As filed with the Securities and Exchange Commission on
                            December 20, 1995

                       Registration No. 33-_______

_________________________________________________________________
_________________________________________________________________

                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549

                   __________________________________

                                FORM S-8

                         REGISTRATION STATEMENT
                                  Under
                       THE SECURITIES ACT OF 1933

                   __________________________________

                     AMERICAN TRAVELLERS CORPORATION
           (Exact name of registrant as specified in charter)

          Pennsylvania                               23-1738097     
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

                           3220 Tillman Drive
                       Bensalem, Pennsylvania 19020     
                (Address of Principal Executive Offices)

         AMERICAN TRAVELLERS CORPORATION 1995 STOCK OPTION PLAN
                        (Full title of the plan)

                             John A. Powell
                   Chairman of the Board and President
                     American Travellers Corporation
                           3220 Tillman Drive
                           Bensalem, PA 19020
                 (Name and address of agent for service)

                             [215] 244-1600
                                                   
      (Telephone number, including area code, of agent for service)

                               Copies to:

                         Ramon R. Obod, Esquire
                    Fox Rothschild O'Brien & Frankel
                     2000 Market Street, 10th Floor
                         Philadelphia, PA  19103


 _________________Calculation_of_Registration_Fee______________________


                                   Proposed       Proposed
                                   Maximum        Maximum
                                   Offering       Aggregate   Amount of
Title of Securities Amount to be   Price          Offering    Registration
to be Registered    Registered(1)  Per Share(2)   Price       Fee    

                                   
Common Stock,       500,000        $25 1/2       $12,750,000  $4,396.58        
$.01 par value      Shares


_________________________________________________________________

(1)      In accordance with Rule 416 under the Securities Act of
         1933, also includes such additional shares as may be issued
         to prevent dilution of the shares covered hereby as a result
         of stock splits, stock dividends or similar transactions.

(2)      Estimated solely for purposes of computing the registration
         fee in accordance with Rule 457(h) under the Securities Act
         of 1933.

                     
                     AMERICAN TRAVELLERS CORPORATION

                          CROSS REFERENCE SHEET

Pursuant to Rule 404 and Item 501 of Regulations S-K

Form S-8 Item No.                      Heading in Prospectus

1.       Plan Information

         (a)  General Plan            Cover Page; Description of the
              Information             Plan - General, Purposes;
                                      Administration; Term of the Plan and 
                                      Amendment, Suspension and 
                                      Termination of the Plan

         (b)  Securities to be        Cover Page; Description of the 
              Offered                 Plan - General
                                      
         (c) Employees Who May        Description of the Plan - 
             Participate in the       General - Purposes and - 
             Plan                     Participants and Grants -
                                      Formula Awards to Eligible 
                                      Directors; Reports of the 
                                      Company

         (d) Purchase of Securities   Description of the Plan -
             Pursuant to the Plan     Participants and Grants -
             and Payment for          Formula Awards to Eligible
             Securities Offered       Directors

         (e)  Resale Restrictions     Description of the Plan -
                                      Participants and Grants -
                                      Formula Awards to Eligible
                                      Directors; Resale Restrictions

         (f)  Tax Effects of Plan     Federal Tax Consequences
              Participation
              
         (g)  Investment of Funds     Not Applicable

         (h)  Withdrawal from the     Description of the Plan -
              Plan; Assignment of     Participants and Grants -
              Interest                Formula Awards to Eligible
                                      Directors

         (i)  Forfeitures and         Description of the Plan -
              Penalties               Participants and Grants - 
                                      Formula Awards to Eligible
                                      Directors

         (j)  Charges and Deductions  Description of the Plan -
              and Liens Therefor      Participants and Grants - 
                                      Formula Awards to Eligible
                                      Directors

2.       Registrant Information and   Reports of the Company;
         Employee Plan Annual         Incorporation of Certain
         Information                  Documents by Reference
         
         

                 AMERICAN TRAVELLERS CORPORATION

                         500,000 Shares

                  Common Stock, $.01 Par value



     This Prospectus relates to the offering by American
Travellers Corporation (the "Company") of 500,000 shares of the
Company's Common Stock, $.01 par value ("Common Stock"), pursuant
to the Company's 1995 Stock Option Plan (the "Plan") which
provides for the granting of awards covering up to 500,000 shares
of Common Stock subject to adjustment upon the occurrence of
certain events specified in the Plan, including stock dividends,
stock splits and extraordinary cash dividends.  The awards which
may be issued pursuant to the Plan include stock options to
"Participants" (as defined) and stock options which may be
granted as "Formula Awards" (as defined) to "Eligible Directors"
(as defined), all as more fully described in this Prospectus.


                                         


     The Common Stock of the Company is traded on the over the
counter market and quoted on the NASDAQ National Market System. 
On December 19, 1995, the last reported sale price of the Common
Stock as reported by NASDAQ was $26 per share.


                                         


THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                                         



     The date of this Prospectus is December 20, 1995.


                     ADDITIONAL INFORMATION



     The Company has filed a Registration Statement with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, with respect to the shares
offered hereby.  The Company will provide, without charge, to
each person to whom this Prospectus is delivered, a copy of the
Company's annual report to shareholders for its last fiscal year
and, promptly upon the written or oral request of such person, a
copy of any document or part thereof incorporated by reference in
this Prospectus but not delivered herewith (not including
exhibits to such information, unless such exhibits are
specifically incorporated by reference into the information that
this Prospectus incorporates).  Requests should be directed to
Susan T. Mankowski, Secretary of the Company, 3220 Tillman Drive,
Bensalem, Pennsylvania 19020 (telephone 215-244-1600).

     No person is authorized to give any information or to make
any representations not contained in this Prospectus in
connection with the offer described herein, and any information
or representation not contained herein must not be relied upon as
having been authorized by the Company.  This Prospectus does not
constitute an offer to sell these securities in any state to any
person to whom it is unlawful to make such offer in such state.
Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication
that information herein is correct as of any time subsequent to
its date.


                     DESCRIPTION OF THE PLAN
General

     This Prospectus relates to an aggregate of 500,000 shares of
Common Stock which may be issued pursuant to the Company's 1995
Stock Option Plan.  The Plan provides for the issuance of up to
470,000 shares of the Company's Common Stock, upon the exercise
of stock options, to employees and persons with managerial,
professional or supervisory responsibilities (other than Eligible
Directors) whom the committee administering the Plan (the
"Committee") determines from time to time have the capacity to
make a substantial contribution to the success of the Company
("Participants").

     The Plan also provides for the issuance of up to an
additional 30,000 shares of the Company's Common Stock upon the
exercise of stock options granted as Formula Awards to Eligible
Directors pursuant to the Plan.  The Plan, which was originally
adopted by the Company's Board of Directors (the "Board of
Directors") on February 16, 1995, was approved by the Company's
shareholders on May 25, 1995 and became effective on that date. 
The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").

     The description of the Plan contained herein does not
purport to be complete, and reference is made to the Plan and to
the respective agreements evidencing awards made pursuant to the
Plan for a full statement of the terms and provisions applicable
to such awards.

     The principal office of the Company is located at 3220
Tillman Drive, Bensalem, Pennsylvania and its telephone number is
(215) 244-1600.

Purposes

     The purposes of the Plan are to enable the Company and its
subsidiaries to attract and retain the services of key employees
and persons with managerial, professional or supervisory
responsibilities, including, but not limited to, members of the
Board of Directors, officers of, and consultants to, the Company,
responsible for the past and continued success of the Company,
and to provide them with increased motivation and incentive to
exert their best efforts on behalf of the Company by enlarging
their personal stake in its success.

Administration

     The Plan is administered by the Committee which, according
to the terms of the Plan, must consist of two or more directors
of the Company designated by the Board of Directors.  Except to
the extent an Eligible Director is permitted to receive Formula
Awards, members of the Committee are not eligible to participate
in the Plan and no such member may have otherwise participated in
the Plan or any other plan of the Company or its subsidiaries
providing for the acquisition of stock, stock options, or other
types of grants permitted pursuant to the Plan within one year
prior to serving on the Committee.  Subject to the limitations of
the Plan, the Committee has the sole and complete authority to: 
(i) interpret and administer the Plan and stock options granted
pursuant thereto; (ii) make and interpret rules and regulations
for the administration of the Plan and to make changes in and
revoke such rules and regulations (and in the exercise of this
power, shall generally determine all questions of policy and
expediency that may arise and may correct any defect, omission,
or inconsistency in the Plan or any agreement evidencing the
grant of any stock option in a manner and to the extent it shall
deem necessary to make the Plan fully effective); (iii) determine
those persons to whom stock options other than Formula Awards
shall be granted and the number of stock options other than
Formula Awards to be granted to any such person; (iv) determine
the terms of stock options other than Formula Awards granted
under the Plan, consistent with the provisions of the Plan; and
(v) generally, exercise such powers and perform such acts in
connection with the Plan as are deemed necessary or expedient to
promote the best interests of the Company.  The interpretation
and construction by the Committee of any provisions of the Plan
or of any stock option shall be final, binding and conclusive. 
The Committee's determinations on matters within its authority
are conclusive and binding upon the Company and all other
persons.  There is no set term for the members of the Committee
and they can be removed with or without cause by the Board of
Directors of the Company.

     The present Committee members, each of whom is a director of
the Company, are Walter J. Diener and Arnold H. Keehn.

Limitation on Aggregate Shares

     The number of shares of Common Stock which may be issued
pursuant to the Plan upon the exercise of stock options granted
to Participants and Formula Awards to Eligible Directors may not
exceed, in the aggregate, 500,000 shares.  Of such shares, the
number available for issuance pursuant to Formula Awards granted
to Eligible Directors under the Plan is 30,000.  To the extent
any stock options granted to Participants or granted to Eligible
Directors as Formula Awards expire unexercised or unpaid or are
cancelled, terminated or forfeited in any manner without the
issuance of shares of Common Stock thereunder, such shares will
again be available under the Plan.  The shares of Common Stock
issued pursuant to the Plan may be either authorized and unissued
shares, treasury shares, or a combination thereof, as the
Committee determines.

Participants and Grants

     General.  Stock options may be granted by the Committee to
those persons other than Eligible Directors who the Committee
determines have the capacity to make a substantial contribution
to the success of the Company.  The Committee may grant stock
options to purchase such number of shares of Common Stock
(subject to the aggregate limitations set forth in the Plan) as
the Committee may, in its sole discretion, determine. 
Notwithstanding the foregoing, no Participant shall be granted
stock options in any year (a consecutive twelve (12) month
period) to purchase in excess of 200,000 shares of Common Stock. 
In granting stock options other than Formula Awards under the
Plan, the Committee, on an individual basis, may vary the number
of incentive stock options or non-qualified stock options as
between Participants and may grant incentive stock options and/or
non-qualified stock options to a Participant in such amounts as
the Committee may determine in its sole discretion.

     Price and Other Terms of Options.  Options granted to a
Participant under the Plan may be incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, and any successor statute (the "Code"), or in such
other form, consistent with the Plan, as the Committee may
determine.  The option price per share of Common Stock for an
option granted to a Participant must be fixed by the Committee at
not less than 100% of the "fair market value" of a share of
Common Stock on the date of grant.  For purposes of options to
Participants, the term "fair market value" of the Common Stock
means the last reported sale price of the Common Stock as
reported on NASDAQ on the day immediately preceding the date fair
market value is to be determined.  Options granted to a
Participant will be exercisable at such time or times as the
Committee determines at or subsequent to grant.  Options granted
to a Participant will be exercisable in whole or in part by
written notice to the Company (to the attention of the Company's
Secretary), signed by the Participant exercising the option,
stating the number of shares of Common Stock with respect to
which the option is being exercised and accompanied by payment in
full of the option price. Payment of the option price for an
option granted to a Participant may be made, at the discretion of
the optionee, (A) in cash (including check, bank draft, or money
order), (B) in Common Stock (valued at the "fair market value"
thereof on the date of exercise), or (C) by a combination of cash
and Common Stock.  The Committee may, in its discretion, impose
limitations, conditions and prohibitions on the use by a
Participant of shares of Common Stock to pay the purchase price
payable by such Participant upon exercise of a stock option.  The
date both such notice and payment are received by the office of
the Secretary of the Company will be the date of exercise for the
option as to the number of shares specified.  

     Incentive stock options may be granted to purchase Common
Stock under the Plan at not less than the fair market value of
the shares as of the date of grant (or 110% of fair market value
in the case of any officer or employee holding in excess of 10%
of the combined voting power of all classes of the Company's
stock as of the date of grant).  To the extent that an optionee
is granted incentive stock options under the Plan to purchase
Common Stock having a fair market value (determined as of the
date of grant) which exceeds $100,000 with respect to incentive
stock options which are exercisable for the first time by such
optionee in any calendar year under all stock option plans of the
Company, such excess stock options will be treated as non-
qualified stock options.

     Agreements.  Each stock option granted to a Participant
under the Plan shall be evidenced by an agreement in such form
and containing such terms and conditions (not inconsistent with
the Plan) as the Committee shall determine in its sole
discretion.

     Non-Transferability.  No stock option shall be transferable
except by will or the laws of descent and distribution, nor shall
any stock option be exercisable during the Participant's lifetime
by any person other than the Participant or his guardian or legal
representative.

     Tax Withholding.  The Company's obligations under the Plan
are subject to applicable Federal, state and local tax
withholding requirements.  Federal, state and local withholding
tax due at the time of a grant or upon the exercise of any stock
option may, in the discretion of the Committee, be paid in shares
of Common Stock already owned by the Participant or through the
withholding of shares otherwise issuable to such Participant,
upon such terms and conditions as the Committee shall determine. 
If the Participant shall fail to pay, or make arrangements
satisfactory to the Committee for the payment, to the Company of
all such Federal, state and local taxes required to be withheld
by the Company, then the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind
otherwise due to such Participant an amount equal to any federal,
state or local taxes of any kind required to be withheld by the
Company.

     No Right to Employment.  Neither the adoption of the Plan
nor its operation, nor any document describing or referring to
the Plan, or any part thereof, nor the granting of any stock
options thereunder, shall confer upon any Participant under the
Plan any right to continue in the employ of the Company or any
subsidiary of the Company, or shall in any way affect the right
and power of the Company or any subsidiary to terminate the
employment of any such Participant at any time with or without
assigning a reason therefor, to the same extent as might have
been done if the Plan had not been adopted.

     Termination.   Options expire immediately in the event a
Participant is terminated with or without cause (except due to
death, total disability or retirement as provided below) or
resigns; provided, however, in the event the Company terminates
the employment of a Participant who at the time of such
termination was an officer of the Company and had been
continuously employed by the Company during the five year period
immediately preceding such termination, for any reason except
"good cause" (as defined in the Plan), each stock option held by
such Participant (which had not then previously lapsed or
terminated and which had been held by such Participant for more
than six (6) months prior to such termination) shall become
immediately exercisable as to the total number of shares of
Common Stock and shall remain so exercisable for a period of
three (3) months after such termination unless, in either case,
such option expires earlier by its terms. 

     In the event of a termination as to a Participant's
employment by the Company or its subsidiaries by reason of
permanent and total disability as determined by the Committee
("Total Disability"), or by retirement in accordance with Company
policies ("Retirement"), any outstanding stock option which shall
not have previously lapsed or terminated shall be, or immediately
become, fully exercisable as to the total number of shares of
Common Stock subject thereto (whether or not exercisable to that
extent prior to termination of employment) and shall remain so
exercisable but only for a period of six (6) months with respect
to Total Disability and three (3) months with respect to
Retirement, unless, in either case, such stock option expires
earlier by its terms.

     In the event of the death of a Participant, any outstanding
stock option which shall not have lapsed or terminated prior to
such Participant's death shall be immediately, or become, fully
exercisable by the executors or administrators of such
Participant's estate, or by the person or persons to whom the
deceased Participant's rights thereunder shall have passed by
will or by the laws of descent or distribution, as may be
appropriate, as to the total number of shares of Common Stock
subject thereto (whether or not exercisable to that extent at the
time of death) and shall remain so exercisable for a period of
six (6) months after such Participant's death unless, in either
case, such stock option expires earlier by its terms.

     In the event of the termination of a Participant's service
as a director of the Company, who at the time of such termination
was an Eligible Director and had continuously served as a
director of the company during the five (5) year period
immediately preceding such termination, and such termination is
for any reason except for such Participant's death or total
disability or the removal of such Participant as director (by the
shareholders, the Board of Directors or otherwise) for "good
cause" (as defined in Section 3.7(e) of the Plan), each stock
option held by such Participant (which has not previously lapsed
or terminated and which has been held by such Participant for
more than six (6) months prior to such termination) shall
immediately become fully exercisable as to the total number of
shares of Common Stock subject thereto (whether or not
exercisable to that extent at the time of such termination) and
shall remain so exercisable for a period of three (3) months
after such termination unless such stock option expires earlier
by its terms.

     All aforementioned exercise periods applicable to stock
options upon a termination of employment, whether on account of
Total Disability, Retirement, death or otherwise, are subject to
the further limitation that no option granted pursuant to the
Plan may, in any case, be exercisable beyond the stated
expiration date of such option.

Formula Awards to Eligible Directors

     General.  The Plan provides for the grant of Formula Awards
to Eligible Directors in accordance with the terms of the Plan. 
As defined in the Plan, the term "Eligible Director" means a
member of the Board of Directors who is not otherwise an employee
of the Company or any subsidiary of the Company.  Each Formula
Award granted under the Plan is to be evidenced by an agreement
duly executed on behalf of the Company and by the Eligible
Director to whom such Formula Award is granted and dated as of
the applicable date of grant.  Each such agreement must comply
with and is subject to the terms and conditions of the Plan.  Any
Formula Award agreement may contain such terms, provisions and
conditions not inconsistent with the Plan as may be determined by
the Committee.  All Formula Awards granted under the Plan will be
non-statutory options not intended to qualify as incentive stock
options under Section 422 of the Code.

     Formula Awards.  Subject to the terms of the Plan, an option
to purchase 1,000 shares of Common Stock shall be granted
automatically each year, immediately following the annual meeting
of the Company's shareholders to each director of the Company who
is an Eligible Director immediately following such annual meeting
beginning with the 1995 Annual Meeting of the Company's
shareholders (each, a "Formula Award").

     Formula Award Exercise Price.  The exercise price per share
for a Formula Award shall be the average of the "fair market
value" for the fifth (5th) through the ninth (9th) "business
days" (defined in the Plan as those days on which the NASDAQ is
open for trading) following the date of grant. For purposes of
the preceding sentence, "fair market value" means the last
reported sale price of the Common Stock as reported on NASDAQ.

     Vesting and Exercisability.  Except as otherwise provided in
the Plan, a Formula Award shall immediately vest upon the grant
of the Formula Award.  A Formula Award shall become exercisable
immediately upon vesting for all directors who have served as
directors of the Company for a total of five (5) consecutive
years as of the date of the grant.  If a director has not served
as a director for such period as of the date of the grant, the
Formula Award shall become exercisable according to the following
schedule:

       Period of Optionee's Continuous Service  Portion of
Formula as a Director of the Company Award that is         
Following the Date of the Grant                    Exercisable 

       Twelve months.................................33 1/3%
       Eighteen months...............................66 2/3%
       Twenty-Four months............................100    %

     Except as otherwise provided in the Plan, any Formula Award,
to the extent the same is exercisable in accordance with the
Plan, is exercisable in whole or in part at any time or from time
to time until the expiration or termination in accordance with
the Plan by written notice to the Company, signed by the person
exercising the Formula Award, stating the number of shares with
respect to which the Formula Award is being exercised,
accompanied by payment in full of the exercise price for the
number of shares to be purchased.  The date both such notice and
payment are received by the office of the Secretary of the
Company shall be the date of exercise of the Formula Award as to
such number of shares.

     Term of Formula Awards.  Each Formula Award not earlier
terminated shall have a term of 10 years commencing on its date
of grant.  In the event of the termination of a Formula Award
holder's service as a director of the Company, by reason of his
or her removal as Director (by the shareholders, the Board of
Directors, or otherwise) the then-outstanding Formula Awards of
such holder (whether or not then exercisable) shall automatically
expire on (and may not be exercised on) the effective date of
such termination.  In the event of the termination of a Formula
Award holder's service as a director of the Company by reason of
retirement or total and permanent disability, the then-
outstanding Formula Awards of such holder not then exercisable
shall become exercisable on the date of such termination, and
each Formula Award then held by such holder shall expire one (1)
year after the date of such termination or on the stated grant
expiration date, whichever is earlier.  For purposes of the Plan,
the term "by reason of retirement" means (i) mandatory retirement
pursuant to Board policy or (ii) termination of service on or
after such holder's 65th birthday.  In the event of the death of
a Formula Award holder while the holder is a director of the
Company, the then outstanding Formula Awards of such holder not
then exercisable shall become exercisable on the date of such
termination, and each Formula Award then held by such holder
shall expire one (1) year after the date of death of such holder
or on the stated grant expiration date, whichever is earlier.  In
the event of the termination of a Formula Award holder's service
as a director for any reason other than as described above,
including without limitation, expiration of the director's term
in office (without renomination or reelection) or by resignation,
the then outstanding Formula Awards of such holder not then
exercisable shall be exercisable to the full extent such Formula
Awards were exercisable immediately prior to such termination,
and each such Formula Award shall expire three (3) months after
the effective date of such termination or on the stated grant
expiration date, whichever is earlier.

