720 East Wisconsin Avenue

Milwaukee, WI 53202-4797

March 6, 2009

VIA EDGAR

Securities and Exchange Commission

Division of Investment Management

100 F Street, NE

Washington, DC 20549

RE: Northwestern Mutual Variable Life Account I

EDGAR CIK No. 0000742277; File No. 811-3989

Northwestern Mutual Variable Life Account II

EDGAR CIK No. 0001359314; File No. 811-21933

Dear Sir or Madam:

On behalf of The Northwestern Mutual Life Insurance Company and Northwestern Mutual Variable Life Account and Northwestern Mutual Life Account II (“Registrants” or the “Accounts”) we hereby submit, pursuant to Rule 30b2-1 under the Investment Company Act of 1940 (the “1940 Act”), that the Accounts’ annual report for the period ending December 31, 2008 has been transmitted to policy owners as required by Rule 30e-2 under the 1940 Act.

The Accounts’ annual report consists of the annual reports of the underlying investment companies listed below. The Registrants understand that the annual reports for the following underlying investment companies have been or will be filed with the Commission via EDGAR under separate cover:

Underlying Investment Company	CIK No.	Registration No.
Northwestern Mutual Series Fund, Inc.	0000742212	811-03990
Fidelity VIP Mid Cap Portfolio	0000927384	811-07205
Russell Investment Funds	0000824036	811-05371

Some of the investment companies above (or series thereof) may not be available under every policy offered by a Registrant.

In addition, performance summaries and financial statements for the Accounts are filed herewith. This filing will also include any other materials required to be filed, if any.

Please direct any questions or comments regarding this filing to the undersigned at 414-665-2418.

Sincerely,

/s/ Barbara E. Courtney

Barbara E. Courtney

Director – Mutual Fund Accounting

The Northwestern Mutual Life Insurance Company (Northwestern Mutual)

How To Get More Information

Northwestern Mutual Express:

1-800-519-4665

Get up-to-date information about your Variable CompLife policy at your convenience with your policy number and your Personal Identification Number (PIN). Call toll-free to review policy values, fund performance information, and request a change to the allocations of your existing assets or future premiums/dividends.

Information on the Internet:

Northwestern Mutual Financial Network

WWW.NMFN.COM

To obtain current performance information and information about Northwestern Mutual, visit us on our website. You can also visit us at our customer service section on our website for information on policy values and current fund performance. This site also allows you to view past confirmation and policy statements, as well as transfer funds online.

You can also sign up for this service by calling 1-866-424-2609 between 7 a.m. — 6 p.m. Central Time Monday — Friday. As always, your Investment Services representative of the Northwestern Mutual Financial Network is available to answer any questions you have about your variable life insurance policy or any of our products.

For inforce policy service on Variable CompLife, Custom Variable Universal Life, and Variable Whole Life, please call 1-866-424-2609, between 7 a.m. - 6 p.m. Central Time Monday – Friday.

For inforce policy service on Variable Executive Life, Variable Joint Life, Executive Variable Universal Life, and Survivorship Variable Universal Life, please call 1-866-464-3800, between 7:30 a.m. and 5:00 p.m. Central Time Monday - Friday.

Mason Street Advisors, LLC is the principal investment adviser for all the Portfolios of the Northwestern Mutual Series Fund, Inc. Mason Street Advisors has engaged and oversees sub-advisers who provide day-to-day management for certain of the Series Fund Portfolios. Each sub-adviser may be replaced without the approval of shareholders. Please see the Series Fund prospectus for more information.

Contents

Performance Summaries for the Northwestern Mutual Variable Life Accounts

Northwestern Mutual Series Fund, Inc. - Annual Report

Fidelity VIP Mid Cap Portfolio - Annual Report

(This report follows the end of the Northwestern Mutual Series Fund, Inc.)

Russell Investment Funds - Annual Report

(This report follows the end of the Fidelity VIP Mid Cap Portfolio.)

Northwestern Mutual Variable Life Account
Financial Statements

Northwestern Mutual Variable Life Account II
Financial Statements

Prospectus Supplements

The performance data quoted represents past performance. Past performance is historical and does not guarantee future performance. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the most recent month-end performance information visit www.nmfn.com.

Performance Summary    as of December 31, 2008

Variable Life — Policies Issued Before October 11, 1995

Total return (as of December 31, 2008)	Growth Stock Division		Focused Appreciation Division(b)		Large Cap Core Stock Division		Index 500 Stock Division		Domestic Equity Division(b)		Equity Income Division(b)		Mid Cap Growth Stock Division
1 year	(39.19	%)	(40.34	%)	(39.08	%)	(37.29	%)	(38.83	%)	(36.16	%)	(40.41	%)
5 years	(18.47	%)	8.39	%	(15.19	%)	(13.56	%)	(17.76	%)	(8.09	%)	(11.22	%)
Annualized	(4.00	%)	1.62	%	(3.24	%)	(2.87	%)	(3.83	%)	(1.67	%)	(2.35	%)
10 years	(24.04	%)	—		(32.73	%)	(18.78	%)	—		—		3.11	%
Annualized	(2.71	%)	—		(3.89	%)	(2.06	%)	—		—		0.31	%
Since division inception in Variable Life Account	—		29.36	%(d)	—		—		(16.27	%)(e)	13.11	%(d)	—
Annualized	—		4.65	%	—		—		(2.36	%)	2.20	%	—
Since portfolio inception(c)	—		—		—		—		—		—		—
Annualized	—		—		—		—		—		—		—
Current yield(g)
Variable Complife — Policies Issued On or After October 11, 1995
1 year	(39.13	%)	(40.28	%)	(39.02	%)	(37.22	%)	(38.77	%)	(36.10	%)	(40.35	%)
5 years	(18.06	%)	8.93	%	(14.77	%)	(13.13	%)	(17.35	%)	(7.63	%)	(10.77	%)
Annualized	(3.91	%)	1.73	%	(3.15	%)	(2.78	%)	(3.74	%)	(1.57	%)	(2.25	%)
10 years	(23.27	%)	—		(32.05	%)	(17.96	%)	—		—		4.15	%
Annualized	(2.61	%)	—		(3.79	%)	(1.96	%)	—		—		0.41	%
Since division inception in Variable Life Account	—		30.09	%(d)	—		—		(15.65	%)(e)	13.75	%(d)	—
Annualized	—		4.75	%	—		—		(2.27	%)	2.30	%	—
Since portfolio inception(c)	—		—		—		—		—		—		—
Annualized	—		—		—		—		—		—		—
Current yield(g)
Variable Executive Life & Variable Joint Life(a)
1 year	(38.86	%)	(40.01	%)	(38.74	%)	(36.94	%)	(38.49	%)	(35.81	%)	(40.08	%)
5 years	(15.95	%)	11.74	%	(12.57	%)	(10.89	%)	(15.21	%)	(5.24	%)	(8.47	%)
Annualized	(3.42	%)	2.25	%	(2.65	%)	(2.28	%)	(3.25	%)	(1.07	%)	(1.75	%)
10 years	(18.90	%)	—		(28.18	%)	(13.29	%)	—		—		10.08	%
Annualized	(2.07	%)	—		(3.26	%)	(1.42	%)	—		—		0.97	%
Since division inception in Variable Life Account	—		33.98	%(d)	—		—		(12.21	%)(e)	17.15	%(d)	—
Annualized	—		5.30	%	—		—		(1.74	%)	2.83	%	—
Since portfolio inception(c)	—		—		—		—		—		—		—
Annualized	—		—		—		—		—		—		—
Current yield(g)

All total return figures shown above reflect the deduction of portfolio expenses. Returns do not reflect premium deductions such as sales charges, premium taxes, surrender charges or cost of insurance charges. The returns shown would be lower if excluded policy charges were included and/or if underlying portfolio expense reimbursements and fee waivers were not reflected.

Performance quoted for periods prior to each product’s inception date is based on the actual investment experience of the portfolio, adjusted for the expenses of the product and premium charges.

(a) Variable Executive Life policies were first offered on March 2, 1998. Variable Joint Life policies were first offered on December 28, 1998.

(b) Effective April 30, 2008, the following divisions of the separate account were renamed:

Old Name	New Name
Janus Capital Appreciation Division	Focused Appreciation Division
Capital Guardian Domestic Equity Division	Domestic Equity Division
T. Rowe Price Equity Income Division	Equity Income Division
AllianceBernstein Mid Cap Value Division	Mid Cap Value Division
T. Rowe Price Small Cap Value Division	Small Cap Value Division
Franklin Templeton International Equity Division	International Equity Division

(c) Returns are stated as of the inception date of the portfolio, which precedes the inception date of the division. See the following footnotes for portfolio inception dates. Performance quoted prior to the inception date of the division is based on the actual investment experience of the portfolio, adjusted for the expenses of the product and premium charges.

(d) Division and portfolio inception on May 1, 2003.

(e) Division and portfolio inception on July 31, 2001.

(f) Division inception on June 30, 1999. Portfolio inception on April 30, 1999.

(g) For the seven-day period ended December 31, 2008, the Money Market Portfolio’s yield was 1.37% and was equivalent to a compound effective yield of 1.38%. The seven-day yield does not include deductions that are included in the separate account. The yield quotation more closely reflects the current earnings of the Money Market Portfolio than the total return quotation.

ii

Index 400 Stock Division		Mid Cap Value Division(b)		Small Cap Growth Stock Division		Small Cap Value Division(b)		International Growth Division		International Equity Division(b)		Money Market Division		Select Bond Division		High Yield Bond Division		Balanced Division
(36.63	%)	(35.43	%)	(44.18	%)	(28.53	%)	(46.48	%)	(44.09	%)	2.20	%	2.69	%	(21.78	%)	(23.15	%)
(4.08	%)	(9.90	%)	(15.96	%)	7.62	%	2.46	%	12.15	%	14.95	%	18.37	%	(1.97	%)	(1.80	%)
(0.83	%)	(2.06	%)	(3.42	%)	1.48	%	0.49	%	2.32	%	2.83	%	3.43	%	(0.40	%)	(0.36	%)
—		—		—		—		—		31.74	%	32.57	%	62.71	%	18.33	%	11.23	%
—		—		—		—		—		2.79	%	2.86	%	4.99	%	1.70	%	1.07	%
33.54	%(f)	19.41	%(d)	39.74	%(f)	37.41	%(e)	11.22	%(e)	—		—		—		—		—
3.09	%	3.18	%	3.58	%	4.38	%	1.44	%	—		—		—		—		—
40.72	%(f)	—		68.74	%(f)	—		—		—		—		—		—		—
3.60	%	—		5.56	%	—		—		—		—		—		—		—
												1.38	%
(36.56	%)	(35.36	%)	(44.12	%)	(28.46	%)	(46.43	%)	(44.04	%)	2.30	%	2.79	%	(21.70	%)	(23.07	%)
(3.61	%)	(9.45	%)	(15.54	%)	8.16	%	2.97	%	12.71	%	15.52	%	18.96	%	(1.48	%)	(1.31	%)
(0.73	%)	(1.97	%)	(3.32	%)	1.58	%	0.59	%	2.42	%	2.93	%	3.53	%	(0.30	%)	(0.26	%)
—		—		—		—		—		33.07	%	33.90	%	64.35	%	19.52	%	12.35	%
—		—		—		—		—		2.90	%	2.96	%	5.09	%	1.80	%	1.17	%
34.82	%(f)	20.09	%(d)	41.08	%(f)	38.43	%(e)	12.04	%(e)	—		—		—		—		—
3.19	%	3.28	%	3.69	%	4.48	%	1.54	%	—		—		—		—		—
42.10	%(f)	—		70.39	%(f)	—		—		—		—		—		—		—
3.70	%	—		5.67	%	—		—		—		—		—		—		—
												1.38	%
(36.28	%)	(35.07	%)	(43.87	%)	(28.13	%)	(46.19	%)	(43.78	%)	2.76	%	3.26	%	(21.35	%)	(22.72	%)
(1.12	%)	(7.12	%)	(13.36	%)	10.94	%	5.63	%	15.61	%	18.51	%	22.02	%	1.06	%	1.24	%
(0.23	%)	(1.47	%)	(2.83	%)	2.10	%	1.10	%	2.94	%	3.45	%	4.06	%	0.21	%	0.25	%
—		—		—		—		—		40.65	%	41.52	%	73.71	%	26.33	%	18.75	%
—		—		—		—		—		3.47	%	3.53	%	5.68	%	2.36	%	1.73	%
42.08	%(f)	23.68	%(d)	48.67	%(f)	44.06	%(e)	16.61	%(e)	—		—		—		—		—
3.76	%	3.82	%	4.26	%	5.04	%	2.09	%	—		—		—		—		—
49.89	%(f)	—		79.74	%(f)	—		—		—		—		—		—		—
4.27	%	—		6.25	%	—		—		—		—		—		—		—
												1.38	%

iii

Performance Summary, continued    as of December 31, 2008

Variable Life — Policies Issued Before October 11, 1995

Total return (as of December 31, 2008)	Asset Allocation Division		Fidelity VIP Mid Cap Division		Russell Multi-Style Equity Division		Russell Aggressive Equity Division		Russell Non-U.S. Division		Russell Real Estate Securities Division		Russell Core Bond Division
1 year	(30.51	%)	(39.94	%)	(40.89	%)	(43.23	%)	(42.73	%)	(37.03	%)	(4.09	%)
5 years	(4.06	%)	11.73	%	(15.50	%)	(19.79	%)	2.29	%	6.95	%	11.09	%
Annualized	(0.83	%)	2.24	%	(3.31	%)	(4.31	%)	0.45	%	1.35	%	2.13	%
10 years	—		157.16	%	(28.77	%)	(6.08	%)	3.49	%	—		45.54	%
Annualized	—		9.91	%	(3.34	%)	(0.63	%)	0.34	%	—		3.82	%
Since division inception in Variable Life Account	(0.03	%)(e)	—		—		—		—		90.68	%(f)	—
Annualized	(0.00	%)	—		—		—		—		7.03	%	—
Since portfolio inception(c)	—		—		—		—		—		87.60	%(f)	—
Annualized	—		—		—		—		—		6.72	%	—
Current yield(g)
Variable Complife — Policies Issued On or After October 11, 1995
1 year	(30.44	%)	(39.88	%)	(40.83	%)	(43.17	%)	(42.67	%)	(36.97	%)	(4.00	%)
5 years	(3.58	%)	12.29	%	(15.08	%)	(19.39	%)	2.80	%	7.48	%	11.65	%
Annualized	(0.73	%)	2.35	%	(3.22	%)	(4.22	%)	0.55	%	1.45	%	2.23	%
10 years	—		159.76	%	(28.05	%)	(5.13	%)	4.53	%	—		47.00	%
Annualized	—		10.02	%	(3.24	%)	(0.53	%)	0.44	%	—		3.93	%
Since division inception in Variable Life Account	0.72	%(e)	—		—		—		—		92.50	%(f)	—
Annualized	0.10	%	—		—		—		—		7.13	%	—
Since portfolio inception(c)	—		—		—		—		—		89.43	%(f)	—
Annualized	—		—		—		—		—		6.83	%	—
Current yield(g)
Variable Executive Life & Variable Joint Life(a)
1 year	(30.13	%)	(39.61	%)	(40.56	%)	(42.92	%)	(42.41	%)	(36.68	%)	(3.57	%)
5 years	(1.09	%)	15.19	%	(12.89	%)	(17.31	%)	5.45	%	10.25	%	14.53	%
Annualized	(0.22	%)	2.87	%	(2.72	%)	(3.73	%)	1.07	%	1.97	%	2.75	%
10 years	—		174.55	%	(23.96	%)	0.27	%	10.49	%	—		55.37	%
Annualized	—		10.63	%	(2.70	%)	0.03	%	1.00	%	—		4.50	%
Since division inception in Variable Life Account	4.82	%(e)	—		—		—		—		102.87	%(f)	—
Annualized	0.64	%	—		—		—		—		7.73	%	—
Since portfolio inception(c)	—		—		—		—		—		99.82	%(f)	—
Annualized	—		—		—		—		—		7.42	%	—
Current yield(g)

All total return figures shown above reflect the deduction of portfolio expenses. Returns do not reflect premium deductions such as sales charges, premium taxes, surrender charges or cost of insurance charges. The returns shown would be lower if excluded policy charges were included and/or if underlying portfolio expense reimbursements and fee waivers were not reflected.

