Investment choices performance report. January 31, The Best of America Next Generation FPVUL. Look to your future

Transcription

1 Investment choices performance report January 31, 2010 The Best of America Next Generation FPVUL Look to your future

2 When you have questions we have answers. Nationwide wants you to look to your future and the future of your loved ones. What is variable life insurance? Variable life insurance, like other types of life insurance, helps you protect your family s future by providing a payment known as the death benefit to your beneficiary in the event of your death. What makes variable life insurance different from other types of life insurance is that it allows you to choose from a wide variety of professionally managed investment choices that may help your policy s value grow. What kind of investments can I choose from? With choices like equity, bond and money market funds, you can create a portfolio designed to meet your investment goals based on how much risk you re willing to take. Please keep in mind that because these investment choices are subject to market fluctuation, investment risk and possible loss of principal, your policy s value will vary depending on how they perform. Investment choices within a variable insurance policy are not publicly traded mutual funds and are only available for purchase in variable products. Fees in investment choices cover the fund manager s services and the costs of the underlying investments. Why should I consider variable life? Variable life insurance offers tax-advantaged features like: Income tax-free death benefit If you set up your policy properly, the death benefit paid to your beneficiary may be excluded from your taxable estate. Tax-advantaged access to your money When your variable life insurance policy grows in value, the earnings are tax deferred. And, you can borrow from the cash value of your policy through loans and partial surrenders without incurring income taxes. How does it work? First, you ll choose the amount of insurance how much you choose depends on your needs. These needs may change over time, so be sure to choose an insurance policy that can meet your long-term goals. Based on the amount of insurance, you ll pay a premium into the policy. It s important to pay enough premiums into your policy to keep it from lapsing. And, because your policy s value is based on market performance, you may need to pay extra premiums to keep your policy from lapsing in a volatile market. Certain charges like the cost of insurance, which varies with your gender, health and age, and additional charges for any riders you choose to customize your policy are deducted from the premium and cash value to pay for the policy. Different policies have different costs, so you should consider these costs before deciding which policy to buy. How can I customize my policy? Life insurance policies offer optional features, known as riders or endorsements, that can help make the policy fit your individual needs. Not all riders are available in all states, and some carry an additional cost based on your gender, health and age, the value in your policy and/or the amount of the rider being added. Points to remember: The tax advantages mentioned here assume that the life insurance policy qualifies as life insurance under section 7702 of the Internal Revenue Code and is not a modified endowment contract (MEC) under section 7702A. Most distributions are taxed on a first-in/ first-out basis as long as the contract meets non-mec definitions in section 7702A. Nationwide and its representatives do not give legal or tax advice. Please contact your attorney or tax advisor with any legal or tax questions.

3 Investment choices performance report FS Quality investments, confident choices What matters most to you also matters to us. That s why our team of investment specialists devotes both time and effort to build a lineup of quality investment options that you can choose from with confidence. We do the homework for you researching investments, crunching the numbers and looking for options that have demonstrated consistency in style, management and performance over time. The result is a lineup of investment options from brand-name managers across multiple asset classes. For the investment options that bear the Nationwide Variable Insurance Trust (NVIT) name, we ve hired many of these managers as subadvisors to bring their strategies and experience to your portfolio. Other investment options are available to you directly from third-party managers. We brought investors like you greater choice back in 1982 by pioneering the multi-manager approach to variable insurance products. Today, you can benefit from Nationwide s experience as a manager of managers to bring you the investment options that can help you meet your financial goals. It s natural to want to know how your investments are doing over time This performance report shows how the investment choices within this variable life policy have performed over a series of time periods. Investment choices within this variable life policy are not publicly traded mutual funds and are only available for purchase in variable products. A variable life insurance policy provides access to a wide range of professionally managed investment choices within the contract. These choices range from equity investments to bond funds and money market funds, enabling you to create a portfolio designed to meet your investment objectives. The value of an investment in a variable life policy will vary depending on the performance of the investment choices you select. Investment choices are subject to market fluctuation, investment risk and possible loss of principal. The performance results shown include fund-level fees and expenses and the reinvestment of dividends and distributions. Results do not include any policy fees or expenses, which include premium loads, cost of insurance, policy administrative charges, mortality and expense risk charges, surrender charges, the cost of optional riders or any other charges applied to this policy. If these charges were included, performance results would be significantly lower. Policy fees and expenses vary by product and some will vary by factors such as the insured s age, gender, smoking status, policy specified amount and underwriting class. Refer to the prospectus for complete details about policy fees and charges. A personalized illustration, with a hypothetical rate of return, will show the effects of policy fees and expenses. Ask your investment professional for one today. Helpful terms Asset allocation: The mixture of asset classes an investor chooses based on his or her time horizon and risk tolerance. Markets are volatile and can decline in response to adverse developments. The use of asset allocation does not guarantee returns or protect you from potential losses. Asset class: A group of investments with similar characteristics, such as stocks, bonds or cash. Closed fund: A fund that is no longer accepting contributions from investors. Current yield: A measure of the return an investor might expect if he or she purchased an investment and held it for one year. date: The date the fund first became available to investors. Separate account: An investment pool funded by contributions to variable contracts including variable annuities and variable life insurance. These assets are kept separate from the Nationwide general account. Short-term trading fees: Fees designed to offset the costs associated with short-term trading and to protect the long-term interests of all shareholders. Walled-off fund: A fund that is not open to new investors, but is still accepting contributions from existing investors. Variable products are sold by prospectus. Both the product prospectus and underlying fund prospectuses can be obtained by writing to Nationwide Life Insurance Company, P.O. Box , Columbus, OH or by calling Before investing, you should read the prospectus carefully and consider investment objectives, risks, charges and expenses. The product prospectus and underlying fund prospectuses contain this and other important information. The Best of America Next Generation FPVUL January 31, 2010

