NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT (VLI)

/s/ RAYMOND J. MANISTA

/s/ JOHN E. SCHLIFSKE

Raymond J. Manista,

John E. Schlifske,

General Counsel and Secretary

President and Chief Executive Officer

485BPOS 1 d883272d485bpos.htm NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT (VLI) NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT (VLI)

Registration No. 002-89972

Registration No. 811-03989


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

		FORM N-6

		REGISTRATION STATEMENT UNDER THE SECURITIES
		ACT OF 1933		/ /

		Pre-Effective Amendment No.		/ /

		Post-Effective Amendment No. 45		/ X /
		and/or

		REGISTRATION STATEMENT UNDER THE INVESTMENT
		COMPANY ACT OF 1940		/ /

		Amendment No. 62		/ X /

		(Check appropriate box or boxes.)

		NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT
		(Exact Name of Registrant)

		THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
		(Name of Depositor)

		720 East Wisconsin Avenue, Milwaukee, Wisconsin		53202
		(Address of Depositor’s Principal Executive Offices)		(Zip Code)

Depositor’s Telephone Number, including Area Code 414-271-1444

RAYMOND J. MANISTA, General Counsel and Secretary

The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202

(Name and Address of Agent for Service)

Copy to:

Chad E. Fickett, Assistant General Counsel

The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

414-665-1209

Approximate Date of Proposed Public Offering Continuous

It is proposed that this filing will become effective (check appropriate space)


		immediately upon filing pursuant to paragraph (b) of Rule 485
X		on May 1, 2015 pursuant to paragraph (b) of Rule 485
		60 days after filing pursuant to paragraph (a)(1) of Rule 485
		on pursuant to paragraph (a)(1) of Rule 485
		this post-effective amendment designates a new effective date for a
		previously filed post-effective amendment.

Prospectus

May 1, 2015

Variable Life

Whole Life

Extra Ordinary Life

Single Premium Life

Issued by The Northwestern Mutual Life Insurance Company

and the Northwestern Mutual Variable Life Account

This prospectus describes three Variable Life Insurance Policies (each a “Policy”, together the “Policies”). You may choose to invest your Net Premiums in up to six Divisions of the Northwestern Mutual Variable Life Account (the “Separate Account”), each of which invests in one of the corresponding Portfolios listed below:

Northwestern Mutual Series Fund, Inc.

Growth Stock Portfolio

Focused Appreciation Portfolio

Large Cap Core Stock Portfolio

Large Cap Blend Portfolio

Index 500 Stock Portfolio

Large Company Value Portfolio

Domestic Equity Portfolio

Equity Income Portfolio

Mid Cap Growth Stock Portfolio

Index 400 Stock Portfolio

Mid Cap Value Portfolio

Small Cap Growth Stock Portfolio

Index 600 Stock Portfolio

Small Cap Value Portfolio

International Growth Portfolio

Research International Core Portfolio

International Equity Portfolio

Emerging Markets Equity Portfolio

Money Market Portfolio

Short-Term Bond Portfolio

Select Bond Portfolio

Long-Term U.S. Government Bond Portfolio

Inflation Protection Portfolio

High Yield Bond Portfolio

Multi-Sector Bond Portfolio

Balanced Portfolio

Asset Allocation Portfolio

Fidelity^® Variable Insurance Products

VIP Mid Cap Portfolio

VIP Contrafund^® Portfolio

Neuberger Berman Advisers Management Trust

Socially Responsive Portfolio

Russell Investment Funds

Multi-Style Equity Fund

Aggressive Equity Fund

Global Real Estate Securities Fund

Non-U.S. Fund

Core Bond Fund

Russell Investment Funds LifePoints^®

Variable Target Portfolio Series

Moderate Strategy Fund

Balanced Strategy Fund

Growth Strategy Fund

Equity Growth Strategy Fund

Credit Suisse Trust

Commodity Return Strategy Portfolio

Please note that the Policies and the Portfolios are not guaranteed to achieve their goals and

are not federally insured. The Policies and the Portfolios have not been endorsed by any bank or government agency and are subject to risks, including loss of the principal amount invested.

Each Policy is subject to the law of the state in which it is issued. Some of the terms of a Policy may differ from the terms of a Policy delivered in another state because of state specific legal requirements. Areas where state specific Policy provisions may apply include, but are not limited to:

•

certain investment options and certain policy features; and

•

portfolio transfer rights.

Please read carefully this prospectus and the accompanying prospectuses for the corresponding Portfolios and keep them for future reference. These prospectuses provide information that you should know before investing in the Policies. No person is authorized to make any representation in connection with the offering of the Policies other than those contained in these prospectuses.

The Securities and Exchange Commission (“SEC”) has not approved or disapproved the Policies or determined that this prospectus is accurate or complete. It is a criminal offense to state otherwise.

We no longer issue the three Policies described in this prospectus. The variable life policies we presently offer

are described in separate prospectuses.

LOGO

Contents for this Prospectus


	Page
SUMMARY OF BENEFITS AND RISKS		1
Benefits of the Policies		1
Death Benefit		1
Access to Your Values		1
Flexibility		1
Optional Benefits		1
Income Plan Options		1
Tax Benefits		1
Risks of the Policies		1
Investment Risk		1
Default Risk		1
Policy for Long-Term Protection		1
Policy Lapse		1
Policy Loan Risks		1
Limitations on Access to Your Values		2
Adverse Tax Consequences		2
Risk of an Increase in Current Fees and Expenses		2
FEE AND EXPENSE TABLES		2
Transaction Fees		2
Periodic Charges (Other than Portfolio Operating Expenses)		3
Whole Life Policy		3
Extra Ordinary Life Policy		4
Single Premium Life Policy		6
Annual Portfolio Operating Expenses		6
THE COMPANY		7
THE SEPARATE ACCOUNT		7
THE FUNDS		8
Northwestern Mutual Series Fund, Inc. (the “Series Fund”)		8
Fidelity^® Variable Insurance Products		9
Neuberger Berman Advisers Management Trust		10
Russell Investment Funds		10
Credit Suisse Trust		10
Payments We Receive		10
INFORMATION ABOUT THE POLICIES		11
Premiums		11
Whole Life Policy		12
Extra Ordinary Life Policy		12
Single Premium Life Policy		12
Grace Period		13
Allocating Premiums to the Separate Account		13
Transfers Between Divisions		13
Short-Term and Excessive Trading		13
Deductions and Charges		15
Deductions from Premiums for Whole Life and Extra Ordinary Life Policies		15
Deductions for Single Premium Life Policies		16
Charges Against the Separate Account Assets		16
Optional Benefits		16


	Page
Guarantee of Premiums, Deductions and Charges		17
Death Benefit		17
Variable Insurance Amount		17
Whole Life Policy and Single Premium Life Policy		18
Extra Ordinary Life Policy		18
Cash Value		19
Annual Dividends		20
Policy Loans and Automatic Premium Loans		20
Policy Loans		20
Automatic Premium Loans		20
General Loan Terms		20
Extended Term and Paid-Up Insurance		21
Reinstatement		21
Reinvestments After Surrender		22
Right to Exchange for a Fixed Benefit Policy		22
Modifying a Policy		22
Other Policy Provisions		23
Owner		23
Beneficiary		23
Incontestability		23
Misstatement of Age or Sex		23
Collateral Assignment		23
Optional Benefits		23
Income Plans		23
Deferral of Determination and Payment		23
Voting Rights		23
Substitution of Portfolio Shares and Other Changes.		24
Reports and Financial Statements		24
Special Policy for Employers		24
Householding		24
Abandoned Property Requirements		24
Cybersecurity		24
Legal Proceedings		25
Speculative Investing		25
Owner Inquiries		25
Illustrations		25
TAX CONSIDERATIONS		25
General		25
Life Insurance Qualification		26
Tax Treatment of Life Insurance		26
Modified Endowment Contracts (MEC)		27
Estate and Generation Skipping Taxes		28
Business-Owned Life Insurance		28
Policy Split Right		28
Split Dollar Arrangements		29
Valuation of Life Insurance		29
Other Tax Considerations		29
DISTRIBUTION OF THE POLICY		30
GLOSSARY OF TERMS		30
ADDITIONAL INFORMATION		32

Variable Life

•

Whole Life

•

Extra Ordinary Life

•

Single Premium Life

Summary of Benefits and Risks

The following summary identifies some of the benefits and risks of the three Policies described in this prospectus. It omits important information which is included elsewhere in this prospectus, in the attached mutual fund prospectuses, and in the terms of the Policies. Unless clear from their context or otherwise appropriate, all of the capitalized terms used in this prospectus are defined herein or at the end of this prospectus in the Glossary of Terms.

Benefits of the Policies

Death Benefit The primary benefit of each Policy is the life insurance protection that it provides. For each Policy the Death Benefit includes a guaranteed amount which will not be reduced during the lifetime of the Insured so long as you pay premiums when they are due and no Policy Debt is outstanding. The remainder of the Death Benefit is the variable insurance amount which fluctuates in response to actual investment results and is not guaranteed. The Extra Ordinary Life Policy also provides some term insurance during the early Policy Years. The Death Benefit is increased by the amount of any paid-up additions which you have purchased with any dividends that we pay, except that for Extra Ordinary Life Policies, variable insurance amount and paid-up additions will first be used to replace term insurance before increasing the Death Benefit. The relationships among the guaranteed and variable amounts and any paid-up additions and term insurance depend on the design of the particular Policy.

Access to Your Values The Policy provides access to Cash Value during the lifetime of the Insured. You may surrender your Policy for the Cash Value at any time during the lifetime of the Insured. We will permit a Death Benefit reduction so long as the Policy that remains meets our minimum size requirements. Under some circumstances there may be a release of Cash Value upon the reduction of your Death Benefit. You may borrow up to 90% of your Policy’s Cash Value using the Policy as security.

Flexibility You may direct the allocation of your premiums and apportion the Separate Account assets supporting your Policy among the various Divisions of the Separate Account, using as many as six Divisions at any time. Subject to certain limits, you may transfer accumulated amounts from one Division to another as often as four times in a Policy Year.

Optional Benefits Whole Life and Extra Ordinary Life Policies may include two optional benefits: a Waiver of Premium Benefit and an Additional Purchase Benefit. These optional benefits are not available for all Issue Ages and underwriting classifications, and may not be available in all states.

Income Plan Options There are several ways of receiving proceeds under the Death Benefit and surrender provisions of the Policy, other than in a lump sum. More detailed information concerning these options is included elsewhere in this prospectus. You may also call our Income Benefits Department at 1-866-269-2950 for more information.

Tax Benefits You are generally not taxed on your Policy’s investment gains until you surrender the Policy.

Risks of the Policies

Investment Risk Your Policy allows you to participate in the investment experience of the Divisions you select. You bear the corresponding investment risks. You will be subject to the risk that the investment performance of the Divisions will be unfavorable and that, due both to the unfavorable performance and the resulting higher insurance charges, the Policy Value and Cash Value will decrease. You could lose everything you invest. You may find a comprehensive discussion of these investment risks in the attached mutual fund prospectuses. You will also be subject to the risk that the investment performance of the Divisions you choose may be less favorable than that of other Divisions, and in order to keep the Extra Life Protection of an Extra Ordinary Life Policy from decreasing, you may be required to pay more premiums than originally planned.

Default Risk Because certain guarantees under the Policies are guaranteed by the Company’s General Account assets, the ability to make good on these guarantees depends on the financial strength and claims-paying ability of the Company. Therefore, guaranteed benefits in excess of Invested Assets in the Separate Account are subject to the risk of default to the extent the Company is unable to satisfy some or all of these guarantees.

Policy for Long-Term Protection Your Policy is designed to serve your need for long-term life insurance protection. It is not a suitable investment for short-term goals. We have not designed the Policies for frequent trading.

Policy Lapse Your Whole Life or Extra Ordinary Life Policy will lapse unless you pay the premiums when they are due, unless the Policy is continued as extended term insurance or a reduced amount of paid-up insurance.

Policy Loan Risks A loan, whether or not repaid, will affect your Policy Value and Cash Value over time because the amounts borrowed do not participate in the investment performance of the Divisions; in addition, a charge is deducted from your Policy Value while there is Policy Debt. The effect of a loan may be either favorable or unfavorable,


Variable Life Prospectus			1

depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions. The Death Benefit is reduced by the amount of any Policy Debt outstanding. If you surrender the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly.

Limitations on Access to Your Values The Policies permit access to Cash Value by Policy loans and by surrender of the Policy. A partial withdrawal of the Cash Value is not permitted, except to the extent there is a reduction of Death Benefit which leads to a release of Cash Value.

Adverse Tax Consequences Our understanding of the principal tax considerations for the Policy under current tax law is set forth in this prospectus. There are areas of some uncertainty under current law, and we do not address the likelihood of future changes in the law or interpretations thereof. Among other risks, your Policy may become a modified endowment contract. A modified endowment contract (“MEC”) is a life insurance contract that is taxed less favorably on lifetime distributions than other life insurance

contracts because the contract is considered too investment oriented. A Policy will be classified as a MEC if cumulative premiums paid during the first seven Policy years after issue exceed a “seven-pay” limit defined in the Internal Revenue Code. Distributions, including loans, from a Policy classified as a MEC are taxable to the extent of the gain in the Policy and may be subject to a 10% premature withdrawal penalty if taken before the Owner attains age 59¹⁄₂. Moreover, excessive Policy loans could cause a Policy to terminate with no value with which to pay the tax liability. In addition, please note that you may no longer change Insureds on your Policy, unless you exchange your Policy for a new Policy with mortality tables recognized by the Internal Revenue Service when satisfying the definitional test for life insurance. (See “Tax Treatment of Policy Benefits”). Death Benefit proceeds may be subject to state and/or inheritance taxes.

Risk of an Increase in Current Fees and Expenses Certain fees and expenses are currently assessed at less than their maximum levels. We may increase these current charges in the future up to the guaranteed maximum levels. If fees and expenses are increased, you may need to increase the amount of premiums to keep the Extra Life Protection of an Extra Ordinary Life Policy from decreasing.

Fee and Expense Tables

The following tables describe the fees and expenses that you will pay when owning or surrendering a Policy. See “Deductions and Charges” for a more detailed description.

Transaction Fees¹

This table describes the fees and expenses you will pay when you pay premiums, surrender the Policy or transfer amounts between the Divisions.


	Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Whole Life and Extra Ordinary Life Policies	Premium Taxes	When you pay premiums	2% of the basic premium²	2% of the basic premium²
Whole Life and Extra Ordinary Life Policies	Sales Load	When you pay premiums	Year 1: 30% of basic premium² Years 2-4: 10% of basic premium² Years 5-on: Not more than 7% of basic premium²	Same as the current amount
	Charge for Issuance Expenses	When you pay premiums—first Policy Year only	Not more than $5 for each $1,000 of insurance	Same as the current amount
Single Premium Life Policy	Administrative Charge	When we issue the Policy	$150	$150
Single Premium Life Policy	Surrender Charge	When you surrender the Policy during the first ten Policy Years	0%	Not more than 9% of the premium paid for the Policy³
All Policies	Fee for Transfer of Assets	When you transfer assets among the Divisions	Currently waived	The fee will not exceed our administrative costs of transfers


2		Variable Life Prospectus


	Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Whole Life and Extra Ordinary Life Policies	Extra Premium for Insureds Who Do Not Qualify as Select Risks	When you pay premiums	The amount depends on the underwriting classification	Same as current amount⁴; Variable Whole Life; Maximum: $52.70 per $1,000 of face amount; Variable Extra Ordinary Life Policies; Maximum: $58.71 per $1,000 of face amount
All Policies	Expedited Delivery Charge⁵	When express mail delivery is requested	$15 per delivery (up to $45 for next day, a.m. delivery)	$50 per delivery (up to $75 for next day, a.m. delivery) adjusted for inflation⁶
All Policies	Wire Transfer Fee⁵	When a wire transfer is requested	$25 per transfer (up to $50 for international wires)	$50 per transfer (up to $100 for international wires) adjusted for inflation⁶

¹	Some fees and expenses, such as fees applicable in Policy Years prior to your current Policy Year, may no longer apply because the Policies are no longer issued.

²	The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction for administrative costs. See “Deductions and Charges” for more information.

³	This charge no longer applies because you have owned your Policy for longer than ten years.

⁴	This charge will vary depending on underwriting classification of the Insured.

⁵	This fee may increase over time to cover our administrative or other costs but will not exceed the maximum charge. We may discontinue this service at any time, with or without notice.

⁶

The maximum amount deducted is subject to a consumer price index adjustment in order to accommodate future increases in the costs associated with these requests. The maximum amount deducted will equal the maximum charge shown above multiplied by the CPI for the fourth month prior to the time of the charge, divided by the CPI for April, 2009. “CPI” means the Consumer Price Index for All Urban Consumers, United States City Average, All Items, as published by the United States Bureau of Labor Statistics. If the method for determining the CPI is changed, or it is no longer published, it will be replaced by some other index found by the Company to serve the same purpose.

Periodic Charges (Other than Portfolio Operating Expenses)

These tables describe the fees and expenses, other than operating expenses for the Portfolios, that you will pay periodically during the time that you own a Policy. Please refer to the table specific to your Policy.

Whole Life Policy


Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Charge for Administrative Costs	Annually, on the Policy Anniversary	$35	$35
Charge for Death Benefit Guarantee	Annually, on the Policy Anniversary	1¹⁄₂% of the basic premium¹	1¹⁄₂% of the basic premium¹
Charge for Mortality and Expense Risks	Daily	Annual rate of .50% of the Separate Account Assets	Annual rate of .50% of the Separate Account Assets
Charge for Federal Income Taxes	Daily	Annual rate of .05% of the Separate Account Assets	A rate which reflects that portion of our actual tax expenses which is fairly allocable to the Policies
Cost of Insurance	Calculated at least annually on the Policy Anniversary	Maximum: $1,000 per $1,000 of net amount at risk (Attained Age 99)² Minimum: $0.69 per $1,000 of net amount at risk (Attained Age 10 female)² Representative: $8.71 per $1,000 of net amount at risk (Attained Age 53 male)	Same as current amount, without the current dividend
Charge for Mortality and Expense Risks and Expenses for Loans³	Daily	Annual rate of .85% of the borrowed amount	Annual rate of 1.00% of the borrowed amount


Variable Life Prospectus			3


Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Waiver of Premium Benefit⁴	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 65	Maximum: $2.05 per $1,000 of face amount (Issue Age 58) Minimum: $0.13 per $1,000 of face amount (Issue Age 0-6) Representative: $0.37 per $1,000 of face amount (Issue Age 35)	Same as current amount
Additional Purchase Benefit⁵	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 40	Maximum: $2.21 per $1,000 of Additional Purchase Benefit (Issue Age 38)⁵ Minimum: $0.54 per $1,000 of Additional Purchase Benefit (Issue Age 0)⁵ Representative: $0.54 per $1,000 of Additional Purchase Benefit (Issue Age 0)	Same as current amount

¹	The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction for administrative costs. See “Deductions and Charges” for more information.

The Policy includes no provisions for explicit deductions or charges for the cost of insurance, but this cost is reflected in the table of Cash Values at the front of the Policy and in the table of net single premiums we use to determine the variable insurance amount. The variable insurance amount is used to calculate both the Death Benefit and the Cash Value. The cost of insurance is based on factors including but not limited to the Insured’s Attained Age, the 1980 CSO Mortality Table and the net insurance amount at risk. The net insurance amount at risk is the Death Benefit minus the sum of the Cash Value and any Policy Debt. The rates shown in the table may not be representative of the charge a particular Owner may pay. The amount you pay for the cost of insurance is effectively reduced by the dividends, if any, we currently pay on your Policy. You may ask your Financial Representative for the current dividend amount. Future dividends are not guaranteed. (See “Annual Dividends”).

The charge is applied to the Policy Debt. The charge shown is a loan interest spread that is deducted from the Invested Assets. We add unpaid interest to the amount of the loan. Interest on a Policy loan accrues and is payable on a daily basis at an annual effective rate of 8% or an alternative variable rate based on a bond yield index. The amount of the Policy loan will be transferred from the Divisions to our General Account and credited on a daily basis with an annual earnings rate equal to the Policy loan interest rate less the charge shown.

⁴

The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. Generally, the charge increases for older Issue Ages. In addition, higher rates may apply to substandard underwriting classifications. The charge for the Waiver of Premium Benefit is less for Extra Ordinary Life Policies than for Whole Life Policies, all other factors being equal.

⁵	The maximum benefit amount is $100,000. The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. The charge increases for older Issue Ages.

Extra Ordinary Life Policy


Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Charge for Mortality and Expense Risks	Daily	Annual rate of .50% of the Separate Account Assets	Annual rate of .50% of the Separate Account Assets
Charge for Federal Income Taxes	Daily	Annual rate of .05% of the Separate Account Assets	A rate which reflects that portion of our actual tax expenses which is fairly allocable to the Policies
Cost of Insurance	Calculated at least annually on the Policy Anniversary	Maximum: $1,000 per $1,000 of net amount at risk (Attained Age 99)¹ Minimum: $0.85 per $1,000 of net amount at risk (Attained Age 15 female)¹ Representative: $13.59 per $1,000 of net amount at risk (Attained Age 58 male)	Same as current amount, without the current dividend
Charge for Mortality and Expense Risks and Expenses for Loans²	Daily	Annual rate of .85% of the borrowed amount	Annual rate of 1.00% of the borrowed amount
Charge for Dividends³	Annually, on the Policy Anniversary	Maximum: 17% of the gross annual premium⁴	Same as current amount
Extra Premium for Extra Life Protection (after the expiry of the guaranteed period)	Annually, after the expiry of the guaranteed period, on the Policy Anniversary⁵	Maximum: $283.64 per $1,000 of term insurance⁶ (Attained Age 99 male standard) Minimum: $1.93 per $1,000 of term insurance⁶ (Attained Age 52 female select) Representative: $5.11 per $1,000 of term insurance⁶ (Attained Age 62 male select)	Maximum: $1,000 per $1,000 of term insurance, without the current dividend Minimum: $6.27 per $1,000 of term insurance, without the current dividend


4		Variable Life Prospectus


Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Charge for Administrative Costs	Annually, on the Policy Anniversary	$35	$35
Charge for Death Benefit Guarantee	Annually, on the Policy Anniversary	1¹⁄₂% of the basic premium⁷	1 ¹⁄₂% of the basic premium⁷
Waiver of Premium Benefit⁸	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 65	Maximum: $1.48 per $1,000 of face amount (Issue Age 48) Minimum: $0.10 per $1,000 of face amount (Issue Age 15) Representative: $0.24 per $1,000 of face amount (Issue Age 35)	Same as current amount
Additional Purchase Benefit⁹	Annually, on the Policy Anniversary, if this benefit is attached to your Policy and the Attained Age is less than 40	Maximum: $2.21 per $1,000 of Additional Purchase Benefit (Issue Age 38)⁹ Minimum: $1.06 per $1,000 of Additional Purchase Benefit (Issue Age 15)⁹ Representative: $1.33 per $1,000 of Additional Purchase Benefit (Issue Age 25)⁹	Same as current amount

³	This charge will vary by Issue Age of the Insured.

⁴	The charge for dividends is approximately 7% to 17% of the gross annual premium.

⁵

After the guaranteed period expires, if the sum of positive variable insurance amount plus the paid-up additions is less than the initial amount of Extra Life Protection, we may reduce the amount of term insurance for the Policy Year. Alternatively, you may choose to have the coverage maintained by paying a larger premium based on the term insurance rates described here. Your right to continue to purchase term insurance on this basis will terminate as of the first Policy Anniversary when you fail to pay the additional premium when due.

⁶	Estimated year-end dividends have the effect of reducing the term insurance amounts on which the charges are based.

⁷	The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction for administrative costs. See “Deductions and Charges” for more information.

⁸

The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. Generally, the charge increases for older Issue Ages. In addition, higher rates may apply to substandard underwriting classifications. The charge for the Waiver of Premium benefit is less for Extra Ordinary Life Policies than for Whole Life Policies, all other factors being equal.

⁹	The maximum benefit amount is $100,000. The charges shown in the table may not be representative of the charge that a particular Owner may pay. The charge does not vary by sex. The charge increases for older Issue Ages.


Variable Life Prospectus			5

Single Premium Life Policy


Charge	When Charge is Deducted	Current Amount Deducted	Maximum Amount Deducted
Charge for Mortality and Expense Risks	Daily	Annual rate of .50% of the Separate Account assets	Annual rate of .50% of the Separate Account Assets
Charge for Federal Income Taxes	Daily	Annual rate of .05% of the Separate Account assets	A rate which reflects that portion of our actual tax expenses which is fairly allocable to the Policies
Cost of Insurance	Calculated at least annually on the Policy Anniversary	Maximum: $1,000 per $1,000 of net amount at risk (Attained Age 99)¹ Minimum: $0.69 per $1,000 of net amount at risk (Attained Age 10 female)¹ Representative: $17.54 per $1,000 of net amount at risk (Attained Age 61 male)	Same as current amount, without the current dividend
Charge for Mortality and Expense Risks and Expenses for Loans²	Daily	Annual rate of .85% of the borrowed amount	Annual rate of 1.00% of the borrowed amount

Annual Portfolio Operating Expenses

The table below shows the range (minimum and maximum) of total operating expenses, including investment advisory fees, distribution (12b-1) fees and other expenses of the Portfolios that you may pay periodically during the time you own the Policy. The first line of this table lists expenses that do not reflect fee waivers or expense limits and reimbursements, nor do they reflect short-term trading redemption fees, if any, charged by the Portfolios. The information is based on operations for the year ended December 31, 2014. More details concerning these fees and expenses are contained in the attached prospectuses for the Funds.


	Minimum			Maximum
Range of Total Annual Portfolio Operating Expenses (expenses include investment advisory fees, distribution (12b-1) fees, and other expenses as a percentage of average Portfolio assets)*		0.22	%		1.39	%
Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement**		0.22	%		1.35	%

For certain Portfolios, certain expenses were reimbursed or fees waived during 2014. It is anticipated that these voluntary expense reimbursement and fee waiver arrangements will continue past the current year, although certain arrangements may be terminated at any time. After taking into account these arrangements and any contractual fee waiver or expense reimbursement arrangements, Annual Portfolio Operating Expenses would have ranged from a minimum of 0.22% to a maximum of 1.35%.

The “Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement” line in the above table shows the minimum and maximum fees and expenses charged by all of the Portfolios after taking into account contractual fee waiver or reimbursement arrangements in place. Those contractual arrangements are designed to reduce Total Annual Portfolio Operating Expenses for Owners and will continue for at least one year from the date of this prospectus. For more information about which Portfolios currently have such contractual reimbursement or fee waiver arrangements in place, see the prospectuses of the underlying Funds.


6		Variable Life Prospectus

The Company

The Northwestern Mutual Life Insurance Company is a mutual life insurance company organized by a special act of the Wisconsin Legislature in 1857. It is licensed to conduct a conventional life insurance business in the District of Columbia and in all states of the United States. The total assets of Northwestern Mutual were over $229 billion as of December 31, 2014. The Home Office of Northwestern Mutual is located at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

“Northwestern Mutual,” “Company,” “we,” “us,” and “our” in this prospectus mean The Northwestern Mutual Life Insurance Company.

General Account assets are used to guarantee the payment of certain benefits under the Policies, including death benefits. To the extent that we are required to pay you amounts under

these benefits that are in addition to Invested Assets in the Separate Account, such amounts will come from General Account assets. Thus, Owners must look to the strength of the Company and its General Account with regard to guarantees under the Policies. The General Account is exposed to the risks normally associated with the operation of a life insurance company, including insurance pricing, asset liability management and interest rate risk, operational risks, and the investment risks of a portfolio of securities that consists largely, though not exclusively, of fixed-income securities. Some of the risks associated with such a portfolio include interest rate, option, liquidity, and credit risk. The financial statements contained in the Statement of Additional Information include a further discussion of risks inherent within the General Account investments. The assets in the General Account are subject to the claims of the Company’s general creditors.

The Separate Account

We established the Separate Account by action of our Trustees on November 23, 1983, in accordance with the provisions of Wisconsin insurance law. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 (the “1940 Act”). We own the assets in the Separate Account and we are obligated to pay all benefits under the Policies. We may use the Separate Account to support other variable life insurance policies we issue. We have divided the Separate Account into Divisions, each of which invests in shares of one Portfolio of the Funds.

Under Wisconsin law, Separate Account assets are held separate from our other assets and are not part of our General Account. Income, gains, and losses, whether or not realized, from assets allocated to the Separate Account will be credited to or charged against the Separate Account without regard to our other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Division reflect that Division’s own investment performance and not the investment performance of our other assets. We may not use the Separate Account’s assets to pay any of our liabilities other than those arising from the Policies and any other variable life insurance Policies funded by the Separate Account. We may, however, use all of our assets (except those held in certain other separate accounts) to satisfy our obligations under your Policy.

Where permitted by law and subject to any required regulatory approvals or votes by Owners, we reserve the right to:

•

operate the Separate Account or a Division either as a unit investment trust or a management investment company under the 1940 Act, or in any other form permitted by law, if deemed by the Company to be in the best interest of Owners;

•

invest current and future assets of a Division in securities of another Portfolio as a substitute for shares of a Portfolio already purchased or to be purchased;

•

transfer cash from time to time between the General Account and the Separate Account as deemed necessary or appropriate and consistent with the terms of the Policy, including but not limited to transfers for the deduction of charges and in support of payment options;

•

transfer assets of the Separate Account in excess of reserve requirements applicable to the Policies supported by the Separate Account to the General Account (Invested Assets remaining in the Separate Account necessary to fulfill its obligations under the Policy are not subject to claims against or losses in the General Account);

•

create new separate accounts;

•

add, delete or make substitutions for the securities and other assets held or purchased by the Separate Account;

•

restrict or eliminate any voting rights of Owners or other persons having voting rights as to the Separate Account; and

•

make any changes to the Separate Account to conform with, or required by any change in, federal tax law, the 1940 Act and regulations promulgated thereunder, or any other applicable federal or state laws.

In the event that we take any of these actions, we may make an appropriate endorsement of your Policy and take other actions necessary to comply with applicable law.


Variable Life Prospectus			7

The Funds

A variety of investment options are offered under the Policy for the allocation of your premiums. However, the Company does not endorse or recommend a particular option, nor does it provide investment advice. You are responsible for choosing your investment options and should make your choices based on your individual situation and risk tolerances. After making your initial allocation decisions, you should monitor your allocations and periodically review the options you select and the amounts allocated to each to ensure your selections continue to be appropriate. The amounts you invest in a particular Division are not guaranteed and, because both principal and any return on the investment are subject to market risk, you can lose money.

The assets of each Division are invested in a corresponding Portfolio that is a series of one of the following mutual funds: Northwestern Mutual Series Fund, Inc.; Fidelity^® Variable Insurance Products; Neuberger Berman Advisers Management Trust; Russell Investment Funds; and Credit Suisse Trust. The Separate Account buys shares of the Portfolios at their respective net asset values without sales charge. The Portfolios are available for investment only by separate accounts supporting variable insurance products and are not

publicly traded. Their performance can differ substantially from publicly traded mutual funds with similar names. The specific Portfolios available under your Policy may change from time to time, and not all Portfolios in which assets of the Separate Account are invested may be available under your Policy. Your ability to invest in a Portfolio may be affected by the actions of such Portfolio, such as when a Portfolio closes.

The investment objectives of each Portfolio are set forth below. There is no assurance that any of the Portfolios will achieve its stated objective(s). You can find more detailed information about the Portfolios, including a description of each Portfolio, in the attached Portfolio prospectuses. Read the prospectuses for the Portfolios carefully before investing. Please see the prospectuses for the Portfolios for a discussion of the potential risks and conflicts presented by the use of a Portfolio as an investment option under variable annuity contracts and variable life insurance policies offered by affiliated and non-affiliated life insurance companies. Note: If you received a summary prospectus for a Portfolio listed below, please follow the directions on the first page of the summary prospectus to obtain a copy of the full fund prospectus.

Northwestern Mutual Series Fund, Inc. (the ^“Series Fund^”)

The principal investment adviser for the Portfolios of the Series Fund is Mason Street Advisors, LLC (“MSA”), our wholly-owned company. The investment advisory agreements for the respective Portfolios provide that MSA will provide services and bear certain expenses of the Series Fund. MSA employs a staff of investment professionals to manage the assets of the Series Fund and the other advisory clients of MSA. We provide related facilities and personnel, which MSA uses in performing its investment advisory functions. MSA has retained and oversees a number of asset management firms under investment sub-advisory agreements to provide day-to-day management of the Portfolios indicated below. Each such sub-adviser may be replaced without the approval of shareholders. Please see the attached prospectuses for the Series Fund for more information.


Portfolio	Investment Objective	Sub-adviser (if applicable)
Growth Stock Portfolio	Long-term growth of capital; current income is a secondary objective	The Boston Company Asset Management, LLC
Focused Appreciation Portfolio	Long-term growth of capital	Janus Capital Management LLC
Large Cap Core Stock Portfolio	Long-term growth of capital and income	Fayez Sarofim & Co.
Large Cap Blend Portfolio	Long-term growth of capital and income	Fiduciary Management, Inc.
Index 500 Stock Portfolio	Investment results that approximate the performance of the Standard & Poor’s 500^® Composite Stock Price Index	N/A
Large Company Value Portfolio	Long-term capital growth; income is a secondary objective	American Century Investment Management, Inc.
Domestic Equity Portfolio	Long-term growth of capital and income	Delaware Investments Fund Advisers, a series of Delaware Management Business Trust
Equity Income Portfolio	Long-term growth of capital and income	T. Rowe Price Associates, Inc.
Mid Cap Growth Stock Portfolio	Long-term growth of capital	William Blair & Company, L.L.C.
Index 400 Stock Portfolio	Investment results that approximate the performance of the S&P MidCap Stock Price 400^® Index	N/A
Mid Cap Value Portfolio	Long-term capital growth; current income is a secondary objective	American Century Investment Management, Inc.


8		Variable Life Prospectus


Portfolio	Investment Objective	Sub-adviser (if applicable)
Small Cap Growth Stock Portfolio	Long-term growth of capital	Wellington Management Company LLP
Index 600 Stock Portfolio	Investment results that approximate the performance of the Standard & Poor’s SmallCap 600^® Index	N/A
Small Cap Value Portfolio	Long-term growth of capital	T. Rowe Price Associates, Inc.
International Growth Portfolio	Long-term growth of capital	Janus Capital Management LLC
Research International Core Portfolio	Capital appreciation	Massachusetts Financial Services Company
International Equity Portfolio	Long-term growth of capital; any income realized may be incidental	Templeton Investment Counsel, LLC
Emerging Markets Equity Portfolio	Capital appreciation	Massachusetts Financial Services Company
Money Market Portfolio	Maximum current income to the extent consistent with liquidity and stability of capital⁽¹⁾	BlackRock Advisors, LLC
Short-Term Bond Portfolio	To provide as high a level of current income as is consistent with prudent investment risk	T. Rowe Price Associates, Inc.
Select Bond Portfolio	To provide as high a level of total return as is consistent with prudent investment risk; a secondary objective is to seek preservation of shareholders’ capital	Wells Capital Management, Inc.
Long-Term U.S. Government Bond Portfolio	Maximum total return, consistent with preservation of capital and prudent investment management	Pacific Investment Management Company LLC
Inflation Protection Portfolio	Pursue total return using a strategy that seeks to protect against U.S. inflation	American Century Investment Management, Inc.
High Yield Bond Portfolio	High current income and capital appreciation⁽²⁾	Federated Investment Management Company
Multi-Sector Bond Portfolio	Maximum total return, consistent with prudent investment management	Pacific Investment Management Company LLC
Balanced Portfolio	To realize as high a level of total return as is consistent with prudent investment risk, through income and capital appreciation	N/A
Asset Allocation Portfolio	To realize as high a level of total return as is consistent with reasonable investment risk	N/A

⁽¹⁾

Although the Money Market Portfolio seeks to preserve its value at $1.00 per share, it is possible to lose money by investing in the Money Market Portfolio. An investment in a money market portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. During extended periods of low interest rates, the yield of a money market portfolio may also become extremely low and possibly negative.

⁽²⁾	High yield bonds are commonly referred to as junk bonds.

Fidelity^® Variable Insurance Products

The Fidelity^® VIP Mid Cap Portfolio and the Fidelity^® VIP Contrafund^® Portfolio are series of Variable Insurance Products Fund III and the Variable Insurance Products Fund II, respectively. The Separate Account buys Service Class 2 shares of the Portfolios, the investment adviser for which is the Fidelity Management & Research Company (FMR). The following affiliates of FMR also assist with foreign investments: Fidelity Management & Research (U.K.) Inc., Fidelity Management & Research (Hong Kong) Limited, and Fidelity Management & Research (Japan) Inc.


Portfolio	Investment Objective	Sub-adviser
VIP Mid Cap Portfolio	Long-term growth of capital	FMR Co., Inc.
VIP Contrafund^® Portfolio	Long-term capital appreciation	FMR Co., Inc.


Variable Life Prospectus			9

Neuberger Berman Advisers Management Trust

The Neuberger Berman Advisers Management Trust Socially Responsive Portfolio is a series of the Neuberger Berman Advisers Management Trust. The Separate Account buys Class I shares of the Portfolio, the investment adviser for which is Neuberger Berman Management LLC.


Portfolio	Investment Objective	Sub-adviser
Socially Responsive Portfolio	Long-term growth of capital by investing primarily in securities of companies that meet the Portfolio’s financial criteria and social policy	Neuberger Berman LLC

Russell Investment Funds

The assets of each of the Portfolios comprising the Russell Investment Funds are invested by one or more investment management organizations researched and recommended by Frank Russell Company (“Russell”), and an affiliate of Russell, the Russell Investment Management Company (“RIMCo”). RIMCo is the investment adviser of the Russell Investment Funds.


Portfolio		Investment Objective
Multi-Style Equity Fund		Long-term growth of capital
Aggressive Equity Fund		Long-term growth of capital
Global Real Estate Securities Fund		Current income and long-term growth of capital
Non-U.S. Fund		Long-term growth of capital
Core Bond Fund		Current income and, as a secondary objective, capital appreciation
LifePoints^® Variable Target Portfolio Series Moderate Strategy Fund		Current income and moderate long-term capital appreciation
LifePoints^® Variable Target Portfolio Series Balanced Strategy Fund		Above-average long-term capital appreciation and a moderate level of current income
LifePoints^® Variable Target Portfolio Series Growth Strategy Fund		High long-term capital appreciation; and as a secondary objective, current income
LifePoints^® Variable Target Portfolio Series Equity Growth Strategy Fund		High long-term capital appreciation

Credit Suisse Trust

The Commodity Return Strategy Portfolio is a series of Credit Suisse Trust. The Separate Account buys shares of the Portfolio, the investment adviser for which is Credit Suisse Asset Management, LLC.


Portfolio		Investment Objective
Commodity Return Strategy Portfolio		Total Return

Payments We Receive

We select the Portfolios offered through this Policy based on several criteria, including asset class coverage, the strength of the investment adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolio’s investment adviser or an affiliate will make payments to us or our affiliates. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premiums and/or transfers of accumulated amounts if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from Owners. The Series Fund has been included in part because it is managed by a subsidiary of the Company.

We do not provide any investment advice and do not recommend or endorse any particular Portfolio. You bear the

risk of any decline in the Policy Value of your Policy resulting from the performance of the Portfolios you have chosen.

Owners, through their indirect investment in the Portfolios, bear the costs of the investment advisory or management fees that the Portfolios pay to their respective investment advisors (see the Portfolios’ prospectuses for more information). As described above, an investment adviser of a Portfolio, or its affiliates, may make payments to the Company and/or certain of our affiliates, which is generally a positive factor when selecting Portfolios. However, the amount of such payments is not determinative as to whether a Portfolio is offered through the Policy. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. The amount of the compensation is based on a percentage of assets of the Portfolios attributable to the Policies and certain other


10		Variable Life Prospectus

variable insurance products that the Company issues. The percentages differ and some investment advisers (or other affiliates) may pay more than others. The percentages currently range up to 0.25%. These payments may be used for various purposes, including payment of expenses that the Company and/or its affiliates incur for services performed on behalf of the Policies and the Portfolios. The Company and its affiliates may profit from these payments.

Certain Portfolios have also adopted a Distribution (and/or Shareholder Servicing) Plan under Rule 12b-1 of the 1940 Act, which is described in more detail in the Portfolios’ prospectuses. These payments, which may be up to 0.25%, are deducted from assets of the Portfolios and are paid to our

distributor, Northwestern Mutual Investment Services, LLC. These payments decrease a Portfolio’s investment return. We also consider the receipt of these payments generally to be a positive factor when selecting Portfolios.

Additionally, an investment adviser or sub-adviser of a Portfolio (or of an underlying fund in which a Portfolio invests) or its affiliate may provide the Company with wholesaling services that assist in the distribution of the Policies and may pay the Company and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the investment adviser or sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies.

Information About the Policies

We are no longer issuing these Policies.

This prospectus describes the material provisions of the Policies. You should consult your Policy for more information about its terms and conditions, and for any state specific variations that may apply to your Policy.

Premiums

For Whole Life Policies and, except as explained below, for Extra Ordinary Life Policies, premiums are level, fixed and payable in advance during the Insured’s lifetime on a monthly, quarterly, semiannual or annual basis. You may change the premium frequency. The change will be effective when we accept the premium on the new frequency. The amount of the premium depends on the amount of insurance for which the Policy was issued and the Insured’s age and underwriting classification. The amount of the premium also reflects the sex of the Insured except where state or federal law requires that premiums and other charges and values be determined without regard to sex. We send a notice to the Owner not less than two weeks before each premium is due. If you select the monthly premium frequency, we may require that you make Premium Payments through an automatic payment plan arranged with your bank.

Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on a 12% interest rate, and (2) cover the administrative costs to process the additional Premium Payments. You may obtain information from your Northwestern Mutual Financial Representative about annual percentage rate (APR) calculations for premiums paid other than annually. The APR calculation is also available through www.northwesternmutual.com.

Premium added to the Separate Account will increase your Policy Value according to a formula specified in your Policy that takes into account certain actuarially determined values and the 1980 CSO mortality tables.

If the Insured dies after payment of the premium for the period which includes the date of death, we will refund the portion of the premium for the remainder of that period as part of the Policy proceeds.

You may send Premium Payments to our Home Office or to a payment center designated by us. All payments must be made in U.S. Dollars payable through a U.S. financial institution. We accept Premium Payments by check or electronic funds transfer (“EFT”). We generally will not accept cash, money orders, traveler’s checks or “starter” checks; however, in limited circumstances, we may accept some cash equivalents in accord with our anti-money laundering procedures. If you make a Premium Payment with a check or bank draft and, for whatever reason, it is later returned unpaid or uncollected, or if a Premium Payment by EFT is reversed, we reserve the right to reverse the transaction. If mandated under applicable law, we may be required to reject a Premium Payment. We may also be required to provide information about you and your account to government regulators.

We accept Premium Payments via our website if eligible. Electronic payments via our website must be made in accordance with our current procedures. However, we are not required to accept electronic payments, and we will not be responsible for losses resulting from transactions based on unauthorized electronic payments, provided we follow procedures reasonably designed to verify the authenticity of electronic payments. For more information on electronic payments see “Owner Inquiries.” We reserve the right to limit, modify, suspend or terminate the ability to make payments via our website at any time.


Variable Life Prospectus			11

Whole Life Policy The following table for Whole Life Policies shows representative premiums for male select, standard plus, and standard risks for various face amounts of insurance. Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on a 12% interest rate and (2) cover the administrative costs associated with additional Premium Payments. For example, two semi-annual payments will total more than an annual premium payment.


Age at Issue	Face Amount		Annual Premium		Monthly Premium		Annual Sum of Monthly Premiums*		Annual Sum of Monthly Premiums Minus the Annual Premium
		SELECT
15	$	50,000	$	382.50	$	33.60	$	403.20	$	20.70
35		100,000		1,536.00		135.10		1,621.20		85.20
55		100,000		3,766.00		331.10		3,973.20		207.20
		STANDARD PLUS
15	$	50,000	$	406.00	$	35.60	$	427.20	$	21.20
35		100,000		1,683.00		148.10		1,777.20		94.20
55		100,000		4,125.00		363.10		4,357.20		232.20
		STANDARD
15	$	50,000	$	491.50	$	43.10	$	517.20	$	25.70
35		100,000		1,912.00		168.10		2,017.20		105.20
55		100,000		4,587.00		404.10		4,849.20		262.20

*	In some cases for policies with smaller premiums, the sum of 12 monthly premiums may be less than the sum of other periodic premium amounts due to lower administrative costs.

Extra Ordinary Life Policy The following table for Extra Ordinary Life Policies shows representative annual premiums for male select, standard plus and standard risks for various amounts of insurance. Premiums you pay other than on an annual basis are increased to (1) reflect the time value of money, based on a 12% interest rate and (2) cover the administrative costs associated with additional Premium Payments. For example, two semi-annual payments will total more than an annual premium payment. The amounts of insurance shown in the table are the total amounts in effect when the Extra Ordinary Life Policy is issued, including both the guaranteed minimum death benefit noted in your Policy (“Minimum Death Benefit”), which we guarantee for the lifetime of the Insured, and the Extra Life Protection, which we guarantee for a shorter period. (See “Death Benefit” and “Extra Ordinary Life Policy”).


Age at Issue	Face Amount		Annual Premium		Monthly Premium		Annual Sum of Monthly Premiums^*		Annual Sum of Monthly Premiums Minus the Annual Premium
		SELECT
15	$	50,000	$	261.50	$	23.10	$	277.20	$	15.70
35		100,000		1,014.00		89.10		1,069.20		55.20
55		100,000		2,612.00		230.10		2,761.20		149.20
		STANDARD PLUS
15	$	50,000	$	285.00	$	25.10	$	301.20	$	16.20
35		100,000		1,161.00		102.10		1,225.20		64.20
55		100,000		2,971.00		261.10		3,133.20		162.20
		STANDARD
15	$	50,000	$	357.50	$	31.60	$	379.20	$	21.70
35		100,000		1,377.00		121.10		1,453.20		76.20
55		100,000		3,425.00		301.10		3,613.20		188.20

^*	In some cases for policies with smaller premiums, the sum of 12 monthly premiums may be less than the sum of other periodic premium amounts due to lower administrative costs.

Single Premium Life Policy The Single Premium Life Policy was available only for applicants who met select or standard plus underwriting criteria as we determined. The premiums for these Policies are the same for both select and standard plus risks, but we expect that the dividends will be lower for Policies issued to Insureds in the standard plus classification.

The following table for Single Premium Life Policies shows representative gross single premiums for male select and standard plus risks for various face amounts of insurance:


Age at Issue	Face Amount of Insurance		Gross Single Premium
15	$	10,000	$	1,498.40
35		25,000		6,443.25
55		50,000		23,502.00


12		Variable Life Prospectus

Grace Period

For the Whole Life and Extra Ordinary Life Policies there is a grace period of 31 days for any premium that is not paid when due. The Policy remains in force during this period. If you do not pay the premium within the grace period, the Policy will terminate as of the date when the premium was due and will no longer be in force, unless it is continued as extended term or paid-up insurance (see “Extended Term and Paid-Up Insurance”), or the Automatic Premium Loan provision is currently in effect (see “Policy Loans and Automatic Premium Loans”) to pay any overdue premiums and the premium due is less than the maximum amount allowable. If the Insured dies during the grace period we will deduct any overdue premium from the proceeds of the Policy. If the Insured dies after payment of the premium for the period which includes the date of death, we will refund the portion of the premium for the remainder of that period as part of the Policy proceeds.

Allocating Premiums to the Separate Account

We place the net annual premium for a Whole Life Policy or an Extra Ordinary Life Policy in the Separate Account on the Policy Date and on the Policy Anniversary each year. The net annual premium is the annual premium less the deductions. See “Deductions and Charges” for more information.

You determine how the net annual premium for a Whole Life or an Extra Ordinary Life Policy is apportioned among the Divisions. If you direct any portion of a premium to a Division, the Division must receive at least 10% of that premium. You may change the apportionment for future premiums by written request at any time, but the change will be effective only when we place the net annual premium in the Separate Account on the next Policy Anniversary, even if you are paying premiums other than on an annual basis. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions on your behalf involving the allocation of amounts among available Divisions, subject to our rules and requirements, including the restrictions on short-term and excessive trading.