Performance quoted for periods prior to each product’s inception date is based on the actual investment experience of the portfolio, adjusted for the expenses of the product and premium charges.

(a) Variable Executive Life policies were first offered on March 2, 1998. Variable Joint Life policies were first offered on December 28, 1998.

(b) Effective April 30, 2008, the following divisions of the separate account were renamed:

Old Name	New Name
Janus Capital Appreciation Division	Focused Appreciation Division
Capital Guardian Domestic Equity Division	Domestic Equity Division
T. Rowe Price Equity Income Division	Equity Income Division
AllianceBernstein Mid Cap Value Division	Mid Cap Value Division
T. Rowe Price Small Cap Value Division	Small Cap Value Division
Franklin Templeton International Equity Division	International Equity Division

(c) Returns are stated as of the inception date of the portfolio, which precedes the inception date of the division. See the following footnotes for portfolio inception dates. Performance quoted prior to the inception date of the division is based on the actual investment experience of the portfolio, adjusted for the expenses of the product and premium charges.

(d) Division and portfolio inception on May 1, 2003.

(e) Division and portfolio inception on July 31, 2001.

(f) Division inception on June 30, 1999. Portfolio inception on April 30, 1999.

(g) For the seven-day period ended December 31, 2008, the Money Market Portfolio’s yield was 1.37% and was equivalent to a compound effective yield of 1.38%. The seven-day yield does not include deductions that are included in the separate account. The yield quotation more closely reflects the current earnings of the Money Market Portfolio than the total return quotation.

iv

Performance Summary, continued    as of December 31, 2008

Custom Variable Universal Life, Executive Variable Universal Life & Survivorship Variable Universal Life

Total return (as of December 31, 2008)	Growth Stock Division		Focused Appreciation Division(a)		Large Cap Core Stock Division		Index 500 Stock Division		Domestic Equity Division(a)		Equity Income Division(a)		Mid Cap Growth Stock Division
1 year	(38.86	%)	(40.01	%)	(38.74	%)	(36.94	%)	(38.49	%)	(35.81	%)	(40.08	%)
5 years	(15.95	%)	11.74	%	(12.57	%)	(10.89	%)	(15.21	%)	(5.24	%)	(8.47	%)
Annualized	(3.42	%)	2.25	%	(2.65	%)	(2.28	%)	(3.25	%)	(1.07	%)	(1.75	%)
10 years	(18.90	%)	—		(28.18	%)	(13.29	%)	—		—		10.08	%
Annualized	(2.07	%)	—		(3.26	%)	(1.42	%)	—		—		0.97	%
Since division inception in Variable Life Account II	(34.60	%)	(25.11	%)	(34.28	%)	(34.48	%)	(42.95	%)	(34.66	%)	(30.47	%)
Annualized	(19.89	%)	(14.02	%)	(19.68	%)	(19.81	%)	(25.41	%)	(19.93	%)	(17.28	%)
Since portfolio inception(b)	—		33.98	%(c)	—		—		(12.21	%)(d)	17.15	%(c)	—
Annualized	—		5.30	%	—		—		(1.74	%)	2.83	%	—
Current yield(f)

All total return figures shown above reflect the deduction of portfolio expenses. Returns do not reflect premium deductions such as sales charges, premium taxes, surrender charges or cost of insurance charges. The returns shown would be lower if excluded policy charges were included and/or if underlying portfolio expense reimbursements and fee waivers were not reflected.

All policies were first offered and all divisions of the Variable Life Account II began on January 31, 2007. Performance quoted for periods prior to January 31, 2007 is based on the actual investment experience of the portfolio, adjusted for the expenses of the product and premium charges.

(a) Effective April 30, 2008, the following divisions of the separate account were renamed:

Old Name	New Name
Janus Capital Appreciation Division	Focused Appreciation Division
Capital Guardian Domestic Equity Division	Domestic Equity Division
T. Rowe Price Equity Income Division	Equity Income Division
AllianceBernstein Mid Cap Value Division	Mid Cap Value Division
T. Rowe Price Small Cap Value Division	Small Cap Value Division
Franklin Templeton International Equity Division	International Equity Division

(b) Returns are stated as of the inception date of the portfolio, which precedes the inception date of the division. See the following footnotes for portfolio inception dates.

(c) Portfolio inception on May 1, 2003.

(d) Portfolio inception on July 31, 2001.

(e) Portfolio inception on April 30, 1999.

(f) For the seven-day period ended December 31, 2008, the Money Market Portfolio’s yield was 1.37% and was equivalent to a compound effective yield of 1.38%. The seven-day yield does not include deductions that are included in the separate account. The yield quotation more closely reflects the current earnings of the Money Market Portfolio than the total return quotation.

v

Performance Summary, continued    as of December 31, 2008

Custom Variable Universal Life, Executive Variable Universal Life & Survivorship Variable Universal Life

Total return (as of December 31, 2008)	Index 400 Stock Division		Mid Cap Value Division(a)		Small Cap Growth Stock Division		Small Cap Value Division(a)		International Growth Division		International Equity Division(a)		Money Market Division
1 year	(36.28	%)	(35.07	%)	(43.87	%)	(28.13	%)	(46.19	%)	(43.78	%)	2.76	%
5 years	(1.12	%)	(7.12	%)	(13.36	%)	10.94	%	5.63	%	15.61	%	18.51	%
Annualized	(0.23	%)	(1.47	%)	(2.83	%)	2.10	%	1.10	%	2.94	%	3.45	%
10 years	—		—		—		—		—		40.65	%	41.52	%
Annualized	—		—		—		—		—		3.47	%	3.53	%
Since division inception in Variable Life Account II	(33.61	%)	(36.63	%)	(39.80	%)	(30.47	%)	(39.87	%)	(34.64	%)	7.73	%
Annualized	(19.26	%)	(21.19	%)	(23.28	%)	(17.28	%)	(23.33	%)	(19.91	%)	3.96	%
Since portfolio inception(b)	49.89	%(e)	23.68	%(c)	79.74	%(e)	44.06	%(d)	16.61	%(d)	—		—
Annualized	4.27	%	3.82	%	6.25	%	5.04	%	2.09	%	—		—
Current yield(f)													1.38	%

All total return figures shown above reflect the deduction of portfolio expenses. Returns do not reflect premium deductions such as sales charges, premium taxes, surrender charges or cost of insurance charges. The returns shown would be lower if excluded policy charges were included and/or if underlying portfolio expense reimbursements and fee waivers were not reflected.

All policies were first offered and all divisions of the Variable Life Account II began on January 31, 2007. Performance quoted for periods prior to January 31, 2007 is based on the actual investment experience of the portfolio, adjusted for the expenses of the product and premium charges.

(a) Effective April 30, 2008, the following divisions of the separate account were renamed:

Old Name	New Name
Janus Capital Appreciation Division	Focused Appreciation Division
Capital Guardian Domestic Equity Division	Domestic Equity Division
T. Rowe Price Equity Income Division	Equity Income Division
AllianceBernstein Mid Cap Value Division	Mid Cap Value Division
T. Rowe Price Small Cap Value Division	Small Cap Value Division
Franklin Templeton International Equity Division	International Equity Division

(b) Returns are stated as of the inception date of the portfolio, which precedes the inception date of the division. See the following footnotes for portfolio inception dates.

(c) Portfolio inception on May 1, 2003.

(d) Portfolio inception on July 31, 2001.

(e) Portfolio inception on April 30, 1999.

(f) For the seven-day period ended December 31, 2008, the Money Market Portfolio’s yield was 1.37% and was equivalent to a compound effective yield of 1.38%. The seven-day yield does not include deductions that are included in the separate account. The yield quotation more closely reflects the current earnings of the Money Market Portfolio than the total return quotation.

vi

Select Bond Division		High Yield Bond Division		Balanced Division		Asset Allocation Division		Fidelity VIP Mid Cap Division		Russell Multi-Style Equity Division		Russell Aggressive Equity Division		Russell Non-U.S. Division		Russell Real Estate Securities Division		Russell Core Bond Division
3.26	%	(21.35	%)	(22.72	%)	(30.13	%)	(39.61	%)	(40.56	%)	(42.92	%)	(42.41	%)	(36.68	%)	(3.57	%)
22.02	%	1.06	%	1.24	%	(1.09	%)	15.19	%	(12.89	%)	(17.31	%)	5.45	%	10.25	%	14.53	%
4.06	%	0.21	%	0.25	%	(0.22	%)	2.87	%	(2.72	%)	(3.73	%)	1.07	%	1.97	%	2.75	%
73.71	%	26.33	%	18.75	%	—		174.55	%	(23.96	%)	0.27	%	10.49	%	—		55.37	%
5.68	%	2.36	%	1.73	%	—		10.63	%	(2.70	%)	0.03	%	1.00	%	—		4.50	%
9.76	%	(20.13	%)	(18.67	%)	(24.36	%)	(31.42	%)	(35.49	%)	(42.17	%)	(37.13	%)	(51.02	%)	3.52	%
4.99	%	(11.08	%)	(10.23	%)	(13.57	%)	(17.88	%)	(20.46	%)	(24.87	%)	(21.52	%)	(31.11	%)	1.82	%
—		—		—		4.82	%(d)	—		—		—		—		99.82	%(e)	—
—		—		—		0.64	%	—		—		—		—		7.42	%	—

vii

Annual Report December 31, 2008

Northwestern Mutual Variable Life Account

Financial Statements

Northwestern Mutual Variable Life Account Financial Statements

Table of Contents

Northwestern Mutual Variable Life Account
Statements of Assets and Liabilities	1
Statements of Operations	4
Statements of Changes in Net Assets	6
Notes to Financial Statements	10
Report of Independent Registered Public Accounting Firm	15

Statements of Assets and Liabilities

Northwestern Mutual Variable Life Account

December 31, 2008

(in thousands, except accumulation unit values)

	Growth Stock Division		Focused Appreciation Division (a)		Large Cap Core Stock Division		Index 500 Stock Division		Domestic Equity Division (a)		Equity Income Division (a)		Mid Cap Growth Stock Division
Assets:
Investments, at Value (1)(2)
Northwestern Mutual Series Fund, Inc.	$	198,576	$	59,123	$	138,096	$	525,441	$	91,238	$	46,198	$	268,931
Fidelity Variable Insurance Products		—		—		—		—		—		—		—
Russell Investment Funds		—		—		—		—		—		—		—
Due from Northwestern Mutual Life Insurance Company		240		12		172		232		70		12		253
Total Assets		198,816		59,135		138,268		525,673		91,308		46,210		269,184
Liabilities:
Due to Northwestern Mutual Life Insurance Company		—		—		32		—		—		—		55
Total Liabilities		—		—		32		—		—		—		55
Total Net Assets	$	198,816	$	59,135	$	138,236	$	525,673	$	91,308	$	46,210	$	269,129
Net Assets:
Variable Life Policies Issued
Before October 11, 1995
Policyowners’ Equity	$	17,288	$	4,414	$	15,457	$	75,376	$	8,436	$	4,093	$	37,545
Northwestern Mutual’s Equity		730		125		675		2,569		332		119		1,530
Variable Complife Policies Issued
Between October 11, 1995 and December 31, 2008 (3)
Policyowners’ Equity		156,979		44,629		105,800		378,499		66,501		35,567		205,236
Northwestern Mutual’s Equity		14,596		4,865		9,626		34,893		7,723		3,459		17,896
Variable Executive Life Policies Issued
Between March 2, 1998 and December 31, 2008 (4)
Policyowners’ Equity		4,146		2,673		3,550		10,403		3,553		661		2,771
Variable Joint Life Policies Issued
Between December 10, 1998 and December 31, 2008 (5)
Policyowners’ Equity		5,077		2,429		3,128		23,933		4,763		2,311		4,151
Total Net Assets	$	198,816	$	59,135	$	138,236	$	525,673	$	91,308	$	46,210	$	269,129
(1) Investments, at cost	$	278,675	$	85,995	$	191,851	$	749,522	$	155,526	$	73,588	$	426,195
(2) Shares Outstanding		140,634		49,434		157,463		270,011		144,594		53,223		140,214
(3) Accumulation Unit Value	$	1.594004	$	1.300904	$	1.362693	$	1.808068	$	0.843525	$	1.137525	$	1.619377
Units Outstanding		107,640		38,046		84,706		228,642		87,994		34,308		137,791
(4) Accumulation Unit Value	$	21.408736	$	13.397864	$	18.131181	$	40.340674	$	8.778981	$	11.715261	$	43.872392
Units Outstanding		194		200		196		258		405		56		63
(5) Accumulation Unit Value	$	21.408736	$	13.397864	$	18.131181	$	40.340674	$	8.778981	$	11.715261	$	43.872392
Units Outstanding		237		181		172		593		543		197		95