     Transfer Restrictions.  The right of any holder of a Formula
Award to exercise a Formula Award shall, during the lifetime of
such holder, be exercisable only by such holder or pursuant to a
qualified domestic relations order as defined by the Code or
Title 1 of the Employee Retirement Income Security Act, or the
rules thereunder (a "QDRO") and shall not be assignable or
transferable by such holder other than by will or the laws of
descent and distribution or a QDRO.

     Limitation of Rights.  Neither the recipient of a Formula
Award nor such recipient's successors in interest shall have any
rights as a shareholder on account of such award until the date
of issuance of a stock certificate evidencing shares acquired
upon their purchase pursuant to such Formula Award and then only
to the extent of any rights evidenced by such shares.  Neither
the Plan, nor the granting of a Formula Award, nor any other
action taken pursuant to the Plan shall constitute or be evidence
of any agreement or understanding, express or implied, that an
Eligible Director has a right to continue as a director of the
Company for any period of time or at any particular rate of
compensation.

     Commencement of Grants of Formula Awards.  Notwithstanding
any provision in the Plan to the contrary, no Formula Award shall
be granted pursuant to the Plan unless and until no additional
Formula Awards may be granted pursuant to the Company's 1993
Stock Option Plan.

     Capital Adjustments.  The aggregate number of shares with
respect to which a Formula Award may be granted to an Eligible
Director under the Plan, the number and class of shares subject
to each outstanding Formula Award, and the exercise price per
share specified in each such Formula Award shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a split-up
or consolidation of shares or any like capital adjustment or the
payment of any stock dividend, or other increase or decrease in
the number of such shares effected without receipt of
consideration by the Company.

Awards Outstanding

     As of the date of this Prospectus, options were awarded
(other than Formula Awards) pursuant to the Plan to Participants
to purchase a total of 368,868 shares of Common Stock. Of that 
total, (i) 240,368 options were granted on May 25, 1995 at an
exercise price of $18.00 per share, which options expire on May
24, 2005 and (ii) 128,500 options were granted on November 9,
1995 at an exercise price of $23.625 per share, which options
expire on November 8, 2005. All such options become exercisable
at various times.  No Formula Awards have been issued to date.

Term of the Plan

     Unless extended by the shareholders of the Company or
earlier terminated by the Board of Directors, the Plan will
expire on February 15, 2005 and, thereafter no awards may be made
pursuant to the Plan.  However, the Plan will continue after such
date to govern all awards granted before that date until the
exercise, expiration or cancellation of such awards.

Adjustments Upon Certain Changes

     In the event of changes to the outstanding shares of Common
Stock of the Company through reorganization, merger,
consolidation, recapitalization, reclassification, stock split-
up, stock dividend, stock consolidation or otherwise, or in the
event of a sale of all or substantially all of the assets of the
Company, an appropriate and proportionate adjustment shall be
made in the number and kind of shares as to which stock options
may be granted to Participants.  A corresponding adjustment
changing the number or kind of shares and/or the purchase price
per share of unexercised stock options or portions thereof which
shall have been granted prior to any such change shall likewise
be made.  Notwithstanding the foregoing, in the case of a
reorganization, merger or consolidation, or sale of all or
substantially all of the assets of the Company, in lieu of
adjustments as aforesaid, the Committee may in its discretion
accelerate the date after which a stock option may or may not be
exercised or the stated expiration date thereof.  Adjustments or
changes under this Section shall be made by the Committee, whose
determination as to what adjustments or changes shall be made,
and the extent thereof, shall be final, binding and conclusive.

Amendment, Suspension and Termination of Plan

     The Board of Directors may amend, terminate or suspend the
Plan at any time, in its sole and absolute discretion.  The Board
of Directors may from time to time make such amendments to the
Plan as it may deem advisable, including, with respect to
incentive stock options, amendments deemed necessary or desirable
to comply with Section 422 of the Code and any regulations issued
thereunder; provided, however, that (i) no amendment shall be
made more than once every six (6) months that would change the
amount, price or timing of Formula Awards, and (ii) without the
approval of the Company's shareholders no amendment shall be made
which:

     (i)       increases the maximum number of shares of Common
               Stock which may be subject to Stock Options
               granted under the Plan (other than in connection
               with a recapitalization or certain other events
               pursuant to the terms of the Plan; or 

     (ii)      extends the term of the Plan; or 

     (iii)     increases the period during which a stock option
               may be exercised beyond ten years from the date of
               the Plan; or 

     (iv)      otherwise materially increases the benefits
               accruing to Participants or Eligible Directors
               under the Plan; or 

     (v)       materially modifies the requirements as to
               eligibility for participation in the Plan; or 

     (vi)      will cause stock options granted under the Plan,
               including Formula Awards, to fail to meet the
               requirements of Rule 16b-3.

Governing Law

     The Plan provides that its validity and construction, and
the validity and construction of its rules and regulations and
any agreements entered into thereunder, shall be governed by the
laws (other than choice of law provisions) of the Commonwealth of
Pennsylvania.

                 FEDERAL INCOME TAX CONSEQUENCES

     Set forth below is a general summary of the Federal income
tax aspects of the Plan.  State and local income and other tax
consequences are not discussed and may vary from state to state.

Tax Deductibility Under Code Section 162(m).  Section 162(m) of
the Code disallows a public company's deductions for employee
remuneration exceeding $1,000,000 per year for certain
executives, but contains an exception for qualified "performance-
based compensation."  In December 1993, the Internal Revenue
Service issued proposed regulations interpreting this provision. 
The Plan has been drafted and is intended to be administered to
enable stock options granted under the Plan to qualify as
"performance-based compensation," and the discussion below
assumes that they will.  However, until these regulations are
finalized, there can be no assurance that all of their
requirements will be met.

Non-qualified Stock Options and Formula Awards.  For Federal
income tax purposes, the recipient of a non-qualified option
(including Formula Awards) granted under the Plan will not
recognize any income for Federal income tax purposes upon the
grant of the option, nor will the Company then be entitled to any
deduction.  Generally, upon exercise of a non-qualified option,
the optionee will recognize ordinary income, and the Company will
be entitled to a deduction, in an amount equal to the excess of
the fair market value of the stock at the date of exercise over
the exercise price of the option.  An optionee's basis in the
stock acquired pursuant to a non-qualified option, for purposes
of determining his gain or loss on his subsequent disposition of
the shares, will generally be equal to the fair market value of
the stock on the date of exercise of the non-qualified option.

     Optionees who are subject to the short-swing profit
restrictions of Section 16(b) of the Securities Exchange Act of
1934, as amended, unless they elect within 30 days of exercising
a non-qualified stock option to be taxed as of the time of such
exercise (on the basis of the fair market value of the stock at
such time), are permitted to defer the calculation and imposition
of the tax on the gain realized from the exercise until the
earlier of (i) the expiration of the six month period under
Section 16(b), or (ii) the first day on which the sale of such
stock at a profit will not subject the optionee to liability to
the Company for the profit.

Incentive Stock Options.  An employee generally recognizes no
income when an incentive stock option is granted to him or when
that option is exercised. It should be noted, however, that for
purposes of the alternative minimum tax under Section 55 of the
Code, an incentive stock option is treated as a non-qualified
stock option.  As a result, the excess of the fair market value
of the shares subject to an incentive stock option, determined at
the time of exercise, over the exercise price constitutes
ordinary income for purposes of the alternative minimum tax. 
Therefore, depending upon his other circumstances, the Optionee
may be subject to the alternative minimum tax with regard to the
exercise of an incentive stock option.  For purposes of the
alternative minimum tax, the basis of stock acquired through the
exercise of an incentive stock option is equal to the fair market
value taken into account in determining the amount of ordinary
income recognized with respect to such option.

     Upon a disposition of shares acquired pursuant to an
incentive stock option, the optionee will recognize long-term
capital gain and the Company will not be entitled to a deduction
as long as the optionee does not dispose of the shares, either
(i) within two years after the grant of the option, or (ii)
within one year after the exercise of the option.  However, if
the optionee does not satisfy these holding periods, the optionee
will recognize ordinary income upon such a disposition equal to
the lesser of (i) the excess of the fair market value of the
shares at the time of exercise over the exercise price paid for
such shares, or (ii) the gain realized upon such disposition. 
The Company will be entitled to a deduction only to the extent
the optionee must recognize ordinary income with respect to such
incentive stock option.

     The Optionee's basis (for purposes of determining the amount
of gain or loss upon a subsequent disposition of shares that
satisfies the holding period requirements) in shares acquired
upon the exercise of an incentive stock option is equal to the
exercise price of the shares in the event that the entire
exercise price is paid in cash.  If all or a portion of the
exercise price is paid in the form of shares already owned by the
optionee, Proposed Treasury Regulations indicate that the basis
in the shares received upon such an exercise will be as follows:

          (i)  For that number of shares which is equal to the
     number of already-owned shares that are delivered to the
     Company in part or full payment of the exercise price, the
     basis is the same as the basis of such already-owned shares;
     and

          (ii) For any shares of Common Stock received in excess
     of the number of already-owned shares of Common Stock that
     are delivered to the Company in part or full payment of the
     exercise price, the basis is equal to the amount of cash, if
     any paid, in connection with the exercise of the option.

     It should also be noted that the delivery of already-owned
shares in part or full payment of the exercise price of a stock
option will constitute a disqualifying disposition of such
already-owned shares if (i) such already-owned shares were
previously acquired by the exercise of an incentive stock option
and (ii) at the time of delivery of the already-owned shares the
Optionee has not satisfied the required holding period with
respect to such already-owned shares.

Taxation of Capital Gains and Ordinary Income.  Currently, the
maximum Federal income tax rate for individuals applicable to
long-term capital gains is 28%, whereas the maximum Federal
income tax rate for individuals applicable to ordinary income is
36% (39.6% for individuals with taxable income over $250,000). 
Capital losses generally are only deductible against capital
gains and, for individuals, a limited amount ($3,000 per year) of
ordinary income.  

     The Plan is not qualified under Section 401(a) of the Code.


                       RESALE RESTRICTIONS

     Certain officers and directors of the Company may be deemed
to be "affiliates" of the Company for purposes of the Securities
Act of 1933.  Shares acquired under the Plan by an affiliate or,
under certain conditions, by persons who are not employees of the
Company at the time of exercise of the options or not otherwise
deemed to be employees of the Company, may only be reoffered or
resold pursuant to an effective registration statement under the
Securities Act of 1933 or in accordance with Rule 144 thereunder. 
An affiliate, or any person who is not an employee of the Company
or not deemed to be an employee of the Company, may not reoffer
or resell shares by means of this Prospectus.

     Under Section 16(b) of the Securities Exchange Act of 1934,
as amended, if a director or officer of the Company, or a person
who beneficially owns, directly or indirectly, more than ten
percent of the Common Stock of the Company, purchases and sells,
or sells and then purchases, Common Stock of the Company within a
six-month period, any profit derived from such transactions
within the meaning of Section 16(b) must be paid to the Company. 
The provisions of Section 16(b) are generally known as the
"short-swing profit" provisions.  However, in certain cases
specific rules exempt certain transactions from the short-swing
profit provisions provided applicable conditions set forth in the
rules are complied with.  All directors and officers of the
Company and all persons who beneficially own, directly or
indirectly, more than ten percent of the Common Stock of the
Company, should, therefore, consider the limitations imposed by
Section 16(b) prior to purchasing or selling any Common Stock.

                     REPORTS OF THE COMPANY

     The Company's Quarterly and Annual Reports to Shareholders,
proxy soliciting material and other communications distributed to
the Company's shareholders generally will be provided to all
Participants and Eligible Directors whether or not they are
shareholders of the Company.  If a Participant or Eligible
Director does not for some reason receive a copy of any of such
reports, material or other communications, he or she may obtain
copies of the same which the Company will provide promptly
without charge upon written or oral request.  Such request should
be directed to Susan T. Mankowski, Secretary, 3220 Tillman Drive,
Bensalem, PA 19020, (215-244-1600).

     Participants and Eligible Directors will be provided from
time to time such reports, if any, concerning the amount and
status of stock options and Formula Awards as the Committee deems
appropriate.  While the Committee does not have any present
intention of issuing such reports on a regular basis, any
Participant or Eligible Director may obtain information
concerning the amount and status of his or her stock options or
Formula Awards by contacting Susan T. Mankowski at the address or
telephone number indicated in the preceding paragraph.


                    INCORPORATION OF CERTAIN
                     DOCUMENTS BY REFERENCE 

     The Company hereby incorporates by reference, the following
documents, each of which shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing
thereof with the Securities and Exchange Commission:

     (a)  The Company's Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994;

     (b)  The Company's Quarterly Reports on Form 10-Q for the
          three months ended March 31, 1995, June 30, 1995 and
          September 30, 1995, respectively;

     (c)  The Company's Proxy Statement dated April 21, 1995;

     (d)  The description of the Company's Common Stock, $.01 par
          value, set forth on page 25 of Amendment No. 1 to the
          Company's Registration Statement on Form S-2, dated
          July 18, 1990.

     All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the filing
of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such
reports and documents.


<PAGE>
             INFORMATION NOT REQUIRED IN PROSPECTUS

                             PART II

Item 3.   Incorporation of Documents by Reference

     Reference is made to the information appearing under the
heading "Incorporation of Certain Documents by Reference" in the
Prospectus constituting a part of this Registration Statement,
which information is incorporated herein by this reference.

Item 4.   Description of Securities

     Not Applicable.

Item 5.   Interests of Named Experts and Counsel

Legal Matters

     Legality of the shares offered hereby has been passed upon
for the Company by Fox, Rothschild, O'Brien & Frankel, 2000
Market Street, 10th Floor, Philadelphia, Pennsylvania 19103. 
Ramon R. Obod, a Director of the Company, is a partner in the
firm of Fox, Rothschild, O'Brien & Frankel.

Experts

     The consolidated financial statements and schedules of the
Company and its subsidiaries contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994
which have been incorporated herein by reference, have been
audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and is
included herein upon the authority of such firm as experts in
accounting and auditing.

Item 6.   Indemnification of Directors and Officers

     Under Sections 1741 through 1750 of the Pennsylvania
Business Corporation Law of 1988, as amended, and Section 8365 of
the Pennsylvania Directors' Liability Act, the Company has the
power to indemnify directors and officers under certain
prescribed circumstances and subject to certain limitations
against certain costs and expenses, including attorney's fees,
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his
being a director or officer of the Company if it is determined
that he acted in accordance with the applicable standard of
conduct set forth in such statutory provisions.  Such
indemnification may be made whether or not the Company would have
the power to indemnify the director under any other provision of
law and whether or not the indemnified liability arises or arose
from any action by or in the right of the Company.

     The Company may also purchase and maintain insurance for the
benefit of any director or officer and which may cover claims for
which the Registrant could not indemnify such person.

     Article 8 of the Articles of Incorporation of the Company
provides as follows:

     "The Corporation shall indemnify any and all of its present
or former directors and officers and any person who is or was
serving at the request of the Corporation as a director or
officer of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, to the fullest extent
permitted by law.  Such right of indemnification shall not be
exclusive of any other right which such officers and directors of
the Corporation and other persons may have or hereafter acquire
and, without limiting the generality of such statement, they
shall be entitled to their respective rights of indemnification
under any By-Law, agreement, vote of shareholders, provision of
law or otherwise, as well as their rights under this Article. 
The foregoing indemnification provisions shall be retroactive to
January 27, 1987 to the fullest extent permitted by law."

     Article X of the By-Laws of the Company provides as follows:

     "1.  Right to Indemnification: Each person who was or is
made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding (hereinafter a
"proceeding"), whether civil, criminal, administrative or
investigative, including, without limitation, an action or suit
by or in the right of the Corporation, by reason of the fact that
he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity as director or officer, or in any other
capacity, shall be indemnified and held harmless by the
Corporation to the fullest extent and manner authorized or
permitted by the laws of the Commonwealth of Pennsylvania, as the
same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights then
said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, penalties, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person
who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators:
provided, however, that except as provided in subsection 4
hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.  The right to indemnification conferred in this
Section shall be a contract right and each person to whom this
right to indemnification applies shall be a third party
beneficiary of such right and shall be entitled to enforce
against the Corporation all indemnification and other rights
granted to such person by this such proceeding in advance of the
final disposition of a proceedings shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of
such director or officer to repay all amounts so advanced if it
shall ultimately be determined that such director or officer is
not entitled to be indemnified under this Section or otherwise. 
The Corporation may, by action of its Board of Directors, provide
indemnification to employees, agents or fiduciaries of the
Corporation or to any person who is or was serving at the request
of the Corporation as an employee, agent or fiduciary of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to any employee
benefit plan, with the same or lesser scope and effect as set
forth herein and in the other subsections of this Section.  If
and to the extent that the laws of the Commonwealth of
Pennsylvania require that indemnification be provided in a given
instance only if the person acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct
was unlawful, then termination of any proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
proceedings, that he or she had reasonable cause to believe that
his or her conduct was unlawful.  Termination of any proceeding
by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not of itself be a
determination by a court that the act or failure to act giving
rise to a claim for indemnification constituted willful
misconduct or recklessness.
     2.   Denial of Right to Indemnification: Indemnification
under subsection 1 above shall be made by the Corporation unless
a determination is reasonably and promptly made that
indemnification of a director or officer is not proper in the
circumstances because of grounds for denying indemnification
under this Section or under applicable law.  Such determination
may be made only (i) by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to such
proceeding ("disinterested directors"), or (ii) if such quorum is
not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion, or (iii) by the shareholders.

     3.   Expenses in Successful Defense: Notwithstanding any
other provision of this Section, to the extent that a director or
officer of the Corporation has been successful on the merits or
otherwise in defense of any proceeding referred to in subsection
1 above or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

     4.   Right of Claimant to Bring Suit: If a claim under
subsection 1 of this Section is not paid in full by the
Corporation within thirty (30) days after a written claim has
been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim.  It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has not met the standards of conduct which make it permissible
under the laws of the Commonwealth of Pennsylvania for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation. 
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

     5.   Non-Exclusivity of Rights: The rights to
indemnification and the payment of expenses incurred in a
proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of any right which any person may
have or hereafter acquire under any statute, provision of the
Articles of Incorporation, by-law, agreement, vote of
shareholders or disinterested directors or otherwise.
     6.   Insurance: The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer,
employee, agent or fiduciary of the Corporation or another
corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person
against such expense, liability or loss under the laws of the
Commonwealth of Pennsylvania.

     7.   Interpretation: For purposes of this Section:

     (a)  References to "the Corporation" shall upon written
resolution of the Board of Directors of the Corporation include,
in addition to the Corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify
its directors or officers, so that any person who is or was a
director or officer of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director or officer of another corporation, shall for purposes of
this Section be deemed to hold the same position in the
Corporation as he or she held in such constituent corporation.

     (b)  A person who acted in good faith and in a manner he or
she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Section.

     8.   Amendment or Repeal: This Section may hereafter be
amended to repealed: provided, however, that no amendment or
repeal shall reduce, terminate or otherwise adversely affect the
right of a person who is or was a director or officer to obtain
indemnification or advancement of expenses with respect to a
proceeding that pertains to or arises out of actions or omissions
that occur prior to the effective date of such amendment or
repeal, which date cannot be retroactive."

Item 7.   Exemption from Registration Claimed

     Not Applicable.

Item 8.   Exhibits

Regulation S-K Exhibit No.    Description

           4(a)               1995 Stock Option Plan


           4(b)               Articles of Incorporation, as
                              amended - Incorporated by reference
                              to (i) Exhibit 3(a) of the
                              Registrant's Registration Statement
                              on Form S-3 (File No. 33-94614)

           4(c)               Amended and Restated By-laws -
                              Incorporated by reference to
                              Exhibit 3(b) to the Registrant's
                              Registration Statement on Form S-3
                              (File No. 33-94615)

           5                  Opinion of Fox, Rothschild, 
                              O'Brien & Frankel

          23(a)               Consent of Fox, Rothschild,
                              O'Brien & Frankel.  Reference
                              is made to item 5.

          23(b)               Consent of Arthur Andersen LLP


Item 9.   Undertakings

     The Company hereby undertakes to include any material
information with respect to the plan of distribution not
previously disclosed in the registration statement or any
material change to such information to the registration
statement.

      The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of a post-effective amendment to this registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

     The Company hereby undertakes to remove from registration by
means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the Plan.

     The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and
where applicable, each filing of an employee benefit plan's
annual report pursuant to this Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.  In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action,suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
                           SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8, and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Bensalem, Commonwealth of Pennsylvania, on December
15, 1995.

                              AMERICAN TRAVELLERS CORPORATION

                              By:/s/ John A. Powell              

                                 John A. Powell, President,
                                 Chairman of the Board and
                                 Chief Executive Officer


     KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John A. Powell
and Walter J. Diener, and each of the/m, his or her true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this
registration statement, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.