4 Non-standardized performance: Without surrender charges (CDSC) applied The figures shown are calculated based on a one-time investment of $10,000. These returns are measured from the inception date of the fund and may predate the offering of the fund in the Nationwide separate account. Where this occurs, the performance is hypothetical in that it depicts how the fund would have performed had it been available in the Nationwide separate account during the time period. -to-date returns are shown only for funds incepted on or before December 31 of the previous year. The results shown represent past performance and do not represent expected future performance or experience. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the data quoted. To obtain performance data current to the most recent month-end or for closed and walled-off funds, please call or visit nationwide.com. The Best of America Next Generation FPVUL Asset Class: Asset Allocation 1 American Funds NVIT Asset Allocation Fund - Class II 08/01/ % -2.55% 26.59% -3.92% 2.42% 3.12% BlackRock Global Allocation V.I. Fund - Class II 11/24/ % -2.62% 23.19% 3.28% 7.59% 9.54% Fidelity VIP Freedom Fund 2010 Portfolio - Service Class 04/26/ % -1.54% 27.35% -0.51% N/A 3.57% Fidelity VIP Freedom Fund 2020 Portfolio - Service Class 04/26/ % -2.11% 33.15% -2.66% N/A 3.22% Fidelity VIP Freedom Fund 2030 Portfolio - Service Class 04/26/ % -2.99% 36.69% -4.73% N/A 2.51% Franklin Templeton VIPT Founding Funds Allocation Fund - Class 2 07/02/ % -2.10% 34.97% N/A N/A % Ivy Funds VIP Asset Strategy 05/01/ % -2.70% 23.46% 8.59% 14.42% 10.98% NVIT Cardinal SM Aggressive Fund - Class I 03/27/ % -4.16% 33.68% N/A N/A -8.68% NVIT Cardinal SM Moderately Aggressive Fund - Class I 03/27/ % -3.28% 30.26% N/A N/A -6.04% NVIT Cardinal SM Capital Appreciation Fund - Class I 03/27/ % -2.75% 27.35% N/A N/A -4.39% NVIT Cardinal SM Moderate Fund - Class I 03/27/ % -2.25% 24.71% N/A N/A -2.82% NVIT Cardinal SM Balanced Fund - Class I 03/27/ % -1.68% 22.08% N/A N/A -1.24% NVIT Cardinal SM Moderately Conservatiive Fund - Class I 03/27/ % -1.03% 19.53% N/A N/A 0.24% NVIT Cardinal SM Conservative Fund - Class I 03/27/ % 0.00% 14.22% N/A N/A 2.77% NVIT Investor Destinations Aggressive Fund - Class II 12/12/ % -3.77% 34.95% -6.96% 1.14% 3.11% NVIT Investor Destinations Moderately Aggressive Fund - Class II 12/12/ % -2.98% 30.34% -4.67% 1.90% 3.49% NVIT Investor Destinations Moderate Fund - Class II 12/12/ % -1.96% 23.52% -2.14% 2.44% 3.60% NVIT Investor Destinations Moderately Conservative Fund - Class II 12/12/ % -0.92% 17.49% 0.43% 3.10% 3.85% NVIT Investor Destinations Conservative Fund - Class II 12/12/ % -0.10% 10.89% 2.44% 3.47% 3.73% NVIT Investor Destinations Balanced Fund - Class II 03/24/ % -1.50% N/A N/A N/A 21.31% NVIT Investor Destinations Capital Appreciation Fund - Class II 03/24/ % -2.40% N/A N/A N/A 28.64% 10

