497 1 l88845be497.txt NATIONWIDE VLI SEPARATE ACCOUNT-2 1 SUPPLEMENT DATED JUNE 8, 2001 TO PROSPECTUS DATED MAY 1, 2001 FOR FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICIES ISSUED BY NATIONWIDE LIFE INSURANCE COMPANY THROUGH ITS NATIONWIDE VLI SEPARATE ACCOUNT - 2 THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS. PLEASE READ IT AND KEEP IT WITH YOUR PROSPECTUS FOR FUTURE REFERENCE. 1. THE FOLLOWING IS ADDED TO PAGE 2 OF THE PROSPECTUS: In the future, additional underlying mutual funds managed by certain financial institutions, brokerage firms or their affiliates may be added to the variable account. These funds, as well as other underlying mutual funds, may be offered exclusively to purchasing customers of the particular financial institution or brokerage firm. 2. THE LIST OF AVAILABLE UNDERLYING MUTUAL FUNDS LOCATED ON PAGE 1 OF YOUR PROSPECTUS IS AMENDED BY ADDING THE FOLLOWING: NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST - AMT Balanced Portfolio 3. THE "UNDERLYING MUTUAL FUND ANNUAL EXPENSES" TABLE LOCATED ON PAGES 6-8 OF YOUR PROSPECTUS IS AMENDED AS FOLLOWS: UNDERLYING MUTUAL FUND ANNUAL EXPENSES (AS A PERCENTAGE OF UNDERLYING MUTUAL FUND NET ASSETS, AFTER EXPENSE REIMBURSEMENT)
Management Other 12b-1 Fees Total Mutual Fees Expenses Fund Expenses Neuberger Berman AMT Balanced Portfolio 0.85% 0.14% 0.00% 0.99%
4. "APPENDX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS" LOCATED ON PAGE 37 OF YOUR PROSPECTUS IS AMENDED BY ADDING THE FOLLOWING: NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST Neuberger Berman Advisers Management Trust ("Neuberger Berman AMT") is an open-end, diversified management investment company that offers its portfolios in connection with variable annuity contracts and variable life insurance policies and certain qualified plans. Prior to May 1, 2000, the portfolios invested through a two-tier master/feeder structure, whereby each portfolio invested its assets in another fund that served as a corresponding "master series;" the master series invested in securities. Effective May 1, 2000, the portfolios converted to a conventional one-tier structure, whereby each portfolio holds its securities directly. Neuberger Berman Management Inc. is the investment adviser. AMT BALANCED PORTFOLIO Investment Objective: Long-term capital growth and reasonable current income without undue risk to principal. The Portfolio will seek to achieve its objective through investment of a portion of its assets in common stocks and a portion of its assets in debt securities. The investment adviser anticipates that the Portfolio's investments will normally be managed so that approximately 60% of the Portfolio's total assets will be invested in common stocks and the remaining assets will be invested in debt securities. However, depending on the investment adviser's views regarding current market trends, the common stock portion of the Portfolio's investments may be adjusted downward as low as 50% or upward as high as 70%. At least 25% of the Portfolio's assets will be invested in fixed income senior securities. 2 NATIONWIDE LIFE INSURANCE COMPANY Flexible Premium Variable Universal Life Insurance Policies Issued by Nationwide Life Insurance Company through its Nationwide VLI Separate Account-2 The date of this prospectus is May 1, 2001 This prospectus contains basic information you should know about the policies before investing. Please read it and keep it for future reference. THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE AVAILABLE UNDER THE POLICIES: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. A MEMBER OF THE AMERICAN CENTURY(SM) FAMILY OF INVESTMENTS - American Century VP Balanced - American Century VP Income & Growth - American Century VP International - American Century VP Value CREDIT SUISSE WARBURG PINCUS TRUST (FORMERLY, WARBURG PINCUS TRUST) - Small Company Growth Portfolio DREYFUS - Dreyfus Investment Portfolios - European Equity Portfolio - Initial Shares - The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares - Dreyfus Stock Index Fund, Inc. - Initial Shares DREYFUS VARIABLE INVESTMENT FUND - Appreciation Portfolio - Initial Shares (formerly, Dreyfus Variable Investment Fund - Capital Appreciation Portfolio) - Growth & Income Portfolio* - Initial Shares FIDELITY VARIABLE INSURANCE PRODUCTS FUND - VIP Equity-Income Portfolio - VIP Growth Portfolio - VIP High Income Portfolio* - VIP Overseas Portfolio FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - VIP II Asset Manager Portfolio - VIP II Contrafund(R) Portfolio FIDELITY VARIABLE INSURANCE PRODUCTS FUND III - VIP III Growth Opportunities Portfolio JANUS ASPEN SERIES - Capital Appreciation Portfolio: Service Shares - Global Technology Portfolio: Service International - Growth Portfolio: Service Shares MORGAN STANLEY THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.) - Emerging Markets Debt Portfolio - U.S. Real Estate Portfolio NATIONWIDE SEPARATE ACCOUNT TRUST - Capital Appreciation Fund - Dreyfus NSAT Mid Cap Index Fund (formerly, Nationwide(R) Mid Cap Index FunD - Gartmore NSAT Emerging Markets Fund - Gartmore NSAT Global Technology and Communications Fund - Gartmore NSAT International Growth Fund - Government Bond Fund - MAS NSAT Multi Sector Bond Fund* (formerly, Nationwide(R) Multi Sector Bond Fund) - Money Market Fund - Nationwide(R)Small Cap Growth Fund (subadvisers: Miller, Anderson & Sherrerd, LLP, Neuberger Berman, LLC and Waddell & Reed Investment Management Company) - Nationwide(R)Small Cap Value Fund (subadviser: The Dreyfus Corporation) - Nationwide(R)Small Company Fund (subadviser: The Dreyfus Corporation, Neuberger Berman, LLC, Lazard Asset Management and Strong Capital Management, Inc. and Waddell & Reed Investment Management Company) - Strong NSAT Mid Cap Growth Fund (formerly, Nationwide(R)Strategic Growth Fund) - Total Return Fund - Turner NSAT Growth Focus Fund NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST - AMT Growth Portfolio - AMT Guardian Portfolio - AMT Limited Maturity Bond Portfolio - AMT Partners Portfolio OPPENHEIMER VARIABLE ACCOUNTS FUNDS - Oppenheimer Aggressive Growth Fund/VA (formerly, Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund) - Oppenheimer Bond Fund/VA 1 3 - Oppenheimer Capital Appreciation Fund/VA (formerly, Oppenheimer Growth Fund) - Oppenheimer Global Securities Fund/VA - Oppenheimer Main Street Growth & Income Fund/VA - Oppenheimer Multiple Strategies Fund/VA STRONG OPPORTUNITY FUND II, INC. (FORMERLY, STRONG SPECIAL FUND II, INC.) VAN ECK WORLDWIDE INSURANCE TRUST - Worldwide Bond Fund - Worldwide Emerging Markets Fund - Worldwide Hard Assets Fund NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. - American Century VP Capital Appreciation CREDIT SUISSE WARBURG PINCUS TRUST (FORMERLY, WARBURG PINCUS TRUST) - Global Post-Venture Capital Portfolio (formerly, Post-Venture Capital Portfolio) - International Equity Portfolio STRONG VARIABLE INSURANCE FUNDS, INC. - International Stock Fund II - Strong Discovery Fund II, Inc. *These underlying mutual funds invest in lower quality debt securities commonly referred to as junk bonds. For general information or to obtain FREE copies of the: - prospectus, annual report or semi-annual report for any underlying mutual fund; and - any required Nationwide forms, call: 1-800-547-7548 TDD 1-800-238-3035 or write: NATIONWIDE LIFE INSURANCE COMPANY P.O. BOX 182150 COLUMBUS, OHIO 43218-2150 Material incorporated by reference to this prospectus can be found on the SEC website at: www.sec.gov Information about this and other Best of America Products can be found on the world-wide web at: www.bestofamerica.com THIS POLICY: - IS NOT A BANK DEPOSIT - IS NOT FDIC INSURED - IS NOT INSURED OR ENDORSED BY A BANK OR ANY FEDERAL GOVERNMENT AGENCY - IS NOT AVAILABLE IN EVERY STATE - MAY GO DOWN IN VALUE The life insurance policies offered by this prospectus are flexible premium variable universal life insurance policies (flexible premium variable adjustable life insurance policies in Puerto Rico). They provide flexibility with the amount and frequency of premium payments. No claim is made that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund. The death benefit and cash value of this policy may vary to reflect the experience of the Nationwide VLI Separate Account-2 or the fixed account, depending on how premium payments are invested. Investors assume certain risks when investing in the policies, including the risk of losing of money. Nationwide guarantees the death benefit for as long as the policy is in force. Nationwide guarantees to keep the policy in force so long as minimum premium requirements have been met. The cash surrender value is not guaranteed. The policy will lapse if the cash surrender value is insufficient to cover policy charges. Benefits described in this prospectus may not be available in every jurisdiction - refer to your policy for specific benefit information. THIS PROSPECTUS IS NOT AN OFFERING IN ANY JURISDICTION WHERE SUCH OFFERING MAY NOT LAWFULLY BE MADE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 2 4 GLOSSARY OF SPECIAL TERMS ATTAINED AGE- The insured's age on the policy date, plus the number of full years since the policy date. ACCUMULATION UNIT- An accounting unit of measure used to calculate the cash value of the variable account. BREAK POINT PREMIUM- The level annual premium at which the sales load is reduced on a current basis. FIXED ACCOUNT- An investment option which is funded by the general account of Nationwide. GENERAL ACCOUNT- All assets of Nationwide other than those of the variable account or in other separate accounts that have been or may be established by Nationwide. GUIDELINE LEVEL PREMIUM- The level annual premiums required to mature the policy under reasonable mortality and expense charges with an annual effective interest rate of 5%. It is calculated pursuant to Rule 6e-3(T) of the Investment Company Act of 1940. SUB-ACCOUNTS- Divisions of the variable account to which underlying mutual fund shares are allocated and for which accumulation units are separately maintained. MATURITY DATE- The policy anniversary on or next following the insured's 95th birthday. NATIONWIDE- Nationwide Life Insurance Company. NET PREMIUMS- Net premiums are equal to the actual premiums minus the percent of premium charges. The percent of premium charges are shown on the policy data page. SPECIFIED AMOUNT- The dollar amount used to determine the death benefit under a policy. VALUATION PERIOD- Each day the New York Stock Exchange is open for business. VARIABLE ACCOUNT- Nationwide VLI Separate Account-2, a separate account of Nationwide Life Insurance Company that contains variable account allocations. The variable account is divided into sub-accounts, each of which invests in shares of a separate underlying mutual fund. 3 5 TABLE OF CONTENTS GLOSSARY OF SPECIAL TERMS..................................... SUMMARY OF POLICY EXPENSES.................................... UNDERLYING MUTUAL FUND ANNUAL EXPENSES........................ SYNOPSIS OF THE POLICIES...................................... NATIONWIDE LIFE INSURANCE COMPANY............................. NATIONWIDE INVESTMENT SERVICES CORPORATION.............................................. INVESTING IN THE POLICY....................................... The Variable Account and Underlying Mutual Funds The Fixed Account INFORMATION ABOUT THE POLICIES................................ Minimum Requirements for Policy Issuance Premium Payments Pricing POLICY CHARGES................................................ Sales Load Tax Load Surrender Charges Reductions to Surrender Charges Monthly Cost of Insurance Charge Monthly Administrative Charge Increase Charge Mortality and Expense Risk Charge Income Tax Reduction of Charges SURRENDERING THE POLICY FOR CASH.............................. Surrender (Redemption) Income Tax Withholding VARIATION IN CASH VALUE....................................... Error in Age or Sex POLICY PROVISIONS............................................. Policy Owner Beneficiary Changes in Existing Insurance Coverage OPERATION OF THE POLICY....................................... Allocation of Net Premium and Cash Value How the Investment Experience is Determined Net Investment Factor Determining the Cash Value Transfers RIGHT TO REVOKE............................................... POLICY LOANS.................................................. Taking a Policy Loan Effect on Investment Performance Interest Effect on Death Benefit and Cash Value Repayment ASSIGNMENT.................................................... POLICY OWNER SERVICES......................................... Dollar Cost Averaging DEATH BENEFIT INFORMATION..................................... Calculation of the Death Benefit Changes in the Death Benefit Option Proceeds Payable on Death Incontestability Suicide Maturity Proceeds EXCHANGE RIGHTS............................................... GRACE PERIOD.................................................. Reinstatement TAX MATTERS................................................... Policy Proceeds Withholding Federal Estate and Generation-Skipping Transfers Taxes Non-Resident Aliens Taxation of Nationwide Tax Changes LEGAL CONSIDERATIONS.......................................... STATE REGULATION.............................................. REPORTS TO POLICY OWNERS...................................... ADVERTISING................................................... LEGAL PROCEEDINGS............................................. EXPERTS....................................................... REGISTRATION STATEMENT........................................ DISTRIBUTION OF THE POLICIES.................................. ADDITIONAL INFORMATION ABOUT NATIONWIDE............................................... APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS............ APPENDIX B: ILLUSTRATIONS OF SURRENDER CHARGES................ APPENDIX C: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS................................... 4 6 SUMMARY OF POLICY EXPENSES Nationwide deducts certain charges from the policy. Charges are made for administrative and sales expenses, tax expenses, providing life insurance protection and assuming the mortality and expense risks. Nationwide deducts a sales load and a tax load from premium payments. The sales load is guaranteed never to exceed 3.5% of each premium payment. Currently, the sales load is reduced to 1.5% on any portion of the annual premium paid in excess of the annual break point premium (see "Sales Load"). The tax load is approximately 3.5% of premiums for all states (see "Tax Expense Charge"). Nationwide deducts a mortality and expense risk charge equal to an annualized rate of 0.80% from the daily net assets of the variable account. Nationwide deducts an administrative expense charge of $12.50 per month in the first year, and $5 per month in renewal years. Nationwide guarantees this charge will never exceed $25 per month in the first year and $7.50 per month in renewal years. Nationwide deducts the following charges from the cash value of the policy: - a monthly cost of insurance charge; - a monthly cost of any additional benefits provided by riders to the policy; - an increase charge (applied to increases in the specified amount); and - a surrender charge. The increase charge is comprised of an underwriting and administration component of $1.50 per year per $1,000 and a sales component of $0.54 per year per $1,000 (see "Increase Charge"). A surrender charge is assessed for policies surrendered during the first 9 policy years (see "Surrender Charges"). For more information about any policy charge, see "Policy Charges" in this prospectus. 5 7 UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, after expense reimbursement)
MANAGEMENT OTHER EXPENSES 12b-1 TOTAL MUTUAL FEES FEES FUND EXPENSES American Century Variable Portfolios, Inc. 0.90% 0.00% 0.00% 0.90% - American Century VP Balanced American Century Variable Portfolios, Inc. 0.98% 0.00% 0.00% 0.98% - American Century VP Capital Appreciation American Century Variable Portfolios, Inc. 0.70% 0.00% 0.00% 0.70% - American Century VP Income & Growth American Century Variable Portfolios, Inc. 1.23% 0.00% 0.00% 1.23% - American Century VP International American Century Variable Portfolios, Inc. 1.00% 0.00% 0.00% 1.00% - American Century VP Value Credit Suisse Warburg Pincus Trust - 1.14% 0.26% 0.00% 1.40% Global Post-Venture Capital Portfolio (formerly, Warburg Pincus Trust - Post-Venture Capital Portfolio) Credit Suisse Warburg Pincus Trust 1.00% 0.30% 0.00% 1.30% -International Equity Portfolio (formerly, Warburg Pincus Trust - International Equity Portfolio) Credit Suisse Warburg Pincus Trust - Small 0.90% 0.21% 0.00% 1.11% Company Growth Portfolio (formerly, Warburg Pincus Trust - Small Company Growth Portfolio) Dreyfus Investment Portfolios: European 1.00% 0.25% 0.00% 1.25% Equity Portfolio - Initial Shares The Dreyfus Socially Responsible Growth 0.75% 0.03% 0.00% 0.78% Fund, Inc. - Initial Shares Dreyfus Stock Index Fund, Inc. - Initial 0.25% 0.01% 0.00% 0.26% Shares Dreyfus Variable Investment Fund- 0.75% 0.03% 0.00% 0.78% Appreciation Portfolio - Initial Shares (formerly, Dreyfus Variable Investment Fund - Capital Appreciation Portfolio) Dreyfus Variable Investment Fund- Growth & 0.75% 0.03% 0.00% 0.78% Income Portfolio - Initial Shares Fidelity VIP Equity-Income Portfolio(1) 0.48% 0.08% 0.00% 0.56% Fidelity VIP Growth Portfolio(1) 0.57% 0.08% 0.00% 0.65% Fidelity VIP High Income Portfolio 0.58% 0.10% 0.00% 0.68% Fidelity VIP Overseas Portfolio(1) 0.72% 0.17% 0.00% 0.89% Fidelity VIP II Asset Manager Portfolio 0.53% 0.08% 0.00% 0.61% Fidelity VIP II Contrafund(R)Portfolio(1) 0.57% 0.09% 0.00% 0.66% Fidelity VIP III Growth Opportunities 0.58% 0.10% 0.00% 0.68% Portfolio(1) Janus Aspen Series - Capital Appreciation 0.65% 0.02% 0.25% 0.92% Portfolio: Service Shares Janus Aspen Series - Global Technology 0.65% 0.04% 0.25% 0.94% Portfolio: Service Shares Janus Aspen Series - International Growth 0.65% 0.06% 0.25% 0.96% Portfolio: Service Shares NSAT Capital Appreciation Fund 0.60% 0.20% 0.00% 0.80% NSAT Dreyfus NSAT Mid Cap Index Fund 0.50% 0.15% 0.00% 0.65% (formerly, NSAT Nationwide Mid Cap Index Fund) NSAT Gartmore NSAT Emerging Markets Fund 1.15% 0.60% 0.00% 1.75%
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MANAGEMENT OTHER EXPENSES 12b-1 TOTAL MUTUAL FEES FEES FUND EXPENSES NSAT Gartmore NSAT Global Technology and 0.98% 0.37% 0.00% 1.35% Communications Fund NSAT Gartmore NSAT International Growth 1.00% 0.60% 0.00% 1.60% Fund NSAT Government Bond Fund 0.50% 0.16% 0.00% 0.66% NSAT MAS NSAT Multi Sector Bond Fund 0.75% 0.15% 0.00% 0.90% (formerly, NSAT Nationwide Multi Sector Bond Fund) NSAT Money Market Fund 0.39% 0.16% 0.00% 0.55% NSAT Nationwide Small Cap Growth Fund 1.10% 0.20% 0.00% 1.30% NSAT Nationwide Small Cap Value Fund 0.90% 0.15% 0.00% 1.05% NSAT Nationwide Small Company Fund 0.93% 0.28% 0.00% 1.21% NSAT Strong NSAT Mid Cap Growth Fund 0.90% 0.10% 0.00% 1.00% (formerly, NSAT Nationwide Strategic Growth Fund) NSAT Total Return Fund 0.58% 0.20% 0.00% 0.78% NSAT Turner NSAT Growth Focus Fund 0.90% 0.45% 0.00% 1.35% Neuberger Berman AMT Growth Portfolio 0.82% 0.08% 0.00% 0.90% Neuberger Berman AMT Guardian Portfolio 0.85% 0.15% 0.00% 1.00% Neuberger Berman AMT Limited Maturity Bond 0.65% 0.11% 0.00% 0.76% Portfolio Neuberger Berman AMT Partners Portfolio 0.82% 0.10% 0.00% 0.92% Oppenheimer Variable Account Funds - 0.62% 0.02% 0.00% 0.64% Oppenheimer Aggressive Growth Fund/VA (formerly, Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund) Oppenheimer Variable Account Funds - 0.72% 0.04% 0.00% 0.76% Oppenheimer Bond Fund/VA Oppenheimer Variable Account Funds - 0.64% 0.03% 0.00% 0.67% Oppenheimer Capital Appreciation Fund/VA (formerly, Oppenheimer Variable Account Funds - Oppenheimer Growth Fund) Oppenheimer Variable Account Funds - 0.64% 0.04% 0.00% 0.68% Oppenheimer Global Securities Fund/VA Oppenheimer Variable Account Funds - 0.70% 0.03% 0.00% 0.73% Oppenheimer Main Street Growth & Income Fund/VA Oppenheimer Variable Account Funds - 0.72% 0.04% 0.00% 0.76% Oppenheimer Multiple Strategies Fund/VA Strong Opportunity Fund II, Inc. 1.00% 0.11% 0.00% 1.11% (formerly, Strong Special Fund II, Inc.) Strong Variable Insurance Funds, Inc. - 1.00% 0.22% 0.00% 1.22% Strong Discovery Fund II, Inc. Strong Variable Insurance Funds, Inc. - 1.00% 0.16% 0.00% 1.16% International Stock Fund II The Universal Institutional Funds, Inc. - 0.59% 0.81% 0.00% 1.40% Emerging Markets Debt Portfolio (formerly, Morgan Stanley Dean Witter Universal Funds, Inc. - Emerging Markets Debt Portfolio) The Universal Institutional Funds, Inc. - 0.74% 0.36% 0.00% 1.10% U.S. Real Estate Portfolio
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MANAGEMENT OTHER EXPENSES 12b-1 TOTAL MUTUAL FEES FEES FUND EXPENSES Van Eck Worldwide Insurance Trust - 1.00% 0.15% 0.00% 1.15% Worldwide Bond Fund Van Eck Worldwide Insurance Trust - 1.00% 0.26% 0.00% 1.26% Worldwide Emerging Markets Fund Van Eck Worldwide Insurance Trust - 1.00% 0.14% 0.00% 1.14% Worldwide Hard Assets Fund
(1)Actual annual class operating expenses were lower because a portion of the brokerage commissions that the Fund paid was used to reduce the Fund's expenses, and/or because through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balance were used to reduce a portion of the Fund's custodian expenses. The expenses shown above are deducted by the underlying mutual fund before it provides Nationwide with the daily net asset value. Nationwide then deducts applicable variable account charges from the net asset value in calculating the unit value of the corresponding sub-account. The management fees and other expenses are more fully described in the prospectus for each underlying mutual fund. Information relating to the underlying mutual funds was provided by the underlying mutual funds and not independently verified by Nationwide. Some underlying mutual funds are subject to fee waivers and expense reimbursements. The following chart shows what the expenses would have been for such funds without fee waivers and expense reimbursements.
