-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Be8hkGlX+j+30LVq6xlPOLEkVf5QGmkTPUGqQc+UCsArklDx7kwvJ81cKicTHzAc Q+L1yr8ooeBW+Zvz5u3XpA== 0000950152-02-003373.txt : 20020426 0000950152-02-003373.hdr.sgml : 20020426 ACCESSION NUMBER: 0000950152-02-003373 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020426 EFFECTIVENESS DATE: 20020426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE VLI SEPARATE ACCOUNT 2 CENTRAL INDEX KEY: 0000820914 IRS NUMBER: 314156830 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-42180 FILM NUMBER: 02622042 BUSINESS ADDRESS: STREET 1: ONE NATIONWIDE PLZ STREET 2: C/O NATIONWIDE LIFE INSURANCE CO CITY: COLUMBUS STATE: OH ZIP: 43216 BUSINESS PHONE: 614-249-7111 MAIL ADDRESS: STREET 1: NATIONWIDE LIFE INSURANCE CO STREET 2: ONE NATIONWIDE PLAZA CITY: COLUMBUS STATE: OH ZIP: 43216 485BPOS 1 l93657ae485bpos.txt NATIONWIDE VLI SEPARATE ACCOUNT - 2 485BPOS Registration No. 033-42180 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 23 TO FORM S-6 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 -------------------- NATIONWIDE VLI SEPARATE ACCOUNT-2 (EXACT NAME OF TRUST) -------------------- NATIONWIDE LIFE INSURANCE COMPANY ONE NATIONWIDE PLAZA COLUMBUS, OHIO 43216 (EXACT NAME AND ADDRESS OF DEPOSITOR AND REGISTRANT) PATRICIA R. HATLER SECRETARY ONE NATIONWIDE PLAZA COLUMBUS, OHIO 43215 (NAME AND ADDRESS OF AGENT FOR SERVICE) -------------------- This Post-Effective Amendment amends the Registration Statement with respect to the Prospectus, Financial Statements, and Part II. It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) of Rule 485 [X] on May 1, 2002 pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485 [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 If appropriate check the following box: [ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities being registered: Flexible Premium Variable Universal Life Insurance Policies Approximate date of proposed offering: Continuously on and after May 1, 2002 [ ] Check box if it is proposed that this filing will become effective on (date) at (time) pursuant to Rule 487. ================================================================================ CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-8B-2 N-8B-2 ITEM CAPTION IN PROSPECTUS 1...................................... Nationwide Life Insurance Company The Variable Account 2...................................... Nationwide Life Insurance Company 3...................................... Custodian of Assets 4...................................... Distribution of The Policies 5...................................... The Variable Account 6...................................... Not Applicable 7...................................... Not Applicable 8...................................... Not Applicable 9...................................... Legal Proceedings 10...................................... Information About The Policies; How The Cash Value Varies; Right to Exchange for a Fixed Benefit Policy; Reinstatement; Other Policy Provisions 11...................................... Investments of The Variable Account 12...................................... The Variable Account 13...................................... Policy Charges Reinstatement 14...................................... Underwriting and Issuance - Premium Payments Minimum Requirements for Issuance of a Policy 15...................................... Investments of the Variable Account; Premium Payments 16...................................... Underwriting and Issuance - Allocation of Cash Value 17...................................... Surrendering The Policy for Cash 18...................................... Reinvestment 19...................................... Not Applicable 20...................................... Not Applicable 21...................................... Policy Loans 22...................................... Not Applicable 23...................................... Not Applicable 24...................................... Not Applicable 25...................................... Nationwide Life Insurance Company 26...................................... Not Applicable 27...................................... Nationwide Life Insurance Company 28...................................... Company Management 29...................................... Company Management 30...................................... Not Applicable 31...................................... Not Applicable 32...................................... Not Applicable 33...................................... Not Applicable 34...................................... Not Applicable 35...................................... Nationwide Life Insurance Company 36...................................... Not Applicable 37...................................... Not Applicable 38...................................... Distribution of The Policies
N-8B-2 ITEM CAPTION IN PROSPECTUS 39...................................... Distribution of The Policies 40...................................... Not Applicable 41(a)................................... Distribution of The Policies 42...................................... Not Applicable 43...................................... Not Applicable 44...................................... How The Cash Value Varies 45...................................... Not Applicable 46...................................... How The Cash Value Varies 47...................................... Not Applicable 48...................................... Custodian of Assets 49...................................... Not Applicable 50...................................... Not Applicable 51...................................... Summary of The Policies; Information About The Policies 52...................................... Substitution of Securities 53...................................... Taxation of The Company 54...................................... Not Applicable 55...................................... Not Applicable 56...................................... Not Applicable 57...................................... Not Applicable 58...................................... Not Applicable 59...................................... Financial Statements
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, 2002 - -------------------------------------------------------------------------------- THIS PROSPECTUS CONTAINS BASIC INFORMATION YOU SHOULD UNDERSTAND ABOUT THE POLICIES BEFORE INVESTING - THE INSURANCE POLICY IS THE LEGALLY BINDING INSTRUMENT GOVERNING THE RELATIONSHIP BETWEEN YOU AND NATIONWIDE SHOULD YOU CHOOSE TO INVEST. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. NOT ALL BENEFITS, PROGRAMS, FEATURES AND INVESTMENT OPTIONS DESCRIBED IN THIS PROSPECTUS ARE AVAILABLE OR APPROVED FOR USE IN EVERY STATE. 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 Fund: Class I - - American Century VP Income & Growth Fund: Class I - - American Century VP International Fund: Class I - - American Century VP Ultra Fund: Class I - - American Century VP Value Fund: Class I CREDIT SUISSE TRUST (FORMERLY, CREDIT SUISSE WARBURG PINCUS TRUST) - - Small Cap Growth Portfolio (formerly, Small Company Growth Portfolio) DREYFUS - - Dreyfus Investment Portfolios - Small Cap Stock Index Portfolios: Service 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, Capital Appreciation Portfolio) - - Growth & Income Portfolio: Initial Shares* FEDERATED INSURANCE SERIES - - Federated Quality Bond Fund II: Primary Shares FIDELITY VARIABLE INSURANCE PRODUCTS FUND - - VIP Equity-Income Portfolio: Initial Class - - VIP Growth Portfolio: Initial Class - - VIP High Income Portfolio: Initial Class * - - VIP Overseas Portfolio: Initial Class FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - - VIP II Asset Manager Portfolio: Initial Class - - VIP II Contrafund(R) Portfolio: Initial Class FIDELITY VARIABLE INSURANCE PRODUCTS FUND III - - VIP III Value Strategies Portfolio: Service Class GARTMORE VARIABLE INSURANCE TRUST ("GVIT") (FORMERLY, NATIONWIDE SEPARATE ACCOUNT TRUST) - - Dreyfus GVIT Mid Cap Index Fund: Class I (formerly, Dreyfus NSAT Mid Cap Index Fund) - - Gartmore GVIT Emerging Markets Fund: Class I (formerly, Gartmore NSAT Emerging Markets Fund) - - Gartmore GVIT Global Financial Services Fund: Class I - - Gartmore GVIT Global Health Sciences Fund: Class I - - Gartmore GVIT Global Technology and Communications Fund: Class I (formerly, Gartmore NSAT Global Technology and Communications Fund) - - Gartmore GVIT Global Utilities Fund: Class I - - Gartmore GVIT Government Bond Fund: Class I (formerly, Government Bond Fund) - - Gartmore GVIT Growth Fund: Class I (formerly, Capital Appreciation Fund) - - Gartmore GVIT International Growth Fund: Class I (formerly, Gartmore NSAT International Growth Fund) - - Gartmore GVIT Investor Destinations Funds -- Gartmore GVIT Investor Destinations Conservative Fund -- Gartmore GVIT Investor Destinations Moderately Conservative Fund -- Gartmore GVIT Investor Destinations Moderate Fund -- Gartmore GVIT Investor Destinations Moderately Aggressive Fund -- Gartmore GVIT Investor Destinations Aggressive Fund - - Gartmore GVIT Money Market Fund: Class I (formerly, Money Market Fund) - - Gartmore GVIT Nationwide Leaders Fund: Class I - - Gartmore GVIT Total Return Fund: Class I (formerly, Total Return Fund) - - Gartmore GVIT U.S. Growth Leaders Fund: Class I 1 - - GVIT Small Cap Growth Fund: Class I (formerly, Nationwide(R) Small Cap Growth Fund) (subadvisers: Neuberger Berman, LLC and Waddell & Reed Investment Management Company) - - GVIT Small Cap Value Fund: Class I (formerly, Nationwide(R) Small Cap Value Fund) (subadviser: The Dreyfus Corporation) - - GVIT Small Company Fund: Class I (formerly, Nationwide(R) Small Company Fund) (subadviser: The Dreyfus Corporation, Neuberger Berman, LLC, Strong Capital Management, Inc., Waddell & Reed Investment Management Company and Gartmore Global Partners) - - MAS GVIT Multi Sector Bond Fund: Class I* (formerly, MAS NSAT Multi Sector Bond Fund) - - Strong GVIT Mid Cap Growth Fund: Class I (formerly, Strong NSAT Mid Cap Growth Fund) JANUS ASPEN SERIES - - Capital Appreciation Portfolio: Service Shares - - Global Technology Portfolio: Service Shares - - International Growth Portfolio: Service Shares NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST - - AMT Balanced Portfolio - - AMT Growth Portfolio - - AMT Guardian Portfolio - - AMT Limited Maturity Bond Portfolio - - AMT Partners Portfolio OPPENHEIMER VARIABLE ACCOUNTS FUNDS - - Oppenheimer Aggressive Growth Fund/VA: Initial Class (Oppenheimer Capital Appreciation Fund) - - Oppenheimer Bond Fund/VA: Initial Class - - Oppenheimer Capital Appreciation Fund/VA: Initial Class (formerly, Oppenheimer Growth Fund) - - Oppenheimer Global Securities Fund/VA: Initial Class - - Oppenheimer Main Street Growth & Income Fund/VA: Initial Class - - Oppenheimer Multiple Strategies Fund/VA: Initial Class STRONG OPPORTUNITY FUND II, INC. (FORMERLY, STRONG SPECIAL FUND II, INC.) VAN KAMPEN THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.) - - Emerging Markets Debt Portfolio - - U.S. Real Estate Portfolio THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999: AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. - - American Century VP Capital Appreciation Fund: Class I STRONG VARIABLE INSURANCE FUNDS, INC. - - International Stock Fund II - - Strong Discovery Fund II, Inc. THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER JANUARY 25, 2002: GARTMORE VARIABLE INSURANCE TRUST - - Turner GVIT Growth Focus Fund: Class I (formerly, Turner NSAT Growth Focus Fund) THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002: FIDELITY VARIABLE INSURANCE PRODUCTS FUND III - - VIP III Growth Opportunities Portfolio: Initial Class VAN ECK WORLDWIDE INSURANCE TRUST - - Worldwide Bond Fund - - Worldwide Emerging Markets Fund - - Worldwide Hard Assets Fund EFFECTIVE MAY 1, 2002, THE FOLLOWING UNDERLYING MUTUAL FUNDS ARE NO LONGER AVAILABLE TO RECEIVE TRANSFERS OR NEW PREMIUM PAYMENTS: CREDIT SUISSE TRUST (FORMERLY, CREDIT SUISSE WARBURG PINCUS TRUST) - - Global Post-Venture Capital Portfolio (formerly, Post-Venture Capital Portfolio) - - International Focus Portfolio (formerly, International Equity Portfolio) DREYFUS - - Dreyfus Investment Portfolios - European Equity Portfolio: Initial Shares *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: - - Nationwide's privacy statement; - - 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 2 or write: NATIONWIDE LIFE INSURANCE COMPANY ONE NATIONWIDE PLAZA, RR1-04-D4 COLUMBUS, OHIO 43215 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. DECLINING VALUES OR NEGATIVE INVESTMENT RESULTS MAY RESULT IN REDUCTIONS IN DEATH BENEFITS, CASH VALUES, AND THE LOSS OF INSURANCE COVERAGE IF ADDITIONAL PREMIUMS ARE NOT PAID. Investors assume certain risks when investing in the policies, including the risk 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. 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 additional underlying mutual funds may be offered exclusively to purchasing customers of the particular financial institution or brokerage firm, or through other exclusive distribution arrangements. 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. 3 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. 4 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 RIGHT OF CONVERSION........................................... GRACE PERIOD.................................................. Reinstatement TAX MATTERS................................................... Policy Proceeds Withholding 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............................................. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS...................... 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..................
5 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% of the daily net assets of the variable account. For 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 an annualized rate of 0.50% of the daily net assets of the variable account. For policies issued in New York, the reduction occurs regardless of the cash surrender value. 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. 6 UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, after reimbursements and waivers)
MANAGEMENT OTHER 12B-1 TOTAL MUTUAL FEES EXPENSES FEES FUND EXPENSES - -------------------------------------------------------------------------------------------------------- American Century Variable Portfolios, Inc. 0.90% 0.00% 0.00% 0.90% - - American Century VP Balanced Fund: Class I American Century Variable Portfolios, Inc. 1.00% 0.00% 0.00% 1.00% - - American Century VP Capital Appreciation Fund: Class I American Century Variable Portfolios, Inc. 0.70% 0.00% 0.00% 0.70% - - American Century VP Income & Growth Fund: Class I American Century Variable Portfolios, Inc. 1.26% 0.00% 0.00% 1.26% - - American Century VP International Fund: Class I American Century Variable Portfolios, Inc. 1.00% 0.00% 0.00% 1.00% - - American Century VP Ultra Fund: Class I American Century Variable Portfolios, Inc. 0.97% 0.00% 0.00% 0.97% - - American Century VP Value Fund: Class I Credit Suisse Trust - Global Post-Venture 1.04% 0.36% 0.00% 1.40% Capital Portfolio Credit Suisse Trust - International Focus 1.00% 0.30% 0.00% 1.30% Portfolio Credit Suisse Trust - Small Cap Growth 0.90% 0.22% 0.00% 1.12% Portfolio Dreyfus Investment Portfolios: European 0.81% 0.44% 0.00% 1.25% Equity Portfolio: Initial Shares Dreyfus Investment Portfolios - Small Cap 0.35% 0.00% 0.25% 0.60% Stock Index Portfolios: Service 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 Dreyfus Variable Investment Fund- Growth & 0.75% 0.05% 0.00% 0.80% Income Portfolio: Initial Shares Federated Insurance Series - Federated 0.55% 0.15% 0.00% 0.70% Quality Bond Fund II: Primary Shares Fidelity VIP Equity-Income Portfolio: 0.48% 0.10% 0.00% 0.58% Initial Class Fidelity VIP Growth Portfolio: Initial 0.58% 0.10% 0.00% 0.68% Class Fidelity VIP High Income Portfolio: 0.58% 0.13% 0.00% 0.71% Initial Class Fidelity VIP Overseas Portfolio: Initial 0.73% 0.19% 0.00% 0.92% Class Fidelity VIP II Asset Manager Portfolio: 0.53% 0.11% 0.00% 0.64% Initial Class Fidelity VIP II Contrafund(R) Portfolio: 0.58% 0.10% 0.00% 0.68% Initial Class Fidelity VIP III Growth Opportunities 0.58% 0.11% 0.00% 0.69% Portfolio: Initial Class Fidelity VIP III Value Strategies 0.58% 0.26% 0.10% 0.94% Portfolio: Service Class GVIT Dreyfus GVIT Mid Cap Index Fund: 0.50% 0.26% 0.00% 0.76% Class I GVIT Gartmore GVIT Emerging Markets Fund: 1.15% 0.21% 0.00% 1.36% Class I Gartmore GVIT Global Financial Services 1.00% 0.26% 0.00% 1.26% Fund: Class I Gartmore GVIT Global Health Sciences Fund: 1.00% 0.32% 0.00% 1.32% Class I
7
MANAGEMENT OTHER 12B-1 TOTAL MUTUAL FEES EXPENSES FEES FUND EXPENSES - -------------------------------------------------------------------------------------------------------- GVIT Gartmore GVIT Global Technology and 0.98% 0.26% 0.00% 1.24% Communications Fund: Class I Gartmore GVIT Global Utilities Fund: 0.80% 0.28% 0.00% 1.08% Class I GVIT Gartmore GVIT Government Bond Fund: 0.50% 0.25% 0.00% 0.75% Class I GVIT Gartmore GVIT Growth Fund: Class I 0.59% 0.25% 0.00% 0.84% GVIT Gartmore GVIT International Growth 1.00% 0.33% 0.00% 1.33% Fund: Class I GVIT Gartmore GVIT Investor Destinations 0.00% 0.36% 0.25% 0.61% Conservative Fund GVIT Gartmore GVIT Investor Destinations 0.00% 0.36% 0.25% 0.61% Moderately Conservative Fund GVIT Gartmore GVIT Investor Destinations 0.13% 0.20% 0.25% 0.58% Moderate Fund GVIT Gartmore GVIT Investor Destinations 0.10% 0.26% 0.25% 0.61% Moderately Aggressive Fund GVIT Gartmore GVIT Investor Destinations 0.07% 0.29% 0.25% 0.61% Aggressive Fund GVIT Gartmore GVIT Money Market Fund: 0.38% 0.25% 0.00% 0.63% Class I Gartmore GVIT Nationwide Leaders Fund: 0.84% 0.41% 0.00% 1.25% Class I GVIT Gartmore GVIT Total Return Fund: 0.59% 0.25% 0.00% 0.84% Class I Gartmore GVIT U.S. Growth Leaders Fund: 0.90% 0.22% 0.00% 1.12% Class I GVIT GVIT Small Cap Growth Fund: Class I 1.10% 0.28% 0.00% 1.38% GVIT GVIT Small Cap Value Fund: Class I 0.86% 0.22% 0.00% 1.08% GVIT GVIT Small Company Fund: Class I 0.93% 0.26% 0.00% 1.19% GVIT MAS GVIT Multi Sector Bond Fund: 0.75% 0.27% 0.00% 1.02% Class I GVIT Strong GVIT Mid Cap Growth Fund: 0.90% 0.27% 0.00% 1.17% Class I GVIT Turner GVIT Growth Focus Fund: Class I 0.85% 0.43% 0.00% 1.28% Janus Aspen Series - Capital Appreciation 0.65% 0.01% 0.25% 0.91% Portfolio: Service Shares Janus Aspen Series - Global Technology 0.65% 0.05% 0.25% 0.95% Portfolio: Service Shares Janus Aspen Series - International Growth 0.65% 0.06% 0.25% 0.96% Portfolio: Service Shares Neuberger Berman AMT Balanced Portfolio 0.85% 0.22% 0.00% 1.07% Neuberger Berman AMT Growth Portfolio 0.84% 0.05% 0.00% 0.89% Neuberger Berman AMT Guardian Portfolio 0.85% 0.14% 0.00% 0.99% Neuberger Berman AMT Limited Maturity Bond 0.65% 0.08% 0.00% 0.73% Portfolio Neuberger Berman AMT Partners Portfolio 0.82% 0.05% 0.00% 0.87% Oppenheimer Variable Account Funds - 0.64% 0.04% 0.00% 0.68% Oppenheimer Aggressive Growth Fund/VA: Initial Class Oppenheimer Variable Account Funds - 0.72% 0.05% 0.00% 0.77% Oppenheimer Bond Fund/VA: Initial Class Oppenheimer Variable Account Funds - 0.64% 0.04% 0.00% 0.68% Oppenheimer Capital Appreciation Fund/VA: Initial Class
8
MANAGEMENT OTHER 12B-1 TOTAL MUTUAL FEES EXPENSES FEES FUND EXPENSES - -------------------------------------------------------------------------------------------------------- Oppenheimer Variable Account Funds - 0.64% 0.06% 0.00% 0.70% Oppenheimer Global Securities Fund/VA: Initial Class Oppenheimer Variable Account Funds - 0.68% 0.05% 0.00% 0.73% Oppenheimer Main Street Growth & Income Fund/VA: Initial Class Oppenheimer Variable Account Funds - 0.72% 0.04% 0.00% 0.76% Oppenheimer Multiple Strategies Fund/VA: Initial Class Strong Opportunity Fund II, Inc. 0.75% 0.35% 0.00% 1.10% Strong Variable Insurance Funds, Inc. - 1.00% 0.03% 0.00% 1.03% International Stock Fund II Strong Variable Insurance Funds, Inc. - 1.00% 0.20% 0.00% 1.20% Strong Discovery Fund II, Inc. The Universal Institutional Funds, Inc. - 0.80% 0.37% 0.00% 1.17% Emerging Markets Debt Portfolio The Universal Institutional Funds, Inc. - 0.75% 0.35% 0.00% 1.10% U.S. Real Estate Portfolio Van Eck Worldwide Insurance Trust - 1.00% 0.19% 0.00% 1.19% Worldwide Bond Fund Van Eck Worldwide Insurance Trust - 1.00% 0.28% 0.00% 1.28% Worldwide Emerging Markets Fund Van Eck Worldwide Insurance Trust - 1.00% 0.15% 0.00% 1.15% Worldwide Hard Assets Fund
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. UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, before reimbursements and waivers) 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 12b-1 Total Underlying Fees Expenses Fees Mutual Fund Expenses - ----------------------------------------------------------------------------------------------------------------- Credit Suisse Trust - Global Post-Venture Capital 1.25% 0.36% 0.00% 1.61% Portfolio Federated Insurance Series - Federated Quality Bond 0.60% 0.40% 0.25% 1.25% Fund II: Primary Shares GVIT Gartmore GVIT Investor Destinations Conservative 0.13% 0.43% 0.25% 0.81% Fund GVIT Gartmore GVIT Investor Destinations Moderately 0.13% 0.42% 0.25% 0.80% Conservative Fund GVIT Gartmore GVIT Investor Destinations Moderately 0.13% 0.26% 0.25% 0.64% Aggressive Fund GVIT Gartmore GVIT Investor Destinations Aggressive 0.13% 0.29% 0.25% 0.67% Fund GVIT Gartmore GVIT Nationwide Leaders Fund: Class I 0.90% 0.41% 0.00% 1.31% Strong Opportunity Fund II, Inc. 0.75% 0.65% 0.00% 1.40% The Universal Institutional Funds, Inc. - U.S. Real 0.80% 0.35% 0.00% 1.15% Estate Portfolio
9 UNDERLYING MUTUAL FUND ANNUAL EXPENSES (as a percentage of underlying mutual fund net assets, before reimbursements and waivers)
Management Other 12b-1 Total Underlying Fees Expenses Fees Mutual Fund Expenses - ----------------------------------------------------------------------------------------------------------------- Van Eck Worldwide Insurance Trust - Worldwide Bond 1.00% 0.24% 0.00% 1.24% Fund Van Eck Worldwide Insurance Trust - Worldwide 1.00% 0.30% 0.00% 1.30% Emerging Markets Fund Van Eck Worldwide Insurance Trust - Worldwide Hard 1.00% 0.18% 0.00% 1.18% Assets Fund
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; - - Spouse 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 a wide array of investment products, including variable annuity and variable life insurance products. Each of these products has different charges, benefit features and underlying investment options. Investors are encouraged to compare and contrast the costs and benefits of the policies against those of other investment products, especially other variable annuity and variable life insurance products offered by Nationwide and its affiliates. This process of comparison and analysis should aid in determining whether the purchase of the policy described in this 10 prospectus is consistent with the investor's particular investment objectives, risk tolerance, investment time horizon, marital status, tax situation and other personal characteristics and needs. 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 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, they may make an irrevocable, one time election to transfer all sub-account cash values to the fixed account. 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. 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: 11 (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 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 of 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 12 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: - - 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
Male Female Issue Non- Non- Male Female Age Tobacco 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
Male Female Issue Non- Non- Male Female Age Tobacco 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. 13 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. 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 14 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. 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 the mortality and expense risk charge. 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 15 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. 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. 16 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 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, then 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 GVIT Gartmore GVIT Money Market Fund: Class I during the period that a policy owner can cancel the policy, unless a specific state 17 requires 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 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 18 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. Market-Timing Firms Nationwide reserves the right to refuse or limit transfer requests (or take any other action it deems necessary) in order to protect policy owners and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices that are employed by some policy owners (or third parties acting on their behalf). If Nationwide determines that a policy owner (or a third party acting on the policy owner's behalf) is engaging in harmful short-term trading, Nationwide reserves the right to take actions to protect investors, including exercising its right to terminate the ability of specified policy owners to submit transfer requests via telephone, facsimile, or over the internet. If Nationwide exercises this right, affected policy owners would be limited to submitting transfer requests via U.S. mail. Any action taken by Nationwide pursuant to this provision will be preceded by a 30 day written notice to the affected policy owner. 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 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 19 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: Initial Class; GVIT Gartmore GVIT Government Bond Fund: Class I; GVIT Gartmore GVIT Money Market Fund: Class I; 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. 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. 20 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 may 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." 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. 21 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 Nationwide accepts an application for an increase in the specified amount, Nationwide will pay no more than the death benefit associated with the initial specified amount, plus the Cost of Insurance Charges associated with the increase in specified amount. 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. RIGHT OF CONVERSION The policy owner may, within 24 months of the policy date, make an irrevocable election to transfer all sub-account cash value to the fixed account. This election must be in writing and received at Nationwide's home office. This right of conversion may not be available in every state. 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 premiums required since the policy date, 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 in 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. 22 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 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 (see "Information about the Policies"). 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, 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 premiums paid and will notify the policy owner when the policy is in jeopardy of becoming a modified endowment contract. 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 contract, 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 meeting 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 U.S. 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 23 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 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 policy (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 from a contract may be subject to mandatory back-up withholding (which cannot be waived). The mandatory back-up withholding rate is established by Section 3406 of the Internal Revenue Code and is applied against the income that is distributed. The mandatory backup withholding may arise if no taxpayer identification number is provided to Nationwide, or if the IRS notifies Nationwide that back-up withholding is required. ESTATE AND GENERATION-SKIPPING TRANSFER TAXES 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. The federal estate tax is integrated with the federal gift tax under a unified tax rate schedule. In general, in 2002, an estate of less than $1,000,000 (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 such 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. Secretary of the Treasury, 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 advisers 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 includable 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 if no taxpayer identification number, or an incorrect taxpayer identification number, is provided. TAXATION OF NATIONWIDE Nationwide is taxed as a life insurance company under the Internal Revenue Code. Since the variable account is 24 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 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, you should consult your independent legal, tax and/or financial adviser. 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: 25 - - 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. 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. On January 25, 2002, the plaintiffs filed a motion for leave to amend their complaint to add three new named plaintiffs. On February 9, 2002, the plaintiffs filed a motion for class certification. The class has not been certified. Nationwide intends to defend this lawsuit vigorously. On August 15, 2001, Nationwide was named in a lawsuit filed in Connecticut federal court titled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. On September 5, 2001, the plaintiffs amended their complaint to include class action allegations. The plaintiffs seek to represent a class of plan trustees who purchased variable annuities to fund qualified ERISA retirement plans. The amended complaint alleges that the retirement plans purchased variable annuity contracts from Nationwide which invested in mutual funds that were offered by separate mutual fund companies; that Nationwide was a fiduciary under ERISA and that Nationwide breached its fiduciary duty when it accepted certain fees from the mutual fund companies that purportedly were never disclosed by Nationwide; and that Nationwide violated ERISA by replacing many of the mutual funds originally included in the plaintiffs' annuities with "inferior" funds because the new funds purportedly paid more in revenue sharing. The amended complaint seeks disgourgement of fees by Nationwide and other unspecified compensatory damages. On November 15, 2001, Nationwide filed a motion to dismiss the amended complaint, which has not been decided. On December 3, 2001, the plaintiffs filed a motion for class certification. On January 15, 2002, the plaintiffs filed a response to Nationwide's motion to dismiss the amended complaint. On February 22, 2002, Nationwide filed a reply in support of its motion to dismiss. The class has not been certified. Nationwide intends to defend this lawsuit vigorously. 26 There can be no assurance that any such litigation 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. INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The financial statements of Nationwide VLI Separate Account-2 and Nationwide Life Insurance Company for the periods indicated 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 Nationwide has filed a registration statement with the SEC under the Securities Act of 1933, as amended, for the policies discussed in this prospectus. However, the prospectus does not contain all the information included in the registration statement. The registration statement may also contain amendments and exhibits that are not included in the prospectus. The prospectus is meant to be a summary and explanation of the policy, which is the legal binding instrument for the policies. Please refer to the policy for additional information. 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 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 VLI Separate Account-5; - Nationwide Multi-Flex Variable Account; - Nationwide Variable Account; - Nationwide Variable Account-II; - Nationwide Variable Account-4; - Nationwide Variable Account-5; - Nationwide Variable Account-6; - Nationwide Variable Account-7; - 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-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 NISC will not exceed 99% 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. No underwriting commissions have been paid by Nationwide to NISC. NATIONWIDE INVESTMENT SERVICES CORPORATION DIRECTORS AND OFFICERS The following is a list of Directors and Officers of NISC. Joseph J. Gasper, Director and Chairman of the Board Richard A. Karas, Director and Vice Chairman Mark A. Thresher, Director and Senior Vice President and Treasurer Duane C. Meek, President Robert A. Oakley, Executive Vice President-Chief Financial Officer Robert J. Woodward, Jr., Executive Vice President-Chief Investment Officer Barbara J. Shane, Vice President-Compliance Officer Alan A. Todryk, Vice President-Taxation Carol L. Dove, Associate Vice President-Treasury Services and Assistant Treasurer Glenn W. Soden, Associate Vice President and Secretary John F. Delaloye, Assistant Secretary E. Gary Berndt, Assistant Treasurer Terry C. Smetzer, Assistant Treasurer The business address of the Directors and Officers listed above is One Nationwide Plaza, Columbus, Ohio 43215. 27 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 Variable Account-7; - Nationwide Variable Account-8; - Nationwide Variable Account-9; - Nationwide Variable Account-10; - Nationwide Variable Account-11; - 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. The business address of the directors and officers listed below is One Nationwide Plaza, Columbus, Ohio 43215. W. G. JURGENSEN has been Chief Executive Officer of Nationwide since August 2000, Chief Executive Officer-Elect from May to August 2000 and a Director of Nationwide since May 2000. Previously, he was Executive Vice President of Bank One Corporation from 1998 to 2000. Mr. Jurgensen was Executive Vice President of First Chicago NBD Corporation and Chairman of FCC National Bank from 1996 to 1998. Mr. Jurgensen has been with Nationwide for 2 years. JOSEPH J. GASPER has been President and Chief Operating Officer and a Director of Nationwide since April 1996. Previously, he was Executive Vice President-Property and Casualty Operations of Nationwide from April 1995 to April 1996. He was Senior Vice President-Property and Casualty Operations of Nationwide from September 1993 to April 1995. Prior to that time, Mr. Gasper held various management positions with the Nationwide companies. Mr. Gasper has been with Nationwide for 35 years. GALEN R. BARNES has been a Director of Nationwide since May 2001. He served as President of Nationwide Insurance Enterprise from April 1996 to April 1999. He 28 was Director and Vice Chairman of the Wausau Insurance Companies, a Nationwide affiliate, from September 1996 to December 1998; and Director, President and Chief Operating Officer from May 1993 to September 1996. Mr. Barnes was Senior Vice President of Nationwide from May 1993 to April 1996. Prior to that time, Mr. Barnes held several positions within Nationwide. Mr. Barnes has been with Nationwide for 25 years. RICHARD D. HEADLEY has been Executive Vice President of Nationwide since July 2000. Previously, he was Executive Vice President-Chief Information Technology Officer of Nationwide from August 1999 to August 2000, and Senior Vice President-Chief Information Technology Officer of Nationwide from October 1997 to May 1999. Prior to that time, Mr. Headley was Chairman and Chief Executive Officer of Banc One Services Corporation from 1992 to October 1997. Mr. Headley has been with Nationwide for 4 years. MICHAEL S. HELFER has been Executive Vice President-Corporate Strategy of Nationwide since August 2000. He has been a Director of Nationwide since May 2001. Prior to that time, Mr. Helfer was a partner with Wilmer, Cutler and Pickering from 1978 to October 2000. Mr. Helfer has been with Nationwide for 2 years. DONNA A. JAMES has been Executive Vice President-Chief Administrative Officer of Nationwide since July 2000 and a Director of Nationwide since May 2001. Ms. James was Senior Vice President-Chief Human Resources Officer from May 1999 to July 2000 and Senior Vice President-Human Resources of Nationwide from December 1997 to May 1999. Previously, she was Vice President-Human Resources of Nationwide from July 1996 to December 1997. Previously, Ms. James was Vice President-Assistant to the CEO of Nationwide from March 1996 to July 1996 and Associate Vice President-Assistant to the CEO from May 1994 to March 1996. Prior to that time, Ms. James held several positions within Nationwide. Ms. James has been with Nationwide for 20 years. MICHAEL C. KELLER has been Executive Vice President-Chief Information Officer of Nationwide since June 2001. Prior to that time, Mr. Keller was Senior Vice President of Bank One from January 1998 to June 2001, and held various management positions with IBM from July 1982 to December 1997. Mr. Keller has been with Nationwide for 1 year. ROBERT A. OAKLEY has been Executive Vice President-Chief Financial Officer of Nationwide since April 1995 and a Director of Nationwide since May 2001. Previously, he was Senior Vice President-Chief Financial Officer of Nationwide from October 1993 to April 1995. Prior to that time, Mr. Oakley held several positions within Nationwide. Mr. Oakley has been with Nationwide for 26 years. ROBERT J. WOODWARD, JR. has been Executive Vice President-Chief Investment Officer of Nationwide since August 1995 and a Director of Nationwide since May 2001. Previously, he was Senior Vice President-Fixed Income Investments of Nationwide from March 1991 to August 1995. Prior to that time, Mr. Woodward held several positions within Nationwide. Mr. Woodward has been with Nationwide for 37 years. JOHN R. COOK, JR. has been Senior Vice President-Chief Communications Officer of Nationwide 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 5 years. DAVID A. DIAMOND has been Senior Vice President-Corporate Strategy since December 2000. Previously, he was Senior Vice President-Corporate Controller of Nationwide from August 1999 to December 2000. He was Vice President-Controller of Nationwide from October 1993 to August 1996. Prior to that time, Mr. Diamond held several positions within Nationwide. Mr. Diamond has been with Nationwide for 13 years. 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, and 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 33 years. PATRICIA R. HATLER has been Senior Vice President, General Counsel and Secretary of Nationwide since April 2000, and 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. Ms. Hatler has been with Nationwide for 3 years. DAVID K. HOLLINGSWORTH has been Senior Vice President-President Nationwide Insurance Sales since August 2001. Mr. Hollingsworth has been with Nationwide for 12 years. DAVID R. JAHN has been Senior Vice President-Product Management since November 2000. Mr. Jahn has been with Nationwide for 30 years. RICHARD A. KARAS has been Senior Vice President-Sales-Financial Services of Nationwide since March 1993. Previously, he was Vice President-Sales-Financial Services of Nationwide from February 1989 to March 1993. Prior to that time, Mr. Karas held several positions 29 within Nationwide. Mr. Karas has been with Nationwide for 37 years. GREGORY S. LASHUTKA has been Senior Vice President-Corporate Relations of Nationwide since January 2000. Prior to that time, he was Mayor of the City of Columbus (Ohio) from January 1992 to December 1999. Mr. Lashutka has been with Nationwide for 2 years. EDWIN P. MCCAUSLAND, JR. has been Senior Vice President-Fixed Income Securities since April 1998. Prior to joining Nationwide, he was Vice President-Managing Director of Massachusetts Life Insurance Company. Mr. McCausland has been with Nationwide for 5 years. ROBERT H. MCNAGHTEN has been Senior Vice President-Real Estate Investments since November 2001. Prior to joining Nationwide in 1987 he was Executive Vice President with Buckeye Federal Savings & Loan. Mr. McNaghten has been with Nationwide for 15 years. MICHAEL D. MILLER has been Senior Vice President-NI Finance since May 2001. Prior to joining Nationwide in 1985 he was P/C Accounting Manager with Celina Group. Mr. Miller has been with Nationwide for 17 years. BRIAN W. NOCCO has been Senior Vice President and Treasurer of Nationwide since April 2001. Prior to that time, he was Executive Vice President of Imperial Bank and subsidiaries from May 1998 to June 2001. He was Senior Vice President-Chief Compliance Officer with The Chubb Corporation from 1994 to 1998 and Treasurer and Vice President-Finance of Continental Bank Corporation from 1986 to 1994. From 1974 to 1986 he held management positions in several companies. Mr. Nocco has been with Nationwide for 1 year. MARK D. PHELAN has been Senior Vice President-Technology and Operations of Nationwide since December 2000. Prior to that time, he was Executive Vice President of Check Free Corporation from October 1992 to November 1997, Sales Vice President of AT&T Corporation from February 1982 to November 1992, and Operations Manager with IBM Corporation from April 1977 to February 1982. Mr. Phelan has been with Nationwide for 2 years. DOUGLAS C. ROBINETTE has been Senior Vice President-Claims since November 2000. Prior to joining Nationwide, he was a CPA with KPMG LLP. Mr. Robinette has been with Nationwide for 15 years. JOHN S. SKUBIK has been Senior Vice President-Strategic Initiatives since November 2001. Prior to joining Nationwide in 2001, Mr. Skubik was an Executive Vice President with Bank One. MARK R. THRESHER has been Senior Vice President-Finance-Nationwide Financial since May 1999. Previously, he was Vice President-Controller of Nationwide from August 1996 to May 1999. He was Vice President and Treasurer of Nationwide from June 1996 to August 1996. Prior to that time, Mr. Thresher served as a partner with KPMG LLP from July 1988 to May 1996. Mr. Thresher has been with Nationwide for 6 years. RICHARD M. WAGGONER has been Senior Vice President-Operations since August 1999. Mr. Waggoner has been with Nationwide for 18 years. SUSAN A. WOLKEN has been Senior Vice President-Product Management and Nationwide Financial Marketing since May 1999. Previously, she was Senior Vice President-Life Company Operations of Nationwide from June 1997 to May 1999. She was Senior Vice President-Enterprise Administration of Nationwide from July 1996 to June 1997. Prior to that time, she was Senior Vice President-Human Resources of Nationwide from April 1995 to July 1996, Vice President-Human Resources of Nationwide from September 1993 to April 1995, and Vice President-Individual Life and Health Operations from September 1993 to April 1995. Ms. Wolken has been with Nationwide for 27 years. 30 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 FUND: CLASS I 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 the remainder in fixed income securities. AMERICAN CENTURY VP CAPITAL APPRECIATION FUND: CLASS I (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) 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. AMERICAN CENTURY VP INCOME & GROWTH FUND: CLASS I Investment Objective: Capital growth. The Fund seeks to achieve its investment objective by investing in common stocks. Income is a secondary objective. 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. 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 FUND: CLASS I 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 managers intend to keep the Fund essentially fully invested regardless of the movement of the market generally. AMERICAN CENTURY VP ULTRA FUND: CLASS I Investment Objective: Capital growth by investing in common stocks of growing companies. The basis of the strategy used by the Fund is that, over the long term, stocks of companies with earnings and revenue growth have a greater than average chance to increase in value over time. This strategy looks for stocks of large companies with earnings and revenues that are not only growing, but growing at a successively faster or accelerating pace. Although most of the Fund's assets will be invested in U.S. companies, there is no limit on the amount of assets the Fund can invest in foreign companies. Most of the Fund's foreign investments are in companies located and doing business in developed countries. AMERICAN CENTURY VP VALUE FUND: CLASS I Investment Objective: Long-term capital growth; income is a secondary objective. The managers look for companies whose stock prices are less than they believe the company is worth. The managers attempt to purchase the stock of these undervalued companies and hold them until their stock price has increased to, or is higher than, a level the managers believe more accurately reflects the fair value of the company. Under normal market conditions, the Fund expects to invest at least 80% of the value of its total assets in stocks regardless of the movement of stock prices generally. When the managers believe it is prudent, the Fund may invest a portion of its assets in equity securities, including common and preferred stock, convertible preferred stock and convertible debt securities. CREDIT SUISSE TRUST The Credit Suisse 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 31 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 (NOT AVAILABLE TO RECEIVE TRANSFERS OR PREMIUM PAYMENTS AS OF MAY 1, 2002) 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 FOCUS PORTFOLIO (NOT AVAILABLE TO RECEIVE TRANSFERS OR PREMIUM PAYMENTS AS OF MAY 1, 2002) 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. SMALL CAP 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 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 (NOT AVAILABLE TO RECEIVE TRANSFERS OR PREMIUM PAYMENTS AS OF MAY 1, 2002) 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. SMALL CAP STOCK INDEX PORTFOLIO: SERVICE SHARES Investment Objective: Seeks to match the performance of the Standard & Poor's SmallCap 600 Index. To pursue this goal, the Portfolio invests in a representative sample of stocks included in the S&P SmallCap 600 Index, and in futures whose performance is related to the Index, rather than attempt to replicate the Index. The Portfolio attempts to have a correlation between its performance and that of the Index of at least .95, before expenses. The Portfolio's investments are selected by a "sampling" process based on market capitalization, industry representation and other means. By using this sampling process, the Portfolio typically will not invest in all 600 stocks in the S&P SmallCap 600 Index. 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 32 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 Corporation. 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 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: INITIAL SHARES 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 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. FEDERATED INSURANCE SERIES Federated Insurance Series (the "Trust"), an open-end management investment company, was established as a Massachusetts business trust, under a Declaration of Trust dated September 15, 1993. The Trust offers its shares only as investment vehicles for variable annuity and variable life insurance products of insurance companies. Federated Investment Management Company serves as the investment adviser. FEDERATED QUALITY BOND FUND II: PRIMARY SHARES Investment Objective: Current income by investing in investment grade fixed income securities. 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: INITIAL CLASS Investment Objective: Reasonable income. Also considers the potential for capital appreciation. Seeks to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor's 500 Composite Stock Price Index. Normally invests at least 65% of total assets in income-producing equity securities, which tends to lead to investments in large cap "value" stocks. VIP GROWTH PORTFOLIO: INITIAL CLASS Investment Objective: Capital appreciation. Normally invests primarily in common stocks of companies the investment adviser believes have 33 above-average growth potential (often called "growth" stocks). VIP HIGH INCOME PORTFOLIO: INITIAL CLASS Investment Objective: A high level of current income while also considering growth of capital. Normally invests at least 65% of total assets in income-producing debt securities, preferred stocks and convertible securities, with an emphasis on lower-quality debt securities. VIP OVERSEAS PORTFOLIO: INITIAL CLASS Investment Objective: Long-term capital growth. Normally invests at least 65% of total assets in foreign securities, primarily in common stocks. 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: INITIAL CLASS Investment Objective: High total return with reduced risk over the long term by allocating its assets among stocks, bonds and short-term instruments. Assets are allocated among stocks, bonds, and short-term money market instruments, maintaining a neutral mix over time of 50% of assets in stock, 40% of assets in bonds, and 10% of assets in short-term and money market instruments. VIP II CONTRAFUND(R) PORTFOLIO: INITIAL CLASS Investment Objective: Long-term capital appreciation. Normally invests primarily in common stocks of companies whose value the Portfolio's investment adviser believes is not fully recognized by the public. 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: INITIAL CLASS (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) Investment Objective: Capital growth. Normally invests primarily in common stocks, investing in both domestic and foreign issuers. Invests in either "growth" stocks or "value" stocks or both. VIP III VALUE STRATEGIES PORTFOLIO: SERVICE CLASS Investment Objective: Capital appreciation. The Portfolio pursues its objective by investing primarily in common stocks. GARTMORE VARIABLE INSURANCE TRUST Gartmore Variable Insurance Trust (formerly, Nationwide Separate Account Trust) ("GVIT") is an open-end management investment company created under the laws of Massachusetts. GVIT offers shares in the mutual funds listed below, each with its own investment objectives. Shares of GVIT 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. Gartmore Global Asset Management Trust, an indirect subsidiary of Nationwide Mutual Insurance Company, manages the assets of the Gartmore GVIT Emerging Markets Fund and Gartmore GVIT International Growth Fund. The remaining assets of GVIT are managed by Gartmore Mutual Fund Capital Trust ("GMF"), an indirect subsidiary of Nationwide Financial Services, Inc. DREYFUS GVIT MID CAP INDEX FUND: CLASS I Subadviser: The Dreyfus Corporation Investment Objective: Capital appreciation. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of companies included in the Standard & Poor's MidCap 400 Index and in derivative instruments linked to the S&P 400. The Fund is neither sponsored by nor affiliated with Standard & Poor's Corporation. GARTMORE GVIT EMERGING MARKETS FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long term capital growth. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of companies located in emerging market or developing countries or that derive a significant portion of their earnings or revenue from emerging market countries. GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth. To achieve its objective, the Fund normally invests at least 80% of its net assets in equity securities issued by U.S. and foreign companies with business operations in the financial services sector. These companies will be economically tied to a number of countries throughout the world, including the United States. 34 GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND: CLASS I Investment Objective: Long-term capital appreciation. To achieve its objective, the Fund normally invests at least 80% of its assets in equity securities issued by U.S. and foreign companies engaged in the development, production, or distribution of products and services that have a health sciences orientation (those that focus on maintaining or improving one's quality of life). These companies will be economically tied to a number of countries throughout the world, including the United States. GARTMORE GVIT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND: CLASS I Investment Objective: Long term capital appreciation by investing under normal conditions at least 80% of its net assets in equity securities issued by companies with business operations in technology and communications and/or technology and communication related industries. These companies will be tied economically to a number of countries throughout the world, including the United States. GARTMORE GVIT GLOBAL UTILITIES FUND: CLASS I Subadviser: Gartmore Global Partners Investment Objective: Long-term capital growth. To achieve its objective, the Fund normally invests at least 80% of its net assets in equity securities issued by U.S. and foreign companies with business operations in the utilities sector. These companies will be economically tied to a number of countries throughout the world, including the United States. GARTMORE GVIT GOVERNMENT BOND FUND: CLASS I Investment Objective: Seeks as high a level of income as is consistent with the preservation of capital. Under normal conditions, the Fund invests at least 80% of its net assets in U.S. government and agency bonds, bills and notes. The duration of the Fund will typically be four to six years. GARTMORE GVIT GROWTH FUND: CLASS I Investment Objective: Long-term capital appreciation. The Fund invests primarily in large capitalization companies. The Fund looks for companies whose earnings are expected to grow faster than other companies in the market. GARTMORE GVIT INTERNATIONAL GROWTH FUND: CLASS I 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. GARTMORE GVIT INVESTOR DESTINATIONS FUNDS GARTMORE GVIT INVESTOR DESTINATIONS CONSERVATIVE FUND Investment Objective: To maximize total investment return by seeking income and, secondarily, long term growth of capital. The Fund invests in a target allocation mix of 10% large cap U.S. stocks, 5% mid cap U.S. stocks, 5% international stocks, 35% bonds, and 45% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY CONSERVATIVE FUND Investment Objective: To maximize total investment return by seeking income and, secondarily, growth of capital. The Fund invests in a target allocation mix of 20% large cap U.S. stocks, 10% mid cap U.S. stocks, 10% international stocks, 35% bonds, and 25% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS MODERATE FUND Investment Objective: To maximize total investment return by seeking growth of capital and income. The Fund invests in a target allocation mix of 30% large cap U.S. stocks, 10% mid cap U.S. stocks, 5% small cap U.S. stocks, 15% international stocks, 25% bonds, and 15% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY AGGRESSIVE FUND Investment Objective: To maximize total investment return primarily by seeking growth of capital, but also income. The Fund invests in a target allocation mix of 35% large cap U.S. stocks, 15% mid cap U.S. stocks, 5% small cap U.S. stocks, 25% international stocks, 15% bonds, and 5% short-term investments. GARTMORE GVIT INVESTOR DESTINATIONS AGGRESSIVE FUND Investment Objective: To maximize total investment return primarily by seeking growth of capital. The Fund invests in a target allocation mix of 40% large cap U.S. stocks, 15% mid cap U.S. stocks, 10% small cap U.S. stocks, 30% international funds, and 5% bonds. GARTMORE GVIT MONEY MARKET FUND: CLASS I Investment Objective: As high a level of current income as is consistent with the preservation of capital and maintenance of liquidity. The Fund invests in high-quality money market obligations maturing in 397 days or less. 35 GARTMORE GVIT NATIONWIDE LEADERS FUND: CLASS I Investment Objective: High total return from a concentrated portfolio of U.S. securities. To achieve its objective, the Fund typically invests at least 80% of its net assets in equity securities, primarily in common stocks and convertible securities of U.S. leaders. A U.S. leader is a company with a strong and improving franchise that is well positioned to take advantage of opportunities in the marketplace. The Fund typically invests in a core group of 20 to 30 common stocks of large capitalization companies. GARTMORE GVIT TOTAL RETURN FUND: CLASS I Investment Objective: Seeks total return through a flexible combination of capital appreciation and current income. The Fund invests primarily in common stocks and convertible securities. GARTMORE GVIT U.S. GROWTH LEADERS FUND: CLASS I Investment Objective: Long-term capital growth. To achieve its objective, the Fund normally invests at least 80% of its net assets in equity securities of U.S. growth leaders. The Fund will invest in companies whose earnings are expected to grow faster than other companies in the market. The Fund typically invests in a core group of 20 to 30 common stocks of large capitalization companies. GVIT SMALL CAP GROWTH FUND: CLASS I Subadvisers: Neuberger Berman, LLC and Waddell & Reed Investment Management Company Investment Objective: Seeks 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 as small cap companies. Under normal conditions, the Fund will invest at least 80% of its net assets in the equity securities of small cap companies. GVIT SMALL CAP VALUE FUND: CLASS I Subadviser: The Dreyfus Corporation Investment Objective: Capital appreciation. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities of small capitalization companies. These are companies whose equity market capitalizations at the time of investment are similar to the market capitalizations of companies in the Russell 2000 Index. The Fund will invest in stocks of U.S. and foreign companies which the portfolio managers believe qualify as "value" companies. GVIT SMALL COMPANY FUND: CLASS I Subadvisers: The Dreyfus Corporation, Neuberger Berman, LLC, Gartmore Global Partners, Strong Capital Management, Inc. and Waddell & Reed Investment Management Company Investment Objective: Long-term growth of capital. Under normal conditions, the Fund will invest at least 80% of its net assets in equity securities issued by small capitalization companies. These are companies whose equity market capitalizations at the time of investment are similar to the market capitalizations of companies in the Russell 2000 Index. MAS GVIT MULTI SECTOR BOND FUND: CLASS I 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. STRONG GVIT MID CAP GROWTH FUND: CLASS I 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. Under normal conditions, the Fund invests at least 80% of its net assets in equity securities issued by mid capitalization companies. TURNER GVIT GROWTH FOCUS FUND: CLASS I (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER JANUARY 25, 2002) 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 15 to 30 common stocks. 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- 36 established companies to smaller, emerging growth companies. GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital. Under normal circumstances, the portfolio invests at least 80% of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES Investment Objective: Long-term growth of capital by investing, under normal circumstances, at least 80% of its net 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. 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 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. 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: INITIAL CLASS 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: INITIAL CLASS 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 37 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: INITIAL CLASS 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: INITIAL CLASS 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: INITIAL CLASS 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 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: INITIAL CLASS 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. 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. 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. INTERNATIONAL STOCK FUND II (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) Investment Objective: Capital growth by investing primarily in the equity securities of issuers located outside the United States. STRONG DISCOVERY FUND II, INC. (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER SEPTEMBER 27, 1999) 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. THE UNIVERSAL INSTITUTIONAL 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. 38 EMERGING MARKETS DEBT PORTFOLIO Investment Objective: High total return by investing primarily in fixed income securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries. Morgan Stanley Investment Management Inc., which does business in certain instances using the name Van Kampen, is the Portfolio's investment adviser. U. S. REAL ESTATE PORTFOLIO Investment Objective: Above average current income and long-term capital appreciation by investing primarily in equity securities of companies in the U.S. real estate industry, including real estate investment trusts. Morgan Stanley Investment Management Inc., which does business in certain instances using the name Van Kampen, is the Portfolio'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 is Van Eck Associates Corporation. WORLDWIDE BOND FUND (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) Investment Objective: High total return through a flexible policy of investing globally, primarily in debt securities. WORLDWIDE EMERGING MARKETS FUND (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) 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 (NOT AVAILABLE FOR POLICIES ISSUED ON OR AFTER MAY 1, 2002) 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. 39 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. The following tables illustrate the maximum initial surrender charge per $1,000 of initial specified amount for policies that 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%
40 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.