Signature                    Title                    Date


/s/ John A. Powell      President, Chairman of        December 15, 1995
John A. Powell          the Board, Chief
                        Executive Officer and
                        Director

/s/Benedict J. IacovettiTreasurer and Chief           December 15, 1995
Benedict J. Iacovetti   Financial and Accounting
                        Officer


/s/ Susan T. Mankowski  Vice-President-Internal  December 15, 1995
Susan T. Mankowski           Business Systems,   
                        Secretary and Director

/s/ Walter E. Conrad    Director                 December 15, 1995
Walter E. Conrad

/s/ Walter J. Diener   Director                  December 15, 1995
Walter J. Diener

/s/ Arnold H. Keehn     Director                 December 15, 1995
Arnold H. Keehn

/s/ Alice E. Powell     Director                 December 15, 1995
Alice E. Powell

/s/ Ramon R. Obod       Director                 December 15, 1995
Ramon R. Obod

/s/ Henry G. Hager      Director                 December 15, 1995
Henry G. Hager


Pursuant to the requirements of the Securities Act of 1933, the
Committee which administers the Plan has duly caused this registration
statement to be signed on its behalf by the undersigned, there unto
duly authorized, in the City of Bensalem, Pennsylvania on December 15,
1995.



/s/ Walter J. Diener                             December 15, 1995
Walter J. Diener


/s/ Arnold H. Keehn                              December 15, 1995
Arnold H. Keehn



                            Index to Exhibits


                             
Number             Exhibit   

 4(a)              1995 Stock Option Plan


                 AMERICAN TRAVELLERS CORPORATION

                     1995 STOCK OPTION PLAN


         Adopted by Board of Directors: February 16, 1995

         Approved by Shareholders: May 25, 1995                        
         
         
         TABLE OF CONTENTS
                                                             Page

     1.  PURPOSES OF THE PLAN. . . . . . . . . . . . . . . . .  1

     2.  GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .  1

         2.1  Definitions. . . . . . . . . . . . . . . . . . .  1
         2.2  Administration of the Plan . . . . . . . . . . .  2
         2.3  Effective Date . . . . . . . . . . . . . . . . .  3
         2.4  Duration . . . . . . . . . . . . . . . . . . . .  4
         2.5  Shares Subject to the Plan . . . . . . . . . . .  4
         2.6  Amendments . . . . . . . . . . . . . . . . . . .  4
         2.7  Participants and Grants. . . . . . . . . . . . .  5

     3.  STOCK OPTIONS . . . . . . . . . . . . . . . . . . . .  6

         3.1  General. . . . . . . . . . . . . . . . . . . . .  6
         3.2  Price. . . . . . . . . . . . . . . . . . . . . .  6
         3.3  Period . . . . . . . . . . . . . . . . . . . . .  6
         3.4  Exercise . . . . . . . . . . . . . . . . . . . .  6
         3.5  Payment. . . . . . . . . . . . . . . . . . . . .  6
         3.6  Special Rules for Incentive Stock Options. . . .  6
         3.7  Termination of Employment or Relationship. . . .  7
         3.8  Effect of Leaves of Absence. . . . . . . . . . .  9

     4.  FORMULA AWARDS TO ELIGIBLE DIRECTORS. . . . . . . . .  9

         4.1  General. . . . . . . . . . . . . . . . . . . . .  9
         4.2  Formula Awards . . . . . . . . . . . . . . . . .  9
         4.3  Formula Award Exercise Price . . . . . . . . . . 10
         4.4  Vesting and Exercisability . . . . . . . . . . . 10
         4.5  Time and Manner of Exercise. . . . . . . . . . . 10
         4.6  Payment of Exercise Price. . . . . . . . . . . . 10
         4.7  Term of Formula Awards . . . . . . . . . . . . . 11
         4.8  Transferability. . . . . . . . . . . . . . . . . 12
         4.9  Limitation of Rights . . . . . . . . . . . . . . 12
         4.10 Limitation as to Directorship. . . . . . . . . . 12
         4.11 Capital Adjustments. . . . . . . . . . . . . . . 12
         4.12 Limit on Grants to Eligible Directors. . . . . . 12
         4.13 Commencement of Grants of Formula Awards . . . . 12
         4.14 Termination of Formula Awards. . . . . . . . . . 13
         4.15 Conflicting Provisions . . . . . . . . . . . . . 13

     5.  MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . 13

         5.1  Adjustments Upon Changes in Capitalization . . . 13
         5.2  Non-Transferability. . . . . . . . . . . . . . . 13
         5.3  Withholding. . . . . . . . . . . . . . . . . . . 13
         5.4  Compliance with Law and Approval of Regulatory
         Bodies. . . . . . . . . . . . . . . . . . . . . . . . 14
         5.5  No Right to Employment . . . . . . . . . . . . . 14
         5.6  Exclusion from Pension Computations. . . . . . . 14
         5.7  Abandonment of Options . . . . . . . . . . . . . 15
         5.8  Severability . . . . . . . . . . . . . . . . . . 15
         5.9  Interpretation of the Plan . . . . . . . . . . . 15
         5.10 Use of Proceeds. . . . . . . . . . . . . . . . . 15
         5.11 Construction of Plan . . . . . . . . . . . . . . 15
         
         
                                                        Appendix A
         
                          AMERICAN TRAVELLERS CORPORATION

                     1995 STOCK OPTION PLAN

     1.  PURPOSES OF THE PLAN

         The purposes of this 1995 Stock Option Plan are to enable
         American Travellers Corporation and its Subsidiaries to
         attract and retain the services of key employees and
         persons with managerial, professional or supervisory
         responsibilities, including, but not limited to, members
         of the Board of Directors, officers of, and consultants
         to, the Company, responsible for the past and continued
         success of the Company, and to provide them with
         increased motivation and incentive to exert their best
         efforts on behalf of the Company by enlarging their
         personal stake in its success.


     2.  GENERAL PROVISIONS

         2.1  Definitions

              As used in the Plan:

              (a)    "Act" means the Securities Exchange Act of
                     1934, including any and all amendments
                     thereto.

              (b)    "Board of Directors" means the Board of
                     Directors of the Company.

              (c)    "Code" means the Internal Revenue Code of
                     1986, including any and all amendments
                     thereto.

              (d)    "Committee" means the committee appointed by
                     the Board of Directors from time to time to
                     administer the Plan pursuant to Section 2.2.

              (e)    "Common Stock" means the Company's Common
                     Stock, $.01 par value.

              (f)    "Company" means American Travellers
                     Corporation, a Pennsylvania corporation.

              (g)    "Eligible Director" means a member of the
                     Company's Board of Directors who is not
                     otherwise an employee of the Company or any
                     Subsidiary.

              (h)    "Fair Market Value" means, with respect to a
                     specific date, the last reported sale price
                     of the Common Stock in the over-the-counter
                     market, as reported by NASDAQ; however, if
                     the Common Stock is listed or traded on a
                     national securities exchange on the date Fair
                     Market Value is being determined, Fair Market
                     Value shall mean the last reported sale price
                     of Common Stock on such exchange, as reported
                     by a responsible reporting service the
                     Committee selects; or if there are no
                     transactions in the Common Stock on such day,
                     then Fair Market Value shall mean the last
                     reported sale price of the Common Stock in
                     the over-the-counter market or on such
                     exchange, as the case may be, on the last
                     preceding day on which there was a
                     transaction in the Common Stock.  In the
                     event the Common Stock is not so listed or
                     traded on a date Fair Market Value is being
                     determined, Fair Market Value shall be
                     determined on the basis of an average of the
                     fair market values as of such date as
                     determined by two or more independent and
                     well-qualified experts in the appraisal of
                     stock values, or on the basis of such other
                     method as the Committee shall, in good faith,
                     determine to be reasonable.

              (i)    "Formula Award" means an option grant made to
                     an Eligible Director pursuant to Section 4.2.

              (j)    "Incentive Stock Option" means an option
                     granted under the Plan which is intended to
                     qualify as an incentive stock option under
                     Section 422 of the Code.

              (k)    "NASDAQ" means the National Association of
                     Securities Dealers, Inc. Automated Quotation
                     System.

              (l)    "Non-Qualified Stock Option" means an option
                     granted under the Plan which is not an
                     Incentive Stock Option.

              (m)    "Participant" means a person to whom a Stock
                     Option other than a Formula Award has been
                     granted under the Plan.

              (n)    "Plan" means this 1995 Stock Option Plan.

              (o)    "Rule 16b-3" means Rule 16b-3 promulgated
                     under the Act or any successor Rule.

              (p)    "Stock Option" means an Incentive Stock
                     Option or a Non-Qualified Stock Option
                     granted under the Plan.

              (q)    "Subsidiary" means any corporation (other
                     than the Company) in an unbroken chain of
                     corporations beginning with the Company if,
                     at the time of the granting of the Stock
                     Option, each of the corporations other than
                     the last corporation in the unbroken chain
                     owns 50% or more of the total voting power of
                     all classes of stock in one of the other
                     corporations in such chain.

         2.2  Administration of the Plan

              (a)    The Plan shall be administered by the
                     Committee which shall at all times consist of
                     two (2) or more persons, each of whom shall
                     be members of the Board of Directors.  Each
                     member of the Committee shall be a
                     "disinterested person" (as such term is
                     defined in Rule 16b-3) and is deemed to be an
                     "outside director" within the meaning of
                     Section 162(m) of the Code and any
                     regulations issued thereunder.  The Board of
                     Directors may from time to time remove
                     members from, or add members to, the
                     Committee.  Vacancies on the Committee,
                     howsoever caused, shall be filled by the
                     Board of Directors.  The Committee shall
                     select one of its members as Chairperson, and
                     shall hold meetings at such times and places
                     as it may determine.

              (b)    The Committee shall have the full power,
                     subject to and within the limits of the Plan,
                     to: (i) interpret and administer the Plan,
                     and Stock Options granted under it; (ii) make
                     and interpret rules and regulations for the
                     administration of the Plan and to make
                     changes in and revoke such rules and
                     regulations (and in the exercise of this
                     power, shall generally determine all
                     questions of policy and expediency that may
                     arise and may correct any defect, omission,
                     or inconsistency in the Plan or any agreement
                     evidencing the grant of any Stock Option in a
                     manner and to the extent it shall deem
                     necessary to make the Plan fully effective);
                     (iii) determine those persons to whom Stock
                     Options other than Formula Awards shall be
                     granted and the number of Stock Options other
                     than Formula Awards to be granted to any
                     person; (iv) determine the terms of Stock
                     Options granted under the Plan, consistent
                     with the provisions of the Plan; and (v)
                     generally, exercise such powers and perform
                     such acts in connection with the Plan as are
                     deemed necessary or expedient to promote the
                     best interests of the Company.  The
                     interpretation and construction by the
                     Committee of any provision of the Plan or of
                     any Stock Option shall be final, binding and
                     conclusive.

              (c)    The Committee may act only by a majority of
                     its members then in office; however, the
                     Committee may authorize any one (1) or more
                     of its members or any officer of the Company
                     to execute and deliver documents on behalf of
                     the Committee.

              (d)    No member of the Committee shall be liable
                     for any action taken or omitted to be taken
                     or for any determination made by him or her
                     in good faith with respect to the Plan, and
                     the Company shall indemnify and hold harmless
                     each member of the Committee against any cost
                     or expense (including counsel fees) or
                     liability (including any sum paid in
                     settlement of a claim with the approval of
                     the Committee) arising out of any act or
                     omission in connection with the
                     administration or interpretation of the Plan,
                     unless arising out of such person's own fraud
                     or bad faith.

         2.3  Effective Date

              The Plan is and shall be effective February 16,
              1995, the date of its adoption by the Board of
              Directors, and Stock Options may be granted from
              time to time thereafter, subject, however, to
              approval of the Plan by the affirmative vote of the
              holders of a majority of the shares of the Common
              Stock present in person or by proxy and entitled to
              vote at an annual meeting of the shareholders of the
              Company or at a special meeting of the shareholders
              of the Company expressly called for such purposes,
              or any adjournments thereof, held on or before
              February 15, 1996.  If the Plan is not approved at
              such annual or special meeting or at any
              adjournments thereof, the Plan and all Stock Options
              previously granted thereunder shall become null and
              void.

         2.4  Duration

              If approved by the shareholders of the Company, as
              provided in Section 2.3, unless sooner terminated by
              the Board of Directors, the Plan shall remain in
              effect until February 15, 2005.

         2.5  Shares Subject to the Plan

              The maximum number of shares of Common Stock which
              may be subject to Stock Options granted under the
              Plan shall be 500,000, of which the number of such
              shares which shall be available for issuance
              pursuant to Formula Awards made to Eligible
              Directors under the Plan shall be 30,000.  The Stock
              Options and Formula Awards shall be subject to
              adjustment in accordance with Section 4.11 or 5.1,
              as appropriate, and shares to be issued upon
              exercise of Stock Options and Formula Awards may be
              either authorized and unissued shares of Common
              Stock or authorized and issued shares of Common
              Stock purchased or acquired by the Company for any
              purpose.  If a Stock Option or Formula Award or
              portion thereof shall expire or is terminated,
              cancelled or surrendered for any reason without
              being exercised in full, the unpurchased shares of
              Common Stock which were subject to such Stock Option
              or Formula Award or portion thereof shall be
              available for future grants of Stock Options or
              Formula Awards, as the case may be, under the Plan.

         2.6  Amendments

              The Plan may be suspended, terminated or reinstated,
              in whole or in part, at any time by the Board of
              Directors.  The Board of Directors may from time to
              time make such amendments to the Plan as it may deem
              advisable, including, with respect to Incentive
              Stock Options, amendments deemed necessary or
              desirable to comply with Section 422 of the Code and
              any regulations issued thereunder; provided,
              however, that (i) no amendment shall be made more
              than once every six (6) months that would change the
              amount, price or timing of Formula Awards, and (ii)
              without the approval of the Company's shareholders
              no amendment shall be made which:

              (a)    Increases the maximum number of shares of
                     Common Stock which may be subject to Stock
                     Options or Formula Awards granted under the
                     Plan (other than as provided in Section 4.11
                     or 5.1, as appropriate); or

              (b)    Extends the term of the Plan; or
     
              (c)    Increases the period during which a Stock
                     Option may be exercised beyond ten (10) years
                     from the date of grant; or

              (d)    Otherwise materially increases the benefits
                     accruing to Participants or Eligible
                     Directors under the Plan; or

              (e)    Materially modifies the requirements as to
                     eligibility for participation in the Plan; or
                     

              (f)    Changes the maximum number of shares of
                     Common Stock for which options may be granted
                     to any Participant during any year (a
                     consecutive twelve (12) month period) (other
                     than as provided in Section 5.1); or

              (g)    Will cause Stock Options granted under the
                     Plan to fail to meet the requirements of Rule
                     16b-3.

              Except as otherwise provided herein, termination or
              amendment of the Plan shall not, without the consent
              of a Participant or Eligible Director, affect such
              Participant's or Eligible Director's rights under
              any Stock Option or Formula Award previously granted
              to such Participant or Eligible Director, as the
              case may be.

         2.7  Participants and Grants

              Stock Options may be granted by the Committee to
              those persons who the Committee determines have the
              capacity to make a substantial contribution to the
              success of the Company.  The Committee may grant
              Stock Options to purchase such number of shares of
              Common Stock (subject to the limitations of Section
              2.5) as the Committee may, in its sole discretion,
              determine.  Notwithstanding the foregoing, no
              Participant shall be granted Stock Options in any
              year (a consecutive twelve (12) month period) to
              purchase in excess of 200,000 shares of Common
              Stock.  In granting Stock Options, the Committee, on
              an individual basis, may vary the number of
              Incentive Stock Options or Non-Qualified Stock
              Options as between Participants and may grant
              Incentive Stock Options and/or Non-Qualified Stock
              Options to a Participant in such amounts as the
              Committee may determine in its sole discretion.


     3.  STOCK OPTIONS

         3.1  General

              All Stock Options granted under the Plan shall be
              evidenced by written agreements executed by the
              Company and the Participant to whom granted and
              dated as of the applicable date of grant, which
              agreement shall state the number of shares of Common
              Stock which may be purchased upon the exercise
              thereof and shall contain such investment
              representation and other terms and conditions as the
              Committee may from time to time determine, or, in
              the case of Incentive Stock Options, as may be
              required by Section 422 of the Code, or any other
              applicable law.  Each such grant shall be signed on
              behalf of the Company by a member of the Committee
              or by an officer delegated such authority by the
              Committee.

         3.2  Price

              Subject to the provisions of Sections 3.6(d), 4.11
              and 5.1, the purchase price per share of Common
              Stock subject to a Stock Option shall, in no case,
              be less than one hundred percent (100%) of the Fair
              Market Value of a share of Common Stock on the date
              the Stock Option is granted.

         3.3  Period

              The duration or term of each Stock Option granted
              under the Plan shall be for such period as the
              Committee shall determine but in no event more than
              ten (10) years from the date of grant thereof.

         3.4  Exercise

              Subject to Sections 2.3 and 5.4, Stock Options may
              be exercisable immediately upon the grant of the
              Stock Option or at such other time or times as the
              Committee shall specify when granting the Stock
              Option.  Once exercisable, a Stock Option shall be
              exercisable, in whole or in part, by delivery of a
              written notice of exercise to the Secretary of the
              Company at the principal office of the Company
              specifying the number of whole shares of Common
              Stock as to which the Stock Option is then being
              exercised together with payment of the full purchase
              price for the shares being purchased upon such
              exercise.  Until the shares of Common Stock as to
              which a Stock Option is exercised are issued, the
              Participant shall have none of the rights of a
              shareholder of the Company with respect to such
              shares.

         3.5  Payment

              The purchase price for shares of Common Stock as to
              which a Stock Option has been exercised and any
              amount required to be withheld, as contemplated by
              Section 5.3, may be paid:

              (a)    In United States dollars in cash, or by
                     check, bank draft or money order payable in
                     United States dollars to the order of the
                     Company; or

              (b)    By the delivery by the Participant to the
                     Company of whole shares of Common Stock
                     having an aggregate Fair Market Value on the
                     date of payment equal to the aggregate of the
                     purchase price of Common Stock as to which
                     the Stock Option is then being exercised or
                     by the withholding of whole shares of Common
                     Stock having such Fair Market Value upon the
                     exercise of such Stock Option; or

              (c)    By a combination of both (a) and (b) above.

              The Committee may, in its discretion, impose
              limitations. conditions and prohibitions on the use
              by a Participant of shares of Common Stock to pay
              the purchase price payable by such Participant upon
              the exercise of a Stock Option.

         3.6  Special Rules for Incentive Stock Options

              Notwithstanding any other provision of the Plan, the
              following provisions shall apply to Incentive Stock
              Options granted under the Plan:

              (a)    Incentive Stock Options shall only be granted
                     to Participants who are employees of the
                     Company or a Subsidiary.

              (b)    To the extent that the aggregate Fair Market
                     Value of stock, with respect to which
                     Incentive Stock Options are exercisable for
                     the first time by a Participant during any
                     calendar year under the Plan and any other
                     Stock Option Plan of the Company or a
                     Subsidiary, exceeds $100,000, such excess
                     Stock Options shall be treated as Non-
                     Qualified Stock Options.

              (c)    Any Participant who disposes of shares of
                     Common Stock acquired upon the exercise of an
                     Incentive Stock Option by sale or exchange
                     either within two (2) years after the date of
                     the grant of the Incentive Stock Option under
                     which the shares were acquired or within one
                     (1) year of the acquisition of such shares,
                     shall promptly notify the Secretary of the
                     Company at the principal office of the
                     Company of such disposition, the amount
                     realized, the purchase price per share paid
                     upon exercise and the date of disposition.

              (d)    No Incentive Stock Option shall be granted to
                     a Participant who, at the time of the grant,
                     owns stock representing more than ten percent
                     (10%) of the total combined voting power of
                     all classes of stock either of the Company or
                     any parent or Subsidiary of the Company,
                     unless the purchase price of the shares of
                     Common Stock purchasable upon exercise of
                     such Incentive Stock Option is at least one
                     hundred ten percent (110%) of the Fair Market
                     Value (at the time the Incentive Stock Option
                     is granted) of the Common Stock and the
                     Incentive Stock Option is not exercisable
                     more than five (5) years from the date it is
                     granted.

         3.7  Termination of Employment or Relationship

              (a)    In the event a Participant's employment by,
                     or relationship with, the Company or its
                     Subsidiaries shall terminate for any reason
                     other than those reasons specified in
                     Sections 3.7(b), (c), (d), (e) or (f) while
                     such Participant holds Stock Options granted
                     under the Plan, then all rights of any kind
                     under any outstanding Stock Option held by
                     such Participant which shall not have
                     previously lapsed or terminated shall expire
                     immediately.

              (b)    If a Participant's employment by, or
                     relationship with, the Company or its
                     Subsidiaries shall terminate as a result of
                     such Participant's total disability, each
                     Stock Option held by such Participant (which
                     has not previously lapsed or terminated)
                     shall immediately become fully exercisable as
                     to the total number of shares of Common Stock
                     subject thereto (whether or not exercisable
                     to that extent at the time of such
                     termination) and shall remain so exercisable
                     by such Participant for a period of six (6)
                     months after termination unless such Stock
                     Option expires earlier by its terms.  For
                     purposes of the Plan, "total disability"
                     shall mean permanent mental or physical
                     disability as determined by the Committee.

