497 1 e31338_497.txt FORM 497 Jefferson [LOGO] National -------------------------------------------------------------------------------- Advantage Strategy Individual Flexible Premium Deferred Annuity Contract issued by JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I AND JEFFERSON NATIONAL LIFE INSURANCE COMPANY This prospectus describes the Advantage Strategy individual flexible premium deferred annuity Contract, fixed and variable accounts (Contract) offered by Jefferson National Life Insurance Company (We, Us, Our). This Contract provides for the accumulation of Contract Values and subsequent Annuity Payments on a fixed basis, a variable basis or a combination of both. We no longer issue Contracts to non-natural owners. The Contract has a variety of Investment Options, which include a Fixed Account and several Sub-accounts that invest in the Investment Portfolios listed below. You can put your money in the Fixed Account and/or the Sub-accounts. Money you put in a Sub-account is invested exclusively in a single Investment Portfolio. Your investments in the Investment Portfolios are not guaranteed. You could lose your money. The Fixed Account offers interest rates which are guaranteed by Jefferson National not to be less than the minimum rate prescribed by applicable state law. In certain states, your Contract may not contain a Fixed Account option. A I M Variable Insurance Funds Managed by A I M Advisors, Inc. o AIM V.I. Basic Value - Series II shares o AIM V.I. Core Equity - Series I shares o AIM V.I. Financial Services - Series I shares o AIM V.I. Global Health Care - Series I shares o AIM V.I. Global Real Estate Fund - Series I shares o AIM V.I. High Yield - Series I shares o AIM V.I. Mid Cap Core Equity - Series II shares o AIM V.I. Technology - Series I shares The Alger American Fund Managed by Fred Alger Management, Inc. o Alger American Capital Appreciation - Class O o Alger American Growth -Class O (name changing to Alger American Large Cap Growth 7/1/2008) o Alger American MidCap Growth - Class O o Alger American Small Cap -Class O (closed to new investors) AllianceBernstein Variable Products Series Fund, Inc. Managed by AllianceBernstein L.P. o AllianceBernstein Growth and Income American Century Variable Portfolios, Inc. Managed by American Century Investment Management, Inc. o American Century VP Balanced (Class I) o American Century VP Income & Growth (Class I) o American Century VP Inflation Protection (Class II) o American Century VP Large Company Value (Class I) o American Century VP Ultra (Class I) o American Century VP Value (Class I) o American Century VP Vista (Class I) Managed by American Century Global Investment Management, Inc. o American Century VP International (Class I) The DireXion Insurance Trust Managed by Rafferty Asset Management, LLC o DireXion Dynamic VP HY Bond The Dreyfus Investment Portfolios (Service Shares) Managed by The Dreyfus Corporation o Dreyfus IP - Small Cap Stock Index o Dreyfus Socially Responsible Growth (initial shares) Dreyfus Stock Index Fund, Inc. (Initial Shares) Managed by The Dreyfus Corporation and Mellon Equity Associates. Dreyfus Variable Investment Fund ("Dreyfus VIF") (Initial Shares) Managed by The Dreyfus Corporation o Dreyfus VIF--International Value (Initial Shares) Federated Insurance Series Managed by Federated Investment Management Company o Federated Capital Income II o Federated High Income Bond II (Primary Shares) Managed by Federated Global Investment Management Corp. o Federated International Equity II Managed by Federated Equity Management Company of Pennsylvania o Federated Kaufmann II (Service Shares) o Federated Market Opportunity II (Service Shares) Janus Aspen Series Managed by Janus Capital Management LLC o Janus Aspen Balanced (Institutional Shares} o Janus Aspen Forty (Institutional Shares) o Janus Aspen Global Life Sciences Institutional Shares) o Janus Aspen Growth and Income (Institutional Shares) o Janus Aspen International Growth (Institutional Shares) o Janus Aspen Large Cap Growth (Institutional Shares) o Janus Aspen Mid Cap Growth (Institutional Shares) o Janus Aspen Mid Cap Value Institutional Shares) o Janus Aspen Small Company Value (Service Shares) o Janus Aspen Worldwide Growth (Institutional Shares) Lazard Retirement Series, Inc. Managed by Lazard Asset Management LLC o Lazard Retirement Emerging Markets Equity -------------------------------------------------------------------------------- The Securities and Exchange Commission has not approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. 1 -------------------------------------------------------------------------------- o Lazard Retirement International Equity o Lazard Retirement U.S. Small Cap Equity o Lazard Retirement US Strategic Equity Legg Mason Partners Variable Equity Trust Subadvised by ClearBridge Advisors, LLC o Legg Mason Partners Variable Aggressive Growth o Legg Mason Partners Variable Capital and Income (Formerly Legg Mason Partners Variable Total Return Portfolio) o Legg Mason Partners Variable Fundamental Value (Formerly Legg Mason Partners Variable All Cap) o Legg Mason Partners Variable Large Cap Growth Legg Mason Partners Variable Income Trust Subadvised by West Asset Management Company o Legg Mason Partners Variable Global High Yield Bond o Legg Mason Partners Variable Government Portfolio o Legg Mason Partners Variable Strategic Bond Lord Abbett Series Fund, Inc. Managed by Lord, Abbett & Co. LLC o Lord Abbett Series Fund, Inc. - America's Value o Lord Abbett Series Fund, Inc. - Growth and Income Neuberger Berman Advisers Management Trust ("Neuberger Berman AMT") Managed by Neuberger Berman Management, Inc. o Lehman Brothers High Income Bond (Formerly High Income Bond Portfolio, a series of Neuberger Berman AMT) o Lehman Brothers Short Duration Bond (Formerly Limited Maturity Bond Portfolio) o Neuberger Berman AMT Small Cap Growth (Class S) o Neuberger Berman AMT Mid-Cap Growth o Neuberger Berman AMT Partners o Neuberger Berman AMT Regency o Neuberger Berman AMT Socially Responsive Northern Lights Variable Trust Managed by JNF Advisors, Inc. o JNF Chicago Equity Partners Balanced o JNF Chicago Equity Partners Equity o JNF Loomis Sayles Bond o JNF Money Market PIMCO Variable Insurance Trust Managed by Pacific Investment Management Company LLC o PIMCO VIT All Asset (Administrative Class) o PIMCO VIT CommodityRealReturn(TM) Strategy (Administrative Class) o PIMCO VIT Emerging Markets Bond (Administrative Class) o PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) (Administrative Class) o PIMCO VIT Global Bond (Unhedged) (Administrative Class) o PIMCO VIT High Yield (Administrative Class) o PIMCO VIT Long-Term U.S. Government (Administrative Class) o PIMCO VIT Low Duration (Administrative Class) o PIMCO VIT RealEstateRealReturn Strategy (Administrative Class) o PIMCO VIT Real Return (Administrative Class) o PIMCO VIT Short-Term (Administrative Class) o PIMCO VIT StockPLUS{R} Total Return (Administrative Class) o PIMCO VIT Total Return (Administrative Class) Pioneer Variable Contracts Trust (Class II Shares) Managed by Pioneer Investment Management, Inc. o Pioneer Cullen Value VCT o Pioneer Emerging Markets VCT o Pioneer Equity Income VCT o Pioneer Fund VCT o Pioneer Global High Yield VCT o Pioneer High Yield VCT o Pioneer International Value VCT o Pioneer Mid Cap Value VCT o Pioneer Small Cap Value VCT o Pioneer Strategic Income VCT Royce Capital Fund Managed by Royce & Associates, LLC o Royce Micro-Cap o Royce Small-Cap Rydex Variable Trust Managed by Rydex Investments o Rydex Absolute Return Strategies o Rydex Banking o Rydex Basic Materials o Rydex Biotechnology o Rydex Commodities Strategy o Rydex Consumer Products o Rydex Dow 2x Strategy o Rydex NASDAQ-100{R} 2x Strategy o Rydex Russell 2000{R} 2x Strategy o Rydex S&P 500 2x Strategy o Rydex Strengthening Dollar 2x Strategy o Rydex Weakening Dollar 2x Strategy o Rydex Electronics o Rydex Energy o Rydex Energy Services o Rydex Essential Portfolio Aggressive o Rydex Essential Portfolio Conservative o Rydex Essential Portfolio Moderate o Rydex Europe 1.25x Strategy o Rydex Financial Services o Rydex Government Long Bond 1.2x Strategy o Rydex Health Care o Rydex Hedged Equity o Rydex Internet o Rydex Inverse Dow 2x Strategy o Rydex Inverse Government Long Bond Strategy 2 -------------------------------------------------------------------------------- o Rydex Inverse Mid-Cap Strategy o Rydex Inverse NASDAQ-100{R} Strategy o Rydex Inverse Russell 2000{R} Strategy o Rydex Inverse S&P 500 Strategy o Rydex Japan 1.25x Strategy o Rydex Large-Cap Growth o Rydex Large-Cap Value o Rydex Leisure o Rydex Mid Cap 1.5x Strategy o Rydex Mid-Cap Growth o Rydex Mid-Cap Value o Rydex Multi-Cap Core Equity o Rydex Nova o Rydex NASDAQ-100{R} Strategy o Rydex Precious Metals o Rydex Real Estate o Rydex Retailing o Rydex Russell 2000{R} 1.5x Strategy o Rydex Sector Rotation o Rydex Small-Cap Growth o Rydex Small-Cap Value o Rydex Technology o Rydex Telecommunications o Rydex Transportation o Rydex U.S. Government Money Market o Rydex Utilities o CLS AdvisorOne Amerigo o CLS AdvisorOne Clermont Seligman Portfolios, Inc. Managed by J. & W. Seligman & Co. Incorporated o Seligman Communications and Information o Seligman Global Technology Third Avenue Variable Series Trust Managed by Third Avenue Management LLC. o Third Avenue Value Van Eck Worldwide Insurance Trust Managed by Van Eck Associates Corporation o Van Eck Worldwide Absolute Return o Van Eck Worldwide Bond o Van Eck Worldwide Emerging Markets o Van Eck Worldwide Hard Assets o Van Eck Worldwide Real Estate Wells Fargo Advantage Funds Managed by Wells Fargo Funds Management, LLC o Wells Fargo Advantage VT Discovery o Wells Fargo Advantage VT Opportunity Please read this prospectus before investing. You should keep it for future reference. It contains important information about the Contract. To learn more about the Contract, you can obtain a copy of Our Statement of Additional Information (SAI) dated May 1, 2008. The SAI has been filed with the Securities and Exchange Commission (SEC) and is legally a part of this prospectus. The SEC has a Web site (http:/www.sec.gov) that contains the SAI, material incorporated by reference, and other information regarding companies that file electronically with the SEC. The SAI's Table of Contents is at the end of this prospectus. For a free copy of the SAI, call Us at (866) 667-0561 or write Us at Our administrative office: o Address for correspondence sent via U.S. Mail: P.O. Box 36840, Louisville, Kentucky 40233; o Address for correspondence sent via courier or overnight mail: 9920 Corporate Campus Drive, Suite 1000, Louisville, KY 40223. The Contracts: o are not bank deposits o are not federally insured o are not endorsed by any bank or government agency o are not guaranteed and may be subject to loss of principal May 1, 2008 3 -------------------------------------------------------------------------------- Table of Contents Page Definitions of Special Terms..................................................6 Highlights....................................................................8 Fee Table.....................................................................9 Total Investment Portfolio Operating Expenses..............................10 Examples of Fees and Expenses..............................................11 Condensed Financial Information...............................................12 The Company...................................................................13 The Advantage Strategy Annuity Contract.......................................13 Free Look..................................................................13 Ownership..................................................................13 Beneficiary................................................................13 Assignment.................................................................13 Requesting Transactions or Obtaining Information About Your Contract.......14 Purchase......................................................................14 Purchase Payments..........................................................14 Allocation of Purchase Payments............................................14 Investment Options............................................................14 Investment Portfolios......................................................14 Administrative, Marketing and Support Services Fees........................15 The Fixed Account..........................................................15 The General Account........................................................15 Voting Rights..............................................................15 Substitution...............................................................16 Transfers..................................................................16 Excessive Trading Limits...................................................16 Dollar Cost Averaging Program..............................................17 Rebalancing Program........................................................18 Advisory Fee Withdrawals...................................................18 Interest Sweep Program.....................................................18 Expenses......................................................................18 Insurance Charges..........................................................18 Contract Maintenance Charge................................................18 Contingent Deferred Sales Charge...........................................19 Waiver of Contingent Deferred Sales Charge.................................19 Reduction or Elimination of the Contingent Deferred Sales Charge...........20 Investment Portfolio Operating Expenses....................................20 Transfer Fee...............................................................20 Earnings Protection Benefit Rider..........................................20 Guaranteed Minimum Withdrawal Benefit......................................20 Premium Taxes..............................................................20 Income Taxes...............................................................20 Contract Value................................................................20 Accumulation Units.........................................................20 Access to Your Money..........................................................21 Systematic Withdrawal Program..............................................21 Optional Guaranteed Minimum Withdrawal Benefit.............................21 4 -------------------------------------------------------------------------------- Suspension of Payments or Transfers........................................22 Death Benefit.................................................................22 Upon Your Death During the Accumulation Period.............................22 Standard Death Benefit Amount During the Accumulation Period...............22 Optional Guaranteed Minimum Death Benefits.................................22 Optional Earnings Protection Benefit.......................................23 Payment of the Death Benefit During the Accumulation Period................24 Death of Contract Owner During the Annuity Period..........................24 Death of Annuitant.........................................................24 Annuity Payments (The Annuity Period).........................................24 Annuity Payment Amount.....................................................24 Optional Guaranteed Minimum Income Benefit.................................25 Annuity Options............................................................25 Taxes.........................................................................26 Annuity Contracts in General..................................................26 Tax Status of the Contracts...................................................26 Taxation of Non-Qualified Contracts...........................................26 Taxation of Qualified Contracts...............................................27 Possible Tax Law Changes......................................................27 Other Information.............................................................27 Legal Proceedings..........................................................27 The Separate Account.......................................................28 Distributor................................................................28 Financial Statements.......................................................28 Independent Registered Public Accounting Firm..............................28 Appendix A--More Information About the Investment Portfolios..................29 Appendix B--Earnings Protection Benefit Rider Examples........................42 Appendix C--Guaranteed Minimum Withdrawal Benefit Examples....................44 Appendix D--Accumulation Unit Values..........................................45 Privacy Policy................................................................69 Table of Contents of the Statement of Additional Information..................70 5 -------------------------------------------------------------------------------- Definitions of Special Terms Because of the complex nature of the Contract, We have used certain words or terms in this prospectus, which may need additional explanation. We have identified the following as some of these words or terms. ACCUMULATION PERIOD: The period during which you invest money in your Contract. ACCUMULATION UNIT: A measurement We use to calculate the value of the variable portion of your Contract during the Accumulation Period. ADJUSTED PARTIAL WITHDRAWAL: Adjusted Partial Withdrawal means the amount of the partial withdrawal (including the applicable Contingent Deferred Sales Charges and premium taxes); multiplied by the Death Benefit Amount just before the partial withdrawal; and divided by the Contract Value just before the partial withdrawal. ANNUITANT(S): The natural person(s) on whose life (lives), We base Annuity Payments. On or after the Annuity Date, the Annuitant shall also include any joint Annuitant. In the event of joint Annuitants, the life of both Annuitants is used to determine Annuity Payments. ANNUITY DATE: The date on which Annuity Payments are to begin, as selected by you, or as required by the Contract. ANNUITY OPTION(S): Income plans which can be elected to provide periodic Annuity Payments beginning on the Annuity Date. ANNUITY PAYMENTS: Periodic income payments provided under the terms of one of the Annuity Options. ANNUITY PERIOD: The period during which We make income payments to you. ANNUITY UNIT: A measurement We use to calculate the amount of Annuity Payments you receive from the variable portion of your Contract during the Annuity Period. BENEFICIARY: The person designated to receive any benefits under the Contract if you or, under certain circumstances, the Annuitant dies. BUSINESS DAY: Generally, any day on which the New York Stock Exchange ("NYSE") is open for trading. Our Business Day ends at 4:00 PM Eastern Time or the closing of regular trading on the NYSE, if earlier. Some of the Investment Options may impose earlier deadlines for trading. These deadlines are described in further detail under the heading "Purchase - Allocation of Purchase Payments". COMPANY: Jefferson National Life Insurance Company, also referred to as Jefferson National, We, Us, and Our. CONTINGENT DEFERRED SALES CHARGE: The Contingent Deferred Sales Charge is the charge that may be applied if Purchase Payments are withdrawn from the Contract during a certain period of time after they are made. CONTRACT: The Advantage Strategy individual flexible premium deferred annuity Contract, which provides fixed and variable Investment Options offered by the Company. CONTRACT ANNIVERSARY: The anniversary of the Business Day you purchased the Contract. CONTRACT VALUE: Your Contract Value is the sum of amounts held under your Contract in the Sub-accounts of the Separate Account and the Fixed Account. The Contract Value may not be the value available for withdrawal, surrender or annuitization. DEATH BENEFIT AMOUNT: The Death Benefit Amount is amount payable to the Beneficiary upon the death of the Owner or for a Contract owned by a non-natural person the death of the Annuitant. The Death Benefit Amount includes any amounts payable in excess of the Contract Value under the terms of the standard death benefit provision, any optional Guaranteed Minimum Death Benefit Rider, and the optional Earnings Protection Benefit. FIXED ACCOUNT: The Fixed Account is an Investment Option which invests in the general account of the Company and offers an interest rate that is guaranteed by Us to be no less than the minimum rate prescribed by the applicable state law. FREE LOOK PERIOD: The Free Look Period is the period of time within which you may cancel your Contract without incurring a Contingent Deferred Sales Charge. This period of time is generally 10 days from receipt, but certain states require a longer period. INSURANCE CHARGES: The Insurance Charges compensate Us for assuming certain insurance risks. These charges include the Separate Account Annual Expenses, the optional Guaranteed Minimum Death Benefit, and Guaranteed Minimum Income Benefit. These charges are included in our calculation of the value of the Accumulation Units and the Annuity Units of the Sub-accounts. INVESTMENT ADVISOR: A registered investment adviser, an investment adviser who is exempt from registration with the Securities and Exchange Commission or other adviser selected by You to provide asset allocation and investment advisory services. INVESTMENT ALLOCATIONS OF RECORD: The Investment Allocations of Record specify what percentage of each Purchase Payment is directed to the Fixed Account (if available) and the Sub-accounts you select. You initially establish your initial Investment Allocations of Record at the time you apply for the Contract. The Investment Allocations of Record can be changed by notifying Us in accordance with Our procedures. Any change in Investment Allocations of Record will apply to Purchase Payments received after the change of Investment Allocations of Record is processed. INVESTMENT OPTIONS: The investment choices available to Owners. These choices include the Sub-accounts of the Separate Account and the Fixed Account. INVESTMENT PORTFOLIOS: The variable Investment Options available under the Contract. Each Sub-account has its own investment objective and is invested in the underlying Investment Portfolio. JOINT OWNER: The individual who co-owns the Contract with another person. Joint Owners must be spouses (except in those states where this restriction is not allowed). 6 -------------------------------------------------------------------------------- NON-QUALIFIED (CONTRACT): A Contract purchased with after-tax dollars. In general, these Contracts are not issued in conjunction with any pension plan, specially sponsored program or individual retirement account ("IRA"). OWNER: You, the purchaser of the Contract are the Owner. PURCHASE PAYMENT: The money you give Us to buy the Contract, as well as any additional money you give Us to invest in the Contract after you own it. QUALIFIED (CONTRACT): A Contract purchased with pretax dollars. These Contracts are generally purchased under a pension plan, specially sponsored program or IRA. REGISTERED REPRESENTATIVE: A person, appointed by Us, who is licensed by the Financial Industry Regulatory Authority ("FINRA") to sell variable products and is sponsored by a FINRA member broker/dealer that is party to a selling group agreement with the Company. SEPARATE ACCOUNT: Jefferson National Life Annuity Account I of Jefferson National Life Insurance Company, which invests in the Investment Portfolios. SUB-ACCOUNT: A segment within the Separate Account which invests in a single Investment Portfolio. TAX DEFERRAL: Benefit provided by the Contract under which earnings and appreciation on the Purchase Payments in your Contract are not taxed until you take them out of the Contract either in the form of a withdrawal, income payments or the payment of a death benefit. WEBSITE: www.jeffnat.com, which is the website of Jefferson National Life Insurance Company. You may obtain information about your Contract and request certain transactions through the Website. 7 -------------------------------------------------------------------------------- Highlights The variable annuity Contract that We are offering is a contract between you (the Owner) and Us (the Company). The Contract provides a way for you to invest on a tax-deferred basis in the Sub-accounts of Jefferson National Life Annuity Account I (Separate Account) and the Fixed Account. The Fixed Account may not be available in your state. The Contract is intended to be used to accumulate money for retirement or other long-term tax-deferred investment purposes. We no longer issue Contracts to non-natural owners. The Contract includes a standard minimum death benefit that is guaranteed by Us. This benefit is described in detail under the heading "Standard Death Benefit During the Accumulation Period." The Contract also offers a choice of two Guaranteed Minimum Death Benefit options. These benefits are guaranteed by Us. There is an additional charge for these options. These options may not be available in your state. This benefit is described in detail under the heading "Optional Death Benefits." We offer, for an additional charge, a Guaranteed Minimum Income Benefit option. If you elect the Guaranteed Minimum Income Benefit option, you must also elect one of the Guaranteed Minimum Death Benefit options. If you elect this option, We guarantee that a minimum dollar amount will be applied to your Annuity Option, irrespective of your Contract Value, on your Annuity Date. This optional benefit may not be available in your state. This benefit is described in more detail under the heading "Optional Guaranteed Minimum Income Benefit." We also offer, for an additional charge, an Earnings Protection Benefit ("EPB") option. The EPB option is designed to help your Beneficiary defray federal and state taxes that may apply to the death benefit paid from the Contract. The EPB option is not available for Qualified Contracts and may not be available in your state. This benefit is described in more detail under the heading "Earnings Protection Benefit." The Contract offers, for an additional charge, a Guaranteed Minimum Withdrawal Benefit. Subject to certain limitations, this benefit allows you to make withdrawals from your Contract irrespective of your Contract Value. This benefit is described in more detail under the heading "Optional Guaranteed Minimum Withdrawal Benefit." All deferred annuity Contracts, like the Contract, have two periods: the Accumulation Period and the Annuity Period. During the Accumulation Period, any earnings accumulate on a tax-deferred basis and are taxed as ordinary income when you make a withdrawal. If you make a withdrawal during the Accumulation Period, We may assess a Contingent Deferred Sales Charge (CDSC) of up to 7% of each Purchase Payment withdrawn depending on when the withdrawal is made. The Annuity Period occurs when you begin receiving regular Annuity Payments from your Contract. You can choose to receive Annuity Payments on a variable basis, on a fixed basis or a combination of both. If you choose variable Annuity Payments, the amount of the variable Annuity Payments will depend upon the investment performance of the Investment Portfolios you select for the Annuity Period. If you choose fixed Annuity Payments, the amount of the fixed Annuity Payments are constant for the entire Annuity Period. FREE LOOK. If you cancel the Contract within 10 days after receiving it (or whatever longer time period is required in your state), We will cancel the Contract without assessing a Contingent Deferred Sales Charge. We deem this period as ending 15 days after we mail a Contract. You will receive whatever your Contract is worth on the day We receive your request for cancellation. This may be more or less than your original Purchase Payment. We will return your original Purchase Payment if required by law. TAX PENALTY. In general, your earnings are not taxed until you take money out of your Contract. If you are younger than age 59 1/2 when you take money out, you may be charged a 10% federal tax penalty on the amount treated as income. For Non-Qualified Contracts, Annuity Payments during the Annuity Period are considered partly a return of your original investment. Therefore, the part of each Annuity Payment that is a return of your investment is not taxable as income. Once you have recovered the full amount of your investment, however, the entire amount of your Annuity Payment will be taxable income to you. For Qualified Contracts, the full Annuity Payment is taxable. INQUIRIES. If you need more information, please visit Our Website (www.jeffnat.com) or contact Us at: Jefferson National Life Insurance Company P.O. Box 36840 Louisville, Kentucky 40233 (866) 667-0561 8 -------------------------------------------------------------------------------- Fee Table The following tables describe the fees and expenses that you will pay when buying, owning and surrendering the Contract. The first table describes the fees and expenses that you will pay at the time you buy the Contract, surrender the Contract, or transfer amounts between Investment Options. State premium taxes may also be deducted. Owner Transaction Expenses Contingent Deferred Sales Charge (as a percentage of Purchase Payments withdrawn)(1).... 7% Transfer Fee(2) ................................. You may make a transfer once every 30 days without charge. If you transfer more often, We may charge a fee of $25 per transfer. The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including the Investment Portfolios' fees and expenses.
Current Charge Maximum Charge Contract Maintenance Charge(3) .............................................. $30 per Contract per year $60 per Contract per year Separate Account Annual Expenses (as a percentage of average Separate Account Contract Value) Mortality and Expense Risk and Administrative Charges ....................... 1.40% 1.65% Total Separate Account Annual Expenses (without optional riders) ................................................... 1.40% 1.65% Optional Guaranteed Minimum Withdrawal Benefit Rider (as a percentage of average Separate Account Contract Value) 2 Year Waiting Period ....................................................... 0.50% 0.75% 5 Year Waiting Period ....................................................... 0.35% 0.50% Optional Guaranteed Minimum Death Benefit (GMDB) Option 1 Rider (as a percentage of average Separate Account Contract Value) ................ 0.35% 0.50% Optional Guaranteed Minimum Death Benefit (GMDB) Option 2 Rider (as a percentage of average Separate Account Contract Value) ................ 0.45% 0.65% Optional Guaranteed Minimum Death Benefit (GMDB) Option 1 and Optional Guaranteed Minimum Income Benefit (GMIB) Riders (as a percentage of average Separate Account Contract Value)(4) ............. 0.65% 1.00% Optional Guaranteed Minimum Death Benefit (GMDB) Option 2 and Optional Guaranteed Minimum Income Benefit (GMIB) Riders (as a percentage of average account value)(4) ............................... 0.75% 1.15% Optional Earnings Protection Benefit (EPB) Rider Base Benefit (as a percentage of Contract Value as of each Contract Anniversary) 0.25% 0.25% Optional Benefit (as a percentage of Contract Value as of the Contract Anniversary for each 1% of optional coverage elected) .......................... 0.01% 0.02% Maximum Total Separate Account Annual Expenses (assuming Guaranteed Minimum Withdrawal Benefit (With 2 Year Waiting Period), Guaranteed Minimum Death Benefit Option 2, Guaranteed Minimum Income Benefit and only the Base Benefit under the Earnings Protection Benefit rider) .............................................................. 2.90% 3.80%
9 -------------------------------------------------------------------------------- The next item shows the minimum and maximum total operating expenses charged by the Investment Portfolios that you may pay periodically during the time that you own the Contract. More detail concerning each Investment Portfolio's fees and expenses is contained in the prospectus for each Investment Portfolio. Minimum Maximum Total Investment Portfolio Operating Expenses (expenses that are deducted from Investment Portfolio assets, including management fees, distribution and/or service (12b-1) fees, and Gross: 0.27% Gross: 11.49% otherexpenses)(5)............................. Net: 0.27% Net: 3.83% (1) The Contingent Deferred Sales Charge, which applies separately to each Purchase Payment, decreases to zero over time in accordance with the following schedule: Number of Contract years from Contingent Deferred Receipt of Purchase Payment Sales Charge Percent 0-1 ..................................................... 7% 2 ....................................................... 7% 3 ....................................................... 6% 4 ....................................................... 5% 5 ....................................................... 4% 6 ....................................................... 3% 7 ....................................................... 2% 8 and more .............................................. 0% Subject to any applicable limitations, each Contract year, you can take money out of your Contract without a Contingent Deferred Sales Charge. The amount of money you can withdraw without a Contingent Deferred Sales Charge is the greater of: (i) 10% of the value of your Contract (on a non-cumulative basis) (excluding payments made by Us to Your Investment Advisor); (ii) the IRS minimum distribution requirement for your Contract if issued in connection with certain Individual Retirement Annuities or Qualified Plans; or (iii) the total of your Purchase Payments that have been in the Contract more than 7 complete Contract years. (2) Transfers made for the Dollar Cost Averaging Program, Interest Sweep Program or Rebalancing Program do not count toward the one transfer per 30 day limit. All reallocations made on the same day involving the same Investment Portfolio count as one transfer. Certain restrictions apply as further described under the heading "Transfers - Excessive Trading Limits" and "Transfers - Short Term Trading Risk". (3) Jefferson National will not charge the Contract Maintenance Charge if the value of your Contract is $50,000 or more. We reserve the right to reduce or waive the fee. (4) You can purchase the Guaranteed Minimum Income Benefit rider only if you purchase either Guaranteed Minimum Death Benefit Option 1 rider or Guaranteed Minimum Death Benefit Option 2 rider. (5) The minimum and maximum total Investment Portfolio Operating Expenses may be affected by voluntary or contractual waivers or expense reimbursements. These waivers and expense reimbursements will reduce the actual Total Portfolio Operating Expenses for the affected Investment Portfolios. Please refer to the underlying Investment Portfolio prospectuses for details about the specific expenses of each Investment Portfolio. The net numbers displayed above reflect the minimum and maximum charges after contractual waivers that have been committed through at least April 30, 2009. The gross numbers reflect the minimum and maximum charges without giving effect to the agreed upon waivers. 10 -------------------------------------------------------------------------------- Examples of Fees and Expenses This Example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include owner transaction expenses, Contract fees, Separate Account Annual Expenses, and Investment Portfolio fees and expenses. The Example assumes that you invest $10,000 in the Contract for the time periods indicated. The Example also assumes that your Contract has a 5% return each year. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
(1) If you surrender your Contract at the end of the applicable time period and have not purchased any riders: Assuming Maximum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $1238.76 $3758.10 $5745.08 $9331.19 Assuming Minimum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $880.26 $1310.33 $1678.85 $2820.66 (2) If you annuitize at the end of the applicable time period and have not purchased any riders (except under certain circumstances): Assuming Maximum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $1238.76 $3758.10 $5372.52 $9331.19 Assuming Minimum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $880.26 $1310.33 $1324.07 $2820.66 (3) If you do not surrender your Contract and have not purchased any riders: Assuming Maximum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $608.00 $3207.53 $5372.52 $9331.19 Assuming Minimum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $252.00 $774.90 $1324.07 $2820.66 (4) If you surrender your Contract at the end of the applicable time period and have purchased the Guaranteed Minimum Withdrawal Benefit (with 2 Year Waiting Period), Guaranteed Minimum Death Benefit Option 2, Guaranteed Minimum Income Benefit and Earnings Protection Benefit (Base Benefit only) riders with a maximum charge of 3.80%: Assuming Maximum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $1455.26 $4284.79 $6415.53 $9940.71 Assuming Minimum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $1096.77 $1945.03 $2709.80 $4739.96 (5) If you annuitize at the end of the applicable time period and have purchased the Guaranteed Minimum Withdrawal Benefit (with 2 Year Waiting Period), Guaranteed Minimum Death Benefit Option 2, Guaranteed Minimum Income Benefit and Earnings Protection Benefit (Base Benefit only) riders with a maximum charge of 3.80% (except under certain circumstances): Assuming Maximum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $1455.26 $4284.79 $6039.94 $9940.71 Assuming Minimum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $1096.77 $1945.03 $2350.46 $4739.96
11
-------------------------------------------------------------------------------- (6) If you do not surrender your Contract and have purchased Guaranteed Minimum Withdrawal Benefit (with 2 Year Waiting Period), Guaranteed Minimum Death Benefit Option 2, Guaranteed Minimum Income Benefit and Earnings Protection Benefit (Base Benefit only) riders with a maximum charge of 3.80%: Assuming Maximum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $823.00 $3730.90 $6039.94 $9940.71 Assuming Minimum Investment 1 year 3 years 5 years 10 years Portfolio Operating Expenses .............................. $467.00 $1405.63 $2350.46 $4739.96 Condensed Financial Information Appendix D to this prospectus contains tables that show Accumulation Unit values and the number of Accumulation Units outstanding for each of the Sub-accounts of the Separate Account. The financial data included in the tables should be read in conjunction with the financial statements and the related notes that are in the Statement of Additional Information.
12 -------------------------------------------------------------------------------- The Company Jefferson National Life Insurance Company (Jefferson National) was originally organized in 1937. Prior to May 1, 2003, Jefferson National was known as Conseco Variable Insurance Company and prior to October 7, 1998, We were known as Great American Reserve Insurance Company. We are principally engaged in the life insurance business in 49 states and the District of Columbia. We are a stock company organized under the laws of the state of Texas and are a subsidiary of Jefferson National Financial Corp. The obligations under the Contracts are obligations of Jefferson National Life Insurance Company. The Advantage Strategy Annuity Contract This prospectus describes the variable annuity Contract We are offering. An annuity is a contract between you (the Owner) and Us. Until you decide to begin receiving Annuity Payments, your Contract is in the Accumulation Period. Once you begin receiving Annuity Payments, your Contract is in the Annuity Period. The Contract benefits from Tax Deferral. Tax Deferral means that you are not taxed on any earnings or appreciation on the assets in your Contract until you take money out of your Contract. The Contracts may be issued in conjunction with certain plans qualifying for special income tax treatment under the Code. You should be aware that this annuity will fund a retirement plan that already provides tax deferral under the Code. In such situations, the tax deferral of the annuity does not provide additional benefits. In addition, you should be aware that there are fees and charges in an annuity that may not be included in other types of investments, which may be more or less costly. However, the fees and charges under the Contract are also designed to provide for certain payment guarantees and features other than tax deferral that may not be available through other investments. These features are explained in detail in this prospectus. You should consult with your tax or legal adviser to determine if the Contract is suitable for your tax qualified plan. The Contract is called a variable annuity because you can choose to invest in the Investment Portfolios through the Sub-accounts of the Separate Account, and depending upon market conditions, you can make or lose money in any of these Investment Portfolios. If you select the variable annuity portion of the Contract, the amount of money you are able to accumulate in your Contract during the Accumulation Period depends upon the investment performance of the Investment Portfolio(s) you select. In certain states, the Contract may also offer a Fixed Account Investment Option. The Fixed Account is part of the general account assets of the Company. Interest is credited at a rate that is guaranteed by Us to be no less than the minimum rate prescribed in your Contract. The Fixed Account is only available for investment during the Accumulation Period. You can choose to receive Annuity Payments on a variable basis, fixed basis or a combination of both. If you choose variable Annuity Payments, the amount of the Annuity Payments you receive will depend upon the investment performance of the Investment Portfolio(s) you select for the Annuity Period. If you elect to receive Annuity Payments on a fixed basis, the Annuity Payments you receive will remain level for the period of time selected. We no longer issue Contracts to non-natural owners. Free Look If you change your mind about owning the Contract, you can cancel it within 10 days after receiving it (or whatever longer time period is required in your state). We call this the Free Look Period. We deem this period as ending 15 days after we mail a Contract. When you cancel the Contract within this time period, We will not assess a Contingent Deferred Sales Charge. However, Our Insurance Charges, charges for the optional Guaranteed Minimum Withdrawal Benefit and Investment Portfolio Operating Expenses will have been deducted. On the day We receive your request at Our administrative office, We will return the value of your Contract. In some states, We may be required to refund your Purchase Payment. If you have purchased the Contract as an IRA, We are required to return your Purchase Payment if you decide to cancel your Contract within 10 days after receiving it (or whatever longer period is required in your state). Ownership OWNER. You, as the Owner of the Contract, have all the rights under the Contract. The Owner is as designated at the time the Contract is issued, unless changed. You can change the Owner at any time. A change will automatically revoke any prior Owner designation. You must notify Us in writing of a change of Owner. We will not be liable for any payment or other action We take in accordance with the Contract before We receive notice of the change. A change of Owner may be a taxable event. JOINT OWNER. The Non-Qualified Contract can be owned by Joint Owners. Any Joint Owner must be the spouse of the other Owner (except if state law does not permit this restriction). Upon the death of either Joint Owner, the surviving Joint Owner will be the primary Beneficiary. Any other Beneficiary designation on record at the time of death will be treated as a contingent Beneficiary unless you have previously notified Us in writing otherwise. Beneficiary The Beneficiary is the person(s) or entity you name to receive any Death Benefit Amount. The Beneficiary is named at the time the Contract is issued. If no Beneficiary is designated, your estate will be the Beneficiary. Unless an irrevocable Beneficiary has been named, you can change the Beneficiary at any time before you die. We will not be liable for any payment or other action We take in accordance with the Contract before We receive notice of the change of Beneficiary. Assignment Subject to applicable law, you can assign the Contract at any time during your lifetime. We will not be bound by the assignment until We receive the written notice of the assignment. We will not be liable for any payment or other action We take in accordance with the Contract before We receive notice of the assignment. If the Contract is a Qualified Contract, there are limitations on your ability to assign the Contract. An assignment may be a taxable event. 13 -------------------------------------------------------------------------------- Requesting Transactions or Obtaining Information About your Contract You may request transactions or obtain information about your Contract by submitting a request to Us in writing via U.S. Mail. Subject to Our administrative rules and procedures, We may also allow you to submit a request through other means. TELEPHONE AND WEBSITE TRANSACTIONS. You can elect to request transactions and receive information about your Contract by telephone or though our Website (www.jeffnat.com). All transaction requests are processed subject to Our administrative rules and procedures. If you do not want the ability to request transactions or receive information about your Contract by telephone or through Our Website, you should notify Us in writing. We will accept transaction requests from your Registered Representative and/or your Investment Advisor. You can also authorize someone else, via submitting a power of attorney in good order, to request transactions for you. If you own the Contract with a Joint Owner, unless We are instructed otherwise, We will accept instructions from and provide information to either you or the other Owner. We will use reasonable procedures to confirm that instructions given to Us by telephone are genuine. All telephone calls will be recorded and the caller will be asked to produce personalized data about the Owner before We will make the telephone transaction. A password will be required for Website transfers. We will send you a confirmation of all transactions. If We fail to use such procedures We may be liable for any losses due to unauthorized or fraudulent instructions. Purchase Purchase Payments A Purchase Payment is the money you give Us to buy the Contract. You can make Purchase Payments at any time before the Annuity Date. The minimum initial Purchase Payment We will accept is $5,000 when the Contract is bought as a Non-Qualified Contract. If you are buying the Contract as a Qualified Contract, the minimum initial Purchase Payment We will accept is $2,000. We reserve the right to issue Qualified or Non-Qualified Contracts for less than the minimum. The maximum of total Purchase Payments is $2,000,000 without Our prior approval and subject to such terms and conditions as We may require. Jefferson National reserves the right to refuse any Purchase Payment. You can make additional Purchase Payments of $500 or more to a Non-Qualified Contract and $50 or more to a Qualified Contract. If you select the systematic payment option or electronic funds transfer (EFT), you can make additional Purchase Payments of $100 each month for Non-Qualified Contracts and $50 each month for Qualified Contracts. We reserve the right to accept subsequent purchase payments for less than the minimum. Allocation of Purchase Payments You control where your Purchase Payments are invested. When you purchase a Contract, We will allocate your Purchase Payment according to your Investment Allocation of Record, which you can change at any time for future Purchase Payments. When you make additional Purchase Payments, We will allocate them based on the Investment Allocations of Record in effect when We receive the Purchase Payment. Allocation percentages must be in whole numbers. Once We receive your Purchase Payment and the necessary information, We will issue your Contract and allocate your first Purchase Payment within 2 Business Days. If you do not provide Us all of the information needed, We will contact you to get it. If for some reason We are unable to complete this process within 5 Business Days, We will either send back your money or get your permission to keep it until We get all of the necessary information. The method of payment (e.g., check, wire transfer, electronic funds transfer) may affect when your Purchase Payment is received by Us. If you add more money to your Contract by making additional Purchase Payments, We will credit these amounts to your Contract as of the Business Day We receive your Purchase Payment. Our Business Day closes when the New York Stock Exchange closes, usually 4:00 P.M. Eastern time. Any transaction involving a Rydex Investment Portfolio received after the applicable cut-off time set forth in the chart below, including a transfer request involving any other Investment Portfolio not listed or any Investment Portfolio with an earlier cut-off time, will be processed on the next Business Day --------------------------------------------------------------- 15 Minutes Before NYSE Close --------------------------------------------------------------- 15 Minutes Before NYSE Close --------------------------------------------------------------- Dow 2x Strategy NASDAQ-100(R) 2x Russell 2000(R) 2x Strategy Strategy --------------------------------------------------------------- S&P 500 2x Strategy Strengthening Dollar Weakening Dollar 2x Strategy 2x Strategy --------------------------------------------------------------- Europe 1.25x Government Long Bond Inverse Dow 2x Strategy 1.2x Strategy Strategy --------------------------------------------------------------- Inverse Government Inverse Mid-Cap Inverse Long Bond Strategy NASDAQ-100(R) Strategy --------------------------------------------------------------- Inverse Russell Inverse S&P 500 Japan Advantage 2000(R) Strategy Strategy 1.25x Strategy --------------------------------------------------------------- Large-Cap Growth Large-Cap Value Mid Cap 1.5x Strategy --------------------------------------------------------------- Mid-Cap Growth Mid-Cap Value Nova --------------------------------------------------------------- NASDAQ-100(R) Russell 2000(R) 1.5x Small-Cap Growth Strategy Strategy --------------------------------------------------------------- 30 Minutes Before NYSE Close --------------------------------------------------------------- Banking Basic Materials Biotechnology --------------------------------------------------------------- Commodities Strategy Consumer Products Electronics --------------------------------------------------------------- Energy Energy Services Financial Services --------------------------------------------------------------- Health Care Internet Leisure --------------------------------------------------------------- Precious Metals Real Estate Retailing --------------------------------------------------------------- Technology Telecommunication Transportation --------------------------------------------------------------- Similarly, any transaction involving the DireXion Dynamic VP HY Bond Fund received after 2:00 P.M., including a transfer request involving the DireXion Dynamic VP HY Bond Fund and any other Investment Portfolio, will be processed on the next Business Day. Investment Options Investment Portfolios The Contract offers several Sub-accounts, each of which invests exclusively in an Investment Portfolio listed at the beginning of this prospectus. During the Accumulation Period, 14 -------------------------------------------------------------------------------- money you invest in the Sub-accounts may grow in value, decline in value, or grow less than you expect, depending on the investment performance of the Investment Portfolios in which those Sub-accounts invest. You bear the investment risk that those Investment Portfolios might not meet their investment objectives. Additional Investment Portfolios may be available in the future. If you elect variable Annuity Payments, during the Annuity Period, the variable portion of your Annuity Payment will vary based on the performance of the Investment Portfolios. You should read the prospectuses for these Investment Portfolios carefully. Copies of these prospectuses will be sent to you with your Contract. If you would like a copy of the Investment Portfolio prospectuses, call Us at: (866) 667-0561 or visit Our Website. See Appendix A for a summary of the investment objectives and strategies for each Investment Portfolio. The investment objectives and policies of certain of the Investment Portfolios are similar to the investment objectives and policies of other mutual funds managed by the same investment advisers. Although the objectives and policies may be similar, the investment results of the Investment Portfolios may be higher or lower than the results of such other mutual funds. The investment advisers cannot guarantee, and make no representation that the investment results of similar funds will be comparable even though the Investment Portfolios have the same investment advisers. A significant portion of the assets of certain of the Investment Portfolios come from investors who take part in certain strategic and tactical asset allocation programs. These Investment Portfolios anticipate that investors who take part in these programs may frequently redeem or exchange shares of these Investment Portfolios, which may cause the Investment Portfolios to experience high portfolio turnover. Higher portfolio turnover may result in the Investment Portfolios paying higher levels of transaction costs. Large movements of assets into and out of the Investment Portfolios may also negatively impact an Investment Portfolios's ability to achieve its investment objective. In addition, the extent to which Contracts are owned by investors who engage in frequent redemptions or exchanges involving Investment Portfolios which do not limit such activity may result in more redemption and exchange activity in other Investment Portfolios which impose limits on such activity. The adverse impact, if any, of such activity will be constrained by the limits those other Investment Portfolios impose on frequent redemption or exchange activity. Refer to the Investment Portfolios' prospectuses for more details on the risks associated with any specific Investment Portfolio. Shares of the Investment Portfolios may be offered in connection with certain variable annuity contracts and variable life insurance policies of other life insurance companies, which may or may not be affiliated with Us. Certain Investment Portfolios may also be sold directly to qualified plans. The Investment Portfolios do not believe that offering their shares in this manner will be disadvantageous to you. Administrative, Marketing and Support Services Fees Jefferson National and the principal underwriter for the Contracts have arrangements with the investment advisor, subadvisor, distributor, and/or affiliated companies of most of the Investment Portfolios under which Jefferson National and the principal underwriter for the Contracts receive payments in connection with the provision of administrative, marketing or other support services to the Investment Portfolios. Proceeds of these payments may be used for any corporate purpose, including payment of expenses that the Company and the principal underwriter for the contracts incur in promoting, issuing, distributing and administering the contracts. The Company and its affiliates may profit from these fees. The payments are generally based on a percentage of the average assets of each Investment Portfolio allocated to the investment options under the Contract or other contracts offered by the Company. The amount of the fee that an Investment Portfolio and its affiliates pay the Company and/or the Company's affiliates is negotiated and varies with each Investment Portfolio. Aggregate fees relating to the different Investment Portfolio may be as much as .50% of the average net assets of an Investment Portfolio attributable to the relevant contracts. This amount may change at any time without notice. A portion of these payments may come from revenue derived from the distribution and/or service fees (12b-1 fees) that are paid by an Investment Portfolio out of its assets as part of its total annual operating expenses. The Fixed Account During the Accumulation Period, you can invest in the Fixed Account. The Fixed Account offers an interest rate that is guaranteed by Us to be no less than 3% or the minimum rate prescribed by applicable state law. From time to time, We may change the interest rate credited to amounts invested in the Fixed Account. If you select the Fixed Account, your money will be placed with Our other general account assets. The Fixed Account option may not be available in your state. The Fixed Account is not registered under the federal securities laws and it is generally not subject to its provisions. The staff of the SEC has not reviewed the disclosure related to the Fixed Account. The disclosure may, however, be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. The Separate Account Annual Expenses do not apply to amounts allocated to the Fixed Account. See your Contract for more information regarding the Fixed Account. The General Account During the Annuity Period, the portion of your Annuity Payments that are fixed will be paid out of Our general account. We guarantee a specified interest rate used in determining the Annuity Payments. If you elect fixed Annuity Payments, the fixed portion of your Annuity Payments will remain level. Voting Rights Jefferson National is the legal owner of the Investment Portfolio shares. However, when an Investment Portfolio solicits proxies in conjunction with a vote of its shareholders, We will send you and other owners materials describing the matters to be voted on. You instruct Us how you want Us to vote your shares. When We receive those instructions, We will vote all of the shares We own and those for which no timely instructions are received in proportion to those instructions timely received. As a result of proportional voting, the vote of a small number of contract owners could determine the 15 -------------------------------------------------------------------------------- outcome of a proposal subject to a shareholder vote. Should We determine that We are no longer required to follow this voting procedure, We will vote the shares ourselves. Substitution It may be necessary to discontinue one or more of the Investment Portfolios or substitute a new Investment Portfolio for one of the Investment Portfolios you have selected. New or substitute Investment Portfolios may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will notify you of Our intent to do this. We will obtain any required prior approval from the Securities and Exchange Commission before any such change is made. Transfers You can transfer money among the Fixed Account and the Sub-account. Such transfers may be submitted in writing to Our administrative offices. Transfers may be deferred as permitted or required by law. See "Suspension of Payments or Transfers Section" in this prospectus. TRANSFERS DURING THE ACCUMULATION PERIOD. You can transfer money to or from the Fixed Account, and to or from any Sub-account. Transfers may be made by contacting Our administrative offices or through Our Website. The following apply to any transfer during the Accumulation Period: 1. If you make more than one transfer in 30 days, a transfer fee of $25 may be deducted. 2. Limits on transfers out of the Fixed Account may apply. 3. Your request for a transfer must clearly state which Sub-account(s) are involved in the transfer. 4. Your request for transfer must clearly state how much the transfer is for. 5. Your right to make transfers is subject to modification if We determine, in Our sole opinion, that the exercise of the right by one or more owners is, or would be, to the disadvantage of other owners. Restrictions may be applied in any manner reasonably designed to prevent any use of the transfer right, which is considered by Us to be to the disadvantage of other owners. A modification could be applied to transfers to, or from, one or more of the Investment Portfolios and could include, but is not limited to: a. the requirement of a minimum time period between each transfer; b. not accepting a transfer request from an agent acting under a power of attorney on behalf of more than one owner; or c. limiting the dollar amount that may be transferred between Sub-accounts by an owner at any one time. 6. We reserve the right, at any time, and without prior notice to any party, to terminate, suspend or modify the transfer privilege during the Accumulation Period. TRANSFERS DURING THE ANNUITY PERIOD. You can make one transfer per 30 days during the Annuity Period. Thereafter, We may impose a transfer fee of $25 charge per transfer. The following rules also apply to any transfer during the Annuity Period: 1. No transfers can be made between the Fixed Account and the Sub-accounts. You may only make transfers between the Sub-accounts. 2. We reserve the right, at any time, and without prior notice to any party, to terminate, suspend or modify the transfer privilege during the Annuity Period. This product is not designed for professional market timing strategies by third parties. We reserve the right to modify (including terminating) the transfer privileges described above. Excessive Trading Limits The Contracts are first and foremost annuity contracts, designed for retirement or other long-term financial planning purposes, and are not designed for market timers or other persons that make frequent transfers. The use of such transfers can be disruptive to any underlying Investment Portfolio and harmful to other contract owners invested in the Investment Portfolio. We reserve the right to limit transfers in any Contract year, or to refuse any transfer request for an Owner, Registered Representative, Investment Advisor or other third party acting under a Limited Power of Attorney, for any reason, including without limitation, if: o We believe, in Our sole discretion, that excessive trading by the Owner, or a specific transfer request, submitted by a third party advisor, or a group of transfer requests, may have a detrimental effect on the Accumulation Unit values of any subaccount or the share prices of any Investment Portfolio or would be detrimental to other Owners; or o We are informed by one or more Investment Portfolios that they intend to restrict the purchase of Investment Portfolio shares because of excessive trading or because they believe that a specific transfer or group of transfers would have a detrimental effect on the price of Investment Portfolio shares; or o the requested transaction violates Our administrative rules designed to detect and prevent market timing. The restrictions imposed may include, but are not limited to, restrictions on transfers (e.g., by not processing requested transfers, limiting the number of transfers allowed, and/or the dollar amount, requiring holding periods, allowing transfer requests by U.S. Mail only, etc.) or even prohibitions on them for particular owners who, in Our view, have abused or appear likely to abuse the transfer privilege. These restrictions do not apply to redemptions from the Contract. We may apply restrictions in any manner reasonably designed to prevent transfers that We consider disadvantageous to other Owners. These excessive trading limits apply to all owners. However, using our processes and procedures, we may not detect all market timers, prevent frequent transfers, or prevent harm caused by excessive transfers. The difficulty in detecting market timing activity may have the effect of allowing some to engage in market timing activities while preventing others. SHORT-TERM TRADING RISK. Frequent exchanges among Investment Portfolios by Owners can reduce the long-term returns of the underlying mutual funds. The reduced returns could adversely affect the owners, annuitants, insureds or beneficiaries of any variable annuity or variable life insurance contract issued by any insurance company with respect to values allocated to the underlying fund. Frequent exchanges 16 -------------------------------------------------------------------------------- may reduce the underlying fund's performance by increasing costs paid by the fund (such as brokerage commissions); they can disrupt portfolio management strategies; and they can have the effect of diluting the value of the shares of long term shareholders in cases in which fluctuations in markets are not fully priced into the fund's net asset value. The insurance-dedicated mutual funds available through the Investment Portfolios are also available in products issued by other insurance companies. These funds carry a significant risk that short-term trading may go undetected. The funds themselves generally cannot detect individual contract owner exchange activity, because they are owned primarily by insurance company separate accounts that aggregate exchange orders from owners of individual contracts. Accordingly, the funds are dependent in large part on the rights, ability and willingness of all participating insurance companies to detect and deter short-term trading by contract owners. As outlined below, We have adopted policies regarding frequent trading, but can provide no assurance that other insurance companies using the same underlying funds have adopted comparable procedures. There is also the risk that these policies and procedures concerning short-term trading will prove ineffective in whole or in part to detect or prevent frequent trading. The difficulty in detecting market timing activity may have the effect of allowing some to engage in market timing while preventing others. Please review the underlying funds' prospectuses for specific information about the funds' short-term trading policies and risks. We have adopted policies and procedures with respect to frequent transfers. These policies apply to all Investment Portfolios except for Investment Portfolios that contain disclosure permitting active trading. As of the date of this prospectus, the only Investment Portfolios which permit active trading are those of the Rydex Variable Trust (other than Rydex Sector Rotation Fund, Rydex Absolute Return Strategies Fund, Rydex Multi-Cap Core Equity Fund, Rydex Hedged Equity Fund, Rydex Essential Portfolio Conservative, Rydex Essential Portfolio Aggressive, and Rydex Essential Portfolio Moderate which do not permit active trading), the DireXion Dynamic VP HY Bond Fund and the JNF Money Market Portfolio. This list may change any time without notice. Pursuant to this policy, we block trades that are the second transaction in a purchase and sale or sale and purchase involving the same Investment Portfolio in less than seven (7) days (or whatever greater time period is required by the Investment Portfolio). As of the date of this prospectus, We impose longer hold periods for the funds set forth in the following table. ------------------------------------------------------------- 30 Day Hold ------------------------------------------------------------- American Century VP American Century American Century Balanced VP Income & Growth VP Inflation Protection ------------------------------------------------------------- American Century VP American Century American Century Large Company Value VP Ultra VP Value ------------------------------------------------------------- American Century VP American Century Vista VP International ------------------------------------------------------------- Federated Capital Income Fund II ------------------------------------------------------------- Federated High Federated Federated Income Bond Fund II International Kaufmann Fund II Equity Fund II ------------------------------------------------------------- Federated Market Legg Mason Legg Mason Opportunity Fund II Aggressive Growth Capital and Income ------------------------------------------------------------- Legg Mason Legg Mason High Legg Mason Large Fundamental Value Yield Bond Cap Growth ------------------------------------------------------------- Legg Mason Lord Abbett Lord Abbett Strategic Bond America's Value Growth and Income ------------------------------------------------------------- Rydex Absolute Rydex Essential Rydex Essential Return Strategies Portfolio Portfolio Aggressive Conservative ------------------------------------------------------------- Rydex Essential Rydex Hedged Equity Rydex Multi-Cap Portfolio Moderate Core Equity ------------------------------------------------------------- Rydex Sector Rotation ------------------------------------------------------------- 60 Day Hold ------------------------------------------------------------- Dreyfus Dreyfus Small Cap Dreyfus Socially International Value Stock Index Responsible Growth ------------------------------------------------------------- Dreyfus Stock Index Third Avenue Value ------------------------------------------------------------- 90 Day Hold ------------------------------------------------------------- AllianceBernstein Janus Aspen Janus Aspen Forty Growth and Income Balanced ------------------------------------------------------------- Janus Aspen Global Janus Aspen Growth Janus Aspen Life Science and Income International Growth ------------------------------------------------------------- Janus Aspen Large Janus Aspen Mid Janus Aspen Mid Cap Growth Cap Growth Cap Value ------------------------------------------------------------- Janus Aspen Small Janus Aspen Company Value Worldwide Growth ------------------------------------------------------------- This list may change at any time without notice. If only one portion of a transfer request involving multiple Investment Portfolios violates our policy, the entire transfer request is blocked. We monitor transfers and impose these rules across multiple Contracts owned by the same owner. Thus, if you own two Contracts and make a purchase in an Investment Portfolio in Contract 1, you will have to wait at least seven (7) days (or such greater time period as set forth in the table above) to make a sale in the same Investment Portfolio in Contract 2. With the exception of contributions to, and withdrawals from, the Contract, all transfers are monitored, including without limitation, systematic transfers such as dollar cost averaging, rebalancing, systematic contributions and systematic withdrawals. Transactions are not monitored if they are scheduled at least 7 days in advance. These policies apply to all Investment Options except for Investment Options that contain disclosure permitting active trading. The statement of additional information contains more information about market timing arrangements and disclosure of Investment Portfolio securities holdings to individuals. If you (or your agent's) Website transfer request is restricted or denied, we will send notice via U.S. Mail. Dollar Cost Averaging Program The Dollar Cost Averaging Program (DCA Program) allows you to systematically transfer a set amount either monthly, quarterly, semi-annually or annually. By allocating amounts on a regular schedule as opposed to allocating the total amount at one particular time, you may be less susceptible to the impact of market fluctuations. However, this is not guaranteed. Subject to Our administrative procedures, you may select the Business Day when dollar cost averaging transfers will occur. You can sign up for the DCA Program for a specified time 17 -------------------------------------------------------------------------------- period. The DCA Program will end when the value in the Sub-account(s) from which you are transferring is zero. We will notify you when that happens. A transfer request will not automatically terminate the DCA Program. The transfers made under the DCA Program are not taken into account in determining any transfer fee. There is no additional charge for the DCA Program. However, We reserve the right to charge for the DCA Program in the future. We reserve the right, at any time and without prior notice, to terminate, suspend or modify the DCA Program. The DCA Program may vary by state. Dollar cost averaging does not assure a profit and does not protect against loss in declining markets. Dollar cost averaging involves continuous investment in the Fixed Account or selected Sub-account(s) regardless of fluctuating price levels of the Sub-account(s). You should consider your financial ability to continue the DCA Program through periods of fluctuating price levels. Rebalancing Program Once your money has been allocated among the Sub-accounts, the performance of each Investment Portfolio may cause your allocation to shift. You can direct Us to automatically rebalance your Contract to return to your Investment Allocation of Record or some other allocation of your choosing by selecting Our Rebalancing Program. When you elect the Rebalancing Program, you must specify the date on which you would like the initial rebalancing to occur and the frequency of the rebalancing (i.e. quarterly, semi-annually or annually). We will measure the rebalancing periods from the initial rebalancing date selected. You must use whole percentages in 1% increments for rebalancing. Rebalancing does not include assets allocated to the Fixed Account. You can discontinue the Rebalancing Program at any time. You can modify rebalancing percentages for future rebalancing by submitting your request prior to the next rebalancing date. The transfers made under the Rebalancing Program are not taken into account in determining any transfer fee. Currently, there is no charge for participating in the Rebalancing Program. We reserve the right, at any time and without prior notice, to terminate, suspend or modify this program. EXAMPLE: Assume that you want your initial Purchase Payment split between 2 Sub-accounts. You want 40% to be in the Fixed Income Portfolio Sub-account and 60% to be in the Growth Portfolio Sub-account. Over the next 2 1/2 months the bond market does very well while the stock market performs poorly. At the end of the first quarter, the Fixed Income Portfolio Sub-account now represents 50% of your holdings because of its increase in value. If you had chosen to have your holdings rebalanced quarterly, on the first day of the next quarter, We would sell some of your units in the Fixed Income Portfolio Sub-account to bring its value back to 40% and use the money to buy more units in the Growth Portfolio Sub-account to increase those holdings to 60%. Advisory Fee Withdrawals We understand the importance to you of having advice from a financial adviser regarding your investments in the Contract. Certain investment advisors have made arrangements with Us to make their services available to you. Jefferson National has not made any independent investigation of these advisors and is not endorsing such programs. You may be required to enter into an advisory agreement with your Investment Advisor to have the fees paid out of your Contract during the Accumulation Period. Jefferson National will, pursuant to an agreement with you, make a partial withdrawal from the value of your Contract to pay for the services of your Investment Advisor. If the Contract is a Non-Qualified Contract, the withdrawal will be treated like any other distribution and may be included in gross income for federal tax purposes. Further, if you are under age 59 1/2, it may be subject to a tax penalty. If the Contract is a Qualified Contract, the withdrawal for the payment of fees may not be treated as a taxable distribution if certain conditions are met. Additionally, any withdrawals for this purpose may be subject to a Contingent Deferred Sales Charge. You should consult a tax adviser regarding the tax treatment of the payment of investment advisor fees from your Contract. Interest Sweep Program You can elect to transfer (sweep) your interest from the Fixed Account to the Sub-accounts on a periodic and systematic basis. Currently, there is no charge for the Interest Sweep Program. Expenses There are charges and other expenses associated with the Contract that reduce the return on your investment in the Contract. These charges and expenses are: Insurance Charges Each day, We make a deduction for Insurance Charges. The Insurance Charges do not apply to amounts allocated to the Fixed Account. The Insurance Charges will vary depending on whether, at the time you apply for the Contract, you choose one of the Guaranteed Minimum Death Benefits (GMDB) and/or the Guaranteed