SURRENDER SURRENDER SURRENDER CHARGE AS A CHARGE AS A CHARGE AS A COMPLETED % OF INITIAL COMPLETED % OF INITIAL COMPLETED % OF INITIAL POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER YEARS CHARGES YEARS CHARGES YEARS 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. 41 APPENDIX C: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS (BOA - FPVUL) 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 0.72% 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, 2001. Some underlying mutual funds are subject to expense reimbursements and fee waivers. Absent expense reimbursements and fee waivers, the annualized rate would have been 0.93%. 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 -1.73%, 4.27% and 10.27%. 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 -1.43%, 4.57%, and 10.57%, 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 currently made against the variable account. If such a charge is made in the future, it will require a higher gross 42 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. 43 DEATH BENEFIT OPTION 1 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,614 851 278 50,000 942 368 50,000 1,037 463 50,000 3 2,483 1,295 779 50,000 1,475 958 50,000 1,669 1,153 50,000 4 3,394 1,716 1,257 50,000 2,014 1,555 50,000 2,350 1,891 50,000 5 4,351 2,114 1,712 50,000 2,560 2,159 50,000 3,084 2,683 50,000 6 5,357 2,490 2,146 50,000 3,115 2,771 50,000 3,879 3,534 50,000 7 6,412 2,850 2,563 50,000 3,684 3,397 50,000 4,745 4,459 50,000 8 7,520 3,188 2,959 50,000 4,262 4,032 50,000 5,687 5,458 50,000 9 8,683 3,506 3,334 50,000 4,851 4,679 50,000 6,713 6,540 50,000 10 9,905 3,803 3,803 50,000 5,451 5,451 50,000 7,831 7,831 50,000 11 11,188 4,075 4,075 50,000 6,058 6,058 50,000 9,049 9,049 50,000 12 12,535 4,320 4,320 50,000 6,672 6,672 50,000 10,377 10,377 50,000 13 13,949 4,536 4,536 50,000 7,290 7,290 50,000 11,824 11,824 50,000 14 15,434 4,717 4,717 50,000 7,907 7,907 50,000 13,401 13,401 50,000 15 16,993 4,856 4,856 50,000 8,516 8,516 50,000 15,118 15,118 50,000 16 18,630 4,953 4,953 50,000 9,120 9,120 50,000 16,993 16,993 50,000 17 20,349 5,001 5,001 50,000 9,709 9,709 50,000 19,041 19,041 50,000 18 22,154 4,990 4,990 50,000 10,276 10,276 50,000 21,281 21,281 50,000 19 24,049 4,921 4,921 50,000 10,822 10,822 50,000 23,740 23,740 50,000 20 26,039 4,784 4,784 50,000 11,338 11,338 50,000 26,445 26,445 50,000 21 28,129 4,573 4,573 50,000 11,820 11,820 50,000 29,520 29,520 50,000 22 30,323 4,279 4,279 50,000 12,259 12,259 50,000 32,938 32,938 50,000 23 32,626 3,891 3,891 50,000 12,646 12,646 50,000 36,751 36,751 50,000 24 35,045 3,395 3,395 50,000 12,970 12,970 50,000 41,024 41,024 50,000 25 37,585 2,788 2,788 50,000 13,228 13,228 50,000 45,814 45,814 53,144 26 40,252 2,055 2,055 50,000 13,407 13,407 50,000 51,084 51,084 58,746 27 43,052 1,162 1,162 50,000 13,481 13,481 50,000 56,887 56,887 64,283 28 45,992 101 101 50,000 13,443 13,443 50,000 63,287 63,287 70,249 29 49,079 (*) (*) (*) 13,272 13,272 50,000 70,353 70,353 76,685 30 52,321 (*) (*) (*) 12,949 12,949 50,000 78,169 78,169 83,641
(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 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 LAPSE WITHOUT VALUE. 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. 44 DEATH BENEFIT OPTION 1 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,614 538 0 50,000 606 32 50,000 677 103 50,000 3 2,483 878 362 50,000 1,012 495 50,000 1,157 641 50,000 4 3,394 1,193 734 50,000 1,415 956 50,000 1,666 1,207 50,000 5 4,351 1,482 1,080 50,000 1,814 1,413 50,000 2,206 1,804 50,000 6 5,357 1,742 1,398 50,000 2,207 1,863 50,000 2,777 2,433 50,000 7 6,412 1,970 1,684 50,000 2,589 2,302 50,000 3,380 3,093 50,000 8 7,520 2,163 1,934 50,000 2,956 2,727 50,000 4,014 3,785 50,000 9 8,683 2,316 2,143 50,000 3,303 3,131 50,000 4,679 4,507 50,000 10 9,905 2,424 2,424 50,000 3,624 3,624 50,000 5,375 5,375 50,000 11 11,188 2,484 2,484 50,000 3,915 3,915 50,000 6,101 6,101 50,000 12 12,535 2,493 2,493 50,000 4,169 4,169 50,000 6,859 6,859 50,000 13 13,949 2,446 2,446 50,000 4,383 4,383 50,000 7,650 7,650 50,000 14 15,434 2,338 2,338 50,000 4,548 4,548 50,000 8,476 8,476 50,000 15 16,993 2,161 2,161 50,000 4,654 4,654 50,000 9,334 9,334 50,000 16 18,630 1,907 1,907 50,000 4,691 4,691 50,000 10,225 10,225 50,000 17 20,349 1,565 1,565 50,000 4,646 4,646 50,000 11,147 11,147 50,000 18 22,154 1,122 1,122 50,000 4,500 4,500 50,000 12,097 12,097 50,000 19 24,049 560 560 50,000 4,233 4,233 50,000 13,071 13,071 50,000 20 26,039 (*) (*) (*) 3,823 3,823 50,000 14,066 14,066 50,000 21 28,129 (*) (*) (*) 3,244 3,244 50,000 15,082 15,082 50,000 22 30,323 (*) (*) (*) 2,471 2,471 50,000 16,118 16,118 50,000 23 32,626 (*) (*) (*) 1,470 1,470 50,000 17,175 17,175 50,000 24 35,045 (*) (*) (*) 200 200 50,000 18,255 18,255 50,000 25 37,585 (*) (*) (*) (*) (*) (*) 19,355 19,355 50,000 26 40,252 (*) (*) (*) (*) (*) (*) 20,469 20,469 50,000 27 43,052 (*) (*) (*) (*) (*) (*) 21,591 21,591 50,000 28 45,992 (*) (*) (*) (*) (*) (*) 22,707 22,707 50,000 29 49,079 (*) (*) (*) (*) (*) (*) 23,809 23,809 50,000 30 52,321 (*) (*) (*) (*) (*) (*) 24,889 24,889 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 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 LAPSE WITHOUT VALUE. 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. 45 DEATH BENEFIT OPTION 2 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES >
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,614 846 273 50,846 937 363 50,937 1,031 457 51,031 3 2,483 1,285 769 51,285 1,463 947 51,463 1,656 1,140 51,656 4 3,394 1,699 1,240 51,699 1,993 1,534 51,993 2,326 1,867 52,326 5 4,351 2,087 1,686 52,087 2,527 2,125 52,527 3,043 2,642 53,043 6 5,357 2,451 2,107 52,451 3,065 2,720 53,065 3,814 3,470 53,814 7 6,412 2,797 2,510 52,797 3,612 3,326 53,612 4,650 4,364 54,650 8 7,520 3,118 2,889 53,118 4,164 3,935 54,164 5,551 5,322 55,551 9 8,683 3,416 3,244 53,416 4,720 4,548 54,720 6,524 6,352 56,524 10 9,905 3,691 3,691 53,691 5,281 5,281 55,281 7,575 7,575 57,575 11 11,188 3,936 3,936 53,936 5,840 5,840 55,840 8,706 8,706 58,706 12 12,535 4,152 4,152 54,152 6,396 6,396 56,396 9,925 9,925 59,925 13 13,949 4,334 4,334 54,334 6,945 6,945 56,945 11,234 11,234 61,234 14 15,434 4,477 4,477 54,477 7,479 7,479 57,479 12,637 12,637 62,637 15 16,993 4,573 4,573 54,573 7,989 7,989 57,989 14,134 14,134 64,134 16 18,630 4,621 4,621 54,621 8,474 8,474 58,474 15,734 15,734 65,734 17 20,349 4,615 4,615 54,615 8,923 8,923 58,923 17,437 17,437 67,437 18 22,154 4,543 4,543 54,543 9,324 9,324 59,324 19,243 19,243 69,243 19 24,049 4,408 4,408 54,408 9,674 9,674 59,674 21,161 21,161 71,161 20 26,039 4,199 4,199 54,199 9,961 9,961 59,961 23,193 23,193 73,193 21 28,129 3,912 3,912 53,912 10,176 10,176 60,176 25,343 25,343 75,343 22 30,323 3,540 3,540 53,540 10,306 10,306 60,306 27,697 27,697 77,697 23 32,626 3,071 3,071 53,071 10,335 10,335 60,335 30,187 30,187 80,187 24 35,045 2,495 2,495 52,495 10,248 10,248 60,248 32,814 32,814 82,814 25 37,585 1,815 1,815 51,815 10,038 10,038 60,038 35,592 35,592 85,592 26 40,252 1,019 1,019 51,019 9,689 9,689 59,689 38,525 38,525 88,525 27 43,052 81 81 50,081 9,163 9,163 59,163 41,597 41,597 91,597 28 45,992 (*) (*) (*) 8,455 8,455 58,455 44,822 44,822 94,822 29 49,079 (*) (*) (*) 7,542 7,542 57,542 48,203 48,203 98,203 30 52,321 (*) (*) (*) 6,404 6,404 56,404 51,743 51,743 101,743
(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 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 LAPSE WITHOUT VALUE. 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. 46 DEATH BENEFIT OPTION 2 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES >
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 26 50,600 671 97 50,671 3 2,483 867 351 50,867 999 483 50,999 1,143 626 51,143 4 3,394 1,175 716 51,175 1,393 934 51,393 1,640 1,181 51,640 5 4,351 1,453 1,052 51,453 1,779 1,377 51,779 2,162 1,760 52,162 6 5,357 1,701 1,357 51,701 2,154 1,810 52,154 2,709 2,364 52,709 7 6,412 1,914 1,627 51,914 2,513 2,226 52,513 3,278 2,991 53,278 8 7,520 2,088 1,859 52,088 2,851 2,622 52,851 3,868 3,639 53,868 9 8,683 2,219 2,047 52,219 3,162 2,990 53,162 4,475 4,303 54,475 10 9,905 2,303 2,303 52,303 3,440 3,440 53,440 5,095 5,095 55,095 11 11,188 2,335 2,335 52,335 3,677 3,677 53,677 5,724 5,724 55,724 12 12,535 2,312 2,312 52,312 3,868 3,868 53,868 6,358 6,358 56,358 13 13,949 2,232 2,232 52,232 4,007 4,007 54,007 6,995 6,995 56,995 14 15,434 2,089 2,089 52,089 4,085 4,085 54,085 7,628 7,628 57,628 15 16,993 1,875 1,875 51,875 4,092 4,092 54,092 8,247 8,247 58,247 16 18,630 1,584 1,584 51,584 4,015 4,015 54,015 8,842 8,842 58,842 17 20,349 1,207 1,207 51,207 3,843 3,843 53,843 9,401 9,401 59,401 18 22,154 733 733 50,733 3,555 3,555 53,555 9,906 9,906 59,906 19 24,049 149 149 50,149 3,132 3,132 53,132 10,336 10,336 60,336 20 26,039 (*) (*) (*) 2,557 2,557 52,557 10,669 10,669 60,669 21 28,129 (*) (*) (*) 1,807 1,807 51,807 10,882 10,882 60,882 22 30,323 (*) (*) (*) 864 864 50,864 10,949 10,949 60,949 23 32,626 (*) (*) (*) (*) (*) (*) 10,843 10,843 60,843 24 35,045 (*) (*) (*) (*) (*) (*) 10,531 10,531 60,531 25 37,585 (*) (*) (*) (*) (*) (*) 9,970 9,970 59,970 26 40,252 (*) (*) (*) (*) (*) (*) 9,105 9,105 59,105 27 43,052 (*) (*) (*) (*) (*) (*) 7,869 7,869 57,869 28 45,992 (*) (*) (*) (*) (*) (*) 6,180 6,180 56,180 29 49,079 (*) (*) (*) (*) (*) (*) 3,945 3,945 53,945 30 52,321 (*) (*) (*) (*) (*) (*) 1,070 1,070 51,070
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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. 47 DEATH BENEFIT OPTION 1 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,340 647 50,000 1,486 793 50,000 1,639 946 50,000 3 3,972 2,003 1,379 50,000 2,289 1,665 50,000 2,599 1,976 50,000 4 5,431 2,626 2,071 50,000 3,097 2,542 50,000 3,630 3,075 50,000 5 6,962 3,200 2,715 50,000 3,903 3,417 50,000 4,730 4,245 50,000 6 8,570 3,730 3,314 50,000 4,708 4,292 50,000 5,910 5,494 50,000 7 10,259 4,205 3,859 50,000 5,506 5,160 50,000 7,173 6,826 50,000 8 12,032 4,619 4,342 50,000 6,288 6,011 50,000 8,521 8,243 50,000 9 13,893 4,972 4,765 50,000 7,055 6,847 50,000 9,967 9,759 50,000 10 15,848 5,257 5,257 50,000 7,800 7,800 50,000 11,519 11,519 50,000 11 17,901 5,469 5,469 50,000 8,518 8,518 50,000 13,190 13,190 50,000 12 20,056 5,601 5,601 50,000 9,202 9,202 50,000 14,992 14,992 50,000 13 22,318 5,643 5,643 50,000 9,844 9,844 50,000 16,940 16,940 50,000 14 24,694 5,583 5,583 50,000 10,432 10,432 50,000 19,052 19,052 50,000 15 27,189 5,421 5,421 50,000 10,967 10,967 50,000 21,360 21,360 50,000 16 29,808 5,144 5,144 50,000 11,438 11,438 50,000 23,893 23,893 50,000 17 32,559 4,724 4,724 50,000 11,819 11,819 50,000 26,680 26,680 50,000 18 35,447 4,155 4,155 50,000 12,106 12,106 50,000 29,864 29,864 50,000 19 38,479 3,420 3,420 50,000 12,284 12,284 50,000 33,439 33,439 50,000 20 41,663 2,499 2,499 50,000 12,335 12,335 50,000 37,482 37,482 50,000 21 45,006 1,356 1,356 50,000 12,231 12,231 50,000 42,092 42,092 50,000 22 48,517 (*) (*) (*) 11,936 11,936 50,000 47,395 47,395 50,000 23 52,202 (*) (*) (*) 11,409 11,409 50,000 53,365 53,365 56,034 24 56,073 (*) (*) (*) 10,608 10,608 50,000 59,923 59,923 62,919 25 60,136 (*) (*) (*) 9,471 9,471 50,000 67,121 67,121 70,477 26 64,403 (*) (*) (*) 7,924 7,924 50,000 75,018 75,018 78,769 27 68,883 (*) (*) (*) 5,874 5,874 50,000 83,676 83,676 87,859 28 73,587 (*) (*) (*) 3,205 3,205 50,000 93,162 93,162 97,820 29 78,527 (*) (*) (*) (*) (*) (*) 103,548 103,548 108,726 30 83,713 (*) (*) (*) (*) (*) (*) 114,911 114,911 120,656
(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 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 LAPSE WITHOUT VALUE. 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. DEATH BENEFIT OPTION 1 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 287 0 50,000 327 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 1,109 486 50,000 1,308 684 50,000 1,525 901 50,000 4 5,431 1,427 873 50,000 1,745 1,190 50,000 2,108 1,553 50,000 5 6,962 1,674 1,189 50,000 2,135 1,650 50,000 2,685 2,200 50,000 6 8,570 1,843 1,427 50,000 2,469 2,053 50,000 3,251 2,835 50,000 7 10,259 1,925 1,579 50,000 2,735 2,388 50,000 3,795 3,449 50,000 8 12,032 1,908 1,631 50,000 2,916 2,639 50,000 4,305 4,027 50,000 9 13,893 1,777 1,569 50,000 2,994 2,786 50,000 4,763 4,556 50,000 10 15,848 1,517 1,517 50,000 2,950 2,950 50,000 5,155 5,155 50,000 11 17,901 1,115 1,115 50,000 2,762 2,762 50,000 5,459 5,459 50,000 12 20,056 553 553 50,000 2,407 2,407 50,000 5,656 5,656 50,000 13 22,318 (*) (*) (*) 1,858 1,858 50,000 5,721 5,721 50,000 14 24,694 (*) (*) (*) 1,079 1,079 50,000 5,621 5,621 50,000 15 27,189 (*) (*) (*) 26 26 50,000 5,312 5,312 50,000 16 29,808 (*) (*) (*) (*) (*) (*) 4,733 4,733 50,000 17 32,559 (*) (*) (*) (*) (*) (*) 3,803 3,803 50,000 18 35,447 (*) (*) (*) (*) (*) (*) 2,410 2,410 50,000 19 38,479 (*) (*) (*) (*) (*) (*) 414 414 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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 635 0 50,635 686 0 50,686 738 45 50,738 2 2,583 1,323 630 51,323 1,468 775 51,468 1,618 925 51,618 3 3,972 1,969 1,346 51,969 2,250 1,626 52,250 2,555 1,932 52,555 4 5,431 2,569 2,014 52,569 3,028 2,474 53,028 3,549 2,994 53,549 5 6,962 3,112 2,627 53,112 3,793 3,307 53,793 4,594 4,109 54,594 6 8,570 3,602 3,186 53,602 4,543 4,127 54,543 5,697 5,281 55,697 7 10,259 4,029 3,682 54,029 5,268 4,921 55,268 6,854 6,507 56,854 8 12,032 4,383 4,105 54,383 5,956 5,679 55,956 8,057 7,780 58,057 9 13,893 4,666 4,458 54,666 6,606 6,398 56,606 9,313 9,105 59,313 10 15,848 4,868 4,868 54,868 7,205 7,205 57,205 10,615 10,615 60,615 11 17,901 4,986 4,986 54,986 7,745 7,745 57,745 11,962 11,962 61,962 12 20,056 5,011 5,011 55,011 8,214 8,214 58,214 13,348 13,348 63,348 13 22,318 4,932 4,932 54,932 8,596 8,596 58,596 14,765 14,765 64,765 14 24,694 4,741 4,741 54,741 8,877 8,877 58,877 16,203 16,203 66,203 15 27,189 4,438 4,438 54,438 9,050 9,050 59,050 17,664 17,664 67,664 16 29,808 4,013 4,013 54,013 9,100 9,100 59,100 19,137 19,137 69,137 17 32,559 3,439 3,439 53,439 8,991 8,991 58,991 20,593 20,593 70,593 18 35,447 2,719 2,719 52,719 8,716 8,716 58,716 22,028 22,028 72,028 19 38,479 1,842 1,842 51,842 8,255 8,255 58,255 23,430 23,430 73,430 20 41,663 799 799 50,799 7,587 7,587 57,587 24,779 24,779 74,779 21 45,006 (*) (*) (*) 6,680 6,680 56,680 26,047 26,047 76,047 22 48,517 (*) (*) (*) 5,497 5,497 55,497 27,282 27,282 77,282 23 52,202 (*) (*) (*) 4,002 4,002 54,002 28,375 28,375 78,375 24 56,073 (*) (*) (*) 2,161 2,161 52,161 29,289 29,289 79,289 25 60,136 (*) (*) (*) (*) (*) (*) 29,981 29,981 79,981 26 64,403 (*) (*) (*) (*) (*) (*) 30,399 30,399 80,399 27 68,883 (*) (*) (*) (*) (*) (*) 30,488 30,488 80,488 28 73,587 (*) (*) (*) (*) (*) (*) 30,193 30,193 80,193 29 78,527 (*) (*) (*) (*) (*) (*) 29,439 29,439 79,439 30 83,713 (*) (*) (*) (*) (*) (*) 28,140 28,140 78,140
(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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 279 0 50,279 319 0 50,319 360 0 50,360 2 2,583 707 14 50,707 810 117 50,810 919 226 50,919 3 3,972 1,070 446 51,070 1,262 638 51,262 1,472 849 51,472 4 5,431 1,362 808 51,362 1,666 1,112 51,666 2,014 1,459 52,014 5 6,962 1,577 1,092 51,577 2,012 1,527 52,012 2,532 2,047 52,532 6 8,570 1,706 1,291 51,706 2,289 1,873 52,289 3,016 2,601 53,016 7 10,259 1,744 1,397 51,744 2,485 2,138 52,485 3,454 3,107 53,454 8 12,032 1,676 1,399 51,676 2,581 2,303 52,581 3,825 3,547 53,825 9 13,893 1,491 1,283 51,491 2,558 2,350 52,558 4,107 3,899 54,107 10 15,848 1,178 1,178 51,178 2,399 2,399 52,399 4,277 4,277 54,277 11 17,901 725 725 50,725 2,084 2,084 52,084 4,310 4,310 54,310 12 20,056 123 123 50,123 1,593 1,593 51,593 4,180 4,180 54,180 13 22,318 (*) (*) (*) 908 908 50,908 3,857 3,857 53,857 14 24,694 (*) (*) (*) 4 4 50,004 3,306 3,306 53,306 15 27,189 (*) (*) (*) (*) (*) (*) 2,482 2,482 52,482 16 29,808 (*) (*) (*) (*) (*) (*) 1,328 1,328 51,328 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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 1 $1500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 947 49 100,000 1,016 118 100,000 1,085 188 100,000 2 3,229 1,946 1,048 100,000 2,145 1,248 100,000 2,353 1,456 100,000 3 4,965 2,908 2,100 100,000 3,302 2,494 100,000 3,730 2,922 100,000 4 6,788 3,834 3,116 100,000 4,488 3,770 100,000 5,227 4,509 100,000 5 8,703 4,726 4,098 100,000 5,707 5,079 100,000 6,858 6,229 100,000 6 10,713 5,585 5,047 100,000 6,959 6,421 100,000 8,638 8,100 100,000 7 12,824 6,400 5,952 100,000 8,237 7,788 100,000 10,573 10,124 100,000 8 15,040 7,162 6,803 100,000 9,530 9,171 100,000 12,669 12,310 100,000 9 17,367 7,872 7,602 100,000 10,841 10,572 100,000 14,946 14,676 100,000 10 19,810 8,520 8,520 100,000 12,163 12,163 100,000 17,414 17,414 100,000 11 22,376 9,121 9,121 100,000 13,508 13,508 100,000 20,110 20,110 100,000 12 25,069 9,682 9,682 100,000 14,885 14,885 100,000 23,066 23,066 100,000 13 27,898 10,206 10,206 100,000 16,300 16,300 100,000 26,315 26,315 100,000 14 30,868 10,673 10,673 100,000 17,736 17,736 100,000 29,964 29,964 100,000 15 33,986 11,068 11,068 100,000 19,179 19,179 100,000 33,969 33,969 100,000 16 37,261 11,394 11,394 100,000 20,635 20,635 100,000 38,379 38,379 100,000 17 40,699 11,645 11,645 100,000 22,100 22,100 100,000 43,242 43,242 100,000 18 44,309 11,806 11,806 100,000 23,562 23,562 100,000 48,609 48,609 100,000 19 48,099 11,873 11,873 100,000 25,020 25,020 100,000 54,548 54,548 100,000 20 52,079 11,850 11,850 100,000 26,561 26,561 100,000 61,139 61,139 100,000 21 56,258 11,725 11,725 100,000 28,106 28,106 100,000 68,471 68,471 100,000 22 60,646 11,468 11,468 100,000 29,633 29,633 100,000 76,640 76,640 100,000 23 65,253 11,071 11,071 100,000 31,141 31,141 100,000 85,773 85,773 101,212 24 70,091 10,505 10,505 100,000 32,612 32,612 100,000 95,883 95,883 112,183 25 75,170 9,760 9,760 100,000 34,044 34,044 100,000 106,996 106,996 124,116 26 80,504 8,823 8,823 100,000 35,432 35,432 100,000 119,213 119,213 137,095 27 86,104 7,655 7,655 100,000 36,754 36,754 100,000 132,675 132,675 149,922 28 91,984 6,237 6,237 100,000 38,007 38,007 100,000 147,523 147,523 163,751 29 98,158 4,542 4,542 100,000 39,180 39,180 100,000 163,920 163,920 178,672 30 104,641 2,520 2,520 100,000 40,249 40,249 100,000 182,047 182,047 194,790
(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 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. 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 DEATH BENEFIT OPTION 1 $1500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,671 773 100,000 1,850 952 100,000 2,037 1,139 100,000 3 4,965 2,550 1,743 100,000 2,904 2,096 100,000 3,288 2,481 100,000 4 6,788 3,387 2,669 100,000 3,975 3,257 100,000 4,638 3,920 100,000 5 8,703 4,178 3,550 100,000 5,060 4,432 100,000 6,095 5,467 100,000 6 10,713 4,921 4,382 100,000 6,156 5,618 100,000 7,667 7,128 100,000 7 12,824 5,611 5,162 100,000 7,260 6,811 100,000 9,360 8,912 100,000 8 15,040 6,242 5,883 100,000 8,365 8,006 100,000 11,184 10,825 100,000 9 17,367 6,809 6,540 100,000 9,466 9,197 100,000 13,147 12,877 100,000 10 19,810 7,307 7,307 100,000 10,557 10,557 100,000 15,260 15,260 100,000 11 22,376 7,729 7,729 100,000 11,632 11,632 100,000 17,535 17,535 100,000 12 25,069 8,070 8,070 100,000 12,686 12,686 100,000 19,988 19,988 100,000 13 27,898 8,327 8,327 100,000 13,715 13,715 100,000 22,640 22,640 100,000 14 30,868 8,492 8,492 100,000 14,710 14,710 100,000 25,509 25,509 100,000 15 33,986 8,555 8,555 100,000 15,662 15,662 100,000 28,703 28,703 100,000 16 37,261 8,504 8,504 100,000 16,558 16,558 100,000 32,181 32,181 100,000 17 40,699 8,326 8,326 100,000 17,386 17,386 100,000 35,975 35,975 100,000 18 44,309 8,002 8,002 100,000 18,125 18,125 100,000 40,123 40,123 100,000 19 48,099 7,512 7,512 100,000 18,757 18,757 100,000 44,666 44,666 100,000 20 52,079 6,834 6,834 100,000 19,258 19,258 100,000 49,662 49,662 100,000 21 56,258 5,947 5,947 100,000 19,608 19,608 100,000 55,178 55,178 100,000 22 60,646 4,828 4,828 100,000 19,781 19,781 100,000 61,301 61,301 100,000 23 65,253 3,452 3,452 100,000 19,752 19,752 100,000 68,134 68,134 100,000 24 70,091 1,788 1,788 100,000 19,487 19,487 100,000 75,806 75,806 100,000 25 75,170 (*) (*) (*) 18,941 18,941 100,000 84,471 84,471 100,000 26 80,504 (*) (*) (*) 18,054 18,054 100,000 94,200 94,200 108,330 27 86,104 (*) (*) (*) 16,746 16,746 100,000 104,911 104,911 118,549 28 91,984 (*) (*) (*) 14,915 14,915 100,000 116,710 116,710 129,548 29 98,158 (*) (*) (*) 12,436 12,436 100,000 129,728 129,728 141,403 30 104,641 (*) (*) (*) 9,167 9,167 100,000 144,123 144,123 154,212
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $1500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 943 46 100,943 1,012 115 101,012 1,081 184 101,081 2 3,229 1,935 1,038 101,935 2,134 1,236 102,134 2,341 1,443 102,341 3 4,965 2,887 2,079 102,887 3,278 2,470 103,278 3,702 2,895 103,702 4 6,788 3,799 3,081 103,799 4,446 3,728 104,446 5,176 4,458 105,176 5 8,703 4,672 4,044 104,672 5,639 5,011 105,639 6,775 6,146 106,775 6 10,713 5,508 4,969 105,508 6,859 6,321 106,859 8,510 7,971 108,510 7 12,824 6,294 5,846 106,294 8,094 7,645 108,094 10,383 9,934 110,383 8 15,040 7,021 6,662 107,021 9,332 8,973 109,332 12,395 12,036 112,395 9 17,367 7,688 7,419 107,688 10,575 10,306 110,575 14,562 14,292 114,562 10 19,810 8,287 8,287 108,287 11,810 11,810 111,810 16,885 16,885 116,885 11 22,376 8,831 8,831 108,831 13,051 13,051 113,051 19,395 19,395 119,395 12 25,069 9,328 9,328 109,328 14,305 14,305 114,305 22,119 22,119 122,119 13 27,898 9,781 9,781 109,781 15,576 15,576 115,576 25,080 25,080 125,080 14 30,868 10,170 10,170 110,170 16,840 16,840 116,840 28,364 28,364 128,364 15 33,986 10,474 10,474 110,474 18,078 18,078 118,078 31,909 31,909 131,909 16 37,261 10,700 10,700 110,700 19,292 19,292 119,292 35,744 35,744 135,744 17 40,699 10,840 10,840 110,840 20,471 20,471 120,471 39,891 39,891 139,891 18 44,309 10,877 10,877 110,877 21,597 21,597 121,597 44,363 44,363 144,363 19 48,099 10,807 10,807 110,807 22,661 22,661 122,661 49,188 49,188 149,188 20 52,079 10,638 10,638 110,638 23,664 23,664 123,664 54,408 54,408 154,408 21 56,258 10,354 10,354 110,354 24,589 24,589 124,589 60,046 60,046 160,046 22 60,646 9,925 9,925 109,925 25,398 25,398 125,398 66,113 66,113 166,113 23 65,253 9,344 9,344 109,344 26,157 26,157 126,157 72,642 72,642 172,642 24 70,091 8,585 8,585 108,585 26,755 26,755 126,755 79,650 79,650 179,650 25 75,170 7,641 7,641 107,641 27,175 27,175 127,175 87,177 87,177 187,177 26 80,504 6,506 6,506 106,506 27,401 27,401 127,401 95,268 95,268 195,268 27 86,104 5,143 5,143 105,143 27,381 27,381 127,381 103,938 103,938 203,938 28 91,984 3,549 3,549 103,549 27,096 27,096 127,096 113,239 113,239 213,239 29 98,158 1,707 1,707 101,707 26,515 26,515 126,515 123,217 123,217 223,217 30 104,641 (*) (*) (*) 25,584 25,584 125,584 133,901 133,901 233,901
(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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 746 0 100,746 809 0 100,809 872 0 100,872 2 3,229 1,660 763 101,660 1,838 940 101,838 2,023 1,126 102,023 3 4,965 2,529 1,721 102,529 2,879 2,071 102,879 3,259 2,452 103,259 4 6,788 3,349 2,631 103,349 3,930 3,212 103,930 4,585 3,867 104,585 5 8,703 4,120 3,492 104,120 4,988 4,360 104,988 6,007 5,378 106,007 6 10,713 4,837 4,299 104,837 6,048 5,510 106,048 7,528 6,990 107,528 7 12,824 5,495 5,046 105,495 7,104 6,656 107,104 9,153 8,704 109,153 8 15,040 6,088 5,729 106,088 8,149 7,790 108,149 10,885 10,526 110,885 9 17,367 6,609 6,339 106,609 9,174 8,905 109,174 12,726 12,457 112,726 10 19,810 7,052 7,052 107,052 10,172 10,172 110,172 14,679 14,679 114,679 11 22,376 7,411 7,411 107,411 11,131 11,131 111,131 16,748 16,748 116,748 12 25,069 7,680 7,680 107,680 12,044 12,044 112,044 18,936 18,936 118,936 13 27,898 7,855 7,855 107,855 12,904 12,904 112,904 21,250 21,250 121,250 14 30,868 7,928 7,928 107,928 13,697 13,697 113,697 23,692 23,692 123,692 15 33,986 7,889 7,889 107,889 14,409 14,409 114,409 26,263 26,263 126,263 16 37,261 7,726 7,726 107,726 15,022 15,022 115,022 29,049 29,049 129,049 17 40,699 7,428 7,428 107,428 15,519 15,519 115,519 31,977 31,977 131,977 18 44,309 6,975 6,975 106,975 15,871 15,871 115,871 35,041 35,041 135,041 19 48,099 6,348 6,348 106,348 16,050 16,050 116,050 38,230 38,230 138,230 20 52,079 5,530 5,530 105,530 16,030 16,030 116,030 41,537 41,537 141,537 21 56,258 4,505 4,505 104,505 15,780 15,780 115,780 44,953 44,953 144,953 22 60,646 3,258 3,258 103,258 15,271 15,271 115,271 48,468 48,468 148,468 23 65,253 1,774 1,774 101,774 14,476 14,476 114,476 52,076 52,076 152,076 24 70,091 35 35 100,035 13,357 13,357 113,357 55,759 55,759 155,759 25 75,170 (*) (*) (*) 11,869 11,869 111,869 59,494 59,494 159,494 26 80,504 (*) (*) (*) 9,954 9,954 109,954 63,241 63,241 163,241 27 86,104 (*) (*) (*) 7,539 7,539 107,539 66,946 66,946 166,946 28 91,984 (*) (*) (*) 4,538 4,538 104,538 70,536 70,536 170,536 29 98,158 (*) (*) (*) 860 860 100,860 73,930 73,930 173,930 30 104,641 (*) (*) (*) (*) (*) (*) 77,048 77,048 177,048
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,533 370 100,000 1,647 484 100,000 1,761 599 100,000 2 5,381 3,102 1,940 100,000 3,429 2,266 100,000 3,770 2,607 100,000 3 8,275 4,622 3,576 100,000 5,264 4,217 100,000 5,960 4,914 100,000 4 11,314 6,073 5,143 100,000 7,135 6,205 100,000 8,334 7,404 100,000 5 14,505 7,440 6,626 100,000 9,027 8,213 100,000 10,893 10,080 100,000 6 17,855 8,727 8,029 100,000 10,947 10,249 100,000 13,667 12,970 100,000 7 21,373 9,930 9,349 100,000 12,892 12,311 100,000 16,676 16,095 100,000 8 25,066 11,036 10,571 100,000 14,852 14,387 100,000 19,936 19,471 100,000 9 28,945 12,042 11,694 100,000 16,825 16,476 100,000 23,477 23,128 100,000 10 33,017 12,956 12,956 100,000 18,820 18,820 100,000 27,344 27,344 100,000 11 37,293 13,765 13,765 100,000 20,831 20,831 100,000 31,666 31,666 100,000 12 41,782 14,444 14,444 100,000 22,837 22,837 100,000 36,404 36,404 100,000 13 46,497 14,987 14,987 100,000 24,837 24,837 100,000 41,617 41,617 100,000 14 51,446 15,372 15,372 100,000 26,814 26,814 100,000 47,365 47,365 100,000 15 56,644 15,592 15,592 100,000 28,857 28,857 100,000 53,732 53,732 100,000 16 62,101 15,638 15,638 100,000 30,888 30,888 100,000 60,821 60,821 100,000 17 67,831 15,478 15,478 100,000 32,890 32,890 100,000 68,744 68,744 100,000 18 73,848 15,100 15,100 100,000 34,862 34,862 100,000 77,650 77,650 100,000 19 80,165 14,485 14,485 100,000 36,803 36,803 100,000 87,720 87,720 100,000 20 86,798 13,592 13,592 100,000 38,694 38,694 100,000 99,116 99,116 106,054 21 93,763 12,386 12,386 100,000 40,528 40,528 100,000 111,759 111,759 117,347 22 101,076 10,784 10,784 100,000 42,265 42,265 100,000 125,667 125,667 131,950 23 108,755 8,720 8,720 100,000 43,885 43,885 100,000 140,957 140,957 148,005 24 116,818 6,117 6,117 100,000 45,366 45,366 100,000 157,760 157,760 165,648 25 125,284 2,871 2,871 100,000 46,678 46,678 100,000 176,214 176,214 185,024 26 134,173 (*) (*) (*) 47,791 47,791 100,000 196,469 196,469 206,293 27 143,506 (*) (*) (*) 48,676 48,676 100,000 218,691 218,691 229,625 28 153,307 (*) (*) (*) 49,285 49,285 100,000 243,052 243,052 255,204 29 163,597 (*) (*) (*) 49,560 49,560 100,000 269,739 269,739 283,226 30 174,402 (*) (*) (*) 49,407 49,407 100,000 298,946 298,946 313,894
(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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,210 47 100,000 1,314 151 100,000 1,418 256 100,000 2 5,381 2,536 1,374 100,000 2,825 1,663 100,000 3,128 1,965 100,000 3 8,275 3,767 2,720 100,000 4,327 3,281 100,000 4,937 3,891 100,000 4 11,314 4,894 3,964 100,000 5,811 4,881 100,000 6,851 5,921 100,000 5 14,505 5,910 5,096 100,000 7,268 6,454 100,000 8,873 8,059 100,000 6 17,855 6,806 6,108 100,000 8,687 7,990 100,000 11,008 10,310 100,000 7 21,373 7,570 6,989 100,000 10,057 9,476 100,000 13,261 12,680 100,000 8 25,066 8,186 7,721 100,000 11,360 10,895 100,000 15,634 15,169 100,000 9 28,945 8,637 8,288 100,000 12,575 12,227 100,000 18,130 17,782 100,000 10 33,017 8,905 8,905 100,000 13,686 13,686 100,000 20,757 20,757 100,000 11 37,293 8,974 8,974 100,000 14,671 14,671 100,000 23,526 23,526 100,000 12 41,782 8,825 8,825 100,000 15,512 15,512 100,000 26,453 26,453 100,000 13 46,497 8,440 8,440 100,000 16,187 16,187 100,000 29,651 29,651 100,000 14 51,446 7,794 7,794 100,000 16,668 16,668 100,000 33,077 33,077 100,000 15 56,644 6,850 6,850 100,000 16,917 16,917 100,000 36,760 36,760 100,000 16 62,101 5,558 5,558 100,000 16,882 16,882 100,000 40,734 40,734 100,000 17 67,831 3,853 3,853 100,000 16,494 16,494 100,000 45,041 45,041 100,000 18 73,848 1,647 1,647 100,000 15,665 15,665 100,000 49,733 49,733 100,000 19 80,165 (*) (*) (*) 14,289 14,289 100,000 54,884 54,884 100,000 20 86,798 (*) (*) (*) 12,249 12,249 100,000 60,605 60,605 100,000 21 93,763 (*) (*) (*) 9,407 9,407 100,000 67,048 67,048 100,000 22 101,076 (*) (*) (*) 5,600 5,600 100,000 74,417 74,417 100,000 23 108,755 (*) (*) (*) 625 625 100,000 82,986 82,986 100,000 24 116,818 (*) (*) (*) (*) (*) (*) 93,115 93,115 100,000 25 125,284 (*) (*) (*) (*) (*) (*) 104,823 104,823 110,064 26 134,173 (*) (*) (*) (*) (*) (*) 117,636 117,636 123,518 27 143,506 (*) (*) (*) (*) (*) (*) 131,644 131,644 138,226 28 153,307 (*) (*) (*) (*) (*) (*) 146,936 146,936 154,283 29 163,597 (*) (*) (*) (*) (*) (*) 163,609 163,609 171,789 30 174,402 (*) (*) (*) (*) (*) (*) 181,759 181,759 190,847
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,520 357 101,520 1,633 471 101,633 1,747 584 101,747 2 5,381 3,066 1,904 103,066 3,389 2,226 103,389 3,725 2,563 103,725 3 8,275 4,550 3,504 104,550 5,181 4,135 105,181 5,866 4,820 105,866 4 11,314 5,952 5,022 105,952 6,990 6,060 106,990 8,161 7,231 108,161 5 14,505 7,253 6,439 107,253 8,794 7,981 108,794 10,607 9,793 110,607 6 17,855 8,458 7,760 108,458 10,598 9,901 110,598 13,220 12,522 113,220 7 21,373 9,560 8,978 109,560 12,393 11,812 112,393 16,009 15,428 116,009 8 25,066 10,543 10,078 110,543 14,160 13,695 114,160 18,974 18,509 118,974 9 28,945 11,403 11,054 111,403 15,892 15,543 115,892 22,124 21,776 122,124 10 33,017 12,147 12,147 112,147 17,591 17,591 117,591 25,485 25,485 125,485 11 37,293 12,761 12,761 112,761 19,241 19,241 119,241 29,149 29,149 129,149 12 41,782 13,216 13,216 113,216 20,805 20,805 120,805 33,035 33,035 133,035 13 46,497 13,503 13,503 113,503 22,271 22,271 122,271 37,156 37,156 137,156 14 51,446 13,597 13,597 113,597 23,603 23,603 123,603 41,506 41,506 141,506 15 56,644 13,491 13,491 113,491 24,787 24,787 124,787 46,098 46,098 146,098 16 62,101 13,180 13,180 113,180 25,807 25,807 125,807 50,948 50,948 150,948 17 67,831 12,628 12,628 112,628 26,698 26,698 126,698 56,040 56,040 156,040 18 73,848 11,829 11,829 111,829 27,365 27,365 127,365 61,390 61,390 161,390 19 80,165 10,770 10,770 110,770 27,778 27,778 127,778 67,005 67,005 167,005 20 86,798 9,416 9,416 109,416 27,886 27,886 127,886 72,871 72,871 172,871 21 93,763 7,743 7,743 107,743 27,646 27,646 127,646 78,984 78,984 178,984 22 101,076 5,680 5,680 105,680 26,962 26,962 126,962 85,288 85,288 185,288 23 108,755 3,186 3,186 103,186 25,766 25,766 125,766 91,752 91,752 191,752 24 116,818 223 223 100,223 23,986 23,986 123,986 98,344 98,344 198,344 25 125,284 (*) (*) (*) 21,465 21,465 121,465 105,015 105,015 205,015 26 134,173 (*) (*) (*) 18,198 18,198 118,198 111,720 111,720 211,720 27 143,506 (*) (*) (*) 14,113 14,113 114,113 118,421 118,421 218,421 28 153,307 (*) (*) (*) 9,113 9,113 109,113 125,051 125,051 225,051 29 163,597 (*) (*) (*) 3,096 3,096 103,096 131,538 131,538 231,538 30 174,402 (*) (*) (*) (*) (*) (*) 137,765 137,765 237,765
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,195 33 101,195 1,298 135 101,298 1,401 239 101,401 2 5,381 2,494 1,332 102,494 2,778 1,616 102,778 3,076 1,914 103,076 3 8,275 3,682 2,636 103,682 4,229 3,183 104,229 4,825 3,779 104,825 4 11,314 4,750 3,820 104,750 5,638 4,708 105,638 6,646 5,716 106,646 5 14,505 5,689 4,876 105,689 6,992 6,178 106,992 8,531 7,717 108,531 6 17,855 6,488 5,791 106,488 8,274 7,577 108,274 10,475 9,777 110,475 7 21,373 7,135 6,554 107,135 9,467 8,886 109,467 12,467 11,886 112,467 8 25,066 7,611 7,146 107,611 10,545 10,080 110,545 14,491 14,026 114,491 9 28,945 7,897 7,548 107,897 11,481 11,132 111,481 16,525 16,177 116,525 10 33,017 7,977 7,977 107,977 12,248 12,248 112,248 18,551 18,551 118,551 11 37,293 7,834 7,834 107,834 12,819 12,819 112,819 20,545 20,545 120,545 12 41,782 7,454 7,454 107,454 13,166 13,166 113,166 22,486 22,486 122,486 13 46,497 6,822 6,822 106,822 13,262 13,262 113,262 24,348 24,348 124,348 14 51,446 5,921 5,921 105,921 13,071 13,071 113,071 26,099 26,099 126,099 15 56,644 4,723 4,723 104,723 12,551 12,551 112,551 27,782 27,782 127,782 16 62,101 3,191 3,191 103,191 11,643 11,643 111,643 29,264 29,264 129,264 17 67,831 1,279 1,279 101,279 10,279 10,279 110,279 30,467 30,467 130,467 18 73,848 (*) (*) (*) 8,372 8,372 108,372 31,295 31,295 131,295 19 80,165 (*) (*) (*) 5,834 5,834 105,834 31,640 31,640 131,640 20 86,798 (*) (*) (*) 2,580 2,580 102,580 31,391 31,391 131,391 21 93,763 (*) (*) (*) (*) (*) (*) 30,441 30,441 130,441 22 101,076 (*) (*) (*) (*) (*) (*) 28,673 28,673 128,673 23 108,755 (*) (*) (*) (*) (*) (*) 25,964 25,964 125,964 24 116,818 (*) (*) (*) (*) (*) (*) 22,175 22,175 122,175 25 125,284 (*) (*) (*) (*) (*) (*) 17,060 17,060 117,060 26 134,173 (*) (*) (*) (*) (*) (*) 10,464 10,464 110,464 27 143,506 (*) (*) (*) (*) (*) (*) 2,112 2,112 102,112 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 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 LAPSE WITHOUT VALUE. 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 APPENDIX C: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH BENEFITS (NLAIC - FPVUL) 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 0.63% 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, 2001. Some underlying mutual funds are subject to expense reimbursements and fee waivers. Absent expense reimbursements and fee waivers, the annualized rate would have been 0.82%. 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 -1.62%, 4.38% and 10.38%. 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 -1.32%, 4.68%, and 10.68%, 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 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. 60 Upon request, Nationwide will furnish a comparable illustration based on the proposed Insured's age, sex, smoking classification, rating classification and premium payment requested. 61 DEATH BENEFIT OPTION 1 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,614 853 279 50,000 944 370 50,000 1,039 465 50,000 3 2,483 1,298 782 50,000 1,478 962 50,000 1,673 1,157 50,000 4 3,394 1,721 1,262 50,000 2,020 1,561 50,000 2,357 1,898 50,000 5 4,351 2,122 1,720 50,000 2,570 2,168 50,000 3,096 2,694 50,000 6 5,357 2,500 2,156 50,000 3,128 2,784 50,000 3,896 3,552 50,000 7 6,412 2,864 2,577 50,000 3,702 3,415 50,000 4,770 4,483 50,000 8 7,520 3,205 2,976 50,000 4,286 4,056 50,000 5,720 5,491 50,000 9 8,683 3,527 3,355 50,000 4,881 4,709 50,000 6,757 6,585 50,000 10 9,905 3,828 3,828 50,000 5,489 5,489 50,000 7,889 7,889 50,000 11 11,188 4,104 4,104 50,000 6,105 6,105 50,000 9,123 9,123 50,000 12 12,535 4,354 4,354 50,000 6,729 6,729 50,000 10,471 10,471 50,000 13 13,949 4,575 4,575 50,000 7,358 7,358 50,000 11,942 11,942 50,000 14 15,434 4,761 4,761 50,000 7,987 7,987 50,000 13,547 13,547 50,000 15 16,993 4,905 4,905 50,000 8,610 8,610 50,000 15,296 15,296 50,000 16 18,630 5,008 5,008 50,000 9,229 9,229 50,000 17,211 17,211 50,000 17 20,349 5,061 5,061 50,000 9,835 9,835 50,000 19,305 19,305 50,000 18 22,154 5,056 5,056 50,000 10,421 10,421 50,000 21,599 21,599 50,000 19 24,049 4,992 4,992 50,000 10,987 10,987 50,000 24,122 24,122 50,000 20 26,039 4,860 4,860 50,000 11,526 11,526 50,000 26,901 26,901 50,000 21 28,129 4,655 4,655 50,000 12,032 12,032 50,000 30,066 30,066 50,000 22 30,323 4,367 4,367 50,000 12,499 12,499 50,000 33,590 33,590 50,000 23 32,626 3,984 3,984 50,000 12,916 12,916 50,000 37,528 37,528 50,000 24 35,045 3,493 3,493 50,000 13,273 13,273 50,000 41,948 41,948 50,000 25 37,585 2,891 2,891 50,000 13,567 13,567 50,000 46,889 46,889 54,391 26 40,252 2,162 2,162 50,000 13,787 13,787 50,000 52,323 52,323 60,172 27 43,052 1,272 1,272 50,000 13,905 13,905 50,000 58,314 58,314 65,895 28 45,992 214 214 50,000 13,916 13,916 50,000 64,927 64,927 72,069 29 49,079 (*) (*) (*) 13,801 13,801 50,000 72,237 72,237 78,738 30 52,321 (*) (*) (*) 13,539 13,539 50,000 80,330 80,330 85,953
(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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 1 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 788 175 0 50,000 200 0 50,000 226 0 50,000 2 1,614 539 0 50,000 607 34 50,000 679 105 50,000 3 2,483 881 364 50,000 1,014 498 50,000 1,160 644 50,000 4 3,394 1,197 738 50,000 1,419 960 50,000 1,671 1,212 50,000 5 4,351 1,488 1,086 50,000 1,821 1,420 50,000 2,214 1,813 50,000 6 5,357 1,750 1,406 50,000 2,217 1,873 50,000 2,790 2,446 50,000 7 6,412 1,980 1,694 50,000 2,603 2,316 50,000 3,398 3,111 50,000 8 7,520 2,176 1,946 50,000 2,974 2,744 50,000 4,039 3,810 50,000 9 8,683 2,331 2,159 50,000 3,325 3,153 50,000 4,712 4,540 50,000 10 9,905 2,442 2,442 50,000 3,652 3,652 50,000 5,418 5,418 50,000 11 11,188 2,505 2,505 50,000 3,949 3,949 50,000 6,156 6,156 50,000 12 12,535 2,516 2,516 50,000 4,210 4,210 50,000 6,928 6,928 50,000 13 13,949 2,472 2,472 50,000 4,431 4,431 50,000 7,736 7,736 50,000 14 15,434 2,368 2,368 50,000 4,604 4,604 50,000 8,581 8,581 50,000 15 16,993 2,194 2,194 50,000 4,719 4,719 50,000 9,463 9,463 50,000 16 18,630 1,942 1,942 50,000 4,766 4,766 50,000 10,380 10,380 50,000 17 20,349 1,603 1,603 50,000 4,731 4,731 50,000 11,335 11,335 50,000 18 22,154 1,161 1,161 50,000 4,596 4,596 50,000 12,322 12,322 50,000 19 24,049 601 601 50,000 4,341 4,341 50,000 13,340 13,340 50,000 20 26,039 (*) (*) (*) 3,943 3,943 50,000 14,387 14,387 50,000 21 28,129 (*) (*) (*) 3,378 3,378 50,000 15,463 15,463 50,000 22 30,323 (*) (*) (*) 2,619 2,619 50,000 16,570 16,570 50,000 23 32,626 (*) (*) (*) 1,632 1,632 50,000 17,712 17,712 50,000 24 35,045 (*) (*) (*) 378 378 50,000 18,891 18,891 50,000 25 37,585 (*) (*) (*) (*) (*) (*) 20,109 20,109 50,000 26 40,252 (*) (*) (*) (*) (*) (*) 21,366 21,366 50,000 27 43,052 (*) (*) (*) (*) (*) (*) 22,658 22,658 50,000 28 45,992 (*) (*) (*) (*) (*) (*) 23,983 23,983 50,000 29 49,079 (*) (*) (*) (*) (*) (*) 25,340 25,340 50,000 30 52,321 (*) (*) (*) (*) (*) (*) 26,821 26,821 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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,614 848 274 50,848 938 365 50,938 1,033 459 51,033 3 2,483 1,288 772 51,288 1,467 950 51,467 1,660 1,144 51,660 4 3,394 1,704 1,245 51,704 1,999 1,540 51,999 2,333 1,874 52,333 5 4,351 2,095 1,693 52,095 2,536 2,134 52,536 3,055 2,653 53,055 6 5,357 2,461 2,117 52,461 3,078 2,734 53,078 3,831 3,487 53,831 7 6,412 2,810 2,523 52,810 3,630 3,343 53,630 4,674 4,387 54,674 8 7,520 3,135 2,905 53,135 4,187 3,958 54,187 5,584 5,354 55,584 9 8,683 3,437 3,264 53,437 4,750 4,578 54,750 6,567 6,395 56,567 10 9,905 3,715 3,715 53,715 5,318 5,318 55,318 7,631 7,631 57,631 11 11,188 3,964 3,964 53,964 5,885 5,885 55,885 8,778 8,778 58,778 12 12,535 4,185 4,185 54,185 6,450 6,450 56,450 10,015 10,015 60,015 13 13,949 4,371 4,371 54,371 7,009 7,009 57,009 11,345 11,345 61,345 14 15,434 4,519 4,519 54,519 7,554 7,554 57,554 12,774 12,774 62,774 15 16,993 4,618 4,618 54,618 8,076 8,076 58,076 14,300 14,300 64,300 16 18,630 4,672 4,672 54,672 8,575 8,575 58,575 15,934 15,934 65,934 17 20,349 4,670 4,670 54,670 9,039 9,039 59,039 17,677 17,677 67,677 18 22,154 4,603 4,603 54,603 9,455 9,455 59,455 19,529 19,529 69,529 19 24,049 4,472 4,472 54,472 9,821 9,821 59,821 21,500 21,500 71,500 20 26,039 4,267 4,267 54,267 10,126 10,126 60,126 23,592 23,592 73,592 21 28,129 3,984 3,984 53,984 10,359 10,359 60,359 25,811 25,811 75,811 22 30,323 3,614 3,614 53,614 10,509 10,509 60,509 28,245 28,245 78,245 23 32,626 3,148 3,148 53,148 10,559 10,559 60,559 30,826 30,826 80,826 24 35,045 2,575 2,575 52,575 10,493 10,493 60,493 33,558 33,558 83,558 25 37,585 1,896 1,896 51,896 10,306 10,306 60,306 36,454 36,454 86,454 26 40,252 1,100 1,100 51,100 9,979 9,979 59,979 39,520 39,520 89,520 27 43,052 162 162 50,162 9,477 9,477 59,477 42,743 42,743 92,743 28 45,992 (*) (*) (*) 8,792 8,792 58,792 46,139 46,139 96,139 29 49,079 (*) (*) (*) 7,903 7,903 57,903 49,712 49,712 99,712 30 52,321 (*) (*) (*) 6,788 6,788 56,788 53,469 53,469 103,469
(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 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 LAPSE WITHOUT VALUE. 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 DEATH BENEFIT OPTION 2 $750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 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 1,614 534 0 50,534 601 28 50,601 672 98 50,672 3 2,483 870 353 50,870 1,002 485 51,002 1,146 629 51,146 4 3,394 1,178 719 51,178 1,397 938 51,397 1,645 1,186 51,645 5 4,351 1,459 1,057 51,459 1,786 1,384 51,786 2,170 1,769 52,170 6 5,357 1,708 1,364 51,708 2,163 1,819 52,163 2,721 2,377 52,721 7 6,412 1,924 1,637 51,924 2,526 2,239 52,526 3,296 3,009 53,296 8 7,520 2,100 1,871 52,100 2,868 2,639 52,868 3,892 3,663 53,892 9 8,683 2,234 2,062 52,234 3,184 3,011 53,184 4,506 4,334 54,506 10 9,905 2,320 2,320 52,320 3,466 3,466 53,466 5,135 5,135 55,135 11 11,188 2,355 2,355 52,355 3,709 3,709 53,709 5,775 5,775 55,775 12 12,535 2,335 2,335 52,335 3,906 3,906 53,906 6,422 6,422 56,422 13 13,949 2,257 2,257 52,257 4,051 4,051 54,051 7,073 7,073 57,073 14 15,434 2,115 2,115 52,115 4,136 4,136 54,136 7,723 7,723 57,723 15 16,993 1,904 1,904 51,904 4,150 4,150 54,150 8,361 8,361 58,361 16 18,630 1,614 1,614 51,614 4,081 4,081 54,081 8,978 8,978 58,978 17 20,349 1,239 1,239 51,239 3,916 3,916 53,916 9,562 9,562 59,562 18 22,154 766 766 50,766 3,635 3,635 53,635 10,095 10,095 60,095 19 24,049 182 182 50,182 3,221 3,221 53,221 10,556 10,556 60,556 20 26,039 (*) (*) (*) 2,652 2,652 52,652 10,924 10,924 60,924 21 28,129 (*) (*) (*) 1,909 1,909 51,909 11,175 11,175 61,175 22 30,323 (*) (*) (*) 973 973 50,973 11,285 11,285 61,285 23 32,626 (*) (*) (*) (*) (*) (*) 11,226 11,226 61,226 24 35,045 (*) (*) (*) (*) (*) (*) 10,966 10,966 60,966 25 37,585 (*) (*) (*) (*) (*) (*) 10,461 10,461 60,461 26 40,252 (*) (*) (*) (*) (*) (*) 9,658 9,658 59,658 27 43,052 (*) (*) (*) (*) (*) (*) 8,488 8,488 58,488 28 45,992 (*) (*) (*) (*) (*) (*) 6,870 6,870 56,870 29 49,079 (*) (*) (*) (*) (*) (*) 4,711 4,711 54,711 30 52,321 (*) (*) (*) (*) (*) (*) 1,918 1,918 51,918
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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. 65 DEATH BENEFIT OPTION 1 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 642 0 50,000 694 1 50,000 746 53 50,000 2 2,583 1,343 650 50,000 1,489 796 50,000 1,642 949 50,000 3 3,972 2,008 1,384 50,000 2,294 1,671 50,000 2,606 1,982 50,000 4 5,431 2,634 2,079 50,000 3,106 2,552 50,000 3,641 3,087 50,000 5 6,962 3,212 2,727 50,000 3,917 3,432 50,000 4,748 4,263 50,000 6 8,570 3,746 3,330 50,000 4,729 4,313 50,000 5,937 5,522 50,000 7 10,259 4,226 3,880 50,000 5,535 5,188 50,000 7,211 6,865 50,000 8 12,032 4,645 4,368 50,000 6,325 6,048 50,000 8,573 8,296 50,000 9 13,893 5,004 4,796 50,000 7,103 6,895 50,000 10,037 9,829 50,000 10 15,848 5,295 5,295 50,000 7,859 7,859 50,000 11,610 11,610 50,000 11 17,901 5,514 5,514 50,000 8,590 8,590 50,000 13,307 13,307 50,000 12 20,056 5,652 5,652 50,000 9,290 9,290 50,000 15,140 15,140 50,000 13 22,318 5,701 5,701 50,000 9,948 9,948 50,000 17,126 17,126 50,000 14 24,694 5,648 5,648 50,000 10,556 10,556 50,000 19,283 19,283 50,000 15 27,189 5,493 5,493 50,000 11,112 11,112 50,000 21,645 21,645 50,000 16 29,808 5,224 5,224 50,000 11,607 11,607 50,000 24,243 24,243 50,000 17 32,559 4,811 4,811 50,000 12,015 12,015 50,000 27,108 27,108 50,000 18 35,447 4,249 4,249 50,000 12,331 12,331 50,000 30,388 30,388 50,000 19 38,479 3,521 3,521 50,000 12,542 12,542 50,000 34,078 34,078 50,000 20 41,663 2,606 2,606 50,000 12,631 12,631 50,000 38,260 38,260 50,000 21 45,006 1,469 1,469 50,000 12,568 12,568 50,000 43,040 43,040 50,000 22 48,517 70 70 50,000 12,320 12,320 50,000 48,546 48,546 50,974 23 52,202 (*) (*) (*) 11,847 11,847 50,000 54,693 54,693 57,428 24 56,073 (*) (*) (*) 11,106 11,106 50,000 61,451 61,451 64,524 25 60,136 (*) (*) (*) 10,038 10,038 50,000 68,878 68,878 72,322 26 64,403 (*) (*) (*) 8,572 8,572 50,000 77,035 77,035 80,886 27 68,883 (*) (*) (*) 6,614 6,614 50,000 85,987 85,987 90,287 28 73,587 (*) (*) (*) 4,054 4,054 50,000 95,808 95,808 100,598 29 78,527 (*) (*) (*) 735 735 50,000 106,572 106,572 111,900 30 83,713 (*) (*) (*) (*) (*) (*) 118,360 118,360 124,278
(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 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 LAPSE WITHOUT VALUE. 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. 66 DEATH BENEFIT OPTION 1 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES >
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 288 0 50,000 328 0 50,000 369 0 50,000 2 2,583 730 37 50,000 835 142 50,000 946 253 50,000 3 3,972 1,113 489 50,000 1,312 688 50,000 1,530 906 50,000 4 5,431 1,433 878 50,000 1,751 1,197 50,000 2,116 1,561 50,000 5 6,962 1,682 1,197 50,000 2,145 1,660 50,000 2,698 2,213 50,000 6 8,570 1,853 1,437 50,000 2,482 2,066 50,000 3,268 2,853 50,000 7 10,259 1,938 1,592 50,000 2,752 2,406 50,000 3,820 3,473 50,000 8 12,032 1,923 1,646 50,000 2,939 2,661 50,000 4,338 4,060 50,000 9 13,893 1,795 1,587 50,000 3,022 2,815 50,000 4,807 4,599 50,000 10 15,848 1,538 1,538 50,000 2,984 2,984 50,000 5,210 5,210 50,000 11 17,901 1,138 1,138 50,000 2,803 2,803 50,000 5,529 5,529 50,000 12 20,056 578 578 50,000 2,454 2,454 50,000 5,742 5,742 50,000 13 22,318 (*) (*) (*) 1,912 1,912 50,000 5,827 5,827 50,000 14 24,694 (*) (*) (*) 1,140 1,140 50,000 5,749 5,749 50,000 15 27,189 (*) (*) (*) 94 94 50,000 5,467 5,467 50,000 16 29,808 (*) (*) (*) (*) (*) (*) 4,919 4,919 50,000 17 32,559 (*) (*) (*) (*) (*) (*) 4,024 4,024 50,000 18 35,447 (*) (*) (*) (*) (*) (*) 2,673 2,673 50,000 19 38,479 (*) (*) (*) (*) (*) (*) 726 726 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 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 LAPSE WITHOUT VALUE. 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. 67 DEATH BENEFIT OPTION 2 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 636 0 50,636 687 0 50,687 739 46 50,739 2 2,583 1,326 633 51,326 1,470 777 51,470 1,622 929 51,622 3 3,972 1,974 1,350 51,974 2,256 1,632 52,256 2,562 1,938 52,562 4 5,431 2,576 2,022 52,576 3,038 2,483 53,038 3,560 3,006 53,560 5 6,962 3,124 2,638 53,124 3,807 3,322 53,807 4,612 4,127 54,612 6 8,570 3,617 3,201 53,617 4,563 4,147 54,563 5,723 5,307 55,723 7 10,259 4,048 3,702 54,048 5,295 4,948 55,295 6,890 6,544 56,890 8 12,032 4,407 4,130 54,407 5,991 5,714 55,991 8,107 7,830 58,107 9 13,893 4,695 4,488 54,695 6,650 6,442 56,650 9,378 9,170 59,378 10 15,848 4,903 4,903 54,903 7,259 7,259 57,259 10,699 10,699 60,699 11 17,901 5,026 5,026 55,026 7,810 7,810 57,810 12,068 12,068 62,068 12 20,056 5,056 5,056 55,056 8,292 8,292 58,292 13,480 13,480 63,480 13 22,318 4,983 4,983 54,983 8,687 8,687 58,687 14,927 14,927 64,927 14 24,694 4,797 4,797 54,797 8,982 8,982 58,982 16,400 16,400 66,400 15 27,189 4,498 4,498 54,498 9,171 9,171 59,171 17,900 17,900 67,900 16 29,808 4,078 4,078 54,078 9,236 9,236 59,236 19,419 19,419 69,419 17 32,559 3,508 3,508 53,508 9,144 9,144 59,144 20,927 20,927 70,927 18 35,447 2,790 2,790 52,790 8,886 8,886 58,886 22,422 22,422 72,422 19 38,479 1,915 1,915 51,915 8,442 8,442 58,442 23,890 23,890 73,890 20 41,663 872 872 50,872 7,792 7,792 57,792 25,315 25,315 75,315 21 45,006 (*) (*) (*) 6,902 6,902 56,902 26,749 26,749 76,749 22 48,517 (*) (*) (*) 5,736 5,736 55,736 28,090 28,090 78,090 23 52,202 (*) (*) (*) 4,256 4,256 54,256 29,300 29,300 79,300 24 56,073 (*) (*) (*) 2,430 2,430 52,430 30,345 30,345 80,345 25 60,136 (*) (*) (*) 217 217 50,217 31,182 31,182 81,182 26 64,403 (*) (*) (*) (*) (*) (*) 31,762 31,762 81,762 27 68,883 (*) (*) (*) (*) (*) (*) 32,030 32,030 82,030 28 73,587 (*) (*) (*) (*) (*) (*) 31,933 31,933 81,933 29 78,527 (*) (*) (*) (*) (*) (*) 31,397 31,397 81,397 30 83,713 (*) (*) (*) (*) (*) (*) 30,338 30,338 80,338
(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 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 LAPSE WITHOUT VALUE. 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. 68 DEATH BENEFIT OPTION 2 $1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,260 280 0 50,280 320 0 50,320 360 0 50,360 2 2,583 709 16 50,709 812 119 50,812 921 228 50,921 3 3,972 1,073 450 51,073 1,266 642 51,266 1,477 853 51,477 4 5,431 1,367 813 51,367 1,672 1,118 51,672 2,021 1,467 52,021 5 6,962 1,584 1,099 51,584 2,021 1,536 52,021 2,544 2,058 52,544 6 8,570 1,716 1,300 51,716 2,302 1,886 52,302 3,033 2,617 53,033 7 10,259 1,756 1,409 51,756 2,501 2,154 52,501 3,477 3,130 53,477 8 12,032 1,690 1,413 51,690 2,601 2,324 52,601 3,854 3,577 53,854 9 13,893 1,507 1,299 51,507 2,583 2,375 52,583 4,144 3,936 54,144 10 15,848 1,196 1,196 51,196 2,428 2,428 52,428 4,324 4,324 54,324 11 17,901 744 744 50,744 2,117 2,117 52,117 4,368 4,368 54,368 12 20,056 142 142 50,142 1,631 1,631 51,631 4,249 4,249 54,249 13 22,318 (*) (*) (*) 949 949 50,949 3,938 3,938 53,938 14 24,694 (*) (*) (*) 48 48 50,048 3,400 3,400 53,400 15 27,189 (*) (*) (*) (*) (*) (*) 2,589 2,589 52,589 16 29,808 (*) (*) (*) (*) (*) (*) 1,448 1,448 51,448 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 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 LAPSE WITHOUT VALUE. 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. 69 DEATH BENEFIT OPTION 1 $1500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 948 50 100,000 1,017 120 100,000 1,087 189 100,000 2 3,229 1,949 1,052 100,000 2,149 1,252 100,000 2,358 1,460 100,000 3 4,965 2,915 2,107 100,000 3,310 2,502 100,000 3,739 2,931 100,000 4 6,788 3,845 3,127 100,000 4,502 3,784 100,000 5,243 4,525 100,000 5 8,703 4,743 4,115 100,000 5,727 5,099 100,000 6,883 6,255 100,000 6 10,713 5,608 5,069 100,000 6,989 6,450 100,000 8,676 8,137 100,000 7 12,824 6,430 5,981 100,000 8,277 7,828 100,000 10,626 10,178 100,000 8 15,040 7,199 6,840 100,000 9,582 9,223 100,000 12,742 12,383 100,000 9 17,367 7,918 7,648 100,000 10,908 10,639 100,000 15,044 14,774 100,000 10 19,810 8,575 8,575 100,000 12,247 12,247 100,000 17,542 17,542 100,000 11 22,376 9,186 9,186 100,000 13,611 13,611 100,000 20,274 20,274 100,000 12 25,069 9,757 9,757 100,000 15,011 15,011 100,000 23,274 23,274 100,000 13 27,898 10,292 10,292 100,000 16,450 16,450 100,000 26,575 26,575 100,000 14 30,868 10,771 10,771 100,000 17,913 17,913 100,000 30,287 30,287 100,000 15 33,986 11,177 11,177 100,000 19,387 19,387 100,000 34,366 34,366 100,000 16 37,261 11,515 11,515 100,000 20,877 20,877 100,000 38,864 38,864 100,000 17 40,699 11,778 11,778 100,000 22,379 22,379 100,000 43,832 43,832 100,000 18 44,309 11,952 11,952 100,000 23,883 23,883 100,000 49,322 49,322 100,000 19 48,099 12,033 12,033 100,000 25,387 25,387 100,000 55,405 55,405 100,000 20 52,079 12,023 12,023 100,000 26,980 26,980 100,000 62,168 62,168 100,000 21 56,258 11,911 11,911 100,000 28,581 28,581 100,000 69,699 69,699 100,000 22 60,646 11,667 11,667 100,000 30,172 30,172 100,000 78,104 78,104 100,000 23 65,253 11,283 11,283 100,000 31,750 31,750 100,000 87,508 87,508 103,259 24 70,091 10,730 10,730 100,000 33,298 33,298 100,000 97,899 97,899 114,542 25 75,170 9,998 9,998 100,000 34,815 34,815 100,000 109,334 109,334 126,827 26 80,504 9,075 9,075 100,000 36,298 36,298 100,000 121,918 121,918 140,206 27 86,104 7,918 7,918 100,000 37,726 37,726 100,000 135,799 135,799 153,453 28 91,984 6,512 6,512 100,000 39,096 39,096 100,000 151,127 151,127 167,751 29 98,158 4,828 4,828 100,000 40,399 40,399 100,000 168,071 168,071 183,198 30 104,641 2,815 2,815 100,000 41,615 41,615 100,000 186,823 186,823 199,901
(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 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. 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. 70 DEATH BENEFIT OPTION 1 $1500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 751 0 100,000 814 0 100,000 877 0 100,000 2 3,229 1,674 777 100,000 1,853 956 100,000 2,040 1,143 100,000 3 4,965 2,557 1,749 100,000 2,911 2,104 100,000 3,296 2,489 100,000 4 6,788 3,397 2,679 100,000 3,987 3,269 100,000 4,653 3,935 100,000 5 8,703 4,193 3,565 100,000 5,078 4,450 100,000 6,118 5,490 100,000 6 10,713 4,941 4,403 100,000 6,183 5,644 100,000 7,701 7,162 100,000 7 12,824 5,637 5,188 100,000 7,296 6,847 100,000 9,408 8,960 100,000 8 15,040 6,276 5,917 100,000 8,412 8,053 100,000 11,250 10,891 100,000 9 17,367 6,850 6,581 100,000 9,526 9,257 100,000 13,235 12,965 100,000 10 19,810 7,356 7,356 100,000 10,632 10,632 100,000 15,374 15,374 100,000 11 22,376 7,786 7,786 100,000 11,725 11,725 100,000 17,682 17,682 100,000 12 25,069 8,136 8,136 100,000 12,798 12,798 100,000 20,174 20,174 100,000 13 27,898 8,403 8,403 100,000 13,848 13,848 100,000 22,872 22,872 100,000 14 30,868 8,577 8,577 100,000 14,867 14,867 100,000 25,796 25,796 100,000 15 33,986 8,649 8,649 100,000 15,845 15,845 100,000 29,056 29,056 100,000 16 37,261 8,608 8,608 100,000 16,770 16,770 100,000 32,612 32,612 100,000 17 40,699 8,440 8,440 100,000 17,630 17,630 100,000 36,500 36,500 100,000 18 44,309 8,126 8,126 100,000 18,406 18,406 100,000 40,756 40,756 100,000 19 48,099 7,645 7,645 100,000 19,076 19,076 100,000 45,429 45,429 100,000 20 52,079 6,976 6,976 100,000 19,620 19,620 100,000 50,578 50,578 100,000 21 56,258 6,098 6,098 100,000 20,016 20,016 100,000 56,275 56,275 100,000 22 60,646 4,986 4,986 100,000 20,240 20,240 100,000 62,612 62,612 100,000 23 65,253 3,618 3,618 100,000 20,267 20,267 100,000 69,700 69,700 100,000 24 70,091 1,959 1,959 100,000 20,064 20,064 100,000 77,674 77,674 100,000 25 75,170 (*) (*) (*) 19,586 19,586 100,000 86,700 86,700 100,572 26 80,504 (*) (*) (*) 18,774 18,774 100,000 96,759 96,759 111,273 27 86,104 (*) (*) (*) 17,549 17,549 100,000 107,839 107,839 121,858 28 91,984 (*) (*) (*) 15,810 15,810 100,000 120,058 120,058 133,264 29 98,158 (*) (*) (*) 13,435 13,435 100,000 133,553 133,553 145,573 30 104,641 (*) (*) (*) 10,284 10,284 100,000 148,492 148,492 158,886
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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. 71 DEATH BENEFIT OPTION 2 $1500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 944 47 100,944 1,013 116 101,013 1,083 185 101,083 2 3,229 1,939 1,041 101,939 2,138 1,240 102,138 2,345 1,448 102,345 3 4,965 2,894 2,086 102,894 3,286 2,478 103,286 3,711 2,904 103,711 4 6,788 3,810 3,092 103,810 4,459 3,741 104,459 5,192 4,474 105,192 5 8,703 4,688 4,060 104,688 5,660 5,031 105,660 6,800 6,171 106,800 6 10,713 5,530 4,991 105,530 6,888 6,349 106,888 8,547 8,008 108,547 7 12,824 6,323 5,874 106,323 8,133 7,684 108,133 10,435 9,987 110,435 8 15,040 7,057 6,698 107,057 9,384 9,025 109,384 12,467 12,108 112,467 9 17,367 7,733 7,464 107,733 10,640 10,371 110,640 14,657 14,387 114,657 10 19,810 8,340 8,340 108,340 11,892 11,892 111,892 17,009 17,009 117,009 11 22,376 8,893 8,893 108,893 13,150 13,150 113,150 19,553 19,553 119,553 12 25,069 9,400 9,400 109,400 14,425 14,425 114,425 22,317 22,317 122,317 13 27,898 9,863 9,863 109,863 15,718 15,718 115,718 25,326 25,326 125,326 14 30,868 10,262 10,262 110,262 17,007 17,007 117,007 28,668 28,668 128,668 15 33,986 10,577 10,577 110,577 18,273 18,273 118,273 32,280 32,280 132,280 16 37,261 10,813 10,813 110,813 19,516 19,516 119,516 36,193 36,193 136,193 17 40,699 10,963 10,963 110,963 20,728 20,728 120,728 40,432 40,432 140,432 18 44,309 11,011 11,011 111,011 21,890 21,890 121,890 45,010 45,010 145,010 19 48,099 10,952 10,952 110,952 22,991 22,991 122,991 49,958 49,958 149,958 20 52,079 10,792 10,792 110,792 24,035 24,035 124,035 55,319 55,319 155,319 21 56,258 10,517 10,517 110,517 25,003 25,003 125,003 61,119 61,119 161,119 22 60,646 10,098 10,098 110,098 25,938 25,938 125,938 67,372 67,372 167,372 23 65,253 9,526 9,526 109,526 26,752 26,752 126,752 74,114 74,114 174,114 24 70,091 8,774 8,774 108,774 27,407 27,407 127,407 81,365 81,365 181,365 25 75,170 7,836 7,836 107,836 27,889 27,889 127,889 89,169 89,169 189,169 26 80,504 6,706 6,706 106,706 28,178 28,178 128,178 97,574 97,574 197,574 27 86,104 5,347 5,347 105,347 28,225 28,225 128,225 106,603 106,603 206,603 28 91,984 3,755 3,755 103,755 28,011 28,011 128,011 116,310 116,310 216,310 29 98,158 1,913 1,913 101,913 27,502 27,502 127,502 126,747 126,747 226,747 30 104,641 (*) (*) (*) 26,646 26,646 126,646 137,950 137,950 237,950
(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 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 LAPSE WITHOUT VALUE. 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. 72 DEATH BENEFIT OPTION 2 $1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 45 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 1,575 747 0 100,747 810 0 100,810 873 0 100,873 2 3,229 1,663 766 101,663 1,841 944 101,841 2,027 1,130 102,027 3 4,965 2,535 1,727 102,535 2,886 2,078 102,886 3,268 2,460 103,268 4 6,788 3,359 2,641 103,359 3,942 3,224 103,942 4,599 3,881 104,599 5 8,703 4,135 3,506 104,135 5,006 4,378 105,006 6,029 5,401 106,029 6 10,713 4,857 4,318 104,857 6,074 5,535 106,074 7,561 7,023 107,561 7 12,824 5,521 5,072 105,521 7,139 6,691 107,139 9,200 8,751 109,200 8 15,040 6,120 5,761 106,120 8,195 7,836 108,195 10,949 10,590 110,949 9 17,367 6,648 6,379 106,648 9,233 8,963 109,233 12,811 12,541 112,811 10 19,810 7,099 7,099 107,099 10,244 10,244 110,244 14,789 14,789 114,789 11 22,376 7,466 7,466 107,466 11,219 11,219 111,219 16,888 16,888 116,888 12 25,069 7,742 7,742 107,742 12,149 12,149 112,149 19,111 19,111 119,111 13 27,898 7,926 7,926 107,926 13,028 13,028 113,028 21,467 21,467 121,467 14 30,868 8,007 8,007 108,007 13,842 13,842 113,842 23,958 23,958 123,958 15 33,986 7,976 7,976 107,976 14,577 14,577 114,577 26,585 26,585 126,585 16 37,261 7,821 7,821 107,821 15,215 15,215 115,215 29,437 29,437 129,437 17 40,699 7,530 7,530 107,530 15,737 15,737 115,737 32,442 32,442 132,442 18 44,309 7,084 7,084 107,084 16,117 16,117 116,117 35,594 35,594 135,594 19 48,099 6,463 6,463 106,463 16,325 16,325 116,325 38,884 38,884 138,884 20 52,079 5,651 5,651 105,651 16,335 16,335 116,335 42,307 42,307 142,307 21 56,258 4,630 4,630 104,630 16,116 16,116 116,116 45,853 45,853 145,853 22 60,646 3,385 3,385 103,385 15,641 15,641 115,641 49,518 49,518 149,518 23 65,253 1,903 1,903 101,903 14,878 14,878 114,878 53,294 53,294 153,294 24 70,091 163 163 100,163 13,793 13,793 113,793 57,169 57,169 157,169 25 75,170 (*) (*) (*) 12,339 12,339 112,339 61,119 61,119 161,119 26 80,504 (*) (*) (*) 10,456 10,456 110,456 65,108 65,108 165,108 27 86,104 (*) (*) (*) 8,074 8,074 108,074 69,085 69,085 169,085 28 91,984 (*) (*) (*) 5,103 5,103 105,103 72,979 72,979 172,979 29 98,158 (*) (*) (*) 1,453 1,453 101,453 76,714 76,714 176,714 30 104,641 (*) (*) (*) (*) (*) (*) 80,213 80,213 180,213
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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. 73 DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,535 372 100,000 1,649 486 100,000 1,763 601 100,000 2 5,381 3,108 1,946 100,000 3,435 2,273 100,000 3,777 2,614 100,000 3 8,275 4,633 3,587 100,000 5,277 4,230 100,000 5,975 4,929 100,000 4 11,314 6,092 5,162 100,000 7,156 6,226 100,000 8,360 7,430 100,000 5 14,505 7,466 6,652 100,000 9,060 8,246 100,000 10,935 10,121 100,000 6 17,855 8,763 8,066 100,000 10,994 10,297 100,000 13,728 13,031 100,000 7 21,373 9,978 9,396 100,000 12,957 12,375 100,000 16,763 16,181 100,000 8 25,066 11,096 10,631 100,000 14,936 14,471 100,000 20,055 19,590 100,000 9 28,945 12,116 11,767 100,000 16,933 16,585 100,000 23,636 23,288 100,000 10 33,017 13,044 13,044 100,000 18,956 18,956 100,000 27,552 27,552 100,000 11 37,293 13,868 13,868 100,000 20,999 20,999 100,000 31,935 31,935 100,000 12 41,782 14,564 14,564 100,000 23,041 23,041 100,000 36,747 36,747 100,000 13 46,497 15,125 15,125 100,000 25,081 25,081 100,000 42,049 42,049 100,000 14 51,446 15,528 15,528 100,000 27,187 27,187 100,000 47,904 47,904 100,000 15 56,644 15,767 15,767 100,000 29,288 29,288 100,000 54,401 54,401 100,000 16 62,101 15,833 15,833 100,000 31,385 31,385 100,000 61,646 61,646 100,000 17 67,831 15,693 15,693 100,000 33,461 33,461 100,000 69,756 69,756 100,000 18 73,848 15,336 15,336 100,000 35,517 35,517 100,000 78,887 78,887 100,000 19 80,165 14,741 14,741 100,000 37,551 37,551 100,000 89,228 89,228 100,000 20 86,798 13,870 13,870 100,000 39,548 39,548 100,000 100,909 100,909 107,972 21 93,763 12,686 12,686 100,000 41,502 41,502 100,000 113,859 113,859 119,552 22 101,076 11,105 11,105 100,000 43,376 43,376 100,000 128,120 128,120 134,526 23 108,755 9,063 9,063 100,000 45,154 45,154 100,000 143,816 143,816 151,007 24 116,818 6,481 6,481 100,000 46,816 46,816 100,000 161,084 161,084 169,138 25 125,284 3,258 3,258 100,000 48,339 48,339 100,000 180,070 180,070 189,073 26 134,173 (*) (*) (*) 49,698 49,698 100,000 200,933 200,933 210,979 27 143,506 (*) (*) (*) 50,874 50,874 100,000 223,846 223,846 235,038 28 153,307 (*) (*) (*) 51,829 51,829 100,000 248,993 248,993 261,442 29 163,597 (*) (*) (*) 52,517 52,517 100,000 276,572 276,572 290,400 30 174,402 (*) (*) (*) 52,867 52,867 100,000 306,790 306,790 322,129
(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 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 LAPSE WITHOUT VALUE. 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. 74 DEATH BENEFIT OPTION 1 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,212 49 100,000 1,316 153 100,000 1,420 258 100,000 2 5,381 2,541 1,379 100,000 2,831 1,668 100,000 3,134 1,972 100,000 3 8,275 3,776 2,730 100,000 4,338 3,292 100,000 4,950 3,904 100,000 4 11,314 4,910 3,980 100,000 5,830 4,900 100,000 6,873 5,943 100,000 5 14,505 5,933 5,119 100,000 7,296 6,482 100,000 8,908 8,095 100,000 6 17,855 6,836 6,139 100,000 8,727 8,030 100,000 11,060 10,363 100,000 7 21,373 7,610 7,029 100,000 10,112 9,530 100,000 13,335 12,754 100,000 8 25,066 8,236 7,771 100,000 11,431 10,966 100,000 15,735 15,270 100,000 9 28,945 8,697 8,348 100,000 12,665 12,317 100,000 18,264 17,915 100,000 10 33,017 8,976 8,976 100,000 13,797 13,797 100,000 20,931 20,931 100,000 11 37,293 9,056 9,056 100,000 14,808 14,808 100,000 23,749 23,749 100,000 12 41,782 8,919 8,919 100,000 15,676 15,676 100,000 26,735 26,735 100,000 13 46,497 8,546 8,546 100,000 16,382 16,382 100,000 30,006 30,006 100,000 14 51,446 7,911 7,911 100,000 16,897 16,897 100,000 33,519 33,519 100,000 15 56,644 6,979 6,979 100,000 17,185 17,185 100,000 37,307 37,307 100,000 16 62,101 5,697 5,697 100,000 17,192 17,192 100,000 41,408 41,408 100,000 17 67,831 4,002 4,002 100,000 16,852 16,852 100,000 45,869 45,869 100,000 18 73,848 1,805 1,805 100,000 16,075 16,075 100,000 50,747 50,747 100,000 19 80,165 (*) (*) (*) 14,758 14,758 100,000 56,127 56,127 100,000 20 86,798 (*) (*) (*) 12,782 12,782 100,000 62,128 62,128 100,000 21 93,763 (*) (*) (*) 10,014 10,014 100,000 68,918 68,918 100,000 22 101,076 (*) (*) (*) 6,289 6,289 100,000 76,721 76,721 100,000 23 108,755 (*) (*) (*) 1,405 1,405 100,000 85,832 85,832 100,000 24 116,818 (*) (*) (*) (*) (*) (*) 96,640 96,640 101,472 25 125,284 (*) (*) (*) (*) (*) (*) 108,816 108,816 114,257 26 134,173 (*) (*) (*) (*) (*) (*) 122,156 122,156 128,264 27 143,506 (*) (*) (*) (*) (*) (*) 136,755 136,755 143,593 28 153,307 (*) (*) (*) (*) (*) (*) 152,711 152,711 160,347 29 163,597 (*) (*) (*) (*) (*) (*) 170,127 170,127 178,633 30 174,402 (*) (*) (*) (*) (*) (*) 189,108 189,108 198,564
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE. (2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY $25 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 LAPSE WITHOUT VALUE. 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. 75 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 CURRENT VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,522 360 101,522 1,635 473 101,635 1,749 587 101,749 2 5,381 3,072 1,909 103,072 3,395 2,233 103,395 3,732 2,570 103,732 3 8,275 4,561 3,515 104,561 5,194 4,147 105,194 5,880 4,834 105,880 4 11,314 5,970 5,040 105,970 7,011 6,081 107,011 8,187 7,257 108,187 5 14,505 7,279 6,465 107,279 8,827 8,013 108,827 10,647 9,833 110,647 6 17,855 8,493 7,795 108,493 10,644 9,947 110,644 13,279 12,581 113,279 7 21,373 9,605 9,024 109,605 12,455 11,874 112,455 16,092 15,511 116,092 8 25,066 10,600 10,135 110,600 14,241 13,776 114,241 19,086 18,621 119,086 9 28,945 11,472 11,123 111,472 15,994 15,645 115,994 22,274 21,925 122,274 10 33,017 12,229 12,229 112,229 17,717 17,717 117,717 25,678 25,678 125,678 11 37,293 12,857 12,857 112,857 19,394 19,394 119,394 29,394 29,394 129,394 12 41,782 13,325 13,325 113,325 20,988 20,988 120,988 33,343 33,343 133,343 13 46,497 13,626 13,626 113,626 22,487 22,487 122,487 37,539 37,539 137,539 14 51,446 13,734 13,734 113,734 23,856 23,856 123,856 41,975 41,975 141,975 15 56,644 13,642 13,642 113,642 25,079 25,079 125,079 46,668 46,668 146,668 16 62,101 13,344 13,344 113,344 26,222 26,222 126,222 51,635 51,635 151,635 17 67,831 12,804 12,804 112,804 27,162 27,162 127,162 56,861 56,861 156,861 18 73,848 12,017 12,017 112,017 27,882 27,882 127,882 62,366 62,366 162,366 19 80,165 10,968 10,968 110,968 28,351 28,351 128,351 68,159 68,159 168,159 20 86,798 9,622 9,622 109,622 28,518 28,518 128,518 74,228 74,228 174,228 21 93,763 7,957 7,957 107,957 28,339 28,339 128,339 80,573 80,573 180,573 22 101,076 5,898 5,898 105,898 27,718 27,718 127,718 87,139 87,139 187,139 23 108,755 3,407 3,407 103,407 26,588 26,588 126,588 93,901 93,901 193,901 24 116,818 444 444 100,444 24,875 24,875 124,875 100,829 100,829 200,829 25 125,284 (*) (*) (*) 22,418 22,418 122,418 107,880 107,880 207,880 26 134,173 (*) (*) (*) 19,216 19,216 119,216 115,012 115,012 215,012 27 143,506 (*) (*) (*) 15,194 15,194 115,194 122,192 122,192 222,192 28 153,307 (*) (*) (*) 10,255 10,255 110,255 129,361 129,361 229,361 29 163,597 (*) (*) (*) 4,294 4,294 104,294 136,450 136,450 236,450 30 174,402 (*) (*) (*) (*) (*) (*) 143,349 143,349 243,349
(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 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 LAPSE WITHOUT VALUE. 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. 76 DEATH BENEFIT OPTION 2 $2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT MALE: NON-TOBACCO ISSUE: AGE 55 GUARANTEED VALUES