Management Other Expenses 12b-1 Total Underlying Fees Fees Mutual Fund Expenses Credit Suisse Warburg Pincus Trust - Global 1.25% 0.00% 0.28% 1.53% Post-Venture Capital Portfolio (formerly, Warburg Pincus Trust - Post-Venture Capital Portfolio) Credit Suisse Warburg Pincus Trust - International 1.00% 0.32% 0.00% 1.32% Equity Portfolio (formerly, Warburg Pincus Trust - International Equity Portfolio) Credit Suisse Warburg Pincus Trust - Small 0.90% 0.23% 0.00% 1.13% Company Growth Portfolio (formerly, Warburg Pincus Trust - Small Company Growth Portfolio) Dreyfus Investment Portfolios: European Equity 1.00% 0.60% 0.00% 1.60% Portfolio - Initial Shares NSAT Capital Appreciation Fund 0.60% 0.23% 0.00% 0.83% NSAT Dreyfus NSAT Mid Cap Index Fund (formerly, 0.50% 0.40% 0.00% 0.90% NSAT Nationwide Mid-Cap Index Fund) NSAT Gartmore NSAT Emerging Markets Fund 1.15% 2.94% 0.00% 4.09% NSAT Gartmore NSAT Global Technology and 0.98% 1.59% 0.00% 2.57% Communications Fund NSAT Gartmore NSAT International Growth Fund 1.00% 1.88% 0.00% 2.88% NSAT Government Bond Fund 0.50% 0.23% 0.00% 0.73% NSAT MAS NSAT Multi Sector Bond Fund formerly, 0.75% 0.34% 0.00% 1.60% NSAT Nationwide Multi Sector Bond Fund) NSAT Money Market Fund 0.39% 0.22% 0.00% 0.61% NSAT Nationwide Small Cap Growth Fund 1.10% 0.50% 0.00% 1.60% NSAT Nationwide Small Cap Value Fund 0.90% 0.30% 0.00% 1.20% NSAT Strong NSAT Mid Cap Growth Fund (formerly, 0.90% 0.27% 0.00% 1.17% NSAT Nationwide Strategic Growth Fund) NSAT Total Return Fund 0.58% 0.23% 0.00% 0.81% NSAT Turner NSAT Growth Focus Fund 0.90% 4.13% 0.00% 5.03% Strong Opportunity Fund II, Inc. (formerly, Strong 1.00% 0.18% 0.00% 1.18% Special Fund II, Inc.) Strong Variable Insurance Funds, Inc. - Strong 1.00% 0.25% 0.00% 1.25% Discovery Fund II, Inc. Strong Variable Insurance Funds, Inc. - 1.00% 0.58% 0.00% 1.58% International Stock Fund II
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Management Other Expenses 12b-1 Total Underlying Fees Fees Mutual Fund Expenses The Universal Institutional Funds, Inc. - Emerging 0.80% 0.81% 0.00% 1.61% Markets Debt Portfolio (formerly, Morgan Stanley Dean Witter Universal Funds, Inc. - Emerging Markets Debt Portfolio) The Universal Institutional Funds, Inc. - U.S. 0.80% 0.36% 0.00% 1.16% Real Estate Portfolio Van Eck Worldwide Insurance Trust - Worldwide Bond 1.00% 0.21% 0.00% 1.21% Fund Van Eck Worldwide Insurance Trust - Worldwide 1.00% 0.33% 0.00% 1.33% Emerging Markets Fund Van Eck Worldwide Insurance Trust - Worldwide Hard 1.00% 0.16% 0.00% 1.16% Assets Fund
9 11 SYNOPSIS OF THE POLICIES The policy offered by this prospectus provides for life insurance coverage on the insured. The death benefit and cash value of the policy may increase or decrease to reflect the performance of the investment options chosen by the policy owner (see "Death Benefit Information"). CASH SURRENDER VALUE If the policy is terminated during the insured's lifetime, a cash surrender value may be payable under the policy. However, there is no guaranteed cash surrender value (see "Variation in Cash Value "). The policy will lapse without value if the cash surrender value falls below what is needed to cover policy charges. PREMIUMS The minimum initial premium for which a policy may be issued is equal to the minimum monthly premium. The initial premium is shown on the policy data page. Each premium payment must be at least equal to the minimum monthly premium. Additional premium payments may be made at any time while the policy is in force, subject to certain restrictions (see "Premium Payments"). TAXATION The policies described in this prospectus meet the definition of "life insurance" under Section 7702 of the Internal Revenue Code. Nationwide will monitor compliance with the tests provided by Section 7702 to insure the policies continue to receive this favored tax treatment (see "Tax Matters"). NONPARTICIPATING POLICIES The policies are nonparticipating policies on which no dividends are payable. The policies do not share in the profits or surplus earnings of Nationwide. RIDERS A rider may be added to the policy (availability varies by state). Riders currently include: - Maturity Extension Endorsement; - Spousal Rider; - Child Rider; - Waiver of Monthly Deductions Rider; - Accidental Death Benefit Rider; - Base Insured Term Rider; - Accelerated Death Benefit Rider; - Change of Insured Rider; and - Guaranteed Minimum Death Benefit Rider. POLICY CANCELLATION Policy owners may return the policy for any reason within certain time periods and Nationwide will refund the policy value or the amount required by law (see "Right to Revoke"). NATIONWIDE LIFE INSURANCE COMPANY Nationwide is a stock life insurance company organized under the laws of the State of Ohio in March 1929, with its home office at One Nationwide Plaza, Columbus, Ohio 43215. Nationwide is a provider of life insurance, annuities and retirement products. It is admitted to do business in all states, the District of Columbia and Puerto Rico. CUSTODIAN OF ASSETS Nationwide serves as the custodian of the assets of the variable account. OTHER CONTRACTS ISSUED BY NATIONWIDE Nationwide offers variable contracts and policies with benefits which vary in accordance with the investment experience of a separate account of Nationwide. NATIONWIDE INVESTMENT SERVICES CORPORATION The policies are distributed by Nationwide Investment Services Corporation ("NISC"), Two Nationwide Plaza, Columbus, Ohio 43215. (For policies issued in the State of Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.) NISC is a wholly owned subsidiary of Nationwide. INVESTING IN THE POLICY THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS Nationwide VLI Separate Account-2 is a separate account that invests in the underlying mutual fund options listed in Appendix A. Nationwide established the separate account on May 7, 1987, pursuant to Ohio law. Although the separate account is registered with the SEC as a unit investment trust pursuant to the Investment Company Act of 1940 ("1940 Act"), the SEC does not supervise the management of Nationwide or the variable account. Income, gains, and losses credited to, or charged against the variable account reflect the variable account's own investment experience and not the investment experience of Nationwide's other assets. The variable account's assets are held separately from Nationwide's assets and are not chargeable with liabilities incurred in any other business of Nationwide. Nationwide is obligated to pay 10 12 all amounts promised to policy owners under the policies. The variable account is divided into sub-accounts. Policy owners elect to have net premiums allocated among the sub-accounts and the fixed account at the time of application. Nationwide uses the assets of each sub-account to buy shares of the underlying mutual funds based on policy owner instructions. A policy's investment performance depends upon the performance of the underlying mutual fund options chosen by the policy owner. Each underlying mutual fund's prospectus contains more detailed information about that fund. Prospectuses for the underlying mutual funds should be read in conjunction with this prospectus. Underlying mutual funds in the variable account are NOT publicly traded mutual funds. The underlying mutual fund options are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans. Policy owners should not compare the performance of a publicly traded fund with the performance of underlying mutual funds participating in the variable account. The performance of the underlying mutual funds could differ substantially from that of any publicly traded funds. Changes of Investment Policy Nationwide may materially change the investment policy of the variable account. Nationwide must inform policy owners and obtain all necessary regulatory approvals. Any change must be submitted to the various state insurance departments which may disapprove it if deemed detrimental to the interests of the policy owners or if it renders Nationwide's operations hazardous to the public. If a policy owner objects, the policy may be converted to a substantially comparable general account life insurance policy offered by Nationwide. The policy owner has the later of 60 days (6 months in Pennsylvania) from the date of the investment policy change or 60 days (6 months in Pennsylvania) from being informed of the change to make the conversion. Nationwide will not require evidence of insurability for this conversion. The new policy will not be affected by the investment experience of any separate account. The new policy will be for an amount of insurance not exceeding the death benefit of the policy converted on the date of the conversion. Voting Rights Policy owners who have allocated assets to the underlying mutual funds are entitled to certain voting rights. Nationwide will vote policy owner shares at special shareholder meetings based on policy owner instructions. However, if the law changes allowing Nationwide to vote in its own right, it may elect to do so. Policy owners with voting interests in an underlying mutual fund will be notified of issues requiring the shareholder's vote as soon as possible before the shareholder meeting. Notification will contain proxy materials, and a form to return to Nationwide with voting instructions. Nationwide will vote shares for which no instructions are received in the same proportion as those that are received. The number of shares which a policy owner may vote is determined by dividing the cash value of the amount they have allocated to an underlying mutual fund by the net asset value of that underlying mutual fund. Nationwide will designate a date for this determination not more than 90 days before the shareholder meeting. Substitution of Securities Nationwide may substitute, eliminate and/or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occur: (1) shares of a current underlying mutual fund option are no longer available for investment; or (2) further investment in an underlying mutual fund option is inappropriate. No substitution, elimination, and/or combination of shares may take place without the prior approval of the SEC and state insurance departments. Material Conflicts The underlying mutual funds may be offered through separate accounts of other insurance companies, as well as through other separate accounts of Nationwide. Nationwide does not anticipate any disadvantages to this. However, it is possible that a conflict may arise between the interests of the variable account and one or more of the other separate accounts in which these underlying mutual funds participate. Material conflicts may occur due to a change in law affecting the operations of variable life insurance policies and variable annuity contracts, or differences in the voting instructions of the policy owners and those of other companies. If a material conflict occurs, Nationwide will take whatever steps are necessary to protect policy owners, including withdrawal of the 11 13 variable account from participation in the underlying mutual fund(s) involved in the conflict. THE FIXED ACCOUNT The fixed account is an investment option that is funded by assets of Nationwide's general account. The general account contains all of Nationwide's assets other than this and those in other Nationwide separate accounts. The general account is used to support Nationwide's annuity and insurance obligations and may contain compensation for mortality and expense risks. Under exemptive and exclusionary provisions, Nationwide's general account has not been registered under the Securities Act of 1933 and has not been registered as an investment company under the Investment Company Act of 1940. Accordingly, neither the general account nor any interest therein is subject to the provisions of these Acts. Nationwide has been advised that the staff of the SEC has not reviewed the disclosures in this prospectus relating to the fixed account. Disclosures regarding the general account may, however, be subject to certain generally applicable provisions of the federal securities laws concerning the accuracy and completeness of statements made in prospectuses. Premium payments will be allocated to the fixed account by election of the policy owner. The investment income earned by the fixed account will be allocated to the policies at varying rate(s) set by Nationwide. The guaranteed rate for any premium payment will be effective for not less than twelve months. Nationwide guarantees that the rate will not be less than 4.0% per year. Any interest in excess of 4.0% will be credited to fixed account allocations at Nationwide's sole discretion. The policy owner assumes the risk that interest credited to fixed account allocations may not exceed the minimum guarantee of 4.0% for any given year. New premium payments deposited to the contract which are allocated to the fixed account may receive a different rate if interest than amounts transferred from the sub-accounts to the fixed account and amounts maturing in the fixed account. INFORMATION ABOUT THE POLICIES MINIMUM REQUIREMENTS FOR ISSUANCE OF A POLICY This policy provides life insurance coverage with the flexibility to vary the amount and frequency of premium payments. Minimum requirements for policy issuance include: - the insured must be age 80 or younger; - Nationwide may require satisfactory evidence of insurability (including a medical exam); and - a minimum specified amount $50,000 ($100,000 in Pennsylvania and New Jersey). PREMIUM PAYMENTS Each premium payment must be at least equal to the minimum monthly premium. The initial premium is payable in full at Nationwide's home office or to an authorized agent of Nationwide. Upon payment of the initial premium, temporary insurance may be provided. Issuance of the continuing insurance coverage is dependent upon completion of all underwriting requirements, payment of initial premium, and delivery of the policy while the insured is still living. Additional premium payments may be made at any time while the policy is in force, subject to the following conditions: - Nationwide may require satisfactory evidence of insurability before accepting any additional premium payment which results in an increase in the net amount at risk; - during the first 3 policy years, the total premium payments, less any policy indebtedness, less any partial surrenders, less any partial surrender fee, must be greater than or equal to the minimum premium requirement in order to guarantee the policy remain in force. (The minimum premium requirement is shown on the policy data page.); - premium payments in excess of the premium limit established by the IRS to qualify the policy as a contract for life insurance will be refunded; and - Nationwide may require policy indebtedness be repaid prior to accepting any additional premium payments. Additional premium payments or other changes to the policy may jeopardize the policy's non-modified endowment status. Nationwide will monitor premiums paid and other policy transactions and will notify the policy owner when non-modified endowment contract status is in jeopardy. PRICING Premiums will not be priced when the New York Stock Exchange is closed or on the following nationally recognized holidays: 12 14 - New Year's Day - Independence Day - Martin Luther King, Jr. Day - Labor Day - Presidents' Day - Thanksgiving - Good Friday - Christmas - Memorial Day Nationwide also will not price premium payments if: (1) trading on the New York Stock Exchange is restricted; (2) an emergency exists making disposal or valuation of securities held in the variable account impracticable; or (3) the SEC, by order, permits a suspension or postponement for the protection of security holders. Rules and regulations of the SEC will govern as to when the conditions described in (2) and (3) exist. If Nationwide is closed on days when the New York Stock Exchange is open, contract value may be affected since the policy owner would not have access to their account. POLICY CHARGES SALES LOAD Nationwide deducts a sales load from each premium payment received. It is guaranteed not to exceed 3.5% of each premium payment. Currently, the sales load is reduced to 1.5% on any portion of the annual premium paid in excess of the break point premium. The break point premium is located on the policy data page. The total sales load actually deducted from any policy will be equal to the sum of this front-end sales load plus any sales surrender charge. TAX LOAD Nationwide deducts a tax load equal to 3.5% from all premium payments. This charge is associated with the premium taxes imposed by various state and local jurisdictions and by the federal government under Section 848 of the Internal Revenue Code. The tax load may not equal the assessment paid by Nationwide during any particular year. Nationwide does not expect to make a profit from these charges. SURRENDER CHARGES Nationwide deducts a surrender charge from the cash value of any policy surrendered during the first 9 years. The charge will be deducted proportionally from the cash value in each sub-account and the fixed account. The maximum initial surrender charge varies by issue age, sex, specified amount and underwriting classification. The surrender charge is calculated based on the initial specified amount. The following tables illustrate the maximum initial surrender charge per $1,000 of initial specified amount for policies which are issued on a standard basis (see Appendix B for specific examples). INITIAL SPECIFIED AMOUNT $50,000-$99,999
Issue Male Female Male Female Age Non-Tobacco Non-Tobacco Standard Standard 25 $7.776 $7.521 $8.369 $7.818 35 $8.817 $8.398 $9.811 $8.891 45 $12.191 $11.396 $13.887 $12.169 55 $15.636 $14.011 $18.415 $15.116 65 $22.295 $19.086 $26.577 $20.641
INITIAL SPECIFIED AMOUNT $100,000 OR MORE
Issue Male Female Male Female Age Non-Tobacco Non-Tobacco Standard Standard 25 $5.776 $5.521 $6.369 $5.818 35 $6.817 $6.398 $7.811 $6.891 45 $9.691 $8.896 $11.387 $9.669 55 $13.136 $11.511 $15.915 $12.616 65 $21.295 $18.086 $25.577 $19.641
The surrender charge is comprised of two components: - an underwriting component; and - sales component. The underwriting component varies by issue age in the following manner: $1,000 OF INITIAL SPECIFIED AMOUNT
Issue Specified Amounts Specified Amounts Age less than $100,000 $100,000 or more 0-35 $6.00 $4.00 36-55 $7.50 $5.00 56-80 $7.50 $6.50
The underwriting component is designed to cover the administrative expenses associated with underwriting and issuing policies, including the costs of: - processing applications; - conducting medical exams; - determining insurability and the insured's underwriting class; and - establishing policy records. 13 15 The remainder of the surrender charge that is not attributable to the underwriting component represents the sales component. In no event will this component exceed 26 1/2% of the lesser of the Guideline Level Premium required in the first year or the premiums actually paid in the first year. The purpose of the sales component is to reimburse Nationwide for expenses incurred in the distribution of the policies. The surrender charge may be insufficient to recover certain expenses related to the sale of the policies. Unrecovered expenses are borne by Nationwide's general assets which may include profits, if any, from mortality and expense risk charges. Additional premiums and/or income earned on assets in the variable account have no effect on these charges. REDUCTIONS TO SURRENDER CHARGES Surrender charges are reduced in subsequent policy years as follows: COMPLETED SURRENDER CHARGE AS A % OF POLICY YEARS INITIAL SURRENDER CHARGES 0 100% 1 100% 2 90% 3 80% 4 70% 5 60% 6 50% 7 40% 8 30% 9 and After 0% The surrender charge is reduced by any partial surrender charge actually paid on previous decreases in the specified amount. For the initial specified amount, a completed policy year (in the chart above) is measured from the issue date. For any increase in the specified amount, a completed policy year (in the chart above) is measured from the effective date of the increase. Special guaranteed maximum surrender charges apply in Pennsylvania (see Appendix B). MONTHLY COST OF INSURANCE CHARGE The cost of insurance charge for each policy month is determined by multiplying the monthly cost of insurance rate by the net amount at risk. The net amount at risk is the difference between the death benefit and the policy's cash value, each calculated at the beginning of the policy month. This deduction is charged proportionately to the cash value in each sub-account and the fixed account. If Death Benefit Option 1 is in effect and there have been increases in the specified amount, then the cash value will first be considered a part of the initial specified amount. If the cash value exceeds the initial specified amount, it will then be considered a part of the additional increases in specified amount resulting from the increases in the order of the increases. Monthly cost of insurance rates will not exceed those guaranteed in the policy. Guaranteed cost of insurance rates for policies issued on specified amounts less than $100,000 are based on the 1980 Commissioner's Extended Term Mortality Table, Age Last Birthday (1980 CET). Guaranteed cost of insurance rates for policies issued on specified amounts of $100,000 or more are based on the 1980 Commissioner's Standard Ordinary Mortality Table, Age Last Birthday (1980 CSO). Guaranteed cost of insurance rates for policies issued on a substandard basis are based on appropriate percentage multiples of the guaranteed cost of insurance rate on a standard basis. These mortality tables are sex distinct. In addition, separate mortality tables will be used for tobacco and non-tobacco. For policies issued in Texas on a standard basis ("Special Class - Standard" in Texas), guaranteed cost of insurance rates for specified amounts less than $100,000 are based on 130% of the 1980 CSO. The rate class of an insured may affect the cost of insurance rate. Nationwide currently places insureds into both standard rate classes and substandard rate classes that involve a higher mortality risk. In an otherwise identical policy, an insured in the standard rate class will have a lower cost of insurance than an insured in a rate class with higher mortality risks. Nationwide may also issue certain policies on a "non medical" basis to certain categories of individuals. Due to the underwriting criteria established for policies issued on a non medical basis, actual rates will be higher than the current cost of insurance rates being charged under policies that are medically underwritten. MONTHLY ADMINISTRATIVE CHARGE Nationwide deducts an administrative expense charge proportionately to the cash value in each sub-account and the fixed account on a monthly basis. This charge reimburses Nationwide for certain actual expenses related to maintenance of the policies including accounting and record keeping, and periodic reporting to policy owners. Nationwide does not expect to recover any amount in excess of aggregate maintenance expenses from this charge. Currently, this charge is $12.50 per month in the first year and $5 per month in renewal years. Nationwide may, at its sole discretion, increase this charge. However, Nationwide guarantees that this charge will never exceed $25 per month in the first year and $7.50 per month in renewal years. 14 16 INCREASE CHARGE The increase charge is deducted proportionally from the cash value in the sub-accounts and the fixed account when the policy owner requests an increase in the specified amount. It is used to cover the cost of underwriting the requested increase and processing and distribution expenses related to the increase. The increase charge is comprised of two components: underwriting and administration; and sales. The underwriting and administration component is equal to $1.50 per year per $1,000. The sales component is equal to $0.54 per year per $1,000. Nationwide does not expect to realize a profit from this charge. MORTALITY AND EXPENSE RISK CHARGE Nationwide assumes certain risks for guaranteeing the mortality and expense charges. The mortality risk assumed under the policies is that the insured may not live as long as expected. The expense risk assumed is that the actual expenses incurred in issuing and administering the policies may be greater than expected. In addition, Nationwide assumes risks associated with the non-recovery of policy issue, underwriting and other administrative expenses due to policies that lapse or are surrendered in the early policy years. Nationwide deducts the mortality and expense risk charge from the variable account on a daily basis. The charge is equivalent to an annualized rate of 0.80% of the daily net assets of the variable account. Each policy anniversary starting on the 10th anniversary, if the cash surrender value is $25,000 or more, the mortality and expense risk charge is reduced to 0.50% on an annualized basis. Policy owners receive quarterly and annual statements, advising policy owners of the cancellation of accumulation units for mortality and expense risk charges. For policies issued in New York, the reduction occurs regardless of the cash surrender value. All charges are guaranteed. Nationwide may realize a profit from policy charges. INCOME TAX No charge is assessed to policy owners for income taxes incurred by Nationwide as a result of the operations of the sub-accounts. However, Nationwide reserves the right to assess a charge for income taxes assessed against the variable account if income taxes are incurred. REDUCTION OF CHARGES The policy is available for purchase by individuals, corporations and other groups. Nationwide may reduce or eliminate certain charges (sales load, surrender charge, monthly administrative charge, monthly cost of insurance charge, or other charges), where the size or nature of the group results in savings in sales, underwriting, administrative or other costs, to Nationwide. These charges may be reduced in certain group or sponsored arrangements made available by Nationwide (including employees of Nationwide and their families). Eligibility for reduction in charges and the amount of any reduction is determined by a number of factors, including: - the number of insureds; - the total premium expected to be paid; - total assets under management for the policy owner; - the nature of the relationship among individual insureds; - the purpose for which the policies are being purchased; - the expected persistency of individual policies; and - any other circumstances which are rationally related to the expected reduction in expenses. The extent and nature of reductions may change from time to time. The charge structure may vary. Variations are determined in a manner not unfairly discriminatory to policy owners which reflect differences in costs of services. SURRENDERING THE POLICY FOR CASH SURRENDER (REDEMPTION) Policies may be surrendered for the cash surrender value any time while the insured is living. The cancellation will be effective as of the date Nationwide receives the policy accompanied by a signed, written request for cancellation. Nationwide may require the policy owner's signature to be guaranteed by a member firm of the New York, American, Boston, Midwest, Philadelphia or Pacific Stock Exchanges, or by a commercial bank or a savings and loan, which is a member of the Federal Deposit Insurance Corporation. In some cases, Nationwide may require additional documentation of a customary nature. Nationwide is required by state law to reserve the right to postpone payment of assets in the fixed account for a period of up to six months from the date of the surrender request. 