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Assets and Liabilities

1

Statements of Assets and Liabilities

Northwestern Mutual Variable Life Account

December 31, 2008

(in thousands, except accumulation unit values)

	Index 400 Stock Division		Mid Cap Value Division (a)		Small Cap Growth Stock Division		Small Cap Value Division (a)		International Growth Division		International Equity Division (a)		Money Market Division
Assets:
Investments, at Value (1)(2)
Northwestern Mutual Series Fund, Inc.	$	134,381	$	25,465	$	128,988	$	97,324	$	61,555	$	367,946	$	177,858
Fidelity Variable Insurance Products		—		—		—		—		—		—		—
Russell Investment Funds		—		—		—		—		—		—		—
Due from Northwestern Mutual Life Insurance Company		19		1		18		33		35		96		92
Total Assets		134,400		25,466		129,006		97,357		61,590		368,042		177,950
Liabilities:
Due to Northwestern Mutual Life Insurance Company		—		—		111		—		—		—		16
Total Liabilities		—		—		111		—		—		—		16
Total Net Assets	$	134,400	$	25,466	$	128,895	$	97,357	$	61,590	$	368,042	$	177,934
Net Assets:
Variable Life Policies Issued
Before October 11, 1995
Policyowners’ Equity	$	7,350	$	1,856	$	5,758	$	7,481	$	3,226	$	47,272	$	12,054
Northwestern Mutual’s Equity		230		52		208		234		111		1,560		276
Variable Complife Policies Issued
Between October 11, 1995 and December 31, 2008 (3)
Policyowners’ Equity		106,327		19,652		105,088		74,013		46,648		273,610		130,751
Northwestern Mutual’s Equity		10,332		2,255		11,039		7,940		5,348		25,639		15,766
Variable Executive Life Policies Issued
Between March 2, 1998 and December 31, 2008 (4)
Policyowners’ Equity		4,718		518		2,064		2,702		2,808		8,962		12,971
Variable Joint Life Policies Issued
Between December 10, 1998 and December 31, 2008 (5)
Policyowners’ Equity		5,443		1,133		4,738		4,987		3,449		10,999		6,116
Total Net Assets	$	134,400	$	25,466	$	128,895	$	97,357	$	61,590	$	368,042	$	177,934
(1) Investments, at cost	$	192,942	$	45,730	$	228,770	$	127,906	$	108,165	$	459,658	$	177,858
(2) Shares Outstanding		148,652		31,244		118,665		85,672		71,826		278,326		177,858
(3) Accumulation Unit Value	$	1.348229	$	1.200893	$	1.410759	$	1.384260	$	1.120404	$	1.914107	$	1.557129
Units Outstanding		86,531		18,243		82,321		59,206		46,408		156,342		94,094
(4) Accumulation Unit Value	$	14.989442	$	12.367958	$	17.974245	$	14.406429	$	11.660588	$	2.857743	$	40.947848
Units Outstanding		315		42		115		188		241		3,136		316
(5) Accumulation Unit Value	$	14.989442	$	12.367958	$	17.974245	$	14.406429	$	11.660588	$	2.857743	$	40.947848
Units Outstanding		363		92		264		346		296		3,849		148

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

2

Statements of Assets and Liabilities

Select Bond Division		High Yield Bond Division		Balanced Division		Asset Allocation Division		Fidelity VIP Mid Cap Division		Russell Multi-Style Equity Division		Russell Aggressive Equity Division		Russell Non-US Division		Russell Real Estate Securities Division		Russell Core Bond Division
$	191,303	$	55,193	$	254,869	$	28,942	$	—	$	—	$	—	$	—	$	—	$	—
	—		—		—		—		72,215		—		—		—		—		—
	—		—		—		—		—		127,994		54,445		103,120		85,891		64,740
	29		10		126		7		25		30		17		7		59		9
	191,332		55,203		254,995		28,949		72,240		128,024		54,462		103,127		85,950		64,749
	232		—		174		—		1		17		—		33		—		2
	232		—		174		—		1		17		—		33		—		2
$	191,100	$	55,203	$	254,821	$	28,949	$	72,239	$	128,007	$	54,462	$	103,094	$	85,950	$	64,747
$	17,624	$	4,489	$	116,369	$	3,273	$	6,970	$	5,274	$	3,061	$	5,698	$	5,216	$	4,242
	397		148		2,440		81		234		182		109		198		176		134
	134,907		43,194		117,086		21,483		53,252		89,970		41,067		71,529		64,538		41,384
	12,041		3,763		9,956		2,001		6,410		9,623		4,618		7,366		7,059		4,134
	18,006		1,867		3,399		804		2,374		17,060		3,773		13,102		5,350		11,492
	8,125		1,742		5,571		1,307		2,999		5,898		1,834		5,201		3,611		3,361
$	191,100	$	55,203	$	254,821	$	28,949	$	72,239	$	128,007	$	54,462	$	103,094	$	85,950	$	64,747
$	191,765	$	72,610	$	381,037	$	41,592	$	122,674	$	171,963	$	97,609	$	155,138	$	147,616	$	70,662
	158,364		108,010		231,489		37,344		3,985		14,081		7,418		13,695		9,079		6,917
$	2.026282	$	1.613065	$	1.898456	$	1.007179	$	1.573285	$	0.643528	$	0.941939	$	0.979547	$	1.925035	$	1.490991
	72,523		29,111		66,920		23,316		37,922		154,769		48,505		80,545		37,194		30,529
$	156.116892	$	20.699102	$	100.918470	$	10.482012	$	16.202990	$	6.983334	$	10.483725	$	10.384851	$	19.982226	$	15.497865
	115		90		34		77		146		2,443		360		1,262		268		742
$	156.116892	$	20.699102	$	100.918470	$	10.482012	$	16.202990	$	6.983334	$	10.483725	$	10.384851	$	19.982226	$	15.497865
	52		84		55		125		185		845		175		501		181		217

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Assets and Liabilities

3

Statements of Operations

Northwestern Mutual Variable Life Account

For the Year Ended December 31, 2008

(in thousands)

	Growth Stock Division			Focused Appreciation Division (a)			Large Cap Core Stock Division			Index 500 Stock Division
Income:
Dividend income	$	2,945		$	285		$	3,058		$	15,676
Expenses:
Mortality and expense risk charges		1,185			339			814			2,991
Taxes		12			3			11			52
Net investment income (loss)		1,748			(57	)		2,233			12,633
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(3,575	)		335			(2,228	)		(3,534	)
Realized gain distributions		18,302			2,211			—			22,166
Realized gains (losses)		14,727			2,546			(2,228	)		18,632
Change in unrealized appreciation/depreciation of investments during the period		(148,186	)		(42,472	)		(89,197	)		(340,532	)
Net increase (decrease) in net assets resulting from operations	$	(131,711	)	$	(39,983	)	$	(89,192	)	$	(309,267	)
	International Equity Division (a)			Money Market Division			Select Bond Division			High Yield Bond Division
Income:
Dividend income	$	13,841		$	4,195		$	8,306		$	5,360
Expenses:
Mortality and expense risk charges		2,263			634			699			277
Taxes		36			5			9			3
Net investment income (loss)		11,542			3,556			7,598			5,080
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		5,240			—			(253	)		(739	)
Realized gain distributions		51,083			33			—			—
Realized gains (losses)		56,323			33			(253	)		(739	)
Change in unrealized appreciation/depreciation of investments during the period		(359,106	)		—			(2,394	)		(19,755	)
Net increase (decrease) in net assets resulting from operations	$	(291,241	)	$	3,589		$	4,951		$	(15,414	)

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

4

Statements of Operations

Domestic Equity Division (a)			Equity Income Division (a)			Mid Cap Growth Stock Division			Index 400 Stock Division			Mid Cap Value Division (a)			Small Cap Growth Stock Division			Small Cap Value Division (a)			International Growth Division
$	3,541		$	15		$	1,118		$	2,886		$	—		$	311		$	427		$	1,353
	500			244			1,683			776			146			763			513			365
	6			3			27			6			1			4			5			3
	3,035			(232	)		(592	)		2,104			(147	)		(456	)		(91	)		985
	(749	)		(487	)		(6,064	)		720			(1,311	)		(1,790	)		1,917			1,060
	10,366			1,364			50,475			19,563			745			34,977			10,402			10,588
	9,617			877			44,411			20,283			(566	)		33,187			12,319			11,648
	(70,544	)		(25,366	)		(227,780	)		(101,475	)		(12,984	)		(134,208	)		(51,023	)		(65,655	)
$	(57,892	)	$	(24,721	)	$	(183,961	)	$	(79,088	)	$	(13,697	)	$	(101,477	)	$	(38,795	)	$	(53,022	)
Balanced Division			Asset Allocation Division			Fidelity VIP Mid Cap Division			Russell Multi-Style Equity Division			Russell Aggressive Equity Division			Russell Non-US Division			Russell Real Estate Securities Division			Russell Core Bond Division
$	3,919		$	1,074		$	237		$	2,458		$	681		$	—		$	2,321		$	2,974
	1,383			154			409			659			316			547			496			222
	72			2			5			4			2			4			4			2
	2,464			918			(177	)		1,795			363			(551	)		1,821			2,750
	(3,127	)		164			(619	)		(1,414	)		134			1,173			420			(1,953	)
	84,559			2,998			15,755			1,689			19			1,396			—			1,423
	81,432			3,162			15,136			275			153			2,569			420			(530	)
	(161,197	)		(16,799	)		(61,619	)		(86,477	)		(42,383	)		(78,201	)		(51,294	)		(5,710	)
$	(77,301	)	$	(12,719	)	$	(46,660	)	$	(84,407	)	$	(41,867	)	$	(76,183	)	$	(49,053	)	$	(3,490	)

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Operations

5

Statements of Changes in Net Assets

Northwestern Mutual Variable Life Account

(in thousands)

	Growth Stock Division						Focused Appreciation Division (a)
	Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
Operations:
Net investment income (loss)	$	1,748		$	1,533		$	(57	)	$	(221	)
Net realized gains (losses)		14,727			2,495			2,546			1,279
Net change in unrealized appreciation/depreciation		(148,186	)		23,620			(42,472	)		13,388
Net increase (decrease) in net assets resulting from operations		(131,711	)		27,648			(39,983	)		14,446
Policy Transactions:
Policyowners’ net payments		29,593			34,361			8,639			6,631
Policy loans, surrenders and death benefits		(27,071	)		(25,592	)		(5,444	)		(2,956	)
Mortality and other (net)		(8,098	)		(8,741	)		(2,353	)		(1,562	)
Transfers from other divisions		18,462			19,311			34,334			27,521
Transfers to other divisions		(21,042	)		(27,144	)		(17,332	)		(11,670	)
Net increase (decrease) in net assets resulting from policy transactions		(8,156	)		(7,805	)		17,844			17,964
Net increase (decrease) in net assets		(139,867	)		19,843			(22,139	)		32,410
Net Assets:
Beginning of period		338,683			318,840			81,274			48,864
End of period	$	198,816		$	338,683		$	59,135		$	81,274
Units issued during the period		20,386			18,966			19,278			14,333
Units redeemed during the period		(21,616	)		(22,119	)		(12,094	)		(7,156	)
Net units issued (redeemed) during period		(1,230	)		(3,153	)		7,184			7,177
	Mid Cap Growth Stock Division (b)						Index 400 Stock Division
	Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
Operations:
Net investment income (loss)	$	(592	)	$	1,360		$	2,104		$	1,808
Net realized gains (losses)		44,411			38,827			20,283			17,383
Net change in unrealized appreciation/depreciation		(227,780	)		39,220			(101,475	)		(3,726	)
Net increase (decrease) in net assets resulting from operations		(183,961	)		79,407			(79,088	)		15,465
Policy Transactions:
Policyowners’ net payments		37,125			40,349			18,654			20,924
Policy loans, surrenders and death benefits		(30,270	)		(30,560	)		(16,781	)		(15,047	)
Mortality and other (net)		(10,613	)		(11,281	)		(5,103	)		(5,405	)
Transfers from other divisions		18,232			23,802			16,038			21,795
Transfers to other divisions		(25,685	)		(41,497	)		(17,976	)		(25,428	)
Net increase (decrease) in net assets resulting from policy transactions		(11,211	)		(19,187	)		(5,168	)		(3,161	)
Net increase (decrease) in net assets		(195,172	)		60,220			(84,256	)		12,304
Net Assets:
Beginning of period		464,301			404,081			218,656			206,352
End of period	$	269,129		$	464,301		$	134,400		$	218,656
Units issued during the period		22,890			23,210			17,831			17,682
Units redeemed during the period		(25,943	)		(29,532	)		(19,303	)		(18,766	)
Net units issued (redeemed) during period		(3,053	)		(6,322	)		(1,472	)		(1,084	)

(a) Division was renamed effective April 30, 2008. See Note 1.

