   $    7,075,257               11%
                                   ==============   ==============   ==============   ==============   ==============

December 31, 2001:
   Life insurance in force         $  750,557,000   $  179,242,000   $  817,437,000   $1,388,752,000               59%
                                   ==============   ==============   ==============   ==============   ==============

   Premiums:
     Life insurance                $    6,579,409   $      635,733   $      649,916   $    6,593,592               10%
     Accident & health insurance          150,777            8,342               --          142,435               --
                                   --------------   --------------   --------------   --------------   --------------

   Total Premiums                  $    6,730,186   $      644,075   $      649,916   $    6,736,027               10%
                                   ==============   ==============   ==============   ==============   ==============

</TABLE>

See accompanying auditor's report.


<PAGE>


Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting
          and Financial Disclosure.
---------------------------------------------------------------------------

None

Item 9A.  Controls and Procedures

     (a)  Evaluation  of  disclosure  controls and  procedures  - The  Company's
principal  executive  officer and principal  financial officer have reviewed and
evaluated the effectiveness of the Company's  disclosure controls and procedures
(as defined in Rules  240.13a-14(c) and 15d-14(c) under the Securities  Exchange
Act of 1934 (the  "Exchange  Act") as of the end of the  period  covered by this
annual report. Based on that evaluation, the principal executive officer and the
principal  financial  officer  have  concluded  that  the  Company's  disclosure
controls and procedures are effective,  providing them with material information
relating to the Company as required to be  disclosed  in the reports the Company
files or submits under the Exchange Act on a timely basis.

     (b) Changes in internal controls - There were no significant changes in the
Company's  internal  controls over financial  reporting or in other factors that
could  significantly  affect the  Company's  internal  controls  and  procedures
subsequent  to the date of their  most  recent  evaluation,  nor were  there any
significant  deficiencies  or  material  weaknesses  in the  Company's  internal
controls. As a result, no corrective actions were required or undertaken.

                                    PART III

Item 10.  Directors and executive officers of the Company.
----------------------------------------------------------

The Company's Board of Directors consists of eight persons, four of whom are not
employees of the Company.  There is no family relationship  between or among any
of the directors, except that Scott M. Quist and G. Robert Quist are the sons of
George R. Quist. The following table sets forth certain information with respect
to the directors and executive officers of the Company.

                                Director/Officer
Name                    Age         Since          Position(s) with the Company
----                    ---     ----------------   ----------------------------
George R. Quist         83      December 1998       Chairman of the Board and
                                                    Chief Executive Officer

Scott M. Quist          50      December 1998       President, General Counsel,
                                                    Chief Operating Officer and
                                                    Director

G. Robert Quist         52      April 1999          Vice President, Secretary
                                                    and Director

J. Lynn Beckstead, Jr.  50      March 2002          Vice President and Director

Charles L. Crittenden   83      December 1998       Director

Robert G. Hunter        44      December 1998       Director

H. Craig Moody          52      December 1998       Director

Norman G. Wilbur        65      December 1998       Director

Stephen M. Sill         58      March 2002          Vice President, Treasurer
                                                    and Chief Financial Officer

Committees of the Board of Directors  include an executive  committee,  on which
Messrs. George Quist, Scott Quist, and Moody serve; an audit committee, on which
Messrs.  Crittenden,  Moody, and Wilbur serve; and a compensation  committee, on
which Messrs. Crittenden, Wilbur and George Quist serve.


<PAGE>

The audit  committee  is  composed of  directors  who are, in the opinion of the
Board of Directors,  free from any  relationship  which would interfere with the
exercise of independent  judgment and who possess an  understanding of financial
statements and generally accepted accounting principles. Thus, each member is an
"independent"  director  as  that  term is  defined  by the  regulations  of the
Security Exchange Act of 1934. The Board of Directors has determined that Norman
G. Wilbur, who currently serves as a director of the Company as well as a member
of its audit committee, is an independent audit committee financial expert.