Eligible Owners may also submit allocation requests via the Variable Life Service Center at 1-866-424-2609 or via our website at www.northwesternmutual.com (“Electronic Instructions”) in accordance with our then-current procedures for Electronic Instructions provided you have properly authorized us to accept Electronic Instructions in advance of your request. For more information see “Owner Inquiries.” However, we are not required to accept Electronic Instructions, and we will not be responsible for losses resulting from transactions based on unauthorized Electronic Instructions, provided we follow procedures reasonably designed to verify the authenticity of Electronic Instructions.

For a Single Premium Policy we placed the entire single premium, less an administrative charge of $150, in the Separate Account on the Policy Date, and we apportioned the amount among the Divisions as you determined.

You may apportion the Separate Account assets supporting your Policy among as many as six Divisions at any time.

Transfers Between Divisions Subject to the short-term and excessive trading limitations described below, you may transfer accumulated amounts from one Division to another so long as you are invested in no more than six Divisions at a time. Transfer requests will be effective after our receipt of your request in Good Order at our Home Office. If we receive your request for transfer before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will deem your request to be received and effective that day. If we receive your request for transfer on or after the close of trading on the NYSE, we will deem your request to be received and effective on the next regular trading session of the NYSE. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements.

In order to take full advantage of these features, you should carefully consider, on a continuing basis, which investment options are best suited to your long-term investment needs. Although no fee is presently charged, we reserve the right where allowed by state law to charge a fee that will cover the administrative costs of transfers. In addition, certain Portfolios in which the Divisions invest may impose redemption fees. These fees are described in the Portfolios’ prospectuses. Transfer requests must be in amounts greater than or equal to 1% of Invested Assets or the request will not be processed. When a transfer is made from any Division, the resulting allocation of Invested Assets must be in whole percentages in all Divisions that have any Invested Assets as a result of the transfer. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions on your behalf involving the transfer of accumulated amounts among available Divisions, subject to our rules and requirements, including the restrictions on short-term and excessive trading discussed below.

You may request the transfer in writing at our Home Office, via the Variable Life Service Center at 1-866-424-2609 or, if eligible, via our website at www.northwesternmutual.com. The submission of transfer instructions by telephone or through our website (“Electronic Instructions”) must be made in accordance with our current procedures for Electronic Instructions and you must properly authorize us to accept Electronic Instructions in advance of your request. For more information see “Owner Inquiries.” However, we are not required to accept Electronic Instructions, and we will not be responsible for losses resulting from transactions based on unauthorized Electronic Instructions, provided we follow procedures reasonably designed to verify the authenticity of Electronic Instructions. We reserve the right to limit, modify, suspend or terminate the ability to make transfers via Electronic Instructions.

Short-Term and Excessive Trading Short-term and excessive trading (sometimes referred to as “market timing”) may present risks to a Portfolio’s long-term investors, such as Owners and other persons who may have material rights under the Policy (e.g., beneficiaries), because it can, among other things, disrupt Portfolio investment strategies, increase Portfolio transaction and administrative costs, require higher


Variable Life Prospectus			13

than normal levels of cash reserves to fund unusually large or unexpected redemptions, and adversely affect investment performance. These risks may be greater for Portfolios that invest in securities that may be more vulnerable to arbitrage trading, including foreign securities and thinly traded securities, such as small cap stocks and non-investment grade bonds. These types of trading activities also may dilute the value of long-term investors’ interests in a Portfolio if it calculates its net asset value using closing prices that are no longer accurate. Accordingly, we discourage market timing activities.

To deter short-term and excessive trading, we have adopted and implemented policies and procedures which are designed to control abusive trading practices. We seek to apply these policies and procedures uniformly to all Owners. Any exceptions must be either expressly permitted by our policies and procedures or subject to an approval process described in them. We may also be prevented from uniformly applying these policies and procedures under applicable state or federal law or regulation. Because exceptions are permitted, it is possible that investors may be treated differently and, as a result, some may be allowed to engage in trading activity that might be viewed as market timing.

Among the steps we have taken to reduce the frequency and effect of these practices are monitoring trading activity and imposing trading restrictions, including the prohibition of more than twelve transfers among Divisions under a single Policy during a Policy Year. Multiple transfers with the same effective date made by the same Owner will be counted as a single transfer for purposes of applying the twelve transfer limitation. Further, an investor who is identified as having made a transfer in and out of the same Division, excluding the Money Market Division, (“round trip transfer”) in an amount in excess of $10,000 within fourteen calendar days will be restricted from making additional transfers after making two more such round trip transfers within any Policy Year, including the year in which the first such round trip transfer was made. The restriction will last until the next Policy Anniversary and the Policy Owner will be sent a letter informing him or her of the restriction. An Owner who is identified as having made one round trip transfer within thirty calendar days aggregating more than one percent (1%) of the total assets of the Portfolio underlying a Division, excluding the Money Market Division and the Divisions corresponding to the Portfolios of the Russell Investment Funds LifePoints^® Variable Target Portfolio Series, will be restricted from making additional transfers after making one more such round trip transfer within any Policy Year, including the year in which the first such round trip transfer was made. The restriction will last until the next Policy Anniversary and the Policy Owner will be sent a letter informing him or her of the restriction. These limitations do not apply to automatic asset transfers, scheduled or systematic transactions involving portfolio rebalancing, dollar cost averaging, initial allocations or changes in future allocations. Once a Policy is restricted, we will allow one additional transfer into the Money Market Division until the next Policy Anniversary. Additionally, in accordance with our procedures, we may modify some of

these limitations to allow for transfers that would not count against the total transfer limit but only as necessary to alleviate any potential hardships to Owners (e.g., in situations involving a substitution of an underlying fund).

Policies such as yours (or other Policies supported by the Separate Account) may be purchased by a corporation or other entity as a means to informally fund the liabilities created by the entity’s employee benefit or similar plan. These Policies may be aggregately managed to match liabilities under such plans. Policies sold under these circumstances may be subject to special transfer restrictions. Namely, transactions involving portfolio rebalancing programs may be exempt from the twelve transfers per Policy year limitation where: (1) the purpose of the portfolio rebalancing program is to match the Policy to the entity’s employee benefit or similar plan; (2) the portfolio rebalancing program adequately protects against short-term or excessive trading; and (3) the portfolio rebalancing program is managed by a third party administrator that meets our requirements. We reserve the right to monitor or limit transactions involving portfolio rebalancing programs where we believe such transactions may be potentially harmful to a Portfolio.

We may change these policies and procedures from time to time in our sole discretion without notice; provided, however, Owners will be given advance, written notice if the policies and procedures are revised to accommodate market timing. Additionally, the Funds may have their own policies and procedures described in their prospectuses that are designed to limit or restrict frequent trading. Such policies may be different from our policies and procedures, and may be more or less restrictive. As the Funds may accept purchase payments from other investors, including other insurance company separate accounts on behalf of their variable product customers and retirement plans, we cannot guarantee that the Funds will not be harmed by any abusive market timing activity relating to the retirement plans and/or other insurance companies that may invest in the Funds. The Funds’ policies and procedures may provide for the imposition of a redemption fee and, upon request from the Fund, require us to provide transaction information to the Fund (including an Owner’s tax identification number) and to restrict or prohibit transfers and other transactions that involve the purchase of shares of a Portfolio. In the event a Fund instructs us to restrict or prohibit transfers or other transactions involving shares of a Portfolio, you may not be able to make additional purchases in a Division until the restriction or prohibition ends. If you submit a request that includes a purchase or transfer into such a restricted Division, we will consider the request “not in Good Order” and it will not be processed. You may, however, submit a new transfer request.

If we believe your trading activity is in violation of, or inconsistent with, our policies and procedures or otherwise is potentially disruptive to the interests of other investors, you may be asked to stop such activities, and future investments and allocations or transfers by you may be rejected without prior notice. Because we retain discretion to determine what action is appropriate in a given situation, investors may be


14		Variable Life Prospectus

treated differently and some may be allowed to engage in activities that might be viewed as market timing.

We intend to monitor events and the effectiveness of our policies and procedures in order to identify whether instances of potentially abusive trading practices are occurring. However, we may not be able to identify all instances of abusive trading practices, nor completely eliminate the possibility of such activities, and there may be technological limitations on our ability to impose restrictions on the trading practices of Owners.

Deductions and Charges

The Net Premiums we place in the Separate Account for Whole Life, Extra Ordinary Life and Single Premium Life Policies are the gross premiums after the deductions described in the next two sections below. The Net Premiums for Whole Life and Extra Ordinary Life Policies exclude any extra premium we charge for Insureds who do not qualify as select risks and the extra premium for any optional benefits. We make a charge for mortality and expense risks against the assets of the Separate Account. There is also a charge for taxes. (See “Charges Against the Separate Account Assets”). In addition, the funds in which the Separate Account assets are invested pay an investment advisory fee and certain other expenses. (See “Fee and Expense Tables—Annual Portfolio Operating Expenses” and the attached Fund prospectuses.)

We may impose a fee for transfers that will not exceed our administrative costs associated with transfers. This fee is currently being waived.

You may have the option of receiving funds via wire transfer or priority mail. Currently, a fee of $25 is charged for wire transfers (up to $50 for international wires) and a $15 fee (up to $45 for next day, a.m. delivery) for priority mail. These fees are to cover our administrative costs or other expenses. We may discontinue the availability of these options at any time, with or without notice.

Deductions from Premiums for Whole Life and Extra Ordinary Life Policies The deductions described in this section are for Whole Life and Extra Ordinary Life Policies only. The deductions for Single Premium Life Policies are described under the next caption below.

For the first Policy Year there was a one-time deduction of not more than $5 for each $1,000 of insurance, based on the face amount for Whole Life or the Minimum Death Benefit stated in the Policy for Extra Ordinary Life. This was for the costs of processing applications, medical examinations, determining insurability and establishing records.

There is an annual deduction of $35 for administrative costs to maintain the Policy. Expenses include costs of premium billing and collection, processing claims, keeping records and communicating with Owners.

There is a deduction each year for sales costs. This amount may be considered a sales load. The deduction will be not

more than 30% of the basic premium (as defined below) for the first Policy Year, not more than 10% for each of the next three years and not more than 7% each year thereafter. The basic premium for a Policy is the gross premium which would be payable if you paid the premium annually, less the annual deduction of $35 for administrative costs. The basic premium is based on the cost of insurance for Insureds who qualify as select risks and does not include any extra premium amounts for Insureds whom we place in other underwriting classifications. The basic premium does not include the extra premium for any optional benefits. For an Extra Ordinary Life Policy, the basic premium does not include any extra premium for the Extra Life Protection.

The amount of the deduction for sales costs for any Policy Year is not specifically related to sales costs we incur for that year. We expect to recover our total sales expenses from the amounts we deduct for sales costs over the period while the Policies are in force. To the extent that sales expenses exceed the amounts deducted, we will pay the expenses from our other assets. These assets may include, among other things, any gain realized from the charge against the assets of the Separate Account for the mortality and expense risks we assume. (See “Charges Against the Separate Account Assets”). To the extent that the amounts deducted for sales costs exceed the amounts needed, we will realize a gain.

We make a deduction equal to 2% of each basic premium for state premium taxes. Premium taxes vary from state to state and currently range from 0% to 3.5% of life insurance premiums. The 2% rate is an average, and we charge the same percentage regardless of the state in which you live, which may be more or less than the percentage charged by your state of residence.

Provided that all premiums are paid when due, we guarantee that the Death Benefit, before adjustments, for a Whole Life Policy will never be less than the face amount of the Policy, regardless of the investment experience of the Separate Account and that, for an Extra Ordinary Life Policy, the Death Benefit, before adjustments, will never be less than the Minimum Death Benefit stated in the Policy. For both Policies, there is a deduction equal to 1.5% of each basic premium to compensate us for the risk that the Insured may die at a point in time when the Death Benefit that would ordinarily be paid is less than this guaranteed minimum amount.

For an Extra Ordinary Life Policy there is a deduction for dividends. This deduction will vary by age of the Insured and duration of the Policy and we expect it to be in the range of approximately 7-17% of the gross annual premium. The deduction is in consideration of the Policy’s receipt of dividends that may be paid or credited in accordance with the dividend scale in effect on the issue date of the Policy. Dividends will be affected by, among other factors, whether the Policy includes a term insurance component. Future dividends are not guaranteed. (See “Annual Dividends”).

The following tables illustrate the amount of net annual premium, for select and standard risks, to be placed in the


Variable Life Prospectus			15

Separate Account at the beginning of each Policy Year after the deductions described above:

Whole Life


Beginning of Policy Year	Male Age 35 - Select Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	154.28	$	320.16	$	1,647.28
2 through 4		402.11		834.48		4,293.51
5 and later		416.05		863.41		4,442.36

Beginning of Policy Year	Male Age 35 - Standard Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	123.37	$	256.03	$	1,317.30
2 through 4		321.57		667.33		3,433.44
5 and later		332.71		690.46		3,552.48

Extra Ordinary Life

Beginning of Policy Year	Male Age 35 - Select Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	134.23	$	278.56	$	1,433.21
2 through 4		369.62		767.07		3,946.64
5 and later		383.58		796.05		4,095.74

Beginning of Policy Year	Male Age 35 - Standard Risk Annual Premium
Beginning of Policy Year	$500		$1,000		$5,000
1	$	97.92	$	203.21	$	1,045.54
2 through 4		269.65		559.59		2,879.11
5 and later		279.83		580.73		2,987.88

Deductions for Single Premium Life Policies For a Single Premium Life Policy, the only deduction from the single premium was an administrative charge of $150. The administrative costs for issuing and maintaining a Single Premium Life Policy are similar to those we incur with a Whole Life Policy or an Extra Ordinary Life Policy, except for the costs of premium billing and collection. (See “Deductions from Premiums for Whole Life and Extra Ordinary Life Policies”). We placed the entire premium for a Single Premium Life Policy, after this deduction of $150, in the Separate Account when we issued the Policy without any of the other deductions which apply to premiums for Whole Life and Extra Ordinary Life Policies. There is no annual fee for a Single Premium Life Policy.

For a Single Premium Life Policy during the first ten Policy Years, the Cash Value payable on surrender of the Policy was reduced by a deduction for sales costs. The deduction during the first Policy Year was not more than 9% of the Policy’s tabular Cash Value. (See “Cash Value”). The deduction decreased over time until it was eliminated at the end of the tenth Policy Year. We intended the deduction to recover the costs we incurred in distributing Single Premium Life Policies which were surrendered in their early years. The deduction was never more than 9% of the single premium paid for the Policy, excluding the administrative charge of $150.

The following table illustrates the schedule for the decreasing deduction for sales costs for a policy surrendered at the end of each of the first ten Policy Years. The illustration is for a

Single Premium Life Policy, male age 35. The schedule varies slightly by age and sex and amount of insurance.


Policy Year End When Policy Is Surrendered	Deduction as % of Tabular Cash Value
1		7.9	%
2		7.1
3		6.3
4		5.4
5		4.6
6		3.7
7		2.8
8		1.9
9		0.9
10 and subsequent years		0

Charges Against the Separate Account Assets There is a daily charge to the Separate Account for the mortality and expense risks that we have assumed. The charge is at the annual rate of .50% of the assets of the Separate Account. The mortality risk is that Insureds may not live as long as we estimated. The expense risk is that expenses of issuing and administering the Policies may exceed the estimated costs, including other costs such as those related to marketing and distribution. The actual mortality and expense experience under the Policies will be a factor used in determining dividends. (See “Annual Dividends”).

The Policies provide that we may make a charge for taxes against the assets of the Separate Account. Currently, we are making a daily charge for income taxes we incur at the annual rate of .05% of the assets of the Separate Account. We may increase, decrease or eliminate the charge for taxes in the future to reflect the portion of our actual tax expenses which is fairly allocable to the Policies.

Optional Benefits There is a separate charge for any optional benefit you have selected. (See “Other Policy Provisions—Optional Benefits”). For a Whole Life Policy, the Waiver of Premium Benefit has a maximum charge of $2.05 per $1,000 of face amount and a minimum charge of $0.13 per $1,000 of face amount. The Additional Purchase Benefit has a maximum charge of $2.21 per $1,000 of Additional Purchase Benefit and a minimum charge of $0.54 per $1,000 of Additional Purchase Benefit.

For an Extra Ordinary Life Policy, the Waiver of Premium Benefit has a maximum charge of $1.48 per $1,000 of face amount and a minimum charge of $0.10 per $1,000 of face amount. The Additional Purchase Benefit has a maximum charge of $2.21 per $1,000 of Additional Purchase Benefit and a minimum charge of $1.06 per $1,000 of Additional Purchase Benefit.

We will realize a gain from these charges to the extent they are not needed to provide benefits and pay expenses under the Policies, in which case the gain may be used for any Company purpose.

The Portfolios in which the assets that support your Policy are invested also bear expenses which reduce the investment rate of return. (See “Fee and Expense Tables—Range of Total


16		Variable Life Prospectus

Annual Portfolio Operating Expenses” and attached mutual fund prospectuses.)

Guarantee of Premiums, Deductions and Charges

We guarantee that the premiums, the amounts we deduct from premiums, and the charge for mortality and expense risks will not increase over time. These amounts will not increase regardless of future changes in longevity or increases in expenses. The Extra Ordinary Life Policy provides an opportunity to pay an additional amount of premium after the guaranteed period for the Extra Life Protection has expired if the total Death Benefit would otherwise fall below the initial amount of insurance. (See “Extra Ordinary Life Policy”).

Death Benefit

If an Income Plan was not previously elected by the Owner and in lieu of a lump sum payment, Death Benefits, less any Policy Debt, may be paid under an Income Plan selected by your beneficiary after the death of the Insured. Available Income Plans include an interest income plan, installment income plans, and life income plans. The Company may offer additional Income Plans. Generally, (1) an interest Income Plan accrues interest on the Death Benefit, the interest may be received monthly, and any remaining proceeds or interest may be withdrawn at any time; (2) an installment Income Plan pays Death Benefit proceeds in installments for a fixed period of time, and any remaining proceeds may be withdrawn at any time; and (3) a life Income Plan makes payments monthly for a chosen period and after that, for the life of the person on whose life the payments are based (or two persons if the joint option is selected). Any proceeds added to increase the amount payable under a monthly income plan may be subject to a 2.00% expense charge plus any applicable state premium tax. The choice of income plans will vary depending on financial situation and the amount of income desired monthly for a chosen time period. The Owner may elect an Income Plan while the Insured is living or, if the Insured is not the Owner, during the first 60 days after the Insured’s date of death. An Income Plan that is elected by the Owner will take effect on the date of death of the Insured if the notice of election is received in our Home Office while the Insured is living. In all other cases, the Income Plan will take effect on the date of receipt of the notice of election. If no Income Plan is elected, the benefit is paid to the beneficiary with interest based on rates declared by the Company or as required by applicable state law on the date of death of the Insured.

The amount payable under the Death Benefit will be reduced by the amount of any Policy Debt. Subject to the terms and conditions of the Policy, the proceeds will be paid to a beneficiary or other payee after proof of the death of the Insured is received in our Home Office. The amount of proceeds will be determined as of the date of death. We will pay interest on the proceeds from that date until payment is made.

The Death Benefit for a variable life insurance policy is, in part, a guaranteed amount which will not be reduced during the lifetime of the Insured so long as you pay premiums when they are due and no Policy Debt is outstanding. The remainder

of the Death Benefit is the variable insurance amount which fluctuates in response to actual investment results and is not guaranteed. The amount of any paid-up additions is also included in the total Death Benefit and, in addition, the Extra Ordinary Life Policy provides some term insurance during the early Policy Years. Paid-up additions are amounts of permanent insurance, paid for with dividends and added to a basic life insurance policy, and for which the premium for the entire lifetime of the Insured has been paid. Paid-up additions have Cash Value and loan value. The relationships among the guaranteed and variable amounts and any paid-up additions and term insurance depend on the design of the particular Policy. For a more detailed description of how the Death Benefit is calculated for your Policy, see “Whole Life Policy and Single Premium Life Policy” and “Extra Ordinary Life Policy” below.

Variable Insurance Amount The variable insurance amount reflects, on a cumulative basis, the investment experience of the Divisions in which the Policy has participated. We adjust the variable insurance amount annually on each Policy Anniversary. For the first Policy Year the variable insurance amount was zero. For any subsequent year it may be either positive or negative. If the variable insurance amount is positive, subsequent good investment results will produce a larger variable insurance amount and therefore an increase in the Death Benefit. If the variable insurance amount is negative, subsequent good investment results will first have to offset the negative amount before the Death Benefit will increase.

In setting the premium rates for each Policy we have assumed that investment results will cause the Separate Account assets supporting the Policy to grow at a net annual rate of 4%. If the assets grow at a net rate of exactly 4% for a Policy Year, the variable insurance amount will neither increase nor decrease on the following Policy anniversary. If the net rate of growth exceeds 4%, the variable insurance amount will increase. If it is less than 4%, the variable insurance amount will decrease.

The method for calculating the changes in the Death Benefit is described in the Policy. The Policy includes a table of net single premiums used to convert the investment results for a Policy into increases or decreases in the variable insurance amount. The insurance rates in the table depend on the sex and the Attained Age of the Insured for each Policy Year. For a Whole Life Policy, the changes in the Death Benefit will be smaller for a Policy issued with a higher premium for extra mortality risk. The net single premium for a particular variable insurance amount is the price for that amount of paid-up whole life insurance based on the Insured’s age on the Policy Anniversary.

To illustrate how the variable insurance amount affects the Death Benefit for a Whole Life Policy, suppose that on your Policy Anniversary investment results since your last Policy Anniversary (excluding investment results on paid-up additions) were $500 less than the amount that would have been expected assuming a net annual growth rate of 4%. By way of example, if your net single premium (based on your underwriting classification as indicated in your Policy) per


Variable Life Prospectus			17

$1.00 of insurance was .40440, the variable insurance amount for the current year will decrease by $1,236 ($500/.40440), thereby decreasing the Death Benefit if the variable insurance amount had been positive. (See “Whole Life Policy and Single Premium Life Policy”).

Because the variable insurance amount is adjusted only on the Policy Anniversary, we bear the risk that the Insured may die before the next anniversary after an interim period of adverse investment experience. If investment experience during the interim period is favorable, you will forgo the benefit and we will realize a gain. However, if on the date of death of the Insured the value of the Policy, considered as a net single premium, would buy more Death Benefit than the amount otherwise determined under the Policy, we will pay this increased Death Benefit.

The cost of life insurance increases with the advancing age of the Insured, and therefore a larger dollar amount of investment earnings is required to produce the same increase in the Death Benefit in the later Policy Years. In general, however, the effect of investment results on the Death Benefit will tend to be greater in the later Policy Years because the amount of assets invested for the Policy will tend to increase as the Policy remains in force.

The cost of providing insurance protection under a Policy is reflected in the Cash Value of the Policy. (See “Cash Value”). The cost is actuarially computed for each Policy each year, based on the Insured’s Attained Age, the 1980 Commissioners Standard Ordinary Mortality Table and the net insurance amount at risk under the Policy. The net insurance amount at risk is the Death Benefit for the Policy minus the sum of the Cash Value and any Policy Debt. The cost of insurance differs each year because the probability of death increases as the Insured advances in age, and the net insurance amount at risk decreases or increases from year to year depending on investment experience. The cost assumes that all Insureds are in the select underwriting classification. The differences in the mortality rates of the various underwriting classifications are reflected in the different premiums (or different dividend scales) for those underwriting classifications. The cost of insurance is based on the mortality table identified above and we guarantee it for the life of a Policy regardless of any future changes in mortality experience. Our revenues attributable to this charge may exceed our costs attributable to this charge, in which case we may realize a gain.

Whole Life Policy and Single Premium Life Policy For a Whole Life Policy or a Single Premium Life Policy the Death Benefit is the face amount of the Policy plus any positive variable insurance amount in force. We adjust the Death Benefit on each Policy Anniversary when we determine the variable insurance amount for the following year. The total Death Benefit also includes the amount of insurance provided by any paid-up additions which you have purchased with dividends. The Death Benefit for a Whole Life Policy will not be less than the face amount so long as you pay premiums when they are due. For a Single Premium Life Policy the Death Benefit will not be less than the face amount. The amount payable at death is reduced by the amount of any Policy Debt outstanding.

Paid-up additions you have purchased with dividends are not counted for purposes of the guarantee that the Death Benefit of a Whole Life Policy or a Single Premium Life Policy will never be less than the face amount of the Policy. If the variable insurance amount is negative, the total Death Benefit will be the guaranteed face amount plus the amount of insurance provided by any paid-up additions. Paid-up additions are amounts of permanent insurance, paid for with dividends and added to a basic life insurance policy, and for which the premium for the entire lifetime of the Insured has been paid. Paid-up additions have Cash Value and loan value.

Extra Ordinary Life Policy The Death Benefit for an Extra Ordinary Life Policy is affected by the amount of Extra Life Protection in force. Initially, the amount of Extra Life Protection is 40% of the total amount of insurance and is in the form of one year term insurance; the amount of term insurance may be adjusted on each Policy Anniversary thereafter. Term insurance is life insurance which pays a Death Benefit only if the Insured dies during the term for which the insurance has been purchased. Term insurance is ordinarily purchased on an annual basis at a cost which rises with the increasing age of the Insured. It has no cash surrender value or loan value. The amount of term insurance included in Extra Life Protection affects the dividends payable on Extra Ordinary Life Policies. Over time, positive variable insurance amounts and paid-up additions purchased with dividends will reduce the one year term insurance portion of the Extra Life Protection to an amount that (with variable insurance amounts and paid-up additions) will maintain the total Death Benefit at the amount for which the Policy was issued. The term insurance is eliminated at any time when the sum of positive variable insurance amount plus the paid-up additions equals or exceeds the initial amount of Extra Life Protection.

The amount of Extra Life Protection may increase over time but it will not decrease below the initial amount during the Policy’s guaranteed period, so long as you pay premiums when they are due, all dividends are applied to purchase paid-up additions and no paid-up additions are surrendered for their Cash Value. The length of the guaranteed period depends on the age of the Insured at issue. Please note that neither the actual investment results nor the dividends to be paid on the Policy are guaranteed. You may request an in-force illustration to illustrate the effect of various future rates of return on the amount of Extra Life Protection.

After the guaranteed period expires, if the sum of positive variable insurance amounts plus the paid-up additions is less than the initial amount of Extra Life Protection on any Policy Anniversary, we may reduce the amount of your term insurance for the Policy Year. We will give you notice of the reduction and you will have an opportunity to pay an additional amount of premium in order to keep the initial amount of insurance in force. The maximum premium rate is set forth in the Policy. The maximum premium rate varies between $6.27 per $1,000 of term insurance and $1,000 per $1,000 of term insurance, depending on the age and sex of the insured. Your right to continue the Extra Life Protection will terminate as of the first Policy Anniversary when you fail to pay the additional premium when due.


18		Variable Life Prospectus

The Death Benefit for an Extra Ordinary Life Policy is the sum of the Minimum Death Benefit plus the amount of Extra Life Protection in force. The Minimum Death Benefit is 60% of the total amount of insurance for which the Policy was issued. We guarantee the Minimum Death Benefit for the lifetime of the Insured so long as you pay premiums when they are due.

The total Death Benefit is not affected by either investment results or the amount of dividends paid, so long as the Policy is within the guaranteed period of Extra Life Protection unless the term insurance has been eliminated by positive variable insurance amount and paid-up additions as described above. Good investment results and increases in dividends increase the likelihood that the total Death Benefit will begin to rise before the guaranteed period of Extra Life Protection expires. Adverse investment results or decreases in dividends could cause the total Death Benefit to fall below the amount of insurance which was initially in force, after the guaranteed period of Extra Life Protection expires, but it cannot fall below the Minimum Death Benefit so long as you pay premiums when they are due. In each case the amount payable at death is reduced by any Policy Debt outstanding.

The following three examples illustrate how Extra Life Protection operates during the guaranteed period. In each example the Policy was issued for a total amount of $250,000. The minimum death benefit is $150,000 (60% of $250,000) and the initial amount of Extra Life Protection is $100,000 (40% of $250,000).

•

Example 1: On a Policy Anniversary, there is a total positive variable insurance amount of $10,000 and paid-up additions are $15,000. The Extra Life Protection for the following year would consist of term insurance in the amount of $75,000 ($100,000 minus the sum of $10,000 and $15,000) in order to maintain the initial amount of Extra Life Protection. There would be no effect on the current Death Benefit because the total of the variable insurance amount and paid-up additions has not exceeded the initial amount of Extra Life Protection.

•

Example 2: On a Policy Anniversary, there is a total negative variable insurance amount of -$12,000 and paid-up additions are $15,000. The Extra Life Protection for the following year would consist of term insurance in the amount of $85,000, reflecting a reduction for paid-up additions but not negative variable insurance amounts. Again, there would be no effect on the current Death Benefit. In subsequent years positive variable insurance amounts will need to make up for the negative variable insurance amounts in order to affect the amount of term insurance.

•

Example 3: On a Policy Anniversary, there is a total positive variable insurance amount of $60,000 and paid-up additions are $50,000. The Extra Life Protection for the following year would consist of no term insurance and would increase to $110,000 (the sum of $60,000 and $50,000). In this case the current Death Benefit would increase to reflect variable insurance amounts and paid-up insurance in excess of the Extra Life Protection (see “Variable Insurance Amount” above).

We have designed the Extra Ordinary Life Policy for a purchaser who intends to use all dividends to purchase paid-up additions. If you use dividends for any other purpose, or if any paid-up additions are surrendered for their Cash Value, the term insurance in force will immediately terminate, any remaining guaranteed period of Extra Life Protection will terminate and your right to continue the amount of Extra Life Protection as described above will terminate. The amount of Extra Life Protection thereafter will be the sum of positive variable insurance amount plus any paid-up additions which remain in force.

Cash Value

The Cash Value of a Policy is equal to the amount you are eligible to receive when you surrender the Policy. If investment results were a net level 4% every year, the Cash Value would increase each year according to a table in your Policy (“tabular Cash Value”). However, the Cash Value for all Policies will change daily in response to investment results. For any given date, to calculate the Cash Value, the tabular Cash Value for the last Policy Anniversary is adjusted to reflect the time elapsed since the last Policy Anniversary. We then adjust the sum of the tabular Cash Value and the net single premium for the variable insurance amount (see the discussion of net single premiums under “Variable Insurance Amount”) to reflect investment results from the last Policy Anniversary to the date for which the calculation is being made. The Cash Value is increased by the value of any paid-up additions which have been purchased with dividends. If a portion of the premium for the current Policy Year has not been paid, the Cash Value of a Whole Life Policy or an Extra Ordinary Life Policy will be reduced. The Cash Value for all Policies will be reduced by any Policy Debt outstanding. No minimum Cash Value is guaranteed.

If a portion of the premium for the current Policy Year has not been paid, the Cash Value of a Whole Life Policy or an Extra Ordinary Life Policy will be reduced.

The Cash Value for the Whole Life Policy, the Extra Ordinary Life Policy and the Single Premium Life Policy will be reduced by the amount of any Policy Debt outstanding.

We determine the Cash Value for a Policy at the end of each valuation period (typically, 4:00 p.m. Eastern Time each business day). Each business day, together with any non-business days before it, is a valuation period. A business day is any day on which the NYSE is open for trading. In accordance with the requirements of the 1940 Act, we may also determine the Cash Value for a Policy on any other day on which there is sufficient trading in securities to materially affect the value of the securities held by the Portfolios.

You may surrender a Policy for the Cash Value at any time during the lifetime of the Insured. We will surrender your Policy upon receiving a surrender request in Good Order at our Home Office. Requests for surrender received before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE are deemed to be received and effective that day. If received on or after the close of trading, requests are deemed to be received and effective as of the close of the next regular trading session


Variable Life Prospectus			19

of the NYSE. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements. Alternatively, you may use the Cash Value of a Whole Life Policy or an Extra Ordinary Life Policy to provide extended term insurance or a reduced amount of fixed or variable paid-up insurance. (See “Extended Term and Paid-Up Insurance”). Surrender proceeds may be paid under an Income Plan requested by an Owner at the time of surrender. Available Income Plans include an interest income plan, installment income plans, and life income plans. The Company may offer additional Income Plans.

You may request a Death Benefit reduction, so long as the Policy’s Death Benefit after reduction meets the regular minimum size requirements. A proportionate refund of the Policy’s Cash Value will result from any Death Benefit reduction. The refund of Cash Value will first be applied toward any existing loan balance. The remainder of the Cash Value refunded will be returned to the Owner. The remaining Policy will be based on the age and underwriting classification of the Insured at the time of issuance of the original Policy. We will allocate reductions among the Divisions in proportion to the amounts in the Divisions.

Annual Dividends

The Policies are eligible to share in the divisible surplus, if any, of the Company. Each year we determine, in our sole discretion, the amount and appropriate allocation of divisible surplus. Divisible surplus allocated to your Policy is referred to as a “dividend.” A Policy’s share, if any, will be credited as a dividend on the Policy Anniversary. We will not pay a dividend on a Whole Life Policy or an Extra Ordinary Life Policy which is in force as extended term insurance. There is no guaranteed method or formula for the determination or allocation of divisible surplus. The Company’s approach is subject to change. There is no guarantee of a divisible surplus. Even if there is a divisible surplus, the payment of a dividend on a Policy is not guaranteed.

Illustrated dividends published at the time a life insurance policy is issued generally reflect the actual recent experience of the issuing company with respect to mortality and expenses and hypothetical investment results. State law generally prohibits a company from projecting or estimating future results.

If you receive dividends, you may use them to purchase variable paid-up additions, unless the Policy is in force as reduced fixed paid-up insurance. We will also pay dividends in cash, or you may use them to pay premiums or leave them to accumulate with interest (see “Tax Consideration—Tax Treatment of Life Insurance”); but unless you use all dividends we pay on an Extra Ordinary Life Policy to purchase paid-up additions, the term insurance portion of the Extra Life Protection will be terminated. (See “Extra Ordinary Life Policy”). We hold dividends you leave to accumulate with interest in our General Account and we will credit them with a rate of interest we determine annually. The interest rate will not be less than an annual effective rate of 3.5%. If a Whole Life Policy or an Extra Ordinary Life Policy is in force

as reduced fixed benefit paid-up insurance, dividends may be used to purchase fixed benefit paid-up additions. (See “Extended Term and Paid-Up Insurance”). Dividends used to purchase variable benefit paid-up additions will be allocated to the Divisions of the Separate Account according to the allocation of Net Premiums then in effect.

Policy Loans and Automatic Premium Loans

Described below are certain terms and conditions that apply when you borrow amounts under the Policy. For information on the tax treatment of loans, see “Tax Treatment of Policy Benefits” and consult with your tax advisor.

Policy Loans You may borrow an amount that, when added to existing Policy Debt, is not more than the loan value. The loan value is 90% of the sum of the Cash Value and any existing Policy Debt on the date of the loan. You may take loan proceeds in cash or, for the Whole Life and Extra Ordinary Life Policies, you may use them to pay premiums on the Policy. We normally pay the loan proceeds within seven days after we receive a proper loan request at our Home Office. Eligible Owners may also submit loan requests via the Variable Life Service Center at 1-866-424-2609. Written and telephone requests will be processed based on the date and time they are received in the Home Office, provided the request is received in Good Order. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements. Based on our administrative procedures, you may have the option of receiving funds via wire transfer or priority mail, and we may charge a fee for this service to cover our administrative costs. We may postpone payments of loans under certain conditions described in the “Deferral of Determination and Payment” section of this prospectus. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions regarding loan requests on your behalf.

Automatic Premium Loans If you have chosen the Automatic Premium Loan provision or it is currently in effect for your Policy, a premium loan, which is a form of Policy loan, will automatically be made to pay an overdue premium if the premium is less than the maximum amount available for a new loan. A confirmation statement will be sent each time an automatic premium loan occurs.

General Loan Terms Interest on a loan accrues and is payable on a daily basis. We add unpaid interest to the amount of the loan. The Policy’s Cash Value is reduced by the amount of the loan. If the Cash Value decreases to zero, the Policy will terminate unless a sufficient portion of the loan is repaid. We will send you a notice at least 31 days before the termination date. The notice will show how much you must repay to keep the Policy in force.

You select the loan interest rate. The loan interest rate is applied to both the amount of the loan and accrued interest. A specified annual effective rate of 8% is one choice. (The specified annual effective rate may be lower in Arkansas.) The other choice is a variable rate based on a corporate bond yield index. We will adjust the variable rate annually. It will not be less than 5%.


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We will take the amount of a loan, including interest as it accrues, from the Divisions in proportion to the amounts in the Divisions. We will transfer the amounts withdrawn to our General Account and will credit those amounts on a daily basis with an annual earnings rate equal to the loan interest rate less a charge for the mortality and expense risks we have assumed and for expenses, including taxes. The aggregate charge is currently at the annual rate of .85% for the 8% specified loan interest rate and .85% for the variable loan interest rate. For example, the earnings rate corresponding to an 8% loan interest rate is currently 7.15%. A loan, even if you repay it, will have a permanent effect on the Policy’s variable insurance amount and Cash Value because the amounts you have borrowed will not participate in the Separate Account’s investment results while the loan is outstanding. The effect may be either favorable or unfavorable depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions of the Separate Account.

The amount payable at death will also be reduced by the amount of any Policy Debt outstanding. If you surrender or exchange the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly.

You may repay a loan, and any accrued interest outstanding, in whole or in part, at any time while the Insured is alive. If we receive a payment without specific instructions, we will first apply the payment to any premium due, with any remaining amount being applied to any outstanding loans. Payments in excess of outstanding debt and premiums due will be returned unless such amounts are deemed to be de minimis according to our procedures. Except as described below, if we receive your loan payments before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will credit payments as of the date we receive them and transfer them from our General Account to the Divisions, in proportion to the amounts in the Divisions, as of the same date. If we receive your loan payments on or after the close of trading on the NYSE, we will credit payments as of the close of the next regular trading session of the NYSE and transfer them from our General Account to the Divisions, in proportion to the amounts in the Divisions, as of the date we credit the payment. Payments must be in Good Order to be processed. If your payment is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your payment to our then-current requirements.

Policy loan payments received within 34 days after the loan interest billing date will be credited as of the loan interest billing date. Automatic premium loans are effective as of the premium due date unless a loan payment is received between the premium due date and the date the Automatic Premium Loan is made. Automatic premium loan payments received up to 66 days after the loan interest billing date will be credited as of the Policy Anniversary, depending on your premium payment schedule. We will send you a notice indicating your

loan interest billing date. Loan repayments are not subject to transaction fees.

Extended Term and Paid-Up Insurance

If a premium for a Whole Life Policy or an Extra Ordinary Life Policy is not paid when due or within the 31-day grace period (see “Grace Period”), and you have not chosen the Automatic Premium Loan (APL) provision or do not have sufficient loan value to pay the premium, (see “Policy Loans and Automatic Premium Loans”), the Cash Value will purchase extended term insurance, or, at your request, a reduced amount of either fixed or variable benefit paid-up insurance.

If you use the Cash Value to provide a reduced amount of fixed benefit paid-up insurance or for extended term insurance, we will transfer the amount of the Cash Value from the Separate Account to our General Account at the conclusion of the 31 day grace period. Thereafter the Policy will not participate in the Separate Account’s investment results unless the Policy is subsequently reinstated. (See “Reinstatement”). You may select variable benefit paid-up insurance only if the Policy has at least $1,000 of Cash Value. The minimum guaranteed death benefit (the face amount for Whole Life or the Minimum Death Benefit for Extra Ordinary Life) is not in effect for variable paid-up insurance.

For fixed paid-up insurance, you must have selected paid-up insurance within three months after the due date of your first unpaid premium. We determine the amount of paid-up insurance by the amount of Cash Value and the age and sex of the Insured, using the table of net single premiums at the Attained Age. Fixed benefit paid-up insurance has guaranteed cash and loan values. Paid-up insurance remains in force for the lifetime of the Insured unless the Policy is surrendered or the Cash Value is reduced to zero because of a Policy loan.

If the Policy remains in force as extended term insurance, the amount of insurance will equal the Death Benefit prior to the date the premium was due, less any Policy Debt. The amount of Cash Value and the age and sex of the Insured will determine how long the insurance continues. We will, upon your request, tell you the amount of insurance and how long the term will be. Extended term insurance is not available if the Policy was issued with a higher premium for extra mortality risk. Extended term insurance has a Cash Value but no loan value.

Reinstatement

If a premium for a Whole Life Policy or an Extra Ordinary Life Policy is due and remains unpaid at the end of the grace period, the Policy will lapse. The Policy may be reinstated after lapse within five years after the premium due date. The Insured must provide satisfactory evidence of insurability. Any premium or other payment due, including any applicable interest, will also be required. If we approve your request for reinstatement and the request is received before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will deem your request to be received and effective that day. If we receive your request on or after the close of trading on the NYSE, we will deem your request to be received and effective


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on the next regular trading session of the NYSE. Applications must be received in Good Order to be processed. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements.

The Company may waive the requirement to provide satisfactory evidence of insurability if the reinstatement is applied for, and any premium or other payment due is paid, within 90 days after the premium due date and while the Insured is alive. Upon reinstatement, your Policy Date will not change. Therefore, fees and charges that vary by Policy year will take into account the period of time your Policy was terminated. In addition, following the reinstatement the Policy will have the same Death Benefit and amount in each Division as if all premiums had been paid when due. We will make an adjustment for any Policy Debt or the debt may be reinstated. A reinstatement may have important tax consequences. If you contemplate any such transaction you should consult a qualified tax adviser.

Reinvestments After Surrender

While Owners have no right to reinvestment after a surrender, we may, at our sole discretion, permit such reinvestments as described in this paragraph. In special limited circumstances, we may allow payments into a Policy in the form of returned surrender proceeds in connection with a request to void a surrender if the request is received by the Company within a reasonable time after the surrender proceeds are mailed. These payments may be processed without a sales load in the case of a Whole Life Policy or an Extra Ordinary Life Policy. The period for which we will accept requests for the return of surrender proceeds after a surrender may vary in accordance with our administrative procedures. The returned surrender proceeds will be reinvested after our receipt of the reinvestment request in Good Order at our Home Office. If we receive your request before the close of trading (typically, 4:00 p.m. Eastern Time) on the NYSE, we will deem your request to be received and effective that day. If we receive your request on or after the close of trading on the NYSE, we will deem your request to be received and effective on the next regular trading session of the NYSE. If your request is not in Good Order, either we or your Financial Representative may notify you in writing, by telephone or by email in an effort to conform your request to our then-current requirements. Proceeds will be applied to the same Division from which the surrender was made. Under certain circumstances in accordance with our procedures your Financial Representative may provide us with instructions regarding requests for reinvestment on your behalf.

Depending on the Insured’s underwriting classification, we may not accept the reinvestment or we may accept the reinvestment with different charges and expenses under the Policy. We may refuse to process reinvestments where it is not administratively feasible. Decisions regarding requests for reinvestment will take into consideration differences in costs and services and will not be unfairly discriminatory. Policies

with reinvested surrender proceeds will have the same Death Benefit as if the proceeds had not been surrendered, except the values will reflect the fact that amounts were not invested in the Separate Account during the period of time the surrender proceeds were not in the Policy as well as any changes in charges and expenses due to a change in underwriting classification. We will make an adjustment for any Policy Debt or the debt may be reinstated.

Right to Exchange for a Fixed Benefit Policy

It is currently Company practice to allow you to exchange your Policy for a policy that does not vary with the investment experience of the Separate Account (“Fixed Benefit Policy”). We may modify or terminate this accommodation at any time, with or without notice, unless your state or the terms of your Policy provide for such an exchange. We may require evidence of insurability. The Fixed Benefit Policy will be on the life of the same Insured and at the time of the exchange will have the same Policy Date and Issue Age and a Death Benefit at least as great as the initial guaranteed Death Benefit of your Policy (assuming no reduction in Death Benefit prior to the exchange). The premiums and Cash Value will be the same as those for fixed benefit policies that we issue on the issue date of the Fixed Benefit Policy. The exchange may be subject to an equitable cash adjustment, which will recognize the investment performance of the Policy through the effective date of the exchange, and may have tax consequences. An exchange will be effective when we receive a proper written request, as well as the Policy, and any amount due on the exchange.

In addition, you may exchange a Policy for a Fixed Benefit Policy if, at any time, a Fund changes its investment adviser, if there is a material change in the investment objectives or restrictions of a Portfolio, or a Portfolio is substituted for another portfolio (see “Substitution of Portfolio Shares and Other Changes”). There may be a cost associated with the exchange. We will give you notice of any such change and you will have 60 days to make the exchange.

Modifying a Policy

Any Policy change that you request is subject to our then current insurability and processing requirements. Processing requirements may include, for example, completion of certain forms and satisfying certain evidentiary requirements.

If the Policy is changed or modified, we may make appropriate endorsements to the Policy, and we may require you to send your Policy to our Home Office for endorsement. Any modification or waiver of our rights or requirements under the Policy must be in writing and signed by an officer of the Company. No agent or other person may bind us by waiving or changing any provision contained in the Policy.

Upon notice to you, we may modify a Policy:

•

to conform the Policy, our operations, or the Separate Account’s operations to the requirements of any law (including any regulation issued by a government agency) to which the Policy, the Company, or the Separate Account is subject;


22		Variable Life Prospectus

•

to ensure continued qualification of the Policy as a life insurance contract under the federal tax laws; or

•

to reflect a change in the Separate Account’s operation.

Other Policy Provisions

Owner The Owner is identified in the Policy. The Owner may exercise all rights under the Policy while the Insured is living. Ownership may be transferred to another. Written proof of the transfer must be received by Northwestern Mutual at its Home Office. In this prospectus “you” means the Owner of a Policy. Generally, only Owners are entitled to important information about the Policy. Other persons, such as beneficiaries or payors, are entitled to only limited information.

Beneficiary The beneficiary is the person to whom the Death Benefit is payable. The beneficiary is named in the Application. You may change the beneficiary in accordance with the Policy provisions.

Incontestability We will not contest a Policy after it has been in force during the lifetime of the Insured for two years from the Date of Issue or two years from the effective date of a reinstatement.

Misstatement of Age or Sex If the age or sex of the Insured has been misstated, we will adjust benefits under a Policy to reflect the correct age and sex.

Collateral Assignment You may assign a Policy as collateral security. We are not responsible for the validity or effect of a collateral assignment and will not be deemed to know of an assignment before receipt of the assignment in writing at our Home Office.

Optional Benefits If available in your state, there are two optional benefits available for purchase under the Whole Life Policy or Extra Ordinary Life Policy: (1) a Waiver of Premium Benefit; and (2) an Additional Purchase Benefit.

Subject to the terms and conditions of the benefit, the Waiver of Premium Benefit waives the payment of all premiums that come due during the total disability of the Insured if the disability is due to accident or sickness and it begins on or before the Policy Anniversary nearest the Insured’s 60^th birthday. If the disability occurs after the Policy Anniversary nearest the Insured’s 60^th birthday, the benefit waives the payment of all premiums that come due during the total disability of the Insured until the Policy Anniversary nearest the Insured’s 65^th birthday.

Subject to the terms and conditions of the benefit, the Additional Purchase Benefit guarantees the right to buy more insurance without proof of insurability.

If you selected one or both of these optional benefits, you are subject to a separate charge. (See “Periodic Charges (Other than Fund Operating Expenses)” and “Deductions and Charges—Optional Benefits” for more information about the charges.) Any charge will continue to be assessed as long as the benefit remains in force. Once the Policy has been issued, an optional benefit may be issued only upon mutual agreement.

Income Plans The Policy provides a variety of Income Plans for Policy benefits. Any Northwestern Mutual Financial Representative authorized to sell the Policies can explain these provisions on request.

