Citizens, Inc. Reports 93.1% Increase in 2001 Earnings

Citizens, Inc. reported net income of $4.0 million or $0.16 per share for the year ended December 31, 2001, compared to net income of $2.1 million or $0.08 per share during the same period in 2000, an increase of 93.1%.

Austin, Texas -- March 26, 2002 -- Citizens, Inc. (AMEX: CIA), reported net income of $4.0 million or $0.16 per share for the year ended December 31, 2001, compared to net income of $2.1 million or $0.08 per share during the same period in 2000, an increase of 93.1%. Increased production of new business coupled with improved persistency contributed to the rise in earnings.

Production of new life insurance premiums, measured in issued and paid annualized premiums, increased 14.9% in 2001, while renewal premiums rose 3.4%. Revenues for the year increased to $67.6 million due in part to a 5.9% increase in net investment income. Accident and health premiums declined 30.1%, a result of the Companys previous termination of its book of individual major medical and group dental business. Claims and surrenders for the year ended December 31, 2001 declined 3.9% to $29.2 million from $30.4 million in 2000.

Net income for the quarter ended December 31, 2001 was $1.5 million, or $0.06 per share, compared to $1.7 million, or $0.07 per share, for the same period in 2000. Realized losses on the disposal of bonds during the quarter caused the decline in net income.

Revenues for the fourth quarter of 2001 increased $600,000 to $18.2 million, compared to $17.6 million for the same period in 2000. Premium income rose 6.4% during the quarter to $15.0 million, compared to $14.1 million in 2000. Accident and health premiums for the quarter declined 32%. The Company realized losses of approximately $390,000 before tax during the quarter on the disposal of approximately $9 million of U.S. Treasury notes, purchased in the early 1990s. Additionally, net investment income declined slightly to $3.2 million due to the decrease in interest rates during the year. Claims and surrenders increased 26.1% during the quarter to $7.6 million, compared to $6.0 million for the same period in 2000, as a result of death claims.

Total assets at December 31, 2001 were $282.1 million, compared to $267.8 million at December 31, 2000, an increase of 5.3%. Stockholders equity was $82.7 million at the close of 2001, compared to $77.3 million at December 31, 2000. The increase resulted from the 2001 earnings and a $1.4 million mark-to-market increase in the value of the Companys bond portfolio.

On March 19, 2002, the Company announced it had consummated its pending acquisition of Combined Underwriters Life Insurance Company and Lifeline Underwriters Life Insurance Company, both of Tyler, Texas, for shares of Citizens Class A Common stock. On an estimated basis, the transaction boosts Citizens assets to $300 million, annual revenues to $84 million and stockholders equity to $95 million.

About Citizens, Inc.
Citizens, Inc. is a financial services company listed on the American Stock Exchange under the symbol CIA. Its growth strategy is to achieve $1 billion in assets, $250 million in revenues and $10 billion of life insurance in force by 2010 targeting the sale of U.S. dollar whole life insurance policies in the United States as well as world-wide and through the acquisition of other life insurance companies.

Citizens is included in the Russell 2000® Index, which measures the performance of the largest companies in the U.S. stock market, based on market capitalization. Citizens stock closed at $10.76 on March 25, 2002.

Additional information is available at the Companys web site: www.citizensinc.com.

###

Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as may", will", expect", anticipate" or continue" or comparable words. In addition, all statements other than statements of historical facts that address activities that the Company expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of the Company, particularly its Form 10-K for the fiscal year ended December 31, 2001, for the meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.