The  following  is a  description  of the  business  experience  of  each of the
directors and executive officers.


George R. Quist has been  Chairman of the Board and Chief  Executive  Officer of
the Company since  December 1998. He has served as President of the Company from
December  1998 until July 2002.  Mr.  Quist has also  served as  Chairman of the
Board and Chief  Executive  Office of Security  National  Financial  Corporation
since October 1979,  and its President  from October 1979 until July 2002.  From
1960 to 1964, he was Executive Vice President and Treasurer of Pacific  Guardian
Life Insurance Company. From 1946 to 1960, he was an agent, District Manager and
Associate General Agent for various insurance  companies.  Mr. Quist also served
from  1981  to  1982  as the  President  of The  National  Association  of  Life
Companies, a trade association of 642 life insurance companies, and from 1982 to
1983 as its Chairman of the Board.

Scott M. Quist has been  President  of the  Company  since July 2002,  its Chief
Operating  Officer since October 2001, and as its General Counsel and a director
since  December  1998. In addition,  Mr. Quist served as First Vice President of
the  Company  from  December  1998 to July 2002.  Mr.  Quist has also  served as
President of Security  National  Financial  Corporation  since July 2002, as its
Chief  Operating  Officer  since  October  2001,  and its General  Counsel and a
director since May 1986.  From 1980 to 1982, Mr. Quist was a tax specialist with
Peat,  Marwick,  Mitchell,  & Co., in Dallas,  Texas.  From 1986 to 1991, he was
Treasurer and a director of The National Association of Life Companies,  a trade
association  of 642  insurance  companies  until its  merger  with the  American
Council of Life Companies. Mr. Quist has been a member of the Board of Governors
of the  Forum  500  Section  (representing  small  insurance  companies)  of the
American Council of Life Insurance.  He has also served as regional  director of
Key Bank of Utah since  November  1993.  Mr.  Quist is  currently a director and
immediate past  president of the National  Alliance of Life  Companies,  a trade
association of over 200 life companies.

G.  Robert  Quist has been a director  of the  Company  since April 1999 and its
First Vice  President and Secretary  since March 2002. Mr. Quist has also served
as First Vice President and Secretary of Security National Financial Corporation
since March 2002.  He has served as President and a director of Big Willow Water
Company since 1987 and a director of Investors Equity Life Insurance  Company of
Hawaii  from  1987 to 1992.  He has also  served  as  Secretary-Treasurer  and a
director of the Utah Cemetery Association since 1987.

J. Lynn  Beckstead Jr. has been a director of the Company since March 2002.  Mr.
Beckstead has also served as Vice President and a director of Security  National
Financial Corporation since March 2002. In addition, he is President of Security
National Mortgage Company,  an affiliate of the Company,  and has served in this
position since July 1993.  From 1990 to 1993,  Mr.  Beckstead was Vice President
and a  director  of  Republic  Mortgage  Corporation.  From  1983 to  1990,  Mr.
Beckstead  was Vice  President  and a director  of  Richards  Woodbury  Mortgage
Corporation.  From  1980  to  1983,  he was a  principal  broker  for  Boardwalk
Properties.  From 1978 to 1980, Mr. Beckstead was a residential loan officer for
Medallion Mortgage Company. From 1977 to 1978, he was a residential construction
loan manager of Citizens Bank.

Charles L.  Crittenden  has been a director of the Company since  December 1998.
Mr. Crittenden is also a director of Security National Financial Corporation and
has served in this position  since October 1979.  Mr.  Crittenden  has been sole
stockholder of Crittenden  Paint & Glass Company since 1958. He is also an owner
of Crittenden  Enterprises,  a real estate development  company, and Chairman of
the Board of Linco, Inc.

