content: UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
  
                                    FORM 10-Q
  
  
  [ X ]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
  
                   For the Quarterly Period Ended June 30, 2000
  
  [   ]          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: 2-17039
  
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
              (Exact name of Registrant as specified in its charter)
  
  
            COLORADO                                 84-0467208
      (State of Incorporation)        (I.R.S. Employer Identification Number)
  
  
        850 EAST ANDERSON LANE
       AUSTIN, TEXAS 78752-1602                           (512) 836-1010
  (Address of Principal Executive Offices)              (Telephone Number)
  
  
  Indicate by check mark whether the Registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the preceding 12 months (or for such shorter period that the
  Registrant was required to file such reports), and (2) has been subject to
  such filing requirements for the past 90 days:
  
  Yes [ X  ]     No  [      ]
  
  
  As of August 10, 2000, the number of shares of Registrant's common stock
  outstanding was:  Class A - 3,301,755 and Class B - 200,000.
  
  
  
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                                      INDEX
  
  
  
  Part I.  Financial Information:                                        Page
  
  Item 1.  Financial Statements
  
  Condensed Consolidated Balance Sheets
  June 30, 2000 (Unaudited) and December 31, 1999
  
  Condensed Consolidated Statements of Earnings
  For the Three Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Earnings
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Comprehensive Income
  For the Three Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Comprehensive Income
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Stockholders' Equity
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Cash Flows
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Notes to Condensed Consolidated Financial Statements (Unaudited)
  
  Item 2.  Management's Discussion and Analysis of
  Financial Condition and Results of Operations
  
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  
  Part II.  Other Information:
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
  Item 6.  Exhibits and Reports on Form 8-K
  
  Signatures
  
  Exhibit 11 - Computation of Earnings per Share
  For the Three Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Exhibit 11 - Computation of Earnings per Share
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  
  
  
                          PART I.  FINANCIAL INFORMATION
  
                          ITEM 1.  FINANCIAL STATEMENTS
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
                                                       (Unaudited)
                                                        June 30,   December 31,
                    ASSETS                                2000         1999
  
  <S>                                                <C>             <C>
  
  Cash and investments:
      Securities held to maturity,
      at amortized cost                              $  2,138,688    2,151,924
      Securities available for sale, at fair value        728,186      717,948
      Mortgage loans, net of allowances for
      possible losses ($4,104 and $4,104)                 202,024      183,902
      Policy loans                                        115,772      117,309
      Index options                                        22,598       32,820
      Other long-term investments                          40,396       32,766
      Cash and short-term investments                       2,638       14,010
  
  Total cash and investments                            3,250,302    3,250,679
  
  Deferred policy acquisition costs                       392,123      369,665
  Accrued investment income                                49,444       47,756
  Federal income tax receivable                               282          237
  Deferred Federal income tax asset                         1,345         -
  Other assets                                             23,588       14,491
  
                                                     $  3,717,084    3,682,828
  
  <FN>
  
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands except share amounts)
  
  <TABLE>
  <CAPTION>
  
                                                       (Unaudited)
                                                        June 30,   December 31,
         LIABILITIES AND STOCKHOLDERS' EQUITY             2000         1999
  
  <S>                                                <C>             <C>
  
  LIABILITIES:
  
  Future policy benefits:
      Traditional life and annuity products          $    161,806      165,020
      Universal life and investment
      annuity contracts                                 2,984,775    2,983,060
  Other policyholder liabilities                           25,861       24,103
  Federal income taxes payable:
      Current                                                -           4,763
      Deferred                                               -           4,659
  Short-term borrowings                                    23,000         -
  Other liabilities                                        38,714       25,701
  
  Total liabilities                                     3,234,156    3,207,306
  
  COMMITMENTS AND CONTINGENCIES (Note 3)
  
  STOCKHOLDERS' EQUITY:
  
  Common stock:
      Class A - $1 par value; 7,500,000
      shares authorized; 3,301,755
      and 3,300,728 shares issued and outstanding
      in 2000 and 1999                                      3,302        3,301
      Class B - $1 par value; 200,000
      shares authorized, issued,
      and outstanding in 2000 and 1999                        200          200
  Additional paid-in capital                               25,065       25,028
  Accumulated other comprehensive loss                    (16,124)      (3,566)
  Retained earnings                                       470,485      450,559
  
  Total stockholders' equity                              482,928      475,522
  
                                                     $  3,717,084    3,682,828
  
  <FN>
  
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                For the Three Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                     (In thousands except per share amounts)
  
  <TABLE>
  <CAPTION>
  
                                                          2000         1999
  
  <S>                                                <C>                <C>
  
  Premiums and other revenue:
      Life and annuity premiums                      $      2,900        3,381
      Universal life and investment annuity
      contract revenues                                    25,384       20,658
      Net investment income                                48,815       64,704
      Other income                                            139          127
      Realized gains (losses) on investments               (5,832)         873
  
  Total premiums and other revenue                         71,406       89,743
  
  Benefits and expenses:
      Life and other policy benefits                        9,501        8,465
      Decrease in liabilities for
      future policy benefits                               (1,011)        (408)
      Amortization of deferred policy
      acquisition costs                                    11,293       10,435
      Universal life and investment annuity
      contract interest                                    32,760       44,993
      Other operating expenses                              7,360        7,828
  
  Total benefits and expenses                              59,903       71,313
  
  Earnings before Federal income taxes                     11,503       18,430
  
  Provision (benefit) for Federal income taxes:
      Current                                               4,180        7,664
      Deferred                                               (270)      (1,432)
  
  Total Federal income taxes                                3,910        6,232
  
  Net earnings                                       $      7,593       12,198
  
  Basic Earnings Per Share:
      Net earnings                                   $       2.17         3.49
  
  Diluted Earnings Per Share:
      Net earnings                                   $       2.16         3.46
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                     (In thousands except per share amounts)
  
  <TABLE>
  <CAPTION>
  
                                                          2000         1999
  
  <S>                                                <C>               <C>
  
  Premiums and other revenue:
      Life and annuity premiums                      $      5,272        5,792
      Universal life and investment annuity
      contract revenues                                    46,287       42,190
      Net investment income                               106,555      122,556
      Other income                                            254          277
      Realized gains (losses) on investments               (6,412)       5,678
  
  Total premiums and other revenue                        151,956      176,493
  
  Benefits and expenses:
      Life and other policy benefits                       19,593       17,153
      Decrease in liabilities for
      future policy benefits                               (3,493)        (649)
      Amortization of deferred policy
      acquisition costs                                    22,178       20,006
      Universal life and investment annuity
      contract interest                                    69,411       85,604
      Other operating expenses                             14,077       14,529
  
  Total benefits and expenses                             121,766      136,643
  
  Earnings before Federal income taxes                     30,190       39,850
  
  Provision for Federal income taxes:
      Current                                               9,505       13,124
      Deferred                                                759          425
  
  Total Federal income taxes                               10,264       13,549
  
  Net earnings                                       $     19,926       26,301
  
  Basic Earnings Per Share:
      Net earnings                                   $       5.69         7.52
  
  Diluted Earnings Per Share:
      Net earnings                                   $       5.66         7.45
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                For the Three Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  <TABLE>
  <CAPTION>
  
                                                          2000         1999
  
  <S>                                                <C>                <C>
  
  Net earnings                                       $      7,593       12,198
  
  Other comprehensive income (loss),
  net of effects of deferred
  policy acquisition costs and taxes:
      Unrealized losses on securities:
          Unrealized holding losses
          arising during period                            (6,298)      (7,060)
          Less: reclassification adjustment
          for losses (gains)
          included in net earnings                          4,203         (377)
          Amortization of net unrealized gains
          related to transferred securities                  (110)          54
          Unrealized losses on securities
          transferred during period from
          held to maturity to available for sale           (1,145)        -
  
          Net unrealized losses on securities              (3,350)      (7,383)
  
      Foreign currency translation adjustments                  5          (69)
  
  Other comprehensive loss                                 (3,345)      (7,452)
  
  Comprehensive income                               $      4,248        4,746
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
  
                                                          2000         1999
  
  <S>                                                <C>               <C>
  
  Net earnings                                       $     19,926       26,301
  
  Other comprehensive income (loss),
  net of effects of deferred
  policy acquisition costs and taxes:
      Unrealized losses on securities:
          Unrealized holding losses
          arising during period                            (7,774)     (11,946)
          Less: reclassification adjustment
          for losses (gains)
          included in net earnings                          4,203       (2,048)
          Amortization of net unrealized gains
          related to transferred securities                  (179)         (31)
          Unrealized losses on securities
          transferred during period
          from held to maturity to available for sale      (9,166)        -
  
          Net unrealized losses on securities             (12,916)     (14,025)
  
      Foreign currency translation adjustments                358          (78)
  
  Other comprehensive loss                                (12,558)     (14,103)
  
  Comprehensive income                               $      7,368       12,198
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
                                                          2000         1999
  
  <S>                                                <C>               <C>
  
  Common stock:
      Balance at beginning of year                   $      3,501        3,498
      Shares exercised under stock option plan                  1            3
  
  Balance at end of period                                  3,502        3,501
  
  Additional paid-in capital:
      Balance at beginning of year                         25,028       24,899
      Shares exercised under stock option plan                 37          129
  
  Balance at end of period                                 25,065       25,028
  
  Accumulated other comprehensive income (loss):
       Unrealized gains (losses) on securities:
          Balance at beginning of year                     (6,412)      16,000
          Change in unrealized losses during period       (12,916)     (14,025)
  
          Balance at end of period                        (19,328)       1,975
  
      Foreign currency translation adjustments:
          Balance at beginning of year                      2,846        2,634
          Change in translation adjustments
          during period                                       358          (78)
  
          Balance at end of period                          3,204        2,556
  
  Accumulated other comprehensive
  income (loss) at end of period                          (16,124)       4,531
  
  Retained earnings:
      Balance at beginning of year                        450,559      391,334
      Net earnings                                         19,926       26,301
  
  Balance at end of  period                               470,485      417,635
  
  Total stockholders' equity                         $    482,928      450,695
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
  
                                                          2000         1999
  
  <S>                                                <C>              <C>
  
  Cash flows from operating activities:
      Net earnings                                   $     19,926       26,301
      Adjustments to reconcile net
      earnings to net cash
      from operating activities:
      Universal life and investment
      annuity contract interest                            69,411       85,604
      Surrender charges and other policy revenues         (22,555)     (19,616)
      Realized losses (gains) on investments                6,412       (5,678)
      Accrual and amortization of
      investment income                                    (2,213)      (2,670)
      Depreciation and amortization                           527          505
      Decrease (increase) in insurance
      receivables and other assets                         (2,466)       4,965
      Increase in accrued investment income                (1,688)      (1,294)
      Increase in deferred policy
      acquisition costs                                    (8,988)     (12,033)
      Decrease in liability for future
      policy benefits                                      (3,493)        (649)
      Increase in other policyholder liabilities            1,758          122
      Decrease in Federal income taxes payable             (4,049)      (2,138)
      Increase (decrease) in other liabilities             13,013      (12,301)
      Decrease (increase) in value of index options        11,832       (6,836)
      Other                                                  (336)        (221)
  
  Net cash provided by operating activities                77,091       54,061
  
  Cash flows from investing activities:
      Proceeds from sales of:
         Securities held to maturity                         -            -
         Securities available for sale                      9,993       40,101
         Other investments                                 13,874        9,848
      Proceeds from maturities and redemptions of:
         Securities held to maturity                       14,189       42,997
         Securities available for sale                     24,825       34,535
      Purchases of:
         Securities held to maturity                      (64,815)    (116,474)
         Securities available for sale                    (18,765)     (93,984)
         Other investments                                (23,192)     (23,512)
      Principal payments on mortgage loans                  9,683       29,140
      Cost of mortgage loans acquired                     (27,357)     (27,951)
      Decrease in policy loans                              1,537        5,333
      Decrease in assets of discontinued operations          -              48
      Decrease in liabilities of
      discontinued operations                                -             (48)
      Other                                                (6,670)        (212)
  
  Net cash used in investing activities                   (66,698)    (100,179)
  
  
  <FN>
  
  (Continued on next page)
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  
  <TABLE>
  <CAPTION>
  
  
                                                          2000         1999
  
  <S>                                                <C>              <C>
  
  Cash flows from financing activities:
      Deposits to account balances for universal
      life and investment annuity contracts          $    188,988      210,832
      Return of account balances on universal
      life and investment annuity contracts              (233,791)    (184,474)
      Increase in short-term borrowings                    23,000         -
      Issuance of common stock under
      stock option plan                                        38          132
  
  Net cash provided by (used in)
  financing activities                                    (21,765)      26,490
  
  Net decrease in cash and short-term investments         (11,372)     (19,628)
  Cash and short-term investments
  at beginning of year                                     14,010       24,508
  
  Cash and short-term investments at end of period   $      2,638        4,880
  
  <FN>
  
  See accompanying notes to condensed consolidated financial statements.
  
  </FN>
  </TABLE>
  
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
  
  
  (1)  BASIS OF PRESENTATION
  
  The accompanying condensed consolidated financial statements include the
  accounts of National Western Life Insurance Company  and its  wholly-owned
  subsidiaries  (the  Company),  The  Westcap  Corporation  (Westcap),  NWL
  Investments, Inc., NWL Properties, Inc., NWL 806 Main, Inc., NWL Services,
  Inc., and NWL Financial, Inc.  The Westcap Corporation ceased brokerage
  operations during 1995 and filed for reorganization under Chapter 11 of the
  U.S. Bankruptcy Code in 1996.  The bankruptcy reorganization was completed in
  January, 1999 and National Western retained 100% continuing ownership of the
  reorganized subsidiary.  As a result, The Westcap Corporation is reflected as
  discontinued operations in the accompanying financial statements for portions
  of 1999 and prior years.  Westcap is currently operating as a real estate
  management company.  All significant intercorporate transactions and accounts
  have been eliminated in consolidation.
  
  In the opinion of  the Company, the accompanying consolidated financial
  statements contain all adjustments necessary to present fairly the financial
  position of the Company as of June 30, 2000,  and  the  results of its
  operations for the three months and six months ended June 30, 2000 and 1999,
  and its cash flows for the six months ended June 30, 2000 and 1999.  The
  results of operations for the three months and six months ended June 30, 2000
  and 1999 are not necessarily indicative of the results to be expected  for the
  full year.
  
  
  (2) STOCKHOLDERS' EQUITY
  
  (A) Changes in Common Stock Shares Outstanding
  
  Details of changes in shares of common stock outstanding are provided below:
  
  <TABLE>
  <CAPTION>
  
                                                      Six Months Ended June 30,
                                                            2000        1999
                                                            (In thousands)
  
  <S>                                                       <C>          <C>
  
  Common stock shares outstanding:
     Shares outstanding at beginning of year                3,501        3,498
     Shares exercised under stock option plan                   1            3
  
  Shares outstanding at end of period                       3,502        3,501
  
  </TABLE>
  
  (B)  Dividends
  
  The Company paid no cash dividends on common stock during the six months ended
  June 30, 2000 and 1999.
  
  
  (3)  DISCONTINUED BROKERAGE OPERATIONS
  
  The Chapter 11 bankruptcy reorganization of the Company's wholly owned
  subsidiary,  The Westcap Corporation, was completed in the first quarter of
  1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in 1999 as the entire $14,125,000 settlement
  payment was accrued and reported as a loss in the third quarter of 1998.  Any
  additional losses will depend on the results of The City Colleges lawsuit
  filed against National Western on March 28, 1994, for alleged federal or state
  securities law "control person" violations relating to Westcap, and which is
  pending in the United States District Court, Western District of Texas.
  National Western believes it has reasonable and adequate defenses to this suit
  and, accordingly, no amounts have been accrued in National Western's financial
  statements for potential losses relating to such suit.
  
  
  (4) SEGMENT AND OTHER OPERATING INFORMATION
  
  The Company's reportable operating segments include domestic life insurance,
  international life insurance, and annuities. These segments are organized
  based on product types and geographic marketing areas.  A summary of segment
  information for the three and six months ended June 30, 2000 and 1999 is
  provided below.
  
  <TABLE>
  <CAPTION>
  
  Selected Segment Information:
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
  
                                           (In thousands)
  
  <S>                <C>           <C>       <C>            <C>      <C>
  
  June 30, 2000:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs             $  74,601      76,165     241,357        -        392,123
  Total segment
   assets              406,158     382,253   2,860,791      47,899   3,697,101
  Future policy
   benefits            320,863     296,200   2,529,518        -      3,146,581
  Other
   policyholder
   liabilities           9,259       6,944       9,658        -         25,861
  
  Three Months
  Ended
  June 30, 2000:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues          $  6,007      11,022      11,255        -         28,284
  Net investment
   income                6,563       5,769      34,246       2,237      48,815
  Other income              22           2         115        -            139
   Total
   revenues             12,592      16,793      45,616       2,237      77,238
  Policy benefits        4,305       4,144          41        -          8,490
  Amortization of
   deferred
   policy
   acquisition
   costs                   572       3,794       6,927        -         11,293
  Universal life
   and investment
   annuity
   contract
   interest              2,418       3,956      26,386        -         32,760
  Other operating
   expenses              2,297       2,049       2,774         240       7,360
  Federal income
   taxes                 1,029         979       3,260         683       5,951
   Total expenses       10,621      14,922      39,388         923      65,854
  Segment earnings    $  1,971       1,871       6,228       1,314      11,384
  
  Six Months Ended
  June 30, 2000:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues           $ 11,937      21,708      17,914        -         51,559
  Net investment
   income               13,035      11,419      79,342       2,759     106,555
  Other income              22          29         203        -            254
   Total revenues       24,994      33,156      97,459       2,759     158,368
  Policy benefits        8,198       7,794         108        -         16,100
  Amortization of
   deferred
   policy
   acquisition
   costs                 2,198       6,951      13,029        -         22,178
  Universal life
   and investment
   annuity
   contract
   interest              4,640       7,886      56,885        -         69,411
  Other operating
   expenses              4,383       4,043       5,411         240      14,077
  Federal income
   taxes                 1,905       2,215       7,527         861      12,508
   Total expenses       21,324      28,889      82,960       1,101     134,274
  Segment earnings    $  3,670       4,267      14,499       1,658      24,094
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
  Selected Segment Information:
  
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
                                           (In thousands)
  
  <S>                <C>           <C>       <C>            <C>      <C>
  
  June 30, 1999:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs              $ 69,886      73,021     200,654        -        343,561
  Total segment
   assets              408,013     373,831   2,767,952      34,521   3,584,317
  Future policy
   benefits            323,527     287,792   2,459,637        -      3,070,956
  Other
   policyholder
   liabilities           9,062       7,383       7,632        -         24,077
  
  Three Months
  Ended
  June 30, 1999:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues           $  6,489      10,516       7,034        -         24,039
  Net investment
   income                6,347       5,460      50,864       2,033      64,704
  Other income              51          41          35        -            127
   Total revenues       12,887      16,017      57,933       2,033      88,870
  Policy benefits        5,156       3,705        (804)       -          8,057
  Amortization of
   deferred
   policy
   acquisition
   costs                 1,460       3,283       5,692        -         10,435
  Universal life
   and investment
   annuity contract
   interest              2,436       3,461      39,096        -         44,993
  Other operating
   expenses              2,757       2,268       2,803        -          7,828
  Federal income
   taxes                   362       1,115       3,762         688       5,927
   Total expenses       12,171      13,832      50,549         688      77,240
  Segment earnings    $    716       2,185       7,384       1,345      11,630
  
  Six Months Ended
  June 30, 1999:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues           $ 12,280      20,744      14,958        -         47,982
  Net investment
   income               12,678      10,903      96,760       2,215     122,556
  Other income              67          53         157        -            277
   Total revenues       25,025      31,700     111,875       2,215     170,815
  Policy benefits        8,700       8,407        (603)       -         16,504
  Amortization of
   deferred
   policy
   acquisition
   costs                 2,392       6,562      11,052        -         20,006
  Universal life
   and investment
   annuity contract
   interest              4,885       6,894      73,825        -         85,604
  Other operating
   expenses              4,819       4,403       5,307        -         14,529
  Federal income
   taxes                 1,431       1,839       7,543         749      11,562
   Total expenses       22,227      28,105      97,124         749     148,205
  Segment earnings    $  2,798       3,595      14,751       1,466      22,610
  
  </TABLE>
  
  
  Reconciliations of segment information to the Company's consolidated financial
  statements are provided below:
  
  <TABLE>
  <CAPTION>
  
                        Three Months Ended June 30,   Six Months Ended June 30,
                               2000         1999         2000         1999
                                               (In thousands)
  
  <S>                     <C>                <C>         <C>          <C>
  
  Premiums and Other
  Revenue:
  Premiums and contract
   revenues               $     28,284       24,039       51,559       47,982
  Net investment income         48,815       64,704      106,555      122,556
  Other income                     139          127          254          277
  Realized gains on
   investments                  (5,832)         873       (6,412)       5,678
  
  Total consolidated
   premiums
   and other revenue      $     71,406       89,743      151,956      176,493
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
  
                    Three Months Ended June 30,       Six Months Ended June 30,
                               2000         1999         2000         1999
                                               (In thousands)
  
  <S>                      <C>                <C>         <C>          <C>
  
  Federal Income Taxes:
  Total segment Federal
   income taxes            $     5,951        5,927       12,508       11,562
  Taxes (benefits)
   on realized
   gains (losses)
   on investments               (2,041)         305       (2,244)       1,987
  
  Total consolidated
   Federal income taxes    $     3,910        6,232       10,264       13,549
  
  </TABLE>
  
  
  <TABLE>
  <CAPTION>
  
                          Three Months Ended June 30, Six Months Ended June 30,
                               2000         1999         2000         1999
                                              (In thousands)
  
  <S>                       <C>              <C>          <C>          <C>
  
  Net Earnings:
  Total segment earnings    $   11,384       11,630       24,094       22,610
  Realized gains (losses)
   on investments,
   net of taxes                 (3,791)         568       (4,168)       3,691
  
  Total consolidated
   net earnings             $    7,593       12,198       19,926       26,301
  
  </TABLE>
  
  
  <TABLE>
  <CAPTION>
  
                                                               June 30,
                                                          2000         1999
                                                            (In thousands)
  
  <S>                                                <C>             <C>
  
  Assets:
  Total segment assets                               $  3,697,101    3,584,317
  Other unallocated assets                                 19,983       15,535
  
  Total consolidated assets                          $  3,717,084    3,599,852
  
  </TABLE>
  
  
  
  
                   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  
  GENERAL
  
  National Western Life Insurance Company is a life insurance company, chartered
  in the State of Colorado in 1956, and doing business in forty-three states and
  the District of Columbia. The Company also accepts applications from and
  issues policies to residents of various Central and South American, Caribbean,
  and Pacific Rim countries.  A distribution of the Company's direct premium
  revenues and deposits by domestic and international markets is provided below:
  
  <TABLE>
  <CAPTION>
  
                                          Six Months Ended June 30,
                                             2000           1999
  
  <S>                                           <C>            <C>
  
  United States domestic market:
       Investment annuities                      77.3  %        81.6  %
       Life insurance                             6.6            5.9
  
  Total domestic market                          83.9           87.5
  
  International market:
       Investment annuities                       3.0            0.9
       Life insurance                            13.1           11.6
  
  Total international market                     16.1           12.5
  
  Total direct premiums collected               100.0  %       100.0  %
  
  </TABLE>
  
  Insurance Operations - Domestic
  
  The Company's domestic operations concentrate marketing efforts on federal
  employees, seniors, and specific employee groups in private industry, as well
  as individual sales.  The products marketed are annuities, universal life
  insurance, and traditional life insurance, which includes both term and whole
  life products.  The majority of products sold are the Company's annuities,
  which include single and flexible premium deferred annuities, single premium
  immediate annuities, and equity-indexed annuities.  Most of these annuities
  can be sold as tax qualified or nonqualified products.
  