(b) Division was renamed effective April 30, 2007. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

6

Statements of Changes in Net Assets

Large Cap Core Stock Division						Index 500 Stock Division						Domestic Equity Division (a)						Equity Income Division (a)
Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
$	2,233		$	1,604		$	12,633		$	10,003		$	3,035		$	1,569		$	(232	)	$	1,029
	(2,228	)		345			18,632			35,940			9,617			8,358			877			7,363
	(89,197	)		16,396			(340,532	)		(5,633	)		(70,544	)		(20,854	)		(25,366	)		(7,119	)
	(89,192	)		18,345			(309,267	)		40,310			(57,892	)		(10,927	)		(24,721	)		1,273
	20,838			21,193			70,545			74,560			16,481			16,453			6,547			5,770
	(17,883	)		(15,242	)		(51,292	)		(56,861	)		(9,153	)		(8,338	)		(3,552	)		(3,205	)
	(5,656	)		(5,927	)		(19,781	)		(21,456	)		(3,480	)		(3,798	)		(1,625	)		(1,458	)
	17,653			17,788			45,705			45,675			16,621			28,856			12,616			22,243
	(15,169	)		(21,325	)		(47,205	)		(50,447	)		(16,883	)		(13,308	)		(7,125	)		(8,794	)
	(217	)		(3,513	)		(2,028	)		(8,529	)		3,586			19,865			6,861			14,556
	(89,409	)		14,832			(311,295	)		31,781			(54,306	)		8,938			(17,860	)		15,829
	227,645			212,813			836,968			805,187			145,614			136,676			64,070			48,241
$	138,236		$	227,645		$	525,673		$	836,968		$	91,308		$	145,614		$	46,210		$	64,070
	17,095			15,102			42,685			37,712			25,310			25,674			11,363			13,333
	(16,100	)		(16,672	)		(41,348	)		(38,775	)		(22,492	)		(14,593	)		(7,258	)		(5,887	)
	995			(1,570	)		1,337			(1,063	)		2,818			11,081			4,105			7,446
Mid Cap Value Division (a)						Small Cap Growth Stock Division						Small Cap Value Division (a)						International Growth Division
Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
$	(147	)	$	163		$	(456	)	$	(802	)	$	(91	)	$	(3	)	$	985		$	406
	(566	)		6,928			33,187			25,003			12,319			11,835			11,648			10,206
	(12,984	)		(8,305	)		(134,208	)		(4,623	)		(51,023	)		(13,868	)		(65,655	)		(289	)
	(13,697	)		(1,214	)		(101,477	)		19,578			(38,795	)		(2,036	)		(53,022	)		10,323
	4,325			4,220			21,318			23,769			14,351			14,718			11,155			10,238
	(2,634	)		(1,881	)		(15,175	)		(16,589	)		(9,639	)		(9,328	)		(6,966	)		(6,648	)
	(1,010	)		(1,020	)		(5,100	)		(6,040	)		(3,634	)		(3,488	)		(2,549	)		(2,497	)
	5,724			21,744			16,171			21,763			16,412			26,413			16,514			32,451
	(7,586	)		(9,691	)		(18,594	)		(30,824	)		(17,185	)		(21,525	)		(14,301	)		(14,302	)
	(1,181	)		13,372			(1,380	)		(7,921	)		305			6,790			3,853			19,242
	(14,878	)		12,158			(102,857	)		11,657			(38,490	)		4,754			(49,169	)		29,565
	40,344			28,186			231,752			220,095			135,847			131,093			110,759			81,194
$	25,466		$	40,344		$	128,895		$	231,752		$	97,357		$	135,847		$	61,590		$	110,759
	5,811			10,923			17,812			16,426			15,592			17,125			14,733			17,549
	(6,359	)		(4,957	)		(17,304	)		(18,895	)		(14,339	)		(13,409	)		(12,804	)		(9,453	)
	(548	)		5,966			508			(2,469	)		1,253			3,716			1,929			8,096

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Changes in Net Assets

7

Statements of Changes in Net Assets

Northwestern Mutual Variable Life Account

(in thousands)

	International Equity Division (a)						Money Market Division
	Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
Operations:
Net investment income (loss)	$	11,542		$	8,708		$	3,556		$	6,473
Net realized gains (losses)		56,323			15,305			33			—
Net change in unrealized appreciation/depreciation		(359,106	)		72,441			—			—
Net increase (decrease) in net assets resulting from operations		(291,241	)		96,454			3,589			6,473
Policy Transactions:
Policyowners’ net payments		47,261			45,168			127,153			147,825
Policy loans, surrenders and death benefits		(39,886	)		(40,034	)		(32,703	)		(22,982	)
Mortality and other (net)		(14,184	)		(14,813	)		(9,181	)		(10,201	)
Transfers from other divisions		43,550			74,534			118,140			68,359
Transfers to other divisions		(39,554	)		(40,577	)		(172,012	)		(178,304	)
Net increase (decrease) in net assets resulting from policy transactions		(2,813	)		24,278			31,397			4,697
Net increase (decrease) in net assets		(294,054	)		120,732			34,986			11,170
Net Assets:
Beginning of period		662,096			541,364			142,948			131,778
End of period	$	368,042		$	662,096		$	177,934		$	142,948
Units issued during the period		32,894			35,217			138,287			132,172
Units redeemed during the period		(33,011	)		(27,891	)		(121,020	)		(129,384	)
Net units issued (redeemed) during period		(117	)		7,326			17,267			2,788
	Fidelity VIP Mid Cap Division						Russell Multi-Style Equity Division
	Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
Operations:
Net investment income (loss)	$	(177	)	$	69		$	1,795		$	1,159
Net realized gains (losses)		15,136			9,398			275			9,489
Net change in unrealized appreciation/depreciation		(61,619	)		3,421			(86,477	)		7,614
Net increase (decrease) in net assets resulting from operations		(46,660	)		12,888			(84,407	)		18,262
Policy Transactions:
Policyowners’ net payments		11,389			11,058			17,990			19,346
Policy loans, surrenders and death benefits		(6,285	)		(6,780	)		(14,512	)		(13,164	)
Mortality and other (net)		(2,884	)		(2,632	)		(4,628	)		(5,157	)
Transfers from other divisions		17,833			26,901			31,224			21,125
Transfers to other divisions		(12,686	)		(14,438	)		(23,142	)		(16,556	)
Net increase (decrease) in net assets resulting from policy transactions		7,367			14,109			6,932			5,594
Net increase (decrease) in net assets		(39,293	)		26,997			(77,475	)		23,856
Net Assets:
Beginning of period		111,532			84,535			205,482			181,626
End of period	$	72,239		$	111,532		$	128,007		$	205,482
Units issued during the period		11,896			12,961			35,184			32,425
Units redeemed during the period		(8,750	)		(8,528	)		(32,499	)		(27,340	)
Net units issued (redeemed) during period		3,146			4,433			2,685			5,085

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

8

Statements of Changes in Net Assets

Select Bond Division						High Yield Bond Division						Balanced Division						Asset Allocation Division
Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
$	7,598		$	5,334		$	5,080		$	4,113		$	2,464		$	8,586		$	918		$	687
	(253	)		41			(739	)		(569	)		81,432			8,584			3,162			3,251
	(2,394	)		3,433			(19,755	)		(2,224	)		(161,197	)		1,193			(16,799	)		(706	)
	4,951			8,808			(15,414	)		1,320			(77,301	)		18,363			(12,719	)		3,232
	17,523			16,532			6,771			7,604			24,927			26,885			3,388			3,383
	(15,323	)		(10,521	)		(6,206	)		(4,287	)		(23,106	)		(22,009	)		(2,942	)		(3,303	)
	(5,877	)		(3,955	)		(1,929	)		(1,874	)		(9,174	)		(8,938	)		(1,076	)		(1,047	)
	53,414			35,758			10,024			12,041			13,352			16,498			6,249			5,652
	(28,297	)		(16,611	)		(10,441	)		(10,816	)		(13,724	)		(18,128	)		(4,127	)		(4,123	)
	21,440			21,203			(1,781	)		2,668			(7,725	)		(5,692	)		1,492			562
	26,391			30,011			(17,195	)		3,988			(85,026	)		12,671			(11,227	)		3,794
	164,709			134,698			72,398			68,410			339,847			327,176			40,176			36,382
$	191,100		$	164,709		$	55,203		$	72,398		$	254,821		$	339,847		$	28,949		$	40,176
	26,079			20,245			7,697			8,454			12,855			12,120			6,845			5,812
	(15,095	)		(12,583	)		(8,071	)		(7,161	)		(12,189	)		(12,871	)		(5,875	)		(5,238	)
	10,984			7,662			(374	)		1,293			666			(751	)		970			574
Russell Aggressive Equity Division						Russell Non- US Division						Russell Real Estate Securities Division						Russell Core Bond Division
Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2007
$	363		$	(34	)	$	(551	)	$	3,882		$	1,821		$	2,978		$	2,750		$	3,274
	153			14,527			2,569			34,686			420			26,247			(530	)		(45	)
	(42,383	)		(11,504	)		(78,201	)		(22,933	)		(51,294	)		(56,015	)		(5,710	)		1,219
	(41,867	)		2,989			(76,183	)		15,635			(49,053	)		(26,790	)		(3,490	)		4,448
	8,815			9,736			13,977			14,662			13,989			14,806			6,092			6,050
	(6,922	)		(7,298	)		(11,977	)		(10,982	)		(10,246	)		(11,769	)		(6,647	)		(3,399	)
	(2,333	)		(2,624	)		(3,886	)		(4,317	)		(3,466	)		(4,012	)		(2,286	)		(1,640	)
	9,828			10,070			24,117			24,224			22,210			31,566			31,539			16,936
	(11,796	)		(11,010	)		(23,724	)		(16,457	)		(18,679	)		(37,877	)		(31,697	)		(12,174	)
	(2,408	)		(1,126	)		(1,493	)		7,130			3,808			(7,286	)		(2,999	)		5,773
	(44,275	)		1,863			(77,676	)		22,765			(45,245	)		(34,076	)		(6,489	)		10,221
	98,737			96,874			180,770			158,005			131,195			165,271			71,236			61,015
$	54,462		$	98,737		$	103,094		$	180,770		$	85,950		$	131,195		$	64,747		$	71,236
	11,216			10,558			18,272			19,319			10,829			10,730			14,007			9,912
	(11,908	)		(10,718	)		(19,643	)		(15,988	)		(9,633	)		(12,510	)		(10,388	)		(6,762	)
	(692	)		(160	)		(1,371	)		3,331			1,196			(1,780	)		3,619			3,150

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Changes in Net Assets

9

Notes to Financial Statements

Northwestern Mutual Variable Life Account

December 31, 2008

1. Organization

Northwestern Mutual Variable Life Account (“the Account”) is registered as a unit investment trust under the Investment Company Act of 1940 and is a segregated asset account of The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) used to fund variable life insurance policies.

All assets of each Division of the Account are invested in shares of the corresponding Portfolio of Northwestern Mutual Series Fund, Inc., Fidelity Variable Insurance Products and the Russell Investment Funds (collectively known as “the Funds”). The Funds are open-end investment companies registered under the Investment Company Act of 1940.

Effective April 30, 2008, the following Divisions of the Account were renamed:

Old Name	New Name
Janus Capital Appreciation Division	Focused Appreciation Division
Capital Guardian Domestic Equity Division	Domestic Equity Division
T. Rowe Price Equity Income Division	Equity Income Division
AllianceBernstein Mid Cap Value Division	Mid Cap Value Division
T. Rowe Price Small Cap Value Division	Small Cap Value Division
Franklin Templeton International Equity Division	International Equity Division

Effective April 30, 2007, the Aggressive Growth Stock Division was renamed to the Mid Cap Growth Stock Division.

2. Significant Accounting Policies

A. Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

B. Investment Valuation — The shares are valued at the Funds’ offering and redemption prices per share. In September 2006, the Financial Accounting Standards Board issued Standard No. 157, “Fair Value Measurements” (“FAS 157”) effective for fiscal years beginning after November 15, 2007. FAS 157 redefines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, establishes a framework for measuring fair value and requires additional disclosure about the use of fair value measurements in an effort to make the measurement of fair value more consistent and comparable. The Account adopted FAS 157 effective January 1, 2008. As of December 31, 2008, all of the Account’s investments are identified as Level 1 securities for valuation purposes under FAS 157. Level 1 securities are valued at fair value as determined by quoted prices in active markets for identical securities.

C. Investment Income, Securities Transactions and Policy Dividends — Transactions in the Funds’ shares are accounted for on the trade date. The basis for determining cost on sale of Funds’ shares is identified cost. Dividend income and distributions of net realized gains from the Funds are recorded on the ex-date of the dividends. Dividends and distributions received are reinvested in additional shares of the respective portfolios of the Funds. The policies are eligible to receive dividends from Northwestern Mutual. Policyowners have the option of receiving the dividend in cash or having it reinvested in the Account. Any dividends reinvested in the Account are reflected in Policyowners’ net payments in the accompanying financial statements.

D. Taxes — Northwestern Mutual is taxed as a “life insurance company” under the Internal Revenue Code. The variable life insurance policies, which are funded in the Account, are taxed as part of the operations of Northwestern Mutual. Policies provide that a charge for taxes may be made against the assets of the Account. Generally, for Variable Life policies, Northwestern Mutual charges the Account at an annual rate of 0.05% of the Account’s net assets and reserves the right to increase, decrease or eliminate the charge for taxes in the future. Generally, for Variable CompLife, Variable Executive Life and Variable Joint Life policies, there is no charge being made against the assets of the Account for federal income taxes, but Northwestern Mutual reserves the right to charge for taxes in the future.

E. Premium Payments — For Variable Life and Variable CompLife policies the Account is credited for the policyowners’ net annual premiums at the respective policy anniversary dates regardless of when policyowners actually pay their premiums. Northwestern Mutual’s equity represents any unpaid portion of net annual premiums.

10

Notes to Financial Statements

Notes to Financial Statements

3. Purchases and Sales of Investments

Purchases and sales of the Funds’ shares for the year ended December 31, 2008 were as follows: (in thousands)

Division	Purchases		Sales
Growth Stock	$	42,664	$	31,693
Focused Appreciation		26,811		6,833
Large Cap Core Stock		22,104		20,220
Index 500 Stock		92,295		59,685
Domestic Equity		27,907		10,938
Equity Income		12,220		4,241
Mid Cap Growth Stock		74,170		35,699
Index 400 Stock		36,001		19,513
Mid Cap Value		2,545		3,129
Small Cap Growth Stock		51,270		18,014
Small Cap Value		22,093		11,565
International Growth		24,005		8,603
International Equity		106,885		47,088
Money Market		86,722		52,030
Select Bond		47,613		18,375
High Yield Bond		10,370		7,080
Balanced		106,303		26,905
Asset Allocation		8,764		3,409
Fidelity VIP Mid Cap		30,837		7,907
Russell Multi-Style Equity		27,660		17,244
Russell Aggressive Equity		6,170		8,223
Russell Non-U.S.		13,992		14,599
Russell Real Estate Securities		17,865		12,316
Russell Core Bond		9,107		7,942

4. Expenses and Related Party Transactions

A deduction for mortality and expense risks is paid to Northwestern Mutual. The mortality risk is that insureds may not live as long as estimated. The expense risk is that expenses of issuing and administering the policies may exceed the estimated costs.