15 17 Cash Surrender Value The cash surrender value increases or decreases daily to reflect the investment experience of the variable account and the daily crediting of interest in the fixed account and the policy loan account. The cash surrender value equals the policy's cash value, next computed after the date Nationwide receives a proper written request for surrender and the policy, minus any charges, indebtedness or other deductions due on that date, which may also include a surrender charge. Partial Surrenders After the policy has been in force for one year, the policy owner may request a partial surrender. Partial surrenders are permitted if they satisfy the following requirements: (1) the minimum partial surrender is $500; (2) partial surrenders may not reduce the specified amount to less than $50,000; (3) after a partial surrender, the cash surrender value is greater than $500 or an amount equal to three times the current monthly deduction if higher; (4) maximum total partial surrenders in any policy year are limited to 10% of the total premium payments. Currently, this requirement is waived beginning in the 15th year if the cash surrender value is $10,000 or more after the withdrawal; and (5) after the partial surrender, the policy continues to qualify as life insurance. When a partial surrender is made, the cash value will be reduced by the amount of the partial surrender. Under Death Benefit Option 1, the specified amount is reduced by the amount of the partial surrender, unless the death benefit is based on the applicable percentage of cash value. In that case, a partial surrender will decrease the specified amount by the amount the partial surrender exceeds the difference between the death benefit and specified amount. Surrenders charges are waived for partial surrenders that satisfy the above conditions. Certain partial surrenders may result in currently taxable income and tax penalties. INCOME TAX WITHHOLDING Federal law requires Nationwide to withhold income tax from any portion of surrender proceeds subject to tax. Nationwide will withhold income tax unless the policy owner advises Nationwide, in writing, of his or her request not to withhold. If a policy owner requests that taxes not be withheld, or if the taxes withheld are insufficient, the policy owner may be liable for payment of an estimated tax. Policy owners should consult a tax advisor. In certain employer-sponsored life insurance arrangements, including equity split dollar arrangements, participants may be required to report for income tax purposes, one or more of the following: (1) the value each year of the life insurance protection provided; (2) an amount equal to any employer-paid premiums; or (3) some or all of the amount by which the current value exceeds the employer's interest in the policy. Participants should consult with the sponsor or the administrator of the plan, and/or with their personal tax or legal advisor, to determine the tax consequences, if any, of their employer-sponsored life insurance arrangements. VARIATION IN CASH VALUE On any date during the policy year, the cash value equals the cash value on the preceding valuation period plus any net premium applied since the previous valuation period, minus any partial surrenders, plus or minus any investment results, minus any surrender charge for decreases in specified amount, and less any policy charges. There is no guaranteed cash value. The cash value will vary with the investment experience of the variable account and/or the daily crediting of interest in the fixed account and policy loan account depending on the allocation of cash value by the policy owner. ERROR IN AGE OR SEX If the age or sex of the insured has been misstated, the death benefit and cash value will be adjusted. The cash value will be adjusted to reflect the cost of insurance charges on the correct age and sex from the policy date. POLICY PROVISIONS POLICY OWNER While the insured is living, all rights in this policy are vested in the policy owner named in the application or as subsequently changed, subject to assignment, if any. The policy owner may name a contingent policy owner or a new policy owner while the insured is living. Any change must be in a written form satisfactory to Nationwide and recorded at Nationwide's home office. Once recorded, the change will be effective when 16 18 signed. The change will not affect any payment made or action taken by Nationwide before it was recorded. Nationwide may require that the policy be submitted for endorsement before making a change. If the policy owner is other than the insured and names no contingent policy owner, and dies before the insured, the policy owner's rights in this policy belong to the policy owner's estate. BENEFICIARY The beneficiary(ies) will be as named in the application or as subsequently changed, subject to assignment, if any. The policy owner may name a new beneficiary while the insured is living. Any change must be in a written form satisfactory to Nationwide and recorded at Nationwide's home office. Once recorded, the change will be effective when signed. The change will not affect any payment made or action taken by Nationwide before it was recorded. If any beneficiary predeceases the insured, that beneficiary's interest passes to any surviving beneficiary(ies), unless otherwise provided. Multiple beneficiaries will be paid in equal shares, unless otherwise provided. If no named beneficiary survives the insured, the death proceeds will be paid to the policy owner or the policy owner's estate. CHANGES IN EXISTING INSURANCE COVERAGE The policy owner may request certain changes in the insurance coverage under the policy. Requests must be in writing and received by Nationwide. No change will take effect unless the cash surrender value after the change is sufficient to keep the policy in force for at least 3 months. Specified Amount Increases After the first policy year, the policy owner may request an increase to the specified amount. Any increase will be subject to the following conditions: (1) the request must be applied for in writing; (2) satisfactory evidence of insurability must be provided; (3) the increase must be for a minimum of $10,000; (4) the cash surrender value is sufficient to continue the policy in force for at least 3 months; and (5) age limits are the same as for a new issue. Any approved increase will have an effective date of the monthly anniversary day on or next following the date Nationwide approves the supplemental application. Nationwide reserves the right to limit the number of specified amount increases to one each policy year. Specified Amount Decreases After the first policy year, the policy owner may also request a decrease to the specified amount. Any approved decrease will be effective on the monthly anniversary date on or next following the date Nationwide receives the request. Any such decrease will reduce insurance in the following order: (1) against insurance provided by the most recent increase; (2) against the next most recent increases successively; and (3) against insurance provided under the original application. Nationwide reserves the right to limit the number of specified amount decreases to one each policy year. Nationwide will refuse a request for a decrease which would: (1) reduce the specified amount to less than $50,000 ($100,000 in New Jersey and Pennsylvania); or (2) disqualify the policy as a contract for life insurance. OPERATION OF THE POLICY ALLOCATION OF NET PREMIUM AND CASH VALUE Nationwide allocates premium payments to sub-accounts or the fixed account, as instructed by policy owners. Shares of the underlying mutual funds allocated to the sub-accounts are purchased at net asset value, than converted into accumulation units. All percentage allocations must be in whole numbers, and must be at least 1%. The sum of allocations must equal 100%. Future premium allocations may be changed by giving written notice to Nationwide. Premiums allocated to sub-accounts on the application will be allocated to the NSAT Money Market Fund during the period that a policy owner can cancel the policy, unless specific state require premiums to be allocated to the fixed account. At the expiration of this cancellation period, these premiums are used to purchase shares of the underlying mutual funds specified by the policy owner at net asset value for the respective sub-account(s). The policy owner may change the allocation of net premiums or may transfer cash value from one sub-account to another. Changes are subject to the terms and conditions imposed by each underlying mutual fund and those found in this prospectus. Net premiums allocated 17 19 to the fixed account at the time of application may not be transferred from the fixed account prior to the first policy anniversary (see "Transfers"). HOW THE INVESTMENT EXPERIENCE IS DETERMINED The accumulation unit value for a valuation period is determined by multiplying the accumulation unit value for each sub-account for the immediately preceding valuation period by the net investment factor for the sub-account for the subsequent valuation period. NET INVESTMENT FACTOR Net investment factor is determined by dividing (a) by (b) and subtracting (c) from the result where: (a) is the sum of: (1) the net asset value of the underlying mutual fund held in the sub-account as of the end of the current valuation period; and (2) the per share amount of any dividend or income distributions made by the underlying mutual fund (if the date of the dividend or income distribution occurs during the current valuation period). (b) is the net asset value of the underlying mutual fund determined as of the end of the preceding valuation period. (c) is a factor representing the daily mortality and expense risk charge. This factor is equal to an annualized rate of 0.80% of the daily net assets of the variable account. Each policy anniversary starting on the 10th the mortality and expense risk charge is reduced to 0.50% on an annualized basis of the daily net assets of the variable account if the cash surrender value is $25,000 or more each anniversary. For policies issued in New York, the charge is reduced regardless of the cash surrender value on each anniversary. Based on the net investment factor, the value of an accumulation unit may increase or decrease. Changes in the net investment factor may not be directly proportional to changes in the net asset value of underlying mutual fund shares, because of the deduction for mortality and expense risk charge, and any charge or credit for tax reserves. Though the number of accumulation units will not change as a result of investment experience, the value of an accumulation unit may increase or decrease from valuation period to valuation period. DETERMINING THE CASH VALUE The cash value is the sum of the value of all variable account accumulation units attributable to the policy plus amounts credited to the fixed account and the policy loan account. The number of accumulation units credited to each sub-account is determined by dividing the net amount allocated to the sub-account by the accumulation unit value for the sub-account for the valuation period during which the premium is received by Nationwide. In the event part or all of the cash value is surrendered or charges or deductions are made against the cash value, an appropriate number of accumulation units from the variable account and an appropriate amount from the fixed account will be deducted in the same proportion that the policy owner's interest in the variable account and the fixed account bears to the total cash value. The cash value in the fixed account and the policy loan account is credited with interest daily at an annualized rate which Nationwide periodically declares. The annual effective rate will never be less than 4%. (For a description of the annualized credited rates, see "The Fixed Account" and "Policy Loans.") Upon request, Nationwide will inform the policy owner of the then applicable rates for each account. TRANSFERS Policy owners can transfer 100% of allocations without penalty or adjustment subject to the following conditions: - Nationwide reserves the right to restrict transfers between the fixed account and the sub-accounts to one per policy year; - transfers made to the fixed account may not be made in the first policy year; - Nationwide reserves the right to restrict transfers from the fixed account to 25% of the cash value attributable to the fixed account; and - Nationwide reserves the right to restrict transfers to the fixed account to 25% of cash value. Transfer Requests Nationwide will accept transfer requests in writing, over the telephone or via the internet. Nationwide will use reasonable procedures to confirm that instructions received are genuine and will not be liable for following instructions it reasonably determined to be genuine. Nationwide may withdraw the telephone and/or internet exchange privilege upon 30 days written notice to policy owners. 18 20 Market-Timing Firms Some policy owners may use market-timing firms or other third parties to make transfers on their behalf. Generally, in order to take advantage of perceived market trends, market-timing firms will submit transfer requests on behalf of multiple policy owners at the same time. Sometimes this can result in unusually large transfers of funds. These large transfers might interfere with the ability of Nationwide or the underlying mutual fund to process transactions. This can potentially disadvantage policy owners not using market-timing firms. To avoid this, Nationwide may modify the transfer rights of policy owners who use market-timing firms (or other third parties) to initiate transfers on their behalf. The transfer rights of individual policy owners will not be modified in any way when instructions are submitted directly by the policy owner, or by the policy owner's representative (as authorized by the execution of a valid Nationwide Limited Power of Attorney Form). To protect policy owners, Nationwide may refuse transfer requests: - submitted by any agent acting under a power of attorney on behalf of more than one policy owner; or - submitted on behalf of individual policy owners who have executed pre-authorized exchange forms which are submitted by market-timing firms (or other third parties) on behalf of more than one policy owner at the same time. Nationwide will not restrict transfer rights unless Nationwide believes it to be necessary for the protection of all policy owners. RIGHT TO REVOKE A policy owner may cancel the policy by returning it by the latest of: - 10 days after receiving the policy; - 45 days after signing the application; or - 10 days after Nationwide delivers a Notice of Right of Withdrawal. The policy can be mailed to the registered representative who sold it, or directly to Nationwide. Returned policies are deemed void from the beginning. Nationwide will refund the amount prescribed by the state in which the policy was issued within seven days after it receives the policy. This right varies by state. POLICY LOANS TAKING A POLICY LOAN The policy owner may take a policy loan at any time after the first policy year using the policy as security. Maximum policy indebtedness is limited to 90% of the cash value of the variable account, less any surrender charges, less interest due on the next policy anniversary. For policies issued in Texas, maximum policy indebtedness is limited to 90% of the cash value in the sub-accounts and 100% of the cash value in the fixed account, less surrender charges and interest due on the next policy anniversary. Nationwide will not grant a loan for an amount less than $200. Policy indebtedness will be deducted from the death benefit, cash surrender value upon surrender, or the maturity proceeds. Any request for a policy loan must be in written form. The request must be signed and, where permitted, the signature guaranteed by a member firm of the New York, American, Boston, Midwest, Philadelphia or Pacific Stock Exchanges, or by a commercial bank or a savings and loan which is a member of the Federal Deposit Insurance Corporation. Certain policy loans may result in currently taxable income and tax penalties. A policy owner considering the use of policy loans in connection with his or her retirement income plan should consult his or her personal tax adviser regarding potential tax consequences that may arise if necessary payments are not made to keep the policy from lapsing. The amount of the payments necessary to prevent the policy from lapsing will increase with age. EFFECT ON INVESTMENT PERFORMANCE When a loan is made, an amount equal to the amount of the loan is transferred from the variable account to the policy loan account. If the assets relating to a policy are held in more than one sub-account, withdrawals from sub-accounts will be made in proportion to the assets in each sub-account at the time of the loan. Policy loans will be transferred from the fixed account only when sufficient amounts are not available in the sub-accounts. The amount taken out of the variable account will not be affected by the variable account's investment experience while the loan is outstanding. INTEREST Currently, policy loans are credited with an annual effective rate of 5.1% during policy years 2 through 14 and an annual effective rate of 6% during the 15th and subsequent policy years. Nationwide guarantees the rate will never be lower than 5.1%. Nationwide may change 19 21 the current interest crediting rate on policy loans at any time at its sole discretion. The loan interest rate is 6% per year for all policy loans. If it is determined that such loans will be treated, as a result of the differential between the interest crediting rate and the loan interest rate, as taxable distributions under any applicable ruling, regulation, or court decision, Nationwide retains the right to increase the net cost (by decreasing the interest crediting rate) on all subsequent policy loans to an amount that would result in the transaction being treated as a loan under federal tax law. Amounts transferred to the policy loan account will earn interest daily from the date of transfer. The earned interest is transferred from the policy loan account to a variable account or the fixed account on each policy anniversary, at the time a new loan is requested or at the time of loan repayment. The earned interest will be allocated according to the fund allocation factors in effect at the time of the transfer. Interest is charged daily and is payable at the end of each policy year or at the time of loan repayment. Unpaid interest will be added to the existing policy indebtedness as of the due date and will be charged interest at the same rate as the rest of the indebtedness. Whenever the total policy indebtedness exceeds the cash value less any surrender charges, Nationwide will send a notice to the policy owner and the assignee, if any. The policy will terminate without value 61 days after the mailing of the notice unless a sufficient repayment is made during that period. A repayment is sufficient if it is large enough to reduce the total policy indebtedness to an amount equal to the total cash value less any surrender charges plus an amount sufficient to continue the policy in force for 3 years. EFFECT ON DEATH BENEFIT AND CASH VALUE A policy loan, whether or not repaid, will have a permanent effect on the death benefit and cash value because the investment results of the variable account or the fixed account will apply only to the non-loaned portion of the cash value. The longer the loan is outstanding, the greater the effect is likely to be. Depending on the investment results of the variable account or the fixed account while the loan is outstanding, the effect could be favorable or unfavorable. REPAYMENT All or part of the indebtedness may be repaid at any time while the policy is in force during the insured's lifetime. Any payment intended as a loan repayment, rather than a premium payment, must be identified as such. Loan repayments will be credited to the sub-accounts and the fixed account in proportion to the policy owner's underlying mutual fund allocation factors in effect at the time of the repayment. Each repayment may not be less than $50. Nationwide reserves the right to require that any loan repayments resulting from policy loans transferred from the fixed account must be first allocated to the fixed account. ASSIGNMENT While the insured is living, the policy owner may assign his or her rights in the policy. The assignment must be in writing, signed by the policy owner and recorded at Nationwide's home office. Prior to being recorded, assignments will not affect any payments made or actions taken by Nationwide. Nationwide is not responsible for any assignment not submitted for recording, nor is Nationwide responsible for the sufficiency or validity of any assignment. Assignments are subject to any indebtedness owed to Nationwide before being recorded. POLICY OWNER SERVICES DOLLAR COST AVERAGING Dollar Cost Averaging is a long-term transfer program that allows you to make regular, level investments over time. It involves the automatic transfer of a specified amount from certain sub-accounts and the fixed account into other sub-accounts. Nationwide does not guarantee that this program will result in profit or protect policy owners from loss. Policy owners direct Nationwide to automatically transfer specified amounts from the fixed account and the following underlying mutual fund options: Fidelity VIP High Income Portfolio; NSAT Government Bond Fund; NSAT Money Market Fund; and the Neuberger Berman AMT Limited Maturity Bond Portfolio. Transfers from the fixed account must be equal to or less than 1/30th of the fixed account value at the time the program is requested. Transfers occur monthly or on another frequency if permitted by Nationwide. Nationwide will process transfers until either the value in the originating investment option is exhausted, or the policy owner instructs Nationwide in writing to stop the transfers. Nationwide reserves the right to stop establishing new Dollar Cost Averaging programs. Nationwide reserves the right to assess a processing fee for this service. 20 22 DEATH BENEFIT INFORMATION CALCULATION OF THE DEATH BENEFIT At issue, the policy owner selects the specified amount. While the policy is in force, the death benefit will never be less than the specified amount. The death benefit may vary with the cash value of the policy, which depends on investment performance. The policy owner may choose one of two death benefit options: OPTION 1. The death benefit will be the greater of the specified amount or the applicable percentage of cash value. Under Option 1 the amount of the death benefit will ordinarily not change for several years to reflect the investment performance and may not change at all. If investment performance is favorable, the amount of death benefit may increase. To see how and when investment performance will begin to affect death benefits, please see the illustrations. OPTION 2. The death benefit will be the greater of the specified amount plus the cash value, or the applicable percentage of cash value and will vary directly with the investment performance. The term "applicable percentage" means: (1) 250% when the insured is attained age 40 or less at the beginning of a policy year; and (2) when the insured is above attained age 40, the percentage shown in the "Applicable Percentage of Cash Value Table." 21 23 APPLICABLE PERCENTAGE OF CASH VALUE TABLE
ATTAINED PERCENTAGE OF ATTAINED PERCENTAGE OF ATTAINED PERCENTAGE OF AGE CASH VALUE AGE CASH VALUE AGE CASH VALUE 0-40 250% 60 130% 80 105% 41 243% 61 128% 81 105% 42 236% 62 126% 82 105% 43 229% 63 124% 83 105% 44 222% 64 122% 84 105% 45 215% 65 120% 85 105% 46 209% 66 119% 86 105% 47 203% 67 118% 87 105% 48 197% 68 117% 88 105% 49 191% 69 116% 89 105% 50 185% 70 115% 90 105% 51 178% 71 113% 91 104% 52 171% 72 111% 92 103% 53 164% 73 109% 93 102% 54 157% 74 107% 94 101% 55 150% 75 105% 95 100% 56 146% 76 105% 57 142% 77 105% 58 138% 78 105% 59 134% 79 105%
CHANGES IN THE DEATH BENEFIT OPTION After the first policy year, the policy owner may elect to change the death benefit option under the policy from either Option 1 to Option 2, or from Option 2 to Option 1. Only one change of death benefit option is permitted per policy year. The effective date of a change will be the monthly anniversary date following the date the change is approved by Nationwide. If the change is from Option 1 to Option 2, the specified amount will be decreased by the amount of the cash value. Nationwide may require evidence of insurability for a change from Option 1 to Option 2. If the change is from Option 2 to Option 1, the specified amount will be increased by the amount of the cash value. A change in death benefit option will not be permitted if it results in the total premiums paid exceeding the current maximum premium limitations under Section 7702 of the Internal Revenue Code. PROCEEDS PAYABLE ON DEATH The actual death proceeds payable on the insured's death will be the death benefit as described above, less any policy indebtedness and less any unpaid policy charges. Under certain circumstances, the death proceeds may be adjusted (see "Incontestability," "Error in Age or Sex," and "Suicide"). INCONTESTABILITY Nationwide will not contest payment of the death proceeds based on the initial specified amount after the policy has been in force during the insured's lifetime for 2 years from the policy date. For any increase in specified amount requiring evidence of insurability, Nationwide will not contest payment of the death proceeds based on such an increase after it has been in force during the insured's lifetime for 2 years from its effective date. SUICIDE If the insured dies by suicide, while sane or insane, within 2 years from the policy date, Nationwide will pay no more than the sum of the premiums paid, less any indebtedness. If the insured dies by suicide, while sane or insane, within 2 years from the date an application is accepted for an increase in the specified amount, Nationwide will pay no more than the amount paid for the additional benefit. MATURITY PROCEEDS The maturity date is the policy anniversary on or next following the insured's 95th birthday. If the policy is still in force, maturity proceeds are payable to the policy owner on the maturity date. Maturity proceeds are equal to the amount of the policy's cash value, less any indebtedness. EXCHANGE RIGHTS The policy owner may exchange the policy for a flexible premium adjustable life insurance policy offered by Nationwide on the policy date. The benefits for the new policy will not vary with the investment experience of a 22 24 separate account. The exchange must be elected within 24 months from the policy date. No evidence of insurability will be required. The policy owner and beneficiary under the new policy will be the same as those under the exchanged policy on the effective date of the exchange. The new policy will have a death benefit on the exchange date not more than the death benefit of the original policy immediately prior to the exchange date. The new policy will have the same policy date and issue age as the original policy. The initial specified amount and any increases in specified amount will have the same rate class as those of the original policy. Any indebtedness may be transferred to the new policy. The exchange may be subject to an equitable adjustment in rates and values to reflect variances, if any, in the rates and values between the two policies. After adjustment, if any excess is owed the policy owner, Nationwide will pay the excess to the policy owner in cash. The exchange may be subject to federal income tax withholding (see "Income Tax Withholding"). GRACE PERIOD First Three Policy Years The policies will not lapse during the first three policy years provided that on each monthly anniversary date (1) is greater than or equal to (2), where: (1) is the sum of all premiums paid to date minus any policy indebtedness, minus any partial surrenders, and minus any partial surrender fee; and (2) is the sum of monthly minimum premiums required since the minimum premium, including the monthly minimum premium for the current monthly anniversary date. If (1) is less than (2) and the cash surrender value is less than zero, a grace period of 61 days from the monthly anniversary day will be allowed for the payment of sufficient premium to satisfy the minimum premium requirement. If sufficient premium is not paid by the end of the grace period, the policy will lapse without value. In any event, the policy will not lapse as long as there is a positive cash surrender value. Policy Years Four and After If the cash surrender value on a monthly anniversary day is not sufficient to cover the current policy charges, a grace period of 61 days from the monthly anniversary day will be allowed for the payment of sufficient premium to cover the current policy charges due, plus an amount equal to three times the current monthly deduction. All Policy Years Nationwide will send a notice at the start of the grace period to the policy owner's last known address. If the insured dies during the grace period, Nationwide will pay the death proceeds. REINSTATEMENT If the grace period ends and the policy owner has neither paid the required premium nor surrendered the policy for its cash surrender value, the policy owner may reinstate the policy by: (1) submitting a written request at any time within 3 years after the end of the grace period and prior to the maturity date; (2) providing evidence of insurability satisfactory to Nationwide; (3) paying an amount of premium equal to the minimum monthly premiums missed since the beginning of the grace period, if the policy terminated to the first 3 policy years; (4) paying sufficient premium to cover all policy charges that were due and unpaid during the grace period if the policy terminated in the fourth or later policy year; (5) paying sufficient premium to keep the policy in force for 3 months from the date of reinstatement; and (6) paying or reinstating any indebtedness against the policy which existed at the end of the grace period. The effective date of a reinstated policy will be the monthly anniversary date on or next following the date the application for reinstatement is approved by Nationwide. If the policy is reinstated, the cash value on the date of reinstatement, but prior to applying any premiums or loan repayments received, will be set equal to the lesser of: (1) the cash value at the end of the grace period; or (2) the surrender charge for the policy year in which the policy was reinstated. Amounts allocated to underlying mutual funds at the start of the grace period will be reinstated, unless the policy owner provides otherwise. TAX MATTERS POLICY PROCEEDS Section 7702 of the Internal Revenue Code provides that if certain tests