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN PREMIUMS PAID PLUS CASH CASH CASH POLICY INTEREST AT CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH YEAR 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT ---- ---------- ------- -------- ------- ----- -------- ------- -------- -------- ------- 1 2,625 1,197 35 101,197 1,300 137 101,300 1,403 241 101,403 2 5,381 2,499 1,337 102,499 2,784 1,622 102,784 3,082 1,920 103,082 3 8,275 3,691 2,645 103,691 4,240 3,194 104,240 4,838 3,792 104,838 4 11,314 4,766 3,836 104,766 5,657 4,727 105,657 6,667 5,737 106,667 5 14,505 5,711 4,897 105,711 7,019 6,206 107,019 8,565 7,751 108,565 6 17,855 6,517 5,820 106,517 8,312 7,615 108,312 10,525 9,827 110,525 7 21,373 7,172 6,591 107,172 9,518 8,937 109,518 12,536 11,955 112,536 8 25,066 7,656 7,191 107,656 10,610 10,145 110,610 14,584 14,119 114,584 9 28,945 7,952 7,603 107,952 11,563 11,214 111,563 16,647 16,298 116,647 10 33,017 8,040 8,040 108,040 12,348 12,348 112,348 18,706 18,706 118,706 11 37,293 7,906 7,906 107,906 12,938 12,938 112,938 20,740 20,740 120,740 12 41,782 7,534 7,534 107,534 13,306 13,306 113,306 22,726 22,726 122,726 13 46,497 6,910 6,910 106,910 13,424 13,424 113,424 24,641 24,641 124,641 14 51,446 6,016 6,016 106,016 13,256 13,256 113,256 26,452 26,452 126,452 15 56,644 4,823 4,823 104,823 12,759 12,759 112,759 28,205 28,205 128,205 16 62,101 3,294 3,294 103,294 11,875 11,875 111,875 29,764 29,764 129,764 17 67,831 1,385 1,385 101,385 10,534 10,534 110,534 31,056 31,056 131,056 18 73,848 (*) (*) (*) 8,650 8,650 108,650 31,983 31,983 131,983 19 80,165 (*) (*) (*) 6,133 6,133 106,133 32,437 32,437 132,437 20 86,798 (*) (*) (*) 2,897 2,897 102,897 32,310 32,310 132,310 21 93,763 (*) (*) (*) (*) (*) (*) 31,492 31,492 131,492 22 101,076 (*) (*) (*) (*) (*) (*) 29,870 29,870 129,870 23 108,755 (*) (*) (*) (*) (*) (*) 27,320 27,320 127,320 24 116,818 (*) (*) (*) (*) (*) (*) 23,702 23,702 123,702 25 125,284 (*) (*) (*) (*) (*) (*) 18,766 18,766 118,766 26 134,173 (*) (*) (*) (*) (*) (*) 12,361 12,361 112,361 27 143,506 (*) (*) (*) (*) (*) (*) 4,212 4,212 104,212 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 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 LAPSE WITHOUT VALUE. 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. 77 Independent Auditors' Report The Board of Directors of Nationwide Life Insurance Company and Contract Owners of Nationwide VLI Separate Account-2: We have audited the accompanying statement of assets, liabilities and contract owners' equity of Nationwide VLI Separate Account-2 (comprised of the sub-accounts listed in note 1(b)) (collectively, "the Account") as of December 31, 2001, and the related statements of operations and changes in contract owners' equity, and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2001, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Account as of December 31, 2001, and the results of its operations, changes in contract owners' equity, and financial highlights for each of the periods indicated herein, in conformity with accounting principles generally accepted in the United States of America. KPMG LLP Columbus, Ohio February 20, 2002 NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY DECEMBER 31, 2001 ASSETS: Investments at fair value: American Century VP - American Century VP Balanced (ACVPBal) 781,490 shares (cost $5,821,077) .................................................. $ 5,150,017 American Century VP - American Century VP Capital Appreciation (ACVPCapAp) 2,173,271 shares (cost $24,043,046) ............................................... 16,299,534 American Century VP - American Century VP Income & Growth (ACVPIncGr) 662,065 shares (cost $4,752,168) .................................................. 4,276,937 American Century VP - American Century VP International (ACVPInt) 2,220,164 shares (cost $18,974,637) ............................................... 14,630,883 American Century VP - American Century VP Value (ACVPValue) 1,653,746 shares (cost $11,583,135) ............................................... 12,303,870 Credit Suisse Trust - Global Post-Venture Capital Portfolio (CSWPGPV) 177,315 shares (cost $2,145,061) .................................................. 1,723,501 Credit Suisse Trust - International Equity Portfolio (CSWPIntEq) 811,829 shares (cost $6,619,592) .................................................. 6,770,656 Credit Suisse Trust - Small Cap Growth Portfolio (CSWPSmCo) 1,301,131 shares (cost $21,273,729) ............................................... 18,228,846 Dreyfus IP - European Equity Portfolio (DryEuroEq) 7,666 shares (cost $81,306) ....................................................... 81,944 The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro) 510,423 shares (cost $18,276,231) ................................................. 13,612,983 Dreyfus Stock Index Fund (DryStkIx) 3,025,332 shares (cost $97,823,554) ............................................... 88,823,754 Dreyfus VIF - Appreciation Portfolio (DryAp) 192,936 shares (cost $7,293,541) .................................................. 6,748,906 Dreyfus VIF - Growth and Income Portfolio (DryGrInc) 133,404 shares (cost $3,193,858) .................................................. 2,888,194 Fidelity(R) VIP - Equity-Income Portfolio: Initial Class (FidVIPEI) 3,385,841 shares (cost $81,987,638) ............................................... 77,027,880 Fidelity(R) VIP - Growth Portfolio: Initial Class (FidVIPGr) 3,551,766 shares (cost $159,626,892) .............................................. 119,374,842 Fidelity(R) VIP - High Income Portfolio: Initial Class (FidVIPHI) 2,596,303 shares (cost $22,319,658) ............................................... 16,642,300 Fidelity(R) VIP - Overseas Portfolio: Initial Class (FidVIPOv) 1,245,436 shares (cost $25,570,260) ............................................... 17,286,658 Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class (FidVIPAM) 1,834,323 shares (cost $29,818,675) ............................................... 26,616,026
Fidelity(R) VIP II - Contrafund Portfolio: Initial Class (FidVIPCon) 2,612,730 shares (cost $63,463,282) ............................................... 52,594,255 Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class (FidVIPGrOp) 272,910 shares (cost $5,244,133) .................................................. 4,129,133 Janus AS - Capital Appreciation Portfolio - Service Shares (JanCapAp) 127,773 shares (cost $2,893,416) .................................................. 2,628,288 Janus AS - Global Technology Portfolio - Service Shares (JanGlTech) 461,980 shares (cost $1,907,991) .................................................. 1,884,877 Janus AS - International Growth Portfolio - Service Shares (JanIntGro) 83,743 shares (cost $1,859,200) ................................................... 1,951,218 Nationwide(R) SAT - Capital Appreciation Fund Class I (NSATCapAp) 1,770,510 shares (cost $37,635,429) ............................................... 18,678,881 Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I (NSATMidCapIx) 253,656 shares (cost $3,293,702) .................................................. 3,340,652 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I (NSATEmMkt) 60,392 shares (cost $394,939) ..................................................... 427,574 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I (NSATGlobTC) 83,133 shares (cost $367,567) ..................................................... 349,990 Nationwide(R) SAT - Gartmore International Growth Fund Class I (NSATIntGr) 8,999 shares (cost $54,414) ....................................................... 55,252 Nationwide(R) SAT - Government Bond Fund Class I (NSATGvtBd) 1,602,637 shares (cost $18,941,535) ............................................... 18,686,753 Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I (NSATMSecBd) 68,346 shares (cost $625,323) ..................................................... 624,683 Nationwide(R) SAT - Money Market Fund Class I (NSATMyMkt) 51,651,981 shares (cost $51,651,981) .............................................. 51,651,981 Nationwide(R) SAT - Small Cap Growth Fund Class I (NSATSmCapG) 92,044 shares (cost $1,322,196) ................................................... 1,332,790 Nationwide(R) SAT - Small Cap Value Fund Class I (NSATSmCapV) 1,523,366 shares (cost $15,782,867) ............................................... 15,782,072 Nationwide(R) SAT - Small Company Fund Class I (NSATSmCo) 1,373,785 shares (cost $28,912,245) ............................................... 25,607,361 Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I (NSATStMCap) 79,823 shares (cost $915,284) ..................................................... 925,153 Nationwide(R) SAT - Total Return Fund Class I (NSATTotRe) 7,808,043 shares (cost $114,619,147) .............................................. 77,221,541 Nationwide(R) SAT - Turner Growth Focus Fund Class I (NSATGrFoc) 55,997 shares (cost $201,411) ..................................................... 203,829 Neuberger Berman AMT - Balanced Portfolio (NBAMTBal) 1,476 shares (cost $14,135) ....................................................... 14,260 Neuberger Berman AMT - Growth Portfolio (NBAMTGro) 2,059,243 shares (cost $27,220,898) ............................................... 23,722,484 Neuberger Berman AMT - Guardian Portfolio (NBAMTGuard) 176,527 shares (cost $2,801,821) .................................................. 2,584,354
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED Neuberger Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat) 367,681 shares (cost $4,848,302) .................................................. 4,952,667 Neuberger Berman AMT - Partners Portfolio (NBAMTPart) 1,566,122 shares (cost $26,356,552) ............................................... 23,648,440 Oppenheimer Aggressive Growth Fund/VA (OppAggGro) 44,046 shares (cost $1,921,533) ................................................... 1,793,534 Oppenheimer Bond Fund/VA (OppBdFd) 1,168,321 shares (cost $13,301,583) ............................................... 13,096,874 Oppenheimer Capital Appreciation Fund/VA (OppCapAp) 456,413 shares (cost $21,761,302) ................................................. 16,695,583 Oppenheimer Global Securities Fund/VA (OppGlSec) 1,459,363 shares (cost $37,422,502) ............................................... 33,331,862 Oppenheimer Main Street Growth & Income Fund/VA (OppMSGrInc) 45,030 shares (cost $891,831) ..................................................... 855,117 Oppenheimer Multiple Strategies Fund/VA (OppMult) 947,213 shares (cost $15,452,114) ................................................. 14,587,088 Strong Opportunity Fund II, Inc. (StOpp2) 2,217,437 shares (cost $48,190,456) ............................................... 43,129,141 Strong VIF - Strong Discovery Fund II (StDisc2) 666,299 shares (cost $6,698,848) .................................................. 6,876,204 Strong VIF - Strong International Stock Fund II (StIntStk2) 308,039 shares (cost $2,462,548) .................................................. 2,291,811 UIF - Emerging Markets Debt Portfolio (UIFEmMkt) 183,848 shares (cost $1,327,245) .................................................. 1,275,905 UIF - U.S. Real Estate Portfolio (UIFUSRE) 734,078 shares (cost $8,923,116) .................................................. 8,867,664 Van Eck WIT - Worldwide Bond Fund (VEWrldBd) 238,713 shares (cost $2,297,143) .................................................. 2,248,680 Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt) 444,033 shares (cost $3,491,190) .................................................. 3,614,431 Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs) 308,515 shares (cost $3,310,810) .................................................. 3,298,022 ------------ Total investments ............................................................... 933,448,135 Accounts receivable ................................................................... -- ------------ Total assets .................................................................... 933,448,135 ACCOUNTS PAYABLE ........................................................................ 43,158 ------------ CONTRACT OWNERS' EQUITY (NOTE 7) ........................................................ $933,404,977 ============
See accompanying notes to financial statements. NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
TOTAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 14,498,694 14,156,269 14,098,293 Mortality and expense risk charges (note 3) .... (7,447,011) (8,863,841) (7,660,149) ------------- ------------- ------------- Net investment income ........................ 7,051,683 5,292,428 6,438,144 ------------- ------------- ------------- Proceeds from mutual funds shares sold ......... 667,653,990 891,657,787 955,670,735 Cost of mutual fund shares sold ................ (763,360,903) (830,522,167) (897,919,980) ------------- ------------- ------------- Realized gain (loss) on investments .......... (95,706,913) 61,135,620 57,750,755 Change in unrealized gain (loss) on investments ............................... (102,443,273) (263,179,099) 93,482,590 ------------- ------------- ------------- Net gain (loss) on investments ............... (198,150,186) (202,043,479) 151,233,345 ------------- ------------- ------------- Reinvested capital gains ....................... 59,973,994 117,294,274 39,898,769 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........... $(131,124,509) (79,456,777) 197,570,258 ============= ============= =============
ACVPBAL ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 149,365 142,768 104,861 Mortality and expense risk charges (note 3) .... (39,398) (43,349) (43,480) ------------- ------------- ------------- Net investment income ........................ 109,967 99,419 61,381 ------------- ------------- ------------- Proceeds from mutual funds shares sold ......... 707,642 1,172,289 971,140 Cost of mutual fund shares sold ................ (856,776) (1,257,855) (1,022,836) ------------- ------------- ------------- Realized gain (loss) on investments .......... (149,134) (85,566) (51,696) Change in unrealized gain (loss) on investments ............................... (374,866) (306,371) (209,153) ------------- ------------- ------------- Net gain (loss) on investments ............... (524,000) (391,937) (260,849) ------------- ------------- ------------- Reinvested capital gains ....................... 177,314 89,903 723,542 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........... (236,719) (202,615) 524,074 ============= ============= =============
ACVPCAPAP ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (157,084) (225,875) (108,580) ------------- ------------- ------------- Net investment income ........................ (157,084) (225,875) (108,580) ------------- ------------- ------------- Proceeds from mutual funds shares sold ......... 10,422,004 25,900,893 22,591,735 Cost of mutual fund shares sold ................ (19,980,200) (17,223,897) (21,828,544) ------------- ------------- ------------- Realized gain (loss) on investments .......... (9,558,196) 8,676,996 763,191 Change in unrealized gain (loss) on investments ............................... (5,254,647) (7,733,755) 6,761,369 ------------- ------------- ------------- Net gain (loss) on investments ............... (14,812,843) 943,241 7,524,560 ------------- ------------- ------------- Reinvested capital gains ....................... 7,598,012 750,781 -- ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations ........... (7,371,915) 1,468,147 7,415,980 ============= ============= =============
ACVPINCGR ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 35,914 25,931 655 Mortality and expense risk charges (note 3) .... (31,543) (33,212) (27,101) ----------- ----------- ----------- Net investment income ........................ 4,371 (7,281) (26,446) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 1,306,804 6,896,325 4,520,179 Cost of mutual fund shares sold ................ (1,674,238) (6,623,978) (4,059,023) ----------- ----------- ----------- Realized gain (loss) on investments .......... (367,434) 272,347 461,156 Change in unrealized gain (loss) on investments ............................... (36,896) (817,445) 247,602 ----------- ----------- ----------- Net gain (loss) on investments ............... (404,330) (545,098) 708,758 ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ (399,959) (552,379) 682,312 =========== =========== ===========
ACVPINT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 16,208 31,996 -- Mortality and expense risk charges (note 3) .... (131,716) (192,630) (123,973) ----------- ----------- ----------- Net investment income ........................ (115,508) (160,634) (123,973) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 18,165,796 28,784,239 25,003,227 Cost of mutual fund shares sold ................ (24,504,893) (24,108,086) (22,517,439) ----------- ----------- ----------- Realized gain (loss) on investments .......... (6,339,097) 4,676,153 2,485,788 Change in unrealized gain (loss) on investments ............................... (1,840,599) (9,830,737) 6,850,984 ----------- ----------- ----------- Net gain (loss) on investments ............... (8,179,696) (5,154,584) 9,336,772 ----------- ----------- ----------- Reinvested capital gains ....................... 1,789,528 478,387 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (6,505,676) (4,836,831) 9,212,799 =========== =========== ===========
ACVPVALUE ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 89,617 34,989 26,285 Mortality and expense risk charges (note 3) .... (66,662) (27,164) (20,993) ----------- ----------- ----------- Net investment income ........................ 22,955 7,825 5,292 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 33,073,002 53,718,428 10,125,505 Cost of mutual fund shares sold ................ (32,800,437) (53,369,596) (10,140,086) ----------- ----------- ----------- Realized gain (loss) on investments .......... 272,565 348,832 (14,581) Change in unrealized gain (loss) on investments ............................... 549,875 414,821 (279,501) ----------- ----------- ----------- Net gain (loss) on investments ............... 822,440 763,653 (294,082) ----------- ----------- ----------- Reinvested capital gains ....................... -- 89,531 249,026 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... 845,395 861,009 (39,764) =========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPGPV ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ -- -- -- Mortality and expense risk charges (note 3) .... (15,488) (26,477) (13,686) ----------- ----------- ----------- Net investment income ........................ (15,488) (26,477) (13,686) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 3,317,543 21,730,640 11,451,361 Cost of mutual fund shares sold ................ (4,552,542) (21,573,716) (10,619,693) ----------- ----------- ----------- Realized gain (loss) on investments .......... (1,234,999) 156,924 831,668 Change in unrealized gain (loss) on investments ............................... 471,352 (1,447,278) 489,466 ----------- ----------- ----------- Net gain (loss) on investments ............... (763,647) (1,290,354) 1,321,134 ----------- ----------- ----------- Reinvested capital gains ....................... -- 359,529 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ (779,135) (957,302) 1,307,448 =========== =========== ===========
CSWPINTEQ ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... -- 51,283 106,392 Mortality and expense risk charges (note 3) .... (56,285) (81,674) (70,225) ----------- ----------- ----------- Net investment income ........................ (56,285) (30,391) 36,167 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 29,337,215 11,655,731 19,261,615 Cost of mutual fund shares sold ................ (33,297,876) (11,306,949) (18,047,381) ----------- ----------- ----------- Realized gain (loss) on investments .......... (3,960,661) 348,782 1,214,234 Change in unrealized gain (loss) on investments ............................... 2,099,268 (4,794,748) 3,271,039 ----------- ----------- ----------- Net gain (loss) on investments ............... (1,861,393) (4,445,966) 4,485,273 ----------- ----------- ----------- Reinvested capital gains ....................... -- 1,233,063 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (1,917,678) (3,243,294) 4,521,440 =========== =========== ===========
CSWPSMCO ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (138,697) (216,538) (114,737) ----------- ----------- ----------- Net investment income ........................ (138,697) (216,538) (114,737) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 12,518,866 42,618,463 12,560,036 Cost of mutual fund shares sold ................ (23,848,090) (37,312,904) (11,995,881) ----------- ----------- ----------- Realized gain (loss) on investments .......... (11,329,224) 5,305,559 564,155 Change in unrealized gain (loss) on investments ............................... 7,104,902 (18,360,336) 8,391,845 ----------- ----------- ----------- Net gain (loss) on investments ............... (4,224,322) (13,054,777) 8,956,000 ----------- ----------- ----------- Reinvested capital gains ....................... -- 5,714,137 709,970 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (4,363,019) (7,557,178) 9,551,233 =========== =========== ===========
DRYEUROEQ ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 809 234 -- Mortality and expense risk charges (note 3) .... (1,545) (527) -- ----------- ----------- ----------- Net investment income ........................ (736) (293) -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 4,515,612 633,945 -- Cost of mutual fund shares sold ................ (4,512,771) (640,858) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... 2,841 (6,913) -- Change in unrealized gain (loss) on investments ............................... (878) 1,517 -- ----------- ----------- ----------- Net gain (loss) on investments ............... 1,963 (5,396) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- 1,253 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ 1,227 (4,436) -- =========== =========== ===========
DRYSRGRO ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 9,820 157,148 2,403 Mortality and expense risk charges (note 3) .... (119,024) (157,030) (114,846) ----------- ----------- ----------- Net investment income ........................ (109,204) 118 (112,443) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 4,586,357 4,108,551 17,180,969 Cost of mutual fund shares sold ................ (4,955,722) (3,386,569) (15,391,528) ----------- ----------- ----------- Realized gain (loss) on investments .......... (369,365) 721,982 1,789,441 Change in unrealized gain (loss) on investments ............................... (3,939,932) (3,257,761) 1,688,692 ----------- ----------- ----------- Net gain (loss) on investments ............... (4,309,297) (2,535,779) 3,478,133 ----------- ----------- ----------- Reinvested capital gains ....................... -- -- 646,972 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (4,418,501) (2,535,661) 4,012,662 =========== =========== ===========
DRYSTKIX ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 997,440 1,011,600 1,066,045 Mortality and expense risk charges (note 3) .... (664,865) (797,960) (719,164) ----------- ----------- ----------- Net investment income ........................ 332,575 213,640 346,881 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 18,098,585 16,033,223 20,339,759 Cost of mutual fund shares sold ................ (18,088,650) (11,951,284) (15,264,747) ----------- ----------- ----------- Realized gain (loss) on investments .......... 9,935 4,081,939 5,075,012 Change in unrealized gain (loss) on investments ............................... (13,687,873) (16,940,040) 11,113,462 ----------- ----------- ----------- Net gain (loss) on investments ............... (13,677,938) (12,858,101) 16,188,474 ----------- ----------- ----------- Reinvested capital gains ....................... 467,526 1,618,261 920,361 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (12,877,837) (11,026,200) 17,455,716 =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
DRYAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 58,719 47,656 43,739 Mortality and expense risk charges (note 3) .... (50,539) (58,150) (57,406) ------------ ------------ ------------ Net investment income ........................ 8,180 (10,494) (13,667) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 1,565,000 3,065,559 6,550,844 Cost of mutual fund shares sold ................ (1,658,890) (2,858,894) (6,135,399) ------------ ------------ ------------ Realized gain (loss) on investments .......... (93,890) 206,665 415,445 Change in unrealized gain (loss) on investments ............................... (617,829) (365,322) 269,060 ------------ ------------ ------------ Net gain (loss) on investments ............... (711,719) (158,657) 684,505 ------------ ------------ ------------ Reinvested capital gains ....................... -- 80,911 29,215 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $ (703,539) (88,240) 700,053 ============ ============ ============
DRYGRINC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 15,122 18,343 16,508 Mortality and expense risk charges (note 3) .... (20,036) (19,919) (15,950) ------------ ------------ ------------ Net investment income ........................ (4,914) (1,576) 558 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 744,456 319,148 1,753,038 Cost of mutual fund shares sold ................ (752,434) (251,568) (1,678,061) ------------ ------------ ------------ Realized gain (loss) on investments .......... (7,978) 67,580 74,977 Change in unrealized gain (loss) on investments ............................... (258,534) (314,432) 230,049 ------------ ------------ ------------ Net gain (loss) on investments ............... (266,512) (246,852) 305,026 ------------ ------------ ------------ Reinvested capital gains ....................... 45,863 113,207 87,323 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (225,563) (135,221) 392,907 ============ ============ ============
FIDVIPEI -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 1,346,217 1,394,973 1,233,625 Mortality and expense risk charges (note 3) .... (625,985) (630,229) (714,035) ------------ ------------ ------------ Net investment income ........................ 720,232 764,744 519,590 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 6,533,958 29,031,941 21,969,547 Cost of mutual fund shares sold ................ (6,478,110) (24,700,721) (15,562,997) ------------ ------------ ------------ Realized gain (loss) on investments .......... 55,848 4,331,220 6,406,550 Change in unrealized gain (loss) on investments ............................... (9,359,446) (5,231,085) (5,267,170) ------------ ------------ ------------ Net gain (loss) on investments ............... (9,303,598) (899,865) 1,139,380 ------------ ------------ ------------ Reinvested capital gains ....................... 3,782,228 5,255,479 2,726,961 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (4,801,138) 5,120,358 4,385,931 ============ ============ ============
FIDVIPGR -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 107,526 196,483 215,538 Mortality and expense risk charges (note 3) .... (1,036,867) (1,438,136) (1,145,435) ------------ ------------ ------------ Net investment income ........................ (929,341) (1,241,653) (929,897) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 14,172,289 20,493,336 91,394,903 Cost of mutual fund shares sold ................ (18,446,053) (16,880,509) (75,684,409) ------------ ------------ ------------ Realized gain (loss) on investments .......... (4,273,764) 3,612,827 15,710,494 Change in unrealized gain (loss) on investments ............................... (33,423,042) (42,932,678) 17,198,414 ------------ ------------ ------------ Net gain (loss) on investments ............... (37,696,806) (39,319,851) 32,908,908 ------------ ------------ ------------ Reinvested capital gains ....................... 10,107,480 19,550,081 13,551,946 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $(28,518,667) (21,011,423) 45,530,957 ============ ============ ============
FIDVIPHI -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 2,383,612 1,693,393 2,570,090 Mortality and expense risk charges (note 3) .... (136,475) (168,596) (197,828) ------------ ------------ ------------ Net investment income ........................ 2,247,137 1,524,797 2,372,262 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 8,880,061 9,968,353 29,571,691 Cost of mutual fund shares sold ................ (13,585,088) (10,903,346) (32,450,313) ------------ ------------ ------------ Realized gain (loss) on investments .......... (4,705,027) (934,993) (2,878,622) Change in unrealized gain (loss) on investments ............................... (27,924) (6,237,391) 2,437,032 ------------ ------------ ------------ Net gain (loss) on investments ............... (4,732,951) (7,172,384) (441,590) ------------ ------------ ------------ Reinvested capital gains ....................... -- -- 96,078 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (2,485,814) (5,647,587) 2,026,750 ============ ============ ============
FIDVIPOV -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 1,100,964 425,125 332,184 Mortality and expense risk charges (note 3) .... (162,010) (230,607) (199,894) ------------ ------------ ------------ Net investment income ........................ 938,954 194,518 132,290 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 7,182,379 10,777,638 34,092,869 Cost of mutual fund shares sold ................ (10,030,666) (9,504,431) (31,976,653) ------------ ------------ ------------ Realized gain (loss) on investments .......... (2,848,287) 1,273,207 2,116,216 Change in unrealized gain (loss) on investments ............................... (4,902,933) (10,130,820) 6,394,423 ------------ ------------ ------------ Net gain (loss) on investments ............... (7,751,220) (8,857,613) 8,510,639 ------------ ------------ ------------ Reinvested capital gains ....................... 1,740,234 2,677,139 535,780 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (5,072,032) (5,985,956) 9,178,709 ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPAM ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 1,179,485 1,031,299 1,040,155 Mortality and expense risk charges (note 3) .... (233,118) (267,155) (270,444) ----------- ----------- ----------- Net investment income ........................ 946,367 764,144 769,711 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 2,948,969 4,375,902 4,829,331 Cost of mutual fund shares sold ................ (3,146,043) (3,632,011) (3,813,802) ----------- ----------- ----------- Realized gain (loss) on investments .......... (197,074) 743,891 1,015,529 Change in unrealized gain (loss) on investments ............................... (2,656,974) (5,439,784) 26,818 ----------- ----------- ----------- Net gain (loss) on investments ............... (2,854,048) (4,695,893) 1,042,347 ----------- ----------- ----------- Reinvested capital gains ....................... 442,307 2,429,670 1,317,530 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $(1,465,374) (1,502,079) 3,129,588 =========== =========== ===========
FIDVIPCON ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 456,978 244,158 261,343 Mortality and expense risk charges (note 3) .... (413,391) (521,700) (460,248) ----------- ----------- ----------- Net investment income ........................ 43,587 (277,542) (198,905) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 7,291,690 7,260,544 25,340,625 Cost of mutual fund shares sold ................ (7,489,134) (5,658,545) (16,733,032) ----------- ----------- ----------- Realized gain (loss) on investments .......... (197,444) 1,601,999 8,607,593 Change in unrealized gain (loss) on investments ............................... (9,738,153) (15,273,672) 2,632,252 ----------- ----------- ----------- Net gain (loss) on investments ............... (9,935,597) (13,671,673) 11,239,845 ----------- ----------- ----------- Reinvested capital gains ....................... 1,612,865 8,862,945 1,916,516 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (8,279,145) (5,086,270) 12,957,456 =========== =========== ===========
FIDVIPGROP ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 17,465 77,263 58,964 Mortality and expense risk charges (note 3) .... (31,285) (40,980) (47,088) ----------- ----------- ----------- Net investment income ........................ (13,820) 36,283 11,876 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 1,573,054 5,312,933 3,165,507 Cost of mutual fund shares sold ................ (2,207,850) (5,576,382) (2,711,647) ----------- ----------- ----------- Realized gain (loss) on investments .......... (634,796) (263,449) 453,860 Change in unrealized gain (loss) on investments ............................... (126,832) (1,250,959) (343,328) ----------- ----------- ----------- Net gain (loss) on investments ............... (761,628) (1,514,408) 110,532 ----------- ----------- ----------- Reinvested capital gains ....................... -- 391,834 110,237 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (775,448) (1,086,291) 232,645 =========== =========== ===========
JANCAPAP ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 25,263 19,570 -- Mortality and expense risk charges (note 3) .... (21,001) (10,464) -- ----------- ----------- ----------- Net investment income ........................ 4,262 9,106 -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 5,487,669 1,441,203 -- Cost of mutual fund shares sold ................ (6,621,307) (1,508,835) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (1,133,638) (67,632) -- Change in unrealized gain (loss) on investments ............................... 244,422 (509,550) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (889,216) (577,182) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ (884,954) (568,076) -- =========== =========== ===========
JANGLTECH ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 12,133 14,871 -- Mortality and expense risk charges (note 3) .... (15,286) (10,447) -- ----------- ----------- ----------- Net investment income ........................ (3,153) 4,424 -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 10,060,090 733,862 -- Cost of mutual fund shares sold ................ (12,182,785) (720,686) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (2,122,695) 13,176 -- Change in unrealized gain (loss) on investments ............................... 1,125,331 (1,148,444) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (997,364) (1,135,268) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (1,000,517) (1,130,844) -- =========== =========== ===========
JANINTGRO ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 14,370 68,254 -- Mortality and expense risk charges (note 3) .... (16,892) (8,795) -- ----------- ----------- ----------- Net investment income ........................ (2,522) 59,459 -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 3,309,639 1,279,606 -- Cost of mutual fund shares sold ................ (4,315,738) (1,460,939) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (1,006,099) (181,333) -- Change in unrealized gain (loss) on investments ............................... 441,311 (349,293) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (564,788) (530,626) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (567,310) (471,167) -- =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATCAPAP ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ -- 64,829 277,922 Mortality and expense risk charges (note 3) .... (149,321) (262,581) (323,069) ----------- ----------- ----------- Net investment income ........................ (149,321) (197,752) (45,147) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 3,987,142 9,898,396 14,859,491 Cost of mutual fund shares sold ................ (8,267,452) (9,942,866) (13,314,168) ----------- ----------- ----------- Realized gain (loss) on investments .......... (4,280,310) (44,470) 1,545,323 Change in unrealized gain (loss) on investments ............................... (3,202,773) (16,033,473) (2,937,651) ----------- ----------- ----------- Net gain (loss) on investments ............... (7,483,083) (16,077,943) (1,392,328) ----------- ----------- ----------- Reinvested capital gains ....................... -- 6,018,129 2,820,485 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $(7,632,404) (10,257,566) 1,383,010 =========== =========== ===========
NSATMIDCAPIX ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 13,844 5,044 -- Mortality and expense risk charges (note 3) .... (17,915) (4,225) -- ----------- ----------- ----------- Net investment income ........................ (4,071) 819 -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 5,810,245 5,847,137 -- Cost of mutual fund shares sold ................ (6,065,948) (5,829,612) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (255,703) 17,525 -- Change in unrealized gain (loss) on investments ............................... 115,892 (68,941) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (139,811) (51,416) -- ----------- ----------- ----------- Reinvested capital gains ....................... 25,776 59,565 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (118,106) 8,968 -- =========== =========== ===========
NSATEMMKT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 1,129 -- -- Mortality and expense risk charges (note 3) .... (1,054) (21) -- ----------- ----------- ----------- Net investment income ........................ 75 (21) -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 925,621 21,742 -- Cost of mutual fund shares sold ................ (950,127) (22,889) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (24,506) (1,147) -- Change in unrealized gain (loss) on investments ............................... 33,345 (711) -- ----------- ----------- ----------- Net gain (loss) on investments ............... 8,839 (1,858) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... 8,914 (1,879) -- =========== =========== ===========
NSATGLOBTC ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ -- -- -- Mortality and expense risk charges (note 3) .... (2,955) (918) -- ----------- ----------- ----------- Net investment income ........................ (2,955) (918) -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 410,266 16,330 -- Cost of mutual fund shares sold ................ (835,201) (22,265) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (424,935) (5,935) -- Change in unrealized gain (loss) on investments ............................... 215,502 (233,078) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (209,433) (239,013) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- 8,554 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ (212,388) (231,377) -- =========== =========== ===========
NSATINTGR ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 28 -- -- Mortality and expense risk charges (note 3) .... (193) (14) -- ----------- ----------- ----------- Net investment income ........................ (165) (14) -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 427,289 23,858 -- Cost of mutual fund shares sold ................ (430,379) (24,091) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (3,090) (233) -- Change in unrealized gain (loss) on investments ............................... 1,005 (168) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (2,085) (401) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (2,250) (415) -- =========== =========== ===========
NSATGVTBD ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 811,537 692,626 787,049 Mortality and expense risk charges (note 3) .... (128,835) (99,480) (121,678) ----------- ----------- ----------- Net investment income ........................ 682,702 593,146 665,371 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 21,314,906 10,368,266 29,946,083 Cost of mutual fund shares sold ................ (20,624,557) (10,500,566) (30,797,415) ----------- ----------- ----------- Realized gain (loss) on investments .......... 690,349 (132,300) (851,332) Change in unrealized gain (loss) on investments ............................... (567,238) 822,785 (301,600) ----------- ----------- ----------- Net gain (loss) on investments ............... 123,111 690,485 (1,152,932) ----------- ----------- ----------- Reinvested capital gains ....................... 25,190 -- 25,753 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... 831,003 1,283,631 (461,808) =========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATMSECBD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 29,490 3,708 -- Mortality and expense risk charges (note 3) .... (2,786) (220) -- ------------ ------------ ------------ Net investment income ........................ 26,704 3,488 -- ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 1,985,743 237,528 -- Cost of mutual fund shares sold ................ (2,002,292) (238,314) -- ------------ ------------ ------------ Realized gain (loss) on investments .......... (16,549) (786) -- Change in unrealized gain (loss) on investments ............................... (1,097) 457 -- ------------ ------------ ------------ Net gain (loss) on investments ............... (17,646) (329) -- ------------ ------------ ------------ Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $ 9,058 3,159 -- ============ ============ ============
NSATMYMKT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 1,894,859 3,057,620 2,607,883 Mortality and expense risk charges (note 3) .... (423,551) (413,875) (415,133) ------------ ------------ ------------ Net investment income ........................ 1,471,308 2,643,745 2,192,750 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 207,472,704 292,342,512 257,299,024 Cost of mutual fund shares sold ................ (207,472,704) (292,342,512) (257,299,024) ------------ ------------ ------------ Realized gain (loss) on investments .......... -- -- -- Change in unrealized gain (loss) on investments ............................... -- -- -- ------------ ------------ ------------ Net gain (loss) on investments ............... -- -- -- ------------ ------------ ------------ Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 1,471,308 2,643,745 2,192,750 ============ ============ ============
NSATSMCAPG -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (8,611) (2,514) -- ------------ ------------ ------------ Net investment income ........................ (8,611) (2,514) -- ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 11,138,422 1,286,406 -- Cost of mutual fund shares sold ................ (11,361,555) (1,360,619) -- ------------ ------------ ------------ Realized gain (loss) on investments .......... (223,133) (74,213) -- Change in unrealized gain (loss) on investments ............................... 178,447 (167,853) -- ------------ ------------ ------------ Net gain (loss) on investments ............... (44,686) (242,066) -- ------------ ------------ ------------ Reinvested capital gains ....................... -- 2,683 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (53,297) (241,897) -- ============ ============ ============
NSATSMCAPV -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 3,877 -- -- Mortality and expense risk charges (note 3) .... (97,351) (51,635) (12,857) ------------ ------------ ------------ Net investment income ........................ (93,474) (51,635) (12,857) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 41,798,997 9,626,402 38,165,993 Cost of mutual fund shares sold ................ (41,688,579) (9,463,196) (37,730,603) ------------ ------------ ------------ Realized gain (loss) on investments .......... 110,418 163,206 435,390 Change in unrealized gain (loss) on investments ............................... 1,228,548 (1,082,758) (178,227) ------------ ------------ ------------ Net gain (loss) on investments ............... 1,338,966 (919,552) 257,163 ------------ ------------ ------------ Reinvested capital gains ....................... 1,026,030 1,418,043 463,979 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $ 2,271,522 446,856 708,285 ============ ============ ============
NSATSMCO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 29,451 8,275 -- Mortality and expense risk charges (note 3) .... (195,239) (220,692) (133,984) ------------ ------------ ------------ Net investment income ........................ (165,788) (212,417) (133,984) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 12,888,373 34,607,733 12,258,303 Cost of mutual fund shares sold ................ (17,290,472) (25,554,105) (11,935,965) ------------ ------------ ------------ Realized gain (loss) on investments .......... (4,402,099) 9,053,628 322,338 Change in unrealized gain (loss) on investments ............................... 2,206,825 (12,312,627) 6,521,648 ------------ ------------ ------------ Net gain (loss) on investments ............... (2,195,274) (3,258,999) 6,843,986 ------------ ------------ ------------ Reinvested capital gains ....................... -- 5,338,437 1,017,362 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (2,361,062) 1,867,021 7,727,364 ============ ============ ============
NSATSTMCAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (6,440) (2,791) -- ------------ ------------ ------------ Net investment income ........................ (6,440) (2,791) -- ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 6,243,931 1,977,764 -- Cost of mutual fund shares sold ................ (6,691,865) (2,065,729) -- ------------ ------------ ------------ Realized gain (loss) on investments .......... (447,934) (87,965) -- Change in unrealized gain (loss) on investments ............................... 118,872 (109,003) -- ------------ ------------ ------------ Net gain (loss) on investments ............... (329,062) (196,968) -- ------------ ------------ ------------ Reinvested capital gains ....................... -- 14,918 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (335,502) (184,841) -- ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATTOTRE -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 622,347 612,176 663,979 Mortality and expense risk charges (note 3) .... (612,246) (736,850) (774,887) ------------ ------------ ------------ Net investment income ........................ 10,101 (124,674) (110,908) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 5,229,380 13,544,946 7,683,042 Cost of mutual fund shares sold ................ (6,985,175) (9,201,670) (4,796,181) ------------ ------------ ------------ Realized gain (loss) on investments .......... (1,755,795) 4,343,276 2,886,861 Change in unrealized gain (loss) on investments ............................... (11,829,407) (40,766,537) (615,625) ------------ ------------ ------------ Net gain (loss) on investments ............... (13,585,202) (36,423,261) 2,271,236 ------------ ------------ ------------ Reinvested capital gains ....................... 2,194,987 33,726,301 3,857,973 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $(11,380,114) (2,821,634) 6,018,301 ============ ============ ============
NSATGRFOC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (1,295) (100) -- ------------ ------------ ------------ Net investment income ........................ (1,295) (100) -- ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 5,355,883 7,483 -- Cost of mutual fund shares sold ................ (5,498,348) (10,247) -- ------------ ------------ ------------ Realized gain (loss) on investments .......... (142,465) (2,764) -- Change in unrealized gain (loss) on investments ............................... 26,613 (24,195) -- ------------ ------------ ------------ Net gain (loss) on investments ............... (115,852) (26,959) -- ------------ ------------ ------------ Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (117,147) (27,059) -- ============ ============ ============
NBAMTBAL -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (43) -- -- ------------ ------------ ------------ Net investment income ........................ (43) -- -- ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 357 -- -- Cost of mutual fund shares sold ................ (373) -- -- ------------ ------------ ------------ Realized gain (loss) on investments .......... (16) -- -- Change in unrealized gain (loss) on investments ............................... 125 -- -- ------------ ------------ ------------ Net gain (loss) on investments ............... 109 -- -- ------------ ------------ ------------ Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 66 -- -- ============ ============ ============
NBAMTGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ -- -- -- Mortality and expense risk charges (note 3) .... (193,586) (326,947) (183,268) ------------ ------------ ------------ Net investment income ........................ (193,586) (326,947) (183,268) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 15,400,054 29,136,062 90,781,328 Cost of mutual fund shares sold ................ (44,397,183) (19,441,919) (88,544,143) ------------ ------------ ------------ Realized gain (loss) on investments .......... (28,997,129) 9,694,143 2,237,185 Change in unrealized gain (loss) on investments ............................... 6,433,848 (18,572,555) 7,073,105 ------------ ------------ ------------ Net gain (loss) on investments ............... (22,563,281) (8,878,412) 9,310,290 ------------ ------------ ------------ Reinvested capital gains ....................... 12,536,350 3,211,533 1,124,154 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $(10,220,517) (5,993,826) 10,251,176 ============ ============ ============
NBAMTGUARD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 10,656 12,425 4,569 Mortality and expense risk charges (note 3) .... (16,691) (14,688) (12,787) ------------ ------------ ------------ Net investment income ........................ (6,035) (2,263) (8,218) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 1,068,268 2,733,360 8,197,327 Cost of mutual fund shares sold ................ (1,061,536) (2,651,491) (8,110,096) ------------ ------------ ------------ Realized gain (loss) on investments .......... 6,732 81,869 87,231 Change in unrealized gain (loss) on investments ............................... (216,517) (98,383) 43,771 ------------ ------------ ------------ Net gain (loss) on investments ............... (209,785) (16,514) 131,002 ------------ ------------ ------------ Reinvested capital gains ....................... 152,227 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (63,593) (18,777) 122,784 ============ ============ ============
NBAMTLMAT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 255,613 306,913 277,113 Mortality and expense risk charges (note 3) .... (35,234) (32,093) (35,738) ------------ ------------ ------------ Net investment income ........................ 220,379 274,820 241,375 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 3,377,140 9,275,328 1,296,663 Cost of mutual fund shares sold ................ (3,287,910) (9,541,403) (1,370,958) ------------ ------------ ------------ Realized gain (loss) on investments .......... 89,230 (266,075) (74,295) Change in unrealized gain (loss) on investments ............................... 11,853 223,548 (128,665) ------------ ------------ ------------ Net gain (loss) on investments ............... 101,083 (42,527) (202,960) ------------ ------------ ------------ Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 321,462 232,293 38,415 ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTPART ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 90,620 217,800 395,343 Mortality and expense risk charges (note 3) .... (165,930) (194,093) (234,549) ----------- ----------- ----------- Net investment income ........................ (75,310) 23,707 160,794 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 2,321,375 11,982,768 10,213,406 Cost of mutual fund shares sold ................ (3,124,641) (14,409,112) (10,762,285) ----------- ----------- ----------- Realized gain (loss) on investments .......... (803,266) (2,426,344) (548,879) Change in unrealized gain (loss) on investments ............................... (872,728) (2,383,122) 1,854,882 ----------- ----------- ----------- Net gain (loss) on investments ............... (1,675,994) (4,809,466) 1,306,003 ----------- ----------- ----------- Reinvested capital gains ....................... 860,887 4,631,886 687,554 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ (890,417) (153,873) 2,154,351 =========== =========== ===========
OPPAGGGRO ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 20,230 -- -- Mortality and expense risk charges (note 3) .... (16,032) (9,718) -- ----------- ----------- ----------- Net investment income ........................ 4,198 (9,718) -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 4,586,812 8,805,282 -- Cost of mutual fund shares sold ................ (6,129,642) (9,294,608) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (1,542,830) (489,326) -- Change in unrealized gain (loss) on investments ............................... 307,499 (435,498) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (1,235,331) (924,824) -- ----------- ----------- ----------- Reinvested capital gains ....................... 315,653 -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (915,480) (934,542) -- =========== =========== ===========
OPPBDFD ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 864,092 888,727 563,814 Mortality and expense risk charges (note 3) .... (92,640) (84,563) (91,553) ----------- ----------- ----------- Net investment income ........................ 771,452 804,164 472,261 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 6,081,563 2,331,159 3,691,017 Cost of mutual fund shares sold ................ (6,575,644) (2,569,226) (3,697,719) ----------- ----------- ----------- Realized gain (loss) on investments .......... (494,081) (238,067) (6,702) Change in unrealized gain (loss) on investments ............................... 471,071 16,219 (794,086) ----------- ----------- ----------- Net gain (loss) on investments ............... (23,010) (221,848) (800,788) ----------- ----------- ----------- Reinvested capital gains ....................... -- -- 54,146 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... 748,442 582,316 (274,381) =========== =========== ===========
OPPCAPAP ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 110,415 18,905 16,006 Mortality and expense risk charges (note 3) .... (129,492) (129,760) (48,619) ----------- ----------- ----------- Net investment income ........................ (19,077) (110,855) (32,613) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 3,376,810 10,473,722 25,212,861 Cost of mutual fund shares sold ................ (4,406,616) (8,613,035) (24,502,814) ----------- ----------- ----------- Realized gain (loss) on investments .......... (1,029,806) 1,860,687 710,047 Change in unrealized gain (loss) on investments ............................... (3,248,518) (3,665,305) 1,735,399 ----------- ----------- ----------- Net gain (loss) on investments ............... (4,278,324) (1,804,618) 2,445,446 ----------- ----------- ----------- Reinvested capital gains ....................... 1,656,912 1,008,850 175,824 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $(2,640,489) (906,623) 2,588,657 =========== =========== ===========
OPPGLSEC ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 250,956 99,579 255,944 Mortality and expense risk charges (note 3) .... (268,070) (313,312) (190,529) ----------- ----------- ----------- Net investment income ........................ (17,114) (213,733) 65,415 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 8,061,340 4,035,642 6,535,136 Cost of mutual fund shares sold ................ (7,350,064) (2,393,689) (4,397,501) ----------- ----------- ----------- Realized gain (loss) on investments .......... 711,276 1,641,953 2,137,635 Change in unrealized gain (loss) on investments ............................... (10,336,593) (5,708,731) 9,595,322 ----------- ----------- ----------- Net gain (loss) on investments ............... (9,625,317) (4,066,778) 11,732,957 ----------- ----------- ----------- Reinvested capital gains ....................... 4,652,673 5,565,874 717,222 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (4,989,758) 1,285,363 12,515,594 =========== =========== ===========
OPPMSGRINC ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 2,647 -- -- Mortality and expense risk charges (note 3) .... (4,216) (965) -- ----------- ----------- ----------- Net investment income ........................ (1,569) (965) -- ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 271,972 100,863 -- Cost of mutual fund shares sold ................ (340,552) (98,302) -- ----------- ----------- ----------- Realized gain (loss) on investments .......... (68,580) 2,561 -- Change in unrealized gain (loss) on investments ............................... 3,903 (40,617) -- ----------- ----------- ----------- Net gain (loss) on investments ............... (64,677) (38,056) -- ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (66,246) (39,021) -- =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OPPMULT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 585,774 684,260 480,400 Mortality and expense risk charges (note 3) .... (122,655) (125,117) (115,579) ------------ ------------ ------------ Net investment income ........................ 463,119 559,143 364,821 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 2,496,202 4,981,698 2,796,637 Cost of mutual fund shares sold ................ (2,749,417) (4,584,087) (2,391,468) ------------ ------------ ------------ Realized gain (loss) on investments .......... (253,215) 397,611 405,169 Change in unrealized gain (loss) on investments ............................... (788,871) (1,160,185) 10,270 ------------ ------------ ------------ Net gain (loss) on investments ............... (1,042,086) (762,574) 415,439 ------------ ------------ ------------ Reinvested capital gains ....................... 782,407 993,822 694,901 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $ 203,440 790,391 1,475,161 ============ ============ ============
STOPP2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 254,345 -- -- Mortality and expense risk charges (note 3) .... (345,200) (355,887) (283,101) ------------ ------------ ------------ Net investment income ........................ (90,855) (355,887) (283,101) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 4,912,670 5,753,763 6,031,119 Cost of mutual fund shares sold ................ (4,102,002) (3,771,596) (4,291,744) ------------ ------------ ------------ Realized gain (loss) on investments .......... 810,668 1,982,167 1,739,375 Change in unrealized gain (loss) on investments ............................... (9,214,867) (4,879,451) 5,430,662 ------------ ------------ ------------ Net gain (loss) on investments ............... (8,404,199) (2,897,284) 7,170,037 ------------ ------------ ------------ Reinvested capital gains ....................... 6,568,447 5,562,609 3,541,869 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... (1,926,607) 2,309,438 10,428,805 ============ ============ ============
STDISC2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 48,229 -- -- Mortality and expense risk charges (note 3) .... (56,087) (58,904) (53,820) ------------ ------------ ------------ Net investment income ........................ (7,858) (58,904) (53,820) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 8,810,961 6,435,185 8,370,593 Cost of mutual fund shares sold ................ (10,205,721) (5,682,290) (9,362,894) ------------ ------------ ------------ Realized gain (loss) on investments .......... (1,394,760) 752,895 (992,301) Change in unrealized gain (loss) on investments ............................... 323,479 (482,257) 125,370 ------------ ------------ ------------ Net gain (loss) on investments ............... (1,071,281) 270,638 (866,931) ------------ ------------ ------------ Reinvested capital gains ....................... 1,246,478 -- 1,035,670 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 167,339 211,734 114,919 ============ ============ ============
STINTSTK2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... $ -- -- 7,958 Mortality and expense risk charges (note 3) .... (19,820) (49,525) (22,468) ------------ ------------ ------------ Net investment income ........................ (19,820) (49,525) (14,510) ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 19,473,590 45,151,810 12,615,085 Cost of mutual fund shares sold ................ (20,141,787) (45,538,936) (11,285,141) ------------ ------------ ------------ Realized gain (loss) on investments .......... (668,197) (387,126) 1,329,944 Change in unrealized gain (loss) on investments ............................... (12,561) (1,546,991) 1,572,604 ------------ ------------ ------------ Net gain (loss) on investments ............... (680,758) (1,934,117) 2,902,548 ------------ ------------ ------------ Reinvested capital gains ....................... 94,952 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... $ (605,626) (1,983,642) 2,888,038 ============ ============ ============
UIFEMMKT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 109,934 108,788 84,322 Mortality and expense risk charges (note 3) .... (6,381) (6,391) (3,195) ------------ ------------ ------------ Net investment income ........................ 103,553 102,397 81,127 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 1,558,402 696,248 1,067,995 Cost of mutual fund shares sold ................ (1,555,432) (669,859) (1,041,803) ------------ ------------ ------------ Realized gain (loss) on investments .......... 2,970 26,389 26,192 Change in unrealized gain (loss) on investments ............................... (10,775) (38,552) 29,379 ------------ ------------ ------------ Net gain (loss) on investments ............... (7,805) (12,163) 55,571 ------------ ------------ ------------ Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 95,748 90,234 136,698 ============ ============ ============
UIFUSRE -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Reinvested dividends ........................... 324,384 514,484 400,217 Mortality and expense risk charges (note 3) .... (63,716) (46,629) (44,010) ------------ ------------ ------------ Net investment income ........................ 260,668 467,855 356,207 ------------ ------------ ------------ Proceeds from mutual funds shares sold ......... 9,726,902 11,404,275 6,089,310 Cost of mutual fund shares sold ................ (9,227,767) (10,957,678) (7,139,977) ------------ ------------ ------------ Realized gain (loss) on investments .......... 499,135 446,597 (1,050,667) Change in unrealized gain (loss) on investments ............................... (151,471) 443,730 478,383 ------------ ------------ ------------ Net gain (loss) on investments ............... 347,664 890,327 (572,284) ------------ ------------ ------------ Reinvested capital gains ....................... 71,668 36,959 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations ........... 680,000 1,395,141 (216,077) ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF OPERATIONS, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
VEWRLDBD ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... $ 101,924 125,433 135,225 Mortality and expense risk charges (note 3) .... (19,527) (21,681) (25,601) ----------- ----------- ----------- Net investment income ........................ 82,397 103,752 109,624 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 6,609,847 11,085,379 4,442,114 Cost of mutual fund shares sold ................ (6,708,322) (11,357,847) (4,822,035) ----------- ----------- ----------- Realized gain (loss) on investments .......... (98,475) (272,468) (379,921) Change in unrealized gain (loss) on investments ............................... (128,804) 148,290 (74,747) ----------- ----------- ----------- Net gain (loss) on investments ............... (227,279) (124,178) (454,668) ----------- ----------- ----------- Reinvested capital gains ....................... -- -- 60,420 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... $ (144,882) (20,426) (284,624) =========== =========== ===========
VEWRLDEMKT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... -- -- -- Mortality and expense risk charges (note 3) .... (26,750) (53,777) (32,044) ----------- ----------- ----------- Net investment income ........................ (26,750) (53,777) (32,044) ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 27,874,002 22,197,969 26,145,515 Cost of mutual fund shares sold ................ (28,521,629) (22,523,533) (24,002,878) ----------- ----------- ----------- Realized gain (loss) on investments .......... (647,627) (325,564) 2,142,637 Change in unrealized gain (loss) on investments ............................... 690,151 (2,614,711) 1,939,640 ----------- ----------- ----------- Net gain (loss) on investments ............... 42,524 (2,940,275) 4,082,277 ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... 15,774 (2,994,052) 4,050,233 =========== =========== ===========
VEWRLDHAS ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Reinvested dividends ........................... 45,286 47,340 61,762 Mortality and expense risk charges (note 3) .... (31,957) (36,261) (36,567) ----------- ----------- ----------- Net investment income ........................ 13,329 11,079 25,195 ----------- ----------- ----------- Proceeds from mutual funds shares sold ......... 10,858,141 17,958,019 19,298,812 Cost of mutual fund shares sold ................ (11,323,718) (17,432,316) (18,689,697) ----------- ----------- ----------- Realized gain (loss) on investments .......... (465,577) 525,703 609,115 Change in unrealized gain (loss) on investments ............................... (17,134) (152,863) 199,401 ----------- ----------- ----------- Net gain (loss) on investments ............... (482,711) 372,840 808,516 ----------- ----------- ----------- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations ........... (469,382) 383,919 833,711 =========== =========== ===========
See accompanying notes to financial statements. NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
TOTAL ----------------------------------------------------- 2001 2000 1999 --------------- --------------- --------------- INVESTMENT ACTIVITY: Net investment income .......................... $ 7,051,683 5,292,428 6,438,144 Realized gain (loss) on investments ............ (95,706,913) 61,135,620 57,750,755 Change in unrealized gain (loss) on investments ............................... (102,443,273) (263,179,099) 93,482,590 Reinvested capital gains ....................... 59,973,994 117,294,274 39,898,769 --------------- --------------- --------------- Net increase (decrease) in contract owners' equity resulting from operations .................. (131,124,509) (79,456,777) 197,570,258 --------------- --------------- --------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 103,755,686 120,946,341 155,876,754 Transfers between funds ........................ -- -- -- Surrenders ..................................... (47,591,030) (41,340,894) (29,241,082) Death benefits (note 4) ........................ (3,310,640) (2,753,264) (5,189,106) Policy loans (net of repayments) (note 5) ...... (8,284,301) (18,700,994) (16,840,767) Deductions for surrender charges (note 2d) ..... (4,259,124) (3,783,229) (4,371,271) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (46,802,944) (46,656,142) (46,509,797) Asset charges (note 3): MSP contracts ................................ (487,482) (600,986) (560,395) LSFP contracts ............................... (374,976) (385,150) (275,681) --------------- --------------- --------------- Net equity transactions .................... (7,354,811) 6,725,682 52,888,655 --------------- --------------- --------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (138,479,320) (72,731,095) 250,458,913 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 1,071,884,297 1,144,615,392 894,156,479 --------------- --------------- --------------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 933,404,977 1,071,884,297 1,144,615,392 =============== =============== =============== CHANGES IN UNITS: Beginning units ................................ 44,184,383 42,923,800 39,766,962 --------------- --------------- --------------- Units purchased ................................ 8,105,043 9,659,168 12,461,932 Units redeemed ................................. (7,779,263) (8,398,585) (9,305,094) --------------- --------------- --------------- Ending units ................................... 44,510,163 44,184,383 42,923,800 =============== =============== ===============