Deferral of Determination and Payment So long as premiums have been paid when due, we will ordinarily pay Policy benefits within seven days after we receive all required documents at our Home Office. However, we may defer determination and payment of benefits during any period when it is not reasonably practicable to value securities because the NYSE is closed, or the SEC, by order, either has determined that an emergency exists or permits deferral of the determination and payment of benefits for the protection of Owners. If a Whole Life Policy or an Extra Ordinary Life Policy is continued in force as extended term or reduced fixed benefit paid-up insurance, we have the right to defer payment of the Cash Value for up to six months from the date of a Policy loan or surrender. If payment of surrender proceeds is deferred for 30 days or more, we will pay interest at an annual effective rate of 4%. If, under SEC rules, the Money Market Portfolio suspends payments of redemption proceeds in connection with a liquidation of the Portfolio, we will delay payment of any transfer, partial surrender, surrender, death benefit from the Money Market Division until the Portfolio is liquidated.

If you have submitted a check or draft to our Home Office, we have the right to defer payment of surrender proceeds, Cash Value resulting from a Death Benefit reduction, Death Benefit or loan proceeds or Income Plan benefits until the check or draft has been honored.

If mandated under applicable law, we may be required to block an Owner’s account and thereby refuse to pay any requests for transfer, Death Benefit reduction, surrender, loans, or Death Benefit proceeds, until instructions are received from the appropriate legal authority. We may also be required to provide additional information about an Owner and an Owner’s account to government authorities.

Voting Rights

As long as the Separate Account continues to be registered as a unit investment trust under the 1940 Act, and as long as Separate Account assets of a particular Division are invested in shares of a given Portfolio, we will vote the shares of that Portfolio held in the Separate Account in accordance with instructions we receive from Owners. Periodic reports relating to the Portfolios, proxy material, and a form on which one can give instructions with respect to the proportion of shares of the Portfolio held in the Separate Account corresponding to the Owner’s Policy Value, will be made available to the Owner(s). We will vote shares for which no instructions have been received and shares held in our General Account in the same proportion as the shares for which instructions have been received from Owners. The effect of such proportional voting is that a small number of Owners may control the outcome of a particular vote.


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Substitution of Portfolio Shares and Other Changes

If, in our judgment, one or more Portfolios become unsuitable for continued use with the Policies because of a change in investment objectives or restrictions, for each such Portfolio we may substitute shares of another Portfolio or another mutual fund. Any substitution of shares will be subject to any required approval of the SEC, the Wisconsin Commissioner of Insurance or other regulatory authority. We have also reserved the right, subject to applicable federal and state law, to operate the Separate Account or any of its Divisions as a management company under the 1940 Act, or in any other form permitted, or to terminate registration of the Separate Account if registration is no longer required, and to change the provisions of the Policies to comply with any applicable laws. Pursuant to an order of the Securities and Exchange Commission (“SEC”), effective November 15, 2013 the Commodity Return Strategy Portfolio was substituted for the Commodities Return Strategy Portfolio, a series of the Series Fund (the “Replaced Portfolio”). The Replaced Portfolio is no longer available as an investment option. As a condition of the order, until November 15, 2015 we will periodically reimburse subaccount expenses to the extent the Commodity Return Strategy Portfolio’s expenses exceed the expenses of the Replaced Portfolio. Depending on the timing of such reimbursement (typically quarterly), financial information or values of the Division investing in the Commodity Return Strategy Portfolio for some of the time periods reflected in such values would be lower prior to the reimbursements being applied. In the event we take any action to substitute another Portfolio in the future, we may make an appropriate endorsement of your Policy and take other necessary actions.

Reports and Financial Statements

For each Policy Year you will receive a statement showing the Death Benefit, Cash Value and any Policy loan (including interest charged) as of the Policy anniversary. We will also send you a confirmation statement when you transfer among Divisions, take a Policy loan, or surrender the Policy. The annual statement and confirmation statements will show your apportioned amounts among the Divisions. If the Policy is in force as extended term or fixed benefit paid-up insurance, statements and reports will be limited to an annual Policy statement showing the Death Benefit, Cash Value and any Policy loan.

Annually, we will send you a report containing financial statements of the Separate Account and semi-annually, we will send you reports containing financial information and schedules of investments for the Portfolios underlying the Divisions to which your Invested Assets are allocated. The financial statements of the Company appear in the Statement of Additional Information. To receive a copy of the Annual Report, Semi-Annual Report and/or the Statement of Additional Information, call 1-866-424-2609. Certain reports and other information can be obtained on our website at www.northwesternmutual.com.

Special Policy for Employers

The premium for the standard Policy is based in part on the sex of the Insured. The standard annuity rates for Income Plans which last for the lifetime of the payee are also based, in part, on the sex of the payee. However, if your Policy was issued in connection with an employer sponsored benefit plan or arrangement, federal law and the laws of certain states may require that premiums and annuity rates be determined without regard to sex. You are urged to review any questions in this area with qualified counsel.

Householding

To reduce costs, we may send only a single copy of the same disclosure document(s) (such as prospectuses, prospectus supplements, reports, announcements, proxy statements, notices, and information statements) to each consenting household (rather than sending copies to each Owner residing in a household). If you are or become a member of such a household, you can revoke your consent to “householding” at any time, and can begin receiving your own copy of such disclosure documents, by calling us at 1-866-424-2609.

Abandoned Property Requirements

Every state has unclaimed property laws which generally declare insurance contracts/policies to be abandoned after a period of inactivity of three to five years from the contract’s/policy’s maturity date, the date the death benefit is due and payable, or in some states, the date the insurer learns of the death of the insured. For example, if the payment of the death benefit has been triggered, but, if after a thorough search, we are still unable to locate the beneficiary, or if the beneficiary does not come forward to claim the death benefit proceeds in a timely manner, the death benefit proceeds will be paid to the abandoned property division or unclaimed property office of the state in which the beneficiary or you last resided, as shown on our books and records, or to our state of domicile. This “escheatment” is revocable, however, and the state is obligated to pay the death benefit proceeds (without interest) if your beneficiary steps forward to claim it with the proper documentation. To prevent such escheatment, it is important that you update your beneficiary designations, including addresses, if and as they change. Please contact your Financial Representative or call 1-866-424-2609 for assistance in making such changes.

Cybersecurity

The Company has administrative, technical and physical safeguards in place with respect to information security, nevertheless, our variable product business is potentially susceptible to operational and information security risks resulting from a cyber-attack as it is highly dependent upon the effective operation of our computer systems and those of our business partners. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, denial of service on websites and other operational disruption and unauthorized release of


24		Variable Life Prospectus

confidential customer information. Cyber-attacks affecting us, the Portfolios, intermediaries and other affiliated or third-party service providers may adversely affect us and your Policy Value. For instance, cyber-attacks may interfere with our processing of contract transactions (including the processing of orders through our website, if available, or with the Portfolios), impact our ability to calculate values, cause the release and possible destruction of confidential customer or business information, impede order processing, subject us and/or our service providers and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cybersecurity risks may also impact the issuers of securities in which the Portfolios invest, which may cause the Portfolios to lose value. There can be no assurance that we or the Portfolios or our service providers will avoid losses affecting your Policy due to cyber-attacks or information security breaches in the future.

Legal Proceedings

Northwestern Mutual, like other life insurance companies, is generally involved in litigation at any given time. Although the outcome of any litigation cannot be predicted with certainty, we believe that, as of the date of this prospectus, there are no pending or threatened lawsuits that will have a materially adverse impact on the ability of Northwestern Mutual to meet its obligations under the Policy, on the Separate Account, or on Northwestern Mutual Investment Services, LLC, the principal underwriter for the Separate Account, and its ability to perform its duties as underwriter for the Separate Account.

Speculative Investing

This Policy, or any of its riders, should not be used for any type of speculative collective investment scheme (including, for example, arbitrage). Your Policy is not intended to be traded on any stock exchange or secondary market, and attempts to engage in such trading may violate state and/or federal law.

Owner Inquiries

You may receive information about your Policy via the Variable Life Service Center by calling toll-free at 1-866-424-2609. With your User ID and password, you can also visit our website www.northwesternmutual.com to access

performance information, forms for routine service, and daily Policy values for Policies you own. Eligible Owners may also set up certain electronic payments, transfer accumulated amounts among Divisions and change the allocation of future contributions online, subject to our administrative procedures. For enrollment information, please visit our website www.northwesternmutual.com. Please note that electronic devices may not always be available. Any electronic device, whether it is yours, your service provider’s, your agent’s or ours, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your request or payment. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request or payment in writing at our Home Office. Electronic requests or payments are deemed to be received by us upon receipt at the electronic location designated by us in our procedures. If you have questions about surrendering your Policy, please call your Financial Representative or the Variable Life Service Center at 1-866-424-2609. To file a claim, please call your Financial Representative or Life Benefits at 1-800-635-8855.

Illustrations

Your Northwestern Mutual Financial Representative will provide you with an illustration for your Policy upon request. The illustration will reflect the performance of your Policy to date and will show how the amount payable at death and Cash Value would vary based on hypothetical future investment results.

Illustrations for variable life insurance policies do not project or predict investment results. The illustrated values assume that non-guaranteed elements such as dividends, policy charges and level investment returns will not change. Given the volatility of the securities markets over time, the illustrated scenario is unlikely to occur and the Policy’s actual Cash Value, amount payable at death, and certain expenses (which will vary with the investment performance of the Portfolios) will be more or less than those illustrated. In addition, the actual timing and amounts of payments, deductions, expenses and any values removed from the policy will also impact product performance. Due to these variations, even a Portfolio that averaged the same return as illustrated will produce values which will be more or less than those which were illustrated.

Tax Considerations

General The following discussion provides a general description of federal tax considerations relating to your Policy. The discussion is based on current provisions of the Internal Revenue Code (“Code”) as currently interpreted by the Treasury Department and the Internal Revenue Service (“IRS”). The discussion is not exhaustive, it does not address the likelihood of future changes in federal tax law or interpretations thereof, and it does not address state or local

tax considerations which may be significant in the purchase and ownership of a Policy.

Depending on the circumstances, the exchange of a Policy, a Policy loan (including the addition of unpaid loan interest to a Policy loan), or a change in ownership or an assignment of the Policy may have federal income tax consequences. In addition, federal, state and local transfer, estate, inheritance, and other tax consequences of Policy ownership, premium


Variable Life Prospectus			25

payments and receipt of Policy proceeds depend on the circumstances of each Owner or beneficiary. If you contemplate any such transaction you should consult a qualified tax adviser.

This tax discussion is intended to describe the tax consequences associated with your Policy. It does not constitute legal or tax advice, and is not intended to be used and cannot be used to avoid any penalties that may be imposed on a taxpayer. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.

Life Insurance Qualification Section 7702 of the Code defines life insurance for federal income tax purposes. Under Section 7702, a Policy will generally be treated as life insurance for federal tax purposes if at all times it meets either a guideline premium test or a cash value accumulation test. We have designed your Policy to comply with only the cash value accumulation test. We may take any action that may be necessary for the Policy to qualify as life insurance for tax purposes.

The definitional tests under the Code are based on the Commissioner’s Standard Ordinary (CSO) mortality tables in effect when the Policies were issued. For Policies issued or materially changed after 2008, the tests must be based on the 2001 CSO mortality tables. Because Policies issued based on the 1980 CSO mortality tables may not satisfy the definitional tests using the 2001 CSO mortality tables, certain changes to those Policies will not be permitted (as defined by IRS Notices 2004-61 and 2006-95). Special safe harbor calculation rules apply to life insurance after the Insured attains age 100. See IRS Rev. Proc. 2010-28.

As provided by Section 817(h) of the Code, the Secretary of the Treasury has set standards for diversification of the investments underlying variable life insurance policies. Failure to meet the diversification requirements would disqualify your Policy as life insurance for purposes of Section 7702 of the Code. We believe that your Policy complies with the provisions of Sections 7702 and 817(h) of the Code, but the application of these rules is not entirely clear. We may make changes to your Policy if necessary for the Policy to qualify as life insurance for tax purposes.

IRS Rev. Ruls. 2003-91 and 2003-92 provide guidance on when an Owner’s control of Separate Account assets will cause the Owner, and not the life insurance company, to be treated as the owner of those assets. Important indicators of investor control are the ability of the Owner to select the investment advisor, the investment strategy or the particular investments of the Separate Account. If the Owner of a Policy were treated as the owner of the assets held in the Separate Account, the income and gains related to those assets would be included in the Owner’s gross income for federal income tax purposes. We believe that we own the assets of the Separate Account under current federal income tax law.

Tax Treatment of Life Insurance While your Policy is in force, increases due to investment experience are not subject to federal income tax until there is a distribution as defined by the Code. Death Benefit proceeds received by a beneficiary will generally not be subject to federal income tax.

So long as your Policy is not classified as a MEC (see “Modified Endowment Contract”), the proceeds from a surrender or withdrawal will generally be taxable only to the extent that the proceeds exceed the basis of the Policy. The basis of the Policy is generally equal to the premiums paid less any amounts previously received as tax-free distributions. Dividends paid in cash are generally taxed as withdrawals with a resulting reduction in basis. However, dividends applied to purchase additional insurance or used to pay premiums are generally not taxable. In certain circumstances, a withdrawal of Cash Value during the first 15 Policy Years may be taxable to the extent that the Cash Value exceeds the basis of the Policy. This means that the amount withdrawn may be taxable even if that amount is less than the basis of the Policy.

Unless the Policy is a MEC, a loan received under your Policy will not be treated as a distribution subject to current federal income tax. If the Policy remains in force until the death of the Insured or, in the case of joint life insurance, the second death, the Policy Debt will be repaid from the Death Benefit. However, if the Policy terminates by any method other than death, the Policy Debt will be repaid from the Cash Value of the Policy, and the total Cash Value, including the total amount of the Policy Debt, will be taxable to the extent it exceeds the basis of the Policy. If the extended term insurance nonforfeiture option is available in your Policy, and it lapses to extended term insurance, the Policy Debt will be repaid from Cash Value of the Policy and the Policy Debt repayment will be treated as income and taxable to the extent it exceeds Policy’s basis.

Caution must be used when taking cash out of a Policy through policy loans. If interest is not paid annually, it is added to the principal amount and the total Policy Debt will continue to increase for as long as the loan is maintained on the Policy. In extreme situations, Owners can face what is called the “surrender squeeze.” The surrender squeeze occurs if the Policy Debt becomes too large when compared to the unborrowed Cash Value remaining in the Policy, thereby causing the Policy to lapse. (See the “Policy Loans and Automatic Premium Loans” section for more details). As described above, if your policy lapses with outstanding Policy Debt, you will have an income tax liability to the extent the Policy Debt exceeds the Policy basis. This means that you may have to pay income tax for a year in which you did not receive any cash from the policy.

Interest paid by individual Owners of a Policy will ordinarily not be deductible. You should consult a qualified tax advisor as to the deductibility of interest paid, or accrued, by business Owners of a Policy. (See “Business-Owned Life Insurance”).

Subject to the agreement of the Company, and the Owner meeting any conditions set by the Company, a Policy may be exchanged tax-free for another life insurance policy covering the same Insured (or, in the case of joint life insurance, covering the Insureds or a surviving Insured) or an annuity contract with the same owner (or, in the case of an annuity owned by a non-natural owner, if the annuitant is the same as the life insurance policy insured). The Code also allows certain policies to be exchanged for stand-alone and combination long-term care policies on a tax-free basis.


26		Variable Life Prospectus

Policies that are exchanged for life insurance policies after 2008 may only be exchanged for life insurance policies using 2001 CSO mortality tables. Any cash received or loan repaid in an exchange will be taxed to the extent of the gain in the Policy (i.e., on gain-first basis).

Ownership of a Policy may be transferred to a new owner. If the transfer is a sale, it is taxable to the extent the sales proceeds exceed the basis of the Policy. The transfer of a Policy with a loan in excess of Policy basis is considered a sale to the extent of the loan, and the loan is treated as “sales proceeds” paid to the transferor. In Rev. Rul. 2009-13, the IRS ruled that, when a life insurance policy is sold to a person with no insurable interest in the insured, the taxable gain is calculated by reducing the basis of the policy by the annual cost of the insurance protection provided by the policy. The death benefit of a policy that was previously sold or otherwise transferred for valuable consideration is taxable as ordinary income to the extent it exceeds the sum of the purchase price and subsequent premiums paid by the new owner. However, the death benefit will not be taxable if the new owner is the insured, a partner of the insured, a partnership in which the insured is a partner or a corporation in which the insured is a shareholder or officer or the basis of the Policy is carried over, in whole or in part, in the transfer. You should seek qualified tax advice if you plan a transfer of ownership.

Where the Policy cash value is distributed as periodic payments under a payment plan, part or all of the taxable payments may be subject to an additional 3.8% Medicare tax. The tax will be assessed on the Owner’s net investment income for the year to the extent that the Owner’s adjusted gross income (with slight modifications) exceeds $250,000 (married filing jointly or surviving spouse), $125,000 (married filing separately) or $200,000 (other filers) (not indexed) Under final regulations issued by the IRS, “net investment income” may include among other things the transfer of a life insurance policy that constitutes a sale, interest paid on the Death Benefit and taxable distributions from life insurance policies held in arrangements that constitute “passive activities”. You should seek qualified tax advice.

Modified Endowment Contracts (MEC) A modified endowment contract (“MEC”) is a type of life insurance contract that is taxed less favorably on lifetime distributions than other life insurance contracts. A MEC has less favorable tax treatment because it is considered to be too investment oriented. Generally, a Policy may be classified as a MEC if the cumulative premiums paid during the first seven Policy Years after issue, or after a “material change” (described below), exceed the policy’s “seven-pay” limit. The seven-year time period is commonly referred to as the “seven-pay period”. Code Section 7702A defines the seven-pay limit as the sum of the premiums (net of expense and administrative charges) that would have to be paid in order for the Policy to be fully paid-up after seven level annual payments based on defined interest and mortality assumptions. If premiums in excess of the seven-pay limit are paid during a seven-pay period, a Policy will be a MEC. However, a policy will not be a MEC if the excess premiums are refunded, with interest,

within 60 days after the end of the Policy Year in which they are paid. For purposes of measuring this 60-day refund period, the term “Policy Year” refers to the year that starts on the date of a material change if that date is different than the Policy Date. If excess premium is refunded, all Policy values are recalculated as though the excess premium had never been paid.

A policy can also become a MEC if the benefits under the Policy are reduced during a seven-pay period or, in the case of joint life Policies, the lifetime of either Insured. If a reduction occurs during a seven-pay period, the seven-pay premium limit will be redetermined based on the reduced level of benefits. All premiums paid during the seven-pay period must be retroactively tested against the new, lower, seven-pay limit. If the premiums previously paid are greater than the recalculated seven-pay premium level limit, the Policy will become a MEC. This means that a reduction of Policy benefits can result in a MEC because of premiums paid in prior years even if those premiums did not exceed the policy’s seven-pay limit at the time they were paid. A reduction in benefits includes a decrease in the amount of coverage, the termination or reduction of certain riders, a withdrawal or any other action resulting in a surrender of Cash Value to you according to the terms of the Policy, an election of the paid-up option or, in some cases, a lapsing of the Policy where the Policy is not reinstated within 90 days. A life insurance policy which is received in exchange for a MEC will also be considered a MEC. In the case of joint life Policies, the reduction test must be applied during the lifetime of either Insured rather than only during seven-pay periods.

Whenever there is a “material change” under a Policy, it will generally be treated as a new contract for purposes of determining whether the Policy is a MEC. This means that a new seven-pay period begins with a new seven-pay limit. The new seven-pay limit is determined by taking into account the value of the Policy at the time of such change. A material change could occur as a result of certain changes to the benefits or terms of the Policy, such as a change in a death benefit option or a change in the Insured(s), if allowable under your Policy. A material change could occur as a result of an increase in the death benefit, the addition of a benefit or the payment of a premium after the seven-pay period, which could be considered “unnecessary” under the Code.

If a Policy is a MEC, any distribution from the Policy will be treated as a distribution of gain first, subject to ordinary income taxation. Distributions for this purpose include a loan a withdrawal of Cash Value or a surrender of the Policy. Distributions taken within the two-year period prior to the Policy becoming a MEC may also be taxed under the MEC tax rules. The Policy basis is increased to the extent a loan is a taxable distribution from a MEC. For these purposes, the term “loan”, includes an increase in Policy Debt due to accrued but unpaid loan interest, or an assignment or pledge of the policy to secure a loan. For purposes of determining the taxable portion of any distribution, all MECs issued by Northwestern Mutual to the same Owner (excluding certain qualified plans) during any calendar year are to be aggregated. The Secretary of the


Variable Life Prospectus			27

Treasury has authority to prescribe additional rules to prevent avoidance of gain-first taxation on distributions from MECs.

A 10% penalty tax will apply to the taxable portion of a distribution from a MEC. The penalty tax will not, however, apply to distributions (i) to taxpayers 59¹⁄₂ years of age or older, (ii) in the case of a disability (as defined in the Code) or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and the taxpayer’s beneficiaries. The exceptions generally do not apply to life insurance policies owned by corporations or other entities.

Estate and Generation Skipping Taxes If the Insured owns, or has any incidents of ownership in, the Policy, the amount of the Death Benefit will generally be includible in the Insured’s estate for federal estate tax purposes and any applicable state inheritance tax. If a Policy is a joint life Policy, the Death Benefit will be includible in the estate of the second to die if that that individual owned or had any incidents of ownership in, the policy at the time of death. In some circumstances, the Death Benefit of a policy may be included in an Insured’s estate even if not owned at the time of death. This may occur if the Insured transferred an ownership interest, or an incident of ownership, in a policy within three years of death. If the Owner dies, but an Insured is still alive, the fair market value of the Policy will be includible in the Owner’s estate. With appropriate estate planning, A unlimited marital deduction may permit deferral of federal estate and gift taxes until the death of the Owner’s surviving spouse.

If ownership of a Policy is transferred, either directly or in trust, to a person two or more generations younger than the Owner, the value of the Policy may be subject to a generation skipping transfer tax.

An exemption limit of $5 million (single)/$10 million (married) (with inflation indexing after 2011) and a maximum rate of 40% applies for purposes of the estate, gift and generation skipping transfer taxes. In addition, any unused estate exemption limit may be carried over to the surviving spouse.

Business-Owned Life Insurance Business-owned life insurance may be subject to certain additional rules. Section 101(j) of the Code provides that a portion of the Death Benefit payable under business-owned life insurance in which the business is also the beneficiary will be taxable to the extent it exceeds the premiums or other consideration the business paid for the policy. This rule will not apply if (i) the Insured is an eligible employee and (ii) certain notice and consent requirements are satisfied before the policy is issued. Generally, an eligible employee is someone who was an employee at any time during the 12 month period before death, a director, a person who owns more than 5% of the business, an employee earning more than $120,000 annually (increased for cost of living), one of the highest 5 paid officers or an employee who is among the highest paid 35% of employees. The law also imposes an annual reporting and record-keeping obligation on the employer. Increases in Policy or Cash Value may also be subject to tax under the corporation alternative minimum tax provisions.

Section 264(a)(1) of the Code generally disallows a deduction for premiums paid on Policies by anyone who is directly or indirectly a beneficiary under the Policy. Interest on debt that is related to or is incurred to purchase or carry life insurance might be deductible in certain, limited, circumstances set forth in Code Section 264. For example, interest paid or accrued for up to an aggregate of $50,000 of indebtedness with respect to life insurance covering a “key person” may be deductible. Generally, a key person is defined as an officer or a 20% owner. However, the number of key persons will be limited to the greater of (a) five individuals, or (b) the lesser of 5% of the total officers and employees of the taxpayer or 20 individuals. Deductible interest for these Policies will be subject to limits based on current market rates.

In addition, if a business owns life insurance with cash value, Section 264(f) of the Code may disallow a portion of a business’s non-life insurance related interest deduction. The disallowance is based on a ratio that compares the amount of unborrowed life insurance Cash Value to the adjusted basis of other business assets. Certain policies may be excluded the disallowance calculation. These include policies held by natural persons unless the business is a direct or indirect beneficiary under the policy and policies owned by a business and insuring an individual who at the time the policy is issued is an employee, director, officer or 20% owner (as well as joint policies insuring 20% owners and their spouses). The IRS has ruled that a policy received in a tax-free exchange is newly issued for this purpose.

The IRS has ruled privately that losses in business-owned life insurance could be deducted upon the surrender of the policy if there was no reasonable prospect of recovery, but that the losses would be calculated by reducing the basis of the policy by the annual cost of the insurance protection provided by the policy. Private rulings apply only to the taxpayer who receives the ruling but may be indicative of the IRS’s thinking on an issue.

Special rules under the Code govern how life insurance companies calculate income tax deductions. Under these rules the annual increase in the cash value of life insurance policies owned by life insurance companies may limit the company’s deductions, resulting in an overall increase in its taxable income. In Revenue Procedure 2007-61, the IRS provided a safe harbor under which the annual increase in cash value of life insurance policies covering no more than 35% of the company’s employees, directors, officers and 20% owners will not limit the life insurance company’s deductions. Additionally, the Revenue Procedure included language that the tax-deferred nature of such contracts remains subject to challenge by the IRS under other provisions of the tax law, including judicial doctrines such as the business purpose doctrine.

Policy Split Right If your Policy is a joint life Policy, your Policy permits the Owner to exchange the Policy for two policies, one on the life of each Insured, without evidence of insurability, if a change in the federal estate tax law results in either the repeal of the unlimited marital deduction or a 50% or greater reduction in the maximum estate tax rate set forth in the law. The exchange must be made while both Insureds are alive (and neither Insured is classified as a Joint Insurable).


28		Variable Life Prospectus

The request for exchange must be received no later than 180 days after the earlier of the enactment of the law repealing the unlimited marital deduction or the enactment of the law reducing the estate tax rate by at least 50%.

The IRS has ruled with respect to one taxpayer that such a transaction would be treated as a non-taxable exchange. If not so treated, such a split of the Policy could result in the recognition of taxable income.

Split Dollar Arrangements Life insurance purchased under a split dollar arrangement is subject to special tax rules. IRS Notice 2002-8 provides that (1) the value of the current life insurance protection provided to the employee under the arrangement is taxed to the employee each year and, until the issuance of further guidance, can be determined using the government’s Table 2001 rates or the insurer’s lower one year term rates (which, for arrangements entered into after January 28, 2002, must satisfy additional sales requirements); and (2) for split dollar arrangements entered into on or before September 17, 2003, taxation of the equity (cash surrender value in excess of the amount payable to the employer) is governed by prior law and is subject to the following three safe harbors: (a) the annual accrual of income will not, by itself, be enough to trigger a taxable transfer; (b) equity will not be taxed regardless of the level of the employer’s economic interest in the life insurance policy as long as the value of the life insurance protection is treated and reported as an economic benefit; and (c) the employee can elect loan treatment at any time, provided all premiums paid by the employer are treated as a loan entered into at the beginning of the first year in which payments are treated as loans.

The Treasury and IRS regulations regarding the taxation of split dollar arrangements apply only to arrangements entered into or materially changed after September 17, 2003. The regulations provide that such split dollar arrangements must be taxed under one of two mutually exclusive tax regimes depending on the ownership of the underlying life insurance policy. Collateral assignment split dollar arrangements, in which the employee owns the policy, must be taxed under a loan regime. Where such an arrangement imposes a below market interest rate or no interest rate, the employee is taxed on the imputed interest under Section 7872 of the Code. Endorsement split dollar arrangements, in which the employer owns the policy, must be taxed under an economic benefit regime. Under this regime, the employee is taxed each year on (i) the value of the current life insurance protection provided to the employee, (ii) the increase in the amount of policy Cash Value to which the employee has current access, and (iii) the value of any other economic benefits provided to the employee during the taxable year.

Under the Sarbanes-Oxley Act of 2002, it is a criminal offense for an employer with publicly traded stock to extend or

arrange a personal loan to a director or executive officer after July 30, 2002. One issue that has not been clarified is whether each premium paid by such an employer under a split dollar arrangement with a director or executive officer is a personal loan subject to the new law.

Section 409A of the Code imposes requirements for nonqualified deferred compensation plans with regard to the timing of deferrals, distribution triggers, funding mechanisms and reporting requirements. Nonqualified deferred compensation plans that fail to meet these conditions are taxed currently on all compensation previously deferred and interest earned thereon and assessed an additional 20% penalty. The law does not limit the use of life insurance as an informal funding mechanism for nonqualified deferred compensation plans, but IRS Notice 2007-34 treats certain split dollar arrangements as nonqualified deferred compensation plans that must comply with the new rules. The effective date of these rules was December 31, 2008. Congress has also considered limiting an individual’s annual aggregate deferrals to a nonqualified deferred compensation plan to $1,000,000.

Valuation of Life Insurance Special valuation rules apply to life insurance contracts distributed from a qualified plan to a participant or transferred by an employer to an employee. IRS Rev. Proc. 2005-25 provides safe harbor formulas for valuing variable and non-variable life insurance policies. Generally, the safe harbor value is the greater of (i) the sum of the interpolated terminal reserve, any unearned premiums, and a pro rata portion of the estimated dividends for the Policy Year; or (ii) the cash value without reduction for any surrender charges (but adjusted by a surrender factor for policies distributed from qualified plans) multiplied by a factor specified in Rev. Proc. 2005-25. These rules do not apply to split dollar arrangements entered into on or before September 17, 2003 and not materially modified thereafter.

Other Tax Considerations Under Code Section 6011, taxpayers are required to annually report all “reportable transactions”. Regulations under Code Section 6011 provide a list of several types of reportable transactions, some of which may involve life insurance policies. For example, in some circumstances a reportable transaction might exist if life insurance is owned by a welfare benefit plan. “Reportable transactions” also include transactions that create significant differences between the amount of any item for purposes of determining income, gain, expense or loss for tax purposes differs by more than $10 million, on a gross basis, from the amount of the item for purposes for book purposes. However, Rev. Proc. 2004-67 held that the purchase of life insurance policies that creates such a difference does not, by itself, constitute a “reportable transaction.” The rules related to reportable transactions are complicated and you should consult a qualified tax advisor before purchasing any insurance policy as part of a transaction.


Variable Life Prospectus			29

Distribution of the Policy

We sell the Policy through our Financial Representatives who also are registered representatives of Northwestern Mutual Investment Services, LLC (“NMIS”). NMIS, our wholly-owned company, was organized under Wisconsin law in 1998 and is located at 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. NMIS is a registered broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority. NMIS is the principal underwriter and distributor of the Policy and has entered into a Distribution Agreement with us.

Northwestern Mutual variable insurance and annuity products are available exclusively through NMIS and its registered representatives and cannot be held with or transferred to an unaffiliated broker-dealer. Except in limited circumstances, NMIS registered representatives are required to offer Northwestern Mutual variable insurance and annuity products. The amount and timing of sales compensation paid by insurance companies varies. The commissions, benefits, and other sales compensation that NMIS and its registered representatives receive for the sale of a Northwestern Mutual variable insurance or annuity product might be more or less than that received for the sale of a comparable product from another company.

The maximum commission payable to the registered representative who sold the Whole Life or Extra Ordinary Life Policy is 55% of the premium during the first Policy Year; 9% of the premium in Policy Years 2-3; 6% of the premium in Policy Years 4-7; 3% of the premium in Policy Years 8-10; and 2% of Premium Payments thereafter. For the Single Premium Life Policy, commissions were 2.75% of the premium. Registered representatives may receive less than the maximum commission or no commission in certain circumstances according to pre-established guidelines. We may also pay new registered representatives differently during

a training period. The entire amount of sales commissions paid to registered representatives is passed through NMIS to the registered representative who sold the Policy and to his or her managers. The Company pays compensation and bonuses for the management team of NMIS, and other expenses of distributing the Policies.

Because registered representatives of NMIS are also our appointed agents, they may be eligible for various cash benefits, such as bonuses, insurance benefits, retirement benefits, and non-cash compensation programs that we offer, such as conferences, achievement recognition, prizes, and awards. In addition, registered representatives of NMIS who meet certain productivity, persistency, and length of service standards and/or their managers may be eligible for additional compensation. For example, registered representatives who meet certain annual sales production requirements with respect to their sales of Northwestern Mutual insurance and annuity products may qualify to receive additional cash compensation for their other sales of investment products and services. Sales of the Policies may help registered representatives and/or their managers qualify for such compensation and benefits. Certain registered representatives of NMIS may receive other payments from us for the recruitment, training, development, and supervision of financial representatives, production of promotional literature and similar services.

Commissions and other incentives and payments described above are not charged directly to Owners or to the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Policy. NMIS registered representatives receive ongoing servicing compensation related to the Policies, but may be ineligible to receive ongoing servicing compensation paid by issuers of other investment products for certain smaller accounts.

Glossary of Terms

APPLICATION

The form completed by the applicant when applying for coverage under the Policy. This includes any:

amendments or endorsements;

supplemental Applications;

reinstatement Applications; and

Policy change Applications.

ATTAINED AGE

The Insured’s Issue Age listed in the Policy, plus the number of complete Policy Years that have elapsed since the Policy Date.

CASH VALUE

The amount available in cash if the Policy is surrendered.

DATE OF ISSUE

The date on which insurance coverage takes effect as shown in the Policy.

DEATH BENEFIT

The gross amount payable to the beneficiary upon the death of the Insured, before the deduction of Policy Debt and other adjustments.


30		Variable Life Prospectus

DIVISION

A subdivision of the Separate Account. We invest each Division’s assets exclusively in shares of one Portfolio.

FINANCIAL REPRESENTATIVE

An individual who is authorized to sell you the Policy and who is both licensed as a Northwestern Mutual insurance agent and registered as a representative of our affiliate, Northwestern Mutual Investment Services, LLC, the principal underwriter of the Policy.

FUND

Each Fund is registered under the 1940 Act as an open-end management investment company or as a unit investment trust, or is not required to be registered under the Act. Each Portfolio of the Funds is available as an investment option under the Policy. The assets of each of the Divisions of the Separate Account are used to purchase shares of the corresponding Portfolio of a Fund.

GENERAL ACCOUNT

All assets of the Company, other than those held in the Separate Account or in other separate accounts that have been or may be established by the Company.

GOOD ORDER

Your request or payment meets all the current requirements necessary for us to process it. For certain requests this may include, as applicable, the return of proceeds, evidence of insurability, underwriting, MEC-limit (or insurance qualification) requirements, any premium payments due or proper completion of certain Northwestern Mutual forms.

HOME OFFICE

Our office at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-4797.

INCOME PLAN

An optional method of receiving the Death Benefit, maturity benefit, surrender proceeds or withdrawal proceeds of an insurance policy or annuity contract through a series of periodic payments. An Income Plan may also be known as a “payment plan.”

INSURED

The person named as the Insured on the Application and in the Policy.

INVESTED ASSETS

The sum of all amounts in the Divisions of the Separate Account.

ISSUE AGE

The Insured’s age on his or her birthday nearest the Policy Date.

MEC

Modified endowment contract as described in Section 7702A of the Internal Revenue Code. A modified endowment contract is a life insurance contract that is considered too investment oriented and is taxed less favorably on lifetime distributions than other life insurance contracts. See the “Tax Considerations” section for more detailed information.

NET PREMIUM

The amount of Premium Payment remaining after Premium charges have been deducted.

NYSE

New York Stock Exchange.

OWNER (You, Your)

The person named in the Application as the Owner, or the person who becomes Owner of a Policy by transfer or succession.

POLICY ANNIVERSARY

The same day and month as the Policy Date in each year following the first Policy Year.

POLICY DATE

The date shown in the Policy from which the following are computed, among other things:

Policy Year;

Policy Anniversary;

the Issue Age of Insured; and

the Attained Age of the Insured.

POLICY DEBT

The total amount of all outstanding Policy loans, including both principal and accrued interest.

POLICY VALUE

The sum of Invested Assets and Policy Debt less applicable charges.

POLICY YEAR

A year that starts on the Policy Date or on a Policy Anniversary.

PORTFOLIO

A series of a Fund available for investment under the Policy, which corresponds to a particular Division of the Separate Account.

PREMIUM PAYMENTS

All payments you make under the Policy other than loan repayments and transaction charges.

SEPARATE ACCOUNT

Northwestern Mutual Variable Life Account.


Variable Life Prospectus			31

Additional Information

More information about the Separate Account is included in a Statement of Additional Information (“SAI”), which is dated the same day as this prospectus, is incorporated by reference into this prospectus, and is available free of charge from the Company. To request a free copy of the Separate Account’s SAI, or current annual report, call us toll-free at 1-866-424-2609. Under certain circumstances you or your financial representative may be able to obtain these documents online at www.northwesternmutual.com. Information about the Separate Account (including the SAI) can be reviewed and copied at the Public Reference Room of the SEC in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-551-8090. Reports and other information about the Separate Account are available on the SEC’s Internet site at http://www.sec.gov, or they may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street, NE, Washington, DC
20549-0102.

Your Northwestern Mutual Financial Representative will provide you with illustrations for your Policy free of charge upon your request. The illustrations show how the Death Benefit, Invested Assets and cash surrender value for the Policy would vary based on hypothetical investment results. Your Northwestern Mutual Financial Representative will also respond to other inquiries you may have regarding the Policy, or you may contact the Variable Life Service Center at 1-866-424-2609.

Investment Company Act File No. 811-3989


32		Variable Life Prospectus

STATEMENT OF ADDITIONAL INFORMATION

May 1, 2015

VARIABLE LIFE

Whole Life

Extra Ordinary Life

Single Premium Life

Issued by The Northwestern Mutual Life Insurance Company

and

Northwestern Mutual Variable Life Account

(Account)

We no longer issue the three Policies described in this Statement of Additional Information.

The Policies we currently offer are described in separate Prospectuses and

Statements of Additional Information.

This Statement of Additional Information (“SAI”) is not a prospectus, but supplements, and should be read in conjunction with the prospectus for the Policies identified above and dated the same date as this SAI. The prospectus may be obtained by writing The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”), 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, or by calling telephone number 1-866-424-2609.

B-1

TABLE OF CONTENTS


	Page

DISTRIBUTION OF THE POLICIES		B-3

EXPERTS		B-3

FINANCIAL STATEMENTS OF THE ACCOUNT		F-1

FINANCIAL STATEMENTS OF NORTHWESTERN MUTUAL		NM-1

B-2

DISTRIBUTION OF THE POLICIES

The Policies are offered on a continuous basis exclusively through individuals who, in addition to being life insurance agents of Northwestern Mutual, are registered representatives of Northwestern Mutual Investment Services, LLC (“NMIS”). NMIS is our wholly-owned company. The principal business address of NMIS is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

NMIS is the principal underwriter of the Policies for purposes of the federal securities laws. We paid the following amounts to NMIS with respect to sales of variable life insurance policies issued in connection with the Account during each of the last three fiscal years representing commission payments NMIS made to our agents and related benefits. None of these amounts was retained by NMIS and no amounts were paid to other underwriters or broker-dealers. We also paid additional amounts to NMIS in reimbursement for other expenses related to the distribution of variable life insurance policies


Year	Amount
2014		$5,607,850
2013		$9,032,836
2012		$12,321,208

NMIS also provides certain services related to the administration of payment plans under the Policies pursuant to an administrative services contract with Northwestern Mutual. In exchange for these services, NMIS receives compensation to cover the actual costs incurred by NMIS in performing these services.

EXPERTS

The financial statements of the Account, and the related notes and report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, included in this Statement of Additional Information and the consolidated financial statements of Northwestern Mutual, and the related notes and report of PricewaterhouseCoopers LLP included in this Statement of Additional Information are so included in reliance on the reports of PricewaterhouseCoopers LLP given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP provides audit services for the Account. The address of PricewaterhouseCoopers LLP is 100 East Wisconsin Avenue, Suite 1800, Milwaukee, Wisconsin 53202.

B-3

Annual Report December 31, 2014

Northwestern Mutual Variable Life Account

Financial Statements

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Growth Stock Division		Focused Appreciation Division		Large Cap Core Stock Division		Large Cap Blend Division		Index 500 Stock Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	386,880	$	122,803	$	244,071	$	8,194	$	1,122,451
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		-		-		-		-		-
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		45		-		-		-		-

Total Assets		386,925		122,803		244,071		8,194		1,122,451


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		8		28		2		56
Due to Participants		-		-		-		-		-

Total Liabilities		-		8		28		2		56


Total Net Assets	$	386,925	$	122,795	$	244,043	$	8,192	$	1,122,395


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	34,459	$	7,639	$	27,147	$	402	$	156,204
Northwestern Mutual Equity		455		81		421		4		1,761
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		329,431		104,279		200,779		7,165		883,779
Northwestern Mutual Equity		8,108		3,028		5,077		167		21,214
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		6,969		3,877		5,715		340		22,363
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		7,503		3,891		4,904		114		37,074


Total Net Assets	$	386,925	$	122,795	$	244,043	$	8,192	$	1,122,395


(1) Investments, at cost	$	275,260	$	88,344	$	175,468	$	6,917	$	762,545
Mutual Fund Shares Held		134,567		46,622		147,654		7,290		282,307
(2) Accumulation Unit Value	$	3.949121	$	3.141534	$	2.981972	$	1.577743	$	4.519180
Units Outstanding		85,472		34,157		69,034		4,647		200,257
(3) Accumulation Unit Value	$	54.488126	$	33.238141	$	40.759702	$	13.487127	$	103.583087
Units Outstanding		128		117		140		25		216
(4) Accumulation Unit Value	$	54.488126	$	33.238141	$	40.759702	$	13.487127	$	103.583087
Units Outstanding		138		117		120		8		358

The Accompanying Notes are an Integral Part of the Financial Statements.

F-1

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Large Company Value Division		Domestic Equity Division		Equity Income Division		Mid Cap Growth Stock Division		Index 400 Stock Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	11,443	$	190,761	$	123,136	$	465,335	$	290,566
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		-		-		-		-		-
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		23		13		13		-		30

Total Assets		11,466		190,774		123,149		465,335		290,596


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		-		-		29		-
Due to Participants		-		-		-		-		-

Total Liabilities		-		-		-		29		-


Total Net Assets	$	11,466	$	190,774	$	123,149	$	465,306	$	290,596


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	829	$	17,427	$	10,182	$	66,729	$	14,890
Northwestern Mutual Equity		5		208		123		955		157
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		9,883		157,668		101,498		376,623		252,644
Northwestern Mutual Equity		224		4,545		2,658		9,236		6,244
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		19		4,302		4,368		4,457		7,342
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		506		6,624		4,320		7,306		9,319


Total Net Assets	$	11,466	$	190,774	$	123,149	$	465,306	$	290,596


(1) Investments, at cost	$	10,157	$	132,350	$	88,589	$	399,363	$	212,838
Mutual Fund Shares Held		9,976		132,289		69,490		136,903		148,248
(2) Accumulation Unit Value	$	1.648404	$	2.146602	$	2.579506	$	3.689747	$	3.817251
Units Outstanding		6,131		75,568		40,378		104,577		67,822
(3) Accumulation Unit Value	$	13.865219	$	22.950784	$	27.291728	$	102.693582	$	43.598907
Units Outstanding		1		187		160		43		168
(4) Accumulation Unit Value	$	13.865219	$	22.950784	$	27.291728	$	102.693582	$	43.598907
Units Outstanding		37		289		158		71		214

The Accompanying Notes are an Integral Part of the Financial Statements.

F-2

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Mid Cap Value Division		Small Cap Growth Stock Division		Index 600 Stock Division		Small Cap Value Division		International Growth Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	60,345	$	255,432	$	20,247	$	174,576	$	90,806
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		-		-		-		-		-
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		5		-		1		-		-

Total Assets		60,350		255,432		20,248		174,576		90,806


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		29		-		23		3
Due to Participants		-		-		-		-		-

Total Liabilities		-		29		-		23		3


Total Net Assets	$	60,350	$	255,403	$	20,248	$	174,553	$	90,803


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	4,262	$	11,971	$	2,167	$	13,587	$	4,166
Northwestern Mutual Equity		47		134		25		164		63
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		51,344		225,037		16,611		146,621		76,999
Northwestern Mutual Equity		1,449		5,986		402		4,084		2,305
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		1,186		4,375		695		3,388		4,023
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		2,062		7,900		348		6,709		3,247


Total Net Assets	$	60,350	$	255,403	$	20,248	$	174,553	$	90,803


(1) Investments, at cost	$	43,941	$	201,781	$	20,992	$	121,939	$	91,074
Mutual Fund Shares Held		34,074		102,378		17,380		73,229		67,514
(2) Accumulation Unit Value	$	3.042400	$	3.633783	$	1.587514	$	3.191481	$	1.832844
Units Outstanding		17,353		63,577		10,717		47,222		43,268
(3) Accumulation Unit Value	$	32.189353	$	47.561777	$	17.638780	$	34.121874	$	19.596007
Units Outstanding		37		92		39		99		205
(4) Accumulation Unit Value	$	32.189353	$	47.561777	$	17.638780	$	34.121874	$	19.596007
Units Outstanding		64		166		20		197		166

The Accompanying Notes are an Integral Part of the Financial Statements.

F-3

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Research International Core Division		International Equity Division		Emerging Markets Equity Division		Money Market Division		Short-Term Bond Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	20,847	$	525,038	$	34,818	$	166,462	$	13,390
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		-		-		-		-		-
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		13		80		25		10		2

Total Assets		20,860		525,118		34,843		166,472		13,392


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		-		-		-		-
Due to Participants		-		-		-		648		-

Total Liabilities		-		-		-		648		-


Total Net Assets	$	20,860	$	525,118	$	34,843	$	165,824	$	13,392


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	1,357	$	63,071	$	1,619	$	11,807	$	1,192
Northwestern Mutual Equity		31		1,014		30		219		14
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		17,065		422,389		28,641		116,846		10,874
Northwestern Mutual Equity		450		11,264		690		4,733		309
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		1,351		12,793		2,527		12,485		243
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		606		14,587		1,336		19,734		760


Total Net Assets	$	20,860	$	525,118	$	34,843	$	165,824	$	13,392


(1) Investments, at cost	$	19,767	$	500,388	$	37,634	$	166,462	$	13,420
Mutual Fund Shares Held		23,111		295,963		37,600		166,462		13,026
(2) Accumulation Unit Value	$	1.071981	$	3.229216	$	0.849119	$	1.538686	$	1.010036
Units Outstanding		16,338		134,291		34,542		79,015		11,073
(3) Accumulation Unit Value	$	10.212438	$	4.952849	$	10.109813	$	41.568533	$	12.188479
Units Outstanding		132		2,583		250		316		20
(4) Accumulation Unit Value	$	10.212438	$	4.952849	$	10.109813	$	41.568533	$	12.188479
Units Outstanding		59		2,945		132		475		62

The Accompanying Notes are an Integral Part of the Financial Statements.

F-4

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Select Bond Division		Long-Term U.S. Government Bond Division		Inflation Protection Division		High Yield Bond Division		Multi-Sector Bond Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	248,596	$	6,936	$	8,559	$	106,148	$	26,344
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		-		-		-		-		-
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		19		8		-		6		-

Total Assets		248,615		6,944		8,559		106,154		26,344


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		-		-		-		-
Due to Participants		-		-		-		-		-

Total Liabilities		-		-		-		-		-


Total Net Assets	$	248,615	$	6,944	$	8,559	$	106,154	$	26,344


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	23,802	$	451	$	755	$	7,436	$	1,474
Northwestern Mutual Equity		380		4		7		107		19
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		183,351		6,316		6,501		87,915		22,751
Northwestern Mutual Equity		5,320		159		159		2,280		625
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		25,648		14		441		5,169		395
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		10,114		-		696		3,247		1,080


Total Net Assets	$	248,615	$	6,944	$	8,559	$	106,154	$	26,344


(1) Investments, at cost	$	246,963	$	6,395	$	9,042	$	102,000	$	26,878
Mutual Fund Shares Held		196,208		6,199		7,782		147,223		24,280
(2) Accumulation Unit Value	$	2.671248	$	1.371509	$	1.065002	$	3.335950	$	1.169486
Units Outstanding		70,630		4,721		6,254		27,038		19,988
(3) Accumulation Unit Value	$	211.428447	$	19.181310	$	13.899486	$	43.976216	$	15.951947
Units Outstanding		121		1		32		118		25
(4) Accumulation Unit Value	$	211.428447	$	19.181310	$	13.899486	$	43.976216	$	15.951947
Units Outstanding		48		-		50		74		68

The Accompanying Notes are an Integral Part of the Financial Statements.

