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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

CITIZENS, INC.
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value or transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:
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2) Form, Schedule or
Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF CITIZENS, INC.
A COLORADO CORPORATION

EXECUTIVE OFFICE: 400 EAST ANDERSON LANE, AUSTIN, TEXAS 78752

TO THE STOCKHOLDERS OF CITIZENS, INC.

Notice is hereby given that the Annual Meeting of Stockholders of Citizens, Inc.
will be held Tuesday, June 5, 2001, at 10:00 a.m., local time, at the Executive
Office of the Company, 400 East Anderson Lane, Austin, Texas, for the following
purposes:

(1) To elect the members of the Board of Directors of the Company; and

(2) To transact such other business as may properly come before the Meeting
or any adjournment thereof.

It is important, regardless of the number of shares you hold, that your stock be
represented at the Meeting by a signed proxy card or personal attendance.

STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. PLEASE
COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY TO THE TRANSFER
AGENT IN THE ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED. IF YOU ATTEND THE
MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.

BY ORDER OF THE BOARD OF DIRECTORS

APRIL 27, 2001 JEFFREY J. WOOD, SECRETARY

CITIZENS, INC.
400 EAST ANDERSON LANE
AUSTIN, TEXAS 78752
APRIL 27, 2001

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON JUNE 5, 2001

SOLICITATION OF PROXIES

This proxy statement is furnished in connection with the solicitation of proxies
by and on behalf of the Board of Directors of Citizens, Inc., for use at the
Annual Meeting of Stockholders to be held Tuesday, June 5, 2001, at 10:00 a.m.,
local time, (the "Meeting") at the Executive Office of the Company, 400 East
Anderson Lane, Austin, Texas. This statement was sent to the stockholders of the
Company on or about April 30, 2001.

You are requested to complete the enclosed proxy card, sign where indicated, and
return it to the Transfer Agent in the envelope provided, which requires no
postage if mailed in the United States. Solicitation of proxies will be
primarily through the mail. Proxies may also be solicited by personal interview,
telephone or telegram, by directors, officers and employees of the Company and
its wholly-owned subsidiaries at no additional cost to the Company. The Company
may also request banking institutions, brokerage firms, custodians, trustees,
nominees and fiduciaries to forward soliciting material to the beneficial owners
of the Company's common stock held of record by such persons, firms, or
institutions, and the Company will reimburse the forwarding expense. The cost of
this solicitation will be borne by the Company.

PROXIES

The matters to be brought before the Meeting are: (i) the election of directors;
and (ii) such other matters as may properly be brought before the Meeting.
Shares represented by properly executed proxies received by the Company prior to
the Meeting will be voted as specified thereon. If a proxy fails to specify how
it is to be voted on any proposal it will be voted FOR such proposal. A person
giving a proxy shall have the power to revoke it at any time before it is voted
by notifying the Secretary of the Company in writing or by personally
withdrawing such proxy at the Meeting. With regard to election of directors,
votes may be cast in favor or withheld; votes that are withheld will be excluded
entirely from the vote and will have no effect. Under American Stock Exchange
rules, brokers who have not received instructions from their customers may vote
in the election of directors shares held in street name.

RECORD DATE

Only stockholders of record at the close of business on April 20, 2001 are
entitled to vote at the Meeting. As of the record date, the Company had
outstanding and entitled to vote 24,417,092 Class A shares of common stock and
711,040 Class B shares of common stock.

QUORUM

The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock of the Company entitled to vote at the
Meeting is necessary to constitute a quorum at the Meeting. Abstentions and
broker non-votes are counted for purposes of determining the presence or absence
of a quorum for the transaction of business. If a quorum is not present or
represented at the Meeting, the stockholders entitled to vote thereat, present
in person or represented by proxy, have the power to adjourn or recess the
Meeting from time to time for up to thirty (30) days without notice, other than
announcement at the Meeting, until a quorum is present or represented. At such
reconvened Meeting at which a quorum is present or represented, any business may
be transacted which might have been transacted at the Meeting as originally
noticed.

Management knows of no matters to be submitted at the Meeting with respect to
which the stockholders are entitled to vote, other than the proposals listed
below. In the event other matters properly come before the Meeting, the persons
named in the proxy will vote according to their best judgment.