5 The Best of America Next Generation FPVUL Asset Class: Balanced Franklin Templeton VIPT Income Securities Fund - Class 2 01/24/ % -0.78% 36.59% -0.87% 3.75% 7.72% Asset Class: Bonds 2,3,9 American Century VP Inflation Protection Fund - Class II 12/31/ % 1.13% 11.57% 6.26% 4.37% 4.70% American Funds NVIT Bond Fund - Class II 01/02/ % 1.50% 13.83% 1.79% 2.57% 4.56% Federated NVIT High Income Bond Fund - Class III 10 11/03/ % 1.21% 42.14% 2.83% 4.43% 5.25% Fidelity VIP Investment Grade Bond Portfolio - Service Class 12/30/ % 1.69% 16.44% 5.82% 4.65% 6.30% NVIT Core Bond Fund - Class I 03/24/ % 1.76% 9.68% N/A N/A 5.28% NVIT Core Plus Bond Fund - Class I 03/24/ % 1.58% 18.95% N/A N/A 9.51% NVIT Government Bond Fund - Class I 11/08/ % 1.53% 5.49% 6.34% 4.99% 6.13% NVIT Multi Sector Bond Fund - Class I 10/31/ % 1.33% 25.01% 2.97% 3.12% 5.24% Asset Class: Cash 4 NVIT Money Market Fund - Class I 7-day current yield: 0.00% * 11/10/ % 0.00% 0.01% 2.14% 2.77% 2.57% Asset Class: International Stocks 5 American Funds NVIT Global Growth Fund - Class II 04/30/ % -4.70% 45.88% -2.13% 5.53% 1.49% Fidelity VIP Overseas Portfolio - Service Class R 10 01/28/ % -5.88% 34.63% -8.06% 2.48% -0.40% Gartmore NVIT Emerging Markets Fund - Class III 10 08/30/ % -5.91% 68.97% -1.54% 11.28% 8.00% Gartmore NVIT International Equity Fund - Class III 10 08/30/ % -6.61% 34.42% -6.60% 7.81% 0.44% Gartmore NVIT Worldwide Leaders Fund - Class III 10 10/31/ % -4.40% 33.38% -8.35% 3.89% 0.43% Janus Aspen Series Overseas Portfolio - Service II Shares 10 05/02/ % -2.21% 77.22% 2.28% 15.86% 4.81% NVIT International Index Fund - Class VI 10 05/01/ % -5.06% 38.87% -9.13% N/A -4.70% NVIT Multi-Manager International Growth Fund - Class III 10 03/24/ % -4.51% 38.28% N/A N/A -9.22% NVIT Multi-Manager International Value Fund - Class III 10 11/01/ % -5.31% 41.29% % -1.10% 2.41% Oppenheimer Global Securities Fund/VA - Class /01/ % -2.92% 47.98% -5.10% 3.88% 10.70% Templeton NVIT International Value Fund - Class III 10 03/24/ % -5.83% N/A N/A N/A 32.94% *Current yield more closely reflects current money market fund earnings than the total return calculation. 10