are met, a policy will be treated as a life insurance policy for federal tax purposes. Nationwide 23 25 will monitor compliance with these tests. The policy should thus receive the same federal income tax treatment as fixed benefit life insurance. As a result, the death proceeds payable under a policy are generally excludable from gross income of the beneficiary under Section 101 of the Internal Revenue Code. However, if the policy is transferred for valuable consideration, then a portion of the death proceeds may be includable in the beneficiary's gross income. Section 7702A of the Internal Revenue Code defines modified endowment contracts as those life insurance policies issued or materially changed on or after June 21, 1988 on which the total premiums paid during the first seven years exceed the amount that would have been paid if the policy provided for paid up benefits after seven level annual premiums. As a general rule, distributions from a life insurance policy (other than a modified endowment contract) during the life of the insured are treated as the non-taxable return of premium, to the extent of premiums previously paid. For this purpose, dividends that are used to purchase riders are treated as distributions; dividends that are used to purchase paid-up additions or to reduce premiums are not treated as distributions. Aggregate amounts distributed in excess of aggregate premiums paid are generally treated as taxable ordinary income. A loan from a life insurance policy that is not a modified endowment contract generally is not treated as a taxable distribution. However, if the total loan is not repaid and is forgiven (such as if the life insurance policy lapses or is surrendered), then the amount of the outstanding loan balance is treated as a distribution to the policy owner and may be treated as ordinary income in whole or in part. The Internal Revenue Code provides special rules for the taxation of surrenders, partial surrenders, loans, collateral assignments and other pre-death distributions from modified endowment contracts (other than certain distributions to terminally ill individuals). Under these special rules, such transactions are taxable to the extent the cash value of the policy exceeds, at the time of distribution, the premiums paid into the policy. In addition, a 10% tax penalty generally applies to the taxable portion of such distributions unless the policy owner is over age 59 1/2 or disabled or the distribution is part of a series of substantially equal periodic payments as defined in the Internal Revenue Code. Under certain circumstances, certain distributions made under a policy on the life of a "terminally ill individual", as that term is defined in the Internal Revenue Code, are, treated as death proceeds and are subject to the death benefit rules of Section 101 of the Internal Revenue Code, described above. The policies offered by this prospectus may or may not be issued as modified endowment contracts. If the policy is not issued as a modified endowment contract, Nationwide will monitor the premium paid and will notify the policy owner when the policy's non-modified endowment status is in jeopardy. If a policy is not a modified endowment contract, a cash distribution during the first 15 years after a policy is issued which causes a reduction in death benefits may still become fully or partially taxable to the policy owner pursuant to Section 7702(f)(7) of the Internal Revenue Code. The policy owner should carefully consider this potential effect and seek further information before initiating any changes in the terms of the policy. Under certain conditions, a policy may become a modified endowment or may become subject to a new 7 year testing period as a result of a material change or a reduction in benefits as defined by Section 7702A(c) of the Internal Revenue Code. In addition to the tests required under Section 7702, Section 817(h) of the Internal Revenue Code requires that the investments of separate accounts such as the variable account be adequately diversified. Regulations under 817(h) provide that a variable life policy that fails to satisfy the diversification standards will not be treated as life insurance unless such failure was inadvertent, is corrected, and the policy owner or the issuer pays an amount to the IRS. The amount will be based on the tax that would have been paid by the policy owner if the income, for the period the policy was not diversified, had been received by the policy owner. If the failure to diversify is not corrected in this manner, the policy owner will be deemed to be the owner of the underlying securities and taxed on the earnings of his or her account. Representatives of the IRS have suggested, from time to time, that the number of underlying mutual funds available or the number of transfer opportunities available under a variable product may be relevant in determining whether the product qualifies for the desired tax treatment. No formal guidance has been issued in this area. Should the Secretary of the Treasury issue additional rules or regulations limiting the number of underlying mutual funds, transfers between underlying mutual funds, exchanges of underlying mutual funds or changes in investment objectives of underlying mutual funds such that the policy would no longer qualify as life insurance under Section 7702 of the Internal Revenue Code, Nationwide will take whatever steps are available to remain in compliance. Nationwide will monitor compliance with these regulations and, to the extent necessary, will change the objectives or assets of the sub-account investments to remain in compliance. A 24 26 total surrender or cancellation of the policy by lapse or the maturity of the policy on its Maturity date may have adverse tax consequences. If the amount received by the policy owner plus total policy Indebtedness exceeds the premiums paid into the policy, then the excess generally will be treated as taxable income, regardless of whether or not the policy is a modified endowment contract. WITHHOLDING Distributions of income from a life insurance contract (including a modified endowment contract) are subject to federal income tax withholding; however, the recipient may elect not to have the withholding taken from the distribution. A distribution of income may be subject to mandatory back-up withholding (which cannot be waived). The mandatory back-up withholding rate is 31% of the income that is distributed and will arise if no taxpayer identification number is provided to Nationwide, or if the IRS notifies Nationwide that back-up withholding is required. FEDERAL ESTATE AND GENERATION-SKIPPING TRANSFER TAXES The federal estate tax is integrated with the federal gift tax under a unified tax rate schedule. In general, in 2001, an estate of less than $675,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability. In addition, an unlimited marital deduction may be available for federal estate tax purposes, for certain amounts that pass to the surviving spouse. When the insured dies, the death benefit will generally be included in the insured's federal gross estate if: (1) the proceeds were payable to or for the benefit of the insured's estate; or (2) the insured held any "incident of ownership" in the policy at death or at any time within three years of death. An incident of ownership is, in general, any right that may be exercised by the policy owner, such as the right to borrow on the policy, or the right to name a new beneficiary. If the policy owner (whether or not he or she is the insured) transfers ownership of the policy to another person, such transfer may be subject to a federal gift tax. In addition, if such policy owner transfers the policy to someone two or more generations younger than the policy owner, the transfer may be subject to the federal generation-skipping transfer tax ("GSTT"), the taxable amount being the value of the policy. Similarly, if the beneficiary is two or more generations younger than the insured, the payment of the death proceeds at the death of the insured may be subject to the GSTT. Pursuant to regulations recently promulgated by the U.S. Treasury Department, Nationwide may be required to withhold a portion of the death proceeds and pay them directly to the IRS as the GSTT liability. The GSTT provisions generally apply to the same transfers that are subject to estate or gift taxes. The tax rate is a flat rate equal to the maximum estate tax rate (currently 55%), and there is a provision for an aggregate $1 million exemption. Due to the complexity of these rules, the policy owner should consult with counsel and other competent advisors regarding these taxes. NON-RESIDENT ALIENS Pre-death distributions from modified endowment contracts to nonresident aliens ("NRAs") are generally subject to federal income tax and tax withholding, at a statutory rate of 30% of the amount of income that is distributed. Nationwide is required to withhold such amount from the distribution and remit it to the IRS. Distributions to certain NRAs may be subject to lower, or in certain instances zero, tax and withholding rates, if the United States has entered into an applicable treaty. However, in order to obtain the benefits of such treaty provisions, the NRA must give to Nationwide sufficient proof of his or her residency and citizenship in the form and manner prescribed by the IRS. In addition, the NRA must obtain an individual taxpayer identification number from the IRS, and furnish that number to Nationwide prior to the distribution. If Nationwide does not have the proper proof of citizenship or residency and a proper individual taxpayer identification number prior to any distribution, Nationwide will be required to withhold 30% of the income, regardless of any treaty provision. A pre-death distribution may not be subject to withholding where the recipient sufficiently establishes to Nationwide that such payment is effectively connected to the recipient's conduct of a trade or business in the United States and that such payment is includible in the recipient's gross income for United States federal income tax purposes. Any such distributions may be subject to back-up withholding at the statutory rate (currently 31%) if no individual taxpayer identification number, or an incorrect individual taxpayer identification number, is provided. State and local estate, inheritance, income and other tax consequences of ownership or receipt of policy proceeds depend on the circumstances of each policy owner or beneficiary. TAXATION OF NATIONWIDE Nationwide is taxed as a life insurance company under the Internal Revenue Code. Since the variable account is not a separate entity from Nationwide and its operations form a part of Nationwide, it will not be taxed separately as a "regulated investment company" under Sub-chapter 25 27 M of the Internal Revenue Code. Investment income and realized capital gains on the assets of the variable account are reinvested and taken into account in determining the value of accumulation units. As a result, such investment income and realized capital gains are automatically applied to increase reserves under the policies. Nationwide does not initially expect to incur any federal income tax liability that would be chargeable to the variable account. Based upon these expectations, no charge is currently being made against the variable account for federal income taxes. If, however, Nationwide determines that on a separate company basis such taxes may be incurred, it reserves the right to assess a charge for such taxes against the variable account. Nationwide may also incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant. If they increase, however, charges for such taxes may be made. TAX CHANGES The foregoing discussion, which is based on Nationwide's understanding of federal tax laws as they are currently interpreted by the IRS, is general and is not intended as tax advice. The Internal Revenue Code has been subjected to numerous amendments and changes, and it is reasonable to believe that it will continue to be revised. The United States Congress has, in the past, considered numerous legislative proposals that, if enacted, could change the tax treatment of the policies. It is reasonable to believe that such proposals, and future proposals, may be enacted into law. The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may be at variance with its current positions on these matters. In addition, current state law (which is not discussed herein), and future amendments to state law, may affect the tax consequences of the policy. If the policy owner, insured, or beneficiary or other person receiving any benefit or interest in or from the policy is not both a resident and citizen of the United States, there may be a tax imposed by a foreign country, in addition to any tax imposed by the United States. The foreign law (including regulations, rulings, and case law) may change and impose additional taxes on the policy, the death proceeds, or other distributions and/or ownership of the policy, or a treaty may be amended and all or part of the favorable treatment may be eliminated. Any or all of the foregoing may change from time to time without any notice, and the tax consequences arising out of a policy may be changed retroactively. There is no way of predicting if, when, or to what extent any such change may take place. No representation is made as to the likelihood of the continuation of these current laws, interpretations, and policies. The foregoing is a general explanation as to certain tax matters pertaining to insurance policies. It is not intended to be legal or tax advice, and should not take the place of your independent legal, tax and/or financial advisor. LEGAL CONSIDERATIONS On July 6, 1983, the U.S. Supreme Court held in Arizona Governing Committee v. Norris that certain annuity benefits provided by employers' retirement and fringe benefit programs may not vary between men and women on the basis of sex. This decision applies only to benefits derived from premiums made on or after August 1, 1983. The policies offered by this prospectus are based upon actuarial tables which distinguish between men and women. Thus the policies provide different benefits to men and women of the same age. Accordingly, employers and employee organizations should consider, in consultation with legal counsel, the impact of Norris on any employment related insurance or benefit program before purchasing this policy. STATE REGULATION Nationwide is subject to the laws of Ohio governing insurance companies and to regulation by the Ohio Insurance Department. An annual statement in a prescribed form is filed with the Insurance Department each year covering the operation of Nationwide for the preceding year and its financial condition as of the end of such year. Regulation by the Insurance Department includes periodic examination to determine Nationwide's contract liabilities and reserves so that the Insurance Department may certify the items are correct. Nationwide's books and accounts are subject to review by the Insurance Department at all times and a full examination of its operations is conducted periodically by the National Association of Insurance Commissioners. Such regulation does not, however, involve any supervision of management or investment practices or policies. In addition, Nationwide is subject to regulation under the insurance laws of other jurisdictions in which it may operate. REPORTS TO POLICY OWNERS Nationwide will mail to the policy owner at the last known address of record: 26 28 - an annual statement containing: the amount of the current death benefit, cash value, cash surrender value, premiums paid, monthly charges deducted, amounts invested in the fixed account and the sub-accounts, and policy indebtedness; - annual and semi-annual reports containing all applicable information and financial statements or their equivalent, which must be sent to the underlying mutual fund beneficial shareholders as required by the rules under the Investment Company Act of 1940 for the variable account; and - statements of significant transactions, such as changes in specified amount, changes in death benefit options, changes in future premium allocations, transfers among sub-accounts, premium payments, loans, loan repayments, reinstatement and termination. ADVERTISING Nationwide is ranked and rated by independent financial rating services, including Moody's, Standard & Poor's and A.M. Best Company. The purpose of these ratings is to reflect the financial strength or claims-paying ability of Nationwide. The ratings are not intended to reflect the investment experience or financial strength of the variable account. Nationwide may advertise these ratings from time to time. In addition, Nationwide may include in certain advertisements, endorsements in the form of a list of organizations, individuals or other parties which recommend Nationwide or the policies. Furthermore, Nationwide may occasionally include in advertisements comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets, or discussions of alternative investment vehicles and general economic conditions. LEGAL PROCEEDINGS Nationwide is a party to litigation and arbitration proceedings in the ordinary course of its business, none of which is expected to have a material adverse effect on Nationwide. In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits relating to life insurance and annuity pricing and sales practices. A number of these lawsuits have resulted in substantial jury awards or settlements. On October 29, 1998, Nationwide was named in a lawsuit filed in Ohio state court related to the sale of deferred annuity products for use as investments in tax-deferred contributory retirement plans (Mercedes Castillo v. Nationwide Financial Services, Inc., Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company). On May 3, 1999, the complaint was amended to, among other things, add Marcus Shore as a second plaintiff. The amended complaint is brought as a class action on behalf of all persons who purchased individual deferred annuity contracts or participated in group annuity contracts sold by Nationwide and the other named Nationwide affiliates which were used to fund certain tax-deferred retirement plans. The amended complaint seeks unspecified compensatory and punitive damages. No class has been certified. On June 11, 1999, Nationwide and the other named defendants filed a motion to dismiss the amended complaint. On March 8, 2000, the Court denied the motion to dismiss the amended complaint filed by Nationwide and the other named defendants. Nationwide intends to defend this lawsuit vigorously. There can be no assurance that any litigation relating to pricing or sales practices will not have a material adverse effect on Nationwide in the future. The general distributor, NISC, is not engaged in any litigation of any material nature. EXPERTS The financial statements of Nationwide and the variable account have been included herein in reliance upon the reports of KPMG LLP, independent certified public accountants appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. REGISTRATION STATEMENT A Registration Statement has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the policies offered hereby. This prospectus does not contain all the information set forth in the Registration Statement and amendments thereto and exhibits filed as a part thereof, to all of which reference is hereby made for further information concerning the variable account, Nationwide, and the policies offered hereby. Statements contained in this prospectus as to the content of policies and other legal instruments are summaries. For a complete statement of the terms thereof, reference is made to such instruments as filed. DISTRIBUTION OF THE POLICIES The policies will be sold by licensed insurance agents in those states where the policies may lawfully be sold. Agents are registered representatives of broker dealers registered under the Securities Exchange Act of 1934 27 29 who are member firms of the National Association of Securities Dealers, Inc. ("NASD"). The policies will be distributed by the general distributor, NISC. NISC was organized as an Oklahoma corporation on March 19, 1974. NISC is a wholly owned subsidiary of Nationwide and a member of the NASD. NISC acts as general distributor for the following separate accounts, all of which are separate investment accounts of Nationwide or its affiliates: - Nationwide VLI Separate Account-2; - Nationwide VLI Separate Account-3; - Nationwide VLI Separate Account-4; - Nationwide Multi-Flex Variable Account; - Nationwide Variable Account; - Nationwide Variable Account-II; - Nationwide Variable Account-5; - Nationwide Variable Account-6; - Nationwide Variable Account-8; - Nationwide Variable Account-9; - Nationwide Variable Account-10; - Nationwide VA Separate Account-A; - Nationwide VA Separate Account-B; - Nationwide VA Separate Account-C; - Nationwide VL Separate Account-A; - Nationwide VL Separate Account-B; - Nationwide VL Separate Account-C; and - Nationwide VL Separate Account-D. Gross first year commissions plus any expense allowance payments paid by Nationwide on the sale of these policies provided by the NISC will not exceed 80% of the target premium plus 4% of any excess premium payments. Gross renewal commissions in years 2 through 10 paid by Nationwide will not exceed 4% of actual premium payment, and will not exceed 1% in policy years 11 and thereafter. 28 30 NATIONWIDE INVESTMENT SERVICES CORPORATION DIRECTORS AND OFFICERS
POSITIONS AND OFFICES NAME AND BUSINESS ADDRESS WITH UNDERWRITER W.G. Jurgensen Chief Executive Officer and One Nationwide Plaza Director Columbus, OH 43215 Joseph J. Gasper Chairman of the Board and Director One Nationwide Plaza Columbus, OH 43215 Richard A. Karas Vice Chairman and Director One Nationwide Plaza Columbus, OH 43215 Duane C. Meek President One Nationwide Plaza Columbus, OH 43215 Philip C. Gath Director One Nationwide Plaza Columbus, OH 43215 Susan A. Wolken Director One Nationwide Plaza Columbus, OH 43215 Robert A. Oakley Executive Vice President - Chief Financial Officer One Nationwide Plaza Columbus, OH 43215 Robert J. Woodward, Jr. Executive Vice President - Chief Investment Officer One Nationwide Plaza Columbus, OH 43215 Mark R. Thresher Senior Vice President and Treasurer One Nationwide Plaza Columbus, OH 43215 Barbara J. Shane Vice President - Compliance Officer Two Nationwide Plaza Columbus, OH 43215 Alan A. Todryk Vice President - Taxation One Nationwide Plaza Columbus, OH 43215 John F. Delaloye Assistant Secretary One Nationwide Plaza Columbus, OH 43215 Glenn W. Soden Associate Vice President and Secretary One Nationwide Plaza Columbus, OH 43215 E. Gary Berndt Assistant Treasurer One Nationwide Plaza Columbus, OH 43215 Carol L. Dove Associate Vice President -Treasury Services and Assistant Treasurer One Nationwide Plaza Columbus, OH 43215 Terry C. Smetzer Assistant Treasurer One Nationwide Plaza Columbus, OH 43215
29 31 ADDITIONAL INFORMATION ABOUT NATIONWIDE The life insurance business, including annuities, is the only business in which Nationwide is engaged. Nationwide markets its policies through independent insurance brokers, general agents, and registered representatives of registered NASD broker/dealer firms. Nationwide serves as depositor for the following separate investment accounts, each of which is a registered investment company: - Nationwide Variable Account; - Nationwide Variable Account-II; - Nationwide Variable Account-3; - Nationwide Variable Account-4; - Nationwide Variable Account-5; - Nationwide Variable Account-6; - Nationwide Fidelity Advisor Variable Account; - Nationwide Variable Account-8; - Nationwide Variable Account-9; - Nationwide Variable Account-10; - MFS Variable Account; - Nationwide Multi-Flex Variable Account; - Nationwide VLI Separate Account; - Nationwide VLI Separate Account-2; - Nationwide VLI Separate Account-3; - Nationwide VLI Separate Account-4; and - Nationwide VLI Separate Account-5. Nationwide, in common with other insurance companies, is subject to regulation and supervision by the regulatory authorities of the states in which it is licensed to do business. A license from the state insurance department is a prerequisite to the transaction of insurance business in that state. In general, all states have statutory administrative powers. Such regulation relates, among other things, to licensing of insurers and their agents, the approval of policy forms, the methods of computing reserves, the form and content of statutory financial statements, the amount of policyholders' and stockholders' dividends, and the type of distribution of investments permitted. Nationwide operates in the highly competitive field of life insurance. There are approximately 2,300 stock, mutual and other types of insurers in the life insurance business in the United States, and a large number of them compete with the registrant in the sale of insurance policies. As is customary in insurance company groups, employees are shared with the other insurance companies in the group. In addition to its direct salaried employees, Nationwide shares employees with Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company. Nationwide does not presently own or lease any materially important physical properties when its property holdings are viewed in relation to its total assets. Nationwide shares its home office, other facilities and equipment with Nationwide Mutual Insurance Company. COMPANY MANAGEMENT Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company, together with Nationwide Mutual Insurance Company, Nationwide Mutual Fire Insurance Company, Nationwide Property and Casualty Insurance Company and Nationwide General Insurance Company and their affiliated companies comprise the Nationwide group of companies. The companies listed above have substantially common boards of directors and officers. Nationwide Financial Services, Inc. ("NFS") is the sole shareholder of Nationwide. NFS serves as a holding company for other financial institutions. Nationwide is the sole owner of Nationwide Life and Annuity Insurance Company. Each of the directors and officers listed below is a director or officer respectively of at least one or more of the other major insurance affiliates of the Nationwide group of companies. Messrs. Gasper and Woodward are also trustees of one or more of the registered investment companies distributed by NISC, a registered broker-dealer affiliated with the Nationwide group of companies. 30 32 DIRECTORS OF NATIONWIDE
DIRECTORS OF THE DEPOSITOR NAME AND POSITIONS AND OFFICES PRINCIPAL BUSINESS ADDRESS WITH DEPOSITOR PRINCIPAL OCCUPATION Lewis J. Alphin Director Farm Owner and Operator, Bell Farms (1) 519 Bethel Church Road Mount Olive, NC 28365-6107 A. I. Bell Director Farm Owner and Operator (1) 4121 North River Road West Zanesville, OH 43701 Yvonne M. Curl Director Vice President, Chief Marketing Officer Avaya Inc. Avaya Inc.(2) Room 3C322 211 Mt. Airy Road Basing Ridge, NJ 07920 Kenneth D. Davis Director Farm Owner and Operator (1) 7229 Woodmansee Road Leesburg, OH 45135 Keith W. Eckel Director Partner, Fred W. Eckel Sons; President, Eckel 1647 Falls Road Farms, Inc. (1) Clarks Summit, PA 18411 Willard J. Engel Director Retired General Manager, Lyon County Co-operative 301 East Marshall Street Oil Company (1) Marshall, MN 56258 Fred C. Finney Director Owner and Operator, Moreland Fruit Farm; Operator, 1558 West Moreland Road Melrose Orchard (1) Wooster, OH 44691 Joseph J. Gasper President and Chief President and Chief Operating Officer, Nationwide One Nationwide Plaza Operating Officer and Life Insurance Company and Nationwide Life and Columbus, OH 43215 Director Annuity Insurance Company (1) W.G. Jurgensen Chief Executive Officer Chairman and Chief Executive Officer (3) One Nationwide Plaza and Director Columbus, OH 43215 David O. Miller Chairman of the Board and President, Owen Potato Farm, Inc.; Partner, M&M 115 Sprague Drive Director Enterprises (1) Hebron, OH 43025 Ralph M. Paige Director Executive Director Federation of Southern Federation of Southern Cooperatives/Land Assistance Fund (1) Cooperatives/Land Assistance Fund 2769 Church Street East Point, GA 30344 James F. Patterson Director Vice President, Pattersons, Inc.; President, 8765 Mulberry Road Patterson Farms, Inc. (1) Chesterland, OH 44026 Arden L. Shisler Director President and Chief Executive Officer, K&B 1356 North Wenger Road Transport, Inc. (1) Dalton, OH 44618 Robert L. Stewart Director Owner and Operator Sunnydale Farms and Mining (1) 88740 Fairview Road Jewett, OH 43986
(1) Principal occupation for last 5 years. (2) Prior to assuming this current position, Ms. Curl held other executive management positions with the Xerox Corporation. (3) Prior to assuming this current position, Mr. Jurgensen was Executive Vice President of Bank One Corporation. Prior to that, Mr. Jurgensen was Executive Vice President of First Chicago NBD. 31 33 Each of the directors is a director of the other major insurance affiliates of the Nationwide group of companies except Mr. Gasper who is a director only of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company. Mr. Gasper is a director of NISC, a registered broker-dealer. Messrs. Miller, Patterson, and Shisler are directors of Nationwide Financial Services, Inc. Messrs. Gasper and Woodward are trustees of Nationwide Separate Account Trust and Nationwide Asset Allocation Trust, registered investment companies. EXECUTIVE OFFICERS OF NATIONWIDE