              (c)    In the event of the death of a Participant,
                     each Stock Option held by such Participant
                     (which has not previously lapsed or
                     terminated) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject thereto (whether or
                     not exercisable to that extent at the time of
                     death) by the executor or administrator of
                     the Participant's estate or by the person or
                     persons to whom the deceased Participant's
                     rights thereunder shall have passed by will
                     or by the laws of descent or distribution,
                     and shall remain so exercisable for a period
                     of six (6) months after such Participant's
                     death unless such Stock Option expires
                     earlier by its terms.

              (d)    If a Participant's employment by the Company
                     or a Subsidiary shall terminate by reason of
                     such Participant's retirement in accordance
                     with Company policies, each Stock Option held
                     by such Participant at the date of
                     termination (which has not previously lapsed
                     or terminated) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject hereto (whether or
                     not exercisable to that extent at the time of
                     such termination) and shall remain so
                     exercisable by such Participant for a period
                     of three (3) months after termination, unless
                     such Stock Option expires earlier by its
                     terms.

              (e)    In the event the Company terminates the
                     employment of a Participant who at the time
                     of such termination was an officer of the
                     Company and had been continuously employed by
                     the Company during the five (5) year period
                     immediately preceding such termination, for
                     any reason except "good cause" (hereafter
                     defined) and except upon such Participant's
                     death, total disability or retirement in
                     accordance with Company policies, each Stock
                     Option held by such Participant (which has
                     not previously lapsed or terminated and which
                     has been held by such Participant for more
                     than six (6) months prior to such
                     termination) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject thereto (whether or
                     not exercisable to that extent at the time of
                     such termination) and shall remain so
                     exercisable for a period of three (3) months
                     after such termination unless such Stock
                     Option expires earlier by its terms. A
                     termination for "good cause" shall have
                     occurred only if the Participant in question
                     is terminated, by written notice (i) because
                     of his or her conviction of a felony for a
                     crime involving an act of fraud or
                     dishonesty, (ii) intentional acts or
                     omissions on such Participant's part causing
                     material injury to the property or business
                     of the Company, or (iii) because such
                     Participant shall have breached any material
                     term of any employment agreement in place
                     between such Participant and the Company and
                     shall have failed to correct such breach
                     within any grace period provided for in such
                     agreement. "Good cause" for termination shall
                     not include bad judgment or any act or
                     omission reasonably believed by such
                     Participant, in good faith, to have been in,
                     or not opposed to, the best interests of the
                     Company.

              (f)    In the event of the termination of a
                     Participant's service as a Director of the
                     Company, who at the time of such termination
                     was an Eligible Director and had continuously
                     served as a Director of the Company during
                     the five (5) year period immediately
                     preceding such termination, and such
                     termination is for any reason except for such
                     Participant's death or total disability or
                     the removal of such Participant as Director
                     (by the shareholders, the Board of Directors
                     or otherwise) for "good cause" (as defined in
                     Section 3.7(e)(i) and (ii)), each Stock
                     Option held by such Participant (which has
                     not previously lapsed or terminated and which
                     has been held by such Participant for more
                     than six (6) months prior to such termina-
                     tion) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject thereto (whether or
                     not exercisable to that extent at the time of
                     such termination) and shall remain so
                     exercisable for a period of three (3) months
                     after such termination unless such Stock
                     Option expires earlier by its terms.

         3.8  Effect of Leaves of Absence

              It shall not be considered a termination of
              employment when a Participant is on military or sick
              leave or such other type of leave of absence which
              is considered a continuing intact the employment
              relationship of the Participant with the Company or
              any of its Subsidiaries. In case of such leave of
              absence, the employment relationship shall be deemed
              to have continued until the later of (i) the date
              when such leave shall have lasted ninety (90) days
              in duration, or (ii) the date as of which the
              Participant's right to re-employment shall have no
              longer been guaranteed either by statute or
              contract.


     4.  FORMULA AWARDS TO ELIGIBLE DIRECTORS

         4.1  General

              Each Formula Award granted under the Plan shall be
              evidenced by a written agreement executed by the
              Company and by the Eligible Director to whom such
              Formula Award is granted and dated as of the
              applicable date of grant.  Each Agreement shall be
              signed on behalf of the Company by a member of the
              Committee or by an officer delegated such authority
              by the Committee.  Each such agreement shall comply
              with and be subject to the terms and conditions of
              the Plan.  Any such agreement may contain such other
              terms, provisions and conditions not inconsistent
              with the Plan or this Section 4 as may be determined
              by the Committee.  All Formula Awards granted under
              the Plan shall, except where this Section 4 or the
              context clearly indicates to the contrary, be
              subject to the provisions of the Plan applicable to
              Non-Qualified Stock Options.

         4.2  Formula Awards

              Subject to the limitations in Sections 4.13 and
              4.14, an option to purchase 1,000 shares of Common
              Stock (as adjusted pursuant to Section 4.11) shall
              be granted automatically each year, immediately
              following the annual meeting of the Company's
              shareholders, to each member of the Company's Board
              of Directors (each, a "Director") who is an Eligible
              Director at such time immediately following such
              annual meeting beginning with the annual meeting of
              the shareholders at which the shareholders approve
              the Plan.

         4.3  Formula Award Exercise Price

              The exercise price per share for a Formula Award
              shall be the average of the Fair Market Values for
              the fifth (5th) through the ninth (9th) business
              days (which, for purposes of this Section 4.3 shall
              mean those days on which the NASDAQ is open for
              trading) following the date of grant.

         4.4  Vesting and Exercisability

              Except as otherwise provided in Section 4.7, a
              Formula Award shall immediately vest and become non-
              forfeitable upon the grant of the Formula Award. 
              Except as otherwise provided in Section 4.7, a
              Formula Award shall become exercisable immediately
              upon vesting for all Directors who have served as
              Directors of the Company for a total of five (5)
              consecutive years as of the date of the grant.  If
              a Director has not served as a Director for such
              period, a Formula Award shall become exercisable
              according to the following schedule:

              Period of Optionee's Continuous        Portion of
                Service as a Director of the        Formula Award
                Company following the Grant            That is
                                                     Exercisable

                     Twelve months                     33-1/3%
                     Eighteen months                   66-2/3%
                     Twenty-four months                100%

         4.5 Time and Manner of Exercise

             Except as otherwise provided in this Section 4.5, any
             vested Formula Award, to the extent the same is
             exercisable in accordance with Section 4.4, is
             exercisable in whole or in part at any time from time
             to time until the expiration or termination of its
             term in accordance with Section 4.7 by giving written
             notice, signed by the person exercising the Formula
             Award, to the Company (to the attention of the
             Company's Corporate Secretary) stating the number of
             whole shares of Common Stock with respect to which the
             Formula Award is being exercised, accompanied by
             payment in full of the option exercise price for the
             number of shares of Common Stock to be purchased. The
             date both such notice and payment are received by the
             office of the Corporate Secretary of the Company shall
             be the date of exercise of the Formula Award as to
             such number of shares.

         4.6 Payment of Exercise Price

             Payment of the exercise price for a Formula Award may
             be in cash or by check, bank draft or money order
             payable in United States dollars to the order of the
             Company or payment may be in whole or in part by

             (a) transfer to the Company of shares of Common Stock
                 having a Fair Market Value (as determined in
                 Section 4.3) on the date of exercise equal to the
                 exercise price; or

             (b) delivery of instructions to the Company to
                 withhold from the shares of Common Stock that
                 would otherwise be issued on exercise of that
                 number of such shares having a Fair Market Value
                 (as determined in Section 4.3) equal to the
                 exercise price.

             If the Fair Market Value (as determined in Section
             4.3) of the number of whole shares of Common Stock
             transferred or the number of whole shares of Common
             Stock withheld is less than the total exercise price,
             the shortfall must be paid in cash, check, bank draft
             or money order, as aforesaid.

         4.7 Term of Formula Awards

             Each Formula Award shall expire ten (10) years from
             its date of grant, but shall be subject to earlier
             termination as follows:

             (a) In the event of the termination of a Formula
                 Award holder's service as a Director, by reason
                 of his or her removal as Director (by the
                 shareholders, the Board of Directors or
                 otherwise), the then outstanding Formula Awards
                 of such holder (whether or not then exercisable)
                 shall automatically expire on (and may not be
                 exercised on) the effective date of such
                 termination.

             (b) In the event of the termination of a Formula
                 Award holder's service as a Director by reason of
                 retirement or total disability, the then
                 outstanding Formula Awards of such holder shall
                 become exercisable, to the full extent of the
                 number of shares of Common Stock remaining
                 covered by such Formula Awards, regardless of
                 whether such Formula Awards were previously
                 exercisable, and each such Formula Award shall
                 expire one (1) year after the date of such
                 termination or on the stated grant expiration
                 date, whichever is earlier.  For purposes of this
                 Section 4.7, the phrase "by reason of retirement"
                 means (a) mandatory retirement pursuant to Board
                 policy or (b) termination of service on or after
                 the holder's 65th birthday.

             (c) In the event of the death of a Formula Award
                 holder while such holder is a Director, the then
                 outstanding Formula Awards of such holder shall
                 become exercisable, to the full extent of the
                 number of shares of Common Stock remaining
                 covered by such Formula Awards, regardless of
                 whether such Formula Awards were previously
                 exercisable, and each such Formula Award shall
                 expire one (1) year after the date of death of
                 such holder or on the stated grant expiration
                 date, whichever is earlier.  Exercise of a
                 deceased holder's Formula Awards that are still
                 exercisable shall be by the estate of such holder
                 or by the person or persons to whom the holder's
                 rights have passed by will or the laws of descent
                 and distribution.

             (d) In the event of the termination of a Formula
                 Award holder's service as a Director by reason of
                 the expiration of the Director's term in office
                 (without renomination or reelection) or by reason
                 of resignation, or for any other reason except
                 those  described in Sections 4.7(a), (b) or (c),
                 the then outstanding Formula Awards of such
                 holder shall become exercisable, to the full
                 extent of the number of shares of Common Stock
                 remaining covered by such Formula Awards,
                 regardless of whether such Formula Awards were
                 previously exercisable, and each such Formula
                 Award shall expire three (3) months after the
                 effective date of such termination.

         4.8 Transferability

             The right to exercise a Formula Award shall, during
             the lifetime of the Eligible Director to whom such
             Formula Award was granted, be exercisable only by such
             recipient or pursuant to a qualified domestic
             relations order as defined by the Code or Title l of
             the Employee Retirement Income Security' Act, or the
             rules thereunder (a "QDRO") and shall not be
             assignable or transferable by such recipient other
             than by will or the laws of descent and distribution
             or a QDRO. Any purported transfer contrary to this
             provision will be null and void and without effect.

         4.9 Limitation of Rights

             Neither the recipient of a Formula Award under the
             Plan nor the recipient's successor or successors in
             interest shall have any rights as a shareholder of the
             Company with respect to any shares of Common Stock
             subject to a Formula Award granted to such person
             until the date of issuance of a stock certificate for
             such shares of Common Stock.

         4.10    Limitation as to Directorship

             Neither the Plan, nor the grant of a Formula Award,
             nor any other action taken pursuant to the Plan shall
             constitute or be evidence of any agreement or
             understanding, express or implied, that an Eligible
             Director has a right to continue as a Director for any
             period of time or at any particular rate of
             compensation.

         4.11    Capital Adjustments

             The number and class of shares with respect to which
             a Formula Award may be granted to an Eligible Director
             under the Plan, the number and class of shares subject
             to each outstanding Formula Award, and the exercise
             price per share specified in each such Formula Award
             shall be proportionate adjustment in accordance with
             the provisions Section 5.1   For purposes of the
             preceding sentence, the Company shall be deemed to
             have received consideration for any shares issued
             pursuant to this or any other employee benefit plan
             meeting the requirements of Rule 16b-3.

         4.12    Limit on Grants to Eligible Directors

             Notwithstanding any provision to the contrary, the
             Committee may, but shall not be obligated to, grant an
             Eligible Director Stock Options under the Plan and
             such grant, if any, shall not affect the Eligible
             Director's entitlement to be granted Formula Awards
             pursuant to Section 4.2.

         4.13    Commencement of Grants of Formula Awards

             Notwithstanding any provision to the contrary, no
             Formula Award shall be granted pursuant to the Plan
             unless and until no additional Formula Awards may be
             granted pursuant to the Company's 1993 Stock Option
             Plan.

         4.14    Termination of Formula Awards

             Notwithstanding any provision to the contrary, no
             Formula Award shall be granted pursuant to the Plan on
             a date when the number of shares of Common Stock
             authorized for issuance pursuant to the Plan and then
             available for issuance pursuant to new Formula Awards
             is less than the aggregate number of such shares which
             would be issuable pursuant to Formula Awards otherwise
             required to be granted on such date, assuming the full
             vesting and exercise of such Formula Awards. In the
             event Formula Awards are not granted as a result of
             the application of this Section 4.14, no Formula
             Awards shall thereafter be granted pursuant to the
             Plan.

         4.15    Conflicting Provisions

             In the event of any conflict between a provision of
             this Section 4 and a provision in any other paragraph
             of the Plan with respect to Formula Awards, such
             provision of this Section 4 shall be deemed to
             control.


     5.  MISCELLANEOUS PROVISIONS

         5.1 Adjustments Upon Changes in Capitalization

             In the event of changes to the outstanding shares of
             Common Stock of the Company through reorganization,
             merger, consolidation, recapitalization,
             reclassification, stock split-up, stock dividend,
             stock consolidation or otherwise, or in the event of
             a sale of all or substantially all of the assets of
             the Company, an appropriate and proportionate
             adjustment shall be made in the number and class of
             shares as to which Stock Options and Formula Awards
             may be granted.  A corresponding adjustment changing
             the number or class of shares and/or the exercise
             price per share of unexercised Stock Options and
             Formula Awards or portions thereof which shall have
             been granted prior to any such change shall likewise
             be made.  Notwithstanding the foregoing, in the case
             of a reorganization, merger or consolidation, or sale
             of all or substantially all of the assets of the
             Company, in lieu of adjustments as aforesaid, the
             Committee may in is discretion accelerate the date
             after which a Stock Option or Formula Award may or may
             not be exercised or the stated expiration date
             thereof. Adjustments or changes under this Section 5.1
             shall be made by the Committee, whose determination as
             to what adjustments or changes shall be made, and the
             extent thereof, shall be final, binding and
             conclusive.

         5.2 Non-Transferability

             No Stock Option shall be transferable except by will
             or the laws of descent and distribution, nor shall any
             Stock Option be exercisable during the Participant's
             lifetime by any person other than the Participant or
             his guardian or legal representative.

         5.3 Withholding

             The Company's obligations under the Plan shall be
             subject to applicable federal, state and local tax
             withholding requirements.  Federal, state and local
             withholding tax due at the time of a grant or upon the
             exercise of any Stock Option may, in the discretion of
             the Committee, be paid in shares of Common Stock
             already owned by the Participant or through the
             withholding of shares otherwise issuable to such
             Participant, upon such terms and conditions as the
             Committee shall determine. If the Participant shall
             fail to pay, or make arrangements satisfactory to the
             Committee for the payment, to the Company of all such
             federal, state and local taxes required to be withheld
             by the Company, then the Company shall, to the extent
             permitted by law, have the right to deduct from any
             payment of any kind otherwise due to such Participant
             an amount equal to any federal, state or local taxes
             of any kind required to be withheld by the Company.

         5.4 Compliance with Law and Approval of Regulatory Bodies

             No Stock Option or Formula Award shall be exercisable
             and no shares will be delivered under the Plan except
             in compliance with all applicable federal and state
             laws and regulations including, without limitation,
             compliance with all federal and state securities laws
             and withholding tax requirements and with the rules of
             NASDAQ and of all domestic stock exchanges on which
             the Common Stock may be listed.  Any share certificate
             issued to evidence shares for which a Stock Option or
             Formula Award is exercised may bear legends and
             statements the Committee shall deem advisable to
             assure compliance with federal and state laws and
             regulations.  No Stock Option or Formula Award shall
             be exercisable and no shares will be delivered under
             the Plan, until the Company has obtained the consent
             or approval from regulatory bodies, federal or state,
             having jurisdiction over such matters as the Committee
             may deem advisable.  In the case of the exercise of a
             Stock Option or Formula Award by a person or estate
             acquiring the right to exercise the Stock Option or
             Formula Award as a result of the death of the
             Participant, the Committee may require reasonable
             evidence as to the ownership of the Stock Option or
             Formula Award and may require consents and releases of
             taxing authorities that it may deem advisable.

         5.5 No Right to Employment

             Neither the adoption of the Plan nor its operation,
             nor any document describing or referring to the Plan,
             or any part thereof, nor the granting of any Stock
             Options hereunder, shall confer upon any Participant
             under the Plan any right to continue in the employ of
             the Company or any Subsidiary, or shall in any way
             affect the right and power of the Company or any
             Subsidiary to terminate the employment of any
             Participant at any time with or without assigning a
             reason therefor, to the same extent as might have been
             done if the Plan had not been adopted.

         5.6 Exclusion from Pension Computations

             By acceptance of a grant of a Stock Option under the
             Plan, the recipient shall be deemed to agree that any
             income realized upon the receipt or exercise thereof
             or upon the disposition of the shares received upon
             exercise will not be taken into account as "base
             remuneration", "wages", "salary" or "compensation" in
             determining the amount of any contribution to or
             payment or any other benefit under any pension,
             retirement, incentive, profit-sharing or deferred
             compensation plan of the Company or any Subsidiary.

         5.7 Abandonment of Options

             A Participant or Eligible Director may at any time
             abandon a Stock Option or Formula Award prior to its
             expiration date.  The abandonment shall be evidenced
             in writing, in such form as the Committee may from
             time to time prescribe.  A Participant or Eligible
             Director shall have no further rights with respect to
             any Stock Option or Formula Award so abandoned.

         5.8 Severability

             If any of the terms of provisions of the Plan conflict
             with the requirements of Rule 16b-3, then such terms
             or provisions shall be deemed inoperative to the
             extent they so conflict with the requirements of Rule
             16b-3.

         5.9 Interpretation of the Plan

             Headings are given to the Sections of the Plan solely
             as a convenience to facilitate reference, such
             headings, numbering and paragraphing shall not in any
             case be deemed in any way material or relevant to the
             construction of the Plan or any provision hereof.  The
             use of the masculine gender shall also include within
             its meaning the feminine. The use of the singular
             shall also include within Its meaning the plural and
             vice versa.

         5.10    Use of Proceeds

             Funds received by the Company upon the exercise of
             Stock Options and Formula Awards shall be used for the
             general corporate purposes of the Company.

         5.11    Construction of Plan

             The place of administration of the Plan shall be in
             the Commonwealth of Pennsylvania, and the validity,
             construction, interpretation, administration and
             effect of the Plan and of its rules and regulations,
             and rights relating to the Plan, shall be determined
             solely in accordance with the laws of the Commonwealth
             of Pennsylvania.





 5                 Opinion of Fox, Rothschild, 
                   O'Brien & Frankel


PA DIRECT DIAL (215) 299-2000                       December 20, 1995





American Travellers Corporation
3220 Tillman Drive
Bensalem, Pennsylvania  19020

Gentlemen:

	We have acted as your counsel in connection with the filing 
of a Registration Statement on Form S-8 (the "Registration 
Statement") with the Securities and Exchange Commission covering 
500,000 shares of Common Stock, $.01 par value (the "Shares"), of 
American Travellers Corporation, a Pennsylvania corporation (the 
"Company").  Such shares may be issued pursuant to the Company's 
1995 Stock Option Plan (the "Plan").

	As counsel for the Company, we have examined such corporate 
records, certificates and other documents and questions of law as 
we have considered necessary or appropriate for purposes of this 
opinion.  For purposes of this opinion, we have assumed that the 
Shares will be issued in accordance with the terms and conditions 
of the Plan.  Based on the foregoing, we advise you that, in our 
opinion, such of the Shares as are issued and paid for in 
accordance with the terms and conditions of the Plan, will be 
legally issued, fully-paid and non-assessable.

	We consent to the filing of this opinion as an exhibit to 
the Registration Statement.  In giving this consent, we do not 
hereby admit that we come within the category of persons whose 
consent is required under Section 7 of the Securities Act of 
1933. as amended, or the rules and regulations thereunder.

Very truly yours,

/s/ Fox, Rothschild, O'Brien and Frankel 



23(b)              Consent of Arthur Andersen LLP


Arthur Andersen LLP

As independent public accountants, we hereby consent to the
incorporation in this Registration Statement of our report dated
February 27, 1995 included in American Travellers Corporation 10-
K for the year ended December 31, 1994 and to all references to
our firm included in the Registration Statement.