ACVPBAL ----------------------------------------------------- 2001 2000 1999 --------------- --------------- --------------- INVESTMENT ACTIVITY: Net investment income .......................... 109,967 99,419 61,381 Realized gain (loss) on investments ............ (149,134) (85,566) (51,696) Change in unrealized gain (loss) on investments ............................... (374,866) (306,371) (209,153) Reinvested capital gains ....................... 177,314 89,903 723,542 --------------- --------------- --------------- Net increase (decrease) in contract owners' equity resulting from operations .................. (236,719) (202,615) 524,074 --------------- --------------- --------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 537,559 657,944 765,352 Transfers between funds ........................ (18,553) (516,182) (71,304) Surrenders ..................................... (274,881) (287,549) (170,759) Death benefits (note 4) ........................ (19,851) (2,238) (3,696) Policy loans (net of repayments) (note 5) ...... (7,043) (90,905) (109,266) Deductions for surrender charges (note 2d) ..... (24,600) (26,315) (25,527) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (264,440) (253,169) (273,361) Asset charges (note 3): MSP contracts ................................ (4,877) (5,232) (4,829) LSFP contracts ............................... (1,571) (1,420) (912) --------------- --------------- --------------- Net equity transactions .................... (78,257) (525,066) 105,698 --------------- --------------- --------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (314,976) (727,681) 629,772 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 5,464,950 6,192,631 5,562,859 --------------- --------------- --------------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 5,149,974 5,464,950 6,192,631 =============== =============== =============== CHANGES IN UNITS: Beginning units ................................ 280,165 306,093 299,058 --------------- --------------- --------------- Units purchased ................................ 32,188 35,007 51,610 Units redeemed ................................. (36,385) (60,935) (44,575) --------------- --------------- --------------- Ending units ................................... 275,968 280,165 306,093 =============== =============== ===============
ACVPCAPAP ----------------------------------------------------- 2001 2000 1999 --------------- --------------- --------------- INVESTMENT ACTIVITY: Net investment income .......................... (157,084) (225,875) (108,580) Realized gain (loss) on investments ............ (9,558,196) 8,676,996 763,191 Change in unrealized gain (loss) on investments ............................... (5,254,647) (7,733,755) 6,761,369 Reinvested capital gains ....................... 7,598,012 750,781 -- --------------- --------------- --------------- Net increase (decrease) in contract owners' equity resulting from operations .................. (7,371,915) 1,468,147 7,415,980 --------------- --------------- --------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,922,090 2,321,398 1,955,940 Transfers between funds ........................ (3,106,083) 6,725,158 261,755 Surrenders ..................................... (994,264) (1,026,955) (723,035) Death benefits (note 4) ........................ (26,610) (20,053) (23,318) Policy loans (net of repayments) (note 5) ...... (266,547) (635,720) (241,323) Deductions for surrender charges (note 2d) ..... (88,981) (93,980) (108,087) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (917,212) (1,000,118) (687,205) Asset charges (note 3): MSP contracts ................................ (8,721) (12,135) (3,806) LSFP contracts ............................... (4,237) (4,320) (1,392) --------------- --------------- --------------- Net equity transactions .................... (3,490,565) 6,253,275 429,529 --------------- --------------- --------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (10,862,480) 7,721,422 7,845,509 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 27,161,584 19,440,162 11,594,653 --------------- --------------- --------------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 16,299,104 27,161,584 19,440,162 =============== =============== =============== CHANGES IN UNITS: Beginning units ................................ 1,120,543 851,973 825,873 --------------- --------------- --------------- Units purchased ................................ 114,186 379,881 175,114 Units redeemed ................................. (289,549) (111,311) (149,014) --------------- --------------- --------------- Ending units ................................... 945,180 1,120,543 851,973 =============== =============== ===============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
ACVPINCGR ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ 4,371 (7,281) (26,446) Realized gain (loss) on investments ............ (367,434) 272,347 461,156 Change in unrealized gain (loss) on investments ............................... (36,896) (817,445) 247,602 Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (399,959) (552,379) 682,312 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 463,372 588,512 482,154 Transfers between funds ........................ (30,266) 51,206 2,244,545 Surrenders ..................................... (128,813) (103,924) (56,332) Death benefits (note 4) ........................ -- (25,723) -- Policy loans (net of repayments) (note 5) ...... (177) (54,872) 49,802 Deductions for surrender charges (note 2d) ..... (11,528) (9,510) (8,421) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (171,662) (149,381) (109,013) Asset charges (note 3): MSP contracts ................................ (2,384) (3,446) (3,326) LSFP contracts ............................... (2,139) (3,118) (4,278) ----------- ----------- ----------- Net equity transactions .................... 116,403 289,744 2,595,131 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (283,556) (262,635) 3,277,443 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 4,560,448 4,823,083 1,545,640 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 4,276,892 4,560,448 4,823,083 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 403,910 378,466 142,086 ----------- ----------- ----------- Units purchased ................................ 56,641 100,713 256,957 Units redeemed ................................. (44,262) (75,269) (20,577) ----------- ----------- ----------- Ending units ................................... 416,289 403,910 378,466 =========== =========== ===========
ACVPINT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (115,508) (160,634) (123,973) Realized gain (loss) on investments ............ (6,339,097) 4,676,153 2,485,788 Change in unrealized gain (loss) on investments ............................... (1,840,599) (9,830,737) 6,850,984 Reinvested capital gains ....................... 1,789,528 478,387 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (6,505,676) (4,836,831) 9,212,799 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,563,930 1,859,782 1,793,620 Transfers between funds ........................ (1,610,440) 2,472,737 1,521,029 Surrenders ..................................... (411,527) (699,631) (363,715) Death benefits (note 4) ........................ (16,220) (56,581) (15,489) Policy loans (net of repayments) (note 5) ...... (123,790) (164,750) (508,785) Deductions for surrender charges (note 2d) ..... (36,829) (64,025) (54,372) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (668,820) (777,200) (578,192) Asset charges (note 3): MSP contracts ................................ (7,104) (13,908) (9,808) LSFP contracts ............................... (10,541) (14,309) (5,962) ----------- ----------- ----------- Net equity transactions .................... (1,321,341) 2,542,115 1,778,326 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (7,827,017) (2,294,716) 10,991,125 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 22,457,622 24,752,338 13,761,213 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 14,630,605 22,457,622 24,752,338 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 1,027,636 935,555 847,041 ----------- ----------- ----------- Units purchased ................................ 97,198 201,426 177,900 Units redeemed ................................. (174,047) (109,345) (89,386) ----------- ----------- ----------- Ending units ................................... 950,787 1,027,636 935,555 =========== =========== ===========
ACVPVALUE ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 22,955 7,825 5,292 Realized gain (loss) on investments ............ 272,565 348,832 (14,581) Change in unrealized gain (loss) on investments ............................... 549,875 414,821 (279,501) Reinvested capital gains ....................... -- 89,531 249,026 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 845,395 861,009 (39,764) ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 582,884 396,314 536,794 Transfers between funds ........................ 4,815,841 2,843,992 (10,220) Surrenders ..................................... (424,152) (139,365) (44,773) Death benefits (note 4) ........................ (32,416) -- (18,972) Policy loans (net of repayments) (note 5) ...... 258,803 (132,570) (46,175) Deductions for surrender charges (note 2d) ..... (37,959) (12,754) (6,693) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (320,328) (122,278) (138,847) Asset charges (note 3): MSP contracts ................................ (5,886) (2,874) (3,246) LSFP contracts ............................... (4,940) (4,255) (1,972) ----------- ----------- ----------- Net equity transactions .................... 4,831,847 2,826,210 265,896 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 5,677,242 3,687,219 226,132 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 6,626,601 2,939,382 2,713,250 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 12,303,843 6,626,601 2,939,382 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 435,109 225,895 205,278 ----------- ----------- ----------- Units purchased ................................ 340,692 242,795 49,493 Units redeemed ................................. (53,917) (33,581) (28,876) ----------- ----------- ----------- Ending units ................................... 721,884 435,109 225,895 =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
CSWPGPV ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ (15,488) (26,477) (13,686) Realized gain (loss) on investments ............ (1,234,999) 156,924 831,668 Change in unrealized gain (loss) on investments ............................... 471,352 (1,447,278) 489,466 Reinvested capital gains ....................... -- 359,529 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (779,135) (957,302) 1,307,448 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 175,113 246,696 139,661 Transfers between funds ........................ (290,162) (728,042) 2,043,854 Surrenders ..................................... (95,856) (35,654) (28,894) Death benefits (note 4) ........................ (2,390) -- -- Policy loans (net of repayments) (note 5) ...... 36,298 (69,160) (72,651) Deductions for surrender charges (note 2d) ..... (8,579) (3,263) (4,319) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (90,037) (103,357) (50,521) Asset charges (note 3): MSP contracts ................................ (952) (1,735) (847) LSFP contracts ............................... (980) (1,618) (855) ----------- ----------- ----------- Net equity transactions .................... (277,545) (696,133) 2,025,428 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (1,056,680) (1,653,435) 3,332,876 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 2,780,103 4,433,538 1,100,662 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 1,723,423 2,780,103 4,433,538 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 176,075 227,326 91,311 ----------- ----------- ----------- Units purchased ................................ 20,442 37,149 157,184 Units redeemed ................................. (42,279) (88,400) (21,169) ----------- ----------- ----------- Ending units ................................... 154,238 176,075 227,326 =========== =========== ===========
CSWPINTEQ ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (56,285) (30,391) 36,167 Realized gain (loss) on investments ............ (3,960,661) 348,782 1,214,234 Change in unrealized gain (loss) on investments ............................... 2,099,268 (4,794,748) 3,271,039 Reinvested capital gains ....................... -- 1,233,063 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (1,917,678) (3,243,294) 4,521,440 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,047,183 1,203,310 1,411,984 Transfers between funds ........................ (704,029) (1,618,161) (167,066) Surrenders ..................................... (368,264) (182,801) (642,724) Death benefits (note 4) ........................ (7,251) (17,201) (124,597) Policy loans (net of repayments) (note 5) ...... (66,856) (160,238) (83,407) Deductions for surrender charges (note 2d) ..... (32,958) (16,729) (96,081) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (361,742) (426,399) (427,942) Asset charges (note 3): MSP contracts ................................ (5,243) (8,051) (8,596) LSFP contracts ............................... (4,614) (6,243) (3,905) ----------- ----------- ----------- Net equity transactions .................... (503,774) (1,232,513) (142,334) ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (2,421,452) (4,475,807) 4,379,106 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 9,192,407 13,668,214 9,289,108 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 6,770,955 9,192,407 13,668,214 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 711,440 779,846 805,473 ----------- ----------- ----------- Units purchased ................................ 110,791 83,704 160,398 Units redeemed ................................. (142,631) (152,110) (186,025) ----------- ----------- ----------- Ending units ................................... 679,600 711,440 779,846 =========== =========== ===========
CSWPSMCO ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (138,697) (216,538) (114,737) Realized gain (loss) on investments ............ (11,329,224) 5,305,559 564,155 Change in unrealized gain (loss) on investments ............................... 7,104,902 (18,360,336) 8,391,845 Reinvested capital gains ....................... -- 5,714,137 709,970 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (4,363,019) (7,557,178) 9,551,233 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,168,671 3,205,250 2,658,532 Transfers between funds ........................ (3,347,967) 7,227,152 (248,812) Surrenders ..................................... (805,855) (818,535) (301,023) Death benefits (note 4) ........................ (86,645) (46,924) (60,498) Policy loans (net of repayments) (note 5) ...... (1,349) (406,035) (288,744) Deductions for surrender charges (note 2d) ..... (72,120) (74,907) (45,000) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (922,151) (1,346,935) (902,731) Asset charges (note 3): MSP contracts ................................ (9,810) (17,598) (9,685) LSFP contracts ............................... (8,705) (12,620) (5,597) ----------- ----------- ----------- Net equity transactions .................... (3,085,931) 7,708,848 796,442 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (7,448,950) 151,670 10,347,675 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 25,677,975 25,526,305 15,178,630 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 18,229,025 25,677,975 25,526,305 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 1,272,956 1,024,167 1,015,805 ----------- ----------- ----------- Units purchased ................................ 137,229 353,977 183,941 Units redeemed ................................. (325,463) (105,188) (175,579) ----------- ----------- ----------- Ending units ................................... 1,084,722 1,272,956 1,024,167 =========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
DRYEUROEQ -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ (736) (293) -- Realized gain (loss) on investments ............ 2,841 (6,913) -- Change in unrealized gain (loss) on investments ............................... (878) 1,517 -- Reinvested capital gains ....................... -- 1,253 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 1,227 (4,436) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 12,657 5,122 -- Transfers between funds ........................ (35,400) 113,027 -- Surrenders ..................................... (1,022) -- -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (300) 2 -- Deductions for surrender charges (note 2d) ..... (91) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (6,296) (2,481) -- Asset charges (note 3): MSP contracts ................................ (46) (27) -- LSFP contracts ............................... (3) (6) -- ------------ ------------ ------------ Net equity transactions .................... (30,501) 115,637 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (29,274) 111,201 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 111,201 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 81,927 111,201 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 11,957 -- -- ------------ ------------ ------------ Units purchased ................................ 6,654 12,230 -- Units redeemed ................................. (6,237) (273) -- ------------ ------------ ------------ Ending units ................................... 12,374 11,957 -- ============ ============ ============
DRYSRGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (109,204) 118 (112,443) Realized gain (loss) on investments ............ (369,365) 721,982 1,789,441 Change in unrealized gain (loss) on investments ............................... (3,939,932) (3,257,761) 1,688,692 Reinvested capital gains ....................... -- -- 646,972 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (4,418,501) (2,535,661) 4,012,662 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,143,427 2,490,032 2,602,017 Transfers between funds ........................ (1,098,629) 2,460,935 2,581,796 Surrenders ..................................... (891,852) (724,497) (387,508) Death benefits (note 4) ........................ (23,643) (47,303) (31,507) Policy loans (net of repayments) (note 5) ...... (372,581) (577,113) (488,829) Deductions for surrender charges (note 2d) ..... (79,816) (66,301) (57,929) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (968,162) (1,048,030) (879,312) Asset charges (note 3): MSP contracts ................................ (6,768) (9,779) (7,129) LSFP contracts ............................... (5,485) (7,247) (5,332) ------------ ------------ ------------ Net equity transactions .................... (1,303,509) 2,470,697 3,326,267 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (5,722,010) (64,964) 7,338,929 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 19,334,340 19,399,304 12,060,375 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 13,612,330 19,334,340 19,399,304 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 629,857 556,165 446,957 ------------ ------------ ------------ Units purchased ................................ 83,928 149,111 173,727 Units redeemed ................................. (139,814) (75,419) (64,519) ------------ ------------ ------------ Ending units ................................... 573,971 629,857 556,165 ============ ============ ============
DRYSTKIX -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... 332,575 213,640 346,881 Realized gain (loss) on investments ............ 9,935 4,081,939 5,075,012 Change in unrealized gain (loss) on investments ............................... (13,687,873) (16,940,040) 11,113,462 Reinvested capital gains ....................... 467,526 1,618,261 920,361 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (12,877,837) (11,026,200) 17,455,716 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 10,603,012 12,374,808 13,344,420 Transfers between funds ........................ 1,384,992 (5,097,368) 11,928,413 Surrenders ..................................... (4,146,012) (3,029,913) (2,827,148) Death benefits (note 4) ........................ (431,669) (407,101) (157,295) Policy loans (net of repayments) (note 5) ...... (379,222) (1,621,944) (1,610,756) Deductions for surrender charges (note 2d) ..... (371,045) (277,277) (422,632) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (4,015,363) (4,198,947) (4,097,507) Asset charges (note 3): MSP contracts ................................ (40,868) (52,991) (54,699) LSFP contracts ............................... (56,827) (60,980) (48,577) ------------ ------------ ------------ Net equity transactions .................... 2,546,998 (2,371,713) 16,054,219 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (10,330,839) (13,397,913) 33,509,935 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 99,153,528 112,551,441 79,041,506 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 88,822,689 99,153,528 112,551,441 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 3,460,355 3,543,874 2,959,968 ------------ ------------ ------------ Units purchased ................................ 525,479 448,057 907,973 Units redeemed ................................. (433,865) (531,576) (324,067) ------------ ------------ ------------ Ending units ................................... 3,551,969 3,460,355 3,543,874 ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
DRYAP ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ 8,180 (10,494) (13,667) Realized gain (loss) on investments ............ (93,890) 206,665 415,445 Change in unrealized gain (loss) on investments ............................... (617,829) (365,322) 269,060 Reinvested capital gains ....................... -- 80,911 29,215 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (703,539) (88,240) 700,053 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 775,908 980,051 1,147,358 Transfers between funds ........................ 107,630 (1,176,921) 2,166,937 Surrenders ..................................... (233,967) 101,300 (296,009) Death benefits (note 4) ........................ (642) (8,995) (13,006) Policy loans (net of repayments) (note 5) ...... (93,305) (150,408) (134,352) Deductions for surrender charges (note 2d) ..... (20,939) 9,270 (44,251) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (325,049) (296,841) (299,558) Asset charges (note 3): MSP contracts ................................ (2,606) (2,821) (3,070) LSFP contracts ............................... (6,023) (5,196) (2,988) ----------- ----------- ----------- Net equity transactions .................... 201,007 (550,561) 2,521,061 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (502,532) (638,801) 3,221,114 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 7,251,397 7,890,198 4,669,084 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 6,748,865 7,251,397 7,890,198 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 503,469 540,642 353,868 ----------- ----------- ----------- Units purchased ................................ 85,636 100,075 246,230 Units redeemed ................................. (68,687) (137,248) (59,456) ----------- ----------- ----------- Ending units ................................... 520,418 503,469 540,642 =========== =========== ===========
DRYGRINC ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (4,914) (1,576) 558 Realized gain (loss) on investments ............ (7,978) 67,580 74,977 Change in unrealized gain (loss) on investments ............................... (258,534) (314,432) 230,049 Reinvested capital gains ....................... 45,863 113,207 87,323 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (225,563) (135,221) 392,907 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 293,388 350,148 430,878 Transfers between funds ........................ 103,859 289,849 18,919 Surrenders ..................................... (217,868) (36,572) (34,300) Death benefits (note 4) ........................ (317) -- (18,064) Policy loans (net of repayments) (note 5) ...... (34,479) (40,935) (18,736) Deductions for surrender charges (note 2d) ..... (19,498) (3,347) (5,128) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (138,857) (130,262) (129,582) Asset charges (note 3): MSP contracts ................................ (3,439) (3,923) (3,346) LSFP contracts ............................... (2,419) (2,236) (1,645) ----------- ----------- ----------- Net equity transactions .................... (19,630) 422,722 238,996 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (245,193) 287,501 631,903 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 3,133,370 2,845,869 2,213,966 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 2,888,177 3,133,370 2,845,869 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 220,323 191,266 172,937 ----------- ----------- ----------- Units purchased ................................ 34,265 44,176 59,773 Units redeemed ................................. (37,315) (15,119) (41,444) ----------- ----------- ----------- Ending units ................................... 217,273 220,323 191,266 =========== =========== ===========
FIDVIPEI ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 720,232 764,744 519,590 Realized gain (loss) on investments ............ 55,848 4,331,220 6,406,550 Change in unrealized gain (loss) on investments ............................... (9,359,446) (5,231,085) (5,267,170) Reinvested capital gains ....................... 3,782,228 5,255,479 2,726,961 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (4,801,138) 5,120,358 4,385,931 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 7,191,894 8,138,570 10,203,955 Transfers between funds ........................ 1,446,582 (10,789,250) (3,247,107) Surrenders ..................................... (3,544,539) (3,122,051) (2,431,139) Death benefits (note 4) ........................ (225,553) (189,944) (137,938) Policy loans (net of repayments) (note 5) ...... (805,494) (1,035,827) (1,117,875) Deductions for surrender charges (note 2d) ..... (317,216) (285,708) (363,433) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (3,630,378) (3,073,309) (3,725,075) Asset charges (note 3): MSP contracts ................................ (39,422) (38,789) (46,610) LSFP contracts ............................... (22,617) (19,695) (17,059) ----------- ----------- ----------- Net equity transactions .................... 53,257 (10,416,003) (882,281) ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (4,747,881) (5,295,645) 3,503,650 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 81,772,283 87,067,928 83,564,278 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 77,024,402 81,772,283 87,067,928 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 2,276,206 2,594,139 2,614,531 ----------- ----------- ----------- Units purchased ................................ 280,800 259,043 349,328 Units redeemed ................................. (271,444) (576,976) (369,720) ----------- ----------- ----------- Ending units ................................... 2,285,562 2,276,206 2,594,139 =========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPGR ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Net investment income .......................... $ (929,341) (1,241,653) (929,897) Realized gain (loss) on investments ............ (4,273,764) 3,612,827 15,710,494 Change in unrealized gain (loss) on investments ............................... (33,423,042) (42,932,678) 17,198,414 Reinvested capital gains ....................... 10,107,480 19,550,081 13,551,946 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations .................. (28,518,667) (21,011,423) 45,530,957 ------------- ------------- ------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 13,007,093 15,063,048 15,418,413 Transfers between funds ........................ (8,018,175) 2,949,689 13,284,488 Surrenders ..................................... (5,631,639) (5,630,898) (3,962,266) Death benefits (note 4) ........................ (304,251) (464,693) (299,356) Policy loans (net of repayments) (note 5) ...... (1,189,965) (3,566,377) (3,173,351) Deductions for surrender charges (note 2d) ..... (504,000) (515,300) (592,322) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (6,302,082) (6,864,591) (6,220,078) Asset charges (note 3): MSP contracts ................................ (46,539) (69,249) (50,059) LSFP contracts ............................... (31,178) (34,365) (23,234) ------------- ------------- ------------- Net equity transactions .................... (9,020,736) 867,264 14,382,235 ------------- ------------- ------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (37,539,403) (20,144,159) 59,913,192 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 156,911,792 177,055,951 117,142,759 ------------- ------------- ------------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 119,372,389 156,911,792 177,055,951 ============= ============= ============= CHANGES IN UNITS: Beginning units ................................ 3,462,746 3,435,387 3,041,033 ------------- ------------- ------------- Units purchased ................................ 354,493 378,450 730,961 Units redeemed ................................. (591,126) (351,091) (336,607) ------------- ------------- ------------- Ending units ................................... 3,226,113 3,462,746 3,435,387 ============= ============= =============
FIDVIPHI ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Net investment income .......................... 2,247,137 1,524,797 2,372,262 Realized gain (loss) on investments ............ (4,705,027) (934,993) (2,878,622) Change in unrealized gain (loss) on investments ............................... (27,924) (6,237,391) 2,437,032 Reinvested capital gains ....................... -- -- 96,078 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations .................. (2,485,814) (5,647,587) 2,026,750 ------------- ------------- ------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,363,311 2,816,915 3,767,754 Transfers between funds ........................ 603,870 (2,585,935) (4,726,508) Surrenders ..................................... (908,331) (1,009,915) (711,931) Death benefits (note 4) ........................ (56,917) (215,967) (83,542) Policy loans (net of repayments) (note 5) ...... (38,801) (36,510) (257,597) Deductions for surrender charges (note 2d) ..... (81,290) (92,420) (106,427) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (953,764) (982,080) (1,219,918) Asset charges (note 3): MSP contracts ................................ (14,190) (22,334) (29,175) LSFP contracts ............................... (8,038) (7,947) (7,937) ------------- ------------- ------------- Net equity transactions .................... 905,850 (2,136,193) (3,375,281) ------------- ------------- ------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (1,579,964) (7,783,780) (1,348,531) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 18,222,153 26,005,933 27,354,464 ------------- ------------- ------------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 16,642,189 18,222,153 26,005,933 ============= ============= ============= CHANGES IN UNITS: Beginning units ................................ 972,429 1,081,513 1,213,502 ------------- ------------- ------------- Units purchased ................................ 170,800 140,914 174,332 Units redeemed ................................. (125,490) (249,998) (306,321) ------------- ------------- ------------- Ending units ................................... 1,017,739 972,429 1,081,513 ============= ============= =============
FIDVIPOV ----------------------------------------------- 2001 2000 1999 ------------- ------------- ------------- INVESTMENT ACTIVITY: Net investment income .......................... 938,954 194,518 132,290 Realized gain (loss) on investments ............ (2,848,287) 1,273,207 2,116,216 Change in unrealized gain (loss) on investments ............................... (4,902,933) (10,130,820) 6,394,423 Reinvested capital gains ....................... 1,740,234 2,677,139 535,780 ------------- ------------- ------------- Net increase (decrease) in contract owners' equity resulting from operations .................. (5,072,032) (5,985,956) 9,178,709 ------------- ------------- ------------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,097,571 2,338,549 2,603,811 Transfers between funds ........................ (1,327,939) (191,092) (1,140,865) Surrenders ..................................... (1,006,514) (1,476,671) (511,027) Death benefits (note 4) ........................ (101,240) (31,249) (42,803) Policy loans (net of repayments) (note 5) ...... (85,860) (709,130) (436,230) Deductions for surrender charges (note 2d) ..... (90,077) (135,135) (76,394) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (832,760) (931,867) (936,056) Asset charges (note 3): MSP contracts ................................ (5,818) (9,547) (9,310) LSFP contracts ............................... (6,533) (8,001) (4,398) ------------- ------------- ------------- Net equity transactions .................... (1,359,170) (1,154,143) (553,272) ------------- ------------- ------------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (6,431,202) (7,140,099) 8,625,437 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 23,708,747 30,848,846 22,223,409 ------------- ------------- ------------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 17,277,545 23,708,747 30,848,846 ============= ============= ============= CHANGES IN UNITS: Beginning units ................................ 1,146,574 1,202,196 1,218,999 ------------- ------------- ------------- Units purchased ................................ 129,935 139,166 165,048 Units redeemed ................................. (208,734) (194,788) (181,851) ------------- ------------- ------------- Ending units ................................... 1,067,775 1,146,574 1,202,196 ============= ============= =============
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
FIDVIPAM -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ 946,367 764,144 769,711 Realized gain (loss) on investments ............ (197,074) 743,891 1,015,529 Change in unrealized gain (loss) on investments ............................... (2,656,974) (5,439,784) 26,818 Reinvested capital gains ....................... 442,307 2,429,670 1,317,530 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (1,465,374) (1,502,079) 3,129,588 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,952,879 2,378,371 2,909,351 Transfers between funds ........................ (924,825) (1,984,742) (2,311,042) Surrenders ..................................... (1,051,266) (944,977) (832,733) Death benefits (note 4) ........................ (24,025) (13,747) (42,640) Policy loans (net of repayments) (note 5) ...... (139,132) (368,885) (659,859) Deductions for surrender charges (note 2d) ..... (94,082) (86,478) (124,486) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,110,503) (1,085,359) (1,199,744) Asset charges (note 3): MSP contracts ................................ (10,168) (11,244) (11,668) LSFP contracts ............................... (3,155) (3,046) (2,332) ------------ ------------ ------------ Net equity transactions .................... (1,404,277) (2,120,107) (2,275,153) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (2,869,651) (3,622,186) 854,435 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 29,485,536 33,107,722 32,253,287 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 26,615,885 29,485,536 33,107,722 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,150,637 1,229,226 1,312,905 ------------ ------------ ------------ Units purchased ................................ 95,668 102,304 133,092 Units redeemed ................................. (151,886) (180,893) (216,771) ------------ ------------ ------------ Ending units ................................... 1,094,419 1,150,637 1,229,226 ============ ============ ============
FIDVIPCON -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... 43,587 (277,542) (198,905) Realized gain (loss) on investments ............ (197,444) 1,601,999 8,607,593 Change in unrealized gain (loss) on investments ............................... (9,738,153) (15,273,672) 2,632,252 Reinvested capital gains ....................... 1,612,865 8,862,945 1,916,516 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (8,279,145) (5,086,270) 12,957,456 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 5,795,249 7,336,354 8,483,644 Transfers between funds ........................ (3,613,770) (2,948,975) 5,291,011 Surrenders ..................................... (2,048,334) (2,212,824) (1,395,137) Death benefits (note 4) ........................ (148,293) (73,090) (199,019) Policy loans (net of repayments) (note 5) ...... (442,265) (1,259,765) (834,500) Deductions for surrender charges (note 2d) ..... (183,314) (202,502) (208,560) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (2,534,714) (2,638,799) (2,643,787) Asset charges (note 3): MSP contracts ................................ (28,667) (38,581) (36,244) LSFP contracts ............................... (22,235) (23,285) (18,084) ------------ ------------ ------------ Net equity transactions .................... (3,226,343) (2,061,467) 8,439,324 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (11,505,488) (7,147,737) 21,396,780 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 64,099,278 71,247,015 49,850,235 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 52,593,790 64,099,278 71,247,015 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 2,697,733 2,777,590 2,397,557 ------------ ------------ ------------ Units purchased ................................ 300,960 337,798 636,459 Units redeemed ................................. (458,872) (417,655) (256,426) ------------ ------------ ------------ Ending units ................................... 2,539,821 2,697,733 2,777,590 ============ ============ ============
FIDVIPGROP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (13,820) 36,283 11,876 Realized gain (loss) on investments ............ (634,796) (263,449) 453,860 Change in unrealized gain (loss) on investments ............................... (126,832) (1,250,959) (343,328) Reinvested capital gains ....................... -- 391,834 110,237 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (775,448) (1,086,291) 232,645 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 793,729 917,497 1,132,717 Transfers between funds ........................ (496,644) (800,042) 12,561 Surrenders ..................................... (258,771) (161,720) (135,968) Death benefits (note 4) ........................ (237) (20,814) (53,293) Policy loans (net of repayments) (note 5) ...... (39,475) (58,980) (44,200) Deductions for surrender charges (note 2d) ..... (23,158) (14,800) (20,326) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (236,312) (280,822) (320,411) Asset charges (note 3): MSP contracts ................................ (2,717) (3,949) (5,191) LSFP contracts ............................... (2,557) (3,318) (2,905) ------------ ------------ ------------ Net equity transactions .................... (266,142) (426,948) 562,984 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (1,041,590) (1,513,239) 795,629 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 5,170,670 6,683,909 5,888,280 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 4,129,080 5,170,670 6,683,909 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 446,913 475,926 434,495 ------------ ------------ ------------ Units purchased ................................ 82,751 80,319 135,244 Units redeemed ................................. (109,553) (109,332) (93,813) ------------ ------------ ------------ Ending units ................................... 420,111 446,913 475,926 ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
JANCAPAP ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ 4,262 9,106 -- Realized gain (loss) on investments ............ (1,133,638) (67,632) -- Change in unrealized gain (loss) on investments ............................... 244,422 (509,550) -- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (884,954) (568,076) -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 395,668 163,374 -- Transfers between funds ........................ 497,060 3,483,176 -- Surrenders ..................................... (98,492) (18,995) -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (63,185) (36,245) -- Deductions for surrender charges (note 2d) ..... (8,814) (1,738) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (158,392) (66,641) -- Asset charges (note 3): MSP contracts ................................ (2,325) (1,552) -- LSFP contracts ............................... (1,195) (436) -- ----------- ----------- ----------- Net equity transactions .................... 560,325 3,520,943 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (324,629) 2,952,867 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 2,952,867 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 2,628,238 2,952,867 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 373,970 -- -- ----------- ----------- ----------- Units purchased ................................ 118,903 387,744 -- Units redeemed ................................. (64,088) (13,774) -- ----------- ----------- ----------- Ending units ................................... 428,785 373,970 -- =========== =========== ===========
JANGLTECH ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (3,153) 4,424 -- Realized gain (loss) on investments ............ (2,122,695) 13,176 -- Change in unrealized gain (loss) on investments ............................... 1,125,331 (1,148,444) -- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (1,000,517) (1,130,844) -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 364,127 200,047 -- Transfers between funds ........................ 478,283 3,477,054 -- Surrenders ..................................... (146,539) (16,070) -- Death benefits (note 4) ........................ (98,999) -- -- Policy loans (net of repayments) (note 5) ...... (41,135) (15,097) -- Deductions for surrender charges (note 2d) ..... (13,114) (1,471) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (106,881) (59,588) -- Asset charges (note 3): MSP contracts ................................ (1,712) (1,521) -- LSFP contracts ............................... (802) (407) -- ----------- ----------- ----------- Net equity transactions .................... 433,228 3,582,947 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (567,289) 2,452,103 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 2,452,103 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 1,884,814 2,452,103 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 363,557 -- -- ----------- ----------- ----------- Units purchased ................................ 180,547 375,042 -- Units redeemed ................................. (94,989) (11,485) -- ----------- ----------- ----------- Ending units ................................... 449,115 363,557 -- =========== =========== ===========
JANINTGRO ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (2,522) 59,459 -- Realized gain (loss) on investments ............ (1,006,099) (181,333) -- Change in unrealized gain (loss) on investments ............................... 441,311 (349,293) -- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (567,310) (471,167) -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 286,461 121,443 -- Transfers between funds ........................ 263,144 2,598,237 -- Surrenders ..................................... (60,603) (16,540) -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (50,849) (11,714) -- Deductions for surrender charges (note 2d) ..... (5,424) (1,514) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (95,431) (34,493) -- Asset charges (note 3): MSP contracts ................................ (1,219) (1,038) -- LSFP contracts ............................... (668) (146) -- ----------- ----------- ----------- Net equity transactions .................... 335,411 2,654,235 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (231,899) 2,183,068 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 2,183,068 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 1,951,169 2,183,068 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 276,083 -- -- ----------- ----------- ----------- Units purchased ................................ 104,433 284,504 -- Units redeemed ................................. (55,767) (8,421) -- ----------- ----------- ----------- Ending units ................................... 324,749 276,083 -- =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATCAPAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ (149,321) (197,752) (45,147) Realized gain (loss) on investments ............ (4,280,310) (44,470) 1,545,323 Change in unrealized gain (loss) on investments ............................... (3,202,773) (16,033,473) (2,937,651) Reinvested capital gains ....................... -- 6,018,129 2,820,485 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (7,632,404) (10,257,566) 1,383,010 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 4,054,677 5,307,598 6,414,922 Transfers between funds ........................ (1,301,931) (7,322,445) (902,464) Surrenders ..................................... (1,215,938) (1,101,685) (1,464,698) Death benefits (note 4) ........................ (94,201) (67,374) (26,646) Policy loans (net of repayments) (note 5) ...... (469,940) (651,768) (839,186) Deductions for surrender charges (note 2d) ..... (108,820) (100,818) (218,959) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,486,232) (1,990,000) (2,416,248) Asset charges (note 3): MSP contracts ................................ (8,664) (20,853) (26,238) LSFP contracts ............................... (9,001) (15,363) (15,764) ------------ ------------ ------------ Net equity transactions .................... (640,050) (5,962,708) 504,719 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (8,272,454) (16,220,274) 1,887,729 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 26,950,799 43,171,073 41,283,344 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 18,678,345 26,950,799 43,171,073 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,201,390 1,403,197 1,381,944 ------------ ------------ ------------ Units purchased ................................ 245,018 187,771 272,423 Units redeemed ................................. (289,101) (389,578) (251,170) ------------ ------------ ------------ Ending units ................................... 1,157,307 1,201,390 1,403,197 ============ ============ ============
NSATMIDCAPIX -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (4,071) 819 -- Realized gain (loss) on investments ............ (255,703) 17,525 -- Change in unrealized gain (loss) on investments ............................... 115,892 (68,941) -- Reinvested capital gains ....................... 25,776 59,565 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (118,106) 8,968 -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 190,528 32,770 -- Transfers between funds ........................ 1,669,130 1,786,882 -- Surrenders ..................................... (44,557) (2,384) -- Death benefits (note 4) ........................ (7,174) -- -- Policy loans (net of repayments) (note 5) ...... (24,551) (7,462) -- Deductions for surrender charges (note 2d) ..... (3,988) (218) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (116,906) (19,481) -- Asset charges (note 3): MSP contracts ................................ (1,953) (199) -- LSFP contracts ............................... (578) (87) -- ------------ ------------ ------------ Net equity transactions .................... 1,659,951 1,789,821 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,541,845 1,798,789 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 1,798,789 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 3,340,634 1,798,789 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 171,893 -- -- ------------ ------------ ------------ Units purchased ................................ 173,353 174,796 -- Units redeemed ................................. (19,255) (2,903) -- ------------ ------------ ------------ Ending units ................................... 325,991 171,893 -- ============ ============ ============
NSATEMMKT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... 75 (21) -- Realized gain (loss) on investments ............ (24,506) (1,147) -- Change in unrealized gain (loss) on investments ............................... 33,345 (711) -- Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 8,914 (1,879) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 5,169 541 -- Transfers between funds ........................ 413,987 10,816 -- Surrenders ..................................... (2,213) -- -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... 198 -- -- Deductions for surrender charges (note 2d) ..... (198) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (7,221) (235) -- Asset charges (note 3): MSP contracts ................................ (295) -- -- LSFP contracts ............................... (7) -- -- ------------ ------------ ------------ Net equity transactions .................... 409,420 11,122 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 418,334 9,243 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 9,243 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 427,577 9,243 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,063 -- -- ------------ ------------ ------------ Units purchased ................................ 52,164 1,081 -- Units redeemed ................................. (1,215) (18) -- ------------ ------------ ------------ Ending units ................................... 52,012 1,063 -- ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATGLOBTC ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ (2,955) (918) -- Realized gain (loss) on investments ............ (424,935) (5,935) -- Change in unrealized gain (loss) on investments ............................... 215,502 (233,078) -- Reinvested capital gains ....................... -- 8,554 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (212,388) (231,377) -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 75,992 13,606 -- Transfers between funds ........................ 172,244 634,363 -- Surrenders ..................................... (3,862) -- -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (58,752) (641) -- Deductions for surrender charges (note 2d) ..... (346) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (29,002) (9,740) -- Asset charges (note 3): MSP contracts ................................ (90) (34) -- LSFP contracts ............................... -- -- -- ----------- ----------- ----------- Net equity transactions .................... 156,184 637,554 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (56,204) 406,177 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 406,177 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 349,973 406,177 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 67,646 -- -- ----------- ----------- ----------- Units purchased ................................ 65,702 68,793 -- Units redeemed ................................. (30,732) (1,147) -- ----------- ----------- ----------- Ending units ................................... 102,616 67,646 -- =========== =========== ===========
NSATINTGR ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (165) (14) -- Realized gain (loss) on investments ............ (3,090) (233) -- Change in unrealized gain (loss) on investments ............................... 1,005 (168) -- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (2,250) (415) -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,587 2 -- Transfers between funds ........................ 52,127 4,696 -- Surrenders ..................................... (14) -- -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (105) (1) -- Deductions for surrender charges (note 2d) ..... (1) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,273) (100) -- Asset charges (note 3): MSP contracts ................................ -- -- -- LSFP contracts ............................... -- -- -- ----------- ----------- ----------- Net equity transactions .................... 53,321 4,597 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 51,071 4,182 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 4,182 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 55,253 4,182 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 453 -- -- ----------- ----------- ----------- Units purchased ................................ 8,228 464 -- Units redeemed ................................. (225) (11) -- ----------- ----------- ----------- Ending units ................................... 8,456 453 -- =========== =========== ===========
NSATGVTBD ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 682,702 593,146 665,371 Realized gain (loss) on investments ............ 690,349 (132,300) (851,332) Change in unrealized gain (loss) on investments ............................... (567,238) 822,785 (301,600) Reinvested capital gains ....................... 25,190 -- 25,753 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 831,003 1,283,631 (461,808) ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,047,084 943,979 755,607 Transfers between funds ........................ 6,329,761 (1,337,392) 381,498 Surrenders ..................................... (497,629) (403,544) (310,304) Death benefits (note 4) ........................ (69,873) (5,619) (3,017) Policy loans (net of repayments) (note 5) ...... (1,259,271) (161,143) (495,291) Deductions for surrender charges (note 2d) ..... (44,535) (36,929) (46,387) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (627,606) (631,603) (500,735) Asset charges (note 3): MSP contracts ................................ (13,288) (9,707) (13,045) LSFP contracts ............................... (8,008) (4,392) (2,382) ----------- ----------- ----------- Net equity transactions .................... 4,856,635 (1,646,350) (234,056) ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 5,687,638 (362,719) (695,864) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 12,999,190 13,361,909 14,057,773 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 18,686,828 12,999,190 13,361,909 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 696,947 791,927 790,689 ----------- ----------- ----------- Units purchased ................................ 377,562 74,451 135,050 Units redeemed ................................. (134,347) (169,431) (133,812) ----------- ----------- ----------- Ending units ................................... 940,162 696,947 791,927 =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATMSECBD ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ 26,704 3,488 -- Realized gain (loss) on investments ............ (16,549) (786) -- Change in unrealized gain (loss) on investments ............................... (1,097) 457 -- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 9,058 3,159 -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 22,300 2,289 -- Transfers between funds ........................ 526,721 82,990 -- Surrenders ..................................... (4,013) -- -- Death benefits (note 4) ........................ (954) -- -- Policy loans (net of repayments) (note 5) ...... (829) (190) -- Deductions for surrender charges (note 2d) ..... (359) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (13,528) (1,041) -- Asset charges (note 3): MSP contracts ................................ (733) (115) -- LSFP contracts ............................... (60) (4) -- ----------- ----------- ----------- Net equity transactions .................... 528,545 83,929 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 537,603 87,088 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 87,088 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 624,691 87,088 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 8,333 -- -- ----------- ----------- ----------- Units purchased ................................ 54,885 8,485 -- Units redeemed ................................. (5,339) (152) -- ----------- ----------- ----------- Ending units ................................... 57,879 8,333 -- =========== =========== ===========
NSATMYMKT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 1,471,308 2,643,745 2,192,750 Realized gain (loss) on investments ............ -- -- -- Change in unrealized gain (loss) on investments ............................... -- -- -- Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 1,471,308 2,643,745 2,192,750 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 7,038,540 9,251,495 33,970,462 Transfers between funds ........................ (1,799,877) (7,781,365) (20,060,327) Surrenders ..................................... (6,733,123) (3,720,656) (2,949,962) Death benefits (note 4) ........................ (323,940) (45,052) (1,748,315) Policy loans (net of repayments) (note 5) ...... 312,202 335,834 257,119 Deductions for surrender charges (note 2d) ..... (602,577) (340,488) (440,992) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (2,220,627) (1,615,471) (2,710,844) Asset charges (note 3): MSP contracts ................................ (44,176) (45,443) (55,122) LSFP contracts ............................... (38,727) (27,847) (32,642) ----------- ----------- ----------- Net equity transactions .................... (4,412,305) (3,988,993) 6,229,377 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (2,940,997) (1,345,248) 8,422,127 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 54,591,864 55,937,112 47,514,985 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 51,650,867 54,591,864 55,937,112 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 3,829,526 4,122,003 3,682,600 ----------- ----------- ----------- Units purchased ................................ 732,398 935,006 3,648,845 Units redeemed ................................. (1,021,909) (1,227,483) (3,209,442) ----------- ----------- ----------- Ending units ................................... 3,540,015 3,829,526 4,122,003 =========== =========== ===========
NSATSMCAPG ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (8,611) (2,514) -- Realized gain (loss) on investments ............ (223,133) (74,213) -- Change in unrealized gain (loss) on investments ............................... 178,447 (167,853) -- Reinvested capital gains ....................... -- 2,683 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (53,297) (241,897) -- ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 104,712 34,629 -- Transfers between funds ........................ 646,697 992,140 -- Surrenders ..................................... (30,141) (8,200) -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (30,450) (923) -- Deductions for surrender charges (note 2d) ..... (2,697) (750) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (61,379) (14,507) -- Asset charges (note 3): MSP contracts ................................ (635) (255) -- LSFP contracts ............................... (264) (8) -- ----------- ----------- ----------- Net equity transactions .................... 625,843 1,002,126 -- ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 572,546 760,229 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 760,229 -- -- ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 1,332,775 760,229 -- =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 94,113 -- -- ----------- ----------- ----------- Units purchased ................................ 113,449 96,894 -- Units redeemed ................................. (21,282) (2,781) -- ----------- ----------- ----------- Ending units ................................... 186,280 94,113 -- =========== =========== ===========
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATSMCAPV -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ (93,474) (51,635) (12,857) Realized gain (loss) on investments ............ 110,418 163,206 435,390 Change in unrealized gain (loss) on investments ............................... 1,228,548 (1,082,758) (178,227) Reinvested capital gains ....................... 1,026,030 1,418,043 463,979 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 2,271,522 446,856 708,285 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 856,736 441,523 205,584 Transfers between funds ........................ 6,194,722 4,096,956 1,364,159 Surrenders ..................................... (349,290) (460,458) (9,301) Death benefits (note 4) ........................ (3,924) (1,053) -- Policy loans (net of repayments) (note 5) ...... (53,992) (43,917) (17,764) Deductions for surrender charges (note 2d) ..... (31,259) (42,138) (1,390) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (387,192) (151,631) (60,914) Asset charges (note 3): MSP contracts ................................ (5,500) (2,859) (3,844) LSFP contracts ............................... (8,972) (7,330) (2,270) ------------ ------------ ------------ Net equity transactions .................... 6,211,329 3,829,093 1,474,260 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 8,482,851 4,275,949 2,182,545 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 7,299,116 3,023,167 840,622 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 15,781,967 7,299,116 3,023,167 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 610,738 277,593 98,226 ------------ ------------ ------------ Units purchased ................................ 520,517 411,148 195,544 Units redeemed ................................. (96,353) (78,003) (16,177) ------------ ------------ ------------ Ending units ................................... 1,034,902 610,738 277,593 ============ ============ ============
NSATSMCO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (165,788) (212,417) (133,984) Realized gain (loss) on investments ............ (4,402,099) 9,053,628 322,338 Change in unrealized gain (loss) on investments ............................... 2,206,825 (12,312,627) 6,521,648 Reinvested capital gains ....................... -- 5,338,437 1,017,362 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (2,361,062) 1,867,021 7,727,364 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,441,354 2,677,792 3,047,229 Transfers between funds ........................ (3,075,492) 2,990,395 108,189 Surrenders ..................................... (849,541) (609,371) (506,958) Death benefits (note 4) ........................ (69,847) (168,776) (58,447) Policy loans (net of repayments) (note 5) ...... (474,171) (467,147) (304,105) Deductions for surrender charges (note 2d) ..... (76,029) (55,765) (75,786) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,301,720) (1,160,409) (1,042,927) Asset charges (note 3): MSP contracts ................................ (17,316) (21,930) (14,377) LSFP contracts ............................... (13,625) (16,087) (6,706) ------------ ------------ ------------ Net equity transactions .................... (3,436,387) 3,168,702 1,146,112 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (5,797,449) 5,035,723 8,873,476 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 31,404,476 26,368,753 17,495,277 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 25,607,027 31,404,476 26,368,753 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,306,261 1,185,688 1,118,367 ------------ ------------ ------------ Units purchased ................................ 116,845 234,167 222,497 Units redeemed ................................. (281,130) (113,594) (155,176) ------------ ------------ ------------ Ending units ................................... 1,141,976 1,306,261 1,185,688 ============ ============ ============
NSATSTMCAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (6,440) (2,791) -- Realized gain (loss) on investments ............ (447,934) (87,965) -- Change in unrealized gain (loss) on investments ............................... 118,872 (109,003) -- Reinvested capital gains ....................... -- 14,918 -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (335,502) (184,841) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 128,618 52,824 -- Transfers between funds ........................ 407,630 989,506 -- Surrenders ..................................... (17,647) (1,135) -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (28,387) (20,424) -- Deductions for surrender charges (note 2d) ..... (1,579) (104) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (47,737) (14,396) -- Asset charges (note 3): MSP contracts ................................ (769) (656) -- LSFP contracts ............................... (240) (36) -- ------------ ------------ ------------ Net equity transactions .................... 439,889 1,005,579 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 104,387 820,738 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 820,738 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 925,125 820,738 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 101,174 -- -- ------------ ------------ ------------ Units purchased ................................ 87,445 105,044 -- Units redeemed ................................. (23,747) (3,870) -- ------------ ------------ ------------ Ending units ................................... 164,872 101,174 -- ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NSATTOTRE -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ 10,101 (124,674) (110,908) Realized gain (loss) on investments ............ (1,755,795) 4,343,276 2,886,861 Change in unrealized gain (loss) on investments ............................... (11,829,407) (40,766,537) (615,625) Reinvested capital gains ....................... 2,194,987 33,726,301 3,857,973 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (11,380,114) (2,821,634) 6,018,301 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 10,570,297 12,173,163 14,477,695 Transfers between funds ........................ (1,415,297) (9,625,991) (3,544,992) Surrenders ..................................... (4,543,745) (3,857,717) (2,714,451) Death benefits (note 4) ........................ (691,160) (355,642) (233,861) Policy loans (net of repayments) (note 5) ...... (338,342) (2,458,440) (2,351,544) Deductions for surrender charges (note 2d) ..... (406,639) (353,031) (405,785) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (5,593,239) (5,594,595) (6,266,041) Asset charges (note 3): MSP contracts ................................ (34,275) (42,471) (46,751) LSFP contracts ............................... (19,473) (21,288) (17,691) ------------ ------------ ------------ Net equity transactions .................... (2,471,873) (10,136,012) (1,103,421) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (13,851,987) (12,957,646) 4,914,880 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 91,072,596 104,030,242 99,115,362 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 77,220,609 91,072,596 104,030,242 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 2,847,611 3,151,278 3,169,018 ------------ ------------ ------------ Units purchased ................................ 387,748 376,602 505,511 Units redeemed ................................. (476,855) (680,269) (523,251) ------------ ------------ ------------ Ending units ................................... 2,758,504 2,847,611 3,151,278 ============ ============ ============
NSATGRFOC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (1,295) (100) -- Realized gain (loss) on investments ............ (142,465) (2,764) -- Change in unrealized gain (loss) on investments ............................... 26,613 (24,195) -- Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (117,147) (27,059) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 17,433 2,062 -- Transfers between funds ........................ 263,212 75,866 -- Surrenders ..................................... (397) -- -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (5) (160) -- Deductions for surrender charges (note 2d) ..... (35) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (8,497) (1,281) -- Asset charges (note 3): MSP contracts ................................ (166) -- -- LSFP contracts ............................... -- -- -- ------------ ------------ ------------ Net equity transactions .................... 271,545 76,487 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 154,398 49,428 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 49,428 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 203,826 49,428 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 7,806 -- -- ------------ ------------ ------------ Units purchased ................................ 47,788 7,989 -- Units redeemed ................................. (2,354) (183) -- ------------ ------------ ------------ Ending units ................................... 53,240 7,806 -- ============ ============ ============