Robert G. Hunter,  M.D. has been a director of the Company since  December 1998.
Dr. Hunter is also a director of Security National Financial Corporation and has
served in this position since October 1998. Dr. Hunter is currently a practicing
physician  in  private  practice.  Dr.  Hunter  created  the State  Wide  E.N.T.
Organization (Rocky Mountain E.N.T., Inc.) where he is currently a member of the
Executive  Committee.  He is  Chairman  of Surgery  at  Cottonwood  Hospital,  a
delegate to the Utah Medical Association and a delegate representing Utah to the
American Medical Association, and a member of several medical advisory boards.


<PAGE>

H. Craig Moody has been a director of the Company since December 1998. Mr. Moody
is also a director of Security National Financial  Corporation and has served in
this position since September 1995. Mr. Moody is owner of Moody & Associates,  a
political  consulting and real estate company.  He is a former Speaker and House
Majority Leader of the House of Representatives of the State of Utah.

Norman G. Wilbur has been a director of the Company  since  December  1998.  Mr.
Wilbur is also a director of Security  National  Financial  Corporation  and has
served in this position since October 1998.  Mr. Wilbur worked for J.C.  Penny's
regional  offices in budget and  analysis.  His final  position  was  Manager of
Planning  and  Reporting  for J.C.  Penney's  stores.  After 36 years  with J.C.
Penny's,  he took an option of an early retirement in 1997. Mr. Wilbur is a past
board member of a homeless organization in Plano, Texas.

Stephen M. Sill has been Vice President,  Treasurer and Chief Financial  Officer
of the Company since March 2002.  From 1998 to 2002, Mr. Sill was Vice President
and Controller of the Company.  He has also served as Vice President,  Treasurer
and Chief Financial  Officer of Security  National  Financial  Corporation since
March 2002.  From 1997 to 2002,  Mr. Sill was Vice  President and  Controller of
Security National  Financial  Corporation.  From 1994 to 2002, Mr. Sill was Vice
President and Controller of Security National Life Insurance Company.  From 1989
to 1993, he was  Controller  of Flying J, Inc.  From 1978 to 1989,  Mr. Sill was
Senior Vice President and Controller of Surety Life Insurance Company. From 1975
to 1978, he was Vice President and Controller of Sambo's  Restaurant,  Inc. From
1974 to  1975,  Mr.  Sill  was  Director  of  Reporting  of  Northwest  Pipeline
Corporation. From 1970 to 1974, he was an auditor with Arthur Andersen & Co. Mr.
Sill is a director and immediate past president of the Insurance  Accounting and
Systems  Association  (IASA),  a national  association  of over 1,300  insurance
companies and associate members.

Executive Officers

The following table sets forth certain information with respect to the executive
officers of the Company (the business biographies set forth above):

Name                       Age          Title
George R. Quist (1)        83       Chairman of the Board and Chief Executive
                                    Officer

Scott M. Quist (1)         50       President, General Counsel and Chief
                                    Operating Officer

G. Robert Quist (1)        52       Vice President and Secretary

Stephen M. Sill            58       Vice President, Treasurer and
                                    Chief Financial Officer

(1) George R. Quist is the father of Scott M. Quist and G. Robert Quist.

The Board of Directors  of the Company has a written  procedure  which  requires
disclosure to the board of any material  interest or any affiliation on the part
of any of its officers, directors or employees which is in conflict or may be in
conflict with the interests of the Company.

No director,  officer or 5% stockholder of the Company or its  subsidiaries,  or
any  affiliate  thereof  has  had  any  transactions  with  the  Company  or its
subsidiaries during 2003 or 2002.

Each  of  the  directors  are  board  members  of  Security  National  Financial
Corporation (the ultimate parent of the Company) with the exception of G. Robert
Quist,  which has a class of equity  securities  registered under the Securities
Exchange  Act of 1934,  as amended.  In  addition,  Scott M. Quist is a regional
director of Key Bank of Utah. All directors of the Company hold office until the
next annual meeting of  stockholders,  until their  successors have been elected
and qualified, or until their earlier resignation or removal.