/s/ Arthur Andersen

Philadelphia, PA
December 20, 1995
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 126720}]
{"company-data": {"conformed-name": "AMERICAN TRAVELLERS CORP", "cik": "0000790928", "assigned-sic": "6331", "irs-number": "231738097", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "033-65207", "film-number": "95603181"}, "business-address": {"street1": "3220 TILLMAN DR", "city": "BENSALEM", "state": "PA", "zip": "19020", "phone": "2152441600"}, "mail-address": {"street1": "3220 TILLMAN DR", "city": "BENSALEM", "state": "PA", "zip": "19020"}}
As filed with the Securities and Exchange Commission on
                            December 20, 1995

                       Registration No. 33-_______

_________________________________________________________________
_________________________________________________________________

                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549

                   __________________________________

                                FORM S-8

                         REGISTRATION STATEMENT
                                  Under
                       THE SECURITIES ACT OF 1933

                   __________________________________

                     AMERICAN TRAVELLERS CORPORATION
           (Exact name of registrant as specified in charter)

          Pennsylvania                               23-1738097     
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

                           3220 Tillman Drive
                       Bensalem, Pennsylvania 19020     
                (Address of Principal Executive Offices)

         AMERICAN TRAVELLERS CORPORATION 1995 STOCK OPTION PLAN
                        (Full title of the plan)

                             John A. Powell
                   Chairman of the Board and President
                     American Travellers Corporation
                           3220 Tillman Drive
                           Bensalem, PA 19020
                 (Name and address of agent for service)

                             [215] 244-1600
                                                   
      (Telephone number, including area code, of agent for service)

                               Copies to:

                         Ramon R. Obod, Esquire
                    Fox Rothschild O'Brien & Frankel
                     2000 Market Street, 10th Floor
                         Philadelphia, PA  19103

 _________________Calculation_of_Registration_Fee______________________

                                   Proposed       Proposed
                                   Maximum        Maximum
                                   Offering       Aggregate   Amount of
Title of Securities Amount to be   Price          Offering    Registration
to be Registered    Registered(1)  Per Share(2)   Price       Fee    

                                   
Common Stock,       500,000        $25 1/2       $12,750,000  $4,396.58        
$.01 par value      Shares

_________________________________________________________________

(1)      In accordance with Rule 416 under the Securities Act of
         1933, also includes such additional shares as may be issued
         to prevent dilution of the shares covered hereby as a result
         of stock splits, stock dividends or similar transactions.

(2)      Estimated solely for purposes of computing the registration
         fee in accordance with Rule 457(h) under the Securities Act
         of 1933.

                     
                     AMERICAN TRAVELLERS CORPORATION

                          CROSS REFERENCE SHEET

Pursuant to Rule 404 and Item 501 of Regulations S-K

Form S-8 Item No.                      Heading in Prospectus

1.       Plan Information

         (a)  General Plan            Cover Page; Description of the
              Information             Plan - General, Purposes;
                                      Administration; Term of the Plan and 
                                      Amendment, Suspension and 
                                      Termination of the Plan

         (b)  Securities to be        Cover Page; Description of the 
              Offered                 Plan - General
                                      
         (c) Employees Who May        Description of the Plan - 
             Participate in the       General - Purposes and - 
             Plan                     Participants and Grants -
                                      Formula Awards to Eligible 
                                      Directors; Reports of the 
                                      Company

         (d) Purchase of Securities   Description of the Plan -
             Pursuant to the Plan     Participants and Grants -
             and Payment for          Formula Awards to Eligible
             Securities Offered       Directors

         (e)  Resale Restrictions     Description of the Plan -
                                      Participants and Grants -
                                      Formula Awards to Eligible
                                      Directors; Resale Restrictions

         (f)  Tax Effects of Plan     Federal Tax Consequences
              Participation
              
         (g)  Investment of Funds     Not Applicable

         (h)  Withdrawal from the     Description of the Plan -
              Plan; Assignment of     Participants and Grants -
              Interest                Formula Awards to Eligible
                                      Directors

         (i)  Forfeitures and         Description of the Plan -
              Penalties               Participants and Grants - 
                                      Formula Awards to Eligible
                                      Directors

         (j)  Charges and Deductions  Description of the Plan -
              and Liens Therefor      Participants and Grants - 
                                      Formula Awards to Eligible
                                      Directors

2.       Registrant Information and   Reports of the Company;
         Employee Plan Annual         Incorporation of Certain
         Information                  Documents by Reference
         
         

                 AMERICAN TRAVELLERS CORPORATION

                         500,000 Shares

                  Common Stock, $.01 Par value

     This Prospectus relates to the offering by American
Travellers Corporation (the "Company") of 500,000 shares of the
Company's Common Stock, $.01 par value ("Common Stock"), pursuant
to the Company's 1995 Stock Option Plan (the "Plan") which
provides for the granting of awards covering up to 500,000 shares
of Common Stock subject to adjustment upon the occurrence of
certain events specified in the Plan, including stock dividends,
stock splits and extraordinary cash dividends.  The awards which
may be issued pursuant to the Plan include stock options to
"Participants" (as defined) and stock options which may be
granted as "Formula Awards" (as defined) to "Eligible Directors"
(as defined), all as more fully described in this Prospectus.

                                         

     The Common Stock of the Company is traded on the over the
counter market and quoted on the NASDAQ National Market System. 
On December 19, 1995, the last reported sale price of the Common
Stock as reported by NASDAQ was $26 per share.

                                         

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                                         

     The date of this Prospectus is December 20, 1995.

                     ADDITIONAL INFORMATION

     The Company has filed a Registration Statement with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, with respect to the shares
offered hereby.  The Company will provide, without charge, to
each person to whom this Prospectus is delivered, a copy of the
Company's annual report to shareholders for its last fiscal year
and, promptly upon the written or oral request of such person, a
copy of any document or part thereof incorporated by reference in
this Prospectus but not delivered herewith (not including
exhibits to such information, unless such exhibits are
specifically incorporated by reference into the information that
this Prospectus incorporates).  Requests should be directed to
Susan T. Mankowski, Secretary of the Company, 3220 Tillman Drive,
Bensalem, Pennsylvania 19020 (telephone 215-244-1600).

     No person is authorized to give any information or to make
any representations not contained in this Prospectus in
connection with the offer described herein, and any information
or representation not contained herein must not be relied upon as
having been authorized by the Company.  This Prospectus does not
constitute an offer to sell these securities in any state to any
person to whom it is unlawful to make such offer in such state.
Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication
that information herein is correct as of any time subsequent to
its date.

                     DESCRIPTION OF THE PLAN
General

     This Prospectus relates to an aggregate of 500,000 shares of
Common Stock which may be issued pursuant to the Company's 1995
Stock Option Plan.  The Plan provides for the issuance of up to
470,000 shares of the Company's Common Stock, upon the exercise
of stock options, to employees and persons with managerial,
professional or supervisory responsibilities (other than Eligible
Directors) whom the committee administering the Plan (the
"Committee") determines from time to time have the capacity to
make a substantial contribution to the success of the Company
("Participants").

     The Plan also provides for the issuance of up to an
additional 30,000 shares of the Company's Common Stock upon the
exercise of stock options granted as Formula Awards to Eligible
Directors pursuant to the Plan.  The Plan, which was originally
adopted by the Company's Board of Directors (the "Board of
Directors") on February 16, 1995, was approved by the Company's
shareholders on May 25, 1995 and became effective on that date. 
The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").

     The description of the Plan contained herein does not
purport to be complete, and reference is made to the Plan and to
the respective agreements evidencing awards made pursuant to the
Plan for a full statement of the terms and provisions applicable
to such awards.

     The principal office of the Company is located at 3220
Tillman Drive, Bensalem, Pennsylvania and its telephone number is
(215) 244-1600.

Purposes

     The purposes of the Plan are to enable the Company and its
subsidiaries to attract and retain the services of key employees
and persons with managerial, professional or supervisory
responsibilities, including, but not limited to, members of the
Board of Directors, officers of, and consultants to, the Company,
responsible for the past and continued success of the Company,
and to provide them with increased motivation and incentive to
exert their best efforts on behalf of the Company by enlarging
their personal stake in its success.

Administration

     The Plan is administered by the Committee which, according
to the terms of the Plan, must consist of two or more directors
of the Company designated by the Board of Directors.  Except to
the extent an Eligible Director is permitted to receive Formula
Awards, members of the Committee are not eligible to participate
in the Plan and no such member may have otherwise participated in
the Plan or any other plan of the Company or its subsidiaries
providing for the acquisition of stock, stock options, or other
types of grants permitted pursuant to the Plan within one year
prior to serving on the Committee.  Subject to the limitations of
the Plan, the Committee has the sole and complete authority to: 
(i) interpret and administer the Plan and stock options granted
pursuant thereto; (ii) make and interpret rules and regulations
for the administration of the Plan and to make changes in and
revoke such rules and regulations (and in the exercise of this
power, shall generally determine all questions of policy and
expediency that may arise and may correct any defect, omission,
or inconsistency in the Plan or any agreement evidencing the
grant of any stock option in a manner and to the extent it shall
deem necessary to make the Plan fully effective); (iii) determine
those persons to whom stock options other than Formula Awards
shall be granted and the number of stock options other than
Formula Awards to be granted to any such person; (iv) determine
the terms of stock options other than Formula Awards granted
under the Plan, consistent with the provisions of the Plan; and
(v) generally, exercise such powers and perform such acts in
connection with the Plan as are deemed necessary or expedient to
promote the best interests of the Company.  The interpretation
and construction by the Committee of any provisions of the Plan
or of any stock option shall be final, binding and conclusive. 
The Committee's determinations on matters within its authority
are conclusive and binding upon the Company and all other
persons.  There is no set term for the members of the Committee
and they can be removed with or without cause by the Board of
Directors of the Company.

     The present Committee members, each of whom is a director of
the Company, are Walter J. Diener and Arnold H. Keehn.

Limitation on Aggregate Shares

     The number of shares of Common Stock which may be issued
pursuant to the Plan upon the exercise of stock options granted
to Participants and Formula Awards to Eligible Directors may not
exceed, in the aggregate, 500,000 shares.  Of such shares, the
number available for issuance pursuant to Formula Awards granted
to Eligible Directors under the Plan is 30,000.  To the extent
any stock options granted to Participants or granted to Eligible
Directors as Formula Awards expire unexercised or unpaid or are
cancelled, terminated or forfeited in any manner without the
issuance of shares of Common Stock thereunder, such shares will
again be available under the Plan.  The shares of Common Stock
issued pursuant to the Plan may be either authorized and unissued
shares, treasury shares, or a combination thereof, as the
Committee determines.

Participants and Grants

     General.  Stock options may be granted by the Committee to
those persons other than Eligible Directors who the Committee
determines have the capacity to make a substantial contribution
to the success of the Company.  The Committee may grant stock
options to purchase such number of shares of Common Stock
(subject to the aggregate limitations set forth in the Plan) as
the Committee may, in its sole discretion, determine. 
Notwithstanding the foregoing, no Participant shall be granted
stock options in any year (a consecutive twelve (12) month
period) to purchase in excess of 200,000 shares of Common Stock. 
In granting stock options other than Formula Awards under the
Plan, the Committee, on an individual basis, may vary the number
of incentive stock options or non-qualified stock options as
between Participants and may grant incentive stock options and/or
non-qualified stock options to a Participant in such amounts as
the Committee may determine in its sole discretion.

     Price and Other Terms of Options.  Options granted to a
Participant under the Plan may be incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, and any successor statute (the "Code"), or in such
other form, consistent with the Plan, as the Committee may
determine.  The option price per share of Common Stock for an
option granted to a Participant must be fixed by the Committee at
not less than 100% of the "fair market value" of a share of
Common Stock on the date of grant.  For purposes of options to
Participants, the term "fair market value" of the Common Stock
means the last reported sale price of the Common Stock as
reported on NASDAQ on the day immediately preceding the date fair
market value is to be determined.  Options granted to a
Participant will be exercisable at such time or times as the
Committee determines at or subsequent to grant.  Options granted
to a Participant will be exercisable in whole or in part by
written notice to the Company (to the attention of the Company's
Secretary), signed by the Participant exercising the option,
stating the number of shares of Common Stock with respect to
which the option is being exercised and accompanied by payment in
full of the option price. Payment of the option price for an
option granted to a Participant may be made, at the discretion of
the optionee, (A) in cash (including check, bank draft, or money
order), (B) in Common Stock (valued at the "fair market value"
thereof on the date of exercise), or (C) by a combination of cash
and Common Stock.  The Committee may, in its discretion, impose
limitations, conditions and prohibitions on the use by a
Participant of shares of Common Stock to pay the purchase price
payable by such Participant upon exercise of a stock option.  The
date both such notice and payment are received by the office of
the Secretary of the Company will be the date of exercise for the
option as to the number of shares specified.  

     Incentive stock options may be granted to purchase Common
Stock under the Plan at not less than the fair market value of
the shares as of the date of grant (or 110% of fair market value
in the case of any officer or employee holding in excess of 10%
of the combined voting power of all classes of the Company's
stock as of the date of grant).  To the extent that an optionee
is granted incentive stock options under the Plan to purchase
Common Stock having a fair market value (determined as of the
date of grant) which exceeds $100,000 with respect to incentive
stock options which are exercisable for the first time by such
optionee in any calendar year under all stock option plans of the
Company, such excess stock options will be treated as non-
qualified stock options.

     Agreements.  Each stock option granted to a Participant
under the Plan shall be evidenced by an agreement in such form
and containing such terms and conditions (not inconsistent with
the Plan) as the Committee shall determine in its sole
discretion.

     Non-Transferability.  No stock option shall be transferable
except by will or the laws of descent and distribution, nor shall
any stock option be exercisable during the Participant's lifetime
by any person other than the Participant or his guardian or legal
representative.

     Tax Withholding.  The Company's obligations under the Plan
are subject to applicable Federal, state and local tax
withholding requirements.  Federal, state and local withholding
tax due at the time of a grant or upon the exercise of any stock
option may, in the discretion of the Committee, be paid in shares
of Common Stock already owned by the Participant or through the
withholding of shares otherwise issuable to such Participant,
upon such terms and conditions as the Committee shall determine. 
If the Participant shall fail to pay, or make arrangements
satisfactory to the Committee for the payment, to the Company of
all such Federal, state and local taxes required to be withheld
by the Company, then the Company shall, to the extent permitted
by law, have the right to deduct from any payment of any kind
otherwise due to such Participant an amount equal to any federal,
state or local taxes of any kind required to be withheld by the
Company.

     No Right to Employment.  Neither the adoption of the Plan
nor its operation, nor any document describing or referring to
the Plan, or any part thereof, nor the granting of any stock
options thereunder, shall confer upon any Participant under the
Plan any right to continue in the employ of the Company or any
subsidiary of the Company, or shall in any way affect the right
and power of the Company or any subsidiary to terminate the
employment of any such Participant at any time with or without
assigning a reason therefor, to the same extent as might have
been done if the Plan had not been adopted.

     Termination.   Options expire immediately in the event a
Participant is terminated with or without cause (except due to
death, total disability or retirement as provided below) or
resigns; provided, however, in the event the Company terminates
the employment of a Participant who at the time of such
termination was an officer of the Company and had been
continuously employed by the Company during the five year period
immediately preceding such termination, for any reason except
"good cause" (as defined in the Plan), each stock option held by
such Participant (which had not then previously lapsed or
terminated and which had been held by such Participant for more
than six (6) months prior to such termination) shall become
immediately exercisable as to the total number of shares of
Common Stock and shall remain so exercisable for a period of
three (3) months after such termination unless, in either case,
such option expires earlier by its terms. 

     In the event of a termination as to a Participant's
employment by the Company or its subsidiaries by reason of
permanent and total disability as determined by the Committee
("Total Disability"), or by retirement in accordance with Company
policies ("Retirement"), any outstanding stock option which shall
not have previously lapsed or terminated shall be, or immediately
become, fully exercisable as to the total number of shares of
Common Stock subject thereto (whether or not exercisable to that
extent prior to termination of employment) and shall remain so
exercisable but only for a period of six (6) months with respect
to Total Disability and three (3) months with respect to
Retirement, unless, in either case, such stock option expires
earlier by its terms.

     In the event of the death of a Participant, any outstanding
stock option which shall not have lapsed or terminated prior to
such Participant's death shall be immediately, or become, fully
exercisable by the executors or administrators of such
Participant's estate, or by the person or persons to whom the
deceased Participant's rights thereunder shall have passed by
will or by the laws of descent or distribution, as may be
appropriate, as to the total number of shares of Common Stock
subject thereto (whether or not exercisable to that extent at the
time of death) and shall remain so exercisable for a period of
six (6) months after such Participant's death unless, in either
case, such stock option expires earlier by its terms.

     In the event of the termination of a Participant's service
as a director of the Company, who at the time of such termination
was an Eligible Director and had continuously served as a
director of the company during the five (5) year period
immediately preceding such termination, and such termination is
for any reason except for such Participant's death or total
disability or the removal of such Participant as director (by the
shareholders, the Board of Directors or otherwise) for "good
cause" (as defined in Section 3.7(e) of the Plan), each stock
option held by such Participant (which has not previously lapsed
or terminated and which has been held by such Participant for
more than six (6) months prior to such termination) shall
immediately become fully exercisable as to the total number of
shares of Common Stock subject thereto (whether or not
exercisable to that extent at the time of such termination) and
shall remain so exercisable for a period of three (3) months
after such termination unless such stock option expires earlier
by its terms.

     All aforementioned exercise periods applicable to stock
options upon a termination of employment, whether on account of
Total Disability, Retirement, death or otherwise, are subject to
the further limitation that no option granted pursuant to the
Plan may, in any case, be exercisable beyond the stated
expiration date of such option.

Formula Awards to Eligible Directors

     General.  The Plan provides for the grant of Formula Awards
to Eligible Directors in accordance with the terms of the Plan. 
As defined in the Plan, the term "Eligible Director" means a
member of the Board of Directors who is not otherwise an employee
of the Company or any subsidiary of the Company.  Each Formula
Award granted under the Plan is to be evidenced by an agreement
duly executed on behalf of the Company and by the Eligible
Director to whom such Formula Award is granted and dated as of
the applicable date of grant.  Each such agreement must comply
with and is subject to the terms and conditions of the Plan.  Any
Formula Award agreement may contain such terms, provisions and
conditions not inconsistent with the Plan as may be determined by
the Committee.  All Formula Awards granted under the Plan will be
non-statutory options not intended to qualify as incentive stock
options under Section 422 of the Code.

     Formula Awards.  Subject to the terms of the Plan, an option
to purchase 1,000 shares of Common Stock shall be granted
automatically each year, immediately following the annual meeting
of the Company's shareholders to each director of the Company who
is an Eligible Director immediately following such annual meeting
beginning with the 1995 Annual Meeting of the Company's
shareholders (each, a "Formula Award").

     Formula Award Exercise Price.  The exercise price per share
for a Formula Award shall be the average of the "fair market
value" for the fifth (5th) through the ninth (9th) "business
days" (defined in the Plan as those days on which the NASDAQ is
open for trading) following the date of grant. For purposes of
the preceding sentence, "fair market value" means the last
reported sale price of the Common Stock as reported on NASDAQ.

     Vesting and Exercisability.  Except as otherwise provided in
the Plan, a Formula Award shall immediately vest upon the grant
of the Formula Award.  A Formula Award shall become exercisable
immediately upon vesting for all directors who have served as
directors of the Company for a total of five (5) consecutive
years as of the date of the grant.  If a director has not served
as a director for such period as of the date of the grant, the
Formula Award shall become exercisable according to the following
schedule:

       Period of Optionee's Continuous Service  Portion of
Formula as a Director of the Company Award that is         
Following the Date of the Grant                    Exercisable 

       Twelve months.................................33 1/3%
       Eighteen months...............................66 2/3%
       Twenty-Four months............................100    %

     Except as otherwise provided in the Plan, any Formula Award,
to the extent the same is exercisable in accordance with the
Plan, is exercisable in whole or in part at any time or from time
to time until the expiration or termination in accordance with
the Plan by written notice to the Company, signed by the person
exercising the Formula Award, stating the number of shares with
respect to which the Formula Award is being exercised,
accompanied by payment in full of the exercise price for the
number of shares to be purchased.  The date both such notice and
payment are received by the office of the Secretary of the
Company shall be the date of exercise of the Formula Award as to
such number of shares.

     Term of Formula Awards.  Each Formula Award not earlier
terminated shall have a term of 10 years commencing on its date
of grant.  In the event of the termination of a Formula Award
holder's service as a director of the Company, by reason of his
or her removal as Director (by the shareholders, the Board of
Directors, or otherwise) the then-outstanding Formula Awards of
such holder (whether or not then exercisable) shall automatically
expire on (and may not be exercised on) the effective date of
such termination.  In the event of the termination of a Formula
Award holder's service as a director of the Company by reason of
retirement or total and permanent disability, the then-
outstanding Formula Awards of such holder not then exercisable
shall become exercisable on the date of such termination, and
each Formula Award then held by such holder shall expire one (1)
year after the date of such termination or on the stated grant
expiration date, whichever is earlier.  For purposes of the Plan,
the term "by reason of retirement" means (i) mandatory retirement
pursuant to Board policy or (ii) termination of service on or
after such holder's 65th birthday.  In the event of the death of
a Formula Award holder while the holder is a director of the
Company, the then outstanding Formula Awards of such holder not
then exercisable shall become exercisable on the date of such
termination, and each Formula Award then held by such holder
shall expire one (1) year after the date of death of such holder
or on the stated grant expiration date, whichever is earlier.  In
the event of the termination of a Formula Award holder's service
as a director for any reason other than as described above,
including without limitation, expiration of the director's term
in office (without renomination or reelection) or by resignation,
the then outstanding Formula Awards of such holder not then
exercisable shall be exercisable to the full extent such Formula
Awards were exercisable immediately prior to such termination,
and each such Formula Award shall expire three (3) months after
the effective date of such termination or on the stated grant
expiration date, whichever is earlier.