F-5

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Balanced Division		Asset Allocation Division		Fidelity VIP Mid Cap Division		Fidelity VIP Contrafund Division		Neuberger Berman AMT Socially Responsive Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	360,231	$	47,340	$	-	$	-	$	-
Fidelity Variable Insurance Products		-		-		175,277		37,759		-
Neuberger Berman Advisers Management Trust		-		-		-		-		4,590
Russell Investment Funds		-		-		-		-		-
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		3		-		37		-		-

Total Assets		360,234		47,340		175,314		37,759		4,590


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		1		-		2		-
Due to Participants		-		-		-		-		-

Total Liabilities		-		1		-		2		-


Total Net Assets	$	360,234	$	47,339	$	175,314	$	37,757	$	4,590


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	162,634	$	6,025	$	15,323	$	2,620	$	298
Northwestern Mutual Equity		1,669		81		170		26		4
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		177,262		36,817		143,081		31,509		3,469
Northwestern Mutual Equity		4,757		1,066		4,173		755		89
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		7,198		1,102		6,119		1,788		236
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		6,714		2,248		6,448		1,059		494


Total Net Assets	$	360,234	$	47,339	$	175,314	$	37,757	$	4,590


(1) Investments, at cost	$	361,987	$	42,120	$	143,230	$	29,443	$	3,680
Mutual Fund Shares Held		243,235		39,615		4,758		1,029		192
(2) Accumulation Unit Value	$	3.329658	$	1.916252	$	4.048702	$	1.547371	$	1.513495
Units Outstanding		54,667		19,769		36,371		20,851		2,351
(3) Accumulation Unit Value	$	181.830315	$	20.487411	$	42.835362	$	16.754369	$	16.275087
Units Outstanding		40		54		143		107		14
(4) Accumulation Unit Value	$	181.830315	$	20.487411	$	42.835362	$	16.754369	$	16.275087
Units Outstanding		37		110		151		63		30

The Accompanying Notes are an Integral Part of the Financial Statements.

F-6

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Russell Multi-Style Equity Division		Russell Aggressive Equity Division		Russell Non-U.S. Division		Russell Core Bond Division		Russell Global Real Estate Securities Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	-	$	-	$	-	$	-	$	-
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		213,356		104,712		121,463		86,900		175,393
Credit Suisse Trust		-		-		-		-		-
Due from Northwestern Mutual Life Insurance Company		6		-		13		-		-

Total Assets		213,362		104,712		121,476		86,900		175,393


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		7		-		9		19
Due to Participants		-		-		-		-		-

Total Liabilities		-		7		-		9		19


Total Net Assets	$	213,362	$	104,705	$	121,476	$	86,891	$	175,374


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	9,427	$	7,060	$	7,525	$	5,478	$	10,267
Northwestern Mutual Equity		113		80		114		111		122
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		178,429		88,540		100,170		62,217		148,325
Northwestern Mutual Equity		5,045		2,510		2,847		1,822		4,275
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		11,656		3,409		6,695		13,488		6,013
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		8,692		3,106		4,125		3,775		6,372


Total Net Assets	$	213,362	$	104,705	$	121,476	$	86,891	$	175,374


(1) Investments, at cost	$	166,648	$	89,475	$	120,475	$	85,014	$	168,520
Mutual Fund Shares Held		11,781		6,751		10,525		8,152		11,222
(2) Accumulation Unit Value	$	1.621079	$	2.373801	$	1.633987	$	2.180310	$	4.188148
Units Outstanding		113,181		38,357		63,046		29,371		36,437
(3) Accumulation Unit Value	$	18.071559	$	27.141282	$	17.795979	$	23.281628	$	44.660949
Units Outstanding		645		126		376		579		135
(4) Accumulation Unit Value	$	18.071559	$	27.141282	$	17.795979	$	23.281628	$	44.660949
Units Outstanding		481		114		232		162		143

The Accompanying Notes are an Integral Part of the Financial Statements.

F-7

Northwestern Mutual Variable Life Account

Statements of Assets and Liabilities

December 31, 2014

(in thousands, except accumulation unit values)


	Russell LifePoints Moderate Strategy Division		Russell LifePoints Balanced Strategy Division		Russell LifePoints Growth Strategy Division		Russell LifePoints Equity Growth Strategy Division		Credit Suisse Trust Commodity Return Strategy Division

Assets:
Investments, at value (1)
Northwestern Mutual Series Fund, Inc.	$	-	$	-	$	-	$	-	$	-
Fidelity Variable Insurance Products		-		-		-		-		-
Neuberger Berman Advisers Management Trust		-		-		-		-		-
Russell Investment Funds		3,327		17,114		20,167		8,766		-
Credit Suisse Trust		-		-		-		-		15,925
Due from Northwestern Mutual Life Insurance Company		-		3		-		-		9

Total Assets		3,327		17,117		20,167		8,766		15,934


Liabilities:
Due to Northwestern Mutual Life Insurance Company		-		-		41		4		-
Due to Participants		-		-		-		-		-

Total Liabilities		-		-		41		4		-


Total Net Assets	$	3,327	$	17,117	$	20,126	$	8,762	$	15,934


Net Assets:
Variable Life Policies Issued:
Before October 11, 1995
Policyowners’ Equity	$	974	$	2,522	$	3,131	$	776	$	435
Northwestern Mutual Equity		11		36		44		11		9
Variable CompLife Policies Issued Between October 11, 1995 and December 31, 2008 (2)
Policyowners’ Equity		2,194		13,835		16,181		7,070		13,370
Northwestern Mutual Equity		75		381		499		201		380
Variable Executive Life Policies Issued Between March 2, 1998 and December 31, 2008 (3)
Policyowners’ Equity		49		6		1		-		1,126
Variable Joint Life Policies Issued Between December 10, 1998 and December 31, 2008 (4)
Policyowners’ Equity		24		337		270		704		614


Total Net Assets	$	3,327	$	17,117	$	20,126	$	8,762	$	15,934


(1) Investments, at cost	$	3,345	$	16,353	$	18,697	$	7,789	$	19,073
Mutual Fund Shares Held		318		1,646		2,003		927		3,051
(2) Accumulation Unit Value	$	1.179226	$	1.222287	$	1.235139	$	1.258221	$	6.387246
Units Outstanding		1,924		11,631		13,504		5,778		2,153
(3) Accumulation Unit Value	$	14.227181	$	13.866173	$	13.064429	$	12.149681	$	5.885213
Units Outstanding		3		-		-		-		191
(4) Accumulation Unit Value	$	14.227181	$	13.866173	$	13.064429	$	12.149681	$	5.885213
Units Outstanding		2		24		21		58		104

The Accompanying Notes are an Integral Part of the Financial Statements.

F-8

Northwestern Mutual Variable Life Account

Statements of Operations

For the Year Ended December 31, 2014

(in thousands)


	Growth Stock Division		Focused Appreciation Division		Large Cap Core Stock Division		Large Cap Blend Division		Index 500 Stock Division

Income:
Dividend income	$	2,222	$	23	$	3,583	$	3	$	16,996
Expenses:
Mortality and expense risk charges		1,638		487		1,040		31		4,559
Taxes		17		4		14		-		75

Total Expenses		1,655		491		1,054		31		4,634

Net investment income (loss)		567		(468)		2,529		(28)		12,362


Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		6,541		3,222		4,482		299		12,668
Realized gain distributions		35,938		11,724		21,530		282		13,243

Realized gains (losses)		42,479		14,946		26,012		581		25,911


Change in unrealized appreciation/(depreciation) of investments during the period		(12,180)		(4,410)		(9,983)		284		91,365


Net increase (decrease) in net assets resulting from operations	$	30,866	$	10,068	$	18,558	$	837	$	129,638


	Large Company Value Division		Domestic Equity Division		Equity Income Division		Mid Cap Growth Stock Division		Index 400 Stock Division

Income:
Dividend income	$	-	$	3,097	$	1,487	$	1,592	$	2,803
Expenses:
Mortality and expense risk charges		37		770		504		1,981		1,201
Taxes		-		8		5		32		7

Total Expenses		37		778		509		2,013		1,208

Net investment income (loss)		(37)		2,319		978		(421)		1,595


Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		346		2,166		1,875		5,594		7,262
Realized gain distributions		444		-		3,559		87,466		13,440

Realized gains (losses)		790		2,166		5,434		93,060		20,702


Change in unrealized appreciation/(depreciation) of investments during the period		284		18,290		1,702		(57,841)		2,033


Net increase (decrease) in net assets resulting from operations	$	1,037	$	22,775	$	8,114	$	34,798	$	24,330

The Accompanying Notes are an Integral Part of the Financial Statements.

F-9

Northwestern Mutual Variable Life Account

Statements of Operations

For the Year Ended December 31, 2014

(in thousands)


	Mid Cap Value Division		Small Cap Growth Stock Division		Index 600 Stock Division		Small Cap Value Division		International Growth Division

Income:
Dividend income	$	544	$	-	$	284	$	628	$	1,261
Expenses:
Mortality and expense risk charges		233		1,044		79		752		401
Taxes		2		6		1		7		2

Total Expenses		235		1,050		80		759		403

Net investment income (loss)		309		(1,050)		204		(131)		858


Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		454		4,487		674		4,982		(636)
Realized gain distributions		4,586		27,451		3,169		4,529		-

Realized gains (losses)		5,040		31,938		3,843		9,511		(636)


Change in unrealized appreciation/(depreciation) of investments during the period		2,912		(11,529)		(3,135)		(9,904)		(4,954)


Net increase (decrease) in net assets resulting from operations	$	8,261	$	19,359	$	912	$	(524)	$	(4,732)


	Research International Core Division		International Equity Division		Emerging Markets Equity Division		Money Market Division		Short-Term Bond Division

Income:
Dividend income	$	300	$	10,956	$	216	$	119	$	73
Expenses:
Mortality and expense risk charges		84		2,477		139		628		50
Taxes		1		35		1		7		1

Total Expenses		85		2,512		140		635		51

Net investment income (loss)		215		8,444		76		(516)		22


Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		431		8,002		193		-		9
Realized gain distributions		128		38,609		12		-		-

Realized gains (losses)		559		46,611		205		-		9


Change in unrealized appreciation/(depreciation) of investments during the period		(2,302)		(108,669)		(2,705)		-		(46)


Net increase (decrease) in net assets resulting from operations	$	(1,528)	$	(53,614)	$	(2,424)	$	(516)	$	(15)

The Accompanying Notes are an Integral Part of the Financial Statements.

F-10

Northwestern Mutual Variable Life Account

Statements of Operations

For the Year Ended December 31, 2014

(in thousands)


	Select Bond Division		Long-Term U.S. Government Bond Division		Inflation Protection Division		High Yield Bond Division		Multi-Sector Bond Division
Income:
Dividend income	$	4,970	$	113	$	46	$	5,505	$	660
Expenses:
Mortality and expense risk charges		956		25		34		456		105
Taxes		12		-		-		4		1
Total Expenses		968		25		34		460		106
Net investment income (loss)		4,002		88		12		5,045		554

Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		1,331		(267)		(273)		839		141
Realized gain distributions		-		-		83		-		-
Realized gains (losses)		1,331		(267)		(190)		839		141

Change in unrealized appreciation/(depreciation) of investments during the period		7,009		1,340		415		(5,047)		(116)

Net increase (decrease) in net assets resulting from operations	$	12,342	$	1,161	$	237	$	837	$	579


	Balanced Division		Asset Allocation Division		Fidelity VIP Mid Cap Division		Fidelity VIP Contrafund Division		Neuberger Berman AMT Socially Responsive Division
Income:
Dividend income	$	8,291	$	1,018	$	33	$	269	$	16
Expenses:
Mortality and expense risk charges		1,614		196		722		142		17
Taxes		82		3		8		1		-
Total Expenses		1,696		199		730		143		17
Net investment income (loss)		6,595		819		(697)		126		(1)

Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		(2,721)		450		1,455		1,634		351
Realized gain distributions		28,444		4,184		4,047		749		-
Realized gains (losses)		25,723		4,634		5,502		2,383		351

Change in unrealized appreciation/(depreciation) of investments during the period		(14,678)		(3,302)		4,538		1,090		66

Net increase (decrease) in net assets resulting from operations	$	17,640	$	2,151	$	9,343	$	3,599	$	416

The Accompanying Notes are an Integral Part of the Financial Statements.

F-11

Northwestern Mutual Variable Life Account

Statements of Operations

For the Year Ended December 31, 2014

(in thousands)



	Russell Multi-Style Equity Division		Russell Aggressive Equity Division		Russell Non-U.S. Division		Russell Core Bond Division		Russell Global Real Estate Securities Division

Income:
Dividend income	$	2,398	$	264	$	2,536	$	1,312	$	5,490
Expenses:
Mortality and expense risk charges		837		441		532		311		701
Taxes		5		3		4		3		5

Total Expenses		842		444		536		314		706

Net investment income (loss)		1,556		(180)		2,000		998		4,784


Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		6,219		1,779		966		319		1,408
Realized gain distributions		28,069		10,016		-		1,675		7,337

Realized gains (losses)		34,288		11,795		966		1,994		8,745


Change in unrealized appreciation/(depreciation) of investments during the period		(13,926)		(10,588)		(9,202)		1,207		8,524


Net increase (decrease) in net assets resulting from operations	$	21,918	$	1,027	$	(6,236)	$	4,199	$	22,053


	Russell LifePoints Moderate Strategy Division		Russell LifePoints Balanced Strategy Division		Russell LifePoints Growth Strategy Division		Russell LifePoints Equity Growth Strategy Division		Credit Suisse Trust Commodity Return Strategy Division

Income:
Dividend income	$	86	$	483	$	583	$	283	$	-
Waiver Income		-		-		-		-		2

Total Income		86		483		583		283		2
Expenses:
Mortality and expense risk charges		12		70		86		36		71
Taxes		-		1		2		-		-

Total Expenses		12		71		88		36		71
Less waived fees		-		-		-		-		(14)

Net Expenses		12		71		88		36		57

Net investment income (loss)		74		412		495		247		(55)


Realized gain (loss) on investments:
Realized gain (loss) on sale of fund shares		58		379		303		99		73
Realized gain distributions		41		298		424		139		-

Realized gains (losses)		99		677		727		238		73


Change in unrealized appreciation/(depreciation) of investments during the period		(60)		(489)		(624)		(229)		(3,407)


Net increase (decrease) in net assets resulting from operations	$	113	$	600	$	598	$	256	$	(3,389)

The Accompanying Notes are an Integral Part of the Financial Statements.

F-12

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Growth Stock Division				Focused Appreciation Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	567	$	761	$	(468)	$	59
Net realized gains (losses)		42,479		26,883		14,946		2,826
Net change in unrealized appreciation/(depreciation)		(12,180)		69,866		(4,410)		23,435

Net increase (decrease) in net assets resulting from operations		30,866		97,510		10,068		26,320


Policy Transactions:
Policyowners’ net payments		16,464		17,907		5,808		6,168
Policy loans, surrenders and death benefits		(19,999)		(20,110)		(5,800)		(6,020)
Mortality and other (net)		(7,770)		(7,299)		(2,453)		(2,289)
Transfers from other divisions		35,723		18,642		11,837		11,303
Transfers to other divisions		(36,524)		(23,073)		(13,051)		(15,183)

Net increase (decrease) in net assets resulting from policy transactions		(12,106)		(13,933)		(3,659)		(6,021)


Net increase (decrease) in net assets		18,760		83,577		6,409		20,299

Net Assets:
Beginning of period		368,165		284,588		116,386		96,087

End of period	$	386,925	$	368,165	$	122,795	$	116,386


Units issued during the period		7,930		9,982		4,304		5,521
Units redeemed during the period		(11,049)		(13,965)		(5,205)		(7,158)

Net units issued (redeemed) during period		(3,119)		(3,983)		(901)		(1,637)


	Large Cap Core Stock Division				Large Cap Blend Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	2,529	$	1,528	$	(28)	$	29
Net realized gains (losses)		26,012		1,581		581		429
Net change in unrealized appreciation/(depreciation)		(9,983)		49,353		284		829

Net increase (decrease) in net assets resulting from operations		18,558		52,462		837		1,287


Policy Transactions:
Policyowners’ net payments		11,922		12,566		300		213
Policy loans, surrenders and death benefits		(13,603)		(14,423)		(125)		(178)
Mortality and other (net)		(5,313)		(5,144)		(132)		(92)
Transfers from other divisions		19,392		9,870		2,725		2,754
Transfers to other divisions		(20,795)		(13,352)		(1,570)		(1,442)

Net increase (decrease) in net assets resulting from policy transactions		(8,397)		(10,483)		1,198		1,255


Net increase (decrease) in net assets		10,161		41,979		2,035		2,542

Net Assets:
Beginning of period		233,882		191,903		6,157		3,615

End of period	$	244,043	$	233,882	$	8,192	$	6,157


Units issued during the period		7,017		7,972		1,722		1,532
Units redeemed during the period		(9,376)		(11,575)		(919)		(680)

Net units issued (redeemed) during period		(2,359)		(3,603)		803		852

The Accompanying Notes are an Integral Part of the Financial Statements.

F-13

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Index 500 Stock Division				Large Company Value Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	12,362	$	12,463	$	(37)	$	79
Net realized gains (losses)		25,911		23,308		790		493
Net change in unrealized appreciation/(depreciation)		91,365		208,382		284		870

Net increase (decrease) in net assets resulting from operations		129,638		244,153		1,037		1,442


Policy Transactions:
Policyowners’ net payments		45,360		46,553		320		122
Policy loans, surrenders and death benefits		(52,593)		(56,088)		(50)		(218)
Mortality and other (net)		(21,250)		(19,846)		(161)		(98)
Transfers from other divisions		113,171		84,237		4,781		4,785
Transfers to other divisions		(100,733)		(75,741)		(2,046)		(1,560)

Net increase (decrease) in net assets resulting from policy transactions		(16,045)		(20,885)		2,844		3,031


Net increase (decrease) in net assets		113,593		223,268		3,881		4,473

Net Assets:
Beginning of period		1,008,802		785,534		7,585		3,112

End of period	$	1,122,395	$	1,008,802	$	11,466	$	7,585


Units issued during the period		21,063		25,004		2,862		3,218
Units redeemed during the period		(23,844)		(29,019)		(937)		(1,274)

Net units issued (redeemed) during period		(2,781)		(4,015)		1,925		1,944


	Domestic Equity Division				Equity Income Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	2,319	$	1,953	$	978	$	1,001
Net realized gains (losses)		2,166		(43)		5,434		674
Net change in unrealized appreciation/(depreciation)		18,290		42,071		1,702		25,112

Net increase (decrease) in net assets resulting from operations		22,775		43,981		8,114		26,787


Policy Transactions:
Policyowners’ net payments		8,391		8,611		5,464		5,510
Policy loans, surrenders and death benefits		(8,458)		(8,618)		(5,448)		(4,783)
Mortality and other (net)		(3,777)		(3,511)		(2,389)		(2,324)
Transfers from other divisions		14,632		10,450		36,104		28,760
Transfers to other divisions		(15,246)		(13,084)		(36,775)		(26,171)

Net increase (decrease) in net assets resulting from policy transactions		(4,458)		(6,152)		(3,044)		992


Net increase (decrease) in net assets		18,317		37,829		5,070		27,779

Net Assets:
Beginning of period		172,457		134,628		118,079		90,300

End of period	$	190,774	$	172,457	$	123,149	$	118,079


Units issued during the period		8,598		10,133		6,746		8,784
Units redeemed during the period		(10,287)		(12,440)		(7,617)		(8,263)

Net units issued (redeemed) during period		(1,689)		(2,307)		(871)		521

The Accompanying Notes are an Integral Part of the Financial Statements.

F-14

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Mid Cap Growth Stock Division				Index 400 Stock Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	(421)	$	(591)	$	1,595	$	1,599
Net realized gains (losses)		93,060		18,432		20,702		13,514
Net change in unrealized appreciation/(depreciation)		(57,841)		73,842		2,033		54,212

Net increase (decrease) in net assets resulting from operations		34,798		91,683		24,330		69,325


Policy Transactions:
Policyowners’ net payments		21,515		22,196		11,385		10,729
Policy loans, surrenders and death benefits		(25,248)		(27,277)		(16,132)		(13,987)
Mortality and other (net)		(9,424)		(9,230)		(5,305)		(4,925)
Transfers from other divisions		20,093		19,133		62,611		39,075
Transfers to other divisions		(25,349)		(22,182)		(65,706)		(34,548)

Net increase (decrease) in net assets resulting from policy transactions		(18,413)		(17,360)		(13,147)		(3,656)


Net increase (decrease) in net assets		16,385		74,323		11,183		65,669

Net Assets:
Beginning of period		448,921		374,598		279,413		213,744

End of period	$	465,306	$	448,921	$	290,596	$	279,413


Units issued during the period		9,212		11,187		7,642		9,937
Units redeemed during the period		(13,457)		(15,991)		(10,817)		(10,904)

Net units issued (redeemed) during period		(4,245)		(4,804)		(3,175)		(967)


	Mid Cap Value Division				Small Cap Growth Stock Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013
Operations:
Net investment income (loss)	$	309	$	247	$	(1,050)	$	127
Net realized gains (losses)		5,040		349		31,938		4,094
Net change in unrealized appreciation/(depreciation)		2,912		11,079		(11,529)		64,636

Net increase (decrease) in net assets resulting from operations		8,261		11,675		19,359		68,857


Policy Transactions:
Policyowners’ net payments		2,735		2,710		11,123		12,154
Policy loans, surrenders and death benefits		(2,854)		(2,883)		(14,024)		(12,997)
Mortality and other (net)		(1,152)		(1,022)		(4,833)		(4,569)
Transfers from other divisions		9,848		7,488		30,350		17,758
Transfers to other divisions		(7,824)		(5,963)		(33,208)		(19,635)

Net increase (decrease) in net assets resulting from policy transactions		753		330		(10,592)		(7,289)


Net increase (decrease) in net assets		9,014		12,005		8,767		61,568

Net Assets:
Beginning of period		51,336		39,331		246,636		185,068

End of period	$	60,350	$	51,336	$	255,403	$	246,636


Units issued during the period		3,304		3,228		6,914		8,260
Units redeemed during the period		(3,043)		(3,212)		(9,629)		(10,665)

Net units issued (redeemed) during period		261		16		(2,715)		(2,405)

The Accompanying Notes are an Integral Part of the Financial Statements.

F-15

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Index 600 Stock Division				Small Cap Value Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	204	$	440	$	(131)	$	1,186
Net realized gains (losses)		3,843		940		9,511		4,507
Net change in unrealized appreciation/(depreciation)		(3,135)		2,223		(9,904)		38,712

Net increase (decrease) in net assets resulting from operations		912		3,603		(524)		44,405


Policy Transactions:
Policyowners’ net payments		863		585		8,132		8,638
Policy loans, surrenders and death benefits		(587)		(410)		(9,054)		(8,717)
Mortality and other (net)		(339)		(208)		(3,385)		(3,495)
Transfers from other divisions		8,942		11,460		14,172		16,147
Transfers to other divisions		(6,362)		(4,417)		(19,575)		(16,164)

Net increase (decrease) in net assets resulting from policy transactions		2,517		7,010		(9,710)		(3,591)


Net increase (decrease) in net assets		3,429		10,613		(10,234)		40,814

Net Assets:
Beginning of period		16,819		6,206		184,787		143,973

End of period	$	20,248	$	16,819	$	174,553	$	184,787


Units issued during the period		4,295		6,483		5,119		7,449
Units redeemed during the period		(2,892)		(2,020)		(7,567)		(8,471)

Net units issued (redeemed) during period		1,403		4,463		(2,448)		(1,022)


	International Growth Division				Research International Core Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	858	$	885	$	215	$	(44)
Net realized gains (losses)		(636)		(650)		559		236
Net change in unrealized appreciation/(depreciation)		(4,954)		15,636		(2,302)		2,435

Net increase (decrease) in net assets resulting from operations		(4,732)		15,871		(1,528)		2,627


Policy Transactions:
Policyowners’ net payments		5,660		6,264		905		874
Policy loans, surrenders and death benefits		(4,599)		(5,244)		(1,050)		(196)
Mortality and other (net)		(1,984)		(1,942)		(390)		(316)
Transfers from other divisions		17,644		15,020		9,476		8,888
Transfers to other divisions		(19,217)		(14,779)		(5,722)		(4,941)

Net increase (decrease) in net assets resulting from policy transactions		(2,496)		(681)		3,219		4,309


Net increase (decrease) in net assets		(7,228)		15,190		1,691		6,936

Net Assets:
Beginning of period		98,031		82,841		19,169		12,233

End of period	$	90,803	$	98,031	$	20,860	$	19,169


Units issued during the period		7,159		7,831		5,563		6,065
Units redeemed during the period		(8,179)		(7,964)		(3,140)		(2,347)

Net units issued (redeemed) during period		(1,020)		(133)		2,423		3,718

The Accompanying Notes are an Integral Part of the Financial Statements.

F-16

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	International Equity Division				Emerging Markets Equity Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	8,444	$	9,490	$	76	$	86
Net realized gains (losses)		46,611		5,177		205		407
Net change in unrealized appreciation/(depreciation)		(108,669)		88,525		(2,705)		(1,882)

Net increase (decrease) in net assets resulting from operations		(53,614)		103,192		(2,424)		(1,389)


Policy Transactions:
Policyowners’ net payments		27,749		29,876		1,734		2,064
Policy loans, surrenders and death benefits		(28,999)		(32,280)		(1,721)		(1,883)
Mortality and other (net)		(11,126)		(11,521)		(568)		(470)
Transfers from other divisions		79,349		55,104		16,865		19,420
Transfers to other divisions		(81,497)		(55,596)		(9,497)		(8,757)

Net increase (decrease) in net assets resulting from policy transactions		(14,524)		(14,417)		6,813		10,374


Net increase (decrease) in net assets		(68,138)		88,775		4,389		8,985

Net Assets:
Beginning of period		593,256		504,481		30,454		21,469

End of period	$	525,118	$	593,256	$	34,843	$	30,454


Units issued during the period		26,270		24,658		12,600		17,287
Units redeemed during the period		(29,614)		(28,508)		(6,703)		(7,400)

Net units issued (redeemed) during period		(3,344)		(3,850)		5,897		9,887


	Money Market Division				Short-Term Bond Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	(516)	$	(471)	$	22	$	(21)
Net realized gains (losses)		-		-		9		1
Net change in unrealized appreciation/(depreciation)		-		-		(46)		39

Net increase (decrease) in net assets resulting from operations		(516)		(471)		(15)		19


Policy Transactions:
Policyowners’ net payments		52,008		64,763		562		371
Policy loans, surrenders and death benefits		(25,101)		(27,725)		(876)		(715)
Mortality and other (net)		(5,089)		(5,466)		(239)		(187)
Transfers from other divisions		147,165		137,550		6,927		7,512
Transfers to other divisions		(172,809)		(168,425)		(3,549)		(3,378)

Net increase (decrease) in net assets resulting from policy transactions		(3,826)		697		2,825		3,603


Net increase (decrease) in net assets		(4,342)		226		2,810		3,622

Net Assets:
Beginning of period		170,166		169,940		10,582		6,960

End of period	$	165,824	$	170,166	$	13,392	$	10,582


Units issued during the period		80,985		82,988		5,788		6,713
Units redeemed during the period		(83,425)		(85,306)		(3,709)		(3,532)

Net units issued (redeemed) during period		(2,440)		(2,318)		2,079		3,181

The Accompanying Notes are an Integral Part of the Financial Statements.

F-17

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Select Bond Division				Long-Term U.S. Government Bond Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	4,002	$	4,830	$	88	$	(28)
Net realized gains (losses)		1,331		5,751		(267)		(718)
Net change in unrealized appreciation/(depreciation)		7,009		(17,205)		1,340		(211)

Net increase (decrease) in net assets resulting from operations		12,342		(6,624)		1,161		(957)


Policy Transactions:
Policyowners’ net payments		13,249		14,540		169		410
Policy loans, surrenders and death benefits		(15,378)		(15,249)		(561)		(444)
Mortality and other (net)		(5,015)		(5,078)		(118)		(135)
Transfers from other divisions		141,385		104,940		4,423		3,693
Transfers to other divisions		(142,710)		(115,861)		(3,006)		(5,624)

Net increase (decrease) in net assets resulting from policy transactions		(8,469)		(16,708)		907		(2,100)


Net increase (decrease) in net assets		3,873		(23,332)		2,068		(3,057)

Net Assets:
Beginning of period		244,742		268,074		4,876		7,933

End of period	$	248,615	$	244,742	$	6,944	$	4,876


Units issued during the period		11,439		13,625		3,636		3,165
Units redeemed during the period		(14,176)		(19,051)		(2,891)		(3,839)

Net units issued (redeemed) during period		(2,737)		(5,426)		745		(674)


	Inflation Protection Division				High Yield Bond Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	12	$	69	$	5,045	$	5,475
Net realized gains (losses)		(190)		79		839		1,291
Net change in unrealized appreciation/(depreciation)		415		(1,087)		(5,047)		(1,181)

Net increase (decrease) in net assets resulting from operations		237		(939)		837		5,585


Policy Transactions:
Policyowners’ net payments		331		362		5,119		5,387
Policy loans, surrenders and death benefits		(554)		(581)		(5,438)		(6,064)
Mortality and other (net)		(168)		(203)		(2,233)		(2,185)
Transfers from other divisions		4,580		6,912		22,054		17,601
Transfers to other divisions		(4,455)		(7,633)		(21,223)		(19,556)

Net increase (decrease) in net assets resulting from policy transactions		(266)		(1,143)		(1,721)		(4,817)


Net increase (decrease) in net assets		(29)		(2,082)		(884)		768

Net Assets:
Beginning of period		8,588		10,670		107,038		106,270

End of period	$	8,559	$	8,588	$	106,154	$	107,038


Units issued during the period		2,743		3,546		4,029		4,777
Units redeemed during the period		(3,104)		(4,629)		(4,473)		(5,884)

Net units issued (redeemed) during period		(361)		(1,083)		(444)		(1,107)

The Accompanying Notes are an Integral Part of the Financial Statements.

F-18

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Multi-Sector Bond Division				Balanced Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	554	$	682	$	6,595	$	10,036
Net realized gains (losses)		141		430		25,723		11,919
Net change in unrealized appreciation/(depreciation)		(116)		(1,610)		(14,678)		15,646

Net increase (decrease) in net assets resulting from operations		579		(498)		17,640		37,601


Policy Transactions:
Policyowners’ net payments		1,133		1,197		15,639		16,344
Policy loans, surrenders and death benefits		(1,196)		(1,082)		(18,704)		(23,536)
Mortality and other (net)		(490)		(443)		(8,527)		(8,291)
Transfers from other divisions		7,315		11,363		96,430		56,503
Transfers to other divisions		(2,915)		(7,491)		(96,270)		(55,676)

Net increase (decrease) in net assets resulting from policy transactions		3,847		3,544		(11,432)		(14,656)


Net increase (decrease) in net assets		4,426		3,046		6,208		22,945

Net Assets:
Beginning of period		21,918		18,872		354,026		331,081

End of period	$	26,344	$	21,918	$	360,234	$	354,026


Units issued during the period		6,278		10,007		6,850		7,120
Units redeemed during the period		(3,523)		(7,378)		(7,513)		(9,043)

Net units issued (redeemed) during period		2,755		2,629		(663)		(1,923)


	Asset Allocation Division				Fidelity VIP Mid Cap Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	819	$	1,217	$	(697)	$	(212)
Net realized gains (losses)		4,634		98		5,502		19,927
Net change in unrealized appreciation/(depreciation)		(3,302)		4,990		4,538		24,808

Net increase (decrease) in net assets resulting from operations		2,151		6,305		9,343		44,523


Policy Transactions:
Policyowners’ net payments		2,317		2,050		8,187		8,242
Policy loans, surrenders and death benefits		(3,446)		(2,883)		(8,634)		(7,592)
Mortality and other (net)		(1,076)		(998)		(3,449)		(3,211)
Transfers from other divisions		5,593		2,953		23,763		18,005
Transfers to other divisions		(3,034)		(2,166)		(23,345)		(18,902)

Net increase (decrease) in net assets resulting from policy transactions		354		(1,044)		(3,478)		(3,458)


Net increase (decrease) in net assets		2,505		5,261		5,865		41,065

Net Assets:
Beginning of period		44,834		39,573		169,449		128,384

End of period	$	47,339	$	44,834	$	175,314	$	169,449


Units issued during the period		3,856		3,078		4,874		5,829
Units redeemed during the period		(3,257)		(3,864)		(5,743)		(6,607)

Net units issued (redeemed) during period		599		(786)		(869)		(778)

The Accompanying Notes are an Integral Part of the Financial Statements.

F-19

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Fidelity VIP Contrafund Division				Neuberger Berman AMT Socially Responsive Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	126	$	129	$	(1)	$	13
Net realized gains (losses)		2,383		878		351		150
Net change in unrealized appreciation/(depreciation)		1,090		5,939		66		738

Net increase (decrease) in net assets resulting from operations		3,599		6,946		416		901


Policy Transactions:
Policyowners’ net payments		1,314		1,438		212		145
Policy loans, surrenders and death benefits		(1,620)		(805)		(260)		(264)
Mortality and other (net)		(623)		(464)		(83)		(58)
Transfers from other divisions		14,008		13,079		1,721		3,541
Transfers to other divisions		(10,466)		(8,883)		(2,064)		(1,300)

Net increase (decrease) in net assets resulting from policy transactions		2,613		4,365		(474)		2,064


Net increase (decrease) in net assets		6,212		11,311		(58)		2,965

Net Assets:
Beginning of period		31,545		20,234		4,648		1,683

End of period	$	37,757	$	31,545	$	4,590	$	4,648


Units issued during the period		6,279		7,574		721		1,645
Units redeemed during the period		(4,977)		(4,208)		(729)		(483)

Net units issued (redeemed) during period		1,302		3,366		(8)		1,162


	Russell Multi-Style Equity Division				Russell Aggressive Equity Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	1,556	$	1,459	$	(180)	$	10
Net realized gains (losses)		34,288		16,263		11,795		8,774
Net change in unrealized appreciation/(depreciation)		(13,926)		32,859		(10,588)		22,279

Net increase (decrease) in net assets resulting from operations		21,918		50,581		1,027		31,063


Policy Transactions:
Policyowners’ net payments		8,630		9,168		4,861		4,980
Policy loans, surrenders and death benefits		(12,629)		(12,936)		(5,309)		(6,040)
Mortality and other (net)		(4,081)		(3,942)		(2,109)		(2,093)
Transfers from other divisions		11,926		8,571		10,675		8,683
Transfers to other divisions		(13,990)		(11,935)		(13,697)		(8,074)

Net increase (decrease) in net assets resulting from policy transactions		(10,144)		(11,074)		(5,579)		(2,544)


Net increase (decrease) in net assets		11,774		39,507		(4,552)		28,519

Net Assets:
Beginning of period		201,588		162,081		109,257		80,738

End of period	$	213,362	$	201,588	$	104,705	$	109,257


Units issued during the period		10,643		12,565		4,270		5,419
Units redeemed during the period		(15,679)		(19,240)		(6,216)		(6,849)

Net units issued (redeemed) during period		(5,036)		(6,675)		(1,946)		(1,430)

The Accompanying Notes are an Integral Part of the Financial Statements.

F-20

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Russell Non-U.S. Division				Russell Core Bond Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	2,000	$	1,936	$	998	$	968
Net realized gains (losses)		966		306		1,994		1,375
Net change in unrealized appreciation/(depreciation)		(9,202)		21,730		1,207		(3,998)

Net increase (decrease) in net assets resulting from operations		(6,236)		23,972		4,199		(1,655)


Policy Transactions:
Policyowners’ net payments		6,830		7,255		4,153		4,661
Policy loans, surrenders and death benefits		(7,968)		(8,105)		(6,576)		(8,529)
Mortality and other (net)		(2,611)		(2,626)		(1,855)		(1,898)
Transfers from other divisions		13,509		9,902		27,291		20,129
Transfers to other divisions		(16,209)		(11,904)		(26,330)		(26,632)

Net increase (decrease) in net assets resulting from policy transactions		(6,449)		(5,478)		(3,317)		(12,269)


Net increase (decrease) in net assets		(12,685)		18,494		882		(13,924)

Net Assets:
Beginning of period		134,161		115,667		86,009		99,933

End of period	$	121,476	$	134,161	$	86,891	$	86,009


Units issued during the period		7,389		8,807		5,632		6,210
Units redeemed during the period		(9,611)		(11,348)		(6,927)		(9,484)

Net units issued (redeemed) during period		(2,222)		(2,541)		(1,295)		(3,274)


	Russell Global Real Estate Securities Division				Russell LifePoints Moderate Strategy Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	4,784	$	5,671	$	74	$	27
Net realized gains (losses)		8,745		6,143		99		92
Net change in unrealized appreciation/(depreciation)		8,524		(6,967)		(60)		9

Net increase (decrease) in net assets resulting from operations		22,053		4,847		113		128


Policy Transactions:
Policyowners’ net payments		8,395		9,046		130		78
Policy loans, surrenders and death benefits		(9,064)		(9,485)		(344)		(13)
Mortality and other (net)		(3,414)		(3,214)		(61)		(35)
Transfers from other divisions		26,051		26,695		2,416		1,188
Transfers to other divisions		(25,918)		(23,189)		(1,078)		(1,334)

Net increase (decrease) in net assets resulting from policy transactions		(3,950)		(147)		1,063		(116)


Net increase (decrease) in net assets		18,103		4,700		1,176		12

Net Assets:
Beginning of period		157,271		152,571		2,151		2,139

End of period	$	175,374	$	157,271	$	3,327	$	2,151


Units issued during the period		5,216		6,665		1,288		868
Units redeemed during the period		(5,822)		(6,714)		(875)		(857)

Net units issued (redeemed) during period		(606)		(49)		413		11

The Accompanying Notes are an Integral Part of the Financial Statements.

F-21

Northwestern Mutual Variable Life Account

Statements of Changes in Net Assets

(in thousands)


	Russell LifePoints Balanced Strategy Division				Russell LifePoints Growth Strategy Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Year Ended December 31, 2013

Operations:
Net investment income (loss)	$	412	$	226	$	495	$	272
Net realized gains (losses)		677		465		727		320
Net change in unrealized appreciation/(depreciation)		(489)		706		(624)		1,551

Net increase (decrease) in net assets resulting from operations		600		1,397		598		2,143


Policy Transactions:
Policyowners’ net payments		606		487		945		784
Policy loans, surrenders and death benefits		(551)		(1,053)		(520)		(1,411)
Mortality and other (net)		(327)		(257)		(416)		(350)
Transfers from other divisions		3,729		6,035		3,850		5,316
Transfers to other divisions		(1,666)		(1,556)		(1,067)		(1,091)

Net increase (decrease) in net assets resulting from policy transactions		1,791		3,656		2,792		3,248


Net increase (decrease) in net assets		2,391		5,053		3,390		5,391

Net Assets:
Beginning of period		14,726		9,673		16,736		11,345

End of period	$	17,117	$	14,726	$	20,126	$	16,736


Units issued during the period		3,484		4,776		3,362		4,260
Units redeemed during the period		(1,773)		(1,999)		(1,578)		(1,823)

Net units issued (redeemed) during period		1,711		2,777		1,784		2,437


	Russell LifePoints Equity Growth Strategy Division				Credit Suisse Trust Commodity Return Strategy Division
	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2014		Period November 15 to December 31, 2013

Operations:
Net investment income (loss)	$	247	$	153	$	(55)	$	(6)
Net realized gains (losses)		238		120		73		1
Net change in unrealized appreciation/(depreciation)		(229)		954		(3,407)		259

Net increase (decrease) in net assets resulting from operations		256		1,227		(3,389)		254


Policy Transactions:
Policyowners’ net payments		504		439		1,235		146
Policy loans, surrenders and death benefits		(337)		235		(858)		21
Mortality and other (net)		(153)		(133)		(322)		(33)
Transfers from other divisions		320		1,755		10,338		15,625
Transfers to other divisions		(52)		(670)		(6,635)		(448)

Net increase (decrease) in net assets resulting from policy transactions		282		1,626		3,758		15,311


Net increase (decrease) in net assets		538		2,853		369		15,565

Net Assets:
Beginning of period		8,224		5,371		15,565		-

End of period	$	8,762	$	8,224	$	15,934	$	15,565


Units issued during the period		631		2,161		1,557		2,038
Units redeemed during the period		(423)		(746)		(1,072)		(75)

Net units issued (redeemed) during period		208		1,415		485		1,963

The Accompanying Notes are an Integral Part of the Financial Statements.

F-22

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014

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 (“the 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, Neuberger Berman Advisers Management Trust, Russell Investment Funds and Credit Suisse Trust (collectively known as “the Funds”). The Funds are open-end investment companies registered under the Investment Company Act of 1940. The financial statements for the Portfolios should be read in conjunction with the financial statements and footnotes of the Divisions. Each Division of the account indirectly bears exposure to the market credit and liquidity risks of the Portfolio in which it invests.

New sales of the Policies which invest in the Account were discontinued for Variable CompLife, Variable Executive Life, and Variable Joint Life policies in 2008, Variable Life was discontinued in 1995. However, premium payments made by policy owners existing at that date will continue to be recorded by the Account.

On September 18, 2013, the Securities Exchange Commission approved an application from Northwestern Mutual on behalf of the Account permitting Northwestern Mutual to automatically transfer all remaining policy values in the Northwestern Mutual Commodities Return Strategy Division to the Credit Suisse Trust Commodity Return Strategy Division. The transfer was executed on November 15, 2013 and is included in the Statement of Changes in Net Assets as part of the transfers from other divisions or sponsor line item. Additionally, Northwestern Mutual will periodically reimburse policyowners for the additional operating expenses of the Credit Suisse Trust Commodity Return Strategy Division. Refer to note 4 - Expenses and Related Party Transactions footnote.

2.	Significant Accounting Policies

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 increases and decreases in net assets for use in estimates. Actual results could differ from those estimates.

Investment Valuation – The shares are valued at the Funds’ offering and redemption prices per share. As of December 31, 2014, all of the Account’s investments are identified as Level 1 securities for valuation purposes under the Fair Value Measurement Topic of the FASB Accounting Standards Codification. Level 1 securities are valued at fair value as determined by quoted prices in active markets for identical securities. All changes in fair value are recorded as change in unrealized appreciation/(depreciation) of investments during the period in the statements of operations of the applicable Division.

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 the 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 policy dividends from Northwestern Mutual. Any dividends reinvested in the Account are reflected in Policyowners’ net payments in the accompanying financial statements.


F-23

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014

2.	Significant Accounting Policies (continued)

Due to Participants – Upon notification of death of the policyowner, a liability is recorded and is included in Due to Participants in the accompanying financial statements. This liability is identified as Level 1 for valuation purposes under the Fair Value Meaurements and Disclosures Topic of the FASB Accounting Standards Codification.

Taxes – Northwestern Mutual is taxed as a “life insurance company” under the Internal Revenue Code. The Policies, which are funded in the Account, are taxed as part of the operations of Northwestern Mutual. The Policies provide that a charge for taxes may be made against the assets of the Account. Currently, for Variable Life policies issued before October 11, 1995, 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. Currently, for Variable CompLife policies issued on or after October 11, 1995, Variable Executive Life policies issued on or after March 2, 1998, and Variable Joint Life policies issued on or after December 10, 1998, 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.

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.

3.	Purchases and Sales of Investments

Purchases and sales of the Funds’ shares for the year ended December 31, 2014 were as follows: (in thousands)


Division	Purchases		Sales
Growth Stock	$	55,464	$	31,124
Focused Appreciation		19,717		12,105
Large Cap Core Stock		37,711		22,048
Large Cap Blend		2,757		1,303
Index 500 Stock		92,649		83,060
Large Company Value		5,192		1,970
Domestic Equity		14,668		16,794
Equity Income		15,161		13,664
Mid Cap Growth Stock		106,630		38,010
Index 400 Stock		31,691		29,843
Mid Cap Value		12,727		7,082
Small Cap Growth Stock		40,851		25,017
Index 600 Stock		9,918		4,030
Small Cap Value		13,896		19,168
International Growth		9,757		11,391
Research International Core		6,258		2,697
International Equity		79,250		46,780
Emerging Markets Equity		11,024		4,143
Money Market		70,081		73,901
Short-Term Bond		6,783		3,937
Select Bond		29,006		33,398
Long-Term U.S. Government Bond		4,571		3,582
Inflation Protection		3,021		3,189
High Yield Bond		14,694		11,377
Multi-Sector Bond		7,817		3,414
Balanced		56,956		33,870


F-24

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014

3.	Purchases and Sales of Investments (continued)


Division	Purchases		Sales
Asset Allocation	$	11,992	$	6,639
Fidelity VIP Mid Cap		16,467		16,626
Fidelity VIP Contrafund		9,140		5,652
Neuberger Berman AMT Socially Responsive		1,071		1,545
Russell Multi-Style Equity		40,600		21,122
Russell Aggressive Equity		17,084		12,976
Russell Non-U.S.		10,617		15,083
Russell Core Bond		12,137		12,771
Russell Global Real Estate Securities		25,936		17,744
Russell LifePoints Moderate Strategy		2,678		1,500
Russell LifePoints Balanced Strategy		5,533		3,033
Russell LifePoints Growth Strategy		5,751		1,998
Russell LifePoints Equity Growth Strategy		1,149		479
Credit Suisse Trust Commodity Return Strategy		7,174		3,475

4.	Expenses and Related Party Transactions

A deduction for mortality and expense risks is paid to Northwestern Mutual. Mortality risk is the risk that insureds may not live as long as estimated. Expense risk is the risk 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. These charges are reflected as a reduction in invested assets and are included in Mortality and expense risk charges in the accompanying financial statements.

A deduction for the mortality and expense risks for Variable Executive Life policies is determined monthly at an annual rate of 0.48% of the amount invested in the Account for the Policy for the first ten Policy years, and 0.05% thereafter for policies with the Cash Value Amendment, or 0.03% thereafter for the 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 0.00% of the amount invested in the Account. Additional Variable Joint Life mortality and expense risks deductions are determined annually and are paid to Northwestern Mutual for the first ten Policy years based on the age of the insured individuals at the time the policy was issued.

Additional mortality costs are deducted from the Policies 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 among other charges which are detailed in the Prospectus.


F-25

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014

4.	Expenses and Related Party Transactions (continued)

Mortality and expense risks deductions for Variable Executive Life and Variable Joint Life policies, as well as the noted additional mortality costs and other deductions for each of the products are reflected as a reduction in units and are included in Mortality and other in the accompanying financial statements.

The net operating expenses of the Credit Suisse Trust Commodity Return Strategy Portfolio are limited to 1.05% of average net assets through November 15, 2015 by Credit Suisse Trust and Credit Suisse Asset Management, LLC. Pursuant to the substitution order of the Securities and Exchange Commission, effective November 15, 2013 through November 15, 2015, Northwestern Mutual will periodically reimburse policyowners to the extent the net operating expenses of the Credit Suisse Trust Commodity Return Strategy Portfolio exceed that of the fee waiver agreement of 0.95% of the Northwestern Mutual Commodities Return Strategy Portfolio which was in place at the time of the substitution.