STOCK AND PRINCIPAL STOCKHOLDERS

Both classes of common stock are equal in all respects, except that (i) Class B
common stock elects a simple majority of the Board of Directors of the Company
and Class A common stock elects the remaining directors; and (ii) Class A
Stockholders receive, on a per-share basis, twice the cash dividends paid on a
per-share basis to Class B Stockholders. Each outstanding share of common stock
has one vote in all matters to be considered at the Meeting.

The following table shows the persons known to the Company to be the beneficial
owners of more than five percent of the Company's Class A and Class B common
stock at April 20, 2001.

SHARES OWNED AND PERCENT OF
NAME AND ADDRESS NATURE OF OWNERSHIP CLASS
---------------- ------------------- -----------

Harold E. Riley 4,374,108 Class A direct and
Post Office Box 149151 indirect* 17.9%
Austin, Texas 711,040 Class B indirect* 100.0%

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* See footnote (1) in the table immediately following.

The following table shows, as of April 20, 2001, certain information with regard
to the beneficial ownership of the Company's Common Stock by each director, the
named executive officers and by the executive officers and directors as a group.

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SHARES OWNED AND PERCENT OF
NAME NATURE OF OWNERSHIP CLASS
---- ------------------- ----------

Harold E. Riley 4,374,108 Class A direct and
indirect (1) 17.9%
711,040 Class B indirect (1) 100.0%

Rick D. Riley 505,717 Class A direct and
indirect (2) 2.1%

Joe R. Reneau, M.D. 55,138 Class A direct (3)

Timothy T. Timmerman 11,449 Class A direct (3)

Ralph M. Smith, Th.D. 6,647 Class A direct and
indirect (4) (3)

Steven F. Shelton 2,157 Class A direct (3)

Mark A. Oliver 1,035 Class A direct (3)

Jeffrey J. Wood 315 Class A direct (3)

Dr. E. Dean Gage - (3)

Dr. Richard C. Scott - (3)

All executive officers 4,956,566 Class A direct and
and directors as indirect 20.3%
a group (ten persons) 711,040 Class B indirect 100.0%

- ------------

(1) Owns 4,081,599 Class A shares directly and spouse owns 292,509 Class A
shares. The Harold E. Riley Trust, of which Mr. Riley is the controlling
Trustee, owns all of the 711,040 issued and outstanding shares of Class B
common stock.

(2) Owns 318,366 Class A shares directly, 10,989 Class A shares as joint
tenant with spouse, and 159,599 and 16,763 Class A shares indirectly as
trustee for minor children and spouse, respectively.

(3) Less than one percent (1%).

(4) Owns 2,367 Class A shares directly and spouse owns 4,280 Class A shares.

The Company is not aware of any arrangement, including any pledge by any person
of securities of the Company, the operation of which may at a subsequent date
result in a change of control of the Company.

CONTROL OF THE COMPANY

Harold E. Riley is deemed to be the "controlling stockholder" of the Company.
Mr. Riley owns, directly and indirectly, 4,374,108 shares (17.9%) of the
outstanding Class A common stock and 711,040 shares (100%) of the Class B common
stock, which stock elects a majority of the Company's Board of Directors.

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ELECTION OF DIRECTORS

Harold E. Riley has advised the Company that he intends to vote all of his Class
A shares in favor of the Class A nominees and all of the Class B shares owned by
the Harold E. Riley Trust in favor of the Class B nominees. A majority vote of a
quorum of Class A shares is necessary to elect the Class A nominees as
directors. Cumulative voting is not permitted. The Class B nominees will be
elected directors upon affirmative vote of the Class B shares by Harold E. Riley
as controlling trustee of the Harold E. Riley Trust.

If for any reason any nominee herein named is not a candidate when the election
takes place (which is not expected), the proxy will be voted for the election of
a substitute nominee at the discretion of the persons named in the proxy.

Listed below are the persons who have been nominated for election as directors
of the Company to serve for one year until the next Annual Meeting of
Stockholders proposed to be held the first Tuesday of June 2002, or until their
respective successors are duly elected and qualified. Class A Stockholders will
vote on the nominees indicated below for election by Class A Stockholders, and
Class B Stockholders will vote on the Class B nominees.