  National Western markets and distributes its domestic products primarily
  through independent marketing organizations (IMOs).   These IMOs assist the
  Company in recruiting, contracting, and supervising agents.  The Company
  currently has over 80 IMOs contracted for sales of life and annuity products.
  
  Insurance Operations - International
  
  The Company's international operations focus marketing efforts on foreign
  nationals in upper socioeconomic classes with substantial financial resources.
  Insurance sales are on insureds from countries in Central and South America,
  the Caribbean, and the Pacific Rim.  Policy sales on insureds from numerous
  countries in these different regions provides diversification that helps to
  minimize large fluctuations in sales that can occur due to various economic,
  political, and competitive pressures that may occur from one country to
  another.  Products sold in the international market are almost entirely
  universal life and traditional life insurance products.  However, certain
  annuity and investment contracts are also available in this market.
  
  International sales production is from broker-agents, many of whom have been
  selling National Western products for 20 or more years.  The Company continues
  to expand its sales networks in specifically targeted South American and
  Pacific Rim countries which have higher growth potential than other countries.
  
  There are inherent risks of conducting international business that are not
  present within the domestic market.  The risks involved with international
  business are reduced substantially by the Company in several ways.  As
  previously described, the Company focuses its marketing efforts on a specific
  niche group, which is foreign nationals in upper socioeconomic classes who
  have substantial financial resources.  This targeted customer base coupled
  with National Western's conservative, yet competitive, underwriting practices
  have historically resulted in claims experience similar to that in the United
  States.  The Company also minimizes exposure to foreign currency risks, as
  almost all foreign policies require payment of premiums and claims in United
  States dollars.  Finally, the Company's experience in the international market
  and its strong broker-agent relationships, which in many cases exceed 20
  years, help minimize risks and problems when selling products to foreign
  nationals.
  
  
  INVESTMENTS IN DEBT AND EQUITY SECURITIES
  
  Investment Philosophy
  
  The Company's investment philosophy is to maintain a diversified portfolio of
  investment grade debt and equity securities that provide adequate liquidity to
  meet policyholder obligations and other cash needs.  The prevailing strategy
  within this philosophy is the intent to hold investments in debt securities to
  maturity. However, the Company manages its portfolio, which entails monitoring
  and reacting to all components which affect changes in the price, value, or
  credit rating of investments in debt and equity securities.
  
  Investments in debt and equity securities are classified and reported as
  either securities held to maturity or securities available for sale.  The
  Company does not maintain a portfolio of trading securities.  The reporting
  category chosen for the Company's securities investments depends on various
  factors including the type and quality of the particular security and how it
  will be incorporated into the Company's overall asset/liability management
  strategy.  At June 30, 2000, approximately 26.1% of the Company's total debt
  and equity securities, based on fair values, were classified as securities
  available for sale.  These holdings provide flexibility to the Company to
  react to market opportunities and conditions and to practice active management
  within the portfolio to provide adequate liquidity to meet policyholder
  obligations and other cash needs.
  
  Securities the Company purchases with the intent to hold to maturity are
  classified as securities held to maturity. Because the Company has strong cash
  flows and matches expected maturities of assets and liabilities, the Company
  has the ability to hold the securities, as it would be unlikely that forced
  sales of securities would be required prior to maturity to cover payments of
  liabilities. As a result, securities held to maturity are carried at amortized
  cost less declines in value that are other than temporary. However, certain
  situations may change the Company's intent to hold a particular security to
  maturity, the most notable of which is a deterioration in the issuer's
  creditworthiness. Accordingly, a security may be sold to avoid a further
  decline in realizable value when there has been a significant change in the
  credit risk of the issuer.
  
  Securities that are not classified as held to maturity are reported as
  securities available for sale. These securities may be sold if market or other
  measurement factors change unexpectedly after the securities are acquired. For
  example, opportunities arise that allow the Company to improve the performance
  and credit quality of the investment portfolio by replacing an existing
  security with an alternative security while still maintaining an appropriate
  matching of expected maturities of assets and liabilities. Examples of such
  improvements are as follows: improving the yield earned on invested assets,
  improving the credit quality, changing the duration of the portfolio, and
  selling securities in advance of anticipated calls or other prepayments.
  Securities  available  for  sale  are  reported  in  the  Company's  financial
  statements at fair value. Any unrealized gains or losses resulting from
  changes in the fair value of the securities are reflected in accumulated other
  comprehensive income.
  
  As an integral part of its investment philosophy, the Company performs an
  ongoing process of monitoring the creditworthiness of issuers within the
  investment portfolio.  Review procedures are also performed on securities that
  have had significant declines in fair value. The Company's objective in these
  circumstances is to determine if the decline in fair value is due to changing
  market expectations regarding inflation and general interest rates or other
  factors.  Additionally, the Company closely monitors financial, economic, and
  interest rate conditions to manage prepayment and extension risks in its
  mortgage-backed securities portfolio.
  
  The Company's overall conservative investment philosophy is reflected in the
  allocation of its investments which is detailed below as of June 30, 2000 and
  December 31, 1999.  The Company emphasizes investment grade debt securities,
  with smaller holdings in mortgage loans and real estate.
  
  <TABLE>
  <CAPTION>
                                              Percent of Investments
                                             June 30,     December 31,
                                               2000           1999
  
  <S>                                           <C>             <C>
  
  Debt securities                                  87.7%          87.8%
  Mortgage loans                                    6.2            5.7
  Policy loans                                      3.6            3.6
  Index options                                     0.7            1.0
  Equity securities                                 0.5            0.5
  Real estate                                       0.4            0.4
  Other                                             0.9            1.0
  
  Totals                                          100.0%         100.0%
  
  </TABLE>
  
  
  Portfolio Analysis
  
  The Company maintains a diversified debt securities portfolio which consists
  of various types of fixed income securities including primarily corporate,
  mortgage-backed   securities,   and   public   utilities.   Investments   in
  mortgage-backed  securities  include  primarily  U.S.  government  agency
  pass-through securities and collateralized mortgage obligations (CMOs).
  
  An important aspect of the Company's investment philosophy is managing the
  credit quality of its investments in debt securities.  Thorough credit
  analysis  is  performed  on  existing  and  potential  corporate  investments
  including examination of a company's credit and industry outlook, financial
  strength, effectiveness of management, and event risks.  In the past few
  years, credit analysis has become one of the most critical activities of the
  Company's portfolio management.
  
  National Western continues to follow its conservative investment philosophy by
  minimizing its holdings of  below investment grade debt securities, as these
  securities generally have greater default risk than higher rated corporate
  debt. These issuers usually are more sensitive to adverse industry or economic
  conditions than are investment grade issuers. The Company's holdings of below
  investment grade debt securities, which are lower than industry averages, are
  summarized below.
  
  <TABLE>
  <CAPTION>
  
                                             Below Investment
                                          Grade Debt Securities
                                                                        % of
                             Amortized     Carrying      Market      Invested
                               Cost         Value        Value        Assets
                                    (In thousands except percentages)
  
  <S>                     <C>                <C>          <C>             <C>
  
  June 30, 2000           $    103,624       78,510       75,240          2.4%
  
  December 31, 1999       $     73,607       70,900       63,864          2.2%
  
  December 31, 1998       $     46,453       44,974       45,317          1.4%
  
  </TABLE>
  
  Although National Western purchases only investment grade debt securities, a
  growing number of companies have become more leveraged due to an environment
  of heightened acquisition activity and large share repurchase programs.
  Therefore, continued monitoring of credit quality after the purchase of a
  company's debt securities is crucial in order for National Western to maintain
  a high quality portfolio with a low percentage of below investment grade debt
  securities.  While the Company's holdings of below investment grade debt
  securities remain low, these holdings have increased from $44,974,000 at
  December 31, 1998, to $78,510,000 at June 30, 2000.  This increase is due to
  downgrades of investment grade debt securities as opposed to purchases of such
  holdings.  Historically, the Company's strong credit risk management and
  commitment to quality has resulted in minimal defaults in the debt securities
  portfolio.
  
  During the third and fourth quarters of 1999, the Company recorded permanent
  impairment writedowns totaling $4,403,000 related to two separate securities.
  The writedowns were reflected as realized losses.  One of these securities was
  classified as available for sale and the other as held to maturity.  The
  Company subsequently transferred the held to maturity holding to securities
  available for sale during the first quarter of 2000.  Subsequently, three
  additional debt securities experienced significant credit deterioration.  As a
  result  of  the  significant  deterioration  of  the  issuing  companies'
  creditworthiness, National Western also transferred these three securities
  from held to maturity to available for sale during the first quarter of 2000.
  Amortized cost, net of writedowns, of the four transferred securities totaled
  $49,528,000.  Unrealized losses resulting from recording the securities at
  fair value, before effects of taxes and deferred policy acquisitions costs,
  totaled $20,376,000.  The unrealized losses were recorded as a component of
  accumulated other comprehensive loss in the accompanying financial statements
  for the quarter ended March 31, 2000.
  
  During the second quarter of 2000, an additional below investment grade debt
  security, which the Company has been monitoring closely due to credit
  deterioration, defaulted on its interest payment.  Based on the current
  condition of the issuing company, complete recovery of National Western's
  investment in this security is not expected.  As a result, the Company
  recorded  a  permanent  impairment  writedown  for  this  security  totaling
  $6,715,000 during the quarter ended June 30, 2000 and also transferred the
  security from held to maturity to available for sale.  The writedown was
  recorded as a realized investment loss.  Amortized cost, net of writedowns, of
  this  security  totaled  $8,250,000  and  unrealized  losses  resulting  from
  recording the security at fair value, before the effects of taxes and deferred
  policy acquisition costs, totaled $4,000,000.  The unrealized losses were
  recorded as a component of accumulated other comprehensive loss in the
  accompanying financial statements for the quarter ended June 30, 2000.
  
  The Company is closely monitoring the previously described securities as well
  as its other below investment grade holdings.  While additional losses are not
  currently anticipated based on the existing status and condition of these
  securities, continued credit deterioration of some securities is possible,
  which may result in further writedowns.
  
  Although there is loss exposure related to its below investment grade debt
  securities, the Company is firmly committed to minimizing credit risks and
  maintaining a high quality portfolio.  This commitment is reflected in the
  high average credit rating of the Company's portfolio.  In the table below,
  investments in debt securities are classified according to credit ratings by
  Standard  and  Poor's  (S&P),  a  nationally  recognized  statistical  rating
  organization (NRSRO).  If securities were not rated by S&P, the equivalent
  rating of another NRSRO or the National Association of Insurance Commissioners
  was used.
  
  <TABLE>
  <CAPTION>
  
                                             June 30,      December 31,
                                               2000            1999
  
  <S>                                            <C>              <C>
  
  AAA and U.S. government                          28.4%           28.7%
  AA                                                7.9             8.8
  A                                                33.9            34.1
  BBB                                              27.1            25.9
  BB and other below investment grade               2.7             2.5
  
                                                  100.0%          100.0%
  
  </TABLE>
  
  Another important part of the Company's investment philosophy is managing the
  cash flow stability of the portfolio.  Because expected maturities of
  securities  may  differ  from  contractual  maturities  due  to  prepayments,
  extensions, and calls, the Company takes steps to manage and minimize these
  risks.  The Company continues to reduce its exposure to prepayment and
  extension risks by lowering its holdings of mortgage-backed securities.  This
  strategy began in 1994 when mortgage-backed securities totaled 47.6% of the
  entire portfolio, but now total only 20.2% at June 30, 2000.  The majority of
  this reduction has been achieved by shifting investments into corporate
  securities and public utilities, as these holdings have increased from 47.0%
  at December 31, 1994 to 69.5% at June 30, 2000.  Also, most of these additions
  have been noncallable corporates, which help reduce prepayment and call risks.
  
  As indicated above, the Company's holdings of mortgage-backed securities are
  also subject to prepayment risk, as well as extension risk.  Both of these
  risks are addressed by specific portfolio management strategies.  The Company
  has substantially reduced both prepayment and extension risks by investing
  primarily in collateralized mortgage obligations, which have more predictable
  cash flow patterns than pass-through  securities.  These securities, known as
  planned amortization class I (PAC I) CMOs, are designed to amortize in a more
  predictable manner than other CMO classes or pass-throughs.  Using this
  strategy, the Company can more effectively manage and reduce prepayment and
  extension risks, thereby helping to maintain the appropriate matching of the
  Company's assets and liabilities.
  
  As of June  30, 2000, CMOs represent approximately 94% of the Company's
  mortgage-backed securities. The CMOs in the Company's portfolio have been
  modeled and subjected to detailed, comprehensive analysis by the Company's
  investment staff.  The overall structure of the CMO as well as the individual
  tranche being considered for purchase have been evaluated to ensure that the
  security fits appropriately within the Company's investment philosophy and
  asset/liability management parameters.  The Company's investment mix between
  mortgage-backed securities and other fixed income securities helps effectively
  balance prepayment, extension, and credit risks.
  
  At June 30, 2000, the Company's debt and equity securities were classified as
  follows:
  
  <TABLE>
  <CAPTION>
  
                                                                   Unrealized
                                          Fair       Amortized       Gains
                                          Value         Cost        (Losses)
                                                   (In thousands)
  
  <S>                                <C>             <C>            <C>
  
  Securities held to maturity:
      Debt securities                $  2,063,393    2,138,688       (75,295)
  Securities available for sale:
      Debt securities                     712,117      771,963       (59,846)
      Equity securities                    16,069       12,754         3,315
  
  Totals                             $  2,791,579    2,923,405      (131,826)
  
  </TABLE>
  
  As detailed above, debt securities classified as held to maturity comprise the
  majority of the Company's securities portfolio, while equity securities are a
  small component of the portfolio.  Unrealized losses totaling $131,826,000 on
  the securities portfolio at June 30, 2000, are a reflection of market
  conditions at quarter-end.  The fair values, or market values, of fixed income
  debt  securities  generally  correlate  to  external  market  interest  rate
  conditions.  Because the interest rates are fixed on almost all of the
  Company's debt securities, market values typically increase when market
  interest  rates  decline,  and  decrease  when  market  interest  rates  rise.
  However, market values may fluctuate for other reasons, such as changing
  economic conditions or increasing event-risk concerns.  An analysis of the
  change in unrealized gains and losses on the Company's securities portfolio
  for the quarter ended June 30, 2000, is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                                    Change in
                                     Unrealized Gains (Losses)     Unrealized
                                          At            At       Gains (Losses)
                                       June 30,      March 31,     During 2nd
                                         2000          2000       Quarter 2000
                                                   (In thousands)
  
  <S>                               <C>               <C>             <C>
  
  Securities held to maturity:
      Debt securities               $    (75,295)      (68,470)        (6,825)
  Securities available for sale:
      Debt securities                    (59,846)      (48,078)       (11,768)
      Equity securities                    3,315         3,222             93
  
  Totals                            $   (131,826)     (113,326)       (18,500)
  
  </TABLE>
  
  Unrealized losses at June 30, 2000, increased 45% from year-end 1999 and 16%
  from March 31, 2000, even though market interest rates of the ten year U.S.
  Treasury bond actually decreased approximately 40 basis points during this six
  month period.  With market interest rates declining, it would be expected that
  market values of debt securities would increase.  However, market values
  actually decreased because of the substantial widening of the yield premium
  for corporate bonds over comparable Treasury securities.  Approximately 69% of
  National Western's bond portfolio consists of corporate bonds, including
  public utilities.  The increase of the yield premium has primarily been event-
  risk driven as companies increase their leverage through stock buyback
  programs and acquisitions.  Because the majority of the Company's debt
  securities are classified as held to maturity, which are recorded at amortized
  cost, changes in market values have relatively small effects on the Company's
  financial statements.  Also, the Company has the intent and ability to hold
  these securities to maturity, and it is unlikely that sales of such securities
  would be required which would realize market gains or losses.
  
  Changes in fair values of securities due to changes in market interest rates
  is an example of market risk.  Market risk is the risk of change in market
  values of financial instruments due to changes in interest rates, currency
  exchange rates, commodity prices, or equity prices.  The most significant
  market risk exposure for National Western is interest rate risk. The Company
  manages interest rate risk through on-going cash flow testing required for
  insurance regulatory purposes. Computer models are used to perform cash flow
  testing under various commonly used stress test interest rate scenarios to
  determine if existing assets would be sufficient to meet projected liability
  outflows.  Management strives to closely match the durations of its assets and
  liabilities.   Sensitivity analysis allows the Company to measure the
  potential gain or loss in fair value of its interest-sensitive instruments and
  to seek to protect its economic value and achieve a predictable spread between
  what is earned on invested assets and what is paid on liabilities.  The
  Company seeks to minimize the impact of interest risk through surrender
  charges that are imposed to discourage policy surrenders.  Interest rate
  changes can be anticipated and risk may be limited due to management actions
  regarding asset and liability instruments.  However, potential changes in the
  values of financial instruments indicated by hypothetical interest changes
  will likely be different from actual changes experienced, and the differences
  may be material.
  
  The Company's market risk-sensitive assets include debt securities, equity
  securities which are almost entirely preferred stocks, mortgage loans, policy
  loans, and index options.  The Company does not maintain a securities trading
  portfolio.  Market risk-sensitive liabilities include policy liabilities for
  deferred  and  immediate  investment  annuity  contracts  and  supplemental
  contracts.  Sensitivity analysis expresses the potential gain or loss in fair
  value, over a selected time period, from one or more selected hypothetical
  changes in interest rates which are reasonably possible in the near term.  The
  Company performed detailed sensitivity analysis at December 31, 1999, for its
  interest rate-sensitive assets.  Based on the recent changes in market
  conditions in the first six months of 2000, the changes in market values of
  the Company's debt securities fell somewhat outside the expected range of
  results of this analysis.  The deviation from the expected results was due to
  the volatility in the corporate bond market as previously described above.
  
  In addition to the securities described above, the Company invests in index
  options which are derivative financial instruments used to hedge the equity
  return component of the Company's equity-indexed annuities.  The values of
  these options are primarily impacted by equity price risk, as the options'
  fair values are dependent on the performance of the S&P 500 Composite Stock
  Price Index.  However, increases or decreases in investment returns from these
  options are substantially offset by corresponding increases or decreases in
  amounts paid to equity-indexed annuity policyholders, subject to minimum
  guaranteed policy interest rates.
  
  The Company's market risk liabilities, which include policy liabilities for
  investment annuity and supplemental contracts, are managed for interest rate
  risk through cash flow testing as previously described.  As part of this cash
  flow testing, the Company has analyzed the potential impact on net earnings of
  both a 100 basis point increase and decrease in the U.S. Treasury yield curve
  as of December 31, 1999.  A 100 basis point interest rate decline would
  decrease net earnings for 2000 by approximately $300,000, based on the
  Company's projections.  A 100 basis point increase in interest rates would
  increase net earnings by approximately $200,000, based on the Company's
  projections.  These estimated impacts to earnings are net of tax effects
  determined at a tax rate of 35% and are also net of the estimated effects of
  deferred policy acquisition costs.
  
  The Company has modeled these scenarios, as a change in market interest rates
  could pose potential risks to the current profitability levels of this
  business.  These movements in interest rates are also reasonably possible
  near-term scenarios given the current interest rate environment.  The risks
  from such changes are primarily due to changes in interest rate spreads, which
  are the differences between investment income earned and credited interest
  paid to policyholders.  Also, the changes in interest rates can effect the
  level of surrenders and timing of cash flows related to policy liabilities.
  
  The above-described scenarios produce estimated changes in cash flows as well
  as cash flow reinvestment projections.  Estimated cash flows in the Company's
  model assume cash flow reinvestments which are representative of the Company's
  current  investment  strategy.    Calls  and  prepayments  include  scheduled
  maturities and those expected to occur which would benefit the security
  issuers.  Assumed policy surrenders consider differences and relationships
  between credited interest rates and market interest rates as well as surrender
  charges on individual policies.  The impact to earnings also includes the
  expected effects on amortization of deferred policy acquisition costs.  The
  model considers only investment annuity and supplemental contracts in-force at
  December 31, 1999, and does not consider new product sales or the possible
  impact of interest rate changes on sales.
  
  
  MORTGAGE LOANS AND REAL ESTATE
  
  Investment Philosophy
  
  In general, the Company seeks loans on high quality, income producing
  properties such as shopping centers, freestanding retail stores, office
  buildings, industrial and sales or service facilities, selected apartment
  buildings, motels, and health care facilities.  The location of these loans is
  typically  in  growth  areas  that  offer  a  potential  for  property  value
  appreciation.  These growth areas are found primarily in major metropolitan
  areas, but occasionally in selected smaller communities.
  
  The Company seeks to minimize the credit and default risk in its mortgage loan
  portfolio  through  strict  underwriting  guidelines  and  diversification  of
  underlying property types and geographic locations.   In addition to being
  secured by the property, mortgage loans with leases on the underlying property
  are often guaranteed by the lessee, in which case the Company approves the
  loan based on the credit strength of the lessee.  This approach has resulted
  in higher quality mortgage loans with fewer defaults.
  
  The Company's direct investments in real estate are not a significant portion
  of its total investment portfolio.  Many of these investments were acquired
  through mortgage loan foreclosures.  However, the Company also participates in
  several real estate joint ventures and limited partnerships.  The joint
  ventures  and  partnerships  invest  primarily  in  income-producing  retail
  properties.    These  investments  have  typically  enhanced  the  Company's
  investment portfolio returns.
  
  Portfolio Analysis
  
  The Company held net investments in mortgage loans totaling $202,024,000 and
  $183,902,000, or 6.2% and 5.7% of total invested assets, at June 30, 2000, and
  December  31,  1999,  respectively.  The  loans  are  real  estate  mortgages,
  substantially  all  of  which  are  related  to  commercial  properties  and
  developments and have fixed interest rates.
  
  The diversification of the mortgage loan portfolio by geographic regions of
  the United States and by property type as of June 30, 2000, and December 31,
  1999, was as follows:
  
  <TABLE>
  <CAPTION>
  
                                        June 30,     December 31,
  Geographic Region:                      2000           1999
  
  <S>                                      <C>            <C>
  
  West South Central                        55.2%          58.8%
  Mountain                                  23.3           20.5
  Pacific                                    9.8           11.0
  South Atlantic                             4.5            5.1
  East South Central                         3.8            4.2
  Other                                      3.4            0.4
  
  Totals                                   100.0%         100.0
  
  </TABLE>
  
  <TABLE>
  <CAPTION>
  
                                         June 30,     December 31,
  Property Type:                           2000           1999
  
  <S>                                      <C>            <C>
  
  Retail                                    60.3%          56.1%
  Office                                    24.2           27.4
  Hotel/Motel                                6.4            7.2
  Land/Lots                                  3.5            2.5
  Nursing Homes                              2.0            2.4
  Apartment                                  1.0            1.6
  Other                                      2.6            2.8
  
  Totals                                   100.0%         100.0%
  
  </TABLE>
  
  As of June 30, 2000, the allowance for possible losses on mortgage loans was
  $4,104,000.  No additions were made to the allowance in the first six months
  of 2000.  Although management believes that the current balance is adequate,
  future additions to the allowance may be necessary based on changes in
  economic conditions, particularly in the West South Central region which
  includes Texas, Louisiana, Oklahoma, and Arkansas, as this area contains the
  highest concentrations of the Company's mortgage loans.
  
