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UICI (ticker: UCI, exchange: New York Stock Exchange (.N)) News Release - 7-Jun-2005

NORTH RICHLAND HILLS, Texas, June 7 /PRNewswire-FirstCall/ -- UICI (NYSE: UCI), a leading provider of affordable health insurance, announced today the introduction of innovative consumer-driven health plans for small businesses, affording employers and employees a health insurance choice that rewards consumers for effectively managing their health care dollars.

The consumer-driven plans will be made available through The MEGA Life and Health Insurance Company, a wholly owned subsidiary of UICI. The company has received regulatory approval to offer the Small Employer Group plans to consumers in Arizona, Georgia, Michigan, Nevada, Tennessee and Texas.

Geared for businesses with two to 50 employees, the plans incorporate features, methods and technology that were adapted from HealthMarket, a top consumer-driven health plan provider that UICI acquired last year.

"We believe our approach is unique in the American market place, and it's a game-changer," said Bill Gedwed, UICI President and CEO. "Our consumer- driven health plans provide access to information that consumers need. The average consumer spends more time searching on the Internet for information about a car purchase than for choosing a doctor or hospital. We believe that that's not a wise way for the consumer to make decisions."

The MEGA consumer-driven health plans lets consumers comparison shop for doctors and hospitals before making an appointment, using Web-based, user friendly technology. The plans put the consumer in control, with access to information to make informed choices. The MEGA consumer-driven plans provide consumers with innovative tools and expertise to voluntarily make more economical, thoughtful choices - keeping premiums low.

MEGA's "Consumer Advantage Plan" allows a consumer to "dial up" or "dial down" premiums with a wide range of features. Along with traditional insurance pricing mechanisms like adjustable deductibles, coinsurance and extra benefit riders, the plan uses powerful new tools such as spending accounts and scheduled benefits and the Maximum Allowable Charge (MAC). Doctors and hospitals are rated based on fees they charge compared to the MAC.

The plan includes a health and wellness account that MEGA believes is the richest benefit in the marketplace for routine and preventative care. On day 1 of coverage, consumers get $1,250 for that year's routine services, such as check ups, mammograms and lab tests -- with no deductible or co-pay. If there's money left over at the end of the year, up to $500 remaining in the fund can be rolled over to the next year. If the fund is depleted, routine services remain covered, but with deductibles and coinsurance. The bottom line: easy access to preventative care that keeps overall health premiums lower.

ABOUT UICI

UICI (headquartered in North Richland Hills, Texas) through its subsidiaries offers insurance (primarily health and life) to niche consumer and institutional markets. Through its Self-Employed Agency Division, UICI provides to the self-employed market health insurance and related insurance products, which are distributed primarily through the Company's dedicated agency field forces, UGA-Association Field Services and Cornerstone America. Through its Student Insurance Division, UICI provides tailored health insurance programs for students enrolled in universities, colleges and kindergarten through grade twelve. Through its Star HRG Division, UICI markets, administers and underwrites limited benefit insurance plans for entry level, high turnover, hourly employees. Through its Life Insurance Division, UICI offers life insurance products to selected markets. Through its ZON Re USA unit, the Company underwrites, administers and issues accidental death, accidental death and dismemberment (AD&D), accident medical and accident disability insurance policies, both on a primary and on a reinsurance basis. For more information, visit http://www.uici.net .