     Transfer Restrictions.  The right of any holder of a Formula
Award to exercise a Formula Award shall, during the lifetime of
such holder, be exercisable only by such holder or pursuant to a
qualified domestic relations order as defined by the Code or
Title 1 of the Employee Retirement Income Security Act, or the
rules thereunder (a "QDRO") and shall not be assignable or
transferable by such holder other than by will or the laws of
descent and distribution or a QDRO.

     Limitation of Rights.  Neither the recipient of a Formula
Award nor such recipient's successors in interest shall have any
rights as a shareholder on account of such award until the date
of issuance of a stock certificate evidencing shares acquired
upon their purchase pursuant to such Formula Award and then only
to the extent of any rights evidenced by such shares.  Neither
the Plan, nor the granting of a Formula Award, nor any other
action taken pursuant to the Plan shall constitute or be evidence
of any agreement or understanding, express or implied, that an
Eligible Director has a right to continue as a director of the
Company for any period of time or at any particular rate of
compensation.

     Commencement of Grants of Formula Awards.  Notwithstanding
any provision in the Plan to the contrary, no Formula Award shall
be granted pursuant to the Plan unless and until no additional
Formula Awards may be granted pursuant to the Company's 1993
Stock Option Plan.

     Capital Adjustments.  The aggregate number of shares with
respect to which a Formula Award may be granted to an Eligible
Director under the Plan, the number and class of shares subject
to each outstanding Formula Award, and the exercise price per
share specified in each such Formula Award shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a split-up
or consolidation of shares or any like capital adjustment or the
payment of any stock dividend, or other increase or decrease in
the number of such shares effected without receipt of
consideration by the Company.

Awards Outstanding

     As of the date of this Prospectus, options were awarded
(other than Formula Awards) pursuant to the Plan to Participants
to purchase a total of 368,868 shares of Common Stock. Of that 
total, (i) 240,368 options were granted on May 25, 1995 at an
exercise price of $18.00 per share, which options expire on May
24, 2005 and (ii) 128,500 options were granted on November 9,
1995 at an exercise price of $23.625 per share, which options
expire on November 8, 2005. All such options become exercisable
at various times.  No Formula Awards have been issued to date.

Term of the Plan

     Unless extended by the shareholders of the Company or
earlier terminated by the Board of Directors, the Plan will
expire on February 15, 2005 and, thereafter no awards may be made
pursuant to the Plan.  However, the Plan will continue after such
date to govern all awards granted before that date until the
exercise, expiration or cancellation of such awards.

Adjustments Upon Certain Changes

     In the event of changes to the outstanding shares of Common
Stock of the Company through reorganization, merger,
consolidation, recapitalization, reclassification, stock split-
up, stock dividend, stock consolidation or otherwise, or in the
event of a sale of all or substantially all of the assets of the
Company, an appropriate and proportionate adjustment shall be
made in the number and kind of shares as to which stock options
may be granted to Participants.  A corresponding adjustment
changing the number or kind of shares and/or the purchase price
per share of unexercised stock options or portions thereof which
shall have been granted prior to any such change shall likewise
be made.  Notwithstanding the foregoing, in the case of a
reorganization, merger or consolidation, or sale of all or
substantially all of the assets of the Company, in lieu of
adjustments as aforesaid, the Committee may in its discretion
accelerate the date after which a stock option may or may not be
exercised or the stated expiration date thereof.  Adjustments or
changes under this Section shall be made by the Committee, whose
determination as to what adjustments or changes shall be made,
and the extent thereof, shall be final, binding and conclusive.

Amendment, Suspension and Termination of Plan

     The Board of Directors may amend, terminate or suspend the
Plan at any time, in its sole and absolute discretion.  The Board
of Directors may from time to time make such amendments to the
Plan as it may deem advisable, including, with respect to
incentive stock options, amendments deemed necessary or desirable
to comply with Section 422 of the Code and any regulations issued
thereunder; provided, however, that (i) no amendment shall be
made more than once every six (6) months that would change the
amount, price or timing of Formula Awards, and (ii) without the
approval of the Company's shareholders no amendment shall be made
which:

     (i)       increases the maximum number of shares of Common
               Stock which may be subject to Stock Options
               granted under the Plan (other than in connection
               with a recapitalization or certain other events
               pursuant to the terms of the Plan; or 

     (ii)      extends the term of the Plan; or 

     (iii)     increases the period during which a stock option
               may be exercised beyond ten years from the date of
               the Plan; or 

     (iv)      otherwise materially increases the benefits
               accruing to Participants or Eligible Directors
               under the Plan; or 

     (v)       materially modifies the requirements as to
               eligibility for participation in the Plan; or 

     (vi)      will cause stock options granted under the Plan,
               including Formula Awards, to fail to meet the
               requirements of Rule 16b-3.

Governing Law

     The Plan provides that its validity and construction, and
the validity and construction of its rules and regulations and
any agreements entered into thereunder, shall be governed by the
laws (other than choice of law provisions) of the Commonwealth of
Pennsylvania.

                 FEDERAL INCOME TAX CONSEQUENCES

     Set forth below is a general summary of the Federal income
tax aspects of the Plan.  State and local income and other tax
consequences are not discussed and may vary from state to state.

Tax Deductibility Under Code Section 162(m).  Section 162(m) of
the Code disallows a public company's deductions for employee
remuneration exceeding $1,000,000 per year for certain
executives, but contains an exception for qualified "performance-
based compensation."  In December 1993, the Internal Revenue
Service issued proposed regulations interpreting this provision. 
The Plan has been drafted and is intended to be administered to
enable stock options granted under the Plan to qualify as
"performance-based compensation," and the discussion below
assumes that they will.  However, until these regulations are
finalized, there can be no assurance that all of their
requirements will be met.

Non-qualified Stock Options and Formula Awards.  For Federal
income tax purposes, the recipient of a non-qualified option
(including Formula Awards) granted under the Plan will not
recognize any income for Federal income tax purposes upon the
grant of the option, nor will the Company then be entitled to any
deduction.  Generally, upon exercise of a non-qualified option,
the optionee will recognize ordinary income, and the Company will
be entitled to a deduction, in an amount equal to the excess of
the fair market value of the stock at the date of exercise over
the exercise price of the option.  An optionee's basis in the
stock acquired pursuant to a non-qualified option, for purposes
of determining his gain or loss on his subsequent disposition of
the shares, will generally be equal to the fair market value of
the stock on the date of exercise of the non-qualified option.

     Optionees who are subject to the short-swing profit
restrictions of Section 16(b) of the Securities Exchange Act of
1934, as amended, unless they elect within 30 days of exercising
a non-qualified stock option to be taxed as of the time of such
exercise (on the basis of the fair market value of the stock at
such time), are permitted to defer the calculation and imposition
of the tax on the gain realized from the exercise until the
earlier of (i) the expiration of the six month period under
Section 16(b), or (ii) the first day on which the sale of such
stock at a profit will not subject the optionee to liability to
the Company for the profit.

Incentive Stock Options.  An employee generally recognizes no
income when an incentive stock option is granted to him or when
that option is exercised. It should be noted, however, that for
purposes of the alternative minimum tax under Section 55 of the
Code, an incentive stock option is treated as a non-qualified
stock option.  As a result, the excess of the fair market value
of the shares subject to an incentive stock option, determined at
the time of exercise, over the exercise price constitutes
ordinary income for purposes of the alternative minimum tax. 
Therefore, depending upon his other circumstances, the Optionee
may be subject to the alternative minimum tax with regard to the
exercise of an incentive stock option.  For purposes of the
alternative minimum tax, the basis of stock acquired through the
exercise of an incentive stock option is equal to the fair market
value taken into account in determining the amount of ordinary
income recognized with respect to such option.

     Upon a disposition of shares acquired pursuant to an
incentive stock option, the optionee will recognize long-term
capital gain and the Company will not be entitled to a deduction
as long as the optionee does not dispose of the shares, either
(i) within two years after the grant of the option, or (ii)
within one year after the exercise of the option.  However, if
the optionee does not satisfy these holding periods, the optionee
will recognize ordinary income upon such a disposition equal to
the lesser of (i) the excess of the fair market value of the
shares at the time of exercise over the exercise price paid for
such shares, or (ii) the gain realized upon such disposition. 
The Company will be entitled to a deduction only to the extent
the optionee must recognize ordinary income with respect to such
incentive stock option.

     The Optionee's basis (for purposes of determining the amount
of gain or loss upon a subsequent disposition of shares that
satisfies the holding period requirements) in shares acquired
upon the exercise of an incentive stock option is equal to the
exercise price of the shares in the event that the entire
exercise price is paid in cash.  If all or a portion of the
exercise price is paid in the form of shares already owned by the
optionee, Proposed Treasury Regulations indicate that the basis
in the shares received upon such an exercise will be as follows:

          (i)  For that number of shares which is equal to the
     number of already-owned shares that are delivered to the
     Company in part or full payment of the exercise price, the
     basis is the same as the basis of such already-owned shares;
     and

          (ii) For any shares of Common Stock received in excess
     of the number of already-owned shares of Common Stock that
     are delivered to the Company in part or full payment of the
     exercise price, the basis is equal to the amount of cash, if
     any paid, in connection with the exercise of the option.

     It should also be noted that the delivery of already-owned
shares in part or full payment of the exercise price of a stock
option will constitute a disqualifying disposition of such
already-owned shares if (i) such already-owned shares were
previously acquired by the exercise of an incentive stock option
and (ii) at the time of delivery of the already-owned shares the
Optionee has not satisfied the required holding period with
respect to such already-owned shares.

Taxation of Capital Gains and Ordinary Income.  Currently, the
maximum Federal income tax rate for individuals applicable to
long-term capital gains is 28%, whereas the maximum Federal
income tax rate for individuals applicable to ordinary income is
36% (39.6% for individuals with taxable income over $250,000). 
Capital losses generally are only deductible against capital
gains and, for individuals, a limited amount ($3,000 per year) of
ordinary income.  

     The Plan is not qualified under Section 401(a) of the Code.

                       RESALE RESTRICTIONS

     Certain officers and directors of the Company may be deemed
to be "affiliates" of the Company for purposes of the Securities
Act of 1933.  Shares acquired under the Plan by an affiliate or,
under certain conditions, by persons who are not employees of the
Company at the time of exercise of the options or not otherwise
deemed to be employees of the Company, may only be reoffered or
resold pursuant to an effective registration statement under the
Securities Act of 1933 or in accordance with Rule 144 thereunder. 
An affiliate, or any person who is not an employee of the Company
or not deemed to be an employee of the Company, may not reoffer
or resell shares by means of this Prospectus.

     Under Section 16(b) of the Securities Exchange Act of 1934,
as amended, if a director or officer of the Company, or a person
who beneficially owns, directly or indirectly, more than ten
percent of the Common Stock of the Company, purchases and sells,
or sells and then purchases, Common Stock of the Company within a
six-month period, any profit derived from such transactions
within the meaning of Section 16(b) must be paid to the Company. 
The provisions of Section 16(b) are generally known as the
"short-swing profit" provisions.  However, in certain cases
specific rules exempt certain transactions from the short-swing
profit provisions provided applicable conditions set forth in the
rules are complied with.  All directors and officers of the
Company and all persons who beneficially own, directly or
indirectly, more than ten percent of the Common Stock of the
Company, should, therefore, consider the limitations imposed by
Section 16(b) prior to purchasing or selling any Common Stock.

                     REPORTS OF THE COMPANY

     The Company's Quarterly and Annual Reports to Shareholders,
proxy soliciting material and other communications distributed to
the Company's shareholders generally will be provided to all
Participants and Eligible Directors whether or not they are
shareholders of the Company.  If a Participant or Eligible
Director does not for some reason receive a copy of any of such
reports, material or other communications, he or she may obtain
copies of the same which the Company will provide promptly
without charge upon written or oral request.  Such request should
be directed to Susan T. Mankowski, Secretary, 3220 Tillman Drive,
Bensalem, PA 19020, (215-244-1600).

     Participants and Eligible Directors will be provided from
time to time such reports, if any, concerning the amount and
status of stock options and Formula Awards as the Committee deems
appropriate.  While the Committee does not have any present
intention of issuing such reports on a regular basis, any
Participant or Eligible Director may obtain information
concerning the amount and status of his or her stock options or
Formula Awards by contacting Susan T. Mankowski at the address or
telephone number indicated in the preceding paragraph.

                    INCORPORATION OF CERTAIN
                     DOCUMENTS BY REFERENCE 

     The Company hereby incorporates by reference, the following
documents, each of which shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing
thereof with the Securities and Exchange Commission:

     (a)  The Company's Annual Report on Form 10-K for the fiscal
          year ended December 31, 1994;

     (b)  The Company's Quarterly Reports on Form 10-Q for the
          three months ended March 31, 1995, June 30, 1995 and
          September 30, 1995, respectively;

     (c)  The Company's Proxy Statement dated April 21, 1995;

     (d)  The description of the Company's Common Stock, $.01 par
          value, set forth on page 25 of Amendment No. 1 to the
          Company's Registration Statement on Form S-2, dated
          July 18, 1990.

     All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the filing
of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such
reports and documents.
INFORMATION NOT REQUIRED IN PROSPECTUS

                             PART II

Item 3.   Incorporation of Documents by Reference

     Reference is made to the information appearing under the
heading "Incorporation of Certain Documents by Reference" in the
Prospectus constituting a part of this Registration Statement,
which information is incorporated herein by this reference.

Item 4.   Description of Securities

     Not Applicable.

Item 5.   Interests of Named Experts and Counsel

Legal Matters

     Legality of the shares offered hereby has been passed upon
for the Company by Fox, Rothschild, O'Brien & Frankel, 2000
Market Street, 10th Floor, Philadelphia, Pennsylvania 19103. 
Ramon R. Obod, a Director of the Company, is a partner in the
firm of Fox, Rothschild, O'Brien & Frankel.

Experts

     The consolidated financial statements and schedules of the
Company and its subsidiaries contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994
which have been incorporated herein by reference, have been
audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and is
included herein upon the authority of such firm as experts in
accounting and auditing.

Item 6.   Indemnification of Directors and Officers

     Under Sections 1741 through 1750 of the Pennsylvania
Business Corporation Law of 1988, as amended, and Section 8365 of
the Pennsylvania Directors' Liability Act, the Company has the
power to indemnify directors and officers under certain
prescribed circumstances and subject to certain limitations
against certain costs and expenses, including attorney's fees,
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his
being a director or officer of the Company if it is determined
that he acted in accordance with the applicable standard of
conduct set forth in such statutory provisions.  Such
indemnification may be made whether or not the Company would have
the power to indemnify the director under any other provision of
law and whether or not the indemnified liability arises or arose
from any action by or in the right of the Company.

     The Company may also purchase and maintain insurance for the
benefit of any director or officer and which may cover claims for
which the Registrant could not indemnify such person.

     Article 8 of the Articles of Incorporation of the Company
provides as follows:

     "The Corporation shall indemnify any and all of its present
or former directors and officers and any person who is or was
serving at the request of the Corporation as a director or
officer of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, to the fullest extent
permitted by law.  Such right of indemnification shall not be
exclusive of any other right which such officers and directors of
the Corporation and other persons may have or hereafter acquire
and, without limiting the generality of such statement, they
shall be entitled to their respective rights of indemnification
under any By-Law, agreement, vote of shareholders, provision of
law or otherwise, as well as their rights under this Article. 
The foregoing indemnification provisions shall be retroactive to
January 27, 1987 to the fullest extent permitted by law."

     Article X of the By-Laws of the Company provides as follows:

     "1.  Right to Indemnification: Each person who was or is
made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding (hereinafter a
"proceeding"), whether civil, criminal, administrative or
investigative, including, without limitation, an action or suit
by or in the right of the Corporation, by reason of the fact that
he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity as director or officer, or in any other
capacity, shall be indemnified and held harmless by the
Corporation to the fullest extent and manner authorized or
permitted by the laws of the Commonwealth of Pennsylvania, as the
same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights then
said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, penalties, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person
who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators:
provided, however, that except as provided in subsection 4
hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.  The right to indemnification conferred in this
Section shall be a contract right and each person to whom this
right to indemnification applies shall be a third party
beneficiary of such right and shall be entitled to enforce
against the Corporation all indemnification and other rights
granted to such person by this such proceeding in advance of the
final disposition of a proceedings shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of
such director or officer to repay all amounts so advanced if it
shall ultimately be determined that such director or officer is
not entitled to be indemnified under this Section or otherwise. 
The Corporation may, by action of its Board of Directors, provide
indemnification to employees, agents or fiduciaries of the
Corporation or to any person who is or was serving at the request
of the Corporation as an employee, agent or fiduciary of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to any employee
benefit plan, with the same or lesser scope and effect as set
forth herein and in the other subsections of this Section.  If
and to the extent that the laws of the Commonwealth of
Pennsylvania require that indemnification be provided in a given
instance only if the person acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct
was unlawful, then termination of any proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
proceedings, that he or she had reasonable cause to believe that
his or her conduct was unlawful.  Termination of any proceeding
by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not of itself be a
determination by a court that the act or failure to act giving
rise to a claim for indemnification constituted willful
misconduct or recklessness.
     2.   Denial of Right to Indemnification: Indemnification
under subsection 1 above shall be made by the Corporation unless
a determination is reasonably and promptly made that
indemnification of a director or officer is not proper in the
circumstances because of grounds for denying indemnification
under this Section or under applicable law.  Such determination
may be made only (i) by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to such
proceeding ("disinterested directors"), or (ii) if such quorum is
not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion, or (iii) by the shareholders.

     3.   Expenses in Successful Defense: Notwithstanding any
other provision of this Section, to the extent that a director or
officer of the Corporation has been successful on the merits or
otherwise in defense of any proceeding referred to in subsection
1 above or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

     4.   Right of Claimant to Bring Suit: If a claim under
subsection 1 of this Section is not paid in full by the
Corporation within thirty (30) days after a written claim has
been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim.  It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has not met the standards of conduct which make it permissible
under the laws of the Commonwealth of Pennsylvania for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation. 
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

     5.   Non-Exclusivity of Rights: The rights to
indemnification and the payment of expenses incurred in a
proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of any right which any person may
have or hereafter acquire under any statute, provision of the
Articles of Incorporation, by-law, agreement, vote of
shareholders or disinterested directors or otherwise.
     6.   Insurance: The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer,
employee, agent or fiduciary of the Corporation or another
corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person
against such expense, liability or loss under the laws of the
Commonwealth of Pennsylvania.

     7.   Interpretation: For purposes of this Section:

     (a)  References to "the Corporation" shall upon written
resolution of the Board of Directors of the Corporation include,
in addition to the Corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify
its directors or officers, so that any person who is or was a
director or officer of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director or officer of another corporation, shall for purposes of
this Section be deemed to hold the same position in the
Corporation as he or she held in such constituent corporation.

     (b)  A person who acted in good faith and in a manner he or
she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Section.

     8.   Amendment or Repeal: This Section may hereafter be
amended to repealed: provided, however, that no amendment or
repeal shall reduce, terminate or otherwise adversely affect the
right of a person who is or was a director or officer to obtain
indemnification or advancement of expenses with respect to a
proceeding that pertains to or arises out of actions or omissions
that occur prior to the effective date of such amendment or
repeal, which date cannot be retroactive."

Item 7.   Exemption from Registration Claimed

     Not Applicable.

Item 8.   Exhibits

Regulation S-K Exhibit No.    Description

           4(a)               1995 Stock Option Plan

           4(b)               Articles of Incorporation, as
                              amended - Incorporated by reference
                              to (i) Exhibit 3(a) of the
                              Registrant's Registration Statement
                              on Form S-3 (File No. 33-94614)

           4(c)               Amended and Restated By-laws -
                              Incorporated by reference to
                              Exhibit 3(b) to the Registrant's
                              Registration Statement on Form S-3
                              (File No. 33-94615)

           5                  Opinion of Fox, Rothschild, 
                              O'Brien & Frankel

          23(a)               Consent of Fox, Rothschild,
                              O'Brien & Frankel.  Reference
                              is made to item 5.

          23(b)               Consent of Arthur Andersen LLP

Item 9.   Undertakings

     The Company hereby undertakes to include any material
information with respect to the plan of distribution not
previously disclosed in the registration statement or any
material change to such information to the registration
statement.

      The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of a post-effective amendment to this registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

     The Company hereby undertakes to remove from registration by
means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the Plan.

     The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and
where applicable, each filing of an employee benefit plan's
annual report pursuant to this Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.  In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action,suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8, and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Bensalem, Commonwealth of Pennsylvania, on December
15, 1995.