  The Company currently places all loans past due three months or more on
  nonaccrual status, thus recognizing no interest income on the loans.  The
  Company had mortgage loan principal balances on nonaccrual status totaling
  $3,031,000  and  $3,014,000  at  June  30,  2000  and  December  31,  1999,
  respectively.  Also, the Company will at times restructure mortgage loans
  under certain conditions which may involve changes in interest rates, payment
  terms, or other modifications.  For the six months ended June 30, 2000, the
  reductions in interest income due to nonaccrual and restructured mortgage
  loans were approximately $155,000.  For the six months ended June 30, 1999,
  the reductions in interest income due to nonaccrual and restructured mortgage
  loans were not significant.
  
  The Company owns real estate that was acquired through foreclosure and through
  direct investment totaling $12,355,000 and $11,388,000 at June 30, 2000, and
  December 31, 1999, respectively.  This small concentration of properties
  represents less than one percent of the Company's entire investment portfolio.
  The real estate holdings consist primarily of income-producing properties
  which are being operated by the Company.  The Company recognized operating
  income on these properties of approximately $395,000 and $450,000 for the six
  months ended June 30, 2000 and 1999.  Also during the first six months of 2000
  and 1999, the Company sold real estate properties resulting in realized gains
  on investments totaling $207,000 and  $1,419,000, respectively.
  
  The Company monitors the conditions and market values of these properties on a
  regular basis.  No significant realized losses were recognized due to declines
  in values of properties for the six months ended June 30, 2000 and 1999,
  respectively.  The Company makes repairs and capital improvements to keep the
  properties in good condition and will continue this maintenance as needed.
  
  
  RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2000 AND 1999
  
  Consolidated Operations
  
  Summary of Consolidated Operating Results
  
  A summary of operating results for the three months ended June 30, 2000 and
  1999 is provided below:
  
  <TABLE>
  <CAPTION>
  
                                                   Three Months Ended June 30,
                                                          2000          1999
                                           (In thousands except per share data)
  
  <S>                                               <C>                 <C>
  
  Revenues:
  Revenues, excluding realized gains
  (losses) and index options                        $      89,728       82,918
  Index options                                           (12,490)       5,952
  Realized gains (losses) on investments                   (5,832)         873
  
  Total revenues                                    $      71,406       89,743
  
  Earnings:
  Earnings from operations                          $      11,384       11,630
  Net realized gains (losses) on investments               (3,791)         568
  
  Net earnings                                      $       7,593       12,198
  
  Basic Earnings Per Share:
  Earnings from operations                          $        3.25         3.33
  Net realized gains (losses) on investments                (1.08)        0.16
  
  Net earnings                                      $        2.17         3.49
  
  Diluted Earnings Per Share:
  Earnings from operations                          $        3.24         3.30
  Net realized gains (losses) on investments                (1.08)        0.16
  
  Net earnings                                      $        2.16         3.46
  
  </TABLE>
  
  Consolidated  Operating  Results:  Earnings  from  operations,  excluding  net
  realized gains and losses on investments, totaled $11,384,000 for the quarter
  ended June 30, 2000, compared to $11,630,000 for the second quarter of 1999.
  Earnings for the current quarter were affected by the Company's equity-indexed
  annuity  business.    These  annuities  combine  features  associated  with
  traditional fixed annuities, with the option to have interest rates linked in
  part to an equity index, the S&P 500 Index.  Volatility and declines in the
  S&P 500 Index during the second quarter of 2000 resulted in lower earnings
  from this block of business.  However, universal life and annuity contract
  revenues were significantly higher offsetting much of the impact from the
  equity-indexed annuity business.
  
  Revenues for the quarters ended June 30, 2000 and 1999 totaled $71,406,000 and
  $89,743,000, respectively. The lower revenues in 2000 are due to realized
  losses on investments and significant decreases in investment income from
  index options which are used to hedge the Company's equity-indexed annuities.
  The lower investment income was substantially offset by lower annuity contract
  interest expense, which reflects the results of the Company's hedging policy
  of this business.  Excluding both realized gains and losses on investments and
  income or losses from index options, as these items can be irregular and
  variable in nature, revenues reflected significant growth totaling $89,728,000
  and $82,918,000 for the quarters ended June 30, 2000 and 1999, respectively.
  
  The Company recorded realized losses on investments, net of taxes, totaling
  $3,791,000 for the quarter ended June 30, 2000, compared to gains of $568,000
  for the second quarter of 1999.  The loss in the second quarter of 2000 is
  primarily due to a permanent impairment writedown for a specific debt security
  which defaulted during the quarter.   The Company's policy is to record an
  impairment writedown when a decline in value is other than temporary and full
  recovery of the investment cost is not expected.  Overall, the Company's debt
  securities portfolio remains high quality with minimal holdings of below
  investment grade securities, particularly in comparison to life insurance
  industry averages.
  
  Universal Life and Investment Annuity Contract Revenues: Contract revenues
  increased significantly during the quarter ended June 30, 2000 totaling
  $25,384,000 compared to $20,658,000 for the comparable 1999 period.  This
  increase of over 22% is almost entirely due to higher annuity surrender charge
  income.    Surrenders  for  both  single-tier  and  two-tier  annuities  were
  abnormally high during the second quarter of 2000.
  
  Net Investment Income:  Net investment income decreased 24.6% from the second
  quarter of 1999, primarily due to declines in fair values of index options
  used to hedge the equity return component of the Company's equity-indexed
  annuity product. The index options, which act as hedges to match closely the
  returns on the S&P 500 Index, are reported at fair value in the accompanying
  financial statements. The changes in the values of the index options and the
  credited interest on policyholder liabilities for equity-indexed annuities are
  both reflected in the statement of earnings.  The reduction to investment
  income from index options for the quarter ended June 30, 2000, totaled
  $12,490,000 compared to income of $5,952,000 for the comparable period of
  1999.  This significant decline is directly attributable to the volatility and
  decline in the S&P 500 Index.  While net investment income was lower due to
  these options, this reduction was substantially offset by lower annuity
  contract interest expense as the credited return on the Company's equity-
  indexed annuities are also based on the same S&P 500 Index. A detail of net
  investment income is provided below:
  
  <TABLE>
  <CAPTION>
  
                                           Three Months Ended June 30,
                                                2000          1999
                                                  (In thousands)
  
  <S>                                     <C>                  <C>
  
  Investment income:
      Debt securities                     $      52,894        51,097
      Mortgage loans                              4,726         4,021
      Policy loans                                2,040         2,045
      Index options                             (12,490)        5,952
      Other investment income                     2,790         2,720
  
  Total investment income                        49,960        65,835
  Investment expenses                             1,145         1,131
  
  Net investment income                   $      48,815        64,704
  
  </TABLE>
  
  Life and Other Policy Benefits: Policy benefits in the second quarter of 2000
  increased 12.2% over the 1999 second quarter.  The higher expenses were almost
  entirely due to life insurance benefits claims which increased $1,044,000 as
  indicated in the comparative detail provided below:
  
  <TABLE>
  <CAPTION>
  
                                            Three Months Ended June 30,
                                                 2000          1999
                                                   (In thousands)
  
  <S>                                      <C>                 <C>
  
  Life insurance benefit claims            $       6,482         5,438
  Surrenders of traditional products               2,658         2,513
  Other policy benefits                              361           514
  
  Totals                                   $       9,501         8,465
  
  </TABLE>
  
  Universal Life and Investment Annuity Contract Interest:  The Company closely
  monitors its credited interest rates, taking into consideration such factors
  as profitability goals, policyholder benefits, product marketability, and
  economic market conditions.  Rates are established or adjusted after careful
  consideration and evaluation of these factors against established objectives.
  As market interest rates fluctuate, the Company's credited interest rates are
  often adjusted accordingly, while also taking into consideration other factors
  as described above.  Contract interest totaled $32.8 million and $45.0 million
  for the quarters ended June 30, 2000 and 1999, respectively.  The decrease is
  primarily attributable to interest on the Company's equity-indexed annuity
  products.  Because of the volatility and decline of the S&P 500 Index during
  the second quarter of 2000, the related contract interest of the equity-
  indexed annuities also declined.  Correspondingly, the income from index
  options used to hedge these annuities also declined, substantially offsetting
  the lower contract interest.
  
  Other Operating Expenses: These expenses totaled $7,360,000 and $7,828,000 for
  the quarters ended June 30, 2000 and 1999, respectively.  Included in 1999
  expenses is an additional accrual for state income taxes totaling $800,000.
  While a portion of these taxes relate to 1999, the majority of this accrual
  covers adjustments for previous years.
  
  Federal Income Taxes:  Federal income taxes include no unusual items as
  effective tax rates for the quarters ended June  30, 2000 and 1999 were 34.0%
  and 33.8%, respectively.
  
  Segment Operations
  
  Summary of Segment Earnings
  
  A summary of segment earnings for the quarters ended June 30, 2000 and 1999 is
  provided below.  The segment earnings exclude realized gains and losses on
  investments, net of taxes.
  
  <TABLE>
  <CAPTION>
  
                      Domestic   International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
                                           (In thousands)
  
  <S>                  <C>           <C>         <C>         <C>        <C>
  
  Segment earnings:
  
   June 30, 2000       $ 1,971       1,871       6,228       1,314      11,384
  
   June 30, 1999       $   716       2,185       7,384       1,345      11,630
  
  </TABLE>
  
  Domestic Life Insurance Operations
  
  The Company's domestic life insurance operations concentrate marketing efforts
  on federal employees, seniors, and specific employee groups in private
  industry, as well as individual sales.  The products marketed are universal
  life insurance and traditional life insurance, which includes both term and
  whole life products.  National Western markets and distributes its domestic
  products primarily through independent agents and brokers and independent
  marketing  organizations  (IMOs).    The  IMOs  also  assist  the  Company  in
  recruiting,  contracting,  and  supervising  agents  as  well  as  providing
  additional financial resources for product marketing.  Geographically, the
  domestic life insurance operations market products in most of the United
  States, which encompasses 43 states and the District of Columbia.  The states
  in which the Company does not conduct business are primarily in the northeast
  and include Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey,
  New York, and Vermont.
  
  Earnings for the domestic life insurance operating segment were $1,971,000 and
  $716,000 for the three months ended June 30, 2000 and 1999, respectively.  The
  increase in earnings in 2000 is primarily due to decreases in amortization of
  deferred policy acquisition costs, policy benefits, and other operating
  expenses.
  
  A comparative analysis of results of operations for the Company's domestic
  life insurance segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                    Three Months Ended June 30,
  Domestic Life Insurance Operations:                    2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                  <C>
  
  Premiums and other revenue:
      Premiums and contract revenues               $       6,007         6,489
      Net investment income                                6,563         6,347
      Other income                                            22            51
  
  Total premiums and other revenue                        12,592        12,887
  
  Benefits and expenses:
      Policy benefits                                      4,305         5,156
      Amortization of deferred policy
      acquisition costs                                      572         1,460
      Universal life insurance
      contract interest                                    2,418         2,436
      Other operating expenses                             2,297         2,757
  
  Total benefits and expenses                              9,592        11,809
  
  Segment earnings before Federal income taxes             3,000         1,078
  
  Federal income taxes                                     1,029           362
  
  Segment earnings                                 $       1,971           716
  
  </TABLE>
  
  Revenues from domestic life insurance operations include life insurance
  premiums on traditional type products and revenues from universal life
  insurance.  The Company's current marketing efforts focus more on universal
  life insurance, and, as a result, revenues from these products continue to
  increase over traditional products.  Revenues from traditional products are
  simply premiums collected, while revenues from universal life insurance
  consist of policy charges for the cost of insurance, policy administration
  fees, and surrender charges assessed during the period.  A comparative detail
  of premiums and contract revenues is provided below:
  
  <TABLE>
  <CAPTION>
  
                                                  Three Months Ended June 30,
                                                       2000          1999
                                                         (In thousands)
  
  <S>                                           <C>                   <C>
  
  Universal life insurance:
      Cost of insurance                         $        3,037         2,947
      Surrender charges                                    476           477
      Policy fees and other revenues                       170           335
  Traditional life insurance premiums                    2,324         2,730
  
  Totals                                        $        6,007         6,489
  
  </TABLE>
  
  Actual universal life insurance deposits collected for the quarters ended June
  30,  2000  and  1999  are  detailed  below.    Deposits  collected  on  these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  
  <TABLE>
  <CAPTION>
                                                    Three Months Ended June 30,
                                                       2000         1999
                                                         (In thousands)
  
  <S>                                            <C>                  <C>
  
  Universal life insurance:
      First year and single premiums             $       1,281        1,270
      Renewal premiums                                   3,676        3,491
  Totals                                         $       4,957        4,761
  
  </TABLE>
  
  Policy benefits were lower in the second quarter of 2000 totaling $4,305,000
  compared to $5,156,000 for the comparable 1999 period.  The decrease is due to
  reductions in traditional policy liabilities which were partially offset by
  higher life insurance benefit claims.  Mortality claims experience fluctuates
  from period to period, and such deviations are not uncommon in the life
  insurance industry.
  
  Universal life insurance contract interest remained relatively constant at
  $2,418,000 in 2000 compared to $2,436,000 in 1999.  This is consistent with
  the relative stable to declining size of this block of business.
  
  Amortization of deferred policy acquisition costs was significantly lower in
  2000 totaling $572,000 compared to $1,460,000 in 1999.  These expenses
  represent the amortization of the costs of acquiring or producing new
  business, which consists primarily of agents' commissions.  The majority of
  such costs are amortized in direct relation to the anticipated future gross
  profits of the applicable blocks of business.  The lower amortization costs in
  2000 resulted from  adjustments to deferred policy acquisition costs as
  anticipated future gross profits on domestic blocks of business were revised.
  
  Other operating expenses totaled $2,297,000 and $2,757,000 for the quarters
  ended June 30, 2000 and 1999, respectively.  Expenses for 2000 were lower as
  1999 expenses include an additional accrual for state income taxes as
  previously described.
  
  International Life Insurance Operations
  
  The Company's international life insurance operations focus marketing efforts
  on foreign nationals in upper socioeconomic classes with substantial financial
  resources.  Insurance sales are primarily on insureds from countries in
  Central and South America, the Caribbean, and the Pacific Rim.  Policy sales
  on insureds from numerous countries in these different regions provides
  diversification that helps to minimize large fluctuations in sales that can
  occur due to various economic, political, and competitive pressures that may
  occur from one country to another.  Historically, the top three countries in
  insurance sales have often been Argentina, Chile, and Peru.  Products sold in
  the international market include both universal life and traditional life
  insurance products.  The Company minimizes exposure to foreign currency risks,
  as almost all foreign policies require payment of premiums and claims in
  United States dollars.  Sales production from the international market is from
  independent broker-agents, many of whom have been selling National Western
  products for 20 or more years.
  
  Earnings  for  the  international  life  insurance  operating  segment  were
  $1,871,000 and $2,185,000 for the quarters ended June 30, 2000 and 1999,
  respectively.  Earnings in 2000 were somewhat lower due to higher life
  insurance benefit claims, amortization of deferred policy acquisition costs,
  and contract interest, partially offset by increases in universal life
  insurance revenues.
  
  A  comparative  analysis  of  results  of  operations  for  the  Company's
  international life insurance segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                    Three Months Ended June 30,
  International Life Insurance Operations:               2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                  <C>
  
  Premiums and other revenue:
      Premiums and contract revenues               $      11,022        10,516
      Net investment income                                5,769         5,460
      Other income                                             2            41
  
  Total premiums and other revenue                        16,793        16,017
  
  Benefits and expenses:
      Policy benefits                                      4,144         3,705
      Amortization of deferred policy
      acquisition costs                                    3,794         3,283
      Universal life insurance contract interest           3,956         3,461
      Other operating expenses                             2,049         2,268
  
  Total benefits and expenses                             13,943        12,717
  
  Segment earnings before Federal income taxes             2,850         3,300
  
  Federal income taxes                                       979         1,115
  
  Segment earnings                                 $       1,871         2,185
  
  </TABLE>
  
  As with domestic operations, revenues from the international life insurance
  segment include both premiums on traditional type products and revenues from
  universal life insurance.  The international operations' marketing efforts are
  also focused more on universal life insurance, and, as a result, revenues from
  these products continue to increase over traditional products.  Cost of
  insurance revenues continue to increase as the international block of business
  grows.   A comparative detail of premiums and contract revenues is provided
  below:
  
  <TABLE>
  <CAPTION>
  
                                                   Three Months Ended June 30,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                  <C>
  
  Universal life insurance:
      Cost of insurance                           $       7,667         7,292
      Surrender charges                                   1,882         1,707
      Policy fees and other revenues                        919           887
  Traditional life insurance premiums                       554           630
  
  Totals                                          $      11,022        10,516
  
  </TABLE>
  
  Actual universal life insurance deposits collected for the quarters ended June
  30,  2000  and  1999  are  detailed  below.    Deposits  collected  on  these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  
  <TABLE>
  <CAPTION>
                                                 Three Months Ended June 30,
                                                      2000          1999
                                                        (In thousands)
  
  <S>                                           <C>                  <C>
  
  Universal life insurance:
      First year and single premiums            $       3,376         3,317
      Renewal premiums                                  9,569         8,978
  
  Totals                                        $      12,945        12,295
  
  </TABLE>
  
  Life insurance benefit claims, which are reflected in policy benefits for
  segment reporting purposes, were higher in 2000 at $2,700,000 compared to
  $2,163,000 in 1999.  As previously described for domestic life insurance
  operations,  mortality  claims  fluctuate  from  period  to  period.    These
  deviations, which can at times be significant, are not uncommon in the life
  insurance industry.  Over extended periods of time, higher claims experience
  tends to be offset by periods of lower claims experience.  Additionally, the
  Company  utilizes  reinsurance  to  help  minimize  its  exposure  to  adverse
  mortality experience.  The Company's general policy is to reinsure amounts in
  excess of $200,000 on the life of any one individual.
  
  Universal life insurance contract interest increased from $3,461,000 in 1999
  to $3,956,000 in 2000.  The increase in contract interest is consistent with
  growth in the universal life insurance business.
  
  Annuity Operations
  
  The Company's annuity operations are almost exclusively in the United States.
  Like the Company's domestic life insurance operations, annuities are marketed
  in 43 states and the District of Columbia using independent agents, brokers,
  and  independent  marketing  organizations  (IMOs).  For  most  of  these
  organizations, annuity sales are much more significant and are the primary
  focus of their business operations.  Although some of the Company's annuities
  are available in the international market, current sales are insignificant to
  total annuity sales.
  
  Annuities sold include single and flexible premium deferred annuities, single
  premium immediate annuities, and equity-indexed annuities.  These products can
  be tax qualified or nonqualified annuities.  In recent years the majority of
  annuities sold have been nonqualified deferred annuities.  The Company also
  continues to collect additional premiums on existing two-tier annuities, as a
  large portion of the two-tier block of business is flexible premium annuities
  on which renewal premiums continue to be collected.  However, the Company has
  not sold two-tier annuities since 1992.
  
  Earnings for the annuity operating segment were $6,228,000 and $7,384,000 for
  the quarters ended June 30, 2000 and 1999, respectively.  Earnings for 2000
  were down from 1999 primarily due to lower earnings from the Company's equity-
  indexed annuity business, offset significantly by higher annuity contract
  revenues primarily from surrender charges.
  
  A comparative analysis of results of operations for the Company's annuity
  segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                    Three Months Ended June 30,
  Annuity Operations:                                    2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                  <C>
  
  Premiums and other revenue:
      Premiums and contract revenues               $      11,255         7,034
      Net investment income                               34,246        50,864
      Other income                                           115            35
  
  Total premiums and other revenue                        45,616        57,933
  
  Benefits and expenses:
      Policy benefits                                         41          (804)
      Amortization of deferred policy
      acquisition costs                                    6,927         5,692
      Annuity contract interest                           26,386        39,096
      Other operating expenses                             2,774         2,803
  
  Total benefits and expenses                             36,128        46,787
  
  Segment earnings before Federal income taxes             9,488        11,146
  
  Federal income taxes                                     3,260         3,762
  
  Segment earnings                                 $       6,228         7,384
  
  </TABLE>
  
  Revenues from annuity operations include primarily surrender charges and
  recognition of deferred revenues relating to immediate or payout annuities.
  Annuitizations result in transfers of policies from deferred to immediate or
  payout status.  The deferred revenues related to these annuities are amortized
  into income during the payout period.  Surrender charge revenues were up 76%
  in 2000 compared to 1999 due to increases in surrender charges from both
  single-tier and two-tier annuities.  Actual policy surrenders for annuities
  were abnormally high increasing 85% in the second quarter of 2000 from the
  comparable period of 1999.  This unusual rate of surrenders has slowed through
  the first portion of the third quarter of 2000.  A comparative detail of the
  components of premiums and annuity contract revenues is provided below.
  
  <TABLE>
  <CAPTION>
  
                                                    Three Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                   <C>
  
  Surrender charges:
     Two-tier annuities                            $       5,414         3,924
     Single-tier annuities                                 4,261         1,579
  
  Total surrender charges                                  9,675         5,503
  Payout annuity and other revenues                        1,558         1,510
  Traditional annuity premiums                                22            21
  
  Totals                                           $      11,255         7,034
  
  </TABLE>
  
  Actual annuity deposits collected for the quarters ended June 30, 2000 and
  1999 are detailed below.  Deposits collected on these nontraditional products
  are not reflected as revenues in the Company's statements of earnings, as they
  are recorded directly to policyholder liabilities upon receipt, in accordance
  with generally accepted accounting principles.
  
  <TABLE>
  <CAPTION>
                                                    Three Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                  <C>
  
  Deferred annuities:
      Equity-indexed                               $      27,083        44,289
      Other                                               52,720        46,287
  
  Total deferred annuities                                79,803        90,576
  Immediate annuities                                      6,275         6,043
  
  Totals                                           $      86,078        96,619
  
  </TABLE>
  
  Although total annuity deposits for the quarter ended June 30, 2000, were
  lower than the comparable 1999 period, the decline is primarily attributable
  to equity-indexed annuities.  Sales of the Company's other deferred annuity
  products  and  immediate  annuities  reflect  increases  of  13.9%  and  3.8%,
  respectively.
  
  While sales were lower in 2000, equity-indexed annuities are a major portion
  of the Company's total annuity production.  The Company's equity-indexed
  annuities are flexible premium deferred annuities which combine the features
  associated with traditional fixed annuities, with the option to have interest
  rates that are linked in part to an equity index, the S&P 500 Index.  These
  annuities are long-term contracts designed as planning vehicles for retirement
  security.    These  annuities  are  attractive  to  customers,  as  they  have
  guaranteed  minimum  interest  rates,  coupled  with  the  potential  for
  significantly higher returns based on an equity index component.  Also,
  because the Company does not offer variable products or mutual funds, these
  products provide a key equity-based alternative to the Company's existing
  fixed annuity products.  In conjunction with the sale of these annuities, the
  Company uses an investment hedging program to offset the potential higher
  returns that could be paid on these products.  Specifically, the Company
  purchases index options from highly rated banks and brokerage firms.  These
  index options act as hedges to match closely the returns based on the S&P 500
  Index which may be paid to policyholders.
  
  Sales of equity-indexed annuities began declining during the year ended
  December 31, 1999, primarily due to volatility in the stock market.  This
  volatility affects both the immediate demand for these annuities and the
  pricing of these products.  Increased product costs from stock market
  volatility, particularly costs of index options used to hedge the equity
  return component of these annuities, can reduce potential credited interest to
  policyholders.  The lower production level has continued in the first and
  second quarters of 2000, which is consistent with volatility in the stock
  market.
  
  Net investment income for the second quarters of 2000 and 1999 totaled
  $34,246,000 and $50,864,000, respectively.  As previously described in Summary
  of Consolidated Operating Results, the decrease in net investment income is
  due to lower income from index options.  Declines in fair values of index
  options used to hedge the equity return component of the Company's equity-
  indexed annuity products resulted in lower investment income for the second
  quarter of 2000.  The decline is directly attributable to the decline in the
  S&P 500 Index over the same period.
  