NBAMTBAL ------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (43) -- -- Realized gain (loss) on investments ............ (16) -- -- Change in unrealized gain (loss) on investments ............................... 125 -- -- Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 66 -- -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 469 -- -- Transfers between funds ........................ 14,107 -- -- Surrenders ..................................... -- -- -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... -- -- -- Deductions for surrender charges (note 2d) ..... -- -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (374) -- -- Asset charges (note 3): MSP contracts ................................ -- -- -- LSFP contracts ............................... -- -- -- ------------ ------------ ------------ Net equity transactions .................... 14,202 -- -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 14,268 -- -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... -- -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 14,268 -- -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ -- -- -- ------------ ------------ ------------ Units purchased ................................ 654 -- -- Units redeemed ................................. (18) -- -- ------------ ------------ ------------ Ending units ................................... 636 -- -- ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ (193,586) (326,947) (183,268) Realized gain (loss) on investments ............ (28,997,129) 9,694,143 2,237,185 Change in unrealized gain (loss) on investments ............................... 6,433,848 (18,572,555) 7,073,105 Reinvested capital gains ....................... 12,536,350 3,211,533 1,124,154 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (10,220,517) (5,993,826) 10,251,176 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,731,498 3,061,931 2,741,841 Transfers between funds ........................ 444,727 9,518,532 (2,585,171) Surrenders ..................................... (974,018) (1,565,105) (733,093) Death benefits (note 4) ........................ (42,216) (35,426) (1,410,172) Policy loans (net of repayments) (note 5) ...... (212,223) (903,203) (530,684) Deductions for surrender charges (note 2d) ..... (87,169) (143,228) (109,591) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,244,333) (1,638,100) (1,049,294) Asset charges (note 3): MSP contracts ................................ (12,841) (20,766) (9,624) LSFP contracts ............................... (9,710) (11,928) (4,427) ------------ ------------ ------------ Net equity transactions .................... 593,715 8,262,707 (3,690,215) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (9,626,802) 2,268,881 6,560,961 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 33,341,564 31,072,683 24,511,722 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 23,714,762 33,341,564 31,072,683 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,073,053 862,532 1,004,418 ------------ ------------ ------------ Units purchased ................................ 180,511 320,777 172,219 Units redeemed ................................. (138,923) (110,256) (314,105) ------------ ------------ ------------ Ending units ................................... 1,114,641 1,073,053 862,532 ============ ============ ============
NBAMTGUARD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (6,035) (2,263) (8,218) Realized gain (loss) on investments ............ 6,732 81,869 87,231 Change in unrealized gain (loss) on investments ............................... (216,517) (98,383) 43,771 Reinvested capital gains ....................... 152,227 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (63,593) (18,777) 122,784 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 222,976 236,546 241,772 Transfers between funds ........................ 726,698 (205,049) 1,149,560 Surrenders ..................................... (143,079) (207,025) (18,129) Death benefits (note 4) ........................ -- (13,947) (281) Policy loans (net of repayments) (note 5) ...... (25,903) (1,956) (19,356) Deductions for surrender charges (note 2d) ..... (12,805) (18,946) (2,710) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (90,460) (64,600) (59,481) Asset charges (note 3): MSP contracts ................................ (1,858) (1,487) (1,168) LSFP contracts ............................... (1,559) (1,145) (701) ------------ ------------ ------------ Net equity transactions .................... 674,010 (277,609) 1,289,506 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 610,417 (296,386) 1,412,290 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 1,974,105 2,270,491 858,201 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 2,584,522 1,974,105 2,270,491 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 184,667 213,441 92,073 ------------ ------------ ------------ Units purchased ................................ 88,493 29,781 134,132 Units redeemed ................................. (26,023) (58,555) (12,764) ------------ ------------ ------------ Ending units ................................... 247,137 184,667 213,441 ============ ============ ============
NBAMTLMAT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... 220,379 274,820 241,375 Realized gain (loss) on investments ............ 89,230 (266,075) (74,295) Change in unrealized gain (loss) on investments ............................... 11,853 223,548 (128,665) Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 321,462 232,293 38,415 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 299,644 124,829 418,414 Transfers between funds ........................ 1,321,934 (907,154) (166,249) Surrenders ..................................... (773,410) (310,740) (82,093) Death benefits (note 4) ........................ (14,103) -- (50,646) Policy loans (net of repayments) (note 5) ...... 159,958 (7,769) (66,552) Deductions for surrender charges (note 2d) ..... (69,216) (28,437) (12,272) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (172,678) (139,082) (161,822) Asset charges (note 3): MSP contracts ................................ (5,349) (5,836) (7,656) LSFP contracts ............................... (1,030) (720) (487) ------------ ------------ ------------ Net equity transactions .................... 745,750 (1,274,909) (129,363) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,067,212 (1,042,616) (90,948) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 3,885,764 4,928,380 5,019,328 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 4,952,976 3,885,764 4,928,380 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 252,610 342,163 349,795 ------------ ------------ ------------ Units purchased ................................ 105,369 23,235 62,199 Units redeemed ................................. (59,489) (112,788) (69,831) ------------ ------------ ------------ Ending units ................................... 298,490 252,610 342,163 ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
NBAMTPART -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ (75,310) 23,707 160,794 Realized gain (loss) on investments ............ (803,266) (2,426,344) (548,879) Change in unrealized gain (loss) on investments ............................... (872,728) (2,383,122) 1,854,882 Reinvested capital gains ....................... 860,887 4,631,886 687,554 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (890,417) (153,873) 2,154,351 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 2,895,052 3,997,213 5,441,082 Transfers between funds ........................ (551,168) (6,757,477) (8,211,478) Surrenders ..................................... (900,324) (1,477,559) (949,302) Death benefits (note 4) ........................ (80,967) (143,800) (94,956) Policy loans (net of repayments) (note 5) ...... (121,221) (176,640) (473,894) Deductions for surrender charges (note 2d) ..... (80,574) (135,216) (141,912) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,226,475) (1,294,898) (1,823,914) Asset charges (note 3): MSP contracts ................................ (16,055) (19,393) (23,724) LSFP contracts ............................... (13,840) (12,402) (10,391) ------------ ------------ ------------ Net equity transactions .................... (95,572) (6,020,172) (6,288,489) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (985,989) (6,174,045) (4,134,138) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 24,634,148 30,808,193 34,942,331 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 23,648,159 24,634,148 30,808,193 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,056,621 1,307,010 1,570,249 ------------ ------------ ------------ Units purchased ................................ 143,261 184,798 257,385 Units redeemed ................................. (149,545) (435,187) (520,624) ------------ ------------ ------------ Ending units ................................... 1,050,337 1,056,621 1,307,010 ============ ============ ============
OPPAGGGRO -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... 4,198 (9,718) -- Realized gain (loss) on investments ............ (1,542,830) (489,326) -- Change in unrealized gain (loss) on investments ............................... 307,499 (435,498) -- Reinvested capital gains ....................... 315,653 -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (915,480) (934,542) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 414,251 238,305 -- Transfers between funds ........................ (327,543) 3,670,423 -- Surrenders ..................................... (70,469) (19,423) -- Death benefits (note 4) ........................ -- -- -- Policy loans (net of repayments) (note 5) ...... (30,433) (15,499) -- Deductions for surrender charges (note 2d) ..... (6,307) (1,778) -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (140,549) (63,844) -- Asset charges (note 3): MSP contracts ................................ (1,861) (1,077) -- LSFP contracts ............................... (353) (72) -- ------------ ------------ ------------ Net equity transactions .................... (163,264) 3,807,035 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (1,078,744) 2,872,493 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 2,872,493 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 1,793,749 2,872,493 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 369,008 -- -- ------------ ------------ ------------ Units purchased ................................ 71,698 379,813 -- Units redeemed ................................. (102,937) (10,805) -- ------------ ------------ ------------ Ending units ................................... 337,769 369,008 -- ============ ============ ============
OPPBDFD -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... 771,452 804,164 472,261 Realized gain (loss) on investments ............ (494,081) (238,067) (6,702) Change in unrealized gain (loss) on investments ............................... 471,071 16,219 (794,086) Reinvested capital gains ....................... -- -- 54,146 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 748,442 582,316 (274,381) ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,078,932 1,288,550 1,530,602 Transfers between funds ........................ 1,213,664 (1,146,061) (747,631) Surrenders ..................................... (744,342) (429,249) (352,928) Death benefits (note 4) ........................ (21,063) (4,850) (9,225) Policy loans (net of repayments) (note 5) ...... (35,391) (75,839) (214,389) Deductions for surrender charges (note 2d) ..... (66,614) (39,282) (52,759) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (528,090) (431,185) (496,721) Asset charges (note 3): MSP contracts ................................ (10,865) (9,970) (9,861) LSFP contracts ............................... (3,915) (2,013) (1,060) ------------ ------------ ------------ Net equity transactions .................... 882,316 (849,899) (353,972) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,630,758 (267,583) (628,353) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 11,466,171 11,733,754 12,362,107 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 13,096,929 11,466,171 11,733,754 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 647,048 692,055 707,690 ------------ ------------ ------------ Units purchased ................................ 120,657 89,307 108,517 Units redeemed ................................. (75,805) (134,314) (124,152) ------------ ------------ ------------ Ending units ................................... 691,900 647,048 692,055 ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OPPCAPAP -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ (19,077) (110,855) (32,613) Realized gain (loss) on investments ............ (1,029,806) 1,860,687 710,047 Change in unrealized gain (loss) on investments ............................... (3,248,518) (3,665,305) 1,735,399 Reinvested capital gains ....................... 1,656,912 1,008,850 175,824 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (2,640,489) (906,623) 2,588,657 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,908,054 2,157,034 1,214,511 Transfers between funds ........................ 1,333,450 6,354,660 3,004,317 Surrenders ..................................... (730,423) (726,427) (60,102) Death benefits (note 4) ........................ (20,947) (6,975) (6,703) Policy loans (net of repayments) (note 5) ...... (312,079) (235,392) (111,846) Deductions for surrender charges (note 2d) ..... (65,369) (66,477) (8,985) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (860,437) (739,986) (351,903) Asset charges (note 3): MSP contracts ................................ (9,111) (9,840) (4,217) LSFP contracts ............................... (7,689) (7,653) (3,718) ------------ ------------ ------------ Net equity transactions .................... 1,235,449 6,718,944 3,671,354 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (1,405,040) 5,812,321 6,260,011 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 18,099,350 12,287,029 6,027,018 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 16,694,310 18,099,350 12,287,029 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,010,305 679,081 467,763 ------------ ------------ ------------ Units purchased ................................ 199,382 432,286 284,637 Units redeemed ................................. (135,693) (101,062) (73,319) ------------ ------------ ------------ Ending units ................................... 1,073,994 1,010,305 679,081 ============ ============ ============
OPPGLSEC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (17,114) (213,733) 65,415 Realized gain (loss) on investments ............ 711,276 1,641,953 2,137,635 Change in unrealized gain (loss) on investments ............................... (10,336,593) (5,708,731) 9,595,322 Reinvested capital gains ....................... 4,652,673 5,565,874 717,222 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (4,989,758) 1,285,363 12,515,594 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 3,040,269 3,586,290 3,377,203 Transfers between funds ........................ (700,733) 3,670,519 127,319 Surrenders ..................................... (1,165,344) (1,335,643) (755,080) Death benefits (note 4) ........................ (59,812) (106,833) (44,903) Policy loans (net of repayments) (note 5) ...... (641,888) (736,228) (343,214) Deductions for surrender charges (note 2d) ..... (104,292) (122,229) (112,877) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,470,276) (1,541,228) (1,110,398) Asset charges (note 3): MSP contracts ................................ (14,321) (17,080) (9,874) LSFP contracts ............................... (7,414) (8,237) (4,111) ------------ ------------ ------------ Net equity transactions .................... (1,123,811) 3,389,331 1,124,065 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (6,113,569) 4,674,694 13,639,659 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 39,444,895 34,770,201 21,130,542 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 33,331,326 39,444,895 34,770,201 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,321,836 1,212,506 1,158,329 ------------ ------------ ------------ Units purchased ................................ 124,911 237,815 196,187 Units redeemed ................................. (168,042) (128,485) (142,010) ------------ ------------ ------------ Ending units ................................... 1,278,705 1,321,836 1,212,506 ============ ============ ============
OPPMSGRINC -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (1,569) (965) -- Realized gain (loss) on investments ............ (68,580) 2,561 -- Change in unrealized gain (loss) on investments ............................... 3,903 (40,617) -- Reinvested capital gains ....................... -- -- -- ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (66,246) (39,021) -- ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 73,457 18,231 -- Transfers between funds ........................ 478,473 465,697 -- Surrenders ..................................... (13,868) -- -- Death benefits (note 4) ........................ (5,572) -- -- Policy loans (net of repayments) (note 5) ...... (6,462) (13,064) -- Deductions for surrender charges (note 2d) ..... (1,241) -- -- Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (28,125) (5,465) -- Asset charges (note 3): MSP contracts ................................ (846) (407) -- LSFP contracts ............................... (396) (32) -- ------------ ------------ ------------ Net equity transactions .................... 495,420 464,960 -- ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 429,174 425,939 -- CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 425,939 -- -- ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 855,113 425,939 -- ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 47,244 -- -- ------------ ------------ ------------ Units purchased ................................ 67,246 49,163 -- Units redeemed ................................. (8,150) (1,919) -- ------------ ------------ ------------ Ending units ................................... 106,340 47,244 -- ============ ============ ============
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
OPPMULT -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... $ 463,119 559,143 364,821 Realized gain (loss) on investments ............ (253,215) 397,611 405,169 Change in unrealized gain (loss) on investments ............................... (788,871) (1,160,185) 10,270 Reinvested capital gains ....................... 782,407 993,822 694,901 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 203,440 790,391 1,475,161 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 1,340,866 1,409,025 1,717,678 Transfers between funds ........................ 73,937 (593,747) (1,101,933) Surrenders ..................................... (1,108,678) (532,389) (382,853) Death benefits (note 4) ........................ (15,941) (31,040) (36,757) Policy loans (net of repayments) (note 5) ...... (124,435) (299,399) (234,710) Deductions for surrender charges (note 2d) ..... (99,220) (48,720) (57,233) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (685,803) (598,149) (646,532) Asset charges (note 3): MSP contracts ................................ (8,884) (8,633) (8,700) LSFP contracts ............................... (3,101) (2,652) (1,730) ------------ ------------ ------------ Net equity transactions .................... (631,259) (705,704) (752,770) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (427,819) 84,687 722,391 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 15,014,837 14,930,150 14,207,759 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 14,587,018 15,014,837 14,930,150 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 597,489 625,008 661,584 ------------ ------------ ------------ Units purchased ................................ 62,920 66,207 80,794 Units redeemed ................................. (85,593) (93,726) (117,370) ------------ ------------ ------------ Ending units ................................... 574,816 597,489 625,008 ============ ============ ============
STOPP2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (90,855) (355,887) (283,101) Realized gain (loss) on investments ............ 810,668 1,982,167 1,739,375 Change in unrealized gain (loss) on investments ............................... (9,214,867) (4,879,451) 5,430,662 Reinvested capital gains ....................... 6,568,447 5,562,609 3,541,869 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. (1,926,607) 2,309,438 10,428,805 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 3,747,736 3,997,729 4,448,212 Transfers between funds ........................ 1,868,557 46,907 (12,621) Surrenders ..................................... (1,628,712) (1,864,450) (1,148,838) Death benefits (note 4) ........................ (138,099) (68,640) (104,927) Policy loans (net of repayments) (note 5) ...... (509,235) (890,076) (753,805) Deductions for surrender charges (note 2d) ..... (145,760) (170,621) (171,741) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (1,891,585) (1,687,865) (1,589,094) Asset charges (note 3): MSP contracts ................................ (10,652) (11,771) (9,653) LSFP contracts ............................... (7,189) (6,074) (4,177) ------------ ------------ ------------ Net equity transactions .................... 1,285,061 (654,861) 653,356 ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (641,546) 1,654,577 11,082,161 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 43,772,522 42,117,945 31,035,784 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 43,130,976 43,772,522 42,117,945 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 1,075,957 1,086,172 1,071,986 ------------ ------------ ------------ Units purchased ................................ 153,470 130,217 143,914 Units redeemed ................................. (120,020) (140,432) (129,728) ------------ ------------ ------------ Ending units ................................... 1,109,407 1,075,957 1,086,172 ============ ============ ============
STDISC2 -------------------------------------------- 2001 2000 1999 ------------ ------------ ------------ INVESTMENT ACTIVITY: Net investment income .......................... (7,858) (58,904) (53,820) Realized gain (loss) on investments ............ (1,394,760) 752,895 (992,301) Change in unrealized gain (loss) on investments ............................... 323,479 (482,257) 125,370 Reinvested capital gains ....................... 1,246,478 -- 1,035,670 ------------ ------------ ------------ Net increase (decrease) in contract owners' equity resulting from operations .................. 167,339 211,734 114,919 ------------ ------------ ------------ EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 677,166 954,266 1,126,745 Transfers between funds ........................ 331,868 (570,553) (2,017,437) Surrenders ..................................... (500,137) (235,086) (201,408) Death benefits (note 4) ........................ (9,601) (21,678) (1,033) Policy loans (net of repayments) (note 5) ...... 1,236 (266,090) (115,906) Deductions for surrender charges (note 2d) ..... (44,759) (21,513) (30,109) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (360,160) (329,564) (340,295) Asset charges (note 3): MSP contracts ................................ (1,879) (1,697) (1,300) LSFP contracts ............................... (1,043) (903) (513) ------------ ------------ ------------ Net equity transactions .................... 92,691 (492,818) (1,581,256) ------------ ------------ ------------ NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 260,030 (281,084) (1,466,337) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 6,604,411 6,885,495 8,351,832 ------------ ------------ ------------ CONTRACT OWNERS' EQUITY END OF PERIOD ............ 6,864,441 6,604,411 6,885,495 ============ ============ ============ CHANGES IN UNITS: Beginning units ................................ 325,876 349,019 440,162 ------------ ------------ ------------ Units purchased ................................ 54,515 53,248 70,498 Units redeemed ................................. (53,274) (76,391) (161,641) ------------ ------------ ------------ Ending units ................................... 327,117 325,876 349,019 ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
STINTSTK2 ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ (19,820) (49,525) (14,510) Realized gain (loss) on investments ............ (668,197) (387,126) 1,329,944 Change in unrealized gain (loss) on investments ............................... (12,561) (1,546,991) 1,572,604 Reinvested capital gains ....................... 94,952 -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (605,626) (1,983,642) 2,888,038 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 379,003 580,207 428,882 Transfers between funds ........................ (626,846) (2,282,869) 2,309,650 Surrenders ..................................... (73,457) (136,421) (56,239) Death benefits (note 4) ........................ (8,282) (8,738) (4,048) Policy loans (net of repayments) (note 5) ...... (5,357) (28,642) 52,892 Deductions for surrender charges (note 2d) ..... (6,574) (12,484) (8,407) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (138,425) (207,957) (125,810) Asset charges (note 3): MSP contracts ................................ (1,205) (2,758) (2,085) LSFP contracts ............................... (2,203) (4,055) (1,753) ----------- ----------- ----------- Net equity transactions .................... (483,346) (2,103,717) 2,593,082 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (1,088,972) (4,087,359) 5,481,120 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 3,380,757 7,468,116 1,986,996 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 2,291,785 3,380,757 7,468,116 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 339,841 453,067 222,590 ----------- ----------- ----------- Units purchased ................................ 48,269 53,645 255,086 Units redeemed ................................. (90,356) (166,871) (24,609) ----------- ----------- ----------- Ending units ................................... 297,754 339,841 453,067 =========== =========== ===========
UIFEMMKT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 103,553 102,397 81,127 Realized gain (loss) on investments ............ 2,970 26,389 26,192 Change in unrealized gain (loss) on investments ............................... (10,775) (38,552) 29,379 Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 95,748 90,234 136,698 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 115,651 106,585 106,804 Transfers between funds ........................ 58,296 219,001 158,219 Surrenders ..................................... (10,839) (10,363) (6,693) Death benefits (note 4) ........................ (558) (3,364) -- Policy loans (net of repayments) (note 5) ...... (2,643) (4,279) (7,238) Deductions for surrender charges (note 2d) ..... (970) (948) (1,001) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (40,159) (31,590) (24,247) Asset charges (note 3): MSP contracts ................................ (898) (542) (425) LSFP contracts ............................... (2,146) (1,706) (885) ----------- ----------- ----------- Net equity transactions .................... 115,734 272,794 224,534 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 211,482 363,028 361,232 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 1,064,426 701,398 340,166 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 1,275,908 1,064,426 701,398 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 106,632 77,785 48,664 ----------- ----------- ----------- Units purchased ................................ 22,094 35,031 35,161 Units redeemed ................................. (11,905) (6,184) (6,040) ----------- ----------- ----------- Ending units ................................... 116,821 106,632 77,785 =========== =========== ===========
UIFUSRE ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 260,668 467,855 356,207 Realized gain (loss) on investments ............ 499,135 446,597 (1,050,667) Change in unrealized gain (loss) on investments ............................... (151,471) 443,730 478,383 Reinvested capital gains ....................... 71,668 36,959 -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 680,000 1,395,141 (216,077) ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 771,202 743,161 1,006,759 Transfers between funds ........................ 801,119 623,498 (1,435,388) Surrenders ..................................... (221,091) (117,484) (187,346) Death benefits (note 4) ........................ (6,563) (3,388) (2,653) Policy loans (net of repayments) (note 5) ...... (125,377) (37,568) (131,155) Deductions for surrender charges (note 2d) ..... (19,786) (10,751) (28,007) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (419,054) (274,253) (432,919) Asset charges (note 3): MSP contracts ................................ (5,645) (4,297) (4,975) LSFP contracts ............................... (3,546) (2,747) (2,459) ----------- ----------- ----------- Net equity transactions .................... 771,259 916,171 (1,218,143) ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ 1,451,259 2,311,312 (1,434,220) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 7,416,383 5,105,071 6,539,291 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 8,867,642 7,416,383 5,105,071 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 388,011 339,591 417,073 ----------- ----------- ----------- Units purchased ................................ 83,489 81,265 63,982 Units redeemed ................................. (46,231) (32,845) (141,464) ----------- ----------- ----------- Ending units ................................... 425,269 388,011 339,591 =========== =========== ===========
NATIONWIDE VLI SEPARATE ACCOUNT-2 STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
VEWRLDBD ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... $ 82,397 103,752 109,624 Realized gain (loss) on investments ............ (98,475) (272,468) (379,921) Change in unrealized gain (loss) on investments ............................... (128,804) 148,290 (74,747) Reinvested capital gains ....................... -- -- 60,420 ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (144,882) (20,426) (284,624) ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 148,351 195,128 232,837 Transfers between funds ........................ (16,738) (244,098) (449,720) Surrenders ..................................... (89,552) (111,418) (98,243) Death benefits (note 4) ........................ (911) (594) (25,665) Policy loans (net of repayments) (note 5) ...... 58,063 (49,056) (70,184) Deductions for surrender charges (note 2d) ..... (8,014) (10,196) (14,686) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (94,179) (83,862) (113,947) Asset charges (note 3): MSP contracts ................................ (1,268) (1,432) (1,809) LSFP contracts ............................... (221) (159) (145) ----------- ----------- ----------- Net equity transactions .................... (4,469) (305,687) (541,562) ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (149,351) (326,113) (826,186) CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 2,394,922 2,721,035 3,547,221 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ $ 2,245,571 2,394,922 2,721,035 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 170,727 195,887 233,069 ----------- ----------- ----------- Units purchased ................................ 17,591 16,793 18,613 Units redeemed ................................. (18,125) (41,953) (55,795) ----------- ----------- ----------- Ending units ................................... 170,193 170,727 195,887 =========== =========== ===========
VEWRLDEMKT ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... (26,750) (53,777) (32,044) Realized gain (loss) on investments ............ (647,627) (325,564) 2,142,637 Change in unrealized gain (loss) on investments ............................... 690,151 (2,614,711) 1,939,640 Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. 15,774 (2,994,052) 4,050,233 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 490,507 797,659 580,564 Transfers between funds ........................ (331,274) (3,479,128) 4,022,991 Surrenders ..................................... (180,526) (194,407) (107,435) Death benefits (note 4) ........................ (8,562) (13,706) -- Policy loans (net of repayments) (note 5) ...... 28,266 (160,319) (70,361) Deductions for surrender charges (note 2d) ..... (16,156) (17,791) (16,061) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (186,521) (270,107) (157,046) Asset charges (note 3): MSP contracts ................................ (2,672) (4,809) (3,494) LSFP contracts ............................... (2,560) (4,221) (1,983) ----------- ----------- ----------- Net equity transactions .................... (209,498) (3,346,829) 4,247,175 ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (193,724) (6,340,881) 8,297,408 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 3,808,102 10,148,983 1,851,575 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 3,614,378 3,808,102 10,148,983 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 573,188 882,045 320,168 ----------- ----------- ----------- Units purchased ................................ 86,484 89,672 609,978 Units redeemed ................................. (101,379) (398,529) (48,101) ----------- ----------- ----------- Ending units ................................... 558,293 573,188 882,045 =========== =========== ===========
VEWRLDHAS ----------------------------------------- 2001 2000 1999 ----------- ----------- ----------- INVESTMENT ACTIVITY: Net investment income .......................... 13,329 11,079 25,195 Realized gain (loss) on investments ............ (465,577) 525,703 609,115 Change in unrealized gain (loss) on investments ............................... (17,134) (152,863) 199,401 Reinvested capital gains ....................... -- -- -- ----------- ----------- ----------- Net increase (decrease) in contract owners' equity resulting from operations .................. (469,382) 383,919 833,711 ----------- ----------- ----------- EQUITY TRANSACTIONS: Purchase payments received from contract owners .............................. 327,399 365,844 602,994 Transfers between funds ........................ (274,541) (236,020) (822,875) Surrenders ..................................... (221,290) (307,798) (289,205) Death benefits (note 4) ........................ (9,201) (5,146) (1,818) Policy loans (net of repayments) (note 5) ...... (6,073) (120,415) 77,240 Deductions for surrender charges (note 2d) ..... (19,804) (28,167) (43,233) Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c) ............................ (191,766) (176,970) (189,825) Asset charges (note 3): MSP contracts ................................ (1,931) (2,345) (1,809) LSFP contracts ............................... (644) (1,775) (322) ----------- ----------- ----------- Net equity transactions .................... (397,851) (512,792) (668,853) ----------- ----------- ----------- NET CHANGE IN CONTRACT OWNERS' EQUITY ............ (867,233) (128,873) 164,858 CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ...................................... 4,165,570 4,294,443 4,129,585 ----------- ----------- ----------- CONTRACT OWNERS' EQUITY END OF PERIOD ............ 3,298,337 4,165,570 4,294,443 =========== =========== =========== CHANGES IN UNITS: Beginning units ................................ 278,673 317,507 361,828 ----------- ----------- ----------- Units purchased ................................ 26,308 29,839 63,996 Units redeemed ................................. (57,511) (68,673) (108,317) ----------- ----------- ----------- Ending units ................................... 247,470 278,673 317,507 =========== =========== ===========
See accompanying notes to financial statements. NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001, 2000 AND 1999 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization and Nature of Operations The Nationwide VLI Separate Account-2 (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on May 7, 1987. The Account is registered as a unit investment trust under the Investment Company Act of 1940. The Company offers Single Premium, Modified Single Premium, Flexible Premium and Last Survivor Flexible Premium Variable Life Insurance Policies through the Account. The primary distribution for the contracts is through the brokerage community; however, other distributors may be utilized. (b) The Contracts Prior to December 31, 1990, only contracts without a front-end sales charge, but with a contingent deferred sales charge and certain other fees, were offered for purchase. Beginning December 31, 1990, contracts with a front-end sales charge, a contingent deferred sales charge and certain other fees, are offered for purchase. See note 2 for a discussion of policy charges and note 3 for asset charges. Contract owners may invest in the following: Portfolios of the American Century Variable Portfolios, Inc. (American Century VP); American Century VP - American Century VP Balanced (ACVPBal) American Century VP - American Century VP Capital Appreciation (ACVPCapAp) American Century VP - American Century VP Income & Growth (ACVPIncGr) American Century VP - American Century VP International (ACVPInt) American Century VP - American Century VP Value (ACVPValue) Portfolios of the Credit Suisse Trust; Credit Suisse Trust - Global Post-Venture Capital Portfolio (CSWPGPV) Credit Suisse Trust - International Equity Portfolio (CSWPIntEq) Credit Suisse Trust - Small Cap Growth Portfolio (CSWPSmCo) Portfolio of the Dreyfus Investment Portfolios (Dreyfus IP); Dreyfus IP - European Equity Portfolio (DryEuroEq) The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro) Dreyfus Stock Index Fund (DryStkIx) Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF); Dreyfus VIF - Appreciation Portfolio (DryAp) Dreyfus VIF - Growth and Income Portfolio (DryGrInc) Portfolios of the Fidelity(R) Variable Insurance Products Fund (Fidelity(R) VIP); Fidelity(R) VIP - Equity-Income Portfolio: Initial Class (FidVIPEI) Fidelity(R) VIP - Growth Portfolio: Initial Class (FidVIPGr) Fidelity(R) VIP - High Income Portfolio: Initial Class (FidVIPHI) Fidelity(R) VIP - Overseas Portfolio: Initial Class (FidVIPOv) Portfolios of the Fidelity(R) Variable Insurance Products Fund II (Fidelity(R) VIP-II); Fidelity(R) VIP-II - Asset Manager Portfolio: Initial Class (FidVIPAM) Fidelity(R) VIP-II - Contrafund Portfolio: Initial Class (FidVIPCon) Portfolio of the Fidelity(R) Variable Insurance Products Fund III (Fidelity(R) VIP-III); Fidelity(R) VIP-III - Growth Opportunities Portfolio: Initial Class (FidVIPGrOp) Portfolios of the Janus Aspen Series (Janus AS); Janus AS - Capital Appreciation Portfolio - Service Shares (JanCapAp) Janus AS - Global Technology Portfolio - Service Shares (JanGlTech) Janus AS - International Growth Portfolio - Service Shares (JanIntGro) Funds of the Nationwide(R) Separate Account Trust (Nationwide(R) SAT); Nationwide(R) SAT - Capital Appreciation Fund Class I (NSATCapAp) Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I (NSATMidCapIx) Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I (NSATEmMkt) Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I (NSATGlobTC) Nationwide(R) SAT - Gartmore International Growth Fund Class I (NSATIntGr) Nationwide(R) SAT - Government Bond Fund Class I (NSATGvtBd) Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I (NSATMSecBd) Nationwide(R) SAT - Money Market Fund Class I (NSATMyMkt) Nationwide(R) SAT - Small Cap Growth Fund Class I (NSATSmCapG) Nationwide(R) SAT - Small Cap Value Fund Class I (NSATSmCapV) Nationwide(R) SAT - Small Company Fund Class I (NSATSmCo) Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I (NSATStMCap) Nationwide(R) SAT - Total Return Fund Class I (NSATTotRe) Nationwide(R) SAT - Turner Growth Focus Fund Class I (NSATGrFoc) Portfolios of the Neuberger Berman Advisers Management Trust (Neuberger Berman AMT); Neuberger Berman AMT - Balanced Portfolio (NBAMTBal) Neuberger Berman AMT - Growth Portfolio (NBAMTGro) Neuberger Berman AMT - Guardian Portfolio (NBAMTGuard) Neuberger Berman AMT - Limited Maturity Bond Portfolio (NBAMTLMat) Neuberger Berman AMT - Partners Portfolio (NBAMTPart) Funds of the Oppenheimer Variable Account Funds; Oppenheimer Aggressive Growth Fund/VA (OppAggGro) Oppenheimer Bond Fund/VA (OppBdFd) Oppenheimer Capital Appreciation Fund/VA (OppCapAp) Oppenheimer Global Securities Fund/VA (OppGlSec) Oppenheimer Main Street Growth & Income Fund/VA (OppMSGrInc) Oppenheimer Multiple Strategies Fund/VA (OppMult) Strong Opportunity Fund II, Inc. (StOpp2) Funds of the Strong Variable Insurance Funds, Inc. (Strong VIF); Strong VIF - Strong Discovery Fund II (StDisc2) Strong VIF - Strong International Stock Fund II (StIntStk2) Funds of The Universal Institutional Funds, Inc. (UIF); UIF - Emerging Markets Debt Portfolio (UIFEmMkt) (formerly Morgan Stanley - Emerging Markets Debt Portfolio) UIF - U.S. Real Estate Portfolio (UIFUSRE) (formerly Van Kampen American Capital - Morgan Stanley U.S. Real Estate Portfolio) Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT); Van Eck WIT - Worldwide Bond Fund (VEWrldBd) Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt) Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs) (Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED At December 31, 2001, contract owners have invested in all of the above funds. The contract owners' equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see notes 2 and 3). The accompanying financial statements include only contract owners' purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the accounts of the Company. A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds 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. Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially. (c) Security Valuation, Transactions and Related Investment Income The fair value of the underlying mutual funds is based on the closing net asset value per share at December 31, 2001. Fund purchases and sales are accounted for on the trade date (date the order to buy or sell is executed). The cost of investments sold is determined on a specific identification basis, and dividends (which include capital gain distributions) are accrued as of the ex-dividend date. (d) Federal Income Taxes Operations of the Account form a part of, and are taxed with, operations of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are the responsibility of the contract owner upon termination or withdrawal. (e) Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (2) POLICY CHARGES (a) Deductions from Premiums For single premium contracts, no deduction is made from any premium at the time of payment. On multiple payment contracts, flexible premium contracts and modified single premium contracts, the Company deducts a charge for state premium taxes equal to 2.5% of all premiums received to cover the payment of these premium taxes. The Company also deducts a sales load from each premium payment received not to exceed 3.5% of each premium payment. On last survivor flexible premium contracts, the Company deducts a charge for state premium taxes equal to 3.5% of all premiums received to cover the payment of these premium taxes. The Company also deducts a sales load from each premium payment received not to exceed 5% of each premium payment during the first ten years and 1.5% of each premium payment thereafter. The Company may at its sole discretion reduce this sales loading. (b) Cost of Insurance A cost of insurance charge is assessed monthly against each contract by liquidating units. The amount of the charge is based upon age, sex, rate class and net amount at risk (death benefit less total contract value). For last survivor flexible premium contracts, the monthly cost of insurance is determined in a manner that reflects the anticipated mortality of the two insureds and the fact that the death benefit is not payable until the death of the second insured policyholder. (c) Administrative Charges An administrative charge is assessed against each contract to recover policy maintenance, accounting, record keeping and other administrative expenses and is assessed against each contract by liquidating units. For single premium contracts, the Company deducts an annual administrative charge which is determined as follows: Contracts issued prior to April 16, 1990: Purchase payments totalling less than $25,000 - $10/month Purchase payments totalling $25,000 or more - none Contracts issued on or after April 16, 1990: Purchase payments totalling less than $25,000 - $90/year ($65/year in New York) Purchase payments totalling $25,000 or more - $50/year For multiple payment contracts, the Company currently deducts a monthly administrative charge of $5 (not to exceed $7.50 per month). For flexible premium contracts, the Company currently deducts a monthly administrative charge of $12.50 during the first policy year. For all subsequent years, a monthly administrative charge is deducted (currently $5 per month not to exceed $7.50). Additionally, the Company deducts an increase charge of $2.04 per year per $1,000 applied to any increase in the specified amount during the first 12 months after the increase becomes effective. For modified single premium contracts, the monthly charge is equal to an annual rate of .30% multiplied by the policy's cash value. For policy years 11 and later, this monthly charge is reduced to an annual rate of 0.15% of the policy's cash value. The monthly charge is subject to a $10 minimum. For last survivor flexible premium contracts, the Company deducts a monthly administrative charge equal to the sum of the policy charge and the basic coverage charge. For policy years one through ten the policy charge is $10. Additionally, there is a $0.04 per $1,000 basic coverage charge (not less than $20 or more than $80 per policy). For policy years eleven and after, the policy charge is $5. Additionally, there is a $0.02 per $1,000 basic coverage charge (not less than $10 or more than $40 per policy). Additionally, the Company deducts a monthly increase charge of $2.40 per $1,000 applied to any increase in the specified amount during the first 12 months after the increase becomes effective. The charge may be raised to $3.60 per $1,000 of increase per year at the Company's discretion. (d) Surrender Charges Policy surrenders result in a redemption of the contract value from the Account and payment of the surrender proceeds to the contract owner or designee. The surrender proceeds consist of the contract value, less any outstanding policy loans, and less a surrender charge, if applicable. The charge is determined according to contract type. For single premium contracts, the charge is determined based upon a specified percentage of the original purchase payment. For single premium contracts issued prior to April 16, 1990, the charge is 8% in the first year and declines to 0% after the ninth year. For single premium contracts issued on or after April 16, 1990, the charge is 8.5% in the first year, and declines to 0% after the ninth year. For multiple payment contracts and flexible premium contracts, the amount charged is based upon a specified percentage of the initial surrender charge, which varies by issue age, sex and rate class. The charge is 100% of the initial surrender charge in the first year, declining to 0% after the ninth year. (Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED For modified single premium contracts, the amount charged is based on the original purchase payment. The charge is 10% in the first year, declining to 0% in the ninth year. For last survivor flexible premium contracts, the charge is 100% of the initial surrender charge, declining to 0% in the fourteenth year if the average issue age is 74 or less. The charge is 100% of the initial surrender charge, declining to 0% in the ninth year if the average issue age is 75 or greater. For last survivor flexible payment contracts, the initial surrender charge is comprised of two components, an underwriting surrender charge and a sales surrender charge. The Company may waive the surrender charge for certain contracts in which the sales expenses normally associated with the distribution of a contract are not incurred. (3) ASSET CHARGES For single premium contracts, the Company deducts a charge from the contract to cover mortality and expense risk charges related to operations, and to recover policy maintenance and premium tax charges. For contracts issued prior to April 16, 1990, the charge is equal to an annual rate of .95% during the first ten policy years, and .50% thereafter. A reduction of charges on these contracts is possible in policy years six through ten for those contracts achieving certain investment performance criteria. For single premium contracts issued on or after April 16, 1990, the charge is equal to an annual rate of 1.30% during the first ten policy years, and 1.00% thereafter. The above charges are assessed through the daily unit value calculation and are reflected in the table below. For multiple payment contracts and flexible premium contracts, the Company deducts a charge equal to an annual rate of .80%, with certain exceptions, to cover mortality and expense risk charges related to operations. The above charges are assessed through the daily unit value calculation and are reflected in the table below. For modified single premium contracts (MSP), the Company deducts an annual rate of .90% charged against the cash value of the contracts. This charge is assessed monthly against each contract by liquidating units. For last survivor flexible premium contracts (LSFP), the Company deducts an annual rate of .80% in policy years one through ten. This charge is assessed monthly by liquidating units. In policy years eleven and greater, the Company deducts an annual rate of .80% if the cash value of the contract is less than $100,000. If the cash value is greater than or equal to $100,000, the Company reduces the annual asset fee rate to .30%. The following table provides mortality and expense risk charges by contract type for the period ended December 31, 2001:
TOTAL ACVPBAL ACVPCAPAP ACVPINCGR ACVPINT ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 9,945 -- 1,018 -- 73 Single Premium contracts issued on or after April 16, 1990 .... 1,353,580 7,447 31,357 5,783 25,817 Multiple Payment contracts and Flexible Premium contracts .... 6,083,486 31,951 124,709 25,760 105,826 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 7,447,011 39,398 157,084 31,543 131,716 ============ ============ ============ ============ ============ ACVPVALUE CSWPGPV CSWPINTEQ CSWPSMCO DRYEUROEQ ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 5 94 -- -- -- Single Premium contracts issued on or after April 16, 1990 .... 17,208 1,626 9,068 17,489 452 Multiple Payment contracts and Flexible Premium contracts .... 49,449 13,768 47,217 121,208 1,093 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 66,662 15,488 56,285 138,697 1,545 ============ ============ ============ ============ ============
DRYSRGRO DRYSTKIX DRYAP DRYGRINC FIDVIPEI ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ -- 376 -- -- 954 Single Premium contracts issued on or after April 16, 1990 .... 10,745 80,334 12,577 2,918 142,241 Multiple Payment contracts and Flexible Premium contracts .... 108,279 584,155 37,962 17,118 482,790 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 119,024 664,865 50,539 20,036 625,985 ============ ============ ============ ============ ============
FIDVIPGR FIDVIPHI FIDVIPOV FIDVIPAM FIDVIPCON ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 1,155 199 283 166 -- Single Premium contracts issued on or after April 16, 1990 .... 165,229 27,672 35,278 67,334 62,048 Multiple Payment contracts and Flexible Premium contracts .... 870,483 108,604 126,449 165,618 351,343 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 1,036,867 136,475 162,010 233,118 413,391 ============ ============ ============ ============ ============
FIDVIPGROP JANCAPAP JANGLTECH JANINTGRO NSATCAPAP ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 65 -- -- 1 3 Single Premium contracts issued on or after April 16, 1990 .... 3,098 2,039 3,286 5,738 9,520 Multiple Payment contracts and Flexible Premium contracts .... 28,122 18,962 12,000 11,153 139,798 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 31,285 21,001 15,286 16,892 149,321 ============ ============ ============ ============ ============
NSATMIDCAPIX NSATEMMKT NSATGLOBTC NSATINTGR NSATGVTBD ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ -- -- -- -- 188 Single Premium contracts issued on or after April 16, 1990 .... 3,038 40 847 18 59,091 Multiple Payment contracts and Flexible Premium contracts .... 14,877 1,014 2,108 175 69,556 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 17,915 1,054 2,955 193 128,835 ============ ============ ============ ============ ============
NSATMSECBD NSATMYMKT NSATSMCAPG NSATSMCAPV NSATSMCO ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 1 1,003 -- 1,152 91 Single Premium contracts issued on or after April 16, 1990 .... 355 171,623 1,121 40,521 16,666 Multiple Payment contracts and Flexible Premium contracts .... 2,430 250,925 7,490 55,678 178,482 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 2,786 423,551 8,611 97,351 195,239 ============ ============ ============ ============ ============
NSATSTMCAP NSATTOTRE NSATGRFOC NBAMTBAL NBAMTGRO ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ -- 232 -- -- 572 Single Premium contracts issued on or after April 16, 1990 .... 1,051 40,397 97 -- 34,690 Multiple Payment contracts and Flexible Premium contracts .... 5,389 571,617 1,198 43 158,324 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 6,440 612,246 1,295 43 193,586 ============ ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
NBAMTGUARD NBAMTLMAT NBAMTPART OPPAGGGRO OPPBDFD ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 1 537 2 1 4 Single Premium contracts issued on or after April 16, 1990 .... 884 14,129 16,958 1,776 18,350 Multiple Payment contracts and Flexible Premium contracts .... 15,806 20,568 148,970 14,255 74,286 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 16,691 35,234 165,930 16,032 92,640 ============ ============ ============ ============ ============
OPPCAPAP OPPGLSEC OPPMSGRINC OPPMULT STOPP2 ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 661 84 -- -- 581 Single Premium contracts issued on or after April 16, 1990 .... 19,634 33,610 588 33,772 51,199 Multiple Payment contracts and Flexible Premium contracts .... 109,197 234,376 3,628 88,883 293,420 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 129,492 268,070 4,216 122,655 345,200 ============ ============ ============ ============ ============
STDISC2 STINTSTK2 UIFEMMKT UIFUSRE VEWRLDBD ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ -- -- 65 293 83 Single Premium contracts issued on or after April 16, 1990 .... 9,142 4,397 652 14,648 5,690 Multiple Payment contracts and Flexible Premium contracts .... 46,945 15,423 5,664 48,775 13,754 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 56,087 19,820 6,381 63,716 19,527 ============ ============ ============ ============ ============
VEWRLDEMKT VEWRLDHAS ------------ ------------ Single Premium contracts issued prior to April 16, 1990 ....... $ 2 -- Single Premium contracts issued on or after April 16, 1990 .... 3,098 9,194 Multiple Payment contracts and Flexible Premium contracts .... 23,650 22,763 ------------ ------------ Total ....................... $ 26,750 31,957 ============ ============
The following table provides mortality and expense risk charges by contract type for the period ended December 31, 2000:
TOTAL ACVPBAL ACVCAPAP ACVPINCGR ACVPINT ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 24,586 -- 2,924 -- 575 Single Premium contracts issued on or after April 16, 1990 .... 1,668,100 8,312 50,858 7,821 39,191 Multiple Payment and Flexible Premium contracts ............. 7,171,155 35,037 172,093 25,391 152,864 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 8,863,841 43,349 225,875 33,212 192,630 ============ ============ ============ ============ ============
ACVPVALUE CSWPGPV CSWPINTEQ CSWPSMCO DRYEUROEQ ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 9 794 -- -- -- Single Premium contracts issued on or after April 16, 1990 .... 7,369 2,662 12,244 35,097 469 Multiple Payment and Flexible Premium contracts ............. 19,786 23,021 69,430 181,441 58 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 27,164 26,477 81,674 216,538 527 ============ ============ ============ ============ ============
DRYSRGRO DRYSTKIX DRYAP DRYGRINC FIDVIPEI ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ -- 2,043 -- -- 2,573 Single Premium contracts issued on or after April 16, 1990 .... 14,818 104,574 14,211 3,646 167,821 Multiple Payment and Flexible Premium contracts ............. 142,212 691,343 43,939 16,273 459,835 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 157,030 797,960 58,150 19,919 630,229 ============ ============ ============ ============ ============
FIDVIPGR FIDVIPHI FIDVIPOV FIDVIPAM FIDVIPCON ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 3,497 443 734 369 -- Single Premium contracts issued on or after April 16, 1990 .... 234,747 32,538 47,224 81,758 85,023 Multiple Payment and Flexible Premium contracts ............. 1,199,892 135,615 182,649 185,028 436,677 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 1,438,136 168,596 230,607 267,155 521,700 ============ ============ ============ ============ ============
FIDVIPGROP JANCAPAP JANGLTECH JANINTGRO NSATCAPAP ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 151 -- -- -- -- Single Premium contracts issued on or after April 16, 1990 .... 3,965 2,507 5,105 8,260 15,130 Multiple Payment and Flexible Premium contracts ............. 36,864 7,957 5,342 535 247,451 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 40,980 10,464 10,447 8,795 262,581 ============ ============ ============ ============ ============
NSATMIDCAPIX NSATEMMKT NSATGLOBTC NSATINTGR NSATGVTBD ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ -- -- -- -- 458 Single Premium contracts issued on or after April 16, 1990 .... 1,586 -- 789 -- 55,609 Multiple Payment and Flexible Premium contracts ............. 2,639 21 129 14 43,413 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 4,225 21 918 14 99,480 ============ ============ ============ ============ ============
NSATMSECBD NSATMYMKT NSATSMCAPG NSATSMCAPV NSATSMCO ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 15 2,426 -- 737 203 Single Premium contracts issued on or after April 16, 1990 .... 109 180,399 362 40,313 26,301 Multiple Payment and Flexible Premium contracts ............. 96 231,050 2,152 10,585 194,188 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 220 413,875 2,514 51,635 220,692 ============ ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
NSATSTMCAP NSATTOTRE NSATGRFOC NBAMTGRO NBAMTGUARD ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ -- 581 -- 1,617 -- Single Premium contracts issued on or after April 16, 1990 .... 1,065 52,162 -- 52,458 654 Multiple Payment and Flexible Premium contracts ............. 1,726 684,107 100 272,872 14,034 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 2,791 736,850 100 326,947 14,688 ============ ============ ============ ============ ============
NBAMTLMAT NBAMTPART OPPAGGGRO OPPBDFD OPPCAPAP ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 1,243 9 -- 11 1,316 Single Premium contracts issued on or after April 16, 1990 .... 13,012 16,642 2,875 15,964 23,233 Multiple Payment and Flexible Premium contracts ............. 17,838 177,442 6,843 68,588 105,211 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 32,093 194,093 9,718 84,563 129,760 ============ ============ ============ ============ ============
OPPGLSEC OPPMSGRINC OPPMULT STOPP2 STDISC2 ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 681 -- -- 202 -- Single Premium contracts issued on or after April 16, 1990 .... 43,763 390 38,900 59,630 8,552 Multiple Payment and Flexible Premium contracts ............. 268,868 575 86,217 296,055 50,352 ------------ ------------ ------------ ------------ ------------ Total ....................... $313,312 965 125,117 355,887 58,904 ============ ============ ============ ============ ============
STINTSTK2 UIFEMMKT UIFUSRE VEWRLDBD VEWRLDEMKT ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ -- 133 631 181 29 Single Premium contracts issued on or after April 16, 1990 .... 11,016 1,340 13,596 6,649 3,523 Multiple Payment and Flexible Premium contracts ............. 38,509 4,918 32,402 14,851 50,225 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 49,525 6,391 46,629 21,681 53,777 ============ ============ ============ ============ ============
VEWRLDHAS ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 1 Single Premium contracts issued on or after April 16, 1990 .... 11,858 Multiple Payment and Flexible Premium contracts ............. 24,402 ------------ Total ....................... $ 36,261 ============
The following table provides mortality and expense risk charges by contract type for the period ended December 31, 1999:
TOTAL ACVPBAL ACVPCAPAP ACVPINCGR ACVPINT ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 22,217 126 315 79 360 Single Premium contracts issued on or after April 16, 1990 .... 1,597,906 9,070 22,650 5,653 25,861 Multiple Payment and Flexible Premium contracts ............. 6,040,026 34,284 85,615 21,369 97,752 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 7,660,149 43,480 108,580 27,101 123,973 ============ ============ ============ ============ ============
ACVPVALUE CSWPGPV CSWPINTEQ CSWPSMCO DRYSRGRO ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 61 40 204 333 333 Single Premium contracts issued on or after April 16, 1990 .... 4,379 2,855 14,649 23,934 23,957 Multiple Payment and Flexible Premium contracts ............. 16,553 10,791 55,372 90,470 90,556 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 20,993 13,686 70,225 114,737 114,846 ============ ============ ============ ============ ============
DRYSTKIX DRYAP DRYGRINC FIDVIPEI FIDVIPGR ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 2,086 166 46 2,071 3,322 Single Premium contracts issued on or after April 16, 1990 .... 150,018 11,975 3,327 148,948 238,938 Multiple Payment and Flexible Premium contracts ............. 567,060 45,265 12,577 563,016 903,175 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 719,164 57,406 15,950 714,035 1,145,435 ============ ============ ============ ============ ============
FIDVIPHI FIDVIPOV FIDVIPAM FIDVIPCON FIDVIPGROP ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 574 580 784 1,335 137 Single Premium contracts issued on or after April 16, 1990 .... 41,267 41,698 56,415 96,008 9,823 Multiple Payment and Flexible Premium contracts ............. 155,987 157,616 213,245 362,905 37,128 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 197,828 199,894 270,444 460,248 47,088 ============ ============ ============ ============ ============
NSATCAPAP NSATGVTBD NSATMYMKT NSATSMCAPV NSATSMCO ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 937 352 1,204 37 389 Single Premium contracts issued on or after April 16, 1990 .... 67,386 25,386 86,597 2,682 27,949 Multiple Payment and Flexible Premium contracts ............. 254,746 95,940 327,332 10,138 105,646 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 323,069 121,678 415,133 12,857 133,984 ============ ============ ============ ============ ============
NSATTOTRE NBAMTGRO NBAMTGUARD NBAMTLMAT NBAMTPART ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 2,247 531 37 104 680 Single Premium contracts issued on or after April 16, 1990 .... 161,641 38,230 2,667 7,455 48,927 Multiple Payment and Flexible Premium contracts ............. 610,999 144,507 10,083 28,179 184,942 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 774,887 183,268 12,787 35,738 234,549 ============ ============ ============ ============ ============
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
OPPBDFD OPPCAPAP OPPGLSEC OPPMULT STOPP2 ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 266 141 553 335 821 Single Premium contracts issued on or after April 16, 1990 .... 19,098 10,142 39,744 24,110 59,055 Multiple Payment and Flexible Premium contracts ............. 72,189 38,336 150,232 91,134 223,225 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 91,553 48,619 190,529 115,579 283,101 ============ ============ ============ ============ ============
STDISC2 STINTSTK2 UIFEMMKT UIFUSRE VEWRLDBD ------------ ------------ ------------ ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 156 65 9 128 74 Single Premium contracts issued on or after April 16, 1990 .... 11,227 4,687 666 9,180 5,340 Multiple Payment and Flexible Premium contracts ............. 42,437 17,716 2,520 34,702 20,187 ------------ ------------ ------------ ------------ ------------ Total ....................... $ 53,820 22,468 3,195 44,010 25,601 ============ ============ ============ ============ ============
VEWRLDEMKT VEWRLDHAS ------------ ------------ Single Premium contracts issued prior to April 16,1990 ........ $ 93 106 Single Premium contracts issued on or after April 16, 1990 .... 6,684 7,628 Multiple Payment and Flexible Premium contracts ............. 25,267 28,833 ------------ ------------ Total ....................... $ 32,044 36,567 ============ ============
(4) DEATH BENEFITS Death benefit proceeds result in a redemption of the contract value from the Account and payment of those proceeds, less any outstanding policy loans (and policy charges), to the legal beneficiary. For last survivor flexible premium contracts, the proceeds are payable on the death of the last surviving insured. In the event that the guaranteed death benefit exceeds the contract value on the date of death, the excess is paid by the Company's general account. (5) POLICY LOANS (NET OF REPAYMENTS) Contract provisions allow contract owners to borrow up to 90% (50% during first year of single and modified single premium contracts) of a policy's cash surrender value. For single premium contracts issued prior to April 16, 1990, 6.5% interest is due and payable annually in advance. For single premium contracts issued on or after April 16, 1990, multiple payment, flexible premium, modified single and last survivor flexible premium contracts, 6% interest is due and payable in advance on the policy anniversary when there is a loan outstanding on the policy. At the time the loan is granted, the amount of the loan is transferred from the Account to the Company's general account as collateral for the outstanding loan. Collateral amounts in the general account are credited with the stated rate of interest in effect at the time the loan is made, subject to a guaranteed minimum rate. Loan repayments result in a transfer of collateral, including interest, back to the Account. (6) RELATED PARTY TRANSACTIONS The Company performs various services on behalf of the Mutual Fund Companies in which the Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, preparation, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company. (7) FINANCIAL HIGHLIGHTS The following is a summary of units, unit fair values and contract owners' equity outstanding for variable life and annuity contracts as of the end of the period indicated, and the contract expense rate and total return for each of the five years in the period ended December 31, 2001.