6 The Best of America Next Generation FPVUL Asset Class: Large-cap Stocks American Century NVIT Multi Cap Value Fund - Class I 03/24/ % -2.59% N/A N/A N/A 30.22% American Funds NVIT Growth Fund - Class II 02/08/ % -4.04% 42.09% -6.46% 1.48% 0.27% American Funds NVIT Growth-Income Fund - Class II 03/09/ % -4.32% 34.35% -7.49% -0.17% 2.63% Dreyfus Stock Index Fund, Inc. - Initial Shares 09/29/ % -3.61% 32.94% -7.41% -0.02% -1.03% Dreyfus VIF Appreciation Portfolio - Initial Shares 04/05/ % -3.31% 28.27% -3.80% 1.91% 0.63% Fidelity VIP Equity-Income Portfolio - Service Class 10/09/ % -3.10% 41.38% % -0.96% 1.92% Fidelity VIP Growth Portfolio - Service Class 10/09/ % -5.47% 29.58% -7.37% -1.12% -4.08% Janus Aspen Series Forty Portfolio - Service Shares 05/01/ % -4.94% 41.41% 0.93% 6.27% 0.22% MFS VIT Value Series - Initial Class 01/02/ % -3.05% 28.73% -5.20% 2.43% 4.12% Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I 03/24/ % -2.96% 52.28% N/A N/A % Neuberger Berman NVIT Socially Responsible Fund - Class I 03/24/ % -2.61% 35.69% N/A N/A -9.61% NVIT Multi-Manager Large Cap Growth Fund - Class I 03/24/ % -5.41% 28.68% N/A N/A -9.59% NVIT Multi-Manager Large Cap Value Fund - Class I 03/24/ % -2.87% 36.05% N/A N/A -9.70% NVIT Nationwide Fund - Class I 11/08/ % -3.95% 32.06% -9.21% -1.03% -0.25% NVIT U.S. Growth Leaders Fund - Class I 12/31/ % -5.60% 22.49% -6.17% -0.19% 2.73% Oppenheimer Main Street Fund/VA - Non-Service Shares 07/05/ % -2.53% 35.36% -7.52% 0.11% -0.56% Oppenheimer NVIT Large Cap Growth Fund - Class I 03/24/ % -5.68% N/A N/A N/A 35.37% Van Kampen NVIT Comstock Value Fund - Class I 10/31/ % -2.48% 41.57% -8.78% -0.76% -1.59% Asset Class: Mid-cap Stocks 6 AIM V.I. Capital Development Fund - Series I Shares 05/01/ % -4.96% 38.99% -8.48% 0.67% 2.45% AllianceBernstein VPS Small/Mid Cap Value Portfolio - Class A 05/02/ % -2.54% 57.31% -3.75% 2.85% 8.08% American Century VP Mid Cap Value Fund - Class I 10/29/ % -2.72% 37.51% -2.72% 4.64% 6.38% Fidelity VIP Mid Cap Portfolio - Service Class 12/28/ % -3.03% 42.78% -2.26% 5.06% 9.59% NVIT Mid Cap Index Fund - Class I 10/31/ % -3.24% 42.73% -4.41% 2.72% 5.59% NVIT Multi-Manager Mid Cap Growth Fund - Class I 03/24/ % -5.96% 23.86% N/A N/A % NVIT Multi-Manager Mid Cap Value Fund - Class II 03/24/ % -3.29% 36.62% N/A N/A -5.41% 10

7 The Best of America Next Generation FPVUL Asset Class: Short-term Bonds 9 Neuberger Berman AMT Short Duration Bond Portfolio - I Class 09/10/ % 1.69% 11.70% 1.43% 2.02% 3.41% NVIT Short Term Bond Fund - Class II 03/24/ % 0.78% 6.42% N/A N/A 3.84% PIMCO VIT Low Duration Portfolio - Administrative 02/16/ % 1.12% 13.90% 6.96% 5.19% 5.19% Asset Class: Small-cap Stocks 6 Dreyfus IP Small Cap Stock Index Portfolio - Service Shares 05/01/ % -3.28% 38.43% -6.66% 0.81% 3.57% Franklin VIPT Small Cap Value Securities Fund - Class I 05/01/ % -3.38% 43.02% -7.36% 1.36% 9.46% NVIT Multi-Manager Small Cap Growth Fund - Class I 05/03/ % -4.96% 30.18% % -3.80% -4.79% NVIT Multi-Manager Small Cap Value Fund - Class I 10/31/ % -3.25% 37.24% -8.75% -0.47% 6.65% NVIT Multi-Manager Small Company Fund - Class I 10/23/ % -3.94% 42.79% -7.22% 0.95% 3.91% Oppenheimer Main Street Small Cap Fund/VA - Non-Service Shares 05/01/ % -3.82% 48.56% -7.63% 1.23% 2.25% Wells Fargo Advantage VT Small Cap Growth Fund 05/01/ % -2.99% 60.84% -1.22% 6.12% -3.00% Asset Class: Specialty 7,8 AllianceBernstein NVIT Global Fixed Income Fund - Class III 10 03/24/ % 1.09% N/A N/A N/A 16.13% Fidelity VIP Energy Portfolio - Service Class /19/ % -4.35% 40.79% -2.23% 9.42% 9.76% NVIT Health Sciences Fund - Class III 10 12/29/ % 0.10% 20.88% -0.73% 2.75% 3.46% NVIT Technology and Communications Fund - Class III 10 06/30/ % -7.29% 48.60% -5.29% 1.47% -9.42% PIMCO VIT Foreign Bond Portfolio (unhedged): Administrative Class 04/30/ % 1.26% 8.48% N/A N/A 6.44% Van Kampen NVIT Real Estate Fund - Class I 03/24/ % -5.34% 50.14% N/A N/A % 10