  Annuity contract interest was $26.4 million in 2000 compared to $39.1 million
  in 1999, reflecting a decrease of $12.7 million.  The decrease is primarily
  due to lower interest credited on equity-indexed annuities due to the
  volatility and decline in the S&P 500 Index. While 2000 contract interest is
  lower, net investment income for 2000 was also $16.6 million lower than the
  comparable 1999 second quarter.  Most of the difference between the contract
  interest and net investment income declines is related to the equity-indexed
  annuity business.  Although index options are used as hedges, differences
  between  income  from  index  options  and  contract  interest  credited  to
  policyholders will occur for several reasons, some of which may only be timing
  differences between the recognition of income and expenses.  One reason is
  that the costs of the index options are essentially amortized against net
  investment income as the options are marked to fair value each reporting
  period.  The costs of options are covered by additional income earned on debt
  securities purchased with equity-indexed annuity premiums. Other differences
  are  due  to  asset  fees  charged  against  policyholder  contract  interest,
  surrenders and death benefits on annuities within the annual hedging period,
  and inherent differences between index option fair values and policy liability
  reserves related to minimum guaranteed interest rates.
  
  Amortization of deferred policy acquisition costs represents the amortization
  of the costs of acquiring or producing new business, primarily agents'
  commissions, the majority of which are amortized in direct relation to the
  anticipated future gross profits of the applicable blocks of business.
  Amortization is also impacted by the level of policy surrenders.  Amortization
  for 2000 and 1999 was $6,927,000 and $5,692,000, respectively.  The large
  increase in amortization is directly related to the significant increase in
  annuity  surrenders  in  the  quarter  ended  June  30,  2000,  as  previously
  described.
  
  Other Operations
  
  Earnings for other operations totaled $1,314,000 and $1,345,000 for the second
  quarters of 2000 and 1999, respectively. While National Western's primary
  business encompasses its domestic and international life insurance operations
  and its annuity operations, the Company also has small real estate, nursing
  home, and other investment operations through the following wholly owned
  subsidiaries: NWL Investments, Inc., NWL Properties, Inc., NWL 806 Main, Inc.,
  NWL Services, Inc., and NWL Financial, Inc.  Also, during January, 1999, the
  Company's wholly owned subsidiary, The Westcap Corporation, completed its
  Chapter 11 bankruptcy reorganization.  With the reorganization complete,
  National Western transferred its investment real estate holdings totaling
  approximately $11,589,000 to Westcap and the subsidiary is now operating as a
  real estate management company.
  
  During the first quarter of 2000, the Company acquired a nursing home facility
  through an affiliated limited partnership.  The acquisition, which totaled
  approximately $6.6 million, was made by a newly formed limited partnership,
  the partners of which are downstream subsidiaries of National Western.  The
  nursing home facility, which opened in late July, 2000, is operated by an
  affiliated  limited  partnership  and  the  financial  operating  results  are
  consolidated with those of the Company.  Daily operations and management of
  the nursing home are performed by an experienced management company through a
  contract with the limited partnership.  Initial first year start up expenses
  could generate minimum operating losses of approximately $600,000, before
  taxes.  Currently, operating losses from initial start up costs totaled
  $240,000 for the period from inception to June 30, 2000.
  
  Most of the income from the Company's other operations is from a life interest
  in the Libbie Shearn Moody Trust.  This asset was owned by National Western
  Life Insurance Company during 1996 but was transferred to NWL Services, Inc.,
  in 1997.  Dividend distributions from the Trust are declared semi-annually in
  June and December each year.  Because the asset is a life interest, these
  distributions are only accrued in the Company's financial statements when
  declared.  Semi-annual distributions totaled $1,793,000 and $1,751,000 in June
  2000 and 1999, respectively.
  
  
  RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2000 AND 1999
  
  Consolidated Operations
  
  Summary of Consolidated Operating Results
  
  A summary of operating results for the six months ended June 30, 2000 and 1999
  is provided below:
  
  <TABLE>
  <CAPTION>
  
                                                     Six Months Ended June 30,
                                                        2000           1999
                                           (In thousands except per share data)
  
  <S>                                             <C>                  <C>
  
  Revenues:
  Revenues, excluding realized gains
  (losses) and index options                      $     172,583        163,288
  Index options                                         (14,215)         7,527
  Realized gains (losses) on investments                 (6,412)         5,678
  
  Total revenues                                  $     151,956        176,493
  
  Earnings:
  Earnings from operations                        $      24,094         22,610
  Net realized gains (losses) on investments             (4,168)         3,691
  
  Net earnings                                    $      19,926         26,301
  
  Basic Earnings Per Share:
  Earnings from operations                        $        6.88           6.47
  Net realized gains (losses) on investments              (1.19)          1.05
  
  Net earnings                                    $        5.69           7.52
  
  Diluted Earnings Per Share:
  Earnings from operations                        $        6.85           6.40
  Net realized gains (losses) on investments              (1.19)          1.05
  
  Net earnings                                    $        5.66           7.45
  
  </TABLE>
  
  Consolidated Operating Results:  For the six months ended June 30, 2000,
  earnings  from  operations,  excluding  net  realized  gains  and  losses  on
  investments, totaled $24,094,000 compared to $22,610,000 for the same period
  of 1999.  This 6.6% increase in earnings is largely attributable to higher
  universal life and investment annuity contract revenues.  Additionally, while
  life insurance benefit claims were significantly higher in the first six
  months of 2000, this increase was largely offset by reductions in traditional
  policy liabilities.
  
  The Company recorded realized losses on investments, net of taxes, totaling
  $4,168,000 for the six months ended June 30, 2000, compared to gains of
  $3,691,000 for the first six months of 1999.  The losses in 2000 are primarily
  due to a permanent impairment writedown for a specific debt security which
  defaulted during the second quarter as previously described.  The 1999 gains
  were primarily from sales and calls of investments in debt securities totaling
  $2,099,000, net of taxes.  Also included in 1999 was a net gain totaling
  $922,000 from the sale of investment real estate owned by one of National
  Western's subsidiaries,  NWL 806 Main, Inc.
  
  As previously reported, the bankruptcy reorganization of the Company's wholly
  owned subsidiary,  The Westcap Corporation, was completed in the first quarter
  of 1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in the six months ended June 30, 1999, as
  the entire $14,125,000 settlement payment was accrued and reported as a loss
  in the third quarter of 1998.
  
  Segment Operations
  
  Summary of Segment Earnings
  
  A summary of segment earnings for the six months ended June 30, 2000 and 1999
  is provided below.  The segment earnings exclude realized gains and losses on
  investments, net of taxes.
  
  <TABLE>
  <CAPTION>
  
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
                                           (In thousands)
  
  <S>                  <C>            <C>        <C>          <C>        <C>
  
  Segment earnings:
  
  June 30, 2000        $  3,670       4,267      14,499       1,658      24,094
  
  June 30, 1999        $  2,798       3,595      14,751       1,466      22,610
  
  </TABLE>
  
  Domestic Life Insurance Operations
  
  Earnings for the domestic life insurance operating segment were $3,670,000 and
  $2,798,000 for the six months ended June 30, 2000 and 1999, respectively.  The
  increase in earnings is primarily due to lower policy benefits and other
  operating expenses.  A comparative analysis of results of operations for the
  Company's domestic life insurance segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                    Six Months Ended June 30,
  Domestic Life Insurance Operations:                   2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                  <C>
  
  Premiums and other revenue:
      Premiums and contract revenues              $      11,937        12,280
      Net investment income                              13,035        12,678
      Other income                                           22            67
  
  Total premiums and other revenue                       24,994        25,025
  
  Benefits and expenses:
      Policy benefits                                     8,198         8,700
      Amortization of deferred policy
      acquisition costs                                   2,198         2,392
      Universal life insurance contract interest          4,640         4,885
      Other operating expenses                            4,383         4,819
  
  Total benefits and expenses                            19,419        20,796
  
  Segment earnings before Federal income taxes            5,575         4,229
  
  Federal income taxes                                    1,905         1,431
  
  Segment earnings                                $       3,670         2,798
  
  </TABLE>
  
  Revenues from domestic life insurance operations include life insurance
  premiums on traditional type products and revenues from universal life
  insurance.  Concentration on sales of universal life insurance as opposed to
  traditional products continue to result in increases in cost of insurance
  revenues and declines in traditional premiums. A comparative detail of
  premiums and contract revenues is provided below:
  
  <TABLE>
  <CAPTION>
  
                                                      Six Months Ended June 30,
                                                        2000          1999
                                                           (In thousands)
  
  <S>                                             <C>                  <C>
  
  Universal life insurance:
      Cost of insurance                           $       6,060         5,784
      Surrender charges                                     958           883
      Policy fees and other revenues                        613           643
  Traditional life insurance premiums                     4,306         4,970
  
  Totals                                          $      11,937        12,280
  
  </TABLE>
  
  Actual universal life insurance deposits, which are recorded directly to
  policyholder liabilities upon receipt, for the six months ended June 30, 2000
  and 1999 are detailed below.
  
  <TABLE>
  <CAPTION>
  
                                                    Six Months Ended June 30,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                   <C>
  
  Universal life insurance:
      First year and single premiums              $       2,891         2,375
      Renewal premiums                                    7,344         7,260
  
  Totals                                          $      10,235         9,635
  
  </TABLE>
  
  Consistent with the second quarter of 2000, policy benefits were lower for the
  six months ended June 30, 2000, totaling $8,198,000 compared to $8,700,000 for
  the comparable 1999 period.  The decrease is due to reduction in traditional
  policy liabilities which were partially offset by higher life insurance
  benefit claims.
  
  Other operating expenses totaled $4,383,000 and $4,819,000 for the six months
  ended June 30, 2000 and 1999, respectively.  As previously described for the
  quarters ended June 30, 2000 and 1999, expenses for 2000 were lower as 1999
  expenses include an additional accrual for state income taxes.
  
  International Life Insurance Operations
  
  Earnings  for  the  international  life  insurance  operating  segment  were
  $4,267,000 and $3,595,000 for the six months ended June 30, 2000 and 1999,
  respectively.  Earnings for 2000 were higher primarily due to increases in
  universal life insurance revenues and lower policy benefits .
  
  A  comparative  analysis  of  results  of  operations  for  the  Company's
  international life insurance segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                     Six Months Ended June 30,
  International Life Insurance Operations:               2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                 <C>
  
  Premiums and other revenue:
      Premiums and contract revenues               $      21,708        20,744
      Net investment income                               11,419        10,903
      Other income                                            29            53
  
  Total premiums and other revenue                        33,156        31,700
  
  Benefits and expenses:
      Policy benefits                                      7,794         8,407
      Amortization of deferred policy
      acquisition costs                                    6,951         6,562
      Universal life insurance contract interest           7,886         6,894
      Other operating expenses                             4,043         4,403
  
  Total benefits and expenses                             26,674        26,266
  
  Segment earnings before Federal income taxes             6,482         5,434
  
  Federal income taxes                                     2,215         1,839
  
  Segment earnings                                 $       4,267         3,595
  
  </TABLE>
  
  A comparative detail of premiums and contract revenues, which reflects the
  increase in universal life insurance revenues as previously described, is
  provided below:
  
  <TABLE>
  <CAPTION>
                                                     Six Months Ended June 30,
                                                        2000          1999
                                                           (In thousands)
  
  <S>                                             <C>                  <C>
  
  Universal life insurance:
      Cost of insurance                           $      15,283        14,513
      Surrender charges                                   3,773         3,663
      Policy fees and other revenues                      1,722         1,785
  Traditional life insurance premiums                       930           783
  
  Totals                                          $      21,708        20,744
  
  </TABLE>
  
  Actual universal life insurance deposits collected for the six months ended
  June 30, 2000 and 1999 are detailed below.  Increases in current year premiums
  are  partially  due  to  improved  economic  conditions  during  2000  in  the
  international Central and South American markets.
  
  <TABLE>
  <CAPTION>
                                                    Six Months Ended June 30,
                                                        2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                  <C>
  
  Universal life insurance:
      First year and single premiums              $       6,499         5,886
      Renewal premiums                                   17,912        17,464
  
  Totals                                          $      24,411        23,350
  
  </TABLE>
  
  Annuity Operations
  
  Earnings for the annuity operating segment were $14,499,000 and $14,751,000
  for the six months ended June 30, 2000 and 1999, respectively.  Consistent
  with the second quarter results as previously described, earnings for the six
  months ended June 30, 2000, were lower than 1999 due to the Company's equity-
  indexed annuity business.  However, increases in annuity contract revenues,
  primarily from policy surrender charges, mitigated much of this effect.
  Higher amortization of deferred policy acquisition costs resulting from the
  increased level of surrenders also tempered the revenue increases.
  
  A comparative analysis of results of operations for the Company's annuity
  segment is detailed below:
  
  <TABLE>
  <CAPTION>
  
                                                    Six Months Ended June 30,
  Annuity Operations:                                   2000          1999
                                                          (In thousands)
  
  <S>                                             <C>                 <C>
  
  Premiums and other revenue:
      Premiums and contract revenues              $      17,914        14,958
      Net investment income                              79,342        96,760
      Other income                                          203           157
  
  Total premiums and other revenue                       97,459       111,875
  
  Benefits and expenses:
      Policy benefits                                       108          (603)
      Amortization of deferred policy
      acquisition costs                                  13,029        11,052
      Annuity contract interest                          56,885        73,825
      Other operating expenses                            5,411         5,307
  
  Total benefits and expenses                            75,433        89,581
  
  Segment earnings before Federal income taxes           22,026        22,294
  
  Federal income taxes                                    7,527         7,543
  
  Segment earnings                                $      14,499        14,751
  
  </TABLE>
  
  Premiums and annuity contract revenues were up $2,956,000, or 19.8%, from
  $14,958,000 in 1999 to $17,914,000 in 2000. This increase is due to higher
  surrender charge revenues from single-tier annuities.  As previously described
  for the three months ended June 30, 2000, actual policy surrenders were
  abnormally high during the second quarter of 2000 resulting in increased
  revenues.  However, this unusually high rate of surrenders has slowed through
  the first portion of the third quarter of 2000. A comparative detail of the
  components of premiums and annuity contract revenues is provided below.
  
  <TABLE>
  <CAPTION>
                                                     Six Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                  <C>
  
  Surrender charges:
     Two-tier annuities                            $       8,466         8,567
     Single-tier annuities                                 6,428         3,408
  
  Total surrender charges                                 14,894        11,975
  Payout annuity and other revenues                        2,984         2,944
  Traditional annuity premiums                                36            39
  
  Totals                                           $      17,914        14,958
  
  </TABLE>
  
  Annuity deposits for 2000 reflect a decline of 11.1% compared to the same
  period of 1999, resulting from decreases in equity-indexed annuity deposits.
  Sales of these annuities continue to slow, largely a result of volatility in
  the stock market as previously described for the quarter ended June 30, 2000.
  Some of the decline in equity-indexed annuity sales is being countered with
  increases in sales of other deferred annuities, which reflect growth of 6.1%
  for 2000.  Actual annuity deposits collected for the six months ended June 30,
  2000 and 1999 are detailed below.
  
  <TABLE>
  <CAPTION>
                                                     Six Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  
  <S>                                              <C>                 <C>
  
  Deferred annuities:
      Equity-indexed                               $      61,322        89,919
      Other                                              104,077        98,105
  
  Total deferred annuities                               165,399       188,024
  Immediate annuities                                     14,000        13,667
  
  Totals                                           $     179,399       201,691
  
  </TABLE>
  
  Net investment income for the six months ended June 30, 2000 and 1999 totaled
  $79,342,000 and $96,760,000, respectively. Declines in fair values of index
  options resulted in a reduction to net investment income totaling $14,215,000
  for the six months ended June 30, 2000.  For the comparable 1999 period,
  increases in fair values of index options resulted in additions to net
  investment income totaling $7,527,000.  Index options are used to hedge the
  equity  return  component  of  the  Company's  equity-indexed  annuities.
  Fluctuations in the income from index options correlates to the performance of
  the stock market, more specifically the S&P 500 Index.  The significant
  decline in investment income resulting from the index options is substantially
  offset by lower annuity contract interest expense.
  
  Annuity contract interest was $56.9 million in 2000 compared to $73.8 million
  in 1999.  As previously described for the quarter ended June 30, 2000, the
  decrease is primarily due to lower interest credited on equity-indexed
  annuities resulting from the volatility and decline in the S&P 500 Index.
  Also as described above, decreases in index option income were experienced
  during the six months ended June 30, 2000, reflecting the hedging policy
  implemented for the equity-indexed annuity business.  However, differences
  between  income  from  index  options  and  contract  interest  credited  to
  policyholders will occur for several reasons as previously explained in detail
  for the three months ended June 30, 2000.
  
  Amortization for the six months ended June 30, 2000 and 1999 totaled
  $13,029,000 and $11,052,000, respectively.  The increase in amortization is
  directly related to the increase in annuity policy surrenders as previously
  described.
  
  Other Operations
  
  As previously described for the six months ended June 30, 2000, National
  Western has small real estate, nursing home,  and other investment operations
  through its wholly owned subsidiaries.  Earnings for these other operations
  totaled $1,658,000 and $1,466,000 for the six months ended June 30, 2000 and
  1999, respectively.  Currently, most of the income from these operations is
  from a life interest in the Libbie Shearn Moody Trust.
  
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity
  
  The liquidity requirements of the Company are met primarily by funds provided
  from  operations.  Premium  deposits  and  revenues,  investment  income,  and
  investment maturities are the primary sources of funds, while investment
  purchases and policy benefits are the primary uses of funds.  Primary sources
  of liquidity to meet cash needs are the Company's securities available for
  sale portfolio, net cash provided by operations, and a bank line of credit.
  The Company's investments consist primarily of marketable debt securities that
  could be readily converted to cash for liquidity needs.  The Company may also
  borrow up to $60 million on its bank line of credit for short-term cash needs.
  
  A primary liquidity concern for the Company's life insurance operations is the
  risk of early policyholder withdrawals.  Consequently, the Company closely
  evaluates and manages the risk of early surrenders or withdrawals.  The
  Company includes provisions within annuity and universal life insurance
  policies, such as surrender charges, that help limit early withdrawals.  The
  Company also prepares cash flow projections and performs cash flow tests under
  various market interest rate scenarios to assist in evaluating liquidity needs
  and adequacy.  The Company currently expects available liquidity sources and
  future cash flows to be adequate to meet the demand for funds.
  
  In the past, cash flows from the Company's insurance operations have been more
  than adequate to meet current needs.  Cash flows from operating activities
  were $77.1 million and $54.1 million for the six months ended June 30, 2000
  and 1999, respectively.  Net cash flows from the Company's deposit product
  operations, which includes universal life and investment annuity products,
  totaled $26.4 million for the first six months of 1999, but reflected cash
  outflows of $44.8 million for the comparable period of 2000.  The negative
  cash flow in the Company's deposit product operations is primarily due to
  abnormally high annuity surrenders during the second quarter of 2000.  While
  increased surrenders may continue, this high rate of surrenders has slowed
  significantly in the first portion of the third quarter.  Premium deposits
  have also been lower in the first six months of 2000 due to lower equity-
  indexed annuity sales, which have been affected by the volatility in the stock
  market.  The Company primarily used cash generated from operations and some
  short-term borrowings to manage this negative cash flow during the second
  quarter.
  
  The  Company  also  has  significant  cash  flows  from  both  scheduled  and
  unscheduled investment security maturities, redemptions, and prepayments.
  These cash flows totaled $39.0 million and $77.5 million for the six months
  ended June 30, 2000 and 1999, respectively.  The Company expects significant
  cash flows from these sources throughout the remainder of 2000.
  
  Capital Resources
  
  The Company relies on stockholders' equity for its capital resources, as there
  has been no long-term debt outstanding in 2000 or recent years.  The Company
  does not anticipate the need for any long-term debt in the near future.  There
  are  also  no  current  or  anticipated  material  commitments  for  capital
  expenditures in 2000.
  
  Stockholders' equity totaled $482.9 million at June 30, 2000, reflecting an
  increase of $7.4 million from December 31, 1999.  The increase in capital is
  primarily from net earnings of $19.9 million, offset by an increase in net
  unrealized losses on investment securities totaling $12.9 million during the
  first six months of 2000.  The increase in unrealized losses was due to market
  interest rate conditions and transfers of securities from held to maturity to
  available for sale.  As previously described in Investments in Debt and Equity
  Securities, the debt securities transfers were executed due to significant
  credit deterioration of the issuing companies.  Book value per share at June
  30, 2000, was $137.91.
  
  FORWARD-LOOKING STATEMENTS
  
  The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
  for forward-looking statements.  Certain information contained herein or in
  other written or oral statements made by or on behalf of National Western Life
  Insurance Company or its subsidiaries are or may be viewed as forward-looking.
  Although the Company has used appropriate care in developing any such
  information, forward-looking information involves risks and uncertainties that
  could significantly impact actual results.  These risks and uncertainties
  include, but are not limited to, matters described in the Company's SEC
  filings such as exposure to market risks, anticipated cash flows or operating
  performance, future capital needs, and statutory or regulatory related issues.
  However, National Western, as a matter of policy, does not make any specific
  projections as to future earnings, nor does it endorse any projections
  regarding future performance that may be made by others.  Whether or not
  actual results differ materially from forward-looking statements may depend on
  numerous foreseeable and unforeseeable events or developments.  Also, the
  Company undertakes no obligation to publicly update or revise any forward-
  looking  statements,  whether  as  a  result  of  new  information,  future
  developments, or otherwise.
  
  
                ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK
  
  
  This information is included in Item 2, Management's Discussion and Analysis
  of Financial Condition and Results of Operations, in the Investments in Debt
  and Equity Securities section.
  
  
                           PART II.  OTHER INFORMATION
  
           ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
  
  On June 23, 2000, the stockholders voted upon the following matters at the
  annual stockholders meeting:
  
  (a) The election of Class A directors to serve one-year terms.  The results of
  the voting were as follows:
  
  <TABLE>
  <CAPTION>
                                         For         Against
  
  <S>                                  <C>              <C>
  
       Robert L. Moody                 2,730,195        33,800
       Arthur O. Dummer                2,730,005        33,990
       Harry L. Edwards                2,730,005        33,900
       E. J. Pederson                  2,730,205        33,790
  
  </TABLE>
  
  
  (b) The election of Class B directors to serve one-year terms.  The results of
  the voting were as follows:
  
  <TABLE>
  <CAPTION>
                                         For         Against
  
  <S>                                    <C>               <S>
  
       E. Douglas McLeod                 200,000           -
       Charles D. Milos                  200,000           -
       Frances A. Moody                  200,000           -
       Ross R. Moody                     200,000           -
       Russell S. Moody                  200,000           -
       Louis E. Pauls, Jr.               200,000           -
  
  </TABLE>
  
  
                    ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  
  (a) Exhibits
  
  Exhibit 11 -Computation of Earnings Per Share (filed on pages __ and __
               of this report).
  
  Exhibit 27 -Financial Data Schedule (filed electronically pursuant to
               Regulation S-K).
  
  (b) Reports on Form 8-K
  
  No reports on Form 8-K were filed during the quarter ended June 30, 2000.
  
  
  
                                    SIGNATURES
  
  Pursuant to the  requirements of the Securities Exchange Act  of 1934, the
  Registrant has duly caused this report to be signed on its behalf  by the
  undersigned thereunto duly authorized.
  