OFFICERS OF THE DEPOSITOR OFFICES OF THE DEPOSITOR NAME AND PRINCIPAL BUSINESS ADDRESS Richard D. Headley Executive Vice President One Nationwide Plaza Columbus, OH 43215 Michael S. Helfer Executive Vice President -Corporate Strategy One Nationwide Plaza Columbus, OH 43215 Donna A. James Executive Vice President - Chief Administrative Officer One Nationwide Plaza Columbus, OH 43215 Robert A. Oakley Executive Vice President - Chief Financial Officer and Treasurer One Nationwide Plaza Columbus, OH 43215 Robert J. Woodward, Jr. Executive Vice President - Chief Investment Officer One Nationwide Plaza Columbus, OH 43215 John R. Cook, Jr. Senior Vice President - Chief Communications Officer One Nationwide Plaza Columbus, OH 43215 Thomas L. Crumrine Senior Vice President One Nationwide Plaza Columbus, OH 43215 David A. Diamond Senior Vice President - Corporate Strategy One Nationwide Plaza Columbus, OH 43215 Philip C. Gath Senior Vice President - Chief Actuary - Nationwide Financial One Nationwide Plaza Columbus, OH 43215 Patricia R. Hatler Senior Vice President, General Counsel and Secretary One Nationwide Plaza Columbus, OH 43215 David K. Hollingsworth Senior Vice President - Business Development and Sponsor One Nationwide Plaza Relations Columbus, OH 43215 David R. Jahn Senior Vice President - Product Management One Nationwide Plaza Columbus, OH 43215 Richard A. Karas Senior Vice President - Sales - Financial Services One Nationwide Plaza Columbus, OH 43215 Gregory S. Lashutka Senior Vice President - Corporate Relations One Nationwide Plaza Columbus, OH 43215 Edwin P. McCausland, Jr. Senior Vice President - Fixed Income Securities One Nationwide Plaza Columbus, OH 43215
32 34 EXECUTIVE OFFICERS OF NATIONWIDE (CONTINUED)
OFFICERS OF THE DEPOSITOR OFFICES OF THE DEPOSITOR NAME AND PRINCIPAL BUSINESS ADDRESS Mark D. Phelan Senior Vice President - Technology and Operations One Nationwide Plaza Columbus, OH 43215 Douglas C. Robinette Senior Vice President - Claims One Nationwide Plaza Columbus, OH 43215 Mark R. Thresher Senior Vice President - Finance - Nationwide Financial One Nationwide Plaza Columbus, OH 43215 Richard M. Waggoner Senior Vice President - Operations One Nationwide Plaza Columbus, OH 43215 Susan A. Wolken Senior Vice President - Product Management and Nationwide One Nationwide Plaza Financial Marketing Columbus, OH 43215
W.G. JURGENSEN has been a Director and Chief Executive Officer since 2000. Previously, he was Executive Vice President of Bank One Corporation from 1998 to May 2000. Prior to Bank One's merger with First Chicago NBD, Mr. Jurgensen served from 1990 to 1998 as Executive Vice President with First Chicago, leading various business units. For 17 years, Mr. Jurgensen was with Norwest Corporation, beginning as a corporate banking officer and serving in increasingly responsible roles including president and CEO of Norwest Investment Services and management of the treasury function. Mr. Jurgensen's final post was Executive Vice President - Corporate Banking. JOSEPH J. GASPER has been President and Chief Operating Officer and Director of Nationwide since April 1996. Previously, he was Executive Vice President - Property/Casualty Operations of Nationwide Mutual Insurance Company from April 1995 to April 1996. He was Senior Vice President - Property/Casualty Operations of Nationwide Mutual Insurance Company from September 1993 to April 1995. Prior to that time, Mr. Gasper held numerous positions within Nationwide. Mr. Gasper has been with Nationwide for 34 years. LEWIS J. ALPHIN has been a Director of Nationwide since 1993. Mr. Alphin owns and operates an 800-acre farm in Mt. Olive, NC. He taught agriculture business at James Sprunt Community College in Kenansville, NC for more than 22 years before retiring in 1994. He is the former board chairman of the Cape Fear Farm Credit Association, a member and former vice president, secretary/treasurer, and director of the Duplin County Agribusiness Council, and a former board member of the Southern States Cooperative (1986 to 1993). Mr. Alphin is a member of the Duplin County Farm Bureau, the North Carolina Farm Bureau, ad the Farm Credit Council. He is a member and former director of the Oak Wolfe Fire Department. A. I. BELL has been a Director of Nationwide since April, 1998. Mr. Bell has served as a state trustee of the Ohio Farm Bureau Federation from 1991 to 1998 and as president that last four years. He oversees the Bell family farm in Zanesville, Ohio. The farm is the hub of a multi-family swine network, in addition to grain and beef operations. Mr. Bell has represented the Ohio Farm Bureau at state and national level activities, and has traveled internationally representing Ohio agriculture. In 1995, he was introduced into The Ohio State University Department of Animal Sciences Hall of Fame. YVONNE M. CURL has been a Director of Nationwide since April 1998. Ms. Curl is Vice President - Chief Marketing Officer for Avaya Inc. located in Basking Ridge, NJ. Prior to joining Avaya Inc. in November 2000, she was employed by the Xerox Corporation. She joined Xerox in 1976 as a sales representative and progressed through management positions, including vice president - field operations; executive assistant to the chairman and CEO; and as corporate vice president serving as senior vice president and general manager, public sector worldwide/global solutions group. JOHN R. COOK, JR. has been Senior Vice President - Chief Communications Officer since May 1997. Previously, Mr. Cook was Senior Vice President - Chief Communications Officer of USAA from July 1989 to May 1997. Mr. Cook has been with Nationwide for 3 years. THOMAS L. CRUMRINE has been Senior Vice President of Nationwide since September 1997. Previously he was Senior Vice President - Property/Casualty from March 1996 to September 1997. Prior to that time, he was 33 35 Senior Vice President - Claims from April 1995 to March 1996, Vice President - Claims from 1993 to March 1996, Vice President - Agency Sales from 1991 to 1993 and Vice President - Agency Services from 1989 to 1991. Prior to 1991, Mr. Crumrine held several other positions within Nationwide. KENNETH D. DAVIS has been a Director of Nationwide since April 1999. Mr. Davis is the immediate past president of the Ohio Farm Bureau Federation. He served as a member of the Ohio Farm Bureau Federation's board of trustees from 1989 until 1999. He served as first vice president of the board from 1994 until 1998. Mr. Davis serves on the board of directors of his local rural electric cooperatives and is a member of many agriculture organizations including the Ohio Corn Growers, Ohio Cattlemen's and Ohio Soybean associations. DAVID A. DIAMOND has been Senior Vice President - Corporate Controller since December 11, 2000. Previously, Mr. Diamond was Senior Vice President - Corporate Controller from August 1999 to December 2000. He was Vice President - Controller from October 1993 to August 1999. Prior to that time, Mr. Diamond held several positions within Nationwide. Mr. Diamond has been with Nationwide for 12 years. KEITH W. ECKEL has been a Director of Nationwide since April 1996. Mr. Eckel is a partner of Fred W. Eckel Sons and president of Eckel Farms, Inc. in northeast Pennsylvania. He received the Master Farmer award from Penn State University in 1982. Mr. Eckel is a member of the Pennsylvania Agricultural Land Preservation Board. He is a former president of the Pennsylvania Farm Bureau, a position he held for 15 years, and the Lackawanna County Cooperative Extension Association. He has served as a board member and executive committee member of the American Farm Bureau Federation. He is a former vice president of the Pennsylvania Council of Cooperative Extension Associations and former board member of the Pennsylvania Vegetable Growers Association. WILLARD J. ENGEL has been a Director of Nationwide since 1994. Mr. Engel served as general manager of Lyon County Co-Operative Oil Co. in Marshall, MN from 1975 to 1997, and occasionally serves on a consulting basis. He previously was a division manager of the Truman Farmers Elevator. He is a former director of the Western Co-op Transport in Montevideo, MN, a former director and legislative committee chairman of the Northwest Petroleum Association in St. Paul, and a former director of Farmland Industries in Kansas City. FRED C. FINNEY has been a Director of Nationwide since 1992. Mr. Finney is the owner and operator of the Moreland Fruit Farm and operator of Melrose Orchard in Wooster, OH. He is past president of the Ohio Farm Bureau Federation, the Ohio Fruit Growers Society, Wayne County Farm Bureau, and the Westwood Ruritan Club. He is a member of the American Berry Cooperative. PHILIP C. GATH has been Senior Vice President - Chief Actuary - Nationwide Financial since May 1998. Previously, Mr. Gath was Vice President - Product Manager - Individual Variable Annuity from July 1997 to May 1998. Mr. Gath was Vice President - Individual Life Actuary from August 1989 to July 1997. Prior to that time, Mr. Gath held several positions within Nationwide. Mr. Gath has been with Nationwide for 32 years. PATRICIA R. HATLER has been Senior Vice President, General Counsel and Secretary since April 2000. Previously, she was Senior Vice President and General Counsel from July 1999 to April 2000. Prior to that time, she was General Counsel and Corporate Secretary of Independence Blue Cross from 1983 to July 1999. RICHARD D. HEADLEY has been Executive Vice President for Nationwide since July 2000. Previously, he was Executive Vice President - Chief Information Technology Officer from May 1999 to July 2000. He was Senior Vice President - Chief Information Technology Officer from October 1997 to May 1999. Previously, Mr. Headly was Chairman and Chief Executive Officer of Banc One Services Corporation from 1992 to Octover 1997. From January 1975 until 1992, Mr. Headley held several positions with Banc One Corporation. Mr. Headley has been with Nationwide for 3 years. MICHAEL S. HELFER has been Executive Vice President - Corporate Strategy since August 2000. He is a former partner and head of the financial institutions group at Wilmer, Cutler and Pickering, a 350-lawyer international law firm headquartered in Washington, D.C. He served as that firm's Chairman and Chief Executive Officer from 1995 to 1998. DAVID K. HOLLINGSWORTH has been Senior Vice President - Business Development and Sponsor Relations since April 2000. Previously, he was Senior Vice President - Multi Channel and Sponsor relations from August 1999 until April 2000. Previously, he was Senior Vice President - Marketing from June 1999 to August 1999. Prior to that time, Mr. Hollingsworth held numerous positions within Nationwide. Mr. Hollingsworth has been with Nationwide for 26 years. DAVID R. JAHN has been Senior Vice President - Product Management since November 2000. Previously, he was Senior Vice President - Commercial Insurance 34 36 from March 1998 to November 2000. Previously, he was Vice President - Property/Casualty Operations and Vice President - Resource Management from March 1996 to January 1998. Prior to that time, Mr. Jahn has held numerous positions within Nationwide. Mr. Jahn has been with Nationwide for 29 years. DONNA A. JAMES has been Executive Vice President - Chief Administrative Officer since July 2000. Previously, she was Senior Vice President - Chief Human Resources Officer from May 1999 to July 2000. She was Senior Vice President - Human Resources from December 1997 to May 1999. Previously, she was Vice President - Human Resources from July 1996 to December 1997. Prior to that time, Ms. James was Vice President - Assistant to the CEO of Nationwide from March 1996 to July 1996. From May 1994 to March 1996, she was Associate Vice President - Assistant to the CEO of Nationwide. Previously, Ms. James held several positions within Nationwide. Ms. James has been with Nationwide for 19 years. RICHARD A. KARAS has been Senior Vice President - Sales - Financial Services since March 1993. Previously, he was Vice President - Sales - Financial Services from February 1989 to March 1993. Prior to that time, Mr. Karas held several positions within Nationwide. Mr. Karas has been with Nationwide for 36 years. GREGORY S. LASHUTKA has been Senior Vice President - Corporate Relations since January 2000. Previously, he was the Mayor of the City of Columbus (Ohio) from January 1992 to December 1999. From January 1986 to December 1991, Mr. Lashutka was a Partner with Squire, Sanders & Dempsey. From January 1978 to December 1985, he was City Attorney for the City of Columbus (Ohio). EDWIN P. MCCAUSLAND, JR. has been Senior Vice President - Fixed Income Securities since 1999. Mr. McCausland has 29 years of experience in insurance investments beginning his career in 1970 with Connecticut Mutual Life Insurance Company. He joined Phoenix Mutual Life Insurance Company in 1981 as second Vice President of Bond Investments and rising to Vice President of Pension Operations. He was Vice President and Managing Director of Mass Mutual Life Insurance Company prior to joining Nationwide. DAVID O. MILLER has been a Director of Nationwide since November 1996. Mr. Miller has been Chairman of the Board since 1998. Mr. Miller is president of Owen Potato Farm, Inc. and a partner of M&M Enterprises in Licking County, OH. He is a director and board chairman of the National Cooperative Business Association, director of Cooperative Business International and the International Cooperative Alliance, and serves on the educational executive committee of the National Council of Farmer Cooperatives. He was president of the Ohio Farm Bureau Federation from 1981 to 1985 and was vice president for six years. Mr. Miller served a two year term on the board of the American Farm Bureau Association. He is past president of the Ohio Vegetable and Potato Growers Association, and was a director of Landmark, Inc., a farm supply cooperative which is now part of Indianapolis-based Countrymark. ROBERT A. OAKLEY has been Executive Vice President - Chief Financial Officer and Treasurer since December 2000. Previously, Mr. Oakley was Executive Vice President - Chief Financial Officer from April 1995 to December 2000. Prior to that, Mr. Oakley was Senior Vice President - Chief Financial Officer from October 1993 to April 1995. Prior to that time, Mr. Oakley held several positions within Nationwide. Mr. Oakley has been with Nationwide for 25 years. RALPH M. PAIGE has been a Director of Nationwide since April 1999. Mr. Paige has been the Executive Director of the Federation of Southern Cooperatives/Land Assistance Fund since 1969. Mr. Paige also served as the National Field Director/Georgia State Director from 1981 to 1984. JAMES F. PATTERSON has been a Director of Nationwide since April 1989. Mr. Patterson is president of Patterson Farms, Inc. and has operated Patterson Fruit Farm in Chesterland, OH since 1964. Mr. Patterson is on the boards of The Ohio State University Hospitals Health System in Cleveland, Geauga Hospital, Inc. and the National Cooperative Business Association. He is past president of the Ohio Farm Bureau Federation and former member of Cleveland Foundation's Lake and Geauga Advisory Committees. MARK D. PHELAN has been Senior Vice President - Technology and Operations since December 2000. Previously, he was Senior Vice President - Technology Services from 1998 to December 2000. His previous management experience includes five years (1977 - 1982) with the data processing division's sales group at IBM Corporation. From 1982 through 1990, Mr. Phelan served as Director of AT&T's Consumer Communications Services Group and he was subsequently promoted to Sales Vice President for the Eastern Region of the Business Communications Services Division. In 1992, he became Executive Vice President - Sales and Marketing for the Electronic Commerce Division of Checkfree Corporation, a position he held for five years. From 1997 until 1998, he was in private consulting. 35 37 DOUGLAS C. ROBINETTE has been Senior Vice President - Claims since November 2000. Previously he was Senior Vice President - Claims and Financial Services from 1999 to November 2000. Prior to that time, Mr. Robinette was Senior Vice President - Marketing and Product Management from May 1998 to 1999. Mr. Robinette was Executive Vice President, Customer Services of Employers Insurance of Wausau, and a member of the Nationwide group until 1998, from September 1996 to May 1998. Prior to that time, he was Executive Vice President, Finance and Insurance Services of Wausau from May 1995 to September 1996. From November 1994 to May 1995, Mr. Robinette was Senior Vice President, Finance and Insurance Services of Wausau. From May 1993 to November 1994, he was Senior Vice President, Finance of Wausau. Prior to that time, Mr. Robinette held several positions within the Nationwide group. Mr. Robinette has been with Nationwide for 14 years. ARDEN L. SHISLER has been a Director of Nationwide since 1984. Mr. Shisler is president and chief executive officer of K&B Transport, Inc., a trucking firm in Dalton, OH. He is a director of the National Cooperative Business Association in Washington, DC. He is a former board member and vice president of the Ohio Farm Bureau Federation and past president of the Ohio Agricultural Marketing Association, an Ohio Farm Bureau Federation subsidiary. He is a member of the Ohio Trucking Association, the Ohio Trucking Safety Council, the Wayne County Farm Bureau, Cornerstone Community Church, the Advisory Committee of The Ohio State University Agriculture Technical Institute and a board member of the Wilderness Center. ROBERT L. STEWART has been a Director of Nationwide since 1989. Mr. Stewart is the owner and operator of Sunnydale Farms and Mining in Jewett, OH. He served on the board of the Ohio Farm Bureau Federation and as president of the Ohio Holstein Association board. Mr. Stewart was a director of the Ohio Agricultural Stabilization and Conservation Service board and Landmark, Inc. a farm supply cooperative which is now part of Indianapolis-based Countrymark. MARK R. THRESHER has been Senior Vice President - Finance - Nationwide Financial since May 1999. He was Vice President - Controller from August 1996 to May 1999. He was Vice President and Treasurer from November 1996 to February 1997. Previously, he was Vice President and Treasurer from June 1996 to November 1996. Prior to joining Nationwide, Mr. Thresher served as a partner with KPMG LLP from July 1988 to June 1996. RICHARD M. WAGGONER has been Senior Vice President - Operations since May 1999. Previously, he was President of Nationwide Services from May 1997 to May 1999. Prior to that time, Mr. Waggoner has held numerous positions within the Nationwide group of companies. Mr. Waggoner has been with Nationwide for 24 years. SUSAN A. WOLKEN has been Senior Vice President - Product Management and Nationwide Financial Marketing since May 1999. Previously, Ms. Wolken was Senior Vice President - Life Company Operations from June 1997 to May 1999. She was Senior Vice President - Enterprise Administration from July 1996 to June 1997. Prior to that time, she was Senior Vice President - Human Resources from April 1995 to July 1996. From September 1993 to April 1995, Ms. Wolken was Vice President - Human Resources. From October 1989 to September 1993 she was Vice President - Individual Life and Health Operations. Ms. Wolken has been with Nationwide for 26 years. ROBERT J. WOODWARD, JR. has been Executive Vice President - Chief Investment Officer since August 1995. Previously, he was Senior Vice President - Fixed Income Investments from March 1991 to August 1995. Prior to that time, Mr. Woodward held several positions within Nationwide. Mr. Woodward has been with Nationwide for 36 years. 36 38 APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS The underlying mutual funds listed below are designed primarily as investment vehicles for variable annuity contracts and variable life insurance policies issued by insurance companies. There is no guarantee that the investment objectives will be met. AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURY(SM) FAMILY OF INVESTMENTS American Century Variable Portfolios, Inc. was organized as a Maryland corporation in 1987. It is a diversified, open-end management company, designed only to provide investment vehicles for variable annuity and variable life insurance products of insurance companies. American Century Variable Portfolios, Inc. is managed by American Century Investment Management, Inc. AMERICAN CENTURY VP BALANCED Investment Objective: Capital growth and current income. The Fund will seek to achieve its objective by maintaining approximately 60% of the assets of the Fund in common stocks (including securities convertible into common stocks and other equity equivalents) that are considered by management to have better-than-average prospects for appreciation and approximately 40% in fixed income securities. A minimum of 25% of the fixed income portion of the Fund will be invested in fixed income senior securities. AMERICAN CENTURY VP INCOME & GROWTH Investment Objective: Dividend growth, current income and capital appreciation. The Fund seeks to achieve its investment objective by investing in common stocks. The investment manager constructs the portfolio to match the risk characteristics of the S & P 500 Stock Index and then optimizes each portfolio to achieve the desired balance of risk and return potential. This includes targeting a dividend yield that exceeds that of the S & P 500 Stock Index. Such a management technique known as "portfolio optimization" may cause the Fund to be more heavily invested in some industries than in others. However, the Fund may not invest more than 25% of its total assets in companies whose principal business activities are in the same industry. AMERICAN CENTURY VP INTERNATIONAL Investment Objective: Capital growth. The Fund will seek to achieve its investment objective by investing primarily in securities of foreign companies that meet certain fundamental and technical standards of selection and, in the opinion of the investment manager, have potential for appreciation. Under normal conditions, the Fund will invest at least 65% of its assets in common stocks or other equity securities of issuers from at least three countries outside the United States. Securities of United States issuers may be included in the portfolio from time to time. Although the primary investment of the Fund will be common stocks (defined to include depository receipts for common stocks), the Fund may also invest in other types of securities consistent with the Fund's objective. When the manager believes that the total return potential of other securities equals or exceeds the potential return of common stocks, the Fund may invest up to 35% of its assets in such other securities. AMERICAN CENTURY VP VALUE Investment Objective: Long-term capital growth; income is a secondary objective. Under normal market conditions, the Fund expects to invest at least 80% of the value of its total asset in equity securities, including common and preferred stock, convertible preferred stock and convertible debt obligations. The equity securities in which the Fund will invest will be primarily securities of well-established companies with intermediate-to-large market capitalizations that are believed by management to be undervalued at the time of purchase. CREDIT SUISSE WARBURG PINCUS TRUST (FORMERLY, WARBURG PINCUS TRUST) The Credit Suisse Warburg Pincus Trust is an open-end management investment company organized in March 1995 as a business trust under the laws of The Commonwealth of Massachusetts. The Trust offers its shares to insurance companies for allocation to separate accounts for the purpose of funding variable annuity and variable life contracts. The portfolios are managed by Credit Suisse Asset Management, LLC. ("Credit Suisse"). SMALL COMPANY GROWTH PORTFOLIO Investment Objective: Capital growth by investing in a portfolio of equity securities of small-sized domestic companies. The Portfolio ordinarily will invest at least 65% of its total assets in common stocks or warrants of small-sized companies (i.e., companies having stock market capitalizations of between $25 million and $1 billion at the time of purchase) that represent attractive opportunities for capital growth. The Portfolio intends to invest 37 39 primarily in companies whose securities are traded on domestic stock exchanges or in the over-the-counter market. The Portfolio's investments will be made on the basis of their equity characteristics and securities ratings generally will not be a factor in the selection process. DREYFUS INVESTMENT PORTFOLIOS Dreyfus Investment Portfolios (the "Fund") is an open-end, management investment company known as a mutual fund. Shares are offered only to variable annuity and variable life insurance separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies and to qualified pension and retirement plans. Individuals may not purchase shares directly from the Fund. The Dreyfus Corporation serves as the Fund's investment adviser. EUROPEAN EQUITY PORTFOLIO - INITIAL SHARES Investment Objective: Long-term capital growth. To pursue this goal, the Portfolio generally invests at least 80% of its total assets in stocks included within the universe of the 300 largest European companies. The Portfolio may invest up to 10% of its total assets in the stocks of non-European companies. The Portfolio's stock investments may include common stocks, preferred stocks and convertible securities. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. - INITIAL SHARES The Dreyfus Socially Responsible Growth Fund is an open-end, diversified, management investment company incorporated under Maryland law on July 20, 1992, and commenced operations on October 7, 1993. The Fund offers its shares only as investment vehicles for variable annuity and variable life insurance companies. The Dreyfus Corporation serves as the Fund's investment advisor. NCM Capital Management Group, Inc. serves as the Fund's sub-investment adviser and provides day-to-day management of the Fund's portfolio. Investment Objective: Capital growth through equity investment in companies that, in the opinion of the Fund's advisers, not only meet traditional investment standards, but which also show evidence that they conduct their business in a manner that contributes to the enhancement of the quality of life in America. Current income is secondary to the primary goal. DREYFUS STOCK INDEX FUND, INC. - INITIAL SHARES Dreyfus Stock Index Fund, Inc. ("Fund") is an open-end, non-diversified, management investment company. It was incorporated under Maryland law on January 24, 1989, and commenced operations on September 29, 1989. The Fund offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. The Dreyfus Corporation ("Dreyfus") serves as the Fund's manager, while Mellon Equity Associates, an affiliate of Dreyfus serves as the Fund's index manager. Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank Coropration. Investment Objective: To provide investment results that correspond to the price and yield performance of publicly traded common stocks in the aggregate, as represented by the Standard & Poor's 500 Composite Stock Price Index. The Fund is neither sponsored by nor affiliated with Standard & Poor's Corporation. DREYFUS VARIABLE INVESTMENT FUND Dreyfus Variable Investment Fund (the "Fund") is an open-end, management investment company. It was organized as an unincorporated business trust under the laws of the Commonwealth of Massachusetts on October 29,1986 and commenced operations August 31, 1990. The Fund offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. Dreyfus serves as the Fund's manager. Fayez Sarofim & Company serves as the sub-adviser and provides day-to-day management of the Portfolio. APPRECIATION PORTFOLIO - INITIAL SHARES (FORMERLY, CAPITAL APPRECIATION PORTFOLIO) Investment Objective: Primarily to provide long-term capital growth consistent with the preservation of capital; current income is a secondary investment objective. This Portfolio invests primarily in the common stocks of domestic and foreign issuers. GROWTH AND INCOME PORTFOLIO Investment Objective: Long-term capital growth, current income and growth of income, consistent with reasonable investment risk. The Portfolio invests in equity securities, debt securities and money market instruments of domestic and foreign issuers. The proportion of the Portfolio's assets invested in each type of security will vary from time to time in accordance with Dreyfus' assessment of economic conditions and investment opportunities. In purchasing equity securities, Dreyfus will invest in common stocks, preferred stocks and securities convertible into common stocks, particularly those which offer opportunities for capital appreciation and growth of earnings, while paying current dividends. The Portfolio will generally invest in investment-grade debt obligations, except that it may invest up to 35% of the value of its net assets in convertible debt securities rated not lower than Caa by Moody's Investor Service, Inc. or CCC by Standard & Poor's Ratings Group, Fitch Investors Service, L.P. or Duff & Phelps Credit Rating Co., or 38 40 if unrated, deemed to be of comparable quality by Dreyfus. These securities are considered to have predominantly speculative characteristics with respect to capacity to pay interest and repay principal and are considered to be of poor standing. See "Investment Considerations and Risks-Lower Rated Securities" in the Portfolio's prospectuses. FIDELITY VARIABLE INSURANCE PRODUCTS FUND Fidelity Variable Insurance Products Fund ("VIP") is an open-end, diversified, management investment company organized as a Massachusetts business trust on November 13, 1981. VIP's shares are purchased by insurance companies to fund benefits under variable insurance and annuity policies. Fidelity Management & Research Company ("FMR") is the manager for VIP and its portfolios. VIP EQUITY-INCOME PORTFOLIO Investment Objective: Reasonable income by investing primarily in income-producing equity securities. In choosing these securities FMR also will consider the potential for capital appreciation. The Portfolio's goal is to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor's 500 Composite Stock Price Index. VIP GROWTH PORTFOLIO Investment Objective: Capital appreciation. This Portfolio will invest in the securities of both well-known and established companies, and smaller, less well-known companies which may have a narrow product line or whose securities are thinly traded. These latter securities will often involve greater risk than may be found in the ordinary investment security. FMR's analysis and expertise plays an integral role in the selection of securities and, therefore, the performance of the Portfolio. Many securities which FMR believes would have the greatest potential may be regarded as speculative, and investment in the Portfolio may involve greater risk than is inherent in other underlying mutual funds. It is also important to point out that the Portfolio makes most sense for you if you can afford to ride out changes in the stock market, because it invests primarily in common stocks. FMR also can make temporary investments in common stocks. VIP HIGH INCOME PORTFOLIO Investment Objective: High level of current income by investing primarily in high-risk, high-yielding, lower-rated, fixed-income securities, while also considering growth of capital. FMR will seek high current income normally by investing the Portfolio's assets as follows: -at least 65% in income-producing debt securities and preferred stocks, including convertible securities, zero coupon securities, and mortgage-backed and asset-backed securities. -up to 20% in common stocks and other equity securities when consistent with the Portfolio's primary objective or acquired as part of a unit combining fixed-income and equity securities. Higher yields are usually available on securities that are lower-rated or that are unrated. Lower-rated securities are usually defined as Ba or lower by Moody's Investor Services Inc. ("Moodys"); BB or lower by Standard & Poor's and may be deemed to be of a speculative nature. The Portfolio may also purchase lower-quality bonds such as those rated Ca3 by Moody's or C- by Standard & Poor's which provide poor protection for payment of principal and interest (commonly referred to as "junk bonds"). For a further discussion of lower-rated securities, please see the "Risks of Lower-Rated Debt Securities" section of the Portfolio's prospectus. VIP OVERSEAS PORTFOLIO Investment Objective: Long-term growth of capital primarily through investments in foreign securities. The Portfolio provides a means for investors to diversify their own portfolios by participating in companies and economies outside of the United States. FIDELITY VARIABLE INSURANCE PRODUCTS FUND II Fidelity Variable Insurance Products Fund II ("VIP II") is an open-end, diversified, management investment company organized as a Massachusetts business trust on March 21, 1988. VIP II's shares are purchased by insurance companies to fund benefits under variable insurance and annuity policies. FMR is the manager of VIP II and its portfolios. VIP II ASSET MANAGER PORTFOLIO Investment Objective: Obtain high total return with reduced risk over the long-term by allocating its assets among domestic and foreign stocks, bonds and short-term fixed income instruments. VIP II CONTRAFUND(R) PORTFOLIO Investment Objective: Capital appreciation by investing primarily in companies that FMR believes 39 41 to be undervalued due to an overly pessimistic appraisal by the public. This strategy can lead to investments in domestic or foreign companies, small and large, many of which may not be well known. The Portfolio primarily invests in common stock and securities convertible into common stock, but it has the flexibility to invest in any type of security that may produce capital appreciation. FIDELITY VARIABLE INSURANCE PRODUCTS FUND III The Fidelity Variable Insurance Products Fund III ("VIP III") is an open-end, diversified, management investment company organized as a Massachusetts business trust on July 14, 1994. VIP III's shares are purchased by insurance companies to fund benefits under variable life insurance and annuity contracts. FMR is the manager of VIP III and its portfolios. VIP III GROWTH OPPORTUNITIES PORTFOLIO Investment Objective: Capital growth by investing primarily in common stocks and securities convertible into common stocks. The Portfolio, under normal conditions, will invest at least 65% of its total assets in securities of companies that FMR believes have long-term growth potential. Although the Portfolio invests primarily in common stock and securities convertible into common stock, it has the ability to purchase other securities, such as preferred stock and bonds, that may produce capital growth. The Portfolio may invest in foreign securities without limitation. JANUS ASPEN SERIES The Janus Aspen Series is an open-end management investment company whose shares are offered in connection with investment in and payments under variable annuity contracts and variable life insurance policies, as well as certain qualified retirement plans. Janus Capital Corporation serves as investment adviser to each Portfolio. CAPITAL APPRECIATION PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital by investing primarily in common stocks selected for their growth potential. The Portfolio may invest in companies of any size, from larger, well-established companies to smaller, emerging growth companies. GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. Under normal circumstances, the portfolio invests at least 65% of its total assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital by investing at least 65% of its total assets in securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may invest in U.S. issuers and it may at times invest all of its assets in fewer than five countries, or even a single country. NATIONWIDE SEPARATE ACCOUNT TRUST Nationwide Separate Account Trust ("NSAT") is a diversified open-end management investment company created under the laws of Massachusetts. NSAT offers shares in the mutual funds listed below, each with its own investment objectives. Shares of NSAT will be sold primarily to separate accounts to fund the benefits under variable life insurance policies and variable annuity contracts issued by life insurance companies. Villanova Global Asset Management Trust, an indirect subsidiary of Nationwide Mutual Insurance Company, manages the assets of the Gartmore NSAT Emerging Markets Fund and Gartmore NSAT International Growth Fund. The remaining assets of NSAT are managed by Villanova Mutual Fund Capital Trust ("VMF"), an indirect subsidiary of Nationwide Financial Services, Inc. CAPITAL APPRECIATION FUND Investment Objective: Long-term capital appreciation. DREYFUS NSAT MID CAP INDEX FUND (FORMERLY, NSAT NATIONWIDE MID CAP INDEX FUND) Subadviser: The Dreyfus Corporation Investment Objective: Capital appreciation. The Fund seeks to match the performance of the Standard & Poor's MidCap 400 Index. To pursue this goal, the Fund generally is fully invested in all 400 stocks included in this index in proportion to their weighting in the index, and in futures whose performance is tied to the index. The Fund is neither sponsored by nor affiliated with Standard & Poor's Corporation. GARTMORE NSAT EMERGING MARKETS FUND Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth by investing primarily in equity securities of companies located in emerging market countries. 40 42 GARTMORE NSAT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND Investment Objective: Long-term capital appreciation by investing primarily and at least 65% of its total assets in equity securities issued by U.S. and foreign companies with business operations in technology and communications and/or technology and communication related industries. GARTMORE NSAT INTERNATIONAL GROWTH FUND Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth by investing primarily in equity securities of companies in Europe, Australia, the Far East and other regions, including developing countries. The Fund invests at least 65% of its assets in established companies located in at least three countries other than the U.S. GOVERNMENT BOND FUND Investment Objective: As high a level of income as is consistent with the preservation of capital by investing at least 65% of its total assets in U.S. government and agency bonds, bills and notes. MAS NSAT MULTI SECTOR BOND FUND (FORMERLY, NATIONWIDE MULTI SECTOR BOND FUND) Subadviser: Miller, Anderson & Sherrerd, LLP Investment Objective: Primarily seeks above average total return over a market cycle of three to five years. The Fund invests in a diversified portfolio of U.S. and foreign fixed income securities, including high yield securities (commonly referred to as "junk bonds") and emerging markets securities. The subadviser will use futures, swaps and other derivatives in managing the Fund. MONEY MARKET FUND Investment Objective: As high a level of current income as is consistent with the preservation of capital and maintenance of liquidity. NATIONWIDE SMALL CAP GROWTH FUND Subadvisers: Miller Anderson & Sherrerd, LLP, Neuberger Berman, LLC and Waddell & Reed Investment Management Company Investment Objective: Capital growth by investing in a broadly diversified portfolio of equity securities issued by U.S. and foreign companies with market capitalizations in the range of companies represented by the Russell 2000, known has small cap companies. Under normal market conditions, the Fund will invest at least 65% of its total assets in the equity securities of small cap companies. The balance of the Fund's assets may be invested in equity securities of larger cap companies. NATIONWIDE SMALL CAP VALUE FUND Subadviser: The Dreyfus Corporation Investment Objective: Capital appreciation through investment in a diversified portfolio of equity securities of companies with a medial market capitalization of approximately $1 billion. Under normal market conditions, at least 75% of the Fund's total assets in equity securities of companies whose equity market capitalizations at the time of investment are similar to the market capitalizations of companies in the Russell 2000 Index. NATIONWIDE SMALL COMPANY FUND Subadvisers: The Dreyfus Corporation, Neuberger Berman, LLC, Lazard Asset Management, Strong Capital Management, Inc. and Waddell & Reed Investment Management Company Investment Objective: Long-term growth of capital. Under normal market conditions, the Fund will invest at least 65% of its total assets in equity securities of companies whose equity market capitalizations at the time of investment are similar to the market capitalizations of companies in the Russell 2000 Index. STRONG NSAT MID CAP GROWTH FUND (FORMERLY, NATIONWIDE STRATEGIC GROWTH FUND) Subadviser: Strong Capital Management Inc. Investment Objective: Capital growth by focusing on common stocks of U.S. and foreign companies that the subadviser believes are reasonably priced and have above-average growth potential. The Fund invests primarily in stocks of medium sized companies but its portfolio can include stocks of companies of any size. TOTAL RETURN FUND Investment Objective: Reasonable, long-term total return on invested capital. TURNER NSAT GROWTH FOCUS FUND Subadviser: Turner Investment Partners, Inc. Investment Objective: Long-term capital appreciation by investing primarily in U.S. common stocks, ADRs and foreign companies that demonstrate strong earnings growth potential. The Fund is non-diversified and typically focuses its investments in a core group of 20 to 30 common stocks. NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST ("AMT") Neuberger Berman AMT is an open-end, diversified management investment company that offers its Portfolios in connection with variable annuity contracts and variable life insurance policies, and certain qualified plans. Prior to May 1, 2000, the Portfolios invested 41 43 through a two-tier master/feeder structure, whereby each portfolio invested its assets in another fund that served as a corresponding "master series;" the master series invested in securities. Effective May 1, 2000, the Portfolios converted to a conventional one-tier structure, whereby each portfolio holds its securities directly. Neuberger Berman Management Inc. is the investment adviser. AMT GROWTH PORTFOLIO Investment Objective: Capital growth. The Portfolio pursues this goal by investing mainly in the common stocks of mid-capitalization companies. The managers look for fast-growing companies that are in new or rapidly evolving industries and seek to reduce risk by diversifying among many companies, industries and sectors. AMT GUARDIAN PORTFOLIO Investment Objective: Long-term capital growth, with current income as a secondary objective. The Portfolio pursues these goals by investing mainly in common stocks of large-capitalization companies. AMT LIMITED MATURITY BOND PORTFOLIO Investment Objective: The highest available current income consistent with liquidity and low risk to principal; total return is a secondary objective. The Portfolio pursues these goals by investing mainly in investment-grade bonds and other debt securities from U.S. government and corporate issuers. AMT PARTNERS PORTFOLIO Investment Objective: Capital growth. The Portfolio pursues its goal by investing mainly in common stocks of mid- to large-capitalization companies. OPPENHEIMER VARIABLE ACCOUNT FUNDS The Oppenheimer Variable Account Funds are an open-end, diversified management investment company organized as a Massachusetts business trust in 1984. Shares of the Funds are sold only to provide benefits under variable life insurance policies and variable annuity contracts. OppenheimerFunds, Inc. is the investment adviser. OPPENHEIMER AGGRESSIVE GROWTH FUND/VA Investment Objective: Capital appreciation by investing in "growth type" companies. Such companies are believed to have relatively favorable long-term prospects for increasing demand for their goods or services, or to be developing new products, services or markets and normally retain a relatively larger portion of their earnings for research, development and investment in capital assets. The Fund may also invest in cyclical industries in "special situations" that OppenheimerFunds, Inc. believes present opportunities for capital growth. OPPENHEIMER BOND FUND/VA Investment Objective: Primarily seeks a high level of current income by investing at least 65% of its total assets in investment grade debt securities, U.S. government securities and money market instruments. Investment grade debt securities would include those rated in one of the four highest ranking categories by any nationally-recognized rating organization or if unrated or split-rated (rated investment grade and below investment grade by different rating organizations), determined by OppenheimerFunds, Inc. to be of comparable quality. The Fund may invest up to 35% of its total assets in debt securities rated less than investment grade when consistent with the Fund's investment objectives. The Fund seeks capital growth as a secondary objective when consistent with its primary objective. OPPENHEIMER CAPITAL APPRECIATION FUND/VA (FORMERLY, OPPENHEIMER GROWTH FUND) Investment Objective: Capital appreciation by investing in securities of well-known established companies. Such securities generally have a history of earnings and dividends and are issued by seasoned companies (having an operating history of at least five years including predecessors). Current income is a secondary consideration in the selection of the Fund's portfolio securities. OPPENHEIMER GLOBAL SECURITIES FUND/VA Investment Objective: Long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations which are considered to have appreciation possibilities. Current income is not an objective. These securities may be considered to be speculative. OPPENHEIMER MAIN STREET GROWTH & INCOME FUND/VA Investment Objective: High total return, which stocks, preferred stocks, convertible securities and warrants. Debt investments will include bonds, participation includes growth in the value of its shares as well as current income from quality and debt securities. In seeking its investment objectives, the Fund may invest in equity and debt securities. Equity investments will include common interests, asset-backed securities, private-label mortgage-backed securities and CMOs, zero coupon securities and U.S. debt obligations, and cash and cash equivalents. From time to time, the Fund may focus 42 44 on small to medium capitalization issuers, the securities of which may be subject to greater price volatility than those of larger capitalized issuers. OPPENHEIMER MULTIPLE STRATEGIES FUND/VA Investment Objective: Total investment return (which includes current income and capital appreciation in the value of its shares) from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. STRONG OPPORTUNITY FUND II, INC. (FORMERLY, STRONG SPECIAL FUND II, INC.) Strong Opportunity Fund II, Inc. is a diversified, open-end management company commonly called a mutual fund. Strong Opportunity Fund II, Inc. was incorporated in Wisconsin and may only be purchased by the separate accounts of insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Strong Capital Management Inc. is the investment adviser for the Fund. Investment Objective: Capital appreciation through investments in a diversified portfolio of equity securities. THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.) The Universal Institutional Funds, Inc. is a mutual fund designed to provide investment vehicles for variable annuity contracts and variable life insurance policies and for certain tax-qualified investors. EMERGING MARKETS DEBT PORTFOLIO Investment Objective: High total return by investing primarily in dollar- and non-dollar denominated fixed income securities of government and government related issuers located in emerging market countries, which securities provide a high level of current income, while at the same time holding the potential for capital appreciation if the perceived creditworthiness of the issuer improves due to improving economic, financial, political, social or other conditions in the country in which the issuer is located. Morgan Stanley Dean Witter Investment Management Inc. serves as the Fund's investment adviser. U. S. REAL ESTATE PORTFOLIO Investment Objective: Long-term capital growth by investing principally in a diversified portfolio of securities of companies operating in the real estate industry ("Real Estate Securities"). Current income is a secondary consideration. Real Estate Securities include equity securities, including common stocks and convertible securities, as well as non-convertible preferred stocks and debt securities of real estate industry companies. A "real estate industry company" is a company that derives at least 50% of its assets (marked to market), gross income or net profits from the ownership, construction, management or sale of residential, commercial or industrial real estate. Under normal market conditions, at least 65% of the Fund's total assets will be invested in Real Estate Securities, primarily equity securities of real estate investment trusts. The Portfolio may invest up to 25% of its total assets in securities issued by foreign issuers, some or all of which may also be Real Estate Securities. Morgan Stanley Asset Management, Inc. serves as the Fund's investment adviser. VAN ECK WORLDWIDE INSURANCE TRUST Van Eck Worldwide Insurance Trust ("Van Eck Trust") is an open-end management investment company organized as a business trust under the laws of the Commonwealth of Massachusetts on January 7, 1987. Shares of the Van Eck Trust are offered only to separate accounts of various insurance companies to fund benefits of variable insurance and annuity policies. The investment adviser and manager isVan Eck Associates Corporation. WORLDWIDE BOND FUND Investment Objective: High total return through a flexible policy of investing globally, primarily in debt securities. WORLDWIDE EMERGING MARKETS FUND Investment Objective: Long-term capital appreciation by investing primarily in equity securities in emerging markets around the world. The Fund specifically emphasizes investment in countries that, compared to the world's major economies, exhibit relatively low gross national product per capita, as well as the potential for rapid economic growth. WORLDWIDE HARD ASSETS FUND Investment Objective: Long-term capital appreciation by investing globally, primarily in "Hard Assets Securities." For the Fund's purpose Hard assets are real estate, energy, timber, and industrial and precious metals. Income is a secondary consideration. The following underlying mutual funds are no longer available as investment options for policies issued on or after September 27, 1999: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., MEMBER OF THE AMERICAN CENTURY(SM) FAMILY OF INVESTMENTS. American Century Variable Portfolios, Inc. was organized as a Maryland corporation in 1987. It is a diversified, open-end investment management company 43 45 which offers its shares only to provide investment vehicles for variable annuity and variable life insurance products of insurance companies. American Century Variable Portfolios, Inc. is managed by American Century Investment Management, Inc. AMERICAN CENTURY VP CAPITAL APPRECIATION Investment Objective: Capital growth. The Fund will seek to achieve its objective by investing in common stocks (including securities convertible into common stocks and other equity equivalents) that meet certain fundamental and technical standards of selection and have, in the opinion of the Fund's investment manager, better than average potential for appreciation. The Fund tries to stay fully invested in such securities, regardless of the movement of stock prices generally. The Fund may invest in cash and cash equivalents temporarily or when it is unable to find common stocks meeting its criteria of selection. It may purchase securities only of companies that have a record of at least three years continuous operation. There can be no assurance that the Fund will achieve its investment objective. CREDIT SUISSE WARBURG PINCUS TRUST (FORMERLY, WARBURG PINCUS TRUST) The Credit Suisse Warburg Pincus Trust is an open-end management investment company organized in March 1995 as a business trust under the laws of The Commonwealth of Massachusetts. The Trust offers its shares to insurance companies for allocation to separate accounts for the purpose of funding variable annuity and variable life contracts. The Portfolios are managed by Credit Suisse Asset Management, LLC ("Credit Suisse"). GLOBAL POST-VENTURE CAPITAL PORTFOLIO (FORMERLY, POST-VENTURE CAPITAL PORTFOLIO) Investment Objective: Long-term growth of capital by investing primarily in equity securities of U.S. and foreign companies considered to be in their post-venture capital stage of development. Under normal conditions, the Portfolio will invest at least 65% of its total assets in equity securities of "post-venture capital companies." A post-venture capital company is on that has received venture capital financing either: (a) during the early stages of the company's existence or the early stages of the development of a new product or service; or (b) as part of the restructuring or recapitalization of the company. The Portfolio will invest in at least three countries, including the United States. INTERNATIONAL EQUITY PORTFOLIO Investment Objective: Long-term capital appreciation by investing primarily in a broadly diversified portfolio of equity securities of companies, wherever organized, that in the judgment of Credit Suisse have their principal business activities and interests outside the United States. The Portfolio will ordinarily invest substantially all of its assets, but no less than 65% of its total assets, in common stocks, warrants and securities convertible into or exchangeable for common stocks. The Portfolio intends to invest principally in the securities of financially strong companies with opportunities for growth within growing international economies and markets through increased earning power and improved utilization or recognition of assets. STRONG VARIABLE INSURANCE FUNDS, INC. Strong Variable Insurance Funds, Inc. ("Corporation") is an open-end management investment company commonly referred to as a mutual fund. Incorporated in the State of Wisconsin, the Corporation has been authorized to issue shares of common stock and series and classes of series of common stock. The International Stock Fund II and The Strong Discovery Fund II, Inc. ("Funds") are offered by the Corporation to insurance company separate accounts for the purpose of funding variable life insurance policies and variable annuity contracts. Strong Capital Management, Inc. is the investment advisor to the Funds. STRONG DISCOVERY FUND II, INC. Investment Objective: Maximum capital appreciation through investments in a diversified portfolio of securities. The Fund normally emphasizes investment in equity securities and may invest up to 100% of its total assets in equity securities including common stocks, preferred stocks and securities convertible into common or preferred stocks. Although the Fund normally emphasizes investment in equity securities, the Fund has the flexibility to invest in any type of security that the Advisor believes has the potential for capital appreciation including up to 100% of its total assets in debt obligations, including intermediate to long-term corporate or U.S. government debt securities. INTERNATIONAL STOCK FUND II Investment Objective: Capital growth by investing primarily in the equity securities of issuers located outside the United States. 44 46 APPENDIX B: ILLUSTRATIONS OF SURRENDER CHARGES Example 1. A female non-tobacco, age 45, purchases a policy with a specified amount of $50,000 and a scheduled premium of $750. She now wishes to surrender the policy during the first policy year. By using the "Initial Surrender Charge" table reproduced below, (also see "Surrender Charges") the total surrender charge per thousand, multiplied by the specified amount expressed in thousands, equals the total Surrender Charge of $569.80 ($11.396 x 50=569.80). Example 2. A male non-tobacco, age 35, purchases a policy with a specified amount of $100,000 and a scheduled premium of $1,100. He now wants to surrender the policy in the sixth policy year. The total initial surrender charge is calculated using the method illustrated above. (Surrender charge per 1,000=6.817 x 100 for a total of $681.70 maximum initial surrender charge). Because the fifth policy year has been completed, the maximum initial surrender charge is reduced by multiplying it by the applicable percentage factor from the "Reductions to Surrender Charges" table below. (Also see "Reductions to Surrender Charges"). In this case, $681.70 x 60%=$409.02 which is the amount Nationwide deducts as a total surrender charge. Maximum surrender charge per $1,000 of initial specified amount for policies which are issued on a standard basis. INITIAL SPECIFIED AMOUNT $50,000-$99,999
ISSUE MALE FEMALE MALE FEMALE AGE NON-TOBACCO NON-TOBACCO STANDARD STANDARD 25 $7.776 $7.521 $8.369 $7.818 35 8.817 8.398 9.811 8.891 45 12.191 11.396 13.887 12.169 55 15.636 14.011 18.415 15.116 65 22.295 19.086 26.577 20.641
INITIAL SPECIFIED AMOUNT $100,000 OR MORE
ISSUE MALE FEMALE MALE FEMALE AGE NON-TOBACCO NON-TOBACCO STANDARD STANDARD 25 $5.776 $5.521 $6.369 $5.818 35 6.817 6.398 7.811 6.891 45 9.691 8.896 11.387 9.669 55 13.136 11.511 15.915 12.616 65 21.295 18.086 25.577 19.641
REDUCTIONS TO SURRENDER CHARGES
SURRENDER CHARGE SURRENDER CHARGE COMPLETED AS A % OF INITIAL COMPLETED AS A % OF INITIAL POLICY YEARS SURRENDER CHARGES POLICY YEARS SURRENDER CHARGES 0 100% 5 60% 1 100% 6 50% 2 90% 7 40% 3 80% 8 30% 4 70% 9+ 0%
45 47 The current surrender charges are the same for all states. However, in Pennsylvania, the guaranteed maximum surrender charges are spread out over 14 years. The guaranteed maximum surrender charges in subsequent years in Pennsylvania are reduced in the following manner.