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Modified Single Premium contracts and Last Survivor Flexible Premium contracts: American Century VP - American Century VP Balanced 2001 ............................................ 0.00% 46,974 $15.146118 $ 711,474 -3.54% 2000 ............................................ 0.00% 46,479 15.701900 729,809 -2.65% 1999 ............................................ 0.00% 47,439 16.129489 765,167 10.06% 1998 ............................................ 0.00% 40,224 14.655512 589,503 15.77% 1997 ............................................ 0.00% 27,206 12.659036 344,402 15.81% American Century VP - American Century VP Capital Appreciation 2001 ............................................ 0.00% 113,954 11.137742 1,269,190 -28.07% 2000 ............................................ 0.00% 136,380 15.483078 2,111,582 9.03% 1999 ............................................ 0.00% 67,671 14.200282 960,947 64.52% 1998 ............................................ 0.00% 56,709 8.631172 489,465 -2.16% 1997 ............................................ 0.00% 32,542 8.821378 287,065 -3.26% American Century VP - American Century VP Income & Growth 2001 ............................................ 0.00% 53,217 10.558315 561,882 -8.35% 2000 ............................................ 0.00% 51,494 11.520561 593,240 -10.62% 1999 ............................................ 0.00% 90,023 12.888778 1,160,286 18.02% 1998 ............................................ 0.00% 49,568 10.920877 541,326 9.21% 5/1/98 American Century VP - American Century VP International 2001 ............................................ 0.00% 111,542 14.668200 1,636,120 -29.17% 2000 ............................................ 0.00% 143,626 20.710054 2,974,502 -16.83% 1999 ............................................ 0.00% 120,278 24.899615 2,994,876 64.04% 1998 ............................................ 0.00% 109,633 15.178805 1,664,098 18.76% 1997 ............................................ 0.00% 32,515 12.781185 415,580 18.63% American Century VP - American Century VP Value 2001 ............................................ 0.00% 98,909 17.718442 1,752,513 12.82% 2000 ............................................ 0.00% 53,790 15.704757 844,759 18.14% 1999 ............................................ 0.00% 42,323 13.293167 562,607 -0.85% 1998 ............................................ 0.00% 39,670 13.407134 531,861 4.81% 1997 ............................................ 0.00% 17,691 12.791587 226,296 26.08% Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 ............................................ 0.00% 12,080 11.607891 140,223 -28.63% 2000 ............................................ 0.00% 19,402 16.265390 315,581 -18.94% 1999 ............................................ 0.00% 14,680 20.065541 294,562 63.50% 1998 ............................................ 0.00% 4,122 12.272697 50,588 6.51% 1997 ............................................ 0.00% 2,527 11.522579 29,118 13.34% Credit Suisse Trust - International Equity Portfolio 2001 ............................................ 0.00% 120,573 9.040640 1,090,057 -22.27% 2000 ............................................ 0.00% 119,996 11.631433 1,395,725 -25.90% 1999 ............................................ 0.00% 142,042 15.696053 2,229,499 53.43% 1998 ............................................ 0.00% 132,142 10.230064 1,351,821 5.35% 1997 ............................................ 0.00% 112,574 9.710827 1,093,187 -2.26%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Credit Suisse Trust - Small Cap Growth Portfolio 2001 ............................................ 0.00% 185,522 12.840185 2,382,137 -16.01% 2000 ............................................ 0.00% 212,377 15.287247 3,246,660 -18.11% 1999 ............................................ 0.00% 154,684 18.668523 2,887,722 69.08% 1998 ............................................ 0.00% 131,376 11.041376 1,450,572 -2.85% 1997 ............................................ 0.00% 116,237 11.365509 1,321,093 15.65% Dreyfus IP - European Equity Portfolio 2001 ............................................ 0.00% 133 6.722485 894 -28.13% 2000 ............................................ 0.00% 2,553 9.353456 23,879 -9.65% The Dreyfus Socially Responsible Growth Fund, Inc. 2001 ............................................ 0.00% 72,096 16.646416 1,200,140 -22.57% 2000 ............................................ 0.00% 87,987 21.499776 1,891,701 -11.03% 1999 ............................................ 0.00% 72,077 24.166067 1,741,818 30.08% 1998 ............................................ 0.00% 59,391 18.577940 1,103,362 29.38% 1997 ............................................ 0.00% 37,804 14.359114 542,832 28.43% Dreyfus Stock Index Fund 2001 ............................................ 0.00% 599,693 18.770165 11,256,337 -12.18% 2000 ............................................ 0.00% 591,538 21.373424 12,643,192 -9.28% 1999 ............................................ 0.00% 619,532 23.560156 14,596,271 20.60% 1998 ............................................ 0.00% 451,985 19.535151 8,829,595 28.21% 1997 ............................................ 0.00% 228,273 15.236658 3,478,118 32.96% Dreyfus VIF - Appreciation Portfolio 2001 ............................................ 0.00% 81,387 13.409044 1,091,322 -9.31% 2000 ............................................ 0.00% 68,662 14.785375 1,015,193 -0.65% 1999 ............................................ 0.00% 54,118 14.882433 805,408 11.46% 1998 ............................................ 0.00% 32,649 13.352746 435,954 30.22% 1997 ............................................ 0.00% 450 10.254291 4,614 2.54% 7/14/97 Dreyfus VIF - Growth and Income Portfolio 2001 ............................................ 0.00% 42,969 13.745232 590,619 -5.85% 2000 ............................................ 0.00% 50,580 14.598583 738,396 -3.78% 1999 ............................................ 0.00% 42,510 15.172345 644,976 16.88% 1998 ............................................ 0.00% 33,423 12.980656 433,852 11.81% 1997 ............................................ 0.00% 18,834 11.609215 218,648 16.21% Fidelity(R) VIP - Equity-Income Portfolio: Initial Class 2001 ............................................ 0.00% 431,008 16.906669 7,286,910 -4.96% 2000 ............................................ 0.00% 410,082 17.788146 7,294,598 8.42% 1999 ............................................ 0.00% 442,948 16.406894 7,267,401 6.33% 1998 ............................................ 0.00% 424,796 15.430209 6,554,691 11.63% 1997 ............................................ 0.00% 299,539 13.822981 4,140,522 28.11% Fidelity(R) VIP - Growth Portfolio: Initial Class 2001 ............................................ 0.00% 464,650 18.128151 8,423,245 -17.65% 2000 ............................................ 0.00% 494,090 22.013206 10,876,505 -10.98% 1999 ............................................ 0.00% 462,592 24.728511 11,439,211 37.44% 1998 ............................................ 0.00% 312,967 17.992701 5,631,122 39.49% 1997 ............................................ 0.00% 162,254 12.898986 2,092,912 23.48%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Fidelity(R) VIP - High Income Portfolio: Initial Class 2001 ............................................ 0.00% 268,872 9.023656 2,426,208 -11.73% 2000 ............................................ 0.00% 251,453 10.222956 2,570,593 -22.47% 1999 ............................................ 0.00% 301,341 13.186454 3,973,619 8.15% 1998 ............................................ 0.00% 328,441 12.192188 4,004,414 -4.33% 1997 ............................................ 0.00% 171,832 12.743794 2,189,792 17.67% Fidelity(R) VIP - Overseas Portfolio: Initial Class 2001 ............................................ 0.00% 100,976 12.204145 1,232,326 -21.17% 2000 ............................................ 0.00% 109,074 15.480896 1,688,563 -19.11% 1999 ............................................ 0.00% 121,065 19.137888 2,316,928 42.63% 1998 ............................................ 0.00% 94,348 13.418281 1,265,988 12.75% 1997 ............................................ 0.00% 45,600 11.900892 542,681 11.56% Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class 2001 ............................................ 0.00% 97,209 15.661062 1,522,396 -4.09% 2000 ............................................ 0.00% 97,054 16.328861 1,584,781 -3.93% 1999 ............................................ 0.00% 98,987 16.996678 1,682,450 11.09% 1998 ............................................ 0.00% 96,546 15.299714 1,477,126 15.05% 1997 ............................................ 0.00% 73,280 13.298253 974,496 20.65% Fidelity(R) VIP II - Contrafund Portfolio: Initial Class 2001 ............................................ 0.00% 310,919 18.482808 5,746,656 -12.24% 2000 ............................................ 0.00% 339,730 21.061590 7,155,254 -6.62% 1999 ............................................ 0.00% 334,798 22.555449 7,551,519 24.25% 1998 ............................................ 0.00% 294,323 18.152724 5,342,764 29.98% 1997 ............................................ 0.00% 167,595 13.965921 2,340,619 24.14% Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class 2001 ............................................ 0.00% 59,212 10.143319 600,606 -14.42% 2000 ............................................ 0.00% 67,837 11.852480 804,037 -17.07% 1999 ............................................ 0.00% 67,209 14.291602 960,524 4.27% 1998 ............................................ 0.00% 54,891 13.706120 752,343 24.61% 1997 ............................................ 0.00% 13,840 10.998857 152,224 9.99% 7/14/97 Janus AS - Capital Appreciation Portfolio - Service Shares 2001 ............................................ 0.00% 62,604 6.201616 388,246 -21.83% 2000 ............................................ 0.00% 54,056 7.933369 428,846 -30.82% 5/1/00 Janus AS - Global Technology Portfolio - Service Shares 2001 ............................................ 0.00% 58,616 4.249300 249,077 -37.31% 2000 ............................................ 0.00% 51,067 6.778794 346,173 -20.67% 5/1/00 Janus AS - International Growth Portfolio - Service Shares 2001 ............................................ 0.00% 37,721 6.088787 229,675 -23.43% 2000 ............................................ 0.00% 28,662 7.951801 227,915 -20.48% 5/1/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 ............................................ 0.00% 169,484 11.173143 1,893,669 -28.13% 2000 ............................................ 0.00% 202,780 15.547089 3,152,639 -26.53% 1999 ............................................ 0.00% 234,699 21.161942 4,966,687 4.28% 1998 ............................................ 0.00% 207,778 20.293858 4,216,617 29.96% 1997 ............................................ 0.00% 92,414 15.614947 1,443,040 34.49% Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 ............................................ 0.00% 37,983 10.379883 394,259 -1.30% 2000 ............................................ 0.00% 15,903 10.517026 167,252 5.17% 5/1/00 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 ............................................ 0.00% 27,272 8.260926 225,292 -5.18%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 ............................................ 0.00% 2,536 3.446837 8,741 -42.72% 2000 ............................................ 0.00% 2,596 6.017639 15,622 -39.82% 10/2/00 Nationwide(R) SAT - Government Bond Fund Class I 2001 ............................................ 0.00% 192,314 15.033937 2,891,237 7.25% 2000 ............................................ 0.00% 147,694 14.017108 2,070,243 12.54% 1999 ............................................ 0.00% 146,891 12.455412 1,829,588 -2.35% 1998 ............................................ 0.00% 100,956 12.754801 1,287,674 8.91% 1997 ............................................ 0.00% 38,575 11.711522 451,772 9.67% Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 ............................................ 0.00% 2,363 10.932334 25,833 4.19% 2000 ............................................ 0.00% 3,146 10.492823 33,010 4.93% 5/1/00 Nationwide(R) SAT - Money Market Fund Class I 2001 ............................................ 0.00% 752,971 13.194770 9,935,279 3.60% 2000 ............................................ 0.00% 690,357 12.735851 8,792,284 6.03% 1999 ............................................ 0.00% 710,620 12.011954 8,535,935 4.85% 1998 ............................................ 0.00% 904,630 11.456534 10,363,924 5.27% 1997 ............................................ 0.00% 680,581 10.882768 7,406,605 5.26% Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 ............................................ 0.00% 28,981 7.239237 209,800 -10.84% 2000 ............................................ 0.00% 5,428 8.119138 44,071 -18.81% 5/1/00 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 ............................................ 0.00% 145,093 15.689204 2,276,394 28.28% 2000 ............................................ 0.00% 92,343 12.230652 1,129,415 11.20% 1999 ............................................ 0.00% 86,677 10.998838 953,346 27.84% 1998 ............................................ 0.00% 18,425 8.603810 158,525 -13.96% 5/1/98 Nationwide(R) SAT - Small Company Fund Class I 2001 ............................................ 0.00% 171,105 18.253468 3,123,260 -6.70% 2000 ............................................ 0.00% 232,635 19.565011 4,551,506 8.90% 1999 ............................................ 0.00% 210,131 17.966399 3,775,297 44.02% 1998 ............................................ 0.00% 170,740 12.475012 2,129,984 1.01% 1997 ............................................ 0.00% 99,062 12.350345 1,223,450 17.35% Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 ............................................ 0.00% 15,083 5.680754 85,683 -30.31% 2000 ............................................ 0.00% 15,341 8.151094 125,046 -18.49% 5/1/00 Nationwide(R) SAT - Total Return Fund Class I 2001 ............................................ 0.00% 370,050 16.144226 5,974,171 -11.82% 2000 ............................................ 0.00% 383,717 18.308017 7,025,097 -2.12% 1999 ............................................ 0.00% 408,867 18.704720 7,647,743 6.94% 1998 ............................................ 0.00% 377,762 17.490359 6,607,193 18.07% 1997 ............................................ 0.00% 270,928 14.813042 4,013,268 29.43% Neuberger Berman AMT - Growth Portfolio 2001 ............................................ 0.00% 194,831 13.610476 2,651,743 -30.36% 2000 ............................................ 0.00% 165,377 19.543829 3,232,100 -11.66% 1999 ............................................ 0.00% 101,415 22.122463 2,243,550 50.40% 1998 ............................................ 0.00% 95,390 14.709510 1,403,140 15.53% 1997 ............................................ 0.00% 35,081 12.732630 446,673 29.01%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Neuberger Berman AMT - Guardian Portfolio 2001 ............................................ 0.00% 42,795 10.719948 458,760 -1.51% 2000 ............................................ 0.00% 31,192 10.883981 339,493 1.13% 1999 ............................................ 0.00% 28,718 10.762335 309,073 14.93% 1998 ............................................ 0.00% 15,552 9.364011 145,629 -6.36% 5/1/98 Neuberger Berman AMT - Limited Maturity Bond Portfolio 2001 ............................................ 0.00% 53,267 13.761786 733,049 8.78% 2000 ............................................ 0.00% 48,744 12.650873 616,654 6.78% 1999 ............................................ 0.00% 73,941 11.847132 875,989 1.48% 1998 ............................................ 0.00% 72,201 11.674617 842,919 4.39% 1997 ............................................ 0.00% 63,831 11.183579 713,859 6.74% Neuberger Berman AMT - Partners Portfolio 2001 ............................................ 0.00% 214,234 16.491924 3,533,131 -2.83% 2000 ............................................ 0.00% 218,683 16.971642 3,711,410 0.07% 1999 ............................................ 0.00% 229,651 16.853460 3,870,414 7.37% 1998 ............................................ 0.00% 241,826 15.696640 3,795,856 4.21% 1997 ............................................ 0.00% 154,752 15.062681 2,330,980 31.25% Oppenheimer Aggressive Growth Fund/VA 2001 ............................................ 0.00% 27,049 5.377832 145,465 -31.27% 2000 ............................................ 0.00% 29,380 7.824211 229,875 -21.76% 5/1/00 Oppenheimer Bond Fund/VA 2001 ............................................ 0.00% 120,742 13.988352 1,688,982 7.79% 2000 ............................................ 0.00% 108,962 12.977817 1,414,089 6.10% 1999 ............................................ 0.00% 101,438 12.232154 1,240,805 -1.52% 1998 ............................................ 0.00% 90,724 12.420731 1,126,858 6.80% 1997 ............................................ 0.00% 60,188 11.629634 699,964 9.25% Oppenheimer Capital Appreciation Fund/VA 2001 ............................................ 0.00% 116,791 16.074008 1,877,299 -12.58% 2000 ............................................ 0.00% 115,080 18.386180 2,115,882 -0.23% 1999 ............................................ 0.00% 83,414 18.428739 1,537,215 41.66% 1998 ............................................ 0.00% 98,891 13.009524 1,286,525 24.00% 1997 ............................................ 0.00% 7,635 10.491590 80,103 4.92% 7/14/97 Oppenheimer Global Securities Fund/VA 2001 ............................................ 0.00% 111,537 22.171331 2,472,924 -12.04% 2000 ............................................ 0.00% 119,169 25.205074 3,003,663 5.09% 1999 ............................................ 0.00% 94,622 23.984739 2,269,484 58.48% 1998 ............................................ 0.00% 89,467 15.133929 1,353,987 14.10% 1997 ............................................ 0.00% 53,741 13.263226 712,779 22.42% Oppenheimer Main Street Growth & Income Fund/VA 2001 ............................................ 0.00% 21,240 8.134641 172,780 -10.16% 2000 ............................................ 0.00% 10,745 9.054521 97,291 -9.45% 5/1/00 Oppenheimer Multiple Strategies Fund/VA 2001 ............................................ 0.00% 84,920 16.632670 1,412,446 2.22% 2000 ............................................ 0.00% 82,390 16.271709 1,340,626 6.44% 1999 ............................................ 0.00% 80,822 15.287602 1,235,575 11.80% 1998 ............................................ 0.00% 90,548 13.674340 1,238,184 6.65% 1997 ............................................ 0.00% 58,544 12.821215 750,605 17.22%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Strong Opportunity Fund II, Inc. ................... 2001 ............................................ 0.00% 103,859 21.238327 2,205,791 -3.70% 2000 ............................................ 0.00% 96,471 22.004768 2,122,822 6.60% 1999 ............................................ 0.00% 85,543 20.690172 1,769,899 34.91% 1998 ............................................ 0.00% 85,559 15.336685 1,312,191 13.54% 1997 ............................................ 0.00% 50,153 13.507426 677,438 25.45% Strong VIF - Strong Discovery Fund II 2001 ............................................ 0.00% 22,035 13.485135 297,145 4.08% 2000 ............................................ 0.00% 25,155 12.955970 325,907 4.39% 1999 ............................................ 0.00% 19,763 12.410693 245,273 5.09% 1998 ............................................ 0.00% 20,724 11.809640 244,743 7.26% 1997 ............................................ 0.00% 15,515 11.010302 170,825 11.39% Strong VIF - Strong International Stock Fund II 2001 ............................................ 0.00% 55,640 7.298468 406,087 -22.14% 2000 ............................................ 0.00% 51,648 9.373600 484,128 -39.52% 1999 ............................................ 0.00% 91,170 15.499580 1,413,097 87.20% 1998 ............................................ 0.00% 36,980 8.279751 306,185 -4.78% 1997 ............................................ 0.00% 28,984 8.695226 252,022 -13.52% UIF - Emerging Markets Debt Portfolio 2001 ............................................ 0.00% 33,534 11.216363 376,130 10.10% 2000 ............................................ 0.00% 33,493 10.187412 341,207 11.39% 1999 ............................................ 0.00% 25,999 9.146001 237,787 29.37% 1998 ............................................ 0.00% 6,444 7.069376 45,555 -28.38% 1997 ............................................ 0.00% 3,497 9.870449 34,517 -1.30% 7/14/97 UIF - U.S. Real Estate Portfolio 2001 ............................................ 0.00% 58,299 19.952330 1,163,201 9.84% 2000 ............................................ 0.00% 57,529 18.164582 1,044,990 28.06% 1999 ............................................ 0.00% 53,125 14.184757 753,565 -3.37% 1998 ............................................ 0.00% 58,853 14.679798 863,950 -11.62% 1997 ............................................ 0.00% 47,746 16.610019 793,062 21.47% Van Eck WIT - Worldwide Bond Fund 2001 ............................................ 0.00% 15,977 10.819530 172,864 -5.10% 2000 ............................................ 0.00% 15,146 11.400381 172,670 1.87% 1999 ............................................ 0.00% 16,613 11.191476 185,924 -7.82% 1998 ............................................ 0.00% 21,531 12.141253 261,413 12.75% 1997 ............................................ 0.00% 19,142 10.767851 206,118 2.39% Van Eck WIT - Worldwide Emerging Markets Fund 2001 ............................................ 0.00% 79,757 6.710492 535,209 -1.81% 2000 ............................................ 0.00% 91,301 6.834145 623,964 -41.87% 1999 ............................................ 0.00% 175,122 11.755719 2,058,685 100.28% 1998 ............................................ 0.00% 41,962 5.869611 246,301 -34.13% 1997 ............................................ 0.00% 13,242 8.910909 117,998 -11.60% Van Eck WIT - Worldwide Hard Assets Fund 2001 ............................................ 0.00% 32,526 8.239575 268,000 -10.44% 2000 ............................................ 0.00% 35,253 9.200485 324,345 11.40% 1999 ............................................ 0.00% 38,783 8.258894 320,305 21.00% 1998 ............................................ 0.00% 21,804 6.825397 148,821 -30.97% 1997 ............................................ 0.00% 14,793 9.887286 146,263 -1.68%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Single Premium contracts issued prior to April 16, 1990 (policy years 11 and thereafter): American Century VP - American Century VP Capital Appreciation 2001 ............................................ 0.50% 2,922 28.500613 83,279 -28.43% 2000 ............................................ 0.50% 7,428 39.820221 295,785 8.49% 1999 ............................................ 0.50% 6,108 36.406768 222,373 63.70% 1998 ............................................ 0.50% 6,437 22.339504 143,799 -2.73% 1997 ............................................ 0.50% 8,329 23.049846 191,982 -4.17% American Century VP - American Century VP International 2000 ............................................ 0.50% 2,453 22.205291 54,470 -17.24% 1999 ............................................ 0.50% 2,459 26.614141 65,444 63.23% American Century VP - American Century VP Value 2000 ............................................ 0.50% 118 15.308543 1,806 17.56% Credit Suisse Trust - Global Post-Venture Capital Portfolio 2000 ............................................ 0.50% 4,740 15.854894 75,152 -19.34% Credit Suisse Trust - International Equity Portfolio 1998 ............................................ 0.50% 1,777 11.754581 20,888 4.73% 1997 ............................................ 0.50% 1,792 11.264405 20,186 -3.18% Credit Suisse Trust - Small Cap Growth Portfolio 1997 ............................................ 0.50% 134 16.093971 2,157 14.56% The Dreyfus Socially Responsible Growth Fund, Inc. 1999 ............................................ 0.50% 1,699 36.209915 61,521 29.43% Dreyfus Stock Index Fund 2001 ............................................ 0.50% 1,122 26.476528 29,707 -12.62% 2000 ............................................ 0.50% 6,384 30.300792 193,440 -9.73% 1999 ............................................ 0.50% 16,208 33.296352 539,667 20.00% 1998 ............................................ 0.50% 14,798 27.871347 412,440 27.46% 1997 ............................................ 0.50% 9,956 21.945853 218,493 31.70% Dreyfus VIF - Appreciation Portfolio 1999 ............................................ 0.50% 868 14.538186 12,619 10.90% 1998 ............................................ 0.50% 876 13.168334 11,535 28.99% Fidelity(R) VIP - Equity-Income Portfolio: Initial Class 2001 ............................................ 0.50% 3,200 45.378727 145,212 -5.43% 2000 ............................................ 0.50% 5,076 47.985530 243,575 7.88% 1999 ............................................ 0.50% 5,082 44.120448 224,220 5.80% 1998 ............................................ 0.50% 6,566 41.890019 275,050 10.97% 1997 ............................................ 0.50% 6,812 37.884780 258,071 26.90% Fidelity(R) VIP - Growth Portfolio: Initial Class 2001 ............................................ 0.50% 3,370 57.875878 195,042 -18.06% 2000 ............................................ 0.50% 4,686 70.634432 330,993 -11.42% 1999 ............................................ 0.50% 3,009 79.099308 238,010 36.75% 1998 ............................................ 0.50% 4,551 58.102055 264,422 38.67% 1997 ............................................ 0.50% 5,177 42.050483 217,695 22.31% Fidelity(R) VIP - High Income Portfolio: Initial Class 2001 ............................................ 0.50% 1,784 19.796324 35,317 -12.17% 2000 ............................................ 0.50% 1,862 22.540543 41,970 -22.86% 1999 ............................................ 0.50% 2,115 28.983767 61,301 7.62% 1998 ............................................ 0.50% 3,510 27.054068 94,960 -4.89% 1997 ............................................ 0.50% 3,493 28.548032 99,718 16.55%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Fidelity(R) VIP - Overseas Portfolio: Initial Class 2001 ............................................ 0.50% 2,274 21.810922 49,598 -21.56% 2000 ............................................ 0.50% 2,500 27.806776 69,517 -19.51% 1999 ............................................ 0.50% 4,084 34.268141 139,951 41.92% 1998 ............................................ 0.50% 4,966 24.255551 120,453 12.09% 1997 ............................................ 0.50% 5,108 21.717871 110,935 10.50% Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class 2001 ............................................ 0.50% 1,169 28.291882 33,073 -4.57% 2000 ............................................ 0.50% 1,178 29.647039 34,924 -4.41% 1999 ............................................ 0.50% 1,185 30.762893 36,454 10.54% 1998 ............................................ 0.50% 1,193 27.955691 33,351 14.38% 1997 ............................................ 0.50% 1,203 24.530415 29,510 19.51% Fidelity(R) VIP II - Contrafund Portfolio: Initial Class 1999 ............................................ 0.50% 677 25.968332 17,581 23.63% 1998 ............................................ 0.50% 684 21.098746 14,432 29.22% 1997 ............................................ 0.50% 3,331 16.387248 54,586 22.97% Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class 2001 ............................................ 0.50% 1,210 9.889817 11,967 -14.85% 2000 ............................................ 0.50% 1,231 11.614608 14,298 -17.48% 1999 ............................................ 0.50% 1,477 13.960952 20,620 3.75% Nationwide(R) SAT - Capital Appreciation Fund Class I 1999 ............................................ 0.50% 1,979 32.388538 64,097 3.76% 1998 ............................................ 0.50% 2,354 31.356408 73,813 29.20% 1997 ............................................ 0.50% 2,373 24.356996 57,799 33.22% Nationwide(R) SAT - Government Bond Fund Class I 2001 ............................................ 0.50% 1,291 27.097613 34,983 6.72% 2000 ............................................ 0.50% 1,707 25.392104 43,344 11.98% 1999 ............................................ 0.50% 1,747 22.492327 39,294 -2.83% 1998 ............................................ 0.50% 1,481 23.252862 34,437 8.27% 1997 ............................................ 0.50% 2,159 21.554629 46,536 8.63% Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2000 ............................................ 0.50% 259 10.458203 2,709 4.58% 5/1/00 Nationwide(R) SAT - Money Market Fund Class I 2001 ............................................ 0.50% 7,295 18.417013 134,352 3.08% 2000 ............................................ 0.50% 12,856 17.866283 229,689 5.50% 1999 ............................................ 0.50% 16,350 16.794246 274,586 4.32% 1998 ............................................ 0.50% 9,477 16.171326 153,256 4.67% 1997 ............................................ 0.50% 9,301 15.508767 144,247 4.26% Nationwide(R) SAT - Small Cap Value Fund Class I 2001 ............................................ 0.50% 16,203 15.403979 249,591 27.63% 2000 ............................................ 0.50% 5,781 12.068870 69,770 10.65% 1999 ............................................ 0.50% 2,201 10.825871 23,828 27.20% Nationwide(R) SAT - Small Company Fund Class I 2001 ............................................ 0.50% 749 23.371178 17,505 -7.17% 2000 ............................................ 0.50% 762 25.176901 19,185 8.36% 1999 ............................................ 0.50% 913 23.047417 21,042 43.30% 1997 ............................................ 0.50% 124 16.146794 2,002 16.24%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Nationwide(R) SAT - Total Return Fund Class I 2001 ............................................ 0.50% 1,162 36.560512 42,483 -12.26% 2000 ............................................ 0.50% 1,319 41.669957 54,963 -2.61% 1999 ............................................ 0.50% 4,738 42.439374 201,078 6.41% 1998 ............................................ 0.50% 4,462 40.062865 178,761 17.38% 1997 ............................................ 0.50% 2,904 34.253930 99,473 28.21% Neuberger Berman AMT - Growth Portfolio 2001 ............................................ 0.50% 3,126 33.226236 103,865 -30.71% 2000 ............................................ 0.50% 3,192 47.952407 153,064 -12.09% 1999 ............................................ 0.50% 3,041 54.109841 164,548 49.65% 1998 ............................................ 0.50% 4,910 36.321304 178,338 14.85% 1997 ............................................ 0.50% 5,113 31.739871 162,286 27.79% Neuberger Berman AMT - Guardian Portfolio 1999 ............................................ 0.50% 561 10.593122 5,943 14.36% Neuberger Berman AMT - Limited Maturity Bond Portfolio 2001 ............................................ 0.50% 2,817 20.939856 58,988 8.24% 2000 ............................................ 0.50% 6,082 19.346478 117,665 6.25% 1999 ............................................ 0.50% 5,986 18.060558 108,111 0.97% 1998 ............................................ 0.50% 5,842 17.967444 104,966 3.78% 1997 ............................................ 0.50% 5,557 17.375997 96,558 5.73% Neuberger Berman AMT - Partners Portfolio 2000 ............................................ 0.50% 72 25.096849 1,807 0.20% 1997 ............................................ 0.50% 2,379 22.629887 53,837 30.01% Oppenheimer Bond Fund/VA 2001 ............................................ 0.50% 47 21.678723 1,019 7.25% 2000 ............................................ 0.50% 51 20.213946 1,031 5.57% Oppenheimer Capital Appreciation Fund/VA 2001 ............................................ 0.50% 8,487 15.672302 133,011 -13.02% 2000 ............................................ 0.50% 6,917 18.017261 124,625 -0.73% Oppenheimer Global Securities Fund/VA 2000 ............................................ 0.50% 2,118 30.445645 64,484 4.57% Strong Opportunity Fund II, Inc. ................... 2001 ............................................ 0.50% 3,831 41.000669 157,074 -4.19% 2000 ............................................ 0.50% 447 42.694690 19,085 6.07% 1999 ............................................ 0.50% 450 40.018322 18,008 34.23% 1998 ............................................ 0.50% 452 29.946506 13,536 12.88% 1997 ............................................ 0.50% 456 26.626359 12,142 24.27% UIF - Emerging Markets Debt Portfolio 2001 ............................................ 0.50% 1,244 10.935992 13,604 9.55% 2000 ............................................ 0.50% 1,265 9.982829 12,628 10.83% 1999 ............................................ 0.50% 1,518 8.934183 13,562 28.73% UIF - U.S. Real Estate Portfolio 2000 ............................................ 0.50% 3,074 19.442286 59,766 27.42% 1998 ............................................ 0.50% 4,103 15.812545 64,879 -12.14% 1997 ............................................ 0.50% 4,138 18.062622 74,743 20.33%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Van Eck WIT - Worldwide Bond Fund 2001 ............................................ 0.50% 1,086 14.653212 15,913 -5.57% 2000 ............................................ 0.50% 1,105 15.517699 17,147 1.36% 1999 ............................................ 0.50% 1,325 15.185599 20,121 -8.28% 1998 ............................................ 0.50% 264 16.631673 4,391 12.09% 1997 ............................................ 0.50% 22 14.891060 328 1.42% Van Eck WIT - Worldwide Emerging Markets Fund 2000 ............................................ 0.50% 407 6.661531 2,711 -42.15% 1999 ............................................ 0.50% 6,267 11.423096 71,589 99.29% Van Eck WIT - Worldwide Hard Assets Fund 2001 ............................................ 0.50% 4 11.933986 48 -10.89% 2000 ............................................ 0.50% 5 13.393001 67 10.85% 1999 ............................................ 0.50% 10 11.984540 120 20.40% 1998 ............................................ 0.50% 5,479 9.998900 54,784 -31.37% 1997 ............................................ 0.50% 5,526 14.622970 80,807 -2.61% Multiple Payment contracts and Flexible Premium contracts: American Century VP - American Century VP Balanced 2001 ............................................ 0.80% 201,384 19.493759 3,925,731 -4.31% 2000 ............................................ 0.80% 204,099 20.372425 4,157,992 -3.42% 1999 ............................................ 0.80% 222,611 21.094348 4,695,834 9.18% 1998 ............................................ 0.80% 215,629 19.320541 4,166,069 14.85% 1997 ............................................ 0.80% 162,980 16.822481 2,741,728 14.88% American Century VP - American Century VP Capital Appreciation 2001 ............................................ 0.80% 735,263 17.987270 13,225,374 -28.64% 2000 ............................................ 0.80% 819,897 25.207415 20,667,484 8.17% 1999 ............................................ 0.80% 643,372 23.303640 14,992,909 63.21% 1998 ............................................ 0.80% 649,478 14.277913 9,273,190 -2.94% 1997 ............................................ 0.80% 655,176 14.709822 9,637,522 -4.03% American Century VP - American Century VP Income & Growth 2001 ............................................ 0.80% 322,604 10.252927 3,307,635 -9.09% 2000 ............................................ 0.80% 303,622 11.277817 3,424,193 -11.32% 1999 ............................................ 0.80% 235,223 12.717991 2,991,564 17.08% 1998 ............................................ 0.80% 73,815 10.862660 801,827 8.63% 5/1/98 American Century VP - American Century VP International 2001 ............................................ 0.80% 733,730 15.554724 11,412,968 -29.74% 2000 ............................................ 0.80% 754,646 22.139513 16,707,495 -17.49% 1999 ............................................ 0.80% 649,836 26.831062 17,435,790 62.74% 1998 ............................................ 0.80% 568,779 16.487231 9,377,591 17.81% 1997 ............................................ 0.80% 333,719 13.994328 4,670,173 17.69% American Century VP - American Century VP Value 2001 ............................................ 0.80% 499,070 17.020923 8,494,632 11.92% 2000 ............................................ 0.80% 323,587 15.208380 4,921,234 17.21% 1999 ............................................ 0.80% 156,791 12.975752 2,034,481 -1.64% 1998 ............................................ 0.80% 140,522 13.192098 1,853,780 3.98% 1997 ............................................ 0.80% 81,237 12.687534 1,030,697 25.08%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 ............................................ 0.80% 135,156 11.150533 1,507,061 -29.21% 2000 ............................................ 0.80% 139,959 15.751152 2,204,515 -19.58% 1999 ............................................ 0.80% 123,907 19.586645 2,426,922 62.20% 1998 ............................................ 0.80% 64,081 12.075838 773,832 5.66% 1997 ............................................ 0.80% 44,199 11.428806 505,142 12.43% Credit Suisse Trust - International Equity Portfolio 2001 ............................................ 0.80% 503,048 10.194751 5,128,449 -22.90% 2000 ............................................ 0.80% 525,361 13.222451 6,946,560 -26.48% 1999 ............................................ 0.80% 555,966 17.985801 9,999,494 52.21% 1998 ............................................ 0.80% 579,078 11.816371 6,842,600 4.51% 1997 ............................................ 0.80% 651,598 11.306660 7,367,397 -3.04% Credit Suisse Trust - Small Cap Growth Portfolio 2001 ............................................ 0.80% 816,970 17.675000 14,439,945 -16.68% 2000 ............................................ 0.80% 942,509 21.214019 19,994,404 -18.76% 1999 ............................................ 0.80% 754,487 26.113570 19,702,349 67.73% 1998 ............................................ 0.80% 731,702 15.568525 11,391,521 -3.63% 1997 ............................................ 0.80% 712,489 16.154327 11,509,780 14.73% Dreyfus IP - European Equity Portfolio 2001 ............................................ 0.80% 9,248 6.633319 61,345 -28.71% 2000 ............................................ 0.80% 3,721 9.304097 34,621 -6.96% 5/1/00 The Dreyfus Socially Responsible Growth Fund, Inc. 2001 ............................................ 0.80% 479,262 24.776659 11,874,511 -23.20% 2000 ............................................ 0.80% 508,803 32.259560 16,413,761 -11.74% 1999 ............................................ 0.80% 450,901 36.549891 16,480,382 29.04% 1998 ............................................ 0.80% 359,871 28.323603 10,192,843 28.35% 1997 ............................................ 0.80% 275,028 22.067304 6,069,126 27.41% Dreyfus Stock Index Fund 2001 ............................................ 0.80% 2,735,378 26.351146 72,080,345 -12.88% 2000 ............................................ 0.80% 2,613,545 30.248565 79,055,986 -10.00% 1999 ............................................ 0.80% 2,592,791 33.609618 87,142,715 19.64% 1998 ............................................ 0.80% 2,166,290 28.091438 60,854,201 27.19% 1997 ............................................ 0.80% 1,577,410 22.086039 34,838,739 31.90% Dreyfus VIF - Appreciation Portfolio 2001 ............................................ 0.80% 358,763 12.938645 4,641,907 -10.04% 2000 ............................................ 0.80% 365,003 14.382034 5,249,486 -1.44% 1999 ............................................ 0.80% 404,377 14.591996 5,900,668 10.57% 1998 ............................................ 0.80% 257,361 13.197284 3,396,466 29.18% 1997 ............................................ 0.80% 33,449 10.216196 341,722 2.16% 7/14/97 Dreyfus VIF - Growth and Income Portfolio 2001 ............................................ 0.80% 162,195 13.204070 2,141,634 -6.60% 2000 ............................................ 0.80% 152,925 14.137245 2,161,938 -4.54% 1999 ............................................ 0.80% 138,815 14.810164 2,055,873 15.95% 1998 ............................................ 0.80% 125,274 12.772496 1,600,062 10.92% 1997 ............................................ 0.80% 74,022 11.514756 852,345 15.29%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Fidelity(R) VIP - Equity-Income Portfolio: Initial Class 2001 ............................................ 0.80% 1,558,719 37.915521 59,099,643 -5.72% 2000 ............................................ 0.80% 1,556,185 40.214814 62,581,690 7.56% 1999 ............................................ 0.80% 1,750,754 37.388084 65,457,338 5.48% 1998 ............................................ 0.80% 1,726,955 35.444796 61,211,568 10.74% 1997 ............................................ 0.80% 1,533,661 32.007773 49,089,073 27.09% Fidelity(R) VIP - Growth Portfolio: Initial Class 2001 ............................................ 0.80% 2,474,278 40.327380 99,781,149 -18.31% 2000 ............................................ 0.80% 2,621,312 49.366480 129,404,946 -11.69% 1999 ............................................ 0.80% 2,613,902 55.899014 146,114,544 36.34% 1998 ............................................ 0.80% 2,346,630 40.998916 96,209,286 38.38% 1997 ............................................ 0.80% 2,133,432 29.627929 63,209,172 22.5% Fidelity(R) VIP - High Income Portfolio: Initial Class 2001 ............................................ 0.80% 653,854 18.882734 12,346,551 -12.44% 2000 ............................................ 0.80% 619,065 21.565326 13,350,339 -23.09% 1999 ............................................ 0.80% 672,537 28.039263 18,857,442 7.29% 1998 ............................................ 0.80% 737,225 26.133234 19,266,073 -5.09% 1997 ............................................ 0.80% 660,090 27.535006 18,175,582 16.73% Fidelity(R) VIP - Overseas Portfolio: Initial Class 2001 ............................................ 0.80% 814,381 16.843777 13,717,252 -21.80% 2000 ............................................ 0.80% 866,875 21.539183 18,671,779 -19.75% 1999 ............................................ 0.80% 863,446 26.840170 23,175,037 41.49% 1998 ............................................ 0.80% 871,214 18.969496 16,526,490 11.85% 1997 ............................................ 0.80% 801,447 16.959418 13,592,075 10.67% Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class 2001 ............................................ 0.80% 808,651 24.805237 20,058,780 -4.86% 2000 ............................................ 0.80% 851,071 26.071970 22,189,098 -4.69% 1999 ............................................ 0.80% 917,098 27.355020 25,087,234 10.21% 1998 ............................................ 0.80% 961,754 24.821550 23,872,225 14.13% 1997 ............................................ 0.80% 930,767 21.747656 20,242,001 19.69% Fidelity(R) VIP II - Contrafund Portfolio: Initial Class 2001 ............................................ 0.80% 2,013,717 21.083066 42,455,328 -12.95% 2000 ............................................ 0.80% 2,107,468 24.218904 51,040,565 -7.36% 1999 ............................................ 0.80% 2,151,780 26.143948 56,256,024 23.26% 1998 ............................................ 0.80% 1,826,890 21.209617 38,747,637 28.94% 1997 ............................................ 0.80% 1,351,683 16.448700 22,233,428 23.15% Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class 2001 ............................................ 0.80% 341,765 9.787292 3,344,954 -15.11% 2000 ............................................ 0.80% 358,453 11.528985 4,132,599 -17.72% 1999 ............................................ 0.80% 385,372 14.012663 5,400,088 3.44% 1998 ............................................ 0.80% 315,036 13.546531 4,267,645 23.62% 1997 ............................................ 0.80% 55,769 10.958018 611,118 9.58% 7/14/97 Janus AS - Capital Appreciation Portfolio - Service Shares 2001 ............................................ 0.80% 350,620 6.119334 2,145,561 -22.46% 2000 ............................................ 0.80% 297,781 7.891490 2,349,936 -21.09% 5/1/00 Janus AS - Global Technology Portfolio - Service Shares 2001 ............................................ 0.80% 346,031 4.192814 1,450,844 -37.82% 2000 ............................................ 0.80% 259,751 6.742955 1,751,489 -32.57% 5/1/00
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Janus AS - International Growth Portfolio - Service Shares 2001 ............................................ 0.80% 227,552 6.008001 1,367,133 -24.04% 2000 ............................................ 0.80% 174,672 7.909816 1,381,623 -20.90% 5/1/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 ............................................ 0.80% 950,129 17.022307 16,173,388 -28.71% 2000 ............................................ 0.80% 952,662 23.877962 22,747,627 -27.12% 1999 ............................................ 0.80% 1,104,444 32.761545 36,183,292 3.45% 1998 ............................................ 0.80% 1,058,148 31.669989 33,511,536 28.93% 1997 ............................................ 0.80% 755,171 24.563746 18,549,829 33.42% Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 ............................................ 0.80% 246,977 10.242303 2,529,613 -2.10% 2000 ............................................ 0.80% 145,426 10.461575 1,521,385 4.62% 5/1/00 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 ............................................ 0.80% 23,612 8.178748 193,117 -5.94% 2000 ............................................ 0.80% 1,063 8.695491 9,243 -13.05% 10/2/00 Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 ............................................ 0.80% 86,686 3.412440 295,811 -43.18% 2000 ............................................ 0.80% 46,652 6.005978 280,191 -39.94% 10/2/00 Nationwide(R) SAT - Gartmore International Growth Fund Class I 2001 ............................................ 0.80% 8,456 6.534130 55,253 -29.22% 2000 ............................................ 0.80% 453 9.231934 4,182 -7.68% 10/2/00 Nationwide(R) SAT - Government Bond Fund Class I 2001 ............................................ 0.80% 492,674 20.807253 10,251,193 6.40% 2000 ............................................ 0.80% 359,189 19.556523 7,024,488 11.65% 1999 ............................................ 0.80% 402,906 17.516435 7,057,477 -3.13% 1998 ............................................ 0.80% 414,068 18.081576 7,487,002 8.04% 1997 ............................................ 0.80% 237,476 16.735906 3,974,376 8.79% Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 ............................................ 0.80% 55,247 10.787560 595,980 3.35% 2000 ............................................ 0.80% 3,000 10.437484 31,312 4.37% 5/1/00 Nationwide(R) SAT - Money Market Fund Class I 2001 ............................................ 0.80% 1,991,692 14.974957 29,825,502 2.77% 2000 ............................................ 0.80% 2,268,467 14.571330 33,054,581 5.18% 1999 ............................................ 0.80% 2,312,418 13.853330 32,034,690 4.01% 1998 ............................................ 0.80% 1,953,963 13.319323 26,025,464 4.43% 1997 ............................................ 0.80% 1,823,184 12.754301 23,253,438 4.42% Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 ............................................ 0.80% 146,635 7.143137 1,047,434 -11.55% 2000 ............................................ 0.80% 85,563 8.076240 691,027 -19.24% 5/1/00 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 ............................................ 0.80% 679,631 15.235359 10,354,422 27.25% 2000 ............................................ 0.80% 275,697 11.972833 3,300,874 10.32% 1999 ............................................ 0.80% 165,130 10.852975 1,792,152 26.82% 1998 ............................................ 0.80% 50,840 8.557853 435,081 -14.42% 5/1/98 Nationwide(R) SAT - Small Company Fund Class I 2001 ............................................ 0.80% 928,089 23.188796 21,521,266 -7.45% 2000 ............................................ 0.80% 998,068 25.056031 25,007,623 8.03% 1999 ............................................ 0.80% 907,754 23.192622 21,053,195 42.87% 1998 ............................................ 0.80% 879,309 16.233001 14,273,824 0.02% 1997 ............................................ 0.80% 690,077 16.199871 11,179,158 16.41%
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 ............................................ 0.80% 146,210 5.605279 819,548 -30.87% 2000 ............................................ 0.80% 76,685 8.108035 621,765 -18.92% 5/1/00 Nationwide(R) SAT - Total Return Fund Class I 2001 ............................................ 0.80% 2,295,929 29.801440 68,421,990 -12.53% 2000 ............................................ 0.80% 2,359,054 34.069071 80,370,778 -2.90% 1999 ............................................ 0.80% 2,622,351 35.085217 92,005,754 6.09% 1998 ............................................ 0.80% 2,650,483 33.070880 87,653,805 17.13% 1997 ............................................ 0.80% 2,342,232 28.233403 66,129,180 28.40% Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 ............................................ 0.80% 50,607 3.829622 193,806 -39.52% 2000 ............................................ 0.80% 7,806 6.332010 49,428 -36.68% Neuberger Berman AMT - Balanced Portfolio 2001 ............................................ 0.80% 636 22.433930 14,268 -3.34% 6/15/01 Neuberger Berman AMT - Growth Portfolio 2001 ............................................ 0.80% 800,152 22.896752 18,320,882 -30.92% 2000 ............................................ 0.80% 793,907 33.145055 26,314,091 -12.36% 1999 ............................................ 0.80% 660,524 37.818375 24,979,944 49.20% 1998 ............................................ 0.80% 767,489 25.347646 19,454,039 14.61% 1997 ............................................ 0.80% 628,860 22.117203 13,908,624 27.98% Neuberger Berman AMT - Guardian Portfolio 2001 ............................................ 0.80% 196,852 10.409898 2,049,209 -2.30% 2000 ............................................ 0.80% 149,159 10.654639 1,589,235 0.33% 1999 ............................................ 0.80% 181,217 10.619652 1,924,461 14.02% 1998 ............................................ 0.80% 71,761 9.314041 668,385 -6.86% 5/1/98 Neuberger Berman AMT - Limited Maturity Bond Portfolio 2001 ............................................ 0.80% 178,198 17.101800 3,047,507 7.91% 2000 ............................................ 0.80% 141,846 15.848178 2,248,001 5.94% 1999 ............................................ 0.80% 203,409 14.959827 3,042,963 0.67% 1998 ............................................ 0.80% 195,748 14.860392 2,908,892 3.56% 1997 ............................................ 0.80% 178,356 14.349688 2,559,353 5.89% Neuberger Berman AMT - Partners Portfolio 2001 ............................................ 0.80% 777,174 24.119941 18,745,391 -3.61% 2000 ............................................ 0.80% 781,588 25.022294 19,557,125 -0.01% 1999 ............................................ 0.80% 1,008,241 25.046437 25,252,845 6.51% 1998 ............................................ 0.80% 1,151,452 23.514569 27,075,898 3.38% 1997 ............................................ 0.80% 928,663 22.746051 21,123,416 30.21% Oppenheimer Aggressive Growth Fund/VA 2001 ............................................ 0.80% 298,688 5.306432 1,584,968 -31.82% 2000 ............................................ 0.80% 313,898 7.782869 2,443,027 -22.17% 5/1/00 Oppenheimer Bond Fund/VA 2001 ............................................ 0.80% 499,632 19.904727 9,945,039 6.92% 2000 ............................................ 0.80% 480,377 18.615856 8,942,629 5.26% 1999 ............................................ 0.80% 520,266 17.686402 9,201,634 -2.30% 1998 ............................................ 0.80% 532,098 18.103341 9,632,752 5.95% 1997 ............................................ 0.80% 381,236 17.086434 6,513,964 8.38%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Oppenheimer Capital Appreciation Fund/VA 2001 ............................................ 0.80% 859,711 15.509895 13,334,027 -13.28% 2000 ............................................ 0.80% 796,536 17.884539 14,245,679 -1.02% 1999 ............................................ 0.80% 535,283 18.069110 9,672,087 40.53% 1998 ............................................ 0.80% 342,717 12.857977 4,406,647 23.01% 1997 ............................................ 0.80% 40,779 10.452595 426,246 4.53% 7/14/97 Oppenheimer Global Securities Fund/VA 2001 ............................................ 0.80% 1,078,042 26.520512 28,590,226 -12.74% 2000 ............................................ 0.80% 1,096,887 30.393395 33,338,120 4.26% 1999 ............................................ 0.80% 1,018,848 29.152831 29,702,304 57.22% 1998 ............................................ 0.80% 980,014 18.542353 18,171,766 13.20% 1997 ............................................ 0.80% 855,620 16.380762 14,015,708 21.45% Oppenheimer Main Street Growth & Income Fund/VA 2001 ............................................ 0.80% 73,856 8.026816 592,829 -10.88% 2000 ............................................ 0.80% 33,482 9.006749 301,564 -9.93% 5/1/00 Oppenheimer Multiple Strategies Fund/VA 2001 ............................................ 0.80% 394,571 26.951432 10,634,253 1.40% 2000 ............................................ 0.80% 412,843 26.579650 10,973,222 5.59% 1999 ............................................ 0.80% 437,927 25.171538 11,023,296 10.91% 1998 ............................................ 0.80% 460,679 22.696024 10,455,582 5.80% 1997 ............................................ 0.80% 387,094 21.450954 8,303,536 16.29% Strong Opportunity Fund II, Inc. ................... 2001 ............................................ 0.80% 901,762 40.890795 36,873,765 -4.48% 2000 ............................................ 0.80% 877,807 42.709091 37,490,339 5.75% 1999 ............................................ 0.80% 898,106 40.478200 36,353,714 33.83% 1998 ............................................ 0.80% 874,006 30.245312 26,434,584 12.64% 1997 ............................................ 0.80% 791,884 26.851737 21,263,461 24.46% Strong VIF - Strong Discovery Fund II 2001 ............................................ 0.80% 269,121 21.646818 5,825,613 3.25% 2000 ............................................ 0.80% 271,144 20.965624 5,684,703 3.57% 1999 ............................................ 0.80% 296,260 20.243703 5,997,399 4.25% 1998 ............................................ 0.80% 360,468 19.418031 6,999,579 6.41% 1997 ............................................ 0.80% 337,867 18.249145 6,165,784 10.50% Strong VIF - Strong International Stock Fund II 2001 ............................................ 0.80% 213,256 7.816872 1,666,995 -22.76% 2000 ............................................ 0.80% 210,636 10.120684 2,131,780 -40.00% 1999 ............................................ 0.80% 219,407 16.868902 3,701,155 85.71% 1998 ............................................ 0.80% 149,776 9.083353 1,360,468 -5.54% 1997 ............................................ 0.80% 140,532 9.615755 1,351,321 -14.21% UIF - Emerging Markets Debt Portfolio 2001 ............................................ 0.80% 74,719 10.822665 808,659 9.22% 2000 ............................................ 0.80% 62,323 9.909218 617,572 10.50% 1999 ............................................ 0.80% 43,728 8.967304 392,122 28.35% 1998 ............................................ 0.80% 34,905 6.986851 243,876 -28.95% 1997 ............................................ 0.80% 16,674 9.833749 163,968 -1.66% 7/14/97
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- UIF - U.S. Real Estate Portfolio 2001 ............................................ 0.80% 313,717 21.092541 6,617,089 8.96% 2000 ............................................ 0.80% 277,285 19.357784 5,367,623 27.04% 1999 ............................................ 0.80% 246,788 15.237208 3,760,360 -4.14% 1998 ............................................ 0.80% 287,075 15.895654 4,563,245 -12.33% 1997 ............................................ 0.80% 275,704 18.130321 4,998,602 20.51% Van Eck WIT - Worldwide Bond Fund 2001 ............................................ 0.80% 120,008 13.323421 1,598,917 -5.86% 2000 ............................................ 0.80% 123,195 14.152095 1,743,467 1.06% 1999 ............................................ 0.80% 143,676 14.003753 2,012,003 -8.56% 1998 ............................................ 0.80% 154,980 15.314274 2,373,406 11.86% 1997 ............................................ 0.80% 121,423 13.690999 1,662,402 1.57% Van Eck WIT - Worldwide Emerging Markets Fund 2001 ............................................ 0.80% 444,368 6.445985 2,864,389 -2.60% 2000 ............................................ 0.80% 443,771 6.617911 2,936,837 -42.33% 1999 ............................................ 0.80% 576,742 11.474995 6,618,112 98.69% 1998 ............................................ 0.80% 253,188 5.775322 1,462,242 -34.66% 1997 ............................................ 0.80% 222,956 8.838307 1,970,554 -12.31% Van Eck WIT - Worldwide Hard Assets Fund 2001 ............................................ 0.80% 176,699 14.394010 2,543,407 -11.16% 2000 ............................................ 0.80% 186,255 16.202639 3,017,823 10.52% 1999 ............................................ 0.80% 206,979 14.660562 3,034,428 20.04% 1998 ............................................ 0.80% 206,325 12.213208 2,519,890 -31.52% 1997 ............................................ 0.80% 212,577 17.834480 3,791,200 -2.46% Single Premium contracts issued on or after April 16, 1990: American Century VP - American Century VP Balanced 2001 ............................................ 1.30% 27,610 18.571841 512,769 -4.79% 2000 ............................................ 1.30% 29,587 19.506844 577,149 -3.90% 1999 ............................................ 1.30% 36,043 20.298769 731,629 8.64% 1998 ............................................ 1.30% 43,205 18.685028 807,287 14.28% 1997 ............................................ 1.30% 38,245 16.350628 625,330 14.31% American Century VP - American Century VP Capital Appreciation 2001 ............................................ 1.30% 93,041 18.500029 1,721,261 -29.00% 2000 ............................................ 1.30% 156,838 26.057031 4,086,733 7.63% 1999 ............................................ 1.30% 134,822 24.209204 3,263,933 62.40% 1998 ............................................ 1.30% 113,249 14.906965 1,688,199 -3.42% 1997 ............................................ 1.30% 129,674 15.434921 2,001,508 -4.51% American Century VP - American Century VP Income & Growth 2001 ............................................ 1.30% 40,468 10.066594 407,375 -9.54% 2000 ............................................ 1.30% 48,794 11.128733 543,015 -11.76% 1999 ............................................ 1.30% 53,220 12.612413 671,233 16.50% 1998 ............................................ 1.30% 18,703 10.826437 202,487 8.26% 5/1/98 American Century VP - American Century VP International 2001 ............................................ 1.30% 105,515 14.988556 1,581,517 -30.10% 2000 ............................................ 1.30% 126,911 21.441430 2,721,153 -17.90% 1999 ............................................ 1.30% 162,982 26.114709 4,256,228 61.93% 1998 ............................................ 1.30% 168,629 16.127264 2,719,524 17.23% 1997 ............................................ 1.30% 109,065 13.757328 1,500,443 17.10%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- American Century VP - American Century VP Value 2001 ............................................ 1.30% 123,905 16.598988 2,056,698 11.36% 2000 ............................................ 1.30% 57,614 14.906133 858,802 16.63% 1999 ............................................ 1.30% 26,781 12.781220 342,294 -2.13% 1998 ............................................ 1.30% 25,086 13.059452 327,609 3.46% 1997 ............................................ 1.30% 36,293 12.622928 458,124 24.45% Credit Suisse Trust - Global Post-Venture Capital Portfolio 2001 ............................................ 1.30% 7,002 10.873870 76,139 -29.56% 2000 ............................................ 1.30% 11,974 15.438040 184,855 -19.98% 1999 ............................................ 1.30% 88,739 19.293144 1,712,054 61.39% 1998 ............................................ 1.30% 23,108 11.954408 276,242 5.13% 1997 ............................................ 1.30% 20,440 11.370593 232,415 11.87% Credit Suisse Trust - International Equity Portfolio 2001 ............................................ 1.30% 55,979 9.868857 552,449 -23.29% 2000 ............................................ 1.30% 66,083 12.864457 850,122 -26.85% 1999 ............................................ 1.30% 81,838 17.586224 1,439,221 51.45% 1998 ............................................ 1.30% 92,476 11.611647 1,073,799 3.99% 1997 ............................................ 1.30% 134,117 11.166430 1,497,608 -3.52% Credit Suisse Trust - Small Cap Growth Portfolio 2001 ............................................ 1.30% 82,230 17.109846 1,406,943 -17.10% 2000 ............................................ 1.30% 118,070 20.639565 2,436,913 -19.17% 1999 ............................................ 1.30% 114,996 25.533360 2,936,234 66.90% 1998 ............................................ 1.30% 152,727 15.298780 2,336,537 -4.11% 1997 ............................................ 1.30% 175,452 15.954033 2,799,167 14.16% Dreyfus IP - European Equity Portfolio 2001 ............................................ 1.30% 2,993 6.578172 19,688 -29.06% 2000 ............................................ 1.30% 5,683 9.273374 52,701 -7.27% 5/1/00 The Dreyfus Socially Responsible Growth Fund, Inc. . 2001 ............................................ 1.30% 22,613 23.777410 537,679 -23.58% 2000 ............................................ 1.30% 33,067 31.114958 1,028,878 -12.18% 1999 ............................................ 1.30% 31,488 35.428815 1,115,583 28.40% 1998 ............................................ 1.30% 27,695 27.592332 764,170 27.71% 1997 ............................................ 1.30% 27,923 21.605205 603,282 26.78% Dreyfus Stock Index Fund 2001 ............................................ 1.30% 215,776 25.286872 5,456,300 -13.32% 2000 ............................................ 1.30% 248,888 29.173405 7,260,910 -10.45% 1999 ............................................ 1.30% 315,343 32.576553 10,272,788 19.05% 1998 ............................................ 1.30% 326,895 27.364353 8,945,270 26.56% 1997 ............................................ 1.30% 252,267 21.622115 5,454,546 31.24% Dreyfus VIF - Appreciation Portfolio 2001 ............................................ 1.30% 80,268 12.653068 1,015,636 -10.49% 2000 ............................................ 1.30% 69,804 14.135555 986,718 -1.93% 1999 ............................................ 1.30% 81,279 14.413356 1,171,503 10.02% 1998 ............................................ 1.30% 62,982 13.101026 825,129 28.54% 1997 ............................................ 1.30% 8,365 10.192453 85,260 1.92% 7/14/97