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
                                   (Registrant)
  
  
  
  
  
  
  Date: August 18, 2000                      /S/ Ross R. Moody
                                             Ross R. Moody
                                             President, Chief Operating Officer,
                                             and Director
                                             (Authorized Officer)
  
  
  
  Date: August 18, 2000                      /S/ Robert L. Busby, III
                                             Robert L. Busby, III
                                             Senior Vice President -
                                             Chief Administrative Officer,
                                             Chief Financial Officer and
                                             Treasurer
                                             (Principal Financial Officer)
  
  
  
  Date: August 18, 2000                     /S/ Vincent L. Kasch
                                            Vincent L. Kasch
                                            Vice President - Controller
                                            and Assistant Treasurer
                                            (Principal Accounting Officer)
  
  
  
                                    EXHIBIT 11
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                        COMPUTATION OF EARNINGS PER SHARE
                For the Three Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                       (In thousands except per share data)
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>                <C>
  
  Numerator for basic and diluted
  earnings per share:
      Earnings available to common stockholders
      before and after assumed conversions:
      Net earnings                                  $      7,593       12,198
  
  
  Denominator:
      Basic earnings per share -
      weighted-average shares                              3,501        3,499
  
      Effect of dilutive stock options                        18           31
  
  
      Diluted earnings per share -
      adjusted weighted-average
      shares for assumed conversions                       3,519        3,530
  
  
  Basic earnings per share:
      Net earnings                                  $       2.17         3.49
  
  
  Diluted earnings per share:
      Net earnings                                  $       2.16         3.46
  
  </TABLE>
  
  
                                    EXHIBIT 11
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                        COMPUTATION OF EARNINGS PER SHARE
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                       (In thousands except per share data)
  
  <TABLE>
  <CAPTION>
  
                                                         2000         1999
  
  <S>                                               <C>                <C>
  
  Numerator for basic and diluted
  earnings per share:
      Earnings available to common stockholders
      before and after assumed conversions:
      Net earnings                                  $     19,926       26,301
  
  
  Denominator:
      Basic earnings per share -
      weighted-average shares                              3,501        3,499
  
      Effect of dilutive stock options                        18           34
  
      Diluted earnings per share -
      adjusted weighted-average
      shares for assumed conversions                       3,519        3,533
  
  
  Basic earnings per share:
      Net earnings                                  $       5.69         7.52
  
  
  Diluted earnings per share:
      Net earnings                                  $       5.66         7.45
  
  </TABLE>
metadata_filer: {"company-data": {"conformed-name": "NATIONAL WESTERN LIFE INSURANCE CO", "cik": "0000070684", "assigned-sic": "6311", "irs-number": "840467208", "state-of-incorporation": "CO", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "002-17039", "film-number": "706782"}, "business-address": {"street1": "850 E ANDERSON LN", "city": "AUSTIN", "state": "TX", "zip": "78752-1602", "phone": "5128361010"}}
text: UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                    FORM 10-Q
  
  [ X ]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
  
                   For the Quarterly Period Ended June 30, 2000
  
  [   ]          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: 2-17039
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
              (Exact name of Registrant as specified in its charter)
  
            COLORADO                                 84-0467208
      (State of Incorporation)        (I.R.S. Employer Identification Number)
  
        850 EAST ANDERSON LANE
       AUSTIN, TEXAS 78752-1602                           (512) 836-1010
  (Address of Principal Executive Offices)              (Telephone Number)
  
  Indicate by check mark whether the Registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the preceding 12 months (or for such shorter period that the
  Registrant was required to file such reports), and (2) has been subject to
  such filing requirements for the past 90 days:
  
  Yes [ X  ]     No  [      ]
  
  As of August 10, 2000, the number of shares of Registrant's common stock
  outstanding was:  Class A - 3,301,755 and Class B - 200,000.
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                                      INDEX
  
  Part I.  Financial Information:                                        Page
  
  Item 1.  Financial Statements
  
  Condensed Consolidated Balance Sheets
  June 30, 2000 (Unaudited) and December 31, 1999
  
  Condensed Consolidated Statements of Earnings
  For the Three Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Earnings
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Comprehensive Income
  For the Three Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Comprehensive Income
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Stockholders' Equity
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Condensed Consolidated Statements of Cash Flows
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Notes to Condensed Consolidated Financial Statements (Unaudited)
  
  Item 2.  Management's Discussion and Analysis of
  Financial Condition and Results of Operations
  
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk
  
  Part II.  Other Information:
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
  Item 6.  Exhibits and Reports on Form 8-K
  
  Signatures
  
  Exhibit 11 - Computation of Earnings per Share
  For the Three Months Ended June 30, 2000 and 1999 (Unaudited)
  
  Exhibit 11 - Computation of Earnings per Share
  For the Six Months Ended June 30, 2000 and 1999 (Unaudited)
  
                          PART I.  FINANCIAL INFORMATION
  
                          ITEM 1.  FINANCIAL STATEMENTS
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In thousands)
  (Unaudited)
                                                        June 30,   December 31,
                    ASSETS                                2000         1999
  Cash and investments:
      Securities held to maturity,
      at amortized cost                              $  2,138,688    2,151,924
      Securities available for sale, at fair value        728,186      717,948
      Mortgage loans, net of allowances for
      possible losses ($4,104 and $4,104)                 202,024      183,902
      Policy loans                                        115,772      117,309
      Index options                                        22,598       32,820
      Other long-term investments                          40,396       32,766
      Cash and short-term investments                       2,638       14,010
  
  Total cash and investments                            3,250,302    3,250,679
  
  Deferred policy acquisition costs                       392,123      369,665
  Accrued investment income                                49,444       47,756
  Federal income tax receivable                               282          237
  Deferred Federal income tax asset                         1,345         -
  Other assets                                             23,588       14,491
  
                                                     $  3,717,084    3,682,828
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       (In thousands except share amounts)
  (Unaudited)
                                                        June 30,   December 31,
         LIABILITIES AND STOCKHOLDERS' EQUITY             2000         1999
  LIABILITIES:
  
  Future policy benefits:
      Traditional life and annuity products          $    161,806      165,020
      Universal life and investment
      annuity contracts                                 2,984,775    2,983,060
  Other policyholder liabilities                           25,861       24,103
  Federal income taxes payable:
      Current                                                -           4,763
      Deferred                                               -           4,659
  Short-term borrowings                                    23,000         -
  Other liabilities                                        38,714       25,701
  
  Total liabilities                                     3,234,156    3,207,306
  
  COMMITMENTS AND CONTINGENCIES (Note 3)
  
  STOCKHOLDERS' EQUITY:
  
  Common stock:
      Class A - $1 par value; 7,500,000
      shares authorized; 3,301,755
      and 3,300,728 shares issued and outstanding
      in 2000 and 1999                                      3,302        3,301
      Class B - $1 par value; 200,000
      shares authorized, issued,
      and outstanding in 2000 and 1999                        200          200
  Additional paid-in capital                               25,065       25,028
  Accumulated other comprehensive loss                    (16,124)      (3,566)
  Retained earnings                                       470,485      450,559
  
  Total stockholders' equity                              482,928      475,522
  
                                                     $  3,717,084    3,682,828
  Note:  The balance sheet at December 31, 1999, has been taken from the audited
  financial statements at that date.
  
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                For the Three Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                     (In thousands except per share amounts)
  2000         1999
  Premiums and other revenue:
      Life and annuity premiums                      $      2,900        3,381
      Universal life and investment annuity
      contract revenues                                    25,384       20,658
      Net investment income                                48,815       64,704
      Other income                                            139          127
      Realized gains (losses) on investments               (5,832)         873
  
  Total premiums and other revenue                         71,406       89,743
  
  Benefits and expenses:
      Life and other policy benefits                        9,501        8,465
      Decrease in liabilities for
      future policy benefits                               (1,011)        (408)
      Amortization of deferred policy
      acquisition costs                                    11,293       10,435
      Universal life and investment annuity
      contract interest                                    32,760       44,993
      Other operating expenses                              7,360        7,828
  
  Total benefits and expenses                              59,903       71,313
  
  Earnings before Federal income taxes                     11,503       18,430
  
  Provision (benefit) for Federal income taxes:
      Current                                               4,180        7,664
      Deferred                                               (270)      (1,432)
  
  Total Federal income taxes                                3,910        6,232
  
  Net earnings                                       $      7,593       12,198
  
  Basic Earnings Per Share:
      Net earnings                                   $       2.17         3.49
  
  Diluted Earnings Per Share:
      Net earnings                                   $       2.16         3.46
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                     (In thousands except per share amounts)
  2000         1999
  Premiums and other revenue:
      Life and annuity premiums                      $      5,272        5,792
      Universal life and investment annuity
      contract revenues                                    46,287       42,190
      Net investment income                               106,555      122,556
      Other income                                            254          277
      Realized gains (losses) on investments               (6,412)       5,678
  
  Total premiums and other revenue                        151,956      176,493
  
  Benefits and expenses:
      Life and other policy benefits                       19,593       17,153
      Decrease in liabilities for
      future policy benefits                               (3,493)        (649)
      Amortization of deferred policy
      acquisition costs                                    22,178       20,006
      Universal life and investment annuity
      contract interest                                    69,411       85,604
      Other operating expenses                             14,077       14,529
  
  Total benefits and expenses                             121,766      136,643
  
  Earnings before Federal income taxes                     30,190       39,850
  
  Provision for Federal income taxes:
      Current                                               9,505       13,124
      Deferred                                                759          425
  
  Total Federal income taxes                               10,264       13,549
  
  Net earnings                                       $     19,926       26,301
  
  Basic Earnings Per Share:
      Net earnings                                   $       5.69         7.52
  
  Diluted Earnings Per Share:
      Net earnings                                   $       5.66         7.45
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                For the Three Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Net earnings                                       $      7,593       12,198
  
  Other comprehensive income (loss),
  net of effects of deferred
  policy acquisition costs and taxes:
      Unrealized losses on securities:
          Unrealized holding losses
          arising during period                            (6,298)      (7,060)
          Less: reclassification adjustment
          for losses (gains)
          included in net earnings                          4,203         (377)
          Amortization of net unrealized gains
          related to transferred securities                  (110)          54
          Unrealized losses on securities
          transferred during period from
          held to maturity to available for sale           (1,145)        -
  
          Net unrealized losses on securities              (3,350)      (7,383)
  
      Foreign currency translation adjustments                  5          (69)
  
  Other comprehensive loss                                 (3,345)      (7,452)
  
  Comprehensive income                               $      4,248        4,746
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Net earnings                                       $     19,926       26,301
  
  Other comprehensive income (loss),
  net of effects of deferred
  policy acquisition costs and taxes:
      Unrealized losses on securities:
          Unrealized holding losses
          arising during period                            (7,774)     (11,946)
          Less: reclassification adjustment
          for losses (gains)
          included in net earnings                          4,203       (2,048)
          Amortization of net unrealized gains
          related to transferred securities                  (179)         (31)
          Unrealized losses on securities
          transferred during period
          from held to maturity to available for sale      (9,166)        -
  
          Net unrealized losses on securities             (12,916)     (14,025)
  
      Foreign currency translation adjustments                358          (78)
  
  Other comprehensive loss                                (12,558)     (14,103)
  
  Comprehensive income                               $      7,368       12,198
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Common stock:
      Balance at beginning of year                   $      3,501        3,498
      Shares exercised under stock option plan                  1            3
  
  Balance at end of period                                  3,502        3,501
  
  Additional paid-in capital:
      Balance at beginning of year                         25,028       24,899
      Shares exercised under stock option plan                 37          129
  
  Balance at end of period                                 25,065       25,028
  
  Accumulated other comprehensive income (loss):
       Unrealized gains (losses) on securities:
          Balance at beginning of year                     (6,412)      16,000
          Change in unrealized losses during period       (12,916)     (14,025)
  
          Balance at end of period                        (19,328)       1,975
  
      Foreign currency translation adjustments:
          Balance at beginning of year                      2,846        2,634
          Change in translation adjustments
          during period                                       358          (78)
  
          Balance at end of period                          3,204        2,556
  
  Accumulated other comprehensive
  income (loss) at end of period                          (16,124)       4,531
  
  Retained earnings:
      Balance at beginning of year                        450,559      391,334
      Net earnings                                         19,926       26,301
  
  Balance at end of  period                               470,485      417,635
  
  Total stockholders' equity                         $    482,928      450,695
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Cash flows from operating activities:
      Net earnings                                   $     19,926       26,301
      Adjustments to reconcile net
      earnings to net cash
      from operating activities:
      Universal life and investment
      annuity contract interest                            69,411       85,604
      Surrender charges and other policy revenues         (22,555)     (19,616)
      Realized losses (gains) on investments                6,412       (5,678)
      Accrual and amortization of
      investment income                                    (2,213)      (2,670)
      Depreciation and amortization                           527          505
      Decrease (increase) in insurance
      receivables and other assets                         (2,466)       4,965
      Increase in accrued investment income                (1,688)      (1,294)
      Increase in deferred policy
      acquisition costs                                    (8,988)     (12,033)
      Decrease in liability for future
      policy benefits                                      (3,493)        (649)
      Increase in other policyholder liabilities            1,758          122
      Decrease in Federal income taxes payable             (4,049)      (2,138)
      Increase (decrease) in other liabilities             13,013      (12,301)
      Decrease (increase) in value of index options        11,832       (6,836)
      Other                                                  (336)        (221)
  
  Net cash provided by operating activities                77,091       54,061
  
  Cash flows from investing activities:
      Proceeds from sales of:
         Securities held to maturity                         -            -
         Securities available for sale                      9,993       40,101
         Other investments                                 13,874        9,848
      Proceeds from maturities and redemptions of:
         Securities held to maturity                       14,189       42,997
         Securities available for sale                     24,825       34,535
      Purchases of:
         Securities held to maturity                      (64,815)    (116,474)
         Securities available for sale                    (18,765)     (93,984)
         Other investments                                (23,192)     (23,512)
      Principal payments on mortgage loans                  9,683       29,140
      Cost of mortgage loans acquired                     (27,357)     (27,951)
      Decrease in policy loans                              1,537        5,333
      Decrease in assets of discontinued operations          -              48
      Decrease in liabilities of
      discontinued operations                                -             (48)
      Other                                                (6,670)        (212)
  
  Net cash used in investing activities                   (66,698)    (100,179)
  (Continued on next page)
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                                  (In thousands)
  2000         1999
  Cash flows from financing activities:
      Deposits to account balances for universal
      life and investment annuity contracts          $    188,988      210,832
      Return of account balances on universal
      life and investment annuity contracts              (233,791)    (184,474)
      Increase in short-term borrowings                    23,000         -
      Issuance of common stock under
      stock option plan                                        38          132
  
  Net cash provided by (used in)
  financing activities                                    (21,765)      26,490
  
  Net decrease in cash and short-term investments         (11,372)     (19,628)
  Cash and short-term investments
  at beginning of year                                     14,010       24,508
  
  Cash and short-term investments at end of period   $      2,638        4,880
  See accompanying notes to condensed consolidated financial statements.
  NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
  
  (1)  BASIS OF PRESENTATION
  
  The accompanying condensed consolidated financial statements include the
  accounts of National Western Life Insurance Company  and its  wholly-owned
  subsidiaries  (the  Company),  The  Westcap  Corporation  (Westcap),  NWL
  Investments, Inc., NWL Properties, Inc., NWL 806 Main, Inc., NWL Services,
  Inc., and NWL Financial, Inc.  The Westcap Corporation ceased brokerage
  operations during 1995 and filed for reorganization under Chapter 11 of the
  U.S. Bankruptcy Code in 1996.  The bankruptcy reorganization was completed in
  January, 1999 and National Western retained 100% continuing ownership of the
  reorganized subsidiary.  As a result, The Westcap Corporation is reflected as
  discontinued operations in the accompanying financial statements for portions
  of 1999 and prior years.  Westcap is currently operating as a real estate
  management company.  All significant intercorporate transactions and accounts
  have been eliminated in consolidation.
  
  In the opinion of  the Company, the accompanying consolidated financial
  statements contain all adjustments necessary to present fairly the financial
  position of the Company as of June 30, 2000,  and  the  results of its
  operations for the three months and six months ended June 30, 2000 and 1999,
  and its cash flows for the six months ended June 30, 2000 and 1999.  The
  results of operations for the three months and six months ended June 30, 2000
  and 1999 are not necessarily indicative of the results to be expected  for the
  full year.
  
  (2) STOCKHOLDERS' EQUITY
  
  (A) Changes in Common Stock Shares Outstanding
  
  Details of changes in shares of common stock outstanding are provided below:
  Six Months Ended June 30,
                                                            2000        1999
                                                            (In thousands)
  Common stock shares outstanding:
     Shares outstanding at beginning of year                3,501        3,498
     Shares exercised under stock option plan                   1            3
  
  Shares outstanding at end of period                       3,502        3,501
  (B)  Dividends
  
  The Company paid no cash dividends on common stock during the six months ended
  June 30, 2000 and 1999.
  
  (3)  DISCONTINUED BROKERAGE OPERATIONS
  
  The Chapter 11 bankruptcy reorganization of the Company's wholly owned
  subsidiary,  The Westcap Corporation, was completed in the first quarter of
  1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in 1999 as the entire $14,125,000 settlement
  payment was accrued and reported as a loss in the third quarter of 1998.  Any
  additional losses will depend on the results of The City Colleges lawsuit
  filed against National Western on March 28, 1994, for alleged federal or state
  securities law "control person" violations relating to Westcap, and which is
  pending in the United States District Court, Western District of Texas.
  National Western believes it has reasonable and adequate defenses to this suit
  and, accordingly, no amounts have been accrued in National Western's financial
  statements for potential losses relating to such suit.
  
  (4) SEGMENT AND OTHER OPERATING INFORMATION
  
  The Company's reportable operating segments include domestic life insurance,
  international life insurance, and annuities. These segments are organized
  based on product types and geographic marketing areas.  A summary of segment
  information for the three and six months ended June 30, 2000 and 1999 is
  provided below.
  Selected Segment Information:
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
  
                                           (In thousands)
  June 30, 2000:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs             $  74,601      76,165     241,357        -        392,123
  Total segment
   assets              406,158     382,253   2,860,791      47,899   3,697,101
  Future policy
   benefits            320,863     296,200   2,529,518        -      3,146,581
  Other
   policyholder
   liabilities           9,259       6,944       9,658        -         25,861
  
  Three Months
  Ended
  June 30, 2000:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues          $  6,007      11,022      11,255        -         28,284
  Net investment
   income                6,563       5,769      34,246       2,237      48,815
  Other income              22           2         115        -            139
   Total
   revenues             12,592      16,793      45,616       2,237      77,238
  Policy benefits        4,305       4,144          41        -          8,490
  Amortization of
   deferred
   policy
   acquisition
   costs                   572       3,794       6,927        -         11,293
  Universal life
   and investment
   annuity
   contract
   interest              2,418       3,956      26,386        -         32,760
  Other operating
   expenses              2,297       2,049       2,774         240       7,360
  Federal income
   taxes                 1,029         979       3,260         683       5,951
   Total expenses       10,621      14,922      39,388         923      65,854
  Segment earnings    $  1,971       1,871       6,228       1,314      11,384
  
  Six Months Ended
  June 30, 2000:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues           $ 11,937      21,708      17,914        -         51,559
  Net investment
   income               13,035      11,419      79,342       2,759     106,555
  Other income              22          29         203        -            254
   Total revenues       24,994      33,156      97,459       2,759     158,368
  Policy benefits        8,198       7,794         108        -         16,100
  Amortization of
   deferred
   policy
   acquisition
   costs                 2,198       6,951      13,029        -         22,178
  Universal life
   and investment
   annuity
   contract
   interest              4,640       7,886      56,885        -         69,411
  Other operating
   expenses              4,383       4,043       5,411         240      14,077
  Federal income
   taxes                 1,905       2,215       7,527         861      12,508
   Total expenses       21,324      28,889      82,960       1,101     134,274
  Segment earnings    $  3,670       4,267      14,499       1,658      24,094
  Selected Segment Information:
  
                      Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
                                           (In thousands)
  June 30, 1999:
  Selected Balance
  Sheet Items:
  Deferred policy
   acquisition
   costs              $ 69,886      73,021     200,654        -        343,561
  Total segment
   assets              408,013     373,831   2,767,952      34,521   3,584,317
  Future policy
   benefits            323,527     287,792   2,459,637        -      3,070,956
  Other
   policyholder
   liabilities           9,062       7,383       7,632        -         24,077
  
  Three Months
  Ended
  June 30, 1999:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues           $  6,489      10,516       7,034        -         24,039
  Net investment
   income                6,347       5,460      50,864       2,033      64,704
  Other income              51          41          35        -            127
   Total revenues       12,887      16,017      57,933       2,033      88,870
  Policy benefits        5,156       3,705        (804)       -          8,057
  Amortization of
   deferred
   policy
   acquisition
   costs                 1,460       3,283       5,692        -         10,435
  Universal life
   and investment
   annuity contract
   interest              2,436       3,461      39,096        -         44,993
  Other operating
   expenses              2,757       2,268       2,803        -          7,828
  Federal income
   taxes                   362       1,115       3,762         688       5,927
   Total expenses       12,171      13,832      50,549         688      77,240
  Segment earnings    $    716       2,185       7,384       1,345      11,630
  
  Six Months Ended
  June 30, 1999:
  Condensed Income
  Statements:
  Premiums and
   contract
   revenues           $ 12,280      20,744      14,958        -         47,982
  Net investment
   income               12,678      10,903      96,760       2,215     122,556
  Other income              67          53         157        -            277
   Total revenues       25,025      31,700     111,875       2,215     170,815
  Policy benefits        8,700       8,407        (603)       -         16,504
  Amortization of
   deferred
   policy
   acquisition
   costs                 2,392       6,562      11,052        -         20,006
  Universal life
   and investment
   annuity contract
   interest              4,885       6,894      73,825        -         85,604
  Other operating
   expenses              4,819       4,403       5,307        -         14,529
  Federal income
   taxes                 1,431       1,839       7,543         749      11,562
   Total expenses       22,227      28,105      97,124         749     148,205
  Segment earnings    $  2,798       3,595      14,751       1,466      22,610
  Reconciliations of segment information to the Company's consolidated financial
  statements are provided below:
  Three Months Ended June 30,   Six Months Ended June 30,
                               2000         1999         2000         1999
                                               (In thousands)
  Premiums and Other
  Revenue:
  Premiums and contract
   revenues               $     28,284       24,039       51,559       47,982
  Net investment income         48,815       64,704      106,555      122,556
  Other income                     139          127          254          277
  Realized gains on
   investments                  (5,832)         873       (6,412)       5,678
  
  Total consolidated
   premiums
   and other revenue      $     71,406       89,743      151,956      176,493
  Three Months Ended June 30,       Six Months Ended June 30,
                               2000         1999         2000         1999
                                               (In thousands)
  Federal Income Taxes:
  Total segment Federal
   income taxes            $     5,951        5,927       12,508       11,562
  Taxes (benefits)
   on realized
   gains (losses)
   on investments               (2,041)         305       (2,244)       1,987
  
  Total consolidated
   Federal income taxes    $     3,910        6,232       10,264       13,549
  Three Months Ended June 30, Six Months Ended June 30,
                               2000         1999         2000         1999
                                              (In thousands)
  Net Earnings:
  Total segment earnings    $   11,384       11,630       24,094       22,610
  Realized gains (losses)
   on investments,
   net of taxes                 (3,791)         568       (4,168)       3,691
  
  Total consolidated
   net earnings             $    7,593       12,198       19,926       26,301
  June 30,
                                                          2000         1999
                                                            (In thousands)
  Assets:
  Total segment assets                               $  3,697,101    3,584,317
  Other unallocated assets                                 19,983       15,535
  
  Total consolidated assets                          $  3,717,084    3,599,852
  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
                 OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  GENERAL
  
  National Western Life Insurance Company is a life insurance company, chartered
  in the State of Colorado in 1956, and doing business in forty-three states and
  the District of Columbia. The Company also accepts applications from and
  issues policies to residents of various Central and South American, Caribbean,
  and Pacific Rim countries.  A distribution of the Company's direct premium
  revenues and deposits by domestic and international markets is provided below:
  Six Months Ended June 30,
                                             2000           1999
  United States domestic market:
       Investment annuities                      77.3  %        81.6  %
       Life insurance                             6.6            5.9
  
  Total domestic market                          83.9           87.5
  
  International market:
       Investment annuities                       3.0            0.9
       Life insurance                            13.1           11.6
  
  Total international market                     16.1           12.5
  
  Total direct premiums collected               100.0  %       100.0  %
  Insurance Operations - Domestic
  
  The Company's domestic operations concentrate marketing efforts on federal
  employees, seniors, and specific employee groups in private industry, as well
  as individual sales.  The products marketed are annuities, universal life
  insurance, and traditional life insurance, which includes both term and whole
  life products.  The majority of products sold are the Company's annuities,
  which include single and flexible premium deferred annuities, single premium
  immediate annuities, and equity-indexed annuities.  Most of these annuities
  can be sold as tax qualified or nonqualified products.
  