Pursuant to Item 406 of  Regulation  S-K under the  Securities  Exchange  Act of
1934,  the  Company  has not yet  adopted a code of ethics  that  applies to its
principle executive officer, principal financial officer,  controller or persons
performing  similar  functions.  The Company is still in the process of studying
this issue and may adopt a code of ethics in the near future.


<PAGE>


Item 11.  Executive compensation.
--------------------------------

     (a) Summary  compensation.  The following table sets forth, for each of the
last three fiscal years, the compensation  received by George R. Quist, Chairman
of the Board and Chief Executive Officer of the Company, and all other executive
officers at December  31,  2003,  whose salary and bonus for all services in all
capacities exceed $100,000 for the fiscal year ended December 31, 2003.
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE
                                                                                       Long Term Compensation

                                           Annual Compensation                Awards           Awards       Payouts
                            ------------------------------------------------             ----------------------------------
    (a)                  (b)        (c)           (d)          (e)           (f)              (g)         (h)           (i)
                                                              Other      Restricted       Securities                All other
Name and                                                     Annual         Stock         Underlying     LTIP         Compen-
Principal                                                 Compensation     Awards          Options/     Payouts       sation
Position                Year     Salary($)     Bonus($)        ($)           ($)            SARs(#)       ($)            $
--------------------------------------------------------------------------------------------------------------------------
Chief
Executive
Officer

<S>                      <C>     <C>             <C>          <C>             <C>            <C>          <C>            <C>
George R. Quist(1)        2003    $0              $0           $0              $0             N/A         N/A            N/A
George R. Quist(1)        2002    $0              $0           $0              $0             N/A         N/A            N/A
George R. Quist(1)        2001    $0              $0           $0              $0             N/A         N/A            N/A
</TABLE>

(1)  Effective  January 1, 1999,  the  Company  entered  into an  Administrative
Services   Agreement  with  its  ultimate  parent  Security  National  Financial
Corporation (Security National).  Under the terms of the Administrative Services
Agreement, all of the Company's employees became employees of Security National.
Administrative  functions  previously  performed  by the  Company  are now being
furnished  to the Company  under this  Agreement.  The Company  pays to Security
National  $250,000  per  month or $3  million  per  year for the  Administrative
services.

     (b)  Perquisites.  The Company does not have a pension, retirement or other
          deferred compensation plan, or any other similar arrangement.

     (c)  Director's  fees  and  other  fees.  Directors  did  not  receive  any
          compensation in 2003, 2002 or 2001.

     (d)  Compensation  committee  interlocks  and  insider  participation.  The
          Executive   Committee  of  the  Company's  Board  of  Directors  makes
          recommendation  to  the  board  concerning  the  compensation  of  the
          Company's executive officers.  Subsequently, the board makes all final
          decisions concerning such compensation.

     (e)  Employee contracts. The Company does not have any employee contracts.

Item 12. Security ownership of certain beneficial owners and management.

The  following  table sets forth,  as of December  31,  2003,  information  with
respect to the only persons known by the Company to be the  beneficial  owner of
more than 5% of the Company's outstanding voting securities:

                                                  Number of Shares       Percent
   Title of          Name and Address of       and Nature of Beneficial     of
    Class             Beneficial Owner                Ownership           Class
   ---------        ---------------------      ------------------------- ------
 Common Shares   SSLIC Holding Company Inc.,
                 formerly Consolidare Enterprises, Inc.   1,207,784      57.4%
                 c/o Security National Life Ins. Co.
                 5300 S 360 W, Suite 200
                 Salt Lake City, UT 84123

 Common Shares   Security National Life Insurance Company   406,635      19.3%
                 5300 South 360 West, Suite 200
                 Salt Lake City, Utah 84123


<PAGE>

Item 13.  Certain relationships and related transactions.
--------------------------------------------------------

Insuradyne Corporation, a wholly owned subsidiary of Security National Financial
Corporation,  serves as general  agent for the  Company,  pursuant  to a general
agency  agreement,  which is terminable by either party with 30 days notice.  In
such capacity, Insuradyne receives a commission on the first year commissionable
premium  on  certain  of the  Company's  policies  as well  as a  small  renewal
commission on certain other policies.  In accordance with the Florida  Insurance
Code,  a  copy  of  the  Company's  General  Agency  Agreement  with  Insuradyne
Corporation was filed with and approved by the Florida  Department of Insurance.
Management  of the  Company  believes  that  the  terms  of its  General  Agency
Agreement  with  Insuradyne are as favorable to the Company as terms which could
be obtained from independent third parties.