For Variable Life and Variable CompLife policies, the deduction is determined daily at an annual rate of 0.50% and 0.45%, respectively, of the net assets of the Account.

A deduction for the mortality and expense risks for Variable Executive Life policies is determined monthly at an annual rate of 0.60% of the amount invested in the Account for the Policy for the first ten Policy years, and 0.17% thereafter for policies with the Cash Value Amendment, or 0.15% thereafter for policies without the Cash Value Amendment. A deduction for the mortality and expense risks for Variable Joint Life policies is determined monthly at an annual rate of 0.10% of the amounts invested in the Account for the Policy. These charges are reflected as a reduction in units and are included in Mortality and Other in the accompanying financial statements.

Additional mortality costs are deducted from the policy annually for Variable Life and Variable CompLife policies, and monthly for Variable Executive Life and Variable Joint Life policies, and are paid to Northwestern Mutual to cover the cost of providing insurance protection. For Variable Life and Variable CompLife policies this cost is actuarially calculated based upon the insured’s age, the 1980 Commissioners Standard Ordinary Mortality Table and the amount of insurance provided under the policy. For Variable Executive Life and Variable Joint Life policies the cost reflects expected mortality costs based upon actual experience.

Certain deductions are also made from the annual, single or other premiums before amounts are allocated to the Account. These deductions are for sales load, administrative expenses, taxes and a risk charge for the guaranteed minimum death benefit.

5. Financial Highlights

(For a unit outstanding during the period)

	As of the respective period end date:				For the respective period ended:
Division	Units Outstanding (000’s)	Unit Value, Lowest to Highest	Net Assets (000’s)		Dividend Income as a % of Average Net Assets	Expense Ratio, Lowest to Highest	Total Return, Lowest to Highest (1)
Growth Stock Division
Year Ended 12/31/08	108,071	$1.594004 to $21.408736	$	198,816	1.06%	0.10% to 0.60%	(39.19%) to (38.86%)
Year Ended 12/31/07	109,301	$2.618873 to $35.015115	$	338,683	0.89%	0.10% to 0.60%	8.60%  to  9.20%
Year Ended 12/31/06	112,452	$2.409175 to $32.066403	$	318,840	0.75%	0.10% to 0.60%	8.97%  to  9.57%
Year Ended 12/31/05	112,012	$2.208643 to $29.265983	$	292,545	1.03%	0.20% to 0.75%	6.96%  to  7.71%
Year Ended 12/31/04	112,546	$2.062785 to $27.170823	$	275,417	0.68%	0.20% to 0.75%	5.93%  to  6.67%
Focused Appreciation Division
Year Ended 12/31/08	38,427	$1.300904 to $13.397864	$	59,135	0.35%	0.10% to 0.60%	(40.34%) to (40.01%)
Year Ended 12/31/07	31,243	$2.178331 to $22.333276	$	81,274	0.04%	0.10% to 0.60%	26.14%  to  26.84%
Year Ended 12/31/06	24,065	$1.725184 to $17.607745	$	48,864	0.42%	0.10% to 0.60%	4.31%  to  4.88%
Year Ended 12/31/05	16,935	$1.647885 to $16.788069	$	33,152	0.20%	0.20% to 0.75%	16.19%  to  17.00%
Year Ended 12/31/04	4,213	$1.418302 to $14.349081	$	7,261	0.15%	0.20% to 0.75%	18.84%  to  19.67%

(1) Total Return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges.

Notes to Financial Statements

11

Notes to Financial Statements

	As of the respective period end date:				For the respective period ended:
Division	Units Outstanding (000’s)	Unit Value, Lowest to Highest	Net Assets (000’s)		Dividend Income as a % of Average Net Assets	Expense Ratio, Lowest to Highest	Total Return, Lowest to Highest (1)
Large Cap Core Stock Division
Year Ended 12/31/08	85,074	$1.362693 to $18.131181	$	138,236	1.62%	0.10% to 0.60%	(39.08%) to (38.74%)
Year Ended 12/31/07	84,079	$2.234518 to $29.597322	$	227,645	1.15%	0.10% to 0.60%	8.52%  to  9.12%
Year Ended 12/31/06	85,650	$2.057029 to $27.123722	$	212,813	1.06%	0.10% to 0.60%	10.89%  to  11.49%
Year Ended 12/31/05	84,325	$1.853229 to $24.327323	$	189,924	1.27%	0.20% to 0.75%	7.71%  to  8.46%
Year Ended 12/31/04	81,773	$1.718946 to $22.430441	$	172,192	0.93%	0.20% to 0.75%	7.41%  to  8.16%
Index 500 Stock Division
Year Ended 12/31/08	229,493	$1.808068 to $40.340674	$	525,673	2.26%	0.10% to 0.60%	(37.29%) to (36.94%)
Year Ended 12/31/07	228,156	$2.880226 to $63.972521	$	836,968	1.62%	0.10% to 0.60%	4.85%  to  5.43%
Year Ended 12/31/06	229,219	$2.744303 to $60.678957	$	805,187	1.57%	0.10% to 0.60%	14.99%  to  15.62%
Year Ended 12/31/05	227,890	$2.384129 to $52.479807	$	702,148	1.72%	0.20% to 0.75%	4.00%  to  4.72%
Year Ended 12/31/04	222,453	$2.290186 to $50.112283	$	663,759	1.31%	0.20% to 0.75%	9.93%  to  10.70%
Domestic Equity Division
Year Ended 12/31/08	88,942	$0.843525 to $8.778981	$	91,308	2.91%	0.10% to 0.60%	(38.83%) to (38.49%)
Year Ended 12/31/07	86,124	$1.377664 to $14.273423	$	145,614	1.44%	0.10% to 0.60%	(6.84%) to (6.33%)
Year Ended 12/31/06	75,043	$1.477394 to $15.237722	$	136,676	0.00%	0.10% to 0.60%	15.93%  to  16.56%
Year Ended 12/31/05	60,708	$1.267542 to $13.072390	$	95,767	1.87%	0.20% to 0.75%	7.30%  to  8.04%
Year Ended 12/31/04	44,092	$1.181356 to $12.099054	$	65,770	1.59%	0.20% to 0.75%	16.04%  to  16.85%
Equity Income Division
Year Ended 12/31/08	34,561	$1.137525 to $11.715261	$	46,210	0.03%	0.10% to 0.60%	(36.16%) to (35.81%)
Year Ended 12/31/07	30,456	$1.780093 to $18.250431	$	64,070	2.10%	0.10% to 0.60%	2.69%  to  3.26%
Year Ended 12/31/06	23,010	$1.731741 to $17.674755	$	48,241	1.82%	0.10% to 0.60%	18.50%  to  19.15%
Year Ended 12/31/05	17,221	$1.456050 to $14.833915	$	31,366	1.74%	0.20% to 0.75%	3.46%  to  4.19%
Year Ended 12/31/04	10,285	$1.407305 to $14.237970	$	18,761	1.99%	0.20% to 0.75%	14.36%  to  15.16%
Mid Cap Growth Stock Division
Year Ended 12/31/08	137,949	$1.619377 to $43.872392	$	269,129	0.30%	0.10% to 0.60%	(40.41%) to (40.08%)
Year Ended 12/31/07	141,002	$2.714862 to $73.219863	$	464,301	0.76%	0.10% to 0.60%	20.04%  to  20.70%
Year Ended 12/31/06	147,324	$2.259482 to $60.663705	$	404,081	0.12%	0.10% to 0.60%	3.83%  to  4.40%
Year Ended 12/31/05	151,330	$2.173946 to $58.106257	$	402,632	0.05%	0.20% to 0.75%	5.40%  to  6.14%
Year Ended 12/31/04	152,471	$2.060530 to $54.747494	$	385,914	0.00%	0.20% to 0.75%	13.42%  to  14.22%
Index 400 Stock Division
Year Ended 12/31/08	87,209	$1.348229 to $14.989442	$	134,400	1.54%	0.10% to 0.60%	(36.63%) to (36.28%)
Year Ended 12/31/07	88,681	$2.125280 to $23.522236	$	218,656	1.23%	0.10% to 0.60%	7.34%  to  7.93%
Year Ended 12/31/06	89,766	$1.978080 to $21.794434	$	206,352	1.06%	0.10% to 0.60%	9.44%  to  10.04%
Year Ended 12/31/05	87,671	$1.793842 to $19.805364	$	184,510	0.76%	0.20% to 0.75%	11.59%  to  12.37%
Year Ended 12/31/04	82,636	$1.607481 to $17.624859	$	155,780	0.66%	0.20% to 0.75%	15.45%  to  16.26%
Mid Cap Value Division
Year Ended 12/31/08	18,377	$1.200893 to $12.367958	$	25,466	0.00%	0.10% to 0.60%	(35.43%) to (35.07%)
Year Ended 12/31/07	18,925	$1.857847 to $19.047672	$	40,344	0.83%	0.10% to 0.60%	(0.71%) to (0.16%)
Year Ended 12/31/06	12,958	$1.869298 to $19.078717	$	28,186	1.30%	0.10% to 0.60%	13.87%  to  14.49%
Year Ended 12/31/05	9,445	$1.635691 to $16.663892	$	18,620	0.67%	0.20% to 0.75%	4.73%  to  5.46%
Year Ended 12/31/04	5,285	$1.561859 to $15.801473	$	10,335	1.20%	0.20% to 0.75%	17.84%  to  18.67%
Small Cap Growth Stock Division
Year Ended 12/31/08	82,700	$1.410759 to $17.974245	$	128,895	0.17%	0.10% to 0.60%	(44.18%) to (43.87%)
Year Ended 12/31/07	82,192	$2.524707 to $32.021844	$	231,752	0.08%	0.10% to 0.60%	8.94%  to  9.54%
Year Ended 12/31/06	84,660	$2.315230 to $29.232653	$	220,095	0.00%	0.10% to 0.60%	6.10%  to  6.68%
Year Ended 12/31/05	84,275	$2.165726 to $27.401692	$	207,501	0.00%	0.20% to 0.75%	10.41%  to  11.18%
Year Ended 12/31/04	79,456	$1.961525 to $24.646196	$	178,276	0.00%	0.20% to 0.75%	17.97%  to  18.80%
Small Cap Value Division
Year Ended 12/31/08	59,740	$1.384260 to $14.406429	$	97,357	0.34%	0.10% to 0.60%	(28.53%) to (28.13%)
Year Ended 12/31/07	58,487	$1.934849 to $20.045927	$	135,847	0.41%	0.10% to 0.60%	(1.37%) to (0.83%)
Year Ended 12/31/06	54,770	$1.959847 to $20.213417	$	131,093	0.23%	0.10% to 0.60%	15.92%  to  16.55%
Year Ended 12/31/05	48,270	$1.681621 to $17.342719	$	99,801	0.31%	0.20% to 0.75%	6.47%  to  7.21%
Year Ended 12/31/04	41,207	$1.579431 to $16.175980	$	81,654	0.21%	0.20% to 0.75%	23.70%  to  24.57%

(1) Total Return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges.