NOMINEES FOR ELECTION BY CLASS A STOCKHOLDERS

COMMON STOCK
PRINCIPAL DIRECTOR BENEFICIALLY
NAME AGE OCCUPATION SINCE OWNED 4/20/01
---- --- ---------- -------- -------------

Dr. E. Dean Gage 58 Associate Dean for 2000 --
Professional Programs
Texas A&M University
College Station, Texas

Steven F. Shelton 44 Farmer/Rancher 1993 2,157 Class A
Lamar, Colorado

Ralph M. Smith, Th.D. 69 Pastor Emeritus 1993 6,647 Class A
Hyde Park Baptist Church
Austin, Texas

Timothy T. Timmerman 39 President 1989 11,449 Class A
Commerce Properties, Inc.;
Partner, Realcom Management;
Partner, Interfase Capital
Austin, Texas

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NOMINEES FOR ELECTION BY CLASS B STOCKHOLDERS

COMMON STOCK
PRINCIPAL DIRECTOR BENEFICIALLY
NAME AGE OCCUPATION SINCE OWNED 4/20/01
---- --- ---------- -------- -------------

Mark A. Oliver 42 President of the Company 1997 1,035 Class A
Austin, Texas

Joe R. Reneau, M.D. 68 Physician, Medical Consultant 1989 55,138 Class A
Austin, Texas

Harold E. Riley 72 Chairman of the Board 1987 4,374,108 Class A
of the Company 711,040 Class B
Austin, Texas

Rick D. Riley ** 47 Vice Chairman and CEO of the Company; 1989 505,717 Class A
Chairman of the Board, CEO and
President of Citizens Insurance Company
of America
Austin, Texas

Dr. Richard C. Scott 66 Vice President for Development Baylor 2000 --
University
Waco, Texas

-----------------

** Son of Harold E. Riley. There are no other family relationships between
or among the nominees to the Board and the Executive Officers of the
Company.

Information concerning the nominees is set forth below:

Dr. E. Dean Gage, Associate Dean of Professional Programs, College of Veterinary
Medicine, Texas A&M University, College Station, Texas, 2001 to present;
President Men's Leadership Ministries, Bryan, Texas, from 1996 to 2000;
Executive Director, Center for Executive Development College of Business, Texas
A&M University, College Station, Texas, from 1994 to 1996; President, Texas A&M
University, College Station, Texas from 1993 to 1994; Executive Vice President
and Provost, Texas A&M University, College Station, Texas from 1989 to 1993.

Mark A. Oliver, President of the Company and Vice Chairman of the Company's
affiliates from February 1999 to present; President of the Company and its
affiliates from March 1997 to February 1999; Executive Vice President, Chief
Financial Officer, Secretary and Treasurer of the Company and its affiliates
from 1990 to 1997; Treasurer and Chief Financial Officer of the Company and its
affiliates from 1988 to 1990; Treasurer and Controller of the Company and its
affiliates from 1984 to 1988.

Joe R. Reneau, M.D., Physician - Medical Consultant, Abbott Laboratories,
Austin, Texas, from 1987 to present and Medical Director of Company and its
affiliates, from 1987 to present.

Harold E. Riley, controlling stockholder; Chairman of the Board of the Company
1987 to present; Chairman of the Board of the Company and its affiliates from
1994 to 1999; Chairman of the Board and Chief Executive Officer of the Company,
1992 to 2000; Chairman of the Board and Chief Executive Officer of the Company
and its affiliates from 1992 to 1999; President of the Company and its
affiliates from November 1996 to March 1997; Chairman of the Board, Chief
Executive Officer and President of the Company and its affiliates, from 1987 to
1992; Chairman of the Board, President and Chief Executive Officer, Continental
Investors Life Insurance Company, from 1989 to 1992.

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Rick D. Riley, Vice Chairman and CEO of the Company, October 2000 to present;
Vice Chairman of the Company, 2000; Chairman of the Board of Directors,
President and CEO of Citizens Insurance Company of America and its affiliates, a
subsidiary of the Company, from February 1999 to present; Chief Administrative
Officer and Secretary of the Company from October 1998 to February 1999;
Executive Vice President of the Company and its affiliates from September 1995
to 1998; Chief Operating Officer of the Company and its affiliates from
September 1995 to March 1997; Chief Administrative Officer of the Company and
its affiliates, from 1994 to June 1995, and President thereafter until September
1995; Executive Vice President and Chief Operating Officer of the Company and
its affiliates, from 1990 to 1991 and 1992 to 1994; President, Computing
Technology, Inc. from 1991 to 1992; Executive Vice President, Data Processing,
the Company and its affiliates, from 1987 to 1991; Executive Vice President,
Continental Investors Life Insurance Company from 1989 to 1992.