Minimum Income Benefits (GMIB). The Insurance Charges compensate the Company for all the insurance benefits, e.g., guarantee of annuity rates, the death benefit, for certain expenses of the Contract, and for assuming the risk (expense risk) that the current charges will be insufficient in the future to cover the cost of administering the Contract. The Insurance Charges are included as part of Our calculation of the value of the Accumulation Units and the Annuity Units. If the Insurance Charges are insufficient, then We will bear the loss. Any profits we derive from the Insurance Charges will become part of our general account assets and can be used for any lawful purpose, including the costs of selling the contracts. The Insurance Charges will be as follows: GMDB GMDB Current Maximum Option 1 Option 2 GMIB Insurance Insurance Elected Elected Elected Charge Charge No No No 1.40% 1.65% Yes No No 1.75% 2.15% No Yes No 1.85% 2.30% Yes No Yes 2.05% 2.65% Yes No Yes 2.15% 2.80% Contract Maintenance Charge On each Contract Anniversary during the Accumulation Period, We deduct $30 (as allowed by state law, this charge can be increased up to a maximum of $60 per Contract per year) from your Contract as a Contract Maintenance Charge. This charge is for certain administrative expenses associated with the Contract. We do not deduct the Contract Maintenance Charge if the 18 -------------------------------------------------------------------------------- value of your Contract is $50,000 or more on the Contract Anniversary. We reserve the right to reduce or waive the Contract Maintenance Charge. If you make a full withdrawal on other than a Contract Anniversary, and the value of your Contract is less than $50,000, We will deduct the full Contract Maintenance Charge at the time of the full withdrawal. If, when you begin to receive Annuity Payments, the Annuity Date is a different date than your Contract Anniversary, We will deduct the full Contract Maintenance Charge on the Annuity Date unless the Contract Value on the Annuity Date is $50,000 or more. The Contract Maintenance Charge will be deducted first from the Fixed Account. If there is insufficient value in the Fixed Account, the fee will then be deducted from the Sub-account with the largest balance. No Contract Maintenance Charge is deducted during the Annuity Period. Contingent Deferred Sales Charge During the Accumulation Period, you can make withdrawals from your Contract. Withdrawals are taken from earnings first and then Purchase Payments. A Contingent Deferred Sales Charge may be assessed against Purchase Payments withdrawn. Each Purchase Payment has its own Contingent Deferred Sales Charge period. When you make a withdrawal, the charge is deducted from Purchase Payments (oldest to newest). Subject to the waivers discussed below, if you make a withdrawal and it has been less than the stated number of years since you made your Purchase Payment, you will have to pay a Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge compensates Us for expenses associated with selling the Contract. The charge is as follows: NUMBER OF YEARS CONTINGENT FROM RECEIPT OF DEFERRED SALES PURCHASE PAYMENT CHARGE 0-1 7% 2 7% 3 6% 4 5% 5 4% 6 3% 7 2% 8 or more 0% In addition, the following circumstances further limit or reduce Contingent Deferred Sales Charge charges, in some states, as applicable: o for issue ages up to 52, there is no Contingent Deferred Sales Charge for withdrawals made after the 15th Contract year; o for issue ages 53 to 56, there is no Contingent Deferred Sales Charge for withdrawals made after you attain age 67; o for issue ages 57 and later, any otherwise applicable Contingent Deferred Sales Charge will be multiplied by a factor ranging from .9 to 0 for Contract years one through ten and later, respectively. FREE WITHDRAWALS. Subject to any applicable limitations, each Contract year you can withdraw money from your Contract, without a Contingent Deferred Sales Charge, in an amount equal to the greater of: o 10% of the Contract Value (on a non-cumulative basis) (excluding payments made by Us to Your Investment Advisor); o the IRS minimum distribution requirement for this Contract if it was issued as an individual retirement annuity or in conjunction with certain qualified retirement plans; or o the total of your Purchase Payments that have been in the Contract for 8 or more complete years. Waiver of Contingent Deferred Sales Charge In addition to the free withdrawal amount discussed above, the Contingent Deferred Sales Charge may be waived under certain circumstances. If the Contract is owned by Joint Owners, these benefits apply to either owner. If the Contract is owned by a non-natural person, then these benefits apply to the Annuitant. UNEMPLOYMENT. Once per Contract year, We will allow an additional free withdrawal of up to 10% of your Contract Value if: o your Contract has been in force for at least 1 year; o you provide Us with a letter of determination from your state's Department of Labor indicating that you qualify for and have been receiving unemployment benefits for at least 60 consecutive days; o you were employed on a full time basis and working at least 30 hours per week on the date your Contract was issued; o your employment was involuntarily terminated by your employer; and o you certify to Us in writing that you are still unemployed when you make the withdrawal request. This benefit may be used by only one person including in the case of Joint Owners or if the Contract continued by a spouse after the death of the Owner. This benefit may not be available in your state. NURSING CARE CONFINEMENT. Once per Contract year, We will allow an additional free withdrawal of up to 10% of your Contract Value if: o you are confined in a qualified nursing care center (as defined in the rider to the Contract) for 90 consecutive days; o confinement begins after the first Contract year; o confinement is prescribed by a qualified physician and is medically necessary; o request for this benefit is made during confinement or within 60 days after confinement ends; and o We receive due proof of confinement. This benefit may be used by only one person including in the case of Joint Owners or if the Contract continued by a spouse after the death of the Owner. This benefit may not be available in your state. TERMINAL ILLNESS. You may take one free withdrawal of up to 100% of your Contract Value after a qualified physician (as defined in the rider to the Contract) provides notice that the owner has a terminal illness (which is expected to result in death within 12 months from the notice). o To qualify, the diagnosis and notice must occur after the first Contract year ends. o This benefit is not available if you have a terminal illness 19 -------------------------------------------------------------------------------- on the date the Contract is issued. All other limitations under the Contract apply. This benefit may only be used one time including in the case of Joint Owners or if the Contract continued by a spouse after the death of the Owner. This benefit may not be available in your state. Reduction or Elimination of the Contingent Deferred Sales Charge We may reduce or eliminate the amount of the Contingent Deferred Sales Charge when the Contract is sold under circumstances that reduce Our sales expenses. Some examples are: if there is a large group of individuals that will be purchasing the Contract or a prospective purchaser already had a relationship with Us. We will not deduct a Contingent Deferred Sales Charge when a Contract is issued to an officer, director or employee of Our company or any of Our affiliates. Any circumstances resulting in the reduction or elimination of the Contingent Deferred Sales Charge requires Our prior written approval. In no event will reduction or elimination of the Contingent Deferred Sales Charge be permitted where it would be unfairly discriminatory to any person. Investment Portfolio Operating Expenses There are deductions from and expenses paid out of the assets of the various Investment Portfolios, which are described in the Investment Portfolio prospectuses. The Investment Portfolio Operating Expenses are included as part of Our calculation of the value of the Accumulation Units and the Annuity Units. We reserve the right to charge transfer fees imposed by the Investment Portfolios for excessive transfers. Transfer Fee During the Accumulation Period, You can make one free transfer per 30 days. If you make more than one transfer per 30 days, you may be charged a transfer fee of $25 per transfer. As allowed by law, We reserve the right to change the transfer fee. During the Accumulation Period, the transfer fee is deducted from the Investment Option that you transfer from. If you transfer your entire interest from an Investment Option, the transfer fee is deducted from the amount transferred. If there are multiple Investment Options from which you transfer funds, the transfer fee will be deducted first from the Fixed Account, and then from the Sub-account with the largest balance that is involved in the transfer. During the Annuity Period, the transfer fee will be deducted from the Annuity Payment immediately following your transfer. If the transfer is part of the Dollar Cost Averaging Program, the Rebalancing Program or the Interest Sweep Program it will not count in determining the transfer fee. All reallocations made on the same date count as one transfer. Earnings Protection Benefit Rider If, at the time you apply for the Contract, you select the Earnings Protection Benefit ("EPB") you also choose the level of protection you desire. (See "Earnings Protection Benefit Rider" later in this Prospectus.) Depending on your choice you will be charged as follows: 0.25% of Contract Value as of the For Base Benefit: Contract Anniversary. For Optional 0.01% of Contract Value as of the Benefit: Contract Anniversary for each 1% of (Current Charge) optional coverage elected. For Optional 0.02% of Contract Value as of the Benefit: Contract Anniversary for each 1% of (Maximum Charge) optional coverage elected. If you make a full surrender or upon the death of the Owner on other than the Contract Anniversary, We will deduct the charge for the EPB on a pro rata basis for the period from the last Contract Anniversary until the date of the full surrender or the date We receive due proof of death of the Owner. We recommend you consult your tax advisor before you purchase this rider. Guaranteed Minimum Withdrawal Benefit If you select the Guaranteed Minimum Withdrawal Benefit, your charge will depend upon the Waiting Period you select. If you select the 2 Year Waiting Period, your charge will be 0.50% of amounts allocated to the Sub-accounts. We may increase this charge up to 0.75%. If you select the 5 Year Waiting Period, your charge will be 0.35% of amounts allocated to the Sub-accounts. We may increase this charge up to 0.50%. These charges, which are expressed as annual rates, will be deducted on a daily basis. Premium Taxes Some states and other governmental entities (e.g., municipalities) charge premium taxes or similar taxes. We are responsible for the payment of these taxes and will make a deduction from the Contract Value for them. These taxes are due either when the Contract is issued or when Annuity Payments begin. It is Our current practice to deduct these taxes when Annuity Payments begin. We may in the future discontinue this practice and assess the charge when the tax is due. Premium taxes currently range from 0% to 3.5%, depending on the jurisdiction. Income Taxes We will deduct from the Contract any income taxes, which We incur because of the Contract. At the present time, We are not making any such deductions. Contract Value Your Contract Value is the sum of amounts held under your Contract in the Sub-accounts and the Fixed Account. The Contract Value may not be the value available for withdrawal, surrender or annuitization. The value of any assets in the Sub-accounts(s) will vary depending upon the investment performance of the Investment Portfolio(s) you choose. In order to keep track of your Contract Value in a Sub-account, We use a unit of measure called an Accumulation Unit. During the Annuity Period of your Contract We call the unit an Annuity Unit. The value of your Contract is affected by the investment performance of the Investment Portfolios, the expenses of the Investment Portfolios and the deduction of fees and charges under the Contract. If your Contract Value is zero, we reserve the right to surrender your contract. Accumulation Units Every Business Day, We determine the value of an Accumulation Unit for each of the Sub-Accounts by multiplying the Accumulation Unit value for the prior Business Day by a factor for the current Business Day. The factor is determined by: 1. dividing the value of a Sub-Account share at the end of 20 -------------------------------------------------------------------------------- the current Business Day (and any charges for taxes) by the value of a Sub-account share for the previous Business Day; and 2. subtracting the daily amount of the Insurance Charges and the charges for the optional Guaranteed Minimum Withdrawal Benefit, if elected. The value of an Accumulation Unit may go up or down from Business Day to Business Day. When you make a Purchase Payment, We credit your Contract with Accumulation Units. The number of Accumulation Units credited is determined by dividing the amount of the Purchase Payment allocated to an Sub-Account by the value of the Accumulation Unit for that Sub-Account on that Business Day. When you make a withdrawal, We deduct Accumulation Units from your Contract representing the withdrawal. We also deduct Accumulation Units when We deduct certain charges under the Contract. Whenever We use an Accumulation Unit value, it will be based on the value next determined after receipt of the request or the Purchase Payment. We calculate the value of an Accumulation Unit for each Sub-Account after the New York Stock Exchange closes each Business Day and then credit your Contract. EXAMPLE: On Wednesday, We receive an additional Purchase Payment of $4,000 from you. You have told Us you want this to go to the Equity Portfolio Sub-account. When the New York Stock Exchange closes on that Wednesday, We determine that the value of an Accumulation Unit for the Equity Portfolio Sub-account is $12.25. We then divide $4,000 by $12.25 and credit your Contract on Wednesday night with 326.53 Accumulation Units for the Equity Portfolio Sub-account. Access to Your Money You can have access to the money in your Contract: o by making a withdrawal (either a partial or a complete withdrawal); o by electing to receive Annuity Payments; or o when a death benefit is paid to your Beneficiary. Withdrawals can only be made during the Accumulation Period. When you make a complete withdrawal, you will receive the Contract Value on the day you made the withdrawal, (i) less any applicable Contingent Deferred Sales Charge; (ii) less any Contract Maintenance Charge; and (iii) less any applicable premium tax. You must tell Us which Investment Option you want the partial withdrawal to come from. Under most circumstances, the amount of any partial withdrawal from any Investment Option must be at least $500. If you do not have at least $500 in the Contract after a partial withdrawal, We reserve the right to terminate the Contract and pay you the Contract Value less any applicable fees and charges. These minimum amounts are waived for systematic withdrawals and required minimum distributions. Once We receive your written request for a withdrawal from an Investment Option, We will pay the amount of that withdrawal within 7 days. Withdrawals may be deferred as permitted or required by law. See "Suspension of Payments or Transfers" section. A withdrawal may result in a withdrawal charge and/or tax consequences (including an additional 10% tax penalty under certain circumstances). Certain withdrawal restrictions may apply if your Contract is issued in connection with a Section 403(b) tax-qualified plan (also known as a tax-sheltered annuity). See "Contingent Deferred Sales Charge" and "Taxes" in this Prospectus. Systematic Withdrawal Program The systematic withdrawal program allows you to receive automatic payments either monthly, quarterly, semi-annually or annually. Subject to Our administrative procedures, you can instruct Us to withdraw a specific amount, which can be a percentage of the Contract Value, or a dollar amount. All systematic withdrawals will be withdrawn from the Investment Options on a pro-rata basis, unless you instruct Us otherwise. You may elect to end the Systematic Withdrawal Program by notifying Us prior to the next systematic withdrawal. The Systematic Withdrawal Program will terminate automatically when the Contract Value is exhausted. We do not currently charge for the Systematic Withdrawal Program, however, the withdrawals may be subject to a Contingent Deferred Sales Charge. Income taxes, tax penalties and certain restrictions may apply to systematic withdrawals. Optional Guaranteed Minimum Withdrawal Benefit For an extra charge, you can elect the Guaranteed Minimum Withdrawal Benefit (GMWB), a living benefit. The GMWB allows you to make withdrawals from your Contract irrespective of your Contract Value, subject to certain limitations. Once the benefit is elected, you cannot cancel it and charges will continue to be deducted until Annuity Payments begin. The charges for the GMWB option are deducted each Business Day from amounts held in the Sub-Accounts. Withdrawals made under this rider will reduce your Contract Value. If you elect the GMWB when you purchase your Contract, your initial Purchase Payment is used as the basis for determining the guaranteed withdrawal amount (the "Benefit Amount"). If you elect this benefit at a later date, your Contract Value on the date the benefit is added to your Contract is used to determine the Benefit Amount. Once the Benefit Amount has been determined, We calculate the annual guaranteed withdrawal amount (the "Benefit Payment"). The Benefit Payment is equal to 7% of the Benefit Amount. If you do not take 7% in one year, you may not take more than 7% the next year. You can continue to take Benefit Payments until the sum of the Benefit Payments equals the Benefit Amount. Each withdrawal you make as a Benefit Payment reduces the amount you may withdraw free of the Contingent Deferred Sales Charge. Withdrawals under this option may result in adverse tax consequences. Benefit Payments are subject to a Waiting Period. Presently, you can choose either a two-year or five-year Waiting Period. We may offer other Waiting Periods in the future. The Waiting Period is the time between the date you elect the GMWB and the date you can begin receiving Benefit Payments. For example, if you choose a Waiting Period of five years, you cannot begin receiving Benefit Payments before the fifth Contract Anniversary after you elect the GMWB. The GMWB charge will vary depending on the 21 -------------------------------------------------------------------------------- length of the Waiting Period you choose. If you elect the GMWB when you purchase your Contract, We count one year as the time between each Contract Anniversary. If you elect the GMWB at any time after purchase, We treat the time between the date We added the option to your Contract and your next Contract Anniversary as the first year. If, in any year, total withdrawals from your Contract are more than your Benefit Payment, your Benefit Payment will be recalculated as follows: o (1 - withdrawal/Contract Value immediately prior to withdrawal) multiplied by your Benefit Payment immediately prior to withdrawal. If you make subsequent Purchase Payments to your Contract, We will recalculate your Benefit Amount and your Benefit Payments. Your new Benefit Amount equals your Benefit Amount immediately prior to the subsequent Purchase Payment plus the subsequent Purchase Payment. Your new Benefit Payment equals your prior Benefit Payment increased by 7% of the subsequent Purchase Payment. Once you elect the GMWB, you are entitled to one free "step-up" of the Benefit Amount over the course of this option. If you choose to "step-up" the benefit, your Benefit Amount is recalculated to equal your Contract Value. The Benefit Payment then becomes the greater of 7% of the new Benefit Amount and your existing Benefit Payment. You would not want to "step-up" if your current Benefit Amount is higher than your Contract Value. Additional "step-ups" are available at an extra charge. At the time you elect to "step-up," there may be a higher charge for the GMWB. When you elect an additional "step-up" you will be charged the current GMWB charge. Before you decide to "step-up," you should consider the current charge for this benefit. If you, the Joint Owner or Annuitant die before you receive all the guaranteed Benefit Payments, the Beneficiary may elect to receive either the remaining Benefit Payments or Death Benefit Amount payable under your Contract. You can surrender your Contract at any time, even if you elect the GMWB, but you will receive your Contract Value, less any applicable Contingent Deferred Sales Charges, less any applicable Contract Maintenance Charge and less premium taxes, at the time of surrender and not the Benefit Amount or the Benefit Payment amount you would have received under the GMWB. Please see Appendix C for examples of how the Benefit Amount and Benefit Payment are calculated. Suspension of Payments or Transfers We may be required to suspend or postpone payments, withdrawals or transfers for any period when: 1. the New York Stock Exchange is closed (other than customary weekend and holiday closings); 2. trading on the New York Stock Exchange is restricted; 3. an emergency exists as a result of which disposal of shares of the Investment Portfolios is not reasonably practicable or We cannot reasonably value the shares of the Investment Portfolios; 4. during any other period when the SEC, by order, so permits for the protection of owners. We have reserved the right to defer payment for a withdrawal or transfer from the Fixed Account for the period permitted by law but not for more than six months. If mandated under applicable law, We may be required to reject a Purchase Payment and/or otherwise block access to an Owner's Contract and thereby refuse to pay any request for transfers, partial or full withdrawals, annuity benefits, or death benefits. Once blocked, monies would be held in that Contract until instructions are received from the appropriate regulator. Death Benefit Upon Your Death During the Accumulation Period If you, or your Joint Owner, die before Annuity Payments begin, We will pay a death benefit to your Beneficiary. If you have a Joint Owner, the surviving Joint Owner will be treated as the primary Beneficiary. Any other Beneficiary designation on record at the time of death will be treated as a contingent Beneficiary. The Contract Value for purposes of calculating any Death Benefit Amount will be determined as of the Business Day We receive due proof of death and an election for the payment method (see below). After the Death Benefit Amount is calculated, it will remain in the Investment Options until distribution begins. Until We distribute the Death Benefit Amount, the Death Benefit Amount in the Sub-Accounts will be subject to investment risk, which is borne by the Beneficiary. If you designate multiple beneficiaries, upon payment of the Death Benefit Amount to the first beneficiary, any remaining Death Benefit Amount invested in the Investment Portfolios will be placed in a money market account until we receive election for the payment of the remaining Death Benefit Amount. Standard Death Benefit Amount During the Accumulation Period If you die prior to age 80 and you did not elect one of the two optional Guaranteed Minimum Death Benefits, the Death Benefit Amount will be the greater of: (1) the Contract Value as of the Business Day We receive due proof of death and a payment election; or (2) the total Purchase Payments you have made, less any partial Withdrawals and Contingent Deferred Sales Charges. If you are age 80 or over and you did not elect one of the two optional Guaranteed Minimum Death Benefit, the Death Benefit Amount will be equal to the Contract Value as of the Business Day We receive due proof of death and a payment election. Optional Guaranteed Minimum Death Benefits For an extra charge, at the time you purchase the Contract, you can choose one of two optional Guaranteed Minimum Death Benefit options each of which, depending on market conditions, may provide a greater Death Benefit Amount than the standard death benefit described above. Guaranteed Minimum Death Benefit Option 1. Under this option, if you die before age 80, the Death Benefit Amount will be the greater of: (1) the total Purchase Payments you have made, less all partial Withdrawals, Contingent Deferred Sales Charges and any applicable premium taxes; (2) the Contract Value as of the Business Day We receive 22 -------------------------------------------------------------------------------- due proof of death and a payment election; or (3) the largest Contract Value on any Contract Anniversary before the Owner or Joint Owner's death, less any Adjusted Partial Withdrawals, and limited to no more than twice the amount of Purchase Payments paid less any Adjusted Partial Withdrawals. Under this option, if death occurs at age 80 or later, the Death Benefit Amount will be the greater of: (1) the Contract Value as of the Business Day We receive due proof of death and a payment election; or (2) the Death Benefit Amount as of the last Contract Anniversary before your 80th birthday, less any Adjusted Partial Withdrawals. Guaranteed Minimum Death Benefit Option 2. Under this option, if you die before age 80, the Death Benefit Amount will be the greater of: (1) the total Purchase Payments you have made, less all partial Withdrawals, Contingent Deferred Sales Charges and any applicable premium taxes; (2) the Contract Value as of the Business Day We receive due proof of death and a payment election; (3) the largest Contract Value on any Contract Anniversary before the Owner or Joint Owner's death, less any Adjusted Partial Withdrawals; or (4) the total Purchase Payments you have made, less any partial Withdrawals, increased by 5% each year up to the date of death. Under this option, if death occurs at age 80 or later, the Death Benefit Amount will be the greater of: (1) the Contract Value as of the Business Day We receive due proof of death and a payment election; or (2) the Death Benefit Amount as of the last Contract Anniversary before your 80th birthday, less any Adjusted Partial Withdrawals. If Joint Owners are named, the Death Benefit Amount is determined based on the age of the oldest Owner and is payable on the first death. If the Owner is a non-natural person, the death of an Annuitant will be treated as the death of the Owner. It is possible that the IRS may take the position that charges for the Optional Guaranteed Minimum Death Benefits are deemed to be taxable distributions to you. Although We do not believe that such charges should be treated as taxable distributions, you should consult your tax adviser prior to selecting these riders. If you take a partial withdrawal at a time when the Death Benefit Amount is greater than your Contract Value, then your Death Benefit Amount may be reduced by an amount greater than the amount withdrawn. If the Beneficiary is the spouse of the Owner of the Contact and elects to continue the Contract after the Owner's death, the Beneficiary may not elect to continue the optional Guaranteed Minimum Death Benefit. These benefits may not be available in your state. Optional Earnings Protection Benefit (EPB) The Earnings Protection Benefit (EPB) is designed to provide an additional benefit at death, which helps to defray federal and state taxes. For an additional charge, you can elect the EPB rider at the time you purchase the Contract if you are below age 76. The rider consists of two portions: base coverage and optional coverage. The rider's base death benefit and the rider's optional death benefit, when elected, are payable in addition to any other Death Benefit Amount under the Contract or any other rider. Withdrawals from the Contract will reduce the rider's death benefit. No benefit is payable if death occurs on or after the Annuity Date. This rider is only available to Non-Qualified Contracts. We recommend that you consult your tax advisor before you purchase this rider. Base Death Benefit. Upon the death of the Owner, We will add an amount to the Death Benefit Amount equal to 50% (30% if the owner was between the ages of 70 and 75 when We issued the Contract) of the Eligible Gain to the Beneficiary upon Our receipt of due proof of death of the Owner at Our administrative office. Optional Death Benefit. If the Owner's death occurs after the fifth Contract Year and the optional death benefit is selected, We add to the Death Benefit Amount, in addition to the rider's base death benefit, an optional rider death benefit in an amount equal to 50% (30% for issue ages 70-75) of the Optional Gain to the Beneficiary upon Our receipt of due proof of death of the Owner. This optional death benefit is only available for exchanges of deferred annuity Contracts in a manner that qualifies for non-recognition of income treatment under Section 1035 of the Internal Revenue Code, as amended. Eligible Gain. Eligible Gain is the least of: o the Contract gain; or o if death occurs during the first Contract year, the initial Purchase Payment less Equivalency Withdrawals from the initial Purchase Payment; or o if death occurs after the first Contract year has elapsed, all Purchase Payments applied to the Contract except Purchase Payments applied within 12 months prior to the date of death, reduced by all Equivalency Withdrawals during the life of the Contract. Equivalency Withdrawal. The Equivalency Withdrawal is: o the partial withdrawal amount; divided by o the Contract Value prior to the withdrawal; multiplied by o the sum of all Purchase Payments less all prior Equivalency Withdrawals. If you take a partial withdrawal at a time when the sum of all Purchase Payments less prior Equivalency Withdrawals is greater than your Contract Value, then your Earnings Protection Benefit will be reduced by an amount greater than the amount withdrawn. Optional Coverage Percentage. The Optional Coverage Percentage is a percentage of the initial Purchase Payment. You must elect the Optional Coverage Percentage at the time of application. Contract Gain. Contract Gain is the Contract Value reduced by the difference of total Purchase Payments and Equivalency Withdrawals. Optional Gain. The Optional Gain is: o the Optional Coverage Percentage; multiplied by o the initial Purchase Payment less Equivalency Withdrawals (from the initial Purchase Payment); less o the sum of all Purchase Payments reduced by withdrawals, less Contract Value, when the sum of all Purchase Payments reduced by withdrawals is greater 23 -------------------------------------------------------------------------------- than Contract Value. Termination. The EPB rider terminates and charges and benefits automatically end on the earliest of: o The Annuity Date; or o Full surrender; or o Death of the Owner; or o Transfer of ownership We may terminate the EPB rider if necessary to comply with applicable state and federal regulations. See Appendix B for examples of how this benefit works. It is possible that the IRS may take the position that charges for the Earnings Protection Benefits are deemed to be taxable distributions to you. Although We do not believe that such charges should be treated as taxable distributions, you should consult your tax adviser prior to selecting these riders. This benefit may not be available in your state. Payment of the Death Benefit During the Accumulation Period Unless already selected by you, a Beneficiary must elect to have the Death Benefit Amount paid under one of the options described below in the event of the death of the Owner or a Joint Owner during the Accumulation Period (including without limitation, non-qualified stretch options). OPTION 1--lump sum payment of the Death Benefit Amount; or OPTION 2--the payment of the entire Death Benefit Amount within 5 years of the date of death of the Owner or Joint Owner; or OPTION 3--payment of the Death Benefit Amount under an Annuity Option over the lifetime of the Beneficiary, or over a period not extending beyond the life expectancy of the Beneficiary, with distribution beginning within 1 year of the date of the death of the Owner or any Joint Owner. Unless you have previously designated one of the payment options above, (including without limitation, non-qualified stretch options), a Beneficiary who is also the spouse of the deceased Owner may elect to: o continue the Contract in his or her own name at the Death Benefit Amount; o elect a lump sum payment of the Death Benefit Amount; or o apply the Death Benefit Amount to an Annuity Option. If the spouse elects to continue the Contract, the Death Benefit Amount will be the initial Purchase Payment for the purpose of determining benefits under the Contract for the continuing spouse. The spouse may not elect an optional Guaranteed Minimum Death Benefit. If a lump sum payment is requested, the Death Benefit Amount will be paid within 7 days, unless the Suspension of Payments provision is in effect. Payment to the Beneficiary, in any form other than a lump sum, may only be elected during the 60-day period beginning with the date of receipt by Us of due proof of death. Death of Contract Owner During the Annuity Period If you or a Joint Owner, who is not the Annuitant, dies during the Annuity Period, any remaining Annuity Payments under the Annuity Option elected will continue to be made at least as rapidly as under the method of distribution in effect at the time of the Owner's or Joint Owner's death. Upon the Owner's death during the Annuity Period, the Beneficiary becomes the Owner. Upon the death of any Joint Owner during the Annuity Period, the surviving Owner, if any, will be treated as the primary Beneficiary. Any other Beneficiary designation on record at the time of death will be treated as a contingent Beneficiary. Death of Annuitant If the Annuitant, who is not an Owner or Joint Owner, dies during the Accumulation Period, you will automatically become the Annuitant. A change of Annuitant by the Owner may result in a taxable event. You may designate a new Annuitant subject to Our approval. If the Owner is a non-natural person (for example, a corporation), then the death of the Annuitant will be treated as the death of the Owner, and a new Annuitant may not be named. Upon the death of the Annuitant during the Annuity Period, the death benefit, if any, will be as provided for in the Annuity Option selected. The death benefit will be paid at least as rapidly as under the method of distribution in effect at the Annuitant's death. Annuity Payments (The Annuity Period) Under the Contract you can receive regular income payments. We call these payments Annuity Payments. You can choose the date on which the Annuity Payments begin. We call that date the Annuity Date. The Annuitant is the person whose life We look to when We determine Annuity Payments. The Annuity Date must be the first day of a calendar month and must be at least 90 days after the Contract issue date. The Annuity Date may not be later than the earlier of the date the Annuitant reaches attained age 90 or the maximum date permitted under applicable state law. If no Annuity Date is selected, we will assume the latest possible Annuity Date. For a Contract held under a tax-qualified retirement arrangement (other than an IRA), the Annuity Date generally may not be later than (i) April 1 of the year after the year in which the Annuitant attains age 70 1/2, or (ii) the calendar year in which the Annuitant retires if later. You can also choose among income plans. We call those Annuity Options. You can elect an Annuity Option by providing Us with a written request. You can change the Annuity Option any time up to 30 days before the existing Annuity Date. If you do not choose an Annuity Option, We will assume that you selected Option 2, which provides a life annuity with 10 years of guaranteed Annuity Payments. During the Annuity Period, you can choose to have fixed Annuity Payments (these payments will come from Jefferson National's general account), variable Annuity Payments (these payments will be based on the performance of the Investment Portfolios) or a combination of both. If you do not tell Us otherwise, your Annuity Payments will be based on the investment allocations that were in place on the Annuity Date. Unless you tell us otherwise, any money in the Fixed Account will be applied to a fixed annuity. Annuity Payment Amount If you choose to have any portion of your Annuity Payments based on the performance of the Investment Portfolio(s), the dollar amount of your Annuity Payment will depend upon: 1) The Contract Value or the Death Benefit Amount (if the 24 -------------------------------------------------------------------------------- Annuity Option is selected to pay the death benefit) applied to a Variable Annuity Option on the Annuity Date; 2) The 3% or 5% (as you select prior to the Annuity Date) assumed investment rate used in the annuity table for the Contract; 3) The performance of the Investment Portfolio(s) you selected; and 4) The Annuity Option you selected. You can choose either a 3% or a 5% assumed investment rate (AIR). If the actual performance exceeds the 3% or 5% (as you selected) AIR, your Annuity Payments will increase. Similarly, if the actual rate is less than 3% or 5% (as you selected) your Annuity Payments will decrease. Using a higher AIR results in a higher initial Annuity Payment, but later Annuity Payments will increase more slowly when investment performance rises and decrease more rapidly when investment performance declines. On the Annuity Date, your Contract Value, less any premium tax, less any Contingent Deferred Sales Charge, and less any Contract Maintenance Charge will be applied under the Annuity Option you selected. If you select an Annuity Date that is on or after the 5th Contract Anniversary, and you choose an Annuity Option that has a life contingency for a minimum of 5 years, We will apply your Contract Value, less any premium tax and less any Contract Maintenance Charge to the Annuity Option you elect. Annuity Payments are made monthly unless you have less than $5,000 to apply toward purchasing an Annuity Option. In that case, We may make a single lump sum payment to you instead of Annuity Payments. Likewise, if your Annuity Payments would be less than $50 a month, We have the right to change the frequency of payments so that your Annuity Payments are at least $50. Unless you notify Us otherwise, We will pay the Annuity Payments to you. You can change the payee at any time prior to the Annuity Date. Income from any distribution will be reported to you for tax purposes. Optional Guaranteed Minimum Income Benefit (GMIB) For an extra charge, you can elect the Guaranteed Minimum Income Benefit. You may not select this benefit unless you also select either Guaranteed Minimum Death Benefit Option 1 or Guaranteed Minimum Death Benefit Option 2. Under the Guaranteed Minimum Income Benefit, a Guaranteed Minimum Income Benefit base will be applied to your Annuity Option to provide Annuity Payments. Prior to your 80th birthday, the Guaranteed Minimum Income Benefit base is equal to the largest Contract Value on any Contract Anniversary, less any Adjusted Partial Withdrawals, and limited to no more than twice the amount of Purchase Payments made less any Adjusted Partial Withdrawals. The Guaranteed Minimum Income Benefit base on or after your 80th birthday is equal to the greater of (1) the Contract Value, less any premium tax, less any Contingent Deferred Sales Charge, and less any Contract Maintenance Charge; or (2) the Guaranteed Minimum Income Benefit base as of the last Contract Anniversary before your 80th birthday less any Adjusted Partial Withdrawals. If you take a partial withdrawal at a time when your Guaranteed Minimum Income Benefit base is greater than your Contract Value, then your Guaranteed Minimum Income Benefit base will be reduced by an amount greater than the amount withdrawn. If you elect the Guaranteed Minimum Income Benefit, the following limitations will apply: o You must choose either Annuity Option 2 or 4, unless otherwise agreed to by Us. If you do not choose an Annuity Option, Annuity Option 2, which provides a life annuity with 10 years of guaranteed Annuity Payments, will be applied. o If you are age 50 or over on the date We issue the Contract, the Annuity Date must be on or after the later of your 65th birthday, or the 7th Contract Anniversary. o If you are under age 50 on the date We issue your Contract, the Annuity Date must be on or after the 15th Contract Anniversary. o The Annuity Date selected must occur within 30 days following a Contract Anniversary. o If there are Joint Owners, the age of the oldest Owner will be used to determine the Guaranteed Minimum Income Benefit. If the Contract is owned by a non-natural person, then Owner will mean the Annuitant for purposes of this benefit. On the Annuity Date, the initial income benefit will not be less than the Guaranteed Minimum Income Benefit base applied to the guaranteed Annuity Payment factors under the Annuity Option elected. It is possible that the IRS may take the position that charges for the Guaranteed Minimum Income Benefits are deemed to be taxable distributions to you. Although We do not believe that such charges should be treated as taxable distributions, you should consult your tax adviser prior to selecting these riders. This benefit may not be available in your state. Annuity Options You can choose one of the following Annuity Options or any other Annuity Option which is acceptable to Us. After Annuity Payments begin, you cannot change the Annuity Option. OPTION 1. INCOME FOR A SPECIFIED PERIOD. We will pay income for a specific number of years in installments. However, if the Annuitant dies and We have made Annuity Payments for less than the specified number of years, you may elect to receive a single lump sum payment which will be equal to the present value of the remaining Annuity Payments (as of the Business Day We receive due proof of death) discounted at the Assumed Investment Rate (AIR) for a variable Annuity Option. OPTION 2. INCOME FOR LIFE WITH PAYMENT GUARANTEED FOR A FIXED NUMBER OF YEARS. We will make monthly Annuity Payments so long as the Annuitant is alive but at least for a specified period certain. If an Annuitant, who is not the Owner, dies before We have made all of the guaranteed Annuity Payments, We will continue to make the Annuity Payments for the remainder of the specified guarantee period to you. If you do not want to receive Annuity Payments after the Annuitant's death, you can request a single lump sum payment which will be equal to the present value of the remaining Annuity Payments (as of the Business Day We receive due proof of death) discounted at the Assumed Investment Rate (AIR) for a variable Annuity Option. 25 -------------------------------------------------------------------------------- OPTION 3. INCOME OF SPECIFIED AMOUNT. We will pay income of a specified amount until the principal and interest are exhausted. However, if the Annuitant dies and We have made Annuity Payments totaling less than the specified amount, you may elect to receive a single lump sum payment, which will be equal to the present value of the remaining Annuity Payments (as of the Business Day We receive due proof of death) discounted at the Assumed Investment Rate (AIR) for a variable Annuity Option. OPTION 4. JOINT AND SURVIVOR INCOME FOR LIFE. We will make monthly Annuity Payments as long as either the Annuitant or a joint Annuitant is alive. The Annuitant must be at least 50 years old, and the joint Annuitant must be at least 45 years old at the time of the first monthly Annuity Payment. Taxes NOTE: Jefferson National has prepared the following information on taxes as a general discussion of the subject. Further information on taxes is contained in the Statement of Additional Information. It is not intended as tax advice to any individual. No attempt is made to consider any applicable state tax or other tax laws, or to address any federal estate, or state and local estate, inheritance and other tax consequences of ownership or receipt of distributions under a Contract. You should consult your tax adviser about your own circumstances. Annuity Contracts in General When you invest in an annuity contract, you usually do not pay taxes on your investment gains until you withdraw the money--generally for retirement purposes. If you invest in a variable annuity as part of a pension plan or employer-sponsored retirement program, your Contract is called a Qualified Contract. If your annuity is independent of any formal retirement or pension plan, it is termed a Non-Qualified Contract. The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan. Tax Status of the Contracts Tax law imposes several requirements that variable annuities must satisfy in order to receive the tax treatment normally accorded to annuity contracts. Diversification Requirements. The Internal Revenue Code (Code) requires that the investments of each investment division of the Variable Account underlying the Contracts be "adequately diversified" in order for the Contracts to be treated as annuity contracts for Federal income tax purposes. It is intended that each investment division, through the Investment Portfolio in which it invests, will satisfy these diversification requirements. Owner Control. In certain circumstances, owners of variable annuity contracts have been considered for Federal income tax purposes to be the owners of the assets of the Variable Account supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the Contract owners have been currently taxed on income and gains attributable to the variable account assets. While We believe that the Contracts do not give owners investment control over Variable Account assets, We reserve the right to modify the Contracts as necessary to prevent an owner from being treated as the owner of the Variable Account assets supporting the Contract. Required Distributions. In order to be treated as an annuity contract for Federal income tax purposes, Section 72(s) of the Code requires any Non-Qualified Contract to contain certain provisions specifying how your interest in the Contract will be distributed in the event of the death of an Owner of the Contract. The Non-Qualified Contracts contain provisions that are intended to comply with these Code requirements, although no regulations interpreting these requirements have yet been issued. We intend to review such provisions and modify them if necessary to assure that they comply with the applicable requirements when such requirements are clarified by regulation or otherwise. Distributions from a Tax Sheltered Annuity, Individual Retirement Annuity, SEP IRA or Simple IRA must begin no later than April 1 of the calendar year following the calendar year in which the contract owner reaches age 70 1/2. Distributions may be paid in a lump sum or in substantially equal payments over periods of time specified in the Code and applicable Treasury Regulations. The rules for Roth IRAs do not require distributions to begin during the Owner's lifetime, therefore, the required beginning date is not applicable to Roth IRAs. If the Owner dies before the required beginning date (in the case of a Tax Sheltered Annuity, Individual Retirement Annuity, SEP IRA or Simple IRA) or before the entire contract value is distributed (in the case of Roth IRAs), any remaining interest in the contract must be distributed over a period not exceeding the applicable distribution periods, which are discussed in the Statement of Additional Information. For Individual Retirement Annuities, SEP IRAs and Simple IRAs, all or a portion of each distribution will be included in the recipient's gross income and taxed at ordinary income tax rates. The portion of a distribution which is taxable is based on the ratio between the amount by which non-deductible purchase payments exceed prior non-taxable distributions and total account balances at the time of the distribution. The owner of an Individual Retirement Annuity, SEP IRA or Simple IRA must annually report the amount of non-deductible purchase payments, the amount of any distribution, the amount by which non-deductible purchase payments for all years exceed non-taxable distributions for all years, and the total balance of all Individual Retirement Annuities, SEP IRAs or Simple IRAs. Distributions from Roth IRAs may be either taxable or nontaxable, depending upon whether they are "qualified distributions" or "non-qualified distributions". Other rules may apply to Qualified Contracts. Taxation of Non-Qualified Contracts Non-Natural Person. If a non-natural person (e.g., a corporation or certain trusts) owns a Non-Qualified Contract, the taxpayer generally must include in income any increase in the excess of the Contract value over the investment in the Contract (generally, the Purchase Payments or other consideration paid for the Contract) during the taxable year. There are some exceptions to this rule and a prospective Owner that is not a natural person should discuss these with a tax adviser. The following discussion generally applies to Contracts owned by natural persons. Withdrawals. When a withdrawal from a Non-Qualified 26 -------------------------------------------------------------------------------- Contract occurs, the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the Contract value immediately before the distribution over the Owner's investment in the Contract (generally, the Purchase Payments or other consideration paid for the Contract, reduced by any amount previously distributed from the Contract that was not subject to tax) at that time. In the case of a surrender under a Non-Qualified Contract, the amount received generally will be taxable only to the extent it exceeds the Owner's investment in the Contract. Penalty Tax on Certain Withdrawals. In the case of a distribution from a Non-Qualified Contract, there may be imposed a federal tax penalty equal to ten percent of the amount treated as income. In general, however, there is no penalty on distributions: o made on or after the taxpayer reaches age 59 1/2; o made on or after the death of an Owner; o attributable to the taxpayer's becoming disabled; or o made as part of a series of substantially equal periodic payments for the life (or life expectancy) of the taxpayer and the Beneficiary. If the series of substantially equal periodic payments is modified before the later of the Owner attaining age 59 1/2 or five years from the date of the first periodic payment, then the tax for the year of the modification is increased by an amount equal to the tax which would have been imposed (the 10% penalty tax) but for the exception, plus interest for the tax years in which the exception was used. Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. Also, additional exceptions apply to distributions from a Qualified Contract. You should consult a tax adviser with regard to exceptions from the penalty tax. Annuity Payments. Although tax consequences may vary depending on the payout option elected under an annuity contract, a portion of each Annuity Payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an Annuity Payment is generally determined in a manner that is designed to allow you to recover your investment in the Contract ratably on a tax-free basis over the expected stream of Annuity Payments, as determined when Annuity Payments start. Once your investment in the Contract has been fully recovered, however, the full amount of each Annuity Payment is subject to tax as ordinary income. Taxation of Death Benefit Proceeds. Amounts may be distributed from a Contract because of your death or the death of the Annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a surrender of the Contract, or (ii) if distributed under a payout option, they are taxed in the same way as annuity payments. Transfers, Assignments or Exchanges of a Contract. A transfer or assignment of ownership of a Contract, the designation of an Annuitant, the selection of certain maturity dates, or the exchange of a contract may result in certain tax consequences to you that are not discussed herein. An Owner contemplating any such transfer, assignment or exchange, should consult a tax advisor as to the tax consequences. Withholding. Annuity distributions are generally subject to withholding for the recipient's federal income tax liability. Recipients can generally elect, however, not to have tax withheld from distributions. Multiple Contracts. All Non-Qualified deferred annuity contracts that are issued by Us (or Our affiliates) to the same Owner during any calendar year are treated as one annuity contract for purposes of determining the amount includible in such Owner's income when a taxable distribution occurs. Taxation of Qualified Contracts The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan. Your rights under a Qualified Contract may be subject to the terms of the retirement plan itself, regardless of the terms of the Qualified Contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions with respect to the Contract comply with the law. The Statement of Additional Information contains a summary discussion of certain tax rules generally applicable to Individual Retirement Accounts (IRAs), as defined in Section 408 of the Code, Roth IRAs, as described in Code Section 408A, corporate pension and profit-sharing plans under Section 401(a) of the Code, Tax Sheltered Annuities under section 403(b) of the Code and certain deferred compensation plans under Code Section 457 Possible Tax Law Changes Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation or otherwise. Consult a tax adviser with respect to legislative developments and their effect on the Contract. We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that Contract Owners currently receive. We make no guarantee regarding the tax status of any Contract and do not intend the above discussion as tax advice. Other Information Legal Proceedings Like other life insurance companies, there is a possibility that We may become involved in lawsuits. Currently, however, there are no legal proceedings to which the Separate Account is a party or to which the assets of the Separate Account are subject. Neither Jefferson National nor Jefferson National Securities Corporation, the distributor of the Contracts, is involved in any litigation that is of material importance in relation to their total assets or that relates to the Separate Account. On August 9, 2004, Jefferson National and Inviva, Inc., a shareholder of Jefferson National and its former parent, without admitting or denying any wrongdoing, settled an administrative proceeding with the Securities and Exchange Commission ("SEC") regarding disclosure of "market timing" arrangements which, to the greatest extent, involved The Monument variable annuity and, to a much lesser extent, the Advantage Plus variable annuity. The market timing arrangements were in place when Inviva acquired Jefferson National in October 2002 and were terminated in October 2003. Under the terms of the settlement, a $5 million pool, $1.5 million of which is characterized as a penalty, has been established for distribution to investors who have suffered losses by virtue of the market timing. This pool will be distributed in accordance with a methodology developed by an 27 -------------------------------------------------------------------------------- independent distribution consultant acceptable to the SEC. On August 9, 2004, Jefferson National and Inviva submitted a Stipulation of Settlement to the New York Attorney General ("NYAG") based on the same set of facts, again without admitting or denying any wrongdoing. The settlement with NYAG recognizes the payments being made in connection with the SEC settlement and did not require Jefferson National or Inviva to make any additional payments. The Separate Account We established a separate account, Jefferson National Life Annuity Account I (Separate Account), to hold the assets that underlie the Contracts. Prior to May 1, 2003, the Separate Account was know as Conseco Variable Annuity Account I. The Board of Directors of Jefferson National adopted a resolution to establish the Separate Account under Texas Insurance law on August 23, 2000. The Separate Account is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940. The Separate Account is divided into Sub-accounts. Registration under the 1940 Act does not involve the supervision by the SEC of the management or investment policies or practices of the Variable Account. The Separate Account is regulated by the Insurance Department of Texas. Regulation by the state, however, does not involve any supervision of the Separate Account, except to determine compliance with broad statutory criteria. The assets of the Separate Account are held in Our name on behalf of the Separate Account and legally belong to Us. However, those assets that underlie the Contracts, are not chargeable with liabilities arising out of any other business We may conduct. All the income, gains and losses (realized or unrealized) resulting from these assets are credited to or charged against the Contracts and not against any other Contracts We may issue. Where permitted by law, We may: o create new separate accounts; o combine separate accounts, including combining the Separate Account with another separate account established by the Company; o transfer assets of the Separate Account, which We determine to be associated with the class of policies to which this policy belongs, to another separate account; o transfer the Separate Account to another insurance company; o add new Sub-accounts to or remove Sub-accounts from the Separate Account, or combine Sub-accounts; o make the Sub-accounts available under other policies We issue; o add new Investment Portfolios or remove existing Investment Portfolios; o substitute new Investment Portfolios for any existing Investment Portfolio, which We determine, is no longer appropriate in light of the purposes of the Separate Account; o deregister the Separate Account under the Investment Company Act of 1940; and o operate the Separate Account under the direction of a committee or in another form. Distributor Jefferson National Securities Corporation (JNSC), 9920 Corporate Campus Drive, Suite 1000, Louisville, Kentucky 40223, acts as the distributor of the Contracts. JNSC is registered as a broker-dealer under the Securities Exchange Act of 1934. JNSC is a member of the Financial Industry Regulatory Authority. Sales of the Contracts will be made by registered representatives of broker-dealers authorized to sell the Contracts. The registered representatives of the broker-dealers will also be licensed insurance representatives of Jefferson National. See the Statement of Additional Information for more information. Commissions will be paid to broker-dealers who sell the Contracts. Broker-dealers' commissions may be up to 8.50% of Purchase Payments and may include reimbursement of promotional or distribution expenses associated with the marketing of the Contracts. We may, by agreement with the broker-dealer, pay commissions as a combination of a certain percentage amount at the time of sale and a trail commission. This combination may result in the broker-dealer receiving more commission over time than would be the case if it had elected to receive only a commission at the time of sale. The commission rate paid to the broker-dealer will depend upon the nature and level of services provided by the broker-dealer. In addition, under certain circumstances, payments may be made to certain sellers or Financial Advisors for other services not directly related to the sale of contracts. Financial Statements Our financial statements have been included in the Statement of Additional Information and should be considered only as bearing upon the ability of the Company to meet its obligations under the Contract. They should not be considered as bearing on the investment performance of the Investment Portfolios. The value of the Investment Portfolios is affected primarily by the performance of the underlying investments. The financial statements of Jefferson National Life Annuity Account I are included in the Statement of Additional Information. Independent Registered Public Accounting Firm The statutory-basis financial statements of Jefferson National Life Insurance Company as of December 31, 2006 and 2007, and for each of the three years in the period then ended December 31, 2007, and the financial statements of Jefferson National Life Annuity Account I as of December 31, 2007 and for each of the two years in the period then ended December 31, 2007 appearing in this Statement of Additional Information have been audited by BDO Seidman LLP, Independent Registered Public Accounting Firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. 28 -------------------------------------------------------------------------------- APPENDIX A--MORE INFORMATION ABOUT THE INVESTMENT PORTFOLIOS Below is a summary of the investment objectives and strategies of each Investment Portfolio available under the Contract. There can be no assurance that the investment objectives will be achieved. The Investment Portfolio prospectuses contain more complete information including a description of the investment objectives, policies, restrictions and risks of each Investment Portfolio. The following descriptions are qualified in their entirety by the prospectus for each Investment Portfolio. AIM VARIABLE INSURANCE FUNDS The AIM Variable Insurance Funds is a mutual fund with multiple portfolios. Invesco Aim Advisors, Inc. serves as the investment advisor. AIM Funds Management Inc. (AIM Funds Management Inc. anticipates changing its name to Invesco Trimark Investment Management Inc. on or prior to December 31, 2008); Invesco Global Asset Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset Management Deutschland, GmbH; and Invesco Australia Limited serves as the investment subadvisors. The following Investment Portfolios are available under the Contract: AIM V.I. Basic Value - Series II shares The fund's investment objective is long-term growth of capital. The fund seeks to meet its objective by investing, normally, at least 65% of its total assets in equity securities of U.S. issuers that have market capitalizations in excess of $5 billion. AIM V.I. Core Equity -- Series I shares The fund's investment objective is growth of capital. The fund seeks to meet its objective by investing normally at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities, including convertible securities, of established companies that have long-term above average growth in earnings, and growth companies that are believed to have the potential for above-average growth in earnings. AIM V.I. Financial Services - Series I shares The fund's investment objective is capital growth. The fund seeks to meet its objective by investing, normally, least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of issuers engaged primarily in financial services-related services. AIM V.I. Global Health Care - Series I shares The fund's investment objective is capital growth. The fund seeks to meet this objective by investing, normally, at least 80% of its assets in securities of health care industry companies. AIM V.I. Global Real Estate - Series I shares The fund's investment objective is high total return through growth of capital and current income. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in securities of real estate and real estate-related companies, including real estate investment trusts (REITs). AIM V.I. High Yield - Series I shares The fund's investment objective is a high level of current income. The fund seeks to meet its objective by investing, normally, at least 80% of its assets in debt securities that are determined to be below investment grade quality because they are rated BB/Ba or lower by Standard & Poor's Ratings Services, Moody's Investors Service, Inc., or any other nationally recognized statistical rating organization (NRSRO), or are determined by the portfolio managers to be of comparable quality to such rated securities. AIM V.I. Mid Cap Core Equity - Series II shares The fund's investment objective is long-term growth of capital. The fund seeks to meet this objective by investing, normally, at least 80% of its assets in equity securities, including convertible securities, of mid-capitalization companies. AIM V.I. Technology - Series I shares The fund's investment objective is capital growth. The fund seeks to meet its objective by investing, normally, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of issuers engaged primarily in technology-related industries. THE ALGER AMERICAN FUND The Alger American Fund is a mutual fund with multiple portfolios. The manager of the fund is Fred Alger Management, Inc. The following Investment Portfolios are available under the Contract: Alger American Capital Appreciation (f/k/a Alger American Leveraged AllCap) The Fund seeks long-term capital appreciation. Under normal market circumstances, the Portfolio invests at least 85% of its net assets plus any borrowings for investment purposes in equity securities of companies of any market capitalization that the Manager believes demonstrate promising growth potential. The Portfolio can leverage, that is, borrow money to buy additional securities. By borrowing money, the Portfolio has the potential to increase its returns if the increase in the value of the securities purchased exceeds the cost of borrowing, including interest paid on the money borrowed. Alger American Growth (name changing to Alger American LargeCap Growth 7/1/2008) The Fund seeks long-term capital appreciation. The following principal strategy is in effect through June 30, 2008: The Portfolio focuses on growing companies that generally have broad product lines, markets, financial resources and depth of management. Under normal circumstances, the Portfolio invests primarily in the equity securities of companies that have a market capitalization of $1 billion or greater. Growth Portfolio is hereby providing shareholders with notice of a new name and principal strategy. Effective July 1, 2008 the Portfolio will be named the Alger American LargeCap Growth Portfolio. Rather than representing a change in the Portfolio's investment strategies, the new name and related policies will better reflect the Portfolio's current actual investment practice. From July 1, 2008, as now, the Portfolio will focus on growing companies that generally have broad product lines, markets, financial resources and depth of management. Effective July 1, 2008 under normal circumstances the Portfolio will invest at least 80% of its net assets in equity securities of companies that, at the time of purchase of the securities, have a market capitalization equal to or greater than the market capitalization of companies included in the Russell 1000 Growth Index, updated quarterly as reported as of the most recent quarter-end. This index is 29 -------------------------------------------------------------------------------- designed to track the performance of large-capitalization growth stocks. At December 31, 2007, the market capitalization of the companies in this index ranged from $624 million to $527.7 billion. Alger American MidCap Growth The Fund seeks long-term capital appreciation. The Portfolio focuses on mid-sized companies that the Manager believes demonstrate promising growth potential. Under normal circumstances, the Portfolio invests at least 80% of its net assets in equity securities of companies that, at the time of purchase of the securities, have total market capitalization within the range of companies included in the Russell Midcap Growth Index or the S&P MidCap 400 Index, as reported by the indexes as of the most recent quarter-end. Both indexes are designed to track the performance of medium-capitalization stocks. At December 31, 2007, the market capitalization of the companies in these indexes ranged from $263 million to $42 billion. Alger American Small Cap Growth (f/k/a Alger American Small Capitalization) Closed to new investors The Alger American Small Capitalization Portfolio seeks long-term capital appreciation. It focuses on small, fast-growing companies that offer innovative products, services or technologies to a rapidly-expanding marketplace. Under normal circumstances, the portfolio invests at least 80% of its net assets in the equity securities of companies that, at the time of purchase of the securities, have a total market capitalization within the range of companies included in the Russell 2000 Growth Index or the S&P SmallCap 600 Index, updated quarterly. Both indexes are broad indexes of small capitalization stocks. ALLIANCEBERNSTEIN L.P. AllianceBernstein L.P. is one of the largest publicly traded global asset management firms in the world with approximately $800 billion in assets under management at December 31, 2007. AllianceBernstein provides diversified, investment management services that include global growth, value and style blend equities, and fixed income services to institutional, high net worth and retail clients worldwide. AllianceBernstein Growth and Income The Portfolio's investment objective is long-term growth of capital. The Portfolio invests primarily in the equity securities of U.S. companies that the Adviser believes are undervalued. The Adviser believes that, over time, a company's stock price will come to reflect its intrinsic economic value. The Adviser uses a disciplined investment process to evaluate the companies in the Adviser's extensive research universe and to identify the stocks of companies that offer the best combination of value and potential for price appreciation. The Portfolio may invest in companies of any size and in any industry. AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. American Century Variable Portfolios, Inc. is a registered open-end management investment company with multiple funds. The funds' investment adviser is American Century Investment Management, Inc, except for American Century Investments VP International Fund, which has American Century Global Investment Management, Inc. as an investment adviser. The following Investment Portfolios are available under the Contract: American Century Investments VP Balanced The American Century Investments VP Balanced Fund seeks long-term capital growth and current income by investing approximately 60% of its assets in equity securities and the remainder in bonds and other fixed-income securities. American Century Investments VP Income & Growth The VP Income & Growth Fund seeks capital growth by investing in common stocks. Income is a secondary objective. American Century Investments VP Inflation Protection The American Century VP Inflation Protection Fund pursues long-term total return using a strategy that seeks to protect against U.S. inflation. American Century Investments VP International The American Century VP International Fund seeks capital growth by investing primarily in securities of foreign companies that management believes to have potential for appreciation. American Century Investments VP Large Company Value (Class I) The American Century VP Large Company Value Fund seeks long-term capital growth. Income is a secondary objective. The fund invests primarily in equity securities of large companies that management believes to be undervalued at the time of purchase. American Century Investments VP Ultra(R) (Class I) The American Century VP Ultra Fund seeks long-term capital growth by investing in common stocks considered by management to have better-than-average prospects for appreciation. American Century Investments VP Value The American Century VP Value Fund seeks long-term capital growth with income as a secondary objective. It invests primarily in equity securities of well-established companies that management believes to be undervalued at the time of purchase. American Century Investments VP Vista(SM) (Class I) The American Century VP Vista(SM) Fund seeks long term capital growth by investing in stocks of medium-sized and smaller companies that management believes will increase in value over time. THE DIREXION INSURANCE TRUST The DireXion Insurance Trust is managed by Rafferty Asset Management, LLC, which provides investment services to the Fund. Rafferty is located at 33 Whitehall St. 10th Floor, New York, NY 10004. As of the date of this prospectus the DireXion Dynamic VP HY Bond Fund permits active trading. This may change at any time without notice. For more information, see the prospectus. The following Investment Portfolio is available under the Contract: DireXion Dynamic VP HY Bond DireXion Dynamic VP HY Bond Fund is an open-end fund. The Fund's objective is to maximize total return. The fund invests at least 80% of the fund's net assets (plus any borrowing for investment purposes) in high yield debt instruments, commonly referred to as "junk bonds", or derivatives of such instruments. The fund is designed to provide liquidity for active asset allocators. THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (Initial Shares) The Dreyfus Socially Responsible Growth Fund, Inc. is a mutual fund. The investment adviser for the fund is The 30 -------------------------------------------------------------------------------- Dreyfus Corporation. The Dreyfus Socially Responsible Growth Fund, Inc. seeks to provide capital growth, with current income as a secondary goal. To pursue these goals, the fund invests at least 80% of its assets in the common stock of companies that, in the opinion of the fund's management, meet traditional investment standards and conduct their business in a manner that contributes to the enhancement of the quality of life in America. DREYFUS INVESTMENT PORTFOLIOS (Service Shares) The Dreyfus Investment Portfolios ("Dreyfus IP") is a mutual fund with multiple portfolios. The investment adviser to the fund is The Dreyfus Corporation. The following Investment Portfolios are available under the Contract: DREYFUS IP - Small Cap Stock Index The portfolio seeks to match the performance of the Standard & Poor's (S&P) SmallCap 600 Index(R). To pursue this goal, the portfolio invests in a representative sample of stocks included in the S&P SmallCap 600 Index(R), and in futures whose performance is related to the index, rather than attempt to replicate the index. DREYFUS STOCK INDEX FUND, INC. (Initial Shares) The Dreyfus Stock Index Fund is a mutual fund. The investment adviser for the fund is The Dreyfus Corporation and the sub-adviser is Mellon Capital Management. The Dreyfus Stock Index Fund seeks to match the total return of the Standard & Poor's 500 Composite Stock Price Index. To pursue this goal, the fund generally invests in all 500 stocks in the S&P 500 in proportion to their weighting in the index. DREYFUS VARIABLE INVESTMENT FUND (Initial Shares) The Dreyfus Variable Investment Fund ("Dreyfus VIF") is a mutual fund with multiple portfolios. The investment adviser for the fund is The Dreyfus Corporation. The following Investment Portfolios are available under the Contract: Dreyfus VIF--International Value The Dreyfus VIF--International Value Portfolio seeks long-term capital growth. To pursue this goal, the portfolio invests at least 80% of its assets in stocks. The Portfolio ordinarily invests most of its assets in foreign issuers which Dreyfus considers to be "value" companies. FEDERATED INSURANCE SERIES Federated Insurance Series is a mutual fund with multiple portfolios. Federated Investment Management Company is the adviser to the Federated High Income Bond Fund II (Primary Shares). Federated Global Investment Management Corp. is the adviser to the Federated International Equity Fund II. Federated Equity Management Company of Pennsylvania is the adviser to the Federated Kaufmann Fund II, the Federated Market Opportunity Fund II and the Federated Capital Income II. Capital Income II's sub-adviser is the Federated Investment Management Company. The following Investment Portfolios are available under the Contract: Federated Capital Income II The Federated Capital Income Fund II seeks high current income and moderate capital appreciation. The Fund pursues its investment objective by investing primarily in equity fixed income securities that have higher relative income potential. The Fund's investment objective is to achieve high current income and moderate capital appreciation. The Fund pursues its investment objectives by investing in both equity and fixed-income securities that have high relative income potential. Federated High Income Bond II (Primary Shares) The Federated High Income Bond Fund II seeks high current income by investing primarily in a professionally managed, diversified portfolio of high yield, lower rated corporate bonds (also known as "junk bonds"). The Fund's investment objective is to seek high current income. The Fund pursues its investment objective by investing primarily in a diversified portfolio of high-yield lower-rated corporate bonds (also known as "junk bonds"). Federated International Equity II The Federated International Equity Fund II seeks to obtain a total return on its assets. The Fund's total return will consist of two components: (1) changes in the market value of its portfolio securities (both realized and unrealized appreciation); and (2) income received from its portfolio securities. The Fund's investment objective is to obtain a total return on its assets. The Fund pursues its investment objective by investing primarily in equity securities of companies based outside the United States. Federated Kaufmann II (Service Shares) The Federated Kaufmann Fund II seeks to provide capital appreciation. The Fund pursues its investment objective by investing primarily in the stocks of small and medium-sized companies that are traded on national security exchanges, the NASDAQ stock market and on the over-the-counter market. Federated Market Opportunity II (Service Shares) The Federated Market Opportunity Fund II seeks to provide moderate capital appreciation and high current income. The Fund pursues its investment objective by investing under normal market conditions, in domestic (including ADRs) and foreign securities that the Adviser deems to be undervalued or out-of-favor or securities that the Adviser believes are attractive due to their income-producing potential. JANUS ASPEN SERIES Each Portfolio is a series of Janus Aspen Series, a Delaware statutory trust. Janus Capital Management LLC is the investment adviser to the Portfolios. Janus Aspen Mid Cap Value Portfolio is subadvised by Perkins, Wolf, McDonnell and Company, LLC. The following Investment Portfolios are available under your Contract: Janus Aspen Balanced (Institutional Shares) The Janus Aspen Balanced Portfolio seeks long-term capital growth, consistent with preservation of capital and balanced by current income. The Portfolio pursues its investment objective by normally investing 50-60% of its assets in equity securities selected primarily for their growth potential and 40-50% of its assets in securities selected primarily for their income potential. The Portfolio normally invests at least 25% of its assets in fixed-income senior securities. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. The Portfolio will limit its investment in high-yield/high-risk bonds (also called ``junk'' bonds) to 35% or less of its net assets. Janus Aspen Forty (Institutional Shares) The Janus Aspen Forty Portfolio seeks long-term growth of capital. The Portfolio pursues its investment objective by normally investing primarily in a core group of 20-40 common stocks selected for their growth potential. The Portfolio may invest in companies of any size, from larger, well-established 31 -------------------------------------------------------------------------------- companies to smaller emerging growth companies. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. Janus Aspen Global Life Sciences (Institutional Shares) The Janus Aspen Global Life Sciences Portfolio seeks long-term growth of capital. The Portfolio invests, under normal circumstances, at least 80% of its net assets in securities of companies that the portfolio manager believes have a life science orientation. Generally speaking, the "life sciences" relate to maintaining or improving quality of life. So, for example, companies with a "life science orientation" include companies engaged in research, development, production, or distribution of products or services related to health and personal care, medicine, or pharmaceuticals. The Portfolio implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. The Portfolio normally invests in issuers from several different countries, which may include the United States. The Portfolio may, under unusual circumstances, invest in a single country. As a fundamental policy, the Portfolio normally invests at least 25% of its total assets in the "life sciences" sector, which may include companies in the following industries: health care; pharmaceuticals; agriculture; cosmetics/personal care; and biotechnology. The Portfolio may have significant exposure to emerging markets. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. Janus Aspen Growth and Income (Institutional Shares) The Janus Aspen Series Growth and Income Portfolio seeks long-term capital growth and current income. It pursues its objective by normally emphasizing investments in common stocks. It will normally invest up to 75% of its assets in equity securities selected primarily for their growth potential, and at least 25% of its assets in securities the portfolio manager believes have income potential. Janus Aspen International Growth (Institutional Shares) The Janus Aspen International Growth Portfolio seeks long-term growth of capital. It invests, under normal circumstances, at least 80% of its net assets in securities of issuers from countries outside of the United States. The Portfolio normally invests in securities of issuers from several 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 at times invest in U.S. issuers, and it may, under unusual circumstances, invest all of its assets in a single country. The Portfolio may have significant exposure to emerging markets. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. Janus Aspen Large Cap Growth (Institutional Shares) The Janus Aspen Large Cap Growth Portfolio seeks long-term growth of capital in a manner consistent with the preservation of capital. It pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in common stocks of large-sized companies. Large-sized companies are those whose market capitalization falls within the range of companies in the Russell 1000(R) Index at the time of purchase. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. Janus Aspen Mid Cap Growth (Institutional Shares) The Janus Aspen Mid Cap Growth Portfolio seeks long-term growth of capital. It pursues its investment objective by investing, under normal circumstances, at least 80% of its net assets in equity securities of mid-sized companies whose market capitalization falls, at the time of purchase, in the 12-month average of the capitalization range of the Russell Midcap(R) Growth Index. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. Janus Aspen Mid Cap Value (Institutional Shares) The Janus Aspen Mid Cap Value Portfolio seeks capital appreciation. The Portfolio pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The Portfolio primarily invests in the common stocks of mid-sized companies whose stock prices the portfolio managers believe to be undervalued. The Portfolio invests, under normal circumstances, at least 80% of its assets in equity securities of companies whose market capitalization falls, at the time of purchase, within the 12-month average of the capitalization range of the Russell Midcap Value Index. The Portfolio focuses on companies that have fallen out of favor with the market or that appear to be temporarily misunderstood by the investment community. To a lesser degree, the Portfolio also invests in companies that demonstrate special situations or turnarounds, meaning companies that have experienced significant business problems but are believed to have favorable prospects for recovery. The Portfolio's portfolio managers generally look for companies with: a low price relative to their assets, earnings, cash flow, or business franchise; products and services that give them a competitive advantage; quality balance sheets and strong management. Janus Aspen Small Company Value (Service Shares) The Janus Aspen Small Company Value Portfolio seeks capital appreciation. The Portfolio pursues its investment objective by investing primarily in common stocks selected for their capital appreciation potential. The Portfolio primarily invests in the common stocks of small companies whose stock prices are believed to be undervalued by the portfolio manager. The Portfolio invests, under normal circumstances, at least 80% of its assets in equity securities of small companies whose market capitalization, at the time of initial purchase, is less than the 12-month average of the maximum market capitalization for companies included in the Russell 2000(R) Value Index. The Portfolio uses fundamental analysis and proprietary valuation models to select a holding of stocks for the Portfolio. The Portfolio's portfolio manager generally looks for companies: that have reasonably solid fundamentals; whose stocks are trading at a discount relative to their intrinsic investment value based on their assets, earnings, cash flow, or franchise values. Janus Aspen Worldwide Growth (Institutional Shares) The Janus Aspen Worldwide Growth Portfolio seeks long-term growth of capital in a manner consistent with the preservation of capital. It pursues its investment objective by investing primarily in common stocks of companies of any size located throughout the world. The Portfolio normally 32 -------------------------------------------------------------------------------- invests in issuers from several different countries, including the United States. The Portfolio may, under unusual circumstances, invest in a single country. The Portfolio may have significant exposure to emerging markets. Within the parameters of its specific investment policies, the Portfolio may invest in foreign equity and debt securities, which may include investments in emerging markets. LAZARD RETIREMENT SERIES, INC. Lazard Retirement Series, Inc. is a mutual fund with multiple portfolios. Lazard Asset Management LLC serves as the investment manager of the portfolios. Lazard Asset Management LLC ("Lazard" or "LAM") is a Delaware limited liability company. It is a subsidiary of Lazard Freres & Co. LLC, (LF&Co), a New York limited liability company with one member, Lazard Group LLC, a Delaware limited liability company. The following Investment Portfolios are available under the Contract: Lazard Retirement Emerging Markets Equity The Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of non-U.S. companies whose principal activities are located in emerging market countries and that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. Emerging market countries include all countries represented by the Morgan Stanley Capital International (MSCI) Emerging Market (EM) Index, which currently includes: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and Venezuela. Under normal circumstances, the Portfolio invests at least 80% of its assets in equity securities of companies whose principal business activities are located in emerging market countries. The allocation of the Portfolio's assets among emerging market countries may shift from time to time based on the Investment Manager's judgment and its analysis of market conditions. However, the Portfolio is likely to focus on companies in Latin America, the Pacific Basin and Eastern Europe. Lazard Retirement International Equity The Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stock, of relatively large non-U.S. companies with market capitalizations in the range of companies included the Morgan Stanley Capital International (MSCI(R)) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. In choosing stocks for the Portfolio, the Investment Manager looks for established companies in economically developed countries. The allocation of the Portfolio's assets among geographic sectors may shift from time to time based on the Investment Manager's judgment. Under normal circumstances, the Portfolio invests at least 80% of its assets in equity securities. The portfolio may invest up to 30% of its assets in securities of companies whose principal business activities are located in emerging market countries, although the allocation of the Portfolio's assets to emerging market countries may vary from time to time. The securities of emerging market countries can be extremely volatile. The Portfolio's performance will be influenced by political, social and economic factors affecting companies in emerging market counties. Emerging market countries can generally have economic structures that are less diverse and mature, and political systems that are less stable, than those of developed countries. Lazard Retirement U.S. Small Cap Equity The Portfolio seeks long-term capital appreciation. The Portfolio invests primarily in equity securities, principally common stocks, of relatively small U.S. companies that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. The Investment Manager considers "small cap companies" to be those companies that at the time of initial purchase by the Portfolio, have market capitalizations within the range of companies included in the Russell 2000(R) Index (up to $2.75 billion as of March 31, 2004). Because small cap companies are defined by reference to an index, the market capitalizations of companies in which the Portfolio may invest may vary with market conditions. Under normal circumstances, the Portfolio invests at least 80% of its assets in equity securities of small cap companies. These securities generally have, in the Investment Manager's opinion, one or more of the following characteristics: The potential to become a larger factor in the company's business sector. Significant debt but high levels of free cash flow. A relatively short corporate history with the expectation that the business may grow. The Portfolio may invest up to 20% of its assets in equity securities of larger U.S. companies. Lazard Retirement U.S. Strategic Equity The Portfolio seeks long-term capital appreciation. Under normal circumstances the Portfolio will invest at least 80% of its net assets, plus any borrowings for investment purposes in equity securities of U.S. companies (or other investments with similar economic characteristics) and certain investment strategies and policies. The Portfolio will generally focus on large-sized companies, although the market capitalizations of issuers in which the Portfolio invests may vary with market conditions and the portfolio will have opportunistic exposure to mid cap companies. From time to time, the Portfolio may invest in companies with market capitalization as small as $500 millions. LEGG MASON PARTNERS FUND ADVISOR, LLC INVESTMENT MANAGER AND SUBADVISORS Legg Mason Partners Fund Advisor, LLC ("LMPFA"), with offices at 620 Eighth Avenue, New York, New York 10018, is the funds' investment manager. LMPFA provides administrative and certain oversight services to the funds and manages the equity funds' cash and short-term investments. ClearBridge Advisors, LLC ("ClearBridge") provides the day-to-day portfolio management of certain of the funds. ClearBridge has offices at 620 Eighth Avenue, New York, New York 10018 and is an investment adviser that was formed to succeed to the equity securities portfolio management business of Citigroup Asset Management, which was acquired by Legg Mason, Inc. in December 2005. Western Asset Management Company ("Western Asset") and Western Asset Management Company Limited ("Western Asset Limited") provide the day-to-day portfolio management of certain of the funds as subadvisors. Western Asset, established in 1971 and having offices at 385 East Colorado Boulevard, Pasadena, California 91101, and Western Asset Limited, with offices at 10 Exchange Place, London, England, act as investment advisers to institutional accounts, such as corporate pension plans, mutual funds and endowment funds. 33 -------------------------------------------------------------------------------- Legg Mason Partners Variable Aggressive Growth The fund seeks capital appreciation. It invests primarily in common stocks of companies that the manager believes are experiencing, or will experience, growth in earnings and/or cash flow that exceeds the average rate of earnings growth of the companies comprising the S&P 500 Index. The fund may invest in the securities of large, well-known companies that offer prospects of long-term earnings growth. However, because higher earnings growth rates are often achieved by small- to medium-sized companies, a significant portion of the fund's assets may be invested in the securities of such companies. Legg Mason Partners Variable Capital and Income The fund seeks total return (that is, a combination of income and long-term capital appreciation). The fund invests in equity and fixed income securities of both U.S. and foreign issuers. The fund seeks to generate income and appreciation by allocating fund assets to income and non-income producing equity and equity related securities, including common stocks, real estate investment trusts and convertible securities. To generate income and enhance exposure to the equity markets, the fund will purchase investment grade and high yield fixed income securities or unrated securities of equivalent quality along with options on securities indices. Fixed income securities may be of any maturity. By investing in a combination of equity and fixed income securities, the fund seeks to produce a pattern of total return that moves with the S&P 500 Index, while generating high income. The fund may also use options, futures and options on futures to increase exposure to part or all of the market or to hedge against adverse changes in the market value of its securities. Legg Mason Partners Variable Fundamental Value The fund seeks long term capital growth. Current income is a secondary consideration. The fund invests primarily in common stocks and common stock equivalents of companies the manager believes are undervalued in the marketplace. While the manager selects investments primarily for their capital appreciation potential, secondary consideration is given to a company's dividend record and the potential for an improved dividend return. The fund generally invests in securities of large well-known companies but may also invest a significant portion of its assets in securities of small to medium-sized companies when the manager believes smaller companies offer more attractive value opportunities. Legg Mason Partners Variable Global High Yield Bond The fund seeks to maximize total return, consistent with the preservation of capital. The fund invests primarily in high yield fixed income securities issued by U.S. and foreign corporations and foreign governments and their agencies and instrumentalities. The fund invests, under normal circumstances, at least 80% of its assets in high yield bonds and related investments. The fund will limit its investments in emerging market governmental issuers to 35% of its assets. The fund invests primarily in fixed income securities rated below investment grade by a recognized rating agency or, if unrated, of equivalent quality as determined by the manager. The fund may also invest up to 20% of its assets in equity and equity related securities and invest up to 100% of its assets in securities of foreign issuers. The fund normally maintains an average portfolio duration of between 3 and 7 years. However, the fund may invest in individual securities of any duration. Legg Mason Partners Variable Large Cap Growth The fund invests, under normal market conditions, at least 80% of the value of its net assets, plus any borrowings for investment purposes, in equity securities or other investments with similar economic characteristics of U.S. companies with large market capitalizations. Large market capitalization companies are currently defined as those whose market capitalizations are similar to companies in the Russell 1000 Index. Up to 20% of the value of the fund's net assets may be invested in companies with smaller market capitalizations. Legg Mason Partners Variable Strategic Bond The fund seeks to maximize total return, consistent with the preservation of capital. The fund invests primarily in a globally diverse portfolio of fixed income securities. The fund invests, under normal circumstances, at least 80% of its assets in fixed income securities and related investments. The manager has broad discretion to allocate the fund's assets among the following segments of the international market for fixed income securities: U.S. government obligations, Mortgage and asset-backed securities, Investment and non-investment securities grade U.S. and foreign corporate debt; and Investment and non-investment debt grade sovereign debt, including issuers in emerging markets. The fund invests in fixed income securities across a range of credit qualities and may invest a substantial portion of the fund's assets in obligations rated below investment grade by a recognized rating agency, or, if unrated, of equivalent quality as determined by the manager. The fund normally maintains an average portfolio duration of between 3 and 7 years. The fund may hold individual securities of any duration and may at times hold a substantial portion of its assets in short-term instruments. LORD ABBETT SERIES FUND, INC. Lord Abbett Series Fund, Inc. is a mutual fund with multiple portfolios. The fund's investment adviser is Lord, Abbett & Co. LLC ("Lord Abbett"), a Delaware limited liability company, which is registered as an investment adviser with the SEC. The following Investment Portfolios are available under the Contract: Lord Abbett Series Fund, Inc.--America's Value The Portfolio's investment objective is to seek current income and capital appreciation. To pursue this goal, the Portfolio normally invests in equity securities of companies with market capitalizations greater than $500 million at the time of purchase and fixed income securities of various types. This market capitalization threshold may vary in response to changes in the markets. The Portfolio generally uses a value approach to identify particular investments for the Portfolio. The mix of the Portfolio's investments at any time will depend on our judgments regarding the degree to which we believe specific securities are undervalued (that is, with the highest projected total return/yield potential) and is subject to change. Under normal circumstances, the Portfolio invests at least 50% of its net assets in equity securities and may invest its remaining assets in equity or fixed income securities. The Portfolio invests under normal circumstances at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity and fixed income securities issued by companies organized in or maintaining their principal place of business in the United States, or whose securities are traded primarily in the United States. The Portfolio will provide shareholders with at least 60 days' 34 -------------------------------------------------------------------------------- notice of any change in this policy. The Portfolio may invest up to 20% of its net assets in foreign securities that are primarily traded outside the United States. Lord Abbett Series Fund, Inc.--Growth and Income The Portfolio's investment objective is long-term growth of capital and income without excessive fluctuations in market value. To pursue this goal, the Portfolio primarily purchases equity securities of large, seasoned, U.S. and multinational companies that we believe are undervalued. Under normal circumstances, the Portfolio will invest at least 80% of its net assets in equity securities of large companies. A large company is defined as a company having a market capitalization at the time of purchase that falls within the market capitalization range of companies in the Russell 1000(R) Index, a widely used benchmark for large-cap stock performance. As of June 30, 2007, following its annual reconstitution the market capitalization range of the Russell 1000(R) Index was $1.5 billion to $472.5 billion. This range varies daily. Equity securities in which the Portfolio may invest may include common stocks, preferred stocks, convertible securities, warrants, and similar instruments. Common stocks, the most familiar type of equity security, represent an ownership interest in a company. NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST Neuberger Berman Advisers Management Trust ("Neuberger Berman AMT") is a registered investment company offering multiple portfolios. The portfolios are managed by Neuberger Berman Management Inc. and sub-advised by Neuberger Berman, LLC (except for Lehman Brothers High Income Bond Portfolio (formerly, High Income Bond Portfolio) and Lehman Brothers Short Duration Bond Portfolio (formerly Limited Maturity Bond Portfolio), which are each sub-advised by Lehman Brothers Asset Management LLC, an affiliate of Neuberger Berman. The following portfolios are available under the Contract: Lehman Brothers High Income Bond The Fund's investment objective is to seek high total returns consistent with capital preservation. To pursue this goal, the Fund normally invests primarily in a diversified portfolio of intermediate term, U.S. dollar-denominated, high-yield corporate bonds of U.S. issuers (including those sometimes known as "junk bonds") rated at the time of investment "Baa1" or below by Moody's Investors Service, Inc. ("Moody's"), or "BBB+" or below by Standard & Poor's ("S&P"), or unrated bonds deemed by the Portfolio Managers to be of comparable quality. Lehman Brothers Short Duration Bond The fund seeks the highest available current income consistent with liquidity and low risk to principal; total return is a secondary goal. To pursue these goals, the Fund invests mainly in investment-grade bonds and other debt securities from U.S. government and corporate issuers. These may include mortgage- and asset backed securities. To enhance yield and add diversification, the Fund may invest up to 10% of its net assets in securities that are below investment grade, provided that, at the time of purchase, they are rated at least B by Moody's or Standard & Poor's or, if unrated by either of these, deemed by the investment manager to be of comparable quality. When the Portfolio Managers believe there are attractive opportunities in foreign markets, the Fund may also invest in foreign debt securities to enhance yield and/or total return. Neuberger Berman AMT Small-Cap Growth (Class S) The Fund seeks long-term capital growth. To pursue this goal, under normal market conditions, at least 80% of the Fund's net assets, plus the amount of any borrowings for investment purposes, will be invested in common stocks of small-capitalization companies which it defines as those with a total market capitalization within the market capitalization range of the Russell 2000 Index at the time of purchase. The Fund may continue to hold or add to a position in a stock after the issuer has grown beyond the capitalization range of the Russell 2000 Index. Neuberger Berman AMT Mid-Cap Growth The Fund seeks growth of capital. To pursue this goal, the portfolio invests mainly in common stocks of mid-capitalization companies. To pursue this goal, the Fund normally invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in common stocks of mid-capitalization companies, which it defines as those with a total market capitalization within the market capitalization range of the Russell Midcap(R) Index at the time of purchase. The Fund may continue to hold or add to a position in a stock after the issuer has grown beyond the capitalization range of the Russell Midcap(R) Index. Neuberger Berman AMT Partners Portfolio The fund seeks growth of capital. The Fund invests mainly in common stocks, of mid- to large- capitalization companies. To pursue this goal, the Fund invests mainly in common stocks of mid- to large capitalization companies. The Fund seeks to reduce risk by diversifying amount many companies and industries. The Portfolio Manager looks for well-managed companies with strong balance sheets whose stock prices are undervalued. Neuberger Berman AMT Regency The Fund seeks growth of capital. To pursue this goal, the Fund invests mainly in common stocks of mid-capitalization companies which it defines as those with a total market capitalization within the market capitalization range of the Russell Midcap(R) Index. The Fund seeks to reduce risk by diversifying among many companies, sectors and industries. Neuberger Berman AMT Socially Responsive The Fund seeks long-term growth of capital by investing primarily in securities of companies that meet the Fund's financial criteria and social policy. The Fund seeks to reduce risk by investing across many different industries. NORTHERN LIGHTS VARIABLE INSURANCE TRUST The Northern Lights Variable Insurance Trust is a Delaware Statutory trust offering multiple portfolios. JNF Advisors, Inc. is the investment manager for the JNF series. It retains Chicago Equity Partners as sub-advisers to manage it's funds as described below. The following Investment Funds are available under the Contract: JNF Chicago Equity Partners Balanced The JNF Chicago Equity Partners Balanced Fund seeks to provide long-term growth of capital and income consistent with preservation of capital and a prudent level of risk. Normally the portfolio invests approximately 65-70% of its assets in mid to large cap equity securities, and the remainder in a combination of fixed-income securities, or cash equivalents. The equity investment strategy is designed to deliver a consistent exposure to the domestic equity market 35 -------------------------------------------------------------------------------- and utilizes a proprietary multi-factor model to identify securities with positive exposure to specific growth, value, quality and momentum factors. The goal of the process is to outperform the benchmark through specific security selection while reducing portfolio risks that lead to volatility and are not consistently rewarded. The fixed income strategy is designed to generate excess return through sector allocation, security selection and maturity distribution. The asset allocation strategy focuses on shifting the allocation to provide additional excess return over the benchmark at a prudent risk level. JNF Chicago Equity Partners Equity The JNF Chicago Equity Partners Equity Fund seeks to provide a high total return consistent with preservation of capital and a prudent level of risk. The investment strategy is designed to deliver a consistent exposure to the domestic mid capitalization equity market and utilizes a proprietary multi-factor model to identify securities with positive exposure to specific growth, value, quality and momentum factors. The goal of the process is to outperform the benchmark through specific stock selection while reducing portfolio risks that lead to volatility and are not consistently rewarded. JNF Loomis Sayles Bond The Portfolio seeks high total investment return through a combination of current income and capital appreciation by investing at least 80% of its net assets (plus any borrowings made for investment purposes) in fixed-income securities. JNF Money Market The Money Market Fund seeks to provide as high a level of current income as is consistent with preservation of capital and daily liquidity by investing at least 95% of its total assets in a diversified portfolio of money market securities that are in the highest rating category for short-term obligations. The Portfolio also may invest up to 5% of its total assets in money market securities that are in the second-highest rating category for short-term obligations. PIMCO VARIABLE INSURANCE TRUST The PIMCO Variable Insurance Trust is a mutual fund with multiple portfolios. Pacific Investment Management Company LLC ("PIMCO") serves as investment adviser and the administrator for the Portfolios. The following Investment Portfolios are available under the Contract: PIMCO VIT All Asset Seeks maximum real return consistent with preservation of real capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of the PIMCO Funds, an affiliated open-end investment company, except the All Asset and All Asset All Authority Funds ("Underlying Funds"). PIMCO VIT CommodityRealReturn(TM) Strategy Portfolio Seeks maximum real return consistent with prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances in commodity-linked derivative instruments backed by a portfolio of inflation-indexed securities and other Fixed Income Instruments. PIMCO VIT Emerging Markets Bond Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in Fixed Income Instruments of issuers that economically are tied to countries with emerging securities markets. PIMCO VIT Foreign Bond (U.S. Dollar-Hedged) Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in Fixed Income Instruments of issuers located outside the United States, representing at least three foreign countries, which may be represented by future contracts (including related options) with respect to such securities, and options on such securities. PIMCO VIT Global Bond (Unhedged) Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in Fixed Income Instruments of issuers located in at least three countries (one of which may be the United States), which my be represented by futures contracts (including related options) with respect to such securities, and options on such securities. PIMCO VIT High Yield Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of high yield securities ("junk bonds") which may be rated below investment grade but rated at least Caa by Moody's or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality, subject to a maximum of 5% of its total assets in securities rated Caa by Moody's or equivalently rated by S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. PIMCO VIT Long-Term U.S. Government (Administrative Class) Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of fixed income securities that are issued or guaranteed by the U.S. Government, its agencies or government-sponsored enterprises ("U.S. Government Securities"). PIMCO VIT Low Duration (Administrative Class) Seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 65% of its total assets in a diversified portfolio of Fixed Income Instruments of varying maturities. PIMCO VIT RealEstateRealReturn Strategy Seeks maximum real return consistent with prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances in real estate-linked derivative instruments backed by a portfolio of inflation-indexed securities and other Fixed Income Instruments. The Portfolio may invest in real estate-linked derivative instruments, including swap agreements, options, futures, options on futures and structured notes. PIMCO VIT Real Return The Portfolio seeks maximum real return, consistent with 36 -------------------------------------------------------------------------------- preservation of real capital and prudent investment management. The Portfolio seeks its investment objective by investing under normal circumstances at least 80% of its net assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or government-sponsored enterprises and corporations. PIMCO VIT Short Term Seeks maximum current income, consistent with preservation of capital and daily liquidity. Invests in money market instruments and short maturity fixed income securities. The average portfolio duration will normally not exceed one year, but will vary based on PIMCO'S forecast for interest rates. PIMCO VIT StockPLUS(R) Total Return Seeks total return which exceeds that of the S&P 500. The Portfolio seeks to exceed the total return of the S&P500 by investing under normal circumstances substantially all of its assets in S&P 500 derivatives, backed by a portfolio of Fixed Income Securities. PIMCO VIT Total Return The Portfolio seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 65% of its total assets in a diversified portfolio of Fixed Income Instruments of varying maturities. PIONEER VARIABLE CONTRACTS TRUST (Class II Shares) Pioneer Variable Contracts Trust is an open-ended management investment company consisting of distinct investment portfolios. Pioneer Investment Management, Inc. (Pioneer) is the investment adviser to each portfolio. Pioneer Cullen Value VCT The Pioneer Cullen Value VCT Portfolio seeks capital appreciation by investing primarily in equity securities of medium- and large capitalization companies. The portfolio invests primarily in equity securities. The portfolio may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the portfolio will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. Secondarily, the portfolio may seek income. Pioneer Emerging Markets VCT The Pioneer Emerging Markets VCT Portfolio seeks long-term growth of capital. The portfolio invests primarily in securities of emerging market issuers. Pioneer Equity Income VCT The Pioneer Equity Income VCT Portfolio seeks current income and long-term growth of capital from a portfolio consisting primarily of income producing equity securities of U.S. corporations. Pioneer Fund VCT The Pioneer Fund VCT Portfolio seeks reasonable income and capital growth. The portfolio invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The portfolio invests the major portion of its assets in equity securities, primarily of U.S. issuers. Pioneer Global High Yield VCT The Pioneer Global High Yield VCT Portfolio seeks to maximize total return through a combination of income and capital appreciation. Normally, the portfolio invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks of U.S. and non-U.S. issuers, including governmental and corporate issuers in emerging markets. Pioneer High Yield VCT The Pioneer High Yield VCT Portfolio seeks to maximize total return through a combination of income and capital appreciation. Normally, the portfolio invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. Pioneer International Value VCT The Pioneer International Value VCT Portfolio seeks long-term growth of capital. Normally, the portfolio invests at least 80% of its total assets in equity securities of non-U.S. issuers. Pioneer Mid Cap Value VCT The Pioneer Mid Cap Value VCT Portfolio seeks capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Normally, the portfolio invests at least 80% of its total assets in equity securities of mid-size companies. Mid-size companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell Midcap Value Index or the 3-year rolling average of the market capitalization of the largest company within the Russell Midcap Value Index as measured at the end of the preceding month, and are not less than the smallest company within the index. Pioneer Small Cap Value VCT The Pioneer Small Cap Value VCT Portfolio seeks capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Normally, the portfolio invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Pioneer Strategic Income VCT The Pioneer Strategic Income VCT Portfolio seeks a high level of current income. Normally, the portfolio invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. ROYCE CAPITAL FUND Royce Capital Fund is a registered management investment company with multiple Portfolios. Royce & Associates, LLC ("Royce") is the investment adviser and is responsible for the management of the Portfolios' assets. The following Investment Portfolios are available under the Contract: Royce Capital Fund--Micro-Cap This Portfolio's primary investment goal is long-term growth of capital. Royce invests the Portfolio's assets primarily in a broadly diversified portfolio of securities issued by micro-cap companies. Royce selects these securities from a universe of more than 5,500 micro-cap companies, generally focusing on factors such as balance sheet quality and cash flow levels. The Portfolio normally invests at least 80% of its net assets in the equity securities of micro-cap companies, defined by Royce as companies with stock market capitalizations less than $500 million. Although the Portfolio normally focuses on the securities of U.S. companies, it may invest up to 10% of its assets in the securities of foreign issuers. Royce Capital Fund--Small-Cap This Portfolio's primary investment goal is long-term growth of capital. Royce generally looks for companies that have 37 -------------------------------------------------------------------------------- excellent business strengths and/or prospects for growth, high internal rates of return, and low leverage, and that are trading significantly below its estimate of their current worth. Any production of income is incidental to the Fund's investment goal. The Portfolio normally invests at least 80% of its assets in the equity securities of small-cap companies, defined as companies with stock market capitalizations of less than $2.5 billion at the time of investment. Although the Portfolio normally focuses on the securities of U.S. companies, it may invest up to 10% of its assets in the securities of foreign issuers. RYDEX VARIABLE TRUST Rydex Variable Trust is a mutual fund with multiple portfolios which are managed by Rydex Investments. As of the date of this prospectus, all of the Investment Portfolios permit active trading (other than the Rydex Sector Rotation Fund, CLS AdvisorOne Amerigo Fund, CLS AdvisorOne Clermont Fund, Rydex Absolute Return Strategies Fund, Rydex Multi-Cap Core Equity Fund, Rydex Hedged Equity Fund, Rydex Essential Portfolio Conservative, Rydex Essential Portfolio Aggressive, and Rydex Essential Portfolio Moderate which do not permit active trading) This list may change at any time without notice. For more information, see the prospectus for these Investment Portfolios. The following Investment Portfolios are available under the Contract: Rydex Absolute Return Strategies The Fund pursues multiple investment styles or mandates that correspond to investment strategies widely employed by hedge funds, including strategies sometimes referred to as absolute return strategies. In particular, the Fund will pursue those investment strategies that may be replicated through proprietary quantitative style analysis. Rydex Banking The Fund seeks to provide capital appreciation by investing in companies that are involved in the banking sector, including commercial banks (and their holding companies) and savings and loan institutions ("Banking Companies"). Rydex Basic Materials The Fund seeks capital appreciation by investing in companies engaged in the mining, manufacture, or sale of basic materials, such as lumber, steel, iron, aluminum, concrete, chemicals and other basic building and manufacturing materials. Rydex Biotechnology The Fund seeks capital appreciation by investing in companies that are involved in the biotechnology industry, including companies involved in research and development, genetic or other biological engineering, and in the design, manufacture, or sale of related biotechnology products or services. Rydex Commodities Strategy The Fund seeks to provide investment results that correlate to the performance of a benchmark for commodities. The Fund's current benchmark is the GSCI(R) Total Return Index. It is anticipated that the Fund's investment exposure will tend to be heavily weighted toward oil and other energy-related commodities. Rydex Consumer Products The Fund seeks capital appreciation by investing in companies engaged in manufacturing finished goods and services both domestically and internationally. Rydex Dow 2x Strategy (f/k/a Dynamic Dow) The Fund seeks to provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the Dow Jones Industrial Average. Rydex OTC NASDAQ-100(R) 2x Strategy (f/k/a Dynamic OTC) The Fund seeks to provide investment results that will match the performance of specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the Nasdaq 100 Index(R). Rydex Russell 2000(R) 2x Strategy (f/k/a Dynamic Russell 2000) The Fund seeks to provide investment results that match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the Russell 2000(R) Index (the "underlying index"). If the Fund meets its objective, the value of the Fund's shares will tend to increase on a daily basis by 200% of any increase in value of the underlying index. When the value of the underlying index declines, the value of the Fund's shares should also decrease on a daily basis 200% of the decrease in the value of the underlying index. Rydex S&P 500 2x Strategy (f/k/a Dynamic S&P 500) The Fund seeks to provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the S&P 500(R) Index. Rydex Strengthening Dollar 2x Strategy (f/k/a Dynamic Strengthening Dollar) The Fund seeks to provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the US Dollar Index(R). The US Dollar Index(R) (USDX) is a broad based, diversified index representing an investment in the U.S. Dollar (USD). The New York Board of Trade determines the value of the US Dollar Index(R) by averaging the exchange rates between the USD and the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc. Rydex Weakening Dollar 2x Strategy (f/k/a Dynamic Weakening Dollar) The Fund seeks to provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the inverse (opposite) performance of the US Dollar Index(R). The US Dollar Index(R) (USDX) is a broad based, diversified index representing an investment in the U.S. Dollar (USD). The New York Board of Trade determines the value of the US Dollar Index(R) by averaging the exchange rates between the USD and the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc. Rydex Electronics The Fund seeks capital appreciation by investing in companies that are involved in the electronics sector, including semiconductor manufacturers and distributors, and makers and vendors of other electronic components and devices. Rydex Energy The Fund seeks capital appreciation by investing in companies involved in the energy field, including the exploration, production, and development of oil, gas, coal and alternative sources of energy. 38 -------------------------------------------------------------------------------- Rydex Energy Services The Fund seeks capital appreciation by investing in companies that are involved in the energy services field, including those that provide services and equipment in the areas of oil, coal, and gas exploration and production. Rydex Essential Portfolio Aggressive The Fund seeks growth of capital by investing principally in a diversified portfolio of underlying funds. The Fund seeks to achieve its investment objective by investing principally in a diversified portfolio of underlying funds that represent traditional asset classes, such as stocks, bonds and money market securities, a broad range of alternative assets, such as real estate investment trusts and commodity-related securities, and alternative investment strategies, such as absolute return, leveraged, and sector-based strategies, in an attempt to improve risk-adjusted returns and lower portfolio volatility. Rydex Essential Portfolio Conservative The Fund seeks preservation of capital and secondarily long-term growth of capital by investing principally in a diversified portfolio of underlying funds. The Fund seeks to achieve its investment objective by investing principally in a diversified portfolio of underlying funds that represent traditional asset classes, such as stocks, bonds and money market securities, broad range of alternative assets, such as real estate investment trusts and commodity-related securities, and alternative investment strategies, such as absolute return, leveraged, and sector-based strategies, in an attempt to improve risk-adjusted returns and lower portfolio volatility. Rydex Essential Portfolio Moderate The Fund seeks growth of capital and secondarily preservation of capital by investing principally in a diversified portfolio of underlying funds. The Fund seeks to achieve its investment objective by investing principally in a diversified portfolio of underlying funds that represent traditional asset classes, such as stocks, bonds and money market securities, a broad range of alternative assets, such as real estate investment trusts and commodity-related securities, and alternative investment strategies, such as absolute return, leveraged, and sector-based strategies, in an attempt to improve risk-adjusted returns and lower portfolio volatility. Rydex Europe 1.25x Strategy (f/k/a Europe Advantage) The Fund seeks to provide investment results that correlate to a daily price movement of a specific benchmark. The Fund's current benchmark is the Dow Jones Stoxx 50 Index(SM). The Fund's investment advisor will attempt to consistently apply leverage to increase the Fund's exposure to 125% of its benchmark. Rydex Financial Services The Fund seeks capital appreciation by investing in companies that are involved in the financial services sector. Rydex Government Long Bond 1.2x Strategy (f/k/a Government Long Bond Advantage) The Fund seeks to provide investment results that correspond to a benchmark for U.S. Government securities. The Fund's current benchmark is 120% of the price movement of the Long Treasury Bond. Rydex Health Care The Fund seeks capital appreciation by investing in companies that are involved in the health care industry. Rydex Hedged Equity The Fund seeks to provide capital appreciation consistent with the return and risk characteristics of the long/short hedge fund universe. The secondary objective is to achieve these returns with low correlation to and less volatility than equity indices. The Fund pursues a long/short investment strategy by employing multiple investment styles widely used by hedge funds. In particular, the Fund will pursue those long/short investment styles that may be replicated through proprietary quantitative style analysis. Rydex Internet The Fund seeks capital appreciation by investing in companies that provide products or services designed for or related to the Internet. Rydex Inverse Dow 2x Strategy (f/k/a Inverse Dynamic Dow) The Fund seeks to provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the inverse (opposite) performance of the Dow Jones Industrial Average. Rydex Inverse Government Long Bond Strategy (f/ka Inverse Government Long Bond) The Fund seeks to provide total returns that will inversely correlate to the price movements of a benchmark for U.S. Treasury debt instruments or futures contract on a specified debt instrument. The Fund's current benchmark is the inverse of the daily price movement of the Long Treasury Bond. Rydex Inverse Mid-Cap Strategy (f/k/a Inverse Mid-Cap) The Fund seeks to provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the S&P MidCap 400 Index (the "underlying index"). Unlike a traditional index fund, the Fund's objective is to perform exactly the opposite of the underlying index. Rydex Inverse NASDAQ-100(R) Strategy (f/k/a Inverse OTC) The Fund seeks to provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the Nasdaq 100 Index(R) (the "underlying index"). Unlike a traditional index fund, the Inverse OTC Fund's benchmark is to perform exactly opposite the underlying index. Rydex Inverse Russell 2000(R) Strategy (f/k/a Inverse Russell 2000) The Fund seeks to provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is inverse of the performance of the Russell 2000 Index(R) (the "underlying index"). Unlike a traditional index fund, the Fund's objective is to perform exactly the opposite of the underlying index. Rydex Inverse S&P 500 Strategy (f/k/a Inverse S&P 500) The Fund seeks to provide investment results that will inversely correlate to the performance of the S&P 500(R) Index. Unlike a traditional index fund, the Inverse S&P 500 Fund's benchmark is to perform exactly opposite the underlying index. Rydex Japan 1.25x Strategy (f/k/a Japan Advantage) The Fund seeks to provide investment results that correlate to a daily price movement of a specific benchmark. The Fund's current benchmark is the Topix 100 Index. The Fund's investment advisor will attempt to consistently apply leverage to increase the Fund's exposure to 125% of its benchmark. Rydex Large Cap Growth The Fund seeks to provide investment results that match the performance of a benchmark for large cap growth securities. 39 -------------------------------------------------------------------------------- The Fund's current benchmark is the S&P 500/Citigroup Pure Growth Index. Rydex Large Cap Value The Fund seeks to provide investment results that match the performance of a benchmark for large cap value securities. The Fund's current benchmark is the S&P 500/Citigroup Pure Value Index. Rydex Leisure The Fund seeks capital appreciation by investing in companies engaged in leisure and entertainment businesses. Rydex Mid Cap 1.5x Strategy (f/k/a Mid-Cap Advantage) The Fund seeks to provide investment results that correlate to the performance of a specific benchmark for mid-cap securities. The Fund's current benchmark is the S&P MidCap 400(R) Index. The Fund's investment advisor will attempt to consistently apply leverage to increase the Fund's exposure to 150% of its benchmark. Rydex Mid-Cap Growth The Fund seeks to provide investment results that match the performance of a benchmark for mid cap growth securities. The Fund's current benchmark is the S&P MidCap 400/Citigroup Pure Growth Index. Rydex Mid-Cap Value The Fund seeks to provide investment results that match the performance of a benchmark for mid cap value securities. The Fund's current benchmark is the S&P MidCap 400/Citigroup Pure Value Index (the "underlying index"). Rydex Multi-Cap Core Equity The Fund seeks long-term capital appreciation. It invests in a broad mix of equity securities of companies representative of the total US stock market as measured by the Russell 3000(R) Index. The Fund pursues its investment objective by investing in securities with the small, medium, and large market capitalization segments that demonstrate value and potential for growth. Rydex Nova The Fund seeks to provide investment results that match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 150% of the performance of the S&P 500(R) Index (the "underlying index"). Rydex NASDAQ-100(R) Strategy (f/k/a OTC) The Fund seeks to provide investment results that correspond to a benchmark for over-the-counter securities. The Fund's current benchmark is the Nasdaq 100 Index(R) (the "underlying index"). Rydex Precious Metals The Fund seeks to provide capital appreciation by investing in U.S. and foreign companies that are involved in the precious metals sector, including exploration, mining, production and development, and other precious metals-related services. Rydex Real Estate The Fund seeks to provide capital appreciation by investing in companies that are involved in the real estate industry including real estate investment trusts. Rydex Retailing The Fund seeks capital appreciation by investing in companies engaged in merchandising finished goods and services, including department stores, restaurant franchises, mail order operations and other companies involved in selling products to consumers. Rydex Russell 2000(R) 1.5x Strategy (f/k/a Russell 2000 Advantage) The Fund seeks to provide investment results that correlate to the performance of a specific benchmark for small-cap securities. The Fund's current benchmark is the Russell 2000 Index(R). The Fund's investment advisor will attempt to consistently apply leverage to increase the Fund's exposure to 150% of its benchmark. Rydex Sector Rotation The Fund seeks long term capital appreciation. The Fund seeks to respond to the dynamically changing economy by moving its investments among different sectors or industries. Rydex Small-Cap Growth The Fund seeks to provide investment results that match the performance of a benchmark for small cap growth securities. The Fund's current benchmark is the S&P SmallCap 600/Citigroup Pure Growth Index. Rydex Small-Cap Value The Fund seeks to provide investment results that match the performance of a benchmark for small cap value securities. The Fund's current benchmark is the S&P SmallCap 600/Citigroup Pure Value Index. Rydex Technology The Fund seeks capital appreciation by investing in companies that are involved in the technology sector, including computer software and service companies, semiconductor manufacturers, networking and telecommunications equipment manufacturers, PC hardware and peripherals companies. Rydex Telecommunications The Fund seeks capital appreciation by investing in companies engaged in the development, manufacture, or sale of communications services or communications equipment. Rydex Transportation The Fund seeks capital appreciation by investing in companies engaged in providing transportation services or companies engaged in the design, manufacture, distribution, or sale of transportation equipment. Rydex U.S. Government Money Market The Fund seeks to provide security of principal, high current income, and liquidity. The U.S. Government Money Market Fund invests primarily in money market instruments issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and enters into repurchase agreements fully collateralized by U.S. Government securities. Rydex Utilities The Fund seeks capital appreciation by investing in companies that operate public utilities. CLS AdvisorOne Amerigo The Fund seeks long-term growth of capital without regard to current income. The Fund invests in Underlying Funds that seek capital growth or appreciation by investing in common stock or securities convertible into or exchangeable for common stock (such as convertible preferred stock, convertible debentures or warrants), including the stock of foreign issuers, or in individual securities that may provide capital growth or appreciation. CLS AdvisorOne Clermont The objective of the Clermont Fund is a combination of current income and growth of capital. The Fund's principal investment strategies include: Investing in Underlying Funds 40 -------------------------------------------------------------------------------- that seek capital growth or appreciation by investing in common stock or securities convertible into or exchangeable for common stock (such as convertible preferred stock, convertible debentures or warrants), including the stock of foreign issuers, or in individual securities that may provide capital growth or appreciation. Investing at least 20% of its total assets in Underlying Funds that invest in long, medium, or short-term bonds and other fixed income securities of varying qualities in order to maximize the Fund's total return, or in individual securities that may provide current income. Some of the Underlying Funds in which the Fund invests may invest part or all of their assets in securities of foreign issuers or engage in foreign currency transactions with respect to these investments. The Fund may also invest in individual securities of foreign issuers and engage in foreign currency transactions. The Fund may invest up to 80% of its total assets in Underlying Funds that invest in futures contracts and options on futures contracts, or invest directly in futures contracts and options on futures contracts. SELIGMAN PORTFOLIOS, INC. Seligman Portfolios, Inc. is a mutual fund with multiple portfolios which are managed by J. & W. Seligman & Co. Incorporated. The following Investment Portfolios are available under the Contract: Seligman Communications and Information The Seligman Communications and Information Portfolio seeks capital gain. The Portfolio invests at least 80% of its net assets in securities of companies operating in the communications, information and related industries. Seligman Global Technology The Seligman Global Technology Portfolio seeks long-term capital appreciation. The Portfolio generally invests at least 80% of its net assets in equity securities of U.S. and non-U.S. companies with business operations in technology and technology-related industries. THIRD AVENUE VARIABLE SERIES TRUST The Third Avenue Variable Series Trust is a mutual fund with one portfolio. Third Avenue Management LLC is the investment adviser for the Portfolio and is responsible for the management of the Portfolio's investments. The following Investment Portfolio is available under the Contract: Third Avenue Value The Third Avenue Value Portfolio seeks long-term capital appreciation. The Portfolio seeks to achieve its objective mainly by acquiring common stocks of well-financed companies (meaning companies without significant liabilities in comparison to their overall resources) at a discount to what the adviser believes is their intrinsic value. The Portfolio also seeks to acquire senior securities, such as preferred stocks and debt instruments (including high yield securities) that the adviser believes are undervalued. VAN ECK WORLDWIDE INSURANCE TRUST Van Eck Worldwide Insurance Trust is a mutual fund with multiple portfolios. Van Eck Associates Corporation serves as investment adviser to the funds. The following Investment Portfolios are available under the Contract: Van Eck Worldwide Absolute Return The Van Eck Worldwide Absolute Return Fund seeks to achieve consistent absolute (positive) returns in various market cycles. The Fund's objective is fundamental and may only be changed with the approval of shareholders. Van Eck Worldwide Bond The Van Eck Worldwide Bond Fund seeks high total return--income plus capital appreciation--by investing globally, primarily in a variety of debt securities. Van Eck Worldwide Emerging Markets The Van Eck Worldwide Emerging Markets Fund seeks long-term capital appreciation by investing primarily in equity securities in emerging markets around the world. Van Eck Worldwide Hard Assets The Van Eck Worldwide Hard Assets Fund seeks long-term capital appreciation by investing primarily in hard asset securities. Income is a secondary consideration. Van Eck Worldwide Real Estate The Van Eck Worldwide Real Estate Fund seeks to maximize return by investing in equity securities of domestic and foreign companies that own significant real estate assets or that principally are engaged in the real estate industry. WELLS FARGO ADVANTAGE FUNDS The Wells Fargo Advantage Funds referenced below are managed by Wells Fargo Funds Management, LLC and sub advised by Wells Capital Management Incorporated The following Funds are available under the Contract: Wells Fargo Advantage VT Opportunity The Wells Fargo Advantage VT Opportunity Fund seeks long-term capital appreciation. We invest in equity securities of medium-capitalization companies that we believe are under-priced yet, have attractive growth prospects. We base the analysis on a comparison between the company's public value, based on market quotations, with its "private market value"--the price an investor would be willing to pay for the entire company given its management strength, financial health and growth potential. We determine a company's private market value based on a fundamental analysis of a company's cash flows, asset valuations, competitive situation, and franchise value. Wells Fargo Advantage VT Discovery The Wells Fargo Advantage VT Discovery Fund seeks long-term capital appreciation. We invest principally in securities of small- and medium-capitalization companies that we believe offer attractive opportunities for growth. We define small- and medium-capitalization companies as those with market capitalizations equal to or lower than the company with the largest market capitalization in the Russell Midcap(R) Index, at the time of purchase. The largest capitalization was $16.5 billion as of June 30, 2006, and is expected to change frequently. We analyze potential investment opportunities by using a disciplined investment process that emphasizes in-depth fundamental analysis across multiple dimensions such as visits with company management, suppliers/distributors, competitors and customers as well as detailed analysis of a company's financial statements. We select securities that exhibit the strongest sustainable growth characteristics such as earnings growth, returns on invested capital and competitive positioning. We may invest in any sector, and at times we may emphasize on or more particular sectors. We also may invest up to 25% of the Fund's assets in foreign securities through ADRs and similar investments 41 -------------------------------------------------------------------------------- APPENDIX B--EARNINGS PROTECTION BENEFIT RIDER EXAMPLES The following examples demonstrate how the Earnings Protection Benefit rider death benefit is calculated. Each example assumes a $100,000 initial Purchase Payment, a $25,000 Purchase Payment on the second Contract Anniversary, and no withdrawals. The examples also assume that the Contract is issued to one Owner who is age 60 on the issue date. Finally, each example assumes that the death of the Owner occurs on the 7th Contract Anniversary. Market Increase Example The Contract Value as of the date We receive due proof of death of the Owner is $150,000. The following benefit would be payable by the rider:
Base Death Benefit Contract Value =....................................................................... $150,000 Sum of all Purchase Payments reduced by Equivalency Withdrawals =......................................... $125,000 Contract Gain =........................................................................................... $ 25,000 All Purchase Payments applied to the Contract except Purchase Payments applied within 12 months prior to the date of death, reduced by all Equivalency Withdrawals during the life of the Contract =................................................................................ $125,000 Eligible Gain = Lesser of $25,000 or $125,000 =........................................................... $ 25,000 Base Death Benefit = 50% x Eligible Gain =................................................................ $ 12,500 Optional Death Benefit (paid in addition to the base death benefit) Optional Coverage Percentage =........ 40% Initial Purchase Payment less Equivalency Withdrawals = $100,000 Sum of all Purchase Payments reduced by withdrawals, less Contract Value, when the sum of all Purchase Payments reduced by Withdrawals is greater than Contract Value =................................. N/A Optional Gain = (40% x $100,000) =........................................................................ $ 40,000 Optional Death Benefit = 50% x Optional Gain =............................................................ $ 20,000 Total Death Benefit provided by the rider = $12,500 + $20,000 =........................................... $ 32,500
42 -------------------------------------------------------------------------------- Market Decrease Example The Contract Value as of the date We receive due proof of death of the Owner is $104,000. The following benefit would be payable by the rider:
Base Death Benefit Contract Value =....................................................................... $104,000 Sum of all Purchase Payments reduced by Equivalency Withdrawals =......................................... $125,000 Contract Gain =........................................................................................... $0 All Purchase Payments applied to the Contract except Purchase Payments applied within 12 months prior to the date of death, reduced by all Equivalency Withdrawals during the life of the Contract =............................................................. $125,000 Eligible Gain = Lesser of $0 or $125,000 =................................................................ $0 Base Death Benefit = 50% x Eligible Gain =................................................................ $0 Optional Death Benefit (paid in addition to the base death benefit) Optional Coverage Percentage =............................................................................ 40% Initial Purchase Payment less Equivalency Withdrawals = $100,000 Sum of all Purchase Payments reduced by withdrawals, less Contract Value, when the sum of all Purchase Payments reduced by Withdrawals is greater than Contract Value = $125,000 - $104,000 =............................................................................. $ 21,000 Optional Gain = 40% x $100,000 - $21,000 =................................................................ $ 19,000 Optional Death Benefit = 50% x Optional Gain =............................................................ $ 9,500 Total Death Benefit provided by the rider = $0 + $9,500 =................................................. $ 9,500
43 APPENDIX C--GUARANTEED MINIMUM WITHDRAWAL BENEFIT EXAMPLES Example 1--Assume you select the Guaranteed Minimum Withdrawal Benefit rider when you purchase your Contract and your initial Purchase Payment is $100,000. o Your Benefit Amount is $100,000, which is your initial Purchase Payment. o Your Benefit Payment is $7,000, which is 7% of your Benefit Amount. Example 2--If you make an additional Purchase Payment of $50,000, then o Your Benefit Amount is $150,000, which is your prior Benefit Amount ($100,000) plus your additional Purchase Payment ($50,000). o Your Benefit Payment is $10,500, which is your prior Benefit Payment ($7,000) plus 7% of your additional Premium Payment ($3,500). Example 3--Assume the same facts as Example 1. If you take the maximum Benefit Payment before the end of the first Contract year that follows the Waiting Period, then o Your remaining Benefit Payments are $93,000, which is your Benefit Amount ($100,000) minus the Benefit Payment ($7,000). o Your Benefit Payment for the next year remains $7,000, because you did not take more than your maximum Benefit Payment ($7,000). Example 4--Assume the same facts as Example 1. If you withdraw $50,000, and your Contract Value is $150,000 at the time of the withdrawal, then o Since the withdrawal ($50,000) exceeds your Benefit Payment ($7,000), We recalculate your Benefit Payment as follows: o The adjusted Benefit Payment is equal to the Benefit Payment ($7,000) prior to the withdrawal multiplied by the quantity of one (1) minus the ratio of the withdrawal ($50,000) divided by the Contract Value ($150,000) prior to the withdrawal. o The adjusted Benefit Payment equals $4,667 [$7,000 times (1 minus $50,000/$150,000)] Example 5--If you elect to "step-up" the Benefit Amount after the fifth year, assuming you have made no withdrawals, and your Contract Value at the time of step-up is $200,000, then o We recalculate your Benefit Amount to equal your Contract Value, which is $200,000. o Your new Benefit Payment is equal to 7% of your new Benefit Amount, or $14,000. 44 APPENDIX D - CONDENSED FINANCIAL INFORMATION Accumulation Unit Value History The following schedule includes Accumulation Unit values for the periods indicated. This data has been taken from the Jefferson National Life Annuity Account I's financial statements. This information should be read in conjunction with Jefferson National Life Annuity Account I's financial statements and related notes which are included in the Statement of Additional Information. The tables below provide per unit information about the financial history of each Sub-Account for the periods ended December 31.
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS: Basic Value Fund (inception date May 1, 2003) --------------------------------------------- Beginning AUV (a) $16.342 $14.673 $14.113 $12.913 $10.000 N/A N/A (b) $12.693 $11.539 $11.238 $10.412 $9.931 N/A N/A Ending AUV (a) $16.333 $16.342 $14.673 $14.113 $12.913 N/A N/A (b) $12.528 $12.693 $11.539 $11.238 $10.412 N/A N/A Ending number of AUs 10,862 12,023 18,941 12,640 2,039 N/A N/A Core Equity Fund (inception date May 1, 2006) --------------------------------------------- Beginning AUV (a) $10.861 $10.043 N/A N/A N/A N/A N/A (b) $10.769 $10.043 N/A N/A N/A N/A N/A Ending AUV (a) $11.578 $10.861 N/A N/A N/A N/A N/A (b) $11.337 $10.769 N/A N/A N/A N/A N/A Ending number of AUs 12,866 6,000 N/A N/A N/A N/A N/A Financial Services Fund (inception date July 2, 2001) ----------------------------------------------------- Beginning AUV (a) $13.354 $11.629 $11.135 $10.391 $8.132 $9.691 $10.430 (b) $12.861 $11.341 $10.995 $10.390 $9.923 N/A N/A Ending AUV (a) $10.242 $13.354 $11.629 $11.135 $10.391 $8.132 $9.691 (b) $9.741 $12.861 $11.341 $10.995 $10.390 N/A N/A Ending number of AUs 4,023 4,246 6,496 4,852 4,207 14,204 13,609 Global Health Care Fund (inception date July 2, 2001) ----------------------------------------------------- Beginning AUV (a) $11.269 $10.859 $10.182 $9.599 $7.618 $10.226 $10.365 (b) $11.616 $11.334 $10.761 $10.273 $9.935 N/A N/A Ending AUV (a) $12.429 $11.269 $10.859 $10.182 $9.599 $7.618 $10.226 (b) $12.652 $11.616 $11.334 $10.761 $10.273 N/A N/A Ending number of AUs 61,447 11,929 19,610 14,816 10,660 21,678 11,170 Global Real Estate Fund (inception date July 2, 2001) ----------------------------------------------------- Beginning AUV (a) $30.971 $22.024 $19.551 $14.517 $10.604 $10.110 $10.259 (b) $21.079 $15.177 $13.642 $10.257 $10.000 N/A N/A Ending AUV (a) $28.847 $30.971 $22.024 $19.551 $14.517 $10.604 $10.110 (b) $19.388 $21.079 $15.177 $13.642 $10.257 N/A N/A Ending number of AUs 26,525 46,100 34,667 35,950 11,492 7,662 54,233 High Yield Fund (inception date May 1 2004) ------------------------------------------- Beginning AUV (a) $11.911 $10.907 $10.768 $9.966 N/A N/A N/A (b) $11.520 $10.682 $10.678 $9.964 N/A N/A N/A Ending AUV (a) $11.890 $11.911 $10.907 $10.768 N/A N/A N/A (b) $11.357 $11.520 $10.682 $10.678 N/A N/A N/A Ending number of AUs 21,678 45,135 16,366 91,513 N/A N/A N/A
45
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE FUNDS: (continued) Mid Cap Core Equity Fund (inception date May 1, 2003) ----------------------------------------------------- Beginning AUV (a) $16.082 $14.694 $13.891 $12.404 $9.958 N/A N/A (b) $12.763 $11.808 $11.302 $10.220 $9.932 N/A N/A Ending AUV (a) $17.329 $16.082 $14.694 $13.891 $12.404 N/A N/A (b) $13.581 $12.763 $11.808 $11.302 $10.220 N/A N/A Ending number of AUs 13,055 10,805 25,929 25,204 6,526 N/A N/A Technology Fund (inception date July 2, 2001) Beginning AUV (a) $6.155 $5.649 $5.607 $5.434 $3.793 $7.236 $9.094 (b) $10.906 $10.136 $10.186 $9.997 $9.797 N/A N/A Ending AUV (a) $6.536 $6.155 $5.649 $5.607 $5.434 $3.793 $7.236 (b) $11.438 $10.906 $10.136 $10.186 $9.997 N/A N/A Ending number of AUs 11,469 10,483 27,638 97,453 108,937 34,725 10,044 ================================================================================================================================ THE ALGER AMERICAN FUND: Growth Portfolio (inception date July 2, 2001) ---------------------------------------------- Beginning AUV (a) $14.073 $13.572 $12.284 $11.809 $8.860 $13.409 $14.638 (b) $11.848 $11.570 $10.603 $10.322 $9.888 N/A N/A Ending AUV (a) $16.643 $14.073 $13.572 $12.284 $11.809 $8.860 $13.409 (b) $13.838 $11.848 $11.570 $10.603 $10.322 N/A N/A Ending number of AUs 106,516 39,790 96,218 77,914 36,575 23,349 2,069 Capital Appreciation Portfolio (inception date July 2, 2001) ------------------------------------------------------------ Beginning AUV (a) $19.666 $16.721 $14.816 $13.888 $10.454 $16.041 $17.259 (b) $13.956 $12.015 $10.779 $10.232 $9.875 N/A N/A Ending AUV (a) $25.894 $19.666 $16.721 $14.816 $13.888 $10.454 $16.041 (b) $18.146 $13.956 $12.015 $10.779 $10.232 N/A N/A Ending number of AUs 30,386 24,097 34,335 39,707 37,122 19,063 1,570 Midcap Growth Portfolio (inception date July 2, 2001) ----------------------------------------------------- Beginning AUV (a) $21.225 $19.542 $18.044 $16.187 $11.107 $15.987 $16.518 (b) $12.779 $11.913 $11.138 $10.118 $9.867 N/A N/A Ending AUV (a) $27.533 $21.225 $19.542 $18.044 $16.187 $11.107 $15.987 (b) $16.370 $12.779 $11.913 $11.138 $10.118 N/A N/A Ending number of AUs 92,083 37,298 56,420 46,251 23,240 18,863 1,317 SmallCap Growth Portfolio (inception date July 2, 2001) ------------------------------------------------------- Beginning AUV (a) $12.650 $10.689 $9.273 $8.068 $5.747 $7.901 $8.768 (b) $15.285 $13.077 $11.488 $10.120 $9.894 N/A N/A Ending AUV (a) $14.624 $12.650 $10.689 $9.273 $8.068 $5.747 $7.901 (b) $17.450 $15.285 $13.077 $11.488 $10.120 N/A N/A Ending number of AUs 23,086 29,743 79,318 59,485 40,285 4,157 298
46
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- ================================================================================================================================= ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.: Growth and Income Portfolio (inception date May 1, 2006) -------------------------------------------------------- Beginning AUV (a) $11.050 $9.957 N/A N/A N/A N/A N/A (b) $10.958 $9.956 N/A N/A N/A N/A N/A Ending AUV (a) $11.454 $11.050 N/A N/A N/A N/A N/A (b) $11.216 $10.958 N/A N/A N/A N/A N/A Ending number of AUs 23,447 4,427 N/A N/A N/A N/A N/A ================================================================================================================================= AMERICAN CENTURY VARIABLE PORTFOLIOS, INC: VP Balanced Fund (inception date May 1, 2005) --------------------------------------------- Beginning AUV (a) $11.457 $10.599 $10.042 N/A N/A N/A N/A (b) $11.221 $10.510 $10.041 N/A N/A N/A N/A Ending AUV (a) $11.855 $11.457 $10.599 N/A N/A N/A N/A (b) $11.465 $11.221 $10.510 N/A N/A N/A N/A Ending number of AUs 9,200 1,857 879 N/A N/A N/A N/A VP Income & Growth Fund (inception date July 2, 2001) ----------------------------------------------------- Beginning AUV (a) $15.049 $13.034 $12.632 $11.337 $8.887 $11.178 $11.901 (b) $13.308 $11.670 $11.452 $10.408 $9.920 N/A N/A Ending AUV (a) $14.829 $15.049 $13.034 $12.632 $11.337 $8.887 $11.178 (b) $12.949 $13.308 $11.670 $11.452 $10.408 N/A N/A Ending number of AUs 34,224 34,555 53,124 70,367 13,818 25,100 621 VP Inflation Protection Fund (inception date May 1, 2004) --------------------------------------------------------- Beginning AUV (a) $10.587 $10.569 $10.553 $10.044 N/A N/A N/A (b) $10.239 $10.351 $10.465 $10.042 N/A N/A N/A Ending AUV (a) $11.431 $10.587 $10.569 $10.553 N/A N/A N/A (b) $10.918 $10.239 $10.351 $10.465 N/A N/A N/A Ending number of AUs 7,811 5,205 5,237 5,949 N/A N/A N/A VP International Fund (inception date July 2, 2001) --------------------------------------------------- Beginning AUV (a) $15.487 $12.561 $11.247 $9.925 $8.083 $10.295 $11.688 (b) $15.483 $12.715 $11.528 $10.301 $9.951 N/A N/A Ending AUV (a) $18.027 $15.487 $12.561 $11.247 $9.925 $8.083 $10.295 (b) $17.798 $15.483 $12.715 $11.528 $10.301 N/A N/A Ending number of AUs 120,808 78,282 34,947 41,034 21,589 16,502 17 VP Large Company Value Fund (inception date May 1, 2007) -------------------------------------------------------- Beginning AUV (a) $10.037 N/A N/A N/A N/A N/A N/A (b) $10.036 N/A N/A N/A N/A N/A N/A Ending AUV (a) $9.368 N/A N/A N/A N/A N/A N/A (b) $9.290 N/A N/A N/A N/A N/A N/A Ending number of AUs 0 N/A N/A N/A N/A N/A N/A