COMPLETED SURRENDER CHARGE CHARGE SURRENDER CHARGE COMPLETED SURRENDER CHARGE POLICY AS A % OF INITIAL POLICY AS A % OF INITIAL POLICY AS A % OF INITIAL YEARS SURRENDER CHARGES YEARS SURRENDER CHARGES YEARS SURRENDER CHARGES 0 100% 5 60% 10 20% 1 100% 6 50% 11 15% 2 90% 7 40% 12 10% 3 80% 8 30% 13 5% 4 70% 9 25% 14+ 0%
The illustrations of current values in this prospectus are the same for Pennsylvania. However, the illustrations of guaranteed values in this prospectus do not reflect guaranteed maximum surrender charges which are spread out over 14 years. If this policy is issued in Pennsylvania, please contact the home office for an illustration. Nationwide has no plans to change the current surrender charges. 46 48 APPENDIX C: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS The illustrations in this prospectus have been prepared to help show how values under the policies change with investment performance. The illustrations illustrate how cash values, cash surrender values and death benefits under a policy would vary over time if the hypothetical gross investment rates of return were a uniform annual effective rate of either 0%, 6% or 12%. If the hypothetical gross investment rate of return averages 0%, 6% or 12% over a period of years, but fluctuates above or below those averages for individual years, the cash values, cash surrender values and death benefits may be different. For hypothetical returns of 0% and 6%, the illustrations also illustrate when the policies would go into default, at which time additional premium payments would be required to continue the policy in force. The illustrations also assume there is no policy indebtedness, no additional premium payments are made, no cash values are allocated to the fixed account, and there are no changes in the specified amount or death benefit option. The amounts shown for the cash value, cash surrender value and death benefit as of each policy anniversary reflect the fact that the net investment return on the assets held in the sub-accounts is lower than the gross return. This is due to the daily charges made against the assets of the sub-accounts for assuming mortality and expense risks. The mortality and expense risk charges are equivalent to an annualized rate of 0.80% of the daily net assets of the variable account. On each policy anniversary beginning with the 10th, the mortality and expense risk charge is reduced to 0.50% on an annualized basis of the daily net assets of the variable account, provided the cash surrender value is $25,000 or more on such anniversary. In addition, the net investment returns also reflect the deduction of underlying mutual fund investment advisory fees and other expenses which are equivalent to an annualized effective rate of 0.90% of the daily net assets of the variable account. This annualized rate is based on the average of the fund expenses, after expense reimbursement, for the preceding year for all underlying mutual fund options available under the policy as of December 31, 2000. Some underlying mutual funds are subject to expense reimbursements and fee waivers. Absent expense reimbursements and fee waivers, the annualized rate would have been 0.94%. Nationwide anticipates that the expense reimbursement and fee waiver arrangements will continue past the current year. Should there be an increase or decrease in the expense reimbursements and fee waivers of these underlying mutual funds, such change will be reflected in the net asset value of the corresponding underlying mutual fund. Considering current charges for mortality and expense risks and underlying mutual fund expenses, gross annual rates of return of 0%, 6% and 12% correspond to net investment experience at constant annual rates of -1.70%, 4.30% and 10.30%. On each policy anniversary beginning with the 10th, the gross annual rates of return of 0%, 6%, and 12% correspond to net investment experience at constant annual rates of -1.50%, 4.60%, and 10.60%, provided the cash surrender value is $25,000 or more on such anniversary. This is due to a guaranteed reduction in the mortality and expense risk charge from an annualized rate of 0.80% to an annualized rate of 0.50% if the aforementioned conditions apply. The illustrations also reflect the fact that Nationwide makes monthly charges for providing insurance protection. Current values reflect current cost of insurance charges and guaranteed values reflect the maximum cost of insurance charges guaranteed in the policy. The values shown are for policies which are issued as standard. Policies issued on a substandard basis would result in lower cash values and death benefits than those illustrated. The illustrations also reflect the fact that Nationwide deducts a sales load from each premium payment. Current values reflect a deduction of 3.5% of each premium payment up to break point premium and 1.5% of any excess. Guaranteed values reflect a deduction of 3.5% of each premium payment. The illustrations also reflect the fact that Nationwide deducts a tax load for state premium taxes equal to 3.5% of all premium payments. The cash surrender values shown in the illustrations reflect the fact that Nationwide will deduct a surrender charge from the cash value for any policy surrendered in full during the first 9 years. In addition, the illustrations reflect the fact that Nationwide deducts a monthly administrative charge at the beginning of each policy month. This monthly administrative expense charge is $12.50 per month in the first year and $5 per month in renewal years. The illustrations assume a monthly administrative expense charge of $25 per month in the first year and $7.50 per month in renewal years. The illustrations also reflect the fact that no charges for federal or state income taxes are 47 49 currently made against the variable account. If such a charge is made in the future, it will require a higher gross investment return than illustrated in order to produce the net after-tax returns shown in the illustrations. Upon request, Nationwide will furnish a comparable illustration based on the proposed Insured's age, sex, smoking classification, rating classification and premium payment requested. 48 50
DEATH BENEFIT OPTION 1 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 788 390 0 50,000 422 0 50,000 454 0 50,000 2 1,614 852 278 50,000 943 369 50,000 1,038 464 50,000 3 2,483 1,296 780 50,000 1,476 959 50,000 1,670 1,154 50,000 4 3,394 1,717 1,258 50,000 2,016 1,557 50,000 2,352 1,893 50,000 5 4,351 2,116 1,714 50,000 2,563 2,161 50,000 3,087 2,686 50,000 6 5,357 2,493 2,149 50,000 3,118 2,774 50,000 3,883 3,539 50,000 7 6,412 2,854 2,567 50,000 3,689 3,402 50,000 4,752 4,465 50,000 8 7,520 3,193 2,964 50,000 4,268 4,039 50,000 5,696 5,467 50,000 9 8,683 3,512 3,340 50,000 4,859 4,687 50,000 6,725 6,553 50,000 10 9,905 3,810 3,810 50,000 5,462 5,462 50,000 7,847 7,847 50,000 11 11,188 4,083 4,083 50,000 6,071 6,071 50,000 9,069 9,069 50,000 12 12,535 4,330 4,330 50,000 6,688 6,688 50,000 10,403 10,403 50,000 13 13,949 4,546 4,546 50,000 7,308 7,308 50,000 11,856 11,856 50,000 14 15,434 4,729 4,729 50,000 7,929 7,929 50,000 13,441 13,441 50,000 15 16,993 4,869 4,869 50,000 8,542 8,542 50,000 15,166 15,166 50,000 16 18,630 4,968 4,968 50,000 9,149 9,149 50,000 17,052 17,052 50,000 17 20,349 5,018 5,018 50,000 9,743 9,743 50,000 19,113 19,113 50,000 18 22,154 5,008 5,008 50,000 10,316 10,316 50,000 21,367 21,367 50,000 19 24,049 4,940 4,940 50,000 10,867 10,867 50,000 23,843 23,843 50,000 20 26,039 4,804 4,804 50,000 11,389 11,389 50,000 26,568 26,568 50,000 21 28,129 4,595 4,595 50,000 11,877 11,877 50,000 29,668 29,668 50,000 22 30,323 4,303 4,303 50,000 12,324 12,324 50,000 33,114 33,114 50,000 23 32,626 3,916 3,916 50,000 12,719 12,719 50,000 36,961 36,961 50,000 24 35,045 3,422 3,422 50,000 13,052 13,052 50,000 41,274 41,274 50,000 25 37,585 2,816 2,816 50,000 13,320 13,320 50,000 46,105 46,105 53,482 26 40,252 2,084 2,084 50,000 13,510 13,510 50,000 51,420 51,420 59,132 27 43,052 1,192 1,192 50,000 13,596 13,596 50,000 57,274 57,274 64,719 28 45,992 131 131 50,000 13,570 13,570 50,000 63,731 63,731 70,741 29 49,079 (*) (*) (*) 13,415 13,415 50,000 70,863 70,863 77,240 30 52,321 (*) (*) (*) 13,108 13,108 50,000 78,753 78,753 84,266
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 49 51 DEATH BENEFIT OPTION 1 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 788 175 0 50,000 200 0 50,000 225 0 50,000 2 1,614 539 0 50,000 606 33 50,000 678 104 50,000 3 2,483 879 362 50,000 1,012 496 50,000 1,158 641 50,000 4 3,394 1,194 735 50,000 1,416 957 50,000 1,667 1,208 50,000 5 4,351 1,484 1,082 50,000 1,816 1,415 50,000 2,208 1,806 50,000 6 5,357 1,744 1,400 50,000 2,210 1,865 50,000 2,781 2,436 50,000 7 6,412 1,973 1,686 50,000 2,593 2,306 50,000 3,385 3,098 50,000 8 7,520 2,167 1,937 50,000 2,961 2,732 50,000 4,021 3,792 50,000 9 8,683 2,320 2,148 50,000 3,309 3,137 50,000 4,688 4,516 50,000 10 9,905 2,429 2,429 50,000 3,632 3,632 50,000 5,386 5,386 50,000 11 11,188 2,490 2,490 50,000 3,924 3,924 50,000 6,116 6,116 50,000 12 12,535 2,499 2,499 50,000 4,180 4,180 50,000 6,877 6,877 50,000 13 13,949 2,453 2,453 50,000 4,396 4,396 50,000 7,673 7,673 50,000 14 15,434 2,346 2,346 50,000 4,563 4,563 50,000 8,504 8,504 50,000 15 16,993 2,170 2,170 50,000 4,672 4,672 50,000 9,369 9,369 50,000 16 18,630 1,916 1,916 50,000 4,711 4,711 50,000 10,267 10,267 50,000 17 20,349 1,576 1,576 50,000 4,669 4,669 50,000 11,198 11,198 50,000 18 22,154 1,132 1,132 50,000 4,526 4,526 50,000 12,158 12,158 50,000 19 24,049 571 571 50,000 4,262 4,262 50,000 13,143 13,143 50,000 20 26,039 (*) (*) (*) 3,855 3,855 50,000 14,153 14,153 50,000 21 28,129 (*) (*) (*) 3,281 3,281 50,000 15,185 15,185 50,000 22 30,323 (*) (*) (*) 2,511 2,511 50,000 16,240 16,240 50,000 23 32,626 (*) (*) (*) 1,514 1,514 50,000 17,320 17,320 50,000 24 35,045 (*) (*) (*) 248 248 50,000 18,427 18,427 50,000 25 37,585 (*) (*) (*) (*) (*) (*) 19,559 19,559 50,000 26 40,252 (*) (*) (*) (*) (*) (*) 20,711 20,711 50,000 27 43,052 (*) (*) (*) (*) (*) (*) 21,878 21,878 50,000 28 45,992 (*) (*) (*) (*) (*) (*) 23,051 23,051 50,000 29 49,079 (*) (*) (*) (*) (*) (*) 24,221 24,221 50,000 30 52,321 (*) (*) (*) (*) (*) (*) 25,386 25,386 50,000
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 50 52
DEATH BENEFIT OPTION 2 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 788 388 0 50,388 420 0 50,420 452 0 50,452 2 1,614 847 273 50,847 937 363 50,937 1,032 458 51,032 3 2,483 1,286 770 51,286 1,464 948 51,464 1,657 1,141 51,657 4 3,394 1,700 1,241 51,700 1,995 1,536 51,995 2,327 1,868 52,327 5 4,351 2,089 1,688 52,089 2,529 2,128 52,529 3,046 2,645 53,046 6 5,357 2,454 2,110 52,454 3,068 2,724 53,068 3,819 3,475 53,819 7 6,412 2,801 2,514 52,801 3,617 3,330 53,617 4,657 4,370 54,657 8 7,520 3,123 2,893 53,123 4,170 3,941 54,170 5,560 5,331 55,560 9 8,683 3,422 3,250 53,422 4,729 4,556 54,729 6,536 6,363 56,536 10 9,905 3,697 3,697 53,697 5,291 5,291 55,291 7,590 7,590 57,590 11 11,188 3,944 3,944 53,944 5,852 5,852 55,852 8,726 8,726 58,726 12 12,535 4,161 4,161 54,161 6,411 6,411 56,411 9,949 9,949 59,949 13 13,949 4,344 4,344 54,344 6,962 6,962 56,962 11,264 11,264 61,264 14 15,434 4,489 4,489 54,489 7,499 7,499 57,499 12,674 12,674 62,674 15 16,993 4,585 4,585 54,585 8,013 8,013 58,013 14,179 14,179 64,179 16 18,630 4,635 4,635 54,635 8,501 8,501 58,501 15,788 15,788 65,788 17 20,349 4,630 4,630 54,630 8,955 8,955 58,955 17,502 17,502 67,502 18 22,154 4,560 4,560 54,560 9,359 9,359 59,359 19,320 19,320 69,320 19 24,049 4,425 4,425 54,425 9,714 9,714 59,714 21,253 21,253 71,253 20 26,039 4,217 4,217 54,217 10,005 10,005 60,005 23,301 23,301 73,301 21 28,129 3,932 3,932 53,932 10,225 10,225 60,225 25,469 25,469 75,469 22 30,323 3,560 3,560 53,560 10,361 10,361 60,361 27,845 27,845 77,845 23 32,626 3,092 3,092 53,092 10,396 10,396 60,396 30,360 30,360 80,360 24 35,045 2,517 2,517 52,517 10,314 10,314 60,314 33,015 33,015 83,015 25 37,585 1,837 1,837 51,837 10,110 10,110 60,110 35,825 35,825 85,825 26 40,252 1,041 1,041 51,041 9,767 9,767 59,767 38,794 38,794 88,794 27 43,052 103 103 50,103 9,248 9,248 59,248 41,907 41,907 91,907 28 45,992 (*) (*) (*) 8,546 8,546 58,546 45,178 45,178 95,178 29 49,079 (*) (*) (*) 7,639 7,639 57,639 48,610 48,610 98,610 30 52,321 (*) (*) (*) 6,508 6,508 56,508 52,209 52,209 102,209
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 51 53
DEATH BENEFIT OPTION 2 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 788 173 0 50,173 198 0 50,198 223 0 50,223 2 1,614 533 0 50,533 600 27 50,600 671 97 50,671 3 2,483 868 352 50,868 1,000 483 51,000 1,143 627 51,143 4 3,394 1,176 717 51,176 1,394 935 51,394 1,641 1,182 51,641 5 4,351 1,455 1,053 51,455 1,781 1,379 51,781 2,164 1,763 52,164 6 5,357 1,703 1,359 51,703 2,156 1,812 52,156 2,712 2,368 52,712 7 6,412 1,917 1,630 51,917 2,517 2,230 52,517 3,283 2,996 53,283 8 7,520 2,092 1,862 52,092 2,856 2,627 52,856 3,875 3,645 53,875 9 8,683 2,223 2,051 52,223 3,168 2,996 53,168 4,483 4,311 54,483 10 9,905 2,308 2,308 52,308 3,447 3,447 53,447 5,106 5,106 55,106 11 11,188 2,341 2,341 52,341 3,686 3,686 53,686 5,738 5,738 55,738 12 12,535 2,318 2,318 52,318 3,878 3,878 53,878 6,375 6,375 56,375 13 13,949 2,239 2,239 52,239 4,019 4,019 54,019 7,016 7,016 57,016 14 15,434 2,096 2,096 52,096 4,099 4,099 54,099 7,653 7,653 57,653 15 16,993 1,883 1,883 51,883 4,108 4,108 54,108 8,278 8,278 58,278 16 18,630 1,592 1,592 51,592 4,033 4,033 54,033 8,879 8,879 58,879 17 20,349 1,216 1,216 51,216 3,862 3,862 53,862 9,445 9,445 59,445 18 22,154 742 742 50,742 3,576 3,576 53,576 9,957 9,957 59,957 19 24,049 157 157 50,157 3,156 3,156 53,156 10,396 10,396 60,396 20 26,039 (*) (*) (*) 2,582 2,582 52,582 10,738 10,738 60,738 21 28,129 (*) (*) (*) 1,835 1,835 51,835 10,961 10,961 60,961 22 30,323 (*) (*) (*) 894 894 50,894 11,040 11,040 61,040 23 32,626 (*) (*) (*) (*) (*) (*) 10,947 10,947 60,947 24 35,045 (*) (*) (*) (*) (*) (*) 10,649 10,649 60,649 25 37,585 (*) (*) (*) (*) (*) (*) 10,103 10,103 60,103 26 40,252 (*) (*) (*) (*) (*) (*) 9,254 9,254 59,254 27 43,052 (*) (*) (*) (*) (*) (*) 8,036 8,036 58,036 28 45,992 (*) (*) (*) (*) (*) (*) 6,366 6,366 56,366 29 49,079 (*) (*) (*) (*) (*) (*) 4,151 4,151 54,151 30 52,321 (*) (*) (*) (*) (*) (*) 1,298 1,298 51,298
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 52 54
DEATH BENEFIT OPTION 1 $1200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,260 641 0 50,000 693 0 50,000 745 52 50,000 2 2,583 1,341 648 50,000 1,487 794 50,000 1,640 947 50,000 3 3,972 2,004 1,380 50,000 2,290 1,666 50,000 2,601 1,978 50,000 4 5,431 2,628 2,073 50,000 3,099 2,545 50,000 3,633 3,079 50,000 5 6,962 3,204 2,719 50,000 3,907 3,421 50,000 4,735 4,250 50,000 6 8,570 3,734 3,318 50,000 4,714 4,298 50,000 5,918 5,502 50,000 7 10,259 4,211 3,864 50,000 5,514 5,167 50,000 7,183 6,837 50,000 8 12,032 4,626 4,349 50,000 6,298 6,021 50,000 8,535 8,258 50,000 9 13,893 4,981 4,773 50,000 7,068 6,860 50,000 9,986 9,778 50,000 10 15,848 5,267 5,267 50,000 7,816 7,816 50,000 11,544 11,544 50,000 11 17,901 5,482 5,482 50,000 8,538 8,538 50,000 13,222 13,222 50,000 12 20,056 5,615 5,615 50,000 9,226 9,226 50,000 15,032 15,032 50,000 13 22,318 5,658 5,658 50,000 9,872 9,872 50,000 16,990 16,990 50,000 14 24,694 5,601 5,601 50,000 10,466 10,466 50,000 19,115 19,115 50,000 15 27,189 5,441 5,441 50,000 11,007 11,007 50,000 21,437 21,437 50,000 16 29,808 5,166 5,166 50,000 11,484 11,484 50,000 23,988 23,988 50,000 17 32,559 4,748 4,748 50,000 11,872 11,872 50,000 26,796 26,796 50,000 18 35,447 4,181 4,181 50,000 12,167 12,167 50,000 30,006 30,006 50,000 19 38,479 3,447 3,447 50,000 12,354 12,354 50,000 33,612 33,612 50,000 20 41,663 2,528 2,528 50,000 12,415 12,415 50,000 37,693 37,693 50,000 21 45,006 1,387 1,387 50,000 12,322 12,322 50,000 42,348 42,348 50,000 22 48,517 (*) (*) (*) 12,040 12,040 50,000 47,707 47,707 50,093 23 52,202 (*) (*) (*) 11,528 11,528 50,000 53,725 53,725 56,411 24 56,073 (*) (*) (*) 10,742 10,742 50,000 60,337 60,337 63,354 25 60,136 (*) (*) (*) 9,624 9,624 50,000 67,597 67,597 70,977 26 64,403 (*) (*) (*) 8,099 8,099 50,000 75,564 75,564 79,342 27 68,883 (*) (*) (*) 6,073 6,073 50,000 84,301 84,301 88,516 28 73,587 (*) (*) (*) 3,434 3,434 50,000 93,877 93,877 98,571 29 78,527 (*) (*) (*) 21 21 50,000 104,366 104,366 109,584 30 83,713 (*) (*) (*) (*) (*) (*) 115,843 115,843 121,635
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of a 6% break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 53 55
DEATH BENEFIT OPTION 1 $1200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,260 287 0 50,000 328 0 50,000 368 0 50,000 2 2,583 728 35 50,000 833 140 50,000 944 251 50,000 3 3,972 1,110 487 50,000 1,309 685 50,000 1,526 903 50,000 4 5,431 1,429 874 50,000 1,746 1,192 50,000 2,110 1,556 50,000 5 6,962 1,676 1,191 50,000 2,138 1,652 50,000 2,689 2,204 50,000 6 8,570 1,846 1,430 50,000 2,472 2,056 50,000 3,256 2,840 50,000 7 10,259 1,929 1,582 50,000 2,739 2,393 50,000 3,802 3,455 50,000 8 12,032 1,912 1,635 50,000 2,922 2,645 50,000 4,314 4,036 50,000 9 13,893 1,781 1,574 50,000 3,002 2,794 50,000 4,775 4,567 50,000 10 15,848 1,523 1,523 50,000 2,959 2,959 50,000 5,170 5,170 50,000 11 17,901 1,121 1,121 50,000 2,773 2,773 50,000 5,478 5,478 50,000 12 20,056 560 560 50,000 2,420 2,420 50,000 5,680 5,680 50,000 13 22,318 (*) (*) (*) 1,872 1,872 50,000 5,750 5,750 50,000 14 24,694 (*) (*) (*) 1,096 1,096 50,000 5,656 5,656 50,000 15 27,189 (*) (*) (*) 45 45 50,000 5,354 5,354 50,000 16 29,808 (*) (*) (*) (*) (*) (*) 4,783 4,783 50,000 17 32,559 (*) (*) (*) (*) (*) (*) 3,863 3,863 50,000 18 35,447 (*) (*) (*) (*) (*) (*) 2,481 2,481 50,000 19 38,479 (*) (*) (*) (*) (*) (*) 499 499 50,000 20 41,663 (*) (*) (*) (*) (*) (*) (*) (*) (*) 21 45,006 (*) (*) (*) (*) (*) (*) (*) (*) (*) 22 48,517 (*) (*) (*) (*) (*) (*) (*) (*) (*) 23 52,202 (*) (*) (*) (*) (*) (*) (*) (*) (*) 24 56,073 (*) (*) (*) (*) (*) (*) (*) (*) (*) 25 60,136 (*) (*) (*) (*) (*) (*) (*) (*) (*) 26 64,403 (*) (*) (*) (*) (*) (*) (*) (*) (*) 27 68,883 (*) (*) (*) (*) (*) (*) (*) (*) (*) 28 73,587 (*) (*) (*) (*) (*) (*) (*) (*) (*) 29 78,527 (*) (*) (*) (*) (*) (*) (*) (*) (*) 30 83,713 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 54 56
DEATH BENEFIT OPTION 2 $1200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,260 635 0 50,635 687 0 50,687 738 45 50,738 2 2,583 1,324 631 51,324 1,468 775 51,468 1,619 926 51,619 3 3,972 1,971 1,347 51,971 2,252 1,628 52,252 2,557 1,933 52,557 4 5,431 2,571 2,016 52,571 3,031 2,477 53,031 3,552 2,997 53,552 5 6,962 3,115 2,630 53,115 3,796 3,311 53,796 4,599 4,114 54,599 6 8,570 3,606 3,190 53,606 4,548 4,132 54,548 5,704 5,288 55,704 7 10,259 4,034 3,687 54,034 5,275 4,929 55,275 6,864 6,517 56,864 8 12,032 4,389 4,112 54,389 5,966 5,688 55,966 8,071 7,794 58,071 9 13,893 4,674 4,466 54,674 6,618 6,410 56,618 9,331 9,123 59,331 10 15,848 4,878 4,878 54,878 7,219 7,219 57,219 10,638 10,638 60,638 11 17,901 4,997 4,997 54,997 7,763 7,763 57,763 11,991 11,991 61,991 12 20,056 5,023 5,023 55,023 8,235 8,235 58,235 13,384 13,384 63,384 13 22,318 4,946 4,946 54,946 8,621 8,621 58,621 14,809 14,809 64,809 14 24,694 4,756 4,756 54,756 8,905 8,905 58,905 16,256 16,256 66,256 15 27,189 4,454 4,454 54,454 9,083 9,083 59,083 17,728 17,728 67,728 16 29,808 4,030 4,030 54,030 9,137 9,137 59,137 19,213 19,213 69,213 17 32,559 3,458 3,458 53,458 9,033 9,033 59,033 20,683 20,683 70,683 18 35,447 2,738 2,738 52,738 8,762 8,762 58,762 22,135 22,135 72,135 19 38,479 1,862 1,862 51,862 8,305 8,305 58,305 23,554 23,554 73,554 20 41,663 819 819 50,819 7,643 7,643 57,643 24,924 24,924 74,924 21 45,006 (*) (*) (*) 6,740 6,740 56,740 26,215 26,215 76,215 22 48,517 (*) (*) (*) 5,562 5,562 55,562 27,476 27,476 77,476 23 52,202 (*) (*) (*) 4,070 4,070 54,070 28,598 28,598 78,598 24 56,073 (*) (*) (*) 2,233 2,233 52,233 29,544 29,544 79,544 25 60,136 (*) (*) (*) 10 10 50,010 30,272 30,272 80,272 26 64,403 (*) (*) (*) (*) (*) (*) 30,730 30,730 80,730 27 68,883 (*) (*) (*) (*) (*) (*) 30,863 30,863 80,863 28 73,587 (*) (*) (*) (*) (*) (*) 30,617 30,617 80,617 29 78,527 (*) (*) (*) (*) (*) (*) 29,917 29,917 79,917 30 83,713 (*) (*) (*) (*) (*) (*) 28,677 28,677 78,677
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 55 57