F-26

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014

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(1)						Total Return, Lowest to Highest(1)
Growth Stock
Year Ended 12/31/14		85,738	$	3.949121	to	$	54.488126	$	386,925		0.59	%		0.00	%	to	0.55	%		8.43	%	to	9.02	%
Year Ended 12/31/13		88,857		3.638539	to		49.977915		368,165		0.68			0.00		to	0.55			35.12		to	35.86
Year Ended 12/31/12		92,840		2.690097	to		36.785012		284,588		0.57			0.00		to	0.55			12.32		to	12.94
Year Ended 12/31/11		97,893		2.392591	to		32.569595		269,305		0.78			0.00		to	0.55			(1.84	)	to	(1.30	)
Year Ended 12/31/10		101,987		2.434967	to		32.998214		288,701		0.82			0.00		to	0.55			11.76		to	12.37
Focused Appreciation
Year Ended 12/31/14		34,391	$	3.141534	to	$	33.238141	$	122,795		0.02	%		0.00	%	to	0.55	%		8.84	%	to	9.43	%
Year Ended 12/31/13		35,292		2.883615	to		30.372615		116,386		0.48			0.00		to	0.55			28.30		to	29.01
Year Ended 12/31/12		36,929		2.245328	to		23.543734		96,087		0.27			0.00		to	0.55			19.48		to	20.14
Year Ended 12/31/11		39,237		1.877354	to		19.596705		85,938		0.18			0.00		to	0.55			(6.61	)	to	(6.10	)
Year Ended 12/31/10		41,221		2.008299	to		20.869750		97,863		0.00			0.00		to	0.55			8.73		to	9.33
Large Cap Core Stock
Year Ended 12/31/14		69,294	$	2.981972	to	$	40.759702	$	244,043		1.49	%		0.00	%	to	0.55	%		7.97	%	to	8.56	%
Year Ended 12/31/13		71,653		2.759081	to		37.544148		233,882		1.15			0.00		to	0.55			27.88		to	28.58
Year Ended 12/31/12		75,256		2.155410	to		29.198468		191,903		1.20			0.00		to	0.55			11.02		to	11.63
Year Ended 12/31/11		78,553		1.939589	to		26.156583		182,605		1.14			0.00		to	0.55			(1.75	)	to	(1.21	)
Year Ended 12/31/10		80,904		1.972165	to		26.477036		192,996		1.20			0.00		to	0.55			12.29		to	12.91
Large Cap Blend
Year Ended 12/31/14		4,680	$	1.577743	to	$	13.487127	$	8,192		0.04	%		0.00	%	to	0.55	%		11.96	%	to	12.58	%
Year Ended 12/31/13		3,877		1.407785	to		11.980322		6,157		0.99			0.00		to	0.55			30.14		to	30.86
Year Ended 12/31/12		3,025		1.080633	to		9.155103		3,615		0.92			0.00		to	0.55			14.57		to	15.20
Period Ended 12/31/11 (2)		3,204		0.942304	to		7.947227		3,113		2.05			0.00		to	0.55			(5.82	)	to	(5.56	)
Index 500 Stock
Year Ended 12/31/14		200,831	$	4.519180	to	$	103.583087	$	1,122,395		1.60	%		0.00	%	to	0.55	%		12.84	%	to	13.46	%
Year Ended 12/31/13		203,612		4.001083	to		91.297175		1,008,802		1.82			0.00		to	0.55			31.33		to	32.05
Year Ended 12/31/12		207,627		3.043500	to		69.136117		785,534		1.77			0.00		to	0.55			15.12		to	15.76
Year Ended 12/31/11		214,351		2.641136	to		59.726031		713,800		1.66			0.00		to	0.55			1.39		to	1.95
Year Ended 12/31/10		220,539		2.602259	to		58.583796		730,891		2.02			0.00		to	0.55			14.27		to	14.89
Large Company Value
Year Ended 12/31/14		6,169	$	1.648404	to	$	13.865219	$	11,466		0.00	%		0.00	%	to	0.55	%		12.41	%	to	13.03	%
Year Ended 12/31/13		4,244		1.464939	to		12.266796		7,585		1.75			0.00		to	0.55			30.57		to	31.29
Year Ended 12/31/12		2,300		1.120811	to		9.343226		3,112		1.90			0.00		to	0.55			15.83		to	16.47
Period Ended 12/31/11 (2)		2,622		0.966635	to		8.021755		2,593		4.57			0.00		to	0.55			(3.38	)	to	(3.12	)
Domestic Equity
Year Ended 12/31/14		76,044	$	2.146602	to	$	22.950784	$	190,774		1.70	%		0.00	%	to	0.55	%		13.25	%	to	13.87	%
Year Ended 12/31/13		77,733		1.893569	to		20.154766		172,457		1.68			0.00		to	0.55			33.29		to	34.03
Year Ended 12/31/12		80,040		1.419182	to		15.037814		134,628		2.16			0.00		to	0.55			13.72		to	14.35
Year Ended 12/31/11		88,764		1.246743	to		13.151218		131,130		2.09			0.00		to	0.55			0.36		to	0.91
Year Ended 12/31/10		90,355		1.241092	to		13.033112		134,632		2.28			0.00		to	0.55			13.99		to	14.62
Equity Income
Year Ended 12/31/14		40,696	$	2.579506	to	$	27.291728	$	123,149		1.23	%		0.00	%	to	0.55	%		6.84	%	to	7.43	%
Year Ended 12/31/13		41,567		2.411872	to		25.403806		118,079		1.36			0.00		to	0.55			29.23		to	29.94
Year Ended 12/31/12		41,046		1.864547	to		19.550985		90,300		1.53			0.00		to	0.55			16.59		to	17.23
Year Ended 12/31/11		40,660		1.597678	to		16.677245		76,853		1.50			0.00		to	0.55			(1.46	)	to	(0.92	)
Year Ended 12/31/10		38,980		1.619759	to		16.832155		73,840		1.70			0.00		to	0.55			14.70		to	15.33
Mid Cap Growth Stock
Year Ended 12/31/14		104,691	$	3.689747	to	$	102.693582	$	465,306		0.36	%		0.00	%	to	0.55	%		7.90	%	to	8.49	%
Year Ended 12/31/13		108,936		3.416219	to		94.654719		448,921		0.31			0.00		to	0.55			24.85		to	25.53
Year Ended 12/31/12		113,740		2.733618	to		75.402575		374,598		0.12			0.00		to	0.55			11.35		to	11.97
Year Ended 12/31/11		121,498		2.452507	to		67.344023		358,497		0.23			0.00		to	0.55			(6.69	)	to	(6.18	)
Year Ended 12/31/10		127,814		2.625759	to		71.778944		404,074		0.28			0.00		to	0.55			23.18		to	23.86

(1)

Total return includes deductions for management and other expenses; it excludes deductions for sales loads and other charges, which are a reduction in units. The expense ratios further reflect only those expenses which impact total return. For additional information regarding all expenses assessed, refer to the accompanying notes. Returns are not annualized for periods less than one year.

(2)	Divisions commenced operations on June 30, 2011.




F-27

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014


	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(1)						Total Return, Lowest to Highest(1)
Index 400 Stock
Year Ended 12/31/14		68,204	$	3.817251	to	$	43.598907	$	290,596		0.98	%		0.00	%	to	0.55	%		8.82	%	to	9.42	%
Year Ended 12/31/13		71,379		3.504450	to		39.846886		279,413		1.06			0.00		to	0.55			32.44		to	33.16
Year Ended 12/31/12		72,346		2.643527	to		29.923387		213,744		0.91			0.00		to	0.55			17.00		to	17.64
Year Ended 12/31/11		77,580		2.257202	to		25.435391		195,635		0.86			0.00		to	0.55			(2.46	)	to	(1.92	)
Year Ended 12/31/10		80,664		2.311836	to		25.934506		208,521		1.09			0.00		to	0.55			25.60		to	26.29
Mid Cap Value
Year Ended 12/31/14		17,454	$	3.042400	to	$	32.189353	$	60,350		0.99	%		0.00	%	to	0.55	%		16.05	%	to	16.69	%
Year Ended 12/31/13		17,193		2.618947	to		27.585004		51,336		0.96			0.00		to	0.55			29.53		to	30.24
Year Ended 12/31/12		17,177		2.019864	to		21.179677		39,331		1.34			0.00		to	0.55			15.93		to	16.57
Year Ended 12/31/11		18,430		1.740555	to		18.168731		37,334		1.74			0.00		to	0.55			(1.15	)	to	(0.61	)
Year Ended 12/31/10		19,018		1.759035	to		18.279525		39,839		1.41			0.00		to	0.55			19.27		to	19.93
Small Cap Growth Stock
Year Ended 12/31/14		63,835	$	3.633783	to	$	47.561777	$	255,403		0.00	%		0.00	%	to	0.55	%		8.06	%	to	8.66	%
Year Ended 12/31/13		66,550		3.359376	to		43.773190		246,636		0.49			0.00		to	0.55			37.84		to	38.60
Year Ended 12/31/12		68,955		2.434726	to		31.582975		185,068		0.00			0.00		to	0.55			8.88		to	9.48
Year Ended 12/31/11		74,363		2.233915	to		28.847575		183,624		0.35			0.00		to	0.55			(3.31	)	to	(2.78	)
Year Ended 12/31/10		78,328		2.308077	to		29.671998		201,112		0.75			0.00		to	0.55			25.16		to	25.85
Index 600 Stock
Year Ended 12/31/14		10,776	$	1.587514	to	$	17.638780	$	20,248		1.53	%		0.00	%	to	0.55	%		4.76	%	to	5.34	%
Year Ended 12/31/13		9,373		1.513818	to		16.744685		16,819		4.29			0.00		to	0.55			39.90		to	40.67
Year Ended 12/31/12		4,910		1.081019	to		11.903891		6,206		3.11			0.00		to	0.55			15.16		to	15.80
Period Ended 12/31/11 (2)		1,384		0.937768	to		10.280016		1,719		2.07			0.00		to	0.55			(6.27	)	to	(6.01	)
Small Cap Value
Year Ended 12/31/14		47,518	$	3.191481	to	$	34.121874	$	174,553		0.36	%		0.00	%	to	0.55	%		(0.33	)%	to	0.22	%
Year Ended 12/31/13		49,966		3.198795	to		34.046809		184,787		1.14			0.00		to	0.55			31.04		to	31.76
Year Ended 12/31/12		50,988		2.438620	to		25.839588		143,973		0.37			0.00		to	0.55			15.69		to	16.33
Year Ended 12/31/11		55,277		2.105813	to		22.212770		134,980		0.60			0.00		to	0.55			(1.90	)	to	(1.36	)
Year Ended 12/31/10		57,649		2.144514	to		22.519799		144,009		1.09			0.00		to	0.55			21.28		to	21.95
International Growth
Year Ended 12/31/14		43,639	$	1.832844	to	$	19.596007	$	90,803		1.30	%		0.00	%	to	0.55	%		(5.04	)%	to	(4.52	)%
Year Ended 12/31/13		44,659		1.928280	to		20.524033		98,031		1.40			0.00		to	0.55			19.15		to	19.81
Year Ended 12/31/12		44,792		1.616718	to		17.130842		82,841		1.33			0.00		to	0.55			17.34		to	17.99
Year Ended 12/31/11		48,394		1.376437	to		14.519220		76,140		1.13			0.00		to	0.55			(13.64	)	to	(13.17	)
Year Ended 12/31/10		49,762		1.592294	to		16.720938		94,974		0.92			0.00		to	0.55			15.79		to	16.43
Research International Core
Year Ended 12/31/13		16,529	$	1.071981	to	$	10.212438	$	20,860		1.45	%		0.00	%	to	0.55	%		(7.22	)%	to	(6.71	)%
Year Ended 12/31/13		14,106		1.154295	to		10.947312		19,169		0.13			0.00		to	0.55			18.27		to	18.92
Year Ended 12/31/12		10,388		0.975017	to		9.205651		12,233		1.72			0.00		to	0.55			16.12		to	16.76
Period Ended 12/31/11 (2)		3,559		0.838851	to		7.884380		3,688		4.07			0.00		to	0.55			(16.16	)	to	(15.93	)
International Equity
Year Ended 12/31/14		139,819	$	3.229216	to	$	4.952849	$	525,118		1.91	%		0.00	%	to	0.55	%		(9.30	)%	to	(8.80	)%
Year Ended 12/31/13		143,163		3.556947	to		5.431053		593,256		2.19			0.00		to	0.55			20.71		to	21.38
Year Ended 12/31/12		147,013		2.943691	to		4.474566		504,481		2.59			0.00		to	0.55			20.85		to	21.52
Year Ended 12/31/11		154,709		2.433405	to		3.682261		438,760		2.10			0.00		to	0.55			(10.59	)	to	(10.10	)
Year Ended 12/31/10		159,931		2.718891	to		4.095847		508,723		3.01			0.00		to	0.55			7.08		to	7.67
Emerging Markets Equity
Year Ended 12/31/14		34,924	$	0.849119	to	$	10.109813	$	34,843		0.63	%		0.00	%	to	0.55	%		(6.76	)%	to	(6.25	)%
Year Ended 12/31/13		29,027		0.909813	to		10.783888		30,454		0.75			0.00		to	0.55			(5.67	)	to	(5.15	)
Year Ended 12/31/12		19,140		0.963548	to		11.369632		21,469		0.15			0.00		to	0.55			18.18		to	18.83
Period Ended 12/31/11 (2)		7,995		0.814525	to		9.567929		7,498		2.54			0.00		to	0.55			(18.59	)	to	(18.36	)
Money Market
Year Ended 12/31/14		79,806	$	1.538686	to	$	41.568533	$	165,824		0.07	%		0.00	%	to	0.55	%		(0.48	)%	to	0.07	%
Year Ended 12/31/13		82,246		1.544536	to		41.539003		170,166		0.10			0.00		to	0.55			(0.45	)	to	0.10
Year Ended 12/31/12		84,564		1.549943	to		41.497953		169,940		0.14			0.00		to	0.55			(0.41	)	to	0.15
Year Ended 12/31/11		85,415		1.554696	to		41.437528		166,908		0.14			0.00		to	0.55			(0.41	)	to	0.14
Year Ended 12/31/10		86,934		1.559508	to		41.380226		169,116		0.29			0.00		to	0.55			(0.25	)	to	0.29

(1)

(2)	Divisions commenced operations on June 30, 2011.

F-28

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014


	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(1)						Total Return, Lowest to Highest(1)
Short-Term Bond
Year Ended 12/31/14		11,155	$	1.010036	to	$	12.188479	$	13,392		0.60	%		0.00	%	to	0.55	%		(0.17	)%	to	0.385	%
Year Ended 12/31/13		9,076		1.010673	to		12.142453		10,582		0.17			0.00		to	0.55			0.00 (4)		to	0.55
Year Ended 12/31/12		5,895		1.009629	to		12.076410		6,960		1.43			0.00		to	0.55			1.51		to	2.07
Period Ended 12/31/11 (2)		3,159		0.993622	to		11.832025		3,681		4.36			0.00		to	0.55			(0.69	)	to	(0.42	)
Select Bond
Year Ended 12/31/14		70,799	$	2.671248	to	$	211.428447	$	248,615		2.02	%		0.00	%	to	0.55	%		4.99	%	to	5.56	%
Year Ended 12/31/13		73,536		2.541856	to		200.286369		244,742		2.31			0.00		to	0.55			(2.69	)	to	(2.16	)
Year Ended 12/31/12		78,962		2.609587	to		204.702189		268,074		2.69			0.00		to	0.55			4.39		to	4.96
Year Ended 12/31/11		77,091		2.497424	to		195.021673		251,418		3.32			0.00		to	0.55			6.58		to	7.16
Year Ended 12/31/10		78,164		2.341027	to		181.992325		238,805		3.75			0.00		to	0.55			6.00		to	6.59
Long-Term U.S Government Bond
Year Ended 12/31/14		4,722	$	1.371509	to	$	19.181310	$	6,944		2.01	%		0.00	%	to	0.55	%		23.05	%	to	23.73	%
Year Ended 12/31/13		3,977		1.113443	to		15.502339		4,876		0.02			0.00		to	0.55			(13.75	)	to	(13.27	)
Year Ended 12/31/12		4,651		1.289646	to		17.875038		7,933		1.85			0.00		to	0.55			3.18		to	3.75
Period Ended 12/31/11 (2)		3,537		1.248644	to		17.228764		6,776		8.82			0.00		to	0.55			24.80		to	25.15
Inflation Protection
Year Ended 12/31/14		6,336	$	1.065002	to	$	13.899486	$	8,559		1.08	%		0.00	%	to	0.55	%		2.57	%	to	3.14	%
Year Ended 12/31/13		6,697		1.037245	to		13.476716		8,588		1.08			0.00		to	0.55			(8.83	)	to	(8.33	)
Year Ended 12/31/12		7,780		1.136621	to		14.701699		10,670		2.68			0.00		to	0.55			6.76		to	7.35
Period Ended 12/31/11 (2)		3,641		1.063572	to		13.694886		4,815		0.03			0.00		to	0.55			6.30		to	6.60
High Yield Bond
Year Ended 12/31/14		27,230	$	3.335950	to	$	43.976216	$	106,154		5.04	%		0.00	%	to	0.55	%		0.62	%	to	1.18	%
Year Ended 12/31/13		27,674		3.312039	to		43.465300		107,038		5.57			0.00		to	0.55			5.26		to	5.84
Year Ended 12/31/12		28,781		3.143457	to		41.068270		106,270		6.24			0.00		to	0.55			13.26		to	13.89
Year Ended 12/31/11		29,124		2.772582	to		36.059875		94,728		6.97			0.00		to	0.55			4.02		to	4.59
Year Ended 12/31/10		29,475		2.662698	to		34.475967		92,381		7.13			0.00		to	0.55			13.93		to	14.56
Multi-Sector Bond
Year Ended 12/31/14		20,081	$	1.169486	to	$	15.951947	$	26,344		2.65	%		0.00	%	to	0.55	%		2.68	%	to	3.25	%
Year Ended 12/31/13		17,326		1.137785	to		15.449941		21,918		3.56			0.00		to	0.55			(2.12	)	to	(1.58	)
Year Ended 12/31/12		14,697		1.161278	to		15.698283		18,872		0.46			0.00		to	0.55			14.31		to	14.94
Period Ended 12/31/11 (2)		4,150		1.014872	to		13.657358		4,850		16.21			0.00		to	0.55			1.44		to	1.71
Balanced
Year Ended 12/31/14		54,744	$	3.329658	to	$	181.830315	$	360,234		2.31	%		0.00	%	to	0.55	%		4.99	%	to	5.56	%
Year Ended 12/31/13		55,407		3.168393	to		172.248875		354,026		3.38			0.00		to	0.55			11.47		to	12.08
Year Ended 12/31/12		57,330		2.839508	to		153.677764		331,081		0.23			0.00		to	0.55			9.09		to	9.69
Year Ended 12/31/11		61,456		2.600265	to		140.096515		318,825		2.75			0.00		to	0.55			1.55		to	2.11
Year Ended 12/31/10		63,195		2.557927	to		137.200077		323,249		2.12			0.00		to	0.55			11.34		to	11.96
Asset Allocation
Year Ended 12/31/14		19,933	$	1.916252	to	$	20.487411	$	47,339		2.15	%		0.00	%	to	0.55	%		4.57	%	to	5.15	%
Year Ended 12/31/13		19,334		1.830603	to		19.484028		44,834		3.32			0.00		to	0.55			16.03		to	16.67
Year Ended 12/31/12		20,120		1.576122	to		16.700324		39,573		0.23			0.00		to	0.55			10.41		to	11.02
Year Ended 12/31/11		22,441		1.426114	to		15.042893		39,577		2.41			0.00		to	0.55			(0.62	)	to	(0.08	)
Year Ended 12/31/10		22,865		1.433617	to		15.054442		40,860		2.92			0.00		to	0.55			12.39		to	13.01
Fidelity VIP Mid Cap
Year Ended 12/31/14		36,665	$	4.048702	to	$	42.835362	$	175,314		0.02	%		0.00	%	to	0.55	%		5.45	%	to	6.03	%
Year Ended 12/31/13		37,534		3.835558	to		40.398542		169,449		0.28			0.00		to	0.55			35.13		to	35.87
Year Ended 12/31/12		38,312		2.835677	to		29.733518		128,384		0.39			0.00		to	0.55			13.93		to	14.56
Year Ended 12/31/11		40,656		2.486413	to		25.953961		120,934		0.02			0.00		to	0.55			(11.34	)	to	(10.85	)
Year Ended 12/31/10		41,434		2.801620	to		29.113348		140,666		0.13			0.00		to	0.55			27.87		to	28.57
Fidelity VIP Contrafund
Year Ended 12/31/14		21,021	$	1.547371	to	$	16.754369	$	37,757		0.78	%		0.00	%	to	0.55	%		11.04	%	to	11.65	%
Year Ended 12/31/13		19,719		1.392090	to		15.005573		31,545		0.90			0.00		to	0.55			30.24		to	30.95
Year Ended 12/31/12		16,353		1.067828	to		11.458810		20,234		1.49			0.00		to	0.55			15.50		to	16.14
Period Ended 12/31/11 (2)		5,922		0.923581	to		9.866342		6,530		2.81			0.00		to	0.55			(7.69	)	to	(7.43	)

(1)

(2)	Divisions commenced operations on June 30, 2011.

(4)	Ratio is less than 0.005%.


F-29

Northwestern Mutual Variable Life Account

Notes to Financial Statements

December 31, 2014


	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(1)						Total Return, Lowest to Highest(1)
Neuberger Berman AMT Socially Responsive
Year Ended 12/31/14		2,395	$	1.513495	to	$	16.275087	$	4,590		0.37	%		0.00	%	to	0.55	%		9.78	%	to	10.38	%
Year Ended 12/31/13		2,403		1.377320	to		14.744385		4,648		0.79			0.00		to	0.55			36.85		to	37.60
Year Ended 12/31/12		1,241		1.005443	to		10.715212		1,683		0.25			0.00		to	0.55			10.37		to	10.98
Period Ended 12/31/11 (2)		606		0.910063	to		9.655117		688		0.90			0.00		to	0.55			(9.04	)	to	(8.79	)
Russell Multi-Style Equity
Year Ended 12/31/14		114,307	$	1.621079	to	$	18.071559	$	213,362		1.16	%		0.00	%	to	0.55	%		11.09	%	to	11.70	%
Year Ended 12/31/13		119,343		1.457823	to		16.178812		201,588		1.21			0.00		to	0.55			32.19		to	32.92
Year Ended 12/31/12		126,018		1.101694	to		12.171877		162,081		1.12			0.00		to	0.55			15.05		to	15.69
Year Ended 12/31/11		139,483		0.956587	to		10.521100		157,923		0.97			0.00		to	0.55			(2.08	)	to	(1.55	)
Year Ended 12/31/10		145,784		0.975990	to		10.686543		173,508		0.91			0.00		to	0.55			15.82		to	16.46
Russell Aggressive Equity
Year Ended 12/31/14		38,597	$	2.373801	to	$	27.141282	$	104,705		0.25	%		0.00	%	to	0.55	%		1.00	%	to	1.56	%
Year Ended 12/31/13		40,543		2.347887	to		26.724835		109,257		0.43			0.00		to	0.55			39.24		to	40.00
Year Ended 12/31/12		41,973		1.684569	to		19.088862		80,738		1.07			0.00		to	0.55			15.20		to	15.84
Year Ended 12/31/11		46,544		1.460862	to		16.479338		77,885		0.49			0.00		to	0.55			(4.72	)	to	(4.20	)
Year Ended 12/31/10		48,091		1.531783	to		17.202203		85,253		0.47			0.00		to	0.55			24.20		to	24.88
Russell Non-U.S.
Year Ended 12/31/14		63,654	$	1.633987	to	$	17.795979	$	121,476		1.95	%		0.00	%	to	0.55	%		(4.97	)%	to	(4.45	)%
Year Ended 12/31/13		65,876		1.717753	to		18.624500		134,161		2.00			0.00		to	0.55			21.24		to	21.91
Year Ended 12/31/12		68,417		1.415380	to		15.277391		115,667		1.77			0.00		to	0.55			19.16		to	19.81
Year Ended 12/31/11		74,999		1.186647	to		12.750860		107,050		1.66			0.00		to	0.55			(13.36	)	to	(12.88	)
Year Ended 12/31/10		77,992		1.368210	to		14.635995		131,861		0.93			0.00		to	0.55			10.81		to	11.42
Russell Core Bond
Year Ended 12/31/14		30,112	$	2.180310	to	$	23.281628	$	86,891		1.55	%		0.00	%	to	0.55	%		4.88	%	to	5.45	%
Year Ended 12/31/13		31,407		2.076847	to		22.077570		86,009		1.44			0.00		to	0.55			(1.99	)	to	(1.45	)
Year Ended 12/31/12		34,681		2.116915	to		22.402721		99,933		2.33			0.00		to	0.55			7.78		to	8.38
Year Ended 12/31/11		34,913		1.962151	to		20.671320		96,920		3.19			0.00		to	0.55			4.11		to	4.68
Year Ended 12/31/10		34,612		1.882787	to		19.746605		98,149		3.79			0.00		to	0.55			9.42		to	10.02
Russell Global Real Estate Securities
Year Ended 12/31/14		36,715	$	4.188148	to	$	44.660949	$	175,374		3.26	%		0.00	%	to	0.55	%		14.12	%	to	14.75	%
Year Ended 12/31/13		37,321		3.666253	to		38.920595		157,271		4.00			0.00		to	0.55			3.08		to	3.65
Year Ended 12/31/12		37,370		3.553123	to		37.550773		152,571		5.00			0.00		to	0.55			26.86		to	27.56
Year Ended 12/31/11		38,799		2.798128	to		29.438654		124,861		2.25			0.00		to	0.55			(7.56	)	to	(7.05	)
Year Ended 12/31/10		39,697		3.023867	to		31.671345		139,710		2.23			0.00		to	0.55			22.25		to	22.92
Russell LifePoints Moderate Strategy
Year Ended 12/31/14		1,929	$	1.179226	to	$	14.227181	$	3,327		3.33	%		0.00	%	to	0.55	%		4.28	%	to	4.85	%
Year Ended 12/31/13		1,516		1.129701	to		13.568584		2,151		1.69			0.00		to	0.55			6.20		to	6.79
Year Ended 12/31/12		1,505		1.062654	to		12.706153		2,139		3.29			0.00		to	0.55			10.46		to	11.07
Period Ended 12/31/11 (2)		320		0.961095	to		11.440046		332		3.14			0.00		to	0.55			(3.94	)	to	(3.67	)
Russell LifePoints Balanced Strategy
Year Ended 12/31/14		11,655	$	1.222287	to	$	13.866173	$	17,117		2.98	%		0.00	%	to	0.55	%		4.04	%	to	4.61	%
Year Ended 12/31/13		9,944		1.173673	to		13.255096		14,726		2.18			0.00		to	0.55			11.81		to	12.43
Year Ended 12/31/12		7,167		1.048620	to		11.789785		9,673		2.60			0.00		to	0.55			12.34		to	12.96
Period Ended 12/31/11 (2)		3,296		0.932549	to		10.437591		4,082		3.47			0.00		to	0.55			(6.79	)	to	(6.53	)
Russell LifePoints Growth Strategy
Year Ended 12/31/14		13,525	$	1.235139	to	$	13.064429	$	20,126		3.03	%		0.00	%	to	0.55	%		3.19	%	to	3.76	%
Year Ended 12/31/13		11,741		1.195791	to		12.591524		16,736		2.32			0.00		to	0.55			15.92		to	16.56
Year Ended 12/31/12		9,304		1.030529	to		10.802768		11,345		2.26			0.00		to	0.55			13.59		to	14.22
Period Ended 12/31/11 (2)		1,932		0.906329	to		9.458077		3,034		3.58			0.00		to	0.55			(9.41	)	to	(9.16	)
Russell LifePoints Equity Growth Strategy
Year Ended 12/31/14		5,836	$	1.258221	to	$	12.149681	$	8,762		3.29	%		0.00	%	to	0.55	%		2.92	%	to	3.48	%
Year Ended 12/31/13		5,628	$	1.221337	to	$	11.740704	$	8,224		2.59			0.00		to	0.55			19.16		to	19.81
Year Ended 12/31/12		4,213		1.023971	to		9.799317		5,371		1.87			0.00		to	0.55			15.04		to	15.68
Period Ended 12/31/11 (2)		1,131		0.889198	to		8.471141		1,453		3.08			0.00		to	0.55			(11.12	)	to	(10.88	)
Credit Suisse Trust Commodity Return Strategy
Year Ended 12/31/14		2,448	$	5.885213	to	$	6.387246	$	15,934		0.00	%		0.00	%	to	0.55	%		(17.39	)%	to	(16.94	)%
Period Ended 12/31/13 (3)		1,963		7.085099	to		7.724122		15,565		0.00			0.00		to	0.55			1.72		to	1.79

(1)

(2)	Divisions commenced operations on June 30, 2011.

(3)	Division commenced operations on November 15, 2013.

F-30

Report of Independent Registered Public Accounting Firm

To The Northwestern Mutual Life Insurance Company Board of Trustees and

Policyowners of the Northwestern Mutual Variable Life Account

In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets 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, Large Cap Blend Division, Index 500 Stock Division, Large Company Value 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, Index 600 Stock Division, Small Cap Value Division, International Growth Division, Research International Core Division, International Equity Division, Emerging Markets Equity Division, Money Market Division, Short-Term Bond Division, Select Bond Division, Long-Term U.S. Government Bond Division, Inflation Protection Division, High Yield Bond Division, Multi-Sector Bond Division, Balanced Division, Asset Allocation Division, Fidelity VIP Mid Cap Division, Fidelity VIP Contrafund Division, Neuberger Berman AMT Socially Responsive Division, Russell Multi-Style Equity Division, Russell Aggressive Equity Division, Russell Non-U.S. Division, Russell Core Bond Division, Russell Global Real Estate Securities Division, Russell LifePoints Moderate Strategy Division, Russell LifePoints Balanced Strategy Division, Russell LifePoints Growth Strategy Division, Russell LifePoints Equity Growth Strategy Division, Credit Suisse Trust Commodity Return Strategy Division, at December 31, 2014, and the results of their operations and the changes in their net assets for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These 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 confirmation of investments owned at December 31, 2014 by correspondence with Northwestern Mutual Series Fund, Inc., Fidelity Variable Insurance Products, Neuberger Berman Advisers Management Trust, the Russell Investment Funds and Credit Suisse Trust, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Milwaukee, Wisconsin

April 27, 2015

F-31

The Northwestern Mutual

Life Insurance Company

Consolidated Financial Statements

December 31, 2014, 2013 and 2012

NM-1

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Financial Position

(in millions)


	December 31,
	2014		2013

Assets:
Bonds	$	128,126	$	122,331
Mortgage loans		29,341		26,845
Policy loans		16,756		16,306
Common and preferred stocks		3,713		2,965
Real estate		1,610		1,506
Other investments		12,827		12,184
Cash and short-term investments		2,588		2,262


Total investments		194,961		184,399

Due and accrued investment income		1,902		1,840
Net deferred tax assets		3,055		2,647
Deferred premium and other assets		2,959		2,877
Separate account assets		27,056		25,343


Total assets	$	229,933	$	217,106


Liabilities and surplus:
Reserves for policy benefits	$	167,508	$	158,581
Policyowner dividends payable		5,510		5,210
Interest maintenance reserve		1,043		1,194
Asset valuation reserve		3,544		3,358
Income taxes payable		322		550
Other liabilities		5,896		5,671
Separate account liabilities		27,056		25,343


Total liabilities		210,879		199,907

Surplus:
Surplus notes		1,750		1,750
Unassigned surplus		17,304		15,449

Total surplus		19,054		17,199


Total liabilities and surplus	$	229,933	$	217,106

The accompanying notes are an integral part of these consolidated financial statements.

NM-2

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Operations

(in millions)


	For the years ended
	December 31,
	2014		2013			2012

Revenue:
Premiums	$	17,001	$	16,599		$	15,394
Net investment income		9,104		8,693			8,625
Other income		602		566			550


Total revenue		26,707		25,858			24,569


Benefits and expenses:
Benefit payments to policyowners and beneficiaries		8,396		7,898			7,250
Net additions to policy benefit reserves		8,910		9,018			8,561
Net transfers to separate accounts		501		542			492


Total benefits		17,807		17,458			16,303

Commissions and operating expenses		2,831		2,680			2,609


Total benefits and expenses		20,638		20,138			18,912


Gain from operations before dividends and taxes		6,069		5,720			5,657

Policyowner dividends		5,511		5,212			5,045


Gain from operations before taxes		558		508			612
Income tax expense (benefit)		22		(18	)		37


Net gain from operations		536		526			575
Net realized capital gains		143		276			208


Net income	$	679	$	802		$	783

The accompanying notes are an integral part of these consolidated financial statements.

NM-3

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


	For the years ended
	December 31,
	2014			2013			2012

Beginning of year balance	$	17,199		$	16,176		$	14,813

Net income		679			802			783

Change in net unrealized capital gains		1,246			346			379

Change in net deferred tax assets		271			237			315

Change in nonadmitted assets and other		(155	)		(58	)		(173	)

Change in asset valuation reserve		(186	)		(142	)		133

Change in reserve valuation basis		-			-			(59	)

Change in accounting principle		-			(162	)		(15	)


Net increase in surplus		1,855			1,023			1,363


End of year balance	$	19,054		$	17,199		$	16,176

The accompanying notes are an integral part of these consolidated financial statements.

NM-4

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Cash Flows

(in millions)


	For the years ended
	December 31,
	2014			2013			2012
Cash flows from operating activities:
Premiums and other income received	$	12,700		$	12,243		$	11,211
Investment income received		9,014			8,827			8,901
Benefit payments to policyowners and beneficiaries		(8,742	)		(8,215	)		(7,702	)
Net transfers to separate accounts		(492	)		(527	)		(474	)
Commissions, expenses and taxes paid		(3,247	)		(2,802	)		(3,118	)

Net cash provided by operating activities		9,233			9,526			8,818

Cash flows from investing activities:
Proceeds from investments sold or matured:
Bonds		33,516			36,567			33,733
Common and preferred stocks		2,898			4,305			7,277
Mortgage loans		1,501			2,169			2,707
Real estate		76			83			570
Other investments		1,676			1,268			1,706

Subtotal proceeds from investments		39,667			44,392			45,993

Cost of investments acquired:
Bonds		38,857			43,758			44,102
Common and preferred stocks		3,394			3,018			3,690
Mortgage loans		4,008			4,670			4,040
Real estate		187			290			192
Other investments		2,002			1,856			1,731

Subtotal cost of investments acquired		48,448			53,592			53,755

Disbursement of policy loans, net of repayments		450			517			642

Net cash applied to investing activities		(9,231	)		(9,717	)		(8,404	)

Cash flows from financing and miscellaneous sources:
Net inflows on deposit-type contracts		56			93			113
Other cash provided (applied)		268			(33	)		(555	)

Net cash provided by (applied to) financing and miscellaneous sources		324			60			(442	)

Net increase (decrease) in cash and short-term investments		326			(131	)		(28	)
Cash and short-term investments, beginning of year		2,262			2,393			2,421

Cash and short-term investments, end of year	$	2,588		$	2,262		$	2,393

Supplemental disclosures of cash flow information
Non-cash investing activities not included above:
Bond forward commitments	$	12,590		$	17,482		$	17,139
Bond refinancings and exchanges		1,713			2,156			1,842
Mortgage loan refinancings		889			831			1,089
Transfers with affiliated entities		344			911			-
Common stock exchanges		61			81			110
Other invested asset exchanges		37			-			-

The accompanying notes are an integral part of these consolidated financial statements.

NM-5

The Northwestern Mutual Life Insurance Company

Notes to Consolidated Financial Statements

December 31, 2014, 2013 and 2012

1.	Basis of Presentation

The accompanying consolidated statutory financial statements include the accounts of The Northwestern Mutual Life Insurance Company and its wholly-owned subsidiary, Northwestern Long Term Care Insurance Company (together, “the Company”). All intercompany balances and transactions have been eliminated. The Company offers life, annuity, disability and long-term care insurance products to the personal, business and estate markets throughout the United States of America.

These financial statements were prepared in accordance with accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin (“statutory basis of accounting”), which are based on the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (“NAIC”). Financial statements prepared on the statutory basis of accounting differ from financial statements prepared in accordance with generally accepted accounting principles (“GAAP”), primarily because on a GAAP basis: (1) certain policy acquisition costs are deferred and amortized, (2) most bond and preferred stock investments are reported at fair value, (3) policy benefit reserves are established using different actuarial methods and assumptions, (4) deposit-type contracts, for which premiums, benefits and reserve changes are not included in revenue or benefits as reported in the statements of operations, are defined differently, (5) majority-owned, non-insurance subsidiaries are consolidated, (6) changes in deferred taxes are reported as a component of net income and (7) no deferral of realized investment gains and losses is permitted. The effects on the Company’s financial statements attributable to the differences between the statutory basis of accounting and GAAP are material.

Reclassifications

Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.

2.	Summary of Significant Accounting Policies

The preparation of financial statements in accordance with the statutory basis of accounting requires the Company to make estimates or assumptions about the future that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the annual periods presented. Actual future results could differ from these estimates and assumptions.

Investments

See Notes 3, 4 and 14 regarding the statement value and fair value of the Company’s investments in bonds, mortgage loans, common and preferred stocks, real estate and other investments, including derivative instruments.

Policy Loans

Policy loans represent amounts borrowed from the Company by life insurance policyowners, secured by the cash value of the related policies, and are reported at the unpaid principal balance. Policy loans earn interest at either a fixed rate or at a variable rate based on an election that is made by the policyowner when applying for their policy. If a variable rate is elected, it is reset annually subsequent to funding of the policy loan. Some policies with a fixed rate loan provision permit the Company, at its discretion, to set the interest rate below that specified by the policy. Annual interest rates on policy loans ranged from 4.25% to 8.00% for loans outstanding at December 31, 2014. Policy loans have no stated maturity date, with repayment of principal made at the discretion of the policyowner. Policyowner dividends available on the portion of life insurance cash values that serve as collateral for policy loans are generally determined using the “direct

NM-6

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

recognition method,” whereby dividends on the loaned portion of such policies are calculated with reference to the interest rate charged on the policy loan. The Company considers the unpaid principal balance of policy loans to approximate fair value.

Cash and Short-term Investments

Cash and short-term investments include securities that had maturities of one year or less at purchase, primarily money market funds and short-term commercial paper. These investments are reported at amortized cost, which approximates fair value.

Separate Accounts

Separate account assets and related reserve liabilities represent the segregation of balances attributable to variable life insurance and variable annuity products, as well as a group annuity separate account used to fund certain of the Company’s employee and financial representative benefit plan obligations. All separate account assets are legally insulated from claims by the Company’s general account policyowners and creditors. Variable product policyowners bear the investment performance risk associated with these products. Separate account assets related to variable products are invested at the direction of the policyowner in a variety of mutual fund options. Variable annuity policyowners also have the option to invest in stated-rate investment options through the Company’s general account. Separate account assets are generally reported at fair value primarily based on quoted market prices for the underlying investment securities. See Note 7 and Note 14 for more information regarding the Company’s separate accounts and Note 8 for more information regarding the Company’s employee and financial representative benefit plans.

Reserves for Policy Benefits

Reserves for policy benefits generally represent the net present value of future policy benefits less future policy premiums, calculated using actuarial methods, mortality and morbidity experience tables and valuation interest rates prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin (“OCI”). These actuarial tables and methods include assumptions regarding future mortality and morbidity experience. Actual future experience could differ from the assumptions used to make these reserve estimates. See Note 5 and Note 14 for more information regarding the Company’s reserves for policy benefits.

Policyowner Dividends

All life, disability and long-term care insurance policies and certain annuity policies issued by the Company are participating. Annually, the Company’s Board of Trustees approves dividends payable on participating policies during the subsequent fiscal year, which are accrued and charged to operations when approved. Depending on the type of policy they own, participating policyowners generally have the option to receive their dividends in cash, use them to reduce future premiums due, use them to purchase additional insurance benefits or leave them on deposit with the Company to accumulate interest. Dividends used by policyowners to purchase additional insurance benefits are reported as premiums in the consolidated statements of operations but are not included in premiums received or benefit payments in the consolidated statements of cash flows. The Company’s annual approval and declaration of policyowner dividends includes a guarantee of a minimum aggregate amount of dividends to be paid to policyowners as a group in the subsequent calendar year. If this guaranteed amount is greater than the aggregate of actual dividends paid to policyowners in the subsequent year, the difference is paid in the immediately succeeding calendar year.

Interest Maintenance Reserve

The Company is required to maintain an interest maintenance reserve (“IMR”). The IMR is used to defer realized capital gains and losses, net of any income tax, on fixed income investments and

NM-7

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

derivatives that are attributable to changes in market interest rates, including both changes in risk-free market interest rates and market credit spreads. Net realized capital gains and losses deferred to the IMR are amortized into investment income over the estimated remaining term to maturity of the investment sold or the asset/liability hedged by an interest rate-related derivative instrument.

Asset Valuation Reserve

The Company is required to maintain an asset valuation reserve (“AVR”). The AVR represents a reserve for invested asset valuation using a formula prescribed by the NAIC. The AVR is intended to protect surplus by absorbing declines in the value of the Company’s investments that are not related to changes in interest rates. Increases or decreases in the AVR are reported as direct adjustments to surplus in the consolidated statements of changes in surplus.

Premium Revenue

Most life insurance premiums are recognized as revenue at the beginning of each respective policy year. Universal life insurance and annuity premiums are recognized as revenue when received. Considerations received on supplementary annuity contracts without life contingencies are deposit-type transactions and are excluded from revenue in the consolidated statements of operations. Disability and long-term care insurance premiums are recognized as revenue when due. Premium revenue is reported net of ceded reinsurance. See Note 9 for more information regarding the Company’s use of reinsurance.

Net Investment Income

Net investment income primarily represents interest, dividends and prepayment fees received or accrued on bonds, mortgage loans, common and preferred stocks, policy loans and other investments. Net investment income also includes dividends and distributions paid to the Company from the accumulated earnings of joint ventures, partnerships and unconsolidated non-insurance subsidiaries. Net investment income is reduced by investment management expenses, real estate depreciation, interest costs associated with securities lending and interest expense related to the Company’s surplus notes. See Note 3 for more information regarding net investment income and Note 13 for more information regarding the Company’s surplus notes.

Other Income

Other income primarily represents ceded reinsurance expense allowances and various insurance policy charges. Ceded reinsurance expense allowance is recognized as revenue when due. See Note 9 for more information regarding the Company’s use of reinsurance.

Benefit Payments to Policyowners and Beneficiaries

Benefit payments to policyowners and beneficiaries include death, surrender, disability and long-term care benefits, as well as matured endowments and payments on supplementary annuity contracts that include life contingencies. Benefit payments on supplementary annuity contracts without life contingencies are deposit-type transactions and excluded from benefits in the consolidated statements of operations. Benefit payments are reported net of ceded reinsurance recoveries. See Note 9 for more information regarding the Company’s use of reinsurance.

Commissions and Operating Expenses

Commissions and other operating costs, including costs of acquiring new insurance policies, are generally charged to expense as incurred.

Information Technology Equipment and Software

The cost of information technology (“IT”) equipment and operating system software is generally capitalized and depreciated over three years using the straight-line method. Non-operating system software is generally capitalized and depreciated over a maximum of five years. IT equipment and operating software assets of $29 million and $41 million at December 31, 2014 and 2013,

NM-8

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

respectively, are included in other assets in the consolidated statements of financial position and are net of accumulated depreciation of $280 million and $256 million, respectively. Non-operating software costs, net of accumulated depreciation, are nonadmitted assets and thereby excluded from assets and surplus in the consolidated statements of financial position. These amounts were $151 million and $132 million at December 31, 2014 and 2013, respectively. Depreciation expense for IT equipment and software totaled $74 million, $70 million and $67 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Furniture, Fixtures and Equipment

The cost of furniture, fixtures and equipment, including leasehold improvements, is generally capitalized and depreciated over the useful life of the assets using the straight-line method. Furniture, fixtures and equipment, net of accumulated depreciation, are nonadmitted assets and thereby excluded from assets and surplus in the consolidated statements of financial position. These amounts were $74 million and $79 million at December 31, 2014 and 2013, respectively. Depreciation expense for furniture, fixtures and equipment totaled $8 million, $7 million and $7 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Investment Capital Gains and Losses

Realized capital gains and losses are recognized based upon specific identification of investments sold. Realized capital losses also include valuation adjustments for impairment of bonds, mortgage loans, common and preferred stocks, real estate and other investments that have experienced a decline in fair value that the Company considers to be “other than temporary.” Realized capital gains and losses as reported in the consolidated statements of operations are net of any capital gains tax (or benefit) and exclude any deferrals to the IMR of interest rate-related capital gains or losses. See Note 3 for more information regarding realized capital gains and losses, including other-than-temporary valuation adjustments.

Unrealized capital gains and losses include changes in the fair value of common stocks and other equity investments and currency translation adjustments on foreign-denominated bonds and are reported net of any related changes in deferred taxes. Other changes in the Company’s equity method share of the accumulated earnings of joint ventures, partnerships and unconsolidated, non-insurance subsidiaries are also reported as changes in unrealized capital gains and losses. Changes in unrealized capital gains and losses are reported in the consolidated statements of changes in surplus. See Note 3 for more information regarding unrealized capital gains and losses.

Nonadmitted Assets

Certain assets are designated as “nonadmitted” on the statutory basis of accounting. Such assets, principally related to defined benefit pension funding, amounts advanced to or due from the Company’s financial representatives, furniture, fixtures, equipment and non-operating software (net of accumulated depreciation), deferred tax assets in excess of statutory limits and certain equity-method investments for which audits are not performed are excluded from assets and surplus in the consolidated statements of financial position. Changes in nonadmitted assets are reported as a direct adjustment to surplus in the consolidated statements of changes in surplus.

Foreign Currency Translation

All of the Company’s insurance operations are conducted in the United States of America on a U.S. dollar-denominated basis. The Company does make bond, mortgage loan, equity and other investments that are denominated in a foreign currency or issued by an entity doing business in another country. Investments denominated in a foreign currency are translated to U.S. dollars at each reporting date using then-current market foreign currency exchange rates. Translation gains or losses relating to fluctuations in market exchange rates are reported as a change in unrealized capital gains and losses until the related investment security is sold or matures, at which time a

NM-9

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

realized capital gain or loss is reported. Transactions denominated in a foreign currency, such as receipt of foreign-denominated interest or dividends, are translated to U.S. dollars based on the actual exchange rate at the time of the transaction. See Note 4 for more information regarding the Company’s use of derivatives to mitigate exposure to fluctuations in foreign currency exchange rates.

Subsequent Events

The Company has evaluated events subsequent to December 31, 2014 through February 24, 2015, the date these consolidated financial statements were available to be issued. Based on this evaluation, it is the Company’s opinion that no events subsequent to December 31, 2014 have occurred that are material to the Company’s financial position at that date or the results of its operations for the year then ended.

3.	Investments

Bonds

The Securities Valuation Office (“SVO”) of the NAIC evaluates the credit quality of the Company’s bond investments and issues related credit ratings. Bonds rated at “1” (highest quality), “2” (high quality), “3” (medium quality), “4” (low quality) or “5” (lower quality) are reported in the financial statements at amortized cost, less any valuation adjustment. Bonds rated “6” (lowest quality) are reported at the lower of amortized cost or fair value. The interest method is used to amortize any purchase premium or discount, including estimates of future prepayments that are obtained from independent sources. Prepayment assumptions are updated at least annually, with the retrospective method used to adjust net investment income for changes in the estimated yield to maturity.

The disclosure of fair value for bonds is primarily based on independent pricing services or internally-developed pricing models utilizing observable market data. See Note 14 for more information regarding the fair value of the Company’s investments in bonds.

Statement value and fair value of bonds at December 31, 2014 and 2013, summarized by asset categories required in the NAIC Annual Statement, were as follows:


December 31, 2014	Reconciliation to Fair Value
			Gross		Gross
	Statement		Unrealized		Unrealized		Fair
	Value		Gains		Losses		Value
		(in millions)
U.S. Government	$	4,493	$	785	$	(1)	$	5,277
States, territories and possessions		694		137		(1)		830
Special revenue and assessments		29,145		1,275		(109)		30,311
All foreign governments		522		65		(5)		582
Hybrid securities		323		33		(25)		331
Industrial and miscellaneous		92,949		5,809		(842)		97,916


Total bonds	$	128,126	$	8,104	$	(983)	$	135,247

NM-10

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


December 31, 2013	Reconciliation to Fair Value
			Gross		Gross
	Statement		Unrealized		Unrealized		Fair
	Value		Gains		Losses		Value
		(in millions)
U.S. Government	$	6,582	$	626	$	(46)	$	7,162
States, territories and possessions		694		51		(7)		738
Special revenue and assessments		27,179		595		(639)		27,135
All foreign governments		328		39		(4)		363
Hybrid securities		292		26		(28)		290
Industrial and miscellaneous		87,256		5,154		(1,070)		91,340


Total bonds	$	122,331	$	6,491	$	(1,794)	$	127,028

Bonds classified by the NAIC as “special revenue and assessments” consist primarily of government agency-issued residential mortgage-backed securities and municipal bonds issued by political subdivisions to finance specific public projects. Bonds classified as “industrial and miscellaneous” consist primarily of notes issued by corporate entities, private utilities and structured securities not issued by government agencies.