                              AMERICAN TRAVELLERS CORPORATION

                              By:/s/ John A. Powell              

                                 John A. Powell, President,
                                 Chairman of the Board and
                                 Chief Executive Officer

     KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John A. Powell
and Walter J. Diener, and each of the/m, his or her true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this
registration statement, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.

Signature                    Title                    Date

/s/ John A. Powell      President, Chairman of        December 15, 1995
John A. Powell          the Board, Chief
                        Executive Officer and
                        Director

/s/Benedict J. IacovettiTreasurer and Chief           December 15, 1995
Benedict J. Iacovetti   Financial and Accounting
                        Officer

/s/ Susan T. Mankowski  Vice-President-Internal  December 15, 1995
Susan T. Mankowski           Business Systems,   
                        Secretary and Director

/s/ Walter E. Conrad    Director                 December 15, 1995
Walter E. Conrad

/s/ Walter J. Diener   Director                  December 15, 1995
Walter J. Diener

/s/ Arnold H. Keehn     Director                 December 15, 1995
Arnold H. Keehn

/s/ Alice E. Powell     Director                 December 15, 1995
Alice E. Powell

/s/ Ramon R. Obod       Director                 December 15, 1995
Ramon R. Obod

/s/ Henry G. Hager      Director                 December 15, 1995
Henry G. Hager

Pursuant to the requirements of the Securities Act of 1933, the
Committee which administers the Plan has duly caused this registration
statement to be signed on its behalf by the undersigned, there unto
duly authorized, in the City of Bensalem, Pennsylvania on December 15,
1995.

/s/ Walter J. Diener                             December 15, 1995
Walter J. Diener

/s/ Arnold H. Keehn                              December 15, 1995
Arnold H. Keehn

                            Index to Exhibits

                             
Number             Exhibit   

 4(a)              1995 Stock Option Plan

                 AMERICAN TRAVELLERS CORPORATION

                     1995 STOCK OPTION PLAN

         Adopted by Board of Directors: February 16, 1995

         Approved by Shareholders: May 25, 1995                        
         
         
         TABLE OF CONTENTS
                                                             Page

     1.  PURPOSES OF THE PLAN. . . . . . . . . . . . . . . . .  1

     2.  GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .  1

         2.1  Definitions. . . . . . . . . . . . . . . . . . .  1
         2.2  Administration of the Plan . . . . . . . . . . .  2
         2.3  Effective Date . . . . . . . . . . . . . . . . .  3
         2.4  Duration . . . . . . . . . . . . . . . . . . . .  4
         2.5  Shares Subject to the Plan . . . . . . . . . . .  4
         2.6  Amendments . . . . . . . . . . . . . . . . . . .  4
         2.7  Participants and Grants. . . . . . . . . . . . .  5

     3.  STOCK OPTIONS . . . . . . . . . . . . . . . . . . . .  6

         3.1  General. . . . . . . . . . . . . . . . . . . . .  6
         3.2  Price. . . . . . . . . . . . . . . . . . . . . .  6
         3.3  Period . . . . . . . . . . . . . . . . . . . . .  6
         3.4  Exercise . . . . . . . . . . . . . . . . . . . .  6
         3.5  Payment. . . . . . . . . . . . . . . . . . . . .  6
         3.6  Special Rules for Incentive Stock Options. . . .  6
         3.7  Termination of Employment or Relationship. . . .  7
         3.8  Effect of Leaves of Absence. . . . . . . . . . .  9

     4.  FORMULA AWARDS TO ELIGIBLE DIRECTORS. . . . . . . . .  9

         4.1  General. . . . . . . . . . . . . . . . . . . . .  9
         4.2  Formula Awards . . . . . . . . . . . . . . . . .  9
         4.3  Formula Award Exercise Price . . . . . . . . . . 10
         4.4  Vesting and Exercisability . . . . . . . . . . . 10
         4.5  Time and Manner of Exercise. . . . . . . . . . . 10
         4.6  Payment of Exercise Price. . . . . . . . . . . . 10
         4.7  Term of Formula Awards . . . . . . . . . . . . . 11
         4.8  Transferability. . . . . . . . . . . . . . . . . 12
         4.9  Limitation of Rights . . . . . . . . . . . . . . 12
         4.10 Limitation as to Directorship. . . . . . . . . . 12
         4.11 Capital Adjustments. . . . . . . . . . . . . . . 12
         4.12 Limit on Grants to Eligible Directors. . . . . . 12
         4.13 Commencement of Grants of Formula Awards . . . . 12
         4.14 Termination of Formula Awards. . . . . . . . . . 13
         4.15 Conflicting Provisions . . . . . . . . . . . . . 13

     5.  MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . 13

         5.1  Adjustments Upon Changes in Capitalization . . . 13
         5.2  Non-Transferability. . . . . . . . . . . . . . . 13
         5.3  Withholding. . . . . . . . . . . . . . . . . . . 13
         5.4  Compliance with Law and Approval of Regulatory
         Bodies. . . . . . . . . . . . . . . . . . . . . . . . 14
         5.5  No Right to Employment . . . . . . . . . . . . . 14
         5.6  Exclusion from Pension Computations. . . . . . . 14
         5.7  Abandonment of Options . . . . . . . . . . . . . 15
         5.8  Severability . . . . . . . . . . . . . . . . . . 15
         5.9  Interpretation of the Plan . . . . . . . . . . . 15
         5.10 Use of Proceeds. . . . . . . . . . . . . . . . . 15
         5.11 Construction of Plan . . . . . . . . . . . . . . 15
         
         
                                                        Appendix A
         
                          AMERICAN TRAVELLERS CORPORATION

                     1995 STOCK OPTION PLAN

     1.  PURPOSES OF THE PLAN

         The purposes of this 1995 Stock Option Plan are to enable
         American Travellers Corporation and its Subsidiaries to
         attract and retain the services of key employees and
         persons with managerial, professional or supervisory
         responsibilities, including, but not limited to, members
         of the Board of Directors, officers of, and consultants
         to, the Company, responsible for the past and continued
         success of the Company, and to provide them with
         increased motivation and incentive to exert their best
         efforts on behalf of the Company by enlarging their
         personal stake in its success.

     2.  GENERAL PROVISIONS

         2.1  Definitions

              As used in the Plan:

              (a)    "Act" means the Securities Exchange Act of
                     1934, including any and all amendments
                     thereto.

              (b)    "Board of Directors" means the Board of
                     Directors of the Company.

              (c)    "Code" means the Internal Revenue Code of
                     1986, including any and all amendments
                     thereto.

              (d)    "Committee" means the committee appointed by
                     the Board of Directors from time to time to
                     administer the Plan pursuant to Section 2.2.

              (e)    "Common Stock" means the Company's Common
                     Stock, $.01 par value.

              (f)    "Company" means American Travellers
                     Corporation, a Pennsylvania corporation.

              (g)    "Eligible Director" means a member of the
                     Company's Board of Directors who is not
                     otherwise an employee of the Company or any
                     Subsidiary.

              (h)    "Fair Market Value" means, with respect to a
                     specific date, the last reported sale price
                     of the Common Stock in the over-the-counter
                     market, as reported by NASDAQ; however, if
                     the Common Stock is listed or traded on a
                     national securities exchange on the date Fair
                     Market Value is being determined, Fair Market
                     Value shall mean the last reported sale price
                     of Common Stock on such exchange, as reported
                     by a responsible reporting service the
                     Committee selects; or if there are no
                     transactions in the Common Stock on such day,
                     then Fair Market Value shall mean the last
                     reported sale price of the Common Stock in
                     the over-the-counter market or on such
                     exchange, as the case may be, on the last
                     preceding day on which there was a
                     transaction in the Common Stock.  In the
                     event the Common Stock is not so listed or
                     traded on a date Fair Market Value is being
                     determined, Fair Market Value shall be
                     determined on the basis of an average of the
                     fair market values as of such date as
                     determined by two or more independent and
                     well-qualified experts in the appraisal of
                     stock values, or on the basis of such other
                     method as the Committee shall, in good faith,
                     determine to be reasonable.

              (i)    "Formula Award" means an option grant made to
                     an Eligible Director pursuant to Section 4.2.

              (j)    "Incentive Stock Option" means an option
                     granted under the Plan which is intended to
                     qualify as an incentive stock option under
                     Section 422 of the Code.

              (k)    "NASDAQ" means the National Association of
                     Securities Dealers, Inc. Automated Quotation
                     System.

              (l)    "Non-Qualified Stock Option" means an option
                     granted under the Plan which is not an
                     Incentive Stock Option.

              (m)    "Participant" means a person to whom a Stock
                     Option other than a Formula Award has been
                     granted under the Plan.

              (n)    "Plan" means this 1995 Stock Option Plan.

              (o)    "Rule 16b-3" means Rule 16b-3 promulgated
                     under the Act or any successor Rule.

              (p)    "Stock Option" means an Incentive Stock
                     Option or a Non-Qualified Stock Option
                     granted under the Plan.

              (q)    "Subsidiary" means any corporation (other
                     than the Company) in an unbroken chain of
                     corporations beginning with the Company if,
                     at the time of the granting of the Stock
                     Option, each of the corporations other than
                     the last corporation in the unbroken chain
                     owns 50% or more of the total voting power of
                     all classes of stock in one of the other
                     corporations in such chain.

         2.2  Administration of the Plan

              (a)    The Plan shall be administered by the
                     Committee which shall at all times consist of
                     two (2) or more persons, each of whom shall
                     be members of the Board of Directors.  Each
                     member of the Committee shall be a
                     "disinterested person" (as such term is
                     defined in Rule 16b-3) and is deemed to be an
                     "outside director" within the meaning of
                     Section 162(m) of the Code and any
                     regulations issued thereunder.  The Board of
                     Directors may from time to time remove
                     members from, or add members to, the
                     Committee.  Vacancies on the Committee,
                     howsoever caused, shall be filled by the
                     Board of Directors.  The Committee shall
                     select one of its members as Chairperson, and
                     shall hold meetings at such times and places
                     as it may determine.

              (b)    The Committee shall have the full power,
                     subject to and within the limits of the Plan,
                     to: (i) interpret and administer the Plan,
                     and Stock Options granted under it; (ii) make
                     and interpret rules and regulations for the
                     administration of the Plan and to make
                     changes in and revoke such rules and
                     regulations (and in the exercise of this
                     power, shall generally determine all
                     questions of policy and expediency that may
                     arise and may correct any defect, omission,
                     or inconsistency in the Plan or any agreement
                     evidencing the grant of any Stock Option in a
                     manner and to the extent it shall deem
                     necessary to make the Plan fully effective);
                     (iii) determine those persons to whom Stock
                     Options other than Formula Awards shall be
                     granted and the number of Stock Options other
                     than Formula Awards to be granted to any
                     person; (iv) determine the terms of Stock
                     Options granted under the Plan, consistent
                     with the provisions of the Plan; and (v)
                     generally, exercise such powers and perform
                     such acts in connection with the Plan as are
                     deemed necessary or expedient to promote the
                     best interests of the Company.  The
                     interpretation and construction by the
                     Committee of any provision of the Plan or of
                     any Stock Option shall be final, binding and
                     conclusive.

              (c)    The Committee may act only by a majority of
                     its members then in office; however, the
                     Committee may authorize any one (1) or more
                     of its members or any officer of the Company
                     to execute and deliver documents on behalf of
                     the Committee.

              (d)    No member of the Committee shall be liable
                     for any action taken or omitted to be taken
                     or for any determination made by him or her
                     in good faith with respect to the Plan, and
                     the Company shall indemnify and hold harmless
                     each member of the Committee against any cost
                     or expense (including counsel fees) or
                     liability (including any sum paid in
                     settlement of a claim with the approval of
                     the Committee) arising out of any act or
                     omission in connection with the
                     administration or interpretation of the Plan,
                     unless arising out of such person's own fraud
                     or bad faith.

         2.3  Effective Date

              The Plan is and shall be effective February 16,
              1995, the date of its adoption by the Board of
              Directors, and Stock Options may be granted from
              time to time thereafter, subject, however, to
              approval of the Plan by the affirmative vote of the
              holders of a majority of the shares of the Common
              Stock present in person or by proxy and entitled to
              vote at an annual meeting of the shareholders of the
              Company or at a special meeting of the shareholders
              of the Company expressly called for such purposes,
              or any adjournments thereof, held on or before
              February 15, 1996.  If the Plan is not approved at
              such annual or special meeting or at any
              adjournments thereof, the Plan and all Stock Options
              previously granted thereunder shall become null and
              void.

         2.4  Duration

              If approved by the shareholders of the Company, as
              provided in Section 2.3, unless sooner terminated by
              the Board of Directors, the Plan shall remain in
              effect until February 15, 2005.

         2.5  Shares Subject to the Plan

              The maximum number of shares of Common Stock which
              may be subject to Stock Options granted under the
              Plan shall be 500,000, of which the number of such
              shares which shall be available for issuance
              pursuant to Formula Awards made to Eligible
              Directors under the Plan shall be 30,000.  The Stock
              Options and Formula Awards shall be subject to
              adjustment in accordance with Section 4.11 or 5.1,
              as appropriate, and shares to be issued upon
              exercise of Stock Options and Formula Awards may be
              either authorized and unissued shares of Common
              Stock or authorized and issued shares of Common
              Stock purchased or acquired by the Company for any
              purpose.  If a Stock Option or Formula Award or
              portion thereof shall expire or is terminated,
              cancelled or surrendered for any reason without
              being exercised in full, the unpurchased shares of
              Common Stock which were subject to such Stock Option
              or Formula Award or portion thereof shall be
              available for future grants of Stock Options or
              Formula Awards, as the case may be, under the Plan.

         2.6  Amendments

              The Plan may be suspended, terminated or reinstated,
              in whole or in part, at any time by the Board of
              Directors.  The Board of Directors may from time to
              time make such amendments to the Plan as it may deem
              advisable, including, with respect to Incentive
              Stock Options, amendments deemed necessary or
              desirable to comply with Section 422 of the Code and
              any regulations issued thereunder; provided,
              however, that (i) no amendment shall be made more
              than once every six (6) months that would change the
              amount, price or timing of Formula Awards, and (ii)
              without the approval of the Company's shareholders
              no amendment shall be made which:

              (a)    Increases the maximum number of shares of
                     Common Stock which may be subject to Stock
                     Options or Formula Awards granted under the
                     Plan (other than as provided in Section 4.11
                     or 5.1, as appropriate); or

              (b)    Extends the term of the Plan; or
     
              (c)    Increases the period during which a Stock
                     Option may be exercised beyond ten (10) years
                     from the date of grant; or

              (d)    Otherwise materially increases the benefits
                     accruing to Participants or Eligible
                     Directors under the Plan; or

              (e)    Materially modifies the requirements as to
                     eligibility for participation in the Plan; or
                     

              (f)    Changes the maximum number of shares of
                     Common Stock for which options may be granted
                     to any Participant during any year (a
                     consecutive twelve (12) month period) (other
                     than as provided in Section 5.1); or

              (g)    Will cause Stock Options granted under the
                     Plan to fail to meet the requirements of Rule
                     16b-3.

              Except as otherwise provided herein, termination or
              amendment of the Plan shall not, without the consent
              of a Participant or Eligible Director, affect such
              Participant's or Eligible Director's rights under
              any Stock Option or Formula Award previously granted
              to such Participant or Eligible Director, as the
              case may be.

         2.7  Participants and Grants

              Stock Options may be granted by the Committee to
              those persons who the Committee determines have the
              capacity to make a substantial contribution to the
              success of the Company.  The Committee may grant
              Stock Options to purchase such number of shares of
              Common Stock (subject to the limitations of Section
              2.5) as the Committee may, in its sole discretion,
              determine.  Notwithstanding the foregoing, no
              Participant shall be granted Stock Options in any
              year (a consecutive twelve (12) month period) to
              purchase in excess of 200,000 shares of Common
              Stock.  In granting Stock Options, the Committee, on
              an individual basis, may vary the number of
              Incentive Stock Options or Non-Qualified Stock
              Options as between Participants and may grant
              Incentive Stock Options and/or Non-Qualified Stock
              Options to a Participant in such amounts as the
              Committee may determine in its sole discretion.

     3.  STOCK OPTIONS

         3.1  General

              All Stock Options granted under the Plan shall be
              evidenced by written agreements executed by the
              Company and the Participant to whom granted and
              dated as of the applicable date of grant, which
              agreement shall state the number of shares of Common
              Stock which may be purchased upon the exercise
              thereof and shall contain such investment
              representation and other terms and conditions as the
              Committee may from time to time determine, or, in
              the case of Incentive Stock Options, as may be
              required by Section 422 of the Code, or any other
              applicable law.  Each such grant shall be signed on
              behalf of the Company by a member of the Committee
              or by an officer delegated such authority by the
              Committee.

         3.2  Price

              Subject to the provisions of Sections 3.6(d), 4.11
              and 5.1, the purchase price per share of Common
              Stock subject to a Stock Option shall, in no case,
              be less than one hundred percent (100%) of the Fair
              Market Value of a share of Common Stock on the date
              the Stock Option is granted.

         3.3  Period

              The duration or term of each Stock Option granted
              under the Plan shall be for such period as the
              Committee shall determine but in no event more than
              ten (10) years from the date of grant thereof.

         3.4  Exercise

              Subject to Sections 2.3 and 5.4, Stock Options may
              be exercisable immediately upon the grant of the
              Stock Option or at such other time or times as the
              Committee shall specify when granting the Stock
              Option.  Once exercisable, a Stock Option shall be
              exercisable, in whole or in part, by delivery of a
              written notice of exercise to the Secretary of the
              Company at the principal office of the Company
              specifying the number of whole shares of Common
              Stock as to which the Stock Option is then being
              exercised together with payment of the full purchase
              price for the shares being purchased upon such
              exercise.  Until the shares of Common Stock as to
              which a Stock Option is exercised are issued, the
              Participant shall have none of the rights of a
              shareholder of the Company with respect to such
              shares.

         3.5  Payment

              The purchase price for shares of Common Stock as to
              which a Stock Option has been exercised and any
              amount required to be withheld, as contemplated by
              Section 5.3, may be paid:

              (a)    In United States dollars in cash, or by
                     check, bank draft or money order payable in
                     United States dollars to the order of the
                     Company; or

              (b)    By the delivery by the Participant to the
                     Company of whole shares of Common Stock
                     having an aggregate Fair Market Value on the
                     date of payment equal to the aggregate of the
                     purchase price of Common Stock as to which
                     the Stock Option is then being exercised or
                     by the withholding of whole shares of Common
                     Stock having such Fair Market Value upon the
                     exercise of such Stock Option; or

              (c)    By a combination of both (a) and (b) above.

              The Committee may, in its discretion, impose
              limitations. conditions and prohibitions on the use
              by a Participant of shares of Common Stock to pay
              the purchase price payable by such Participant upon
              the exercise of a Stock Option.

         3.6  Special Rules for Incentive Stock Options

              Notwithstanding any other provision of the Plan, the
              following provisions shall apply to Incentive Stock
              Options granted under the Plan:

              (a)    Incentive Stock Options shall only be granted
                     to Participants who are employees of the
                     Company or a Subsidiary.

              (b)    To the extent that the aggregate Fair Market
                     Value of stock, with respect to which
                     Incentive Stock Options are exercisable for
                     the first time by a Participant during any
                     calendar year under the Plan and any other
                     Stock Option Plan of the Company or a
                     Subsidiary, exceeds $100,000, such excess
                     Stock Options shall be treated as Non-
                     Qualified Stock Options.

              (c)    Any Participant who disposes of shares of
                     Common Stock acquired upon the exercise of an
                     Incentive Stock Option by sale or exchange
                     either within two (2) years after the date of
                     the grant of the Incentive Stock Option under
                     which the shares were acquired or within one
                     (1) year of the acquisition of such shares,
                     shall promptly notify the Secretary of the
                     Company at the principal office of the
                     Company of such disposition, the amount
                     realized, the purchase price per share paid
                     upon exercise and the date of disposition.

              (d)    No Incentive Stock Option shall be granted to
                     a Participant who, at the time of the grant,
                     owns stock representing more than ten percent
                     (10%) of the total combined voting power of
                     all classes of stock either of the Company or
                     any parent or Subsidiary of the Company,
                     unless the purchase price of the shares of
                     Common Stock purchasable upon exercise of
                     such Incentive Stock Option is at least one
                     hundred ten percent (110%) of the Fair Market
                     Value (at the time the Incentive Stock Option
                     is granted) of the Common Stock and the
                     Incentive Stock Option is not exercisable
                     more than five (5) years from the date it is
                     granted.

         3.7  Termination of Employment or Relationship

              (a)    In the event a Participant's employment by,
                     or relationship with, the Company or its
                     Subsidiaries shall terminate for any reason
                     other than those reasons specified in
                     Sections 3.7(b), (c), (d), (e) or (f) while
                     such Participant holds Stock Options granted
                     under the Plan, then all rights of any kind
                     under any outstanding Stock Option held by
                     such Participant which shall not have
                     previously lapsed or terminated shall expire
                     immediately.