During 2003 and 2002, gross commissions in the amounts of $97,124, and $109,268,
respectively,  were earned by Insuradyne Corporation.  At December 31, 2003, the
Company  owed  $57,064  to  Insuradyne  as a result  of  commissions  earned  by
Insuradyne but for which Insuradyne has not yet requested payment.

No  director  or officer of the  Company or any  associates  of any  director or
officer of the Company was indebted to the Company at December 31, 2003.

The Company  continues  to be indebted to its  parent,  Security  National  Life
Insurance Company (SNLIC), in the amount of $1,000,000, pursuant to a promissory
note dated  December  1988,  which bears interest at the annual rate of interest
equal to the prime rate (as  hereinafter  defined)  plus 2%, with such  interest
rate  not to be  less  than  9% nor in  excess  of  11%.  For  purposes  of this
promissory  note,  prime rate is defined to mean the prime rate as  announced by
Compass Bank,  Birmingham,  Alabama, from time to time, as its prime rate (which
interest  rate  is  only  a  bench  mark,  is  purely  discretionary  and is not
necessarily  the  best  or  lowest  rate  charged  borrowing  customers).   This
promissory note is due on demand and is payable out of capital surplus in excess
of $1,799,000,  pursuant to Florida  Statutes  ss.628.401  (1990).  Interest and
principal  can only be repaid upon the express  written  approval of the Florida
Department of Insurance.

The Company entered into an Administrative Services Agreement dated December 17,
1998 with SNFC. Under the terms of the agreement, SNFC has agreed to provide the
Company  with   certain   defined   administrative   and   financial   services,
underwriting,  data processing,  legal, building management,  marketing advisory
services  and  investment  services.  In  consideration  for the  services to be
provided by SNFC, the Company shall pay SNFC an  administrative  services fee of
$250,000 per month,  which may be  increased,  beginning on January 1, 2001,  to
reflect  increases in Consumer Price Index,  over the index amount as of January
1, 2000.

The Administrative Services Agreement shall remain in effect for an initial term
expiring  on  December  16,  2003.  However,  the term of the  agreement  may be
automatically extended for an additional one-year term unless either the Company
or SNFC shall  deliver a written  notice on or before  September  30 of any year
stating to the other its desire not to extend the term of the  agreement.  SSLIC
Holding Company, a wholly owned subsidiary of SNLIC, owns 77% of the outstanding
shares of common stock of the Company.  SNLIC is a wholly  owned  subsidiary  of
SNFC. In addition, George R. Quist, the Company's Chief Executive Officer is the
Chief  Executive  Officer of SNFC;  Scott M.  Quist,  the  Company's  President,
General Counsel and Chief Operating Officer,  is the President,  General Counsel
and Chief  Operating  Officer of SNFC;  G.  Robert  Quist,  the  Company's  Vice
President and Secretary, is the Vice President and Secretary of SNFC; Stephen M.
Sill, the Company's Vice President,  Treasurer and Chief Financial  Officer,  is
the Vice President,  Treasurer and Chief Financial Officer of SNFC. Finally, the
directors of the Company,  with the exception of G. Robert Quist,  also serve as
the  directors  of SNFC.  See Item 7.  Management's  Discussion  and Analysis of
Financial Condition and Results of Operation.