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Dreyfus VIF - Growth and Income Portfolio 2001 ............................................ 1.30% 12,109 12.876695 155,924 -7.07% 2000 ............................................ 1.30% 16,818 13.856323 233,036 -5.02% 1999 ............................................ 1.30% 9,941 14.588194 145,021 15.38% 1998 ............................................ 1.30% 14,240 12.644103 180,052 10.37% 1997 ............................................ 1.30% 11,510 11.456116 131,860 14.71% Fidelity(R) VIP - Equity-Income Portfolio: Initial Class 2001 ............................................ 1.30% 292,636 35.855591 10,492,637 -6.19% 2000 ............................................ 1.30% 304,863 38.221825 11,652,420 7.03% 1999 ............................................ 1.30% 395,355 35.712129 14,118,969 4.96% 1998 ............................................ 1.30% 456,214 34.025630 15,522,969 10.19% 1997 ............................................ 1.30% 525,933 30.880183 16,240,907 26.45% Fidelity(R) VIP - Growth Portfolio: Initial Class 2001 ............................................ 1.30% 283,815 38.662344 10,972,953 -18.72% 2000 ............................................ 1.30% 342,658 47.567395 16,299,348 -12.12% 1999 ............................................ 1.30% 355,884 54.130524 19,264,187 35.66% 1998 ............................................ 1.30% 376,885 39.900577 15,037,929 37.69% 1997 ............................................ 1.30% 325,852 28.978553 9,442,719 21.89% Fidelity(R) VIP - High Income Portfolio: Initial Class 2001 ............................................ 1.30% 93,229 19.673202 1,834,113 -12.88% 2000 ............................................ 1.30% 100,049 22.581448 2,259,251 -23.47% 1999 ............................................ 1.30% 105,520 29.506936 3,113,572 6.76% 1998 ............................................ 1.30% 144,326 27.638937 3,989,017 -5.56% 1997 ............................................ 1.30% 160,493 29.267460 4,697,222 16.15% Fidelity(R) VIP - Overseas Portfolio: Initial Class 2001 ............................................ 1.30% 150,144 15.174561 2,278,369 -22.19% 2000 ............................................ 1.30% 168,125 19.502680 3,278,888 -20.15% 1999 ............................................ 1.30% 213,601 24.423718 5,216,931 40.79% 1998 ............................................ 1.30% 248,471 17.348011 4,310,478 11.29% 1997 ............................................ 1.30% 310,985 15.587449 4,847,463 10.11% Fidelity(R) VIP II - Asset Manager Portfolio: Initial Class 2001 ............................................ 1.30% 187,390 26.691052 5,001,636 -5.34% 2000 ............................................ 1.30% 201,334 28.195602 5,676,733 -5.16% 1999 ............................................ 1.30% 211,956 29.730624 6,301,584 9.66% 1998 ............................................ 1.30% 253,412 27.112311 6,870,585 13.57% 1997 ............................................ 1.30% 293,986 23.873730 7,018,542 19.09% Fidelity(R) VIP II - Contrafund Portfolio: Initial Class 2001 ............................................ 1.30% 215,185 20.409441 4,391,806 -13.39% 2000 ............................................ 1.30% 250,535 23.563410 5,903,459 -7.82% 1999 ............................................ 1.30% 290,335 25.563198 7,421,891 22.65% 1998 ............................................ 1.30% 275,660 20.842351 5,745,402 28.30% 1997 ............................................ 1.30% 257,262 16.244815 4,179,174 22.54% Fidelity(R) VIP III - Growth Opportunities Portfolio: Initial Class 2001 ............................................ 1.30% 17,924 9.571123 171,553 -15.53% 2000 ............................................ 1.30% 19,392 11.331281 219,736 -18.13% 1999 ............................................ 1.30% 21,868 13.841079 302,677 2.93% 1998 ............................................ 1.30% 64,568 13.447707 868,292 23.01% 1997 ............................................ 1.30% 31,619 10.932562 345,677 9.33% 7/14/97
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Janus AS - Capital Appreciation Portfolio - Service Shares 2001 ............................................ 1.30% 15,561 6.068452 94,431 -22.85% 2000 ............................................ 1.30% 22,133 7.865419 174,085 -21.35% 5/1/00 Janus AS - Global Technology Portfolio - Service Shares 2001 ............................................ 1.30% 44,468 4.157888 184,893 -38.13% 2000 ............................................ 1.30% 52,739 6.720656 354,441 -32.79% 5/1/00 Janus AS - International Growth Portfolio - Service Shares 2001 ............................................ 1.30% 59,476 5.958051 354,361 -24.43% 2000 ............................................ 1.30% 72,749 7.883682 573,530 -21.16% 5/1/00 Nationwide(R) SAT - Capital Appreciation Fund Class I 2001 ............................................ 1.30% 37,694 16.217110 611,288 -29.07% 2000 ............................................ 1.30% 45,948 22.863519 1,050,533 -27.48% 1999 ............................................ 1.30% 62,075 31.526314 1,956,996 2.93% 1998 ............................................ 1.30% 113,664 30.628674 3,481,378 28.29% 1997 ............................................ 1.30% 71,279 23.875030 1,701,788 32.76% Nationwide(R) SAT - Dreyfus Mid Cap Index Fund Class I 2001 ............................................ 1.30% 41,031 10.157238 416,762 -2.59% 2000 ............................................ 1.30% 10,564 10.427067 110,152 4.27% 5/1/00 Nationwide(R) SAT - Gartmore Emerging Markets Fund Class I 2001 ............................................ 1.30% 1,128 8.127810 9,168 -6.42% Nationwide(R) SAT - Gartmore Global Technology & Communications Fund Class I 2001 ............................................ 1.30% 13,394 3.391119 45,421 -43.47% 2000 ............................................ 1.30% 18,398 5.998698 110,364 -40.01% 10/2/00 Nationwide(R) SAT - Government Bond Fund Class I 2001 ............................................ 1.30% 253,883 21.700608 5,509,415 5.86% 2000 ............................................ 1.30% 188,357 20.498919 3,861,115 11.09% 1999 ............................................ 1.30% 240,383 18.452016 4,435,551 -3.61% 1998 ............................................ 1.30% 274,184 19.142839 5,248,660 7.50% 1997 ............................................ 1.30% 255,535 17.806978 4,550,306 8.25% Nationwide(R) SAT - MAS Multi Sector Bond Fund Class I 2001 ............................................ 1.30% 269 10.698042 2,878 2.84% 2000 ............................................ 1.30% 1,928 10.403041 20,057 4.03% 5/1/00 Nationwide(R) SAT - Money Market Fund Class I 2001 ............................................ 1.30% 788,057 14.917365 11,755,734 2.25% 2000 ............................................ 1.30% 857,846 14.589227 12,515,310 4.66% 1999 ............................................ 1.30% 1,082,615 13.940225 15,091,897 3.49% 1998 ............................................ 1.30% 814,530 13.470763 10,972,341 3.90% 1997 ............................................ 1.30% 1,051,590 12.964662 13,633,509 3.89% Nationwide(R) SAT - Small Cap Growth Fund Class I 2001 ............................................ 1.30% 10,664 7.083730 75,541 -12.00% 2000 ............................................ 1.30% 3,122 8.049546 25,131 -29.07% 5/1/00 Nationwide(R) SAT - Small Cap Value Fund Class I 2001 ............................................ 1.30% 193,975 14.958425 2,901,560 26.61% 2000 ............................................ 1.30% 236,917 11.814503 2,799,057 9.77% 1999 ............................................ 1.30% 23,585 10.762831 253,841 26.19% 1998 ............................................ 1.30% 28,961 8.529271 247,016 -14.71% 5/1/98
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Nationwide(R) SAT - Small Company Fund Class I 2001 ............................................ 1.30% 42,033 22.482240 944,996 -7.92% 2000 ............................................ 1.30% 74,796 24.415235 1,826,162 7.50% 1999 ............................................ 1.30% 66,890 22.712185 1,519,218 42.16% 1998 ............................................ 1.30% 68,318 15.976308 1,091,469 -0.30% 1997 ............................................ 1.30% 79,580 16.023638 1,275,161 15.83% Nationwide(R) SAT - Strong Mid Cap Growth Fund Class I 2001 ............................................ 1.30% 3,579 5.558609 19,894 -31.22% 2000 ............................................ 1.30% 9,148 8.081237 73,927 -19.19% 5/1/00 Nationwide(R) SAT - Total Return Fund Class I 2001 ............................................ 1.30% 91,363 30.449581 2,781,965 -12.97% 2000 ............................................ 1.30% 103,521 34.985736 3,621,758 -3.38% 1999 ............................................ 1.30% 115,322 36.208762 4,175,667 5.56% 1998 ............................................ 1.30% 136,311 34.300994 4,675,603 16.55% 1997 ............................................ 1.30% 149,445 29.430261 4,398,205 27.76% Nationwide(R) SAT - Turner Growth Focus Fund Class I 2001 ............................................ 1.30% 2,633 3.805692 10,020 -39.82% Neuberger Berman AMT - Growth Portfolio 2001 ............................................ 1.30% 116,532 22.639891 2,638,272 -31.27% 2000 ............................................ 1.30% 110,577 32.939123 3,642,309 -12.79% 1999 ............................................ 1.30% 97,552 37.771042 3,684,641 48.46% 1998 ............................................ 1.30% 136,629 25.442656 3,476,205 14.03% 1997 ............................................ 1.30% 135,697 22.311330 3,027,581 27.34% Neuberger Berman AMT - Guardian Portfolio 2001 ............................................ 1.30% 7,490 10.220670 76,553 -2.79% 2000 ............................................ 1.30% 4,316 10.513749 45,377 -0.17% 1999 ............................................ 1.30% 2,945 10.531438 31,015 13.45% 1998 ............................................ 1.30% 4,760 9.282948 44,187 -7.17% 5/1/98 Neuberger Berman AMT - Limited Maturity Bond Portfolio 2001 ............................................ 1.30% 64,208 17.341018 1,113,432 7.37% 2000 ............................................ 1.30% 55,938 16.150810 903,444 5.41% 1999 ............................................ 1.30% 58,827 15.321478 901,317 0.17% 1998 ............................................ 1.30% 76,004 15.295923 1,162,551 3.04% 1997 ............................................ 1.30% 169,876 14.844266 2,521,685 5.36% Neuberger Berman AMT - Partners Portfolio 2001 ............................................ 1.30% 58,929 23.242157 1,369,637 -4.09% 2000 ............................................ 1.30% 56,278 24.233377 1,363,806 -0.59% 1999 ............................................ 1.30% 69,118 24.377639 1,684,934 5.98% 1998 ............................................ 1.30% 176,971 23.001381 4,070,577 2.86% 1997 ............................................ 1.30% 233,445 22.361130 5,220,094 29.56% Oppenheimer Aggressive Growth Fund/VA 2001 ............................................ 1.30% 12,032 5.262277 63,316 -32.16% 2000 ............................................ 1.30% 25,730 7.757136 199,591 -22.43% 5/1/00 Oppenheimer Bond Fund/VA 2001 ............................................ 1.30% 71,479 20.452013 1,461,889 6.39% 2000 ............................................ 1.30% 57,658 19.224081 1,108,422 4.73% 1999 ............................................ 1.30% 70,351 18.355321 1,291,315 -2.79% 1998 ............................................ 1.30% 84,868 18.882225 1,602,497 5.42% 1997 ............................................ 1.30% 89,920 17.910876 1,610,546 7.84%
(Continued)
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- Oppenheimer Capital Appreciation Fund/VA 2001 ............................................ 1.30% 89,005 15.167382 1,349,973 -13.71% 2000 ............................................ 1.30% 91,772 17.577949 1,613,164 -1.51% 1999 ............................................ 1.30% 60,384 17.847892 1,077,727 39.83% 1998 ............................................ 1.30% 26,155 12.764150 333,846 22.40% 1997 ............................................ 1.30% 10,788 10.428297 112,500 4.28% 7/14/97 Oppenheimer Global Securities Fund/VA 2001 ............................................ 1.30% 89,126 25.449092 2,268,176 -13.18% 2000 ............................................ 1.30% 103,662 29.312842 3,038,628 3.74% 1999 ............................................ 1.30% 99,036 28.256521 2,798,413 56.44% 1998 ............................................ 1.30% 88,848 18.062180 1,604,789 12.63% 1997 ............................................ 1.30% 113,733 16.036486 1,823,878 20.84% Oppenheimer Main Street Growth & Income Fund/VA 2001 ............................................ 1.30% 11,244 7.960162 89,504 -11.33% 2000 ............................................ 1.30% 3,017 8.977032 27,084 -10.23% 5/1/00 Oppenheimer Multiple Strategies Fund/VA 2001 ............................................ 1.30% 95,325 26.649037 2,540,319 0.89% 2000 ............................................ 1.30% 102,256 26.413991 2,700,989 5.07% 1999 ............................................ 1.30% 106,259 25.139330 2,671,280 10.35% 1998 ............................................ 1.30% 110,357 22.780548 2,513,993 5.28% 1997 ............................................ 1.30% 152,543 21.638756 3,300,841 15.71% Strong Opportunity Fund II, Inc. 2001 ............................................ 1.30% 99,955 38.960989 3,894,346 -4.95% 2000 ............................................ 1.30% 101,232 40.898881 4,140,276 5.23% 1999 ............................................ 1.30% 102,073 38.955700 3,976,325 33.17% 1998 ............................................ 1.30% 111,969 29.253391 3,275,473 12.08% 1997 ............................................ 1.30% 132,285 26.101254 3,452,804 23.83% Strong VIF - Strong Discovery Fund II 2001 ............................................ 1.30% 35,961 20.624646 741,683 2.73% 2000 ............................................ 1.30% 29,577 20.076460 593,801 3.05% 1999 ............................................ 1.30% 32,996 19.481837 642,823 3.73% 1998 ............................................ 1.30% 58,970 18.780910 1,107,510 5.87% 1997 ............................................ 1.30% 68,152 17.738866 1,208,939 9.95% Strong VIF - Strong International Stock Fund II 2001 ............................................ 1.30% 28,858 7.578594 218,703 -23.15% 2000 ............................................ 1.30% 77,557 9.861771 764,849 -40.30% 1999 ............................................ 1.30% 142,490 16.519505 2,353,864 84.79% 1998 ............................................ 1.30% 35,834 8.939643 320,343 -6.01% 1997 ............................................ 1.30% 40,251 9.511045 382,829 -14.64% UIF - Emerging Markets Debt Portfolio 2001 ............................................ 1.30% 7,324 10.583651 77,515 8.67% 2000 ............................................ 1.30% 9,551 9.739230 93,019 9.96% 1999 ............................................ 1.30% 6,540 8.857388 57,927 27.71% 1998 ............................................ 1.30% 7,315 6.935753 50,735 -29.31% 1997 ............................................ 1.30% 5,443 9.810873 53,401 -1.89% 7/14/97
(Continued) NATIONWIDE VLI SEPARATE ACCOUNT-2 NOTES TO FINANCIAL STATEMENTS, CONTINUED
CONTRACT CONTRACT EXPENSE UNIT OWNERS' TOTAL RATE* UNITS FAIR VALUE EQUITY RETURN** -------- ----- ---------- -------- -------- UIF - U.S. Real Estate Portfolio 2001 ............................................ 1.30% 53,253 20.418602 1,087,352 8.41% 2000 ............................................ 1.30% 50,123 18.833757 944,004 26.41% 1999 ............................................ 1.30% 39,678 14.898574 591,146 -4.62% 1998 ............................................ 1.30% 67,042 15.620311 1,047,217 -12.76% 1997 ............................................ 1.30% 98,406 17.905659 1,762,024 19.91% Van Eck WIT - Worldwide Bond Fund 2001 ............................................ 1.30% 33,122 13.823940 457,877 -6.33% 2000 ............................................ 1.30% 31,281 14.757769 461,638 0.56% 1999 ............................................ 1.30% 34,273 14.675886 502,987 -9.01% 1998 ............................................ 1.30% 56,294 16.129801 908,011 11.30% 1997 ............................................ 1.30% 45,566 14.492332 660,358 1.07% Van Eck WIT - Worldwide Emerging Markets Fund 2001 ............................................ 1.30% 34,168 6.285993 214,780 -3.09% 2000 ............................................ 1.30% 37,709 6.486254 244,590 -42.61% 1999 ............................................ 1.30% 123,914 11.302972 1,400,596 97.70% 1998 ............................................ 1.30% 25,018 5.717162 143,032 -34.98% 1997 ............................................ 1.30% 35,382 8.793232 311,122 -12.75% Van Eck WIT - Worldwide Hard Assets Fund 2001 ............................................ 1.30% 38,241 12.731937 486,882 -11.61% 2000 ............................................ 1.30% 57,160 14.404038 823,335 9.97% 1999 ............................................ 1.30% 71,735 13.098076 939,590 19.44% 1998 ............................................ 1.30% 128,220 10.966233 1,406,090 -31.86% 1997 ............................................ 1.30% 142,782 16.093994 2,297,933 -2.95% -------------- Total Contract Owners' Equity by Year 2001..................................................................................... $ 933,404,977 ============== 2000..................................................................................... $1,071,884,297 ============== 1999..................................................................................... $1,144,615,392 ============== 1998..................................................................................... $ 894,156,479 ============== 1997..................................................................................... $ 658,587,322 ==============
* This represents the annualized contract expense rate of the variable account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying fund portfolios and charges made directly to contract owner accounts through the redemption of units. ** This represents the total return for the period indicated and includes a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction of the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the period indicated or from the effective date through the end of the period. INDEPENDENT AUDITORS' REPORT The Board of Directors Nationwide Life Insurance Company: We have audited the consolidated balance sheets of Nationwide Life Insurance Company and subsidiaries (collectively the "Company"), a wholly owned subsidiary of Nationwide Financial Services, Inc., as of December 31, 2001 and 2000, and the related consolidated statements of income, shareholder's equity and cash flows for each of the years in the three-year period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nationwide Life Insurance Company and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. As discussed in note 2 to the consolidated financial statements, the Company changed its methods of accounting for derivative instruments and hedging activities, and for purchased or retained interests in securitized financial assets in 2001. KPMG LLP Columbus, Ohio January 29, 2002 NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Consolidated Balance Sheets (in millions, except per share amounts)
December 31, ------------------------------ 2001 2000 ========= ========= ASSETS Investments: Securities available-for-sale, at fair value: Fixed maturity securities (cost $17,961.6 in 2001; $15,245.8 in 2000) $18,370.8 $15,443.0 Equity securities (cost $83.0 in 2001; $103.5 in 2000) 94.0 109.0 Mortgage loans on real estate, net 7,113.1 6,168.3 Real estate, net 172.0 310.7 Policy loans 591.1 562.6 Other long-term investments 125.0 101.8 Short-term investments, including amounts managed by a related party 1,011.3 442.6 --------- --------- 27,477.3 23,138.0 --------- --------- Cash 22.6 18.4 Accrued investment income 306.7 251.4 Deferred policy acquisition costs 3,189.0 2,865.6 Other assets 646.0 396.7 Assets held in separate accounts 59,513.0 65,897.2 --------- --------- $91,154.6 $92,567.3 ========= ========= LIABILITIES AND SHAREHOLDER'S EQUITY Future policy benefits and claims $25,216.0 $22,183.6 Short-term debt 100.0 118.7 Long-term debt, payable to NFS 300.0 -- Other liabilities 2,307.9 1,164.9 Liabilities related to separate accounts 59,513.0 65,897.2 --------- --------- 87,436.9 89,364.4 --------- --------- Commitments and contingencies (notes 10 and 15) Shareholder's equity: Common stock, $1 par value. Authorized 5.0 million shares; 3.8 million shares issued and outstanding 3.8 3.8 Additional paid-in capital 646.1 646.1 Retained earnings 2,863.1 2,436.3 Accumulated other comprehensive income 204.7 116.7 --------- --------- 3,717.7 3,202.9 --------- --------- $91,154.6 $92,567.3 ========= =========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Consolidated Statements of Income (in millions)
Years ended December 31, ------------------------------------------ 2001 2000 1999 ======== ======== ======== Revenues: Policy charges $1,017.3 $1,091.4 $ 895.5 Life insurance premiums 251.1 240.0 220.8 Net investment income 1,725.0 1,654.9 1,520.8 Net realized (losses) gains on investments, hedging instruments and hedged items: Unrelated parties (62.7) (19.4) (11.6) Related party 44.4 -- -- Other 14.1 17.0 66.1 -------- -------- -------- 2,989.2 2,983.9 2,691.6 -------- -------- -------- Benefits and expenses: Interest credited to policyholder account balances 1,238.7 1,182.4 1,096.3 Other benefits and claims 280.3 241.6 210.4 Policyholder dividends on participating policies 41.7 44.5 42.4 Amortization of deferred policy acquisition costs 347.9 352.1 272.6 Interest expense on debt 6.2 1.3 -- Other operating expenses 444.1 479.0 463.4 -------- -------- -------- 2,358.9 2,300.9 2,085.1 -------- -------- -------- Income before federal income tax expense and cumulative effect of adoption of accounting principles 630.3 683.0 606.5 Federal income tax expense 161.4 207.7 201.4 -------- -------- -------- Income before cumulative effect of adoption of accounting principles 468.9 475.3 405.1 Cumulative effect of adoption of accounting principles, net of tax (7.1) -- -- -------- -------- -------- Net income $ 461.8 $ 475.3 $ 405.1 ======== ======== ========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Consolidated Statements of Shareholder's Equity Years ended December 31, 2001, 2000 and 1999 (in millions)
Accumulated Additional other Total Common paid-in Retained comprehensive shareholder's stock capital earnings income (loss) equity ======== ========== ======== ============= ============= Balance as of December 31, 1998 3.8 914.7 1,579.0 275.6 2,773.1 Comprehensive income: Net income -- -- 405.1 -- 405.1 Net unrealized losses on securities available-for-sale arising during the year, net of tax -- -- -- (315.0) (315.0) -------- Total comprehensive income 90.1 -------- Capital contribution -- 26.4 87.9 23.5 137.8 Return of capital to shareholder -- (175.0) -- -- (175.0) Dividends to shareholder -- -- (61.0) -- (61.0) -------- -------- -------- -------- -------- Balance as of December 31, 1999 3.8 766.1 2,011.0 (15.9) 2,765.0 ======== ======== ======== ======== ======== Comprehensive income: Net income -- -- 475.3 -- 475.3 Net unrealized gains on securities available-for-sale arising during the year, net of tax -- -- -- 132.6 132.6 -------- Total comprehensive income 607.9 -------- Return of capital to shareholder -- (120.0) -- -- (120.0) Dividends to shareholder -- -- (50.0) -- (50.0) -------- -------- -------- -------- -------- Balance as of December 31, 2000 $ 3.8 $ 646.1 $2,436.3 $ 116.7 $3,202.9 ======== ======== ======== ======== ======== Comprehensive income: Net income -- -- 461.8 -- 461.8 Net unrealized gains on securities available-for-sale arising during the year, net of tax -- -- -- 98.2 98.2 Cumulative effect of adoption of accounting principles, net of tax -- -- -- (1.4) (1.4) Accumulated net losses on cash flow hedges, net of tax -- -- -- (8.8) (8.8) -------- Total comprehensive income 549.8 -------- Dividends to shareholder -- -- (35.0) -- (35.0) -------- -------- -------- -------- -------- Balance as of December 31, 2001 $ 3.8 $ 646.1 $2,863.1 $ 204.7 $3,717.7 ======== ======== ======== ======== ========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Consolidated Statements of Cash Flows (in millions)
Years ended December 31, ------------------------------------------ 2001 2000 1999 ======== ======== ======== Cash flows from operating activities: Net income $ 461.8 $ 475.3 $ 405.1 Adjustments to reconcile net income to net cash provided by operating activities: Interest credited to policyholder account balances 1,238.7 1,182.4 1,096.3 Capitalization of deferred policy acquisition costs (743.0) (778.9) (637.0) Amortization of deferred policy acquisition costs 347.9 352.1 272.6 Amortization and depreciation (31.5) (12.7) 2.4 Realized losses (gains) on investments, hedging instruments and hedged items: Unrelated parties 62.7 19.4 11.6 Related parties (44.4) -- -- Cumulative effect of adoption of accounting principles 10.9 -- -- Increase in accrued investment income (55.3) (12.8) (7.9) (Increase) decrease in other assets (272.5) (92.0) 122.9 Increase (decrease) in policy liabilities 33.0 (0.3) (20.9) Increase in other liabilities 304.0 229.3 149.7 Other, net 8.3 22.3 (8.6) -------- -------- -------- Net cash provided by operating activities 1,320.6 1,384.1 1,386.2 -------- -------- -------- Cash flows from investing activities: Proceeds from maturity of securities available-for-sale 3,933.9 2,988.7 2,307.9 Proceeds from sale of securities available-for-sale 497.8 602.0 513.1 Proceeds from repayments of mortgage loans on real estate 1,204.4 911.7 696.7 Proceeds from sale of real estate 29.1 18.7 5.7 Proceeds from sale of limited partnership to related party 158.9 -- -- Proceeds from repayments of policy loans and sale of other invested assets 68.9 79.3 40.9 Cost of securities available-for-sale acquired (7,123.6) (3,475.5) (3,724.9) Cost of mortgage loans on real estate acquired (2,123.1) (1,318.0) (971.4) Cost of real estate acquired (0.4) (7.1) (14.2) Short-term investments, net (568.7) (26.6) (27.5) Collateral received - securities lending, net 791.6 -- -- Other, net (192.2) (182.3) (110.9) -------- -------- -------- Net cash used in investing activities (3,323.4) (409.1) (1,284.6) -------- -------- -------- Cash flows from financing activities: Net proceeds from issuance of long-term debt to NFS 300.0 -- -- Capital returned to shareholder -- (120.0) (175.0) Net change in short-term debt (18.7) 118.7 -- Cash dividends paid (35.0) (100.0) (13.5) Increase in investment and universal life insurance product account balances 5,976.7 4,517.0 3,799.4 Decrease in investment and universal life insurance product account balances (4,216.0) (5,377.1) (3,711.1) -------- -------- -------- Net cash provided by (used in) financing activities 2,007.0 (961.4) (100.2) -------- -------- -------- Net increase in cash 4.2 13.6 1.4 Cash, beginning of year 18.4 4.8 3.4 -------- -------- -------- Cash, end of year $ 22.6 $ 18.4 $ 4.8 ======== ======== ========
See accompanying notes to consolidated financial statements, including note 13 which describes related party transactions. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements December 31, 2001, 2000 and 1999 (1) Organization and Description of Business Nationwide Life Insurance Company (NLIC, or collectively with its subsidiaries, the Company) is a leading provider of long-term savings and retirement products in the United States of America and is a wholly owned subsidiary of Nationwide Financial Services, Inc. (NFS). The Company develops and sells a diverse range of products including individual annuities, private and public sector pension plans and other investment products sold to institutions and life insurance. NLIC sells its products through a diverse network of distribution channels, including independent broker/dealers, brokerage firms, financial institutions, pension plan administrators, life insurance specialists, Nationwide Retirement Solutions and Nationwide agents. Wholly owned subsidiaries of NLIC include Nationwide Life and Annuity Insurance Company (NLAIC), Nationwide Securities, Inc., and Nationwide Investment Services Corporation. (2) Summary of Significant Accounting Policies The significant accounting policies followed by the Company that materially affect financial reporting are summarized below. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) which differ from statutory accounting practices. The statutory financial statements of NLIC and NLAIC are presented on the basis of accounting practices prescribed or permitted by the Ohio Department of Insurance (the Department). The State of Ohio has adopted the National Association of Insurance Commissioners (NAIC) statutory accounting practices (NAIC SAP) as the basis of its statutory accounting practices. NLIC and NLAIC have no statutory accounting practices that differ from NAIC SAP. See also note 12. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ significantly from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs for investment products and universal life insurance products, valuation allowances for mortgage loans on real estate, impairment losses on other investments and federal income taxes. Although some variability is inherent in these estimates, management believes the amounts provided are appropriate. (a) Consolidation Policy The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling interest. All significant intercompany balances and transactions have been eliminated. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (b) Valuation of Investments, Investment Income and Related Gains and Losses The Company is required to classify its fixed maturity securities and equity securities as either held-to-maturity, available-for-sale or trading. The Company classifies fixed maturity and equity securities as available-for-sale. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of adjustments to deferred policy acquisition costs and deferred federal income tax, reported as a separate component of accumulated other comprehensive income (AOCI) in shareholders' equity. The adjustment to deferred policy acquisition costs represents the change in amortization of deferred policy acquisition costs that would have been required as a charge or credit to operations had such unrealized amounts been realized. Management regularly reviews its fixed maturity and equity securities portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments. A number of criteria are considered during this process including, but not limited to, the current fair value as compared to amortized cost or cost, as appropriate, of the security, the length of time the security's fair value has been below amortized cost/cost, and by how much, and specific credit issues related to the issuer. Impairment losses result in a reduction of the cost basis of the underlying investment. For mortgage-backed securities, the Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. When estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments, and any resulting adjustment is included in net investment income. All other investment income is recorded on the accrual basis. Mortgage loans on real estate are carried at the unpaid principal balance less valuation allowances. The Company provides valuation allowances for impairments of mortgage loans on real estate based on a review by portfolio managers. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When the Company determines that a loan is impaired, a provision for loss is established equal to the difference between the carrying value and the estimated value of the mortgage loan. Estimated value is based on the present value of expected future cash flows discounted at the loan's effective interest rate, or the fair value of the collateral, if the loan is collateral dependent. Loans in foreclosure and loans considered impaired are placed on non-accrual status. Interest received on non-accrual status mortgage loans on real estate is included in net investment income in the period received. The valuation allowance account for mortgage loans on real estate is maintained at a level believed adequate by the Company to absorb estimated probable credit losses. The Company's periodic evaluation of the adequacy of the allowance for losses is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Real estate is carried at cost less accumulated depreciation. Real estate designated as held for disposal is carried at the lower of the carrying value at the time of such designation or fair value less cost to sell. Other long-term investments are carried on the equity method of accounting. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Realized gains and losses on the sale of investments are determined on the basis of specific security identification. Changes in valuation allowances and impairment losses for other-than-temporary declines in fair values are included in realized gains and losses on investments, hedging instruments and hedged items. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (c) Derivative Instruments Derivatives are carried at fair value. On the date the derivative contract is entered into, the Company designates the derivative as either a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge), a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), or a foreign currency fair value or cash flow hedge (foreign currency hedge) or a non-hedge transaction. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for entering into various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used for hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively. The Company enters into interest rate swaps, cross-currency swaps or Eurodollar Futures to hedge the fair value of existing fixed rate assets and liabilities. In addition, the Company uses short treasury future positions to hedge the fair value of bond and mortgage loan commitments. Typically, the Company is hedging the risk of changes in fair value attributable to changes in benchmark interest rates. Derivative instruments classified as fair value hedges are carried at fair value, with changes in fair value recorded in realized gains and losses on investments, hedging instruments and hedged items. Changes in the fair value of the hedged item, attributable to the risk being hedged, are also recorded in realized gains and losses on investments, hedging instruments and hedged items. The adjustment of the carrying amount of hedged assets using Eurodollar Futures and firm commitments using Treasury Futures are accounted for in the same manner as other components of the carrying amount of that asset. The adjustment of the carrying amount is amortized to investment income over the life of the asset. The Company may enter into receive fixed/pay variable interest rate swaps to hedge existing floating rate assets or to hedge cash flows from the anticipated purchase of investments. These derivative instruments are classified as cash flow hedges and are carried at fair value, with the offset recorded in AOCI to the extent the hedging relationship is effective. The ineffective portion of the hedging relationship is recorded in realized gains and losses on investments, hedging instruments and hedged items. Gains and losses on cash flow derivative instruments are reclassified out of AOCI and recognized in earnings over the same period(s) that the hedged item affects earnings. Amounts receivable or payable under interest rate and foreign currency swaps are recognized as an adjustment to net investment income or interest credited to policyholder account balances consistent with the nature of the hedged item. From time to time, the Company may enter into a derivative transaction that will not qualify for hedge accounting. These include basis swaps (receive one variable rate, pay another variable rate) to hedge variable rate assets or foreign-denominated liabilities. These instruments are carried at fair value, with changes in fair value recorded in realized gains and losses on investments, hedging instruments and hedged items. The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative expires, or is sold, terminated or exercised, the derivative is dedesignated as a hedging instrument, because it is unlikely that a forecasted transaction will occur, a hedged firm commitment no longer meets the definition of a firm commitment, or management determines that designation of the derivative as a hedging instrument is no longer appropriate. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair value hedge, the Company continues to carry the derivative on the consolidated balance sheet at its fair value, and no longer adjusts the hedged item for changes in fair value. The adjustment of the carrying amount of the hedged item is accounted for in the same manner as other components of the carrying amount of that item. When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, the Company continues to carry the derivative on the consolidated balance sheet at its fair value, removes any asset or liability that was recorded pursuant to recognition of the firm commitment from the consolidated balance sheet and recognizes any gain or loss in net realized gains and losses on investments, hedging instruments and hedged items. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the Company continues to carry the derivative on the consolidated balance sheet at fair value and gains and losses that were accumulated in AOCI are recognized immediately in realized gains and losses on investments, hedging instruments and hedged items. In all other situations in which hedge accounting is discontinued, the Company continues to carry the derivative at its fair value on the consolidated balance sheet, and recognizes any changes in fair value in net realized gains and losses on investments, hedging instruments and hedged items. Prior to the adoption of SFAS 133, defined in note 2 (k), provided they met specific criteria, interest rate and foreign currency swaps and futures were considered hedges and accounted for under the accrual and deferral method, respectively. Amounts receivable or payable under interest rate and foreign currency swaps were recognized as an adjustment to net investment income or interest credited to policyholder account balances consistent with the nature of the hedged item. Changes in the fair value of interest rate swaps were not recognized on the consolidated balance sheet, except for interest rate swaps designated as hedges of fixed maturity securities available-for-sale, for which changes in fair values were reported in AOCI. Gains and losses on foreign currency swaps were recorded in earnings based on the related spot foreign exchange rate at the end of the reporting period. Gains and losses on these contracts offset those recorded as a result of translating the hedged foreign currency denominated liabilities and investments to U.S. dollars. (d) Revenues and Benefits Investment Products and Universal Life Insurance Products: Investment products consist primarily of individual and group variable and fixed deferred annuities. Universal life insurance products include universal life insurance, variable universal life insurance, corporate-owned life insurance and other interest-sensitive life insurance policies. Revenues for investment products and universal life insurance products consist of net investment income, asset fees, cost of insurance, policy administration and surrender charges that have been earned and assessed against policy account balances during the period. The timing of revenue recognition as it relates to fees assessed on investment contracts and universal life contracts is determined based on the nature of such fees. Asset fees, cost of insurance and policy administration charges are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Certain amounts assessed that represent compensation for services to be provided in future periods are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policy account balances and benefits and claims incurred in the period in excess of related policy account balances. Traditional Life Insurance Products: Traditional life insurance products include those products with fixed and guaranteed premiums and benefits and consist primarily of whole life insurance, limited-payment life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are recognized as revenue when due. Benefits and expenses are associated with earned premiums so as to result in recognition of profits over the life of the contract. This association is accomplished by the provision for future policy benefits and the deferral and amortization of policy acquisition costs. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (e) Deferred Policy Acquisition Costs The costs of acquiring new business, principally commissions, certain expenses of the policy issue and underwriting department and certain variable sales expenses that relate to and vary with the production of new or renewal business have been deferred. Deferred policy acquisition costs are subject to recoverability testing at the time of policy issuance and loss recognition testing at the end of each accounting period. For investment products and universal life insurance products, deferred policy acquisition costs are being amortized with interest over the lives of the policies in relation to the present value of estimated future gross profits from projected interest margins, asset fees, cost of insurance, policy administration and surrender charges. For years in which gross profits are negative, deferred policy acquisition costs are amortized based on the present value of gross revenues. The Company regularly reviews the estimated future gross profits and revises such estimates when appropriate. The cumulative change in amortization as a result of changes in estimates to reflect current best estimates is recorded as a charge or credit to amortization expense. The most significant assumptions that are involved in the estimation of future gross profits include future market performance and surrender/lapse rates. In the event actual expense differs significantly from assumptions or assumptions are significantly revised, the Company may be required to record a significant charge or credit to amortization expense. Deferred policy acquisition costs are adjusted to reflect the impact of unrealized gains and losses on fixed maturity securities available-for-sale as described in note 2(b). For traditional life insurance products, these deferred policy acquisition costs are predominantly being amortized with interest over the premium paying period of the related policies in proportion to the ratio of actual annual premium revenue to the anticipated total premium revenue. Such anticipated premium revenue was estimated using the same assumptions as were used for computing liabilities for future policy benefits. (f) Separate Accounts Separate account assets and liabilities represent contractholders' funds which have been segregated into accounts with specific investment objectives. Separate account assets are recorded at market value except for separate account contracts with guaranteed investment returns. For all but $1.39 billion and $1.12 billion of separate account assets as of December 31, 2001 and 2000, respectively, the investment income and gains or losses of these accounts accrue directly to the contractholders. The activity of the separate accounts is not reflected in the consolidated statements of income and cash flows except for the fees the Company receives. Such fees are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. (g) Future Policy Benefits Future policy benefits for investment products in the accumulation phase, universal life insurance and variable universal life insurance policies have been calculated based on participants' contributions plus interest credited less applicable contract charges. Future policy benefits for traditional life insurance policies have been calculated by the net level premium method using interest rates varying from 6.0% to 10.5% and estimates of mortality, morbidity, investment yields and withdrawals which were used or which were being experienced at the time the policies were issued. (h) Participating Business Participating business represented approximately 17% in 2001 (21% in 2000 and 29% in 1999) of the Company's life insurance in force, 63% in 2001 (66% in 2000 and 69% in 1999) of the number of life insurance policies in force, and 9% in 2001 (8% in 2000 and 13% in 1999) of life insurance statutory premiums. The provision for policyholder dividends was based on then current dividend scales and has been included in "Future policy benefits and claims" in the accompanying consolidated balance sheets. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (i) Federal Income Tax The Company files a consolidated federal income tax return with Nationwide Mutual Insurance Company (NMIC), the ultimate majority shareholder of NFS. The members of the consolidated tax return group have a tax sharing arrangement which provides, in effect, for each member to bear essentially the same federal income tax liability as if separate tax returns were filed. The Company provides for federal income taxes based on amounts the Company believes it will ultimately owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain expenses and the realization of certain tax credits. In the event the ultimate deductibility of certain expenses or the realization of certain tax credits differ from estimates, the Company may be required to significantly change the provision for federal income taxes recorded in the consolidated financial statements. The Company utilizes the asset and liability method of accounting for income tax. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under this method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce the deferred tax assets to the amounts expected to be realized. (j) Reinsurance Ceded Reinsurance premiums ceded and reinsurance recoveries on benefits and claims incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded are reported on a gross basis. (k) Recently Issued Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133, as amended by SFAS 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133, and SFAS 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, was adopted by the Company effective January 1, 2001. Upon adoption, the provisions of SFAS 133 were applied prospectively. SFAS 133 establishes accounting and reporting standards for derivative instruments and hedging activities. It requires an entity to recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. As of January 1, 2001, the Company had $755.4 million notional amount of freestanding derivatives with a market value of ($7.0) million. All other derivatives qualified for hedge accounting under SFAS 133. The adoption of SFAS 133 resulted in the Company recording a net transition adjustment loss of $4.8 million (net of related income tax of $2.6 million) in net income. In addition, a net transition adjustment loss of $3.6 million (net of related income tax of $2.0 million) was recorded in AOCI at January 1, 2001. The adoption of SFAS 133 resulted in the Company derecognizing $17.0 million of deferred assets related to hedges, recognizing $10.9 million of additional derivative instrument liabilities and $1.3 million of additional firm commitment assets, while also decreasing hedged future policy benefits by $3.0 million and increasing the carrying amount of hedged investments by $10.6 million. Further, the adoption of SFAS 133 resulted in the Company reporting total derivative instrument assets and liabilities of $44.8 million and $107.1 million, respectively, as of January 1, 2001. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The adoption of SFAS 133 may increase the volatility of reported earnings and other comprehensive income. The amount of volatility will vary with the level of derivative and hedging activities and fluctuations in market interest rates and foreign currency exchange rates during any period. In November 1999, the Emerging Issues Task Force (EITF) issued EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets (EITF 99-20). The Company adopted EITF 99-20 on April 1, 2001. EITF 99-20 establishes the method of recognizing interest income and impairment on asset-backed investment securities. EITF 99-20 requires the Company to update the estimate of cash flows over the life of certain retained beneficial interests in securitization transactions and purchased beneficial interests in securitized financial assets. Pursuant to EITF 99-20, based on current information and events, if the Company estimates that the fair value of its beneficial interests is not greater than or equal to its carrying value and if there has been a decrease in the estimated cash flows since the last revised estimate, considering both timing and amount, then an other-than-temporary impairment should be recognized. The cumulative effect, net of tax, upon adoption of EITF 99-20 on April 1, 2001 decreased net income by $2.3 million with a corresponding increase to AOCI. In July 2001, the FASB issued Statement of Financial Accounting Standards No. 141, Business Combinations (SFAS 141) and Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and the use of the pooling-of-interests method has been eliminated. SFAS 142 applies to all acquired intangible assets whether acquired singularly, as part of a group, or in a business combination. SFAS 142 supersedes APB Opinion No. 17, Intangible Assets, and will carry forward provisions in Opinion 17 related to internally developed intangible assets. SFAS 142 changes the accounting for goodwill and intangible assets with indefinite lives from an amortization method to an impairment-only approach. The amortization of goodwill from past business combinations ceased upon adoption of this statement, which was January 1, 2002 for the Company. Companies are required to evaluate all existing goodwill and intangible assets with indefinite lives for impairment within six months of adoption. Any transitional impairment losses will be recognized in the first interim period in the year of adoption and will be recognized as the cumulative effect of a change in accounting principle. The Company does not expect any material impact of adopting SFAS 141 and SFAS 142 on the results of operations and financial position. In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144 supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, and APB Opinion No. 30, Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS 144 is effective for fiscal years beginning after December 15, 2001 (January 1, 2002 for the Company) and will carry forward many of the provisions of SFAS 121 and Opinion 30 for recognition and measurement of the impairment of long-lived assets to be held and used, and measurement of long-lived assets to be disposed of by sale. Under SFAS 144, if a long-lived asset is part of a group that includes other assets and liabilities, then the provisions of SFAS 144 apply to the entire group. In addition, SFAS 144 does not apply to goodwill and other intangible assets that are not amortized. Management does not expect the adoption of SFAS 144 to have a material impact on the results of operations or financial position of the Company. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued In 2001, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 01-5, Amendments to Specific AICPA Pronouncements for Changes Related to the NAIC Codification (SOP 01-5). In doing so, AICPA SOP 94-5, Disclosures of Certain Matters in the Financial Statements of Insurance Enterprises, was amended to reflect the results of the completion of the NAIC codification of statutory accounting practices for certain insurance enterprises (Codification). The adoption of SOP 01-5 did not have an impact on the results of operations or financial position of the Company. (l) Reclassification Certain items in the 2000 and 1999 consolidated financial statements and related footnotes have been reclassified to conform to the 2001 presentation. (3) Investments The amortized cost, gross unrealized gains and losses and estimated fair value of securities available-for-sale as of December 31, 2001 and 2000 were:
Gross Gross Amortized unrealized unrealized Estimated (in millions) cost gains losses fair value ========= ========== ========== ========== December 31, 2001 Fixed maturity securities: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 263.2 $ 23.1 $ 0.5 $ 285.8 Obligations of states and political subdivisions 7.6 0.3 -- 7.9 Debt securities issued by foreign governments 41.8 2.6 -- 44.4 Corporate securities 11,769.8 470.6 176.5 12,063.9 Mortgage-backed securities - U.S. Government backed 2,012.3 67.8 3.7 2,076.4 Asset-backed securities 3,866.9 76.7 51.2 3,892.4 --------- --------- --------- --------- Total fixed maturity securities 17,961.6 641.1 231.9 18,370.8 Equity securities 83.0 11.0 -- 94.0 --------- --------- --------- --------- $18,044.6 $ 652.1 $ 231.9 $18,464.8 ========= ========= ========= ========= December 31, 2000 Fixed maturity securities: U.S. Treasury securities and obligations of U.S. Government corporations and agencies $ 277.5 $ 33.4 $ 0.1 $ 310.8 Obligations of states and political subdivisions 8.6 0.2 -- 8.8 Debt securities issued by foreign governments 94.1 1.5 0.1 95.5 Corporate securities 9,758.3 235.0 135.1 9,858.2 Mortgage-backed securities - U.S. Government backed 2,719.1 46.1 3.8 2,761.4 Asset-backed securities 2,388.2 36.3 16.2 2,408.3 --------- --------- --------- --------- Total fixed maturity securities 15,245.8 352.5 155.3 15,443.0 Equity securities 103.5 9.5 4.0 109.0 --------- --------- --------- --------- $15,349.3 $ 362.0 $ 159.3 $15,552.0 ========= ========= ========= =========
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The amortized cost and estimated fair value of fixed maturity securities available-for-sale as of December 31, 2001, by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Amortized Estimated (in millions) cost fair value ========= ========== Fixed maturity securities available for sale: Due in one year or less $ 1,125.4 $ 1,141.7 Due after one year through five years 5,154.4 5,295.6 Due after five years through ten years 4,073.6 4,188.8 Due after ten years 1,729.0 1,775.9 --------- --------- 12,082.4 12,402.0 Mortgage-backed securities - U.S. Government backed 2,012.3 2,076.4 Asset-backed securities 3,866.9 3,892.4 --------- --------- $17,961.6 $18,370.8 ========= =========
The components of unrealized gains on securities available-for-sale, net, were as follows as of December 31:
(in millions) 2001 2000 ========= ========= Gross unrealized gains $ 420.2 $ 202.7 Adjustment to deferred policy acquisition costs (94.9) (23.2) Deferred federal income tax (113.9) (62.8) --------- --------- $ 211.4 $ 116.7 ========= =========
An analysis of the change in gross unrealized gains (losses) on securities available-for-sale for the years ended December 31:
(in millions) 2001 2000 1999 ====== ====== ======= Securities available-for-sale: Fixed maturity securities $212.0 $280.5 $(607.1) Equity securities 5.5 (2.5) (8.8) ------ ------ ------- $217.5 $278.0 $(615.9) ====== ====== =======
Proceeds from the sale of securities available-for-sale during 2001, 2000 and 1999 were $497.8 million, $602.0 million and $513.1 million, respectively. During 2001, gross gains of $31.3 million ($12.1 million and $10.4 million in 2000 and 1999, respectively) and gross losses of $10.1 million ($15.1 million and $35.5 million in 2000 and 1999, respectively) were realized on those sales. The Company had $25.2 million and $13.0 million of real estate investments as of December 31, 2001 and 2000, respectively, that were non-income producing the preceding twelve months. Real estate is presented at cost less accumulated depreciation of $22.0 million as of December 31, 2001 ($25.7 million as of December 31, 2000). The carrying value of real estate held for disposal totaled $33.4 million and $8.5 million as of December 31, 2001 and 2000, respectively. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The recorded investment of mortgage loans on real estate considered to be impaired was $29.9 million as of December 31, 2001 ($9.8 million as of December 31, 2000), which includes $5.3 million ($5.3 million as of December 31, 2000) of impaired mortgage loans on real estate for which the related valuation allowance was $1.0 million ($1.6 million as of December 31, 2000) and $24.6 million ($4.5 million as of December 31, 2000) of impaired mortgage loans on real estate for which there was no valuation allowance. Impaired mortgage loans with no valuation allowance are a result of collateral dependent loans where the fair value of the collateral is greater than the recorded investment of the loan. During 2001, the average recorded investment in impaired mortgage loans on real estate was $7.9 million ($7.7 million in 2000) and interest income recognized on those loans totaled $0.4 million in 2001 ($0.4 million in 2000) which is equal to interest income recognized using a cash-basis method of income recognition. Activity in the valuation allowance account for mortgage loans on real estate for the years ended December 31 was as follows:
(in millions) 2001 2000 1999 ======== ======== ======== Allowance, beginning of year $ 45.3 $ 44.4 $ 42.4 Additions (reductions) charged (credited) to operations (1.2) 4.1 0.7 Direct write-downs charged against the allowance (1.2) (3.2) -- Allowance on acquired mortgage loans -- -- 1.3 -------- -------- -------- Allowance, end of year $ 42.9 $ 45.3 $ 44.4 ======== ======== ========
An analysis of investment income (loss) by investment type follows for the years ended December 31:
(in millions) 2001 2000 1999 ======== ======== ======== Gross investment income: Securities available-for-sale: Fixed maturity securities $1,181.1 $1,095.5 $1,031.3 Equity securities 1.8 2.6 2.5 Mortgage loans on real estate 527.9 494.5 460.4 Real estate 33.1 32.2 28.8 Short-term investments 28.3 27.0 18.6 Derivatives (19.7) 3.9 (1.0) Other 20.9 49.3 27.5 -------- -------- -------- Total investment income 1,773.4 1,705.0 1,568.1 Less investment expenses 48.4 50.1 47.3 -------- -------- -------- Net investment income $1,725.0 $1,654.9 $1,520.8 ======== ======== ========
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued An analysis of net realized (losses) gains on investments, hedging instruments and hedged items, by investment type follows for the years ended December 31:
(in millions) 2001 2000 1999 ====== ====== ====== Unrelated parties: Realized gains (losses) on sale of securities available-for-sale: Fixed maturity securities $ 20.8 $ (7.7) $(32.5) Equity securities 0.4 4.7 7.4 Other-than-temporary impairments of securities available-for-sale: Fixed maturity securities (66.1) (10.5) 7.5 Equity securities (13.8) -- -- Real estate 1.9 (0.5) 0.9 Mortgage loans on real estate(1) 0.6 (4.2) (0.6) Derivatives -- (2.7) (1.6) Other (6.5) 1.5 7.3 ------ ------ ------ (62.7) (19.4) (11.6) Related party - gain on sale of limited partnership 44.4 -- -- ------ ------ ------ Net realized losses on investments, hedging instruments and hedged items $(18.3) $(19.4) $(11.6) ====== ====== ======