Statement value of bonds by SVO rating category at December 31, 2014 and 2013 was as follows:


December 31, 2014	SVO Rating

	1		2		3		4		5		6		Total

		(in millions)
U.S. Government	$	4,493	$	-	$	-	$	-	$	-	$	-	$	4,493
States, territories and possessions		694		-		-		-		-		-		694
Special revenue and assessments		29,104		23		-		-		18		-		29,145
All foreign governments		250		259		13		-		-		-		522
Hybrid securities		138		143		42		-		-		-		323
Industrial and miscellaneous		40,763		38,988		6,507		4,924		1,754		13		92,949


Total bonds	$	75,442	$	39,413	$	6,562	$	4,924	$	1,772	$	13	$	128,126


December 31, 2013	SVO Rating

	1		2		3		4		5		6		Total

		(in millions)
U.S. Government	$	6,582	$	-	$	-	$	-	$	-	$	-	$	6,582
States, territories and possessions		694		-		-		-		-		-		694
Special revenue and assessments		27,115		46		-		-		18		-		27,179
All foreign governments		289		39		-		-		-		-		328
Hybrid securities		121		156		7		8		-		-		292
Industrial and miscellaneous		39,176		36,595		5,799		3,971		1,648		67		87,256


Total bonds	$	73,977	$	36,836	$	5,806	$	3,979	$	1,666	$	67	$	122,331

NM-11

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Based on statement value, 90% and 91% of the Company’s bond portfolio was rated either 1 or 2 (i.e., rated as “investment grade”) by the SVO at December 31, 2014 and 2013, respectively.

The Company’s investments in “structured securities” include a significant concentration in residential mortgage-backed securities issued by government agencies. Statement value and fair value of structured securities at December 31, 2014 and 2013, aggregated by investment grade or “below investment grade” (i.e., rated 3, 4, 5 or 6 by the SVO), were as follows:


December 31, 2014	Investment Grade				Below Investment Grade				Total


	Statement Value		Fair Value		Statement Value		Fair Value		Statement Value		Fair Value

		(in millions)
Residential mortgage-backed:
Government agencies	$	26,894	$	27,616	$	-	$	-	$	26,894	$	27,616
Other prime		503		509		1		1		504		510
Other below-prime		39		42		16		19		55		61
Commercial mortgage-backed:
Government agencies		277		297		-		-		277		297
Conduit		1,964		2,011		39		33		2,003		2,044
Re-REMIC		377		394		3		6		380		400
Other commercial mortgage-backed		60		65		4		5		64		70
Other asset-backed		5,105		5,311		49		54		5,154		5,365

Total structured securities	$	35,219	$	36,245	$	112	$	118	$	35,331	$	36,363


December 31, 2013	Investment Grade				Below Investment Grade				Total


	Statement Value		Fair Value		Statement Value		Fair Value		Statement Value		Fair Value

		(in millions)
Residential mortgage-backed:
Government agencies	$	25,526	$	25,405	$	-	$	-	$	25,526	$	25,405
Other prime		385		386		2		2		387		388
Other below-prime		79		81		22		25		101		106
Commercial mortgage-backed:
Government agencies		534		549		-		-		534		549
Conduit		2,000		2,035		129		120		2,129		2,155
Re-REMIC		500		529		5		8		505		537
Other commercial mortgage-backed		68		75		19		19		87		94
Other asset-backed		4,989		5,186		116		122		5,105		5,308

Total structured securities	$	34,081	$	34,246	$	293	$	296	$	34,374	$	34,542

Based on statement value, 99% of the Company’s structured securities portfolio was rated as investment grade at each of December 31, 2014 and 2013.

NM-12

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The Company’s bond portfolio includes securities that are classified as structured notes, as defined by the Purposes and Procedures Manual of the SVO. At December 31, 2014, the Company’s structured note investments included a treasury inflation protected (“TIP”) security and nine securities with step-up coupon provisions. At December 31, 2014, the TIP security had a statement value and fair value of $89 million and $127 million, respectively, while the securities with step-up provisions had aggregate statement values and fair values of $30 million and $23 million, respectively. None of these securities have provisions linked to real estate prices, indices or asset values.

Statement value and fair value of bonds by contractual maturity at December 31, 2014 are summarized below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment fees.


	Statement		Fair
	Value		Value
	(in millions)

Due in one year or less	$	3,353	$	3,407
Due after one year through five years		29,922		31,681
Due after five years through ten years		37,631		38,642
Due after ten years		21,889		25,154


Subtotal		92,795		98,884

Structured securities		35,331		36,363


Total bonds	$	128,126	$	135,247

Mortgage Loans

Mortgage loans consist solely of commercial mortgage loans underwritten and originated by the Company and are reported at unpaid principal balance, less any valuation adjustments or unamortized commitment or origination fees. Such fees are generally deferred upon receipt and amortized into net investment income over the life of the loan using the interest method.

The statement value of mortgage loans by collateral property type and geographic location at December 31, 2014 and 2013 was as follows:


December 31, 2014	United States of America

	East		Midwest		South		West		Canada		Total

		(in millions)
Apartment	$	2,708	$	452	$	1,918	$	3,438	$	-	$	8,516
Office		2,950		792		1,575		3,559		-		8,876
Retail		3,008		780		2,337		2,253		-		8,378
Warehouse/Industrial		473		190		437		1,047		255		2,402
Other		317		145		450		257		-		1,169

Total	$	9,456	$	2,359	$	6,717	$	10,554	$	255	$	29,341

NM-13

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


December 31, 2013	United States of America

	East		Midwest		South		West		Canada		Total

	(in millions)
Apartment	$	2,268	$	357	$	1,754	$	3,198	$	-	$	7,577
Office		2,513		599		1,673		3,549		-		8,334
Retail		2,961		815		2,265		1,989		-		8,030
Warehouse/Industrial		438		213		374		1,047		-		2,072
Other		145		139		299		249		-		832

Total	$	8,325	$	2,123	$	6,365	$	10,032	$	-	$	26,845

The statement value of mortgage loans by contractual maturity at December 31, 2014 is summarized below. Actual maturities may differ from contractual maturities because certain borrowers have the right to prepay obligations with or without prepayment fees.


	Statement Value
	(in millions)
Due in one year or less	$	1,217
Due after one year through two years		2,289
Due after two years through five years		5,684
Due after five years through eight years		8,104
Due after eight years		12,047


Total	$	29,341

All mortgage loans were current on contractual interest and principal payments at each of December 31, 2014 and 2013. The maximum and minimum interest rates for mortgage loans originated during 2014 were 6.10% and 2.58%, respectively, while these rates during 2013 were 6.50% and 3.00%, respectively. The aggregate weighted-average ratio of amounts loaned to the fair value of collateral (“loan-to-value ratio”) for mortgage loans originated or refinanced during 2014 and 2013 was 61% and 59%, respectively, with a maximum of 100% for any single loan during each of 2014 and 2013. Loans with a 100% loan-to-value (“LTV”) ratio at origination are made on a very limited basis and generally represent construction loans on build-to-suit properties. These loans are expected to be refinanced with conventional mortgage loans having a LTV ratio between 50% and 70% upon completion of construction. At December 31, 2014 and 2013, the aggregate weighted-average LTV ratio for the mortgage loan portfolio was 54% and 55%, respectively.

NM-14

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

LTV ratios are commonly used to assess the credit quality of commercial mortgage loans. A smaller LTV ratio generally indicates a higher quality loan. The statement value of mortgage loans by collateral property type and LTV ratio at December 31, 2014 and 2013 was as follows:


December 31, 2014	< 51%		51%-70%		71%-90%		> 90%		Total

	(in millions)
Apartment	$	3,398	$	4,944	$	110	$	64	$	8,516
Office		2,854		5,524		280		218		8,876
Retail		3,933		4,050		343		52		8,378
Warehouse/Industrial		561		1,557		190		94		2,402
Other		218		847		32		72		1,169

Total	$	10,964	$	16,922	$	955	$	500	$	29,341


December 31, 2013	< 51%		51%-70%		71%-90%		> 90%		Total

	(in millions)
Apartment	$	2,204	$	4,826	$	376	$	171	$	7,577
Office		2,295		5,428		546		65		8,334
Retail		3,121		4,465		392		52		8,030
Warehouse/Industrial		407		1,330		251		84		2,072
Other		132		600		61		39		832

Total	$	8,159	$	16,649	$	1,626	$	411	$	26,845

The aggregate statement value of mortgage loans with LTV ratios in excess of 100% was $56 million and $95 million at December 31, 2014 and 2013, respectively.

The estimated fair value of the collateral securing each commercial mortgage loan is updated at least annually by the Company. More frequent updates are performed if deemed necessary by changes in market capitalization rates, borrower financial strength and/or property operating performance. Fair value of the collateral is estimated using the income capitalization approach based on stabilized property income and market capitalization rates. Stabilized property income is derived from actual property financial statements adjusted for non-recurring items, normalized market vacancy and lease rollover, among other factors. Other collateral, such as excess land and additional capital required to maintain property income, is also factored into fair value estimates. Both private market transactions and public market alternatives are considered in determining appropriate market capitalization rates. See Note 14 for more information regarding the fair value of the Company’s investments in mortgage loans.

In the normal course of business, the Company may refinance or otherwise modify the terms of an existing mortgage loan, typically in reaction to a proposal by the borrower. These modifications can include a partial repayment of outstanding loan principal, changes to interest rates, extensions of loan maturity and/or changes to loan covenants. When such modifications are made, statutory accounting guidance requires that the new terms of the loan be evaluated to determine whether the modification qualifies as a “troubled debt restructuring.” If new terms are extended to a borrower that are less favorable to the Company than those currently being offered to new borrowers under similar circumstances in an arms-length transaction, a realized capital loss is reported for the estimated amount of the economic concessions made and the reported value of the mortgage loan is reduced. The Company reported $0, $0 and $9 million of realized capital losses related to troubled debt restructuring of mortgage loans for the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014 and 2013, the Company had $30 million and $66 million, respectively, of principal outstanding on mortgage loans that were considered “restructured.”

NM-15

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

In circumstances where the Company has deemed it probable that it will be unable to collect all contractual principal and interest on a mortgage loan, a valuation allowance is established to reduce the statement value of the mortgage loan to its net realizable value. Changes to mortgage loan valuation allowances are reported as a change in unrealized capital gains and losses in the consolidated statements of changes in surplus. If the Company later determines that the decline in value is other than temporary, a realized capital loss is reported, and any temporary valuation allowance is reversed. The Company had no mortgage loan valuation allowance at December 31, 2014. The Company reported a $3 million mortgage loan valuation allowance at December 31, 2013 on two mortgages with an aggregate statement value of $23 million.

Common and Preferred Stocks

Common stocks are generally reported at fair value, with $3.5 billion and $2.4 billion included in the consolidated statements of financial position at December 31, 2014 and 2013, respectively. The fair value for publicly-traded common stocks is primarily based on quoted market prices. For private common stocks without quoted market prices, fair value is based upon internally-developed pricing models and external pricing sources. The equity method is generally used to report investments in common stock of unconsolidated non-insurance subsidiaries. Common and preferred stocks as reported in the consolidated statements of financial position do not include $3 million of equity in unconsolidated subsidiaries that was nonadmitted at December 31, 2014 and 2013. See Note 14 for more information regarding the fair value of the Company’s investments in common stock.

Preferred stocks rated 1, 2 or 3 by the SVO are reported at amortized cost. Preferred stocks rated 4, 5 or 6 by the SVO are reported at the lower of amortized cost or fair value. At December 31, 2014 and 2013, the consolidated statements of financial position included $175 million and $553 million, respectively, of preferred stocks. The fair value for preferred stocks is primarily based on internally-developed pricing models. See Note 11 regarding the Company’s investments in Russell preferred stock and Note 14 for more information regarding the fair value of the Company’s investments in preferred stock.

Real Estate

Real estate investments are reported at cost, less any valuation adjustments, encumbrances and accumulated depreciation of buildings and other improvements. Depreciation of real estate investments is recorded using a straight-line method over the estimated useful lives of the improvements. Fair value of real estate is estimated primarily based on the capitalization of stabilized net operating income.

The statement value of real estate investments by property type and U.S. geographic location at December 31, 2014 and 2013 was as follows:


December 31, 2014	East		Midwest		South		West		Total

	(in millions)
Apartment	$	300	$	27	$	92	$	253	$	672
Office		65		441		108		39		653
Warehouse/Industrial		40		30		-		171		241
Other		12		-		-		32		44

Total	$	417	$	498	$	200	$	495	$	1,610

NM-16

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


December 31, 2013	East		Midwest		South		West		Total

	(in millions)

Apartment	$	267	$	27	$	57	$	257	$	608
Office		66		407		101		42		616
Warehouse/Industrial		41		18		-		167		226
Other		51		-		5		-		56

Total	$	425	$	452	$	163	$	466	$	1,506

The Company’s home office properties are included above (Office/Midwest) and had an aggregate statement value of $331 million and $296 million at December 31, 2014 and 2013, respectively. These amounts include $32 million and $12 million at December 31, 2014 and 2013, respectively, related to a new office tower in Milwaukee, Wisconsin, that is scheduled for completion and occupancy in 2017 with an estimated total design and construction cost of approximately $450 million. The Company’s other investments in real estate are held for the production of income.

Other Investments

Other investments primarily represent investments that are made through ownership interests in partnerships, joint ventures (“JVs”) and limited liability companies (“LLCs”). In some cases, these ownership interests are held directly by the Company, while in other cases these investments are held indirectly through a wholly-owned non-insurance investment holding company organized as a limited liability company. The statement value of other investments held directly or indirectly by the Company at December 31, 2014 and 2013 was as follows:


	December 31,
	2014		2013

	(in millions)

Securities partnerships and LLCs	$	4,281	$	4,255
Bonds		3,421		2,099
Real estate JVs, partnerships and LLCs		1,661		1,814
Common and preferred stocks		869		1,208
Real estate		769		826
Cash and short-term investments		559		129
Low income housing tax credit properties		474		443
Derivative instruments		330		186
Leveraged leases		230		234
Other assets, net		233		990

Total	$	12,827	$	12,184

The aggregate statement value of other investments held indirectly through non-insurance investment holding companies was $7.4 billion and $6.2 billion at December 31, 2014 and 2013, respectively. Whether held directly by the Company or indirectly through its investment holding companies, securities or real estate partnerships, JVs, and LLCs are reported in the consolidated statements of financial position using the equity method of accounting based on the Company’s share of the underlying entities’ audited GAAP-basis equity. Other investments as reported in the consolidated statements of financial position do not include $83 million and $187 million of nonadmitted assets consisting primarily of equity in unconsolidated subsidiaries at December 31, 2014 and 2013, respectively. For securities partnerships and LLCs, bonds, common and preferred

NM-17

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

stocks, cash and short-term investments and derivative instruments, the underlying entity generally reports these investments at fair value. For real estate-related investments (including JVs, partnerships and LLCs), tax credit properties and leveraged leases, the underlying entity generally reports these investments at cost, reduced where appropriate by depreciation or amortization. Tax credit properties had 14 years and 13 years of unexpired credits at December 31, 2014 and 2013, respectively. The required holding period for tax credit properties is 15 years.

At December 31, 2014 and 2013, oil and gas investments were recorded using the equity method of accounting. However, the statement value of these investments was nonadmitted from assets and surplus in the consolidated statements of financial position as audits were not performed for these investments. During 2013, the Company discontinued the use of a permitted practice related to the valuation of oil and gas investments and reported a $38 million decrease in the statement value of these investments in the consolidated statements of changes in surplus for the year ended December 31, 2013 as a change in accounting principle.

See Note 4 for more information regarding the Company’s use of derivatives.

Net Investment Income

The sources of net investment income for the years ended December 31, 2014, 2013 and 2012 were as follows:


	For the years ended December 31,
	2014		2013		2012
	(in millions)

Bonds	$	5,641	$	5,500	$	5,398
Mortgage loans		1,471		1,412		1,453
Policy loans		1,121		1,089		1,056
Common and preferred stocks		128		178		226
Real estate		196		176		195
Derivative instruments		32		30		29
Other investments		815		617		653
Amortization of IMR		275		262		189

Gross investment income		9,679		9,264		9,199
Less: investment expenses		575		571		574

Net investment income	$	9,104	$	8,693	$	8,625

Accrued investment income more than ninety days past due is a nonadmitted asset. Changes in the nonadmitted amount are reported as a direct adjustment to surplus in the consolidated statements of changes in surplus. Accrued investment income that is ultimately deemed uncollectible is included as a reduction of net investment income in the period that such determination is made.

NM-18

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Realized Capital Gains and Losses

Realized capital gains and losses for the years ended December 31, 2014, 2013 and 2012 were as follows:


	For the year ended								For the year ended								For the year ended
	December 31, 2014								December 31, 2013								December 31, 2012

						Net								Net								Net
						Realized								Realized								Realized
	Realized		Realized			Gains			Realized		Realized			Gains			Realized		Realized			Gains
	Gains		Losses			(Losses)			Gains		Losses			(Losses)			Gains		Losses			(Losses)

	(in millions)								(in millions)								(in millions)

Bonds	$	735	$	(326	)	$	409		$	772	$	(463	)	$	309		$	786	$	(397	)	$	389
Common and preferred stocks		391		(98	)		293			583		(64	)		519			756		(361	)		395
Mortgage loans		9		(3	)		6			-		-			-			-		(9	)		(9	)
Real estate		23		(1	)		22			35		-			35			375		(69	)		306
Other investments		220		(492	)		(272	)		178		(230	)		(52	)		237		(315	)		(78	)


Subtotal	$	1,378	$	(920	)		458		$	1,568	$	(757	)		811		$	2,154	$	(1,151	)		1,003


Less: IMR net gains (before taxes)							192								356								463
Less: Capital gains tax							123								179								332


Net realized capital gains (losses)						$	143							$	276							$	208

Realized capital gains and losses are generally the result of normal investment trading activity. Realized capital gains from real estate investments for the year ended December 31, 2012 included a $297 million pretax gain from the sale of a single commercial office property in Seattle, Washington. Proceeds from the sale of bonds totaled $24 billion at each of the years ended December 31, 2014, 2013 and 2012.

On a quarterly basis, the Company performs a review of bonds, mortgage loans, common and preferred stocks, real estate and other investments to identify those that have experienced a decline in fair value that is “other than temporary.” Factors considered include the duration and extent to which fair value was less than cost, the financial condition and near-term financial prospects of the issuer and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for an anticipated recovery in value. If the decline in an investment’s fair value is considered to be other than temporary, the statement value of the investment is generally written down to fair value and a realized capital loss is reported.

For fixed income investments, the review focuses on the issuer’s ability to remit all contractual interest and principal payments and the Company’s ability and intent to hold the investment until the earlier of a recovery in value or maturity. The Company’s intent and ability to hold an investment takes into consideration broad portfolio management parameters such as expected net cash flows and liquidity targets, asset/liability duration management and issuer and industry segment credit exposures. Mortgage loans considered to have experienced an other-than-temporary decline in value are written down to net realizable value based on the appraised value of the collateral property.

NM-19

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

For equity securities, greater weight and consideration is given to the duration and extent of the decline in fair value and the likelihood that the fair value of the security will recover in the foreseeable future. A real estate equity investment is evaluated for an other-than-temporary valuation adjustment when the fair value of the property is lower than its depreciated cost.

For real estate and other investments that represent ownership interests in partnerships, JVs and LLCs, the review focuses on the likelihood that the Company will ultimately recover its initial investment, adjusted for its share of subsequent net earnings and/or distributions. The Company’s review of securities partnerships will generally defer to GAAP-basis impairment reviews performed by the general partner absent compelling evidence of a permanent impairment of the Company’s partnership interest.

Realized capital losses related to declines in fair value of investments that were considered to be other than temporary for the years ended December 31, 2014, 2013 and 2012 were as follows:


	For the years ended December 31,
	2014			2013			2012

	(in millions)
Bonds, common and preferred stocks:
Structured securities	$	(1	)	$	(14	)	$	(36	)
Financial services		(4	)		(3	)		(42	)
Consumer discretionary		(51	)		(9	)		(26	)
Industrials		(1	)		(14	)		(35	)
Energy		-			-			(30	)
Other		(3	)		(11	)		(30	)

Subtotal		(60	)		(51	)		(199	)
Other investments:
Real estate and RE funds		(40	)		(9	)		(59	)
Mortgage loans		-			-			(9	)
Securities partnerships		-			(6	)		-

Subtotal		(40	)		(15	)		(68	)

Total	$	(100	)	$	(66	)	$	(267	)

In addition to the realized capital losses above, $41 million, $45 million and $42 million of other-than-temporary valuation adjustments were recorded by the Company’s unconsolidated non-insurance subsidiaries for the years ended December 31, 2014, 2013 and 2012, respectively. The decline in the Company’s equity in these subsidiaries resulting from these valuation adjustments is reported in changes in net unrealized capital gains and losses in the consolidated statements of changes in surplus.

Other-than-temporary valuation adjustments on structured securities for the years ended December 31, 2014, 2013 and 2012, including the circumstances of the adjustment, were as follows:


	For the years ended December 31,
	2014			2013			2012

	(in millions)
Intent to sell	$	-		$	-		$	-
Present value of cash flows expected to be collected is less than amortized cost basis		(1	)		(14	)		(36	)

Total	$	(1	)	$	(14	)	$	(36	)

NM-20

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

At December 31, 2014, the Company continued to hold structured securities with aggregate statement values and fair values of $32 million and $52 million, respectively, for which other-than-temporary valuation adjustments totaling $141 million had been recognized since the adoption of Statement of Statutory Accounting Principle No. 43R, Loan-backed and Structured Securities (“SSAP 43R”) during 2009. These valuation adjustments were necessary because the present value of expected cash flows was less than the amortized cost of the security.

Unrealized Capital Gains and Losses

Changes in net unrealized capital gains and losses for the years ended December 31, 2014, 2013 and 2012 were as follows:


	For the years ended December 31,
	2014			2013			2012

	(in millions)
Bonds	$	(194	)	$	61		$	165
Common and preferred stocks		(84	)		52			10
Other investments		1,494			331			279


Subtotal		1,216			444			454

Change in deferred taxes		30			(98	)		(75	)

Change in net unrealized capital gains and losses	$	1,246		$	346		$	379

Unrealized capital gains and losses include changes in the fair value of common stocks and other investments and currency translation adjustments on foreign-denominated bonds. Other changes in the Company’s equity-method share of the undistributed earnings of partnerships, JVs, LLCs and unconsolidated non-insurance subsidiaries are also reported as changes in unrealized capital gains and losses. Unrealized capital gains and losses reported from other investments for the year ended December 31, 2014 included an after tax gain of $1.1 billion from the sale of its investment in Frank Russell Company (“Russell”) as the Company’s common stock investment in Russell was held by a subsidiary at the time of the sale. See Note 11 for more information regarding the sale of Russell. Change in net unrealized capital gains (losses) for the years ended December 31, 2014, 2013 and 2012 included net losses of $(312) million, $(292) million and $(323) million, respectively, related to distributions of accumulated net earnings made to the Company from unconsolidated non-insurance subsidiaries. The Company’s share of the earnings or losses of these subsidiaries is reported as a change in unrealized capital gains and losses when earned under the equity method of accounting. If net earnings are distributed to the Company in the form of dividends, net investment income is recognized in the amount of the distribution and the previously unrealized net capital gains are reversed.

The amortized cost and fair value of bonds and common and preferred stocks for which fair value declined and remained below cost at December 31, 2014 and 2013 were as follows:


	December 31, 2014
	Decline For Less Than 12 Months							Decline For Greater Than 12 Months


	Amortized Cost		Fair Value		Difference			Amortized Cost		Fair Value		Difference

	(in millions)
Bonds	$	17,254	$	16,523	$	(731	)	$	11,387	$	10,984	$	(403	)
Common and preferred stocks		845		748		(97	)		27		19		(8	)

Total	$	18,099	$	17,271	$	(828	)	$	11,414	$	11,003	$	(411	)

NM-21

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


	December 31, 2013
	Decline For Less Than 12 Months							Decline For Greater Than 12 Months


	Amortized Cost		Fair Value		Difference			Amortized Cost		Fair Value		Difference

	(in millions)
Bonds	$	38,433	$	36,949	$	(1,484	)	$	3,305	$	2,946	$	(359	)
Common and preferred stocks		170		152		(18	)		23		19		(4	)

Total	$	38,603	$	37,101	$	(1,502	)	$	3,328	$	2,965	$	(363	)

Based on the results of the impairment review process described above, the Company considers these declines in fair value to be temporary based on current facts and circumstances at December 31, 2014.

At December 31, 2014 and 2013, unrealized capital losses on structured securities in a loss position for greater than 12 months was $149 million and $213 million, respectively, while unrealized capital losses on structured securities in a loss position for less than 12 months was $7 million and $531 million, respectively.

Securities Lending

The Company participates in securities lending programs whereby general account investment securities are loaned to third parties, primarily major brokerage firms. These lending programs are intended to enhance the yield of the Company’s investment portfolio.

At December 31, 2014 and 2013, the aggregate statement value of general account loaned securities was $845 million and $704 million, respectively, while the aggregate fair value of these loaned securities was $932 million and $705 million, respectively. All of the securities on loan at December 31, 2014 and 2013 were bonds and were loaned with open terms. The offsetting liability of $954 million and $725 million, reflecting the obligation to return the collateral, is reported in other liabilities in the consolidated statements of financial position at December 31, 2014 and 2013, respectively. There were no securities on loan within the separate accounts at either December 31, 2014 or 2013.

The Company manages counterparty and other risks associated with its securities lending program by adhering to guidelines that require counterparties to provide the Company with cash or other high-quality collateral of no less than 102% of the market value of the securities on loan plus accrued interest and by setting conservative standards for the Company’s reinvestment of cash collateral received. At December 31, 2014 and 2013, reinvested securities lending collateral held by the Company was $962 million and $733 million, respectively, which is reported at amortized cost.

NM-22

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The amortized cost, fair value and remaining term to maturity of reinvested securities lending collateral held by the Company at December 31, 2014 and 2013 were as follows:


	December 31,
	2014				2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value

	(in millions)

30 days or less	$	401	$	401	$	213	$	213
31-60 days		132		132		67		67
61-90 days		77		77		2		2
91-120 days		20		20		77		77
121-180 days		164		164		49		49
181-365 days		90		90		18		18
1-2 years		78		78		185		185
2-3 years		-		-		52		52
Greater than 3 years		-		-		70		70

Total	$	962	$	962	$	733	$	733

At December 31, 2014, the consolidated statements of financial position included $430 million in bonds and $532 million in cash and short-term investments related to the collateral assets summarized above. At December 31, 2013, the consolidated statements of financial position included $457 million in bonds and $276 million in cash and short-term investments related to these collateral assets.

Restricted Assets

Certain of the Company’s investments are either pledged as collateral or are otherwise held beyond the exclusive control of the Company (“restricted assets”). These restrictions are generally the result of collateral support agreements with counterparties in connection with securities lending and derivative transactions.

At December 31, 2014 and 2013, collateral held by counterparties was primarily in the form of cash, short-term investments and bonds, including U.S. Government securities. See Note 4 for more information regarding the Company’s derivative portfolio.

The statement value of restricted assets at December 31, 2014 and 2013, summarized by type of restriction, was as follows:


	December 31,
	2014		2013


Securities lending	$	845	$	704
Derivative transactions		68		8
Reverse repurchase agreement		25		-
Securities on deposit with states		7		7

Total restricted assets	$	945	$	719

NM-23

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

4.	Derivative Financial Instruments

The Company enters into derivative transactions, generally to mitigate (or “hedge”) the risk to its assets, liabilities and surplus from fluctuations in interest rates, foreign currency exchange rates, credit conditions and other market risks. Derivatives may be exchange traded, cleared, or contracted in the over-the-counter market. A majority of the Company’s over-the-counter derivatives are bilateral contracts between two counterparties. The Company’s remaining over-the-counter derivatives are cleared and settled through central clearing facilities.

Derivatives that are designated as hedges for accounting purposes and meet the qualifications for statutory hedge accounting are reported on a basis consistent with the asset or liability being hedged (i.e., at amortized cost or fair value). Derivatives that are used to mitigate risk but are not designated as hedges for accounting purposes or otherwise do not meet the qualifications for statutory hedge accounting are reported at fair value.

To qualify for hedge accounting, the hedge relationship must be designated and formally documented at inception. This documentation details the risk management objective and strategy for the hedge, the derivative used in the hedge and the methodology for assessing hedge effectiveness. The hedge must also be “highly effective,” with an assessment of its effectiveness performed both at inception and on an ongoing basis over the life of the hedge.

In addition to hedging, the Company may use derivatives for the purpose of investment replication. A replication is a derivative transaction that, when entered into in conjunction with other cash market investments, replicates the risk and reward characteristics of otherwise permissible investment positions. Derivatives used as part of a replication are reported on a basis consistent with the investment position being replicated (i.e., at amortized cost or fair value).

The Company may also use derivatives for income generation purposes. These instruments are reported on a basis consistent with the accounting treatment that would be used for the covering asset or underlying interest to which the derivative relates (i.e., at amortized cost or fair value). The premium received by the Company at the inception of the contract is deferred until the contract matures or is exercised by the counterparty or amortized over the life of the contract if the term of the derivative is greater than one year.

The fair value of derivative instruments is based on quoted market prices when available. In the absence of quoted market prices, fair value is estimated using industry-standard models utilizing market observable inputs.

Derivative transactions expose the Company to the risk that a counterparty may not be able to fulfill its obligations under the contract. The Company manages this risk by dealing only with counterparties that maintain a minimum credit rating, by performing ongoing review of counterparties’ credit standing and by adhering to established limits for credit exposure to any single counterparty. The Company also utilizes collateral support arrangements that require the daily exchange of collateral assets if counterparty credit exposure exceeds certain limits. The Company does not offset the statement values for derivatives executed with the same counterparty, even if a master netting arrangement is in place. The Company also does not offset the right to claim collateral against the obligation to return such collateral.

The Company held $368 million and $160 million of collateral under its derivative collateral support arrangements at December 31, 2014 and 2013, respectively, including $26 million and $8 million, respectively, of derivative collateral related to the separate accounts. The collateral held in the general account is reported as cash and short-term investments in the consolidated statements of financial position, while the Company’s obligation to return the collateral is reported as other

NM-24

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

liabilities. The collateral asset and related liability for collateral held by the separate accounts is reported in the separate account assets and liabilities, respectively in the consolidated statements of financial position.

The Company’s derivative counterparties held $68 million and $8 million of bond collateral and $6 million and $11 million of cash collateral under these arrangements at December 31, 2014 and 2013, respectively. Bonds posted as collateral are reported as bonds and cash posted as collateral is reported as other investments in the consolidated statements of financial position.

The Company has no embedded credit derivatives that expose it to the possibility of being required to make future payments.

Hedging - Designated as Hedging Instruments

The Company designates and accounts for the following derivative types as cash flow hedges, with the related derivative instrument reported at amortized cost in the consolidated statements of financial position. No component of these derivatives’ economic gain or loss was excluded from the assessment of hedge effectiveness. For the years ended December 31, 2014, 2013 and 2012, there were no gains or losses recorded with respect to derivatives that ceased to qualify for cash flow hedge accounting or for which the Company removed the cash flow hedge accounting designation.

Interest rate floors are used to mitigate the asset/liability management risk of a significant and sustained decrease in interest rates for certain of the Company’s insurance products. Interest rate floors entitle the Company to receive payments from a counterparty if market interest rates decline below a specified level. Amounts received on these contracts are reported as net investment income.

Interest rate swaps are used to mitigate interest rate risk for investments in variable interest rate and fixed interest rate bonds over a period of up to ten years. Interest rate swaps obligate the Company and a counterparty to exchange amounts based on the difference between a variable interest rate index and a specified fixed rate of interest applied to the notional amount of the contract. Amounts received or paid on these contracts are reported as net investment income.

Foreign currency swaps are used to mitigate the foreign exchange risk for investments in bonds and mortgage loans denominated in foreign currencies over a period of up to thirty years. Foreign currency swaps obligate the Company and a counterparty to exchange the foreign currency-denominated interest and principal payments receivable on foreign bonds and mortgage loans for U.S. dollar-denominated payments based on currency exchange rates specified at trade inception. Foreign exchange gains or losses on these contracts are reported as a change in unrealized capital gains or losses until the maturity or termination of the contract, at which time a realized capital gain or loss is recognized.

Hedging - Not Designated as Hedging Instruments

The Company enters into other derivative transactions that mitigate economic risks but are not designated as a hedge for accounting purposes or otherwise do not qualify for statutory hedge accounting. These instruments are reported in the consolidated statements of financial position at fair value. Changes in the fair value of these instruments are reported as a change in unrealized capital gains or losses until the maturity or termination of the contract, at which time a realized capital gain or loss is recognized.

NM-25

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Swaptions are used to mitigate the asset/liability management risk of a significant and sustained increase in interest rates for certain of the Company’s insurance products. Swaptions provide the Company an option to enter into an interest rate swap with a counterparty on specified terms.

Fixed income futures are used to mitigate interest rate risk for investments in portfolios of fixed income securities. Fixed income futures obligate the Company to sell to or buy from a counterparty a specified bond at a specified price at a future date.

Foreign currency forwards are used to mitigate the foreign exchange risk for investments in bonds denominated in foreign currencies or common stock or other equity investments in companies operating in foreign countries. Foreign currency forwards obligate the Company to pay to or receive from a counterparty a specified amount of a foreign currency at a future date.

Equity total return swaps are used to mitigate market risk for investments in portfolios of common stocks and other equity securities. Equity total return swaps obligate the Company and a counterparty to exchange amounts based on the difference between a variable equity index return and a specified fixed rate of return applied to the notional amount of the contract.

Equity index futures are used to mitigate market risk for investments in portfolios of common stock. Equity index futures obligate the Company to pay to or receive from a counterparty an amount based on a specified equity market index as of a future date applied to the notional amount of the contract.

Purchased credit default swaps are used to mitigate the credit risk for investments in bonds issued by specific bond issuers. Credit default swaps provide the Company an option to put a specific bond to a counterparty at par in the event of a “credit event” encountered by the bond issuer. A credit event is generally defined as a bankruptcy, failure to make required payments or acceleration of issuer obligations under the terms of the bond.

Investment Replications

Interest rate swap replications are used to replicate a bond investment through the use of cash market instruments combined with interest rate swaps. Interest rate swap replications, including the derivative components, are reported at amortized cost. The Company did not have any open contracts during 2014 or 2013.

Equity total return swap replications are used in conjunction with the purchase of cash market instruments to replicate investment in portfolios of common stocks and other equity securities. Equity total return swaps obligate the Company and a counterparty to exchange amounts based on the difference between a variable equity index return and a specified fixed rate of return applied to the notional amount of the contract. Equity total return swaps are reported at fair value, with changes in fair value reported as a change in unrealized capital gains or losses until the maturity or termination of the contract, at which time a realized capital gain or loss is recognized. The average fair value of open contracts was $2 million and $4 million during 2014 and 2013, respectively.

NM-26

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The effects of the Company’s use of derivative instruments on the consolidated statements of financial position at December 31, 2014 and 2013 were as follows:


	December 31, 2014
	Notional		Statement Value					Fair Value
	Amount		Assets		Liabilities			Assets		Liabilities
	(in millions)
Derivatives designated as hedging instruments:
Interest rate contracts:
Interest rate floors	$	950	$	7	$	-		$	78	$	-
Interest rate swaps		52		-		-			7		-
Foreign exchange contracts:
Foreign currency swaps		2,231		164		(15	)		144		(11	)

Derivatives not designated as hedging instruments:
Interest rate contracts:
Interest rate floors		200		16		-			16		-
Interest rate swaps		291		-		(5	)		-		(5	)
Swaptions		2,870		69		-			69		-
Fixed income futures		2,490		-		-			-		-
Foreign exchange contracts:
Foreign currency forwards		1,591		72		(4	)		72		(4	)
Equity contracts:
Equity total return swaps		455		2		(2	)		2		(2	)
Equity index futures		165		-		-			-		-
Credit contracts:
Purchased credit default swaps		103		-		(1	)		-		(1	)

Investment replications:
Interest rate contracts:
Interest rate swaps		-		-		-			-		-
Equity contracts:
Equity total return swaps		-		-		-			-		-

Total derivatives			$	330	$	(27	)	$	388	$	(23	)

NM-27

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


	December 31, 2013
	Notional		Statement Value					Fair Value
	Amount		Assets		Liabilities			Assets		Liabilities
	(in millions)
Derivatives designated as hedging instruments:
Interest rate contracts:
Interest rate floors	$	950	$	9	$	-		$	79	$	-
Interest rate swaps		92		-		-			10		(1	)
Foreign exchange contracts:
Foreign currency swaps		1,240		26		(76	)		23		(59	)

Derivatives not designated as hedging instruments:
Interest rate contracts:
Interest rate floors		-		-		-			-		-
Interest rate swaps		-		-		-			-		-
Swaptions		2,660		129		-			129		-
Fixed income futures		808		-		-			-		-
Foreign exchange contracts:
Foreign currency forwards		2,061		20		(42	)		20		(42	)
Equity contracts:
Equity total return swaps		104		-		(2	)		-		(2	)
Equity index futures		-		-		-			-		-
Credit contracts:
Purchased credit default swaps		113		-		(1	)		-		(1	)

Investment replications:
Interest rate contracts:
Interest rate swaps		-		-		-			-		-
Equity contracts:
Equity total return swaps		106		2		-			2		-

Total derivatives			$	186	$	(121	)	$	263	$	(105	)

The notional amounts shown above are used to denominate the derivative contracts and do not represent amounts exchanged between the Company and the derivative counterparties. Derivative instruments are reported as other investments or other liabilities in the consolidated statements of financial position.

NM-28

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The effects of the Company’s use of derivative instruments on the consolidated statements of operations and changes in surplus for the years ended December 31, 2014, 2013 and 2012 were as follows:


	For the year ended December 31, 2014

	Change in Net Unrealized Capital Gains (Losses)			Net Realized Capital Gains (Losses)			Net Investment Income
	(in millions)
Derivatives designated as hedging instruments:
Interest rate contracts:
Interest rate floors	$	-		$	-		$	27
Interest rate swaps		-			-			3
Foreign exchange contracts:
Foreign currency swaps		200			(13	)		12

Derivatives not designated as hedging instruments:
Interest rate contracts:
Interest rate floors		10			-			-
Interest rate swaps		(5	)		-			(1	)
Swaptions		(67	)		-			(8	)
Fixed income futures		(56	)		(220	)		-
Foreign exchange contracts:
Foreign currency forwards		90			13			-
Equity contracts:
Equity total return swaps		(2	)		(14	)		-
Equity index futures		(2	)		4			-
Credit contracts:
Purchased credit default swaps		-			-			(1	)

Investment replications:
Interest rate contracts:
Interest rate swaps		-			-			-
Equity contracts:
Equity total return swaps		1			13			-

Total derivatives	$	169		$	(217	)	$	32

NM-29

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


	For the year ended December 31, 2013

	Change in Net Unrealized Capital Gains (Losses)			Net Realized Capital Gains (Losses)			Net Investment Income
	(in millions)
Derivatives designated as hedging instruments:
Interest rate contracts:
Interest rate floors	$	-		$	-		$	28
Interest rate swaps		-			-			3
Foreign exchange contracts:
Foreign currency swaps		28			(9	)		8

Derivatives not designated as hedging instruments:
Interest rate contracts:
Interest rate floors		-			-			-
Interest rate swaps		-			-			-
Swaptions		46			-			(7	)
Fixed income futures		(5	)		21			-
Foreign exchange contracts:
Foreign currency forwards		(3	)		(1	)		-
Equity contracts:
Equity total return swaps		(1	)		(31	)		-
Equity index futures		-			(2	)		-
Credit contracts:
Purchased credit default swaps		1			-			(2	)

Investment replications:
Interest rate contracts:
Interest rate swaps		-			-			-
Equity contracts:
Equity total return swaps		(1	)		51			-

Total derivatives	$	65		$	29		$	30

NM-30

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


	For the year ended December 31, 2012


	Change in Net Unrealized Capital Gains (Losses)			Net Realized Capital Gains (Losses)			Net Investment Income

	(in millions)
Derivatives designated as hedging instruments:
Interest rate contracts:
Interest rate floors	$	-		$	-		$	30
Interest rate swaps		-			-			-
Foreign exchange contracts:
Foreign currency swaps		(22	)		-			4

Derivatives not designated as hedging instruments:
Interest rate contracts:
Interest rate floors		-			-			-
Interest rate swaps		-			-			-
Swaptions		(25	)		-			(7	)
Fixed income futures		45			(131	)		-
Foreign exchange contracts:
Foreign currency forwards		(50	)		24			-
Equity contracts:
Equity total return swaps		(1	)		(11	)		-
Equity index futures		-			(5	)		-
Credit contracts:
Purchased credit default swaps		(1	)		-			(2	)

Investment replications:
Interest rate contracts:
Interest rate swaps		-			7			4
Equity contracts:
Equity total return swaps		2			33			-

Total derivatives	$	(52	)	$	(83	)	$	29

NM-31

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

5.	Reserves for Policy Benefits

General account reserves for policy benefits at December 31, 2014 and 2013 were as follows:


	December 31,
	2014		2013
	(in millions)

Life insurance reserves	$	148,897	$	141,175
Annuity reserves		6,767		6,199
Disability and long-term care unpaid claims and claim reserves		4,667		4,544
Disability and long-term care active life reserves		4,506		4,047
Deposit funds		2,671		2,616

Total reserves for policy benefits	$	167,508	$	158,581

See Note 9 for more information regarding the Company’s use of reinsurance and the related impact on policy benefit reserves.

Life Insurance Reserves

Life insurance reserves on substantially all policies issued since 1978 are based on the Commissioner’s Reserve Valuation Method (“CRVM”) using the 1958, 1980 or 2001 CSO mortality tables with valuation interest rates ranging from 3.50% to 5.50%. Other life insurance reserves are primarily based on the net level premium method, using various mortality tables at interest rates ranging from 2.00% to 4.50%. As of December 31, 2014, the Company had $1.5 trillion of total life insurance in force, including $12.4 billion of life insurance in force for which gross premiums were less than net premiums according to the standard valuation methods and assumptions prescribed by the OCI. Gross premiums are calculated using mortality tables that reflect both the Company’s actual experience and the potential transfer of risk to reinsurers. Net premiums are determined in the calculation of statutory reserves, which must be based on industry-standard mortality tables.

Tabular cost has been determined from the basic data for the calculation of policy reserves. Tabular cost less actual reserves released has been determined from the basic data for the calculation of reserves and reserves released. Tabular interest has been determined from the basic data for the calculation of policy reserves. Tabular interest on funds not involving life contingencies is calculated as the product of the valuation interest rate times the mean of the amount of funds subject to such rate held at the beginning and end of the year of valuation.

Additional premiums are charged for substandard lives on policies issued after January 1, 1956. Net level premium or CRVM mean reserves for these policies are based on multiples of mortality tables or one-half the net flat or other extra mortality charge. The Company waives deduction of fractional premiums upon death of an insured and returns any portion of the final premium beyond the date of death. Cash values are not promised in excess of the legally computed reserves.

Each year, the Company must perform asset adequacy testing (“AAT”) to demonstrate that reserves make adequate provision for the anticipated cash flows required by contractual obligations and related expenses, in light of assets held for the reserves. Asset adequacy testing is performed

NM-32

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

in accordance with presently accepted actuarial standards and must include assumptions necessary to determine the adequacy of reserves under moderately adverse conditions. This testing resulted in increases in certain life insurance reserves of $0, $0 and $1 million for the years ended December 31, 2014, 2013 and 2012, respectively. These reserve increases were reported as net additions to policy benefit reserves in the consolidated statements of operations.

Annuity Reserves

Deferred annuity reserves on policies issued since 1985 are based primarily on the Commissioner’s Annuity Reserve Valuation Method (“CARVM”) using the Annuity 2000 or 2012 Individual Annuity Reserve mortality tables with valuation interest rates ranging from 3.50% to 6.25%. Other deferred annuity reserves are based on policy value, with additional reserves held to reflect guarantees under these contracts. Immediate annuity reserves on policies issued since 1985 are based on the present value of expected benefit payments using either the 1983 Individual Annuity “a”, Annuity 2000 or 2012 Individual Annuity Reserve mortality tables with valuation interest rates ranging from 3.50% to 7.50%. Changes in future policy benefit reserves on supplementary contracts without life contingencies are deposit-type transactions and excluded from net additions to policy benefit reserves in the consolidated statements of operations.

At December 31, 2014 and 2013, the withdrawal characteristics of the Company’s general account and separate account annuity reserves and deposit funds were as follows:


	December 31,
	General Account				Separate Accounts				Total
	2014		2013		2014		2013		2014		2013
	(in millions)

Subject to discretionary withdrawal
- with market value adjustment	$	497	$	689	$	-	$	-	$	497	$	689
- at book value less surrender charge of 5% or more		362		502		-		-		362		502
- at fair value		-		-		16,161		15,008		16,161		15,008
- at book value without adjustment		4,444		4,350		-		-		4,444		4,350

Not subject to discretionary withdrawal		4,135		3,274		4,549		4,174		8,684		7,448

Total annuity reserves and deposit funds	$	9,438	$	8,815	$	20,710	$	19,182	$	30,148	$	27,997

Asset adequacy testing resulted in increases in annuity reserves of $54 million, $0 and $13 million for the years ended December 31, 2014, 2013 and 2012, respectively. These reserve increases were reported as net additions to policy benefit reserves in the consolidated statements of operations.

Disability and Long-Term Care Reserves

Unpaid claims and claim reserves for disability policies are based on the present value of expected benefit payments, primarily using the 1985 Commissioner’s Individual Disability Table A (“CIDA”) modified for Company experience, with valuation interest rates ranging from 3.00% to 5.50%. Unpaid claims and claim reserves for long-term care policies are based on the present value of expected benefit payments using industry-based morbidity experience with valuation interest rates ranging from 3.50% to 4.50%.

NM-33

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Reserves for unpaid claims, losses and loss adjustment expenses on disability and long-term care policies were $4.7 billion and $4.5 billion at December 31, 2014 and 2013, respectively. Changes in these reserves for the years ended December 31, 2014 and 2013 were as follows:


	For the years ended December 31,
	2014			2013
	(in millions)

Balance at January 1	$	4,544		$	4,422

Incurred related to:
Current year		707			670
Prior years		3			20


Total incurred		710			690


Paid related to:
Current year		(23	)		(22	)
Prior years		(564	)		(546	)


Total paid		(587	)		(568	)


Balance at December 31	$	4,667		$	4,544

Changes in reserves for incurred claims related to prior years are generally the result of differences between assumed claim experience at the time reserves were originally estimated and subsequent actual claim experience.

Active life reserves for disability policies issued prior to 1987 are based on the net level premium method, using the 1964 Commissioner’s Disability Table for morbidity with valuation interest rates ranging from 3.00% to 4.00%. Active life reserves for disability policies issued since 1987 are primarily based on the two-year preliminary term method using the 1985 CIDA for morbidity. Policies issued between 1987 and 2012 are based on a valuation interest rate of 4.00% while those issued after 2012 are based on a valuation interest rate of 3.50%. Active life reserves are mean reserves for disability policies issued through 2000 and mid-terminal plus unearned premium reserves for policies issued after 2000.

Active life reserves for long-term care policies consist of mid-terminal reserves and unearned premiums. Mid-terminal reserves are based on the one-year preliminary term method and industry-based morbidity experience. For policies issued prior to March 2002, reserves are based on a 4.00% valuation interest rate and total terminations based on the 1983 Individual Annuity Mortality table without lapses. For policies issued since March 2002, minimum reserves are based on valuation interest rates ranging from 3.50% to 4.50% and total terminations based on the 1994 Group Annuity Mortality table with lapses. For policies issued from March 2002 through September 2010, a separate calculation is performed using valuation interest rates ranging from 4.87% to 5.60% and assuming no lapses. Reserves from the separate calculation are compared in the aggregate to the minimum reserves as calculated above and the greater of the two is reported.