47
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. (continued): VP Ultra Fund (inception date May 1, 2007) ------------------------------------------ Beginning AUV (a) $10.019 N/A N/A N/A N/A N/A N/A (b) $10.018 N/A N/A N/A N/A N/A N/A Ending AUV (a) $11.529 N/A N/A N/A N/A N/A N/A (b) $11.433 N/A N/A N/A N/A N/A N/A Ending number of AUs 0 N/A N/A N/A N/A N/A N/A VP Value Fund (inception date July 2, 2001) ------------------------------------------- Beginning AUV (a) $19.384 $16.566 $15.994 $14.186 $11.156 $12.947 $12.477 (b) $13.754 $11.902 $11.635 $10.450 $9.973 N/A N/A Ending AUV (a) $18.130 $19.384 $16.566 $15.994 $14.186 $11.156 $12.947 (b) $12.704 $13.754 $11.902 $11.635 $10.450 N/A N/A Ending number of AUs 45,933 49,188 34,716 42,068 35,385 37,484 12,343 VP Vista Fund (inception date May 1, 2007) ------------------------------------------ Beginning AUV (a) $9.971 N/A N/A N/A N/A N/A N/A (b) $9.971 N/A N/A N/A N/A N/A N/A Ending AUV (a) $12.362 N/A N/A N/A N/A N/A N/A (b) $12.259 N/A N/A N/A N/A N/A N/A Ending number of AUs 20,859 N/A N/A N/A N/A N/A N/A ================================================================================================================================= DIREXION INSURANCE TRUST Dynamic VP HY Bond Fund (inception date May 1, 2005) ---------------------------------------------------- Beginning AUV (a) $10.925 $10.431 $10.056 N/A N/A N/A N/A (b) $10.700 $10.344 $10.055 N/A N/A N/A N/A Ending AUV (a) $10.582 $10.925 $10.431 N/A N/A N/A N/A (b) $10.234 $10.700 $10.344 N/A N/A N/A N/A Ending number of AUs 322 72,725 4,682 N/A N/A N/A N/A ================================================================================================================================= DREYFUS INVESTMENT PORTFOLIOS Small Cap Stock Index Portfolio (inception date May 1, 2005) ------------------------------------------------------------ Beginning AUV (a) $12.966 $11.492 $10.131 N/A N/A N/A N/A (b) $12.699 $11.396 $10.130 N/A N/A N/A N/A Ending AUV (a) $12.701 $12.966 $11.492 N/A N/A N/A N/A (b) $12.284 $12.699 $11.396 N/A N/A N/A N/A Ending number of AUs 3,794 3,557 2,308 N/A N/A N/A N/A ================================================================================================================================= THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. (inception date July 2, 2001) Beginning AUV (a) $10.568 $9.813 $9.604 $9.170 $7.380 $10.534 $11.878 (b) $11.337 $10.660 $10.563 $10.213 $9.888 N/A N/A Ending AUV (a) $11.231 $10.568 $9.813 $9.604 $9.170 $7.380 $10.534 (b) $11.898 $11.337 $10.660 $10.563 $10.213 N/A N/A Ending number of AUs 13,874 25,963 25,159 37,457 9,517 1,274 771
48
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- DREYFUS INVESTMENT PORTFOLIOS (continued): ================================================================================================================================= DREYFUS STOCK INDEX FUND: (inception date July 2, 2001) ------------------------------------------------------- Beginning AUV (a) $13.881 $12.187 $11.805 $10.820 $8.548 $11.166 $12.046 (b) $12.831 $11.407 $11.187 $10.383 $9.923 N/A N/A Ending AUV (a) $14.406 $13.881 $12.187 $11.805 $10.820 $8.548 $11.166 (b) $13.150 $12.831 $11.407 $11.187 $10.383 N/A N/A Ending number of AUs 74,112 114,057 133,944 156,579 114,285 115,185 15,277 ================================================================================================================================= DREYFUS VARIABLE INVESTMENT FUND: International Value Portfolio (inception date July 2, 2001) ----------------------------------------------------------- Beginning AUV (a) $17.742 $14.676 $13.300 $11.238 $8.358 $9.657 $10.482 (b) $15.927 $13.339 $12.241 $10.473 $10.007 N/A N/A Ending AUV (a) $18.221 $17.742 $14.676 $13.300 $11.238 $8.358 $9.657 (b) $16.153 $15.927 $13.339 $12.241 $10.473 N/A N/A Ending number of AUs 42,713 62,189 53,934 52,715 26,278 6,117 362 ================================================================================================================================= FEDERATED INSURANCE SERIES: Capital Income Fund II (inception date July 2, 2001) ---------------------------------------------------- Beginning AUV (a) $10.085 $8.843 $8.437 $7.784 $6.542 $8.723 $9.725 (b) $12.882 $11.438 $11.050 $10.323 $10.012 N/A N/A Ending AUV (a) $10.345 $10.085 $8.843 $8.437 $7.784 $6.542 $8.723 (b) $13.050 $12.882 $11.438 $11.050 $10.323 N/A N/A Ending number of AUs 13,315 9,727 12,297 23,521 13,333 109,293 274 High Income Bond Fund II (inception date July 2, 2001) ------------------------------------------------------ Beginning AUV (a) $13.009 $11.905 $11.760 $10.797 $8.959 $8.963 $9.026 (b) $11.730 $10.869 $10.871 $10.107 $10.012 N/A N/A Ending AUV (a) $13.267 $13.009 $11.905 $11.760 $10.797 $8.959 $8.963 (b) $11.813 $11.730 $10.869 $10.871 $10.107 N/A N/A Ending number of AUs 29,567 124,669 64,569 139,997 139,518 172,560 9,333 International Equity Fund II (inception date July 2, 2001) ---------------------------- ----------------------------- Beginning AUV (a) $15.583 $13.292 $12.357 $10.986 $8.449 $11.094 $13.194 (b) $14.149 $12.220 $11.503 $10.356 $10.000 N/A N/A Ending AUV (a) $16.832 $15.583 $13.292 $12.357 $10.986 $8.449 $11.094 (b) $15.092 $14.149 $12.220 $11.503 $10.356 N/A N/A Ending number of AUs 18,344 20,913 22,747 36,309 15,012 11,899 0 Kaufmann Fund II (inception date November 1, 2006) -------------------------------------------------- Beginning AUV (a) $10.518 $9.935 N/A N/A N/A N/A N/A (b) $10.497 $9.935 N/A N/A N/A N/A N/A Ending AUV (a) $12.511 $10.518 N/A N/A N/A N/A N/A (b) $12.329 $10.497 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A
49
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- FEDERATED INSURANCE SERIES (continued): Market Opportunity Fund II (inception date November 1, 2006) ------------------------------------------------------------ Beginning AUV (a) $10.141 $10.009 N/A N/A N/A N/A N/A (b) $10.121 $10.009 N/A N/A N/A N/A N/A Ending AUV (a) $9.851 $10.141 N/A N/A N/A N/A N/A (b) $9.708 $10.121 N/A N/A N/A N/A N/A Ending number of AUs 875 0 N/A N/A N/A N/A N/A ================================================================================================================================= JANUS ASPEN SERIES: Balanced Portfolio (inception date May 1, 2007) ----------------------------------------------- Beginning AUV (a) $9.993 N/A N/A N/A N/A N/A N/A (b) $9.992 N/A N/A N/A N/A N/A N/A Ending AUV (a) $10.391 N/A N/A N/A N/A N/A N/A (b) $10.305 N/A N/A N/A N/A N/A N/A Ending number of AUs 1,810 N/A N/A N/A N/A N/A N/A Forty Portfolio (inception date May 1, 2007) -------------------------------------------- Beginning AUV (a) $10.000 N/A N/A N/A N/A N/A N/A (b) $9.999 N/A N/A N/A N/A N/A N/A Ending AUV (a) $12.676 N/A N/A N/A N/A N/A N/A (b) $12.570 N/A N/A N/A N/A N/A N/A Ending number of AUs 7,271 N/A N/A N/A N/A N/A N/A Global Life Sciences Portfolio (inception date may 1, 2007) ----------------------------------------------------------- Beginning AUV (a) $10.009 N/A N/A N/A N/A N/A N/A (b) $10.009 N/A N/A N/A N/A N/A N/A Ending AUV (a) $10.869 N/A N/A N/A N/A N/A N/A (b) $10.778 N/A N/A N/A N/A N/A N/A Ending number of AUs 2,612 N/A N/A N/A N/A N/A N/A Growth and Income Portfolio (inception date March 21, 2003) ----------------------------------------------------------- Beginning AUV (a) $15.982 $14.998 $13.539 $12.266 $10.227 N/A N/A (b) $12.987 $12.340 $11.280 $10.348 $9.912 N/A N/A Ending AUV (a) $17.139 $15.982 $14.998 $13.539 $12.266 N/A N/A (b) $13.753 $12.987 $12.340 $11.280 $10.348 N/A N/A Ending number of AUs 14,464 25,533 39,781 20,515 8,677 N/A N/A International Portfolio (inception date March 21, 2003) ------------------------------------------------------- Beginning AUV (a) $32.031 $22.093 $16.934 $14.438 $10.136 N/A N/A (b) $22.140 $15.462 $12.000 $10.360 $9.923 N/A N/A Ending AUV (a) $40.527 $32.031 $22.093 $16.934 $14.438 N/A N/A (b) $27.663 $22.140 $15.462 $12.000 $10.360 N/A N/A Ending number of AUs 40,391 33,159 13,465 4,936 98 N/A N/A
50
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- JANUS ASPEN SERIES (continued): Large Cap Growth Portfolio (inception date May 1, 2003) ------------------------------------------------------- Beginning AUV (a) $17.160 $15.623 $15.192 $14.741 $12.200 N/A N/A (b) $11.469 $10.573 $10.410 $10.228 $9.872 N/A N/A Ending AUV (a) $19.473 $17.160 $15.623 $15.192 $14.741 N/A N/A (b) $12.853 $11.469 $10.573 $10.410 $10.228 N/A N/A Ending number of AUs 30,171 22,980 37,119 26,140 35,819 N/A N/A Mid Cap Growth Portfolio (inception date July 2, 2001) ------------------------------------------------------ Beginning AUV (a) $16.052 $14.328 $12.937 $10.865 $8.156 $11.477 $13.937 (b) $14.466 $13.074 $11.953 $10.166 $9.900 N/A N/A Ending AUV (a) $19.316 $16.052 $14.328 $12.937 $10.865 $8.156 $11.477 (b) $17.191 $14.466 $13.074 $11.953 $10.166 N/A N/A Ending number of AUs 25,201 20,781 52,601 42,491 29,147 26,197 1,138 JANUS ASPEN SERIES: (continued) Mid Cap Value Portfolio (inception date May 1, 2007) ---------------------------------------------------- Beginning AUV (a) $10.005 N/A N/A N/A N/A N/A N/A (b) $10.005 N/A N/A N/A N/A N/A N/A Ending AUV (a) $9.905 N/A N/A N/A N/A N/A N/A (b) $9.822 N/A N/A N/A N/A N/A N/A Ending number of AUs 489 N/A N/A N/A N/A N/A N/A Small Company Value Portfolio (inception date May 1, 2007) ---------------------------------------------------------- Beginning AUV (a) $10.019 N/A N/A N/A N/A N/A N/A (b) $10.019 N/A N/A N/A N/A N/A N/A Ending AUV (a) $8.903 N/A N/A N/A N/A N/A N/A (b) $8.828 N/A N/A N/A N/A N/A N/A Ending number of AUs 102 N/A N/A N/A N/A N/A N/A Worldwide Growth Portfolio (inception date May 1, 2003) ------------------------------------------------------- Beginning AUV (a) $13.796 $11.835 $11.337 $10.998 $8.858 N/A N/A (b) $12.555 $10.906 $10.577 $10.367 $9.911 N/A N/A Ending AUV (a) $14.913 $13.796 $11.835 $11.337 $10.998 N/A N/A (b) $13.402 $12.555 $10.906 $10.577 $10.367 N/A N/A Ending number of AUs 16,509 13,951 16,058 22,999 40,130 N/A N/A ================================================================================================================================= LAZARD RETIREMENT SERIES INC.: Emerging Markets Equity Portfolio (inception date May 1, 2004) -------------------------------------------------------------- Beginning AUV (a) $22.510 $17.566 $12.653 $9.816 N/A N/A N/A (b) $21.772 $17.203 $12.547 $9.815 N/A N/A N/A Ending AUV (a) $29.587 $22.510 $17.566 $12.653 N/A N/A N/A (b) $28.261 $21.772 $17.203 $12.547 N/A N/A N/A Ending number of AUs 63,671 29,133 70,530 3,301 N/A N/A N/A
51
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- LAZARD RETIREMENT SERIES INC. (continued): International Equity Portfolio (inception date May 1, 2004) ----------------------------------------------------------- Beginning AUV (a) $14.888 $12.321 $11.292 $9.932 N/A N/A N/A (b) $14.400 $12.067 $11.198 $9.930 N/A N/A N/A Ending AUV (a) $16.263 $14.888 $12.321 $11.292 N/A N/A N/A (b) $15.533 $14.400 $12.067 $11.198 N/A N/A N/A Ending number of AUs 8,318 11,771 3,694 1,792 N/A N/A N/A U.S. Small Cap Equity Portfolio (inception date July 2, 2001) ------------------------------------------------------------- Beginning AUV (a) $19.687 $17.200 $16.772 $14.805 $10.941 $13.478 $12.638 (b) $13.086 $11.577 $11.430 $10.217 $9.937 N/A N/A Ending AUV (a) $18.014 $19.687 $17.200 $16.772 $14.805 $10.941 $13.478 (b) $11.825 $13.086 $11.577 $11.430 $10.217 N/A N/A Ending number of AUs 17,068 27,624 42,512 59,010 62,123 60,966 53,279 US Strategic Equity Portfolio (inception date July 2, 2001) ----------------------------------------------------------- Beginning AUV (a) $13.804 $11.915 $11.687 $10.602 $8.670 $10.498 $11.548 (b) $12.973 $11.338 $11.261 $10.344 $9.924 N/A N/A Ending AUV (a) $13.481 $13.804 $11.915 $11.687 $10.602 $8.670 $10.498 (b) $12.511 $12.973 $11.338 $11.261 $10.344 N/A N/A Ending number of AUs 21,507 24,070 10,421 1,531 3,366 11,488 1,624 ================================================================================================================================= LEGG MASON PARTNERS VARIABLE EQUITY TRUST: Aggressive Growth Portfolio (inception date April 30, 2007) ----------------------------------------------------------- Beginning AUV (a) $9.898 N/A N/A N/A N/A N/A N/A (b) $9.897 N/A N/A N/A N/A N/A N/A Ending AUV (a) $9.557 N/A N/A N/A N/A N/A N/A (b) $9.476 N/A N/A N/A N/A N/A N/A Ending number of AUs 1,150 N/A N/A N/A N/A N/A N/A Capital and Income Portfolio (inception date April 30, 2007) ------------------------------------------------------------ Beginning AUV (a) $9.951 N/A N/A N/A N/A N/A N/A (b) $9.950 N/A N/A N/A N/A N/A N/A Ending AUV (a) $10.012 N/A N/A N/A N/A N/A N/A (b) $9.927 N/A N/A N/A N/A N/A N/A Ending number of AUs 5,606 N/A N/A N/A N/A N/A N/A Fundamental Value Portfolio (inception date April 30, 2007) ----------------------------------------------------------- Beginning AUV (a) $9.903 N/A N/A N/A N/A N/A N/A (b) $9.902 N/A N/A N/A N/A N/A N/A Ending AUV (a) $9.497 N/A N/A N/A N/A N/A N/A (b) $9.416 N/A N/A N/A N/A N/A N/A Ending number of AUs 29,492 N/A N/A N/A N/A N/A N/A
52
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- LEGG MASON PARTNERS VARIABLE EQUITY TRUST (continued): Large Cap Growth Portfolio (inception date April 30, 2007) ---------------------------------------------------------- Beginning AUV (a) $9.896 N/A N/A N/A N/A N/A N/A (b) $9.895 N/A N/A N/A N/A N/A N/A Ending AUV (a) $9.921 N/A N/A N/A N/A N/A N/A (b) $9.837 N/A N/A N/A N/A N/A N/A Ending number of AUs 4,653 N/A N/A N/A N/A N/A N/A ================================================================================================================================= LEGG MASON PARTNERS VARIABLE INCOME TRUST: Global High Yield Bond Portfolio (inception date May 1, 2005) ------------------------------------------------------------- Beginning AUV (a) $11.512 $10.551 $10.009 N/A N/A N/A N/A (b) $11.275 $10.463 $10.008 N/A N/A N/A N/A Ending AUV (a) $11.344 $11.512 $10.551 N/A N/A N/A N/A (b) $10.971 $11.275 $10.463 N/A N/A N/A N/A Ending number of AUs 195 0 0 N/A N/A N/A N/A Strategic Bond Portfolio (inception date May 1, 2004) ----------------------------------------------------- Beginning AUV (a) $11.107 $10.724 $10.613 $9.998 N/A N/A N/A (b) $10.743 $10.503 $10.524 $9.997 N/A N/A N/A Ending AUV (a) $11.170 $11.107 $10.724 $10.613 N/A N/A N/A (b) $10.669 $10.743 $10.503 $10.524 N/A N/A N/A Ending number of AUs 14,341 10,505 4,841 9,967 N/A N/A N/A ================================================================================================================================= LORD ABBETT SERIES FUND, INC.: America's Value Portfolio (inception date May 1, 2003) ------------------------------------------------------ Beginning AUV (a) $16.219 $14.358 $14.029 $12.215 $10.000 N/A N/A (b) $13.294 $11.915 $11.788 $10.394 $9.974 N/A N/A Ending AUV (a) $16.498 $16.219 $14.358 $14.029 $12.215 N/A N/A (b) $13.354 $13.294 $11.915 $11.788 $10.394 N/A N/A Ending number of AUs 36,013 40,857 40,580 38,348 6,237 N/A N/A Growth and Income Portfolio (inception date July 2, 2001) --------------------------------------------------------- Beginning AUV (a) $17.852 $15.437 $15.162 $13.649 $10.565 $13.071 $13.617 (b) $13.166 $11.528 $11.464 $10.451 $9.949 N/A N/A Ending AUV (a) $18.208 $17.852 $15.437 $15.162 $13.649 $10.565 $13.071 (b) $13.261 $13.166 $11.528 $11.464 $10.451 N/A N/A Ending number of AUs 63,353 75,327 96,974 100,986 59,789 58,045 2,516 ================================================================================================================================= NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST: Lehman Brothers High Income Bond Portfolio (inception date May 1, 2005) ----------------------------------------------------------------------- Beginning AUV (a) $10.939 $10.322 $9.999 N/A N/A N/A N/A (b) $10.713 $10.236 $9.998 N/A N/A N/A N/A Ending AUV (a) $10.900 $10.939 $10.322 N/A N/A N/A N/A (b) $10.542 $10.713 $10.236 N/A N/A N/A N/A Ending number of AUs 1,792 1,129 389 N/A N/A N/A N/A
53
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (continued): Lehman Brothers Short Term Duration Bond Portfolio (inception date July 2, 2001) -------------------------------------------------------------------------------- Beginning AUV (a) $12.390 $12.058 $12.053 $12.129 $12.009 $11.561 $11.219 (b) $9.858 $9.713 $9.832 $10.018 $10.015 N/A N/A Ending AUV (a) $12.800 $12.390 $12.058 $12.053 $12.129 $12.009 $11.561 (b) $10.056 $9.858 $9.713 $9.832 $10.018 N/A N/A Ending number of AUs 51,234 37,692 47,601 43,985 28,162 48,996 48,165 Small Cap Growth Portfolio (inception date May 1, 2003) ------------------------------------------------------- Beginning AUV (a) $14.571 $14.038 $13.835 $12.541 $10.040 N/A N/A (b) $11.390 $11.112 $11.088 $10.177 $9.917 N/A N/A Ending AUV (a) $14.441 $14.571 $14.038 $13.835 $12.541 N/A N/A (b) $11.148 $11.390 $11.112 $11.088 $10.177 N/A N/A Ending number of AUs 2,602 2,868 3,241 7,637 1,487 N/A N/A Mid Cap Growth Portfolio (inception date July 2, 2001) ------------------------------------------------------ Beginning AUV (a) $11.023 $9.746 $8.689 $7.577 $5.999 $8.610 $9.889 (b) $14.172 $12.687 $11.453 $10.112 $9.854 N/A N/A Ending AUV (a) $13.318 $11.023 $9.746 $8.689 $7.577 $5.999 $8.610 (b) $16.908 $14.172 $12.687 $11.453 $10.112 N/A N/A Ending number of AUs 17,523 13,049 31,063 45,930 24,505 7,051 9,554 Partners Portfolio (inception date July 2, 2001) ------------------------------------------------ Beginning AUV (a) $15.259 $13.786 $11.843 $10.095 $7.578 $10.131 $10.499 (b) $15.000 $13.722 $11.935 $10.302 $9.926 N/A N/A Ending AUV (a) $16.450 $15.259 $13.786 $11.843 $10.095 $7.578 $10.131 (b) $15.969 $15.000 $13.722 $11.935 $10.302 N/A N/A Ending number of AUs 67,394 24,120 28,480 27,589 10,053 1,546 0 Regency Portfolio (inception date May 1, 2003) ---------------------------------------------- Beginning AUV (a) $19.039 $17.368 $15.725 $13.033 $10.010 N/A N/A (b) $14.414 $13.313 $12.205 $10.243 $9.957 N/A N/A Ending AUV (a) $19.393 $19.039 $17.368 $15.725 $13.033 N/A N/A (b) $14.498 $14.414 $13.313 $12.205 $10.243 N/A N/A Ending number of AUs 6,897 8,297 7,282 18,790 389 N/A N/A Socially Responsive Portfolio (inception date May 1, 2004) ---------------------------------------------------------- Beginning AUV (a) $13.345 $11.902 $11.295 $10.015 N/A N/A N/A (b) $12.908 $11.656 $11.200 $10.013 N/A N/A N/A Ending AUV (a) $14.160 $13.345 $11.902 $11.295 N/A N/A N/A (b) $13.525 $12.908 $11.656 $11.200 N/A N/A N/A Ending number of AUs 13,379 2,717 4,814 0 N/A N/A N/A
54
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- ================================================================================================================================= NORTHERN LIGHTS VARIABLE TRUST: JNF Balanced Portfolio (inception date May 1, 2007) --------------------------------------------------- Beginning AUV (a) $10.028 N/A N/A N/A N/A N/A N/A (b) $10.028 N/A N/A N/A N/A N/A N/A Ending AUV (a) $9.787 N/A N/A N/A N/A N/A N/A (b) $9.705 N/A N/A N/A N/A N/A N/A Ending number of AUs 72,737 N/A N/A N/A N/A N/A N/A NORTHERN LIGHTS VARIABLE TRUST: (continued) JNF Equity Portfolio (inception date May 1, 2007) ------------------------------------------------- Beginning AUV (a) $10.012 N/A N/A N/A N/A N/A N/A (b) $10.012 N/A N/A N/A N/A N/A N/A Ending AUV (a) $8.963 N/A N/A N/A N/A N/A N/A (b) $8.888 N/A N/A N/A N/A N/A N/A Ending number of AUs 235,949 N/A N/A N/A N/A N/A N/A ================================================================================================================================= PIMCO VARIABLE INSURANCE TRUST: All Asset Portfolio (inception date May 1, 2006) ------------------------------------------------ Beginning AUV (a) $10.383 $9.973 N/A N/A N/A N/A N/A (b) $10.296 $9.972 N/A N/A N/A N/A N/A Ending AUV (a) $11.090 $10.383 N/A N/A N/A N/A N/A (b) $10.860 $10.296 N/A N/A N/A N/A N/A Ending number of AUs 0 1,995 N/A N/A N/A N/A N/A CommodityRealReturn Strategy Portfolio (inception date May 1, 2006) ------------------------------------------------------------------- Beginning AUV (a) $9.516 $10.104 N/A N/A N/A N/A N/A (b) $9.436 $10.103 N/A N/A N/A N/A N/A Ending AUV (a) $11.563 $9.516 N/A N/A N/A N/A N/A (b) $11.323 $9.436 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Emerging Markets Bond Portfolio (inception date May 1, 2006) ------------------------------------------------------------ Beginning AUV (a) $10.733 $9.978 N/A N/A N/A N/A N/A (b) $10.643 $9.977 N/A N/A N/A N/A N/A Ending AUV (a) $11.197 $10.733 N/A N/A N/A N/A N/A (b) $10.965 $10.643 N/A N/A N/A N/A N/A Ending number of AUs 812 77,010 N/A N/A N/A N/A N/A Foreign Bond US Dollar-Hedged Portfolio (inception date May 1, 2006) -------------------------------------------------------------------- Beginning AUV (a) $10.234 $10.009 N/A N/A N/A N/A N/A (b) $10.148 $10.008 N/A N/A N/A N/A N/A Ending AUV (a) $10.456 $10.234 N/A N/A N/A N/A N/A (b) $10.239 $10.148 N/A N/A N/A N/A N/A Ending number of AUs 216 216 N/A N/A N/A N/A N/A
55
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- PIMCO VARIABLE INSURANCE TRUST: (continued) Global Bond Unhedged Portfolio (inception date May 1, 2006) ----------------------------------------------------------- Beginning AUV (a) $10.161 $10.000 N/A N/A N/A N/A N/A (b) $10.076 $9.999 N/A N/A N/A N/A N/A Ending AUV (a) $10.994 $10.161 N/A N/A N/A N/A N/A (b) $10.766 $10.076 N/A N/A N/A N/A N/A Ending number of AUs 6,805 8,494 N/A N/A N/A N/A N/A High Yield Portfolio (inception date May 1, 2006) ------------------------------------------------- Beginning AUV (a) $10.529 $9.989 N/A N/A N/A N/A N/A (b) $10.441 $9.988 N/A N/A N/A N/A N/A Ending AUV (a) $10.746 $10.529 N/A N/A N/A N/A N/A (b) $10.523 $10.441 N/A N/A N/A N/A N/A Ending number of AUs 12,748 13,302 N/A N/A N/A N/A N/A Long Term US Government Portfolio (inception date November 1, 2006) ------------------------------------------------------------------- Beginning AUV (a) $9.919 $10.047 N/A N/A N/A N/A N/A (b) $9.899 $10.047 N/A N/A N/A N/A N/A Ending AUV (a) $10.734 $9.919 N/A N/A N/A N/A N/A (b) $10.579 $9.899 N/A N/A N/A N/A N/A Ending number of AUs 22,598 0 N/A N/A N/A N/A N/A Low Duration Portfolio (inception date November 1, 2006) -------------------------------------------------------- Beginning AUV (a) $10.029 $10.011 N/A N/A N/A N/A N/A (b) $10.009 $10.010 N/A N/A N/A N/A N/A Ending AUV (a) $10.618 $10.029 N/A N/A N/A N/A N/A (b) $10.464 $10.009 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Real Return Portfolio (inception date May 1, 2003) -------------------------------------------------- Beginning AUV (a) $11.292 $11.370 $11.294 $10.516 $10.035 N/A N/A (b) $10.391 $10.594 $10.655 $10.046 $10.104 N/A N/A Ending AUV (a) $12.318 $11.292 $11.370 $11.294 $10.516 N/A N/A (b) $11.193 $10.391 $10.594 $10.655 $10.046 N/A N/A Ending number of AUs 69,796 74,443 64,460 51,147 6,985 N/A N/A RealEstateRealReturn Strategy Portfolio (inception date May 1, 2006) -------------------------------------------------------------------- Beginning AUV (a) $11.853 $9.823 N/A N/A N/A N/A N/A (b) $11.754 $9.822 N/A N/A N/A N/A N/A Ending AUV (a) $10.206 $11.853 N/A N/A N/A N/A N/A (b) $9.995 $11.754 N/A N/A N/A N/A N/A Ending number of AUs 5,782 2,187 N/A N/A N/A N/A N/A
56
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- PIMCO VARIABLE INSURANCE TRUST: (continued) Short Term Portfolio (inception date May 1, 2004) ------------------------------------------------- Beginning AUV (a) $10.407 $10.120 $10.011 $10.000 N/A N/A N/A (b) $10.065 $9.911 $9.927 $9.998 N/A N/A N/A Ending AUV (a) $10.722 $10.407 $10.120 $10.011 N/A N/A N/A (b) $10.241 $10.065 $9.911 $9.927 N/A N/A N/A Ending number of AUs 80,693 39,388 24,581 2,406 N/A N/A N/A StockPLUS(R) Total Return Portfolio (inception date May 1, 2006) ---------------------------------------------------------------- Beginning AUV (a) $10.932 $9.904 N/A N/A N/A N/A N/A (b) $10.841 $9.903 N/A N/A N/A N/A N/A Ending AUV (a) $11.811 $10.932 N/A N/A N/A N/A N/A (b) $11.566 $10.841 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Total Return Portfolio (inception date May 1, 2003) --------------------------------------------------- Beginning AUV (a) $10.819 $10.566 $10.458 $10.112 $10.010 N/A N/A (b) $10.394 $10.277 $10.301 $10.085 $10.069 N/A N/A Ending AUV (a) $11.600 $10.819 $10.566 $10.458 $10.112 N/A N/A (b) $11.005 $10.394 $10.277 $10.301 $10.085 N/A N/A Ending number of AUs 146,992 145,485 113,223 53,410 11,715 N/A N/A ================================================================================================================================= PIONEER VARIABLE CONTRACTS TRUST: Cullen Value Portfolio (inception date November 1, 2006) -------------------------------------------------------- Beginning AUV (a) $10.331 $9.935 N/A N/A N/A N/A N/A (b) $10.310 $9.935 N/A N/A N/A N/A N/A Ending AUV (a) $10.839 $10.331 N/A N/A N/A N/A N/A (b) $10.682 $10.310 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Emerging Markets Portfolio (inception date November 1, 2006) ------------------------------------------------------------ Beginning AUV (a) $11.144 $10.036 N/A N/A N/A N/A N/A (b) $11.121 $10.035 N/A N/A N/A N/A N/A Ending AUV (a) $15.653 $11.144 N/A N/A N/A N/A N/A (b) $15.426 $11.121 N/A N/A N/A N/A N/A Ending number of AUs 26,961 2,424 N/A N/A N/A N/A N/A Equity Income Portfolio (inception date July 2, 2001) ----------------------------------------------------- Beginning AUV (a) $13.103 $10.880 $10.456 $9.138 $7.579 $9.155 $9.594 (b) $14.382 $12.092 $11.766 $10.413 $9.965 N/A N/A Ending AUV (a) $12.990 $13.103 $10.880 $10.456 $9.138 $7.579 $9.155 (b) $14.079 $14.382 $12.092 $11.766 $10.413 N/A N/A Ending number of AUs 36,548 77,150 54,199 35,182 18,431 3,630 2,426
57
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- PIONEER VARIABLE CONTRACTS TRUST: (continued) Fund Portfolio (inception date July 2, 2001) -------------------------------------------- Beginning AUV (a) $11.139 $9.708 $9.293 $8.496 $6.980 $8.766 $9.441 (b) $13.034 $11.502 $11.148 $10.321 $9.922 N/A N/A Ending AUV (a) $11.509 $11.139 $9.708 $9.293 $8.496 $6.980 $8.766 (b) $13.299 $13.034 $11.502 $11.148 $10.321 N/A N/A Ending number of AUs 42,956 46,373 64,530 67,334 7,500 2,626 4,038 Global High Yield Portfolio (inception date November 1, 2006) ------------------------------------------------------------- Beginning AUV (a) $10.243 $10.012 N/A N/A N/A N/A N/A (b) $10.223 $10.012 N/A N/A N/A N/A N/A Ending AUV (a) $10.316 $10.243 N/A N/A N/A N/A N/A (b) $10.166 $10.223 N/A N/A N/A N/A N/A Ending number of AUs 425 0 N/A N/A N/A N/A N/A High Yield Portfolio (inception date May 1, 2005) ------------------------------------------------- Beginning AUV (a) $11.149 $10.445 $10.003 N/A N/A N/A N/A (b) $10.919 $10.357 $10.002 N/A N/A N/A N/A Ending AUV (a) $11.608 $11.149 $10.445 N/A N/A N/A N/A (b) $11.226 $10.919 $10.357 N/A N/A N/A N/A Ending number of AUs 96,916 58,259 91,422 N/A N/A N/A N/A International Value Portfolio (November 1, 2006) ------------------------------------------------ Beginning AUV (a) $10.534 $10.012 N/A N/A N/A N/A N/A (b) $10.513 $10.012 N/A N/A N/A N/A N/A Ending AUV (a) $11.762 $10.534 N/A N/A N/A N/A N/A (b) $11.592 $10.513 N/A N/A N/A N/A N/A Ending number of AUs 37,257 27,463 N/A N/A N/A N/A N/A Mid Cap Value Portfolio (inception date May 1, 2005) ---------------------------------------------------- Beginning AUV (a) $12.073 $10.904 $10.057 N/A N/A N/A N/A (b) $11.824 $10.813 $10.056 N/A N/A N/A N/A Ending AUV (a) $12.540 $12.073 $10.904 N/A N/A N/A N/A (b) $12.128 $11.824 $10.813 N/A N/A N/A N/A Ending number of AUs 5,127 7,976 7,331 N/A N/A N/A N/A Small Cap Value Portfolio (inception date November 1, 2006) ----------------------------------------------------------- Beginning AUV (a) $10.290 $9.843 N/A N/A N/A N/A N/A (b) $10.270 $9.842 N/A N/A N/A N/A N/A Ending AUV (a) $9.418 $10.290 N/A N/A N/A N/A N/A (b) $9.281 $10.270 N/A N/A N/A N/A N/A Ending number of AUs 54 49 N/A N/A N/A N/A N/A
58
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- PIONEER VARIABLE CONTRACTS TRUST: (continued) Strategic Income Portfolio (inception date November 1, 2006) ------------------------------------------------------------ Beginning AUV (a) $10.098 $10.019 N/A N/A N/A N/A N/A (b) $10.077 $10.019 N/A N/A N/A N/A N/A Ending AUV (a) $10.570 $10.098 N/A N/A N/A N/A N/A (b) $10.417 $10.077 N/A N/A N/A N/A N/A Ending number of AUs 2,591 0 N/A N/A N/A N/A N/A ================================================================================================================================= ROYCE CAPITAL FUND: Micro-Cap Portfolio (inception date May 1, 2003) ------------------------------------------------ Beginning AUV (a) $21.770 $18.234 $16.567 $14.758 $10.052 N/A N/A (b) $14.445 $12.250 $11.270 $10.166 $9.973 N/A N/A Ending AUV (a) $22.319 $21.770 $18.234 $16.567 $14.758 N/A N/A (b) $14.624 $14.445 $12.250 $11.270 $10.166 N/A N/A Ending number of AUs 34,232 31,103 38,891 36,680 9,897 N/A N/A Small-Cap Portfolio (inception date May 1, 2003) ------------------------------------------------ Beginning AUV (a) $20.939 $18.373 $17.163 $13.929 $9.982 N/A N/A (b) $14.720 $13.078 $12.369 $10.166 $9.974 N/A N/A Ending AUV (a) $20.205 $20.939 $18.373 $17.163 $13.929 N/A N/A (b) $14.026 $14.720 $13.078 $12.369 $10.166 N/A N/A Ending number of AUs 52,391 46,655 78,055 71,311 14,108 N/A N/A ================================================================================================================================= RYDEX VARIABLE TRUST: CLS AdvisorOne Amerigo Fund (inception date May 1, 2005) -------------------------------------------------------- Beginning AUV (a) $12.481 $11.267 $10.041 N/A N/A N/A N/A (b) $12.224 $11.173 $10.040 N/A N/A N/A N/A Ending AUV (a) $14.002 $12.481 $11.267 N/A N/A N/A N/A (b) $13.542 $12.224 $11.173 N/A N/A N/A N/A Ending number of AUs 40,146 41,282 2,799 N/A N/A N/A N/A CLS AdvisorOne Clermont Fund (inception date May 1, 2005) --------------------------------------------------------- Beginning AUV (a) $11.250 $10.527 $10.027 N/A N/A N/A N/A (b) $11.018 $10.439 $10.026 N/A N/A N/A N/A Ending AUV (a) $11.783 $11.250 $10.527 N/A N/A N/A N/A (b) $11.396 $11.018 $10.439 N/A N/A N/A N/A Ending number of AUs 915 0 0 N/A N/A N/A N/A Absolute Return Strategies Fund (inception date February 3, 2006) ----------------------------------------------------------------- Beginning AUV (a) $10.301 $9.996 N/A N/A N/A N/A N/A (b) $10.185 $9.995 N/A N/A N/A N/A N/A Ending AUV (a) $10.547 $10.301 N/A N/A N/A N/A N/A (b) $10.298 $10.185 N/A N/A N/A N/A N/A Ending number of AUs 1,614 826 N/A N/A N/A N/A N/A
59
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Banking Fund (inception May 1, 2004) ------------------------------------ Beginning AUV (a) $12.177 $11.100 $11.576 $10.096 N/A N/A N/A (b) $11.778 $10.871 $11.479 $10.094 N/A N/A N/A Ending AUV (a) $8.755 $12.177 $11.100 $11.576 N/A N/A N/A (b) $8.362 $11.778 $10.871 $11.479 N/A N/A N/A Ending number of AUs 0 4,753 397 108 N/A N/A N/A Basic Materials Fund (inception May 1, 2004) -------------------------------------------- Beginning AUV (a) $15.302 $12.688 $12.367 $9.969 N/A N/A N/A (b) $14.800 $12.426 $12.264 $9.967 N/A N/A N/A Ending AUV (a) $20.213 $15.302 $12.688 $12.367 N/A N/A N/A (b) $19.306 $14.800 $12.426 $12.264 N/A N/A N/A Ending number of AUs 46,932 19,970 81,012 4,436 N/A N/A N/A Biotechnology Fund (inception date May 1, 2004) ----------------------------------------------- Beginning AUV (a) $9.624 $10.095 $9.250 $9.795 N/A N/A N/A (b) $9.308 $9.886 $9.172 $9.794 N/A N/A N/A Ending AUV (a) $9.907 $9.624 $10.095 $9.250 N/A N/A N/A (b) $9.462 $9.308 $9.886 $9.172 N/A N/A N/A Ending number of AUs 1,579 945 71,575 1,998 N/A N/A N/A Commodities Strategy Fund (inception date October 21, 2005) ----------------------------------------------------------- Beginning AUV (a) $7.803 $9.635 $10.048 N/A N/A N/A N/A (b) $7.688 $9.612 $10.047 N/A N/A N/A N/A Ending AUV (a) $10.081 $7.803 $9.635 N/A N/A N/A N/A (b) $9.808 $7.688 $9.612 N/A N/A N/A N/A Ending Number of AUs 106 97 2,048 N/A N/A N/A N/A Consumer Products Fund (inception date May 1, 2004) --------------------------------------------------- Beginning AUV (a) $11.832 $10.218 $10.403 $10.096 N/A N/A N/A (b) $11.444 $10.007 $10.315 $10.095 N/A N/A N/A Ending AUV (a) $12.959 $11.832 $10.218 $10.403 N/A N/A N/A (b) $12.378 $11.444 $10.007 $10.315 N/A N/A N/A Ending number of AUs 353 1,218 7,291 327 N/A N/A N/A Dow 2X Strategy Fund (inception date July 15, 2004) --------------------------------------------------- Beginning AUV (a) $13.479 $10.471 $11.038 $9.918 N/A N/A N/A (b) $13.078 $10.286 $10.980 $9.918 N/A N/A N/A Ending AUV (a) $14.374 $13.479 $10.471 $11.038 N/A N/A N/A (b) $13.772 $13.078 $10.286 $10.980 N/A N/A N/A Ending number of AUs 415,631 26,511 125 469 N/A N/A N/A Electronics Fund (inception date May 1, 2004) --------------------------------------------- Beginning AUV (a) $9.418 $9.319 $9.098 $9.740 N/A N/A N/A (b) $9.109 $9.126 $9.021 $9.739 N/A N/A N/A Ending AUV (a) $9.055 $9.418 $9.319 $9.098 N/A N/A N/A (b) $8.648 $9.109 $9.126 $9.021 N/A N/A N/A Ending number of AUs 0 14,607 40,698 1,957 N/A N/A N/A
60
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Energy Fund (inception date May 1, 2004) ---------------------------------------- Beginning AUV (a) $18.239 $16.525 $12.095 $10.225 N/A N/A N/A (b) $17.641 $16.184 $11.994 $10.223 N/A N/A N/A Ending AUV (a) $23.958 $18.239 $16.525 $12.095 N/A N/A N/A (b) $22.883 $17.641 $16.184 $11.994 N/A N/A N/A Ending number of AUs 130,952 64,362 88,360 38,919 N/A N/A N/A Energy Services Fund (inception date May 1, 2004) ------------------------------------------------- Beginning AUV (a) $19.343 $17.674 $12.085 $10.174 N/A N/A N/A (b) $18.709 $17.309 $11.984 $10.173 N/A N/A N/A Ending AUV (a) $26.148 $19.343 $17.674 $12.085 N/A N/A N/A (b) $24.975 $18.709 $17.309 $11.984 N/A N/A N/A Ending number of AUs 126,550 44,554 67,836 36,994 N/A N/A N/A Essential Portfolio Aggressive Fund (November 1, 2006) ------------------------------------------------------ Beginning AUV (a) $10.275 $9.908 N/A N/A N/A N/A N/A (b) $10.254 $9.907 N/A N/A N/A N/A N/A Ending AUV (a) $10.808 $10.275 N/A N/A N/A N/A N/A (b) $10.652 $10.254 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Essential Portfolio Conservative Fund (November 1, 2006) -------------------------------------------------------- Beginning AUV (a) $10.115 $9.984 N/A N/A N/A N/A N/A (b) $10.095 $9.983 N/A N/A N/A N/A N/A Ending AUV (a) $10.617 $10.115 N/A N/A N/A N/A N/A (b) $10.463 $10.095 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Essential Portfolio Moderate Fund (November 1, 2006) ---------------------------------------------------- Beginning AUV (a) $10.263 $9.952 N/A N/A N/A N/A N/A (b) $10.242 $9.951 N/A N/A N/A N/A N/A Ending AUV (a) $10.783 $10.263 N/A N/A N/A N/A N/A (b) $10.627 $10.242 N/A N/A N/A N/A N/A Ending number of AUs 0 0 N/A N/A N/A N/A N/A Europe 1.25X Strategy Fund (inception date May 1, 2004) ------------------------------------------------------- Beginning AUV (a) $16.124 $12.625 $12.038 $10.113 N/A N/A N/A (b) $15.596 $12.365 $11.937 $10.111 N/A N/A N/A Ending AUV (a) $17.976 $16.124 $12.625 $12.038 N/A N/A N/A (b) $17.169 $15.596 $12.365 $11.937 N/A N/A N/A Ending number of AUs 24,451 18,552 3,380 108 N/A N/A N/A Financial Services Fund (inception date May 1, 2004) ---------------------------------------------------- Beginning AUV (a) $13.460 $11.692 $11.469 $10.048 N/A N/A N/A (b) $13.018 $11.451 $11.373 $10.047 N/A N/A N/A Ending AUV (a) $10.776 $13.460 $11.692 $11.469 N/A N/A N/A (b) $10.292 $13.018 $11.451 $11.373 N/A N/A N/A Ending number of AUs 3,403 15,511 17,185 2,250 N/A N/A N/A
61
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Government Long Bond 1.2X Strategy Fund (inception date May 1, 2003) -------------------------------------------------------------------- Beginning AUV (a) $10.487 $10.979 $10.336 $9.668 $9.985 N/A N/A (b) $10.636 $11.275 $10.747 $10.179 $10.221 N/A N/A Ending AUV (a) $11.350 $10.487 $10.979 $10.336 $9.668 N/A N/A (b) $11.367 $10.636 $11.275 $10.747 $10.179 N/A N/A Ending number of AUs 87,029 24,151 5,537 6,762 916 N/A N/A Health Care Fund (inception date May 1, 2004) --------------------------------------------- Beginning AUV (a) $11.376 $10.975 $10.059 $10.065 N/A N/A N/A (b) $11.003 $10.748 $9.974 $10.064 N/A N/A N/A Ending AUV (a) $11.893 $11.376 $10.975 $10.059 N/A N/A N/A (b) $11.359 $11.003 $10.748 $9.974 N/A N/A N/A Ending number of AUs 8,367 37,625 16,907 865 N/A N/A N/A Hedged Equity Fund (inception date February 3, 2006) ---------------------------------------------------- Beginning AUV (a) $10.276 $9.996 N/A N/A N/A N/A N/A (b) $10.161 $9.995 N/A N/A N/A N/A N/A Ending AUV (a) $10.453 $10.276 N/A N/A N/A N/A N/A (b) $10.206 $10.161 N/A N/A N/A N/A N/A Ending number of AUs 71 71 N/A N/A N/A N/A N/A Internet Fund (inception date May 1, 2004) ------------------------------------------ Beginning AUV (a) $11.772 $10.882 $11.189 $9.793 N/A N/A N/A (b) $11.386 $10.657 $11.095 $9.791 N/A N/A N/A Ending AUV (a) $12.813 $11.772 $10.882 $11.189 N/A N/A N/A (b) $12.238 $11.386 $10.657 $11.095 N/A N/A N/A Ending number of AUs 1,826 1,867 36,660 1,903 N/A N/A N/A Inverse Dow 2X Strategy Fund (inception date July 15, 2004) ----------------------------------------------------------- Beginning AUV (a) $6.735 $8.730 $8.711 $10.077 N/A N/A N/A (b) $6.534 $8.576 $8.665 $10.077 N/A N/A N/A Ending AUV (a) $6.044 $6.735 $8.730 $8.711 N/A N/A N/A (b) $5.791 $6.534 $8.576 $8.665 N/A N/A N/A Ending number of AUs 90,238 300,092 68 94 N/A N/A N/A Inverse Government Long Bond Strategy Fund (inception date May 1, 2003) ----------------------------------------------------------------------- Beginning AUV (a) $8.631 $8.096 $8.664 $9.835 $10.000 N/A N/A (b) $8.253 $7.839 $8.494 $9.764 $9.787 N/A N/A Ending AUV (a) $8.126 $8.631 $8.096 $8.664 $9.835 N/A N/A (b) $7.674 $8.253 $7.839 $8.494 $9.764 N/A N/A Ending number of AUs 636 18,166 3,458 7,527 977 N/A N/A Inverse Mid-Cap Strategy Fund (inception date July 15, 2004) ------------------------------------------------------------ Beginning AUV (a) $7.509 $7.918 $8.743 $9.942 N/A N/A N/A (b) $7.286 $7.778 $8.696 $9.942 N/A N/A N/A Ending AUV (a) $7.257 $7.509 $7.918 $8.743 N/A N/A N/A (b) $6.953 $7.286 $7.778 $8.696 N/A N/A N/A Ending number of AUs 0 7,084 0 0 N/A N/A N/A
62
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Inverse NASDAQ-100 Strategy Fund (inception date May 1, 2004) ------------------------------------------------------------- Beginning AUV (a) $8.383 $8.622 $8.634 $10.109 N/A N/A N/A (b) $8.108 $8.444 $8.561 $10.108 N/A N/A N/A Ending AUV (a) $7.334 $8.383 $8.622 $8.634 N/A N/A N/A (b) $7.004 $8.108 $8.444 $8.561 N/A N/A N/A Ending number of AUs 116 1,964 31,928 1,425 N/A N/A N/A Inverse Russell 2000 Strategy Fund (inception date May 1, 2004) --------------------------------------------------------------- Beginning AUV (a) $7.021 $8.086 $8.458 $9.964 N/A N/A N/A (b) $6.812 $7.944 $8.414 $9.964 N/A N/A N/A Ending AUV (a) $7.294 $7.021 $8.086 $8.458 N/A N/A N/A (b) $6.989 $6.812 $7.944 $8.414 N/A N/A N/A Ending number of AUs 18,334 154,507 47,724 0 N/A N/A N/A Inverse S&P 500 Strategy Fund (inception date May 1, 2003) ---------------------------------------------------------- Beginning AUV (a) $6.337 $6.948 $7.100 $8.019 $9.985 N/A N/A (b) $7.318 $8.124 $8.407 $9.614 $10.066 N/A N/A Ending AUV (a) $6.301 $6.337 $6.948 $7.100 $8.019 N/A N/A (b) $7.185 $7.318 $8.124 $8.407 $9.614 N/A N/A Ending number of AUs 75,659 9,132 8,979 9,346 8,868 N/A N/A Japan 1.25X Strategy Fund (inception date May 1, 2004) ------------------------------------------------------ Beginning AUV (a) $12.696 $12.246 $10.318 $9.875 N/A N/A N/A (b) $12.280 $11.993 $10.232 $9.873 N/A N/A N/A Ending AUV (a) $11.113 $12.696 $12.246 $10.318 N/A N/A N/A (b) $10.614 $12.280 $11.993 $10.232 N/A N/A N/A Ending number of AUs 6,096 71,508 48,699 2,481 N/A N/A N/A Large-Cap Growth Fund (inception date July 15, 2004) ---------------------------------------------------- Beginning AUV (a) $10.943 $10.528 $10.490 $9.955 N/A N/A N/A (b) $10.617 $10.342 $10.434 $9.955 N/A N/A N/A Ending AUV (a) $11.320 $10.943 $10.528 $10.490 N/A N/A N/A (b) $10.846 $10.617 $10.342 $10.434 N/A N/A N/A Ending number of AUs 25,342 39,241 11,506 228 N/A N/A N/A Large-Cap Value Fund (inception date July 15, 2004) --------------------------------------------------- Beginning AUV (a) $13.314 $11.474 $11.168 $9.964 N/A N/A N/A (b) $12.917 $11.272 $11.109 $9.964 N/A N/A N/A Ending AUV (a) $12.423 $13.314 $11.474 $11.168 N/A N/A N/A (b) $11.903 $12.917 $11.272 $11.109 N/A N/A N/A Ending number of AUs 34,736 96,086 4,164 0 N/A N/A N/A Leisure Fund (inception date May 1, 2004) ----------------------------------------- Beginning AUV (a) $13.143 $10.794 $11.507 $10.021 N/A N/A N/A (b) $12.712 $10.571 $11.410 $10.020 N/A N/A N/A Ending AUV (a) $12.630 $13.143 $10.794 $11.507 N/A N/A N/A (b) $12.064 $12.712 $10.571 $11.410 N/A N/A N/A Ending number of AUs 23,588 25,748 9,051 442 N/A N/A N/A
63
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Mid Cap 1.5X Strategy Fund (inception date May 1, 2003) ------------------------------------------------------- Beginning AUV (a) $21.880 $20.086 $17.856 $14.826 $10.000 N/A N/A (b) $14.497 $13.475 $12.129 $10.198 $9.867 N/A N/A Ending AUV (a) $22.350 $21.880 $20.086 $17.856 $14.826 N/A N/A (b) $14.623 $14.497 $13.475 $12.129 $10.198 N/A N/A Ending number of AUs 3,733 13,754 9,793 31,581 788 N/A N/A Mid-Cap Growth Fund (inception date July 15, 2004) -------------------------------------------------- Beginning AUV (a) $12.365 $12.158 $11.061 $10.057 N/A N/A N/A (b) $11.997 $11.944 $11.003 $10.057 N/A N/A N/A Ending AUV (a) $13.222 $12.365 $12.158 $11.061 N/A N/A N/A (b) $12.668 $11.997 $11.944 $11.003 N/A N/A N/A Ending number of AUs 6,015 6,559 15,025 72 N/A N/A N/A Mid-Cap Value Fund (inception date July 15, 2004) ------------------------------------------------- Beginning AUV (a) $13.960 $12.092 $11.320 $10.040 N/A N/A N/A (b) $13.545 $11.879 $11.260 $10.040 N/A N/A N/A Ending AUV (a) $13.098 $13.960 $12.092 $11.320 N/A N/A N/A (b) $12.549 $13.545 $11.879 $11.260 N/A N/A N/A Ending number of AUs 4,632 80,800 1,751 322 N/A N/A N/A Multi-Cap Core Equity Fund (inception date February 3, 2006) ------------------------------------------------------------ Beginning AUV (a) $10.892 $9.973 N/A N/A N/A N/A N/A (b) $10.770 $9.972 N/A N/A N/A N/A N/A Ending AUV (a) $10.175 $10.892 N/A N/A N/A N/A N/A (b) $9.935 $10.770 N/A N/A N/A N/A N/A Ending number of AUs 14,896 17,368 N/A N/A N/A N/A N/A Nova Fund (inception date July 2, 2001) --------------------------------------- Beginning AUV (a) $13.523 $11.498 $11.214 $9.922 $7.229 $11.405 $13.201 (b) $13.812 $11.890 $11.743 $10.520 $9.868 N/A N/A Ending AUV (a) $13.485 $13.523 $11.498 $11.214 $9.922 $7.229 $11.405 (b) $13.600 $13.812 $11.890 $11.743 $10.520 N/A N/A Ending number of AUs 6,655 22,986 19,632 15,780 23,877 14,823 21,041 NASDAQ-100 2X Strategy Fund (inception date May 1, 2004) -------------------------------------------------------- Beginning AUV (a) $11.975 $11.581 $12.111 $9.767 N/A N/A N/A (b) $11.582 $11.341 $12.009 $9.766 N/A N/A N/A Ending AUV (a) $15.138 $11.975 $11.581 $12.111 N/A N/A N/A (b) $14.459 $11.582 $11.341 $12.009 N/A N/A N/A Ending number of AUs 150,359 22,063 88,383 34,512 N/A N/A N/A NASDAQ-100 Fund (inception date July 2, 2001) --------------------------------------------- Beginning AUV (a) $14.643 $14.039 $14.079 $13.058 $9.106 $15.102 $17.973 (b) $11.024 $10.701 $10.867 $10.205 $9.821 N/A N/A Ending AUV (a) $17.012 $14.643 $14.039 $14.079 $13.058 $9.106 $15.102 (b) $12.647 $11.024 $10.701 $10.867 $10.205 N/A N/A Ending number of AUs 76,463 2,829 11,880 55,438 32,248 28,750 12,368
64
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Precious Metals Fund (inception date May 1, 2004) ------------------------------------------------- Beginning AUV (a) $16.354 $13.658 $11.457 $9.998 N/A N/A N/A (b) $15.818 $13.375 $11.361 $9.997 N/A N/A N/A Ending AUV (a) $19.279 $16.354 $13.658 $11.457 N/A N/A N/A (b) $18.413 $15.818 $13.375 $11.361 N/A N/A N/A Ending number of AUs 55,118 43,823 13,767 2,131 N/A N/A N/A Real Estate Fund (inception date May 1, 2004) --------------------------------------------- Beginning AUV (a) $18.215 $14.129 $13.372 $10.091 N/A N/A N/A (b) $17.618 $13.838 $13.260 $10.090 N/A N/A N/A Ending AUV (a) $14.526 $18.215 $14.129 $13.372 N/A N/A N/A (b) $13.874 $17.618 $13.838 $13.260 N/A N/A N/A Ending number of AUs 10,740 15,958 10,386 31,657 N/A N/A N/A Retailing Fund (inception date May 1, 2004) ------------------------------------------- Beginning AUV (a) $12.041 $11.093 $10.665 $9.991 N/A N/A N/A (b) $11.647 $10.864 $10.575 $9.990 N/A N/A N/A Ending AUV (a) $10.377 $12.041 $11.093 $10.665 N/A N/A N/A (b) $9.911 $11.647 $10.864 $10.575 N/A N/A N/A Ending number of AUs 0 4,291 0 0 N/A N/A N/A Russell 2000 1.5X Strategy Fund (inception date May 1, 2003) ------------------------------------------------------------ Beginning AUV (a) $23.849 $20.012 $19.529 $15.818 $10.014 N/A N/A (b) $15.010 $12.753 $12.601 $10.336 $9.849 N/A N/A Ending AUV (a) $21.931 $23.849 $20.012 $19.529 $15.818 N/A N/A (b) $13.631 $15.010 $12.753 $12.601 $10.336 N/A N/A Ending number of AUs 8,496 24,504 30,431 46,929 13,941 N/A N/A Russell 2000 2X Strategy Fund (inception date November 1, 2006) --------------------------------------------------------------- Beginning AUV (a) $10.374 $9.620 N/A N/A N/A N/A N/A (b) $10.353 $9.620 N/A N/A N/A N/A N/A Ending AUV (a) $8.942 $10.374 N/A N/A N/A N/A N/A (b) $8.812 $10.353 N/A N/A N/A N/A N/A Ending number of AUs 829 29,861 N/A N/A N/A N/A N/A S&P 500 2X Strategy Fund (inception date May 1, 2004) ----------------------------------------------------- Beginning AUV (a) $14.375 $11.784 $11.559 $10.054 N/A N/A N/A (b) $13.904 $11.541 $11.462 $10.053 N/A N/A N/A Ending AUV (a) $14.261 $14.375 $11.784 $11.559 N/A N/A N/A (b) $13.621 $13.904 $11.541 $11.462 N/A N/A N/A Ending number of AUs 136,637 44,016 93,975 120 N/A N/A N/A Sector Rotation Fund (inception date May 1, 2003) ------------------------------------------------- Beginning AUV (a) $16.806 $15.300 $13.644 $12.498 $10.024 N/A N/A (b) $13.202 $12.170 $10.989 $10.193 $9.858 N/A N/A Ending AUV (a) $20.340 $16.806 $15.300 $13.644 $12.498 N/A N/A (b) $15.779 $13.202 $12.170 $10.989 $10.193 N/A N/A Ending number of AUs 17,001 9,281 8,768 4,514 287 N/A N/A
65
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Small-Cap Growth Fund (inception date July 15, 2004) ---------------------------------------------------- Beginning AUV (a) $12.829 $12.076 $11.531 $10.056 N/A N/A N/A (b) $12.447 $11.863 $11.470 $10.056 N/A N/A N/A Ending AUV (a) $12.636 $12.829 $12.076 $11.531 N/A N/A N/A (b) $12.106 $12.447 $11.863 $11.470 N/A N/A N/A Ending number of AUs 49,031 63,175 8,217 4,533 N/A N/A N/A Small-Cap Value Fund (inception date July 15, 2004) --------------------------------------------------- Beginning AUV (a) $13.813 $11.751 $11.498 $10.043 N/A N/A N/A (b) $13.402 $11.544 $11.437 $10.043 N/A N/A N/A Ending AUV (a) $10.847 $13.813 $11.751 $11.498 N/A N/A N/A (b) $10.393 $13.402 $11.544 $11.437 N/A N/A N/A Ending number of AUs 20,847 28,089 9,163 33,795 N/A N/A N/A Strengthening Dollar 2X Strategy Fund (inception date October 21, 2005) ----------------------------------------------------------------------- Beginning AUV (a) $9.122 $10.350 $10.120 N/A N/A N/A N/A (b) $8.987 $10.324 $10.120 N/A N/A N/A N/A Ending AUV (a) $8.015 $9.122 $10.350 N/A N/A N/A N/A (b) $7.797 $8.987 $10.324 N/A N/A N/A N/A Ending Number of AUs 192 0 0 N/A N/A N/A N/A Technology Fund (inception date May 1, 2004) -------------------------------------------- Beginning AUV (a) $11.109 $10.639 $10.463 $9.844 N/A N/A N/A (b) $10.745 $10.419 $10.375 $9.843 N/A N/A N/A Ending AUV (a) $12.091 $11.109 $10.639 $10.463 N/A N/A N/A (b) $11.548 $10.745 $10.419 $10.375 N/A N/A N/A Ending number of AUs 59,722 1,449 32,854 0 N/A N/A N/A Telecommunications Fund (inception date May 1, 2004) ---------------------------------------------------- Beginning AUV (a) $12.732 $10.803 $10.829 $9.887 N/A N/A N/A (b) $12.315 $10.580 $10.738 $9.885 N/A N/A N/A Ending AUV (a) $13.712 $12.732 $10.803 $10.829 N/A N/A N/A (b) $13.097 $12.315 $10.580 $10.738 N/A N/A N/A Ending number of AUs 71,947 3,668 33,233 1,657 N/A N/A N/A Transportation Fund (inception date May 1, 2004) ------------------------------------------------ Beginning AUV (a) $14.229 $13.437 $12.561 $10.022 N/A N/A N/A (b) $13.763 $13.160 $12.456 $10.021 N/A N/A N/A Ending AUV (a) $12.802 $14.229 $13.437 $12.561 N/A N/A N/A (b) $12.228 $13.763 $13.160 $12.456 N/A N/A N/A Ending number of AUs 1,439 9,219 19,618 5,902 N/A N/A N/A U.S. Government Money Market Fund (inception date July 2, 2001) --------------------------------------------------------------- Beginning AUV (a) $9.987 $9.754 $9.696 $9.810 $9.947 $10.040 $10.025 (b) $9.787 $9.679 $9.742 $9.980 $10.000 N/A N/A Ending AUV (a) $10.229 $9.987 $9.754 $9.696 $9.810 $9.947 $10.040 (b) $9.899 $9.787 $9.679 $9.742 $9.980 N/A N/A Ending number of AUs 899,898 1,137,708 544,809 205,474 14,452 11,847 14,592
66
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Utilities Fund (inception date May 1, 2004) ------------------------------------------- Beginning AUV (a) $14.994 $12.570 $11.529 $10.058 N/A N/A N/A (b) $14.503 $12.310 $11.432 $10.057 N/A N/A N/A Ending AUV (a) $16.687 $14.994 $12.570 $11.529 N/A N/A N/A (b) $15.938 $14.503 $12.310 $11.432 N/A N/A N/A Ending number of AUs 65,891 52,508 57,785 15,412 N/A N/A N/A Weakening Dollar 2X Strategy Fund (inception date July 15, 2005) ---------------------------------------------------------------- Beginning AUV (a) $11.117 $9.659 $9.880 N/A N/A N/A N/A (b) $10.953 $9.635 $9.880 N/A N/A N/A N/A Ending AUV (a) $12.948 $11.117 $9.659 N/A N/A N/A N/A (b) $12.597 $10.953 $9.635 N/A N/A N/A N/A Ending Number of AUs 30,154 1,383 0 N/A N/A N/A N/A ================================================================================================================================= SELIGMAN PORTFOLIOS, INC.: Communications and Information Portfolio (inception date July 2, 2001) ---------------------------------------------------------------------- Beginning AUV (a) $7.153 $5.945 $5.606 $5.129 $3.610 $5.742 $6.165 (b) $13.644 $11.482 $10.965 $10.157 $9.867 N/A N/A Ending AUV (a) $8.118 $7.153 $5.945 $5.606 $5.129 $3.610 $5.742 (b) $15.294 $13.644 $11.482 $10.965 $10.157 N/A N/A Ending number of AUs 14,158 15,056 38,708 45,647 23,582 23,521 10,811 Global Technology Portfolio (inception date July 2, 2001) --------------------------------------------------------- Beginning AUV (a) $5.893 $5.077 $4.769 $4.658 $3.472 $5.162 $5.836 (b) $12.212 $10.653 $10.133 $10.022 $9.857 N/A N/A Ending AUV (a) $6.698 $5.893 $5.077 $4.769 $4.658 $3.472 $5.162 (b) $13.708 $12.212 $10.653 $10.133 $10.022 N/A N/A Ending number of AUs 48,065 9,327 7,501 12,461 12,489 6,542 16,216 ================================================================================================================================= THIRD AVENUE VARIABLE SERIES TRUST: Value Portfolio (inception date May 1, 2003) -------------------------------------------- Beginning AUV (a) $20.971 $18.368 $16.249 $13.744 $10.000 N/A N/A (b) $15.049 $13.346 $11.955 $10.239 $9.911 N/A N/A Ending AUV (a) $19.684 $20.971 $18.368 $16.249 $13.744 N/A N/A (b) $13.950 $15.049 $13.346 $11.955 $10.239 N/A N/A Ending number of AUs 36,801 36,441 76,590 23,795 5,404 N/A N/A ================================================================================================================================= VAN ECK WORLDWIDE INSURANCE TRUST: Absolute Return Fund (inception date May 1, 2003) ------------------------------------------------- Beginning AUV (a) $10.332 $9.643 $9.759 $9.926 $10.000 N/A N/A (b) $9.967 $9.419 $9.651 $9.941 $10.009 N/A N/A Ending AUV (a) $10.601 $10.332 $9.643 $9.759 $9.926 N/A N/A (b) $10.098 $9.967 $9.419 $9.651 $9.941 N/A N/A Ending number of AUs 49,087 35,265 35,091 11,888 847 N/A N/A
67
2007 2006 2005 2004 2003 2002 2001 -------------------------------------------------------------------------------------------------------------------------------- VAN ECK WORLDWIDE INSURANCE TRUST (continued): Bond Fund (inception date July 2, 2001) --------------------------------------- Beginning AUV (a) $14.214 $13.537 $14.156 $13.153 $11.288 $9.409 $9.264 (b) $10.719 $10.337 $10.945 $10.298 $10.077 N/A N/A Ending AUV (a) $15.376 $14.214 $13.537 $14.156 $13.153 $11.288 $9.409 (b) $11.451 $10.719 $10.337 $10.945 $10.298 N/A N/A Ending number of AUs 32,747 42,494 23,907 19,659 13,359 29,626 790 Emerging Markets Fund (inception date July 2, 2001) --------------------------------------------------- Beginning AUV (a) $23.887 $17.365 $13.341 $10.747 $7.068 $7.382 $7.544 (b) $22.616 $16.647 $12.949 $10.563 $9.930 N/A N/A Ending AUV (a) $32.413 $23.887 $17.365 $13.341 $10.747 $7.068 $7.382 (b) $30.306 $22.616 $16.647 $12.949 $10.563 N/A N/A Ending number of AUs 67,849 109,258 76,806 82,370 26,527 5,833 137 Hard Assets Fund (inception date July 2, 2001) ---------------------------------------------- Beginning AUV (a) $25.135 $20.474 $13.689 $11.197 $7.827 $8.170 $8.820 (b) $22.776 $18.785 $12.716 $10.533 $10.092 N/A N/A Ending AUV (a) $36.025 $25.135 $20.474 $13.689 $11.197 $7.827 $8.170 (b) $32.236 $22.776 $18.785 $12.716 $10.533 N/A N/A Ending number of AUs 68,003 22,720 42,580 26,071 47,307 42,563 826 Real Estate Fund (inception date July 2, 2001) ---------------------------------------------- Beginning AUV (a) $26.236 $20.322 $17.030 $12.679 $9.560 $10.150 $10.353 (b) $20.577 $16.138 $13.693 $10.324 $9.992 N/A N/A Ending AUV (a) $26.100 $26.236 $20.322 $17.030 $12.679 $9.560 $10.150 (b) $20.214 $20.577 $16.138 $13.693 $10.324 N/A N/A Ending number of AUs 19,891 27,903 31,366 32,460 11,643 4,145 1,185 ================================================================================================================================= WELLS FARGO ADVANTAGE VARIABLE TRUST: Discovery Fund (inception date April, 8, 2005): ----------------------------------------------- Beginning AUV (a) $12.838 $11.355 $9.904 N/A N/A N/A N/A (b) $12.563 $11.252 $9.903 N/A N/A N/A N/A Ending AUV (a) $15.484 $12.838 $11.355 N/A N/A N/A N/A (b) $14.964 $12.563 $11.252 N/A N/A N/A N/A Ending number of AUs 18,370 9,401 11,513 N/A N/A N/A N/A Opportunity Fund (inception date July 2, 2001): ----------------------------------------------- Beginning AUV (a) $19.341 $17.478 $16.428 $14.093 $10.431 $14.455 $15.154 (b) $13.582 $12.427 $11.827 $10.274 $9.935 N/A N/A Ending AUV (a) $20.336 $19.341 $17.478 $16.428 $14.093 $10.431 $14.455 (b) $14.102 $13.582 $12.427 $11.827 $10.274 N/A N/A Ending number of AUs 27,067 37,751 50,457 50,244 25,405 37,499 3,296
NOTES: The Accumulation Unit value does not reflect the deduction of other charges, such as the Contract Maintenance Charge and the Earnings Protection Benefit Rider Charge. (a) Standard contract which represent lowest annual mortality and expense fee at 1.40% (b) Standard contract plus guaranteed withdrawal benefit (2 Yr), guaranteed minimum death benefit (Opt 2) and guaranteed minimum income benefit at highest mortality and expense fee at 2.50% effective 12/05/2003. For years 2001 and 2002, the highest mortality and expense fee was 2.00% which included the guaranteed minimum death benefit (Opt 1) and the guaranteed minimum income benefit. 68 -------------------------------------------------------------------------------- PRIVACY NOTICE of Jefferson National Life Insurance Company REVISED Notice of Privacy Policy 01/2008 We take your privacy seriously. This notice describes how we treat data about our customers. We do not sell our customer data. We have physical, electronic and procedural security measures in place that comply with legal standards to protect your personal data. Access to customer data is limited to employees who need access to do their jobs. We get most of the data we have about you through your application and administrative forms. We may also receive data from outside sources with your consent, such as: o The Medical Information Bureau o Consumer Reporting Agencies o Service Providers who conduct marketing services on our behalf o Motor Vehicle Bureaus o Other Data Providers Data we collect may include: o Name, address, e-mail address, phone number o Social Security Number o Demographic Data o Health data (for life insurance buyers) or other data about illness, disability or injury o Internet Cookies (cookies help our Internet application process -- they do not store any personal data) We may share customer data we collect with the following with your consent or as permitted by law: o Insurance companies, agents, reinsurers o Group policyholders for purpose of reporting claims experience o Medical Laboratories and Prescription or Pharmacy Database Managers o Medical Information and Motor Vehicle Bureaus or similar institutions o A court or governmental agency when there is a lawful request o Law enforcement officials to prevent criminal activity and/or fraud o Service providers that perform marketing services for us o Service providers that perform administrative services for us o Joint Marketing Partners o Unaffiliated Fund Families o Unaffiliated Third Parties We do not share your health data with anyone without your written consent. We use your health data to: o Underwrite policies o Process, evaluate or defend claims When we use service providers and joint marketers they agree to keep your personal data private and not use it for any other purpose. Data obtained from an insurance support organization, such as, the Medical Information Bureau, may be retained and disclosed by this organization to other persons. For our Internet customers we require you to enter a user name and password to access your online account. You have a right to review your personal data. To do so please send a written request to the Customer Service Department: 9920 Corporate Campus Drive, Suite 1000 Louisville, KY 40223 Please include your name, address, telephone number, and policy number. Also, let us know what kind of data you want to see. We may charge a small fee to collect and send the data to you. If you see any errors, let us know and we will review it. If we agree, we will correct our files. If we disagree, you may file a short statement of dispute with us. Your statement will be included with any data we disclose in the future. You can also request that we send it to anyone who received your data from us in the past 2 years. If we change our privacy notice we will give you notice ahead of time of any change in our privacy practices by providing a new Notice and any opt-in or opt-out rights you may have under any federal or state laws at that time. If you provide personal data to third parties, for example, independent agents or brokers, please note that this Notice will not cover their use of such data. If you provide personal data to us on a website that we sponsor with another financial institution, please note that you are providing your personal data to us and the third party. Accordingly, you should review the privacy notice of any such third parties. 69 -------------------------------------------------------------------------------- TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION General Information General Information Regarding Jefferson National Life Insurance Company Jefferson National Life Annuity Account I Certain Federal Income Tax Consequences Published Ratings Administration Annuity Provisions Distribution Reduction or Elimination of the Contingent Deferred Sales Charge Financial Statements -------------------------------------------------------------------------------- (cut along dotted line) If you would like a free copy of the Statement of Additional Information (Form # JNL-STGY-SAI-I-0508) dated May 1, 2008 for this Prospectus, please complete this form, detach and mail to: Jefferson National Life Insurance Company Administrative Office P.O. Box 36840 Louisville, Kentucky 40233 Please send me a free copy of the Statement of Additional Information for the Jefferson National Life Insurance Annuity Account I fixed and variable annuity at the following address: Name:__________________________________________________________________________ Mailing Address:_______________________________________________________________ Sincerely, _______________________________________________________________________________ (Signature) -------------------------------------------------------------------------------- Jefferson National Life Insurance Company P.O. Box 36840 Louisville, Kentucky 40233 (C) 2008, Jefferson National Life Insurance Company JNL-STGY-PROS-I-0508 70 PART B STATEMENT OF ADDITIONAL INFORMATION INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY CONTRACT ISSUED BY JEFFERSON NATIONAL LIFE INSURANCE COMPANY AND JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I ADMINISTRATIVE OFFICE: P.O. BOX 36840, LOUISVILLE, KENTUCKY 40233 PHONE: (866) 667-0561 (TOLL FREE) MAY 1, 2008 This Statement of Additional Information is not a prospectus and should be read in conjunction with the current prospectus for Jefferson National Life Annuity Account I (the "Separate Account"), dated May 1, 2008. You may obtain a copy of the current prospectus on Our Website or by writing to us at our Administrative Office: P.O. Box 36840, Louisville, Kentucky 40233, telephone: (866) 667-0561. B-1 TABLE OF CONTENTS PAGE GENERAL INFORMATION B-3 CERTAIN FEDERAL INCOME TAX CONSEQUENCES B-3 PUBLISHED RATINGS B-7 ADMINSTRATION B-7 ANNUITY PROVISIONS B-7 DISTRIBUTION B-8 ARRANGEMENTS REGARDING FREQUENT PURCHASES AND REDEMPTIONS B-9 FINANCIAL STATEMENTS B-9 B-2 GENERAL INFORMATION GENERAL INFORMATION REGARDING JEFFERSON NATIONAL LIFE INSURANCE COMPANY: Jefferson National Life Insurance Company ("Jefferson National", "Company", "we", "our" or "us") is a subsidiary of Jefferson National Financial Corp., a Delaware corporation. We are organized as a Texas stock life insurance company, and are subject to Texas law governing insurance companies. We are licensed to sell insurance products in forty-nine of the fifty states of the United States (all states except New York), and the District of Columbia. Jefferson National's executive offices are at 435 Hudson Street, 2nd Floor, New York, NY 10014. Our principal business office is 9920 Corporate Campus Drive, Suite 1000, Louisville, KY 40223. Prior to January 3, 2008, Jefferson National was an indirect, wholly-owned subsidiary of Inviva, Inc. Prior to May 1, 2003, Jefferson National was known as Conseco Variable Insurance Company ("CVIC"). On October 23, 2002 CVIC was purchased by Inviva, Inc. from Conseco Life Insurance Company of Texas. Prior to October 7, 1998, CVIC was known as Great American Reserve Insurance Company. JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I: Jefferson National Life Annuity Account I, also referred to as the "Separate Account", was established on August 23, 2000 pursuant to Texas law. Prior to May 1, 2003, the Separate Account was known as Conseco Variable Annuity Account I. The Separate Account meets the definition of a "separate account" under the federal securities laws and is registered with the Securities and Exchange Commission (the "SEC") as a unit investment trust under the Investment Company Act of 1940 ("Investment Company Act"). This registration does not involve supervision of the management of the separate account or the Company by the SEC. The assets of the Separate Account are the property of the Company. However, the assets of the separate account, equal to its reserves and other contract liabilities, are not chargeable with liabilities arising out of any other business the Company may conduct. Income, gains, and losses, whether or not realized, from assets allocated to the Separate Account are credited to or charged against the Separate Account without regard to other income, gains, or losses of the Company. The Separate Account holds assets of annuities issued by us with values and benefits that vary according to the investment performance of the underlying Investment Portfolios offered as Sub-accounts of the Separate Account. Each Sub-account invests exclusively in an Investment Portfolio. You will find additional information about the Investment Portfolios in their respective prospectuses. We do not guarantee the investment results of any Sub-account. You bear the entire investment risk. We offer a number of Sub-accounts. Certain Sub-accounts may not be available in all jurisdictions. If and when we obtain approval of the applicable authorities to make such Sub-accounts available, we will notify Owners of the availability of such Sub-accounts. A brief summary of the investment objectives and policies of each Investment Portfolio is found in the Prospectus. More detailed information about the investment objectives, policies, risks, costs and management of the Investment Portfolios are found in the prospectuses and statements of additional information for the Investment Portfolios. Also included in such information is the investment policy of each Investment Portfolio regarding the acceptable ratings by recognized rating services for bonds and other debt obligations. There can be no guarantee that any Investment Portfolio will meet its investment objectives. Each underlying Investment Portfolio is registered under the Investment Company Act, as amended, as an open-end management investment company. Each underlying Investment Portfolio thereof may or may not be diversified as defined in the Investment Company Act. The trustees or directors, as applicable, of an underlying Investment Portfolio may add, eliminate or substitute Investment Portfolios from time to time. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following summary does not constitute tax advice. It is a general discussion of certain of the expected federal income tax consequences of investment in and distributions with respect to a Contract, based on the Internal Revenue Code of 1986, as amended, proposed and final Treasury regulations thereunder, judicial B-3 authority, and current administrative rulings and practice. This summary discusses only certain federal income tax consequences to "United States Persons," and does not discuss state, local, or foreign tax consequences. United States Persons means citizens or residents of the United States, domestic corporations, domestic partnerships, trusts with respect to which a court within the United States is able to exercise primary supervision over such trusts' administration and with respect to which one or more United States Persons (as defined herein) have the authority to control such trusts' substantial decisions and estates that are subject to United States federal income tax regardless of the source of their income. TAX STATUS OF THE CONTRACT The following discussion is based on the assumption that the Contract qualifies as an annuity contract for federal income tax purposes. DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Code provides that in order for a variable contract which is based on a segregated asset account to qualify as an annuity contract under the Code, the investments made by such account must be "adequately diversified" in accordance with Treasury regulations. The Treasury regulations issued under Section 817(h) (Treas. Reg. Section 1.817-5) apply a diversification requirement to each of the Sub-accounts of the Separate Account. The Separate Account, through the funds and their Investment Portfolios, intends to comply with the diversification requirements of the Treasury. Section 817(h) applies to variable annuity contracts other than pension plan contracts. The regulations reiterate that the diversification requirements do not apply to pension plan contracts. All of the qualified retirement plans (described below) are defined as pension plan contracts for these purposes. Notwithstanding the exception of qualified contracts from application of the diversification rules, the investment vehicle for Jefferson National's qualified Contracts (i.e., the funds) will be structured to comply with the diversification standards because it serves as the investment vehicle for nonqualified contracts as well as qualified contracts. OWNER CONTROL. In certain circumstances, owners of variable annuity contracts may be considered the owners, for federal income tax purposes, of the assets of the Separate Account used to support their contracts. In those circumstances, income and gains from the separate account assets would be includable in the variable annuity contract owner's gross income. The IRS has stated in published rulings that a variable contract owner will be considered the owner of Separate Account assets if the contract owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. The Treasury Department subsequently announced, in connection with the issuance of regulations concerning investment diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor, rather than the insurance company, to be treated as the owner of the assets in the account." This announcement also stated that guidance would be issued by way of regulations or rulings on the "extent to which contract owners may direct their investments to particular Sub-accounts without being treated as owners of underlying assets." The IRS has issued Revenue Ruling 2003-91 in which it ruled that the ability to choose among 20 Sub-accounts and make not more than one transfer per month without charge did not result in the owner of the Contract being treated as the owner of the assets in the Sub-accounts under the investor control doctrine. The ownership rights under the Contract are similar to, but different in certain respects from, those described by the IRS in rulings in which it was determined that contract owners were not owners of Separate Account assets. Although we do not believe this to be the case, these differences could result in owners being treated as the owners of the assets of the Separate Account. We, therefore, reserve the right to modify the Contracts as necessary to attempt to prevent the owners of the Contracts from being considered the owners of a pro rata share of the assets of the Separate Account. DISTRIBUTION REQUIREMENTS. The Code also requires that nonqualified contracts contain specific provisions for distribution of contract proceeds upon the death of an owner. In order to be treated as an annuity contract for federal income tax purposes, the Code requires that such contracts provide that if any owner dies on or after the maturity date and before the entire interest in the contract has been distributed, the remaining portion must be distributed at least as rapidly as under the method in effect on such owner's death. If any owner dies before the maturity date, the entire interest in the contract must generally be distributed within five years after such owner's date of death or be applied to provide an immediate annuity B-4 under which payments will begin within one year of such owner's death and will be made for the life of the beneficiary or for a period not extending beyond the life expectancy of the beneficiary. However, if such owner's death occurs prior to the maturity date, and such owner's surviving spouse is named beneficiary, then the contract may be continued with the surviving spouse as the new owner. If any owner is not a natural person, then for purposes of these distribution requirements, the primary annuitant shall be treated as an owner and any death or change of such primary annuitant shall be treated as the death of the owner. The Contract contains provisions intended to comply with these requirements of the Code. No regulations interpreting these requirements of the Code have yet been issued and thus no assurance can be given that the provisions contained in the Contracts satisfy all such Code requirements. The provisions contained in the Contracts will be reviewed and modified if necessary to maintain their compliance with the Code requirements when clarified by regulation or otherwise. If the Owner dies before the required beginning date (in the case of a Tax Sheltered Annuity, Individual Retirement Annuity, SEP IRA or Simple IRA) or before the entire contract value is distributed (in the case of Roth IRAs), any remaining interest in the Contract must be distributed over a period not exceeding the applicable distribution period, which is determined as follows: (a) if the only designated beneficiary is the Owner's spouse, the applicable distribution period is the surviving spouse's life expectancy using the surviving spouse's birthday for each distribution calendar year after the calendar year of the Owner's death. For calendar years after the death of the Owner's surviving spouse, the applicable distribution period is the spouse's remaining life expectancy using the spouse's age in the calendar year of the spouse's death, reduced by one for each calendar year that elapsed since the calendar year immediately following the calendar year of the spouse's death; (b) if the designated beneficiary is not solely the Owner's surviving spouse, or if the Owner did not designate a surviving spouse at all, the applicable distribution period is the designated beneficiary's life expectancy using the designated beneficiary's birthday in the calendar year immediately following the calendar year of the Owner's death, reduced by one for each calendar year that elapsed thereafter; and (c) if there is no designated beneficiary, the entire balance of the contract must be distributed by December 31 of the fifth year following the Owner's death. If the Owner dies on or after the required beginning date, the interest in the Tax Sheltered Annuity, Individual Retirement Annuity, SEP IRA or Simple IRA must be distributed over a period not exceeding the applicable distribution period. WITHHOLDING. The portion of any distribution under a Contract that is includable in gross income will be subject to federal income tax withholding unless the recipient of such distribution elects not to have federal income tax withheld and properly notifies us. For certain qualified Contracts, certain distributions are subject to mandatory withholding. The withholding rate varies according to the type of distribution and the owner's tax status. For qualified Contracts, "eligible rollover distributions" from section 401(a) plans, section 403(a) annuities, section 403(b) tax-sheltered annuities and governmental section 457 deferred compensation plans are subject to a mandatory federal income tax withholding of 20%. An eligible rollover distribution is a distribution from such a plan, except certain distributions such as distributions required by the Code, hardship distributions, certain after-tax contributions, or distributions in a specified annuity form. The 20% withholding does not apply, however, to certain nontaxable distributions if the owner chooses a "direct rollover" from the plan to another tax-qualified plan or IRA. QUALIFIED CONTRACTS. The qualified Contract is designed for use with several types of tax-qualified retirement plans. The tax rules applicable to participants and beneficiaries in tax-qualified retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits; distributions prior to age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. Some retirement plans are subject to distribution and other requirements that are not incorporated into the Contracts and our Contract administration procedures. Owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law. B-5 For qualified plans under sections 401(a), 403(a), 403(b), and 457, the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the owner (or plan participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in a specified form or manner. If the plan participant is a "5 percent owner" (as defined in the Code), distributions generally must begin no later than April 1 of the calendar year in which the owner (or plan participant) reaches age 70 1/2. Each owner is responsible for requesting distributions under the Contract that satisfy applicable tax rules. We make no attempt to provide more than general information about use of the Contract with the various types of retirement plans. Purchasers of Contracts for use with any retirement plan should consult their legal counsel and tax advisor regarding the suitability of the Contract. INDIVIDUAL RETIREMENT ANNUITIES. In order to qualify as a traditional individual retirement annuity ("IRA") under section 408(b) of the Code, a Contract must contain certain provisions: (i) the owner must be the annuitant; (ii) the Contract generally is not transferable by the owner, e.g., the owner may not designate a new owner, designate a contingent owner or assign the Contract as collateral security; (iii) subject to special rules, the total purchase payments for any tax year on behalf of any individual may not exceed $5,000 for 2008 ($6,000 if age 50 or older by the end of 2008), except in the case of a rollover amount or contribution under sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code; (iv) annuity payments or partial withdrawals must begin no later than April 1 of the calendar year following the calendar year in which the annuitant attains age 70 1/2 and must be made in a specified form and manner; (v) an annuity payment option with a period certain that will guarantee annuity payments beyond the life expectancy of the annuitant and the beneficiary may not be selected; (vi) certain payments of death benefits must be made in the event the annuitant dies prior to the distribution of the annuity value; and (vii) the entire interest of the owner is non-forfeitable. Contracts intended to qualify as traditional IRAs under section 408(b) of the Code contain such provisions. Amounts in the IRA (other than nondeductible contributions) are taxed when distributed from the IRA. Distributions prior to age 59 1/2 (unless certain exceptions apply) are subject to a 10% penalty tax. Additionally, unless certain annual distribution requirements are met, a penalty tax of 50% will be levied on the difference between the amount that should have been distributed for that year and the amount that actually was distributed for that year. ROTH INDIVIDUAL RETIREMENT ANNUITIES (ROTH IRA). The Roth IRA, under section 408A of the Code, contains many of the same provisions as a traditional IRA. However, there are some differences. First, the contributions are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA may be subject to tax and other special rules may apply to the rollover or conversion and to distributions attributable thereto. You should consult a tax advisor before combining any converted amounts with any other Roth IRA contributions, including any other conversion amounts from other tax years. The Roth IRA is available to individuals with earned income and whose modified adjusted gross income is under $116,000 for single filers, $169,000 for married filing jointly, and $10,000 for married filing separately. The amount per individual that may be contributed to all IRAs (Roth and traditional) is $5,000 for 2008 ($6,000 if age 50 or older by the end of 2008). Secondly, the distributions are taxed differently. The Roth IRA offers tax-free distributions when made five tax years after the first contribution to any Roth IRA of the individual and made after attaining age 59 1/2, or to pay for qualified first time homebuyer expenses (lifetime maximum of $10,000), or due to death or disability. All other distributions are subject to income tax when made from earnings and may be subject to a premature withdrawal penalty tax unless an exception applies. A 10% penalty tax may apply to amounts attributable to a conversion from an IRA if the amounts are distributed within the five taxable years beginning with the year in which the conversion was made. Unlike the traditional IRA, there are no minimum required distributions during the owner's lifetime; however, required distributions at death are generally the same. SECTION 403(b) PLANS. Under section 403(b) of the Code, payments made by public school systems and certain tax exempt organizations to purchase Contracts for their employees are excludable from the gross income of the employee, subject to certain limitations. However, such payments may be subject to FICA (Social Security) taxes. The Contract includes a death benefit that in some cases may exceed the greater of the purchase payments or the annuity value. The death benefit could be characterized as an incidental benefit, the amount of which is limited in any tax-sheltered annuity under section 403(b). Because the death benefit may exceed this limitation, employers using the Contract in connection with such plans should B-6 consult their tax advisor. Additionally, in accordance with the requirements of the Code, section 403(b) annuities generally may not permit distribution of (i) elective contributions made in years beginning after December 31, 1988, (ii) earnings on those contributions, and (iii) earnings on amounts attributed to elective contributions held as of the end of the last year beginning before January 1, 1989. Distributions of such amounts will be allowed only upon the death of the employee, on or after attainment of age 59 1/2, severance from employment, disability, or financial hardship, except that income attributable to elective contributions may not be distributed in the case of hardship. CORPORATE PENSION, PROFIT SHARING PLANS AND H.R. 10 PLANS. Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of retirement plans for employees and self-employed individuals to establish qualified plans for themselves and their employees. Such retirement plans may permit the purchase of the Contracts to accumulate retirement savings. Adverse tax consequences to the plan, the participant or both may result if the Contract is assigned or transferred to any individual as a means to provide benefit payments. The Contract includes a death benefit that in some cases may exceed the greater of the purchase payments or the annuity value. The death benefit could be characterized as an incidental benefit, the amount of which is limited in a pension or profit-sharing plan. Because the death benefit may exceed this limitation, employers using the Contract in connection with such plans should consult their tax advisor. DEFERRED COMPENSATION PLANS. Section 457 of the Code, while not actually providing for a qualified plan (as that term is used in the Code), provides for certain deferred compensation plans with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and tax exempt organizations. The Contracts can be used with such plans. Under such plans a participant may specify the form of investment in which his or her participation will be made. For non-governmental section 457 plans, all such investments, however, are owned by the sponsoring employer, and are subject to the claims of the general creditors of the sponsoring employer. Depending on the terms of the particular plan, a non-governmental employer may be entitled to draw on deferred amounts for purposes unrelated to its section 457 plan obligations. TAXATION OF JEFFERSON NATIONAL Jefferson National at present is taxed as a life insurance company under Part I of Subchapter L of the Code. The separate account is treated as part of us and, accordingly, will not be taxed separately as a "regulated investment company" under Subchapter M of the Code. At present, we do not expect to incur any federal income tax liability with respect to investment income and net capital gains arising from the activities of the separate account retained as part of the reserves under the Contract. Based on this expectation, it is anticipated that no charges will be made against the separate account for federal income taxes. If, in future years, any federal income taxes are incurred by us with respect to the separate account, we may make charges to the separate account. PUBLISHED RATINGS We may from time to time publish in advertisements, sales literature and reports to owners, the ratings and other information assigned to the Company by one or more independent rating organizations, such as A.M. Best Company, Standard and Poor's Insurance Rating Services, Moody's Investors Service, Inc. and Fitch Ratings. These ratings are opinions of an operating insurance company's financial strength and capacity to meet its obligations to Contract owners. These ratings do not apply to the separate account, its Sub-accounts, the Investment Portfolios or to their performance. ADMINISTRATION Jefferson National Financial Corp. performs administrative services for the Contracts. These services include issuance of the Contracts, maintenance of the records concerning the contracts and certain valuation services. ANNUITY PROVISIONS The Company makes available several annuity options that can include either fixed or variable payments or a combination of both. VARIABLE ANNUITY PAYOUT B-7 A variable annuity is an annuity with payments which: (1) are not predetermined as to dollar amount; and (2) will vary in amount with the net investment results of the applicable investment portfolio. Annuity payments also depend upon the age of the annuitant and any joint annuitant and the assumed interest factor utilized. The Annuity Table used will depend upon the annuity option chosen. The dollar amount of annuity payments after the first is determined as follows: 1. The dollar amount of the first variable annuity payment is divided by the value of an annuity unit for each investment portfolio as of the annuity date. This sets the number of annuity units for each monthly payment for the applicable investment portfolio. 2. The fixed number of annuity units for each payment in each investment portfolio is multiplied by the annuity unit value for that investment portfolio for the last valuation period of the month preceding the month for which the payment is due. This result is the dollar amount of the payment for each applicable investment portfolio. The total dollar amount of each variable annuity payment is the sum of all variable annuity payments reduced by the applicable portion of the contract maintenance charge. The calculation of the first annuity payment is made on the annuity date. The Company assesses the insurance charges during both the accumulation phase and the annuity phase. The deduction of the insurance charges will affect the amount of the first and any subsequent annuity payments. In addition, under certain circumstances, the Company may assess a contingent deferred sales charge and/or the contract maintenance charge on the annuity date, which would affect the amount of the first annuity payment (see "Expenses" and "Annuity Payments" in the prospectus). ANNUITY UNIT The annuity unit value at the end of any subsequent valuation period is determined as follows: 1. The net investment factor for the current valuation period is multiplied by the value of the annuity unit for investment portfolio for the immediately preceding valuation period. 2. The result in (1) is then divided by the assumed investment rate factor, which equals 1.00 plus the assumed investment rate for the number of days since the previous valuation period. The owner can choose either a 5% or a 3% assumed investment rate. FIXED ANNUITY PAYOUT A fixed annuity is an annuity with payments which are guaranteed as to dollar amount by the Company and do not vary with the investment experience of the investment portfolios. The dollar amount of each fixed annuity payment is determined in accordance with Annuity Tables contained in the Contract. DISTRIBUTION Jefferson National Securities Corporation, a registered broker-dealer and a member of the Financial Industry Regulatory Authority ("Distributor"), acts as the principal underwriter of the Contracts. The Distributor's address is 9920 Corporate Campus Drive, Suite 1000, Louisville, Kentucky 40223. The Distributor is an affiliated person of ours. We offer the Contracts for sale on a continuous basis through the Distributor. No compensation was paid to the Distributor during the last fiscal year related to the sale of the Contracts. REDUCTION OR ELIMINATION OF THE CONTINGENT DEFERRED SALES CHARGE The amount of the Contingent Deferred Sales Charge on the contracts may be reduced or eliminated when sales of the contracts are made to individuals or to a group of individuals in a manner that results in savings of sales expenses. The entitlement to reduction of the Contingent Deferred Sales Charge will be determined by the Company after examination of all the relevant factors such as: 1. The size and type of group to which sales are to be made will be considered. Generally, the sales expenses for a larger group are less than for a smaller group because of the ability to implement large numbers of contracts with fewer sales contacts. B-8 2. The total amount of purchase payments to be received will be considered. Per contract sales expenses are likely to be less on larger purchase payments than on smaller ones. 3. Any prior or existing relationship with the Company will be considered. Per contract sales expenses are likely to be less when there is a prior existing relationship because of the likelihood of implementing the contract with fewer sales contacts. 4. There may be other circumstances, of which the Company is not presently aware, which could result in reduced sales expenses. If, after consideration of the foregoing factors, the Company determines that there will be a reduction in sales expenses, the Company may provide for a reduction or elimination of the Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge may be eliminated when the contracts are issued to an officer, director or employee of the Company or any of its affiliates. In no event will any reduction or elimination of the Contingent Deferred Sales Charge be permitted where the reduction or elimination will be unfairly discriminatory to any person. ARRANGEMENTS REGARDING FREQUENT PURCHASES AND REDEMPTIONS The Company has no arrangements with any contract owners, financial advisors or other individuals or entities to permit purchases and redemptions other than in accordance with the administrative rules described in the prospectus for Jefferson National Life Annuity Account I, dated May 1, 2008. FINANCIAL STATEMENTS The financial statements of the Company and the Separate Account included in this Statement of Additional Information should be considered only as bearing upon the ability of the Company to meet its obligations under the Contracts. JEFFERSON NATIONAL LIFE INSURANCE COMPANY Annual Report to Contract Owners December 31, 2007 Jefferson National Life Annuity Account I ANNUAL REPORT TO CONTRACT OWNERS TABLE OF CONTENTS DECEMBER 31, 2007
==================================================================================================================== JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I PAGE Statement of Assets and Liabilities as of December 31, 2007 ................................................. 2 Statements of Operations and Changes in Net Assets for the year ended December 31, 2007 ..................... 22 Statements of Operations and Changes in Net Assets for the year ended December 31, 2006 ..................... 46 Notes to Financial Statements ............................................................................... 68 Report of Independent Registered Public Accounting Firm ..................................................... 97
1 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2007
=========================================================================================================================== SHARES COST VALUE --------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in portfolio shares, at net asset value (Note 2): AIM Variable Insurance Funds: Basic Value Fund ...................................................... 13,019.130 $ 175,376 $ 164,301 Core Equity Fund ...................................................... 5,101.143 134,841 148,495 Financial Services Fund ............................................... 3,353.118 54,765 41,109 Global Health Care Fund ............................................... 30,723.543 735,382 739,208 Global Real Estate Fund ............................................... 32,600.385 922,622 713,296 High Yield Fund ....................................................... 44,847.769 271,043 257,426 Mid Cap Core Equity Fund .............................................. 15,467.947 216,154 223,511 Technology Fund ....................................................... 5,402.203 75,953 81,574 The Alger American Fund: Growth Portfolio ...................................................... 35,226.886 1,681,541 1,735,629 Leveraged AllCap Portfolio ............................................ 13,823.780 656,650 765,697 MidCap Growth Portfolio ............................................... 98,621.970 2,178,667 2,329,451 Small Capitalization Portfolio ........................................ 10,337.467 282,433 344,446 AllianceBernstein Variable Products Series Fund, Inc.: Growth and Income Portfolio ........................................... 9,964.475 267,325 267,247 American Century Variable Portfolios, Inc: Balanced Fund ......................................................... 14,617.438 106,514 107,146 Income & Growth Fund .................................................. 59,432.618 476,171 502,801 Inflation Protection Fund ............................................. 8,342.791 85,142 88,016 International Fund .................................................... 179,020.745 1,992,131 2,123,186 Value Fund ............................................................ 107,561.758 913,856 803,487 Vista Fund ............................................................ 11,713.503 257,926 257,697 DireXion Insurance Trust: Dynamic VP HY Bond Fund ............................................... 171.637 3,399 3,350 The Dreyfus Investment Portfolio: Small Cap Stock Index Portfolio ....................................... 2,725.350 48,256 48,076 The Dreyfus Socially Responsible Growth Fund, Inc ........................ 5,114.234 136,503 155,984 Dreyfus Stock Index Fund ................................................. 28,012.010 974,933 1,047,649 Dreyfus Variable Investment Fund: International Value Portfolio ......................................... 43,444.829 779,696 757,243 Federated Insurance Series: Capital Income Fund II ................................................ 14,504.345 134,665 139,533 High Income Bond Fund II .............................................. 51,796.246 391,111 387,955 International Equity Fund II .......................................... 16,285.966 285,415 304,710 Market Opportunity Fund II ............................................ 837.969 8,405 8,589 Janus Aspen Series: Balanced Portfolio .................................................... 626.001 18,515 18,811 Forty Portfolio ....................................................... 2,238.035 90,740 92,162 Global Life Sciences Portfolio ........................................ 2,441.318 27,664 28,393 Growth and Income Portfolio ........................................... 12,254.650 246,381 243,745 International Growth Portfolio ........................................ 23,041.504 1,189,376 1,504,841 Large Cap Growth Portfolio ............................................ 19,142.801 417,480 505,754 Mid Cap Growth Portfolio .............................................. 12,074.561 414,503 482,259 Mid Cap Value Portfolio ............................................... 288.451 4,832 4,843 Small Company Value Portfolio-Service ................................. 50.331 959 905 Worldwide Growth Portfolio ............................................ 6,748.680 229,865 238,431 Lazard Retirement Series, Inc: Emerging Markets Portfolio ............................................ 72,147.596 1,993,781 1,849,864 International Equity Portfolio ........................................ 9,969.729 142,499 133,096 Small Cap Portfolio ................................................... 29,925.213 428,700 298,653 US Strategic Equity Portfolio ......................................... 28,139.379 354,129 286,178 Legg Mason Partners Variable Equity Trust: Aggressive Growth Portfolio ........................................... 674.145 11,541 10,995 Capital and Income Portfolio .......................................... 4,509.316 65,042 55,960 Fundamental Value Portfolio ........................................... 12,892.170 307,842 279,631 Large Cap Growth Portfolio ............................................ 2,778.209 47,339 46,119
The accompanying notes are an integral part of these financial statements. 2 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=========================================================================================================================== SHARES COST VALUE --------------------------------------------------------------------------------------------------------------------------- ASSETS: (continued) Investments in portfolio shares, at net asset value (Note 2): (continued) Legg Mason Partners Variable Income Trust: Global High Yield Bond Portfolio ...................................... 240.499 $ 2,372 $ 2,177 Government Portfolio .................................................. 5,120.321 56,808 54,480 Strategic Bond Portfolio .............................................. 15,915.061 166,762 158,036 Lord Abbett Series Fund, Inc: America's Value Portfolio ............................................. 40,092.507 586,004 592,969 Growth and Income Portfolio ........................................... 43,059.865 1,250,307 1,201,802 Neuberger Berman Advisers Management Trust: Lehman Brothers High Income Bond Portfolio ............................ 2,122.943 20,915 19,531 Lehman Brothers Short Duration Bond Portfolio ......................... 47,756.246 620,301 620,831 Fasciano Portfolio .................................................... 2,583.951 39,901 37,467 Mid-Cap Growth Portfolio .............................................. 8,131.099 211,325 231,736 Partners Portfolio .................................................... 53,210.834 1,121,154 1,105,188 Regency Portfolio ..................................................... 7,693.175 121,080 124,861 Socially Responsive Portfolio ......................................... 10,430.681 183,308 186,814 Northern Lights Variable Trust: JNF Balanced Portfolio ................................................ 46,205.698 729,797 711,566 JNF Equity Portfolio .................................................. 98,468.294 2,336,971 2,113,129 PIMCO Variable Insurance Trust: Emerging Markets Bond Portfolio ....................................... 660.410 9,019 9,027 Foreign Bond US Dollar Hedged Portfolio ............................... 221.820 2,243 2,245 Global Bond Unhedged Portfolio ........................................ 5,853.658 76,054 74,810 High Yield Portfolio .................................................. 16,987.138 137,939 136,746 Long Term US Government Portfolio ..................................... 22,146.149 241,859 242,278 Money Market Portfolio ................................................ 4,875,403.350 4,875,403 4,875,403 RealEstateRealReturn Strategy Portfolio ............................... 6,749.095 63,172 58,987 Real Return Portfolio ................................................. 66,642.856 829,776 837,698 Short-Term Portfolio .................................................. 85,759.911 858,629 858,456 Total Return Portfolio ................................................ 160,667.689 1,627,183 1,685,405 Pioneer Variable Contracts Trust: Emerging Markets Portfolio ............................................ 9,729.386 422,443 421,477 Equity Income Portfolio ............................................... 19,879.938 498,787 474,931 Fund Portfolio ........................................................ 19,265.729 482,986 494,358 Global High Yield Portfolio ........................................... 454.888 4,587 4,385 High Yield Portfolio .................................................. 100,571.168 1,116,164 1,110,305 International Value Portfolio ......................................... 23,550.141 451,282 438,032 Mid Cap Value Portfolio ............................................... 3,354.226 68,268 64,166 Small Cap Value Portfolio ............................................. 39.787 661 510 Strategic Income Portfolio ............................................ 2,529.273 27,243 27,392 Royce Capital Fund: Micro-Cap Portfolio ................................................... 50,798.347 729,119 684,252 Small-Cap Portfolio ................................................... 98,701.272 997,645 983,065 Rydex Variable Trust: CLS AdvisorOne Amerigo Fund ........................................... 14,079.467 509,255 550,929 CLS AdvisorOne Clermont Fund .......................................... 402.505 12,412 10,783 Absolute Return Strategies Fund ....................................... 650.556 17,399 16,882 Basic Materials Fund .................................................. 22,662.439 964,474 944,116 Biotechnology Fund .................................................... 715.668 15,721 15,437 Commodities Strategy Fund ............................................. 44.246 999 1,052 Consumer Products Fund ................................................ 122.293 4,735 4,527 Dow 2X Strategy Fund .................................................. 231,863.301 7,202,964 5,958,886 Energy Fund ........................................................... 78,466.724 3,066,334 3,125,330 Energy Services Fund .................................................. 85,247.587 3,245,918 3,296,525 Europe 1.25X Strategy Fund ............................................ 14,560.800 498,354 436,096 Financial Services Fund ............................................... 1,667.564 43,768 36,619 Government Long Bond 1.2X Strategy Fund ............................... 80,588.702 959,996 986,406 Health Care Fund ...................................................... 3,315.676 102,268 98,179
The accompanying notes are an integral part of these financial statements. 3 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=========================================================================================================================== SHARES COST VALUE --------------------------------------------------------------------------------------------------------------------------- ASSETS: (continued) Investments in portfolio shares, at net asset value (Note 2): (continued) Rydex Variable Trust: (continued) Hedged Equity Fund .................................................... 28.605 $ 740 $ 731 Internet Fund ......................................................... 1,294.380 21,443 23,105 Inverse Dow 2X Strategy Fund .......................................... 18,943.451 538,401 545,382 Inverse Government Long Bond Strategy Fund ............................ 258.850 5,449 5,068 Inverse OTC Strategy Fund ............................................. 49.089 932 834 Inverse Russell 2000 Strategy Fund .................................... 3,847.639 139,953 133,359 Inverse S&P 500 Strategy Fund ......................................... 11,292.298 474,132 476,648 Japan 1.25X Strategy Fund ............................................. 2,973.581 76,543 67,590 Large Cap Growth Fund ................................................. 10,421.681 291,109 285,243 Large Cap Value Fund .................................................. 16,831.748 539,490 427,021 Leisure Fund .......................................................... 13,984.751 364,378 296,757 Mid Cap 1.5X Strategy Fund ............................................ 3,663.750 81,395 79,577 Mid-Cap Growth Fund ................................................... 2,684.273 86,885 79,240 Mid-Cap Value Fund .................................................... 2,897.952 69,127 60,392 Multi-Cap Core Equity Fund ............................................ 6,151.240 159,132 151,566 Nova Fund ............................................................. 8,855.233 90,524 89,084 OTC 2X Strategy Fund .................................................. 74,585.796 2,226,113 2,236,081 OTC Fund .............................................................. 68,629.877 1,193,074 1,243,573 Precious Metals Fund .................................................. 69,480.850 1,000,877 1,044,990 Real Estate Fund ...................................................... 4,533.075 187,513 155,711 Russell 2000 1.5X Strategy Fund ....................................... 5,428.697 198,083 185,662 Russell 2000 2X Strategy Fund ......................................... 330.437 7,540 7,412 S&P 500 2X Strategy Fund .............................................. 101,084.821 2,240,569 1,944,873 Sector Rotation Fund .................................................. 21,985.428 323,988 337,037 Small-Cap Growth Fund ................................................. 22,782.761 711,199 616,729 Small-Cap Value Fund .................................................. 12,378.649 323,391 225,540 Strengthening Dollar 2X Strategy Fund ................................. 75.530 1,721 1,520 Technology Fund ....................................................... 44,348.424 716,604 721,549 Telecommunications Fund ............................................... 40,963.468 1,025,144 978,618 Transportation Fund ................................................... 1,233.891 24,028 18,323 U.S. Government Money Market Fund ..................................... 9,136,992.175 9,136,992 9,136,992 Utilities Fund ........................................................ 48,642.762 1,206,671 1,084,248 Weakening Dollar 2X Strategy Fund ..................................... 13,638.210 419,294 390,054 Seligman Portfolios, Inc.: Communications and Information Portfolio .............................. 5,972.672 86,715 115,094 Global Technology Portfolio ........................................... 30,601.831 543,284 558,483 Third Avenue Variable Series Trust: Value Portfolio ....................................................... 25,788.820 748,782 668,447 Van Eck Worldwide Insurance Trust: Absolute Return Fund .................................................. 47,914.321 500,244 513,160 Bond Fund ............................................................. 40,354.347 454,162 489,094 Emerging Markets Fund ................................................. 78,328.908 1,931,483 2,171,278 Hard Assets Fund ...................................................... 57,516.344 2,137,410 2,369,098 Real Estate Fund ...................................................... 28,988.599 513,732 489,616 Wells Fargo Advantage VT Funds: Discovery Fund ........................................................ 14,102.357 256,891 283,598 Opportunity Fund ...................................................... 21,491.108 474,898 473,449 --------------------------------------------------------------------------------------------------------------------------- Total assets .................................................................................... $87,935,560 ===========================================================================================================================
The accompanying notes are an integral part of these financial statements. 4 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: Contract owners' deferred annuity reserves: AIM Variable Insurance Funds: Basic Value Fund Base .............................................................. 6,791.266 $ 16.332864 $ 110,921 Base + GMDB/1 ..................................................... 126.671 16.080815 2,037 Base + GMDB/2 ..................................................... 265.281 12.942850 3,433 Base + GMDB/1 + GMIB .............................................. 280.998 15.857207 4,456 Base + GMDB/2 + GMIB .............................................. 3,087.099 12.785507 39,470 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................. 47.839 12.604380 603 Base + GMWB/2 ..................................................... 202.998 12.916503 2,622 Base + GMWB/2 + GMDB Opt 2 ........................................ 59.863 12.681690 759 $ 164,301 ----------- Core Equity Fund Base .............................................................. 8,076.354 11.578199 93,510 Base + GMDB/1 ..................................................... 1,800.566 11.510239 20,725 Base + GMDB/2 ..................................................... 231.060 11.490958 2,655 Base + GMDB/1 + GMIB .............................................. 209.452 11.452362 2,399 Base + GMDB/2 + GMIB .............................................. 301.927 11.433108 3,452 Base + GMWB/5 ..................................................... 703.641 11.510239 8,099 Base + GMWB/5 + GMDB Opt 1 ........................................ 1,542.885 11.442732 17,655 148,495 ----------- Financial Services Fund Base .............................................................. 3,804.325 10.241617 38,962 Base + GMDB/1 + GMIB .............................................. 218.509 9.824566 2,147 41,109 ----------- Global Health Care Fund Base .............................................................. 11,399.412 12.428699 141,680 Base + GMDB/1 ..................................................... 1,911.352 12.163568 23,249 Base + GMDB/1 + GMIB .............................................. 47,759.850 11.922596 569,421 Base + GMDB/2 + GMIB .............................................. 376.266 12.912172 4,858 739,208 ----------- Global Real Estate Fund Base .............................................................. 18,473.805 28.846829 532,911 Base + GMDB/1 ..................................................... 508.795 28.231850 14,364 Base + GMDB/2 ..................................................... 272.908 20.030053 5,466 Base + GMDB/1 + GMIB .............................................. 1,999.140 27.672836 55,322 Base + GMDB/2 + GMIB .............................................. 2,280.593 19.786668 45,125 Base + GMWB/5 ..................................................... 2,952.218 20.111568 59,374 Base + GMWB/2 + GMDB Opt 2 ........................................ 37.415 19.626020 734 713,296 ----------- High Yield Fund Base .............................................................. 20,029.684 11.890172 238,156 Base + GMDB/1 ..................................................... 1,021.509 11.738274 11,991 Base + GMDB/1 + GMIB .............................................. 626.976 11.609797 7,279 257,426 ----------- Mid Cap Core Equity Fund Base .............................................................. 9,879.693 17.329027 171,205 Base + GMDB/1 + GMIB .............................................. 2,796.995 16.824441 47,058 Base + GMDB/2 + GMIB .............................................. 378.668 13.860360 5,248 223,511 ----------- Technology Fund Base .............................................................. 8,011.665 6.536114 52,365 Base + GMDB/1 ..................................................... 608.547 6.396656 3,893 Base + GMDB/2 ..................................................... 258.082 11.816963 3,050 Base + GMDB/1 + GMIB .............................................. 1,473.350 6.269847 9,238 Base + GMDB/2 + GMIB .............................................. 985.783 11.673282 11,507 Base + GMWB/2 + GMDB Opt 2 ........................................ 131.339 11.578481 1,521 81,574 ----------- The Alger American Fund Growth Portfolio Base .............................................................. 67,778.014 16.643417 1,128,058 Base + GMDB/1 ..................................................... 26,346.935 16.215043 427,217 Base + GMDB/2 ..................................................... 7,769.965 14.296260 111,081 Base + GMDB/1 + GMIB .............................................. 2,421.026 15.822187 38,306 Base + GMWB/5 ..................................................... 0.965 14.354449 14
The accompanying notes are an integral part of these financial statements. 5 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) The Alger American Fund: (continued) Growth Portfolio (continued) Base + GMWB/5 + GMDB Opt 1 ........................................ 93.483 $ 14.151294 $ 1,323 Base + GMWB/5 + GMDB Opt 2 ........................................ 1,562.503 14.093710 22,021 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................. 12.550 13.922403 175 Base + GMWB/2 + GMDB Opt 2 ........................................ 530.707 14.007802 7,434 $ 1,735,629 ----------- Leveraged AllCap Portfolio Base .............................................................. 23,839.817 25.893924 617,306 Base + GMDB/1 ..................................................... 3,154.357 25.227476 79,576 Base + GMDB/2 ..................................................... 187.728 18.747579 3,519 Base + GMDB/1 + GMIB .............................................. 922.740 24.616278 22,714 Base + GMDB/2 + GMIB .............................................. 481.343 18.519747 8,914 Base + GMWB/2 ..................................................... 1,799.524 18.709427 33,668 765,697 ----------- MidCap Growth Portfolio Base .............................................................. 62,515.538 27.532665 1,721,219 Base + GMDB/1 ..................................................... 9,855.104 26.824130 264,355 Base + GMDB/2 ..................................................... 10,670.336 16.912461 180,462 Base + GMDB/1 + GMIB .............................................. 1,326.326 26.174363 34,716 Base + GMDB/2 + GMIB .............................................. 2,355.482 16.706869 39,353 Base + GMWB/5 ..................................................... 0.419 16.981266 7 Base + GMWB/5 + GMDB Opt 1 ........................................ 43.980 16.740964 736 Base + GMWB/5 + GMDB Opt 2 ........................................ 5,084.389 16.672884 84,771 Base + GMWB/2 + GMDB Opt 2 ........................................ 231.254 16.571217 3,832 2,329,451 ----------- Small Capitalization Portfolio Base .............................................................. 15,896.377 14.623948 232,468 Base + GMDB/1 ..................................................... 3,608.789 14.247363 51,416 Base + GMDB/2 ..................................................... 1,213.325 18.028180 21,874 Base + GMDB/1 + GMIB .............................................. 925.036 13.902079 12,860 Base + GMDB/2 + GMIB .............................................. 23.199 17.809021 413 Base + GMWB/5 ..................................................... 498.557 18.101536 9,025 Base + GMWB/5 + GMDB Opt 1 ........................................ 736.809 17.845346 13,149 Base + GMWB/2 + GMDB Opt 2 ........................................ 183.456 17.664425 3,241 344,446 ----------- AllianceBernstein Variable Products Series Fund, Inc.: Growth and Income Portfolio Base .............................................................. 12,905.585 11.453672 147,816 Base + GMDB/1 + GMIB .............................................. 10,541.500 11.329598 119,431 267,247 ----------- American Century Variable Portfolios, Inc: Balanced Fund Base .............................................................. 1,137.900 11.854850 13,490 Base + GMDB/2 + GMIB .............................................. 6,372.981 11.619632 74,052 Base + GMWB/5 + GMDB Opt 2 ........................................ 1,689.439 11.604104 19,604 107,146 ----------- Income & Growth Fund Base .............................................................. 26,138.935 14.828896 387,612 Base + GMDB/1 ..................................................... 5,924.838 14.447668 85,600 Base + GMDB/2 ..................................................... 827.087 13.378549 11,065 Base + GMDB/1 + GMIB .............................................. 983.397 14.098044 13,864 Base + GMDB/2 + GMIB .............................................. 106.666 13.215938 1,410 Base + GMWB/5 ..................................................... 153.937 13.432982 2,068 Base + GMWB/5 + GMDB Opt 1 ........................................ 89.223 13.242901 1,182 502,801 ----------- Inflation Protection Fund Base .............................................................. 3,178.562 11.431103 36,334 Base + GMDB/1 ..................................................... 63.128 11.285068 712 Base + GMDB/2 ..................................................... 955.811 11.243819 10,747 Base + GMDB/1 + GMIB .............................................. 1,664.041 11.161484 18,573 Base + GMWB/5 ..................................................... 1.234 11.285068 14 Base + GMWB/5 + GMDB Opt 1 ........................................ 104.889 11.141004 1,169 Base + GMWB/5 + GMDB Opt 2 ........................................ 1,843.833 11.100147 20,467 88,016 -----------
The accompanying notes are an integral part of these financial statements. 6 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) American Century Variable Portfolios, Inc: (continued) International Fund Base .............................................................. 36,053.115 $ 18.027448 $ 649,946 Base + GMDB/1 ..................................................... 9,464.587 17.563575 166,232 Base + GMDB/2 ..................................................... 9,690.597 18.388068 178,191 Base + GMDB/1 + GMIB .............................................. 60,991.033 17.138080 1,045,269 Base + GMDB/2 + GMIB .............................................. 3,945.147 18.164600 71,662 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................. 570.754 17.907314 10,221 Base + GMWB/2 + GMDB Opt 2 ........................................ 92.415 18.017137 1,665 $ 2,123,186 ----------- Value Fund Base .............................................................. 36,130.076 18.130460 655,055 Base + GMDB/1 ..................................................... 2,897.751 17.663959 51,186 Base + GMDB/2 ..................................................... 3,013.023 13.124781 39,545 Base + GMDB/1 + GMIB .............................................. 1,666.177 17.236199 28,719 Base + GMDB/2 + GMIB .............................................. 555.944 12.965264 7,208 Base + GMWB/5 ..................................................... 0.936 13.178209 12 Base + GMWB/5 + GMDB Opt 2 ........................................ 596.105 12.938868 7,713 Base + GMWB/2 ..................................................... 1,072.569 13.098080 14,049 803,487 ----------- Vista Fund Base .............................................................. 18,312.889 12.362130 226,386 Base + GMWB/5 + GMDB Opt 2 ........................................ 2,546.421 12.296010 31,311 257,697 ----------- DireXion Insurance Trust: Dynamic VP HY Bond Fund Base + GMDB/1 + GMIB .............................................. 322.158 10.399831 3,350 3,350 ----------- The Dreyfus Investment Portfolio: Small Cap Stock Index Portfolio Base .............................................................. 3,300.362 12.701023 41,918 Base + GMDB/1 + GMIB .............................................. 434.430 12.482298 5,423 Base + GMWB/2 + GMDB Opt 2 ........................................ 59.323 12.382582 735 48,076 ----------- The Dreyfus Socially Responsible Growth Fund, Inc. Base .............................................................. 11,966.050 11.231173 134,393 Base + GMDB/1 ..................................................... 663.716 10.942089 7,262 Base + GMDB/2 ..................................................... 192.243 12.292741 2,363 Base + GMDB/1 + GMIB .............................................. 549.376 10.676912 5,866 Base + GMDB/2 + GMIB .............................................. 502.351 12.143312 6,100 155,984 ----------- Dreyfus Stock Index Fund Base .............................................................. 43,754.050 14.405865 630,315 Base + GMDB/1 ..................................................... 10,280.763 14.035116 144,292 Base + GMDB/2 ..................................................... 258.958 13.585945 3,518 Base + GMDB/1 + GMIB .............................................. 11,973.034 13.695119 163,972 Base + GMDB/2 + GMIB .............................................. 504.226 13.420818 6,767 Base + GMWB/5 ..................................................... 2,427.553 13.641233 33,115 Base + GMWB/2 + GMDB Opt 1 ........................................ 4,869.826 13.366219 65,091 Base + GMWB/2 + GMDB Opt 2 ........................................ 43.504 13.311856 579 1,047,649 ----------- Dreyfus Variable Investment Fund: International Value Portfolio Base .............................................................. 27,060.779 18.221099 493,077 Base + GMDB/1 ..................................................... 2,922.734 17.752171 51,885 Base + GMDB/2 ..................................................... 7,018.531 16.688119 117,126 Base + GMDB/1 + GMIB .............................................. 1,045.759 17.322101 18,115 Base + GMDB/2 + GMIB .............................................. 268.772 16.485326 4,431 Base + GMWB/5 ..................................................... 1,469.837 16.756042 24,629 Base + GMWB/5 + GMDB Opt 1 ........................................ 37.667 16.518951 622 Base + GMWB/5 + GMDB Opt 2 ........................................ 1,961.579 16.451752 32,271 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................. 832.207 16.251811 13,525 Base + GMWB/2 + GMDB Opt 2 ........................................ 95.555 16.351473 1,562 757,243 -----------
The accompanying notes are an integral part of these financial statements. 7 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Federated Insurance Series: Capital Income Fund II Base .............................................................. 11,024.950 $ 10.345234 $ 114,056 Base + GMDB/1 ..................................................... 1,396.030 10.079016 14,071 Base + GMDB/2 ..................................................... 715.952 13.482309 9,653 Base + GMDB/1 + GMIB .............................................. 178.210 9.834937 1,753 $ 139,533 ----------- High Income Bond Fund II Base .............................................................. 22,893.905 13.266831 303,730 Base + GMDB/1 ..................................................... 3,465.878 12.924866 44,796 Base + GMDB/2 ..................................................... 499.314 12.204362 6,094 Base + GMDB/1 + GMIB .............................................. 1,159.530 12.611177 14,623 Base + GMDB/2 + GMIB .............................................. 415.031 12.056004 5,004 Base + GMWB/5 + GMDB Opt 1 ........................................ 850.168 12.080605 10,271 Base + GMWB/2 ..................................................... 217.169 12.179500 2,645 Base + GMWB/2 + GMDB Opt 2 ........................................ 66.253 11.958125 792 387,955 ----------- International Equity Fund II Base .............................................................. 13,988.851 16.832246 235,464 Base + GMDB/1 ..................................................... 1,569.040 16.399010 25,731 Base + GMDB/2 ..................................................... 1,745.292 15.592345 27,213 Base + GMDB/1 + GMIB .............................................. 603.144 16.001674 9,651 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................. 438.042 15.184599 6,651 304,710 ----------- Market Opportunity Fund II Base + GMDB/1 ..................................................... 875.475 9.810841 8,589 8,589 ----------- Janus Aspen Series: Balanced Portfolio Base .............................................................. 1,810.294 10.391305 18,811 18,811 ----------- Forty Portfolio Base .............................................................. 7,270.674 12.675889 92,162 92,162 ----------- Global Life Sciences Portfolio Base .............................................................. 2,612.230 10.869094 28,393 28,393 ----------- Growth and Income Portfolio Base .............................................................. 12,225.454 17.138780 209,529 Base + GMDB/2 ..................................................... 412.694 14.208994 5,864 Base + GMDB/1 + GMIB .............................................. 1,085.220 16.628461 18,046 Base + GMWB/2 + GMDB Opt 2 ........................................ 740.269 13.922312 10,306 243,745 ----------- International Growth Portfolio Base .............................................................. 21,848.007 40.526636 885,426 Base + GMDB/1 ..................................................... 4,551.277 39.888224 181,542 Base + GMDB/2 ..................................................... 4,502.044 28.578988 128,664 Base + GMDB/1 + GMIB .............................................. 3,642.183 39.320673 143,213 Base + GMDB/2 + GMIB .............................................. 2,023.055 28.231849 57,115 Base + GMWB/5 ..................................................... 2,362.448 28.695267 67,791 Base + GMWB/5 + GMDB Opt 2 ........................................ 1,075.863 28.174394 30,312 Base + GMWB/5 + GMDB Opt 1 + GMIB ................................. 385.664 27.945726 10,778 1,504,841 ----------- Large Cap Growth Portfolio Base .............................................................. 11,692.601 19.473472 227,696 Base + GMDB/1 ..................................................... 1,621.862 19.061396 30,915 Base + GMDB/1 + GMIB .............................................. 4,519.329 18.686980 84,453 Base + GMWB/5 ..................................................... 2,775.658 13.332834 37,007 Base + GMWB/5 + GMDB Opt 1 ........................................ 2,435.439 13.144179 32,012 Base + GMWB/5 + GMDB Opt 2 ........................................ 1,579.257 13.090690 20,674 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................. 1,583.005 12.931550 20,471 Base + GMWB/2 ..................................................... 3,963.710 13.251775 52,526 505,754 -----------
The accompanying notes are an integral part of these financial statements. 8 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Janus Aspen Series: (continued) Mid Cap Growth Portfolio Base ............................................................. 21,681.376 $19.316084 $ 418,799 Base + GMDB/1 .................................................... 1,113.770 18.818665 20,960 Base + GMDB/1 + GMIB ............................................. 211.494 18.362507 3,884 Base + GMWB/5 .................................................... 488.290 17.832770 8,708 Base + GMWB/5 + GMDB Opt 1 ....................................... 768.234 17.580392 13,506 Base + GMWB/5 + GMDB Opt 2 ....................................... 828.562 17.508893 14,507 Base + GMWB/2 + GMDB Opt 2 ....................................... 108.880 17.402184 1,895 $ 482,259 ----------- Mid Cap Value Portfolio Base ............................................................. 488.969 9.904639 4,843 4,843 ----------- Small Company Value Portfolio -Service Base ............................................................. 101.708 8.902642 905 905 ----------- Worldwide Growth Portfolio Base ............................................................. 9,057.053 14.912722 135,065 Base + GMDB/1 .................................................... 971.185 14.581009 14,161 Base + GMDB/2 .................................................... 2,023.474 13.845900 28,017 Base + GMDB/1 + GMIB ............................................. 418.570 14.286604 5,980 Base + GMDB/2 + GMIB ............................................. 3,743.511 13.677608 51,202 Base + GMWB/2 + GMDB Opt 2 ....................................... 295.257 13.566548 4,006 238,431 ----------- Lazard Retirement Series, Inc: Emerging Markets Portfolio Base ............................................................. 14,820.896 29.587330 438,511 Base + GMDB/1 .................................................... 2,465.749 29.209604 72,024 Base + GMDB/2 .................................................... 764.474 29.102927 22,248 Base + GMDB/1 + GMIB ............................................. 42,726.280 28.890084 1,234,366 Base + GMDB/2 + GMIB ............................................. 519.662 28.784200 14,958 Base + GMWB/5 + GMDB Opt 2 ....................................... 918.094 28.731377 26,378 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................ 1,388.813 28.416675 39,465 Base + GMWB/2 + GMDB Opt 2 ....................................... 66.989 28.573591 1,914 1,849,864 ----------- International Equity Portfolio Base ............................................................. 2,890.391 16.263164 47,007 Base + GMDB/1 .................................................... 767.778 16.055409 12,327 Base + GMDB/2 .................................................... 444.179 15.996743 7,105 Base + GMDB/1 + GMIB ............................................. 524.356 15.879662 8,327 Base + GMDB/2 + GMIB ............................................. 3,240.952 15.821462 51,277 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................ 145.770 15.619296 2,277 Base + GMWB/2 + GMDB Opt 2 ....................................... 304.120 15.705618 4,776 133,096 ----------- Small Cap Portfolio Base ............................................................. 11,990.409 18.014479 216,001 Base + GMDB/1 .................................................... 3,237.506 17.550939 56,821 Base + GMDB/2 .................................................... 367.355 12.216776 4,488 Base + GMDB/1 + GMIB ............................................. 709.245 17.122684 12,144 Base + GMWB/5 .................................................... 0.496 12.266521 6 Base + GMWB/5 + GMDB Opt 1 ....................................... 43.603 12.092903 527 Base + GMWB/5 + GMDB Opt 2 ....................................... 719.549 12.043680 8,666 298,653 ----------- US Strategic Equity Portfolio Base ............................................................. 15,057.776 13.480718 202,990 Base + GMDB/1 .................................................... 1,703.562 13.133817 22,374 Base + GMDB/1 + GMIB ............................................. 4,745.247 12.815699 60,814 286,178 ----------- Legg Mason Partners Variable Equity Trust: Aggressive Growth Portfolio Base ............................................................. 1,150.468 9.557220 10,995 10,995 -----------
The accompanying notes are an integral part of these financial statements. 9 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Legg Mason Partners Variable Equity Trust: (continued) Capital and Income Portfolio Base ............................................................. 1,606.513 $10.012004 $ 16,084 Base + GMDB/2 .................................................... 1,265.455 9.981319 12,631 Base + GMDB/1 + GMIB ............................................. 1,627.850 9.967722 16,226 Base + GMWB/5 .................................................... 1.332 9.988119 13 Base + GMWB/5 + GMDB Opt 1 ....................................... 119.877 9.964317 1,194 Base + GMWB/5 + GMDB Opt 2 ....................................... 985.347 9.957514 9,812 $ 55,960 ----------- Fundamental Value Portfolio Base ............................................................. 15,238.760 9.497129 144,724 Base + GMDB/1 .................................................... 8,163.696 9.474472 77,347 Base + GMDB/2 .................................................... 1,550.469 9.468032 14,680 Base + GMDB/1 + GMIB ............................................. 461.142 9.455110 4,360 Base + GMWB/5 .................................................... 2.043 9.474472 19 Base + GMWB/5 + GMDB Opt 1 ....................................... 188.625 9.451888 1,783 Base + GMWB/5 + GMDB Opt 2 ....................................... 3,887.361 9.445434 36,718 279,631 ----------- Large Cap Growth Portfolio Base ............................................................. 3,234.704 9.921015 32,092 Base + GMDB/1 .................................................... 629.227 9.897360 6,228 Base + GMDB/2 .................................................... 619.576 9.890629 6,128 Base + GMDB/1 + GMIB ............................................. 169.181 9.877137 1,671 46,119 ----------- Legg Mason Partners Variable Income Trust: Global High Yield Bond Portfolio Base + GMDB/1 + GMIB ............................................. 195.231 11.148478 2,177 2,177 ----------- Government Portfolio Base ............................................................. 1,792.531 10.392615 18,629 Base + GMDB/1 .................................................... 1,734.298 10.295783 17,856 Base + GMDB/1 + GMIB ............................................. 85.741 10.213610 876 Base + GMWB/5 + GMDB Opt 1 ....................................... 1,678.381 10.199958 17,119 54,480 ----------- Strategic Bond Portfolio Base ............................................................. 4,892.498 11.170254 54,650 Base + GMDB/1 .................................................... 2,319.614 11.027508 25,580 Base + GMDB/2 .................................................... 283.153 10.987228 3,111 Base + GMDB/1 + GMIB ............................................. 4,464.289 10.906774 48,691 Base + GMDB/2 + GMIB ............................................. 65.542 10.866787 712 Base + GMWB/5 .................................................... 703.971 11.027508 7,763 Base + GMWB/5 + GMDB Opt 1 ....................................... 1,391.160 10.886761 15,145 Base + GMWB/2 + GMDB Opt 2 ....................................... 221.000 10.787206 2,384 158,036 ----------- Lord Abbett Series Fund, Inc.: America's Value Portfolio Base ............................................................. 33,646.379 16.498403 555,112 Base + GMDB/1 .................................................... 1,096.266 16.243846 17,808 Base + GMDB/1 + GMIB ............................................. 1,145.845 16.015065 18,351 Base + GMDB/2 + GMIB ............................................. 124.609 13.628478 1,698 592,969 ----------- Growth and Income Portfolio Base ............................................................. 46,935.196 18.207798 854,587 Base + GMDB/1 .................................................... 6,076.744 17.739264 107,797 Base + GMDB/2 .................................................... 2,354.911 13.700543 32,264 Base + GMDB/1 + GMIB ............................................. 7,221.013 17.309625 124,993 Base + GMDB/2 + GMIB ............................................. 495.195 13.534001 6,702 Base + GMWB/5 .................................................... 269.960 13.756270 3,714 1,130,057 ----------- Neuberger Berman Advisers Management Trust: Lehman Brothers High Income Bond Portfolio Base ............................................................. 1,791.763 10.900483 19,531 19,531 -----------
The accompanying notes are an integral part of these financial statements. 10 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Neuberger Berman Advisers Management Trust: (continued) Lehman Brothers Short Duration Bond Portfolio Base ............................................................. 25,049.183 $12.800060 $ 320,631 Base + GMDB/1 .................................................... 9,855.894 12.470724 122,910 Base + GMDB/2 .................................................... 8,795.858 10.389893 91,388 Base + GMDB/1 + GMIB ............................................. 4,272.329 12.168749 51,989 Base + GMWB/5 .................................................... 2,935.498 10.432174 30,624 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................ 325.104 10.118160 3,289 $ 620,831 ----------- Fasciano Portfolio Base ............................................................. 2,345.425 14.441033 33,870 Base + GMDB/1 + GMIB ............................................. 256.548 14.020451 3,597 37,467 ----------- Mid-Cap Growth Portfolio Base ............................................................. 10,979.845 13.318043 146,230 Base + GMDB/1 .................................................... 3,307.503 13.033920 43,110 Base + GMDB/1 + GMIB ............................................. 3,013.102 12.775679 38,494 Base + GMWB/5 .................................................... 222.474 17.539954 3,902 231,736 ----------- Partners Portfolio Base ............................................................. 57,523.995 16.450391 946,292 Base + GMDB/1 .................................................... 3,474.694 16.027092 55,689 Base + GMDB/2 .................................................... 75.564 16.497901 1,247 Base + GMDB/1 + GMIB ............................................. 1,375.761 15.638794 21,515 Base + GMDB/2 + GMIB ............................................. 2,353.890 16.297395 38,362 Base + GMWB/5 + GMDB Opt 2 ....................................... 2,096.880 16.264217 34,104 Base + GMWB/2 + GMDB Opt 2 ....................................... 493.623 16.165098 7,979 1,105,188 ----------- Regency Portfolio Base ............................................................. 4,463.664 19.392791 86,563 Base + GMDB/1 .................................................... 439.101 19.093603 8,384 Base + GMDB/2 .................................................... 50.706 14.978766 760 Base + GMDB/1 + GMIB ............................................. 30.796 18.828100 580 Base + GMWB/5 .................................................... 1,194.242 15.039711 17,961 Base + GMWB/5 + GMDB Opt 1 ....................................... 499.740 14.826860 7,410 Base + GMWB/2 + GMDB Opt 2 ....................................... 218.269 14.676547 3,203 124,861 ----------- Socially Responsive Fund Base ............................................................. 4,909.622 14.160406 69,522 Base + GMDB/2 .................................................... 4,027.444 13.928434 56,096 Base + GMDB/1 + GMIB ............................................. 175.446 13.826464 2,426 Base + GMDB/2 + GMIB ............................................. 4,266.151 13.775769 58,770 186,814 ----------- Northern Lights Variable Trust: JNF Balanced Portfolio Base ............................................................. 60,530.693 9.787255 592,429 Base + GMDB/1 .................................................... 6,325.853 9.764284 61,767 Base + GMDB/2 .................................................... 4,870.304 9.757759 47,523 Base + GMDB/1 + GMIB ............................................. 927.937 9.744667 9,042 Base + GMDB/2 + GMIB ............................................. 82.702 9.738134 805 711,566 ----------- JNF Equity Portfolio Base ............................................................. 186,037.052 8.962538 1,667,364 Base + GMDB/1 .................................................... 15,037.477 8.941491 134,457 Base + GMDB/2 .................................................... 13,980.559 8.935506 124,923 Base + GMDB/1 + GMIB ............................................. 2,287.282 8.923515 20,411 Base + GMDB/2 + GMIB ............................................. 10,464.273 8.917521 93,315 Base + GMWB/5 .................................................... 1,233.802 8.941491 11,032 Base + GMWB/5 + GMDB Opt 1 ....................................... 1,136.193 8.920517 10,135 Base + GMWB/5 + GMDB Opt 2 ....................................... 858.544 8.914523 7,654 Base + GMWB/2 .................................................... 2,178.215 8.932512 19,457 Base + GMWB/2 + GMDB Opt 1 ....................................... 2,735.861 8.911530 24,381 2,113,129 -----------
The accompanying notes are an integral part of these financial statements. 11 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) PIMCO Variable Insurance Trust: Emerging Markets Bond Portfolio Base + GMDB/1 .................................................... 221.400 $11.131265 $ 2,464 Base + GMDB/2 .................................................... 590.624 11.112695 6,563 $ 9,027 ----------- Foreign Bond US Dollar Hedged Portfolio Base + GMDB/1 .................................................... 215.954 10.395067 2,245 2,245 ----------- Global Bond Unhedged Portfolio Base ............................................................. 6,804.723 10.993800 74,810 74,810 ----------- High Yield Portfolio Base ............................................................. 10,621.650 10.745740 114,137 Base + GMDB/2 .................................................... 763.249 10.665024 8,140 Base + GMDB/1 + GMIB ............................................. 448.858 10.629318 4,771 Base + GMWB/5 .................................................... 0.626 10.682865 7 Base + GMWB/5 + GMDB Opt 2 ....................................... 914.025 10.602622 9,691 136,746 ----------- Long Term US Government Portfolio Base ............................................................. 19,618.203 10.734340 210,588 Base + GMWB/5 + GMDB Opt 2 ....................................... 2,979.914 10.634671 31,690 242,278 ----------- Money Market Portfolio Base ............................................................. 384,456.195 10.784142 4,146,030 Base + GMDB/1 .................................................... 14,911.228 10.646348 158,750 Base + GMDB/2 .................................................... 5,970.646 10.607424 63,333 Base + GMDB/1 + GMIB ............................................. 11,679.716 10.529767 122,985 Base + GMDB/2 + GMIB ............................................. 380.411 10.491167 3,991 Base + GMWB/5 .................................................... 3,526.449 10.646348 37,544 Base + GMWB/5 + GMDB Opt 1 ....................................... 3,290.100 10.510452 34,580 Base + GMWB/5 + GMDB Opt 2 ....................................... 9,236.742 10.471900 96,726 Base + GMWB/5 + GMDB Opt 1 + GMIB ................................ 4,098.953 10.395217 42,610 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................ 1,612.346 10.357092 16,699 Base + GMWB/2 + GMDB Opt 2 ....................................... 14,610.119 10.414340 152,155 4,875,403 ----------- RealEstateRealReturn Strategy Portfolio Base ............................................................. 5,389.853 10.206463 55,011 Base + GMDB/1 .................................................... 391.810 10.146747 3,976 58,987 ----------- Real Return Portfolio Base ............................................................. 35,019.260 12.317776 431,359 Base + GMDB/1 .................................................... 8,070.121 12.127626 97,871 Base + GMDB/2 .................................................... 7,221.255 11.564534 83,510 Base + GMDB/1 + GMIB ............................................. 2,885.076 11.958947 34,502 Base + GMDB/2 + GMIB ............................................. 4,360.647 11.423929 49,816 Base + GMWB/5 .................................................... 5,533.212 11.611607 64,249 Base + GMWB/5 + GMDB Opt 1 ....................................... 1,034.415 11.447256 11,841 Base + GMWB/5 + GMDB Opt 2 ....................................... 672.416 11.400667 7,666 Base + GMWB/2 + GMDB Opt 1 ....................................... 4,999.726 11.377464 56,884 837,698 ----------- Short Term Portfolio Base ............................................................. 46,878.446 10.721847 502,624 Base + GMDB/1 .................................................... 5,133.104 10.584861 54,333 Base + GMDB/2 .................................................... 17,379.140 10.546171 183,283 Base + GMDB/1 + GMIB ............................................. 805.949 10.468959 8,437 Base + GMDB/2 + GMIB ............................................. 34.028 10.430569 355 Base + GMWB/5 .................................................... 4,258.036 10.584861 45,071 Base + GMWB/5 + GMDB Opt 1 ....................................... 546.709 10.449762 5,713 Base + GMWB/5 + GMDB Opt 2 ....................................... 3,021.628 10.411419 31,459 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................ 2,037.279 10.297281 20,978 Base + GMWB/2 + GMDB Opt 2 ....................................... 599.040 10.354182 6,203 858,456 -----------
The accompanying notes are an integral part of these financial statements. 12 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) PIMCO Variable Insurance Trust: (continued) Total Return Portfolio Base ............................................................. 81,616.692 $11.600147 $ 946,766 Base + GMDB/1 .................................................... 15,723.482 11.421085 179,579 Base + GMDB/2 .................................................... 7,414.397 11.369601 84,299 Base + GMDB/1 + GMIB ............................................. 16,565.900 11.262232 186,569 Base + GMDB/2 + GMIB ............................................. 3,262.963 11.231369 36,648 Base + GMWB/5 .................................................... 4,415.616 11.415874 50,408 Base + GMWB/5 + GMDB Opt 2 ....................................... 2,750.754 11.208492 30,832 Base + GMWB/5 + GMDB Opt 2 + GMIB ................................ 7,929.759 11.072236 87,800 Base + GMWB/2 .................................................... 5,049.683 11.346428 57,296 Base + GMWB/2 + GMDB Opt 2 ....................................... 2,262.775 11.140157 25,208 $ 1,685,405 ----------- Pioneer Variable Contracts Trust: Emerging Markets Portfolio Base ............................................................. 19,219.241 15.652741 300,834 Base + GMDB/1 .................................................... 6,499.599 15.589001 101,322 Base + GMWB/5 .................................................... 675.551 15.589001 10,531 Base + GMWB/5 + GMDB Opt 1 ....................................... 566.142 15.525577 8,790 421,477 ----------- Equity Income Portfolio Base ............................................................. 28,754.591 12.989967 373,521 Base + GMDB/1 + GMIB ............................................. 5,567.602 12.436275 69,240 Base + GMWB/5 .................................................... 946.536 14.605292 13,824 Base + GMWB/5 + GMDB Opt 2 ....................................... 1,279.348 14.340073 18,346 474,931 ----------- Fund Portfolio Base ............................................................. 25,251.977 11.509406 290,635 Base + GMDB/1 .................................................... 1,356.364 11.252619 15,263 Base + GMDB/1 + GMIB ............................................. 13,204.240 11.018660 145,493 Base + GMWB/5 .................................................... 560.536 13.795597 7,733 Base + GMWB/5 + GMDB Opt 1 ....................................... 1,286.142 13.600397 17,492 Base + GMWB/2 .................................................... 1,125.773 13.711733 15,436 Base + GMWB/2 + GMDB Opt 2 ....................................... 171.325 13.462489 2,306 494,358 ----------- Global High Yield Portfolio Base ............................................................. 425.088 10.315744 4,385 4,385 ----------- High Yield Portfolio Base ............................................................. 19,296.692 11.607735 223,991 Base + GMDB/1 .................................................... 7,811.238 11.499616 89,826 Base + GMDB/2 .................................................... 2,180.845 11.469010 25,012 Base + GMDB/1 + GMIB ............................................. 67,556.262 11.407844 770,671 Base + GMWB/2 + GMDB Opt 2 ....................................... 71.142 11.316712 805 1,110,305 ----------- International Value Portfolio Base ............................................................. 33,350.001 11.762244 392,271 Base + GMDB/1 .................................................... 38.775 11.714317 454 Base + GMDB/2 .................................................... 122.486 11.700698 1,433 Base + GMDB/1 + GMIB ............................................. 137.413 11.673426 1,604 Base + GMWB/5 .................................................... 3,608.440 11.714317 42,270 438,032 ----------- Mid Cap Value Portfolio Base ............................................................. 4,169.820 12.540156 52,290 Base + GMDB/1 .................................................... 513.561 12.423359 6,380 Base + GMDB/2 .................................................... 443.575 12.390297 5,496 64,166 ----------- Small Cap Value Portfolio Base ............................................................. 54.164 9.417918 510 510 ----------- Strategic Income Portfolio Base ............................................................. 2,591.413 10.570283 27,392 27,392 -----------
The accompanying notes are an integral part of these financial statements. 13 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Royce Capital Fund: Micro-Cap Portfolio Base ........................................................ 16,868.251 $ 22.319415 $ 376,489 Base + GMDB/1 ............................................... 3,279.904 21.975080 72,076 Base + GMDB/2 ............................................... 3,974.459 15.108953 60,050 Base + GMDB/1 + GMIB ........................................ 3,670.942 21.669613 79,548 Base + GMDB/2 + GMIB ........................................ 2,759.465 14.925295 41,186 Base + GMWB/5 ............................................... 500.536 15.170432 7,593 Base + GMWB/5 + GMDB Opt 1 .................................. 549.384 14.955737 8,216 Base + GMWB/5 + GMDB Opt 2 .................................. 627.290 14.894907 9,343 Base + GMWB/2 + GMDB Opt 1 .................................. 2,001.491 14.864580 29,751 $ 684,252 -------------- Small-Cap Portfolio Base ........................................................ 35,447.922 20.205411 716,240 Base + GMDB/1 ............................................... 4,107.126 19.893663 81,706 Base + GMDB/2 ............................................... 4,533.472 14.491336 65,696 Base + GMDB/1 + GMIB ........................................ 71.663 19.617106 1,406 Base + GMDB/2 + GMIB ........................................ 4,139.479 14.315227 59,258 Base + GMWB/5 ............................................... 748.171 14.550313 10,886 Base + GMWB/5 + GMDB Opt 1 .................................. 206.691 14.344406 2,965 Base + GMWB/5 + GMDB Opt 2 .................................. 534.361 14.286073 7,634 Base + GMWB/2 ............................................... 851.099 14.461857 12,308 Base + GMWB/2 + GMDB Opt 1 .................................. 1,751.148 14.256987 24,966 983,065 -------------- Rydex Variable Trust: CLS AdvisorOne Amerigo Fund Base ........................................................ 2,361.413 14.001841 33,064 Base + GMWB/5 + GMDB Opt 2 .................................. 37,784.691 13.705696 517,865 550,929 -------------- CLS AdvisorOne Clermont Fund Base ........................................................ 915.113 11.783386 10,783 10,783 -------------- Absolute Return Strategies Fund Base + GMDB/1 ............................................... 1,222.703 10.476401 12,810 Base + GMDB/1 + GMIB ........................................ 390.957 10.416621 4,072 16,882 -------------- Basic Materials Fund Base ........................................................ 33,859.609 20.213091 684,407 Base + GMDB/1 ............................................... 7,091.376 19.954918 141,508 Base + GMDB/2 ............................................... 206.060 19.882006 4,097 Base + GMDB/1 + GMIB ........................................ 1,308.526 19.736508 25,826 Base + GMDB/2 + GMIB ........................................ 1,892.633 19.664174 37,217 Base + GMWB/5 ............................................... 1,745.090 19.954918 34,823 Base + GMWB/5 + GMDB Opt 1 .................................. 391.534 19.700297 7,713 Base + GMWB/5 + GMDB Opt 2 .................................. 147.542 19.628076 2,896 Base + GMWB/5 + GMDB Opt 2 + GMIB ........................... 41.539 19.412979 806 Base + GMWB/2 + GMDB Opt 2 .................................. 116.899 19.520250 2,282 Base + GMWB/2 + GMDB Opt 2 + GMIB ........................... 131.637 19.306314 2,541 944,116 -------------- Biotechnology Fund Base ........................................................ 685.261 9.907101 6,789 Base + GMDB/1 ............................................... 177.616 9.780436 1,737 Base + GMDB/2 ............................................... 60.225 9.744680 587 Base + GMDB/2 + GMIB ........................................ 656.168 9.637773 6,324 15,437 -------------- Commodities Strategy Fund Base ........................................................ 8.669 10.080885 87 Base + GMDB/1 + GMIB ........................................ 97.078 9.937833 965 1,052 -------------- Consumer Products Fund Base ........................................................ 145.173 12.959205 1,881 Base + GMDB/2 ............................................... 207.585 12.746909 2,646 4,527 --------------