Dr. Richard C. Scott, Vice President, Baylor University, Waco, Texas from 1968
to present.

Steven F. Shelton, Rancher/Farmer from 1974 to present; Director, First
Centennial Corporation, from January to October 1989 and August 1990 to 1992.
Director of the Company from 1993 to present.

Ralph M. Smith, Th.D., Pastor Emeritus, Hyde Park Baptist Church, Austin, Texas,
from 1960 to March 1996. Director of the Company from 1989 to 1990 and 1993 to
present; Advisory Director of the Company from 1991 to 1993.

Timothy T. Timmerman, President, Commerce Properties, Inc. from 1990 to present;
Partner, Realcom Management from 1990 to present; Partner, Interfase Capital
from 1999 to present. Director of the Company from 1989 to present.

No director of the Company is a director of any other company with a class of
securities registered under the Securities Exchange Act of 1934 or any
investment company registered under the Investment Company Act of 1940, except
for Richard C. Scott, who serves on the Board of Directors of Winnebago
Industries.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The business affairs of the Company are conducted under the direction of its
Board of Directors. The Board of Directors held three (3) meetings during 2000,
at which all directors were present. During 2000, the Board of Directors was
served by three committees - the Executive Committee, the Compensation Committee
and the Audit Committee. The Executive Committee, composed of Messrs. Harold E.
Riley, Joe R. Reneau, M.D. and Timothy Timmerman, met seventeen (17) times
during 2000 and has exercised and may exercise all of the authority of the Board
of Directors in the management of the business affairs of the Company, except
where action of a majority of all members of the Board of Directors is required
by statute or by the Articles of Incorporation or by the Bylaws of the Company.
All actions taken by the Executive Committee are subsequently reviewed by the
Board of Directors.

The Audit Committee composed of Messrs. Joe R. Reneau, M.D., Ralph M. Smith and
Timothy T. Timmerman, met once during 2000. The functions of the Audit Committee
include recommending to the Board each year the firm of independent auditors to
be engaged by the

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Company, reviewing the annual financial statements issued by the Company to its
security holders, reviewing and approving in advance the plan and scope of the
audit of the Company to be performed for the following year by the independent
auditors, reviewing with the principal independent auditors upon completion of
their audit their findings and recommendations, conducting quarterly reviews of
the financial reports issued by the Company with the independent auditors, and
periodically reviewing with them the principal accounting policies of the
Company and other pertinent matters.

The Compensation Committee composed of Messrs. Joe R. Reneau, M.D., Timothy T.
Timmerman and Ralph M. Smith, met once during 2000. The functions of the
Compensation Committee include establishing compensation policies applicable to
the Company's executive officers and making recommendations concerning executive
compensation to the Board of Directors.

CERTAIN REPORTS
Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission. Based
solely upon a review of such reports and amendments thereto furnished to the
Company, the Company believes that during 2000 two such reports were not filed
on a timely basis. Mssrs. Rick D. Riley and Ralph M. Smith each filed one report
late.

EXECUTIVE OFFICERS

The following table sets forth certain information concerning the executive
officers of the Company who are elected annually by the Board of Directors at
the first meeting of the Board following the Annual Meeting of Stockholders of
the Company:

COMPANY POSITIONS &
NAME AGE PRINCIPAL OCCUPATION
---- --- --------------------

Harold E. Riley(1) 72 Chairman of the Board

Rick D. Riley(2) 47 Vice Chairman and CEO

Mark A. Oliver(3) 42 President

Jeffrey J. Wood(4) 47 Executive Vice President, CFO, Secretary
and Treasurer

-----------

(1) Mr. Riley has served since 1987.

(2) Rick Riley became Vice Chairman in December 1999 and Chief Executive
Officer in 2000. He has served in various capacities for the Company
and its affiliates since 1976.

(3) Mark A. Oliver has served since 1987. Prior to becoming President in
March 1997, Mr. Oliver served as Executive Vice President, Chief
Financial Officer and Secretary/Treasurer.