For long-term care reserve valuations prior to 2012, the Company utilized the 1983 Individual Annuity Mortality table, the 1983 Group Annuity Mortality table, or the 1994 Group Annuity Mortality table for the calculation of minimum reserves for policies. At January 1, 2012, use of the 1983 Group Annuity Mortality table to calculate minimum reserves for policies issued from March 2002 through 2004 was replaced with a calculation using only the 1994 Group Annuity Mortality

NM-34

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

table and assumptions regarding interest rates and claim costs were adjusted to reflect more recent expectations. These changes in reserve valuation bases resulted in a $59 million increase in reserves that was reported as a direct decrease to surplus in the consolidated statements of changes in surplus for the year ended December 31, 2012.

Asset adequacy testing resulted in increases in long-term care reserves of $0, $100 million and $165 million for the years ended December 31, 2014, 2013 and 2012, respectively. These reserve increases were reported as net additions to policy benefit reserves in the consolidated statements of operations.

Deposit Funds

Deposit funds primarily represent reserves for supplementary annuity contracts without life contingencies and amounts left on deposit with the Company by beneficiaries or policyowners. Beneficiaries of the Company’s life insurance policies can choose to receive their death benefit in a single lump sum payment or through a payment plan consisting of a series of scheduled payments. Prior to November 1, 2013, beneficiaries also could choose to receive their death benefit by deposit of the proceeds (if $20,000 or more) into an interest-bearing retained asset account (“Northwestern Access Fund”). As of that date, the Northwestern Access Fund was eliminated as an option for receiving death benefits. If the beneficiary does not affirmatively choose a payment plan, the proceeds are automatically paid to the beneficiary in a single lump sum. If the beneficiary chose a Northwestern Access Fund account prior to November 1, 2013, the beneficiary received negotiable drafts that they can use to access the balance in this account at their discretion.

The total reserve liability for Northwestern Access Fund account balances held by the Company on behalf of beneficiaries was $530 million and $695 million at December 31, 2014 and 2013, respectively. Funds held on behalf of Northwestern Access Fund account holders are segmented in the Company’s general account and are invested primarily in short-term, liquid investments.

Northwestern Access Fund accounts are credited with interest at short-term market rates, with certain accounts subject to guaranteed minimum crediting rates. Northwestern Access Fund accounts were credited with interest at annual rates ranging from 0.01% to 3.50% during both 2014 and 2013. The Company does not charge beneficiaries any fees to maintain a Northwestern Access Fund account. Fees may be assessed for special account services such as stop-payment requests, drafts returned for insufficient funds or wire transfers.

6.	Premium and Annuity Considerations Deferred and Uncollected

Gross deferred and uncollected insurance premiums represent life insurance premiums due to be received from policyowners through the next respective policy anniversary dates. Net deferred and uncollected premiums represent only the portion of gross premiums related to mortality charges and interest and are reported in deferred premium and other assets in the consolidated statements of financial position.

Deferred and uncollected premiums at December 31, 2014 and 2013 were as follows:


	December 31, 2014				December 31, 2013
	Gross		Net		Gross		Net
	(in millions)

Ordinary new business	$	223	$	84	$	224	$	86
Ordinary renewal		2,366		1,931		2,278		1,861

Total deferred and uncollected premiums	$	2,589	$	2,015	$	2,502	$	1,947

NM-35

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

7.	Separate Accounts

Separate account liabilities by withdrawal characteristic at December 31, 2014 and 2013 were as follows:


	Variable Life				Variable Annuities				Total
	December 31,
	2014		2013		2014		2013		2014		2013
	(in millions)

Subject to discretionary withdrawal	$	6,252	$	6,009	$	16,161	$	15,008	$	22,413	$	21,017
Not subject to discretionary withdrawal		-		-		4,549		4,174		4,549		4,174


Total separate account reserves	$	6,252	$	6,009	$	20,710	$	19,182		26,962		25,191


Non-policy liabilities										94		152

Total separate account liabilities									$	27,056	$	25,343

While separate account liability values are not guaranteed by the Company, variable annuity and variable life insurance products do include guaranteed minimum death benefits (“GMDB”) underwritten by the Company. The maximum potential cost of these guarantees at December 31, 2014 and 2013 was $86 million and $42 million, respectively, which represents the aggregate difference between guaranteed values and otherwise available values for all variable products for which the guaranteed value was greater at the respective reporting dates. These benefits are only available upon the death of the annuitant or insured, and reserves for these benefits are based upon NAIC-prescribed actuarial methods that take into account, among other factors, the likelihood of death based on standard mortality tables. General account reserves for policy benefits included $12 million and $10 million attributable to GMDB at December 31, 2014 and 2013, respectively.

Premiums and other considerations received from variable annuity and variable life insurance policyowners were $2.0 billion, $1.9 billion and $1.8 billion for the years ended December 31, 2014, 2013 and 2012, respectively. These amounts are reported as premiums in the consolidated statements of operations. The subsequent transfer of these premiums to the separate accounts, net of amounts received from the separate accounts to provide for policy benefit payments to variable product policyowners, is reported as transfers to separate accounts in the consolidated statements of operations.

Following are amounts reported as transfers to and from separate accounts in the summary of operations of the Company’s Separate Account Annual Statement, which agree with the amounts reported as net transfers to separate accounts in the consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012.


	For the years ended December 31,
	2014			2013			2012
	(in millions)

From Separate Account Annual Statement:
Transfers to separate accounts	$	2,176		$	2,120		$	1,982
Transfers from separate accounts		(1,675	)		(1,578	)		(1,490)

Net transfers to separate accounts	$	501		$	542		$	492

NM-36

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

8.	Employee and Financial Representative Benefit Plans

The Company provides defined pension benefits for all eligible employees and financial representatives. This includes sponsorship of noncontributory defined benefit pension plans that are “qualified” under the terms of the Employee Retirement Income Security Act (“ERISA”), as well as “nonqualified” plans that provide benefits to certain participants in excess of limits set by ERISA for the qualified plans. The Company’s funding policy for the qualified plans is to make annual contributions that are no less than the minimum amount needed to comply with the requirements of ERISA and no greater than the maximum amount deductible for federal income tax purposes. The Company made no contributions to the qualified retirement plans during either of the years ended December 31, 2014 and 2013 and does not expect to make a contribution to the plans during 2015.

In addition to defined pension benefits, the Company provides certain health care and life insurance benefits (“postretirement benefits”) to retired employees, retired financial representatives and their eligible dependents. The Company pays the entire cost of retiree life insurance coverage, while retirees pay premiums to offset a portion of the cost of the medical plan.

Benefit Plan Accounting Changes

Effective January 1, 2013, the Company adopted Statement of Statutory Accounting Principle No. 92, Accounting for Postretirement Benefits Other Than Pensions, A Replacement of SSAP No. 14 (“SSAP 92”) and Statement of Statutory Accounting Principle No. 102, Accounting for Pensions, A Replacement of SSAP No. 89 (“SSAP 102”). These new standards require that estimates of projected benefit obligation (“PBO”) and accumulated benefit obligation (“ABO”) include future benefit obligations for non-vested participants. The new standards also required that the Company’s surplus, as reported in the consolidated statements of financial position, fully reflect any net liability related to the plans’ PBO, reduced by the fair value of any plan assets, including previously unrecognized net experience losses, prior service costs and initial net assets (“unrecognized items”).

On January 1, 2013, the recognition of benefits for non-vested participants and unrecognized items created additional net defined benefit pension and postretirement plan liabilities of $1.2 billion and $0.5 billion, respectively. However, SSAPs 92 and 102 permitted the Company to recognize these liabilities and the corresponding decrease in surplus over a period of up to ten years, subject to minimum recognition requirements. The Company elected to utilize this deferral option as of January 1, 2013, at which time the related “transition liability” was $618 million.

NM-37

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The table below summarizes the net surplus impact related to the adoption of these new accounting standards on January 1, 2013, excluding any deferred tax impact.


	Defined Benefit Plans			Postretirement Benefit Plans		Total
	(in millions)
Minimum surplus reduction recognized:
10% of calculated surplus impact	$	149		$	48	$	197
Annual amortization of unrecognized items		797			-		797
Difference between unfunded ABO and accrued benefit cost		84			-		84

Surplus reduction recognized at adoption		1,030			48		1,078
Reversal of:
Additional minimum liability		(73	)		-		(73	)
Nonadmitted asset relating to funded plans		(881	)		-		(881	)

Net reduction to surplus at adoption	$	76		$	48	$	124

Prior to the adoption of SSAPs 92 and 102, an additional minimum liability (“AML”) was required if a plan’s ABO exceeded plan assets or related financial statement liabilities. The AML is no longer required under the new accounting standards. The impact of the elimination of the AML was reported as a direct increase to surplus in the consolidated statements of changes in surplus for the year ended December 31, 2013. Any net pension assets for funded plans are nonadmitted and are thereby excluded from assets and surplus in the consolidated statements of financial position. Pension assets that were nonadmitted prior to the adoption of SSAPs 92 and 102 were included in the initial surplus impact upon adoption. At December 31, 2013, the net reduction to surplus of $124 million was reported as a change in accounting principle in the consolidated statements of changes in surplus.

Benefit Plan Amendments

During 2013, the Company’s Board of Trustees approved certain prospective amendments to defined pension benefits and postretirement benefits that became effective on January 1, 2014. These changes included an amendment of the benefit formula for both the qualified employee defined benefit pension plan and a related nonqualified employee defined benefit pension plan to a cash balance formula. The accrued benefits for each participant as of December 31, 2013 were frozen and remain available to participants upon retirement. In addition, a second nonqualified employee defined benefit pension plan was terminated, with accrued benefits as of January 1, 2014 also available to eligible participants upon retirement. Beginning in 2014, the Company provides eligible participants with cash balance credits based on each participant’s age and years of service. Participants will also receive investment earnings on their cash balances based on market interest rates and subject to a minimum crediting rate.

These amendments also included a change to benefits provided to most participants in the employee postretirement medical plan that will limit the Company’s exposure to a maximum 3% annual medical inflation rate for benefits. Any annual increase in medical costs in excess of 3% will be passed on to the plan’s participants in the form of increased plan premiums beginning January 1, 2019. This amendment to the postretirement medical plan did not impact any plan participant age 65 or older on January 1, 2014. Postretirement medical plan changes also eliminated coverage under the plan for employees hired after December 31, 2013.

NM-38

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

During 2013, the Company announced certain prospective amendments to the defined pension and postretirement benefits to be provided to financial representatives for service beginning on January 1, 2014. These changes included the elimination of cost of living adjustments for financial representatives enrolled in the plan after December 31, 2013. In addition, the postretirement medical plan for financial representatives was amended to limit the Company’s exposure to a maximum 3% annual medical inflation rate for benefits. Any annual increase in medical costs in excess of 3% will be passed on to participants in the form of increased plan premiums beginning January 1, 2019. This amendment to the postretirement medical plan did not impact any plan participant age 65 or older on January 1, 2014. Postretirement medical plan changes for financial representatives also eliminated coverage under the plan for financial representatives that enter into contracts with the Company after December 31, 2013.

In conjunction with the changes made to the Company’s defined benefit and postretirement benefit plans, an amendment to the employee contributory 401(k) plan was also approved that increased the Company’s matching contribution from a maximum of 3% of participant’s pay to a maximum of 4% of participant’s pay. In addition, the definition of pay was expanded to include annual incentive pay in addition to base salary. These changes were also effective January 1, 2014.

Benefit Plan Assets

Aggregate plan assets of the defined benefit pension plans and postretirement benefit plans at December 31, 2014 and 2013, and changes in these assets for the years then ended, were as follows:


	Defined Benefit Plans						Postretirement Benefit Plans
	2014			2013			2014			2013
	(in millions)

Fair value of plan assets at January 1	$	3,913		$	3,545		$	74		$	70
Changes in plan assets:
Actual return on plan assets		433			453			8			9
Company contributions		-			-			-			-
Actual plan benefits paid		(95	)		(85	)		(5	)		(5	)

Fair value of plan assets at December 31	$	4,251		$	3,913		$	77		$	74

Plan assets consist of a share of a group annuity separate account (“GASA”) issued by the Company, which primarily invests in a diversified portfolio of public and private common stocks and corporate, government and mortgage-backed debt securities. The overall investment objective of the plans is to maximize long-term total rate of return, consistent with prudent standards for investment and asset/liability risk management and in accordance with ERISA requirements. Plan investments are managed with a long-term perspective and for the sole benefit of the plans’ participants.

Plan asset allocations are rebalanced regularly to maintain holdings within desired asset allocation ranges and to reposition the portfolio based upon perceived market opportunities and risks. Diversification, both by and within asset classes, is a primary risk management consideration. Assets are invested across various asset classes, sectors, industries and geographies. The measurement date for plan assets was December 31 of the respective period with the fair value of plan assets primarily based on quoted market prices.

NM-39

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The target asset allocations and the actual allocation of the plans’ investments based on fair value at December 31, 2014 and 2013 were as follows:


	Target				Actual
	Allocation				Allocation
	2014		2013		2014		2013

Bonds		49%		50%		50%		49%
Equity securities		50%		49%		46%		45%
Other investments		1%		1%		4%		6%

Total assets		100%		100%		100%		100%

At each of December 31, 2014 and 2013, other investments are comprised of cash and short-term investments.

Benefit Plan Obligations

Aggregate PBOs of the defined benefit pension plans and postretirement benefit plans at December 31, 2014 and 2013 and changes in these obligations for the years then ended were as follows:


	Defined Benefit Plans						Postretirement Benefit Plans
	2014			2013			2014			2013
	(in millions)

Projected benefit obligation at January 1	$	3,663		$	4,295		$	687		$	537
Non-vested liability		-			65			-			340

Adjusted projected benefit obligation at January 1		3,663			4,360			687			877
Changes in benefit obligation:
Service cost of benefits earned		93			166			19			27
Interest cost on projected obligations		180			161			31			30
Projected gross plan benefits paid		(111	)		(105	)		(26	)		(24	)
Projected Medicare Part D reimbursement		-			-			2			2
Experience (gains)/losses		784			(547	)		112			(99	)
Plan amendments		-			(372	)		-			(126	)

Projected benefit obligation at December 31	$	4,609		$	3,663		$	825		$	687

The PBO represents the estimated net present value of estimated future benefit obligations. For defined benefit plans, PBO includes assumptions for future compensation increases for active participants. The ABO is similar to the PBO, but is based only on current compensation with no assumption of future compensation increases. The aggregate ABO for the defined benefit plans was $4.3 billion and $3.4 billion at December 31, 2014 and 2013, respectively. Experience (gains)/losses for the years ended December 31, 2014 and 2013 primarily reflect the impact of changes in the PBO discount rate.

NM-40

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Benefit Plan Assumptions

The assumptions used in estimating the projected benefit obligations at December 31, 2014, 2013 and 2012 and the net periodic benefit cost for the years then ended were as follows:


	Defined Benefit Plans						Postretirement Benefit Plans
	2014		2013		2012		2014		2013		2012
Projected benefit obligation:
Discount rate		4.00%		5.00%		4.00%		4.00%		5.00%		4.00%
Annual increase in compensation		3.75%		3.75%		3.75%		3.75%		3.75%		3.75%

Net periodic benefit cost:
Discount rate		5.00%		4.00%		4.50%		5.00%		4.00%		4.50%
Annual increase in compensation		3.75%		3.75%		3.75%		3.75%		3.75%		3.75%
Long-term rate of return on plan assets		6.50%		6.75%		7.50%		6.50%		6.75%		7.50%

The expected long-term rate of return on plan assets is estimated in consideration of historical financial market performance, third-party capital market expectations and the long-term target asset allocation.

The PBO for postretirement benefits at December 31, 2014 assumed an annual increase in future retiree medical costs of 7.5%, grading down to 5.0% over five years and remaining level thereafter. At December 31, 2013, the comparable assumption was for an annual increase in future retiree medical costs of 6.5% grading down to 5.0% over three years and remaining level thereafter. A greater increase in the assumed health care cost trend of 1.0% in each year would increase the accumulated postretirement benefit obligation at December 31, 2014 by $49 million and net periodic postretirement benefit expense for the year ended December 31, 2014 by $3 million. A decrease in the assumed health care cost trend of 1.0% in each year would reduce the accumulated postretirement benefit obligation as of December 31, 2014 and net periodic postretirement benefit expense for the year ended December 31, 2014 by the same amounts.

During 2010, the Patient Protection and Affordable Care Act (“PPACA”) and the Health Care and Education Reconciliation Act of 2010, which amended certain provisions of the PPACA, were enacted. The new laws created an excise tax beginning in 2018 on health plans that have an aggregate value to the participants greater than a threshold amount. Recent changes to the Company’s postretirement health plans are expected to keep the aggregate value of the plans below the excise tax threshold. The new laws also revoked the non-taxable status of the prescription drug subsidies offered to companies that maintain retiree health plans that are actuarially equivalent to the Medicare Part D benefit.

NM-41

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Benefit Plan Funded Status

Following is an aggregate reconciliation of the funded status of the plans to the related financial statement liabilities reported by the Company at December 31, 2014 and 2013:


	Defined						Postretirement
	Benefit Plans						Benefit Plans
	2014			2013			2014			2013

	(in millions)
Fair value of plan assets	$	4,251		$	3,913		$	77		$	74
Projected benefit obligation		4,609			3,663			825			687

Funded status		(358	)		250			(748	)		(613	)
Unrecognized net experience losses		-			27			1			74
Unrecognized prior service costs/(credits)		-			4			76			106
Nonadmitted asset		(459	)		(947	)		-			-

Financial statement liability	$	(817	)	$	(666	)	$	(671	)	$	(433	)

The PBO for defined benefit plans above included $817 million and $698 million related to nonqualified, unfunded plans at December 31, 2014 and 2013, respectively. In the aggregate, the fair value of qualified defined benefit plan assets represented 112% and 132% of the projected benefit obligations of these plans at December 31, 2014 and 2013, respectively.

Net experience gains or losses represent cumulative amounts by which actual plan experience for return on plan assets or growth in PBO have varied from related assumptions. Prior to the adoption of SSAPs 92 and 102, these differences accumulated without recognition in the Company’s financial statements unless they exceeded certain limits.

Prior service costs/(credits) represent the value of benefits granted or rescinded based on services rendered in prior periods. These costs/(credits) are recognized as components of net periodic benefit cost on a straight line basis over the anticipated future service period of the participants.

NM-42

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

SSAPs 92 and 102 require that changes in plan funded status be recognized immediately as a direct adjustment to surplus, subject to limitations such as admissibility of net pension assets. These adjustments are included in changes in nonadmitted assets and other in the consolidated statements of changes in surplus. Apart from the initial adoption impacts of SSAPs 92 and 102, aggregate defined benefit pension and postretirement plan surplus impacts were as follows for the years ended December 31, 2014 and 2013:


	Defined						Postretirement
	Benefit Plans						Benefit Plans						Total

	2014			2013			2014			2013			2014			2013

		(in millions)
Changes in plan assets and benefit obligations recognized in surplus
Net experience gains/(losses)	$	(639	)	$	602		$	(181	)	$	17		$	(820	)	$	619
Prior service (costs)/credits		(4	)		384			(30	)		(75	)		(34	)		309
Initial net asset		-			4			-			-			-			4

Amounts amortized from surplus into net periodic benefit cost:
Net experience losses	$	25		$	92		$	1		$	5		$	26		$	97
Prior service costs/(credits)		(14	)		(11	)		12			13			(2	)		2
Initial net asset		(17	)		(71	)		-			-			(17	)		(71	)

Net experience gains/(losses) primarily reflect the impacts of any changes to plan assumptions (e.g., discount rate) that are applied to the calculation of PBO estimates. Total defined benefit pension and postretirement plan net experience gains/(losses) recognized in surplus but not yet amortized into net periodic benefit cost were $(1.4) billion and $(0.2) billion at December 31, 2014, respectively and $(745) million and $4 million at December 31, 2013, respectively.

The recognition of a prior service credit during 2013 primarily reflects the impact of adopting the various plan amendments. Total defined benefit and postretirement plan prior service (costs)/credits recognized in surplus but not yet amortized into net periodic benefit cost were $293 million and $109 million at December 31, 2014, respectively, and $311 million and $(91) million at December 31, 2013, respectively. The total initial net asset recognized in surplus but not yet amortized into net periodic benefit cost was $387 million and $404 million at December 31, 2014 and 2013, respectively.

SSAPs 92 and 102 require minimum annual amortization and, in certain circumstances, additional recognition of the transition liability into surplus. For the years ended December 31, 2014 and 2013, transition liabilities of $134 million and $407 million, respectively, were reported as direct reductions to surplus in the consolidated statements of changes in surplus. The remaining unamortized transition liability was $77 million and $211 million at December 31, 2014 and 2013, respectively, and represents the total of all remaining unrecognized items. This remaining transition liability is expected to be amortized as annual direct reductions to surplus of approximately $48 million and $29 million during 2015 and 2016, respectively. It is expected that the transition liability will be fully amortized by December 31, 2016.

NM-43

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Benefit Plan Costs

The components of net periodic benefit cost for the years ended December 31, 2014, 2013 and 2012 were as follows:


	Defined Benefit Plans									Postretirement Benefit Plans

	2014			2013			2012			2014			2013			2012

	(in millions)
Components of net periodic benefit cost:
Service cost of benefits earned	$	93		$	166		$	131		$	19		$	27		$	38
Interest cost on projected obligations		180			161			166			31			30			21
Amortization of experience losses		25			92			88			1			5			6
Amortization of prior service costs/(credits)		(14	)		(11	)		-			12			13			-
Amortization of initial net asset		(17	)		(71	)		(40	)		-			-			-
Curtailment and other		-			11			-			-			-			-
Expected return on plan assets		(251	)		(239	)		(230	)		(5	)		(4	)		(5	)

Net periodic benefit cost	$	16		$	109		$	115		$	58		$	71		$	60

The Company expects to increase/(decrease) periodic benefit costs through the amortization of $65 million, $(14) million and $(41) million of defined benefit plan net experience losses, prior service credits and initial assets, respectively, into net periodic benefit cost during 2015. Amortization of postretirement plan net experience losses of $6 million and prior service costs of $12 million are also expected to increase net periodic benefit cost during 2015.

The expected benefit payments by the defined benefit plans and the postretirement benefit plans for the years 2015 through 2024 are as follows:


	Defined Benefit Plans		Postretirement Benefit Plans
	(in millions)
2015	$	133	$	24
2016		147		27
2017		163		30
2018		180		34
2019		199		37
2020-2024		1,357		238

Total	$	2,179	$	390

The Company sponsors a contributory 401(k) plan for eligible employees, for which the Company provides a matching contribution, and a noncontributory defined contribution plan for financial representatives. In addition, the Company sponsors nonqualified plans that provide related benefits to certain participants in excess of limits set by ERISA for qualified defined contribution plans. For the years ended December 31, 2014, 2013 and 2012, the Company expensed total contributions to these plans of $43 million, $35 million and $33 million, respectively.

NM-44

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

9.	Reinsurance

The Company limits its exposure to life insurance death benefits by ceding insurance coverage to various reinsurers. The Company retains a maximum of $40 million of individual life coverage and a maximum of $60 million of joint life coverage for any single mortality risk. The Company participated in a life insurance catastrophic risk sharing pool for the years ended December 31, 2013 and 2012. The Company discontinued its participation in this risk sharing pool during 2014.

The Company cedes 60% of the morbidity risk on group disability plans. The Company ceased reinsuring new individual disability policies in 1999 and new long-term care policies in 2002 but has maintained a portion of the reinsurance ceded on policies issued prior to those dates.

Amounts in the consolidated financial statements are reported net of the impact of reinsurance. Reserves for policy benefits at each of December 31, 2014 and 2013 were reported net of ceded reserves of $1.7 billion.

The effects of reinsurance on premium revenue and benefit expense for the years ended December 31, 2014, 2013 and 2012 were as follows:


	For the year ended December 31,

	2014			2013			2012

	(in millions)
Direct premium revenue	$	17,894		$	17,481		$	16,258
Premiums ceded		(893	)		(882	)		(864	)

Net premium revenue	$	17,001		$	16,599		$	15,394


Direct benefit expense	$	18,425		$	18,125		$	16,906
Benefits ceded		(618	)		(667	)		(603	)

Net benefit expense	$	17,807		$	17,458		$	16,303

In addition, the Company received $161 million, $164 million and $166 million in allowances from reinsurers for reimbursement of commissions and other expenses on ceded business for the years ended December 31, 2014, 2013 and 2012, respectively. These amounts are reported in other income in the consolidated statements of operations.

Reinsurance contracts do not relieve the Company from its obligations to policyowners. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company mitigates this counterparty risk by dealing only with reinsurers that meet its financial strength standards while adhering to concentration limits for counterparty exposure to any single reinsurer. Most significant reinsurance treaties contain financial protection provisions that take effect if a reinsurer’s credit rating falls below a prescribed level. There were no reinsurance recoverables at December 31, 2014 and 2013 that were considered by the Company to be uncollectible.

Effective October 1, 2014, The Northwestern Mutual Life Insurance Company and Northwestern Long Term Care Insurance Company entered into an affiliated reinsurance agreement. Under this agreement, Northwestern Long Term Care Insurance Company ceded 100% of the net risks associated with its in-force long-term care policies and future issuances of long-term care policies to The Northwestern Mutual Life Insurance Company. All financial statement impacts of this transaction were eliminated upon consolidation of the two entities.

NM-45

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

10.

Income Taxes

The Company files a consolidated federal income tax return including the following subsidiaries:


Northwestern Mutual Investment Services, LLC		Northwestern Mutual Capital, LLC
NML Real Estate Holdings, LLC and subsidiaries		Bradford, Inc. and subsidiaries
NML Securities Holdings, LLC and subsidiaries		Mason Street Advisors, LLC
Northwestern Mutual MU TLD Registry, LLC		NM GP Holdings, LLC and subsidiaries
Northwestern Mutual Wealth Management Company		NM Pebble Valley, LLC
NM Investment Holdings, LLC		Northwestern Mutual Registry, LLC
Northwestern Mutual Real Estate Investments, LLC

The Company collects from or refunds to these subsidiaries their share of consolidated federal income taxes determined pursuant to written tax-sharing agreements, which generally require that these subsidiaries determine their share of consolidated tax payments or refunds as if each subsidiary filed a separate federal income tax return on a stand-alone basis.

The components of current income tax expense in the consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012 related to “ordinary” taxable income or loss were as follows:


	For the year ended December 31,

	2014			2013			2012

	(in millions)
Tax payable on ordinary income	$	200		$	80		$	162
Tax credits		(142	)		(131	)		(116	)
Increase (decrease) in contingent tax liabilities		(36	)		33			(9	)

Total current tax expense (benefit)	$	22		$	(18	)	$	37

In addition to current income tax expense related to ordinary taxable income or loss as summarized above, the Company is subject to federal income tax on “capital” gains and losses that generally result from investment transactions. Investment capital gains and losses resulting from changes in market interest rates or credit spreads are deferred to the IMR net of any related tax expense or benefit. Current tax expense of $86 million, $124 million and $171 million was included in net IMR deferrals for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, net realized capital gains and losses as reported in the consolidated statements of operations included current tax expense of $123 million, $179 million and $332 million for the years ended December 31, 2014, 2013 and 2012, respectively.

The Company’s taxable income can vary significantly from pretax income as reported in the consolidated statements of operations due to temporary and permanent differences in revenue recognition and expense deduction between the tax and statutory financial statement bases of reporting. The Company’s financial statement effective tax rates were (4)%, 8% and 14% for the years ended December 31, 2014, 2013 and 2012, respectively.

The effective tax rate above is not the rate of tax applied to the Company’s federal taxable income or loss by the Internal Revenue Service (“IRS”). It is a financial statement relationship that represents the ratio between the sum of total tax expense or benefit incurred, including current tax expense or benefit on realized capital gains and losses and changes in deferred taxes not related to unrealized capital gains and losses on investments, to the sum of gain from operations before taxes and pretax net realized capital gains or losses. These financial statement effective rates were

NM-46

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

different than the applicable federal income tax rate of 35% due primarily to net investment income eligible for the dividends received deduction, amortization of the IMR, benefit plan obligations and tax loss carryforward credits and refunds to subsidiaries for prior year losses under intercompany tax sharing agreements.

The Company made payments to the IRS for federal income taxes of $480 million, $526 million and $840 million during the years ended December 31, 2014, 2013 and 2012, respectively. Total federal income taxes paid, including refunds or overpayments applied, for tax years 2014, 2013 and 2012 of $602 million, $585 million and $842 million, respectively, are available as of December 31, 2014 for refund claims in the event of future tax losses.

Federal income tax returns for 2009 and prior years are closed as to further assessment of tax. Income taxes payable in the consolidated statements of financial position represents an estimate of taxes payable, including additional taxes that may become due with respect to tax years that remained open to examination by the IRS (“contingent tax liabilities”) at the respective reporting date.

Changes in contingent tax liabilities for the years ended December 31, 2014 and 2013 were as follows:


	2014			2013
	(in millions)
Balance at beginning of year	$	467		$	434
Additions for tax positions of prior years		-			33
Reductions for tax positions of prior years		(36	)		-

Balance at end of year	$	431		$	467

Included in contingent tax liabilities at December 31, 2014 and 2013 were $395 million and $408 million, respectively, of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of the deductions. Because of the impact of deferred taxes for amounts other than interest, the timing of the ultimate deduction would not affect the effective tax rate in future periods. Also included in the December 31, 2014 balance are $14 million of tax positions for which the ultimate deductibility is not certain. The ultimate resolution of these tax positions could have an impact on the effective tax rate in future periods.

A “more likely than not” standard is applied for financial statement recognition of contingent tax liabilities, whereby a liability is only recorded if the Company believes that there is a greater than 50% likelihood that the related tax position will not be sustained upon examination. In cases where liability recognition is appropriate, a best estimate of the ultimate tax liability is made. If this estimate represents 50% or less of the total amount of the tax contingency, the best estimate is established as a liability. If this best estimate represents more than 50% of the total tax contingency, the total amount is established as a liability. Changes in contingent tax liabilities are included in tax expense in the year that such determination is made by the Company.

The Company reports interest accrued or released related to contingent tax liabilities in current income tax expense. For the years ended December 31, 2014, 2013 and 2012, the Company recognized $(15) million, $8 million and $(16) million, respectively, of interest-related tax expense (benefit). Contingent tax liabilities included $22 million and $37 million for the payment of interest at December 31, 2014 and 2013, respectively.

NM-47

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Deferred tax assets and liabilities represent the future tax recoveries or obligations associated with the accumulation of temporary differences between the tax and financial statement bases of the Company’s assets and liabilities. The statutory basis of accounting limits the amount of gross deferred tax assets that can be admitted to surplus to those for which ultimate recoverability can be demonstrated. This limit is based on a calculation that considers available tax loss carryback and carryforward capacity, the expected timing of reversal for accumulated temporary differences, gross deferred tax liabilities and the level of Company surplus.

The components of net deferred tax assets reported in the consolidated statements of financial position at December 31, 2014 and 2013 were as follows:


	December 31,

	2014			2013			Change

	(in millions)						-
Deferred tax assets:
Policy acquisition costs	$	1,192		$	1,146		$	46
Investments		390			426			(36	)
Policy benefit liabilities		2,194			2,099			95
Benefit plan obligations		827			679			148
Other		110			100			10

Gross deferred tax assets		4,713			4,450			263
Nonadmitted deferred tax assets		(9	)		(117	)		108

Gross admitted deferred tax assets		4,704			4,333			371


Deferred tax liabilities:
Investments		892			926			(34	)
Other		757			760			(3	)

Gross deferred tax liabilities		1,649			1,686			(37	)

Net deferred tax assets	$	3,055		$	2,647		$	408

Changes in deferred tax assets and liabilities related to unrealized capital gains and losses on investments are included in changes in unrealized capital gains and losses in the consolidated statements of changes in surplus. Other net changes in deferred tax assets and liabilities are reported as direct adjustments to surplus in the consolidated statements of changes in surplus.

Gross deferred tax assets at December 31, 2014 and 2013 included $4.3 billion and $4.0 billion, respectively, related to temporary differences that were ordinary in nature and $0.4 billion and $0.4 billion, respectively, related to temporary differences that were capital in nature. Gross deferred tax liabilities at December 31, 2014 and 2013 included $0.8 billion and $0.8 billion, respectively, related to temporary differences that were ordinary in nature and $0.9 billion and $0.9 billion, respectively, related to temporary differences that were capital in nature. All gross deferred tax liabilities have been recognized at December 31, 2014 and 2013. The Company did not assume any benefit from future tax planning strategies in its valuation of gross deferred tax assets at either December 31, 2014 or 2013.

The Company exceeded the minimum risk-based capital (“RBC”) level of 300% based on authorized control level RBC computed without net deferred tax assets at December 31, 2014 and 2013 and expects to exceed this minimum during 2015.

NM-48

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Significant components of the calculation of net deferred tax assets at December 31, 2014 and 2013 were as follows (in millions):


	December 31, 2014								December 31, 2013								Change


	Ordinary		Capital			Total			Ordinary		Capital			Total			Ordinary			Capital			Total


Gross deferred tax assets	$	4,323	$	390		$	4,713		$	4,024	$	426		$	4,450		$	299		$	(36	)	$	263

Statutory valuation allowance adjustment		-		-			-			-		-			-			-			-			-


Adjusted gross deferred tax assets		4,323		390			4,713			4,024		426			4,450			299			(36	)		263

Deferred tax assets nonadmitted		9		-			9			117		-			117			(108	)		-			(108	)


Subtotal net admitted deferred tax asset		4,314		390			4,704			3,907		426			4,333			407			(36	)		371

Deferred tax liabilities		757		892			1,649			760		926			1,686			(3	)		(34	)		(37	)


Net admitted deferred tax asset/(liability)	$	3,557	$	(502	)	$	3,055		$	3,147	$	(500	)	$	2,647		$	410		$	(2	)	$	408


	December 31, 2014								December 31, 2013								Change


	Ordinary		Capital			Total			Ordinary		Capital			Total			Ordinary			Capital			Total


Federal income taxes paid in prior years recoverable through loss carrybacks	$	1,868	$	266		$	2,134		$	2,029	$	298		$	2,327		$	(161	)	$	(32	)	$	(193	)

Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets above) after application of the threshold limitation (lesser of a. or b. below)		1,288		-			1,288			902		-			902			386			-			386

Adjusted gross deferred tax assets (excluding the amount of deferred tax assets offset by gross deferred tax liabilities)		1,158		124			1,282			976		128			1,104			182			(4	)		178


Total deferred tax assets admitted as the result of application of SSAP No. 101	$	4,314	$	390		$	4,704		$	3,907	$	426		$	4,333		$	407		$	(36	)	$	371


a. Adjusted gross deferred tax assets expected to be realized following the balance sheet date						$	1,288							$	902								$	386


b. Adjusted gross deferred tax assets allowed per limitation threshold						$	2,408							$	2,211								$	197


Ratio percentage used to detemine recovery period and threshold limitation amount							1144	%							1106	%


Amount of adjusted capital and surplus used to determine recovery period and threshold limitation						$	16,055							$	14,738

11.

Frank Russell Company

On December 2, 2014, the Company sold its entire investment in Russell common and preferred stock to a third party. Prior to this sale, the Company was the majority shareholder of Russell, a worldwide provider of investment products and services. The Company’s common stock investment in Russell was held in a wholly-owned non-insurance subsidiary and represented 92.6% of Russell’s outstanding common stock at December 31, 2013. Upon the sale, the Company’s wholly-owned subsidiary reported an after-tax gain of $1.1 billion from the sale of its common stock investment in Russell, which was reported by the Company as an unrealized capital gain in the consolidated statements of changes in surplus for the year ended December 31, 2014.

NM-49

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The statement value of the Company’s various investments in securities issued by Russell at December 31, 2013 were as follows. The common stock investment in Russell is reported as other investments in the consolidated statements of financial position at that date.


	December 31, 2013
	(in millions)
Common stock	$	418
Senior preferred stock		350
Junior preferred stock		42
Warrants		2

Total	$	812

At December 31, 2013, the common stock investment in Russell was valued using a practice permitted by the OCI, based on the Company’s share of Russell’s audited GAAP-basis equity exclusive of any adjustment for unamortized acquisition goodwill in Russell’s GAAP-basis financial statements. Under Statement of Statutory Accounting Principle No. 97, Investments in Subsidiary, Controlled and Affiliated Entities, A Replacement of SSAP No. 88 (“SSAP 97”), the statutory equity method valuation of the Russell investment would be required to be reduced by its share of Russell’s GAAP goodwill. If the Company had not received permission for this alternative accounting treatment, surplus as reported in the consolidated statements of financial position would have been lower by $795 million at December 31, 2013.

Russell distributed $0 and $69 million in common stock dividends to the Company’s wholly-owned subsidiary during the years ended December 31, 2014, and 2013, respectively. The $69 million dividend remained undistributed to the Company at December 31, 2013. During 2014, this dividend was distributed by the wholly-owned subsidiary and reported as net investment income by the Company for the year ended December 31, 2014. During 2012, the common stock investment in Russell was held directly by the Company, and Russell distributed $23 million to the Company that was reported as net investment income for the year ended December 31, 2012.

Prior to the sale of Russell, the Company held $350 million of perpetual senior preferred stock issued by Russell, paying dividends at a rate of 8.00%. Upon the sale of Russell, the senior preferred stock was retired for consideration equal to the Company’s statutory statement value. The Company earned $27 million, $28 million, and $28 million in dividends from Russell senior preferred stock for the years ended December 31, 2014, 2013 and 2012, respectively.

Prior to the sale of Russell, the Company also held $44 million of junior preferred stock, including detachable warrants, issued by Russell and paying dividends at a rate of 10.00%. Upon the sale of Russell, the junior preferred stock was retired for consideration equal to the Company’s statutory statement value. The Company exercised the warrants as part of the sale transaction and recorded an after-tax realized capital gain of $27 million for the year ended December 31, 2014. The Company earned $4 million in dividends on Russell junior preferred stock for each of the years ended December 31, 2014, 2013 and 2012.

12.

Contingencies and Guarantees

In the normal course of business, the Company makes guarantees to third parties on behalf of affiliates (e.g., debt guarantees) and financial representatives (e.g., the guarantee of office lease payments), or directly to financial representatives (e.g., future minimum compensation payments). If the financial representatives are not able to meet their obligations or these minimum compensation thresholds are not otherwise met, the Company would be required to make payments

NM-50

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

to fulfill its guarantees. For certain of these guarantees, the Company has the right to pursue recovery of payments made under the agreements. The terms of these guarantees range from less than one year to twenty-five years at December 31, 2014.

Following is a summary of the guarantees provided by the Company that were outstanding at December 31, 2014 and 2013, including both the maximum potential exposure under the guarantees and the financial statement liability reported based on estimated fair value of the guarantees.


	December 31, 2014				December 31, 2013

Nature of guarantee	Maximum potential amount of future payments		Financial statement liability		Maximum potential amount of future payments		Financial statement liability

	(in millions)				(in millions)

Guarantees of future minimum compensation - financial representatives	$	128	$	1	$	123	$	2

Guarantees of real estate obligations		388		4		403		4

Guarantees of obligations of affiliates		-		-		102		-

Guarantees issued on behalf of wholly-owned subsidiaries		-		-		2		-


Total contingencies and guarantees	$	516	$	5	$	630	$	6

No payments have been required under these guarantees to date, and the Company believes the probability that it will be required to perform under these guarantees in the future is remote. Performance under these guarantees would require the Company to recognize additional operating expense or increase the amount of its equity investment in the affiliate or subsidiary on behalf of which the guarantee was made.

In the normal course of its investment activities, the Company makes commitments to fund private equity investments, real estate, mortgage loans and other investments. These forward commitments aggregated to $5.5 billion at December 31, 2014 and were extended at market rates and terms.

The Company is engaged in various legal actions in the normal course of its investment and insurance operations. The status of these legal actions is actively monitored by the Company. If the Company believes, based on available information, that an adverse outcome upon resolution of a given legal action was probable and the amount of that adverse outcome was reasonably estimable, a loss is recognized and a related liability reported. Legal actions are subject to inherent uncertainties, and future events could change the Company’s assessment of the probability or estimated amount of potential losses from pending or threatened legal actions. Based on available information, it is the opinion of the Company that the ultimate resolution of pending or threatened legal actions, both individually and in the aggregate, will not result in losses that would have a material effect on the Company’s financial position at December 31, 2014.

NM-51

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

13.

Surplus Notes

On March 26, 2010, the Company issued surplus notes (“notes”) with a principal balance of $1.75 billion, bearing interest at 6.063% and having a maturity date of March 30, 2040. The notes were issued at par and distributed pursuant to Rule 144A under the Securities Act of 1933, as amended. Interest on the notes is payable semi-annually on March 30 and September 30, subject to approval by the OCI. The statutory basis of accounting requires that the Company only recognize interest expense on the notes when and to the extent that the OCI has approved the semi-annual interest payment. The Company recognized $106 million in interest expense on the notes for each of the years ended December 31, 2014, 2013 and 2012, which is reported as a reduction of net investment income in the consolidated statements of operations. A total of $479 million in interest has been paid on the notes from their issuance through December 31, 2014.

The notes are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims of the Company. The notes do not repay principal prior to maturity and principal payment at maturity is subject to the prior approval of the OCI. The notes are not redeemable at the option of any note holder. The notes are redeemable, in whole or in part, at the option of the Company at any time, subject to the prior approval of the OCI, at a “make whole” redemption price equal to the greater of the principal amount of the notes to be redeemed or the sum of the present value of the remaining scheduled payments of principal and interest on the notes to be redeemed, excluding accrued interest as of the date on which the notes are to be redeemed, discounted on a semi-annual basis at a defined U.S. Treasury rate plus 0.25%.

No affiliates of the Company hold any portion of the notes. The notes are generally held of record at the Depositary Trust Company by bank custodians on behalf of investors. The largest holder of the notes was Nippon Life Insurance Company of Japan, which held $250 million in face amount of notes at each of December 31, 2014 and 2013.

14.

Fair Value of Financial Instruments

Certain of the Company’s assets and liabilities are considered “financial instruments” as defined by Statement of Statutory Principles No. 100, Fair Value Measurements (“SSAP 100”). The Company’s estimation of fair value for financial instruments uses a hierarchy that, where possible, makes use of quoted market prices from active and transparent markets for assets that are identical to those being valued, typically obtained from independent pricing services (“level 1”). In the absence of quoted market prices for identical assets, fair value is estimated by these pricing services using relevant and observable market-based inputs for substantially similar securities (“level 2”). Financial instruments for which no quoted market prices or observable inputs are available are generally valued using internally-developed pricing models or indicative (i.e., non-binding) quotes from independent securities brokers (“level 3”).

The Company actively monitors fair value estimates received from independent pricing services at each financial reporting date, including analysis of valuation changes for individual securities compared to overall market trends and validation on an exception basis with internally-developed pricing models. The Company also performs periodic reviews of the information sources, inputs and methods used by its independent pricing services, including an evaluation of their control processes. Where necessary, the Company will challenge third-party valuations or methods and require more observable inputs or different methodologies.

NM-52

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

For financial instruments included in the scope of SSAP 100, the statement value and fair value at December 31, 2014 and 2013 were as follows:


	December 31, 2014
					Quoted prices in		Significant		Significant
					active markets		observable		unobservable
	Statement		Fair		for identical assets		inputs		inputs
	Value		Value		(level 1)		(level 2)		(level 3)

	(in millions)
General account investment assets:
Bonds	$	128,126	$	135,247	$	3,234	$	128,505	$	3,508
Mortgage loans		29,341		31,247		-		-		31,247
Policy loans		16,756		16,756		-		-		16,756
Common and preferred stocks		3,583		3,613		2,970		77		566
Derivative assets		330		388		-		388		-
Surplus note investments		160		211		-		179		32
Collateral loans		40		40		-		-		40
Cash and short-term investments		2,588		2,588		708		1,880		-
Separate account assets		27,056		27,056		24,462		2,221		373

General account liabilities:
Investment-type insurance reserves	$	5,220	$	5,058	$	-	$	-	$	5,058
Liabilities for securities lending		954		954		-		954		-
Derivative liabilities		27		23		-		23		-
Separate account liabilities		27,056		27,056		24,462		2,221		373


	December 31, 2013
					Quoted prices in		Significant		Significant
					active markets		observable		unobservable
	Statement		Fair		for identical assets		inputs		inputs
	Value		Value		(level 1)		(level 2)		(level 3)

	(in millions)
General account investment assets:
Bonds	$	122,331	$	127,028	$	4,342	$	119,059	$	3,627
Mortgage loans		26,845		28,094		-		-		28,094
Policy loans		16,306		16,306		-		-		16,306
Common and preferred stocks		2,831		2,856		1,691		99		1,066
Derivative assets		186		263		-		263		-
Surplus note investments		127		158		-		158		-
Collateral loans		41		41		-		-		41
Cash and short-term investments		2,262		2,262		576		1,686		-
Separate account assets		25,343		25,343		23,115		1,843		385

General account liabilities:
Investment-type insurance reserves	$	5,453	$	5,106	$	-	$	-	$	5,106
Liabilities for securities lending		725		725		-		725		-
Derivative liabilities		121		105		-		105		-
Separate account liabilities		25,343		25,343		23,115		1,843		385

NM-53

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

Bonds

Bonds classified as level 1 financial instruments are generally limited to U.S. Treasury securities. Most bonds, including U.S. and foreign public and private corporate bonds, municipal bonds and structured securities, are classified as level 2 financial instruments and are valued based on prices obtained from independent pricing services or internally-developed pricing models using observable inputs. Typical market-observable inputs include benchmark yields, reported trades, issuer spreads, bids, offers, benchmark securities, estimated cash flows and prepayment speeds. Level 3 bonds are typically privately-placed and relatively illiquid, with fair value based on non-binding broker quotes or internally-developed pricing models utilizing unobservable inputs. See Note 3 for more information regarding the Company’s investments in bonds.

Mortgage Loans

Mortgage loans consist solely of commercial mortgage loans underwritten and originated by the Company. Fair value of these loans is estimated using a discounted cash flow approach based on market interest rates for commercial mortgage debt with comparable credit risk and maturity. See Note 3 for more information regarding the Company’s investments in mortgage loans.

Policy Loans

See Note 2 for information regarding policy loans, for which the Company considers the unpaid principal balance to approximate fair value.

Common and Preferred Stock

Common and preferred stocks classified as level 1 financial instruments are limited to those actively traded on a U.S. or foreign stock exchange. Level 2 securities are stocks for which market quotes are available but are not considered to be actively traded. Common and preferred stocks classified as level 3 are generally privately-placed with fair value based on internally-developed pricing models utilizing unobservable inputs. See Note 3 for more information regarding the Company’s investments in common and preferred stocks.

Derivative Instruments

The Company’s derivative investments are generally traded in over-the-counter markets with fair value estimated using industry-standard models with market-observable inputs such as swap yield curves, London Interbank Offered Rate (“LIBOR”) basis curves, foreign currency spot rates, foreign currency basis curves, option volatilities and credit spreads.

Cash and Short-term Investments

Cash and short-term investments include cash deposit balances, money market funds, short-term commercial paper and other highly-liquid debt instruments, for which the Company considers amortized cost to approximate fair value.

Separate Account Assets and Liabilities

See Note 2 and Note 7 for information regarding the Company’s separate accounts, for which fair value is based primarily on quoted market prices for the related common stocks, preferred stocks, bonds, derivative instruments and other investments. Separate account assets classified as level 3 financial instruments are primarily securities partnership investments that are valued based on the Company’s underlying equity in the partnerships, which the Company considers to approximate fair value.

NM-54

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

General Account Insurance Reserves

The Company’s general account insurance liabilities defined as financial instruments under SSAP 100 are limited to “investment-type” products such as fixed-rate annuity policies, supplementary contracts without life contingencies and amounts left on deposit. The fair value of investment-type insurance reserves is estimated based on future cash flows discounted at market interest rates for similar instruments with comparable maturities.