8 Non-standardized performance: Without surrender charges (CDSC) applied The figures shown are calculated based on a one-time investment of $10,000. These returns are measured from the inception date of the fund and may predate the offering of the fund in the Nationwide separate account. Where this occurs, the performance is hypothetical in that it depicts how the fund would have performed had it been available in the Nationwide separate account during the time period. -to-date returns are shown only for funds incepted on or before December 31 of the previous year. The results shown represent past performance and do not represent expected future performance or experience. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the data quoted. To obtain performance data current to the most recent month-end or for closed and walled-off funds, please call or visit nationwide.com. Walled-off and closed funds The Best of America Next Generation FPVUL Fund Status Asset Class: Balanced Janus Aspen Series Balanced Portfolio - Service Shares Walled-off 09/30/ % -2.15% 24.62% 4.03% 6.57% 3.99% Asset Class: Bonds 2,3,9 Federated NVIT High Income Bond Fund - Class I Closed 10/31/ % 1.21% 42.07% 2.85% 4.47% 5.26% Federated Quality Bond Fund II - Primary Shares Walled-off 04/22/ % 1.96% 21.10% 6.26% 4.74% 6.03% Fidelity VIP High Income Portfolio - Service Class Closed 09/19/ % 0.95% 35.19% 3.42% 5.06% 2.43% Fidelity VIP High Income Portfolio - Service Class R 10 Walled-off 09/19/ % 0.76% 35.06% 3.36% 5.03% 2.41% Oppenheimer High Income Fund/VA - Class 3 10 Walled-off 05/01/ % 0.50% 27.39% N/A N/A % Oppenheimer High Income Fund/VA - Non-Service Shares Closed 04/30/ % 0.51% 25.95% % % -8.99% Van Kampen's UIF Core Plus Fixed Income Portfolio - Class I Walled-off 01/02/ % 1.51% 11.98% 1.74% 2.54% 5.01% Asset Class: International Stocks 5 Credit Suisse Trust - International Equity Flex III Portfolio Walled-off 12/31/ % -4.10% 58.63% -4.68% 7.68% 3.47% Fidelity VIP Overseas Portfolio - Service Class Closed 01/28/ % -5.87% 34.68% -8.07% 2.47% -0.40% Gartmore NVIT Emerging Markets Fund - Class I Closed 08/30/ % -5.99% 68.87% -1.54% 11.27% 8.00% Gartmore NVIT International Equity Fund - Class I Walled-off 08/30/ % -6.62% 34.48% -6.60% 7.78% 0.43% Gartmore NVIT Worldwide Leaders Fund - Class I Walled-off 10/31/ % -4.40% 33.39% -8.35% 3.89% 0.43% Janus Aspen Series Overseas Portfolio - Service Shares Walled-off 05/02/ % -2.46% 76.77% 2.16% 15.77% 4.75% NVIT Multi-Manager International Value Fund - Class I Closed 11/01/ % -5.29% 41.47% % -1.09% 2.43% Oppenheimer Global Securities Fund/VA - Non-Service Shares Closed 11/12/ % -2.94% 48.04% -5.09% 3.89% 3.60% 10