(4) Jeffrey J. Wood joined the Company in February 1999 as Executive Vice
President, Chief Financial Officer, Secretary and Treasurer. From July
1987 to February 1999, Mr. Wood worked at Principal Financial Group as
Associate Controller.

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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

The following table presents the aggregate compensation which was earned by the
Chairman and the Chief Executive Officer for each of the past three years, and
the Company's four most highly compensated officers other than the Chief
Executive Officer. There has been no compensation awarded to, earned by or paid
to any employee required to be reported in any table or column in any fiscal
year, other than what is set forth in the table below.

SUMMARY COMPENSATION TABLE

Long Term Compensation
----------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name and Annual Restricted All Other
Principal Compen- Stock Options LTIP Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation**
-------- ---- ------ ----- ------ ---------- ------- ------- --------

Harold E. Riley, 2000 $495,546 N/A N/A N/A N/A N/A $ 24,000
Chairman 1999 $468,950 N/A N/A N/A N/A N/A $ 22,992
1998 $468,950 N/A N/A N/A N/A N/A $ 24,423

*Clayton Dunham, 2000 $204,704 N/A N/A N/A N/A N/A $ 3,000
***E.V.P./C.M.O. 1999 $200,200 N/A N/A N/A N/A N/A $ 2,499
1998 $189,200 N/A N/A N/A N/A N/A $ 1,110

Mark A. Oliver, 2000 $167,519 N/A N/A N/A N/A N/A $ 16,000
President 1999 $150,200 N/A N/A N/A N/A N/A $ 14,995
1998 $149,382 N/A N/A N/A N/A N/A $ 11,656

Rick D. Riley, Vice 2000 $150,785 N/A N/A N/A N/A N/A $ 24,000
Chairman and Chief 1999 $135,200 N/A N/A N/A N/A N/A $ 22,992
Executive Officer 1998 $133,533 N/A N/A N/A N/A N/A $ 24,423

# T. Roby Dollar, 2000 $131,046 N/A N/A N/A N/A N/A $ 24,000
Vice Chairman, Chief 1999 $125,200 N/A N/A N/A N/A N/A $ 22,992
Actuary and Assistant 1998 $119,991 N/A N/A N/A N/A N/A $ 24,423
Secretary

* Messr. Dunham served as an officer of the Company until February 1999, and
continues to serve as an officer of the Company's subsidiaries.
** Company contribution to qualified profit-sharing plan.
*** Officer of Company subsidiary.
# Retired in January, 2001.

All employees of the Company are covered under a non-contributory profit-sharing
plan. Under the terms of the Plan, all employees who have completed one year of
service are eligible to participate. Vesting begins following completion of
three years' service and employees become fully vested after seven years'
service. The Company made a $200,000 annual contribution in 1999 and 2000.
Messrs. HE Riley, RD Riley, and MA Oliver had $186,455, $195,357 and $71,651,
respectively, vested under the Plan as of December 31, 2000. Mr.

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Dollar and Mr. Dunham had $195,553 and $12,293 vested in the Plan as of December
31, 2000, respectively.

During 2000, the members of Board of Directors who are not officers of the
Company were paid $6,000 per year, while Committee members who are not officers
were paid $500 per physical Committee meeting attended. Total directors' fees
paid during 2000 were $30,750. Messr. Reneau was paid $20,200, respectively in
2000 for services performed as a consultant to the Company.

OTHER BUSINESS

Should any other business come before the Meeting, and management is not aware
of any at this time and does not expect any, the persons named in the proxy will
vote on such business as their best judgment and discretion indicates.

PUBLIC ACCOUNTANTS

KPMG LLP, 200 Crescent Court, Suite 300, Dallas, Texas 75201, is the Company's
principal independent auditor. A representative of KPMG LLP will be present at
the Annual Meeting of Stockholders to answer questions and make any desired
statement.

ANNUAL REPORT AND OTHER MATERIAL

A copy of the Company's Annual Report to Stockholders has been mailed under
separate cover. A copy of the reports of the Compensation Committee and the
Audit Committee of the Board of Directors and a Performance Graph regarding
stockholder return accompany this Proxy Statement. NO PART OF SUCH MATERIAL IS
INCORPORATED HEREIN AND NO PART THEREOF IS TO BE CONSIDERED PROXY SOLICITING
MATERIAL.