Securities Lending Liabilities

See Note 3 for information regarding securities lending activity, for which the Company considers the liability to return collateral to approximate the fair value of collateral originally received.

Assets and Liabilities Reported at Fair Value

The following tables summarize assets and liabilities measured and reported at fair value in the consolidated statements of financial position at December 31, 2014 and 2013.


	December 31, 2014
	Quoted prices in active markets for identical assets (level 1)		Significant observable inputs (level 2)			Significant unobservable inputs (level 3)		Total
	(in millions)
General account:
Common and preferred stocks	$	2,971	$	-		$	443	$	3,414
Bonds		-		14			-		14
Derivative assets at fair value		-		158			-		158
Derivative liabilities at fair value		-		(12	)		-		(12	)

Total general account	$	2,971	$	160		$	443	$	3,574

Separate accounts:
Mutual fund investments		22,663		-			-		22,663
Other benefit plan assets/liabilities		43		19			3		65
Pension and postretirement assets:
Bonds		244		1,908			74		2,226
Common and preferred stock		1,503		5			20		1,528
Cash and short-term securities		10		257			-		267
Other assets/liabilities		-		31			276		307

Subtotal pension and postretirement assets		1,757		2,201			370		4,328

Total separate accounts	$	24,463	$	2,220		$	373	$	27,056

NM-55

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)


	December 31, 2013
	Quoted prices in active markets for identical assets (level 1)			Significant observable inputs (level 2)			Significant unobservable inputs (level 3)		Total
	(in millions)
General account:
Common and preferred stocks	$	1,691		$	-		$	606	$	2,297
Bonds		-			24			7		31
Derivative assets at fair value		-			151			-		151
Derivative liabilities at fair value		-			(45	)		-		(45	)

Total general account	$	1,691		$	130		$	613	$	2,434

Separate accounts:
Mutual fund investments		21,248			-			-		21,248
Other benefit plan assets/liabilities		91			14			3		108
Pension and postretirement assets:
Bonds		234			1,678			74		1,986
Common and preferred stock		1,534			6			30		1,570
Cash and short-term securities		15			133			-		148
Other assets/liabilities		(7	)		12			278		283

Subtotal pension and postretirement assets		1,776			1,829			382		3,987

Total separate accounts	$	23,115		$	1,843		$	385	$	25,343

The Company may reclassify assets reported at fair value between levels of the fair value hierarchy if appropriate based on changes in the quality of valuation inputs available during a reporting period. There were no material asset transfers between Level 1 and Level 2 or between Level 2 and Level 3 during the years ended December 31, 2014 or 2013.

NM-56

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The following tables summarize the changes in fair value of level 3 financial instruments for the years ended December 31, 2014 and 2013.


									Separate account pension and postretirement

For the year ended December 31, 2014	General account common and preferred stock			General account bonds			Separate account other benefit plan assets		Bonds			Common and preferred stocks			Other assets/liabilties			Total
	(in millions)

Fair value, beginning of period	$	606		$	7		$	3	$	74		$	30		$	278		$	998
Realized gains/(losses)		128			-			-		1			16			28			173
Unrealized gains/(losses)		15			2			-		(7	)		(5	)		(2	)		3
Issuances		-			-			-		-			-			-			-
Purchases		14			-			-		28			2			44			88
Sales		(301	)		-			-		(1	)		(24	)		(73	)		(399	)
Settlements		(4	)		(7	)		-		(28	)		1			-			(38	)
Net discount/premium		-			1			-		2			-			-			3
Transfers into Level 3		-			-			-		10			-			2			12
Transfers out of Level 3		(15	)		(3	)		-		(5	)		-			(1	)		(24	)

Fair value, end of period	$	443		$	-		$	3	$	74		$	20		$	276		$	816


									Separate account pension and postretirement

For the year ended December 31, 2013	General account common and preferred stock			General account bonds			Separate account other benefit plan assets		Bonds			Common and preferred stocks		Other assets/liabilties			Total
	(in millions)

Fair value, beginning of period	$	609		$	67		$	3	$	28		$	16	$	246		$	969
Realized gains/(losses)		40			(2	)		-		-			-		10			48
Unrealized gains/(losses)		45			29			-		1			5		26			106
Issuances		-			-			-		-			-		-			-
Purchases		42			-			-		16			7		44			109
Sales		(74	)		(24	)		-		(3	)		-		(48	)		(149	)
Settlements		(64	)		(63	)		-		(7	)		-		-			(134	)
Net discount/premium		-			-			-		-			-		-			-
Transfers into Level 3		18			5			-		43			2		-			68
Transfers out of Level 3		(10	)		(5	)		-		(4	)		-		-			(19	)

Fair value, end of period	$	606		$	7		$	3	$	74		$	30	$	278		$	998

NM-57

The Northwestern Mutual Life Insurance Company

Consolidated Statements of Changes in Surplus

(in millions)

The estimated fair values of level 3 financial instruments are sensitive to changes in significant unobservable inputs. The following table presents certain quantitative information about the unobservable inputs used to estimate fair value measurement for general account bonds and privately-placed common and preferred stocks classified as level 3 financial instruments at December 31, 2014.

Fair value
(in millions)

Valuation techniques

Significant

unobservable inputs

Range

Weighted
average

Bonds

$ 74

Broker quotes

Quoted prices ¹

58.00

108.53

92.13

Discounted cash flows

Credit spreads ²

156.00

1,321.10

892.74

Common and preferred stocks

$ 463

Sponsor valuations

EBITDA multiples

1.20 X

12.94 X

8.24 X

Market comparables

EBITDA multiples

4.13 X

18.51 X

9.22 X

Market comparables

Book Value multiples

0.51 X

2.23 X

1.17 X

1 - Presented as a price per hundred dollars of par

2 - Presented in basis points

Level 3 bonds are valued using a combination of discounted cash flows and indicative quotes from independent securities brokers based on market comparable companies. The most significant unobservable input in the discounted cash flow analysis is the discount rate. This rate is estimated based upon a risk-free market interest rate (U.S. Treasury with comparable maturity) plus a credit spread adjustment based on the estimated credit rating of the issuer. In general, issuers with lower credit ratings have higher credit spreads. A decrease in the credit spread adjustment would increase the estimated fair value of the investment as the future expected cash flows are discounted at a lower rate. The opposite impact would occur if credit spread adjustments increase.

Level 3 privately-placed common and preferred stocks are valued using a market comparables approach. This valuation methodology relies on the use of multiples that are based on industry-specific comparable companies. Multiples are derived from the relationship of an entity’s estimated fair value to its book value or earnings before interest, taxes, depreciation and amortization (“EBITDA”). EBITDA is normalized for company-specific differences in capital structure, taxation and fixed asset accounting. An increase in the multiple would result in an increase in the estimated fair value of the investment. The opposite impact would occur if the multiple decreased.

NM-58

Independent Auditor’s Report

To the Board of Trustees and Policyowners of

The Northwestern Mutual Life Insurance Company

We have audited the accompanying consolidated statutory financial statements of The Northwestern Mutual Life Insurance Company and its subsidiary (the “Company), which are comprised of the consolidated statutory statements of financial position as of December 31, 2014 and 2013, and the related consolidated statutory statements of operations, and of changes in surplus, and of cash flows for each of the three years ended December 31, 2014.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 to the consolidated financial statements, the consolidated financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Office of the Commissioner of Insurance of the State of Wisconsin, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

The effects on the consolidated financial statements of the variances between the statutory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

NM-59

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the consolidated financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2014 and 2013, or the results of their operations or their cash flows for each of the three years then ended.

Opinion on Statutory Basis of Accounting

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years then ended, in accordance with the accounting practices prescribed or permitted by the Office of the Insurance Commissioner of the State of Wisconsin described in Note 1.

Emphasis of Matter

As discussed in Note 8 to the consolidated financial statements, the Company has changed its method of accounting for pension and postretirement benefits in 2013. Our opinion is not modified with respect to this matter.

February 24, 2015

NM-60

PART C

OTHER INFORMATION

Item 26. Exhibits


Exhibit	Description	Filed Herewith/Incorporated Herein By Reference To
(a)(1)	Resolution of the Board of Trustees of The Northwestern Mutual Life Insurance Company amending Northwestern Mutual Variable Life Account Operating Authority	Exhibit (a)(1) to Form N-6 Post-Effective Amendment No. 30 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed February 21, 2006
(a)(2)	Resolution of Board of Trustees of The Northwestern Mutual Life Insurance Company establishing the Account	Exhibit A(1) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-36865, filed on October 1, 1997
(b)	Not Applicable
(c)	Distribution Agreement Between The Northwestern Life Insurance Company and Northwestern Mutual Investment Services, LLC, dated May 1, 2006	Exhibit (c) to Form N-6 Registration Statement for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on July 28, 2006
(d)(1)	Form of Policies – (1) Extra Ordinary Variable Life Insurance Policy (Variable Whole Life Policy with Extra Life Protection), MM17, with application (2) Extra Ordinary Variable Life Insurance Policy (Variable Whole Life Policy with Extra Life Protection), MP17, with application (for employers) (3) Single Premium Variable Whole Life Insurance Policy, MM16, with application (4) Single Premium Variable Whole Life Insurance Policy, MP16, with application (for employers) (5) Form of notice of short-term cancellation right (6) Forms of Optional Riders: (i) Waiver of Premium Benefit (ii) Accidental Death Benefit (iii) Additional Purchase Benefit (iv) Term Insurance Benefit (7) Form of Amendment to Variable Life and Variable EOL Form MM.305.(0593) (8) Form of Amendment to Single Premium Variable Life Form MM.306.(0593) (9) Form of Amendment to Variable Whole Life Form MM.305.(0594) (10) Form of Amendment to Variable Whole Life Form MM.305.(0594) (11) Form of Amendment to Variable Single Premium Life Form MM.306.(0594)	Exhibits (d)(1), (d)(2), (d)(3), (d)(4), (d)(5), (d)(6), (d)(7), (d)(8), (d)(9), (d)(10) and (d)(11) to Form N-6 Post-Effective Amendment No. 26 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed on February 28, 2003
(d)(2)	Amendment to Variable Life and Variable EOL Policy	Exhibit A(5)(a) to Form S-6 Post-Effective Amendment No. 21 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed February 25, 1999
(e)	Form of Life Insurance Application 90-1 JCL (0198) WISCONSIN and Application Supplement (1003)	Exhibit (e) to Form N-6 Post-Effective Amendment No. 9 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed April 28, 2005
(f)(1)	Restated Articles of Incorporation of The Northwestern Mutual Life Insurance Company (adopted July 26, 1972)	Exhibit A(6)(a) to Form S-6 Post-Effective Amendment No. 18 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed April 26, 1996
(f)(2)	Amended By-Laws of The Northwestern Mutual Life Insurance Company dated December 4, 2002	Exhibit (f) to Form N-6 Post-Effective Amendment No. 6 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed February 28, 2003
(g)	Form of Reinsurance Agreement	Exhibit (g) to Form N-6 Post-Effective Amendment No. 6 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed February 28, 2003
(h)(a)(1)	Participation Agreement dated March 16, 1999 Among Russell Insurance Funds, Russell Fund Distributors, Inc. and The Northwestern Mutual Life Insurance Company	Exhibit (b)(8)(a) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005
(h)(a)(2)	Amendment No. 1 dated August 7, 2000 to the Participation Agreement dated March 16, 1999 Among Russell Insurance Funds, Russell Fund Distributors, Inc. and The Northwestern Mutual Life Insurance Company	Exhibit (h)1(a)(2) to Form N-6 Registration Statement for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on July 28, 2006

C-1


(h)(a)(3)	Amendment No. 2 dated October 13, 2006 to Participation Agreements dated March 16, 1999 and August 7, 2000, respectively, by and among The Northwestern Mutual Life Insurance Company, Russell Investment Funds, f/k/a “Russell Insurance Funds,” and Russell Fund Distributors, Inc.	Exhibit (h)1(a)(3) to Form N-6 Pre-Effective Amendment No. 1, for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed December 13, 2006
(h)(a)(4)	Amendment No. 3 dated August 29, 2007 to Participation Agreements dated March 16, 1999, August 7, 2000, and October 13, 2006, respectively, by and among The Northwestern Mutual Life Insurance Company, Russell Investment Funds, f/k/a “Russell Insurance Funds,” and Russell Fund Distributors, Inc.	Exhibit (h)(a)(4) to Form N-6 Post-Effective Amendment No. 41 for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 25, 2013
(h)(b)(1)	Participation Agreement dated May 1, 2003 among Variable Insurance Products Funds, Fidelity Distributors Corporation and The Northwestern Mutual Life Insurance Company	Exhibit (b)(8)(b) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005
(h)(b)(2)	Amendment No. 1 dated October 18, 2006 to Participation Agreement dated May 1, 2003, by and among The Northwestern Mutual Life Insurance Company, Fidelity Distributors Corporation, and each of Variable Insurance Products Fund, Variable Insurance Products Fund II, and Variable Insurance Products Fund III	Exhibit (h)1(b)(2) to Form N-6 Pre-Effective Amendment No. 1, for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed December 13, 2006
(h)(b)(3)	Participation Agreement dated April 30, 2007 among Neuberger Berman Advisers Management Trust, Neuberger Berman Management Inc., and The Northwestern Mutual Life Insurance Company	Exhibit (h)(e) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012
(h)(b)(4)	Participation Agreement dated September 27, 2013 among Credit Suisse Trust, Credit Suisse Asset Management, LLC, Credit Suisse Securities (USA) LLC, and The Northwestern Mutual Life Insurance Company	Exhibit (h)(b)(4) to Form N-6 Post-Effective Amendment No. 10 for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on October 1, 2013
(h)(b)(5)	Form of Amendment to Participation Agreement Regarding Rule 498	Exhibit (h)(b)(5) to Form N-6 Post-Effective Amendment No. 10 for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on October 1, 2013
(h)(c)(1)	Administrative Service Fee Agreement dated February 28, 1999 between The Northwestern Mutual Life Insurance Company and Frank Russell Company	Exhibit (b)(8)(c) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005
(h)(c)(2)	Service Agreement dated May 1, 2003 between Fidelity Investments Institutional Operations Company, Inc. and The Northwestern Mutual Life Insurance Company	Exhibit (b)(8)(c)(2) to Form N-4 Pre-Effective Amendment No. 1 for NML Variable Annuity Account A, File No. 333-133380, filed on August 8, 2006
(h)(c)(3)	Amendment dated August 1, 2004 to the Service Agreement dated May 1, 2003 between Fidelity Investments Institutional Operations Company, Inc. and The Northwestern Mutual Life Insurance Company	Exhibit (b)(8)(c)(3) to Form N-4 Pre-Effective Amendment No. 1 for NML Variable Annuity Account A, File No. 333-133380, filed on August 8, 2006
(h)(c)(4)	Form of Administrative Services Agreement	Exhibit (h)(c)(2) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012

(i)	Not Applicable

C-2


(j)(a)	Agreement entered into on February 13, 1984 among Northwestern Mutual Variable Life Account, The Northwestern Mutual Life Insurance Company and NML Equity Services, Inc. (n/k/a Northwestern Mutual Investment Services, LLC)	Exhibit A(8) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-36865, filed October 1, 1997
(j)(b)	Shareholder Information Agreement dated April 13, 2007 among Russell Investment Management Company on behalf of Russell Investment Funds and The Northwestern Mutual Life Insurance Company	Exhibit (j)(b) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012
(j)(c)	Amendment No. 1 dated October 20, 2008 to Shareholder Information Agreement dated April 13, 2007 among Russell Fund Services Company on behalf of Russell Investment Funds and The Northwestern Mutual Life Insurance Company	Exhibit (j)(c) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012
(j)(d)	Shareholder Information Agreement dated April 13, 2007 among Fidelity Distributors Corporation on behalf of Fidelity^® Variable Insurance Products Fund and The Northwestern Mutual Life Insurance Company	Exhibit (j)(d) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012
(j)(e)	Shareholder Information Agreement dated April 16, 2007 among Northwestern Mutual Series Fund, Inc. and The Northwestern Mutual Life Insurance Company	Exhibit (j)(e) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012
(j)(f)	Shareholder Information Agreement dated October 16, 2007 among Neuberger Berman Management Inc. and The Northwestern Mutual Life Insurance Company	Exhibit (j)(f) to Form N-6 Post-Effective Amendment No. 39, for Northwestern Mutual Variable Life Account, File No. 002-89972, filed on April 30, 2012
(j)(g)	Shareholder Information Agreement dated September 27, 2013 among Credit Suisse Securities (USA) LLC and The Northwestern Mutual Life Insurance Company	Exhibit (j)(f) to Form N-6 Post-Effective Amendment No. 10 for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on October 1, 2013
(j)(h)	Power of Attorney	Filed herewith
(j)(i)	NMIS/NM Annuity Operations Admin Agreement	Exhibit (b)(8)(i) to Form N-4 Post-Effective Amendment No. 19 for NML Variable Annuity Account A, File No. 333-72913, filed on April 22, 2008
(k)	Opinion and Consent of Raymond J. Manista, Esq. dated April 27, 2015	Filed herewith
(l)	Not Applicable
(m)	Not Applicable
(n)	Consent of PricewaterhouseCoopers LLP dated April 27, 2015	Filed herewith
(o)	Not Applicable
(p)	Not Applicable
(q)	Memorandum describing Issuance, Transfer and Redemption Procedures	Filed herewith

Item 27. Directors and Officers of the Depositor

The following lists include all of the Trustees, executive officers and other officers of The Northwestern Mutual Life Insurance Company without regard to their activities relating to variable life insurance policies or their authority to act or their status as “officers” as that term is used for certain purposes of the federal securities laws and rules thereunder.

C-3

TRUSTEES – As of April 1, 2015


		Name		Address
		John N. Balboni		Senior Vice President & CIO International Paper 6400 Poplar Avenue Memphis, TN 38197

		David J. Drury		Owner & CEO Poblocki Sign Company LLC 922 South 70^th Street Milwaukee, WI 53214

		Connie K. Duckworth		President & Chairman of the Board ARZU 77 Stone Gate Lane Lake Forest, IL 60045

		James P. Hackett		President & CEO Steelcase, Inc. 901 - 44th Street Grand Rapids, MI 49508

		P. Russell Hardin		President Robert W. Woodruff Foundation 191 Peachtree Street NE, Suite 3540 Atlanta, GA 30303

		Hans Helmerich		President & CEO Helmerich & Payne, Inc. 1437 S. Boulder Avenue Tulsa, OK 74119-3609

		Dale E. Jones		Vice Chairman Heidrick & Struggles 2001 Pennsylvania Avenue, NW Suite 800 Washington, DC 20006

		Margery Kraus		President & CEO APCO Worldwide 700 12^th Street, NW Suite 800 Washington, DC 20005

		David J. Lubar		President Lubar & Co. 700 N. Water Street Suite 1200 Milwaukee, WI 53202

		Ulice Payne, Jr.		President & CEO Addison-Clifton, LLC 13555 Bishops Court Suite 245 Brookfield, WI 53005

		John E. Schlifske		Chairman, President, & CEO Northwestern Mutual 720 E. Wisconsin Avenue Milwaukee, WI 53202

C-4


		Mary Ellen Stanek		Managing Director & Chief Investment Officer Baird Advisors Robert W. Baird & Co. President-Baird Funds Inc. 777 E. Wisconsin Avenue 21^st Floor Milwaukee, WI 53202

		S. Scott Voynich		Managing Partner Robinson, Grimes & Company, PC 5637 Whitesville Road (31904) P. O. Box 4299 (31914) Columbus, GA

		Ralph A. Weber		Founding Member Gass, Weber, Mullins, LLC 309 North Water Street Suite 700 Milwaukee, WI 53202

		Barry L. Williams		Retired Managing General Partner Williams Pacific Ventures, Inc. 4 Embarcadero Center, Suite 3700 San Francisco, CA 94111

		Benjamin F. Wilson		Managing Principal Beveridge & Diamond, P.C. 1350 I Street, NW Suite 700 Washington, DC 20005

		Edward J. Zore		Retired Chairman Northwestern Mutual 777 E. Wisconsin Suite 3005 Milwaukee, WI 53202

EXECUTIVE OFFICERS – As of April 1, 2015


John E. Schlifske		Chairman of the Board & Chief Executive Officer
Leslie Barbi		Senior Vice President (Public Investments)
Rebekah B. Barsch		Vice President (Planning and Sales)
Blaise C. Beaulier		Vice President (Enterprise Projects & Support)
Sandra L. Botcher		Vice President (Facility Operations)
Michael G. Carter		Executive Vice President & Chief Financial Officer
Eric P. Christophersen		Vice President (Wealth Management)
Joann M. Eisenhart		Senior Vice President (Human Resources)
Christina H. Fiasca		Vice President (Product Finance)
Timothy J. Gerend		Senior Vice President (Agencies)
Kimberley Goode		Vice President (Communications & Corporate Affairs)
Karl G. Gouverneur		Vice President & Chief Technology Officer
John M. Grogan		Senior Vice President (Insurance and Investment Products)
Thomas C. Guay		Vice President (Field Rewards)
Gary M. Hewitt		Vice President (Investment Risk Management)
Meg E. Jansky		Vice President – Field Integration
Ronald P. Joelson		Executive Vice President & Chief Investment Officer
Todd Jones		Vice President & Controller
John L. Kordsmeier		Vice President (Strategic Philanthropy & Community Relations)
Jeffrey J. Lueken		Senior Vice President (Private Securities)

C-5


Stephanie A. Lyons		Vice President – Enterprise Risk Assurance
Raymond J. Manista		Senior Vice President, General Counsel & Secretary
Steven C. Mannebach		Vice President (Field Growth & Development)
Christian W. Mitchell		Vice President (Corporate Strategy)
Gregory C. Oberland		President
Steven M. Radke		Vice President (Government Relations)
David R. Remstad		Senior Vice President & Chief Actuary
Bethany M. Rodenhuis		Senior Vice President (Field Strategy & Services)
Tammy M. Roou		Vice President & Chief Risk Officer
Timothy G. Schaefer		Executive Vice President (Operations & Technology)
Calvin R. Schmidt		Senior Vice President (Integrated Customer Operations)
Sarah R. Schneider		Vice President (New Business)
Todd M. Schoon		Senior Vice President (Field Relations)
Sarah E. Schott		Vice President (Enterprise Compliance)
David W. Simbro		Senior Vice President (Life & Annuity Product)
Steve P. Sperka		Vice President (Disability Income)
David G. Stoeffel		Vice President (Investment Services)
Kamilah D. Williams-Kemp		Vice President (Long Term Care)
Conrad C. York		Vice President (Marketing)
Thomas D. Zale		Vice President (Real Estate)
Todd O. Zinkgraf		Vice President (Enterprise Solutions)

OTHER OFFICERS – As of December 1, 2014



Employee		Title

Lisa C. Gandrud		Senior Actuary
Gregory A. Gurlik		Senior Actuary
James R. Lodermeier		VP-Actuary
Ted A. Matchulat		Director-Product Compliance
Bryan D. Miller		Senior Actuary
Chris G. Trost		Senior Actuary
P. Andrew Ware		VP-Actuary

Somayajulu Durvasula		Director-Network Office Transition
Mark J. Gmach		Regional VP
Laila V. Hick		VP-Agency Development
Jason R. Handal		Regional VP
Arthur J. Mees		Regional VP
Timothy Nelson		Regional VP
Michael E. Pritzl		VP-Managing Director Relations
John C. Roberts		VP-Targeted Office Support

Anne A. Frigo		Director-Insurance Product Compliance
Ricky J. Frank		Director-Systems
Robert J. Johnson		Director-Compliance
Gregory S. Leslie		Director-Variable Product Compliance
Randy M. Pavlick		VP-Managed Investments Compliance
Jeffrey P. Schloemer		Director-Compliance
Rebecca Villegas		Director-Compliance

Kevin J. Abitz		Director-Corporate Reporting
Lisa M. Belli-Fuchs		Director-Reporting & Systems Administration
Barbara E. Courtney		Director-Mutual Fund Accounting
Michelle A. Hinze		Director-Accounting Operations
Todd C. Kuzminski		Director-Investment Accounting
K. David Nunley		VP-Tax
David E. Willert		Director-Federal Tax

C-6



Employee		Title
Rick T. Zehner		VP-Research & Special Projects

Mark McNulty		Director-Field Distribution Policies & Administration
Daniel A. Riedl		VP-Field Distribution Policies & Administration

Cynthia A. Criss		Director-Field Recruitment
David A. Eurich		Director-Field Training
Sarah L. N. Koenig		Director-Horizontal Growth
Cindy S. Prater		Director-Practice Management

Arleen J. Llewellyn		Director-FR Engagement & Selection
Paul J. Steffen		VP-Agency Development

Lisa A. Cadotte		Director-Field System Financial Management
Michael R. Fasciotti		Director-Field Real Estate
Richard P. Snyder		Director-Field Compensation

Brenda J. Antkowski		Director-Network Office Operations
Meg E. Jansky		VP-Field Services & Support
Kevin J. Konopa		Director-Client Management
Joanne M. Migliaccio		Director-Field Services & Support
David J. Writz		Director-Field Technology

Karen A. Molloy		VP-Treasurer
Deborah A. Schultz		VP-Financial Management

Pency P. Byhardt		Vice President-Annuity Operations
Don P. Gehrke		Director-Retail Investment Operations
Dennis P. Goyette		Director-Annuity Customer Service
Linda A. Schaefer		Director-Document Shared Services
Lori A. Torner		Director-Retail Investment Operations

R. David Ells		VP-Investment Strategy

Karla J. Adams		Director-Investment Risk Management
James A. Brewer		Director-Investment Planning
David A. Escamilla		Director-Investment Information
Donald Forecki		Director-Investment Operations, Asst. Secretary
Michael S. Treptow		Director-Investment Performance Management

Mark J. Backe		VP-Insurance & Operations Counsel & Asst. Secretary
Joanne M. Breese-Jaeck		Asst. General Counsel & Asst. Secretary
Christopher W. Brownell		Asst. General Counsel & Asst. Secretary
Michael S. Bula		Asst. General Counsel & Asst. Secretary
Thomas B. Christenson		Asst. General Counsel & Asst. Secretary
Michael J. Conmey		Asst. General Counsel & Asst. Secretary
Mark S. Diestelmeier		Asst. General Counsel & Asst. Secretary
John E. Dunn		VP & Investment Products & Services Counsel & Asst. Secretary
James R. Eben		Asst. General Counsel & Asst. Secretary
Bradley L. Eull		Asst. General Counsel & Asst. Secretary
Chad E. Fickett		Asst. General Counsel & Asst. Secretary
James C. Frasher		Asst. General Counsel & Asst. Secretary
Sheila M. Gavin		Asst. General Counsel & Asst. Secretary
Chris K. Gawart		Asst. General Counsel & Asst. Secretary
Matthew D. Heinke		Asst. General Counsel & Asst. Secretary
Steven J. LaFore		Asst. General Counsel & Asst. Secretary
Lisa A. Leister		Asst. General Counsel & Asst. Secretary

C-7



Employee		Title
Kim W. Lunn		Asst. General Counsel & Asst. Secretary
Michael J. Mazza		Asst. General Counsel & Asst. Secretary
Lesli H. McLinden		Asst. General Counsel & Asst. Secretary
William C. Pickering		Asst. General Counsel & Asst. Secretary
Nora M. Platt		Asst. General Counsel & Asst. Secretary
Zhibin Ren		Asst. General Counsel & Asst. Secretary
Peter K. Richardson		Asst. General Counsel & Asst. Secretary
Monica Riederer		Asst. General Counsel & Asst. Secretary
Rodd Schneider		VP & Litigation and Distribution Counsel & Asst. Secretary
Paul W. Scott		Asst. General Counsel & Asst. Secretary
John M. Thompson		Asst. General Counsel & Asst. Secretary
John W. Warren		Asst. General Counsel & Asst. Secretary
Terry R. Young		Asst. General Counsel & Asst. Secretary
Michael W. Zielinski		Asst. General Counsel & Asst. Secretary

Gregory A. Jaeck		Director-Annuity & Income Markets
Jason T. Klawonn		VP-Advanced Markets
Todd L. Laszewski		Director-Life Product Development
William Brian Henning		Director-Competitive Intelligence
Jane Ann Schiltz		Director-LP Planning & Project Support

Thomas R. Anderson		Director-Advanced Planning
Candace M. Damon		Director-Strategic Productivity
Angela M. DiCastri		Director-Retirement Markets
Ruthann M. Driscoll		Director-Advanced Planning
Kenneth P. Elbert		Director-Advanced Planning
Matthew K. Fleming		Director-Planning & Product Insurance Consultation
Stephen J. Frankl		Regional Sales Director
William F. Grady, IV		Director-Advanced Planning
Terence J. Holahan		Director-Planning & Sales Education & Development
Emily J. Holbrook		Director-Young Personal Market
Patrick J. Horning		Director-Advanced Planning
William R. Hughes		Director-Advanced Planning
Martha M. Kendler		Director-Business Market Division
Amy Kiiskila		Director-Advanced Planning
Shawn P. Mauser		Regional Sales Director
John E. Muth		Director-Advanced Planning
Elizabeth Ridley		Director-Market Strategy, Education & Promotion
Faith B. Rodenkirk		Director-Business Market Development
Andrew J. Smalley		Director-Sales Promotion & Integration
Michael C. Soyka		Regional Sales Director
William H. Taylor		VP-Financial Planning & Sales Support
Janine L. Wagner		Director-Planning & Product Insurance Consultation
Stephanie Wilcox		Director-Planning & Sales Admin/Integration
Brian D. Wilson		VP-National Sales
John K. Wilson		Regional Sales Director
Stanford A. Wynn		Director-Advanced Planning

Angela N. Bickler		Director-Policyowner Services
James LeMere		Director-Policyowner Services
Travis T. Piotrowski		VP-Policyowner Services
Sandra K. Scott		Director-Life Benefits
Carol A. Stilwell		Director-Policyowner Services
Natalie J. Versnik		Director-Policyowner Services

Mark J. McLennon		VP-IPS Business Development

C-8

The business addresses for all of the executive officers and other officers is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

Item 28. Persons Controlled By or Under Common Control with the Depositor or Registrant

The subsidiaries of The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”), as of April 1, 2015 are shown below. In addition to the subsidiaries shown below, the following separate investment accounts (which include the Registrant) may be deemed to be either controlled by, or under common control with, Northwestern Mutual:

NML Variable Annuity Account A

NML Variable Annuity Account B

NML Variable Annuity Account C

Northwestern Mutual Variable Life Account

Northwestern Mutual Variable Life Account II

Northwestern Mutual Series Fund, Inc. (the “Funds”), shown below as a subsidiary of Northwestern Mutual, is an investment company, registered under the Investment Company Act of 1940, offering shares to the separate accounts identified above; and the shares of the Funds held in connection with certain of the accounts are voted by Northwestern Mutual in accordance with voting instructions obtained from the persons who own, or are receiving payments under, variable annuity contracts or variable life insurance policies issued in connection with the separate accounts, or in the same proportions as the shares which are so voted.


NORTHWESTERN MUTUAL CORPORATE STRUCTURE⁽¹⁾ (as of April 1, 2015)
Legal Entity Name	Domestic Jurisdiction	Owner %
Operating Subsidiaries
Northwestern Mutual Capital Limited⁽²⁾	United Kingdom	100.00
Mason Street Advisors, LLC⁽²⁾	Delaware	100.00
Northwestern Long Term Care Insurance Company⁽²⁾	Wisconsin	100.00
Northwestern Mutual Investment Management Company, LLC⁽²⁾	Delaware	100.00
Northwestern Mutual Investment Services, LLC⁽²⁾	Wisconsin	100.00
Northwestern Mutual Wealth Management Company⁽²⁾	United States	100.00

All Other Subsidiaries
31 Ogden, LLC⁽²⁾	Delaware	100.00
3412 Exchange, LLC⁽²⁾	Delaware	100.00
AFE Brentwood Park, LLC⁽²⁾	Delaware	100.00
AMLI at Perimeter Gardens, LLC⁽²⁾	Delaware	100.00
Amber, LLC⁽²⁾	Delaware	100.00
Arbor Lake Village Apartments Limited Liability Company⁽²⁾	Delaware	100.00
Baraboo, Inc.⁽²⁾	Delaware	100.00
Bayridge, LLC⁽²⁾	Delaware	100.00
Bishop Square, LLC⁽²⁾	Delaware	100.00
Bradford, Inc.⁽²⁾	Delaware	100.00
Brendan International Sales, Inc.⁽²⁾	U.S. Virgin Islands	100.00
Burgundy, LLC⁽²⁾	Delaware	100.00
C – Land Fund, LLC⁽²⁾	Delaware	100.00
Chateau, LLC⁽²⁾	Delaware	100.00
Coral, Inc.⁽²⁾	Delaware	100.00
Cortona Holdings, LLC⁽²⁾	Delaware	100.00
Crosland Denver Highway 16, LLC⁽²⁾	North Carolina	100.00
Crosland Greens, LLC⁽²⁾	North Carolina	100.00
Fairfield West Deer Park LLC⁽²⁾	Delaware	100.00
Hazel, Inc.⁽²⁾	Delaware	100.00

C-9


NORTHWESTERN MUTUAL CORPORATE STRUCTURE⁽¹⁾ (as of April 1, 2015)
Higgins, Inc.⁽²⁾	Delaware	100.00
Hobby, Inc.⁽²⁾	Delaware	100.00
Hollenberg 1, Inc.⁽²⁾	Delaware	100.00
Jacksonville Concourse II, LLC⁽²⁾	Delaware	100.00
Jacksonville Concourse III, LLC⁽²⁾	Delaware	100.00
Jacksonville Concourse, LLC⁽²⁾	Delaware	100.00
Juleen, LLC⁽²⁾	Delaware	100.00
Justin International FSC, Inc.⁽²⁾	U.S. Virgin Islands	100.00
Klode, Inc.⁽²⁾	Delaware	100.00
Kristiana International Sales, Inc.⁽²⁾	U.S. Virgin Islands	100.00
Logan, Inc.⁽²⁾	Delaware	100.00
Maroon, Inc.⁽²⁾	Delaware	100.00
Mason & Marshall, Inc.⁽²⁾	Delaware	100.00
Millbrook Apartments Associates L.L.C.⁽²⁾	Virginia	100.00
Mitchell, Inc.⁽²⁾	Delaware	100.00
Model Portfolios, LLC⁽²⁾	Delaware	100.00
Nicolet, Inc.⁽²⁾	Delaware	100.00
NM BSA, LLC⁽²⁾	Delaware	100.00
NM Cancer Center GP, LLC⁽²⁾	Delaware	100.00
NM DFW Lewisville, LLC⁽²⁾	Delaware	100.00
NM GP Holdings, LLC⁽²⁾	Delaware	100.00
NM Harrisburg, Inc.⁽²⁾	Pennsylvania	100.00
NM Imperial, LLC⁽²⁾	Delaware	100.00
NM Investment Holdings, Inc.⁽²⁾	Delaware	100.00
NM Lion, LLC⁽²⁾	Delaware	100.00
NM Majestic Holdings, LLC⁽²⁾	Delaware	100.00
NM Neptune, LLC⁽²⁾	Delaware	100.00
NM Pebble Valley LLC⁽²⁾	Delaware	100.00
NM RE Funds, LLC⁽²⁾	Delaware	100.00
NM Regal, LLC⁽²⁾	Delaware	100.00
NM Twin Creeks GP, LLC⁽²⁾	Delaware	100.00
NML Clubs Associated, Inc.⁽²⁾	Wisconsin	100.00
NML Development Corporation⁽²⁾	Delaware	100.00
NML Real Estate Holdings, LLC⁽²⁾	Wisconsin	100.00
NML Securities Holdings, LLC⁽²⁾	Wisconsin	100.00
NMRM Holdings, LLC⁽²⁾	Delaware	100.00
North Van Buren, Inc.⁽²⁾	Delaware	100.00
Northwestern Ellis Company⁽²⁾	Nova Scotia	100.00
Northwestern Mutual Capital GP II, LLC⁽²⁾	Delaware	100.00
Northwestern Mutual Capital GP III, LLC⁽²⁾	Delaware	100.00
Northwestern Mutual Capital GP, LLC⁽²⁾	Delaware	100.00
Northwestern Mutual Capital Mezzanine Fund II, LP⁽²⁾	Delaware	100.00
Northwestern Mutual Capital Mezzanine Fund III, LP⁽²⁾	Delaware	100.00
Northwestern Mutual Capital Strategic Equity Fund II, LP⁽²⁾	Delaware	100.00
Northwestern Mutual Capital Strategic Equity Fund III, LP⁽²⁾	Delaware	100.00
Northwestern Mutual MU TLD Registry, LLC⁽²⁾	Delaware	100.00
Northwestern Mutual Registry, LLC⁽²⁾	Delaware	100.00
Northwestern Mutual Series Fund, Inc.⁽⁴⁾	Maryland	100.00
NorthWoods Phase I, LLC	Delaware	100.00
Olive, Inc.⁽²⁾	Delaware	100.00
Osprey Links Golf Course, LLC⁽²⁾	Delaware	100.00

C-10


NORTHWESTERN MUTUAL CORPORATE STRUCTURE⁽¹⁾ (as of April 1, 2015)
Osprey Links, LLC⁽²⁾	Delaware	100.00
Park Ridge Corporate Center, LLC⁽²⁾	Delaware	100.00
Piedmont Center, 1-4 LLC⁽²⁾	Delaware	100.00
Piedmont Center, 15 LLC⁽²⁾	Delaware	100.00
Plantation Oaks MHC-NM, LLC⁽²⁾	Delaware	100.00
RE Corp.⁽²⁾	Delaware	100.00
Regina International Sales, Inc.⁽²⁾	U.S. Virgin Islands	100.00
Russet, Inc.⁽²⁾	Delaware	100.00
Scotty, LLC⁽²⁾	Delaware	100.00
Solar Resources, Inc.⁽²⁾	Wisconsin	100.00
Stadium and Arena Management, Inc.⁽²⁾	Delaware	100.00
Tupelo, Inc.⁽²⁾	Delaware	100.00
Two Con Holdings, LLC⁽²⁾	Delaware	100.00
Two Con SPE, LLC⁽²⁾	Delaware	100.00
Two Con, LLC⁽²⁾	Delaware	100.00
Ventura Lakes MHC-NM, LLC	Delaware	100.00
Walden OC, LLC⁽²⁾	Delaware	100.00
Warren Corporate Center, LLC⁽²⁾	Delaware	100.00
West Huron Joint Venture⁽²⁾	Washington	100.00
White Oaks, Inc.⁽²⁾	Delaware	100.00
Windwood Drive Ann Arbor, LLC⁽²⁾	Delaware	100.00

(1)

Certain subsidiaries are omitted on the basis that, considered in the aggregate at year end 2014, they did not constitute a significant subsidiary as defined by Regulation S-X. Certain investment partnerships and limited liability companies that hold real estate assets of The Northwestern Mutual Life Insurance Company are not represented.

(2)	Subsidiary included in the consolidated financial statements.

(3)	Subsidiary files separate financial statements. The Subsidiary is held by Northwestern Mutual through NM Investment Holdings, LLC.

(4)

Growth Stock Portfolio, Focused Appreciation Portfolio, Large Cap Core Stock Portfolio, Large Cap Blend Portfolio, Index 500 Stock Portfolio, Large Company Value Portfolio, Domestic Equity Portfolio, Equity Income Portfolio, Mid Cap Growth Stock Portfolio, Index 400 Stock Portfolio, Mid Cap Value Portfolio, Small Cap Growth Stock Portfolio, Index 600 Stock Portfolio, Small Cap Value Portfolio, International Growth Portfolio, Research International Core Portfolio, International Equity Portfolio, Emerging Markets Equity Portfolio, Money Market Portfolio, Short-Term Bond Portfolio, Select Bond Portfolio, Long-Term U.S. Government Bond Portfolio, Inflation Protection Portfolio, High Yield Bond Portfolio, Multi-Sector Bond Portfolio, Balanced Portfolio, Asset Allocation Portfolio.

Item 29. Indemnification

(a) That portion of the By-laws of the Depositor, Northwestern Mutual, relating to indemnification of Trustees and officers is set forth in full in Article VII of the By-laws of Northwestern Mutual, amended by resolution and previously filed as Exhibit A(6)(b) to the registration statement of Northwestern Mutual Variable Life Account (File No. 333-59103) on July 15, 1998.

(b) Section 10 of the Distribution Agreement dated May 1, 2006 between Northwestern Mutual and Northwestern Mutual Investment Services, LLC (“NMIS”) provides substantially as follows:

B. Indemnification by Company. The Company agrees to indemnify, defend and hold harmless NMIS, its successors and assigns, and their respective officers, directors, and employees (together referred to as “NMIS Related Persons”), from any and all joint or several losses, claims,

C-11

damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which NMIS and/or any NMIS Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by the Company and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of NMIS or for which NMIS is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material.

This indemnification shall be in addition to any liability that the Company may otherwise have; provided, however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.

C. Indemnification by NMIS. NMIS agrees to indemnify, defend and hold harmless the Company, its successors and assigns, and their respective officers, trustees or directors, and employees (together referred to as “Company Related Persons”), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which the Company and/or any Company Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by NMIS and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of the Company or for which the Company is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon information furnished in writing by NMIS to the Company specifically for use in the preparation of the aforesaid material.

This indemnification shall be in addition to any liability that NMIS may otherwise have; provided however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.

D. Indemnification Generally. Any person seeking indemnification under this section shall promptly notify the indemnifying party in writing after receiving notice of the commencement of any action as to which a claim for indemnification will be made; provided, however, that failure to so notify the indemnifying party shall not relieve such party from any liability which it may have to such person otherwise than on account of this section.

The indemnifying party shall be entitled to participate in the defense of the indemnified person but such participation will not relieve such indemnifying party of the obligation to reimburse the indemnified party for reasonable legal and other expenses incurred by such party in defending himself, herself or itself.

Item 30. Principal Underwriters

(a) NMIS is the principal underwriter of the securities of the Registrant. NMIS is also the principal underwriter for the NML Variable Annuity Account A (811-21887), the NML Variable Annuity Account B (811-1668), the NML Variable Annuity Account C (811-21886), and the Northwestern Mutual Variable Life Account II (811-21933).

(b) As of April 1, 2015, the directors and officers of NMIS are as follows:


		Name		Position
		Jason T. Anderson		Assistant Treasurer
		Rebekah B. Barsch		Vice President, Planning and Sales
		Pency P. Byhardt		Vice President, Annuity Operations
		Michael G. Carter		Director
		Linda C. Donahue		NMIS Anti-Money Laundering (AML) Officer
		Bradley L. Eull		Secretary
		Christina H. Fiasca		Vice President, Product Finance
		Don P. Gehrke		Director, Retail Investment Operations

C-12


		Timothy J. Gerend		Director, Senior Vice President, Agencies
		John M. Grogan		Director, Senior Vice President, Insurance and Investment Products
		Thomas C. Guay		Vice President, Field Rewards
		David P. Harley		Director, Investment Services
		Andrew E. Iggens		Assistant Treasurer
		Ronald P. Joelson		Director
		Jennifer W. Murphy		Director, NMIS Home Office Supervision/Administration
		Jeffrey J. Niehaus		Director, Business Retirement Markets
		K. David Nunley		Assistant Treasurer
		Gregory C. Oberland		Executive Officer, Agencies, Sales and Marketing
		Jennifer O’Leary		Treasurer and Financial and Operations Principal
		Travis T. Piotrowski		Vice President, Policyowner Services
		Monica M. Riederer		Assistant Secretary
		Daniel A. Riedl		Vice President, Chief Operating Officer
		Bethany M. Rodenhuis		Senior Vice President, Agencies Strategy and Services
		Calvin R. Schmidt		Director, Senior Vice President, Integrated Operations
		Sarah R. Schneider		Vice President, New Business
		Todd M. Schoon		Senior Vice President, Field Relations
		Sarah E. Schott		Vice President, Compliance/Best Practices
		David W. Simbro		Senior Vice President, Life and Annuity Product
		Todd W. Smasal		Director, Human Resources
		David G. Stoeffel		Director, President and Chief Executive Officer
		Kellen A. Thiel		Director, Investment Products
		Jeffrey B. Williams		Vice President, NMIS Compliance, and Chief Compliance Officer
		Brian D. Wilson		Vice President, National Sales

The address for each director and officer of NMIS is 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

(c) NMIS, the principal underwriter, received $5,607,850 of commissions and other compensation, directly or indirectly, from Registrant during the last fiscal year.

Item 31. Location of Accounts and Records

All accounts, books or other documents required to be maintained in connection with the Registrant’s operations are maintained in the physical possession of Northwestern Mutual at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

Item 32. Management Services

There are no management-related service contracts, other than those referred to in Part A or Part B of this Registration Statement, under which management-related services are provided to the Registrant and pursuant to which total payments of $5,000 or more were made during any of the last three fiscal years.

Item 33. Fee Representation

The Northwestern Mutual Life Insurance Company hereby represents that the fees and charges deducted under the variable life insurance policies which are the subject of this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company under the policies.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, Northwestern Mutual Variable Life Account, certifies that it meets all of the requirements for effectiveness of this Amended Registration pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amended Registration Statement to be signed on its behalf, in the City of Milwaukee, and State of Wisconsin, on the 27^th day of April, 2015.

NORTHWESTERN MUTUAL VARIABLE LIFE

ACCOUNT (Registrant)

THE NORTHWESTERN MUTUAL LIFE

INSURANCE COMPANY (Depositor)

Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed by the Depositor on the 27^th day of April, 2015.

THE NORTHWESTERN MUTUAL LIFE

INSURANCE COMPANY (Depositor)

Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed below by the following persons in the capacities with the Depositor and on the dates indicated:


Signature				Title

				Chairman, Trustee and
/s/ JOHN E. SCHLIFSKE				Chief Executive Officer;
John E. Schlifske				Principal Executive Officer

/s/ MICHAEL G. CARTER				Chief Financial Officer and
Michael G. Carter				Principal Financial Officer

/s/ TODD JONES				Vice President and Controller;
Todd Jones				Principal Accounting Officer

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/s/ John N. Balboni*				Trustee
John N. Balboni

/s/ David J. Drury*				Trustee
David J. Drury

/s/ Connie K. Duckworth*				Trustee
Connie K. Duckworth

/s/ James P. Hackett*				Trustee
James P. Hackett

/s/ P. Russell Hardin*				Trustee
P. Russell Hardin

/s/ Hans Helmerich*				Trustee
Hans Helmerich

/s/ Dale E. Jones*				Trustee
Dale E. Jones

/s/ Margery Kraus*				Trustee
Margery Kraus

/s/ David J. Lubar*				Trustee
David J. Lubar

/s/ Ulice Payne, Jr.*				Trustee
Ulice Payne, Jr.

/s/ John E. Schlifske*				Trustee
John E. Schlifske

/s/ Mary Ellen Stanek*				Trustee
Mary Ellen Stanek

/s/ S. Scott Voynich*				Trustee
S. Scott Voynich

/s/ Ralph A. Weber*				Trustee
Ralph A. Weber

/s/ Barry L. Williams*				Trustee
Barry L. Williams

/s/ Benjamin F. Wilson*				Trustee
Benjamin F. Wilson

/s/ Edward J. Zore*				Trustee
Edward J. Zore

*By:

/s/ JOHN E. SCHLIFSKE

John E. Schlifske, Attorney in fact,

pursuant to the Power of Attorney filed herewith.

Each of the signatures is affixed as of April 27, 2015.

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EXHIBIT INDEX

EXHIBITS FILED WITH FORM N-6

POST-EFFECTIVE AMENDMENT NO. 45 TO

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

FOR

NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT


Exhibit	Description
(j)(h)	Power of Attorney	Filed herewith
(k)	Opinion and Consent of Raymond J. Manista, Esq. dated April 27, 2015	Filed herewith
(n)	Consent of PricewaterhouseCoopers LLP dated April 27, 2015	Filed herewith
(q)	Memorandum describing Issuance, Transfer and Redemption Procedures	Filed herewith

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