SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                           _________________________


                                    FORM 8-K

                 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934




         Date of report (date of earliest event reported): July 29, 2004



                        FINANCIAL INDUSTRIES CORPORATION
               (Exact name of Registrant as specified in charter)




           Texas                        0-4690                  74-2126975
(State or other jurisdiction   (Commission file number)     (I.R.S. employer
 of incorporation)                                           identification no.)





                      6500 River Place Blvd., Building One
                               Austin, Texas 78730
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (512) 404-5000



                       _________________________________



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Item 5.  Other Events

On July 29, 2004, Eugene E. Payne submitted his resignation as a director of the
Company,  effective as of July 27,  2004.  The  resignation  was submited by Dr.
Payne in connection  with a settlement  with the Company as to the amount of the
severance  payment due to him under the provisions of his employment  agreement.
The employment  agreement,  which terminated on January 7, 2004,  provided for a
severance  payment in the amount of $360,000.  Subsequent to the  termination of
the  agreement,  the Company  asserted  certain  offsetting  amounts.  Under the
settlement,  Dr. Payne  received a payment of $340,000,  plus interest from June
11, 2004.



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.



                                        FINANCIAL INDUSTRIES CORPORATION


Date: August 4, 2004                    By:       /s/ J. Bruce Boisture
                                           _____________________________________
                                           President and Chief Executive Officer



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