STOCKHOLDER PROPOSAL
DEADLINE FOR 2002 ANNUAL MEETING

Any proposal by a stockholder to be presented at the Company's next annual
meeting currently scheduled to be held on the first Tuesday in June 2002, must
be received at the offices of the Company, 400 East Anderson Lane, Austin, Texas
78752, no later than December 29, 2001.

BY THE ORDER OF THE BOARD OF DIRECTORS

AUSTIN, TEXAS JEFFREY J. WOOD, SECRETARY

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COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee, which is composed of the three outside
directors named below, makes recommendations to the Board concerning the
compensation of the Company's executive officers. In order to make such
recommendations, toward the end of each year, the Committee evaluates the
Company's performance relative to its business plan and similar companies.
Additionally, each executive officer's contribution to the Company's
achievements during the year is evaluated.

The goal of the Compensation Committee is to ensure that the Company
employs qualified, experienced executive officers whose financial interest is
aligned with that of the shareholders. The Committee considers general industry
practice, tax effects and other factors in structuring executive compensation
awards. The following is a discussion of the compensation forms currently being
utilized.

Salaries for each of the Company's executive officers are determined by
taking into consideration performance, length of tenure with the Company,
compensation by industry competitors for comparable positions and career
achievements. Salaries paid within the industry are weighted more heavily in
setting base salary levels. In order to determine comparable salary levels paid
within the industry, the Committee reviews various industry surveys and publicly
filed information of its competitors. No bonus or stock option plans exist;
however, there is a profit sharing plan, where distribution is based on tenure.

Harold E. Riley was elected Chairman of the Board and Chief Executive
Officer in 1987, although as the founder of the Company, his tenure began in
1968. In October, 2000, he relinquished the position of Chief Executive Officer
to Rick D. Riley, while remaining as Chairman. Harold Riley and Rick Riley are
currently employed by the Company on an "at-will" basis. The Compensation
Committee reviewed industry salary surveys and determined that total cash
compensation for both persons was lower compared to similar positions with
industry competitors; however, their cash compensation was reasonable given the
Company's present size and resources. The Committee considered the significant
role Harold Riley has played in the development of the Company's various
operating and marketing programs, as well as his experience in the merger and
acquisition area and his overall management expertise in establishing his
compensation for the year 2001. Furthermore, the additional responsibilities
assumed by Rick Riley, along with his significant industry experience and
salaries of individuals in comparable positions were considered in his
compensation for the year. The Compensation Committee reviewed the goals of the
Company's business plan relative to compensation of these persons in 2000. The
Committee believes that the cash compensation paid to the Company's Chairman and
to its Chief Executive Officer is designed to closely align their interests with
those of the shareholders, and that their compensation is related directly to
their performance as individuals with considerable experience and ability in the
insurance industry.

COMPENSATION COMMITTEE

Joe R. Reneau, M.D.
Ralph M. Smith, Th.D.
Timothy T. Timmerman

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AUDIT COMMITTEE REPORT

The Audit Committee reports to and acts on behalf of the Board of
Directors by providing oversight of the financial management, independent
auditors and financial reporting procedures of the Company. The Audit
Committee's Charter, which was adopted in 2000, is attached to this proxy
statement as Appendix A. The Company's management is responsible for preparing
the Company's financial statements and the independent auditors are responsible
for auditing those financial statements. The Audit Committee is responsible for
overseeing the conduct of these activities by the Company's management and the
independent auditors. In this context, the Audit Committee has met and held
discussions with management and the independent auditors. Management represented
to the Audit Committee that the Company's consolidated financial statements were
prepared in accordance with generally accepted accounting principles, and the
Audit Committee has reviewed and discussed the consolidated financial statements
with management and the independent auditors.

The members of the Audit Committee are not professionally engaged in
the practice of auditing or accounting and are not financial experts in the
fields of accounting or auditing, including auditor independence. The members of
the Audit Committee rely without independent verification on the information
provided to them and on the representations made by the Company's management and
the independent accountants. Accordingly, the Audit Committee's oversight does
not provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions referred to above do not assure that
the audit of the Company's financial statements have been carried out in
accordance with generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted accounting
principles, or that the Company's auditors are in fact "independent".