9 Walled-off and closed funds The Best of America Next Generation FPVUL Fund Status Asset Class: International Stocks 5 Putnam VT International Equity Fund - Class IB Walled-off 01/02/ % -4.33% 35.55% % 1.15% -0.39% Templeton VIPT Developing Markets Securities Fund - Class 3 10 Walled-off 03/04/ % -5.76% 76.47% 0.14% 10.16% 7.21% Templeton VIPT Foreign Securities Fund - Class 3 10 Walled-off 05/01/ % -4.71% 42.30% -3.69% 4.12% 2.91% Templeton VIPT Foreign Securities Fund - Class I Closed 05/01/ % -4.68% 42.50% -3.48% 4.36% 3.16% Van Eck Worldwide Insurance Trust Worldwide Emerging Markets Fund - Initial Class Walled-off 12/21/ % -5.54% % -0.97% 11.77% 6.94% Asset Class: Large-cap Stocks AIM V.I. Capital Appreciation Fund - Series I Shares Walled-off 05/05/ % -4.67% 19.09% -9.87% -2.41% -4.59% AllianceBernstein VPS Growth & Income Portfolio - Class A Walled-off 01/14/ % -3.09% 21.93% % -1.96% 2.09% American Century VP Income & Growth Fund - Class I Walled-off 10/30/ % -3.72% 25.13% -9.93% -1.34% -0.69% American Century VP Value Fund - Class I Walled-off 05/01/ % -2.65% 28.79% -7.05% 0.57% 6.15% Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares Walled-off 10/06/ % -4.07% 36.41% -4.06% 0.95% -3.46% Federated Capital Appreciation Fund II - Primary Shares Walled-off 06/19/ % -3.67% 18.11% -5.66% 0.44% -5.30% Federated Clover Value Fund II - Primary Shares Walled-off 02/10/ % -3.20% 23.32% % -3.70% -0.68% Fidelity VIP Contrafund Portfolio - Service Class Walled-off 01/03/ % -4.28% 39.60% -5.01% 2.96% 2.64% Fidelity VIP Growth Opportunities Portfolio - Service Class Walled-off 01/03/ % -5.52% 42.23% -9.93% -2.23% -3.30% MFS VIT Investors Growth Stock Series - Initial Class Walled-off 05/03/ % -3.87% 40.28% -2.39% 1.69% -2.75% Neuberger Berman AMT Socially Responsive Portfolio - I Class Walled-off 02/18/ % -2.73% 35.95% -6.57% 0.90% 2.73% NVIT Growth Fund - Class I Walled-off 04/15/ % -5.36% 32.14% -3.72% 1.49% -5.19% NVIT Nationwide Leaders Fund - Class I Walled-off 12/31/ % -4.08% 45.16% % -1.26% 3.19% Oppenheimer Capital Appreciation Fund/VA - Non-Service Shares Walled-off 04/03/ % -5.68% 40.29% -6.18% -0.22% -1.20% Putnam VT Growth & Income Fund - Class IB Walled-off 02/01/ % -2.71% 40.51% % -1.97% 0.61% Putnam VT Voyager Fund - Class IB Walled-off 02/01/ % -3.80% 64.94% 0.71% 3.90% -2.83% T. Rowe Price Blue Chip Growth Portfolio - Class II Walled-off 12/29/ % -5.79% 38.54% -5.41% 0.51% -1.06% T. Rowe Price Equity Income Portfolio - Class II Walled-off 03/31/ % -2.95% 37.72% -7.66% 0.04% 3.96% Asset Class: Mid-cap Stocks 6 Fidelity VIP Value Strategies Portfolio - Service Class Walled-off 02/20/ % -2.33% 70.34% -8.64% -0.08% 3.77% 10

10 Walled-off and closed funds The Best of America Next Generation FPVUL Fund Status Asset Class: Mid-cap Stocks 6 Franklin VIPT Rising Dividends Securities Fund - Class I Walled-off 01/27/ % -1.43% 30.27% -6.71% 0.55% 7.17% Oppenheimer MidCap Fund/VA - Non-Service Shares Walled-off 08/15/ % -5.67% 29.51% % -4.34% -6.91% Asset Class: Small-cap Stocks 6 Dreyfus VIF Developing Leaders Portfolio - Initial Shares Walled-off 08/31/ % -2.26% 39.40% % -4.88% -0.54% Neuberger Berman AMT Small Cap Growth Portfolio - S Class Walled-off 07/12/ % -6.44% 26.35% % -4.84% 0.65% Asset Class: Specialty 7,8 Franklin Templeton VIPT Global Bond Securities Fund - Class 3 10 Walled-off 01/24/ % 0.17% 18.13% 12.14% 9.25% 10.97% Gartmore NVIT Global Utilities Fund - Class I Walled-off 12/28/ % -5.45% 13.18% -6.70% 4.19% 4.81% Janus Aspen Series Global Technology Portfolio: Service Shares Walled-off 01/18/ % -4.18% 55.16% 0.21% 5.25% -7.83% NVIT Global Financial Services Fund - Class I Walled-off 12/28/ % -6.43% 50.94% % -2.11% 3.58% NVIT Health Sciences Fund-Class I Closed 12/29/ % 0.10% 20.93% -0.73% 2.74% 3.45% NVIT Technology and Communications Fund - Class I Closed 06/30/ % -7.35% 48.59% -5.32% 1.42% -9.50% Van Eck Worldwide Insurance Trust Worldwide Hard Assets Fund - Initial Class Walled-off 09/01/ % -4.94% 50.11% 4.96% 16.98% 15.03% Van Kampen's UIF Emerging Markets Debt Portfolio - Class I Walled-off 06/16/ % 0.00% 29.81% 5.85% 7.87% 10.90% 10