- ---------- (1) The 2001 amount is comprised of $9.9 million of net realized gains on the sale of mortgage loans on real estate, including those related to a securitization transaction, and $9.3 million of realized losses on derivatives hedging the sale of mortgage loans on real estate. Fixed maturity securities with an amortized cost of $6.6 million as of December 31, 2001 and $6.5 million as of December 31, 2000 were on deposit with various regulatory agencies as required by law. In addition, fixed maturity securities with an amortized cost of $6.3 million as of December 31, 2000 were placed in escrow under a contractual obligation and none as of December 31, 2001. As of December 31, 2001 the Company had pledged fixed maturity securities with a fair value of $112.3 million as collateral to various derivative counterparties. As of December 31, 2001 the Company held collateral of $18.0 million on derivative transactions. This amount is included in short-term investments with a corresponding liability recorded in other liabilities. As of December 31, 2001, the Company had loaned securities with a fair value of $775.5 million. As of December 31, 2001 the Company held collateral of $791.6 million. This amount is included in short-term investments with a corresponding liability recorded in other liabilities. (4) Short-term Debt NLIC has established a $300 million commercial paper program under which, borrowings are unsecured and are issued for terms of 364 days or less. As of December 31, 2001 and 2000 the Company had $100.0 million and $118.7 million, respectively, of commercial paper outstanding at an average effective rate of 1.90% and 6.53%, respectively. See also note 14. (5) Long-term Debt, payable to NFS On December 19, 2001 the Company sold a 7.50%, $300.0 million surplus note to NFS, maturing on December 17, 2031. The fair value of the surplus note as of December 31, 2001 was $300.0 million. Principal and interest payments are subject to prior approval by the superintendent of insurance of the State of Ohio. The Company is scheduled to pay interest semi-annually on June 17 and December 17 of each year commencing June 17, 2002. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (6) Derivative Financial Instruments QUALITATIVE DISCLOSURE Interest Rate Risk Management The Company is exposed to changes in the fair value of fixed rate investments (commercial mortgage loans and corporate bonds) due to changes in interest rates. To manage this risk, the Company enters into various types of derivative instruments to minimize fluctuations in fair values resulting from changes in interest rates. The Company principally uses interest rate swaps and short Eurodollar futures to manage this risk. Under interest rate swaps, the Company receives variable interest rate payments and makes fixed rate payments, thereby creating floating rate investments. Short Eurodollar futures change the fixed rate cash flow exposure to variable rate cash flows. With short Eurodollar futures, if interest rates rise (fall), the gains (losses) on the futures adjust the fixed rate income on the investments, thereby creating floating rate investments. As a result of entering into commercial mortgage loan and private placement commitments, the Company is exposed to changes in the fair value of the commitment due to changes in interest rates during the commitment period. To manage this risk, the Company enters into short Treasury futures. With short Treasury futures, if interest rates rise (fall), the gains (losses) on the futures will offset the change in fair value of the commitment. Floating rate investments (commercial mortgage loans and corporate bonds) expose the Company to fluctuations in cash flow and investment income due to changes in interest rates. To manage this risk, the Company enters into receive fixed, pay variable over-the-counter interest rate swaps or long Eurodollar futures strips to convert the variable rate investments to a fixed rate. In using interest rate swaps, the Company receives fixed interest rate payments and makes variable rate payments; thereby creating fixed rate assets. The long Eurodollar futures change the variable rate cash flow exposure to fixed rate cash flows. With long Eurodollar futures, if interest rates rise (fall), the losses (gains) on the futures are used to reduce the variable rate income on the investments, thereby creating fixed rate investments. Foreign Currency Risk Management In conjunction with the Company's medium-term note program, from time to time, the Company issues both fixed and variable rate liabilities denominated in foreign currencies. As a result, the Company is exposed to changes in fair value of the liabilities due to changes in foreign currency exchange rates and interest rates. To manage these risks, the Company enters into cross-currency interest rate swaps to convert these liabilities to a variable U.S. dollar rate. For a fixed rate liability, the cross-currency interest rate swap is structured to receive a fixed rate, in the foreign currency, and pay a variable U.S. dollar rate, generally 3-month libor. For a variable rate foreign liability, the cross-currency interest rate swap is structured to receive a variable rate, in the foreign currency, and pay a variable U.S. dollar rate, generally 3-month libor. The Company is exposed to changes in fair value of fixed rate investments denominated in a foreign currency due to changes in foreign currency exchange rates and interest rates. To manage this risk, the Company uses cross-currency interest rate swaps to convert these assets to variable U.S. dollar rate instruments. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Cross-currency interest rate swaps on assets are structured to pay a fixed rate, in the foreign currency, and receive a variable U.S. dollar rate, generally 3-month libor. Non-Hedging Derivatives From time-to-time, the Company enters into over-the-counter basis swaps (receive one variable rate, pay another variable rate) to change the rate characteristics of a specific investment to better match the variable rate paid on a liability. While the pay-side terms of the basis swap will line up with the terms of the asset, the Company is not able to match the receive-side terms of the derivative to a specific liability; therefore, basis swaps do not receive hedge accounting treatment. QUANTITATIVE DISCLOSURE Fair Value Hedges During the year ended December 31, 2001, gains of $2.1 million were recognized in net realized losses on investments, hedging instruments and hedged items. This represents the ineffective portion of the fair value hedging relationships. There were no gains or losses attributable to the portion of the derivative instruments' change in fair value excluded from the assessment of hedge effectiveness. There were also no gains or losses recognized in earnings as a result of hedged firm commitments no longer qualifying as fair value hedges. Cash Flow Hedges For the year ended December 31, 2001, the ineffective portion of cash flow hedges was immaterial. There were no gains or losses attributable to the portion of the derivative instruments' change in fair value excluded from the assessment of hedge effectiveness. The Company anticipates reclassifying less than $0.1 million in losses out of AOCI over the next 12-month period. As of December 31, 2001, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows associated with forecasted transactions is twelve months. The Company did not discontinue any cash flow hedges because the original forecasted transaction was no longer probable. Other Derivative Instruments, Including Embedded Derivatives Net realized gains and losses on investments, hedging instruments and hedged items for the year ended December 31, 2001 include a loss of $1.6 million related to other derivative instruments, including embedded derivatives. For the year ended December 31, 2001 a $27.7 million loss was recorded in net realized losses on investments, hedging instruments and hedged items reflecting the change in fair value of cross-currency interest rate swaps hedging variable rate medium-term notes denominated in foreign currencies. An offsetting gain of $26.3 million was recorded in net realized losses on investments, hedging instruments and hedged items to reflect the change in spot rates of these foreign currency denominated obligations during the year ended December 31, 2001. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The notional amount of derivative financial instruments outstanding as of December 31, 2001 and 2000 were as follows:
(in millions ) 2001 2000 ======== ======== Interest rate swaps Pay fixed/receive variable rate swaps hedging investments $1,952.3 $ 934.8 Pay variable/receive fixed rate swaps hedging investments 698.4 98.8 Pay variable/receive variable rate swaps hedging investments 197.8 184.0 Other contracts hedging investments 523.0 20.4 Cross currency interest rate swaps Hedging foreign currency denominated investments 56.1 30.5 Hedging foreign currency denominated liabilities 2,500.4 1,512.2 Interest rate futures contracts 6,019.4 5,659.8 -------- --------
(7) Federal Income Tax The tax effects of temporary differences that give rise to significant components of the net deferred tax liability as of December 31, 2001 and 2000 were as follows:
(in millions) 2001 2000 ======== ======== Deferred tax assets: Equity securities $ 6.5 $ -- Future policy benefits 8.2 34.7 Liabilities in separate accounts 482.5 462.7 Mortgage loans on real estate and real estate 7.5 18.8 Derivatives 93.0 -- Other assets and other liabilities 81.8 40.3 -------- -------- Total gross deferred tax assets 679.5 556.5 Less valuation allowance (7.0) (7.0) -------- -------- Net deferred tax assets 672.5 549.5 -------- -------- Deferred tax liabilities: Deferred policy acquisition costs 861.3 783.7 Derivatives 91.5 -- Fixed maturity securities 173.0 98.8 Deferred tax on realized investment gains 26.1 29.0 Equity securities and other long-term investments 31.7 6.4 Other 68.8 38.1 -------- -------- Total gross deferred tax liabilities 1,252.4 956.0 -------- -------- Net deferred tax liability $ 579.9 $ 406.5 ======== ========
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the total gross deferred tax assets will not be realized. Future taxable amounts or recovery of federal income tax paid within the statutory carryback period can offset nearly all future deductible amounts. The valuation allowance was unchanged for the years ended December 31, 2001, 2000 and 1999. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The Company's current federal income tax liability was $186.2 million and $108.9 million as of December 31, 2001 and 2000, respectively. Federal income tax expense attributable to income before cumulative effect of adoption of accounting principles for the years ended December 31 was as follows:
(in millions) 2001 2000 1999 ====== ====== ====== Currently payable $ 32.5 $ 78.0 $ 53.6 Deferred tax expense 128.9 129.7 147.8 ------ ------ ------ $161.4 $207.7 $201.4 ====== ====== ======
Total federal income tax expense for the years ended December 31, 2001, 2000 and 1999 differs from the amount computed by applying the U.S. federal income tax rate to income before federal income tax expense and cumulative effect of adoption of accounting principles as follows:
2001 2000 1999 ------------------- ------------------- ------------------- (in millions) Amount % Amount % Amount % ====== ====== ====== ====== ====== ====== Computed (expected) tax expense $220.6 35.0 $239.1 35.0 $212.3 35.0 Tax exempt interest and dividends received deduction (48.8) (7.7) (24.7) (3.6) (7.3) (1.2) Income tax credits (11.5) (1.8) (8.0) (1.2) (4.3) (0.7) Other, net 1.1 0.1 1.3 0.2 0.7 0.1 ------ ------ ------ ------ ------ ------ Total (effective rate of each year) $161.4 25.6 $207.7 30.4 $201.4 33.2 ====== ====== ====== ====== ====== ======
Total federal income tax (refunded) paid was $(45.4) million, $74.6 million and $29.8 million during the years ended December 31, 2001, 2000 and 1999, respectively. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (8) Comprehensive Income (Loss) Comprehensive income (loss) includes net income as well as certain items that are reported directly within separate components of shareholder's equity that bypass net income. Other comprehensive income (loss) is comprised of unrealized gains (losses) on securities available-for-sale and accumulated net losses on cash flow hedges. The related before and after federal income tax amounts for the years ended December 31, 2001, 2000 and 1999 were as follows:
(in millions) 2001 2000 1999 ====== ====== ======= Unrealized gains (losses) on securities available-for-sale arising during the period: Gross $164.0 $264.5 $(665.3) Adjustment to deferred policy acquisition costs (71.7) (74.0) 167.5 Related federal income tax (expense) benefit (32.3) (66.7) 171.4 ------ ------ ------- Net 60.0 123.8 (326.4) ------ ------ ------- Reclassification adjustment for net losses on securities available-for-sale realized during the period: Gross 58.7 13.5 17.6 Related federal income tax benefit (20.5) (4.7) (6.2) ------ ------ ------- Net 38.2 8.8 11.4 ------ ------ ------- Other comprehensive income (loss) on securities available-for-sale 98.2 132.6 (315.0) ------ ------ ------- Accumulated net loss on cash flow hedges: Gross (13.5) -- -- Related federal income tax benefit 4.7 -- -- ------ ------ ------- Other comprehensive loss on cash flow hedges (8.8) -- -- ------ ------ ------- Accumulated net loss on transition adjustments: Transition adjustment - SFAS 133 (5.6) -- -- Transition adjustment - EITF 99-20 3.5 -- -- Related federal income tax benefit 0.7 -- -- ------ ------ ------- Other comprehensive loss on transition adjustments (1.4) -- -- ------ ------ ------- Total other comprehensive income (loss) $ 88.0 $132.6 $(315.0) ====== ====== =======
Reclassification adjustments for net realized gains and losses on the ineffective portion of cash flow hedges were immaterial during 2001 and, therefore, are not reflected in the table above. (9) Fair Value of Financial Instruments The following disclosures summarize the carrying amount and estimated fair value of the Company's financial instruments. Certain assets and liabilities are specifically excluded from the disclosure requirements of financial instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The fair value of a financial instrument is defined as the amount at which the financial instrument could be exchanged in a current transaction between willing parties. In cases where quoted market prices are not available, fair value is to be based on estimates using present value or other valuation techniques. Many of the Company's assets and liabilities subject to the disclosure requirements are not actively traded, requiring fair values to be estimated by management using present value or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Although fair value estimates are calculated using assumptions that management believes are appropriate, changes in assumptions could cause these estimates to vary materially. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in the immediate settlement of the instruments. Although insurance contracts, other than policies such as annuities that are classified as investment contracts, are specifically exempted from the disclosure requirements, estimated fair value of policy reserves on life insurance contracts is provided to make the fair value disclosures more meaningful. The tax ramifications of the related unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. In estimating its fair value disclosures, the Company used the following methods and assumptions: Fixed maturity and equity securities: The fair value for fixed maturity securities is based on quoted market prices, where available. For fixed maturity securities not actively traded, fair value is estimated using values obtained from independent pricing services or, in the case of private placements, is estimated by discounting expected future cash flows using a current market rate applicable to the yield, credit quality and maturity of the investments. The fair value for equity securities is based on quoted market prices. The carrying amount and fair value for fixed maturity and equity securities exclude the fair value of derivatives contracts designated as hedges of fixed maturity and equity securities. Mortgage loans on real estate, net: The fair value for mortgage loans on real estate is estimated using discounted cash flow analyses, using interest rates currently being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. Fair value for impaired mortgage loans is the estimated fair value of the underlying collateral. Policy loans, short-term investments and cash: The carrying amount reported in the consolidated balance sheets for these instruments approximates their fair value. Separate account assets and liabilities: The fair value of assets held in separate accounts is based on quoted market prices. The fair value of liabilities related to separate accounts is the amount payable on demand, which is net of certain surrender charges. Investment contracts: The fair value for the Company's liabilities under investment type contracts is based on one of two methods. For investment contracts without defined maturities, fair value is the amount payable on demand. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued. Policy reserves on life insurance contracts: Included are disclosures for individual and corporate-owned life insurance, universal life insurance and supplementary contracts with life contingencies for which the estimated fair value is the amount payable on demand. Also included are disclosures for the Company's limited payment policies, which the Company has used discounted cash flow analyses similar to those used for investment contracts with known maturities to estimate fair value. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Collateral received - securities lending and derivatives: The carrying amount reported in the consolidated balance sheets for these instruments approximates their fair value. Short-term debt: The carrying amount reported in the consolidated balance sheets for these instruments approximates their fair value. Long-term debt, payable to NFS: The fair value for long-term debt is based on quoted market prices. Commitments to extend credit: Commitments to extend credit have nominal fair value because of the short-term nature of such commitments. See note 10. Futures contracts: The fair value for futures contracts is based on quoted market prices. Interest rate and foreign currency swaps: The fair value for interest rate and foreign currency swaps are calculated with pricing models using current rate assumptions. Carrying amount and estimated fair value of financial instruments subject to disclosure requirements and policy reserves on life insurance contracts were as follows as of December 31:
2001 2000 --------------------------- ---------------------------- Carrying Estimated Carrying Estimated (in millions) amount fair value amount fair value ========== ========== ========== ========== Assets: Investments: Securities available-for-sale: Fixed maturity securities $ 18,370.8 $ 18,370.8 $ 15,451.3 $ 15,451.3 Equity securities 94.0 94.0 109.0 109.0 Mortgage loans on real estate, net 7,113.1 7,293.3 6,168.3 6,327.8 Policy loans 591.1 591.1 562.6 562.6 Short-term investments 1,011.3 1,011.3 442.6 442.6 Cash 22.6 22.6 18.4 18.4 Assets held in separate accounts 59,513.0 59,513.0 65,897.2 65,897.2 Liabilities: Investment contracts (19,549.5) (18,421.0) (16,815.3) (15,979.8) Policy reserves on life insurance contracts (5,666.5) (5,524.4) (5,368.4) (5,128.5) Collateral received - securities lending and derivatives (809.6) (809.6) -- -- Short-term debt (100.0) (100.0) (118.7) (118.7) Long-term debt, payable to NFS (300.0) (300.0) -- -- Liabilities related to separate accounts (59,513.0) (58,387.3) (65,897.2) (64,237.6) Derivative financial instruments: Interest rate swaps hedging assets (5.6) (5.6) (8.3) (8.3) Cross currency interest rate swaps (66.0) (66.0) (24.3) (24.3) Futures contracts (33.0) (33.0) (16.0) (16.0) ---------- ---------- ---------- ----------
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (10) Risk Disclosures The following is a description of the most significant risks facing life insurers and how the Company mitigates those risks: Credit Risk: The risk that issuers of securities owned by the Company or mortgagors on mortgage loans on real estate owned by the Company will default or that other parties, including reinsurers, which owe the Company money, will not pay. The Company minimizes this risk by adhering to a conservative investment strategy, by maintaining reinsurance and credit and collection policies and by providing for any amounts deemed uncollectible. Interest Rate Risk: The risk that interest rates will change and cause a decrease in the value of an insurer's investments. This change in rates may cause certain interest-sensitive products to become uncompetitive or may cause disintermediation. The Company mitigates this risk by charging fees for non-conformance with certain policy provisions, by offering products that transfer this risk to the purchaser and/or by attempting to match the maturity schedule of its assets with the expected payouts of its liabilities. To the extent that liabilities come due more quickly than assets mature, an insurer could potentially have to borrow funds or sell assets prior to maturity and potentially recognize a gain or loss. Legal/Regulatory Risk: The risk that changes in the legal or regulatory environment in which an insurer operates will result in increased competition, reduced demand for a company's products, or create additional expenses not anticipated by the insurer in pricing its products. The Company mitigates this risk by offering a wide range of products and by operating throughout the U. S., thus reducing its exposure to any single product or jurisdiction and also by employing underwriting practices which identify and minimize the adverse impact of this risk. Financial Instruments with Off-Balance-Sheet Risk: The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business through management of its investment portfolio. These financial instruments include commitments to extend credit in the form of loans and derivative financial instruments. These instruments involve, to varying degrees, elements of credit risk in excess of amounts recognized on the consolidated balance sheets. Commitments to fund fixed rate mortgage loans on real estate are agreements to lend to a borrower and are subject to conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a deposit. Commitments extended by the Company are based on management's case-by-case credit evaluation of the borrower and the borrower's loan collateral. The underlying mortgage property represents the collateral if the commitment is funded. The Company's policy for new mortgage loans on real estate is to generally lend no more than 80% of collateral value. Should the commitment be funded, the Company's exposure to credit loss in the event of nonperformance by the borrower is represented by the contractual amounts of these commitments less the net realizable value of the collateral. The contractual amounts also represent the cash requirements for all unfunded commitments. Commitments on mortgage loans on real estate of $344.0 million extending into 2002 were outstanding as of December 31, 2001. The Company also had $81.5 million of commitments to purchase fixed maturity securities outstanding as of December 31, 2001. Notional amounts of derivative financial instruments, primarily interest rate swaps, interest rate futures contracts and foreign currency swaps, significantly exceed the credit risk associated with these instruments and represent contractual balances on which calculations of amounts to be exchanged are based. Credit exposure is limited to the sum of the aggregate fair value of positions that have become favorable to NLIC, including accrued interest receivable due from counterparties. Potential credit losses are minimized through careful evaluation of counterparty credit standing, selection of counterparties from a limited group of high quality institutions, collateral agreements and other contract provisions. As of December 31, 2001, NLIC's credit risk from these derivative financial instruments was $1.5 million net of $18.0 million of cash colleteral. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Equity Market Risk: Asset fees calculated as a percentage of the separate account assets are a significant source of revenue to the Company. As of December 31, 2001, 82% of separate account assets were invested in equity mutual funds. Gains and losses in the equity markets will result in corresponding increases and decreases in the Company's separate account assets and the reported asset fee revenue. In addition, a decrease in separate account assets may decrease the Company's expectations of future profit margins, which may require the Company to accelerate the amortization of deferred policy acquisition costs. Significant Concentrations of Credit Risk: The Company grants mainly commercial mortgage loans on real estate to customers throughout the U. S. The Company has a diversified portfolio with no more than 20% (22% in 2000) in any geographic area and no more than 2% (1% in 2000) with any one borrower as of December 31, 2001. As of December 31, 2001, 34% (36% in 2000) of the carrying value of the Company's commercial mortgage loan portfolio financed retail properties. Significant Business Concentrations: As of December 31, 2001, the Company did not have a material concentration of financial instruments in a single investee, industry or geographic location. Also, the Company did not have a concentration of business transactions with a particular customer, lender or distribution source, a market or geographic area in which business is conducted that makes it vulnerable to an event which could cause a severe impact to the Company's financial position. Reinsurance: The Company has entered into reinsurance contracts to cede a portion of its general account individual annuity business. Total recoveries due from these contracts were $161.2 million and $143.1 million as of December 31, 2001 and 2000, respectively. The contracts are immaterial to the Company's results of operations. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. Under the terms of the contracts, trusts have been established as collateral for the recoveries. The trust assets are invested in investment grade securities, the fair value of which must at all times be greater than or equal to 100% or 102% of the reinsured reserves, as outlined in the underlying contract. Collateral - Derivatives: The Company enters into agreements with various counterparties to execute over-the-counter derivative transactions. The Company's policy is to include a Credit Support Annex with each agreement to protect the Company for any exposure above the approved credit threshold. This also protects the counterparty against exposure to the Company. The Company generally posts securities as collateral and receives cash as collateral from counterparties. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest or dividends received during the loan term. Collateral - Securities Lending: The Company, through its agent, lends certain portfolio holdings and in turn receives cash collateral. The cash collateral is invested in high-quality short-term investments. The Company's policy requires a minimum of 102% of the fair value of the securities loaned be maintained as collateral. Net returns on the investments, after payment of a rebate to the borrower, are shared between the Company and its agent. Both the borrower and the Company can request or return the loaned securities at any time. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest or dividends received during the loan term. (11) Pension Plan, Postretirement Benefits Other than Pensions and Retirement Savings Plan The Company is a participant, together with other affiliated companies, in a pension plan covering all employees who have completed at least one year of service and who have met certain age requirements. Plan contributions are invested in a group annuity contract of NLIC. Benefits are based upon the highest average annual salary of a specified number of consecutive years of the last ten years of service. The Company funds pension costs accrued for direct employees plus an allocation of pension costs accrued for employees of affiliates whose work efforts benefit the Company. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Pension costs (benefits) charged to operations by the Company during the years ended December 31, 2001, 2000 and 1999 were $5.0 million, $1.9 million and $(8.3) million, respectively. The Company has recorded a prepaid pension asset of $9.4 million and $13.6 million as of December 31, 2001 and 2000, respectively. In addition to the defined benefit pension plan, the Company, together with other affiliated companies, participates in life and health care defined benefit plans for qualifying retirees. Postretirement life and health care benefits are contributory and generally available to full time employees who have attained age 55 and have accumulated 15 years of service with the Company after reaching age 40. Postretirement health care benefit contributions are adjusted annually and contain cost-sharing features such as deductibles and coinsurance. In addition, there are caps on the Company's portion of the per-participant cost of the postretirement health care benefits. These caps can increase annually, but not more than three percent. The Company's policy is to fund the cost of health care benefits in amounts determined at the discretion of management. Plan assets are invested primarily in group annuity contracts of NLIC. The Company elected to immediately recognize its estimated accumulated postretirement benefit obligation (APBO), however, certain affiliated companies elected to amortize their initial transition obligation over periods ranging from 10 to 20 years. The Company's accrued postretirement benefit expense as of December 31, 2001 and 2000 was $53.8 million and $51.0 million, respectively and the net periodic postretirement benefit cost (NPPBC) for 2001, 2000 and 1999 was $2.9 million, $3.8 million and $4.9 million, respectively. Information regarding the funded status of the pension plan as a whole and the postretirement life and health care benefit plan as a whole as of December 31, 2001 and 2000 follows:
Pension Benefits Postretirement Benefits ------------------------- ----------------------- (in millions) 2001 2000 2001 2000 ======== ======== ======== ======== Change in benefit obligation Benefit obligation at beginning of year $1,981.7 $1,811.4 $ 276.4 $ 239.8 Service cost 89.3 81.4 12.6 12.2 Interest cost 129.1 125.3 21.4 18.7 Participant contributions -- -- 3.3 2.9 Plan amendment 27.7 -- 0.2 -- Actuarial (gain) loss (5.8) 34.8 20.2 16.1 Benefits paid (89.8) (71.2) (20.1) (13.3) -------- -------- -------- -------- Benefit obligation at end of year 2,132.2 1,981.7 314.0 276.4 ======== ======== ======== ======== Change in plan assets Fair value of plan assets at beginning of year 2,337.1 2,247.6 119.4 91.3 Actual return (loss) on plan assets (46.6) 140.9 (0.2) 12.2 Employer contribution -- -- 17.3 26.3 Participant contributions -- -- 3.3 2.9 Plan curtailment -- 19.8 -- -- Benefits paid (89.8) (71.2) (20.1) (13.3) -------- -------- -------- -------- Fair value of plan assets at end of year 2,200.7 2,337.1 119.7 119.4 -------- -------- -------- -------- Funded status 68.5 355.4 (194.3) (157.0) Unrecognized prior service cost 49.5 25.0 0.2 -- Unrecognized net gains (79.3) (311.7) (4.0) (34.1) Unrecognized net (asset) obligation at transition (5.1) (6.4) 0.8 1.0 -------- -------- -------- -------- Prepaid (accrued) benefit cost $ 33.6 $ 62.3 $ (197.3) $ (190.1) ======== ======== ======== ========
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Assumptions used in calculating the funded status of the pension plan and postretirement life and health care benefit plan were as follows:
Pension Benefits Postretirement Benefits ----------------------- ------------------------ 2001 2000 2001 2000 ======================= ======================== Weighted average discount rate 6.50% 6.75% 7.25% 7.50% Rate of increase in future compensation levels 4.75% 5.00% -- -- Assumed health care cost trend rate: Initial rate -- -- 11.00% 11.00% Ultimate rate -- -- 5.50% 5.50% Declining period -- -- 4 Years 4 Years ----- ----- ----- -----
The components of net periodic pension cost for the pension plan as a whole for the years ended December 31, 2001, 2000 and 1999 were as follows:
(in millions) 2001 2000 1999 ======================================================================================================================= Service cost (benefits earned during the period) $ 89.3 $ 81.4 $ 80.0 Interest cost on projected benefit obligation 129.1 125.3 109.9 Expected return on plan assets (183.8) (184.5) (160.3) Recognized gains (7.8) (11.8) (9.1) Amortization of prior service cost 3.2 3.2 3.2 Amortization of unrecognized transition asset (1.3) (1.3) (1.4) ------ ------ ------ $ 28.7 $ 12.3 $ 22.3 ====== ====== ======
Effective December 31, 1998, Wausau Service Corporation (WSC) ended its affiliation with Nationwide and employees of WSC ended participation in the pension plan resulting in a curtailment gain of $67.1 million. During 1999, the pension plan transferred assets to settle its obligation related to WSC employees, resulting in a gain of $32.9 million. The spin-off of liabilities and assets was completed in the year 2000, resulting in an adjustment to the curtailment gain of $19.8 million. Assumptions used in calculating the net periodic pension cost for the pension plan were as follows:
2001 2000 1999 ==== ==== ==== Weighted average discount rate 6.75% 7.00% 6.08% Rate of increase in future compensation levels 5.00% 5.25% 4.33% Expected long-term rate of return on plan assets 8.00% 8.25% 7.33% ---- ---- ----
The components of NPPBC for the postretirement benefit plan as a whole for the years ended December 31, 2001, 2000 and 1999 were as follows:
(in millions) 2001 2000 1999 ===== ===== ===== Service cost (benefits attributed to employee service during the year) $12.6 $12.2 $14.2 Interest cost on accumulated postretirement benefit obligation 21.4 18.7 17.6 Expected return on plan assets (9.6) (7.9) (4.8) Amortization of unrecognized transition obligation of affiliates 0.6 0.6 0.6 Net amortization and deferral (0.4) (1.3) (0.5) ----- ----- ----- $24.6 $22.3 $27.1 ===== ===== =====
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Actuarial assumptions used for the measurement of the NPPBC for the postretirement benefit plan for 2001, 2000 and 1999 were as follows:
2001 2000 1999 ======= ======= ======= Discount rate 7.50% 7.80% 6.65% Long-term rate of return on plan assets, net of tax in 1999 8.00% 8.30% 7.15% Assumed health care cost trend rate: Initial rate 11.00% 13.00% 15.00% Ultimate rate 5.50% 5.50% 5.50% Declining period 4 Years 5 Years 6 Years ------- ------- -------
Because current plan costs are very close to the employer dollar caps, the health care cost trend has an immaterial effect on plan obligations for the postretirement benefit plan as a whole. For this reason, the effect of a one percentage point increase or decrease in the assumed health care cost trend rate on the APBO as of December 31, 2001 and on the NPPBC for the year ended December 31, 2001 was not calculated. The Company, together with other affiliated companies, sponsors a defined contribution retirement savings plan covering substantially all employees of the Company. Employees may make salary deferral contributions of up to 22%. Salary deferrals of up to 6% are subject to a 50% Company match. The Company match is funded on a bi-weekly basis and the expense of such contributions are allocated to the Company based on employee contributions. The Company's expense for contributions to this plan totaled $5.6 million, $4.4 million and $3.3 million for 2001, 2000 and 1999, respectively. Individuals are subject to a dollar limit on salary deferrals per Internal Revenue Service (IRS) Section 402(g) and other limits also apply. The Company has no legal obligation for benefits under this plan. (12) Shareholder's Equity, Regulatory Risk-Based Capital, Retained Earnings and Dividend Restrictions The State of Ohio, where NLIC and NLAIC are domiciled, imposes minimum risk-based capital requirements that were developed by the NAIC. The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of the Company's insurance regulatory total adjusted capital, as defined by the NAIC, to its authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. NLIC and NLAIC each exceed the minimum risk-based capital requirements for all periods presented herein. The statutory capital and surplus of NLIC as of December 31, 2001, 2000 and 1999 was $1.76 billion, $1.28 billion and $1.35 billion, respectively. The statutory net income of NLIC for the years ended December 31, 2001, 2000 and 1999 was $83.1 million, $158.7 million and $276.2 million, respectively. The NAIC completed a project to codify statutory accounting principles (Codification), which became effective January 1, 2001 for NLIC and NLAIC. The resulting change to NLIC's January 1, 2001 surplus was an increase of approximately $80.0 million. The significant change for NLIC, as a result of Codification, was the recording of deferred taxes, which were not recorded prior to the adoption of Codification. The Company is limited in the amount of shareholder dividends it may pay without prior approval by the Department. As of December 31, 2001 $141.0 million in dividends could be paid by NLIC without prior approval. In addition, the payment of dividends by NLIC may also be subject to restrictions set forth in the insurance laws of the State of New York that limit the amount of statutory profits on NLIC's participating policies (measured before dividends to policyholders) that can inure to the benefit of the Company and its shareholders. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The Company currently does not expect such regulatory requirements to impair its ability to pay operating expenses, interest and shareholder dividends in the future. (13) Related Party Transactions During 2001, the Company entered into a transaction with NMIC, whereby it sold 78% of its interest in a limited partnership (representing 49% of the limited partnership) to NMIC for $158.9 million. As a result of this sale, the Company recorded a realized gain of $44.4 million, and related tax expense of $15.5 million. The sale price, which was paid in cash, represented the fair value of the limited partnership interest and was based on a valuation of the limited partnership and its underlying investments. The valuation was completed by qualified management of the limited partnership and utilized a combination of internal and independent valuations of the underlying investments of the limited partnership. Additionally, senior financial officers and the Boards of Directors of the Company and NMIC separately reviewed and approved the valuation prior to the execution of this transaction. The Company continues to hold an economic and voting interest in the limited partnership of approximately 14%, with NMIC holding the remaining interests. NLIC has issued group annuity and life insurance contracts and performs administrative services for various employee benefit plans sponsored by NMIC or its affiliates. Total account values of these contracts were $4.68 billion and $4.80 billion as of December 31, 2001 and 2000, respectively. Total revenues from these contracts were $150.7 million, $156.8 million, and $149.7 million for the years ended December 31, 2001, 2000, and 1999, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances were $118.4 million, $131.9 million, and $112.0 million for the years ended December 31, 2001, 2000, and 1999, respectively. The terms of these contracts are consistent in all material respects with what the Company offers to unaffiliated parties. The Company files a consolidated federal tax return with NMIC, as described in Note 2(i). Total payments (from) to NMIC were $(45.4) million, $74.6 million, and $29.8 million for the years ended December 31, 2001, 2000, and 1999, respectively. During second quarter 1999, the Company entered into a modified coinsurance arrangement to reinsure the 1999 operating results of an affiliated company, Employers Life Insurance Company of Wausau (ELOW) retroactive to January 1, 1999. In September 1999, NFS acquired ELOW for $120.8 million and immediately merged ELOW into NLIC terminating the modified coinsurance arrangement. Because ELOW was an affiliate, the Company accounted for the merger similar to poolings-of-interests; however, prior period financial statements were not restated due to immateriality. The reinsurance and merger combined contributed $1.46 million to net income in 1999. The Company has a reinsurance agreement with NMIC whereby all of the Company's accident and health business is ceded to NMIC on a modified coinsurance basis. The agreement covers individual accident and health business for all periods presented and group and franchise accident and health business since July 1, 1999. Either party may terminate the agreement on January 1 of any year with prior notice. Prior to July 1, 1999 group and franchise accident and health business and a block of group life insurance policies were ceded to ELOW under a modified coinsurance agreement. Under a modified coinsurance agreement, invested assets are retained by the ceding company and investment earnings are paid to the reinsurer. Under the terms of the Company's agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. Risk of asset default is retained by the Company, although a fee is paid to the Company for the retention of such risk. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. The Company believes that the terms of the modified coinsurance agreements are consistent in all material respects with what the Company could have obtained with unaffiliated parties. Revenues ceded to NMIC and ELOW for the years ended December 31, 2001, 2000 and 1999 were $200.7 million, $170.1 million, and $193.0 million, respectively, while benefits, claims and expenses ceded were $208.5 million, $168.0 million and $197.3 million, respectively. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued Pursuant to a cost sharing agreement among NMIC and certain of its direct and indirect subsidiaries, including the Company, NMIC provides certain operational and administrative services, such as investment management, advertising, personnel and general management services, to those subsidiaries. Expenses covered by such agreement are subject to allocation among NMIC and such subsidiaries. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, salary expense, commission expense and other methods agreed to by the participating companies that are within industry guidelines and practices. In addition, Nationwide Services Company, a subsidiary of NMIC, provides computer, telephone, mail, employee benefits administration, and other services to NMIC and certain of its direct and indirect subsidiaries, including the Company, based on specified rates for units of service consumed. For the years ended December 31, 2001, 2000 and 1999, the Company made payments to NMIC and Nationwide Services Company totaling $139.8 million, $150.3 million, and $124.1 million, respectively. The Company does not believe that expenses recognized under these agreements are materially different than expenses that would have been recognized had the Company operated on a stand-alone basis. Under a marketing agreement with NMIC, NLIC makes payments to cover a portion of the agent marketing allowance that is paid to Nationwide agents. These costs cover product development and promotion, sales literature, rent and similar items. Payments under this agreement totaled $26.4 million, $31.4 million and $34.5 million for the years ended December 31, 2001, 2000 and 1999, respectively. The Company leases office space from NMIC and certain of its subsidiaries. For the years ended December 31, 2001, 2000 and 1999, the Company made lease payments to NMIC and its subsidiaries of $18.7 million, $14.1 million and $9.9 million, respectively. The Company also participates in intercompany repurchase agreements with affiliates whereby the seller will transfer securities to the buyer at a stated value. Upon demand or after a stated period, the seller will repurchase the securities at the original sales price plus a price differential. During 2001, the most the Company had outstanding at any given time was $368.5 million and the Company incurred interest expense on intercompany repurchase agreements of $0.2 million for 2001. Transactions under the agreements during 2000 and 1999 were not material. The Company believes that the terms of the repurchase agreements are materially consistent with what the Company could have obtained with unaffiliated parties. The Company and various affiliates entered into agreements with Nationwide Cash Management Company (NCMC), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC were $54.8 million and $321.1 million as of December 31, 2001 and 2000, respectively, and are included in short-term investments on the accompanying consolidated balance sheets. Certain annuity products are sold through affiliated companies, which are also subsidiaries of NFS. Total commissions and fees paid to these affiliates for the three years ended December 31, 2001 were $52.9 million, $65.0 million and $79.7 million, respectively. On December 19, 2001 the Company sold a 7.50%, $300.0 million surplus note to NFS, maturing on December 17, 2031. The fair value of the surplus note as of December 31, 2001 was $300.0 million. Principal and interest payments are subject to prior approval by the superintendent of insurance of the State of Ohio. The Company is scheduled to pay interest semi-annually on June 17 and December 17 of each year commencing June 17, 2002. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued (14) Bank Lines of Credit The Company has available as a source of funds a $1 billion revolving credit facility entered into by NFS, NLIC and NMIC. The facility is comprised of a five year $700 million agreement and a 364 day $300 million agreement with a group of national financial institutions. The facility provides for several and not joint liability with respect to any amount drawn by any party. The facility provides covenants, including, but not limited to, requirements that the Company maintain consolidated tangible net worth, as defined, in excess of $1.69 billion and NLIC maintain statutory surplus in excess of $935 million. The Company had no amounts outstanding under this agreement as of December 31, 2001. Of the total facility, $300 million is designated to back NLIC's commercial paper program. Therefore, borrowing capacity under this facility is reduced by any amounts outstanding under the commercial paper program, which totaled $100.0 million as of December 31, 2001. (15) Contingencies On October 29, 1998, the Company 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 the Company and the other named Company affiliates which were used to fund certain tax-deferred retirement plans. The amended complaint seeks unspecified compensatory and punitive damages. On June 11, 1999, the Company 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 the Company and the other named defendants. On January 25, 2002, the plaintiffs filed a motion for leave to amend their complaint to add three new named plaintiffs. On February 9, 2002, the plaintiffs filed a motion for class certification. The class has not been certified. The Company intends to defend this lawsuit vigorously. On August 15, 2001, the Company was named in a lawsuit filed in Connecticut federal court titled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. On September 5, 2001, the plaintiffs amended their complaint to include class action allegations. The plaintiffs seek to represent a class of plan trustees who purchased variable annuities to fund qualified ERISA retirement plans. The amended complaint alleges that the retirement plans purchased variable annuity contracts from the Company which invested in mutual funds that were offered by separate mutual fund companies; that the Company was a fiduciary under ERISA and that the Company breached its fiduciary duty when it accepted certain fees from the mutual fund companies that purportedly were never disclosed by the Company; and that the Company violated ERISA by replacing many of the mutual funds originally included in the plaintiffs' annuities with "inferior" funds because the new funds purportedly paid more in revenue sharing. The amended complaint seeks disgourgement of fees by the Company and other unspecified compensatory damages. On November 15, 2001, the Company filed a motion to dismiss the amended complaint, which has not been decided. On December 3, 2001, the plaintiffs filed a motion for class certification. On January 15, 2002, the plaintiffs filed a response to the Company's motion to dismiss the amended complaint. On February 22, 2002, the Company filed a reply in support of its motion to dismiss. The class has not been certified. The Company intends to defend this lawsuit vigorously. There can be no assurance that any such litigation will not have a material adverse effect on the Company in the future. (16) Segment Information The Company uses differences in products as the basis for defining its reportable segments. The Company reports three product segments: Individual Annuity, Institutional Products and Life Insurance. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued The Individual Annuity segment consists of individual The BEST of AMERICA and private label deferred variable annuity products, deferred fixed annuity products and income products. Individual deferred annuity contracts provide the customer with tax-deferred accumulation of savings and flexible payout options including lump sum, systematic withdrawal or a stream of payments for life. In addition, variable annuity contracts provide the customer with access to a wide range of investment options and asset protection in the event of an untimely death, while fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods. The Institutional Products segment is comprised of the Company's private and public sector group retirement plans and medium-term note program. The private sector includes the 401(k) business generated through fixed and variable annuities. The public sector includes the IRC Section 457 business in the form of fixed and variable annuities. The Life Insurance segment consists of investment life products, including both individual variable life and COLI products, traditional life insurance products and universal life insurance. Life insurance products provide a death benefit and generally also allow the customer to build cash value on a tax-advantaged basis. In addition to the product segments, the Company reports a Corporate segment. The Corporate segment includes net investment income not allocated to the three product segments, certain revenues and expenses of the Company's broker/dealer subsidiary, unallocated expenses and interest expense on debt. In addition to these operating revenues and expenses, the Company also reports net realized gains and losses on investments, hedging instruments and hedged items in the Corporate segment. The following tables summarize the financial results of the Company's business segments for the years ended December 31, 2001, 2000 and 1999.
Individual Institutional Life (in millions) Annuity Products Insurance Corporate Total ========== ============ ========== ========= ========= 2001: Net investment income $ 534.7 $ 847.5 $ 323.3 $ 19.5 $ 1,725.0 Other operating revenue 556.0 205.9 506.5 16.0 1,284.4 --------- --------- --------- --------- --------- Total operating revenue (1) 1,090.7 1,053.4 829.8 35.5 3,009.4 --------- --------- --------- --------- --------- Interest credited to policyholder account balances 433.2 627.8 177.7 -- 1,238.7 Amortization of deferred policy acquisition costs 220.0 47.6 80.3 -- 347.9 Interest expense on debt -- -- -- 6.2 6.2 Other benefits and expenses 206.1 170.2 387.1 2.7 766.1 --------- --------- --------- --------- --------- Total benefits and expenses 859.3 845.6 645.1 8.9 2,358.9 --------- --------- --------- --------- --------- Operating income before federal income tax expense (1) 231.4 207.8 184.7 26.6 650.5 Net realized losses on investments, hedging instruments and hedged items (2) -- -- -- (20.2) (20.2) --------- --------- --------- --------- --------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 231.4 $ 207.8 $ 184.7 $ 6.4 $ 630.3 ========= ========= ========= ========= ========= Assets as of year end $43,885.4 $34,130.1 $ 9,129.0 $ 4,010.1 $91,154.6 ========= ========= ========= ========= =========
- ---------- (1) Excludes net realized gains and losses on investments, hedging instruments and hedged items. (2) Realized gains related to securitization transactions are included in operating income. NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES (a wholly owned subsidiary of Nationwide Financial Services, Inc.) Notes to Consolidated Financial Statements, Continued
Individual Institutional Life (in millions) Annuity Products Insurance Corporate Total ========= ============ ========= ========= ========= 2000: Net investment income $ 483.2 $ 827.4 $ 289.2 $ 55.1 $ 1,654.9 Other operating revenue 625.9 251.6 453.9 17.0 1,348.4 --------- --------- --------- --------- --------- Total operating revenue(1) 1,109.1 1,079.0 743.1 72.1 3,003.3 --------- --------- --------- --------- --------- Interest credited to policyholder account balances 396.4 628.8 157.2 -- 1,182.4 Amortization of deferred policy acquisition costs 238.7 49.2 64.2 -- 352.1 Interest expense on debt -- -- -- 1.3 1.3 Other benefits and expenses 192.3 170.3 368.8 33.7 765.1 --------- --------- --------- --------- --------- Total benefits and expenses 827.4 848.3 590.2 35.0 2,300.9 --------- --------- --------- --------- --------- Operating income before federal income tax expense(1) 281.7 230.7 152.9 37.1 702.4 Net realized losses on investments, hedging instruments and hedged items -- -- -- (19.4) (19.4) --------- --------- --------- --------- --------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 281.7 $ 230.7 $ 152.9 $ 17.7 $ 683.0 ========= ========= ========= ========= ========= Assets as of year end $45,422.5 $37,217.3 $ 8,103.3 $ 1,824.2 $92,567.3 ========= ========= ========= ========= ========= 1999: Net investment income $ 458.9 $ 771.2 $ 253.1 $ 37.6 $ 1,520.8 Other operating revenue 511.4 211.9 393.0 66.1 1,182.4 --------- --------- --------- --------- --------- Total operating revenue (1) 970.3 983.1 646.1 103.7 2,703.2 --------- --------- --------- --------- --------- Interest credited to policyholder account balances 384.9 580.9 130.5 -- 1,096.3 Amortization of deferred policy acquisition costs 170.9 41.6 60.1 -- 272.6 Other benefits and expenses 155.3 142.8 334.7 83.4 716.2 --------- --------- --------- --------- --------- Total benefits and expenses 711.1 765.3 525.3 83.4 2,085.1 --------- --------- --------- --------- --------- Operating income before federal income tax expense (1) 259.2 217.8 120.8 20.3 618.1 Net realized losses on investments, hedging instruments and hedged items -- -- -- (11.6) (11.6) --------- --------- --------- --------- --------- Income before federal income tax expense and cumulative effect of adoption of accounting principles $ 259.2 $ 217.8 $ 120.8 $ 8.7 $ 606.5 ========= ========= ========= ========= ========= Assets as of year end $45,667.8 $39,045.1 $ 6,616.7 $ 1,346.3 $92,675.9 ========= ========= ========= ========= =========
- ---------- (1) Excludes net realized gains and losses on investments, hedging instruments and hedged items. The Company has no significant revenue from customers located outside of the United States nor does the Company have any significant long-lived assets located outside the United States. PART II - OTHER INFORMATION CONTENTS OF REGISTRATION STATEMENT This Post-Effective Amendment No. 23 to Form S-6 Registration Statement comprises the following papers and documents: The facing sheet. Cross-reference to items required by Form N-8B-2. The prospectus consisting of 177 pages. Representations and Undertakings. Independent Auditors' Consent. Signatures. The following exhibits required by Forms N-8B-2 and S-6: 1. Power of Attorney dated April 1, 2002. Attached hereto. 2. Resolution of the Depositor's Board of Directors authorizing Included with the Registration Statement on Form N-8B-2 the establishment of the Registrant, adopted for the Nationwide VLI Separate Account-2 (File No. 811-5311), and is hereby incorporated by reference. 3. Distribution Contracts Filed previously with Post-Effective Amendment No. 18 (333-42180) and hereby incorporated by reference. 4. Form of Security Included with the Registration Statement on Form S-6 for the Nationwide VLI Separate Account-2 (File No. 33-42180), and is hereby incorporated by reference. 5. Articles of Incorporation of Depositor Included with the Registration Statement on Form N-8B-2 for the Nationwide VLI Separate Account-2 (File No. 811-5311), and is hereby incorporated by reference. 6. Application form of Security Included with the Registration Statement on Form S-6 for the Nationwide VLI Separate Account-2 (File No. 33-42180), and is hereby incorporated by reference. 7. Opinion of Counsel Included with the Registration Statement on Form S-6 for the Nationwide VLI Separate Account-2 (File No. 33-42180), and is hereby incorporated by reference.
REPRESENTATIONS AND UNDERTAKINGS The Registrant and Nationwide hereby make the following representations and undertakings: (a) This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment Company Act of 1940 (the "Act"). The Registrant and Nationwide elect to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the Act with respect to the policies described in the prospectus. The policies have been designed in a way as to qualify for the exemptive relief from various provisions of the Act afforded by Rule 6e-3(T). (b) Paragraph (b) (13) (iii) (F) of Rule 6e-3(T) is being relied on for the deduction of the mortality and expense risk charges ("risk charges") assumed by Nationwide under the policies. Nationwide represents that the risk charges are within the range of industry practice for comparable policies and reasonable in relation to all of the risks assumed by the issuer under the policies. Actuarial memoranda demonstrating the reasonableness of these charges are maintained by Nationwide, and will be made available to the Securities and Exchange Commission ("SEC") on request. (c) Nationwide has concluded that there is a reasonable likelihood that the distribution financing arrangement of the separate account will benefit the separate account and the contractholders and will keep and make available to the SEC on request a memorandum setting forth the basis for this representation. (d) Nationwide represents that the separate account will invest only in management investment companies which have undertaken to have a board of directors, a majority of whom are not interested persons of the company, formulate and approve any plan under Rule 12b-1 to finance distribution expenses. (e) Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the Registrant hereby undertakes to file with the SEC such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the SEC heretofore or hereafter duly adopted pursuant to authority conferred in that section. (f) The fees and charges deducted under the policy in the aggregate are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Nationwide. INDEPENDENT AUDITORS' CONSENT The Board of Directors of Nationwide Life Insurance Company and Contract Owners of Nationwide VLI Separate Account-2: We consent to use of our reports for Nationwide VLI Separate Account-2 dated February 20, 2002 and for Nationwide Life Insurance Company dated January 29, 2002 included herein, and to the reference to our firm under the heading "Independent Certified Public Accountants" in the Prospectus (File No. 033-42180). KPMG LLP Columbus, Ohio April 22, 2002 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, NATIONWIDE VLI SEPARATE ACCOUNT-2, certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment No. 23 and has duly caused this Post-Effective Amendment to be signed on its behalf by the undersigned thereunto duly authorized, and its seal to be hereunto affixed and attested, in the City of Columbus, and State of Ohio, on the 26th day of April, 2002. NATIONWIDE VLI SEPARATE ACCOUNT-2 ----------------------------------- (Registrant) (Seal) NATIONWIDE LIFE INSURANCE COMPANY Attest: ----------------------------------- (Depositor) By: /s/ GLENN W. SODEN By: /s/ STEVEN SAVINI, ESQ. -------------------------------- -------------------------------- Glenn W. Soden Steven Savini, Esq. Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment has been signed below by the following persons in the capacities indicated on the 26th day of April, 2002.
SIGNATURE TITLE W. G. JURGENSEN Director and Chief Executive Officer - --------------------------- W. G. Jurgensen JOSEPH J. GASPER Director and President and - --------------------------- Chief Operating Officer Joseph J. Gasper MICHAEL S. HELFER Director and Executive - --------------------------- Vice President-Corporate Strategy Michael S. Helfer DONNA A. JAMES Director and Executive Vice - --------------------------- President-Chief Administrative Officer Donna A. James ROBERT A. OAKLEY Director and Executive Vice - --------------------------- President-Chief Financial Officer Robert A. Oakley ROBERT A. WOODWARD, JR. Director and Executive Vice - --------------------------- President-Chief Investment Officer Robert A. Woodward, Jr. Galen R. Barnes Director - --------------------------- Galen R. Barnes
By /s/ STEVEN SAVINI --------------------------- Steven Savini Attorney-in-Fact EX-1 3 l93657aex1.txt EX-1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENT, that each of the undersigned as directors and/or officers of NATIONWIDE LIFE INSURANCE COMPANY and NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY, both Ohio corporations, which have filed or will file with the U.S. Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, and if applicable, the Securities Exchange Act of 1934, various registration statements and amendments thereto for the registration of current, as well as any future, separate accounts established by said corporation for the purpose of registering under said Act(s) immediate or deferred variable annuity contracts, fixed interest rate options subject to a market value adjustment, group flexible fund retirement annuity contracts and variable life insurance policies in connection with the separate accounts listed on Exhibit A. As such, the undersigned hereby constitute and appoint W.G. Jurgensen, Joseph J. Gasper, Robert J. Woodward, Jr., Philip C. Gath, Richard A. Karas, Edwin P. McCausland, Jr., Susan A. Wolken, Steven R. Savini and Mark R. Thresher, and each of them with power to act without the others, his/her attorney, with full power of substitution for and in his/her name, place and stead, in any and all capacities, to approve, and sign such Applications and Registration Statements, and any and all amendments thereto, with power to affix the corporate seal of said corporation thereto and to attest said seal and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, hereby granting unto said attorneys, and each of them, full power and authority to do and perform all and every act and thing requisite to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming that which said attorneys, or any of them, may lawfully do or cause to be done by virtue hereof. This instrument may be executed in one or more counterparts. IN WITNESS WHEREOF, the undersigned have herewith set their names and seals as of this 1st day of April, 2002. - ------------------------------------ ------------------------------------------- W. G. JURGENSEN, Director and Chief JOSEPH J. GASPER, Director and President Executive Officer and Chief Operating Officer - ------------------------------------ ------------------------------------------- MICHAEL S. HELFER, Director and DONNA A. JAMES, Director and Executive Executive Vice President-Corporate Vice President-Chief Administrative Officer Strategy - ------------------------------------ ------------------------------------------- ROBERT A. OAKLEY, Director and ROBERT J. WOODWARD, JR., Director and Executive Vice President-Chief Executive Vice President-Chief Investment Financial Officer Officer - ------------------------------------ GALEN R. BARNES, Director EXHIBIT A - - MFS Variable Account; - - Multi-Flex Variable Account; - - Nationwide Variable Account; - - Nationwide Variable Account-II; - - Nationwide Variable Account-3; - - Nationwide Variable Account-4; - - Nationwide Variable Account-5; - - Nationwide Variable Account-6; - - Nationwide Variable Account-7; - - Nationwide Variable Account-8; - - Nationwide Variable Account-9; - - Nationwide Variable Account-10; - - Nationwide Variable Account-11; - - Nationwide Variable Account-12; - - Nationwide Variable Account-13; - - Nationwide VA Separate Account-A; - - Nationwide VA Separate Account-B; - - Nationwide VA Separate Account-C; - - Nationwide VA Separate Account-D; - - Nationwide Multiple Maturity Separate Account; - - Nationwide Multiple Maturity Separate Account-2; - - Nationwide Multiple Maturity Separate Account-A; - - Nationwide DC Variable Account; - - NACo Variable Account; - - Nationwide VLI Separate Account; - - Nationwide VLI Separate Account-2; - - Nationwide VLI Separate Account-3; - - Nationwide VLI Separate Account-4; - - Nationwide VLI Separate Account-5; - - Nationwide VLI Separate Account-6; - - Nationwide VL Separate Account-A; - - Nationwide VL Separate Account-B; - - Nationwide VL Separate Account-C; and - - Nationwide VL Separate Account-D. -----END PRIVACY-ENHANCED MESSAGE-----