On December 28, 1998 the Company  entered into a Loan Funding and Fee  Agreement
and Agency Agreement (the  "Agreement")  with Security National Mortgage Company
("SNMC"),  a subsidiary of SNFC. Under the terms of the Agreement,  SNMC assigns
its  interest in  residential  mortgage  loans that have been  pre-sold to third
party investors to the Company. The Company purchases these loans and holds them
as short-term  investments  until it receives the proceeds from the  third-party
investors.  The  Company  receives  fee income from SNMC based upon how long the
loans  were  outstanding.  At  December  31,  2003 and  2002,  the  Company  had
outstanding  loan  purchases  of  $17,497,249  and  $16,283,759,   respectively.
Included in investment  income are $1,478,281 and $1,130,231 for the years ended
December 31, 2003 and 2002, respectively.

The Company  received for the years ended  December 31, 2003 and 2002,  $167,349
and  $168,933,  respectively,  as rental  income from SNFC for a lease of office
space in the Company's building under the terms of the  Administrative  Services
Agreement.


<PAGE>

The Company received for the year ended December 31, 2003 and 2002,  $33,767 and
$75,622,  respectively,  in interest  income from SNFC for  short-term  loans of
which  $28,091 and $113,707 were  outstanding  as of December 31, 2003 and 2002,
respectively.

Item 14.  Principal accounting fees and services

Fees for the 2003 annual audit and related quarterly reviews were  approximately
$55,000. There were no other fees during 2003.

<PAGE>


                                     PART IV


Item 15.  Exhibits, Financial Statement Schedules and Reports on 8-K.

                                                                 Page Number
(a) 1. See item 8                                                -----------

    2. Supplemental Schedules

       Required Financial Data - for the years ended December 31,
       2003, 2002 and 2001 - included in Part II, Item 8:

       Schedule I - Summary of Investments -
       Other than Investments in Related
       Parties  .......................................................45

       Schedule III - Supplementary Insurance
       Information.....................................................46

       Schedule IV - Reinsurance.......................................47

Schedules  other than those listed above have been omitted  because they are not
applicable  or because the  required  information  is included in the  financial
statements and notes thereto or in Item 7 - Management's Discussion and Analysis
of Financial Condition and Results of Operations.

3.  Exhibits

     3.1  Articles of Incorporation,  as amended, and Bylaws, as amended,  dated
          September 1994, incorporated by reference from the Annual Report filed
          on Form 10-K for fiscal year ended December 31, 1994.

     10.1 Revolving Financing Agreement between the Company and the Student Loan
          Marketing  Association,  dated  September  19, 1996,  incorporated  by
          reference  from  Annual  Report on Form  10-K for  fiscal  year  ended
          December 31, 1997.

     10.2 Reinsurance  Agreement  between the Company and United Group Insurance
          Company,  dated as of December 31, 1992 incorporated by reference from
          Annual Report on Form 10-K for fiscal year ended December 31, 1992.

     10.3 Agency  Agreement  between  the  Company  and  Insuradyne  Corporation
          incorporated  by reference  from Annual Report on Form 10-K for fiscal
          year ended December 31, 1993.

     10.4 Administrative  Services  Agreement  between the Company and  Security
          National   Financial   Corporation   effective   December   17,  1998,
          incorporated  by reference  from Annual Report on Form 10-K for fiscal
          year ended December 31, 1998.

     10.5 Agency Agreement  between the Company and Security  National  Mortgage
          Company dated December 28, 1998  incorporated by reference from Annual
          Report on Form 10-K for fiscal year ended December 31, 1999.

     10.6 Loan  Funding and Fee  Agreement  between  the  Company  and  Security
          National  Mortgage  Company dated December 28, 1998,  incorporated  by
          reference  from  Annual  Report on Form  10-K for  fiscal  year  ended
          December 31, 1999.

     10.7 Reinsurance  Agreement  between the Company and Security National Life
          Insurance Company dated December 26, 2003.


<PAGE>



     11.1 Statement Re Computation of Net Income per Common Share.

     31.1 Certification pursuant to 18 U.S.C. Section 1350 as enacted by Section
          302 of the Sarbanes-Oxley Act of 2002.