The accompanying notes are an integral part of these financial statements. 14 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Rydex Variable Trust: (continued) Dow 2X Strategy Fund Base ........................................................ 358,898.645 $ 14.374106 $ 5,158,847 Base + GMDB/1 ............................................... 23,337.603 14.202625 331,455 Base + GMDB/2 ............................................... 121.251 14.154186 1,716 Base + GMDB/1 + GMIB ........................................ 17,961.299 14.057418 252,489 Base + GMDB/2 + GMIB ........................................ 14,774.780 14.009291 206,984 Base + GMWB/2 + GMDB Opt 2 + GMIB ........................... 536.938 13.772114 7,395 $ 5,958,886 -------------- Energy Fund Base ........................................................ 110,900.490 23.958045 2,656,959 Base + GMDB/1 ............................................... 1,206.819 23.652026 28,544 Base + GMDB/2 ............................................... 120.013 23.565632 2,828 Base + GMDB/1 + GMIB ........................................ 892.915 23.393157 20,888 Base + GMDB/2 + GMIB ........................................ 16,136.700 23.307397 376,104 Base + GMWB/5 ............................................... 1,515.375 23.652026 35,842 Base + GMWB/5 + GMDB Opt 1 .................................. 76.086 23.350223 1,777 Base + GMWB/5 + GMDB Opt 2 .................................. 28.623 23.264633 666 Base + GMWB/5 + GMDB Opt 2 + GMIB ........................... 36.274 23.009677 835 Base + GMWB/2 + GMDB Opt 2 .................................. 38.349 23.136792 887 3,125,330 -------------- Energy Services Fund Base ........................................................ 106,325.759 26.148176 2,780,225 Base + GMDB/1 ............................................... 4,244.462 25.814137 109,567 Base + GMDB/2 ............................................... 212.857 25.719828 5,475 Base + GMDB/1 + GMIB ........................................ 1,884.406 25.531545 48,112 Base + GMDB/2 + GMIB ........................................ 13,417.731 25.437927 341,319 Base + GMWB/5 + GMDB Opt 1 .................................. 310.532 25.484697 7,914 Base + GMWB/5 + GMDB Opt 2 .................................. 117.454 25.391255 2,982 Base + GMWB/5 + GMDB Opt 2 + GMIB ........................... 37.053 25.112915 931 3,296,525 -------------- Europe 1.25X Strategy Fund Base ........................................................ 14,171.850 17.975744 254,750 Base + GMDB/1 ............................................... 4,818.751 17.746116 85,514 Base + GMDB/2 ............................................... 1,239.272 17.681261 21,912 Base + GMDB/1 + GMIB ........................................ 3,187.983 17.551846 55,955 Base + GMDB/2 + GMIB ........................................ 372.968 17.487515 6,522 Base + GMWB/2 + GMDB Opt 2 .................................. 571.485 17.359491 9,921 Base + GMWB/2 + GMDB Opt 2 + GMIB ........................... 88.666 17.169240 1,522 436,096 -------------- Financial Services Fund Base ........................................................ 3,126.172 10.775929 33,687 Base + GMDB/2 ............................................... 186.451 10.599379 1,976 Base + GMDB/1 + GMIB ........................................ 90.872 10.521767 956 36,619 -------------- Government Long Bond 1.2X Strategy Fund Base ........................................................ 43,274.960 11.349859 491,165 Base + GMDB/1 ............................................... 20,046.593 11.174632 224,013 Base + GMDB/2 ............................................... 4,365.638 11.744210 51,271 Base + GMDB/1 + GMIB ........................................ 4,072.887 11.019189 44,880 Base + GMDB/2 + GMIB ........................................ 59.870 11.601449 695 Base + GMWB/5 + GMDB Opt 1 + GMIB ........................... 6,983.318 11.483793 80,195 Base + GMWB/5 + GMDB Opt 2 + GMIB ........................... 6,681.277 11.437068 76,414 Base + GMWB/2 + GMDB Opt 2 .................................. 1,544.516 11.507229 17,773 986,406 -------------- Health Care Fund Base ........................................................ 3,228.538 11.892872 38,397 Base + GMDB/1 ............................................... 1,332.143 11.740888 15,641 Base + GMDB/2 ............................................... 569.559 11.697988 6,663 Base + GMDB/1 + GMIB ........................................ 665.211 11.612331 7,725 Base + GMDB/2 + GMIB ........................................ 2,571.594 11.569703 29,753 98,179 --------------
The accompanying notes are an integral part of these financial statements. 15 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Rydex Variable Trust: (continued) Hedged Equity Fund Base + GMDB/1 + GMIB ........................................ 70.774 $ 10.323701 $ 731 $ 731 -------------- Internet Fund Base ........................................................ 93.693 12.813312 1,201 Base + GMDB/1 ............................................... 97.676 12.649590 1,236 Base + GMDB/2 ............................................... 56.047 12.603352 706 Base + GMWB/5 ............................................... 1,578.090 12.649590 19,962 23,105 -------------- Inverse Dow 2X Strategy Fund Base ........................................................ 90,170.008 6.043942 544,982 Base + GMDB/2 + GMIB ........................................ 67.865 5.890374 400 545,382 -------------- Inverse Government Long Bond Strategy Fund Base ........................................................ 291.412 8.126171 2,368 Base + GMDB/1 ............................................... 42.164 8.000732 337 Base + GMDB/1 + GMIB ........................................ 84.243 7.889442 665 Base + GMWB/2 + GMDB Opt 2 .................................. 218.631 7.768069 1,698 5,068 -------------- Inverse Mid-Cap Strategy Fund Base + GMDB/1 + GMIB ........................................ 116.476 7.160582 834 834 -------------- Inverse Russell 2000 Strategy Fund Base ........................................................ 14,082.760 7.294468 102,726 Base + GMDB/1 ............................................... 4,114.313 7.207370 29,653 Base + GMDB/1 + GMIB ........................................ 137.311 7.133637 980 133,359 -------------- Inverse S&P 500 Strategy Fund Base ........................................................ 75,396.208 6.300607 475,042 Base + GMDB/1 + GMIB ........................................ 262.546 6.116974 1,606 476,648 -------------- Japan 1.25X Strategy Fund Base ........................................................ 5,572.235 11.112712 61,923 Base + GMDB/2 + GMIB ........................................ 524.182 10.810773 5,667 67,590 -------------- Large Cap Growth Fund Base ........................................................ 17,444.949 11.319867 197,475 Base + GMDB/1 ............................................... 137.843 11.184776 1,542 Base + GMDB/2 ............................................... 5,016.486 11.146609 55,917 Base + GMDB/1 + GMIB ........................................ 2,268.810 11.070392 25,117 Base + GMWB/2 + GMDB Opt 2 .................................. 473.806 10.957755 5,192 285,243 -------------- Large Cap Value Fund Base ........................................................ 17,481.609 12.422961 217,173 Base + GMDB/1 ............................................... 5,550.813 12.274753 68,135 Base + GMDB/1 + GMIB ........................................ 259.640 12.149251 3,154 Base + GMDB/2 + GMIB ........................................ 11,387.686 12.107656 137,878 Base + GMWB/2 + GMDB Opt 2 .................................. 56.601 12.025671 681 427,021 -------------- Leisure Fund Base ........................................................ 16,413.006 12.630330 207,302 Base + GMDB/1 ............................................... 7,076.943 12.468976 88,242 Base + GMDB/2 ............................................... 97.602 12.423418 1,213 296,757 -------------- Mid Cap 1.5X Strategy Fund Base ........................................................ 2,998.795 22.349868 67,023 Base + GMDB/1 + GMIB ........................................ 219.900 21.699200 4,772 Base + GMWB/5 ............................................... 462.457 15.169367 7,015 Base + GMWB/2 + GMDB Opt 2 .................................. 51.814 14.803061 767 79,577 -------------- Mid-Cap Growth Fund Base ........................................................ 5,079.781 13.222394 67,167 Base + GMDB/1 + GMIB ........................................ 761.575 12.930998 9,848 Base + GMWB/2 + GMDB Opt 2 .................................. 173.841 12.799437 2,225 79,240 -------------- Mid-Cap Value Fund Base ........................................................ 3,754.591 13.097930 49,177 Base + GMDB/1 + GMIB ........................................ 396.229 12.809347 5,075 Base + GMDB/2 + GMIB ........................................ 434.014 12.765503 5,540 Base + GMWB/2 + GMDB Opt 2 .................................. 47.331 12.679045 600 60,392 --------------
The accompanying notes are an integral part of these financial statements. 16 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
=================================================================================================================================== UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves:(continued) Rydex Variable Trust: (continued) Multi-Cap Core Equity Fund Base ........................................................ 14,896.306 $ 10.174769 $ 151,566 $ 151,566 -------------- Nova Fund Base ........................................................ 4,646.856 13.484529 62,661 Base + GMDB/1 ............................................... 2,008.264 13.157157 26,423 89,084 -------------- OTC 2X Strategy Fund Base ........................................................ 27,936.978 15.138086 422,912 Base + GMDB/1 ............................................... 22,134.674 14.944657 330,795 Base + GMDB/2 ............................................... 182.704 14.890033 2,720 Base + GMDB/1 + GMIB ........................................ 100,105.023 14.781018 1,479,654 2,236,081 -------------- OTC Fund Base ........................................................ 9,180.896 17.011790 156,183 Base + GMDB/1 ............................................... 442.458 16.598643 7,344 Base + GMDB/1 + GMIB ........................................ 65,672.689 16.220658 1,065,254 Base + GMWB/2 + GMDB Opt 2 .................................. 173.621 12.802515 2,223 Base + GMWB/2 + GMDB Opt 2 + GMIB ........................... 993.823 12.646914 12,569 1,243,573 -------------- Precious Metals Fund Base ........................................................ 14,534.906 19.278714 280,214 Base + GMDB/1 ............................................... 4,035.169 19.032268 76,798 Base + GMDB/2 ............................................... 13,643.347 18.962683 258,714 Base + GMDB/1 + GMIB ........................................ 1,256.838 18.823749 23,658 Base + GMDB/2 + GMIB ........................................ 19,994.000 18.754677 374,981 Base + GMWB/5 + GMDB Opt 2 + GMIB ........................... 1,654.098 18.514894 30,625 1,044,990 -------------- Real Estate Fund Base ........................................................ 9,685.357 14.526075 140,690 Base + GMDB/1 ............................................... 354.447 14.340523 5,083 Base + GMDB/2 ............................................... 47.460 14.288145 678 Base + GMDB/1 + GMIB ........................................ 578.671 14.183583 8,208 Base + GMDB/2 + GMIB ........................................ 74.465 14.131589 1,052 155,711 -------------- Russell 2000 1.5X Strategy Fund Base ........................................................ 8,123.678 21.930793 178,159 Base + GMDB/1 + GMIB ........................................ 315.022 21.292283 6,708 Base + GMWB/2 + GMDB Opt 2 .................................. 57.632 13.798338 795 185,662 -------------- Russell 2000 2X Strategy Fund Base ........................................................ 828.912 8.941503 7,412 7,412 -------------- S&P 500 2X Strategy Fund Base ........................................................ 116,865.575 14.260791 1,666,596 Base + GMDB/1 ............................................... 19,315.418 14.078624 271,935 Base + GMDB/1 + GMIB ........................................ 402.905 13.924491 5,610 Base + GMWB/2 + GMDB Opt 2 .................................. 53.128 13.771872 732 1,944,873 -------------- Sector Rotation Fund Base ........................................................ 11,151.272 20.339861 226,815 Base + GMDB/1 ............................................... 3,870.209 20.026047 77,505 Base + GMDB/1 + GMIB ........................................ 93.574 19.747683 1,848 Base + GMDB/2 + GMIB ........................................ 26.455 16.103903 426 Base + GMWB/5 ............................................... 1,859.843 16.368352 30,443 337,037 -------------- Small-Cap Growth Fund Base ........................................................ 32,808.494 12.635677 414,558 Base + GMDB/1 ............................................... 9,762.617 12.484899 121,885 Base + GMDB/2 ............................................... 5,574.369 12.442291 69,358 Base + GMDB/1 + GMIB ........................................ 785.770 12.357232 9,710 Base + GMWB/2 + GMDB Opt 2 .................................. 99.612 12.231507 1,218 616,729 -------------- Small-Cap Value Fund Base ........................................................ 16,499.536 10.847248 178,975 Base + GMDB/1 ............................................... 3,810.458 10.717796 40,840 Base + GMDB/2 ............................................... 453.417 10.681229 4,843 Base + GMDB/1 + GMIB ........................................ 83.103 10.608197 882 225,540 --------------
The accompanying notes are an integral part of these financial statements. 17 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
================================================================================================================================= UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Rydex Variable Trust: (continued) Strengthening Dollar 2X Strategy Fund Base + GMDB/1 + GMIB ......................................... 192.427 $ 7.900963 $ 1,520 $ 1,520 ------------ Technology Fund Base ......................................................... 58,418.832 12.091149 706,351 Base + GMDB/1 ................................................ 188.219 11.936649 2,247 Base + GMWB/5 + GMDB Opt 2 + GMIB ............................ 1,115.316 11.612344 12,951 721,549 ------------ Telecommunications Fund Base ......................................................... 50,396.004 13.712381 691,049 Base + GMDB/1 ................................................ 33.533 13.537163 454 Base + GMDB/2 ................................................ 210.240 13.487678 2,836 Base + GMDB/1 + GMIB ......................................... 899.095 13.388913 12,038 Base + GMDB/2 + GMIB ......................................... 20,408.107 13.339826 272,241 978,618 ------------ Transportation Fund Base ......................................................... 811.743 12.802388 10,392 Base + GMDB/1 ................................................ 627.518 12.638815 7,931 18,323 ------------ U.S. Government Money Market Fund Base ......................................................... 640,327.563 10.229263 6,550,079 Base + GMDB/1 ................................................ 198,437.032 10.011028 1,986,559 Base + GMDB/1 + GMIB ......................................... 57,295.949 9.812667 562,226 Base + GMWB/2 + GMDB Opt 2 ................................... 1,130.134 10.021103 11,325 Base + GMWB/2 + GMDB Opt 2 + GMIB ............................ 2,707.599 9.899282 26,803 9,136,992 ------------ Utilities Fund Base ......................................................... 26,158.838 16.686641 436,503 Base + GMDB/1 ................................................ 268.104 16.473583 4,417 Base + GMDB/1 + GMIB ......................................... 37,479.263 16.293302 610,661 Base + GMDB/2 + GMIB ......................................... 115.665 16.233622 1,878 Base + GMWB/5 ................................................ 1,868.975 16.473583 30,789 1,084,248 ------------ Weakening Dollar 2X Strategy Fund Base ......................................................... 26,721.038 12.947994 345,984 Base + GMDB/1 ................................................ 2,897.439 12.848816 37,229 Base + GMDB/2 ................................................ 220.877 12.820731 2,832 Base + GMWB/5 + GMDB Opt 1 ................................... 228.669 12.750500 2,916 Base + GMWB/5 + GMDB Opt 2 ................................... 85.896 12.722521 1,093 390,054 ------------ Seligman Portfolios, Inc.: Communications and Information Portfolio Base ......................................................... 12,735.045 8.118445 103,389 Base + GMDB/1 ................................................ 1,198.802 7.921259 9,496 Base + GMDB/2 ................................................ 58.465 15.800665 924 Base + GMDB/1 + GMIB ......................................... 165.996 7.740862 1,285 115,094 ------------ Global Technology Portfolio Base ......................................................... 13,280.559 6.698421 88,959 Base + GMDB/2 ................................................ 243.274 14.162809 3,445 Base + GMDB/1 + GMIB ......................................... 2,312.759 6.386899 14,771 Base + GMDB/2 + GMIB ......................................... 30,463.801 13.990626 426,208 Base + GMWB/5 ................................................ 1,765.082 14.220452 25,100 558,483 ------------ Third Avenue Variable Annuity Trust Series: Value Portfolio Base ......................................................... 22,281.253 19.684481 438,595 Base + GMDB/1 ................................................ 3,593.122 19.380801 69,638 Base + GMDB/2 ................................................ 4,228.289 14.411936 60,938 Base + GMDB/1 + GMIB ......................................... 828.908 19.111338 15,842 Base + GMDB/2 + GMIB ......................................... 3,487.185 14.236775 49,646 Base + GMWB/5 + GMDB Opt 2 ................................... 561.342 14.207799 7,975 Base + GMWB/2 + GMDB Opt 1 ................................... 1,820.508 14.178854 25,813 668,447 ------------
The accompanying notes are an integral part of these financial statements. 18 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
================================================================================================================================= UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Van Eck Worldwide Insurance Trust: Absolute Return Fund Base ......................................................... 18,331.493 $10.601003 $ 194,332 Base + GMDB/1 ................................................ 7,097.786 10.437361 74,082 Base + GMDB/2 ................................................ 7,007.615 10.433249 73,112 Base + GMDB/1 + GMIB ......................................... 8,397.098 10.292179 86,424 Base + GMDB/2 + GMIB ......................................... 776.670 10.306422 8,005 Base + GMWB/5 ................................................ 2.520 10.475718 26 Base + GMWB/5 + GMDB Opt 1 ................................... 223.618 10.327436 2,309 Base + GMWB/5 + GMDB Opt 2 ................................... 3,748.527 10.285417 38,555 Base + GMWB/5 + GMDB Opt 2 + GMIB ............................ 552.384 10.160361 5,612 Base + GMWB/2 ................................................ 2,948.837 10.412013 30,703 $ 513,160 ------------ Bond Fund Base ......................................................... 21,229.127 15.376486 326,429 Base + GMDB/1 ................................................ 7,561.608 14.980897 113,280 Base + GMDB/2 ................................................ 123.732 11.830886 1,464 Base + GMDB/1 + GMIB ......................................... 1,069.870 14.618115 15,639 Base + GMDB/2 + GMIB ......................................... 2,762.220 11.687077 32,282 489,094 ------------ Emerging Markets Fund Base ......................................................... 42,554.922 32.413361 1,379,348 Base + GMDB/1 ................................................ 8,807.878 31.579235 278,146 Base + GMDB/2 ................................................ 2,796.019 31.309510 87,542 Base + GMDB/1 + GMIB ......................................... 3,895.610 30.814303 120,041 Base + GMDB/2 + GMIB ......................................... 2,064.355 30.929165 63,849 Base + GMWB/5 ................................................ 4,680.121 31.436817 147,128 Base + GMWB/5 + GMDB Opt 1 ................................... 198.242 30.992267 6,144 Base + GMWB/5 + GMDB Opt 2 ................................... 74.899 30.866224 2,312 Base + GMWB/2 ................................................ 2,776.956 31.245778 86,768 2,171,278 ------------ Hard Assets Fund Base ......................................................... 37,940.436 36.025255 1,366,814 Base + GMDB/1 ................................................ 4,719.195 35.098579 165,637 Base + GMDB/2 ................................................ 5,182.039 33.303858 172,582 Base + GMDB/1 + GMIB ......................................... 1,174.602 34.248801 40,229 Base + GMDB/2 + GMIB ......................................... 16,484.017 32.899272 542,312 Base + GMWB/5 + GMDB Opt 1 ................................... 228.010 32.966419 7,517 Base + GMWB/5 + GMDB Opt 2 ................................... 85.810 32.832379 2,817 Base + GMWB/5 + GMDB Opt 1 + GMIB ............................ 1,466.022 32.565929 47,742 Base + GMWB/5 + GMDB Opt 2 + GMIB ............................ 633.790 32.433510 20,556 Base + GMWB/2 + GMDB Opt 2 ................................... 88.635 32.632326 2,892 2,369,098 ------------ Real Estate Fund Base ......................................................... 11,463.825 26.099608 299,201 Base + GMDB/1 ................................................ 1,034.708 25.428162 26,311 Base + GMDB/2 ................................................ 913.833 20.883888 19,084 Base + GMDB/1 + GMIB ......................................... 2,627.555 24.812425 65,196 Base + GMDB/2 + GMIB ......................................... 1,672.218 20.630117 34,498 Base + GMWB/5 ................................................ 254.969 20.968852 5,346 Base + GMWB/5 + GMDB Opt 1 ................................... 30.489 20.672201 630 Base + GMWB/5 + GMDB Opt 2 ................................... 454.288 20.588122 9,353 Base + GMWB/2 ................................................ 1,439.321 20.841359 29,997 489,616 ------------
The accompanying notes are an integral part of these financial statements. 19 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF ASSETS AND LIABILITIES - CONTINUED DECEMBER 31, 2007
================================================================================================================================= UNIT SUB-ACCOUNT UNITS VALUE VALUE TOTAL --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS ATTRIBUTABLE TO: (continued) Contract owners' deferred annuity reserves: (continued) Wells Fargo Advantage VT Funds: Discovery Fund Base ......................................................... 13,594.999 $15.483971 $ 210,505 Base + GMDB/1 ................................................ 1,802.514 15.336544 27,644 Base + GMDB/2 ................................................ 422.570 15.294828 6,463 Base + GMDB/1 + GMIB ......................................... 504.428 15.211435 7,673 Base + GMDB/2 + GMIB ......................................... 151.107 15.169908 2,292 Base + GMWB/5 ................................................ 1,731.656 15.336544 26,558 Base + GMWB/5 + GMDB Opt 1 ................................... 117.821 15.190634 1,790 Base + GMWB/5 + GMDB Opt 2 ................................... 44.455 15.149173 673 $ 283,598 ------------ Opportunity Fund Base ......................................................... 8,489.186 20.335997 172,636 Base + GMDB/1 ................................................ 5,486.776 19.812691 108,708 Base + GMDB/2 ................................................ 4,387.490 14.569715 63,924 Base + GMDB/1 + GMIB ......................................... 615.106 19.332780 11,892 Base + GMDB/2 + GMIB ......................................... 5,644.303 14.392619 81,236 Base + GMWB/5 + GMDB Opt 2 ................................... 576.768 14.363327 8,284 Base + GMWB/2 + GMDB Opt 1 ................................... 1,867.486 14.334073 26,769 473,449 --------------------------------------------------------------------------------------------------------------------------------- Net assets attributable to contract owners' deferred annuity reserves ............................................................................... $ 87,863,815 --------------------------------------------------------------------------------------------------------------------------------- Contract owners' annuity payment reserves: Lord Abbett Series Fund, Inc: Growth and Income Portfolio ............................................................................. $ 71,745 --------------------------------------------------------------------------------------------------------------------------------- Net assets attributable to contract owners' annuity payment reserves .............................................................................. $ 71,745 --------------------------------------------------------------------------------------------------------------------------------- Net assets attributable to contract owners' reserves .......................................... $ 87,935,560 =================================================================================================================================
The accompanying notes are an integral part of these financial statements. 20 ================================================================================ THIS PAGE INTENTIONALLY LEFT BLANK. 21 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== 40|86 SERIES TRUST ---------------------------------------------------------------------- FIXED GOVERNMENT MONEY BALANCED (j)* EQUITY (j)* INCOME (a)* SECURITIES (a)* MARKET (a)* ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ... $ 5,321 $ 207 $ 4,103 $ 2,757 $ 16,594 Expenses: Mortality and expense risk fees ......................... 5,541 12,628 1,392 1,188 5,465 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ......................... (220) (12,421) 2,711 1,569 11,129 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ................................... 100,099 (186,559) 1,487 (2,466) -- Net realized short-term capital gain distributions from investments in portfolio shares ................. -- -- -- -- -- Net realized long-term capital gain distributions from investments in portfolio shares ....................... 14,962 275,906 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ............................................ 115,061 89,347 1,487 (2,466) -- ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ......................... (82,198) 80,004 (750) 2,957 -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ..................................... $ 32,643 $ 156,930 $ 3,448 $ 2,060 $ 11,129 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== 40|86 SERIES TRUST ---------------------------------------------------------------------- FIXED GOVERNMENT MONEY BALANCED (j)* EQUITY (j)* INCOME (a)* SECURITIES (a)* MARKET (a)* ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ......................... $ (220) $ (12,421) $ 2,711 $ 1,569 $ 11,129 Net realized gain (loss) on investments in portfolio shares ............................................... 115,061 89,347 1,487 (2,466) -- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ..... (82,198) 80,004 (750) 2,957 -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....................................... 32,643 156,930 3,448 2,060 11,129 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ..... 73,551 6,872 -- 9,265 93,845 Contract redemptions .................................... (159,920) (145,292) (15,495) (35,670) (62,705) Net transfers (including mortality transfers) ........... (864,816) (2,275,037) (369,973) (276,384) (1,399,538) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ..................... (951,185) (2,413,457) (385,468) (302,789) (1,368,398) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............. (918,542) (2,256,527) (382,020) (300,729) (1,357,269) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ............................ 918,542 2,256,527 382,020 300,729 1,357,269 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ....................... $ -- $ -- $ -- $ -- $ -- ====================================================================================================================================
* See Footnote 7 for details. 22
=========================================================================================================================== THE ALGER AMERICAN AIM VARIABLE INSURANCE FUNDS FUND ------------------------------------------------------------------------------------------------------------- ----------- GLOBAL CORE FINANCIAL GLOBAL REAL HIGH MID CAP BASIC VALUE EQUITY SERVICES HEALTH CARE ESTATE YIELD CORE EQUITY TECHNOLOGY GROWTH --------------------------------------------------------------------------------------------------------------------------- $ 576 $ 1,663 $ 878 $ -- $ 46,657 $ 83,600 $ 110 $ -- $ 3,001 2,871 2,246 668 2,896 18,723 12,200 2,668 1,367 14,044 --------------------------------------------------------------------------------------------------------------------------- (2,295) (583) 210 (2,896) 27,934 71,400 (2,558) (1,367) (11,043) --------------------------------------------------------------------------------------------------------------------------- 18,173 3,468 629 7,434 179,425 (29,196) 3,773 2,878 108,068 98 -- 112 -- 11,922 -- -- -- -- 9,587 -- 3,202 -- 99,438 -- 3,304 -- -- --------------------------------------------------------------------------------------------------------------------------- 27,858 3,468 3,943 7,434 290,785 (29,196) 7,077 2,878 108,068 --------------------------------------------------------------------------------------------------------------------------- (26,600) 8,492 (15,567) (3,615) (366,580) 9,436 12,098 1,716 10,346 --------------------------------------------------------------------------------------------------------------------------- $ (1,037) $ 11,377 $ (11,414) $ 923 $ (47,861) $ 51,640 $ 16,617 $ 3,227 $ 107,371 ===========================================================================================================================
=========================================================================================================================== THE ALGER AMERICAN AIM VARIABLE INSURANCE FUNDS FUND ------------------------------------------------------------------------------------------------------------- ----------- GLOBAL CORE FINANCIAL GLOBAL REAL HIGH MID CAP BASIC VALUE EQUITY SERVICES HEALTH CARE ESTATE YIELD CORE EQUITY TECHNOLOGY GROWTH --------------------------------------------------------------------------------------------------------------------------- $ (2,295) $ (583) $ 210 $ (2,896) $ 27,934 $ 71,400 $ (2,558) $ (1,367) $ (11,043) 27,858 3,468 3,943 7,434 290,785 (29,196) 7,077 2,878 108,068 (26,600) 8,492 (15,567) (3,615) (366,580) 9,436 12,098 1,716 10,346 --------------------------------------------------------------------------------------------------------------------------- (1,037) 11,377 (11,414) 923 (47,861) 51,640 16,617 3,227 107,371 --------------------------------------------------------------------------------------------------------------------------- 49,869 425 3,603 1,710 312,245 14,630 243 16,214 4,773 (23,767) (24,216) (3,814) (10,039) (287,305) (15,087) (13,138) (8,864) (98,691) (43,946) 95,804 (3,811) 613,086 (644,562) (330,446) 47,247 (1,275) 1,174,671 --------------------------------------------------------------------------------------------------------------------------- (17,844) 72,013 (4,022) 604,757 (619,622) (330,903) 34,352 6,075 1,080,753 --------------------------------------------------------------------------------------------------------------------------- (18,881) 83,390 (15,436) 605,680 (667,483) (279,263) 50,969 9,302 1,188,124 --------------------------------------------------------------------------------------------------------------------------- 183,182 65,105 56,545 133,528 1,380,779 536,689 172,542 72,272 547,505 --------------------------------------------------------------------------------------------------------------------------- $ 164,301 $ 148,495 $ 41,109 $ 739,208 $ 713,296 $ 257,426 $ 223,511 $ 81,574 $1,735,629 ===========================================================================================================================
23 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== ALLIANCEBERNSTEIN AMERICAN VARIABLE CENTURY PRODUCTS VARIABLE THE ALGER AMERICAN FUND (CONTINUED) SERIES PORTFOLIOS ------------------------------------- ----------------- ----------- LEVERAGED MIDCAP SMALL GROWTH AND ALLCAP GROWTH CAPITALIZATION INCOME BALANCED ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares .... $ -- $ -- $ -- $ 2,194 $ 550 Expenses: Mortality and expense risk fees .......................... 9,335 16,024 5,683 2,724 1,731 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) .......................... (9,335) (16,024) (5,683) (530) (1,181) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares .................... 158,134 34,483 21,245 459 256 Net realized short-term capital gain distributions from investments in portfolio shares ....................... -- 49,995 -- 476 217 Net realized long-term capital gain distributions from investments in portfolio shares ....................... -- 15,591 -- 6,971 1,123 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .......................................... 158,134 100,069 21,245 7,906 1,596 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ....... 8,123 161,853 36,532 (3,421) (466) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .................................... $ 156,922 $ 245,898 $ 52,094 $ 3,955 $ (51) ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== ALLIANCEBERNSTEIN AMERICAN VARIABLE CENTURY PRODUCTS VARIABLE THE ALGER AMERICAN FUND (CONTINUED) SERIES PORTFOLIOS ------------------------------------- ----------------- ----------- LEVERAGED MIDCAP SMALL GROWTH AND ALLCAP GROWTH CAPITALIZATION INCOME BALANCED ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .......................... $ (9,335) $ (16,024) $ (5,683) $ (530) $ (1,181) Net realized gain (loss) on investments in portfolio shares ................................................ 158,134 100,069 21,245 7,906 1,596 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ....................... 8,123 161,853 36,532 (3,421) (466) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ...................................... 156,922 245,898 52,094 3,955 (51) ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ...... 62,884 30,275 11,231 6,055 3 Contract redemptions ..................................... (26,443) (68,697) (45,503) (12,316) (1,521) Net transfers (including mortality transfers) ............ 135,004 1,492,791 (54,338) 220,628 87,537 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ................... 171,445 1,454,369 (88,610) 214,367 86,019 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............ 328,367 1,700,267 (36,516) 218,322 85,968 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ............................. 437,330 629,184 380,962 48,925 21,178 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ...................... $ 765,697 $2,329,451 $ 344,446 $ 267,247 $ 107,146 ====================================================================================================================================
* See Footnote 7 for details. 24
=================================================================================================================================== DIREXION DREYFUS INSURANCE INVESTMENT AMERICAN CENTURY VARIABLE PORTFOLIOS (CONTINUED) TRUST PORTFOLIOS ------------------------------------------------------------------------ ------------ -------------- SMALL DREYFUS CAP SOCIALLY DREYFUS INCOME & INFLATION DYNAMIC VP STOCK RESPONSIBLE STOCK GROWTH PROTECTION INTERNATIONAL VALUE VISTA (k)* HY BOND INDEX GROWTH INDEX ----------------------------------------------------------------------------------------------------------------------------------- $ 8,842 $ 3,494 $ 4,016 $ 23,092 $ -- $ 4,029 $ 172 $ 872 $ 19,612 7,792 1,454 26,154 21,848 228 2,345 1,578 2,505 19,069 ----------------------------------------------------------------------------------------------------------------------------------- 1,050 2,040 (22,138) 1,244 (228) 1,684 (1,406) (1,633) 543 ----------------------------------------------------------------------------------------------------------------------------------- 25,047 1,021 205,753 22,921 2,339 8,174 (9,040) 11,503 187,610 -- -- -- 76,250 -- -- 69 -- -- -- -- -- 43,498 -- -- 1,779 -- -- ----------------------------------------------------------------------------------------------------------------------------------- 25,047 1,021 205,753 142,669 2,339 8,174 (7,192) 11,503 187,610 ----------------------------------------------------------------------------------------------------------------------------------- (38,396) 3,936 (7,600) (190,384) (229) 1,424 (4,003) 1,831 (130,440) ----------------------------------------------------------------------------------------------------------------------------------- $ (12,299) $ 6,997 $ 176,015 $ (46,471) $ 1,882 $ 11,282 $ (12,601) $ 11,701 $ 57,713 ===================================================================================================================================
=================================================================================================================================== DIREXION DREYFUS INSURANCE INVESTMENT AMERICAN CENTURY VARIABLE PORTFOLIOS (CONTINUED) TRUST PORTFOLIOS ------------------------------------------------------------------------ ------------ -------------- SMALL DREYFUS CAP SOCIALLY DREYFUS INCOME & INFLATION DYNAMIC VP STOCK RESPONSIBLE STOCK GROWTH PROTECTION INTERNATIONAL VALUE VISTA (k)* HY BOND INDEX GROWTH INDEX ----------------------------------------------------------------------------------------------------------------------------------- $ 1,050 $ 2,040 $ (22,138) $ 1,244 $ (228) $ 1,684 $ (1,406) $ (1,633) $ 543 25,047 1,021 205,753 142,669 2,339 8,174 (7,192) 11,503 187,610 (38,396) 3,936 (7,600) (190,384) (229) 1,424 (4,003) 1,831 (130,440) ----------------------------------------------------------------------------------------------------------------------------------- (12,299) 6,997 176,015 (46,471) 1,882 11,282 (12,601) 11,701 57,713 ----------------------------------------------------------------------------------------------------------------------------------- 14,647 1,011 66,676 90,591 5,047 (4) 14 664 79,965 (36,567) (1,943) (92,183) (115,835) (264) -- (315) (17,395) (78,266) 22,876 27,312 764,854 (36,456) 251,032 (802,415) 14,878 (119,451) (574,104) ----------------------------------------------------------------------------------------------------------------------------------- 956 26,380 739,347 (61,700) 255,815 (802,419) 14,577 (136,182) (572,405) ----------------------------------------------------------------------------------------------------------------------------------- (11,343) 33,377 915,362 (108,171) 257,697 (791,137) 1,976 (124,481) (514,692) ----------------------------------------------------------------------------------------------------------------------------------- 514,144 54,639 1,207,824 911,658 -- 794,487 46,100 280,465 1,562,341 ----------------------------------------------------------------------------------------------------------------------------------- $ 502,801 $ 88,016 $ 2,123,186 $ 803,487 $ 257,697 $ 3,350 $ 48,076 $ 155,984 $ 1,047,649 ===================================================================================================================================
25 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== DREYFUS VARIABLE INVESTMENT FUND FEDERATED INSURANCE SERIES --------------------------- ---------------------------------------- HIGH DISCIPLINED INTERNATIONAL CAPITAL INCOME INTERNATIONAL STOCK (i)* VALUE INCOME II BOND II EQUITY II ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ... $ -- $ 17,988 $ 3,870 $ 49,720 $ 588 Expenses: Mortality and expense risk fees ......................... 613 17,082 1,883 10,972 4,995 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ......................... (613) 906 1,987 38,748 (4,407) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares .................................. 24,019 11,882 5,211 101,761 47,318 Net realized short-term capital gain distributions from investments in portfolio shares ...................... -- 28,154 -- -- -- Net realized long-term capital gain distributions from investments in portfolio shares ...................... 8,935 116,328 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ............................... 32,954 156,364 5,211 101,761 47,318 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ......................... (29,554) (139,492) (7,760) (109,605) (19,494) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .................................. $ 2,787 $ 17,778 $ (562) $ 30,904 $ 23,417 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== DREYFUS VARIABLE INVESTMENT FUND FEDERATED INSURANCE SERIES --------------------------- ---------------------------------------- HIGH DISCIPLINED INTERNATIONAL CAPITAL INCOME INTERNATIONAL STOCK (i)* VALUE INCOME II BOND II EQUITY II ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ......................... $ (613) $ 906 $ 1,987 $ 38,748 $ (4,407) Net realized gain (loss) on investments in portfolio shares ............................................... 32,954 156,364 5,211 101,761 47,318 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ...................... (29,554) (139,492) (7,760) (109,605) (19,494) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ..................................... 2,787 17,778 (562) 30,904 23,417 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ..... 96 38,047 2,724 5,595 371 Contract redemptions .................................... (32,027) (123,291) (37,252) (53,570) (19,805) Net transfers (including mortality transfers) ........... (114,982) (256,077) 67,261 (1,204,339) (22,371) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions .................. (146,913) (341,321) 32,733 (1,252,314) (41,805) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets .......... (144,126) (323,543) 32,171 (1,221,410) (18,388) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ............................ 144,126 1,080,786 107,362 1,609,365 323,098 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ................... $ -- $ 757,243 $ 139,533 $ 387,955 $ 304,710 ====================================================================================================================================
* See Footnote 7 for details. 26
================================================================================================================================= FEDERATED INSURANCE SERIES (CONTINUED) JANUS ASPEN SERIES ---------------------------- -------------------------------------------------------------------------------------------------- MARKET GLOBAL LIFE GROWTH AND INTERNATIONAL LARGE CAP MID CAP KAUFMANN II OPPORTUNITY II BALANCED (k)* FORTY (k)* SCIENCES (k)* INCOME GROWTH GROWTH GROWTH --------------------------------------------------------------------------------------------------------------------------------- $ -- $ -- $ 210 $ 165 $ -- $ 5,776 $ 8,257 $ 3,809 $ 1,116 140 77 65 165 85 7,370 20,277 8,949 7,323 --------------------------------------------------------------------------------------------------------------------------------- (140) (77) 145 -- (85) (1,594) (12,020) (5,140) (6,207) --------------------------------------------------------------------------------------------------------------------------------- 1,397 1 344 7 10 54,626 150,897 21,305 60,939 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 3,136 --------------------------------------------------------------------------------------------------------------------------------- 1,397 1 344 7 10 54,626 150,897 21,305 64,075 --------------------------------------------------------------------------------------------------------------------------------- -- 184 296 1,422 729 (10,437) 137,865 47,763 32,515 --------------------------------------------------------------------------------------------------------------------------------- $ 1,257 $ 108 $ 785 $ 1,429 $ 654 $ 42,595 $ 276,742 $ 63,928 $ 90,383 =================================================================================================================================
================================================================================================================================= FEDERATED INSURANCE SERIES (CONTINUED) JANUS ASPEN SERIES ---------------------------- -------------------------------------------------------------------------------------------------- MARKET GLOBAL LIFE GROWTH AND INTERNATIONAL LARGE CAP MID CAP KAUFMANN II OPPORTUNITY II BALANCED (k)* FORTY (k)* SCIENCES (k)* INCOME GROWTH GROWTH GROWTH --------------------------------------------------------------------------------------------------------------------------------- $ (140) $ (77) $ 145 $ -- $ (85) $ (1,594) $ (12,020) $ (5,140) $ (6,207) 1,397 1 344 7 10 54,626 150,897 21,305 64,075 -- 184 296 1,422 729 (10,437) 137,865 47,763 32,515 --------------------------------------------------------------------------------------------------------------------------------- 1,257 108 785 1,429 654 42,595 276,742 63,928 90,383 --------------------------------------------------------------------------------------------------------------------------------- 1,040 8,481 (1) 5,046 2,356 11,613 291,792 17,406 8,389 (616) -- -- -- (30) (25,111) (282,607) (48,937) (45,217) (1,681) -- 18,027 85,687 25,413 (182,846) 233,579 142,722 96,502 --------------------------------------------------------------------------------------------------------------------------------- (1,257) 8,481 18,026 90,733 27,739 (196,344) 242,764 111,191 59,674 --------------------------------------------------------------------------------------------------------------------------------- -- 8,589 18,811 92,162 28,393 (153,749) 519,506 175,119 150,057 --------------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- 397,494 985,335 330,635 332,202 --------------------------------------------------------------------------------------------------------------------------------- $ -- $ 8,589 $ 18,811 $ 92,162 $ 28,393 $ 243,745 $ 1,504,841 $ 505,754 $482,259 =================================================================================================================================
27 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== LAZARD JANUS ASPEN SERIES (CONTINUED) RETIREMENT SERIES --------------------------------------- --------------------------- SMALL COMPANY MID CAP VALUE WORLDWIDE EMERGING INTERNATIONAL VALUE (k)* (SERVICE) (k)* GROWTH MARKETS EQUITY ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares .... $ 44 $ -- $ 1,705 $ 14,442 $ 3,146 Expenses: Mortality and expense risk fees .......................... 3 1 4,330 14,499 3,501 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) .......................... 41 (1) (2,625) (57) (355) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ................................... -- -- 41,775 239,595 16,619 Net realized short-term capital gain distributions from investments in portfolio shares ....................... -- -- -- 55,725 4,050 Net realized long-term capital gain distributions from investments in portfolio shares ....................... -- 13 -- 134,524 17,022 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ................................ -- 13 41,775 429,844 37,691 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares .......................... 11 (54) (24,817) (186,555) (22,419) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ................................... $ 52 $ (42) $ 14,333 $ 243,232 $ 14,917 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== LAZARD JANUS ASPEN SERIES (CONTINUED) RETIREMENT SERIES --------------------------------------- --------------------------- SMALL COMPANY MID CAP VALUE WORLDWIDE EMERGING INTERNATIONAL VALUE (k)* (SERVICE) (k)* GROWTH MARKETS EQUITY ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .......................... $ 41 $ (1) $ (2,625) $ (57) $ (355) Net realized gain (loss) on investments in portfolio shares ................................................ -- 13 41,775 429,844 37,691 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ....................... 11 (54) (24,817) (186,555) (22,419) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ...................................... 52 (42) 14,333 243,232 14,917 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ...... -- -- 4,856 55,168 28,872 Contract redemptions ..................................... -- -- (11,190) (30,091) (10,009) Net transfers (including mortality transfers) ............ 4,791 947 44,012 929,061 (75,073) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ................... 4,791 947 37,678 954,138 (56,210) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ........... 4,843 905 52,011 1,197,370 (41,293) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ............................. -- -- 186,420 652,494 174,389 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period .................... $ 4,843 $ 905 $ 238,431 $1,849,864 $ 133,096 ====================================================================================================================================
* See Footnote 7 for details. 28
================================================================================================================================= LAZARD LEGG MASON RETIREMENT SERIES (CONTINUED) LEGG MASON PARTNERS VARIABLE EQUITY TRUST PARTNERS VARIABLE INCOME TRUST ----------------------------- ----------------------------------------------------- ----------------------------------------- US CAPITAL GLOBAL STRATEGIC AGGRESSIVE AND FUNDAMENTAL LARGE CAP HIGH YIELD STRATEGIC SMALL CAP EQUITY (l)* GROWTH (b)* INCOME (b)* VALUE (b)* GROWTH (b)* BOND (c)* GOVERNMENT (d)* BOND (c)* --------------------------------------------------------------------------------------------------------------------------------- $ -- $ 3,702 $ -- $ 773 $ 3,467 $ 20 $ 161 $ 2,933 $ 7,752 5,746 4,592 245 700 2,575 801 42 922 2,662 --------------------------------------------------------------------------------------------------------------------------------- (5,746) (890) (245) 73 892 (781) 119 2,011 5,090 --------------------------------------------------------------------------------------------------------------------------------- 12,823 33,395 (465) 33 35 4,996 -- (400) (633) 55,591 18,013 -- 1,781 1,192 -- 7 -- -- 79,026 41,535 63 7,147 12,097 -- 3 -- -- --------------------------------------------------------------------------------------------------------------------------------- 147,440 92,943 (402) 8,961 13,324 4,996 10 (400) (633) --------------------------------------------------------------------------------------------------------------------------------- (173,168) (92,674) (546) (9,081) (28,210) (1,221) (196) (2,328) (4,885) --------------------------------------------------------------------------------------------------------------------------------- $ (31,474) $ (621) $ (1,193) $ (47) $ (13,994) $ 2,994 $ (67) $ (717) $ (428) =================================================================================================================================
================================================================================================================================= LAZARD LEGG MASON RETIREMENT SERIES (CONTINUED) LEGG MASON PARTNERS VARIABLE EQUITY TRUST PARTNERS VARIABLE INCOME TRUST ----------------------------- ----------------------------------------------------- ----------------------------------------- US CAPITAL GLOBAL STRATEGIC AGGRESSIVE AND FUNDAMENTAL LARGE CAP HIGH YIELD STRATEGIC SMALL CAP EQUITY (l)* GROWTH (b)* INCOME (b)* VALUE (b)* GROWTH (b)* BOND (c)* GOVERNMENT (d)* BOND (c)* --------------------------------------------------------------------------------------------------------------------------------- $ (5,746) $ (890) $ (245) $ 73 $ 892 $ (781) $ 119 $ 2,011 $ 5,090 147,440 92,943 (402) 8,961 13,324 4,996 10 (400) (633) (173,168) (92,674) (546) (9,081) (28,210) (1,221) (196) (2,328) (4,885) --------------------------------------------------------------------------------------------------------------------------------- (31,474) (621) (1,193) (47) (13,994) 2,994 (67) (717) (428) --------------------------------------------------------------------------------------------------------------------------------- 47,706 8,478 1 515 92,294 1,666 2 4 12,719 (28,191) (12,894) (15) (219) (3,533) (1,036) (42) (27,400) (23,370) (208,033) (33,456) 12,202 55,711 204,864 42,495 2,284 82,593 53,502 --------------------------------------------------------------------------------------------------------------------------------- (188,518) (37,872) 12,188 56,007 293,625 43,125 2,244 55,197 42,851 --------------------------------------------------------------------------------------------------------------------------------- (219,992) (38,493) 10,995 55,960 279,631 46,119 2,177 54,480 42,423 --------------------------------------------------------------------------------------------------------------------------------- 518,645 324,671 -- -- -- -- -- -- 115,613 --------------------------------------------------------------------------------------------------------------------------------- $ 298,653 $ 286,178 $ 10,995 $ 55,960 $ 279,631 $ 46,119 $ 2,177 $ 54,480 $ 158,036 =================================================================================================================================
29 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== LORD ABBETT LEEGG MASON PARTNERS VARIABLE PORTFOLIOS SERIES FUND --------------------------------------------------- ----------- AGGRESSIVE LARGE CAP TOTAL AMERICA'S GROWTH (e)* ALL CAP (f)* GROWTH (g)* RETURN (h)* VALUE ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ......... $ -- $ 569 $ -- $ 405 $ 17,914 Expenses: Mortality and expense risk fees ............................... 51 1,004 335 251 9,482 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ............................... (51) (435) (335) 154 8,432 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ........................................ 1,409 21,258 7,364 2,031 34,967 Net realized short-term capital gain distributions from investments in portfolio shares ............................ 29 9,537 -- 259 2,391 Net realized long-term capital gain distributions from investments in portfolio shares ............................ -- 324 -- 58 16,509 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ............................................... 1,438 31,119 7,364 2,348 53,867 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................... (987) (21,472) (4,366) (1,327) (44,203) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ......................................... $ 400 $ 9,212 $ 2,663 $ 1,175 $ 18,096 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== LORD ABBETT LEEGG MASON PARTNERS VARIABLE PORTFOLIOS SERIES FUND --------------------------------------------------- ----------- AGGRESSIVE LARGE CAP TOTAL AMERICA'S GROWTH (e)* ALL CAP (f)* GROWTH (g)* RETURN (h)* VALUE ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ............................... $ (51) $ (435) $ (335) $ 154 $ 8,432 Net realized gain (loss) on investments in portfolio shares ... 1,438 31,119 7,364 2,348 53,867 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................ (987) (21,472) (4,366) (1,327) (44,203) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ... 400 9,212 2,663 1,175 18,096 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........... -- 813 (2) 2 4,026 Contract redemptions .......................................... (30) (418) (1,510) (50) (29,436) Net transfers (including mortality transfers) ................. (11,491) (189,530) (66,074) (36,711) (61,525) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ........................ (11,521) (189,135) (67,586) (36,759) (86,935) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ................ (11,121) (179,923) (64,923) (35,584) (68,839) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period .................................. 11,121 179,923 64,923 35,584 661,808 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ......................... $ -- $ -- $ -- $ -- $ 592,969 ====================================================================================================================================
* See Footnote 7 for details. 30
=================================================================================================================== LORD ABBETT SERIES FUND NORTHERN LIGHTS (CONTINUED) NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST VARIABLE TRUST ------------ ----------------------------------------------------------------------------------- ---------------- LEHMAN LEHMAN BROTHERS BROTHERS GROWTH AND HIGH INCOME SHORT DURATION MID-CAP SOCIALLY JNF INCOME BOND (m)* BOND (n)* FASCIANO GROWTH PARTNERS REGENCY RESPONSIVE BALANCED (k)* ------------------------------------------------------------------------------------------------------------------- $ 14,953 $ 1,497 $ 15,272 $ -- $ -- $ 4,246 $ 627 $ 138 $ 8,764 17,578 2,149 7,637 571 3,802 11,818 2,299 2,087 7,787 ------------------------------------------------------------------------------------------------------------------- (2,625) (652) 7,635 (571) (3,802) (7,572) (1,672) (1,949) 977 ------------------------------------------------------------------------------------------------------------------- 38,746 22,951 1,554 876 9,293 (56,951) 5,481 1,648 (6,209) 5,608 -- -- -- -- 2,204 649 519 -- 76,849 -- -- 289 -- 64,242 3,118 -- -- ------------------------------------------------------------------------------------------------------------------- 121,203 22,951 1,554 1,165 9,293 9,495 9,248 2,167 (6,209) ------------------------------------------------------------------------------------------------------------------- (93,605) (883) 4,817 (994) 3,344 (16,381) (2,748) (703) (18,229) ------------------------------------------------------------------------------------------------------------------- $ 24,973 $ 21,416 $ 14,006 $ (400) $ 8,835 $ (14,458) $ 4,828 $ (485) $ (23,461) ===================================================================================================================
=================================================================================================================== LORD ABBETT SERIES FUND NORTHERN LIGHTS (CONTINUED) NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST VARIABLE TRUST ------------ ----------------------------------------------------------------------------------- ---------------- LEHMAN LEHMAN BROTHERS BROTHERS GROWTH AND HIGH INCOME SHORT DURATION MID-CAP SOCIALLY JNF INCOME BOND (m)* BOND (n)* FASCIANO GROWTH PARTNERS REGENCY RESPONSIVE BALANCED (k)* ------------------------------------------------------------------------------------------------------------------- $ (2,625) $ (652) $ 7,635 $ (571) $ (3,802) $ (7,572) $ (1,672) $ (1,949) $ 977 121,203 22,951 1,554 1,165 9,293 9,495 9,248 2,167 (6,209) (93,605) (883) 4,817 (994) 3,344 (16,381) (2,748) (703) (18,229) ------------------------------------------------------------------------------------------------------------------- 24,973 21,416 14,006 (400) 8,835 (14,458) 4,828 (485) (23,461) ------------------------------------------------------------------------------------------------------------------- 10,537 7,309 163,836 -- 11,138 1,709 2,283 55,159 7,953 (103,805) (2,224) (118,996) (525) (33,678) (38,400) (11,498) (1,607) (37,063) (113,522) (19,323) 132,255 (1,762) 100,873 791,026 (22,048) 98,033 764,137 ------------------------------------------------------------------------------------------------------------------- (206,790) (14,238) 177,095 (2,287) 78,333 754,335 (31,263) 151,585 735,027 ------------------------------------------------------------------------------------------------------------------- (181,817) 7,178 191,101 (2,687) 87,168 739,877 (26,435) 151,100 711,566 ------------------------------------------------------------------------------------------------------------------- 1,383,619 12,353 429,730 40,154 144,568 365,311 151,296 35,714 -- ------------------------------------------------------------------------------------------------------------------- $ 1,201,802 $ 19,531 $ 620,831 $ 37,467 $231,736 $1,105,188 $ 124,861 $ 186,814 $ 711,566 ===================================================================================================================
31 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
=============================================================================================================================== NORTHERN LIGHTS VARIABLE TRUST (CONTINUED) PIMCO VARIABLE INSURANCE TRUST --------------- ------------------------------------------ FOREIGN COMMODITY- EMERGING BOND JNF ALL REALRETURN MARKETS US DOLLAR EQUITY (k)* ASSET STRATEGY BOND HEDGED ------------------------------------------------------------------------------------------------------------------------------- Investment income: Income dividends from investments in portfolio shares ......... $ -- $ 102 $ 33 $ 22,500 $ 74 Expenses: Mortality and expense risk fees ............................... 23,914 63 221 5,605 39 ------------------------------------------------------------------------------------------------------------------------------- Net investment income (expense) ............................... (23,914) 39 (188) 16,895 35 ------------------------------------------------------------------------------------------------------------------------------- Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ........................................ (11,953) 33 (8,257) (8,205) -- Net realized short-term capital gain distributions from investments in portfolio shares ............................ -- -- -- 6,460 -- Net realized long-term capital gain distributions from investments in portfolio shares ............................ -- -- -- 10,314 -- ------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments in portfolio shares ............................................... (11,953) 33 (8,257) 8,569 -- ------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................... (223,841) 174 -- (10,818) 5 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ........................................ $ (259,708) $ 246 $ (8,445) $ 14,646 $ 40 ===============================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
================================================================================================================================= NORTHERN LIGHTS VARIABLE TRUST (CONTINUED) PIMCO VARIABLE INSURANCE TRUST --------------- ------------------------------------------- FOREIGN COMMODITY- EMERGING BOND JNF ALL REALRETURN MARKETS US DOLLAR EQUITY (k)* ASSET STRATEGY BOND HEDGED --------------------------------------------------------------------------------------------------------------------------------- Changes from operations: Net investment income (expense) ............................... $ (23,914) $ 39 $ (188) $ 16,895 $ 35 Net realized gain (loss) on investments in portfolio shares ... (11,953) 33 (8,257) 8,569 -- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................. (223,841) 174 -- (10,818) 5 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..... (259,708) 246 (8,445) 14,646 40 --------------------------------------------------------------------------------------------------------------------------------- Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........... 63,433 -- (1) 16,563 -- Contract redemptions .......................................... (101,896) (16,196) (72) -- -- Net transfers (including mortality transfers) ................. 2,411,300 (4,761) 8,518 (848,698) -- --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from contract owners' transactions ........................... 2,372,837 (20,957) 8,445 (832,135) -- --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets ................... 2,113,129 (20,711) -- (817,489) 40 --------------------------------------------------------------------------------------------------------------------------------- Net assets, beginning of period .................................. -- 20,711 -- 826,516 2,205 --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period ............................. $ 2,113,129 $ -- $ -- $ 9,027 $ 2,245 =================================================================================================================================
* See Footnote 7 for details. 32
=================================================================================================================== PIMCO VARIABLE INSURANCE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------- REALESTATE- GLOBAL BOND HIGH LONG TERM LOW MONEY REALRETURN REAL SHORT- TOTAL UNHEDGED YIELD US GOVERNMENT DURATION MARKET STRATEGY RETURN TERM RETURN ------------------------------------------------------------------------------------------------------------------- $ 5,598 $ 30,925 $ 5,014 $ 796 $ 227,027 $ 6,626 $ 38,022 $ 24,778 $ 78,560 2,397 6,424 1,661 276 79,651 421 13,526 8,452 27,551 ------------------------------------------------------------------------------------------------------------------- 3,201 24,501 3,353 520 147,376 6,205 24,496 16,326 51,009 ------------------------------------------------------------------------------------------------------------------- (7,533) 12,119 5,012 2,263 -- (7,198) (12,947) (738) (321) 865 -- -- -- -- -- 1,934 -- -- 814 -- -- -- -- -- 8 -- -- ------------------------------------------------------------------------------------------------------------------- (5,854) 12,119 5,012 2,263 -- (7,198) (11,005) (738) (321) ------------------------------------------------------------------------------------------------------------------- (708) (5,586) 420 -- -- (2,683) 55,983 (25) 63,312 ------------------------------------------------------------------------------------------------------------------- $ (3,361) $ 31,034 $ 8,785 $ 2,783 $ 147,376 $ (3,676) $ 69,474 $ 15,563 $ 114,000 ===================================================================================================================
=================================================================================================================== PIMCO VARIABLE INSURANCE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------- REALESTATE- GLOBAL BOND HIGH LONG TERM LOW MONEY REALRETURN REAL SHORT- TOTAL UNHEDGED YIELD US GOVERNMENT DURATION MARKET STRATEGY RETURN TERM RETURN ------------------------------------------------------------------------------------------------------------------- $ 3,201 $ 24,501 $ 3,353 $ 520 $ 147,376 $ 6,205 $ 24,496 $ 16,326 $ 51,009 (5,854) 12,119 5,012 2,263 -- (7,198) (11,005) (738) (321) (708) (5,586) 420 -- -- (2,683) 55,983 (25) 63,312 ------------------------------------------------------------------------------------------------------------------- (3,361) 31,034 8,785 2,783 147,376 (3,676) 69,474 15,563 114,000 ------------------------------------------------------------------------------------------------------------------- 262 522 542 (1) 3,160,546 6,155 40,632 7,567 118,066 (27,714) (24,598) (5,968) -- (1,026,088) (199) (172,057) (143,088) (243,937) 19,313 (10,246) 238,919 (2,782) 2,217,506 30,784 76,837 571,640 138,737 ------------------------------------------------------------------------------------------------------------------- (8,139) (34,322) 233,493 (2,783) 4,351,964 36,740 (54,588) 436,119 12,866 ------------------------------------------------------------------------------------------------------------------- (11,500) (3,288) 242,278 -- 4,499,340 33,064 14,886 451,682 126,866 ------------------------------------------------------------------------------------------------------------------- 86,310 140,034 -- -- 376,063 25,923 822,812 406,774 1,558,539 ------------------------------------------------------------------------------------------------------------------- $ 74,810 $ 136,746 $ 242,278 $ -- $ 4,875,403 $ 58,987 $ 837,698 $ 858,456 $ 1,685,405 ===================================================================================================================
33 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
================================================================================================================================ PIONEER VARIABLE CONTRACTS TRUST -------------------------------------------------------------- CORE EMERGING EQUITY GLOBAL BOND (ag)* MARKETS INCOME FUND HIGH YIELD -------------------------------------------------------------------------------------------------------------------------------- Investment income: Income dividends from investments in portfolio shares ...... $ 173 $ 2,167 $ 17,869 $ 4,336 $ 20,710 Expenses: Mortality and expense risk fees ............................ 55 5,295 13,643 6,942 4,008 -------------------------------------------------------------------------------------------------------------------------------- Net investment income (expense) ............................ 118 (3,128) 4,226 (2,606) 16,702 -------------------------------------------------------------------------------------------------------------------------------- Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ......................................... (349) (6,443) 86,331 63,693 (2,995) Net realized short-term capital gain distributions from investments in portfolio shares .......................... -- 3,082 1,464 -- 70 Net realized long-term capital gain distributions from investments in portfolio shares .......................... -- 61,441 32,372 -- 53 -------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments in portfolio shares ............................................... (349) 58,080 120,167 63,693 (2,872) -------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................ (17) (966) (118,633) (34,206) (202) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ........................................ $ (248) $ 53,986 $ 5,760 $ 26,881 $ 13,628 ================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
-------------------------------------------------------------- PIONEER VARIABLE CONTRACTS TRUST -------------------------------------------------------------- CORE EMERGING EQUITY GLOBAL BOND (ag)* MARKETS INCOME FUND HIGH YIELD -------------------------------------------------------------------------------------------------------------------------------- Changes from operations: Net investment income (expense) ............................ $ 118 $ (3,128) $ 4,226 $ (2,606) $ 16,702 Net realized gain (loss) on investments in portfolio shares ................................................... (349) 58,080 120,167 63,693 (2,872) Net change in unrealized appreciation (depreciation) of investments in portfolio shares .......................... (17) (966) (118,633) (34,206) (202) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations .. (248) 53,986 5,760 26,881 13,628 -------------------------------------------------------------------------------------------------------------------------------- Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........ 22,835 208,864 33,865 11,805 125 Contract redemptions ....................................... -- (2,197) (96,628) (57,815) (570) Net transfers (including mortality transfers) .............. (26,145) 133,811 (473,535) 601 (8,798) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from contract owners' transactions ................................. (3,310) 340,478 (536,298) (45,409) (9,243) -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets ................ (3,558) 394,464 (530,538) (18,528) 4,385 -------------------------------------------------------------------------------------------------------------------------------- Net assets, beginning of period ............................... 3,558 27,013 1,005,469 512,886 -- -------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period ......................... $ -- $ 421,477 $ 474,931 $ 494,358 $ 4,385 ================================================================================================================================
* See Footnote 7 for details. 34
===================================================================================================================== PIONEER VARIABLE CONTRACTS TRUST (CONTINUED) ROYCE CAPITAL FUND RYDEX VARIABLE TRUST --------------------------------------------------------------- ------------------------ ------------------------ CLS CLS HIGH INTERNATIONAL MID CAP SMALL STRATEGIC ADVISORONE ADVISORONE YIELD VALUE VALUE CAP VALUE INCOME MICRO-CAP SMALL-CAP AMERIGO CLERMONT --------------------------------------------------------------------------------------------------------------------- $ 49,108 $ 1,202 $ 835 $ 40 $ 348 $ 10,173 $ 525 $ 2,028 $ 212 15,756 7,975 1,756 57 94 14,049 16,505 11,528 95 --------------------------------------------------------------------------------------------------------------------- 33,352 (6,773) (921) (17) 254 (3,876) (15,980) (9,500) 117 --------------------------------------------------------------------------------------------------------------------- 8,555 33,379 (14,599) (2,575) -- 84,778 29,216 4,158 (11) 62 -- 2,353 108 -- 16,668 15,015 13,577 618 527 4,151 12,561 1,758 -- 41,298 30,659 6,944 882 --------------------------------------------------------------------------------------------------------------------- 9,144 37,530 315 (709) -- 142,744 74,890 24,679 1,489 --------------------------------------------------------------------------------------------------------------------- (17,056) (15,332) 6,140 (150) 149 (95,369) (97,151) 41,769 (1,629) --------------------------------------------------------------------------------------------------------------------- $ 25,440 $ 15,425 $ 5,534 $ (876) $ 403 $ 43,499 $ (38,241) $ 56,948 $ (23) =====================================================================================================================
===================================================================================================================== PIONEER VARIABLE CONTRACTS TRUST (CONTINUED) ROYCE CAPITAL FUND RYDEX VARIABLE TRUST --------------------------------------------------------------------------------------------------------------------- CLS CLS HIGH INTERNATIONAL MID CAP SMALL STRATEGIC ADVISORONE ADVISORONE YIELD VALUE VALUE CAP VALUE INCOME MICRO-CAP SMALL-CAP AMERIGO CLERMONT --------------------------------------------------------------- ------------------------- ------------------------ $ 33,352 $ (6,773) $ (921) $ (17) $ 254 $ (3,876) $ (15,980) $ (9,500) $ 117 9,144 37,530 315 (709) -- 142,744 74,890 24,679 1,489 (17,056) (15,332) 6,140 (150) 149 (95,369) (97,151) 41,769 (1,629) --------------------------------------------------------------------------------------------------------------------- 25,440 15,425 5,534 (876) 403 43,499 (38,241) 56,948 (23) --------------------------------------------------------------------------------------------------------------------- 5,589 4,655 4,727 -- -- 169,989 105,186 (79) 37 (31,309) (37,758) (9,058) -- -- (32,696) (42,612) (4,179) -- 462,788 166,547 (33,228) 887 26,989 (107,882) 56,532 (10,769) 10,769 --------------------------------------------------------------------------------------------------------------------- 437,068 133,444 (37,559) 887 26,989 29,411 119,106 (15,027) 10,806 --------------------------------------------------------------------------------------------------------------------- 462,508 148,869 (32,025) 11 27,392 72,910 80,865 41,921 10,783 --------------------------------------------------------------------------------------------------------------------- 647,797 289,163 96,191 499 -- 611,342 902,200 509,008 -- --------------------------------------------------------------------------------------------------------------------- $ 1,110,305 $ 438,032 $ 64,166 $ 510 $ 27,392 $ 684,252 $ 983,065 $ 550,929 $ 10,783 =====================================================================================================================