  National Western markets and distributes its domestic products primarily
  through independent marketing organizations (IMOs).   These IMOs assist the
  Company in recruiting, contracting, and supervising agents.  The Company
  currently has over 80 IMOs contracted for sales of life and annuity products.
  
  Insurance Operations - International
  
  The Company's international operations focus marketing efforts on foreign
  nationals in upper socioeconomic classes with substantial financial resources.
  Insurance sales are on insureds from countries in Central and South America,
  the Caribbean, and the Pacific Rim.  Policy sales on insureds from numerous
  countries in these different regions provides diversification that helps to
  minimize large fluctuations in sales that can occur due to various economic,
  political, and competitive pressures that may occur from one country to
  another.  Products sold in the international market are almost entirely
  universal life and traditional life insurance products.  However, certain
  annuity and investment contracts are also available in this market.
  
  International sales production is from broker-agents, many of whom have been
  selling National Western products for 20 or more years.  The Company continues
  to expand its sales networks in specifically targeted South American and
  Pacific Rim countries which have higher growth potential than other countries.
  
  There are inherent risks of conducting international business that are not
  present within the domestic market.  The risks involved with international
  business are reduced substantially by the Company in several ways.  As
  previously described, the Company focuses its marketing efforts on a specific
  niche group, which is foreign nationals in upper socioeconomic classes who
  have substantial financial resources.  This targeted customer base coupled
  with National Western's conservative, yet competitive, underwriting practices
  have historically resulted in claims experience similar to that in the United
  States.  The Company also minimizes exposure to foreign currency risks, as
  almost all foreign policies require payment of premiums and claims in United
  States dollars.  Finally, the Company's experience in the international market
  and its strong broker-agent relationships, which in many cases exceed 20
  years, help minimize risks and problems when selling products to foreign
  nationals.
  
  INVESTMENTS IN DEBT AND EQUITY SECURITIES
  
  Investment Philosophy
  
  The Company's investment philosophy is to maintain a diversified portfolio of
  investment grade debt and equity securities that provide adequate liquidity to
  meet policyholder obligations and other cash needs.  The prevailing strategy
  within this philosophy is the intent to hold investments in debt securities to
  maturity. However, the Company manages its portfolio, which entails monitoring
  and reacting to all components which affect changes in the price, value, or
  credit rating of investments in debt and equity securities.
  
  Investments in debt and equity securities are classified and reported as
  either securities held to maturity or securities available for sale.  The
  Company does not maintain a portfolio of trading securities.  The reporting
  category chosen for the Company's securities investments depends on various
  factors including the type and quality of the particular security and how it
  will be incorporated into the Company's overall asset/liability management
  strategy.  At June 30, 2000, approximately 26.1% of the Company's total debt
  and equity securities, based on fair values, were classified as securities
  available for sale.  These holdings provide flexibility to the Company to
  react to market opportunities and conditions and to practice active management
  within the portfolio to provide adequate liquidity to meet policyholder
  obligations and other cash needs.
  
  Securities the Company purchases with the intent to hold to maturity are
  classified as securities held to maturity. Because the Company has strong cash
  flows and matches expected maturities of assets and liabilities, the Company
  has the ability to hold the securities, as it would be unlikely that forced
  sales of securities would be required prior to maturity to cover payments of
  liabilities. As a result, securities held to maturity are carried at amortized
  cost less declines in value that are other than temporary. However, certain
  situations may change the Company's intent to hold a particular security to
  maturity, the most notable of which is a deterioration in the issuer's
  creditworthiness. Accordingly, a security may be sold to avoid a further
  decline in realizable value when there has been a significant change in the
  credit risk of the issuer.
  
  Securities that are not classified as held to maturity are reported as
  securities available for sale. These securities may be sold if market or other
  measurement factors change unexpectedly after the securities are acquired. For
  example, opportunities arise that allow the Company to improve the performance
  and credit quality of the investment portfolio by replacing an existing
  security with an alternative security while still maintaining an appropriate
  matching of expected maturities of assets and liabilities. Examples of such
  improvements are as follows: improving the yield earned on invested assets,
  improving the credit quality, changing the duration of the portfolio, and
  selling securities in advance of anticipated calls or other prepayments.
  Securities  available  for  sale  are  reported  in  the  Company's  financial
  statements at fair value. Any unrealized gains or losses resulting from
  changes in the fair value of the securities are reflected in accumulated other
  comprehensive income.
  
  As an integral part of its investment philosophy, the Company performs an
  ongoing process of monitoring the creditworthiness of issuers within the
  investment portfolio.  Review procedures are also performed on securities that
  have had significant declines in fair value. The Company's objective in these
  circumstances is to determine if the decline in fair value is due to changing
  market expectations regarding inflation and general interest rates or other
  factors.  Additionally, the Company closely monitors financial, economic, and
  interest rate conditions to manage prepayment and extension risks in its
  mortgage-backed securities portfolio.
  
  The Company's overall conservative investment philosophy is reflected in the
  allocation of its investments which is detailed below as of June 30, 2000 and
  December 31, 1999.  The Company emphasizes investment grade debt securities,
  with smaller holdings in mortgage loans and real estate.
  Percent of Investments
                                             June 30,     December 31,
                                               2000           1999
  Debt securities                                  87.7%          87.8%
  Mortgage loans                                    6.2            5.7
  Policy loans                                      3.6            3.6
  Index options                                     0.7            1.0
  Equity securities                                 0.5            0.5
  Real estate                                       0.4            0.4
  Other                                             0.9            1.0
  
  Totals                                          100.0%         100.0%
  Portfolio Analysis
  
  The Company maintains a diversified debt securities portfolio which consists
  of various types of fixed income securities including primarily corporate,
  mortgage-backed   securities,   and   public   utilities.   Investments   in
  mortgage-backed  securities  include  primarily  U.S.  government  agency
  pass-through securities and collateralized mortgage obligations (CMOs).
  
  An important aspect of the Company's investment philosophy is managing the
  credit quality of its investments in debt securities.  Thorough credit
  analysis  is  performed  on  existing  and  potential  corporate  investments
  including examination of a company's credit and industry outlook, financial
  strength, effectiveness of management, and event risks.  In the past few
  years, credit analysis has become one of the most critical activities of the
  Company's portfolio management.
  
  National Western continues to follow its conservative investment philosophy by
  minimizing its holdings of  below investment grade debt securities, as these
  securities generally have greater default risk than higher rated corporate
  debt. These issuers usually are more sensitive to adverse industry or economic
  conditions than are investment grade issuers. The Company's holdings of below
  investment grade debt securities, which are lower than industry averages, are
  summarized below.
  Below Investment
                                          Grade Debt Securities
                                                                        % of
                             Amortized     Carrying      Market      Invested
                               Cost         Value        Value        Assets
                                    (In thousands except percentages)
  June 30, 2000           $    103,624       78,510       75,240          2.4%
  
  December 31, 1999       $     73,607       70,900       63,864          2.2%
  
  December 31, 1998       $     46,453       44,974       45,317          1.4%
  Although National Western purchases only investment grade debt securities, a
  growing number of companies have become more leveraged due to an environment
  of heightened acquisition activity and large share repurchase programs.
  Therefore, continued monitoring of credit quality after the purchase of a
  company's debt securities is crucial in order for National Western to maintain
  a high quality portfolio with a low percentage of below investment grade debt
  securities.  While the Company's holdings of below investment grade debt
  securities remain low, these holdings have increased from $44,974,000 at
  December 31, 1998, to $78,510,000 at June 30, 2000.  This increase is due to
  downgrades of investment grade debt securities as opposed to purchases of such
  holdings.  Historically, the Company's strong credit risk management and
  commitment to quality has resulted in minimal defaults in the debt securities
  portfolio.
  
  During the third and fourth quarters of 1999, the Company recorded permanent
  impairment writedowns totaling $4,403,000 related to two separate securities.
  The writedowns were reflected as realized losses.  One of these securities was
  classified as available for sale and the other as held to maturity.  The
  Company subsequently transferred the held to maturity holding to securities
  available for sale during the first quarter of 2000.  Subsequently, three
  additional debt securities experienced significant credit deterioration.  As a
  result  of  the  significant  deterioration  of  the  issuing  companies'
  creditworthiness, National Western also transferred these three securities
  from held to maturity to available for sale during the first quarter of 2000.
  Amortized cost, net of writedowns, of the four transferred securities totaled
  $49,528,000.  Unrealized losses resulting from recording the securities at
  fair value, before effects of taxes and deferred policy acquisitions costs,
  totaled $20,376,000.  The unrealized losses were recorded as a component of
  accumulated other comprehensive loss in the accompanying financial statements
  for the quarter ended March 31, 2000.
  
  During the second quarter of 2000, an additional below investment grade debt
  security, which the Company has been monitoring closely due to credit
  deterioration, defaulted on its interest payment.  Based on the current
  condition of the issuing company, complete recovery of National Western's
  investment in this security is not expected.  As a result, the Company
  recorded  a  permanent  impairment  writedown  for  this  security  totaling
  $6,715,000 during the quarter ended June 30, 2000 and also transferred the
  security from held to maturity to available for sale.  The writedown was
  recorded as a realized investment loss.  Amortized cost, net of writedowns, of
  this  security  totaled  $8,250,000  and  unrealized  losses  resulting  from
  recording the security at fair value, before the effects of taxes and deferred
  policy acquisition costs, totaled $4,000,000.  The unrealized losses were
  recorded as a component of accumulated other comprehensive loss in the
  accompanying financial statements for the quarter ended June 30, 2000.
  
  The Company is closely monitoring the previously described securities as well
  as its other below investment grade holdings.  While additional losses are not
  currently anticipated based on the existing status and condition of these
  securities, continued credit deterioration of some securities is possible,
  which may result in further writedowns.
  
  Although there is loss exposure related to its below investment grade debt
  securities, the Company is firmly committed to minimizing credit risks and
  maintaining a high quality portfolio.  This commitment is reflected in the
  high average credit rating of the Company's portfolio.  In the table below,
  investments in debt securities are classified according to credit ratings by
  Standard  and  Poor's  (S&P),  a  nationally  recognized  statistical  rating
  organization (NRSRO).  If securities were not rated by S&P, the equivalent
  rating of another NRSRO or the National Association of Insurance Commissioners
  was used.
  June 30,      December 31,
                                               2000            1999
  AAA and U.S. government                          28.4%           28.7%
  AA                                                7.9             8.8
  A                                                33.9            34.1
  BBB                                              27.1            25.9
  BB and other below investment grade               2.7             2.5
  
                                                  100.0%          100.0%
  Another important part of the Company's investment philosophy is managing the
  cash flow stability of the portfolio.  Because expected maturities of
  securities  may  differ  from  contractual  maturities  due  to  prepayments,
  extensions, and calls, the Company takes steps to manage and minimize these
  risks.  The Company continues to reduce its exposure to prepayment and
  extension risks by lowering its holdings of mortgage-backed securities.  This
  strategy began in 1994 when mortgage-backed securities totaled 47.6% of the
  entire portfolio, but now total only 20.2% at June 30, 2000.  The majority of
  this reduction has been achieved by shifting investments into corporate
  securities and public utilities, as these holdings have increased from 47.0%
  at December 31, 1994 to 69.5% at June 30, 2000.  Also, most of these additions
  have been noncallable corporates, which help reduce prepayment and call risks.
  
  As indicated above, the Company's holdings of mortgage-backed securities are
  also subject to prepayment risk, as well as extension risk.  Both of these
  risks are addressed by specific portfolio management strategies.  The Company
  has substantially reduced both prepayment and extension risks by investing
  primarily in collateralized mortgage obligations, which have more predictable
  cash flow patterns than pass-through  securities.  These securities, known as
  planned amortization class I (PAC I) CMOs, are designed to amortize in a more
  predictable manner than other CMO classes or pass-throughs.  Using this
  strategy, the Company can more effectively manage and reduce prepayment and
  extension risks, thereby helping to maintain the appropriate matching of the
  Company's assets and liabilities.
  
  As of June  30, 2000, CMOs represent approximately 94% of the Company's
  mortgage-backed securities. The CMOs in the Company's portfolio have been
  modeled and subjected to detailed, comprehensive analysis by the Company's
  investment staff.  The overall structure of the CMO as well as the individual
  tranche being considered for purchase have been evaluated to ensure that the
  security fits appropriately within the Company's investment philosophy and
  asset/liability management parameters.  The Company's investment mix between
  mortgage-backed securities and other fixed income securities helps effectively
  balance prepayment, extension, and credit risks.
  
  At June 30, 2000, the Company's debt and equity securities were classified as
  follows:
  Unrealized
                                          Fair       Amortized       Gains
                                          Value         Cost        (Losses)
                                                   (In thousands)
  Securities held to maturity:
      Debt securities                $  2,063,393    2,138,688       (75,295)
  Securities available for sale:
      Debt securities                     712,117      771,963       (59,846)
      Equity securities                    16,069       12,754         3,315
  
  Totals                             $  2,791,579    2,923,405      (131,826)
  As detailed above, debt securities classified as held to maturity comprise the
  majority of the Company's securities portfolio, while equity securities are a
  small component of the portfolio.  Unrealized losses totaling $131,826,000 on
  the securities portfolio at June 30, 2000, are a reflection of market
  conditions at quarter-end.  The fair values, or market values, of fixed income
  debt  securities  generally  correlate  to  external  market  interest  rate
  conditions.  Because the interest rates are fixed on almost all of the
  Company's debt securities, market values typically increase when market
  interest  rates  decline,  and  decrease  when  market  interest  rates  rise.
  However, market values may fluctuate for other reasons, such as changing
  economic conditions or increasing event-risk concerns.  An analysis of the
  change in unrealized gains and losses on the Company's securities portfolio
  for the quarter ended June 30, 2000, is detailed below:
  Change in
                                     Unrealized Gains (Losses)     Unrealized
                                          At            At       Gains (Losses)
                                       June 30,      March 31,     During 2nd
                                         2000          2000       Quarter 2000
                                                   (In thousands)
  Securities held to maturity:
      Debt securities               $    (75,295)      (68,470)        (6,825)
  Securities available for sale:
      Debt securities                    (59,846)      (48,078)       (11,768)
      Equity securities                    3,315         3,222             93
  
  Totals                            $   (131,826)     (113,326)       (18,500)
  Unrealized losses at June 30, 2000, increased 45% from year-end 1999 and 16%
  from March 31, 2000, even though market interest rates of the ten year U.S.
  Treasury bond actually decreased approximately 40 basis points during this six
  month period.  With market interest rates declining, it would be expected that
  market values of debt securities would increase.  However, market values
  actually decreased because of the substantial widening of the yield premium
  for corporate bonds over comparable Treasury securities.  Approximately 69% of
  National Western's bond portfolio consists of corporate bonds, including
  public utilities.  The increase of the yield premium has primarily been event-
  risk driven as companies increase their leverage through stock buyback
  programs and acquisitions.  Because the majority of the Company's debt
  securities are classified as held to maturity, which are recorded at amortized
  cost, changes in market values have relatively small effects on the Company's
  financial statements.  Also, the Company has the intent and ability to hold
  these securities to maturity, and it is unlikely that sales of such securities
  would be required which would realize market gains or losses.
  
  Changes in fair values of securities due to changes in market interest rates
  is an example of market risk.  Market risk is the risk of change in market
  values of financial instruments due to changes in interest rates, currency
  exchange rates, commodity prices, or equity prices.  The most significant
  market risk exposure for National Western is interest rate risk. The Company
  manages interest rate risk through on-going cash flow testing required for
  insurance regulatory purposes. Computer models are used to perform cash flow
  testing under various commonly used stress test interest rate scenarios to
  determine if existing assets would be sufficient to meet projected liability
  outflows.  Management strives to closely match the durations of its assets and
  liabilities.   Sensitivity analysis allows the Company to measure the
  potential gain or loss in fair value of its interest-sensitive instruments and
  to seek to protect its economic value and achieve a predictable spread between
  what is earned on invested assets and what is paid on liabilities.  The
  Company seeks to minimize the impact of interest risk through surrender
  charges that are imposed to discourage policy surrenders.  Interest rate
  changes can be anticipated and risk may be limited due to management actions
  regarding asset and liability instruments.  However, potential changes in the
  values of financial instruments indicated by hypothetical interest changes
  will likely be different from actual changes experienced, and the differences
  may be material.
  
  The Company's market risk-sensitive assets include debt securities, equity
  securities which are almost entirely preferred stocks, mortgage loans, policy
  loans, and index options.  The Company does not maintain a securities trading
  portfolio.  Market risk-sensitive liabilities include policy liabilities for
  deferred  and  immediate  investment  annuity  contracts  and  supplemental
  contracts.  Sensitivity analysis expresses the potential gain or loss in fair
  value, over a selected time period, from one or more selected hypothetical
  changes in interest rates which are reasonably possible in the near term.  The
  Company performed detailed sensitivity analysis at December 31, 1999, for its
  interest rate-sensitive assets.  Based on the recent changes in market
  conditions in the first six months of 2000, the changes in market values of
  the Company's debt securities fell somewhat outside the expected range of
  results of this analysis.  The deviation from the expected results was due to
  the volatility in the corporate bond market as previously described above.
  
  In addition to the securities described above, the Company invests in index
  options which are derivative financial instruments used to hedge the equity
  return component of the Company's equity-indexed annuities.  The values of
  these options are primarily impacted by equity price risk, as the options'
  fair values are dependent on the performance of the S&P 500 Composite Stock
  Price Index.  However, increases or decreases in investment returns from these
  options are substantially offset by corresponding increases or decreases in
  amounts paid to equity-indexed annuity policyholders, subject to minimum
  guaranteed policy interest rates.
  
  The Company's market risk liabilities, which include policy liabilities for
  investment annuity and supplemental contracts, are managed for interest rate
  risk through cash flow testing as previously described.  As part of this cash
  flow testing, the Company has analyzed the potential impact on net earnings of
  both a 100 basis point increase and decrease in the U.S. Treasury yield curve
  as of December 31, 1999.  A 100 basis point interest rate decline would
  decrease net earnings for 2000 by approximately $300,000, based on the
  Company's projections.  A 100 basis point increase in interest rates would
  increase net earnings by approximately $200,000, based on the Company's
  projections.  These estimated impacts to earnings are net of tax effects
  determined at a tax rate of 35% and are also net of the estimated effects of
  deferred policy acquisition costs.
  
  The Company has modeled these scenarios, as a change in market interest rates
  could pose potential risks to the current profitability levels of this
  business.  These movements in interest rates are also reasonably possible
  near-term scenarios given the current interest rate environment.  The risks
  from such changes are primarily due to changes in interest rate spreads, which
  are the differences between investment income earned and credited interest
  paid to policyholders.  Also, the changes in interest rates can effect the
  level of surrenders and timing of cash flows related to policy liabilities.
  
  The above-described scenarios produce estimated changes in cash flows as well
  as cash flow reinvestment projections.  Estimated cash flows in the Company's
  model assume cash flow reinvestments which are representative of the Company's
  current  investment  strategy.    Calls  and  prepayments  include  scheduled
  maturities and those expected to occur which would benefit the security
  issuers.  Assumed policy surrenders consider differences and relationships
  between credited interest rates and market interest rates as well as surrender
  charges on individual policies.  The impact to earnings also includes the
  expected effects on amortization of deferred policy acquisition costs.  The
  model considers only investment annuity and supplemental contracts in-force at
  December 31, 1999, and does not consider new product sales or the possible
  impact of interest rate changes on sales.
  
  MORTGAGE LOANS AND REAL ESTATE
  
  Investment Philosophy
  
  In general, the Company seeks loans on high quality, income producing
  properties such as shopping centers, freestanding retail stores, office
  buildings, industrial and sales or service facilities, selected apartment
  buildings, motels, and health care facilities.  The location of these loans is
  typically  in  growth  areas  that  offer  a  potential  for  property  value
  appreciation.  These growth areas are found primarily in major metropolitan
  areas, but occasionally in selected smaller communities.
  
  The Company seeks to minimize the credit and default risk in its mortgage loan
  portfolio  through  strict  underwriting  guidelines  and  diversification  of
  underlying property types and geographic locations.   In addition to being
  secured by the property, mortgage loans with leases on the underlying property
  are often guaranteed by the lessee, in which case the Company approves the
  loan based on the credit strength of the lessee.  This approach has resulted
  in higher quality mortgage loans with fewer defaults.
  
  The Company's direct investments in real estate are not a significant portion
  of its total investment portfolio.  Many of these investments were acquired
  through mortgage loan foreclosures.  However, the Company also participates in
  several real estate joint ventures and limited partnerships.  The joint
  ventures  and  partnerships  invest  primarily  in  income-producing  retail
  properties.    These  investments  have  typically  enhanced  the  Company's
  investment portfolio returns.
  
  Portfolio Analysis
  
  The Company held net investments in mortgage loans totaling $202,024,000 and
  $183,902,000, or 6.2% and 5.7% of total invested assets, at June 30, 2000, and
  December  31,  1999,  respectively.  The  loans  are  real  estate  mortgages,
  substantially  all  of  which  are  related  to  commercial  properties  and
  developments and have fixed interest rates.
  
  The diversification of the mortgage loan portfolio by geographic regions of
  the United States and by property type as of June 30, 2000, and December 31,
  1999, was as follows:
  June 30,     December 31,
  Geographic Region:                      2000           1999
  West South Central                        55.2%          58.8%
  Mountain                                  23.3           20.5
  Pacific                                    9.8           11.0
  South Atlantic                             4.5            5.1
  East South Central                         3.8            4.2
  Other                                      3.4            0.4
  
  Totals                                   100.0%         100.0
  June 30,     December 31,
  Property Type:                           2000           1999
  Retail                                    60.3%          56.1%
  Office                                    24.2           27.4
  Hotel/Motel                                6.4            7.2
  Land/Lots                                  3.5            2.5
  Nursing Homes                              2.0            2.4
  Apartment                                  1.0            1.6
  Other                                      2.6            2.8
  
  Totals                                   100.0%         100.0%
  As of June 30, 2000, the allowance for possible losses on mortgage loans was
  $4,104,000.  No additions were made to the allowance in the first six months
  of 2000.  Although management believes that the current balance is adequate,
  future additions to the allowance may be necessary based on changes in
  economic conditions, particularly in the West South Central region which
  includes Texas, Louisiana, Oklahoma, and Arkansas, as this area contains the
  highest concentrations of the Company's mortgage loans.
  