     31.2 Certification pursuant to 18 U.S.C. Section 1350 as enacted by Section
          302 of the Sarbanes-Oxley Act of 2002.

     32.1 Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

     32.2 Certification  pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

          (b)  Reports on Form 8-K

               None

<PAGE>



Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                    SOUTHERN SECURITY LIFE INSURANCE COMPANY


Dated: March 29, 2004                   By:     George R. Quist
                                                ----------------
                                                George R. Quist
                                                Chairman of the Board and
                                                Chief Executive Officer

Pursuant to the requirements of the Securities  Exchange Act of 1934 as amended,
this report has been signed by the following persons in counterpart on behalf of
the Company on the dates indicated:



Signature                   Title                              Date
---------                   -----                              ----
George R. Quist         Chairman of the                      March 29, 2004
                        Board and Chief Executive
                        Officer (Principal Executive
                        Officer)

Scott M. Quist          President, General Counsel,          March 29, 2004
                        Chief Operating Officer and
                        Director

Stephen M. Sill         Vice President, Treasurer and
                        Chief Financial Officer (Principal
                        Financial and Accounting
                        Officer) March 29, 2004

G. Robert Quist         Vice President, Secretary
                        and Director                         March 29, 2004

J. Lynn Beckstead, Jr.  Director                             March 29, 2004

Charles L. Crittenden   Director                             March 29, 2004

Robert G. Hunter        Director                             March 29, 2004

H. Craig Moody          Director                             March 29, 2004

Norman G. Wilbur        Director                             March 29, 2004


<PAGE>


                                  Exhibit 31.1

                                 CERTIFICATIONS

I, George R. Quist, certify that:

1. I have  reviewed  this annual  report on Form 10-K of Southern  Security Life
Insurance Company;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and maintaing  disclosure  controls and  procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant to have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     (b) Evaluated the effectivness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter (the registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

     (a) All  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.


Date: March 29, 2004

                                          By:      George R. Quist
                                                   Chairman of the Board,
                                                   Chief Executive Officer


<PAGE>


                                  Exhibit 31.2

                                 CERTIFICATIONS

I, Stephen M. Sill, certify that:

1. I have  reviewed  this annual  report on Form 10-K of Southern  Security Life
Insurance Company;

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing  and maintaing  disclosure  controls and  procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant to have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     (b) Evaluated the effectivness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
control over financial  reporting  that occurred  during the  registrant's  most
recent fiscal quarter (the registrant's  fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

     (a) All  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.


Date:  March 29, 2004

                                       By:      Stephen M. Sill
                                                Vice President, Treasurer and
                                                Chief Financial Officer


<PAGE>


                                  EXHIBIT 32.1
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Southern Security Life Insurance Company
(the  "Company") on Form 10K for the period  ending  December 31, 2003, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
I, George R. Quist, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that, to the best of my knowledge and belief:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Company.

George R. Quist
Chief Executive Officer
March 29, 2004

                                  EXHIBIT 32.2
                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Southern Security Life Insurance Company
(the  "Company") on Form 10K for the period  ending  December 31, 2003, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
I, Stephen M. Sill, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that, to the best of my knowledge and belief:

     (1)  the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  the  information  contained  in the  Report  fairly  presents,  in all
          material respects, the financial condition and result of operations of
          the Company.

Stephen M. Sill
Chief Financial Officer
March 29, 2004


<PAGE>


                    SOUTHERN SECURITY LIFE INSURANCE COMPANY

                                   EXHIBIT 11

                            COMPUTATION OF NET INCOME

                                PER COMMON SHARE



                                   2003            2002           2001
                                   ----           ----            ----
Weighted Average Shares
    Outstanding                 2,078,548      1,979,291      1,907,989
Net Income (Loss)             $   (95,871)   $   (70,566)   $    70,976
Per Share Amount              $      (.05)   $      (.04)   $       .04