The Committee has discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). In addition, the independent auditors
provided to the Audit Committee the written disclosures required by Independent
Standards Board Standard No. 1 (independence Discussions with Audit Committees),
and the Committee and the independent auditors have discussed the auditors'
independence from the Company and its management, including the matters in those
written disclosures. Additionally, the Committee considered the financial
information systems services and other non-audit services provided by the
independent auditors and the fees and costs billed and expected to be billed by
the independent auditors for those services (as shown below). The Committee has
discussed with management the procedures for selection of consultants and the
related competitive bidding practices and fully considered whether those
services provided by the independent auditors are compatible with maintaining
auditor independence.

The Committee has discussed with the Company's independent auditors, with
and without management present, their evaluations of the Company's internal
accounting controls and the overall quality of the Company's financial
reporting.

In reliance on the reviews and discussions with management and the
independent auditors referred to above, the Audit Committee recommended to the
Board of Directors and the Board has

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approved, the inclusion of the audited financial statements in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000, for
filing with the Securities and Exchange Commission. The Audit Committee also
recommended to the Board of Directors, and the Board has approved the selection
of the Company's independent auditors for 2001. A member of the Company's
independent auditors is expected to attend the Meeting and will have the
opportunity to make a statement, if desired. Such member will also be available
to respond to appropriate questions of stockholders.

AUDIT FEES

The aggregate fees billed by the Company's independent auditors for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2000 and for the reviews of
the financial statements included in the Company's Quarterly Reports on Form
10-Q for that fiscal year were $156,600.

OTHER FEES

The aggregate fees billed by the Company's independent auditors for
services rendered to the Company, other than the services described in the
preceding paragraph were $93,400 for 2000. Professional service fees for
information technology services relating to financial information systems design
and implementation during 2000 for the Company were $0.

AUDIT COMMITTEE

Joe R. Reneau, M.D.
Ralph M. Smith, Th.D.
Timothy T. Timmerman

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COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG CITIZENS, INC.,
AMEX MARKET INDEX AND PEER GROUP INDEX

The following graph represents a comparison of the preceding five-year
cumulative total return of the Company, a peer group and a broad market index.
The broad market index chosen was the AMEX Market Index. The peer group, which
includes life, accident and health companies, was compiled by Media General
Financial Services.

ASSUMES $100 INVESTED ON JAN. O1, 1996
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2000

COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE COMPANIES, PEER GROUPS,
INDUSTRY INDEXES AND/OR BROAD MARKETS

COMPANY 12/29/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/29/2000
- ------- ---------- ---------- ---------- ---------- ---------- ----------

Citizens, Inc. 100.0 92.52 70.75 61.22 80.76 81.49
Life Insurance 100.0 127.52 187.93 278.58 252.74 298.70
AMEX Market Index 100.0 105.52 126.97 125.25 156.15 154.23

Source: Media General Financial Services
P.O. Box 85333
Richmond, Virginia 23293

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APPENDIX A
AUDIT COMMITTEE CHARTER

There shall be a committee of the Board of Directors known as the Audit
Committee. Only independent directors may serve on the Audit Committee. The
primary function of the Committee shall be to assist the Board of Directors in
fulfilling its oversight role regarding the Company's financial reporting
process, its system of internal control and its compliance with applicable laws,
regulations and Company policies. Activities of the Audit Committee are as
follows:

CONTINUOUS ACTIVITIES --- GENERAL

1. Provide an open avenue of communication between the independent auditors,
internal auditors and the Board of Directors.

2. Meet at least two times per year or more frequently as circumstances
require; the Committee may ask members of management or others to attend
meetings and provide pertinent information as necessary.

3. Confirm and ensure the independence of the independent auditors and the
objectivity of the internal auditors.

4. Inquire of management, the independent auditors and the chief financial
officer about significant risks or exposures, and assess the steps
management has taken to minimize such risks to the Company.

5. Meet periodically with the independent auditors, the chief financial
officer and management in separate executive sessions to discuss any
matters that the Committee or these groups believe should be discussed
privately with the Committee.

6. Report periodically to the Board of Directors on significant results of the
foregoing activities.

7. Instruct the independent auditors that the Board of Directors and the Audit
Committee, as the stockholders' representatives, is the auditors' client.

CONTINUOUS ACTIVITIES --- REPORTING SPECIFIC POLICIES

1. Advise financial management and the independent auditors that they are
expected to provide a timely analysis of significant current financial
reporting issues and practices.