  The Company currently places all loans past due three months or more on
  nonaccrual status, thus recognizing no interest income on the loans.  The
  Company had mortgage loan principal balances on nonaccrual status totaling
  $3,031,000  and  $3,014,000  at  June  30,  2000  and  December  31,  1999,
  respectively.  Also, the Company will at times restructure mortgage loans
  under certain conditions which may involve changes in interest rates, payment
  terms, or other modifications.  For the six months ended June 30, 2000, the
  reductions in interest income due to nonaccrual and restructured mortgage
  loans were approximately $155,000.  For the six months ended June 30, 1999,
  the reductions in interest income due to nonaccrual and restructured mortgage
  loans were not significant.
  
  The Company owns real estate that was acquired through foreclosure and through
  direct investment totaling $12,355,000 and $11,388,000 at June 30, 2000, and
  December 31, 1999, respectively.  This small concentration of properties
  represents less than one percent of the Company's entire investment portfolio.
  The real estate holdings consist primarily of income-producing properties
  which are being operated by the Company.  The Company recognized operating
  income on these properties of approximately $395,000 and $450,000 for the six
  months ended June 30, 2000 and 1999.  Also during the first six months of 2000
  and 1999, the Company sold real estate properties resulting in realized gains
  on investments totaling $207,000 and  $1,419,000, respectively.
  
  The Company monitors the conditions and market values of these properties on a
  regular basis.  No significant realized losses were recognized due to declines
  in values of properties for the six months ended June 30, 2000 and 1999,
  respectively.  The Company makes repairs and capital improvements to keep the
  properties in good condition and will continue this maintenance as needed.
  
  RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2000 AND 1999
  
  Consolidated Operations
  
  Summary of Consolidated Operating Results
  
  A summary of operating results for the three months ended June 30, 2000 and
  1999 is provided below:
  Three Months Ended June 30,
                                                          2000          1999
                                           (In thousands except per share data)
  Revenues:
  Revenues, excluding realized gains
  (losses) and index options                        $      89,728       82,918
  Index options                                           (12,490)       5,952
  Realized gains (losses) on investments                   (5,832)         873
  
  Total revenues                                    $      71,406       89,743
  
  Earnings:
  Earnings from operations                          $      11,384       11,630
  Net realized gains (losses) on investments               (3,791)         568
  
  Net earnings                                      $       7,593       12,198
  
  Basic Earnings Per Share:
  Earnings from operations                          $        3.25         3.33
  Net realized gains (losses) on investments                (1.08)        0.16
  
  Net earnings                                      $        2.17         3.49
  
  Diluted Earnings Per Share:
  Earnings from operations                          $        3.24         3.30
  Net realized gains (losses) on investments                (1.08)        0.16
  
  Net earnings                                      $        2.16         3.46
  Consolidated  Operating  Results:  Earnings  from  operations,  excluding  net
  realized gains and losses on investments, totaled $11,384,000 for the quarter
  ended June 30, 2000, compared to $11,630,000 for the second quarter of 1999.
  Earnings for the current quarter were affected by the Company's equity-indexed
  annuity  business.    These  annuities  combine  features  associated  with
  traditional fixed annuities, with the option to have interest rates linked in
  part to an equity index, the S&P 500 Index.  Volatility and declines in the
  S&P 500 Index during the second quarter of 2000 resulted in lower earnings
  from this block of business.  However, universal life and annuity contract
  revenues were significantly higher offsetting much of the impact from the
  equity-indexed annuity business.
  
  Revenues for the quarters ended June 30, 2000 and 1999 totaled $71,406,000 and
  $89,743,000, respectively. The lower revenues in 2000 are due to realized
  losses on investments and significant decreases in investment income from
  index options which are used to hedge the Company's equity-indexed annuities.
  The lower investment income was substantially offset by lower annuity contract
  interest expense, which reflects the results of the Company's hedging policy
  of this business.  Excluding both realized gains and losses on investments and
  income or losses from index options, as these items can be irregular and
  variable in nature, revenues reflected significant growth totaling $89,728,000
  and $82,918,000 for the quarters ended June 30, 2000 and 1999, respectively.
  
  The Company recorded realized losses on investments, net of taxes, totaling
  $3,791,000 for the quarter ended June 30, 2000, compared to gains of $568,000
  for the second quarter of 1999.  The loss in the second quarter of 2000 is
  primarily due to a permanent impairment writedown for a specific debt security
  which defaulted during the quarter.   The Company's policy is to record an
  impairment writedown when a decline in value is other than temporary and full
  recovery of the investment cost is not expected.  Overall, the Company's debt
  securities portfolio remains high quality with minimal holdings of below
  investment grade securities, particularly in comparison to life insurance
  industry averages.
  
  Universal Life and Investment Annuity Contract Revenues: Contract revenues
  increased significantly during the quarter ended June 30, 2000 totaling
  $25,384,000 compared to $20,658,000 for the comparable 1999 period.  This
  increase of over 22% is almost entirely due to higher annuity surrender charge
  income.    Surrenders  for  both  single-tier  and  two-tier  annuities  were
  abnormally high during the second quarter of 2000.
  
  Net Investment Income:  Net investment income decreased 24.6% from the second
  quarter of 1999, primarily due to declines in fair values of index options
  used to hedge the equity return component of the Company's equity-indexed
  annuity product. The index options, which act as hedges to match closely the
  returns on the S&P 500 Index, are reported at fair value in the accompanying
  financial statements. The changes in the values of the index options and the
  credited interest on policyholder liabilities for equity-indexed annuities are
  both reflected in the statement of earnings.  The reduction to investment
  income from index options for the quarter ended June 30, 2000, totaled
  $12,490,000 compared to income of $5,952,000 for the comparable period of
  1999.  This significant decline is directly attributable to the volatility and
  decline in the S&P 500 Index.  While net investment income was lower due to
  these options, this reduction was substantially offset by lower annuity
  contract interest expense as the credited return on the Company's equity-
  indexed annuities are also based on the same S&P 500 Index. A detail of net
  investment income is provided below:
  Three Months Ended June 30,
                                                2000          1999
                                                  (In thousands)
  Investment income:
      Debt securities                     $      52,894        51,097
      Mortgage loans                              4,726         4,021
      Policy loans                                2,040         2,045
      Index options                             (12,490)        5,952
      Other investment income                     2,790         2,720
  
  Total investment income                        49,960        65,835
  Investment expenses                             1,145         1,131
  
  Net investment income                   $      48,815        64,704
  Life and Other Policy Benefits: Policy benefits in the second quarter of 2000
  increased 12.2% over the 1999 second quarter.  The higher expenses were almost
  entirely due to life insurance benefits claims which increased $1,044,000 as
  indicated in the comparative detail provided below:
  Three Months Ended June 30,
                                                 2000          1999
                                                   (In thousands)
  Life insurance benefit claims            $       6,482         5,438
  Surrenders of traditional products               2,658         2,513
  Other policy benefits                              361           514
  
  Totals                                   $       9,501         8,465
  Universal Life and Investment Annuity Contract Interest:  The Company closely
  monitors its credited interest rates, taking into consideration such factors
  as profitability goals, policyholder benefits, product marketability, and
  economic market conditions.  Rates are established or adjusted after careful
  consideration and evaluation of these factors against established objectives.
  As market interest rates fluctuate, the Company's credited interest rates are
  often adjusted accordingly, while also taking into consideration other factors
  as described above.  Contract interest totaled $32.8 million and $45.0 million
  for the quarters ended June 30, 2000 and 1999, respectively.  The decrease is
  primarily attributable to interest on the Company's equity-indexed annuity
  products.  Because of the volatility and decline of the S&P 500 Index during
  the second quarter of 2000, the related contract interest of the equity-
  indexed annuities also declined.  Correspondingly, the income from index
  options used to hedge these annuities also declined, substantially offsetting
  the lower contract interest.
  
  Other Operating Expenses: These expenses totaled $7,360,000 and $7,828,000 for
  the quarters ended June 30, 2000 and 1999, respectively.  Included in 1999
  expenses is an additional accrual for state income taxes totaling $800,000.
  While a portion of these taxes relate to 1999, the majority of this accrual
  covers adjustments for previous years.
  
  Federal Income Taxes:  Federal income taxes include no unusual items as
  effective tax rates for the quarters ended June  30, 2000 and 1999 were 34.0%
  and 33.8%, respectively.
  
  Segment Operations
  
  Summary of Segment Earnings
  
  A summary of segment earnings for the quarters ended June 30, 2000 and 1999 is
  provided below.  The segment earnings exclude realized gains and losses on
  investments, net of taxes.
  Domestic   International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
                                           (In thousands)
  Segment earnings:
  
   June 30, 2000       $ 1,971       1,871       6,228       1,314      11,384
  
   June 30, 1999       $   716       2,185       7,384       1,345      11,630
  Domestic Life Insurance Operations
  
  The Company's domestic life insurance operations concentrate marketing efforts
  on federal employees, seniors, and specific employee groups in private
  industry, as well as individual sales.  The products marketed are universal
  life insurance and traditional life insurance, which includes both term and
  whole life products.  National Western markets and distributes its domestic
  products primarily through independent agents and brokers and independent
  marketing  organizations  (IMOs).    The  IMOs  also  assist  the  Company  in
  recruiting,  contracting,  and  supervising  agents  as  well  as  providing
  additional financial resources for product marketing.  Geographically, the
  domestic life insurance operations market products in most of the United
  States, which encompasses 43 states and the District of Columbia.  The states
  in which the Company does not conduct business are primarily in the northeast
  and include Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey,
  New York, and Vermont.
  
  Earnings for the domestic life insurance operating segment were $1,971,000 and
  $716,000 for the three months ended June 30, 2000 and 1999, respectively.  The
  increase in earnings in 2000 is primarily due to decreases in amortization of
  deferred policy acquisition costs, policy benefits, and other operating
  expenses.
  
  A comparative analysis of results of operations for the Company's domestic
  life insurance segment is detailed below:
  Three Months Ended June 30,
  Domestic Life Insurance Operations:                    2000          1999
                                                           (In thousands)
  Premiums and other revenue:
      Premiums and contract revenues               $       6,007         6,489
      Net investment income                                6,563         6,347
      Other income                                            22            51
  
  Total premiums and other revenue                        12,592        12,887
  
  Benefits and expenses:
      Policy benefits                                      4,305         5,156
      Amortization of deferred policy
      acquisition costs                                      572         1,460
      Universal life insurance
      contract interest                                    2,418         2,436
      Other operating expenses                             2,297         2,757
  
  Total benefits and expenses                              9,592        11,809
  
  Segment earnings before Federal income taxes             3,000         1,078
  
  Federal income taxes                                     1,029           362
  
  Segment earnings                                 $       1,971           716
  Revenues from domestic life insurance operations include life insurance
  premiums on traditional type products and revenues from universal life
  insurance.  The Company's current marketing efforts focus more on universal
  life insurance, and, as a result, revenues from these products continue to
  increase over traditional products.  Revenues from traditional products are
  simply premiums collected, while revenues from universal life insurance
  consist of policy charges for the cost of insurance, policy administration
  fees, and surrender charges assessed during the period.  A comparative detail
  of premiums and contract revenues is provided below:
  Three Months Ended June 30,
                                                       2000          1999
                                                         (In thousands)
  Universal life insurance:
      Cost of insurance                         $        3,037         2,947
      Surrender charges                                    476           477
      Policy fees and other revenues                       170           335
  Traditional life insurance premiums                    2,324         2,730
  
  Totals                                        $        6,007         6,489
  Actual universal life insurance deposits collected for the quarters ended June
  30,  2000  and  1999  are  detailed  below.    Deposits  collected  on  these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  Three Months Ended June 30,
                                                       2000         1999
                                                         (In thousands)
  Universal life insurance:
      First year and single premiums             $       1,281        1,270
      Renewal premiums                                   3,676        3,491
  Totals                                         $       4,957        4,761
  Policy benefits were lower in the second quarter of 2000 totaling $4,305,000
  compared to $5,156,000 for the comparable 1999 period.  The decrease is due to
  reductions in traditional policy liabilities which were partially offset by
  higher life insurance benefit claims.  Mortality claims experience fluctuates
  from period to period, and such deviations are not uncommon in the life
  insurance industry.
  
  Universal life insurance contract interest remained relatively constant at
  $2,418,000 in 2000 compared to $2,436,000 in 1999.  This is consistent with
  the relative stable to declining size of this block of business.
  
  Amortization of deferred policy acquisition costs was significantly lower in
  2000 totaling $572,000 compared to $1,460,000 in 1999.  These expenses
  represent the amortization of the costs of acquiring or producing new
  business, which consists primarily of agents' commissions.  The majority of
  such costs are amortized in direct relation to the anticipated future gross
  profits of the applicable blocks of business.  The lower amortization costs in
  2000 resulted from  adjustments to deferred policy acquisition costs as
  anticipated future gross profits on domestic blocks of business were revised.
  
  Other operating expenses totaled $2,297,000 and $2,757,000 for the quarters
  ended June 30, 2000 and 1999, respectively.  Expenses for 2000 were lower as
  1999 expenses include an additional accrual for state income taxes as
  previously described.
  
  International Life Insurance Operations
  
  The Company's international life insurance operations focus marketing efforts
  on foreign nationals in upper socioeconomic classes with substantial financial
  resources.  Insurance sales are primarily on insureds from countries in
  Central and South America, the Caribbean, and the Pacific Rim.  Policy sales
  on insureds from numerous countries in these different regions provides
  diversification that helps to minimize large fluctuations in sales that can
  occur due to various economic, political, and competitive pressures that may
  occur from one country to another.  Historically, the top three countries in
  insurance sales have often been Argentina, Chile, and Peru.  Products sold in
  the international market include both universal life and traditional life
  insurance products.  The Company minimizes exposure to foreign currency risks,
  as almost all foreign policies require payment of premiums and claims in
  United States dollars.  Sales production from the international market is from
  independent broker-agents, many of whom have been selling National Western
  products for 20 or more years.
  
  Earnings  for  the  international  life  insurance  operating  segment  were
  $1,871,000 and $2,185,000 for the quarters ended June 30, 2000 and 1999,
  respectively.  Earnings in 2000 were somewhat lower due to higher life
  insurance benefit claims, amortization of deferred policy acquisition costs,
  and contract interest, partially offset by increases in universal life
  insurance revenues.
  
  A  comparative  analysis  of  results  of  operations  for  the  Company's
  international life insurance segment is detailed below:
  Three Months Ended June 30,
  International Life Insurance Operations:               2000          1999
                                                           (In thousands)
  Premiums and other revenue:
      Premiums and contract revenues               $      11,022        10,516
      Net investment income                                5,769         5,460
      Other income                                             2            41
  
  Total premiums and other revenue                        16,793        16,017
  
  Benefits and expenses:
      Policy benefits                                      4,144         3,705
      Amortization of deferred policy
      acquisition costs                                    3,794         3,283
      Universal life insurance contract interest           3,956         3,461
      Other operating expenses                             2,049         2,268
  
  Total benefits and expenses                             13,943        12,717
  
  Segment earnings before Federal income taxes             2,850         3,300
  
  Federal income taxes                                       979         1,115
  
  Segment earnings                                 $       1,871         2,185
  As with domestic operations, revenues from the international life insurance
  segment include both premiums on traditional type products and revenues from
  universal life insurance.  The international operations' marketing efforts are
  also focused more on universal life insurance, and, as a result, revenues from
  these products continue to increase over traditional products.  Cost of
  insurance revenues continue to increase as the international block of business
  grows.   A comparative detail of premiums and contract revenues is provided
  below:
  Three Months Ended June 30,
                                                        2000          1999
                                                          (In thousands)
  Universal life insurance:
      Cost of insurance                           $       7,667         7,292
      Surrender charges                                   1,882         1,707
      Policy fees and other revenues                        919           887
  Traditional life insurance premiums                       554           630
  
  Totals                                          $      11,022        10,516
  Actual universal life insurance deposits collected for the quarters ended June
  30,  2000  and  1999  are  detailed  below.    Deposits  collected  on  these
  nontraditional products are not reflected as revenues in the Company's
  statements  of  earnings,  as  they  are  recorded  directly  to  policyholder
  liabilities upon receipt, in accordance with generally accepted accounting
  principles.
  Three Months Ended June 30,
                                                      2000          1999
                                                        (In thousands)
  Universal life insurance:
      First year and single premiums            $       3,376         3,317
      Renewal premiums                                  9,569         8,978
  
  Totals                                        $      12,945        12,295
  Life insurance benefit claims, which are reflected in policy benefits for
  segment reporting purposes, were higher in 2000 at $2,700,000 compared to
  $2,163,000 in 1999.  As previously described for domestic life insurance
  operations,  mortality  claims  fluctuate  from  period  to  period.    These
  deviations, which can at times be significant, are not uncommon in the life
  insurance industry.  Over extended periods of time, higher claims experience
  tends to be offset by periods of lower claims experience.  Additionally, the
  Company  utilizes  reinsurance  to  help  minimize  its  exposure  to  adverse
  mortality experience.  The Company's general policy is to reinsure amounts in
  excess of $200,000 on the life of any one individual.
  
  Universal life insurance contract interest increased from $3,461,000 in 1999
  to $3,956,000 in 2000.  The increase in contract interest is consistent with
  growth in the universal life insurance business.
  
  Annuity Operations
  
  The Company's annuity operations are almost exclusively in the United States.
  Like the Company's domestic life insurance operations, annuities are marketed
  in 43 states and the District of Columbia using independent agents, brokers,
  and  independent  marketing  organizations  (IMOs).  For  most  of  these
  organizations, annuity sales are much more significant and are the primary
  focus of their business operations.  Although some of the Company's annuities
  are available in the international market, current sales are insignificant to
  total annuity sales.
  
  Annuities sold include single and flexible premium deferred annuities, single
  premium immediate annuities, and equity-indexed annuities.  These products can
  be tax qualified or nonqualified annuities.  In recent years the majority of
  annuities sold have been nonqualified deferred annuities.  The Company also
  continues to collect additional premiums on existing two-tier annuities, as a
  large portion of the two-tier block of business is flexible premium annuities
  on which renewal premiums continue to be collected.  However, the Company has
  not sold two-tier annuities since 1992.
  
  Earnings for the annuity operating segment were $6,228,000 and $7,384,000 for
  the quarters ended June 30, 2000 and 1999, respectively.  Earnings for 2000
  were down from 1999 primarily due to lower earnings from the Company's equity-
  indexed annuity business, offset significantly by higher annuity contract
  revenues primarily from surrender charges.
  
  A comparative analysis of results of operations for the Company's annuity
  segment is detailed below:
  Three Months Ended June 30,
  Annuity Operations:                                    2000          1999
                                                           (In thousands)
  Premiums and other revenue:
      Premiums and contract revenues               $      11,255         7,034
      Net investment income                               34,246        50,864
      Other income                                           115            35
  
  Total premiums and other revenue                        45,616        57,933
  
  Benefits and expenses:
      Policy benefits                                         41          (804)
      Amortization of deferred policy
      acquisition costs                                    6,927         5,692
      Annuity contract interest                           26,386        39,096
      Other operating expenses                             2,774         2,803
  
  Total benefits and expenses                             36,128        46,787
  
  Segment earnings before Federal income taxes             9,488        11,146
  
  Federal income taxes                                     3,260         3,762
  
  Segment earnings                                 $       6,228         7,384
  Revenues from annuity operations include primarily surrender charges and
  recognition of deferred revenues relating to immediate or payout annuities.
  Annuitizations result in transfers of policies from deferred to immediate or
  payout status.  The deferred revenues related to these annuities are amortized
  into income during the payout period.  Surrender charge revenues were up 76%
  in 2000 compared to 1999 due to increases in surrender charges from both
  single-tier and two-tier annuities.  Actual policy surrenders for annuities
  were abnormally high increasing 85% in the second quarter of 2000 from the
  comparable period of 1999.  This unusual rate of surrenders has slowed through
  the first portion of the third quarter of 2000.  A comparative detail of the
  components of premiums and annuity contract revenues is provided below.
  Three Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  Surrender charges:
     Two-tier annuities                            $       5,414         3,924
     Single-tier annuities                                 4,261         1,579
  
  Total surrender charges                                  9,675         5,503
  Payout annuity and other revenues                        1,558         1,510
  Traditional annuity premiums                                22            21
  
  Totals                                           $      11,255         7,034
  Actual annuity deposits collected for the quarters ended June 30, 2000 and
  1999 are detailed below.  Deposits collected on these nontraditional products
  are not reflected as revenues in the Company's statements of earnings, as they
  are recorded directly to policyholder liabilities upon receipt, in accordance
  with generally accepted accounting principles.
  Three Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  Deferred annuities:
      Equity-indexed                               $      27,083        44,289
      Other                                               52,720        46,287
  
  Total deferred annuities                                79,803        90,576
  Immediate annuities                                      6,275         6,043
  
  Totals                                           $      86,078        96,619
  Although total annuity deposits for the quarter ended June 30, 2000, were
  lower than the comparable 1999 period, the decline is primarily attributable
  to equity-indexed annuities.  Sales of the Company's other deferred annuity
  products  and  immediate  annuities  reflect  increases  of  13.9%  and  3.8%,
  respectively.
  
  While sales were lower in 2000, equity-indexed annuities are a major portion
  of the Company's total annuity production.  The Company's equity-indexed
  annuities are flexible premium deferred annuities which combine the features
  associated with traditional fixed annuities, with the option to have interest
  rates that are linked in part to an equity index, the S&P 500 Index.  These
  annuities are long-term contracts designed as planning vehicles for retirement
  security.    These  annuities  are  attractive  to  customers,  as  they  have
  guaranteed  minimum  interest  rates,  coupled  with  the  potential  for
  significantly higher returns based on an equity index component.  Also,
  because the Company does not offer variable products or mutual funds, these
  products provide a key equity-based alternative to the Company's existing
  fixed annuity products.  In conjunction with the sale of these annuities, the
  Company uses an investment hedging program to offset the potential higher
  returns that could be paid on these products.  Specifically, the Company
  purchases index options from highly rated banks and brokerage firms.  These
  index options act as hedges to match closely the returns based on the S&P 500
  Index which may be paid to policyholders.
  
  Sales of equity-indexed annuities began declining during the year ended
  December 31, 1999, primarily due to volatility in the stock market.  This
  volatility affects both the immediate demand for these annuities and the
  pricing of these products.  Increased product costs from stock market
  volatility, particularly costs of index options used to hedge the equity
  return component of these annuities, can reduce potential credited interest to
  policyholders.  The lower production level has continued in the first and
  second quarters of 2000, which is consistent with volatility in the stock
  market.
  
  Net investment income for the second quarters of 2000 and 1999 totaled
  $34,246,000 and $50,864,000, respectively.  As previously described in Summary
  of Consolidated Operating Results, the decrease in net investment income is
  due to lower income from index options.  Declines in fair values of index
  options used to hedge the equity return component of the Company's equity-
  indexed annuity products resulted in lower investment income for the second
  quarter of 2000.  The decline is directly attributable to the decline in the
  S&P 500 Index over the same period.
  
  Annuity contract interest was $26.4 million in 2000 compared to $39.1 million
  in 1999, reflecting a decrease of $12.7 million.  The decrease is primarily
  due to lower interest credited on equity-indexed annuities due to the
  volatility and decline in the S&P 500 Index. While 2000 contract interest is
  lower, net investment income for 2000 was also $16.6 million lower than the
  comparable 1999 second quarter.  Most of the difference between the contract
  interest and net investment income declines is related to the equity-indexed
  annuity business.  Although index options are used as hedges, differences
  between  income  from  index  options  and  contract  interest  credited  to
  policyholders will occur for several reasons, some of which may only be timing
  differences between the recognition of income and expenses.  One reason is
  that the costs of the index options are essentially amortized against net
  investment income as the options are marked to fair value each reporting
  period.  The costs of options are covered by additional income earned on debt
  securities purchased with equity-indexed annuity premiums. Other differences
  are  due  to  asset  fees  charged  against  policyholder  contract  interest,
  surrenders and death benefits on annuities within the annual hedging period,
  and inherent differences between index option fair values and policy liability
  reserves related to minimum guaranteed interest rates.
  