11 Understanding Risks Here s a list of some of the risks associated with the investment choices in a variable life insurance policy. For specific risks related to each investment, see the prospectus. 1. Funds-of-funds: Designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in underlying funds. Therefore, in addition to the expenses of the portfolio, you are indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds. 2. Government funds: While the funds invest primarily in the securities of the U.S. government and its agencies, the values are not guaranteed by these entities. 3. High-yield funds: Funds that invest in high-yield securities are subject to greater credit risk and price fluctuations than funds that invest in higher-quality securities. 4. Money market funds: These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal government agency. Although they seek to preserve the value of your investment at $1.00 per share, it s possible to lose money by investing in money market funds. 5. International funds: Funds that invest internationally involve risks not associated with investing solely in the United States, such as currency fluctuation, political risk, differences in accounting and limited availability of information. 6. Small-cap/Mid-cap/Emerging market funds: Funds investing in stocks of smallcap, mid-cap or emerging companies may have less liquidity than those investing in larger, established companies and may be subject to greater price volatility and risk than the overall stock market. 7. Non-diversified funds: Funds that invest in a concentrated sector or focus on a relatively small number of securities may be subject to greater volatility than a more diversified investment. 8. Real estate funds: Funds that focus on real estate investing are sensitive to economic and business cycles, changing demographic patterns and government actions. 9. Bond funds: These funds have the same interest rate, inflation and credit risks associated with the underlying bonds owned by the fund. 10. Short-term trading fee: These funds may charge a fee for exchanges made within 60 days of original allocation. Please refer to the prospectus for details. Fund abbreviations AMT Advisers Management Trust VIF Variable Investment Fund IP Investment Portfolios VIP Variable Insurance Products LIT Life Investment Trust VIPT Variable Insurance Products Trust NVIT Nationwide Variable Insurance Trust VIT Variable Insurance Trust UIF The Universal Institutional Funds, Inc. VP Variable Portfolio VA Variable Account VPS Variable Product Series VI Variable Insurance VT Variable Trust Contract/Policy numbers All state variations of: VLO-510 In OK: VLO Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value Issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, OH, a member of Nationwide Financial. The general distributor is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation. Nationwide Life Insurance Company is a subsidiary of Nationwide Financial Services Corporation. The NVIT Cardinal SM Funds and other funds of Nationwide Variable Insurance Trust are distributed by Nationwide Fund Distributors LLC, member FINRA, 1000 Continental Dr., Suite 400, King of Prussia, PA Nationwide, Nationwide Financial, the Nationwide framemark and On Your Side are service marks of Nationwide Mutual Insurance Company. The Best of America Next Generation is a service mark of Nationwide Life Insurance Company. Nationwide Multi-Manager is a service mark of Nationwide Mutual Insurance Company. NVIT Cardinal is a service mark of Nationwide Life Insurance Company. 2010, Nationwide Financial Services, Inc. All rights reserved.

12 We re On Your Side Your investment professional is a personal resource with the knowledge and commitment to help you determine how to best meet your investment and life insurance needs. Working with him or her, you can learn more about how Nationwide s many products can help you achieve your financial goals. For more information, visit nationwide.com. VLM-0404AO.2

13 Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value Issued by Nationwide Life Insurance Company or Nationwide Life and Annuity Insurance Company, Columbus, OH, a member of Nationwide Financial. The general distributor is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation. Nationwide Life Insurance Company is a subsidiary of Nationwide Financial Services Corporation. For the specific contract number, please refer to the variable life investment choices performance report inside. Nationwide, Nationwide Financial, the Nationwide framemark and On Your Side are service marks of Nationwide Mutual Insurance Company. 2010, Nationwide Financial Services, Inc. All rights reserved. FS