12

Notes to Financial Statements

Notes to Financial Statements

	As of the respective period end date:				For the respective period ended:
Division	Units Outstanding (000’s)	Unit Value, Lowest to Highest	Net Assets (000’s)		Dividend Income as a % of Average Net Assets	Expense Ratio, Lowest to Highest	Total Return, Lowest to Highest (1)
International Growth Division
Year Ended 12/31/08	46,945	$1.120404 to $11.660588	$	61,590	1.52%	0.10% to 0.60%	(46.48%) to (46.19%)
Year Ended 12/31/07	45,016	$2.091399 to $21.668250	$	110,759	0.81%	0.10% to 0.60%	12.00%  to  12.62%
Year Ended 12/31/06	36,920	$1.865431 to $19.240066	$	81,194	0.20%	0.10% to 0.60%	20.81%  to  21.48%
Year Ended 12/31/05	27,233	$1.535755 to $15.838526	$	49,444	1.23%	0.20% to 0.75%	17.18%  to  18.00%
Year Ended 12/31/04	16,457	$1.310570 to $13.422496	$	26,738	0.77%	0.20% to 0.75%	20.74%  to  21.59%
International Equity Division
Year Ended 12/31/08	163,327	$1.914107 to $2.857743		$368,042	2.67%	0.10% to 0.60%	(44.09%) to (43.78%)
Year Ended 12/31/07	163,444	$3.420279 to $5.083451		$662,096	1.83%	0.10% to 0.60%	17.42%  to  18.06%
Year Ended 12/31/06	156,118	$2.910111 to $4.305729		$541,364	1.70%	0.10% to 0.60%	30.18%  to  30.90%
Year Ended 12/31/05	148,008	$2.233185 to $3.289423		$398,833	1.73%	0.20% to 0.75%	10.75%  to  11.52%
Year Ended 12/31/04	136,445	$2.014473 to $2.949634		$335,788	1.69%	0.20% to 0.75%	18.50%  to  19.33%
Money Market Division
Year Ended 12/31/08	94,558	$1.557129 to $40.947848		$177,934	2.65%	0.10% to 0.60%	2.20%  to  2.76%
Year Ended 12/31/07	77,291	$1.522145 to $39.847990		$142,948	5.13%	0.10% to 0.60%	4.70%  to  5.28%
Year Ended 12/31/06	74,505	$1.452309 to $37.848488		$131,778	4.74%	0.10% to 0.60%	4.29%  to  4.86%
Year Ended 12/31/05	70,482	$1.391250 to $36.095241		$119,666	2.95%	0.20% to 0.75%	2.27%  to  2.98%
Year Ended 12/31/04	71,217	$1.359011 to $35.049174		$118,680	1.43%	0.20% to 0.75%	0.73%  to  1.43%
Select Bond Division
Year Ended 12/31/08	72,690	$2.026282 to $156.116892		$191,100	4.60%	0.10% to 0.60%	2.69%  to  3.26%
Year Ended 12/31/07	61,706	$1.971244 to $151.194364		$164,709	3.96%	0.10% to 0.60%	5.81%  to  6.39%
Year Ended 12/31/06	54,043	$1.861181 to $142.110273		$134,698	3.64%	0.10% to 0.60%	3.18%  to  3.74%
Year Ended 12/31/05	47,940	$1.802101 to $136.984725		$118,086	3.47%	0.20% to 0.75%	1.51%  to  2.22%
Year Ended 12/31/04	39,809	$1.773542 to $134.012483		$100,407	4.16%	0.20% to 0.75%	4.02%  to  4.75%
High Yield Bond Division
Year Ended 12/31/08	29,285	$1.613065 to $20.699102		$  55,203	8.18%	0.10% to 0.60%	(21.78%) to (21.35%)
Year Ended 12/31/07	29,659	$2.060165 to $26.317469		$  72,398	6.14%	0.10% to 0.60%	1.82%  to  2.38%
Year Ended 12/31/06	28,367	$2.021433 to $25.706496		$  68,410	6.61%	0.10% to 0.60%	9.18%  to  9.77%
Year Ended 12/31/05	27,480	$1.849698 to $23.417544		$  61,087	6.61%	0.20% to 0.75%	0.69%  to  1.39%
Year Ended 12/31/04	26,333	$1.835249 to $23.096633		$  58,483	6.94%	0.20% to 0.75%	11.98%  to  12.76%
Balanced Division
Year Ended 12/31/08	67,009	$1.898456 to $100.918470		$254,821	1.30%	0.10% to 0.60%	(23.15%) to (22.72%)
Year Ended 12/31/07	66,343	$2.467848 to $130.596514		$339,847	3.04%	0.10% to 0.60%	5.57%  to  6.15%
Year Ended 12/31/06	67,095	$2.335417 to $123.031604		$327,176	2.81%	0.10% to 0.60%	9.82%  to  10.42%
Year Ended 12/31/05	67,338	$2.124518 to $111.421574		$304,390	2.61%	0.20% to 0.75%	2.88%  to  3.59%
Year Ended 12/31/04	63,489	$2.063062 to $107.555819		$291,027	2.50%	0.20% to 0.75%	7.14%  to  7.89%
Asset Allocation Division
Year Ended 12/31/08	23,518	$1.007179 to $10.482012		$  28,949	2.95%	0.10% to 0.60%	(30.51%)  to (30.13%)
Year Ended 12/31/07	22,548	$1.447923 to $15.001132		$  40,176	2.21%	0.10% to 0.60%	8.80%  to  9.40%
Year Ended 12/31/06	21,975	$1.329516 to $13.712349		$  36,382	1.83%	0.10% to 0.60%	9.32%  to  9.91%
Year Ended 12/31/05	20,083	$1.209657 to $12.475450		$  31,500	1.41%	0.20% to 0.75%	6.25%  to  6.99%
Year Ended 12/31/04	16,962	$1.138467 to $11.659896		$  25,578	0.00%	0.20% to 0.75%	9.25%  to  10.02%
Fidelity VIP Mid Cap Division
Year Ended 12/31/08	38,253	$1.573285 to $16.202990		$  72,239	0.24%	0.10% to 0.60%	(39.94%) to (39.61%)
Year Ended 12/31/07	35,107	$2.616815 to $26.828755		$111,532	0.49%	0.10% to 0.60%	14.71%  to  15.34%
Year Ended 12/31/06	30,673	$2.279082 to $23.260937		$  84,535	0.15%	0.10% to 0.60%	11.79%  to  12.40%
Year Ended 12/31/05	22,174	$2.031293 to $20.694231		$  54,896	0.00%	0.20% to 0.75%	17.20%  to  18.02%
Year Ended 12/31/04	10,744	$1.733216 to $17.535222		$  23,473	0.00%	0.20% to 0.75%	23.79%  to  24.66%
Russell Multi-Style Equity Division
Year Ended 12/31/08	158,057	$0.643528 to $6.983334		$128,007	1.44%	0.10% to 0.60%	(40.89%) to (40.56%)
Year Ended 12/31/07	155,372	$1.087639 to $11.749485		$205,482	0.97%	0.10% to 0.60%	9.76%  to  10.36%
Year Ended 12/31/06	150,286	$0.989999 to $10.646608		$181,626	0.94%	0.10% to 0.60%	12.13%  to  12.75%
Year Ended 12/31/05	139,639	$0.876252 to $9.442962		$150,906	1.05%	0.20% to 0.75%	6.53%  to  7.27%
Year Ended 12/31/04	126,766	$0.822570 to $8.802993		$129,070	0.73%	0.20% to 0.75%	9.04%  to  9.81%

(1) Total Return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges.

Notes to Financial Statements

13

Notes to Financial Statements

	As of the respective period end date:			For the respective period ended:
Division	Units Outstanding (000’s)	Unit Value, Lowest to Highest	Net Assets (000’s)	Dividend Income as a % of Average Net Assets	Expense Ratio, Lowest to Highest	Total Return, Lowest to Highest (1)
Russell Aggressive Equity Division
Year Ended 12/31/08	49,040	$0.941939 to $10.483725	$  54,462	0.87%	0.10% to 0.60%	(43.23%) to (42.92%)
Year Ended 12/31/07	49,732	$1.657613 to $18.365962	$  98,737	0.37%	0.10% to 0.60%	2.85%  to  3.42%
Year Ended 12/31/06	49,892	$1.610065 to $17.758799	$  96,874	0.19%	0.10% to 0.60%	14.16%  to  14.79%
Year Ended 12/31/05	46,877	$1.399687 to $15.470599	$  80,521	0.18%	0.20% to 0.75%	5.62%  to  6.36%
Year Ended 12/31/04	43,922	$1.325166 to $14.545498	$  71,319	0.17%	0.20% to 0.75%	13.93%  to  14.73%
Russell Non-US Division
Year Ended 12/31/08	82,308	$0.979547 to $10.384851	$103,094	0.00%	0.10% to 0.60%	(42.73%) to (42.41%)
Year Ended 12/31/07	83,679	$1.708615 to $18.032632	$180,770	2.59%	0.10% to 0.60%	9.52%  to  10.12%
Year Ended 12/31/06	80,347	$1.558635 to $16.375774	$158,005	2.54%	0.10% to 0.60%	22.97%  to  23.64%
Year Ended 12/31/05	71,637	$1.258058 to $13.244730	$114,343	1.59%	0.20% to 0.75%	12.90%  to  13.69%
Year Ended 12/31/04	62,415	$1.114327 to $11.650240	$  88,545	2.08%	0.20% to 0.75%	17.48%  to  18.30%
Russell Real Estate Securities Division
Year Ended 12/31/08	37,643	$1.925035 to $19.982226	$  85,950	1.92%	0.10% to 0.60%	(37.03%) to (36.68%)
Year Ended 12/31/07	36,447	$3.054156 to $31.559603	$131,195	2.29%	0.10% to 0.60%	(16.32%) to (15.86%)
Year Ended 12/31/06	38,227	$3.646143 to $37.506853	$165,271	1.96%	0.10% to 0.60%	35.10%  to  35.84%
Year Ended 12/31/05	35,074	$2.678661 to $27.611672	$112,364	2.13%	0.20% to 0.75%	12.17%  to  12.96%
Year Ended 12/31/04	29,812	$2.387952 to $24.444468	$  86,525	2.31%	0.20% to 0.75%	33.94%  to  34.87%
Russell Core Bond Division
Year Ended 12/31/08	31,488	$1.490991 to $15.497865	$  64,747	4.06%	0.10% to 0.60%	(4.09%) to (3.57%)
Year Ended 12/31/07	27,869	$1.553099 to $16.070912	$  71,236	5.27%	0.10% to 0.60%	6.66%  to  7.24%
Year Ended 12/31/06	24,720	$1.454770 to $14.985609	$  61,015	4.53%	0.10% to 0.60%	3.15%  to  3.72%
Year Ended 12/31/05	21,286	$1.399759 to $14.448349	$  53,033	3.62%	0.20% to 0.75%	1.31%  to  2.01%
Year Ended 12/31/04	16,238	$1.381724 to $14.163304	$  40,747	2.43%	0.20% to 0.75%	3.94%  to  4.66%

(1) Total Return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges.

14

Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To The Northwestern Mutual Life Insurance Company and

Policy Owners of Northwestern Mutual Variable Life Account

In our opinion, the accompanying statements of assets and liabilities, the related statements of operations, and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Northwestern Mutual Variable Life Account and its Growth Stock Division, Focused Appreciation Division, Large Cap Core Stock Division, Index 500 Stock Division, Domestic Equity Division, Equity Income Division, Mid Cap Growth Stock Division, Index 400 Stock Division, Mid Cap Value Division, Small Cap Growth Stock Division, Small Cap Value Division, International Growth Division, International Equity Division, Money Market Division, Select Bond Division, High Yield Bond Division, Balanced Division, Asset Allocation Division, Fidelity VIP Mid Cap Division, Russell Multi-Style Equity Division, Russell Aggressive Equity Division, Russell Non-US Division, Russell Real Estate Securities Division, and Russell Core Bond Division at December 31, 2008, and the results of each of their operations, the changes in each of their net assets and their financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of The Northwestern Mutual Life Insurance Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included direct confirmation of securities owned at December 31, 2008 with Northwestern Mutual Series Fund, Inc., Fidelity Variable Insurance Products Fund III and the Russell Investment Funds, provide a reasonable basis for our opinion.

February 17, 2009

15

Report of Independent Registered Public Accounting Firm

Annual Report December 31, 2008

Northwestern Mutual Variable Life Account II

Financial Statements

Northwestern Mutual Variable Life Account II Financial Statements

Table of Contents

Northwestern Mutual Variable Life Account II
Statements of Assets and Liabilities	1
Statements of Operations	4
Statements of Changes in Net Assets	6
Notes to Financial Statements	10
Report of Independent Registered Public Accounting Firm	13

Statements of Assets and Liabilities

Northwestern Mutual Variable Life Account II

December 31, 2008

(in thousands, except accumulation unit values)

	Growth Stock Division		Focused Appreciation Division (a)		Large Cap Core Stock Division		Index 500 Stock Division		Domestic Equity Division (a)		Equity Income Division (a)		Mid Cap Growth Stock Division
Assets:
Investments, at Value (1)(2)
Northwestern Mutual Series Fund, Inc.	$	394	$	1,380	$	294	$	1,080	$	581	$	541	$	619
Fidelity Variable Insurance Products		—		—		—		—		—		—		—
Russell Investment Funds		—		—		—		—		—		—		—
Due from Northwestern Mutual Life Insurance Company		—		—		—		—		—		—
Total Assets		394		1,380		294		1,080		581		541		619
Liabilities:
Due to Northwestern Mutual Life Insurance Company		—		2		—		2		—		—		—
Total Liabilities		—		2		—		2		—		—		—
Total Net Assets	$	394	$	1,378	$	294	$	1,078	$	581	$	541	$	619
Net Assets:
Custom Variable Universal Life Policies Issued
On or After January 31, 2007 (3)
Policyowners’ Equity	$	272	$	1,032	$	216	$	501	$	570	$	283	$	197
Executive Variable Universal Life Policies Issued
On or After January 31, 2007 (4)
Policyowners’ Equity		75		310		47		574		2		248		389
Survivorship Variable Universal Life Policies Issued
On or After January 31, 2007 (5)
Policyowners’ Equity		47		36		31		3		9		10		33
Total Net Assets	$	394	$	1,378	$	294	$	1,078	$	581	$	541	$	619
(1) Investments, at cost	$	569	$	2,085	$	392	$	1,441	$	854	$	758	$	993
(2) Shares Outstanding		279		1,153		336		555		922		624		323
(3) Accumulation Unit Value	$	21.408736	$	13.397864	$	18.131181	$	40.340674	$	8.778981	$	11.715261	$	43.872392
Units Outstanding		13		77		12		12		65		24		4
(4) Accumulation Unit Value	$	21.408736	$	13.397864	$	18.131181	$	40.340674	$	8.778981	$	11.715261	$	43.872392
Units Outstanding		3		23		3		14		—		21		9
(5) Accumulation Unit Value	$	21.408736	$	13.397864	$	18.131181	$	40.340674	$	8.778981	$	11.715261	$	43.872392
Units Outstanding		2		3		2		—		1		1		1

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Assets and Liabilities

1

Statements of Assets and Liabilities

Northwestern Mutual Variable Life Account II

December 31, 2008

(in thousands, except accumulation unit values)

	Index 400 Stock Division		Mid Cap Value Division (a)		Small Cap Growth Stock Division		Small Cap Value Division (a)		International Growth Division		International Equity Division (a)		Money Market Division
Assets:
Investments, at Value (1)(2)
Northwestern Mutual Series Fund, Inc.	$	652	$	236	$	316	$	773	$	429	$	1,917	$	1,617
Fidelity Variable Insurance Products		—		—		—		—		—		—		—
Russell Investment Funds		—		—		—		—		—		—		—
Due from Northwestern Mutual Life Insurance Company		1		1		—		1		—		1		—
Total Assets		653		237		316		774		429		1,918		1,617
Liabilities:
Due to Northwestern Mutual Life Insurance Company		—		—		—		—		—		—		—
Total Liabilities		—		—		—		—		—		—		—
Total Net Assets	$	653	$	237	$	316	$	774	$	429	$	1,918	$	1,617
Net Assets:
Custom Variable Universal Life Policies Issued
On or After January 31, 2007 (3)
Policyowners’ Equity	$	227	$	130	$	241	$	287	$	414	$	1,261	$	1,104
Executive Variable Universal Life Policies Issued
On or After January 31, 2007 (4)
Policyowners’ Equity		425		104		60		483		2		592		422
Survivorship Variable Universal Life Policies Issued
On or After January 31, 2007 (5)
Policyowners’ Equity		1		3		15		4		13		65		91
Total Net Assets	$	653	$	237	$	316	$	774	$	429	$	1,918	$	1,617
(1) Investments, at cost	$	1,015	$	282	$	484	$	1,068	$	642	$	2,984	$	1,616
(2) Shares Outstanding		722		289		290		680		501		1,450		1,616
(3) Accumulation Unit Value	$	14.989442	$	12.367958	$	17.974245	$	14.406429	$	11.660588	$	2.857743	$	40.947848
Units Outstanding		15		11		13		20		36		441		27
(4) Accumulation Unit Value	$	14.989442	$	12.367958	$	17.974245	$	14.406429	$	11.660588	$	2.857743	$	40.947848
Units Outstanding		28		8		3		34		—		207		10
(5) Accumulation Unit Value	$	14.989442	$	12.367958	$	17.974245	$	14.406429	$	11.660588	$	2.857743	$	40.947848
Units Outstanding		—		—		1		—		1		23		2