  Amortization of deferred policy acquisition costs represents the amortization
  of the costs of acquiring or producing new business, primarily agents'
  commissions, the majority of which are amortized in direct relation to the
  anticipated future gross profits of the applicable blocks of business.
  Amortization is also impacted by the level of policy surrenders.  Amortization
  for 2000 and 1999 was $6,927,000 and $5,692,000, respectively.  The large
  increase in amortization is directly related to the significant increase in
  annuity  surrenders  in  the  quarter  ended  June  30,  2000,  as  previously
  described.
  
  Other Operations
  
  Earnings for other operations totaled $1,314,000 and $1,345,000 for the second
  quarters of 2000 and 1999, respectively. While National Western's primary
  business encompasses its domestic and international life insurance operations
  and its annuity operations, the Company also has small real estate, nursing
  home, and other investment operations through the following wholly owned
  subsidiaries: NWL Investments, Inc., NWL Properties, Inc., NWL 806 Main, Inc.,
  NWL Services, Inc., and NWL Financial, Inc.  Also, during January, 1999, the
  Company's wholly owned subsidiary, The Westcap Corporation, completed its
  Chapter 11 bankruptcy reorganization.  With the reorganization complete,
  National Western transferred its investment real estate holdings totaling
  approximately $11,589,000 to Westcap and the subsidiary is now operating as a
  real estate management company.
  
  During the first quarter of 2000, the Company acquired a nursing home facility
  through an affiliated limited partnership.  The acquisition, which totaled
  approximately $6.6 million, was made by a newly formed limited partnership,
  the partners of which are downstream subsidiaries of National Western.  The
  nursing home facility, which opened in late July, 2000, is operated by an
  affiliated  limited  partnership  and  the  financial  operating  results  are
  consolidated with those of the Company.  Daily operations and management of
  the nursing home are performed by an experienced management company through a
  contract with the limited partnership.  Initial first year start up expenses
  could generate minimum operating losses of approximately $600,000, before
  taxes.  Currently, operating losses from initial start up costs totaled
  $240,000 for the period from inception to June 30, 2000.
  
  Most of the income from the Company's other operations is from a life interest
  in the Libbie Shearn Moody Trust.  This asset was owned by National Western
  Life Insurance Company during 1996 but was transferred to NWL Services, Inc.,
  in 1997.  Dividend distributions from the Trust are declared semi-annually in
  June and December each year.  Because the asset is a life interest, these
  distributions are only accrued in the Company's financial statements when
  declared.  Semi-annual distributions totaled $1,793,000 and $1,751,000 in June
  2000 and 1999, respectively.
  
  RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2000 AND 1999
  
  Consolidated Operations
  
  Summary of Consolidated Operating Results
  
  A summary of operating results for the six months ended June 30, 2000 and 1999
  is provided below:
  Six Months Ended June 30,
                                                        2000           1999
                                           (In thousands except per share data)
  Revenues:
  Revenues, excluding realized gains
  (losses) and index options                      $     172,583        163,288
  Index options                                         (14,215)         7,527
  Realized gains (losses) on investments                 (6,412)         5,678
  
  Total revenues                                  $     151,956        176,493
  
  Earnings:
  Earnings from operations                        $      24,094         22,610
  Net realized gains (losses) on investments             (4,168)         3,691
  
  Net earnings                                    $      19,926         26,301
  
  Basic Earnings Per Share:
  Earnings from operations                        $        6.88           6.47
  Net realized gains (losses) on investments              (1.19)          1.05
  
  Net earnings                                    $        5.69           7.52
  
  Diluted Earnings Per Share:
  Earnings from operations                        $        6.85           6.40
  Net realized gains (losses) on investments              (1.19)          1.05
  
  Net earnings                                    $        5.66           7.45
  Consolidated Operating Results:  For the six months ended June 30, 2000,
  earnings  from  operations,  excluding  net  realized  gains  and  losses  on
  investments, totaled $24,094,000 compared to $22,610,000 for the same period
  of 1999.  This 6.6% increase in earnings is largely attributable to higher
  universal life and investment annuity contract revenues.  Additionally, while
  life insurance benefit claims were significantly higher in the first six
  months of 2000, this increase was largely offset by reductions in traditional
  policy liabilities.
  
  The Company recorded realized losses on investments, net of taxes, totaling
  $4,168,000 for the six months ended June 30, 2000, compared to gains of
  $3,691,000 for the first six months of 1999.  The losses in 2000 are primarily
  due to a permanent impairment writedown for a specific debt security which
  defaulted during the second quarter as previously described.  The 1999 gains
  were primarily from sales and calls of investments in debt securities totaling
  $2,099,000, net of taxes.  Also included in 1999 was a net gain totaling
  $922,000 from the sale of investment real estate owned by one of National
  Western's subsidiaries,  NWL 806 Main, Inc.
  
  As previously reported, the bankruptcy reorganization of the Company's wholly
  owned subsidiary,  The Westcap Corporation, was completed in the first quarter
  of 1999.  Pursuant to the reorganization plan, National Western retained 100%
  continuing ownership of the reorganized Westcap and the subsidiary is now
  operating as a real estate management company.  No losses were reported for
  discontinued brokerage operations in the six months ended June 30, 1999, as
  the entire $14,125,000 settlement payment was accrued and reported as a loss
  in the third quarter of 1998.
  
  Segment Operations
  
  Summary of Segment Earnings
  
  A summary of segment earnings for the six months ended June 30, 2000 and 1999
  is provided below.  The segment earnings exclude realized gains and losses on
  investments, net of taxes.
  Domestic International
                        Life        Life                    All
                      Insurance  Insurance   Annuities    Others      Totals
                                           (In thousands)
  Segment earnings:
  
  June 30, 2000        $  3,670       4,267      14,499       1,658      24,094
  
  June 30, 1999        $  2,798       3,595      14,751       1,466      22,610
  Domestic Life Insurance Operations
  
  Earnings for the domestic life insurance operating segment were $3,670,000 and
  $2,798,000 for the six months ended June 30, 2000 and 1999, respectively.  The
  increase in earnings is primarily due to lower policy benefits and other
  operating expenses.  A comparative analysis of results of operations for the
  Company's domestic life insurance segment is detailed below:
  Six Months Ended June 30,
  Domestic Life Insurance Operations:                   2000          1999
                                                          (In thousands)
  Premiums and other revenue:
      Premiums and contract revenues              $      11,937        12,280
      Net investment income                              13,035        12,678
      Other income                                           22            67
  
  Total premiums and other revenue                       24,994        25,025
  
  Benefits and expenses:
      Policy benefits                                     8,198         8,700
      Amortization of deferred policy
      acquisition costs                                   2,198         2,392
      Universal life insurance contract interest          4,640         4,885
      Other operating expenses                            4,383         4,819
  
  Total benefits and expenses                            19,419        20,796
  
  Segment earnings before Federal income taxes            5,575         4,229
  
  Federal income taxes                                    1,905         1,431
  
  Segment earnings                                $       3,670         2,798
  Revenues from domestic life insurance operations include life insurance
  premiums on traditional type products and revenues from universal life
  insurance.  Concentration on sales of universal life insurance as opposed to
  traditional products continue to result in increases in cost of insurance
  revenues and declines in traditional premiums. A comparative detail of
  premiums and contract revenues is provided below:
  Six Months Ended June 30,
                                                        2000          1999
                                                           (In thousands)
  Universal life insurance:
      Cost of insurance                           $       6,060         5,784
      Surrender charges                                     958           883
      Policy fees and other revenues                        613           643
  Traditional life insurance premiums                     4,306         4,970
  
  Totals                                          $      11,937        12,280
  Actual universal life insurance deposits, which are recorded directly to
  policyholder liabilities upon receipt, for the six months ended June 30, 2000
  and 1999 are detailed below.
  Six Months Ended June 30,
                                                        2000          1999
                                                          (In thousands)
  Universal life insurance:
      First year and single premiums              $       2,891         2,375
      Renewal premiums                                    7,344         7,260
  
  Totals                                          $      10,235         9,635
  Consistent with the second quarter of 2000, policy benefits were lower for the
  six months ended June 30, 2000, totaling $8,198,000 compared to $8,700,000 for
  the comparable 1999 period.  The decrease is due to reduction in traditional
  policy liabilities which were partially offset by higher life insurance
  benefit claims.
  
  Other operating expenses totaled $4,383,000 and $4,819,000 for the six months
  ended June 30, 2000 and 1999, respectively.  As previously described for the
  quarters ended June 30, 2000 and 1999, expenses for 2000 were lower as 1999
  expenses include an additional accrual for state income taxes.
  
  International Life Insurance Operations
  
  Earnings  for  the  international  life  insurance  operating  segment  were
  $4,267,000 and $3,595,000 for the six months ended June 30, 2000 and 1999,
  respectively.  Earnings for 2000 were higher primarily due to increases in
  universal life insurance revenues and lower policy benefits .
  
  A  comparative  analysis  of  results  of  operations  for  the  Company's
  international life insurance segment is detailed below:
  Six Months Ended June 30,
  International Life Insurance Operations:               2000          1999
                                                           (In thousands)
  Premiums and other revenue:
      Premiums and contract revenues               $      21,708        20,744
      Net investment income                               11,419        10,903
      Other income                                            29            53
  
  Total premiums and other revenue                        33,156        31,700
  
  Benefits and expenses:
      Policy benefits                                      7,794         8,407
      Amortization of deferred policy
      acquisition costs                                    6,951         6,562
      Universal life insurance contract interest           7,886         6,894
      Other operating expenses                             4,043         4,403
  
  Total benefits and expenses                             26,674        26,266
  
  Segment earnings before Federal income taxes             6,482         5,434
  
  Federal income taxes                                     2,215         1,839
  
  Segment earnings                                 $       4,267         3,595
  A comparative detail of premiums and contract revenues, which reflects the
  increase in universal life insurance revenues as previously described, is
  provided below:
  Six Months Ended June 30,
                                                        2000          1999
                                                           (In thousands)
  Universal life insurance:
      Cost of insurance                           $      15,283        14,513
      Surrender charges                                   3,773         3,663
      Policy fees and other revenues                      1,722         1,785
  Traditional life insurance premiums                       930           783
  
  Totals                                          $      21,708        20,744
  Actual universal life insurance deposits collected for the six months ended
  June 30, 2000 and 1999 are detailed below.  Increases in current year premiums
  are  partially  due  to  improved  economic  conditions  during  2000  in  the
  international Central and South American markets.
  Six Months Ended June 30,
                                                        2000          1999
                                                          (In thousands)
  Universal life insurance:
      First year and single premiums              $       6,499         5,886
      Renewal premiums                                   17,912        17,464
  
  Totals                                          $      24,411        23,350
  Annuity Operations
  
  Earnings for the annuity operating segment were $14,499,000 and $14,751,000
  for the six months ended June 30, 2000 and 1999, respectively.  Consistent
  with the second quarter results as previously described, earnings for the six
  months ended June 30, 2000, were lower than 1999 due to the Company's equity-
  indexed annuity business.  However, increases in annuity contract revenues,
  primarily from policy surrender charges, mitigated much of this effect.
  Higher amortization of deferred policy acquisition costs resulting from the
  increased level of surrenders also tempered the revenue increases.
  
  A comparative analysis of results of operations for the Company's annuity
  segment is detailed below:
  Six Months Ended June 30,
  Annuity Operations:                                   2000          1999
                                                          (In thousands)
  Premiums and other revenue:
      Premiums and contract revenues              $      17,914        14,958
      Net investment income                              79,342        96,760
      Other income                                          203           157
  
  Total premiums and other revenue                       97,459       111,875
  
  Benefits and expenses:
      Policy benefits                                       108          (603)
      Amortization of deferred policy
      acquisition costs                                  13,029        11,052
      Annuity contract interest                          56,885        73,825
      Other operating expenses                            5,411         5,307
  
  Total benefits and expenses                            75,433        89,581
  
  Segment earnings before Federal income taxes           22,026        22,294
  
  Federal income taxes                                    7,527         7,543
  
  Segment earnings                                $      14,499        14,751
  Premiums and annuity contract revenues were up $2,956,000, or 19.8%, from
  $14,958,000 in 1999 to $17,914,000 in 2000. This increase is due to higher
  surrender charge revenues from single-tier annuities.  As previously described
  for the three months ended June 30, 2000, actual policy surrenders were
  abnormally high during the second quarter of 2000 resulting in increased
  revenues.  However, this unusually high rate of surrenders has slowed through
  the first portion of the third quarter of 2000. A comparative detail of the
  components of premiums and annuity contract revenues is provided below.
  Six Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  Surrender charges:
     Two-tier annuities                            $       8,466         8,567
     Single-tier annuities                                 6,428         3,408
  
  Total surrender charges                                 14,894        11,975
  Payout annuity and other revenues                        2,984         2,944
  Traditional annuity premiums                                36            39
  
  Totals                                           $      17,914        14,958
  Annuity deposits for 2000 reflect a decline of 11.1% compared to the same
  period of 1999, resulting from decreases in equity-indexed annuity deposits.
  Sales of these annuities continue to slow, largely a result of volatility in
  the stock market as previously described for the quarter ended June 30, 2000.
  Some of the decline in equity-indexed annuity sales is being countered with
  increases in sales of other deferred annuities, which reflect growth of 6.1%
  for 2000.  Actual annuity deposits collected for the six months ended June 30,
  2000 and 1999 are detailed below.
  Six Months Ended June 30,
                                                         2000          1999
                                                           (In thousands)
  Deferred annuities:
      Equity-indexed                               $      61,322        89,919
      Other                                              104,077        98,105
  
  Total deferred annuities                               165,399       188,024
  Immediate annuities                                     14,000        13,667
  
  Totals                                           $     179,399       201,691
  Net investment income for the six months ended June 30, 2000 and 1999 totaled
  $79,342,000 and $96,760,000, respectively. Declines in fair values of index
  options resulted in a reduction to net investment income totaling $14,215,000
  for the six months ended June 30, 2000.  For the comparable 1999 period,
  increases in fair values of index options resulted in additions to net
  investment income totaling $7,527,000.  Index options are used to hedge the
  equity  return  component  of  the  Company's  equity-indexed  annuities.
  Fluctuations in the income from index options correlates to the performance of
  the stock market, more specifically the S&P 500 Index.  The significant
  decline in investment income resulting from the index options is substantially
  offset by lower annuity contract interest expense.
  
  Annuity contract interest was $56.9 million in 2000 compared to $73.8 million
  in 1999.  As previously described for the quarter ended June 30, 2000, the
  decrease is primarily due to lower interest credited on equity-indexed
  annuities resulting from the volatility and decline in the S&P 500 Index.
  Also as described above, decreases in index option income were experienced
  during the six months ended June 30, 2000, reflecting the hedging policy
  implemented for the equity-indexed annuity business.  However, differences
  between  income  from  index  options  and  contract  interest  credited  to
  policyholders will occur for several reasons as previously explained in detail
  for the three months ended June 30, 2000.
  
  Amortization for the six months ended June 30, 2000 and 1999 totaled
  $13,029,000 and $11,052,000, respectively.  The increase in amortization is
  directly related to the increase in annuity policy surrenders as previously
  described.
  
  Other Operations
  
  As previously described for the six months ended June 30, 2000, National
  Western has small real estate, nursing home,  and other investment operations
  through its wholly owned subsidiaries.  Earnings for these other operations
  totaled $1,658,000 and $1,466,000 for the six months ended June 30, 2000 and
  1999, respectively.  Currently, most of the income from these operations is
  from a life interest in the Libbie Shearn Moody Trust.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity
  
  The liquidity requirements of the Company are met primarily by funds provided
  from  operations.  Premium  deposits  and  revenues,  investment  income,  and
  investment maturities are the primary sources of funds, while investment
  purchases and policy benefits are the primary uses of funds.  Primary sources
  of liquidity to meet cash needs are the Company's securities available for
  sale portfolio, net cash provided by operations, and a bank line of credit.
  The Company's investments consist primarily of marketable debt securities that
  could be readily converted to cash for liquidity needs.  The Company may also
  borrow up to $60 million on its bank line of credit for short-term cash needs.
  
  A primary liquidity concern for the Company's life insurance operations is the
  risk of early policyholder withdrawals.  Consequently, the Company closely
  evaluates and manages the risk of early surrenders or withdrawals.  The
  Company includes provisions within annuity and universal life insurance
  policies, such as surrender charges, that help limit early withdrawals.  The
  Company also prepares cash flow projections and performs cash flow tests under
  various market interest rate scenarios to assist in evaluating liquidity needs
  and adequacy.  The Company currently expects available liquidity sources and
  future cash flows to be adequate to meet the demand for funds.
  
  In the past, cash flows from the Company's insurance operations have been more
  than adequate to meet current needs.  Cash flows from operating activities
  were $77.1 million and $54.1 million for the six months ended June 30, 2000
  and 1999, respectively.  Net cash flows from the Company's deposit product
  operations, which includes universal life and investment annuity products,
  totaled $26.4 million for the first six months of 1999, but reflected cash
  outflows of $44.8 million for the comparable period of 2000.  The negative
  cash flow in the Company's deposit product operations is primarily due to
  abnormally high annuity surrenders during the second quarter of 2000.  While
  increased surrenders may continue, this high rate of surrenders has slowed
  significantly in the first portion of the third quarter.  Premium deposits
  have also been lower in the first six months of 2000 due to lower equity-
  indexed annuity sales, which have been affected by the volatility in the stock
  market.  The Company primarily used cash generated from operations and some
  short-term borrowings to manage this negative cash flow during the second
  quarter.
  
  The  Company  also  has  significant  cash  flows  from  both  scheduled  and
  unscheduled investment security maturities, redemptions, and prepayments.
  These cash flows totaled $39.0 million and $77.5 million for the six months
  ended June 30, 2000 and 1999, respectively.  The Company expects significant
  cash flows from these sources throughout the remainder of 2000.
  
  Capital Resources
  
  The Company relies on stockholders' equity for its capital resources, as there
  has been no long-term debt outstanding in 2000 or recent years.  The Company
  does not anticipate the need for any long-term debt in the near future.  There
  are  also  no  current  or  anticipated  material  commitments  for  capital
  expenditures in 2000.
  
  Stockholders' equity totaled $482.9 million at June 30, 2000, reflecting an
  increase of $7.4 million from December 31, 1999.  The increase in capital is
  primarily from net earnings of $19.9 million, offset by an increase in net
  unrealized losses on investment securities totaling $12.9 million during the
  first six months of 2000.  The increase in unrealized losses was due to market
  interest rate conditions and transfers of securities from held to maturity to
  available for sale.  As previously described in Investments in Debt and Equity
  Securities, the debt securities transfers were executed due to significant
  credit deterioration of the issuing companies.  Book value per share at June
  30, 2000, was $137.91.
  
  FORWARD-LOOKING STATEMENTS
  
  The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
  for forward-looking statements.  Certain information contained herein or in
  other written or oral statements made by or on behalf of National Western Life
  Insurance Company or its subsidiaries are or may be viewed as forward-looking.
  Although the Company has used appropriate care in developing any such
  information, forward-looking information involves risks and uncertainties that
  could significantly impact actual results.  These risks and uncertainties
  include, but are not limited to, matters described in the Company's SEC
  filings such as exposure to market risks, anticipated cash flows or operating
  performance, future capital needs, and statutory or regulatory related issues.
  However, National Western, as a matter of policy, does not make any specific
  projections as to future earnings, nor does it endorse any projections
  regarding future performance that may be made by others.  Whether or not
  actual results differ materially from forward-looking statements may depend on
  numerous foreseeable and unforeseeable events or developments.  Also, the
  Company undertakes no obligation to publicly update or revise any forward-
  looking  statements,  whether  as  a  result  of  new  information,  future
  developments, or otherwise.
  
                ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK
  
  This information is included in Item 2, Management's Discussion and Analysis
  of Financial Condition and Results of Operations, in the Investments in Debt
  and Equity Securities section.
  
                           PART II.  OTHER INFORMATION
  
           ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
  On June 23, 2000, the stockholders voted upon the following matters at the
  annual stockholders meeting:
  
  (a) The election of Class A directors to serve one-year terms.  The results of
  the voting were as follows:
  For         Against
  Robert L. Moody                 2,730,195        33,800
       Arthur O. Dummer                2,730,005        33,990
       Harry L. Edwards                2,730,005        33,900
       E. J. Pederson                  2,730,205        33,790
  (b) The election of Class B directors to serve one-year terms.  The results of
  the voting were as follows:
  For         Against
  E. Douglas McLeod                 200,000           -
       Charles D. Milos                  200,000           -
       Frances A. Moody                  200,000           -
       Ross R. Moody                     200,000           -
       Russell S. Moody                  200,000           -
       Louis E. Pauls, Jr.               200,000           -
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a) Exhibits
  
  Exhibit 11 -Computation of Earnings Per Share (filed on pages __ and __
               of this report).
  
  Exhibit 27 -Financial Data Schedule (filed electronically pursuant to
               Regulation S-K).
  
  (b) Reports on Form 8-K
  
  No reports on Form 8-K were filed during the quarter ended June 30, 2000.
  
                                    SIGNATURES
  
  Pursuant to the  requirements of the Securities Exchange Act  of 1934, the
  Registrant has duly caused this report to be signed on its behalf  by the
  undersigned thereunto duly authorized.
  
                     NATIONAL WESTERN LIFE INSURANCE COMPANY
                                   (Registrant)
  
  Date: August 18, 2000                      /S/ Ross R. Moody
                                             Ross R. Moody
                                             President, Chief Operating Officer,
                                             and Director
                                             (Authorized Officer)
  
  Date: August 18, 2000                      /S/ Robert L. Busby, III
                                             Robert L. Busby, III
                                             Senior Vice President -
                                             Chief Administrative Officer,
                                             Chief Financial Officer and
                                             Treasurer
                                             (Principal Financial Officer)
  
  Date: August 18, 2000                     /S/ Vincent L. Kasch
                                            Vincent L. Kasch
                                            Vice President - Controller
                                            and Assistant Treasurer
                                            (Principal Accounting Officer)
  
                                    EXHIBIT 11
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                        COMPUTATION OF EARNINGS PER SHARE
                For the Three Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                       (In thousands except per share data)
  2000         1999
  Numerator for basic and diluted
  earnings per share:
      Earnings available to common stockholders
      before and after assumed conversions:
      Net earnings                                  $      7,593       12,198
  
  Denominator:
      Basic earnings per share -
      weighted-average shares                              3,501        3,499
  
      Effect of dilutive stock options                        18           31
  
      Diluted earnings per share -
      adjusted weighted-average
      shares for assumed conversions                       3,519        3,530
  
  Basic earnings per share:
      Net earnings                                  $       2.17         3.49
  
  Diluted earnings per share:
      Net earnings                                  $       2.16         3.46
  EXHIBIT 11
  
             NATIONAL WESTERN LIFE INSURANCE COMPANY AND SUBSIDIARIES
                        COMPUTATION OF EARNINGS PER SHARE
                 For the Six Months Ended June 30, 2000 and 1999
                                   (Unaudited)
                       (In thousands except per share data)
  2000         1999
  Numerator for basic and diluted
  earnings per share:
      Earnings available to common stockholders
      before and after assumed conversions:
      Net earnings                                  $     19,926       26,301
  
  Denominator:
      Basic earnings per share -
      weighted-average shares                              3,501        3,499
  
      Effect of dilutive stock options                        18           34
  
      Diluted earnings per share -
      adjusted weighted-average
      shares for assumed conversions                       3,519        3,533
  
  Basic earnings per share:
      Net earnings                                  $       5.69         7.52
  
  Diluted earnings per share:
      Net earnings                                  $       5.66         7.45