2. Provide a medium for financial management and the independent auditors to
discuss with the Audit Committee their qualitative judgments about the
appropriateness, not just the acceptability, of accounting principles and
financial disclosure practices used or proposed to be adopted by the
Company and, particularly, about the degree of aggressiveness or
conservatism of its accounting principles and underlying estimates.

3. Determine, as it relates to new transactions or events, the auditors'
reasoning for the appropriateness of the accounting principles and
disclosure practices adopted by management.

4. Assure that the auditors' reasoning is described in determining the
appropriateness of changes in accounting principles and disclosure
practices.

5. Assure that the auditors' reasoning is described in accepting or
questioning significant estimates by management.

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SCHEDULED ACTIVITIES

1. Recommend the selection of the independent auditors for approval by the
Board of Directors, and approve the compensation of the independent
auditors.

2. Consider, in consultation with the independent auditors and the Director
of Internal Audit, the audit scope and plan of the independent auditors
and the internal auditors to assure completeness of coverage, reduction of
redundant efforts and the effective use of audit resources.

3. Review with management and the independent auditors the results of annual
audits and related comments in consultation with other committees as
deemed appropriate, including:

a. The annual financial statements, accompanying footnotes and the
independent auditors' report thereon.

b. Any significant changes required in the independent auditors' audit
plan.

c. Any difficulties or disputes with management encountered during the
course of the audit.

d. Other matters related to the conduct of the audit, which are to be
communicated to the Committee under generally accepted auditing
standards.

4. Consider and review with management and the chief financial officer:

a. Significant internal audit findings during the year and management's
responses to them.

b. Any difficulties encountered in the course of internal audit work,
including any restrictions on the scope of activities or access to
required information.

c. Any changes required in the planned scope of the Internal Audit Plan.

d. The Internal Audit Department charter, budget and staffing.

5. Review the interim financial reports with management, the independent
auditors and the chief financial officer before those interim reports are
released to the public or filed with the SEC.

6. Consider and review with the independent auditors and the chief financial
officer:

a. The adequacy of the Company's internal controls, including
computerized information system controls and security.

b. Related findings and recommendations of the independent auditors and
Internal Audit Department, together with management's responses.

7. Review annually with the independent auditors and the chief financial
officer the results of the monitoring of compliance with the company's code
of conduct.

8. Arrange for the independent auditors to be available to the full Board of
Directors at least annually.

9. Review and update the Committee's Charter annually.

"WHEN NECESSARY" ACTIVITIES

1. Review and concur with the appointment of the chief financial officer.

2. Review and approve requests for any management consulting engagement to be
performed by the independent auditors, and be advised of any other study
undertaken at the request of management that is beyond the scope of the
audit engagement letter.

3. Review periodically with legal counsel any regulatory matters that may have
a material impact on the Company's financial statements, compliance
policies and programs.

4. Conduct or authorize investigations into any matters within the Committee's
scope of responsibilities; the Committee shall be empowered to retain
independent counsel and other professionals to assist in conducting any
investigation.

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Please mark
your vote as [X]
indicated in
this example
1. Election of Directors.

FOR all nominees WITHHOLD
listed below AUTHORITY
(except as indicated to vote for all nominees
to the contrary) listed below

[ ] [ ]

Class A Nominees:
Dr. E. Dean Gage, Steven F. Shelton, Ralph M. Smith, Th.D., Timothy T. Timmerman

(Instruction: To withhold authority to vote for any nominee, write that
nominee's name on the line below.)

- --------------------------------------------------------------------------------

2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.

PLEASE COMPLETE, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE.

SIGNATURE(S) Signature if held jointly Dated 2001
------------------ ------------------ -------------

NOTE: Please sign exactly as name appears hereon. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!

ANNUAL MEETING OF STOCKHOLDERS
CITIZENS, INC.

JUNE 5, 2001
19
CITIZENS, INC.

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Mark A. Oliver, Rick D. Riley, Mark A. Thornton
or any of them with full power of substitution, as proxies to vote at the Annual
Meeting of Stockholders of Citizens, Inc. (the "Company") to be held on June 5,
2001 at 10:00 a.m., local time, and at any adjournment or adjournments thereof,
hereby revoking any proxies heretofore given, to vote all shares of common stock
of the Company held or owned by the undersigned as directed on the reverse side
and in their discretion upon such other matters as may properly come before the
meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1.

(TO BE SIGNED ON REVERSE SIDE)

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

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