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

2

Statements of Assets and Liabilities

Select Bond Division		High Yield Bond Division		Balanced Division		Asset Allocation Division		Fidelity VIP Mid Cap Division		Russell Multi-Style Equity Division		Russell Aggressive Equity Division		Russell Non-US Division		Russell Real Estate Securities Division		Russell Core Bond Division
$	1,150	$	401	$	167	$	112	$	—	$	—	$	—	$	—	$	—	$	—
	—		—		—		—		478		—		—		—		—		—
	—		—		—		—		—		424		206		423		399		325
	—		—		—		—		—		—		1		1		1		—
	1,150		401		167		112		478		424		207		424		400		325
	—		—		—		—		—		—		—		—		—		—
	—		—		—		—		—		—		—		—		—		—
$	1,150	$	401	$	167	$	112	$	478	$	424	$	207	$	424	$	400	$	325
$	932	$	164	$	91	$	109	$	464	$	373	$	174	$	331	$	354	$	247
	138		227		76		3		8		51		31		86		24		74
	80		10		—		—		6		—		2		7		22		4
$	1,150	$	401	$	167	$	112	$	478	$	424	$	207	$	424	$	400	$	325
$	1,155	$	505	$	236	$	148	$	681	$	628	$	287	$	590	$	582	$	343
	952		785		151		144		26		47		28		56		42		35
$	156.116892	$	20.699102	$	100.918470	$	10.482012	$	16.202990	$	6.983334	$	10.483725	$	10.384851	$	19.982226	$	15.497865
	6		8		1		10		29		53		17		32		18		16
$	156.116892	$	20.699102	$	100.918470	$	10.482012	$	16.202990	$	6.983334	$	10.483725	$	10.384851	$	19.982226	$	15.497865
	1		11		1		—		—		7		3		8		1		5
$	156.116892	$	20.699102	$	100.918470	$	10.482012	$	16.202990	$	6.983334	$	10.483725	$	10.384851	$	19.982226	$	15.497865
	1		—		—		—		—		—		—		1		1		—

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Assets and Liabilities

3

Statements of Operations

Northwestern Mutual Variable Life Account II

For the Year Ended December 31, 2008

(in thousands)

	Growth Stock Division			Focused Appreciation Division (a)			Large Cap Core Stock Division			Index 500 Stock Division
Income:
Dividend income	$	4		$	5		$	4		$	23
Net investment income (loss)		4			5			4			23
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(10	)		(71	)		(9	)		(97	)
Realized gain distributions		24			40			—			32
Realized gains (losses)		14			(31	)		(9	)		(65	)
Change in unrealized appreciation/depreciation of investments during the period		(175	)		(722	)		(99	)		(351	)
Net increase (decrease) in net assets resulting from operations	$	(157	)	$	(748	)	$	(104	)	$	(393	)
	International Equity Division (a)			Money Market Division			Select Bond Division			High Yield Bond Division
Income:
Dividend income	$	58		$	54		$	36		$	32
Net investment income (loss)		58			54			36			32
Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(191	)		—			(1	)		(18	)
Realized gain distributions		215			—			—			—
Realized gains (losses)		24			—			(1	)		(18	)
Change in unrealized appreciation/depreciation of investments during the period		(1,068	)		—			(9	)		(104	)
Net increase (decrease) in net assets resulting from operations	$	(986	)	$	54		$	26		$	(90	)

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

4

Statements of Operations

Domestic Equity Division (a)			Equity Income Division (a)			Mid Cap Growth Stock Division			Index 400 Stock Division			Mid Cap Value Division (a)			Small Cap Growth Stock Division			Small Cap Value Division (a)			International Growth Division
$	15		$	—		$	2		$	13		$	—		$	—		$	3		$	6
	15			—			2			13			—			—			3			6
	(27	)		(41	)		(25	)		(34	)		(72	)		(23	)		(34	)		(67	)
	43			17			99			87			4			54			72			50
	16			(24	)		74			53			(68	)		31			38			(17	)
	(249	)		(191	)		(376	)		(359	)		12			(167	)		(286	)		(210	)
$	(218	)	$	(215	)	$	(300	)	$	(293	)	$	(56	)	$	(136	)	$	(245	)	$	(221	)
Balanced Division			Asset Allocation Division			Fidelity VIP Mid Cap Division			Russell Multi-Style Equity Division			Russell Aggressive Equity Division			Russell Non-US Division			Russell Real Estate Securities Division			Russell Core Bond Division
$	2		$	2		$	1		$	5		$	2		$	—		$	7		$	8
	2			2			1			5			2			—			7			8
	(11	)		(1	)		(11	)		(7	)		(30	)		(54	)		(76	)		(2	)
	45			6			31			2			—			2			—			5
	34			5			20			(5	)		(30	)		(52	)		(76	)		3
	(70	)		(36	)		(206	)		(203	)		(74	)		(147	)		(89	)		(18	)
$	(34	)	$	(29	)	$	(185	)	$	(203	)	$	(102	)	$	(199	)	$	(158	)	$	(7	)

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Operations

5

Statements of Changes in Net Assets

Northwestern Mutual Variable Life Account II

(in thousands)

	Growth Stock Division						Focused Appreciation Division (a)
	Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
Operations:
Net investment income (loss)	$	4		$	—		$	5		$	—
Net realized gains (losses)		14			2			(31	)		1
Net change in unrealized appreciation/depreciation		(175	)		—			(722	)		17
Net increase (decrease) in net assets resulting from operations		(157	)		2			(748	)		18
Policy Transactions:
Policyowners’ net payments		246			57			548			55
Policy loans, surrenders and death benefits		(2	)		(1	)		—			(5	)
Mortality and other (net)		(54	)		(14	)		(122	)		(8	)
Transfers from other divisions		685			203			4,185			224
Transfers to other divisions		(484	)		(87	)		(2,714	)		(55	)
Net increase (decrease) in net assets resulting from policy transactions		391			158			1,897			211
Net increase (decrease) in net assets		234			160			1,149			229
Net Assets:
Beginning of period		160			—			229			—
End of period	$	394		$	160		$	1,378		$	229
Units issued during the period		35			8			260			14
Units redeemed during the period		(22	)		(3	)		(168	)		(3	)
Net units issued (redeemed) during period		13			5			92			11
	Mid Cap Growth Stock Division (b)						Index 400 Stock Division
	Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
Operations:
Net investment income (loss)	$	2		$	1		$	13		$	1
Net realized gains (losses)		74			9			53			4
Net change in unrealized appreciation/depreciation		(376	)		2			(359	)		(3	)
Net increase (decrease) in net assets resulting from operations		(300	)		12			(293	)		2
Policy Transactions:
Policyowners’ net payments		310			61			238			49
Policy loans, surrenders and death benefits		(1	)		(1	)		—			(28	)
Mortality and other (net)		(55	)		(14	)		(52	)		(9	)
Transfers from other divisions		2,917			321			3,278			277
Transfers to other divisions		(2,417	)		(214	)		(2,698	)		(111	)
Net increase (decrease) in net assets resulting from policy transactions		754			153			766			178
Net increase (decrease) in net assets		454			165			473			180
Net Assets:
Beginning of period		165			—			180			—
End of period	$	619		$	165		$	653		$	180
Units issued during the period		57			6			189			14
Units redeemed during the period		(46	)		(3	)		(154	)		(6	)
Net units issued (redeemed) during period		11			3			35			8

(a) Division was renamed effective April 30, 2008. See Note 1.

(b) Division was renamed effective April 30, 2007. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

6

Statements of Changes in Net Assets

Large Cap Core Stock Division						Index 500 Stock Division						Domestic Equity Division (a)						Equity Income Division (a)
Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
$	4		$	—		$	23		$	1		$	15		$	1		$	—		$	4
	(9	)		1			(65	)		2			16			4			(24	)		20
	(99	)		1			(351	)		(10	)		(249	)		(24	)		(191	)		(26	)
	(104	)		2			(393	)		(7	)		(218	)		(19	)		(215	)		(2	)
	145			33			503			98			261			57			251			37
	(3	)		(2	)		—			(20	)		(11	)		(1	)		(2	)		(1	)
	(33	)		(9	)		(89	)		(13	)		(66	)		(13	)		(46	)		(13	)
	420			123			5,095			779			805			278			3,255			234
	(240	)		(38	)		(4,472	)		(403	)		(464	)		(28	)		(2,927	)		(30	)
	289			107			1,037			441			525			293			531			227
	185			109			644			434			307			274			316			225
	109			—			434			—			274			—			225			—
$	294		$	109		$	1,078		$	434		$	581		$	274		$	541		$	225
	28			5			114			14			100			22			233			16
	(14	)		(2	)		(95	)		(7	)		(53	)		(3	)		(200	)		(3	)
	14			3			19			7			47			19			33			13
Mid Cap Value Division (a)						Small Cap Growth Stock Division						Small Cap Value Division (a)						International Growth Division
Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
$	—		$	2		$	—		$	—		$	3		$	—		$	6		$	1
	(68	)		34			31			3			38			2			(17	)		5
	12			(58	)		(167	)		(2	)		(286	)		(10	)		(210	)		(2	)
	(56	)		(22	)		(136	)		1			(245	)		(8	)		(221	)		4
	76			37			203			51			246			82			147			35
	(1	)		(1	)		(2	)		(1	)		(4	)		(1	)		(6	)		(1	)
	(17	)		(6	)		(40	)		(8	)		(57	)		(10	)		(66	)		(7	)
	822			382			661			192			3,618			246			695			141
	(848	)		(129	)		(509	)		(96	)		(2,954	)		(139	)		(285	)		(7	)
	32			283			313			138			849			178			485			161
	(24	)		261			177			139			604			170			264			165
	261			—			139			—			170			—			165			—
$	237		$	261		$	316		$	139		$	774		$	170		$	429		$	165
	62			20			38			7			227			16			55			8
	(56	)		(7	)		(25	)		(3	)		(181	)		(8	)		(25	)		(1	)
	6			13			13			4			46			8			30			7

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Changes in Net Assets

7

Statements of Changes in Net Assets

Northwestern Mutual Variable Life Account II

(in thousands)

	International Equity Division (a)						Money Market Division
	Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
Operations:
Net investment income (loss)	$	58		$	3		$	54		$	18
Net realized gains (losses)		24			8			—			—
Net change in unrealized appreciation/depreciation		(1,068	)		1			—			—
Net increase (decrease) in net assets resulting from operations		(986	)		12			54			18
Policy Transactions:
Policyowners’ net payments		990			136			10,226			4,589
Policy loans, surrenders and death benefits		—			(16	)		(1	)		(1	)
Mortality and other (net)		(248	)		(36	)		(254	)		(69	)
Transfers from other divisions		5,634			735			2,577			210
Transfers to other divisions		(4,207	)		(96	)		(11,691	)		(4,041	)
Net increase (decrease) in net assets resulting from policy transactions		2,169			723			857			688
Net increase (decrease) in net assets		1,183			735			911			706
Net Assets:
Beginning of period		735			—			706			—
End of period	$	1,918		$	735		$	1,617		$	706
Units issued during the period		1,835			176			362			139
Units redeemed during the period		(1,308	)		(32	)		(341	)		(121	)
Net units issued (redeemed) during period		527			144			21			18
	Fidelity VIP Mid Cap Division						Russell Multi-Style Equity Division
	Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
Operations:
Net investment income (loss)	$	1		$	—		$	5		$	1
Net realized gains (losses)		20			—			(5	)		7
Net change in unrealized appreciation/depreciation		(206	)		3			(203	)		(1	)
Net increase (decrease) in net assets resulting from operations		(185	)		3			(203	)		7
Policy Transactions:
Policyowners’ net payments		280			58			168			58
Policy loans, surrenders and death benefits		(5	)		(1	)		(5	)		(1	)
Mortality and other (net)		(56	)		(8	)		(56	)		(14	)
Transfers from other divisions		584			147			933			272
Transfers to other divisions		(333	)		(6	)		(609	)		(126	)
Net increase (decrease) in net assets resulting from policy transactions		470			190			431			189
Net increase (decrease) in net assets		285			193			228			196
Net Assets:
Beginning of period		193			—			196			—
End of period	$	478		$	193		$	424		$	196
Units issued during the period		42			8			121			29
Units redeemed during the period		(20	)		(1	)		(78	)		(12	)
Net units issued (redeemed) during period		22			7			43			17

(a) Division was renamed effective April 30, 2008. See Note 1.

The Accompanying Notes are an Integral Part of the Financial Statements

8

Statements of Changes in Net Assets

Select Bond Division						High Yield Bond Division						Balanced Division						Asset Allocation Division
Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
$	36		$	3		$	32		$	—		$	2		$	—		$	2		$	—
	(1	)		(1	)		(18	)		—			34			—			5			—
	(9	)		4			(104	)		—			(70	)		—			(36	)		—
	26			6			(90	)		—			(34	)		—			(29	)		—
	481			74			117			12			60			7			79			3
	(5	)		(1	)		(3	)		(1	)		—			(3	)		—			(1	)
	(111	)		(16	)		(24	)		(2	)		(20	)		(2	)		(10	)		(1	)
	1,318			240			1,782			47			417			48			124			9
	(813	)		(49	)		(1,431	)		(6	)		(287	)		(19	)		(62	)		—
	870			248			441			50			170			31			131			10
	896			254			351			50			136			31			102			10
	254			—			50			—			31			—			10			—
$	1,150		$	254		$	401		$	50		$	167		$	31		$	112		$	10
	13			3			82			2			4			1			15			1
	(7	)		(1	)		(65	)		—			(3	)		—			(6	)		—
	6			2			17			2			1			1			9			1
Russell Aggressive Equity Division						Russell Non- US Division						Russell Real Estate Securities Division						Russell Core Bond Division
Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007			Year Ended December 31, 2008			Period from January 31, 2007 to December 31, 2007
$	2		$	—		$	—		$	4		$	7		$	7		$	8		$	2
	(30	)		6			(52	)		18			(76	)		36			3			—
	(74	)		(7	)		(147	)		(20	)		(89	)		(95	)		(18	)		—
	(102	)		(1	)		(199	)		2			(158	)		(52	)		(7	)		2
	94			33			245			85			212			71			101			23
	—			(1	)		(1	)		(1	)		(5	)		(1	)		(1	)		(1	)
	(22	)		(5	)		(49	)		(11	)		(58	)		(17	)		(28	)		(4	)
	486			153			1,276			357			601			383			918			139
	(336	)		(92	)		(1,053	)		(227	)		(538	)		(38	)		(714	)		(103	)
	222			88			418			203			212			398			276			54
	120			87			219			205			54			346			269			56
	87			—			205			—			346			—			56			—
$	207		$	87		$	424		$	205		$	400		$	346		$	325		$	56
	43			9			113			24			31			13			67			10
	(27	)		(5	)		(83	)		(13	)		(22	)		(2	)		(49	)		(7	)
	16			4			30			11			9			11			18			3

The Accompanying Notes are an Integral Part of the Financial Statements

Statements of Changes in Net Assets

9

Notes to Financial Statements

Northwestern Mutual Variable Life Account II

December 31, 2008

1. Organization

Northwestern Mutual Variable Life Account II (“the Account”) is registered as a unit investment trust under the Investment Company Act of 1940 and is a segregated asset account of The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) used to fund variable life insurance policies. The Account began operations on January 31, 2007.