              (b)    If a Participant's employment by, or
                     relationship with, the Company or its
                     Subsidiaries shall terminate as a result of
                     such Participant's total disability, each
                     Stock Option held by such Participant (which
                     has not previously lapsed or terminated)
                     shall immediately become fully exercisable as
                     to the total number of shares of Common Stock
                     subject thereto (whether or not exercisable
                     to that extent at the time of such
                     termination) and shall remain so exercisable
                     by such Participant for a period of six (6)
                     months after termination unless such Stock
                     Option expires earlier by its terms.  For
                     purposes of the Plan, "total disability"
                     shall mean permanent mental or physical
                     disability as determined by the Committee.

              (c)    In the event of the death of a Participant,
                     each Stock Option held by such Participant
                     (which has not previously lapsed or
                     terminated) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject thereto (whether or
                     not exercisable to that extent at the time of
                     death) by the executor or administrator of
                     the Participant's estate or by the person or
                     persons to whom the deceased Participant's
                     rights thereunder shall have passed by will
                     or by the laws of descent or distribution,
                     and shall remain so exercisable for a period
                     of six (6) months after such Participant's
                     death unless such Stock Option expires
                     earlier by its terms.

              (d)    If a Participant's employment by the Company
                     or a Subsidiary shall terminate by reason of
                     such Participant's retirement in accordance
                     with Company policies, each Stock Option held
                     by such Participant at the date of
                     termination (which has not previously lapsed
                     or terminated) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject hereto (whether or
                     not exercisable to that extent at the time of
                     such termination) and shall remain so
                     exercisable by such Participant for a period
                     of three (3) months after termination, unless
                     such Stock Option expires earlier by its
                     terms.

              (e)    In the event the Company terminates the
                     employment of a Participant who at the time
                     of such termination was an officer of the
                     Company and had been continuously employed by
                     the Company during the five (5) year period
                     immediately preceding such termination, for
                     any reason except "good cause" (hereafter
                     defined) and except upon such Participant's
                     death, total disability or retirement in
                     accordance with Company policies, each Stock
                     Option held by such Participant (which has
                     not previously lapsed or terminated and which
                     has been held by such Participant for more
                     than six (6) months prior to such
                     termination) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject thereto (whether or
                     not exercisable to that extent at the time of
                     such termination) and shall remain so
                     exercisable for a period of three (3) months
                     after such termination unless such Stock
                     Option expires earlier by its terms. A
                     termination for "good cause" shall have
                     occurred only if the Participant in question
                     is terminated, by written notice (i) because
                     of his or her conviction of a felony for a
                     crime involving an act of fraud or
                     dishonesty, (ii) intentional acts or
                     omissions on such Participant's part causing
                     material injury to the property or business
                     of the Company, or (iii) because such
                     Participant shall have breached any material
                     term of any employment agreement in place
                     between such Participant and the Company and
                     shall have failed to correct such breach
                     within any grace period provided for in such
                     agreement. "Good cause" for termination shall
                     not include bad judgment or any act or
                     omission reasonably believed by such
                     Participant, in good faith, to have been in,
                     or not opposed to, the best interests of the
                     Company.

              (f)    In the event of the termination of a
                     Participant's service as a Director of the
                     Company, who at the time of such termination
                     was an Eligible Director and had continuously
                     served as a Director of the Company during
                     the five (5) year period immediately
                     preceding such termination, and such
                     termination is for any reason except for such
                     Participant's death or total disability or
                     the removal of such Participant as Director
                     (by the shareholders, the Board of Directors
                     or otherwise) for "good cause" (as defined in
                     Section 3.7(e)(i) and (ii)), each Stock
                     Option held by such Participant (which has
                     not previously lapsed or terminated and which
                     has been held by such Participant for more
                     than six (6) months prior to such termina-
                     tion) shall immediately become fully
                     exercisable as to the total number of shares
                     of Common Stock subject thereto (whether or
                     not exercisable to that extent at the time of
                     such termination) and shall remain so
                     exercisable for a period of three (3) months
                     after such termination unless such Stock
                     Option expires earlier by its terms.

         3.8  Effect of Leaves of Absence

              It shall not be considered a termination of
              employment when a Participant is on military or sick
              leave or such other type of leave of absence which
              is considered a continuing intact the employment
              relationship of the Participant with the Company or
              any of its Subsidiaries. In case of such leave of
              absence, the employment relationship shall be deemed
              to have continued until the later of (i) the date
              when such leave shall have lasted ninety (90) days
              in duration, or (ii) the date as of which the
              Participant's right to re-employment shall have no
              longer been guaranteed either by statute or
              contract.

     4.  FORMULA AWARDS TO ELIGIBLE DIRECTORS

         4.1  General

              Each Formula Award granted under the Plan shall be
              evidenced by a written agreement executed by the
              Company and by the Eligible Director to whom such
              Formula Award is granted and dated as of the
              applicable date of grant.  Each Agreement shall be
              signed on behalf of the Company by a member of the
              Committee or by an officer delegated such authority
              by the Committee.  Each such agreement shall comply
              with and be subject to the terms and conditions of
              the Plan.  Any such agreement may contain such other
              terms, provisions and conditions not inconsistent
              with the Plan or this Section 4 as may be determined
              by the Committee.  All Formula Awards granted under
              the Plan shall, except where this Section 4 or the
              context clearly indicates to the contrary, be
              subject to the provisions of the Plan applicable to
              Non-Qualified Stock Options.

         4.2  Formula Awards

              Subject to the limitations in Sections 4.13 and
              4.14, an option to purchase 1,000 shares of Common
              Stock (as adjusted pursuant to Section 4.11) shall
              be granted automatically each year, immediately
              following the annual meeting of the Company's
              shareholders, to each member of the Company's Board
              of Directors (each, a "Director") who is an Eligible
              Director at such time immediately following such
              annual meeting beginning with the annual meeting of
              the shareholders at which the shareholders approve
              the Plan.

         4.3  Formula Award Exercise Price

              The exercise price per share for a Formula Award
              shall be the average of the Fair Market Values for
              the fifth (5th) through the ninth (9th) business
              days (which, for purposes of this Section 4.3 shall
              mean those days on which the NASDAQ is open for
              trading) following the date of grant.

         4.4  Vesting and Exercisability

              Except as otherwise provided in Section 4.7, a
              Formula Award shall immediately vest and become non-
              forfeitable upon the grant of the Formula Award. 
              Except as otherwise provided in Section 4.7, a
              Formula Award shall become exercisable immediately
              upon vesting for all Directors who have served as
              Directors of the Company for a total of five (5)
              consecutive years as of the date of the grant.  If
              a Director has not served as a Director for such
              period, a Formula Award shall become exercisable
              according to the following schedule:

              Period of Optionee's Continuous        Portion of
                Service as a Director of the        Formula Award
                Company following the Grant            That is
                                                     Exercisable

                     Twelve months                     33-1/3%
                     Eighteen months                   66-2/3%
                     Twenty-four months                100%

         4.5 Time and Manner of Exercise

             Except as otherwise provided in this Section 4.5, any
             vested Formula Award, to the extent the same is
             exercisable in accordance with Section 4.4, is
             exercisable in whole or in part at any time from time
             to time until the expiration or termination of its
             term in accordance with Section 4.7 by giving written
             notice, signed by the person exercising the Formula
             Award, to the Company (to the attention of the
             Company's Corporate Secretary) stating the number of
             whole shares of Common Stock with respect to which the
             Formula Award is being exercised, accompanied by
             payment in full of the option exercise price for the
             number of shares of Common Stock to be purchased. The
             date both such notice and payment are received by the
             office of the Corporate Secretary of the Company shall
             be the date of exercise of the Formula Award as to
             such number of shares.

         4.6 Payment of Exercise Price

             Payment of the exercise price for a Formula Award may
             be in cash or by check, bank draft or money order
             payable in United States dollars to the order of the
             Company or payment may be in whole or in part by

             (a) transfer to the Company of shares of Common Stock
                 having a Fair Market Value (as determined in
                 Section 4.3) on the date of exercise equal to the
                 exercise price; or

             (b) delivery of instructions to the Company to
                 withhold from the shares of Common Stock that
                 would otherwise be issued on exercise of that
                 number of such shares having a Fair Market Value
                 (as determined in Section 4.3) equal to the
                 exercise price.

             If the Fair Market Value (as determined in Section
             4.3) of the number of whole shares of Common Stock
             transferred or the number of whole shares of Common
             Stock withheld is less than the total exercise price,
             the shortfall must be paid in cash, check, bank draft
             or money order, as aforesaid.

         4.7 Term of Formula Awards

             Each Formula Award shall expire ten (10) years from
             its date of grant, but shall be subject to earlier
             termination as follows:

             (a) In the event of the termination of a Formula
                 Award holder's service as a Director, by reason
                 of his or her removal as Director (by the
                 shareholders, the Board of Directors or
                 otherwise), the then outstanding Formula Awards
                 of such holder (whether or not then exercisable)
                 shall automatically expire on (and may not be
                 exercised on) the effective date of such
                 termination.

             (b) In the event of the termination of a Formula
                 Award holder's service as a Director by reason of
                 retirement or total disability, the then
                 outstanding Formula Awards of such holder shall
                 become exercisable, to the full extent of the
                 number of shares of Common Stock remaining
                 covered by such Formula Awards, regardless of
                 whether such Formula Awards were previously
                 exercisable, and each such Formula Award shall
                 expire one (1) year after the date of such
                 termination or on the stated grant expiration
                 date, whichever is earlier.  For purposes of this
                 Section 4.7, the phrase "by reason of retirement"
                 means (a) mandatory retirement pursuant to Board
                 policy or (b) termination of service on or after
                 the holder's 65th birthday.

             (c) In the event of the death of a Formula Award
                 holder while such holder is a Director, the then
                 outstanding Formula Awards of such holder shall
                 become exercisable, to the full extent of the
                 number of shares of Common Stock remaining
                 covered by such Formula Awards, regardless of
                 whether such Formula Awards were previously
                 exercisable, and each such Formula Award shall
                 expire one (1) year after the date of death of
                 such holder or on the stated grant expiration
                 date, whichever is earlier.  Exercise of a
                 deceased holder's Formula Awards that are still
                 exercisable shall be by the estate of such holder
                 or by the person or persons to whom the holder's
                 rights have passed by will or the laws of descent
                 and distribution.

             (d) In the event of the termination of a Formula
                 Award holder's service as a Director by reason of
                 the expiration of the Director's term in office
                 (without renomination or reelection) or by reason
                 of resignation, or for any other reason except
                 those  described in Sections 4.7(a), (b) or (c),
                 the then outstanding Formula Awards of such
                 holder shall become exercisable, to the full
                 extent of the number of shares of Common Stock
                 remaining covered by such Formula Awards,
                 regardless of whether such Formula Awards were
                 previously exercisable, and each such Formula
                 Award shall expire three (3) months after the
                 effective date of such termination.

         4.8 Transferability

             The right to exercise a Formula Award shall, during
             the lifetime of the Eligible Director to whom such
             Formula Award was granted, be exercisable only by such
             recipient or pursuant to a qualified domestic
             relations order as defined by the Code or Title l of
             the Employee Retirement Income Security' Act, or the
             rules thereunder (a "QDRO") and shall not be
             assignable or transferable by such recipient other
             than by will or the laws of descent and distribution
             or a QDRO. Any purported transfer contrary to this
             provision will be null and void and without effect.

         4.9 Limitation of Rights

             Neither the recipient of a Formula Award under the
             Plan nor the recipient's successor or successors in
             interest shall have any rights as a shareholder of the
             Company with respect to any shares of Common Stock
             subject to a Formula Award granted to such person
             until the date of issuance of a stock certificate for
             such shares of Common Stock.

         4.10    Limitation as to Directorship

             Neither the Plan, nor the grant of a Formula Award,
             nor any other action taken pursuant to the Plan shall
             constitute or be evidence of any agreement or
             understanding, express or implied, that an Eligible
             Director has a right to continue as a Director for any
             period of time or at any particular rate of
             compensation.

         4.11    Capital Adjustments

             The number and class of shares with respect to which
             a Formula Award may be granted to an Eligible Director
             under the Plan, the number and class of shares subject
             to each outstanding Formula Award, and the exercise
             price per share specified in each such Formula Award
             shall be proportionate adjustment in accordance with
             the provisions Section 5.1   For purposes of the
             preceding sentence, the Company shall be deemed to
             have received consideration for any shares issued
             pursuant to this or any other employee benefit plan
             meeting the requirements of Rule 16b-3.

         4.12    Limit on Grants to Eligible Directors

             Notwithstanding any provision to the contrary, the
             Committee may, but shall not be obligated to, grant an
             Eligible Director Stock Options under the Plan and
             such grant, if any, shall not affect the Eligible
             Director's entitlement to be granted Formula Awards
             pursuant to Section 4.2.

         4.13    Commencement of Grants of Formula Awards

             Notwithstanding any provision to the contrary, no
             Formula Award shall be granted pursuant to the Plan
             unless and until no additional Formula Awards may be
             granted pursuant to the Company's 1993 Stock Option
             Plan.

         4.14    Termination of Formula Awards

             Notwithstanding any provision to the contrary, no
             Formula Award shall be granted pursuant to the Plan on
             a date when the number of shares of Common Stock
             authorized for issuance pursuant to the Plan and then
             available for issuance pursuant to new Formula Awards
             is less than the aggregate number of such shares which
             would be issuable pursuant to Formula Awards otherwise
             required to be granted on such date, assuming the full
             vesting and exercise of such Formula Awards. In the
             event Formula Awards are not granted as a result of
             the application of this Section 4.14, no Formula
             Awards shall thereafter be granted pursuant to the
             Plan.

         4.15    Conflicting Provisions

             In the event of any conflict between a provision of
             this Section 4 and a provision in any other paragraph
             of the Plan with respect to Formula Awards, such
             provision of this Section 4 shall be deemed to
             control.

     5.  MISCELLANEOUS PROVISIONS

         5.1 Adjustments Upon Changes in Capitalization

             In the event of changes to the outstanding shares of
             Common Stock of the Company through reorganization,
             merger, consolidation, recapitalization,
             reclassification, stock split-up, stock dividend,
             stock consolidation or otherwise, or in the event of
             a sale of all or substantially all of the assets of
             the Company, an appropriate and proportionate
             adjustment shall be made in the number and class of
             shares as to which Stock Options and Formula Awards
             may be granted.  A corresponding adjustment changing
             the number or class of shares and/or the exercise
             price per share of unexercised Stock Options and
             Formula Awards or portions thereof which shall have
             been granted prior to any such change shall likewise
             be made.  Notwithstanding the foregoing, in the case
             of a reorganization, merger or consolidation, or sale
             of all or substantially all of the assets of the
             Company, in lieu of adjustments as aforesaid, the
             Committee may in is discretion accelerate the date
             after which a Stock Option or Formula Award may or may
             not be exercised or the stated expiration date
             thereof. Adjustments or changes under this Section 5.1
             shall be made by the Committee, whose determination as
             to what adjustments or changes shall be made, and the
             extent thereof, shall be final, binding and
             conclusive.

         5.2 Non-Transferability

             No Stock Option shall be transferable except by will
             or the laws of descent and distribution, nor shall any
             Stock Option be exercisable during the Participant's
             lifetime by any person other than the Participant or
             his guardian or legal representative.

         5.3 Withholding

             The Company's obligations under the Plan shall be
             subject to applicable federal, state and local tax
             withholding requirements.  Federal, state and local
             withholding tax due at the time of a grant or upon the
             exercise of any Stock Option may, in the discretion of
             the Committee, be paid in shares of Common Stock
             already owned by the Participant or through the
             withholding of shares otherwise issuable to such
             Participant, upon such terms and conditions as the
             Committee shall determine. If the Participant shall
             fail to pay, or make arrangements satisfactory to the
             Committee for the payment, to the Company of all such
             federal, state and local taxes required to be withheld
             by the Company, then the Company shall, to the extent
             permitted by law, have the right to deduct from any
             payment of any kind otherwise due to such Participant
             an amount equal to any federal, state or local taxes
             of any kind required to be withheld by the Company.

         5.4 Compliance with Law and Approval of Regulatory Bodies

             No Stock Option or Formula Award shall be exercisable
             and no shares will be delivered under the Plan except
             in compliance with all applicable federal and state
             laws and regulations including, without limitation,
             compliance with all federal and state securities laws
             and withholding tax requirements and with the rules of
             NASDAQ and of all domestic stock exchanges on which
             the Common Stock may be listed.  Any share certificate
             issued to evidence shares for which a Stock Option or
             Formula Award is exercised may bear legends and
             statements the Committee shall deem advisable to
             assure compliance with federal and state laws and
             regulations.  No Stock Option or Formula Award shall
             be exercisable and no shares will be delivered under
             the Plan, until the Company has obtained the consent
             or approval from regulatory bodies, federal or state,
             having jurisdiction over such matters as the Committee
             may deem advisable.  In the case of the exercise of a
             Stock Option or Formula Award by a person or estate
             acquiring the right to exercise the Stock Option or
             Formula Award as a result of the death of the
             Participant, the Committee may require reasonable
             evidence as to the ownership of the Stock Option or
             Formula Award and may require consents and releases of
             taxing authorities that it may deem advisable.

         5.5 No Right to Employment

             Neither the adoption of the Plan nor its operation,
             nor any document describing or referring to the Plan,
             or any part thereof, nor the granting of any Stock
             Options hereunder, shall confer upon any Participant
             under the Plan any right to continue in the employ of
             the Company or any Subsidiary, or shall in any way
             affect the right and power of the Company or any
             Subsidiary to terminate the employment of any
             Participant at any time with or without assigning a
             reason therefor, to the same extent as might have been
             done if the Plan had not been adopted.

         5.6 Exclusion from Pension Computations

             By acceptance of a grant of a Stock Option under the
             Plan, the recipient shall be deemed to agree that any
             income realized upon the receipt or exercise thereof
             or upon the disposition of the shares received upon
             exercise will not be taken into account as "base
             remuneration", "wages", "salary" or "compensation" in
             determining the amount of any contribution to or
             payment or any other benefit under any pension,
             retirement, incentive, profit-sharing or deferred
             compensation plan of the Company or any Subsidiary.

         5.7 Abandonment of Options

             A Participant or Eligible Director may at any time
             abandon a Stock Option or Formula Award prior to its
             expiration date.  The abandonment shall be evidenced
             in writing, in such form as the Committee may from
             time to time prescribe.  A Participant or Eligible
             Director shall have no further rights with respect to
             any Stock Option or Formula Award so abandoned.

         5.8 Severability

             If any of the terms of provisions of the Plan conflict
             with the requirements of Rule 16b-3, then such terms
             or provisions shall be deemed inoperative to the
             extent they so conflict with the requirements of Rule
             16b-3.

         5.9 Interpretation of the Plan

             Headings are given to the Sections of the Plan solely
             as a convenience to facilitate reference, such
             headings, numbering and paragraphing shall not in any
             case be deemed in any way material or relevant to the
             construction of the Plan or any provision hereof.  The
             use of the masculine gender shall also include within
             its meaning the feminine. The use of the singular
             shall also include within Its meaning the plural and
             vice versa.

         5.10    Use of Proceeds

             Funds received by the Company upon the exercise of
             Stock Options and Formula Awards shall be used for the
             general corporate purposes of the Company.

         5.11    Construction of Plan

             The place of administration of the Plan shall be in
             the Commonwealth of Pennsylvania, and the validity,
             construction, interpretation, administration and
             effect of the Plan and of its rules and regulations,
             and rights relating to the Plan, shall be determined
             solely in accordance with the laws of the Commonwealth
             of Pennsylvania.

 5                 Opinion of Fox, Rothschild, 
                   O'Brien & Frankel

PA DIRECT DIAL (215) 299-2000                       December 20, 1995

American Travellers Corporation
3220 Tillman Drive
Bensalem, Pennsylvania  19020

Gentlemen:

	We have acted as your counsel in connection with the filing 
of a Registration Statement on Form S-8 (the "Registration 
Statement") with the Securities and Exchange Commission covering 
500,000 shares of Common Stock, $.01 par value (the "Shares"), of 
American Travellers Corporation, a Pennsylvania corporation (the 
"Company").  Such shares may be issued pursuant to the Company's 
1995 Stock Option Plan (the "Plan").

	As counsel for the Company, we have examined such corporate 
records, certificates and other documents and questions of law as 
we have considered necessary or appropriate for purposes of this 
opinion.  For purposes of this opinion, we have assumed that the 
Shares will be issued in accordance with the terms and conditions 
of the Plan.  Based on the foregoing, we advise you that, in our 
opinion, such of the Shares as are issued and paid for in 
accordance with the terms and conditions of the Plan, will be 
legally issued, fully-paid and non-assessable.

	We consent to the filing of this opinion as an exhibit to 
the Registration Statement.  In giving this consent, we do not 
hereby admit that we come within the category of persons whose 
consent is required under Section 7 of the Securities Act of 
1933. as amended, or the rules and regulations thereunder.

Very truly yours,

/s/ Fox, Rothschild, O'Brien and Frankel 

23(b)              Consent of Arthur Andersen LLP

Arthur Andersen LLP

As independent public accountants, we hereby consent to the
incorporation in this Registration Statement of our report dated
February 27, 1995 included in American Travellers Corporation 10-
K for the year ended December 31, 1994 and to all references to
our firm included in the Registration Statement.

/s/ Arthur Andersen

Philadelphia, PA
December 20, 1995