35 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ---------------------------------------------------------------- ABSOLUTE RETURN BASIC BIO- COMMODITIES STRATEGIES BANKING MATERIALS TECHNOLOGY STRATEGY (o)* ---------------------------------------------------------------------------------------------------------------------------------- Investment income: Income dividends from investments in portfolio shares ...... $ 622 $ 623 $ 1,169 $ -- $ -- Expenses: Mortality and expense risk fees ............................ 260 121 15,158 2,230 402 ---------------------------------------------------------------------------------------------------------------------------------- Net investment income (expense) ............................ 362 502 (13,989) (2,230) (402) ---------------------------------------------------------------------------------------------------------------------------------- Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ......................................... (61) (8,967) 45,371 (10,419) (5,791) Net realized short-term capital gain distributions from investments in portfolio shares .......................... 100 -- 38,465 -- -- Net realized long-term capital gain distributions from investments in portfolio shares .......................... 60 -- 25,328 -- -- ---------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments in portfolio shares ............................................... 99 (8,967) 109,164 (10,419) (5,791) ---------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................ (597) 571 (35,609) 125 233 ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations $ (136) $ (7,894) $ 59,566 $ (12,524) $ (5,960) ==================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ---------------------------------------------------------------- ABSOLUTE RETURN BASIC BIO- COMMODITIES STRATEGIES BANKING MATERIALS TECHNOLOGY STRATEGY (o)* ---------------------------------------------------------------------------------------------------------------------------------- Changes from operations: Net investment income (expense) ............................ $ 362 $ 502 $ (13,989) $ (2,230) $ (402) Net realized gain (loss) on investments in portfolio shares .................................................. 99 (8,967) 109,164 (10,419) (5,791) Net change in unrealized appreciation (depreciation) of investments in portfolio shares .......................... (597) 571 (35,609) 125 233 ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations .. (136) (7,894) 59,566 (12,524) (5,960) ---------------------------------------------------------------------------------------------------------------------------------- Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........ 8,501 9 81,147 2,774 (2) Contract redemptions ....................................... (1,047) -- (44,456) (1,355) (52) Net transfers (including mortality transfers) .............. 1,089 (49,986) 543,214 17,504 6,314 ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from contract owners' transactions ................................. 8,543 (49,977) 579,905 18,923 6,260 ---------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets ................ 8,407 (57,871) 639,471 6,399 300 ---------------------------------------------------------------------------------------------------------------------------------- Net assets, beginning of period ............................... 8,475 57,871 304,645 9,038 752 ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period ......................... $ 16,882 $ -- $ 944,116 $ 15,437 $ 1,052 ==================================================================================================================================
* See Footnote 7 for details. 36
============================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------ ESSENTIAL ESSENTIAL CONSUMER DOW 2X ENERGY PORTFOLIO PORTFOLIO EUROPE 1.25X FINANCIAL PRODUCTS STRATEGY (p)* ELECTRONICS ENERGY SERVICES CONSERVATIVE MODERATE STRATEGY (q)* SERVICES ------------------------------------------------------------------------------------------------------------------------------ $ 212 $ 58,631 $ -- $ -- $ -- $ -- $ -- $ 12,274 $ 1,797 783 37,392 2,877 25,610 25,127 29 29 7,939 1,124 ------------------------------------------------------------------------------------------------------------------------------ (571) 21,239 (2,877) (25,610) (25,127) (29) (29) 4,335 673 ------------------------------------------------------------------------------------------------------------------------------ 2,960 28,521 (25,725) (176,199) 39,039 39 (54) (165,239) (16,749) 568 587,032 -- 6,462 4,109 -- -- 43,636 5,108 345 37,927 -- 272,253 160,519 -- -- 6,124 4,795 ------------------------------------------------------------------------------------------------------------------------------ 3,873 653,480 (25,725) 102,516 203,667 39 (54) (115,479) (6,846) ------------------------------------------------------------------------------------------------------------------------------ (648) (1,242,401) 886 317,746 208,844 -- -- (70,281) (5,392) ------------------------------------------------------------------------------------------------------------------------------ $ 2,654 $ (567,682) $ (27,716) $ 394,652 $ 387,384 $ 10 $ (83) $ (181,425) $ (11,565) ==============================================================================================================================
============================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------ ESSENTIAL ESSENTIAL CONSUMER DOW 2X ENERGY PORTFOLIO PORTFOLIO EUROPE 1.25X FINANCIAL PRODUCTS STRATEGY (p)* ELECTRONICS ENERGY SERVICES CONSERVATIVE MODERATE STRATEGY (q)* SERVICES ------------------------------------------------------------------------------------------------------------------------------ $ (571) $ 21,239 $ (2,877) $ (25,610) $ (25,127) $ (29) $ (29) $ 4,335 $ 673 3,873 653,480 (25,725) 102,516 203,667 39 (54) (115,479) (6,846) (648) (1,242,401) 886 317,746 208,844 -- -- (70,281) (5,392) ------------------------------------------------------------------------------------------------------------------------------ 2,654 (567,682) (27,716) 394,652 387,384 10 (83) (181,425) (11,565) ------------------------------------------------------------------------------------------------------------------------------ 14,425 141,750 1,417 145,614 120,136 4,002 4,001 4,686 8,321 (1,440) (84,012) (28,674) (319,238) (341,235) (142) (141) (32,092) (7,824) (25,508) 6,115,661 (80,922) 1,732,084 2,269,646 (3,870) (3,777) 347,675 (160,174) ------------------------------------------------------------------------------------------------------------------------------ (12,523) 6,173,399 (108,179) 1,558,460 2,048,547 (10) 83 320,269 (159,677) ------------------------------------------------------------------------------------------------------------------------------ (9,869) 5,605,717 (135,895) 1,953,112 2,435,931 -- -- 138,844 (171,242) ------------------------------------------------------------------------------------------------------------------------------ 14,396 353,169 135,895 1,172,218 860,594 -- -- 297,252 207,861 ------------------------------------------------------------------------------------------------------------------------------ $ 4,527 $ 5,958,886 $ -- $ 3,125,330 $ 3,296,525 $ -- $ -- $ 436,096 $ 36,619 ==============================================================================================================================
37 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------- GOVERNMENT INVERSE LONG BOND HEALTH HEDGED DOW 2X 1.2X STRATEGY (r)* CARE EQUITY INTERNET STRATEGY (s)* ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ........ $ 15,820 $ -- $ 34 $ -- $ 27,197 Expenses: Mortality and expense risk fees .............................. 7,162 5,464 15 2,518 21,828 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) .............................. 8,658 (5,464) 19 (2,518) 5,369 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ....................................... 38,880 16,194 1 (44,858) (169,725) Net realized short-term capital gain distributions from investments in portfolio shares ........................... -- 3,494 4 -- -- Net realized long-term capital gain distributions from investments in portfolio shares ........................... -- 184 6 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .............................................. 38,880 19,872 11 (44,858) (169,725) ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................... 23,400 552 (22) 1,913 248,669 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .......................................... $ 70,938 $ 14,960 $ 8 $ (45,463) $ 84,313 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------- GOVERNMENT INVERSE LONG BOND HEALTH HEDGED DOW 2X 1.2X STRATEGY (r)* CARE EQUITY INTERNET STRATEGY (s)* ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .............................. $ 8,658 $ (5,464) $ 19 $ (2,518) $ 5,369 Net realized gain (loss) on investments in portfolio shares .. 38,880 19,872 11 (44,858) (169,725) Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................... 23,400 552 (22) 1,913 248,669 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .. 70,938 14,960 8 (45,463) 84,313 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) .......... -- 13,433 -- 434 (175) Contract redemptions ......................................... (19,279) (33,832) -- (4,473) (876,115) Net transfers (including mortality transfers) ................ 681,563 (320,570) -- 50,828 (666,408) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ................................ 662,284 (340,969) -- 46,789 (1,542,698) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............... 733,222 (326,009) 8 1,326 (1,458,385) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ................................. 253,184 424,188 723 21,779 2,003,767 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ........................ $ 986,406 $ 98,179 $ 731 $ 23,105 $ 545,382 ====================================================================================================================================
* See Footnote 7 for details. 38
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------------ INVERSE GOVERNMENT INVERSE INVERSE INVERSE INVERSE LONG BOND MID-CAP OTC RUSSELL 2000 S&P 500 JAPAN 1.25X LARGE CAP LARGE CAP STRATEGY (t)* STRATEGY (u)* STRATEGY (v)* STRATEGY (w)* STRATEGY (x)* STRATEGY (y)* GROWTH VALUE LEISURE ------------------------------------------------------------------------------------------------------------------------------------ $ 247 $ -- $ 27 $ 6,623 $ 2,647 $ 4,693 $ -- $ 8,185 $ -- 1,652 30 534 7,446 1,524 4,983 4,711 14,679 3,593 ------------------------------------------------------------------------------------------------------------------------------------ (1,405) (30) (507) (823) 1,123 (290) (4,711) (6,494) (3,593) ------------------------------------------------------------------------------------------------------------------------------------ (12,440) (2,772) (28,702) (103,363) (53,190) (149,407) 8,846 4,015 14,695 -- -- -- -- -- -- 4,763 38,417 39,732 -- -- -- -- -- -- 1,731 22,204 11,726 ------------------------------------------------------------------------------------------------------------------------------------ (12,440) (2,772) (28,702) (103,363) (53,190) (149,407) 15,340 64,636 66,153 ------------------------------------------------------------------------------------------------------------------------------------ 5,037 3,301 880 138,624 13,363 142,438 (2,585) (110,551) (78,454) ------------------------------------------------------------------------------------------------------------------------------------ $ (8,808) $ 499 $ (28,329) $ 34,438 $ (38,704) $ (7,259) $ 8,044 $ (52,409) $ (15,894) ====================================================================================================================================
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------------ INVERSE GOVERNMENT INVERSE INVERSE INVERSE INVERSE LONG BOND MID-CAP OTC RUSSELL 2000 S&P 500 JAPAN 1.25X LARGE CAP LARGE CAP STRATEGY (t)* STRATEGY (u)* STRATEGY (v)* STRATEGY (w)* STRATEGY (x)* STRATEGY (y)* GROWTH VALUE LEISURE ------------------------------------------------------------------------------------------------------------------------------------ $ (1,405) $ (30) $ (507) $ (823) $ 1,123 $ (290) $ (4,711) $ (6,494) $ (3,593) (12,440) (2,772) (28,702) (103,363) (53,190) (149,407) 15,340 64,636 66,153 5,037 3,301 880 138,624 13,363 142,438 (2,585) (110,551) (78,454) ------------------------------------------------------------------------------------------------------------------------------------ (8,808) 499 (28,329) 34,438 (38,704) (7,259) 8,044 (52,409) (15,894) ------------------------------------------------------------------------------------------------------------------------------------ 31,959 -- 372 182 105 62,642 29,140 43,740 20 (10,714) -- (1,756) (14,606) (331) (10,838) (14,017) (57,383) (10,259) (162,084) (52,973) 14,393 (953,435) 457,746 (877,238) (166,564) (782,170) (13,204) ------------------------------------------------------------------------------------------------------------------------------------ (140,839) (52,973) 13,009 (967,859) 457,520 (825,434) (151,441) (795,813) (23,443) ------------------------------------------------------------------------------------------------------------------------------------ (149,647) (52,474) (15,320) (933,421) 418,816 (832,693) (143,397) (848,222) (39,337) ------------------------------------------------------------------------------------------------------------------------------------ 154,715 52,474 16,154 1,066,780 57,832 900,283 428,640 1,275,243 336,094 ------------------------------------------------------------------------------------------------------------------------------------ $ 5,068 $ -- $ 834 $ 133,359 $ 476,648 $ 67,590 $ 285,243 $ 427,021 $ 296,757 ====================================================================================================================================
39 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------- MID CAP 1.5X MID-CAP MID-CAP MULTI-CAP STRATEGY (z)* GROWTH VALUE CORE EQUITY NOVA ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ........ $ 1,790 $ -- $ 1,219 $ 978 $ 1,270 Expenses: Mortality and expense risk fees .............................. 8,596 1,435 9,837 2,451 2,509 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) .............................. (6,806) (1,435) (8,618) (1,473) (1,239) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ....................................... (108,508) (5,186) 103,616 5,775 46,463 Net realized short-term capital gain distributions from investments in portfolio shares ........................... 3,859 4,126 -- 8,518 -- Net realized long-term capital gain distributions from investments in portfolio shares ........................... 9,664 3,557 59 4,465 -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .............................................. (94,985) 2,497 103,675 18,758 46,463 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares .............................. 65,781 (2,469) (49,693) (26,206) (26,045) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .......................................... $ (36,010) $ (1,407) $ 45,364 $ (8,921) $ 19,179 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------- MID CAP 1.5X MID-CAP MID-CAP MULTI-CAP STRATEGY (z)* GROWTH VALUE CORE EQUITY NOVA ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .............................. $ (6,806) $ (1,435) $ (8,618) $ (1,473) $ (1,239) Net realized gain (loss) on investments in portfolio shares .. (94,985) 2,497 103,675 18,758 46,463 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................... 65,781 (2,469) (49,693) (26,206) (26,045) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .. (36,010) (1,407) 45,364 (8,921) 19,179 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) .......... 164,460 72 10,584 -- 12,729 Contract redemptions ......................................... (23,292) (1,707) (34,776) -- (11,849) Net transfers (including mortality transfers) ................ (322,653) 1,187 (1,085,334) (28,684) (235,713) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ....................... (181,485) (448) (1,109,526) (28,684) (234,833) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............... (217,495) (1,855) (1,064,162) (37,605) (215,654) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ................................. 297,072 81,095 1,124,554 189,171 304,738 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ........................ $ 79,577 $ 79,240 $ 60,392 $ 151,566 $ 89,084 ====================================================================================================================================
* See Footnote 7 for details. 40
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------------ RUSSELL RUSSELL OTC 2X PRECIOUS REAL 2000 1.5X 2000 2X S&P 500 2X SECTOR STRATEGY (aa)* OTC METALS ESTATE RETAILING STRATEGY (ab)* STRATEGY (ac)* STRATEGY (ad)* ROTATION ------------------------------------------------------------------------------------------------------------------------------------ $ 7,072 $ 780 $ -- $ 6,458 $ -- $ 2,376 $ -- $ 20,102 $ -- 20,431 8,741 9,797 4,791 41 6,147 152 14,040 3,470 ------------------------------------------------------------------------------------------------------------------------------------ (13,359) (7,961) (9,797) 1,667 (41) (3,771) (152) 6,062 (3,470) ------------------------------------------------------------------------------------------------------------------------------------ 12,832 6,897 45,145 (23,782) 1,434 (45,495) (19,981) 4,146 1,938 -- -- -- 16,108 -- -- -- 172,722 17,598 -- -- -- 16,108 -- 7,974 -- 42,256 7,298 ------------------------------------------------------------------------------------------------------------------------------------ 12,832 6,897 45,145 8,434 1,434 (37,521) (19,981) 219,124 26,834 ------------------------------------------------------------------------------------------------------------------------------------ 15,922 51,154 19,530 (40,405) 1,120 (13,256) 1,064 (295,573) 9,218 ------------------------------------------------------------------------------------------------------------------------------------ $ 15,395 $ 50,090 $ 54,878 $ (30,304) $ 2,513 $ (54,548) $ (19,069) $ (70,387) $ 32,582 ====================================================================================================================================
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------------ RUSSELL RUSSELL OTC 2X PRECIOUS REAL 2000 1.5X 2000 2X S&P 500 2X SECTOR STRATEGY (aa)* OTC METALS ESTATE RETAILING STRATEGY (ab)* STRATEGY (ac)* STRATEGY (ad)* ROTATION ------------------------------------------------------------------------------------------------------------------------------------ $ (13,359) $ (7,961) $ (9,797) $ 1,667 $ (41) $ (3,771) $ (152) $ 6,062 $ (3,470) 12,832 6,897 45,145 8,434 1,434 (37,521) (19,981) 219,124 26,834 15,922 51,154 19,530 (40,405) 1,120 (13,256) 1,064 (295,573) 9,218 ------------------------------------------------------------------------------------------------------------------------------------ 15,395 50,090 54,878 (30,304) 2,513 (54,548) (19,069) (70,387) 32,582 ------------------------------------------------------------------------------------------------------------------------------------ 41,038 10,645 21,560 42,783 (6) 31,684 (230) 143,241 4,071 (28,248) (24,217) (89,305) (29,683) (48) (41,667) (26) (85,926) (23,729) 1,945,556 1,165,771 342,768 (116,680) (53,314) (332,745) (283,043) 1,329,070 176,586 ------------------------------------------------------------------------------------------------------------------------------------ 1,958,346 1,152,199 275,023 (103,580) (53,368) (342,728) (283,299) 1,386,385 156,928 ------------------------------------------------------------------------------------------------------------------------------------ 1,973,741 1,202,289 329,901 (133,884) (50,855) (397,276) (302,368) 1,315,998 189,510 ------------------------------------------------------------------------------------------------------------------------------------ 262,340 41,284 715,089 289,595 50,855 582,938 309,780 628,875 147,527 ------------------------------------------------------------------------------------------------------------------------------------ $ 2,236,081 $ 1,243,573 $ 1,044,990 $ 155,711 $ -- $ 185,662 $ 7,412 $ 1,944,873 $ 337,037 ====================================================================================================================================
41 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------- STRENGTHENING SMALL-CAP SMALL-CAP DOLLAR 2X TELE- GROWTH VALUE STRATEGY (ae)* TECHNOLOGY COMMUNICATIONS ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ........ $ -- $ 604 $ -- $ -- $ 1,724 Expenses: Mortality and expense risk fees .............................. 9,449 4,080 18 4,836 6,314 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) .............................. (9,449) (3,476) (18) (4,836) (4,590) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ....................................... 20,924 (9,599) (1) (38,287) 3,714 Net realized short-term capital gain distributions from investments in portfolio shares ........................... 35,736 25,546 -- -- -- Net realized long-term capital gain distributions from investments in portfolio shares ........................... 25,302 17,787 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .. 81,962 33,734 (1) (38,287) 3,714 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares .............................. (86,372) (91,777) (200) 4,030 (46,440) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .. $ (13,859) $ (61,519) $ (219) $ (39,093) $ (47,316) ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------- STRENGTHENING SMALL-CAP SMALL-CAP DOLLAR 2X TELE- GROWTH VALUE STRATEGY (ae)* TECHNOLOGY COMMUNICATIONS ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .............................. $ (9,449) $ (3,476) $ (18) $ (4,836) $ (4,590) Net realized gain (loss) on investments in portfolio shares .. 81,962 33,734 (1) (38,287) 3,714 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................... (86,372) (91,777) (200) 4,030 (46,440) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .. (13,859) (61,519) (219) (39,093) (47,316) ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) .......... 21,629 28,358 (3) 48,697 48,291 Contract redemptions ......................................... (26,246) (29,732) -- (32,285) (32,008) Net transfers (including mortality transfers) ................ (172,754) (98,230) 1,742 728,506 962,973 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ....................... (177,371) (99,604) 1,739 744,918 979,256 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............... (191,230) (161,123) 1,520 705,825 931,940 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ................................. 807,959 386,663 -- 15,724 46,678 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ........................ $ 616,729 $ 225,540 $ 1,520 $ 721,549 $ 978,618 ====================================================================================================================================
* See Footnote 7 for details. 42
========================================================================================================================== THIRD AVENUE VAN ECK WORLDWIDE RYDEX VARIABLE TRUST (CONTINUED) SELIGMAN PORTFOLIOS SERIES TRUST INSURANCE TRUST -------------------------------------------------------- -------------------------- ------------ ---------------------- U.S. GOVERNMENT WEAKENING COMMUNICATIONS MONEY DOLLAR 2X AND GLOBAL ABSOLUTE TRANSPORTATION MARKET UTILITIES STRATEGY (af)* INFORMATION TECHNOLOGY VALUE RETURN BOND -------------------------------------------------------------------------------------------------------------------------- $ -- $ 457,685 $ 19,739 $ 22,374 $ -- $ -- $ 16,391 $ 2,768 $ 32,729 11,703 180,692 12,186 1,033 1,674 1,383 12,705 7,604 9,418 -------------------------------------------------------------------------------------------------------------------------- (11,703) 276,993 7,553 21,341 (1,674) (1,383) 3,686 (4,836) 23,311 -------------------------------------------------------------------------------------------------------------------------- (199,394) -- 41,717 343 5,860 1,610 45,568 8,215 (3,449) -- -- 62,376 -- -- -- 699 4,498 -- 12,066 -- 70,791 -- -- -- 46,542 5,016 -- -------------------------------------------------------------------------------------------------------------------------- (187,328) -- 174,884 343 5,860 1,610 92,809 17,729 (3,449) -------------------------------------------------------------------------------------------------------------------------- (379) -- (152,628) (29,122) 10,209 3,081 (137,278) (7,495) 21,171 -------------------------------------------------------------------------------------------------------------------------- $ (199,410) $ 276,993 $ 29,809 $ (7,438) $ 14,395 $ 3,308 $ (40,783) $ 5,398 $ 41,033 ==========================================================================================================================
========================================================================================================================== THIRD AVENUE VAN ECK WORLDWIDE RYDEX VARIABLE TRUST (CONTINUED) SELIGMAN PORTFOLIOS SERIES TRUST INSURANCE TRUST -------------------------------------------------------- -------------------------- ------------ ---------------------- U.S. GOVERNMENT WEAKENING COMMUNICATIONS MONEY DOLLAR 2X AND GLOBAL ABSOLUTE TRANSPORTATION MARKET UTILITIES STRATEGY (af)* INFORMATION TECHNOLOGY VALUE RETURN BOND -------------------------------------------------------------------------------------------------------------------------- $ (11,703) $ 276,993 $ 7,553 $ 21,341 $ (1,674) $ (1,383) $ 3,686 $ (4,836) $ 23,311 (187,328) -- 174,884 343 5,860 1,610 92,809 17,729 (3,449) (379) -- (152,628) (29,122) 10,209 3,081 (137,278) (7,495) 21,171 -------------------------------------------------------------------------------------------------------------------------- (199,410) 276,993 29,809 (7,438) 14,395 3,308 (40,783) 5,398 41,033 -------------------------------------------------------------------------------------------------------------------------- 72,722 14,078,768 49,697 2,552 5,130 6,862 118,017 11,527 3,931 (61,491) (759,886) (110,267) (2,105) (9,363) (1,532) (34,450) (14,728) (70,467) 76,372 (15,772,833) 329,195 381,799 (2,896) 481,231 (43,780) 150,324 (26,069) -------------------------------------------------------------------------------------------------------------------------- 87,603 (2,453,951) 268,625 382,246 (7,129) 486,561 39,787 147,123 (92,605) -------------------------------------------------------------------------------------------------------------------------- (111,807) (2,176,958) 298,434 374,808 7,266 489,869 (996) 152,521 (51,572) -------------------------------------------------------------------------------------------------------------------------- 130,130 11,313,950 785,814 15,246 107,828 68,614 669,443 360,639 540,666 -------------------------------------------------------------------------------------------------------------------------- $ 18,323 $ 9,136,992 $ 1,084,248 $ 390,054 $ 115,094 $ 558,483 $ 668,447 $ 513,160 $ 489,094 ==========================================================================================================================
43 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== VAN ECK WORLDWIDE WELLS FARGO INSURANCE TRUST (CONTINUED) ADVANTAGE VT FUNDS ---------------------------------- ----------------------- EMERGING HARD REAL MARKETS ASSETS ESTATE DISCOVERY OPPORTUNITY ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ............. $ 10,179 $ 707 $ 7,166 $ -- $ 2,966 Expenses: Mortality and expense risk fees ................................... 35,665 21,458 10,598 4,298 8,753 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ................................... (25,486) (20,751) (3,432) (4,298) (5,787) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ............................................ 259,514 270,787 27,501 45,842 39,872 Net realized short-term capital gain distributions from investments in portfolio shares ................................ 158,615 20,479 175 -- 9,051 Net realized long--term capital gain distributions from investments in portfolio shares ................................ 243,436 48,518 68,862 -- 60,448 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ....... 661,565 339,784 96,538 45,842 109,371 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ................................... (106,201) 167,888 (105,756) 4,973 (77,505) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....... $ 529,878 $ 486,921 $ (12,650) $ 46,517 $ 26,079 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== VAN ECK WORLDWIDE WELLS FARGO INSURANCE TRUST (CONTINUED) ADVANTAGE VT FUNDS ---------------------------------- ----------------------- EMERGING HARD REAL MARKETS ASSETS ESTATE DISCOVERY OPPORTUNITY ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ................................... $ (25,486) $ (20,751) $ (3,432) $ (4,298) $ (5,787) Net realized gain (loss) on investments in portfolio shares ....... 661,565 339,784 96,538 45,842 109,371 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ................................ (106,201) 167,888 (105,756) 4,973 (77,505) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....... 529,878 486,921 (12,650) 46,517 26,079 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ............... 112,578 155,549 25,819 2,186 13,035 Contract redemptions .............................................. (157,293) (87,140) (87,317) (16,247) (35,918) Net transfers (including mortality transfers) ..................... (890,762) 1,253,406 (132,511) 130,694 (186,006) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ............................ (935,477) 1,321,815 (194,009) 116,633 (208,889) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets .................... (405,599) 1,808,736 (206,659) 163,150 (182,810) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ...................................... 2,576,877 560,362 696,275 120,448 656,259 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ............................. $2,171,278 $2,369,098 $ 489,616 $ 283,598 $ 473,449 ====================================================================================================================================
* See Footnote 7 for details. 44 ================================================================================ COMBINED TOTAL -------------- $ 1,734,028 1,289,317 -------------- 444,711 -------------- 1,805,370 1,699,120 2,493,712 -------------- 5,998,202 -------------- (3,186,986) -------------- $ 3,255,927 ============== ============== -------------- COMBINED TOTAL -------------- $ 444,711 5,998,202 (3,186,986) -------------- 3,255,927 -------------- 21,854,796 (8,551,838) 1,155,942 -------------- 14,458,900 -------------- 17,714,827 -------------- 70,220,733 -------------- $ 87,935,560 ============== 45 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== 40|86 SERIES TRUST -------------------------------------------------------------- FIXED GOVERNMENT HIGH BALANCED EQUITY INCOME SECURITIES YIELD (a) ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares .......... $ 14,245 $ 12,429 $ 22,071 $ 13,205 $ 27,140 Expenses: Mortality and expense risk fees ................................ 12,328 37,975 7,379 5,630 7,600 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ............................ 1,917 (25,546) 14,692 7,575 19,540 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ............................................. 37,286 72,363 (10,784) (11,262) (87,685) Net realized short-term capital gain distributions from investments in portfolio shares .............................. -- -- -- -- -- Net realized long-term capital gain distributions from investments in portfolio shares .............................. -- 269,737 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .................................................. 37,286 342,100 (10,784) (11,262) (87,685) ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ................................ 52,139 (29,379) 7,581 6,364 85,838 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ... $ 91,342 $ 287,175 $ 11,489 $ 2,677 $ 17,693 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== 40|86 SERIES TRUST ------------------------------------------------------------- FIXED GOVERNMENT HIGH BALANCED EQUITY INCOME SECURITIES YIELD (a) ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ................................ $ 1,917 $ (25,546) $ 14,692 $ 7,575 $ 19,540 Net realized gain (loss) on investments in portfolio shares .... 37,286 342,100 (10,784) (11,262) (87,685) Net change in unrealized appreciation (depreciation) of investments in portfolio shares .............................. 52,139 (29,379) 7,581 6,364 85,838 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ...... 91,342 287,175 11,489 2,677 17,693 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ............ 280,748 323,681 25,979 41,317 11,014 Contract redemptions ........................................... (76,511) (415,002) (67,508) (34,006) (127,035) Net transfers (including mortality transfers) .................. (153,971) (348,948) (151,168) (161,501) (1,418,310) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ..................................... 50,266 (440,269) (192,697) (154,190) (1,534,331) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets .................... 141,608 (153,094) (181,208) (151,513) (1,516,638) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ................................... 776,934 2,409,621 563,228 452,242 1,516,638 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ............................. $ 918,542 $ 2,256,527 $ 382,020 $ 300,729 $ -- ====================================================================================================================================
a) For the period January 1, 2006 through August 31, 2006 (liquidation of fund). b) For the period April 28, 2006 (inception of fund) through Dec 31, 2006. c) For the period January 1, 2006 through April 27, 2006 (fund merged into AIM VI Core Equity). d) Formerly AIM VI Real Estate prior to its name change on July 3, 2006. The accompanying notes are an integral part of these financial statements. 46
==================================================================================================================== 40|86 SERIES TRUST (CONTINUED) AIM VARIABLE INSURANCE FUNDS ----------- ------------------------------------------------------------------------------------------------------ GLOBAL MONEY CORE CORE FINANCIAL GLOBAL REAL HIGH MID CAP MARKET BASIC VALUE EQUITY (b) STOCK (c) SERVICES HEALTH CARE ESTATE (d) YIELD CORE EQUITY -------------------------------------------------------------------------------------------------------------------- $ 139,072 $ 222 $ 347 $ 739 $ 836 $ -- $ 13,308 $ 44,467 $ 2,358 46,910 2,945 631 329 936 3,049 12,635 4,431 3,382 -------------------------------------------------------------------------------------------------------------------- 92,162 (2,723) (284) 410 (100) (3,049) 673 40,036 (1,024) -------------------------------------------------------------------------------------------------------------------- -- 20,693 (154) 7,617 8,340 22,359 200,088 2,115 25,724 -- 487 -- -- -- -- 6,544 -- 4,194 -- 7,238 -- -- 323 -- 39,417 -- 29,477 -------------------------------------------------------------------------------------------------------------------- -- 28,418 (154) 7,617 8,663 22,359 246,049 2,115 59,395 -------------------------------------------------------------------------------------------------------------------- -- (6,015) 5,161 (4,219) (1,425) (13,719) 63,765 (10,144) (28,213) -------------------------------------------------------------------------------------------------------------------- $ 92,162 $ 19,680 $ 4,723 $ 3,808 $ 7,138 $ 5,591 $ 310,487 $ 32,007 $ 30,158 ====================================================================================================================
==================================================================================================================== 40|86 SERIES TRUST (CONTINUED) AIM VARIABLE INSURANCE FUNDS ----------- ------------------------------------------------------------------------------------------------------ GLOBAL MONEY CORE CORE FINANCIAL GLOBAL REAL HIGH MID CAP MARKET BASIC VALUE EQUITY (b) STOCK (c) SERVICES HEALTH CARE ESTATE (d) YIELD CORE EQUITY -------------------------------------------------------------------------------------------------------------------- $ 92,162 $ (2,723) $ (284) $ 410 $ (100) $ (3,049) $ 673 $ 40,036 $ (1,024) -- 28,418 (154) 7,617 8,663 22,359 246,049 2,115 59,395 -- (6,015) 5,161 (4,219) (1,425) (13,719) 63,765 (10,144) (28,213) -------------------------------------------------------------------------------------------------------------------- 92,162 19,680 4,723 3,808 7,138 5,591 310,487 32,007 30,158 -------------------------------------------------------------------------------------------------------------------- 3,131,605 43,749 -- -- 4,414 18,883 93,444 (555) 2,546 (598,807) (37,448) (1,885) -- (2,867) (6,467) (378,840) (68,074) (237,766) (4,354,460) (114,114) 62,267 (66,543) (27,269) (97,048) 608,163 395,655 (2,358) -------------------------------------------------------------------------------------------------------------------- (1,821,662) (107,813) 60,382 (66,543) (25,722) (84,632) 322,767 327,026 (237,578) -------------------------------------------------------------------------------------------------------------------- (1,729,500) (88,133) 65,105 (62,735) (18,584) (79,041) 633,254 359,033 (207,420) -------------------------------------------------------------------------------------------------------------------- 3,086,769 271,315 -- 62,735 75,129 212,569 747,525 177,656 379,962 -------------------------------------------------------------------------------------------------------------------- $ 1,357,269 $ 183,182 $ 65,105 $ -- $ 56,545 $ 133,528 $1,380,779 $ 536,689 $ 172,542 ====================================================================================================================
47 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== AIM VARIABLE INSURANCE FUNDS (CONTINUED) THE ALGER AMERICAN FUND ----------- ------------------------------------------------- LEVERAGED MIDCAP SMALL TECHNOLOGY GROWTH ALLCAP GROWTH CAPITALIZATION ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares .......... $ -- $ 1,422 $ -- $ -- $ -- Expenses: Mortality and expense risk fees ................................ 1,101 15,181 6,925 11,628 11,056 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ............................ (1,101) (13,759) (6,925) (11,628) (11,056) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ............................................. 20,413 101,598 57,397 99,800 167,534 Net realized short-term capital gain distributions from investments in portfolio shares .............................. -- -- -- 65,384 -- Net realized long-term capital gain distributions from investments in portfolio shares .............................. -- -- -- 24,387 -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ................................................... 20,413 101,598 57,397 189,571 167,534 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ................................ (10,797) (81,295) 22,711 (98,383) (58,336) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .... $ 8,515 $ 6,544 $ 73,183 $ 79,560 $ 98,142 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== AIM VARIABLE INSURANCE FUNDS (CONTINUED) THE ALGER AMERICAN FUND ----------- ------------------------------------------------- LEVERAGED MIDCAP SMALL TECHNOLOGY GROWTH ALLCAP GROWTH CAPITALIZATION ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ............................... $ (1,101) $ (13,759) $ (6,925) $ (11,628) $ (11,056) Net realized gain (loss) on investments in portfolio shares ... 20,413 101,598 57,397 189,571 167,534 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................. (10,797) (81,295) 22,711 (98,383) (58,336) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ..... 8,515 6,544 73,183 79,560 98,142 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........... 34,038 12,854 17,334 35,861 481 Contract redemptions .......................................... (8,100) (264,537) (72,404) (162,140) (298,363) Net transfers (including mortality transfers) ................. (122,496) (489,802) (114,456) (277,486) (268,651) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions .................................... (96,558) (741,485) (169,526) (403,765) (566,533) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ................... (88,043) (734,941) (96,343) (324,205) (468,391) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period .................................. 160,315 1,282,446 533,673 953,389 849,353 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ............................. $ 72,272 $ 547,505 $ 437,330 $ 629,184 $ 380,962 ====================================================================================================================================
a) Formerly Potomac Insurance Trust and Potomac Dynamic VP HY Bond prior to their name changes on April 28, 2006. b) For the period May 1, 2006 (inception of fund) through December 31, 2006. The accompanying notes are an integral part of these financial statements. 48
====================================================================================================================== ALLIANCE VARIABLE DIREXION DREYFUS PRODUCTS INSURANCE INVESTMENT SERIES AMERICAN CENTURY VARIABLE PORTFOLIOS TRUST (a) PORTFOLIO ---------- ------------------------------------------------------------ -------------- ---------- DREYFUS SOCIALLY GROWTH AND INCOME & INFLATION DYNAMIC VP SMALL CAP RESPONSIBLE INCOME (b) BALANCED GROWTH PROTECTION INTERNATIONAL VALUE HIGH YIELD (a) INDEX GROWTH ---------------------------------------------------------------------------------------------------------------------- $ -- $ 245 $ 9,413 $ 2,192 $ 7,527 $ 7,260 $ 24,199 $ 117 $ 211 166 689 8,186 1,088 9,670 12,905 3,644 1,598 2,868 ---------------------------------------------------------------------------------------------------------------------- (166) (444) 1,227 1,104 (2,143) (5,645) 20,555 (1,481) (2,657) ---------------------------------------------------------------------------------------------------------------------- 189 3,104 63,143 (778) 56,948 25,799 (2,010) 12,934 11,384 -- 147 -- -- -- 23,960 -- 114 -- -- 674 -- -- -- 21,835 -- 551 -- ---------------------------------------------------------------------------------------------------------------------- 189 3,925 63,143 (778) 56,948 71,594 (2,010) 13,599 11,384 ---------------------------------------------------------------------------------------------------------------------- 3,344 976 17,193 16 50,867 66,340 (1,298) 3,191 4,781 ---------------------------------------------------------------------------------------------------------------------- $ 3,367 $ 4,457 $ 81,563 $ 342 $ 105,672 $ 132,289 $ 17,247 $ 15,309 $ 13,508 ======================================================================================================================
======================================================================================================================= ALLIANCE VARIABLE DIREXION DREYFUS PRODUCTS INSURANCE INVESTMENT SERIES AMERICAN CENTURY VARIABLE PORTFOLIOS TRUST (a) PORTFOLIO ---------- ------------------------------------------------------------- -------------- ---------- DREYFUS SOCIALLY GROWTH AND INCOME & INFLATION DYNAMIC VP SMALL CAP RESPONSIBLE INCOME (b) BALANCED GROWTH PROTECTION INTERNATIONAL VALUE HIGH YIELD (a) INDEX GROWTH ----------------------------------------------------------------------------------------------------------------------- $ (166) $ (444) $ 1,227 $ 1,104 $ (2,143) $ (5,645) $ 20,555 $ (1,481) $ (2,657) 189 3,925 63,143 (778) 56,948 71,594 (2,010) 13,599 11,384 3,344 976 17,193 16 50,867 66,340 (1,298) 3,191 4,781 ----------------------------------------------------------------------------------------------------------------------- 3,367 4,457 81,563 342 105,672 132,289 17,247 15,309 13,508 ----------------------------------------------------------------------------------------------------------------------- 500 3,902 4,835 -- 47,838 53,599 (617) 1,574 6,206 (1,740) (451) (203,259) (3,936) (50,587) (58,110) (64,571) (1,557) (77,051) 46,798 3,954 (51,206) 3,155 666,196 232,411 793,610 4,249 90,868 ----------------------------------------------------------------------------------------------------------------------- 45,558 7,405 (249,630) (781) 663,447 227,900 728,422 4,266 20,023 ----------------------------------------------------------------------------------------------------------------------- 48,925 11,862 (168,067) (439) 769,119 360,189 745,669 19,575 33,531 ----------------------------------------------------------------------------------------------------------------------- -- 9,316 682,211 55,078 438,705 551,469 48,818 26,525 246,934 ----------------------------------------------------------------------------------------------------------------------- $ 48,925 $ 21,178 $ 514,144 $ 54,639 $ 1,207,824 $ 911,658 $ 794,487 $ 46,100 $ 280,465 =======================================================================================================================
49 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== DREYFUS VARIABLE FEDERATED INVESTMENT FUNDS INSURANCE SERIES -------------------------- ----------------------- DREYFUS HIGH STOCK DISCIPLINED INTERNATIONAL CAPITAL INCOME INDEX STOCK VALUE INCOME II BOND II ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ......... $ 24,252 $ 1,378 $ 12,632 $ 6,446 $ 124,676 Expenses: Mortality and expense risk fees ............................... 23,972 2,767 15,102 1,790 21,111 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ........................... 280 (1,389) (2,470) 4,656 103,565 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ............................................ 62,735 8,805 104,317 2,869 (62,496) Net realized short-term capital gain distributions from investments in portfolio shares ............................. -- -- 18,270 -- -- Net realized long-term capital gain distributions from investments in portfolio shares ............................. -- -- 53,106 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .................................................. 62,735 8,805 175,693 2,869 (62,496) ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................... 122,319 13,116 6,975 6,614 98,687 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ... $ 185,334 $ 20,532 $ 180,198 $ 14,139 $ 139,756 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== DREYFUS VARIABLE FEDERATED INVESTMENT FUNDS INSURANCE SERIES -------------------------- ----------------------- DREYFUS HIGH STOCK DISCIPLINED INTERNATIONAL CAPITAL INCOME INDEX STOCK VALUE INCOME II BOND II ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ............................... $ 280 $ (1,389) $ (2,470) $ 4,656 $ 103,565 Net realized gain (loss) on investments in portfolio shares ... 62,735 8,805 175,693 2,869 (62,496) Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................. 122,319 13,116 6,975 6,614 98,687 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....... 185,334 20,532 180,198 14,139 139,756 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........... 29,111 2,050 66,435 -- 16,920 Contract redemptions .......................................... (244,838) (13,839) (229,379) (22,797) (183,458) Net transfers (including mortality transfers) ................. (17,556) (44,357) 277,834 (1,095) 874,282 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ...................................... (233,283) (56,146) 114,890 (23,892) 707,744 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ..................... (47,949) (35,614) 295,088 (9,753) 847,500 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period .................................. 1,610,290 179,740 785,698 117,115 761,865 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ............................... $ 1,562,341 $ 144,126 $ 1,080,786 $ 107,362 $ 1,609,365 ====================================================================================================================================
a) Formerly Equity prior to its name change effective May 1, 2007. The accompanying notes are an integral part of these financial statements. 50
============================================================================================================================ FEDERATED INSURANCE SERIES (CONTINUED) JANUS ASPEN SERIES LAZARD RETIREMENT SERIES ------------ ----------------------------------------------------------------- ---------------------------------------- U.S. INTERNATIONAL GROWTH AND INTERNATIONAL LARGE CAP MID CAP WORLDWIDE EMERGING STRATEGIC INTERNATIONAL EQUITY II INCOME GROWTH GROWTH GROWTH GROWTH MARKETS EQUITY (a) EQUITY ---------------------------------------------------------------------------------------------------------------------------- $ 535 $ 8,235 $ 13,577 $ 1,567 $ -- $ 2,763 $ 3,912 $ 893 $ 4,841 4,757 8,451 13,807 6,317 8,080 2,988 8,484 2,856 2,444 ---------------------------------------------------------------------------------------------------------------------------- (4,222) (216) (230) (4,750) (8,080) (225) (4,572) (1,963) 2,397 ---------------------------------------------------------------------------------------------------------------------------- 43,087 60,425 166,163 35,430 143,751 9,959 194,029 16,588 11,595 -- -- -- -- -- -- 20,745 -- 5,835 -- -- -- -- -- -- 30,576 -- 14,310 ---------------------------------------------------------------------------------------------------------------------------- 43,087 60,425 166,163 35,430 143,751 9,959 245,350 16,588 31,740 ---------------------------------------------------------------------------------------------------------------------------- 9,901 (31,548) 128,529 6,017 (76,521) 19,320 (115,559) 20,321 9,910 ---------------------------------------------------------------------------------------------------------------------------- $ 48,766 $ 28,661 $ 294,462 $ 36,697 $ 59,150 $ 29,054 $ 125,219 $ 34,946 $ 44,047 ============================================================================================================================
============================================================================================================================ FEDERATED INSURANCE SERIES (CONTINUED) JANUS ASPEN SERIES LAZARD RETIREMENT SERIES ------------ ----------------------------------------------------------------- ---------------------------------------- U.S. INTERNATIONAL GROWTH AND INTERNATIONAL LARGE CAP MID CAP WORLDWIDE EMERGING STRATEGIC INTERNATIONAL EQUITY II INCOME GROWTH GROWTH GROWTH GROWTH MARKETS EQUITY (a) EQUITY ---------------------------------------------------------------------------------------------------------------------------- $ (4,222) $ (216) $ (230) $ (4,750) $ (8,080) $ (225) $ (4,572) $ (1,963) $ 2,397 43,087 60,425 166,163 35,430 143,751 9,959 245,350 16,588 31,740 9,901 (31,548) 128,529 6,017 (76,521) 19,320 (115,559) 20,321 9,910 ---------------------------------------------------------------------------------------------------------------------------- 48,766 28,661 294,462 36,697 59,150 29,054 125,219 34,946 44,047 ---------------------------------------------------------------------------------------------------------------------------- 4,532 2,700 21,922 35,747 4,729 24,981 31,787 16,900 20,953 (82,657) (148,125) (100,554) (242,750) (331,356) (37,535) (54,855) (11,905) (14,426) 51,636 (71,799) 516,305 (28,114) (145,978) (14,919) (686,126) 160,685 78,385 ---------------------------------------------------------------------------------------------------------------------------- (26,489) (217,224) 437,673 (235,117) (472,605) (27,473) (709,194) 165,680 84,912 ---------------------------------------------------------------------------------------------------------------------------- 22,277 (188,563) 732,135 (198,420) (413,455) 1,581 (583,975) 200,626 128,959 ---------------------------------------------------------------------------------------------------------------------------- 300,821 586,057 253,200 529,055 745,657 184,839 1,236,469 124,045 45,430 ---------------------------------------------------------------------------------------------------------------------------- $ 323,098 $ 397,494 $ 985,335 $ 330,635 $ 332,202 $ 186,420 $ 652,494 $ 324,671 $ 174,389 ============================================================================================================================
51 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== LAZARD RETIREMENT SERIES (CONTINUED) LEGG MASON PARTNERS VARIABLE PORTFOLIOS (a) ----------- --------------------------------------------- GLOBAL AGGRESSIVE HIGH YIELD LARGE CAP SMALL CAP GROWTH ALL CAP BOND (b) GROWTH ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ............... $ -- $ -- $ 2,307 $ -- $ -- Expenses: Mortality and expense risk fees ..................................... 9,993 72 2,574 2,964 987 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ............................... (9,993) (72) (267) (2,964) (987) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares .............................................. 33,928 3 4,566 14,578 969 Net realized short-term capital gain distributions from investments in portfolio shares .............................................. 19,099 -- 461 -- -- Net realized long-term capital gain distributions from investments in portfolio shares .............................................. 20,308 -- 5,766 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ... 73,335 3 10,793 14,578 969 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ................................................. 14,754 987 13,012 -- 3,033 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ...... $ 78,096 $ 918 $ 23,538 $ 11,614 $ 3,015 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== LAZARD RETIREMENT SERIES (CONTINUED) LEGG MASON PARTNERS VARIABLE PORTFOLIOS (a) ----------- --------------------------------------------- GLOBAL AGGRESSIVE HIGH YIELD LARGE CAP SMALL CAP GROWTH ALL CAP BOND (b) GROWTH ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ..................................... $ (9,993) $ (72) $ (267) $ (2,964) $ (987) Net realized gain (loss) on investments in portfolio shares ......... 73,335 3 10,793 14,578 969 Net change in unrealized appreciation (depreciation) of investments in portfolio shares .............................................. 14,754 987 13,012 -- 3,033 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ......... 78,096 918 23,538 11,614 3,015 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ................. 12,866 -- 18,028 2,728 29,585 Contract redemptions ................................................ (276,643) -- (4,024) (108) (3,192) Net transfers (including mortality transfers) ....................... (5,590) 10,203 (2,005) (14,234) 372 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions .............................. (269,367) 10,203 11,999 (11,614) 26,765 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ...................... (191,271) 11,121 35,537 -- 29,780 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ........................................ 709,916 -- 144,386 -- 35,143 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ............................... $ 518,645 $ 11,121 $ 179,923 $ -- $ 64,923 ====================================================================================================================================
a) Formerly Salomon Brothers Variable Series Funds prior to the name change effective May 1, 2006. b) Formerly High Yield Bond prior to its name change effective September 1, 2006. c) Formerly High Income Bond prior to its name change effective May 1, 2007. d) Formerly Limited Maturity Bond prior to its name change effective May 1, 2007. The accompanying notes are an integral part of these financial statements. 52
=================================================================================================================== LEGG MASON PARTNERS VARIABLE NEUBERGER BERMAN PORTFOLIO (CONTINUED) (a) LORD ABBETT SERIES FUNDS ADVISERS MANAGEMENT TRUST ------------------------- ------------------------ -------------------------------------------------------------- LEHMAN LEHMAN BROTHERS BROTHERS STRATEGIC TOTAL AMERICA'S GROWTH AND HIGH INCOME SHORT DURATION MID CAP BOND RETURN VALUE INCOME FASCIANO BOND (c) BOND (d) GROWTH PARTNERS ------------------------------------------------------------------------------------------------------------------- $ 6,192 $ 723 $ 15,269 $ 26,039 $ -- $ 662 $ 11,886 $ -- $ 5,912 2,227 889 9,056 25,031 1,383 50 6,789 2,743 8,323 ------------------------------------------------------------------------------------------------------------------- 3,965 (166) 6,213 1,008 (1,383) 612 5,097 (2,743) (2,411) ------------------------------------------------------------------------------------------------------------------- 1,483 3,271 28,972 135,392 (3,969) (111) (7,407) 54,467 (6,445) -- -- 4,146 2,623 -- -- -- -- 9,744 167 631 8,583 67,155 1,030 -- -- -- 81,307 ------------------------------------------------------------------------------------------------------------------- 1,650 3,902 41,701 205,170 (2,939) (111) (7,407) 54,467 84,606 ------------------------------------------------------------------------------------------------------------------- 9 1,061 34,568 50,360 (5,129) (284) 11,541 (27,796) (26,441) ------------------------------------------------------------------------------------------------------------------- $ 5,624 $ 4,797 $ 82,482 $ 256,538 $ (9,451) $ 217 $ 9,231 $ 23,928 $ 55,754 ===================================================================================================================
=================================================================================================================== LEGG MASON PARTNERS VARIABLE NEUBERGER BERMAN PORTFOLIO (CONTINUED) (a) LORD ABBETT SERIES FUNDS ADVISERS MANAGEMENT TRUST ------------------------- ------------------------ -------------------------------------------------------------- LEHMAN LEHMAN BROTHERS BROTHERS STRATEGIC TOTAL AMERICA'S GROWTH AND HIGH INCOME SHORT DURATION MID CAP BOND RETURN VALUE INCOME FASCIANO BOND (c) BOND (d) GROWTH PARTNERS ------------------------------------------------------------------------------------------------------------------- $ 3,965 $ (166) $ 6,213 $ 1,008 $ (1,383) $ 612 $ 5,097 $ (2,743) $ (2,411) 1,650 3,902 41,701 205,170 (2,939) (111) (7,407) 54,467 84,606 9 1,061 34,568 50,360 (5,129) (284) 11,541 (27,796) (26,441) ------------------------------------------------------------------------------------------------------------------- 5,624 4,797 82,482 256,538 (9,451) 217 9,231 23,928 55,754 ------------------------------------------------------------------------------------------------------------------- 17,671 22,033 28,855 82,531 (261) 9,052 10,442 9,909 24,672 (2,009) (2,036) (36,994) (361,500) (8,623) (334) (32,677) (258,030) (85,023) 42,922 (10,800) 6,423 (133,821) 15,236 (600) (90,585) 64,637 (19,056) ------------------------------------------------------------------------------------------------------------------- 58,584 9,197 (1,716) (412,790) 6,352 8,118 (112,820) (183,484) (79,407) ------------------------------------------------------------------------------------------------------------------- 64,208 13,994 80,766 (156,252) (3,099) 8,335 (103,589) (159,556) (23,653) ------------------------------------------------------------------------------------------------------------------- 51,405 21,590 581,042 1,539,871 43,253 4,018 533,319 304,124 388,964 ------------------------------------------------------------------------------------------------------------------- $ 115,613 $ 35,584 $ 661,808 $ 1,383,619 $ 40,154 $ 12,353 $ 429,730 $ 144,568 $ 365,311 ===================================================================================================================
53 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (CONTINUED) PIMCO VARIABLE INSURANCE TRUST --------------------- ------------------------------------------ COMMODITY- SOCIALLY ALL REALRETURN EMERGING REGENCY RESPONSIVE ASSET (a) STRATEGY (a) MARKETS BOND (a) ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ........ $ 636 $ 101 $ 722 $ -- $ 19,594 Expenses: Mortality and expense risk fees .............................. 2,201 901 138 46 4,962 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ........................ (1,565) (800) 584 (46) 14,632 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ....................................... (910) 9,160 (200) (1,605) 27,505 Net realized short-term capital gain distributions from investments in portfolio shares ........................... 1,040 26 13 -- 10,122 Net realized long-term capital gain distributions from investments in portfolio shares ........................... 7,779 690 39 -- 1,002 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .............................................. 7,909 9,876 (148) (1,605) 38,629 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares .............................. 4,871 1,775 (174) -- 10,827 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....................................... $ 11,215 $ 10,851 $ 262 $ (1,651) $ 64,088 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST (CONTINUED) PIMCO VARIABLE INSURANCE TRUST --------------------- ------------------------------------------ COMMODITY- SOCIALLY ALL REALRETURN EMERGING REGENCY RESPONSIVE ASSET (a) STRATEGY (a) MARKETS BOND (a) ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .............................. $ (1,565) $ (800) $ 584 $ (46) $ 14,632 Net realized gain (loss) on investments in portfolio shares .................................................... 7,909 9,876 (148) (1,605) 38,629 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................... 4,871 1,775 (174) -- 10,827 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .......................................... 11,215 10,851 262 (1,651) 64,088 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) .......... 11,662 29,041 -- -- 2,127 Contract redemptions ......................................... (7,551) (191) (38,472) (8,666) -- Net transfers (including mortality transfers) ................ 14,399 (60,953) 58,921 10,317 760,301 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ....................... 18,510 (32,103) 20,449 1,651 762,428 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............... 29,725 (21,252) 20,711 -- 826,516 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ................................. 121,571 56,966 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ........................ $ 151,296 $ 35,714 $ 20,711 $ -- $ 826,516 ====================================================================================================================================
a) For the period May 1, 2006 (inception of fund) through December 31, 2006. The accompanying notes are an integral part of these financial statements. 54
============================================================================================================ PIONEER VARIABLE CONTRACTS PIMCO VARIABLE INSURANCE TRUST (CONTINUED) TRUST ------------------------------------------------------------------------------------------------ ---------- FOREIGN BOND REALESTATE- US DOLLAR- GLOBAL BOND HIGH MONEY REALRETURN REAL SHORT- TOTAL CORE HEDGED (a) UNHEDGED (a) YIELD (a) MARKET STRATEGY (a) RETURN TERM RETURN BOND ------------------------------------------------------------------------------------------------------------ $ 98 $ 4,631 $ 24,696 $ 19,015 $ 1,152 $ 33,984 $ 9,890 $ 66,242 $ 141 41 1,903 5,126 6,448 139 12,975 3,771 24,412 47 ------------------------------------------------------------------------------------------------------------ 57 2,728 19,570 12,567 1,013 21,009 6,119 41,830 94 ------------------------------------------------------------------------------------------------------------ 126 (3,014) 7,582 -- 1,383 (15,386) (498) (30,990) (1) 22 -- -- -- -- 21,836 -- 9,192 -- 5 -- -- -- -- -- -- -- -- ------------------------------------------------------------------------------------------------------------ 153 (3,014) 7,582 -- 1,383 6,450 (498) (21,798) (1) ------------------------------------------------------------------------------------------------------------ (3) (537) 4,393 -- (1,502) (35,645) 318 24,042 (20) ------------------------------------------------------------------------------------------------------------ $ 207 $ (823) $ 31,545 $ 12,567 $ 894 $ (8,186) $ 5,939 $ 44,074 $ 73 ============================================================================================================
============================================================================================================ PIONEER VARIABLE CONTRACTS PIMCO VARIABLE INSURANCE TRUST (CONTINUED) TRUST ------------------------------------------------------------------------------------------------ ---------- FOREIGN BOND REALESTATE- US DOLLAR- GLOBAL BOND HIGH MONEY REALRETURN REAL SHORT- TOTAL CORE HEDGED (a) UNHEDGED (a) YIELD (a) MARKET STRATEGY (a) RETURN TERM RETURN BOND ------------------------------------------------------------------------------------------------------------ $ 57 $ 2,728 $ 19,570 $ 12,567 $ 1,013 $ 21,009 $ 6,119 $ 41,830 $ 94 153 (3,014) 7,582 -- 1,383 6,450 (498) (21,798) (1) (3) (537) 4,393 -- (1,502) (35,645) 318 24,042 (20) ------------------------------------------------------------------------------------------------------------ 207 (823) 31,545 12,567 894 (8,186) 5,939 44,074 73 ------------------------------------------------------------------------------------------------------------ 2,161 70 (20) 820,813 817 56,027 15,533 49,710 -- -- (67,228) (92,129) (490,452) (142) (107,687) (19,078) (310,554) -- (163) 154,291 200,638 (197,329) 24,354 163,058 156,450 587,499 134 ------------------------------------------------------------------------------------------------------------ 1,998 87,133 108,489 133,032 25,029 111,398 152,905 326,655 134 ------------------------------------------------------------------------------------------------------------ 2,205 86,310 140,034 145,599 25,923 103,212 158,844 370,729 207 ------------------------------------------------------------------------------------------------------------ -- -- -- 230,464 -- 719,600 247,930 1,187,810 3,351 ------------------------------------------------------------------------------------------------------------ $ 2,205 $ 86,310 $ 140,034 $ 376,063 $ 25,923 $ 822,812 $ 406,774 $ 1,558,539 $ 3,558 ============================================================================================================
55 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
================================================================================================================================= PIONEER VARIABLE CONTRACT TRUST (CONTINUED) ---------------------------------------------------------------- EMERGING EQUITY HIGH MARKETS (a) INCOME EUROPE (b) FUND YIELD --------------------------------------------------------------------------------------------------------------------------------- Investment income: Income dividends from investments in portfolio shares ...... $ -- $ 16,093 $ 4,051 $ 5,205 $ 10,728 Expenses: Mortality and expense risk fees ............................ 9 11,074 2,384 7,484 3,157 --------------------------------------------------------------------------------------------------------------------------------- Net investment income (expense) ...................... (9) 5,019 1,667 (2,279) 7,571 --------------------------------------------------------------------------------------------------------------------------------- Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ..................................... 141 47,850 45,405 73,956 6,243 Net realized short-term capital gain distributions from investments in portfolio shares ......................... -- -- -- -- 399 Net realized long-term capital gain distributions from investments in portfolio shares ......................... -- 8,737 -- -- 437 --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments in portfolio shares .................................. 141 56,587 45,405 73,956 7,079 --------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................ -- 74,149 (7,149) (4,906) 6,611 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ..................................... $ 132 $ 135,755 $ 39,923 $ 66,771 $ 21,261 =================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
================================================================================================================================= PIONEER VARIABLE CONTRACT TRUST (CONTINUED) ---------------------------------------------------------------- EMERGING EQUITY HIGH MARKETS (a) INCOME EUROPE (b) FUND YIELD --------------------------------------------------------------------------------------------------------------------------------- Changes from operations: Net investment income (expense) ............................ $ (9) $ 5,019 $ 1,667 $ (2,279) $ 7,571 Net realized gain (loss) on investments in portfolio shares .................................................. 141 56,587 45,405 73,956 7,079 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ......................... -- 74,149 (7,149) (4,906) 6,611 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from operations ........................................... 132 135,755 39,923 66,771 21,261 --------------------------------------------------------------------------------------------------------------------------------- Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........ -- 43,899 30,738 8,514 13,845 Contract redemptions ....................................... -- (264,737) (4,856) (185,928) (5,459) Net transfers (including mortality transfers) .............. 26,881 500,131 (155,590) (1,302) (336,683) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets from contract owners' transactions ..................... 26,881 279,293 (129,708) (178,716) (328,297) --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets ............. 27,013 415,048 (89,785) (111,945) (307,036) --------------------------------------------------------------------------------------------------------------------------------- Net assets, beginning of period ............................... -- 590,421 89,785 624,831 954,833 --------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period ...................... $ 27,013 $ 1,005,469 $ -- $ 512,886 $ 647,797 =================================================================================================================================
a) For the period November 1, 2006 (inception of fund) through December 31, 2006. b) For the period January 1, 2006 through December 15, 2006 (fund merged into International Value). c) For the period February 3, 2006 (inception of fund) through December 31, 2006. The accompanying notes are an integral part of these financial statements. 56
============================================================================================================================= PIONEER VARIABLE ROYCE CONTRACTS TRUST (CONTINUED) CAPITAL FUND RYDEX VARIABLE TRUST ---------------------------------------- ------------------------ -------------------------------------------------------- INTERNATIONAL MID CAP SMALL CLS ADVISORONE ABSOLUTE RETURN BASIC VALUE (a) VALUE CAP VALUE (a) MICRO-CAP SMALL-CAP AMERIGO STRATEGIES (c) BANKING MATERIALS ------------------------------------------------------------------------------------------------------------------------------ $ -- $ -- $ -- $ 1,069 $ 535 $ 447 $ 49 $ -- $ 2,601 185 1,294 1 9,503 15,287 9,768 56 119 6,779 ------------------------------------------------------------------------------------------------------------------------------ (185) (1,294) (1) (8,434) (14,752) (9,321) (7) (119) (4,178) ------------------------------------------------------------------------------------------------------------------------------ 1 (2,203) -- 83,354 140,606 254 (251) (1,084) 101,911 -- 6,569 -- 4,867 13,132 6,256 34 -- 1,064 -- 16,284 -- 27,687 26,678 35,305 28 -- 2,703 ------------------------------------------------------------------------------------------------------------------------------ 1 20,650 -- 115,908 180,416 41,815 (189) (1,084) 105,678 ------------------------------------------------------------------------------------------------------------------------------ 2,083 (9,790) (1) (6,869) (26,427) (1,247) 79 64 14,484 ------------------------------------------------------------------------------------------------------------------------------ $ 1,899 $ 9,566 $ (2) $ 100,605 $ 139,237 $ 31,247 $ (117) $(1,139) $ 115,984 ==============================================================================================================================
============================================================================================================================== PIONEER VARIABLE ROYCE CONTRACTS TRUST (CONTINUED) CAPITAL FUND RYDEX VARIABLE TRUST ---------------------------------------- ------------------------ -------------------------------------------------------- INTERNATIONAL MID CAP SMALL CLS ADVISORONE ABSOLUTE RETURN BASIC VALUE (a) VALUE CAP VALUE (a) MICRO-CAP SMALL-CAP AMERIGO STRATEGIES (c) BANKING MATERIALS ------------------------------------------------------------------------------------------------------------------------------ $ (185) $ (1,294) $ (1) $ (8,434) $ (14,752) $ (9,321) $ (7) $ (119) $ (4,178) 1 20,650 -- 115,908 180,416 41,815 (189) (1,084) 105,678 2,083 (9,790) (1) (6,869) (26,427) (1,247) 79 64 14,484 ------------------------------------------------------------------------------------------------------------------------------ 1,899 9,566 (2) 100,605 139,237 31,247 (117) (1,139) 115,984 ------------------------------------------------------------------------------------------------------------------------------ 7 10,674 501 52,657 97,086 9,000 31,316 -- 48,758 (579) (4,086) -- (220,021) (379,868) (2,084) -- (862) (8,785) 287,836 132 -- 24,900 (310,106) 439,311 (22,724) 55,461 (870,175) ------------------------------------------------------------------------------------------------------------------------------ 287,264 6,720 501 (142,464) (592,888) 446,227 8,592 54,599 (830,202) ------------------------------------------------------------------------------------------------------------------------------ 289,163 16,286 499 (41,859) (453,651) 477,474 8,475 53,460 (714,218) ------------------------------------------------------------------------------------------------------------------------------ -- 79,905 -- 653,201 1,355,851 31,534 -- 4,411 1,018,863 ------------------------------------------------------------------------------------------------------------------------------ $ 289,163 $ 96,191 $ 499 $ 611,342 $ 902,200 $ 509,008 $ 8,475 $57,871 $ 304,645 ==============================================================================================================================
57 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------- BIO- COMMODITIES CONSUMER DOW 2X OTC 2X TECHNOLOGY STRATEGY (h) PRODUCTS STRATEGY (a) STRATEGY (b) ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ..... $ -- $ -- $ 104 $ 1,337 $ 345 Expenses: Mortality and expense risk fees ........................... 4,451 119 252 4,688 6,428 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ..................... (4,451) (119) (148) (3,351) (6,083) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares .................................... 15,738 (7,437) 312 26,231 (98,011) Net realized short-term capital gain distributions from investments in portfolio shares ........................ -- -- 72 22,589 -- Net realized long-term capital gain distributions from investments in portfolio shares ........................ -- -- 52 4,973 -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ........................................... 15,738 (7,437) 436 53,793 (98,011) ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................... (5,756) 645 1,170 (1,632) (11,754) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .................................... $ 5,531 $ (6,911) $ 1,458 $ 48,810 $ (115,848) ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------- BIO- COMMODITIES CONSUMER DOW 2X OTC 2X TECHNOLOGY STRATEGY (h) PRODUCTS STRATEGY (a) STRATEGY (b) ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ........................... $ (4,451) $ (119) $ (148) $ (3,351) $ (6,083) Net realized gain (loss) on investments in portfolio shares ................................................. 15,738 (7,437) 436 53,793 (98,011) Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................ (5,756) 645 1,170 (1,632) (11,754) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....................................... 5,531 (6,911) 1,458 48,810 (115,848) ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ....... 50,012 -- -- 2,569 56,405 Contract redemptions ...................................... (8,881) (17) (162) (15,861) (23,018) Net transfers (including mortality transfers) ............. (753,323) (12,053) (61,118) 316,337 (678,700) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions .................... (712,192) (12,070) (61,280) 303,045 (645,313) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............ (706,661) (18,981) (59,822) 351,855 (761,161) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period .............................. 715,699 19,733 74,218 1,314 1,023,501 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ..................... $ 9,038 $ 752 $ 14,396 $ 353,169 $ 262,340 ====================================================================================================================================