All assets of each Division of the Account are invested in shares of the corresponding Portfolio of Northwestern Mutual Series Fund, Inc., Fidelity Variable Insurance Products and the Russell Investment Funds (collectively known as “the Funds”). The Funds are open-end investment companies registered under the Investment Company Act of 1940.

Effective April 30, 2008, the following Divisions of the Account were renamed:

Old Name	New Name
Janus Capital Appreciation Division	Focused Appreciation Division
Capital Guardian Domestic Equity Division	Domestic Equity Division
T. Rowe Price Equity Income Division	Equity Income Division
AllianceBernstein Mid Cap Value Division	Mid Cap Value Division
T. Rowe Price Small Cap Value Division	Small Cap Value Division
Franklin Templeton International Equity Division	International Equity Division

Effective April 30, 2007, the Aggressive Growth Stock Division was renamed to the Mid Cap Growth Stock Division.

2. Significant Accounting Policies

A. Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

B. Investment Valuation — The shares are valued at the Funds’ offering and redemption prices per share. In September 2006, the Financial Accounting Standards Board issued Standard No. 157, “Fair Value Measurements” (“FAS 157”) effective for fiscal years beginning after November 15, 2007. FAS 157 redefines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, establishes a framework for measuring fair value and requires additional disclosure about the use of fair value measurements in an effort to make the measurement of fair value more consistent and comparable. The Account adopted FAS 157 effective January 1, 2008. As of December 31, 2008, all of the Account’s investments are identified as Level 1 securities for valuation purposes under FAS 157. Level 1 securities are valued at fair value as determined by quoted prices in active markets for identical securities.

C. Investment Income, Securities Transactions and Policy Dividends — Transactions in the Funds’ shares are accounted for on the trade date. The basis for determining cost on sale of Funds’ shares is identified cost. Dividend income and distributions of net realized gains from the Funds are recorded on the ex-date of the dividends. Dividends and distributions received are reinvested in additional shares of the respective portfolios of the Funds. The policies are eligible to receive dividends from Northwestern Mutual. Policyowners have the option of receiving the dividend in cash or having it reinvested in the Account. Any dividends reinvested in the Account are reflected in Policyowners’ net payments in the accompanying financial statements.

D. Taxes — Northwestern Mutual is taxed as a “life insurance company” under the Internal Revenue Code. The variable life insurance policies, which are funded in the Account, are taxed as part of the operations of Northwestern Mutual. Currently, there is no charge being made against the assets of the Account for federal income taxes, but Northwestern Mutual reserves the right to charge for taxes in the future.

3. Purchases and Sales of Investments

Purchases and sales of the Funds’ shares for the year ended December 31, 2008 were as follows: (in thousands)

Division	Purchases		Sales
Growth Stock	$	504	$	79
Focused Appreciation		2,073		134
Large Cap Core Stock		341		48
Index 500 Stock		1,216		141
Domestic Equity		684		101
Equity Income		604		56
Mid Cap Growth Stock		928		69
Index 400 Stock		920		81
Mid Cap Value		85		47
Small Cap Growth Stock		425		51
Small Cap Value		1,001		71
International Growth		628		78
International Equity		2,753		327
Money Market		11,425		10,493
Select Bond		1,047		141
High Yield Bond		514		37
Balanced		238		24
Asset Allocation		149		10
Fidelity VIP Mid Cap		584		72
Russell Multi-Style Equity		520		71

10

Notes to Financial Statements

Notes to Financial Statements

Division	Purchases		Sales
Russell Aggressive Equity	$	261	$	30
Russell Non-U.S.		488		63
Russell Real Estate Securities		296		78
Russell Core Bond		321		30

4. Expenses and Related Party Transactions

A deduction for mortality and expense risks is determined monthly and paid to Northwestern Mutual. The mortality risk is that insureds may not live as long as estimated. The expense risk is that expenses of issuing and administering the policies may exceed the estimated costs.

A deduction for the mortality and expense risks for Custom Variable Universal Life policies is determined at an annual rate of 0.35% of the amount invested in the Account for the Policy for the first ten Policy years, 0.20% for the next ten Policy years and 0.05% thereafter. A deduction for the mortality and expense risks for Executive Variable Universal Life policies is determined at an annual rate of 0.20% of the amounts invested in the Account for the Policy for the first ten Policy years, and 0.10% thereafter. A deduction for the mortality and expense risks for Survivorship Variable Universal Life Policies is determined at an annual rate of 0.05% of the amount invested in the Account for the Policy. These charges are reflected as a reduction in units and are included in Mortality and Other in the accompanying financial statements.

Additional mortality costs are determined monthly and are paid to Northwestern Mutual to cover the cost of providing insurance protection for the first ten Policy years on all Survivorship Variable Universal Life policies based on the age of the insured individuals at the time the policy is issued.

Certain deductions are also made from the annual, single or other premiums before amounts are allocated to the Account. These deductions are for sales load, administrative expenses and taxes.

5. Financial Highlights

(For a unit outstanding during the period)

	As of the respective period end date:				For the respective period ended:
Division	Units Outstanding (000’s)	Unit Value	Net Assets (000’s)		Dividend Income as a % of Average Net Assets	Expense Ratio, Lowest to Highest	Total Return (1)
Growth Stock Division
Year Ended 12/31/08	18	$21.408736	$	394	1.25%	0.05% to 0.35%	(38.86%)
Period Ended 12/31/07	5	$35.015115	$	160	0.56%	0.05% to 0.35%	6.96%
Focused Appreciation Division
Year Ended 12/31/08	103	$13.397864	$	1,378	0.44%	0.05% to 0.35%	(40.01%)
Period Ended 12/31/07	11	$22.333276	$	229	0.03%	0.05% to 0.35%	24.83%
Large Cap Core Stock Division
Year Ended 12/31/08	17	$18.131181	$	294	1.79%	0.05% to 0.35%	(38.74%)
Period Ended 12/31/07	3	$29.597322	$	109	0.68%	0.05% to 0.35%	7.29%
Index 500 Stock Division
Year Ended 12/31/08	26	$40.340674	$	1,078	2.36%	0.05% to 0.35%	(36.94%)
Period Ended 12/31/07	7	$63.972521	$	434	0.79%	0.05% to 0.35%	3.90%
Domestic Equity Division
Year Ended 12/31/08	66	$  8.778981	$	581	3.27%	0.05% to 0.35%	(38.49%)
Period Ended 12/31/07	19	$14.273423	$	274	1.30%	0.05% to 0.35%	(7.25%)
Equity Income Division
Year Ended 12/31/08	46	$11.715261	$	541	0.03%	0.05% to 0.35%	(35.81%)
Period Ended 12/31/07	13	$18.250431	$	225	3.74%	0.05% to 0.35%	1.79%
Mid Cap Growth Stock Division
Year Ended 12/31/08	14	$43.872392	$	619	0.36%	0.05% to 0.35%	(40.08%)
Period Ended 12/31/07	3	$73.219863	$	165	0.70%	0.05% to 0.35%	16.04%
Index 400 Stock Division
Year Ended 12/31/08	43	$14.989442	$	653	1.84%	0.05% to 0.35%	(36.28%)
Period Ended 12/31/07	8	$23.522236	$	180	1.15%	0.05% to 0.35%	4.18%

(1) Total Return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges. Returns are not annualized for periods less than one year.

Notes to Financial Statements

11

Notes to Financial Statements

	As of the respective period end date:				For the respective period ended:
Division	Units Outstanding (000’s)	Unit Value	Net Assets (000’s)		Dividend Income as a % of Average Net Assets	Expense Ratio, Lowest to Highest	Total Return (1)
Mid Cap Value Division
Year Ended 12/31/08	19	$12.367958	$	237	0.00%	0.05% to 0.35%	(35.07%)
Period Ended 12/31/07	13	$19.047672	$	261	2.24%	0.05% to 0.35%	(2.40%)
Small Cap Growth Stock Division
Year Ended 12/31/08	17	$  17.974245	$	316	0.20%	0.05% to 0.35%	(43.87%)
Period Ended 12/31/07	4	$  32.021844	$	139	0.05%	0.05% to 0.35%	7.25%
Small Cap Value Division
Year Ended 12/31/08	54	$  14.406429	$	774	0.41%	0.05% to 0.35%	(28.13%)
Period Ended 12/31/07	8	$  20.045927	$	170	0.44%	0.05% to 0.35%	(3.25%)
International Growth Division
Year Ended 12/31/08	37	$  11.660588	$	429	1.92%	0.05% to 0.35%	(46.19%)
Period Ended 12/31/07	7	$  21.668250	$	165	0.80%	0.05% to 0.35%	11.73%
International Equity Division
Year Ended 12/31/08	671	$    2.857743	$	1,918	3.21%	0.05% to 0.35%	(43.78%)
Period Ended 12/31/07	144	$    5.083451	$	735	1.28%	0.05% to 0.35%	16.27%
Money Market Division
Year Ended 12/31/08	39	$  40.947848	$	1,617	2.64%	0.05% to 0.35%	2.76%
Period Ended 12/31/07	18	$  39.847990	$	706	4.37%	0.05% to 0.35%	4.83%
Select Bond Division
Year Ended 12/31/08	8	$156.116892	$	1,150	4.95%	0.05% to 0.35%	3.26%
Period Ended 12/31/07	2	$151.194364	$	254	2.93%	0.05% to 0.35%	6.30%
High Yield Bond Division
Year Ended 12/31/08	19	$  20.699102	$	401	9.45%	0.05% to 0.35%	(21.35%)
Period Ended 12/31/07	2	$  26.317469	$	50	3.22%	0.05% to 0.35%	1.55%
Balanced Division
Year Ended 12/31/08	2	$100.918470	$	167	1.48%	0.05% to 0.35%	(22.72%)
Period Ended 12/31/07	1	$130.596514	$	31	3.37%	0.05% to 0.35%	5.24%
Asset Allocation Division
Year Ended 12/31/08	10	$  10.482012	$	112	2.90%	0.05% to 0.35%	(30.13%)
Period Ended 12/31/07	1	$  15.001132	$	10	1.00%	0.05% to 0.35%	8.25%
Fidelity VIP Mid Cap Division
Year Ended 12/31/08	29	$  16.202990	$	478	0.26%	0.05% to 0.35%	(39.61%)
Period Ended 12/31/07	7	$  26.828755	$	193	0.61%	0.05% to 0.35%	13.55%
Russell Multi-Style Equity Division
Year Ended 12/31/08	60	$    6.983334	$	424	1.27%	0.05% to 0.35%	(40.56%)
Period Ended 12/31/07	17	$  11.749485	$	196	0.66%	0.05% to 0.35%	8.54%
Russell Aggressive Equity Division
Year Ended 12/31/08	20	$  10.483725	$	207	1.09%	0.05% to 0.35%	(42.92%)
Period Ended 12/31/07	4	$  18.365962	$	87	0.38%	0.05% to 0.35%	1.32%
Russell Non-US Division
Year Ended 12/31/08	41	$  10.384851	$	424	0.00%	0.05% to 0.35%	(42.41%)
Period Ended 12/31/07	11	$  18.032632	$	205	4.62%	0.05% to 0.35%	9.17%
Russell Real Estate Securities Division
Year Ended 12/31/08	20	$  19.982226	$	400	1.85%	0.05% to 0.35%	(36.68%)
Period Ended 12/31/07	11	$  31.559603	$	346	3.89%	0.05% to 0.35%	(22.64%)
Russell Core Bond Division
Year Ended 12/31/08	21	$  15.497865	$	325	3.63%	0.05% to 0.35%	(3.57%)
Period Ended 12/31/07	3	$  16.070912	$	56	6.26%	0.05% to 0.35%	7.35%

(1) Total Return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges. Returns are not annualized for periods less than one year.

12

Notes to Financial Statements

Report of Independent Registered Public Accounting Firm

To The Northwestern Mutual Life Insurance Company and

Policy Owners of Northwestern Mutual Variable Life Account II

In our opinion, the accompanying statements of assets and liabilities, the related statements of operations, and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Northwestern Mutual Variable Life Account II and its Growth Stock Division, Focused Appreciation Division, Large Cap Core Stock Division, Index 500 Stock Division, Domestic Equity Division, Equity Income Division, Mid Cap Growth Stock Division, Index 400 Stock Division, Mid Cap Value Division, Small Cap Growth Stock Division, Small Cap Value Division, International Growth Division, International Equity Division, Money Market Division, Select Bond Division, High Yield Bond Division, Balanced Division, Asset Allocation Division, Fidelity VIP Mid Cap Division, Russell Multi-Style Equity Division, Russell Aggressive Equity Division, Russell Non-US Division, Russell Real Estate Securities Division, and Russell Core Bond Division at December 31, 2008, and the results of each of their operations, the changes in each of their net assets and their financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of The Northwestern Mutual Life Insurance Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included direct confirmation of securities owned at December 31, 2008 with Northwestern Mutual Series Fund, Inc., Fidelity Variable Insurance Products Fund III and the Russell Investment Funds, provide a reasonable basis for our opinion.

February 17, 2009

Report of Independent Registered Public Accounting Firm

13