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

Some of the matters discussed in this news release may contain forward- looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate", "believe", "estimate", "expect", "intend", "objective", "plan", "possible", "potential" and similar expressions. Actual results may vary materially from those included in the forward-looking statements. Factors that could cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, general economic conditions; the continued ability of the Company to compete for customers and insureds in an industry where many of its competitors may have greater market share and/or greater financial resources; the Company's ability to accurately estimate medical claims and control costs; changes in government regulation that could increase the costs of compliance or cause the Company to discontinue marketing its products in certain states; the Company's failure to comply with new or existing government regulation that could subject it to significant fines and penalties; changes in the relationship between the Company and the membership associations and/or changes in the laws and regulations governing so-called "association group" insurance (particularly changes that would subject the issuance of policies to prior premium rate approval and/or require the issuance of policies on a "guaranteed issue" basis); significant liabilities and costs associated with litigation; failure of the Company's information systems to provide timely and accurate information; negative publicity regarding the Company's business practices and/or regarding the health insurance industry in general; the Company's inability to enter into or maintain satisfactory relationships with networks of hospitals, physicians, dentists, pharmacies and other health care providers; failure of the Company's regulated insurance company subsidiaries to maintain their current ratings by A.M. Best Company, Fitch and/or Standard & Poor's; and the other risk factors set forth in the reports filed by the Company with the Securities and Exchange Commission.

UICI press releases and other company information are available at UICI's website located at http://www.uici.net .

SOURCE UICI

CONTACT: Mark D. Hauptman, Vice President and CFO of UICI, +1-817-255-5200, or, Doug Holt, +1-312-596-3487

Web site: http://www.uici.net(UCI)

CO: UICI; MEGA Life and Health Insurance Company
ST: Texas, Arizona, Georgia, Michigan, Nevada, Tennessee
IN: INS HEA
SU: PDT

TG-SH
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5997 06/07/2005 12:58 EDT http://www.prnewswire.com

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About HealthMarkets

HealthMarkets, headquartered in North Richland Hills, Texas, is a provider of health and life insurance products to individuals, families, the self-employed, Medicare beneficiaries and small businesses. HealthMarkets offers products and services through its licensed insurance subsidiaries The MEGA Life and Health Insurance Company, Mid-West National Life Insurance Company of Tennessee and The Chesapeake Life Insurance Company. The Company’s offerings include individual and self-employed health insurance, small employer group health insurance, life insurance and reinsurance. Through its Consumer Guided Health Insurance plans, HealthMarkets seeks to provide affordable and accessible health coverage to individuals and small businesses. The Company is owned by a group of private equity investors, including affiliates of The Blackstone Group, Goldman Sachs Capital Partners and DLJ Merchant Banking Partners, members of management and the Company’s independent, licensed agents through the Company’s agent stock accumulation plans. For more information, visit http://www.healthmarkets.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

Some of the matters discussed in this news release may contain forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "intend," "objective," "plan," "possible," "potential" and similar expressions. Actual results may vary materially from those included in the forward-looking statements. Factors that could cause actual results to differ materially from those included in the forward-looking statements include, but are not limited to, general economic conditions; the continued ability of the Company to compete for customers and insureds in an industry where many of its competitors may have greater market share and/or greater financial resources; the Company’s ability to accurately estimate medical claims and control costs; changes in government regulation that could increase the costs of compliance or cause the Company to discontinue marketing its products in certain states; the Company’s failure to comply with new or existing government regulations that could subject it to significant fines and penalties and/or result in restrictions on its operations; changes in the relationship between the Company and the membership associations that make available to their members the health insurance and other insurance products issued by the Company’s insurance subsidiaries; changes in the laws and regulations governing so-called “association group” insurance (particularly changes that would subject the issuance of policies to prior premium rate approval and/or require the issuance of policies on a “guaranteed issue” basis); significant liabilities and costs associated with litigation; failure of the Company’s information systems to provide timely and accurate information; negative publicity regarding the Company’s business practices and/or regarding the health insurance industry in general; the Company’s inability to enter into or maintain satisfactory relationships with networks of hospitals, physicians, dentists, pharmacies and other health care providers; failure of the Company’s regulated insurance company subsidiaries to maintain their current ratings by A.M. Best Company, Fitch and/or Standard & Poor’s; and the other risk factors set forth in the reports filed by the Company from time to time with the Securities and Exchange Commission.

Media Contacts:

Donna Ledbetter
HealthMarkets Corporate Communications
(817) 255-5405
Donna.Ledbetter@healthmarkets.com
www.HealthMarkets.com

Karen Mellen
For HealthMarkets
(312) 596-3487
Karen.Mellen@bm.com