recorded and new deposits received. Premiums include receipts from traditional individual life insurance and immediate annuity products. Deposits are received from universal life insurance, variable universal life insurance and fixed deferred and variable annuity products. 

The Individual Insurance segment generated approximately 49% of consolidated insurance revenues for the year ended December 31, 2012, as well as for the year ended December 31, 2011. 

Total premiums increased $4.9 million or 9% in 2012 compared to 2011. Total new premiums increased $5.3 million or 45% in 2012 from the year prior due to higher sales of immediate annuities. 

Total new deposits decreased from the prior year by $2.6 million or 3% in 2012, following a $10.0 million or 10% decrease in 2011. The decrease in 2012 was largely due to a $5.3 million decrease in new fixed deferred annuity deposits. Total renewal deposits decreased from the prior year by $3.6 million or 2% in 2012 following a $5.8 million or 4% increase in 2011. The decline in 2012 was largely attributable to a decrease in fixed deferred annuity renewal deposits. The improvement in 2011 was due to an increase in renewal fixed deferred annuity deposits. 

## Future growth 

The Individual Insurance segment is an essential part of Kansas City 

Life’s core business, representing a majority of the Company’s revenue and net income. The Company plans to continue to grow the segment by recruiting talented general agents and agents. Enhancements to the product portfolio, increased focus on sales development and superior marketing support are elements that will be emphasized to attract new field representatives. 

## Group Insurance 

Kansas City Life Insurance Company offers several insurance products in the Group Insurance segment, including dental, life, vision, and short- and long-term disability. These offerings encompass both traditional, employer- funded group insurance, as well as voluntary, employee-paid products. 

The Group Insurance segment markets its products primarily to small and mid-size organizations. Group products are sold through sales representatives who target a nationwide network of independent general agents and group brokers, along with the Company’s career general agents. The sales network is this segment’s core distribution system. The Company also markets Group products through select third-party marketing arrangements. 

The Group Insurance segment generated 21% of the Company’s consolidated insurance revenues in 2012, compared to 22% in 2011. Total Group premiums increased 

$0.8 million or 1% in 2012, following a $2.9 million or 5% increase in 2011. Moving forward, the Group Insurance segment continues to focus on three primary areas of emphasis to improve sales: 

1. Growing in-force business through the Company’s sales representatives and select third- party marketing arrangements. 

2. Improving administrative efficiency through greater use of customer-facing technology, designed to reduce expenses and improve customer service. 

3. Enhancing the segment’s product portfolio, through delivery of new product offerings and more flexible options to meet the dynamic needs of the employee benefits market. 

## Sunset Financial Services Inc. 

Kansas City Life Insurance Company’s in-house broker/ dealer facilitates the purchase, sale and management of securities, such as variable universal life and variable annuity products. Through this alliance, Sunset Financial Services (SFS) provides registered representatives the flexibility to market a full range of fixed and variable products through a single relationship. 

SFS will continue working with Kansas City Life to help recruit and retain quality agencies and producers. 