DEATH BENEFIT OPTION 2 $1200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,260 280 0 50,280 319 0 50,319 360 0 50,360 2 2,583 708 15 50,708 811 118 50,811 919 226 50,919 3 3,972 1,071 447 51,071 1,263 639 51,263 1,474 850 51,474 4 5,431 1,364 809 51,364 1,668 1,113 51,668 2,016 1,461 52,016 5 6,962 1,579 1,094 51,579 2,015 1,530 52,015 2,535 2,050 52,535 6 8,570 1,709 1,293 51,709 2,293 1,877 52,293 3,021 2,605 53,021 7 10,259 1,747 1,401 51,747 2,489 2,143 52,489 3,460 3,114 53,460 8 12,032 1,680 1,403 51,680 2,586 2,309 52,586 3,833 3,555 53,833 9 13,893 1,496 1,288 51,496 2,565 2,357 52,565 4,117 3,909 54,117 10 15,848 1,183 1,183 51,183 2,407 2,407 52,407 4,290 4,290 54,290 11 17,901 730 730 50,730 2,093 2,093 52,093 4,326 4,326 54,326 12 20,056 128 128 50,128 1,603 1,603 51,603 4,199 4,199 54,199 13 22,318 (*) (*) (*) 919 919 50,919 3,879 3,879 53,879 14 24,694 (*) (*) (*) 16 16 50,016 3,332 3,332 53,332 15 27,189 (*) (*) (*) (*) (*) (*) 2,511 2,511 52,511 16 29,808 (*) (*) (*) (*) (*) (*) 1,360 1,360 51,360 17 32,559 (*) (*) (*) (*) (*) (*) (*) (*) (*) 18 35,447 (*) (*) (*) (*) (*) (*) (*) (*) (*) 19 38,479 (*) (*) (*) (*) (*) (*) (*) (*) (*) 20 41,663 (*) (*) (*) (*) (*) (*) (*) (*) (*) 21 45,006 (*) (*) (*) (*) (*) (*) (*) (*) (*) 22 48,517 (*) (*) (*) (*) (*) (*) (*) (*) (*) 23 52,202 (*) (*) (*) (*) (*) (*) (*) (*) (*) 24 56,073 (*) (*) (*) (*) (*) (*) (*) (*) (*) 25 60,136 (*) (*) (*) (*) (*) (*) (*) (*) (*) 26 64,403 (*) (*) (*) (*) (*) (*) (*) (*) (*) 27 68,883 (*) (*) (*) (*) (*) (*) (*) (*) (*) 28 73,587 (*) (*) (*) (*) (*) (*) (*) (*) (*) 29 78,527 (*) (*) (*) (*) (*) (*) (*) (*) (*) 30 83,713 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 56 58
DEATH BENEFIT OPTION 1 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 947 49 100,000 1,016 119 100,000 1,085 188 100,000 2 3,229 1,946 1,049 100,000 2,146 1,249 100,000 2,354 1,457 100,000 3 4,965 2,910 2,102 100,000 3,304 2,496 100,000 3,732 2,924 100,000 4 6,788 3,837 3,119 100,000 4,492 3,774 100,000 5,231 4,513 100,000 5 8,703 4,731 4,103 100,000 5,712 5,084 100,000 6,865 6,236 100,000 6 10,713 5,591 5,053 100,000 6,967 6,429 100,000 8,648 8,110 100,000 7 12,824 6,408 5,960 100,000 8,247 7,799 100,000 10,587 10,139 100,000 8 15,040 7,172 6,813 100,000 9,544 9,185 100,000 12,689 12,330 100,000 9 17,367 7,884 7,615 100,000 10,860 10,590 100,000 14,972 14,703 100,000 10 19,810 8,535 8,535 100,000 12,186 12,186 100,000 17,449 17,449 100,000 11 22,376 9,139 9,139 100,000 13,536 13,536 100,000 20,155 20,155 100,000 12 25,069 9,703 9,703 100,000 14,919 14,919 100,000 23,123 23,123 100,000 13 27,898 10,229 10,229 100,000 16,341 16,341 100,000 26,386 26,386 100,000 14 30,868 10,700 10,700 100,000 17,784 17,784 100,000 30,052 30,052 100,000 15 33,986 11,097 11,097 100,000 19,236 19,236 100,000 34,077 34,077 100,000 16 37,261 11,427 11,427 100,000 20,701 20,701 100,000 38,511 38,511 100,000 17 40,699 11,681 11,681 100,000 22,175 22,175 100,000 43,402 43,402 100,000 18 44,309 11,846 11,846 100,000 23,649 23,649 100,000 48,803 48,803 100,000 19 48,099 11,916 11,916 100,000 25,119 25,119 100,000 54,780 54,780 100,000 20 52,079 11,897 11,897 100,000 26,675 26,675 100,000 61,418 61,418 100,000 21 56,258 11,775 11,775 100,000 28,234 28,234 100,000 68,803 68,803 100,000 22 60,646 11,522 11,522 100,000 29,779 29,779 100,000 77,036 77,036 100,000 23 65,253 11,128 11,128 100,000 31,306 31,306 100,000 86,243 86,243 101,766 24 70,091 10,566 10,566 100,000 32,798 32,798 100,000 96,429 96,429 112,822 25 75,170 9,824 9,824 100,000 34,252 34,252 100,000 107,629 107,629 124,850 26 80,504 8,891 8,891 100,000 35,666 35,666 100,000 119,945 119,945 137,937 27 86,104 7,726 7,726 100,000 37,017 37,017 100,000 133,520 133,520 150,878 28 91,984 6,311 6,311 100,000 38,301 38,301 100,000 148,498 148,498 164,832 29 98,158 4,619 4,619 100,000 39,509 39,509 100,000 165,042 165,042 179,895 30 104,641 2,600 2,600 100,000 40,618 40,618 100,000 183,337 183,337 196,171
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 57 59
DEATH BENEFIT OPTION 1 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL1 2% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 750 0 100,000 813 0 100,000 876 0 100,000 2 3,229 1,672 774 100,000 1,851 953 100,000 2,038 1,140 100,000 3 4,965 2,552 1,744 100,000 2,906 2,098 100,000 3,290 2,483 100,000 4 6,788 3,389 2,671 100,000 3,978 3,260 100,000 4,642 3,924 100,000 5 8,703 4,182 3,554 100,000 5,065 4,437 100,000 6,102 5,473 100,000 6 10,713 4,926 4,388 100,000 6,163 5,625 100,000 7,676 7,138 100,000 7 12,824 5,618 5,169 100,000 7,269 6,821 100,000 9,373 8,925 100,000 8 15,040 6,251 5,892 100,000 8,378 8,019 100,000 11,202 10,843 100,000 9 17,367 6,820 6,551 100,000 9,482 9,213 100,000 13,171 12,901 100,000 10 19,810 7,320 7,320 100,000 10,578 10,578 100,000 15,291 15,291 100,000 11 22,376 7,744 7,744 100,000 11,657 11,657 100,000 17,575 17,575 100,000 12 25,069 8,088 8,088 100,000 12,717 12,717 100,000 20,039 20,039 100,000 13 27,898 8,348 8,348 100,000 13,751 13,751 100,000 22,703 22,703 100,000 14 30,868 8,515 8,515 100,000 14,753 14,753 100,000 25,586 25,586 100,000 15 33,986 8,580 8,580 100,000 15,711 15,711 100,000 28,798 28,798 100,000 16 37,261 8,532 8,532 100,000 16,615 16,615 100,000 32,298 32,298 100,000 17 40,699 8,357 8,357 100,000 17,452 17,452 100,000 36,118 36,118 100,000 18 44,309 8,036 8,036 100,000 18,201 18,201 100,000 40,294 40,294 100,000 19 48,099 7,548 7,548 100,000 18,843 18,843 100,000 44,873 44,873 100,000 20 52,079 6,873 6,873 100,000 19,356 19,356 100,000 49,910 49,910 100,000 21 56,258 5,988 5,988 100,000 19,718 19,718 100,000 55,475 55,475 100,000 22 60,646 4,871 4,871 100,000 19,905 19,905 100,000 61,656 61,656 100,000 23 65,253 3,497 3,497 100,000 19,891 19,891 100,000 68,558 68,558 100,000 24 70,091 1,834 1,834 100,000 19,643 19,643 100,000 76,311 76,311 100,000 25 75,170 (*) (*) (*) 19,116 19,116 100,000 85,073 85,073 100,000 26 80,504 (*) (*) (*) 18,248 18,248 100,000 94,894 94,894 109,128 27 86,104 (*) (*) (*) 16,963 16,963 100,000 105,704 105,704 119,446 28 91,984 (*) (*) (*) 15,157 15,157 100,000 117,616 117,616 130,554 29 98,158 (*) (*) (*) 12,706 12,706 100,000 130,763 130,763 142,532 30 104,641 (*) (*) (*) 9,468 9,468 100,000 145,305 145,305 155,477
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 58 60
DEATH BENEFIT OPTION 2 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 943 46 100,943 1,012 115 101,012 1,082 184 101,082 2 3,229 1,936 1,039 101,936 2,135 1,237 102,135 2,342 1,444 102,342 3 4,965 2,889 2,081 102,889 3,280 2,472 103,280 3,705 2,897 103,705 4 6,788 3,802 3,084 103,802 4,450 3,732 104,450 5,181 4,463 105,181 5 8,703 4,677 4,048 104,677 5,645 5,017 105,645 6,781 6,153 106,781 6 10,713 5,514 4,975 105,514 6,867 6,328 106,867 8,520 7,981 108,520 7 12,824 6,302 5,853 106,302 8,105 7,656 108,105 10,397 9,948 110,397 8 15,040 7,031 6,672 107,031 9,346 8,987 109,346 12,415 12,056 112,415 9 17,367 7,701 7,431 107,701 10,593 10,324 110,593 14,587 14,318 114,587 10 19,810 8,302 8,302 108,302 11,832 11,832 111,832 16,919 16,919 116,919 11 22,376 8,848 8,848 108,848 13,078 13,078 113,078 19,438 19,438 119,438 12 25,069 9,347 9,347 109,347 14,338 14,338 114,338 22,173 22,173 122,173 13 27,898 9,803 9,803 109,803 15,614 15,614 115,614 25,147 25,147 125,147 14 30,868 10,195 10,195 110,195 16,886 16,886 116,886 28,447 28,447 128,447 15 33,986 10,502 10,502 110,502 18,131 18,131 118,131 32,010 32,010 132,010 16 37,261 10,731 10,731 110,731 19,353 19,353 119,353 35,866 35,866 135,866 17 40,699 10,873 10,873 110,873 20,541 20,541 120,541 40,037 40,037 140,037 18 44,309 10,913 10,913 110,913 21,677 21,677 121,677 44,539 44,539 144,539 19 48,099 10,847 10,847 110,847 22,750 22,750 122,750 49,397 49,397 149,397 20 52,079 10,679 10,679 110,679 23,765 23,765 123,765 54,655 54,655 154,655 21 56,258 10,398 10,398 110,398 24,701 24,701 124,701 60,337 60,337 160,337 22 60,646 9,972 9,972 109,972 25,523 25,523 125,523 66,454 66,454 166,454 23 65,253 9,394 9,394 109,394 26,295 26,295 126,295 73,040 73,040 173,040 24 70,091 8,636 8,636 108,636 26,908 26,908 126,908 80,114 80,114 180,114 25 75,170 7,694 7,694 107,694 27,344 27,344 127,344 87,716 87,716 187,716 26 80,504 6,560 6,560 106,560 27,585 27,585 127,585 95,891 95,891 195,891 27 86,104 5,199 5,199 105,199 27,582 27,582 127,582 104,658 104,658 204,658 28 91,984 3,604 3,604 103,604 27,315 27,315 127,315 114,068 114,068 214,068 29 98,158 1,762 1,762 101,762 26,752 26,752 126,752 124,170 124,170 224,170 30 104,641 0 0 0 25,840 25,840 125,840 134,993 134,993 234,993
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 59 61
DEATH BENEFIT OPTION 2 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 45 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 1,575 747 0 100,747 809 0 100,809 872 0 100,872 2 3,229 1,661 763 101,661 1,839 941 101,839 2,025 1,127 102,025 3 4,965 2,530 1,722 102,530 2,881 2,073 102,881 3,262 2,454 103,262 4 6,788 3,352 2,634 103,352 3,933 3,215 103,933 4,589 3,871 104,589 5 8,703 4,124 3,496 104,124 4,993 4,365 104,993 6,013 5,385 106,013 6 10,713 4,842 4,304 104,842 6,055 5,517 106,055 7,537 6,999 107,537 7 12,824 5,502 5,053 105,502 7,114 6,665 107,114 9,166 8,717 109,166 8 15,040 6,097 5,738 106,097 8,162 7,803 108,162 10,902 10,543 110,902 9 17,367 6,619 6,350 106,619 9,190 8,921 109,190 12,749 12,480 112,749 10 19,810 7,065 7,065 107,065 10,191 10,191 110,191 14,709 14,709 114,709 11 22,376 7,426 7,426 107,426 11,155 11,155 111,155 16,786 16,786 116,786 12 25,069 7,697 7,697 107,697 12,073 12,073 112,073 18,983 18,983 118,983 13 27,898 7,874 7,874 107,874 12,937 12,937 112,937 21,309 21,309 121,309 14 30,868 7,950 7,950 107,950 13,737 13,737 113,737 23,764 23,764 123,764 15 33,986 7,913 7,913 107,913 14,455 14,455 114,455 26,350 26,350 126,350 16 37,261 7,752 7,752 107,752 15,075 15,075 115,075 29,154 29,154 129,154 17 40,699 7,455 7,455 107,455 15,578 15,578 115,578 32,103 32,103 132,103 18 44,309 7,004 7,004 107,004 15,937 15,937 115,937 35,191 35,191 135,191 19 48,099 6,379 6,379 106,379 16,125 16,125 116,125 38,408 38,408 138,408 20 52,079 5,563 5,563 105,563 16,112 16,112 116,112 41,745 41,745 141,745 21 56,258 4,539 4,539 104,539 15,871 15,871 115,871 45,197 45,197 145,197 22 60,646 3,293 3,293 103,293 15,371 15,371 115,371 48,752 48,752 148,752 23 65,253 1,809 1,809 101,809 14,585 14,585 114,585 52,405 52,405 152,405 24 70,091 70 70 100,070 13,475 13,475 113,475 56,141 56,141 156,141 25 75,170 (*) (*) (*) 11,996 11,996 111,996 59,933 59,933 159,933 26 80,504 (*) (*) (*) 10,089 10,089 110,089 63,745 63,745 163,745 27 86,104 (*) (*) (*) 7,684 7,684 107,684 67,523 67,523 167,523 28 91,984 (*) (*) (*) 4,691 4,691 104,691 71,195 71,195 171,195 29 98,158 (*) (*) (*) 1,020 1,020 101,020 74,681 74,681 174,681 30 104,641 (*) (*) (*) (*) (*) (*) 77,902 77,902 177,902
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 60 62
DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 CURRENT VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,533 371 100,000 1,647 485 100,000 1,762 599 100,000 2 5,381 3,104 1,941 100,000 3,431 2,268 100,000 3,772 2,609 100,000 3 8,275 4,625 3,579 100,000 5,267 4,221 100,000 5,964 4,918 100,000 4 11,314 6,078 5,148 100,000 7,141 6,211 100,000 8,341 7,411 100,000 5 14,505 7,447 6,633 100,000 9,036 8,222 100,000 10,905 10,091 100,000 6 17,855 8,737 8,039 100,000 10,960 10,262 100,000 13,684 12,986 100,000 7 21,373 9,943 9,362 100,000 12,910 12,328 100,000 16,699 16,118 100,000 8 25,066 11,052 10,587 100,000 14,875 14,410 100,000 19,968 19,503 100,000 9 28,945 12,062 11,714 100,000 16,854 16,505 100,000 23,520 23,172 100,000 10 33,017 12,980 12,980 100,000 18,857 18,857 100,000 27,400 27,400 100,000 11 37,293 13,793 13,793 100,000 20,877 20,877 100,000 31,739 31,739 100,000 12 41,782 14,476 14,476 100,000 22,892 22,892 100,000 36,497 36,497 100,000 13 46,497 15,025 15,025 100,000 24,903 24,903 100,000 41,735 41,735 100,000 14 51,446 15,415 15,415 100,000 26,893 26,893 100,000 47,511 47,511 100,000 15 56,644 15,639 15,639 100,000 28,949 28,949 100,000 53,913 53,913 100,000 16 62,101 15,691 15,691 100,000 30,997 30,997 100,000 61,045 61,045 100,000 17 67,831 15,536 15,536 100,000 33,017 33,017 100,000 69,018 69,018 100,000 18 73,848 15,164 15,164 100,000 35,010 35,010 100,000 77,985 77,985 100,000 19 80,165 14,555 14,555 100,000 36,973 36,973 100,000 88,129 88,129 100,000 20 86,798 13,667 13,667 100,000 38,890 38,890 100,000 99,603 99,603 106,575 21 93,763 12,467 12,467 100,000 40,753 40,753 100,000 112,329 112,329 117,946 22 101,076 10,871 10,871 100,000 42,524 42,524 100,000 126,332 126,332 132,649 23 108,755 8,813 8,813 100,000 44,183 44,183 100,000 141,732 141,732 148,819 24 116,818 6,215 6,215 100,000 45,708 45,708 100,000 158,661 158,661 166,594 25 125,284 2,976 2,976 100,000 47,071 47,071 100,000 177,258 177,258 186,121 26 134,173 (*) (*) (*) 48,244 48,244 100,000 197,678 197,678 207,562 27 143,506 (*) (*) (*) 49,200 49,200 100,000 220,086 220,086 231,090 28 153,307 (*) (*) (*) 49,893 49,893 100,000 244,659 244,659 256,892 29 163,597 (*) (*) (*) 50,268 50,268 100,000 271,586 271,586 285,165 30 174,402 (*) (*) (*) 50,237 50,237 100,000 301,066 301,066 316,119
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 61 63
DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,210 48 100,000 1,314 152 100,000 1,419 256 100,000 2 5,381 2,538 1,375 100,000 2,827 1,664 100,000 3,130 1,967 100,000 3 8,275 3,769 2,723 100,000 4,330 3,284 100,000 4,941 3,895 100,000 4 11,314 4,898 3,968 100,000 5,816 4,886 100,000 6,857 5,927 100,000 5 14,505 5,916 5,103 100,000 7,275 6,462 100,000 8,882 8,069 100,000 6 17,855 6,814 6,117 100,000 8,698 8,001 100,000 11,022 10,324 100,000 7 21,373 7,581 7,000 100,000 10,072 9,491 100,000 13,281 12,700 100,000 8 25,066 8,200 7,735 100,000 11,379 10,914 100,000 15,661 15,196 100,000 9 28,945 8,653 8,305 100,000 12,600 12,251 100,000 18,167 17,818 100,000 10 33,017 8,925 8,925 100,000 13,716 13,716 100,000 20,805 20,805 100,000 11 37,293 8,996 8,996 100,000 14,708 14,708 100,000 23,587 23,587 100,000 12 41,782 8,851 8,851 100,000 15,556 15,556 100,000 26,529 26,529 100,000 13 46,497 8,469 8,469 100,000 16,240 16,240 100,000 29,748 29,748 100,000 14 51,446 7,826 7,826 100,000 16,730 16,730 100,000 33,197 33,197 100,000 15 56,644 6,885 6,885 100,000 16,989 16,989 100,000 36,908 36,908 100,000 16 62,101 5,596 5,596 100,000 16,966 16,966 100,000 40,917 40,917 100,000 17 67,831 3,893 3,893 100,000 16,591 16,591 100,000 45,266 45,266 100,000 18 73,848 1,689 1,689 100,000 15,776 15,776 100,000 50,008 50,008 100,000 19 80,165 (*) (*) (*) 14,416 14,416 100,000 55,221 55,221 100,000 20 86,798 (*) (*) (*) 12,393 12,393 100,000 61,017 61,017 100,000 21 93,763 (*) (*) (*) 9,571 9,571 100,000 67,554 67,554 100,000 22 101,076 (*) (*) (*) 5,787 5,787 100,000 75,040 75,040 100,000 23 108,755 (*) (*) (*) 836 836 100,000 83,755 83,755 100,000 24 116,818 (*) (*) (*) (*) (*) (*) 94,068 94,068 100,000 25 125,284 (*) (*) (*) (*) (*) (*) 105,902 105,902 111,197 26 134,173 (*) (*) (*) (*) (*) (*) 118,857 118,857 124,800 27 143,506 (*) (*) (*) (*) (*) (*) 133,024 133,024 139,675 28 153,307 (*) (*) (*) (*) (*) (*) 148,495 148,495 155,920 29 163,597 (*) (*) (*) (*) (*) (*) 165,367 165,367 173,635 30 174,402 (*) (*) (*) (*) (*) (*) 183,741 183,741 192,928
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 62 64 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,521 358 101,521 1,634 471 101,634 1,747 585 101,747 2 5,381 3,068 1,905 103,068 3,390 2,228 103,390 3,727 2,565 103,727 3 8,275 4,553 3,507 104,553 5,185 4,138 105,185 5,870 4,824 105,870 4 11,314 5,957 5,027 105,957 6,995 6,065 106,995 8,168 7,238 108,168 5 14,505 7,260 6,446 107,260 8,803 7,989 108,803 10,618 9,804 110,618 6 17,855 8,467 7,770 108,467 10,611 9,913 110,611 13,236 12,538 113,236 7 21,373 9,572 8,991 109,572 12,410 11,829 112,410 16,032 15,450 116,032 8 25,066 10,558 10,093 110,558 14,182 13,717 114,182 19,004 18,539 119,004 9 28,945 11,422 11,073 111,422 15,920 15,571 115,920 22,165 21,816 122,165 10 33,017 12,169 12,169 112,169 17,625 17,625 117,625 25,537 25,537 125,537 11 37,293 12,787 12,787 112,787 19,282 19,282 119,282 29,216 29,216 129,216 12 41,782 13,245 13,245 113,245 20,855 20,855 120,855 33,119 33,119 133,119 13 46,497 13,537 13,537 113,537 22,329 22,329 122,329 37,260 37,260 137,260 14 51,446 13,634 13,634 113,634 23,672 23,672 123,672 41,634 41,634 141,634 15 56,644 13,532 13,532 113,532 24,866 24,866 124,866 46,253 46,253 146,253 16 62,101 13,225 13,225 113,225 25,897 25,897 125,897 51,134 51,134 151,134 17 67,831 12,676 12,676 112,676 26,801 26,801 126,801 56,262 56,262 156,262 18 73,848 11,880 11,880 111,880 27,481 27,481 127,481 61,654 61,654 161,654 19 80,165 10,824 10,824 110,824 27,908 27,908 127,908 67,317 67,317 167,317 20 86,798 9,472 9,472 109,472 28,031 28,031 128,031 73,238 73,238 173,238 21 93,763 7,801 7,801 107,801 27,806 27,806 127,806 79,414 79,414 179,414 22 101,076 5,739 5,739 105,739 27,138 27,138 127,138 85,789 85,789 185,789 23 108,755 3,246 3,246 103,246 25,958 25,958 125,958 92,333 92,333 192,333 24 116,818 283 283 100,283 24,195 24,195 124,195 99,016 99,016 199,016 25 125,284 (*) (*) (*) 21,690 21,690 121,690 105,789 105,789 205,789 26 134,173 (*) (*) (*) 18,438 18,438 118,438 112,609 112,609 212,609 27 143,506 (*) (*) (*) 14,369 14,369 114,369 119,439 119,439 219,439 28 153,307 (*) (*) (*) 9,384 9,384 109,384 126,214 126,214 226,214 29 163,597 (*) (*) (*) 3,380 3,380 103,380 132,863 132,863 232,863 30 174,402 (*) (*) (*) (*) (*) (*) 139,270 139,270 239,270
(1) No policy loans and no partial withdrawals have been made. (2) Current values reflect current cost of insurance charges and a monthly $12.50 administrative expense charge for the first policy year and $5.00 thereafter. Current values reflect a 6% of premium charge on all premiums up to the break point premium and 4% on premiums in excess of break point for any single policy year. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 63 65
DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO: AGE 55 GUARANTEED VALUES 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST CASH SURR DEATH CASH SURR DEATH CASH SURR DEATH YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2,625 1,196 33 101,196 1,299 136 101,299 1,402 239 101,402 2 5,381 2,495 1,333 102,495 2,780 1,617 102,780 3,078 1,915 103,078 3 8,275 3,684 2,638 103,684 4,232 3,186 104,232 4,829 3,782 104,829 4 11,314 4,755 3,825 104,755 5,643 4,713 105,643 6,651 5,721 106,651 5 14,505 5,695 4,882 105,695 6,999 6,186 106,999 8,540 7,727 108,540 6 17,855 6,496 5,799 106,496 8,285 7,587 108,285 10,488 9,791 110,488 7 21,373 7,145 6,564 107,145 9,481 8,900 109,481 12,486 11,905 112,486 8 25,066 7,623 7,158 107,623 10,563 10,098 110,563 14,516 14,051 114,516 9 28,945 7,912 7,563 107,912 11,503 11,154 111,503 16,558 16,210 116,558 10 33,017 7,994 7,994 107,994 12,275 12,275 112,275 18,593 18,593 118,593 11 37,293 7,854 7,854 107,854 12,851 12,851 112,851 20,598 20,598 120,598 12 41,782 7,476 7,476 107,476 13,204 13,204 113,204 22,551 22,551 122,551 13 46,497 6,846 6,846 106,846 13,306 13,306 113,306 24,427 24,427 124,427 14 51,446 5,947 5,947 105,947 13,122 13,122 113,122 26,195 26,195 126,195 15 56,644 4,750 4,750 104,750 12,608 12,608 112,608 27,897 27,897 127,897 16 62,101 3,219 3,219 103,219 11,706 11,706 111,706 29,400 29,400 129,400 17 67,831 1,308 1,308 101,308 10,348 10,348 110,348 30,627 30,627 130,627 18 73,848 (*) (*) (*) 8,448 8,448 108,448 31,482 31,482 131,482 19 80,165 (*) (*) (*) 5,915 5,915 105,915 31,856 31,856 131,856 20 86,798 (*) (*) (*) 2,666 2,666 102,666 31,640 31,640 131,640 21 93,763 (*) (*) (*) (*) (*) (*) 30,725 30,725 130,725 22 101,076 (*) (*) (*) (*) (*) (*) 28,996 28,996 128,996 23 108,755 (*) (*) (*) (*) (*) (*) 26,330 26,330 126,330 24 116,818 (*) (*) (*) (*) (*) (*) 22,587 22,587 122,587 25 125,284 (*) (*) (*) (*) (*) (*) 17,520 17,520 117,520 26 134,173 (*) (*) (*) (*) (*) (*) 10,976 10,976 110,976 27 143,506 (*) (*) (*) (*) (*) (*) 2,678 2,678 102,678 28 153,307 (*) (*) (*) (*) (*) (*) (*) (*) (*) 29 163,597 (*) (*) (*) (*) (*) (*) (*) (*) (*) 30 174,402 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) No policy loans and no partial withdrawals have been made. (2) Guaranteed values reflect guaranteed cost of insurance charges and a monthly $25.00 administrative expense charge for the first policy year and $7.50 thereafter. Guaranteed values reflect a 6% of premium charge on all premiums. (3) Net investment returns are calculated as the hypothetical gross investment return less all charges and deductions shown in the prospectus appendix. (*) Unless additional premium is paid, the policy will not stay in force. The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors, including the investment allocations made by an owner, prevailing rates and rates of inflation. The death benefit and cash value for a policy would be different from those shown if the actual rates of return averaged 0%, 6%, and 12% over a period of years but also fluctuated above or below those averages for individual policy years. No representation can be made by Nationwide Life or the trust that these hypothetical rates of return can be achieved for any one year or sustained over any period of time. 64