a) Formerly Dynamic Dow prior to its name change effective July 3, 2007 and Long Dynamic Dow 30 prior to its name change effective May 1, 2006. b) Formerly Dynamic OTC prior to its name change effective July 3, 2007 and Velocity 100 prior to its name change effective May 1, 2006. c) Formerly Dynamic Russell 2000 prior to its name change effective July 3, 2007 and for the period November 1, 2006 (inception of fund) through December 31, 2006. d) Formerly Dynamic S&P 500 prior to its name change effective July 3, 2007 and Titan 500 prior to its name change effective May 1, 2006. e) Formerly Dynamic Strengthening Dollar prior to its name change effective July 3, 2007 and Strengthening Dollar prior to its name change effective May 1, 2006. f) Formerly Dynamic Weakening Dollar prior to its name change effective July 3, 2007 and Weakening Dollar prior to its name change effective May 1, 2006. g) Formerly Europe Advantage prior to its name change effective July 3, 2007 and Large-Cap Europe prior to its name change effective May 1, 2006. h) Formerly Commodities prior to its name change effective May 1, 2007. The accompanying notes are an integral part of these financial statements. 58
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------------ STRENGTHENING WEAKENING RUSSELL 2000 S&P 500 DOLLAR 2X DOLLAR 2X ENERGY EUROPE 1.25X FINANCIAL 2X STRATEGY (c) 2X STRATEGY (d) STRATEGY (e) STRATEGY (f) ELECTRONICS ENERGY SERVICES STRATEGY (g) SERVICES ------------------------------------------------------------------------------------------------------------------------------------ $ -- $ 35,208 $ -- $ 693 $ -- $ -- $ -- $ 17,974 $ 1,642 47 29,748 4 84 17,711 24,395 25,408 11,703 1,215 ------------------------------------------------------------------------------------------------------------------------------------ (47) 5,460 (4) 609 (17,711) (24,395) (25,408) 6,271 427 ------------------------------------------------------------------------------------------------------------------------------------ 171 402,152 (460) (1,650) (106,477) 222,676 263,468 150,863 15,202 -- 138,688 -- 4 -- 140,704 6,991 27,975 5,276 -- -- -- 6 -- 173,431 123,168 1,275 580 ------------------------------------------------------------------------------------------------------------------------------------ 171 540,840 (460) (1,640) (106,477) 536,811 393,627 180,113 21,058 ------------------------------------------------------------------------------------------------------------------------------------ (1,193) 19,273 -- (120) (28,178) (351,813) (310,479) 8,239 (7,821) ------------------------------------------------------------------------------------------------------------------------------------ $ (1,069) $ 565,573 $ (464) $ (1,151) $ (152,366) $ 160,603 $ 57,740 $ 194,623 $ 13,664 ====================================================================================================================================
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------------ STRENGTHENING WEAKENING RUSSELL 2000 S&P 500 DOLLAR 2X DOLLAR 2X ENERGY EUROPE 1.25X FINANCIAL 2X STRATEGY (c) 2X STRATEGY (d) STRATEGY (e) STRATEGY (f) ELECTRONICS ENERGY SERVICES STRATEGY (g) SERVICES ------------------------------------------------------------------------------------------------------------------------------------ $ (47) $ 5,460 $ (4) $ 609 $ (17,711) $ (24,395) $ (25,408) $ 6,271 $ 427 171 540,840 (460) (1,640) (106,477) 536,811 393,627 180,113 21,058 (1,193) 19,273 -- (120) (28,178) (351,813) (310,479) 8,239 (7,821) ------------------------------------------------------------------------------------------------------------------------------------ (1,069) 565,573 (464) (1,151) (152,366) 160,603 57,740 194,623 13,664 ------------------------------------------------------------------------------------------------------------------------------------ -- 268,673 -- 27,036 109,937 284,636 354,526 74,066 8,502 -- (415,098) -- (155) (182,898) (391,416) (412,775) (119,493) (4,607) 310,849 (897,590) 464 (10,484) (18,032) (340,266) (336,639) 105,401 (10,268) ------------------------------------------------------------------------------------------------------------------------------------ 310,849 (1,044,015) 464 16,397 (90,993) (447,046) (394,888) 59,974 (6,373) ------------------------------------------------------------------------------------------------------------------------------------ 309,780 (478,442) -- 15,246 (243,359) (286,443) (337,148) 254,597 7,291 ------------------------------------------------------------------------------------------------------------------------------------ -- 1,107,317 -- -- 379,254 1,458,661 1,197,742 42,655 200,570 ------------------------------------------------------------------------------------------------------------------------------------ $ 309,780 $ 628,875 $ -- $ 15,246 $ 135,895 $1,172,218 $ 860,594 $ 297,252 $ 207,861 ====================================================================================================================================
59 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) -------------------------------------------------------------- GOVERNMENT INVERSE LONG BOND HEALTH HEDGED DOW 2X 1.2X STRATEGY (a) CARE EQUITY (b) INTERNET STRATEGY(c) ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ........... $ 7,724 $ -- $ 9 $ -- $ 27,587 Expenses: Mortality and expense risk fees ................................. 3,368 5,672 141 711 12,124 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) .............................. 4,356 (5,672) (132) (711) 15,463 ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares .......................................... (16,109) 10,939 86 4,467 (12,294) Net realized short-term capital gain distributions from investments in portfolio shares .............................. -- 16,872 12 -- -- Net realized long-term capital gain distributions from investments in portfolio shares .............................. -- -- 4 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares .................................................. (16,109) 27,811 102 4,467 (12,294) ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................................. 2,499 (7,851) 12 4,189 (241,628) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .. $ (9,254) $ 14,288 $ (18) $ 7,945 $ (238,459) ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) -------------------------------------------------------------- GOVERNMENT INVERSE LONG BOND HEALTH HEDGED DOW 2X 1.2X STRATEGY (a) CARE EQUITY (b) INTERNET STRATEGY(c) ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ................................ $ 4,356 $ (5,672) $ (132) $ (711) $ 15,463 Net realized gain (loss) on investments in portfolio shares .... (16,109) 27,811 102 4,467 (12,294) Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................. 2,499 (7,851) 12 4,189 (241,628) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ....... (9,254) 14,288 (18) 7,945 (238,459) ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ............. 39 91,512 26,971 1,183 87,004 Contract redemptions ............................................ (10,252) (13,690) (84) (4,417) (10,988) Net transfers (including mortality transfers) ................... 211,649 147,048 (26,146) (381,648) 2,165,624 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions .............................. 201,436 224,870 741 (384,882) 2,241,640 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets .................... 192,182 239,158 723 (376,937) 2,003,181 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period .................................... 61,002 185,030 -- 398,716 586 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period .............................. $ 253,184 $424,188 $ 723 $ 21,779 $2,003,767 ====================================================================================================================================
a) Formerly Government Long Bond Advantage prior to its name change effective July 3, 2007 and U.S. Government Bond prior to its name change effective May 1, 2006. b) For the period February 3, 2006 (inception of fund) through December 31, 2006. c) Formerly Inverse Dynamic Dow prior to its name change effective July 3, 2007 and Inverse Dynamic Dow 30 prior to its name change effective May 1, 2006. d) Formerly Inverse Government Long Bond prior to its name change effective July 3, 2007 and Juno prior to its name change effective May 1, 2006. e) Formerly Inverse OTC prior to its name change effective July 3, 2007 and Arktos prior to its name change effective May 1, 2006. f) Formerly Inverse Russell 2000 prior to its name change effective July 3, 2007 and Inverse Small-Cap prior to its name change effective May 1, 2006. g) Formerly Inverse S&P 500 prior to its name change effective July 3, 2007 and Ursa prior to its name change effective May 1, 2006. h) Formerly Japan Advantage prior to its name change effective July 3, 2007 and Large Cap Japan prior to its name change effective May 1, 2006. i) Formerly Inverse Mid-Cap prior to its name change effective July 3, 2007. The accompanying notes are an integral part of these financial statements. 60
=================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------------------------------------------------------------------------- INVERSE GOVERNMENT INVERSE INVERSE INVERSE INVERSE LONG BOND MID-CAP OTC RUSSELL 2000 S&P 500 JAPAN 1.25X LARGE CAP LARGE CAP STRATEGY (d) STRATEGY (i) STRATEGY (e) STRATEGY (f) STRATEGY (g) STRATEGY (h) GROWTH VALUE LEISURE ----------------------------------------------------------------------------------------------------------------------------------- $ 4,086 $ 949 $ 1,060 $ 33,678 $ 4,539 $ 29,028 $ -- $ 4,528 $ -- 1,355 1,005 1,981 11,524 1,063 11,157 4,140 4,755 2,382 ----------------------------------------------------------------------------------------------------------------------------------- 2,731 (56) (921) 22,154 3,476 17,871 (4,140) (227) (2,382) ----------------------------------------------------------------------------------------------------------------------------------- (2,678) (288) (12,779) (107,910) (2,983) 80,924 24,672 46,531 1,924 -- -- -- -- -- 131,632 7,401 5,507 7,435 -- -- -- -- -- 15,433 1,540 8,978 4,071 ----------------------------------------------------------------------------------------------------------------------------------- (2,678) (288) (12,779) (107,910) (2,983) 227,989 33,613 61,016 13,430 ----------------------------------------------------------------------------------------------------------------------------------- (5,631) (3,301) (1,441) (124,985) (8,005) (203,006) (2,362) (1,574) 22,603 ----------------------------------------------------------------------------------------------------------------------------------- $ (5,578) $ (3,645) $ (15,141) $ (210,741) $ (7,512) $ 42,854 $ 27,111 $ 59,215 $ 33,651 ===================================================================================================================================
=================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ----------------------------------------------------------------------------------------------------------------------------------- INVERSE GOVERNMENT INVERSE INVERSE INVERSE INVERSE LONG BOND MID-CAP OTC RUSSELL 2000 S&P 500 JAPAN 1.25X LARGE CAP LARGE CAP STRATEGY (d) STRATEGY (i) STRATEGY (e) STRATEGY (f) STRATEGY (g) STRATEGY (h) GROWTH VALUE LEISURE ----------------------------------------------------------------------------------------------------------------------------------- $ 2,731 $ (56) $ (921) $ 22,154 $ 3,476 $ 17,871 $ (4,140) $ (227) $ (2,382) (2,678) (288) (12,779) (107,910) (2,983) 227,989 33,613 61,016 13,430 (5,631) (3,301) (1,441) (124,985) (8,005) (203,006) (2,362) (1,574) 22,603 ----------------------------------------------------------------------------------------------------------------------------------- (5,578) (3,645) (15,141) (210,741) (7,512) 42,854 27,111 59,215 33,651 ----------------------------------------------------------------------------------------------------------------------------------- 8,927 8,726 999 43,699 79 68,916 11,805 14,494 -- (2,386) (6,327) (1,170) (21,521) (99) (34,793) (37,594) (37,194) (4,337) 126,078 53,720 (241,402) 869,664 2,994 231,921 306,412 1,190,953 209,140 ----------------------------------------------------------------------------------------------------------------------------------- 132,619 56,119 (241,573) 891,842 2,974 266,044 280,623 1,168,253 204,803 ----------------------------------------------------------------------------------------------------------------------------------- 127,041 52,474 (256,714) 681,101 (4,538) 308,898 307,734 1,227,468 238,454 ----------------------------------------------------------------------------------------------------------------------------------- 27,674 -- 272,868 385,679 62,370 591,385 120,906 47,775 97,640 ----------------------------------------------------------------------------------------------------------------------------------- $ 154,715 $ 52,474 $ 16,154 $ 1,066,780 $ 57,832 $ 900,283 $ 428,640 $ 1,275,243 $ 336,094 ===================================================================================================================================
61 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------- MID-CAP 1.5X MID-CAP MID-CAP MULTI-CAP STRATEGY (a) GROWTH VALUE CORE EQUITY (b)(c) NOVA ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ...... $ 1,158 $ -- $ 5,561 $ 81 $ 2,999 Expenses: Mortality and expense risk fees ............................ 3,347 1,014 7,433 1,184 3,192 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ......................... (2,189) (1,014) (1,872) (1,103) (193) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ..................................... 29,245 5,502 (5,597) 91 13,704 Net realized short-term capital gain distributions from investments in portfolio shares ......................... 66,915 5,605 -- 160 -- Net realized long-term capital gain distributions from investments in portfolio shares ......................... 14,858 2,867 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ............................................ 111,018 13,974 (5,597) 251 13,704 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............................ (71,489) (8,183) 47,934 18,641 26,165 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations .................................... $ 37,340 $ 4,777 $ 40,465 $ 17,789 $ 39,676 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== RYDEX VARIABLE TRUST (CONTINUED) ------------------------------------------------------------------- MID-CAP 1.5X MID-CAP MID-CAP MULTI-CAP STRATEGY (a) GROWTH VALUE CORE EQUITY(b)(c) NOVA ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) ............................ $ (2,189) $ (1,014) $ (1,872) $ (1,103) $ (193) Net realized gain (loss) on investments in portfolio shares .................................................. 111,018 13,974 (5,597) 251 13,704 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ......................... (71,489) (8,183) 47,934 18,641 26,165 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ........................................ 37,340 4,777 40,465 17,789 39,676 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ........ 19,898 7,892 -- 146,894 5,403 Contract redemptions ....................................... (49,737) (13,662) (19,728) -- (35,893) Net transfers (including mortality transfers) .............. 111,241 (100,133) 1,082,655 24,488 68,813 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions ..................... 81,402 (105,903) 1,062,927 171,382 38,323 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ............. 118,742 (101,126) 1,103,392 189,171 77,999 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ............................... 178,330 182,221 21,162 -- 226,739 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ...................... $ 297,072 $ 81,095 $1,124,554 $ 189,171 $304,738 ====================================================================================================================================
a) Formerly Mid Cap Advantage prior to its name change effective July 3, 2007 and Medius prior to its name change effective May 1, 2006. b) Formerly Core Equity prior to its name change effective May 1, 2006 c) For the period February 3, 2006 (inception of fund) through December 31, 2006. d) Formerly Russell 2000 Advantage prior to its name change effective July 3, 2007 and Mekros prior to its name change effective May 1, 2006. The accompanying notes are an integral part of these financial statements. 62
================================================================================================================================= RYDEX VARIABLE TRUST (CONTINUED) --------------------------------------------------------------------------------------------------------------------------------- PRECIOUS REAL RUSSELL 2000 1.5X SECTOR SMALL-CAP SMALL-CAP OTC METALS ESTATE RETAILING STRATEGY (d) ROTATION GROWTH VALUE TECHNOLOGY --------------------------------------------------------------------------------------------------------------------------------- $ -- $ -- $ 5,050 $ -- $ 1,471 $ -- $ -- $ 3,553 $ -- 2,846 6,450 3,062 568 11,229 3,683 1,876 5,350 2,115 --------------------------------------------------------------------------------------------------------------------------------- (2,846) (6,450) 1,988 (568) (9,758) (3,683) (1,876) (1,797) (2,115) --------------------------------------------------------------------------------------------------------------------------------- 29,721 (46,668) 6,630 2,800 36,504 (9,643) 2,720 7,330 34,038 -- -- 3,698 329 -- 687 2,623 15,994 -- -- -- 6,115 1,140 -- 6,275 7,793 21,210 -- --------------------------------------------------------------------------------------------------------------------------------- 29,721 (46,668) 16,443 4,269 36,504 (2,681) 13,136 44,534 34,038 --------------------------------------------------------------------------------------------------------------------------------- (814) 4,785 7,753 (1,120) (11,755) (9,635) (6,021) 5,754 (28,989) --------------------------------------------------------------------------------------------------------------------------------- $ 26,061 $ (48,333) $ 26,184 $ 2,581 $ 14,991 $ (15,999) $ 5,239 $ 48,491 $ 2,934 =================================================================================================================================
================================================================================================================================= RYDEX VARIABLE TRUST (CONTINUED) --------------------------------------------------------------------------------------------------------------------------------- PRECIOUS REAL RUSSELL 2000 1.5X SECTOR SMALL-CAP SMALL-CAP OTC METALS ESTATE RETAILING STRATEGY (d) ROTATION GROWTH VALUE TECHNOLOGY --------------------------------------------------------------------------------------------------------------------------------- $ (2,846) $ (6,450) $ 1,988 $ (568) $ (9,758) $ (3,683) $ (1,876) $ (1,797) $ (2,115) 29,721 (46,668) 16,443 4,269 36,504 (2,681) 13,136 44,534 34,038 (814) 4,785 7,753 (1,120) (11,755) (9,635) (6,021) 5,754 (28,989) --------------------------------------------------------------------------------------------------------------------------------- 26,061 (48,333) 26,184 2,581 14,991 (15,999) 5,239 48,491 2,934 --------------------------------------------------------------------------------------------------------------------------------- 6,670 78,945 7,364 -- 94,772 51,695 8,980 9,930 5,557 (64,205) (51,752) (3,078) (666) (254,435) (36,813) (14,392) (40,883) (9,258) (85,662) 548,521 112,526 48,940 206,264 28,457 709,142 261,559 (333,037) --------------------------------------------------------------------------------------------------------------------------------- (143,197) 575,714 116,812 48,274 46,601 43,339 703,730 230,606 (336,738) --------------------------------------------------------------------------------------------------------------------------------- (117,136) 527,381 142,996 50,855 61,592 27,340 708,969 279,097 (333,804) --------------------------------------------------------------------------------------------------------------------------------- 158,420 187,708 146,599 -- 521,346 120,187 98,990 107,566 349,528 --------------------------------------------------------------------------------------------------------------------------------- $ 41,284 $ 715,089 $ 289,595 $ 50,855 $ 582,938 $ 147,527 $ 807,959 $ 386,663 $ 15,724 =================================================================================================================================
63 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== SELIGMAN RYDEX VARIABLE TRUST (CONTINUED) PORTFOLIOS ------------------------------------------------------------ -------------- U.S. GOVERNMENT COMMUNICATIONS TELE- MONEY AND COMMUNICATIONS TRANSPORTATION MARKET UTILITIES INFORMATION ------------------------------------------------------------------------------------------------------------------------------------ Investment income: Income dividends from investments in portfolio shares ......................................... $ 159 $ -- $ 219,496 $ 17,570 $ -- Expenses: Mortality and expense risk fees .................. 459 2,756 88,918 9,809 2,061 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income (expense) ................ (300) (2,756) 130,578 7,761 (2,061) ------------------------------------------------------------------------------------------------------------------------------------ Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ................ (20,701) 37,789 -- 34,108 47,777 Net realized short-term capital gain distributions from investments in portfolio shares ........... 155 -- -- -- -- Net realized long-term capital gain distributions from investments in portfolio shares ........... -- -- -- 7,789 -- ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) on investments in portfolio shares ........................... (20,546) 37,789 -- 41,897 47,777 ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments in portfolio shares ............... 30,228 (30,871) -- 48,453 (12,218) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ............................... $ 9,382 $ 4,162 $ 130,578 $ 98,111 $ 33,498 ====================================================================================================================================
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
==================================================================================================================================== SELIGMAN RYDEX VARIABLE TRUST (CONTINUED) PORTFOLIOS ------------------------------------------------------------ -------------- U.S. GOVERNMENT COMMUNICATIONS TELE- MONEY AND COMMUNICATIONS TRANSPORTATION MARKET UTILITIES INFORMATION ------------------------------------------------------------------------------------------------------------------------------------ Changes from operations: Net investment income (expense) .................. $ (300) $ (2,756) $ 130,578 $ 7,761 $ (2,061) Net realized gain (loss) on investments in portfolio shares ............................... (20,546) 37,789 -- 41,897 47,777 Net change in unrealized appreciation (depreciation) of investments in portfolio shares ........................................ 30,228 (30,871) -- 48,453 (12,218) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from operations ................................. 9,382 4,162 130,578 98,111 33,498 ------------------------------------------------------------------------------------------------------------------------------------ Changes from contract owners' transactions: Net contract purchase payments (including breakage) ..................................... 2,045 31,499 7,474,124 219,205 3,855 Contract redemptions ............................. (3,577) (180) (585,868) (238,981) (136,804) Net transfers (including mortality transfers) .... (320,178) (168,702) (1,001,039) (18,478) (24,118) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets from contract owners' transactions .............. (321,710) (137,383) 5,887,217 (38,254) (157,067) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets ...... (312,328) (133,221) 6,017,795 59,857 (123,569) ------------------------------------------------------------------------------------------------------------------------------------ Net assets, beginning of period ..................... 359,006 263,351 5,296,155 725,957 231,397 ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ................ $ 46,678 $ 130,130 $ 11,313,950 $ 785,814 $ 107,828 ====================================================================================================================================
The accompanying notes are an integral part of these financial statements. 64
============================================================================================== THIRD SELIGMAN AVENUE PORTFOLIOS SERIES (CONTINUED) TRUST VAN ECK WORLDWIDE INSURANCE TRUST FUND ----------- ----------- ------------------------------------------------------------------ GLOBAL ABSOLUTE EMERGING HARD REAL TECHNOLOGY VALUE RETURN BOND MARKETS ASSETS ESTATE ---------------------------------------------------------------------------------------------- $ -- $ 7,639 $ -- $ 25,565 $ 9,187 $ 617 $ 10,153 929 14,583 5,944 6,767 25,214 9,294 10,495 ---------------------------------------------------------------------------------------------- (929) (6,944) (5,944) 18,798 (16,027) (8,677) (342) ---------------------------------------------------------------------------------------------- 3,816 85,080 4,421 (16,789) 352,263 231,848 4,208 -- 356 -- -- 16,785 17,514 14,721 -- 25,663 1,940 -- 127,860 34,966 174,382 ---------------------------------------------------------------------------------------------- 3,816 111,099 6,361 (16,789) 496,908 284,328 193,311 ---------------------------------------------------------------------------------------------- 6,042 (29,108) 20,419 22,681 82,496 (136,713) (23,094) ---------------------------------------------------------------------------------------------- $ 8,929 $ 75,047 $ 20,836 $ 24,690 $ 563,377 $ 138,938 $ 169,875 ==============================================================================================
============================================================================================== THIRD SELIGMAN AVENUE PORTFOLIOS SERIES (CONTINUED) TRUST VAN ECK WORLDWIDE INSURANCE TRUST FUND ----------- ----------- ------------------------------------------------------------------ GLOBAL ABSOLUTE EMERGING HARD REAL TECHNOLOGY VALUE RETURN BOND MARKETS ASSETS ESTATE ---------------------------------------------------------------------------------------------- $ (929) $ (6,944) $ (5,944) $ 18,798 $ (16,027) $ (8,677) $ (342) 3,816 111,099 6,361 (16,789) 496,908 284,328 193,311 6,042 (29,108) 20,419 22,681 82,496 (136,713) (23,094) ---------------------------------------------------------------------------------------------- 8,929 75,047 20,836 24,690 563,377 138,938 169,875 ---------------------------------------------------------------------------------------------- 9,069 83,775 7,005 32,834 188,626 65,105 34,715 (4,404) (88,722) (57,180) (36,790) (304,267) (123,026) (173,892) 5,724 (723,459) 55,338 204,730 807,288 (369,835) 52,096 ---------------------------------------------------------------------------------------------- 10,389 (728,406) 5,163 200,774 691,647 (427,756) (87,081) ---------------------------------------------------------------------------------------------- 19,318 (653,359) 25,999 225,464 1,255,024 (288,818) 82,794 ---------------------------------------------------------------------------------------------- 49,296 1,322,802 334,640 315,202 1,321,853 849,180 613,481 ---------------------------------------------------------------------------------------------- $ 68,614 $ 669,443 $ 360,639 $ 540,666 $ 2,576,877 $ 560,362 $ 696,275 ==============================================================================================
65 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I STATEMENT OF OPERATIONS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
=========================================================================================================================== WELLS FARGO ADVANTAGE VT FUNDS -------------------------------- COMBINED DISCOVERY OPPORTUNITY TOTAL ------------------------------------------------------------------------------------------------------------ ------------- Investment income: Income dividends from investments in portfolio shares ................ $ -- $ -- $ 1,320,152 Expenses: Mortality and expense risk fees ...................................... 1,838 12,217 991,346 ------------------------------------------------------------------------------------------------------------ ------------- Net investment income (expense) .................................... (1,838) (12,217) 328,806 ------------------------------------------------------------------------------------------------------------ ------------- Net realized gains (losses) on investments in portfolio shares: Net realized gains (losses) on sales of investments in portfolio shares ................................................... 11,352 34,106 4,263,379 Net realized short-term capital gain distributions from investments in portfolio shares .................................... -- -- 913,025 Net realized long-term capital gain distributions from investments in portfolio shares .................................... -- 84,663 1,654,984 ------------------------------------------------------------------------------------------------------------ ------------- Net realized gain (loss) on investments in portfolio shares ...... 11,352 118,769 6,831,388 ------------------------------------------------------------------------------------------------------------ ------------- Net change in unrealized appreciation (depreciation) of investments in portfolio shares ...................................... 5,259 (35,459) (954,533) ------------------------------------------------------------------------------------------------------------ ------------- Net increase (decrease) in net assets from operations .......... $ 14,773 $ 71,093 $ 6,205,661 ============================================================================================================ =============
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2006
============================================================================================================================ WELLS FARGO ADVANTAGE VT FUNDS -------------------------------- COMBINED DISCOVERY OPPORTUNITY TOTAL ------------------------------------------------------------------------------------------------------------ ------------- Changes from operations: Net investment income (expense) ...................................... $ (1,838) $ (12,217) $ 328,806 Net realized gain (loss) on investments in portfolio shares .......... 11,352 118,769 6,831,388 Net change in unrealized appreciation (depreciation) of investments in portfolio shares .................................... 5,259 (35,459) (954,533) ------------------------------------------------------------------------------------------------------------ ------------- Net increase (decrease) in net assets from operations ............ 14,773 71,093 6,205,661 ------------------------------------------------------------------------------------------------------------ ------------- Changes from contract owners' transactions: Net contract purchase payments (including breakage) .................. 12,805 43,109 16,329,531 Contract redemptions ................................................. (29,605) (144,821) (12,609,956) Net transfers (including mortality transfers) ........................ (8,153) (134,041) 531,345 ------------------------------------------------------------------------------------------------------------ ------------- Net increase (decrease) in net assets from contract owners' transactions ........................................... (24,953) (235,753) 4,250,920 ------------------------------------------------------------------------------------------------------------ ------------- Net increase (decrease) in net assets .......................... (10,180) (164,660) 10,456,581 ------------------------------------------------------------------------------------------------------------ ------------- Net assets, beginning of period ......................................... 130,628 820,919 59,764,152 ------------------------------------------------------------------------------------------------------------ ------------- Net assets, end of period .................................... $ 120,448 $ 656,259 $ 70,220,733 ============================================================================================================ =============
The accompanying notes are an integral part of these financial statements. 66 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2007 AND 2006 ================================================================================ (1) GENERAL Jefferson National Life Annuity Account I ("Account I") is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. Account I was established on August 23, 2000, and commenced operations on July 2, 2001, as a segregated investment account for individual variable annuity contracts which are registered under the Securities Act of 1933. The operations of Account I are included in the operations of Jefferson National Life Insurance Company (the "Company") (formerly Conseco Variable Insurance Company prior to its name change effective May 1, 2003 pursuant to the provisions of the Texas Insurance Code. Effective October 23, 2002, the Company was acquired from Conseco Life Insurance of Texas, a life insurance company domiciled in the state of Texas and an indirect wholly-owned subsidiary of Conseco, Inc., a publicly-held specialized financial services holding company, by JNF Holding Company, Inc.("JNF Holdings"), a wholly-owned subsidiary of Inviva, Inc., a New York based insurance holding company. As of June 30, 2006, all outstanding shares of the Company were owned by JNF Holdings, an insurance holding company. Effective July 1, 2006, by way of the "Reorganization and Contribution Agreement" adopted by the Board of Directors of Inviva, Inc. ("ultimate parent") and accepted by the Board of Directors of JNF Holdings, all of the outstanding common stock of the Company was contributed from JNF Holdings to a new holding company, Jefferson National Financial Corp. ("JNFC"). This transaction was accounted for using the pooling-of-interest method in accordance with Statement of Financial Accounting Standards No. 141, "Business Combinations". From then forward the Company is wholly-owned by JNFC. JNFC is a wholly owned subsidiary of Inviva, Inc. and JNF Holdings, collectively. JNF Advisors, Inc. ("JNF") was established in January 2007 as a registered investment adviser and is 100% owned by JNFC. JNF serves as adviser to the JNF Balanced and Equity portfolios, but sub-advises the investment management of these portfolios to an unaffiliated registered investment adviser. Various lawsuits against the Company may arise in the ordinary course of the Company's business. Contingent liabilities arising from ordinary course litigation, income taxes and other matters are not expected to be material in relation to the financial position of the Company. The purchase agreement between Inviva and Conseco contained a provision that the Company would be indemnified by Conseco Life of Texas for all cases known as of the acquisition and for certain other matters. Currently, however, there are no legal proceedings to which Account I is a party or to which the assets of Account I are subject. Neither the Company nor Jefferson National Financial Securities Corporation (formerly Inviva Securities Corporation prior to its name change effective July 1, 2006), the distributor of the Account I's contracts, is involved in any litigation that is of material importance in relation to their total assets or that relates to Account I. The following investment options are available to new investors as of December 31, 2007: AIM VARIABLE INSURANCE FUNDS Basic Value Fund Series II Core Equity Fund Series I Financial Services Fund Series I Global Health Care Fund Series I Global Real Estate Fund Series I High Yield Fund Series I Mid Cap Core Equity Fund Series II Technology Fund Series I THE ALGER AMERICAN FUND Growth Portfolio Leveraged AllCap Portfolio MidCap Growth Portfolio ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. Growth and Income Portfolio AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. Balanced Fund Income & Growth Fund Inflation Protection Fund International Fund Large Company Value Fund Ultra Fund Value Fund Vista Fund DIREXION INSURANCE TRUST Dynamic VP HY Bond Fund THE DREYFUS INVESTMENT PORTFOLIOS Dreyfus Small Cap Stock Index Portfolio THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. DREYFUS STOCK INDEX FUND DREYFUS VARIABLE INVESTMENT FUND International Value Portfolio FEDERATED INSURANCE SERIES Capital Income Fund II High Income Bond Fund II International Equity Fund II Kaufmann Fund II Market Opportunity Fund II JANUS ASPEN SERIES Balanced Portfolio Forty Portfolio Global Life Sciences Portfolio Growth and Income Portfolio Large Cap Growth Portfolio Mid Cap Growth Portfolio Mid Cap Value Portfolio Small Company Value Portfolio Worldwide Growth Portfolio LAZARD RETIREMENT SERIES, INC. Emerging Markets Portfolio International Equity Portfolio Small Cap Portfolio US Strategic Equity Portfolio LEGG MASON PARTNERS VARIABLE EQUITY TRUST Aggressive Growth Portfolio Capital and Income Portfolio Fundamental Value Portfolio Large Cap Growth Portfolio LEGG MASON PARTNERS VARIABLE INCOME TRUST Global High Yield Bond Portfolio 67 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 AND 2006 ================================================================================ Government Portfolio Strategic Bond Portfolio LORD ABBETT SERIES FUND, INC. America's Value Portfolio Growth and Income Portfolio NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST Lehman Brothers High Income Bond Portfolio Lehman Brothers Short Duration Bond Portfolio Fasciano Portfolio Mid-Cap Growth Portfolio Partners Portfolio Regency Portfolio Socially Responsive Portfolio NORTHERN LIGHTS VARIABLE TRUST JNF Balanced Portfolio JNF Equity Portfolio PIMCO VARIABLE INSURANCE TRUST All Asset Portfolio CommodityRealReturn Strategy Portfolio Emerging Markets Bond Portfolio Foreign Bond US Dollar-Hedged Portfolio Global Bond Unhedged Portfolio High Yield Portfolio Long Term US Government Portfolio Low Duration Portfolio Money Market Portfolio RealEstateRealReturn Portfolio Real Return Bond Portfolio Short-Term Portfolio StocksPLUS Total Return Portfolio Total Return Portfolio PIONEER VARIABLE CONTRACTS TRUST Cullen Value Portfolio Emerging Markets Portfolio Equity Income Portfolio Fund Portfolio Global High Yield Portfolio High Yield Portfolio International Value Portfolio Mid Cap Value Portfolio Small Cap Value Portfolio Strategic Income Portfolio ROYCE CAPITAL FUND Micro-Cap Portfolio Small-Cap Portfolio RYDEX VARIABLE TRUST CLS AdvisorOne Amerigo Fund CLS AdvisorOne Clermont Fund Absolute Return Strategies Fund Banking Fund Basic Materials Fund Biotechnology Fund Commodities Strategy Fund Consumer Products Fund Dow 2X Strategy Fund Electronics Fund Energy Fund Energy Services Fund Essential Portfolio Aggressive Fund Essential Portfolio Conservative Fund Essential Portfolio Moderate Fund Europe 1.25X Strategy Fund Financial Services Fund Government Long Bond 1.2X Strategy Fund Health Care Fund Hedged Equity Fund Internet Fund Inverse Dow 2X Strategy Fund Inverse Government Long Bond Strategy Fund Inverse Mid-Cap Strategy Fund Inverse OTC Strategy Fund Inverse Russell 2000 Strategy Fund Inverse S&P 500 Strategy Fund Japan 1.25X Strategy Fund Large-Cap Growth Fund Large-Cap Value Fund Leisure Fund Mid Cap 1.5X Strategy Fund Mid-Cap Growth Fund Mid-Cap Value Fund Multi-Cap Core Equity Fund Nova Fund OTC 2X Strategy Fund OTC Fund Precious Metals Fund Real Estate Fund Retailing Fund Russell 2000 1.5X Strategy Fund Russell 2000 2X Strategy Fund S&P 500 2X Strategy Fund Sector Rotation Fund Small-Cap Growth Fund Small-Cap Value Fund Strengthening Dollar 2X Strategy Fund Technology Fund Telecommunications Fund Transportation Fund U.S. Government Money Market Fund Utilities Fund Weakening Dollar 2X Strategy Fund SELIGMAN PORTFOLIOS, INC., (CLASS 2) Communications and Information Portfolio Global Technology Portfolio THIRD AVENUE VARIABLE SERIES TRUST Value Portfolio VAN ECK WORLDWIDE INSURANCE TRUST Absolute Return Fund Bond Fund Emerging Markets Fund Hard Assets Fund Real Estate Fund 68 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 AND 2006 ================================================================================ WELLS FARGO ADVANTAGE VT FUNDS Discovery Fund Opportunity Fund The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENT VALUATION, TRANSACTIONS AND INCOME Investments in portfolio shares are valued using the net asset value of the respective portfolios at the end of each New York Stock Exchange business day, as determined by the investment fund managers. Investment share transactions are accounted for on a trade date basis (the date the order to purchase or redeem shares is executed) and dividend income is recorded on the ex-dividend date. The cost of investments in portfolio shares sold is determined on a first-in first-out basis. Account I does not hold any investments which are restricted as to resale. Net investment income and net realized capital gains (losses) and unrealized appreciation (depreciation) on investments are allocated to the contracts on each valuation date based on each contract's pro rata share of the assets of Account I as of the beginning of the valuation date. FEDERAL INCOME TAXES No provision for federal income taxes has been made in the accompanying financial statements because the operations of Account I are included in the total operations of the Company, which is treated as a life insurance company for federal income tax purposes under the Internal Revenue Code. Net investment income and realized capital gains (losses) are retained in Account I and are not taxable until received by the contract owner or beneficiary in the form of annuity payments or other distributions. ANNUITY RESERVES Deferred annuity contract reserves are comprised of net contract purchase payments less redemptions and benefits. These reserves are adjusted daily for the net investment income (expense) and net realized gains (losses) and unrealized appreciation (depreciation) on investments. Net assets allocated to contract owners' life contingent annuity payment reserves are computed according to the A2000 Annuitant Mortality Table. The standard assumed investment return is 3 percent or 5 percent based upon annuitant's selection. The mortality risk for life contingent payments is fully borne by the Company and may result in additional amounts being transferred into the variable annuity account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company. These transfers are included in the Net Transfer line of the accompanying Statement of Changes in Net Assets. NET TRANSFERS The Net Transfers line of the accompanying Statement of Changes in Net Assets is comprised of the net of any transfers into or from the fund from any other funds within this product plus any transfer of mortality risk as defined in the Annuity Reserves section above. (3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES The aggregate cost of purchases of investments in portfolio shares was $293,706,327 and $196,674,783 for the years ended December 31, 2007 and 2006, respectively. The aggregate proceeds from sales of investments in portfolio shares were $274,610,015 and $189,546,216 for the years ended December 31, 2007 and 2006, respectively. (4) DEDUCTIONS AND EXPENSES Although periodic retirement payments to contract owners vary according to the investment performance of the portfolios, such payments are not affected by mortality or expense experience because the Company assumes the mortality and expense risks under the contracts. The mortality risk assumed by the Company results from the life annuity payment option in the contracts in which the Company agrees to make annuity payments regardless of how long a particular annuitant or other payee lives. The annuity payments are determined in accordance with annuity purchase rate provisions established at the time the contracts are issued. Based on the actuarial determination of expected mortality, the Company is required to fund any deficiency in the annuity payment reserves from its general account assets. The expense risk assumed by the Company is the risk that the deductions for sales and administrative expenses may prove insufficient to cover the actual sales and administrative expenses. The Company deducts daily from Account I a fee, which is equal on an annual basis to 1.40 percent of the daily value of the total investments of Account I, for assuming the mortality and expense risks on standard contracts without the optional riders (guaranteed minimum death benefit, guaranteed minimum income benefit, and guaranteed minimum withdrawal benefit). For contracts with the guaranteed minimum death benefit rider, the fee is an additional .35 percent or .45 percent to the base rate depending on the death benefit option selected. For contracts that include both the guaranteed minimum death benefit and the guaranteed minimum income benefit, the fee is an additional .65 percent or .75 percent to the base rate depending on the death benefit option selected. The guaranteed minimum withdrawal benefit rider is an additional .35 percent or .50 percent to the base rate depending on the waiting period selected. The total fees for all contracts were $1,289,317 and $991,346 for the years ended December 31, 2007 and 2006, respectively. Pursuant to an agreement between Account I and the Company (which may be terminated by the Company at any time), the Company provides sales and administrative services to Account I. The Company may deduct a percentage of amounts surrendered to cover sales expenses. The percentage varies up to 7 percent based upon the number of years the contract has been held. In addition, 69 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 AND 2006 ================================================================================ the Company deducts units from individual contracts annually and upon full surrender to cover an administrative fee of $30 unless the value of the contract is $50,000 or greater. This fee is recorded as a redemption in the accompanying Statements of Changes in Net Assets. The sales and administrative charges were $205,340 and $476,428 for the years ended December 31, 2007 and 2006, respectively. (5) FINANCIAL HIGHLIGHTS The following table discloses total returns, investment income and expense ratios for each offered fund in Account I. The total return is presented using the minimum and maximum expense ratio unit values. It is defined as the percentage change of unit values from the beginning of the period represented to the end of the period represented. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for each period indicated from the effective date though the end of the reporting period. The investment income ratio is the ratio of income dividends to the average daily net assets. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccount invests. The expense ratio consists of the mortality and expense charge for each period indicated for the minimum and maximum ratios. This ratio includes only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund have been excluded. Details begin on the following page. 70 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ AIM VARIABLE INSURANCE FUNDS: Basic Value Fund December 31, 2007 ........... 11 $ 16.33 $ 12.53 1.40% 2.65% $ 164 -0.06% -1.26% 0.33% December 31, 2006 ........... 12 16.34 12.69 1.40% 2.65% 183 11.38% 9.97% 0.12% December 31, 2005 ........... 19 14.67 11.54 1.40% 2.65% 271 3.97% 2.67% 0.00% December 31, 2004 ........... 13 14.11 11.24 1.40% 2.65% 167 9.30% 7.97% 0.00% December 31, 2003 ........... 2 12.91 12.86 1.40% 2.05% 26 29.13% 28.61% 0.00% Inception May 1, 2003 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Core Equity Fund December 31, 2007 ........... 13 11.58 11.34 1.40% 2.65% 148 6.63% 5.29% 1.19% December 31, 2006 ........... 6 10.86 10.77 1.40% 2.65% 65 8.17% 7.27% 0.58% Inception April 28, 2006 .... -- 10.04 10.04 N/A N/A -- N/A N/A N/A Financial Services Fund December 31, 2007 ........... 4 10.24 9.74 1.40% 2.65% 41 -23.30% -24.26% 1.92% December 31, 2006 ........... 4 13.35 12.86 1.40% 2.65% 57 14.79% 13.40% 1.36% December 31, 2005 ........... 6 11.63 11.34 1.40% 2.65% 75 4.40% 3.09% 1.75% December 31, 2004 ........... 5 11.14 11.00 1.40% 2.65% 54 7.22% 5.87% 0.53% December 31, 2003 ........... 4 10.39 10.23 1.40% 2.05% 44 27.78% 27.02% 0.31% Global Health Care Fund December 31, 2007 ........... 61 12.43 12.65 1.40% 2.65% 739 10.29% 8.86% 0.00% December 31, 2006 ........... 12 11.27 11.62 1.40% 2.65% 134 3.78% 2.56% 0.00% December 31, 2005 ........... 20 10.86 11.33 1.40% 2.65% 213 6.68% 5.30% 0.00% December 31, 2004 ........... 15 10.18 10.76 1.40% 2.65% 151 6.04% 4.77% 0.00% December 31, 2003 ........... 11 9.60 9.45 1.40% 2.05% 102 26.01% 25.25% 0.00% Global Real Estate Fund December 31, 2007 ........... 27 28.85 19.39 1.40% 2.65% 713 -6.85% -8.02% 3.87% December 31, 2006 ........... 46 30.97 21.08 1.40% 2.65% 1,381 40.64% 38.87% 1.62% December 31, 2005 ........... 35 22.02 15.18 1.40% 2.65% 748 12.63% 11.29% 1.25% December 31, 2004 ........... 36 19.55 13.64 1.40% 2.65% 680 34.64% 32.94% 1.21% December 31, 2003 ........... 11 14.52 14.29 1.40% 2.05% 166 36.89% 36.08% 1.28% High Yield Fund December 31, 2007 ........... 22 11.89 11.36 1.40% 2.65% 257 -0.17% -1.39% 10.25% December 31, 2006 ........... 45 11.91 11.52 1.40% 2.65% 537 9.17% 7.87% 15.88% December 31, 2005 ........... 16 10.91 10.68 1.40% 2.65% 178 1.30% 0.00% 2.84% December 31, 2004 ........... 92 10.77 10.68 1.40% 2.65% 985 8.02% 7.23% 3.99% Inception May 1, 2004 ....... -- 9.97 9.96 N/A N/A -- N/A N/A N/A Mid Cap Core Equity Fund December 31, 2007 ........... 13 17.33 13.58 1.40% 2.65% 224 7.77% 6.43% 0.06% December 31, 2006 ........... 11 16.08 12.76 1.40% 2.65% 173 9.46% 8.04% 1.04% December 31, 2005 ........... 26 14.69 11.81 1.40% 2.65% 380 5.76% 4.51% 0.29% December 31, 2004 ........... 25 13.89 11.30 1.40% 2.65% 349 12.02% 10.57% 0.02% December 31, 2003 ........... 7 12.40 12.35 1.40% 2.05% 81 24.56% 24.04% 0.00% Inception May 1, 2003 ....... -- 9.96 9.96 N/A N/A -- N/A N/A N/A Technology Fund December 31, 2007 ........... 11 6.54 11.44 1.40% 2.65% 82 6.34% 4.86% 0.00% December 31, 2006 ........... 10 6.15 10.91 1.40% 2.65% 72 8.85% 7.59% 0.00% December 31, 2005 ........... 28 5.65 10.14 1.40% 2.65% 160 0.71% -0.49% 0.00% December 31, 2004 ........... 97 5.61 10.19 1.40% 2.65% 547 3.31% 1.90% 0.00% December 31, 2003 ........... 109 5.43 5.35 1.40% 2.05% 590 43.27% 42.42% 0.00% THE ALGER AMERICAN FUND: Growth Portfolio December 31, 2007 ........... 107 16.64 13.84 1.40% 2.65% 1,736 18.27% 16.79% 0.33% December 31, 2006 ........... 40 14.07 11.85 1.40% 2.65% 547 3.68% 2.42% 0.15% December 31, 2005 ........... 96 13.57 11.57 1.40% 2.65% 1,282 10.50% 9.15% 0.19% December 31, 2004 ........... 78 12.28 10.60 1.40% 2.65% 949 3.98% 2.71% 0.00% December 31, 2003 ........... 37 11.81 11.52 1.40% 2.05% 431 33.28% 32.49% 0.00%
71 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ THE ALGER AMERICAN FUND: (continued) Leveraged AllCap Portfolio December 31, 2007 ........... 30 $ 25.89 $ 18.15 1.40% 2.65% $ 766 31.62% 30.01% 0.00% December 31, 2006 ........... 24 19.67 13.96 1.40% 2.65% 437 17.64% 16.24% 0.00% December 31, 2005 ........... 34 16.72 12.01 1.40% 2.65% 534 12.82% 11.41% 0.00% December 31, 2004 ........... 40 14.82 10.78 1.40% 2.65% 552 6.70% 5.38% 0.00% December 31, 2003 ........... 37 13.89 13.54 1.40% 2.05% 513 32.85% 32.06% 0.00% MidCap Growth Portfolio December 31, 2007 ........... 92 27.53 16.37 1.40% 2.65% 2,329 29.74% 28.09% 0.00% December 31, 2006 ........... 37 21.22 12.78 1.40% 2.65% 629 8.60% 7.30% 0.00% December 31, 2005 ........... 56 19.54 11.91 1.40% 2.65% 953 8.31% 6.91% 0.00% December 31, 2004 ........... 46 18.04 11.14 1.40% 2.65% 739 11.43% 10.08% 0.00% December 31, 2003 ........... 23 16.19 15.79 1.40% 2.05% 374 45.74% 44.87% 0.00% Small Capitalization Portfolio December 31, 2007 ........... 23 14.62 17.45 1.40% 2.65% 344 15.57% 14.13% 0.00% December 31, 2006 ........... 30 12.65 15.29 1.40% 2.65% 381 18.33% 16.90% 0.00% December 31, 2005 ........... 79 10.69 13.08 1.40% 2.65% 849 15.32% 13.84% 0.00% December 31, 2004 ........... 59 9.27 11.49 1.40% 2.65% 569 14.87% 13.54% 0.00% December 31, 2003 ........... 40 8.07 7.87 1.40% 2.05% 323 40.37% 39.53% 0.00% ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.: Growth and Income Fund December 31, 2007 ........... 23 11.45 11.22 1.40% 2.65% 267 3.62% 2.37% 1.31% December 31, 2006 ........... 4 11.05 10.96 1.40% 2.65% 49 10.94% 10.04% 0.00% Inception May 1, 2006 ....... -- 9.96 9.96 N/A N/A -- N/A N/A N/A AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.: Balanced Fund December 31, 2007 ........... 9 11.85 11.47 1.40% 2.65% 107 3.40% 2.23% 0.63% December 31, 2006 ........... 2 11.46 11.22 1.40% 2.65% 21 8.11% 6.76% 0.61% December 31, 2005 ........... 1 10.60 10.51 1.40% 2.65% 9 5.58% 4.68% 0.00% Inception May 1, 2005 ....... -- 10.04 10.04 N/A N/A -- N/A N/A N/A Income & Growth Fund December 31, 2007 ........... 34 14.83 12.95 1.40% 2.65% 503 -1.46% -2.70% 1.71% December 31, 2006 ........... 35 15.05 13.31 1.40% 2.65% 514 15.50% 14.05% 1.77% December 31, 2005 ........... 53 13.03 11.67 1.40% 2.65% 682 3.17% 1.92% 2.32% December 31, 2004 ........... 70 12.63 11.45 1.40% 2.65% 873 11.38% 9.99% 1.47% December 31, 2003 ........... 14 11.34 11.06 1.40% 2.05% 156 27.57% 26.82% 0.43% Inflation Protection Fund December 31, 2007 ........... 8 11.43 10.92 1.40% 2.65% 88 7.93% 6.64% 4.17% December 31, 2006 ........... 5 10.59 10.24 1.40% 2.65% 55 0.19% -1.06% 3.52% December 31, 2005 ........... 5 10.57 10.35 1.40% 2.65% 55 0.19% -1.05% 4.14% December 31, 2004 ........... 6 10.55 10.46 1.40% 2.65% 63 5.08% 4.18% 2.40% Inception May 1, 2004 ....... -- 10.04 10.04 N/A N/A -- N/A N/A N/A International Fund December 31, 2007 ........... 121 18.03 17.80 1.40% 2.65% 2,123 16.40% 14.99% 0.27% December 31, 2006 ........... 78 15.49 15.48 1.40% 2.65% 1,208 23.33% 21.70% 1.19% December 31, 2005 ........... 35 12.56 12.72 1.40% 2.65% 439 11.64% 10.32% 1.24% December 31, 2004 ........... 41 11.25 11.53 1.40% 2.65% 461 13.41% 11.94% 0.39% December 31, 2003 ........... 22 9.92 9.68 1.40% 2.05% 214 22.78% 22.05% 0.19% Large Company Value Fund December 31, 2007 ........... -- 9.37 9.29 1.40% 2.65% -- -6.67% -7.47% 0.00% Inception May 1, 2007 ....... -- 10.04 10.04 N/A N/A -- N/A N/A N/A Ultra Fund December 31, 2007 ........... -- 11.53 11.43 1.40% 2.65% -- 15.07% 14.07% 0.00% Inception May 1, 2007 ....... -- 10.02 10.02 N/A N/A -- N/A N/A N/A
72 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.: (continued) Value Fund December 31, 2007 ........... 46 $ 18.13 $ 12.70 1.40% 2.65% $ 803 -6.45% -7.64% 1.71% December 31, 2006 ........... 49 19.38 13.75 1.40% 2.65% 912 16.96% 15.55% 0.88% December 31, 2005 ........... 35 16.57 11.90 1.40% 2.65% 551 3.63% 2.32% 0.75% December 31, 2004 ........... 42 15.99 11.63 1.40% 2.65% 637 12.68% 11.29% 0.78% December 31, 2003 ........... 35 14.19 13.84 1.40% 2.05% 498 27.17% 26.41% 0.66% Vista Fund December 31, 2007 ........... 21 12.36 12.26 1.40% 2.65% 258 23.97% 22.97% 0.00% Inception May 1, 2007 ....... -- 9.97 9.97 N/A N/A -- N/A N/A N/A DIREXION INSURANCE TRUST: Dynamic VP HY Bond Fund December 31, 2007 ........... -- 10.58 10.23 1.40% 2.65% 3 -3.20% -4.39% 2.63% December 31, 2006 ........... 73 10.93 10.70 1.40% 2.65% 794 4.79% 3.48% 9.48% December 31, 2005 ........... 5 10.43 10.34 1.40% 2.65% 49 3.68% 2.89% 0.00% Inception May 1, 2005 ....... -- 10.06 10.05 N/A N/A -- N/A N/A N/A THE DREYFUS INVESTMENT PORTFOLIOS Small Cap Stock Index Portfolio December 31, 2007 ........... 4 12.70 12.28 1.40% 2.65% 48 -2.08% -3.31% 0.19% December 31, 2006 ........... 4 12.97 12.70 1.40% 2.65% 46 12.88% 11.40% 0.14% December 31, 2005 ........... 2 11.49 11.40 1.40% 2.65% 27 13.43% 12.54% 0.00% Inception May 1, 2005 ....... -- 10.13 10.13 N/A N/A -- N/A N/A N/A THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC. December 31, 2007 ........... 14 11.23 11.90 1.40% 2.65% 156 6.24% 4.94% 0.52% December 31, 2006 ........... 26 10.57 11.34 1.40% 2.65% 280 7.75% 6.38% 0.11% December 31, 2005 ........... 25 9.81 10.66 1.40% 2.65% 247 2.19% 0.95% 0.00% December 31, 2004 ........... 37 9.60 10.56 1.40% 2.65% 367 4.69% 3.43% 0.69% December 31, 2003 ........... 10 9.17 8.94 1.40% 2.05% 87 24.25% 23.51% 0.07% DREYFUS STOCK INDEX FUND December 31, 2007 ........... 74 14.41 13.15 1.40% 2.65% 1,048 3.82% 2.49% 1.66% December 31, 2006 ........... 114 13.88 12.83 1.40% 2.65% 1,562 13.86% 12.45% 1.59% December 31, 2005 ........... 134 12.19 11.41 1.40% 2.65% 1,610 3.31% 1.97% 1.61% December 31, 2004 ........... 157 11.80 11.19 1.40% 2.65% 1,831 9.06% 7.80% 1.99% December 31, 2003 ........... 114 10.82 10.55 1.40% 2.05% 1,232 26.58% 25.82% 0.96% DREYFUS VARIABLE INVESTMENT FUND: International Value Portfolio December 31, 2007 ........... 43 18.22 16.15 1.40% 2.65% 757 2.71% 1.38% 1.71% December 31, 2006 ........... 62 17.74 15.93 1.40% 2.65% 1,081 20.84% 19.42% 1.29% December 31, 2005 ........... 54 14.68 13.34 1.40% 2.65% 786 10.38% 8.99% 0.00% December 31, 2004 ........... 53 13.30 12.24 1.40% 2.65% 698 18.33% 16.91% 1.35% December 31, 2003 ........... 26 11.24 10.96 1.40% 2.05% 295 34.46% 33.66% 0.53% FEDERATED INSURANCE SERIES: Capital Income Fund II December 31, 2007 ........... 13 10.35 13.05 1.40% 2.65% 140 2.68% 1.32% 3.30% December 31, 2006 ........... 10 10.08 12.88 1.40% 2.65% 107 14.03% 12.59% 5.94% December 31, 2005 ........... 12 8.84 11.44 1.40% 2.65% 117 4.74% 3.53% 7.98% December 31, 2004 ........... 24 8.44 11.05 1.40% 2.65% 207 8.48% 7.07% 4.01% December 31, 2003 ........... 13 7.78 7.59 1.40% 2.05% 103 18.99% 18.28% 4.09% High Income Bond Fund II December 31, 2007 ........... 30 13.27 11.81 1.40% 2.65% 388 2.00% 0.68% 7.02% December 31, 2006 ........... 125 13.01 11.73 1.40% 2.65% 1,609 9.24% 7.91% 8.68% December 31, 2005 ........... 65 11.91 10.87 1.40% 2.65% 762 1.28% 0.00% 7.64% December 31, 2004 ........... 140 11.76 10.87 1.40% 2.65% 1,640 8.89% 7.52% 3.98% December 31, 2003 ........... 140 10.80 10.53 1.40% 2.05% 1,505 20.52% 19.80% 6.50%
73 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ FEDERATED INSURANCE SERIES: (continued) International Equity Fund II December 31, 2007 ........... 18 $ 16.83 $ 15.09 1.40% 2.65% $ 305 8.02% 6.64% 0.18% December 31, 2006 ........... 21 15.58 14.15 1.40% 2.65% 323 17.23% 15.79% 0.17% December 31, 2005 ........... 23 13.29 12.22 1.40% 2.65% 301 7.52% 6.26% 0.00% December 31, 2004 ........... 36 12.36 11.50 1.40% 2.65% 446 12.47% 11.00% 0.00% December 31, 2003 ........... 15 10.99 10.71 1.40% 2.05% 165 30.02% 29.25% 0.00% Kaufmann Fund II December 31, 2007 ........... -- 12.51 12.33 1.40% 2.65% -- 18.92% 17.43% 0.00% December 31, 2006 ........... -- 10.52 10.50 1.40% 2.65% -- 5.84% 5.74% 0.00% Inception November 1, 2006 .. -- 9.94 9.93 N/A N/A -- N/A N/A N/A Market Opportunity Fund II December 31, 2007 ........... 1 9.85 9.71 1.40% 2.65% 9 -2.86% -4.05% 0.00% December 31, 2006 ........... -- 10.14 10.12 1.40% 2.65% -- 1.30% 1.10% 0.00% Inception November 1, 2006 .. -- 10.01 10.01 N/A N/A -- N/A N/A N/A JANUS ASPEN SERIES: Balanced Portfolio December 31, 2007 ........... 2 10.39 10.30 1.40% 2.65% 19 4.00% 3.10% 3.00% Inception May 1, 2007 ....... -- 9.99 9.99 N/A N/A -- N/A N/A N/A Forty Portfolio December 31, 2007 ........... 7 12.68 12.57 1.40% 2.65% 92 26.80% 25.70% 0.92% Inception May 1, 2007 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Global Life Sciences Portfolio December 31, 2007 ........... 3 10.87 10.78 1.40% 2.65% 28 8.59% 7.69% 0.00% Inception May 1, 2007 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A Growth and Income Portfolio December 31, 2007 ........... 14 17.14 13.75 1.40% 2.65% 244 7.26% 5.85% 1.22% December 31, 2006 ........... 26 15.98 12.99 1.40% 2.65% 397 6.53% 5.27% 1.55% December 31, 2005 ........... 40 15.00 12.34 1.40% 2.65% 586 10.78% 9.40% 0.75% December 31, 2004 ........... 21 13.54 11.28 1.40% 2.65% 276 10.35% 8.99% 0.83% December 31, 2003 ........... 9 12.27 12.21 1.40% 2.05% 106 17.26% 16.83% 0.78% Inception March 21, 2003 .... -- 10.23 10.45 N/A N/A -- N/A N/A N/A International Growth Portfolio December 31, 2007 ........... 40 40.53 27.66 1.40% 2.65% 1,505 26.54% 24.93% 0.65% December 31, 2006 ........... 33 32.03 22.14 1.40% 2.65% 985 45.00% 43.21% 1.50% December 31, 2005 ........... 13 22.09 15.46 1.40% 2.65% 253 30.48% 28.83% 1.21% December 31, 2004 ........... 5 16.93 12.00 1.40% 2.65% 62 17.24% 15.83% 0.69% December 31, 2003 ........... -- 14.44 14.37 1.40% 2.05% 1 35.86% 35.31% 0.37% Inception March 21, 2003 .... -- 10.14 10.62 N/A N/A -- N/A N/A N/A Large Cap Growth Portfolio December 31, 2007 ........... 30 19.47 12.85 1.40% 2.65% 506 13.46% 12.03% 0.75% December 31, 2006 ........... 23 17.16 11.47 1.40% 2.65% 331 9.86% 8.51% 0.44% December 31, 2005 ........... 37 15.62 10.57 1.40% 2.65% 529 2.83% 1.54% 0.36% December 31, 2004 ........... 26 15.19 10.41 1.40% 2.65% 379 3.05% 1.76% 0.12% December 31, 2003 ........... 36 14.74 14.51 1.40% 2.05% 527 123.60% 121.97% 0.05% JANUS ASPEN SERIES: Mid Cap Growth Portfolio December 31, 2007 ........... 25 19.32 17.19 1.40% 2.65% 482 20.37% 18.80% 0.22% December 31, 2006 ........... 21 16.05 14.47 1.40% 2.65% 332 12.00% 10.71% 0.00% December 31, 2005 ........... 53 14.33 13.07 1.40% 2.65% 746 10.74% 9.37% 0.00% December 31, 2004 ........... 42 12.94 11.95 1.40% 2.65% 545 19.04% 17.50% 0.00% December 31, 2003 ........... 29 10.87 10.60 1.40% 2.05% 316 33.23% 32.43% 0.00% Mid Cap Value Portfolio December 31, 2007 ........... -- 9.90 9.82 1.40% 2.65% 5 -1.10% -1.80% 13.06% Inception May 1, 2007 ....... -- 10.01 10.00 N/A N/A -- N/A N/A N/A
74 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ JANUS ASPEN SERIES: (continued) Small Company Value Portfolio - Service December 31, 2007 ........... -- $ 8.90 $ 8.83 1.40% 2.65% $ 1 -11.18% -11.88% 0.00% Inception May 1, 2007 ....... -- 10.02 10.02 N/A N/A -- N/A N/A N/A Worldwide Growth Portfolio December 31, 2007 ........... 17 14.91 13.40 1.40% 2.65% 238 8.04% 6.77% 0.65% December 31, 2006 ........... 14 13.80 12.55 1.40% 2.65% 186 16.55% 15.03% 1.56% December 31, 2005 ........... 16 11.84 10.91 1.40% 2.65% 185 4.41% 3.12% 1.32% December 31, 2004 ........... 23 11.34 10.58 1.40% 2.65% 256 3.09% 2.03% 0.96% December 31, 2003 ........... 40 11.00 10.75 1.40% 2.05% 439 58.02% 55.81% 0.10% LAZARD RETIREMENT SERIES, INC.: Emerging Markets Portfolio December 31, 2007 ........... 64 29.59 28.26 1.40% 2.65% 1,850 31.45% 29.81% 1.75% December 31, 2006 ........... 29 22.51 21.77 1.40% 2.65% 652 28.12% 26.57% 0.78% December 31, 2005 ........... 71 17.57 17.20 1.40% 2.65% 1,236 38.89% 37.05% 0.24% December 31, 2004 ........... 3 12.65 12.55 1.40% 2.65% 42 28.82% 27.93% 0.03% Inception May 1, 2004 ....... -- 9.82 9.81 N/A N/A -- N/A N/A N/A International Equity Portfolio December 31, 2007 ........... 8 16.26 15.53 1.40% 2.65% 133 9.20% 7.85% 1.44% December 31, 2006 ........... 12 14.89 14.40 1.40% 2.65% 174 20.86% 19.30% 2.93% December 31, 2005 ........... 4 12.32 12.07 1.40% 2.65% 45 9.12% 7.77% 0.94% December 31, 2004 ........... 2 11.29 11.20 1.40% 2.65% 20 13.70% 12.79% 0.00% Inception May 1, 2004 ....... -- 9.93 9.93 N/A N/A -- N/A N/A N/A Small Cap Portfolio December 31, 2007 ........... 17 18.01 11.82 1.40% 2.65% 299 -8.53% -9.70% 0.00% December 31, 2006 ........... 28 19.69 13.09 1.40% 2.65% 519 14.48% 13.04% 0.00% December 31, 2005 ........... 43 17.20 11.58 1.40% 2.65% 710 2.56% 1.31% 0.00% December 31, 2004 ........... 59 16.77 11.43 1.40% 2.65% 964 13.23% 11.84% 0.00% December 31, 2003 ........... 62 14.81 14.44 1.40% 2.05% 919 35.32% 34.51% 0.00% US Strategic Equity Portfolio December 31, 2007 ........... 22 13.48 12.51 1.40% 2.65% 286 -2.32% -3.55% 1.32% December 31, 2006 ........... 24 13.80 12.97 1.40% 2.65% 325 15.87% 14.37% 0.48% December 31, 2005 ........... 10 11.91 11.34 1.40% 2.65% 124 1.88% 0.71% 0.82% December 31, 2004 ........... 2 11.69 11.26 1.40% 2.65% 18 10.28% 8.90% 0.41% December 31, 2003 ........... 3 10.60 10.34 1.40% 2.05% 35 22.29% 21.56% 0.25% LEGG MASON PARTNERS VARIABLE EQUITY TRUST: Aggressive Growth Portfolio December 31, 2007 ........... 1 9.56 9.48 1.40% 2.65% 11 -3.43% -4.24% 0.00% Inception April 30, 2007 .... -- 9.90 9.90 N/A N/A -- N/A N/A N/A Capital and Income Portfolio December 31, 2007 ........... 6 10.01 9.93 1.40% 2.65% 56 0.60% -0.20% 1.39% Inception April 30, 2007 .... -- 9.95 9.95 N/A N/A -- N/A N/A N/A Fundamental Value Portfolio December 31, 2007 ........... 29 9.50 9.42 1.40% 2.65% 280 -4.04% -4.85% 1.52% Inception April 30, 2007 .... -- 9.90 9.90 N/A N/A -- N/A N/A N/A Large Cap Growth Portfolio December 31, 2007 ........... 5 9.92 9.84 1.40% 2.65% 46 0.20% -0.61% 0.03% Inception April 30, 2007 .... -- 9.90 9.89 N/A N/A -- N/A N/A N/A LEGG MASON PARTNERS VARIABLE INCOME TRUST: Global High Yield Bond Portfolio December 31, 2007 ........... -- 11.34 10.97 1.40% 2.65% 2 -1.48% -2.66% 7.82% December 31, 2006 ........... -- 11.51 11.27 1.40% 2.65% -- 9.10% 7.74% 0.00% December 31, 2005 ........... -- 10.55 10.46 1.40% 2.65% -- 5.39% 4.50% 0.00% Inception May 1, 2005 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A
75 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ LEGG MASON PARTNERS VARIABLE INCOME TRUST: (continued) Government Portfolio December 31, 2007 ........... 5 $ 10.39 $ 10.05 1.40% 2.65% $ 54 1.07% -0.20% 5.67% December 31, 2006 ........... -- 10.28 10.07 1.40% 2.65% -- 2.70% 1.41% 0.00% December 31, 2005 ........... -- 10.01 9.93 1.40% 2.65% -- 0.10% -0.70% 0.00% Inception May 1, 2005 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Strategic Bond Portfolio December 31, 2007 ........... 14 11.17 10.67 1.40% 2.65% 158 0.54% -0.65% 5.17% December 31, 2006 ........... 11 11.11 10.74 1.40% 2.65% 116 3.64% 2.29% 4.85% December 31, 2005 ........... 5 10.72 10.50 1.40% 2.65% 51 1.04% -0.19% 2.40% December 31, 2004 ........... 10 10.61 10.52 1.40% 2.65% 105 6.10% 5.20% 16.37% Inception May 1, 2004 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A LORD ABBETT SERIES FUND, INC.: America's Value Portfolio December 31, 2007 ........... 36 16.50 13.35 1.40% 2.65% 593 1.73% 0.45% 2.72% December 31, 2006 ........... 41 16.22 13.29 1.40% 2.65% 662 12.95% 11.49% 2.42% December 31, 2005 ........... 41 14.36 11.92 1.40% 2.65% 581 2.35% 1.10% 2.04% December 31, 2004 ........... 38 14.03 11.79 1.40% 2.65% 532 14.81% 13.47% 2.86% December 31, 2003 ........... 6 12.22 12.17 1.40% 2.05% 76 22.16% 21.66% 0.48% Inception May 1, 2003 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Growth and Income Portfolio December 31, 2007 ........... 63 18.21 13.26 1.40% 2.65% 1,202 2.02% 0.68% 1.30% December 31, 2006 ........... 75 17.85 13.17 1.40% 2.65% 1,384 15.61% 14.22% 1.58% December 31, 2005 ........... 97 15.44 11.53 1.40% 2.65% 1,559 1.85% 0.61% 1.03% December 31, 2004 ........... 101 15.16 11.46 1.40% 2.65% 1,495 11.06% 9.67% 1.03% December 31, 2003 ........... 60 13.65 13.31 1.40% 2.05% 813 29.19% 28.42% 0.44% NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST: Lehman Brothers High Income Bond Portfolio December 31, 2007 ........... 2 10.90 10.54 1.40% 2.65% 20 -0.37% -1.59% 0.98% December 31, 2006 ........... 1 10.94 10.71 1.40% 2.65% 12 6.01% 4.59% 18.32% December 31, 2005 ........... -- 10.32 10.24 1.40% 2.65% 4 3.20% 2.40% 6.75% Inception May 1, 2005 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Lehman Brothers Short Duration Bond Portfolio December 31, 2007 ........... 51 12.80 10.06 1.40% 2.65% 621 3.31% 2.03% 3.26% December 31, 2006 ........... 38 12.39 9.86 1.40% 2.65% 430 2.74% 1.54% 2.95% December 31, 2005 ........... 48 12.06 9.71 1.40% 2.65% 533 0.08% -1.22% 2.69% December 31, 2004 ........... 44 12.05 9.83 1.40% 2.65% 498 -0.66% -1.90% 3.92% December 31, 2003 ........... 28 12.13 11.83 1.40% 2.05% 341 1.00% 0.40% 1.34% Fasciano Portfolio December 31, 2007 ........... 3 14.44 11.15 1.40% 2.65% 37 -0.89% -2.11% 0.00% December 31, 2006 ........... 3 14.57 11.39 1.40% 2.65% 40 3.77% 2.52% 0.00% December 31, 2005 ........... 3 14.04 11.11 1.40% 2.65% 43 1.52% 0.18% 0.00% December 31, 2004 ........... 8 13.83 11.09 1.40% 2.65% 103 10.29% 8.94% 0.00% December 31, 2003 ........... 1 12.54 12.49 1.40% 2.05% 19 24.90% 24.41% 0.00% Inception May 1, 2003 ....... -- 10.04 10.04 N/A N/A -- N/A N/A N/A Mid-Cap Growth Portfolio December 31, 2007 ........... 18 13.32 16.91 1.40% 2.65% 232 20.87% 19.34% 0.00% December 31, 2006 ........... 13 11.02 14.17 1.40% 2.65% 145 13.03% 11.66% 0.00% December 31, 2005 ........... 31 9.75 12.69 1.40% 2.65% 304 12.20% 10.83% 0.00% December 31, 2004 ........... 46 8.69 11.45 1.40% 2.65% 412 14.64% 13.25% 0.00% December 31, 2003 ........... 25 7.58 7.46 1.40% 2.05% 186 26.29% 25.54% 0.00% Partners Portfolio December 31, 2007 ........... 67 16.45 15.97 1.40% 2.65% 1,105 7.80% 6.47% 0.55% December 31, 2006 ........... 24 15.26 15.00 1.40% 2.65% 365 10.66% 9.33% 1.11% December 31, 2005 ........... 28 13.79 13.72 1.40% 2.65% 389 16.47% 14.91% 1.21% December 31, 2004 ........... 28 11.84 11.94 1.40% 2.65% 324 17.34% 15.92% 0.02% December 31, 2003 ........... 10 10.09 9.84 1.40% 2.05% 100 33.21% 32.42% 0.00%
76 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST: (continued) Regency Portfolio December 31, 2007 ........... 7 $ 19.39 $ 14.50 1.40% 2.65% $ 125 1.84% 0.62% 0.42% December 31, 2006 ........... 8 19.04 14.41 1.40% 2.65% 151 9.61% 8.26% 0.43% December 31, 2005 ........... 7 17.37 13.31 1.40% 2.65% 122 10.50% 9.01% 0.09% December 31, 2004 ........... 19 15.72 12.21 1.40% 2.65% 280 20.64% 19.24% 0.02% December 31, 2003 ........... -- 13.03 12.98 1.40% 2.05% 5 30.19% 29.68% 0.00% Inception May 1, 2003 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A Socially Responsive Portfolio December 31, 2007 ........... 13 14.16 13.53 1.40% 2.65% 187 6.07% 4.80% 0.12% December 31, 2006 ........... 3 13.35 12.91 1.40% 2.65% 36 12.18% 10.72% 0.20% December 31, 2005 ........... 5 11.90 11.66 1.40% 2.65% 57 5.40% 4.11% 0.00% December 31, 2004 ........... -- 11.29 11.20 1.40% 2.65% -- 12.79% 11.89% 0.00% Inception May 1, 2004 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A NORTHERN LIGHTS VARIABLE TRUST: JNF Balanced Portfolio December 31, 2007 ........... 73 9.79 9.71 1.40% 2.65% 712 -2.39% -3.19% 1.13% Inception May 1, 2007 ....... -- 10.03 10.03 N/A N/A -- N/A N/A N/A JNF Equity Portfolio December 31, 2007 ........... 236 8.96 8.89 1.40% 2.65% 2,113 -10.49% -11.19% 0.00% Inception May 1, 2007 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A PIMCO VARIABLE INSURANCE TRUST: All Asset Portfolio December 31, 2007 ........... -- 11.09 10.86 1.40% 2.65% -- 6.84% 5.44% 2.40% December 31, 2006 ........... 2 10.38 10.30 1.40% 2.65% 21 4.11% 3.31% 4.90% Inception May 1, 2006 ....... -- 9.97 9.97 N/A N/A -- N/A N/A N/A CommodityRealReturn Strategy Portfolio December 31, 2007 ........... -- 11.56 11.32 1.40% 2.65% -- 21.43% 19.92% 0.21% December 31, 2006 ........... -- 9.52 9.44 1.40% 2.65% -- -5.74% -6.53% 0.00% Inception May 1, 2006 ....... -- 10.10 10.10 N/A N/A -- N/A N/A N/A Emerging Markets Bond Portfolio December 31, 2007 ........... 1 11.20 10.96 1.40% 2.65% 9 4.38% 3.01% 5.81% December 31, 2006 ........... 77 10.73 10.64 1.40% 2.65% 827 7.52% 6.61% 3.71% Inception May 1, 2006 ....... -- 9.98 9.98 N/A N/A -- N/A N/A N/A Foreign Bond US Dollar-Hedged Portfolio December 31, 2007 ........... -- 10.46 10.24 1.40% 2.65% 2 2.25% 0.89% 3.36% December 31, 2006 ........... -- 10.23 10.15 1.40% 2.65% 2 2.20% 1.40% 2.47% Inception May 1, 2006 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A Global Bond Unhedged Portfolio December 31, 2007 ........... 7 10.99 10.77 1.40% 2.65% 75 8.17% 6.85% 3.38% December 31, 2006 ........... 8 10.16 10.08 1.40% 2.65% 86 1.60% 0.80% 2.29% Inception May 1, 2006 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A High Yield Portfolio December 31, 2007 ........... 13 10.75 10.52 1.40% 2.65% 137 2.09% 0.77% 6.85% December 31, 2006 ........... 13 10.53 10.44 1.40% 2.65% 140 5.41% 4.50% 4.54% Inception May 1, 2006 ....... -- 9.99 9.99 N/A N/A -- N/A N/A N/A Long Term US Government Portfolio December 31, 2007 ........... 23 10.73 10.58 1.40% 2.65% 242 8.17% 6.87% 4.45% December 31, 2006 ........... -- 9.92 9.90 1.40% 2.65% -- -1.29% -1.49% 0.00% Inception November 1, 2006 .. -- 10.05 10.05 N/A N/A -- N/A N/A N/A Low Duration Portfolio December 31, 2007 ........... -- 10.62 10.46 1.40% 2.65% -- 5.88% 4.50% 4.37% December 31, 2006 ........... -- 10.03 10.01 1.40% 2.65% -- 0.20% 0.00% 0.00% Inception November 1, 2006 .. -- 10.01 10.01 N/A N/A -- N/A N/A N/A
77 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ PIMCO VARIABLE INSURANCE TRUST: (continued) Money Market Portfolio December 31, 2007 ........... 454 $ 10.78 $ 10.30 1.40% 2.65% $ 4,876 3.36% 2.08% 4.72% December 31, 2006 ........... 36 10.43 10.09 1.40% 2.65% 376 3.17% 1.92% 4.54% December 31, 2005 ........... 23 10.11 9.90 1.40% 2.65% 230 1.30% 0.10% 2.81% December 31, 2004 ........... 11 9.98 9.89 1.40% 2.65% 113 -0.20% -1.10% 0.93% Inception May 1, 2004 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A RealEstateRealReturn Strategy Portfolio December 31, 2007 ........... 6 10.21 9.99 1.40% 2.65% 59 -13.84% -14.98% 22.46% December 31, 2006 ........... 2 11.29 11.75 1.40% 2.65% 26 20.67% 19.65% 4.25% Inception May 1, 2006 ....... -- 9.82 9.82 N/A N/A -- N/A N/A N/A Real Return Portfolio December 31, 2007 ........... 70 12.32 11.19 1.40% 2.65% 838 9.12% 7.70% 4.68% December 31, 2006 ........... 74 11.85 10.39 1.40% 2.65% 823 -0.70% -1.89% 7.75% December 31, 2005 ........... 64 11.37 10.59 1.40% 2.65% 720 0.71% -0.66% 2.84% December 31, 2004 ........... 51 11.29 10.66 1.40% 2.65% 570 7.32% 6.07% 1.11% December 31, 2003 ........... 7 10.52 10.47 1.40% 2.05% 74 4.79% 4.43% 0.30% Inception May 1, 2003 ....... -- 10.04 10.03 N/A N/A -- N/A N/A N/A Short-Term Portfolio December 31, 2007 ........... 81 10.72 10.24 1.40% 2.65% 858 2.98% 1.69% 4.71% December 31, 2006 ........... 39 10.41 10.07 1.40% 2.65% 407 2.87% 1.61% 4.36% December 31, 2005 ........... 25 10.12 9.91 1.40% 2.65% 248 1.10% -0.20% 3.06% December 31, 2004 ........... 2 10.01 9.93 1.40% 2.65% 24 0.10% -0.70% 1.02% Inception May 1, 2004 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A StockPLUS(R) Total Return Portfolio December 31, 2007 ........... -- 11.81 11.57 1.40% 2.65% -- 8.05% 6.73% 0.00% December 31, 2006 ........... -- 10.93 10.84 1.40% 2.65% -- 10.40% 9.49% 0.00% Inception May 1, 2006 ....... -- 9.90 9.90 N/A N/A -- N/A N/A N/A Total Return Portfolio December 31, 2007 ........... 147 11.60 11.00 1.40% 2.65% 1,686 7.21% 5.87% 4.81% December 31, 2006 ........... 145 10.82 10.39 1.40% 2.65% 1,559 2.37% 1.07% 4.41% December 31, 2005 ........... 113 10.57 10.28 1.40% 2.65% 1,188 1.05% -0.19% 3.57% December 31, 2004 ........... 53 10.46 10.30 1.40% 2.65% 557 3.46% 2.18% 1.95% December 31, 2003 ........... 12 10.11 10.07 1.40% 2.05% 119 1.02% 0.71% 0.63% Inception May 1, 2003 ....... -- 10.01 10.00 N/A N/A -- N/A N/A N/A PIONEER VARIABLE CONTRACTS TRUST: Cullen Value Portfolio December 31, 2007 ........... -- 10.84 10.68 1.40% 2.65% -- 4.94% 3.59% 0.00% December 31, 2006 ........... -- 10.33 10.31 1.40% 2.65% -- 3.92% 3.83% $ 0.00 Inception November 1, 2006 .. -- 9.94 9.93 N/A N/A -- N/A N/A N/A Emerging Markets Portfolio December 31, 2007 ........... 27 15.65 15.43 1.40% 2.65% 421 40.48% 38.76% 0.59% December 31, 2006 ........... 2 11.14 11.12 1.40% 2.65% 27 10.96% 10.76% $ 0.00 Inception November 1, 2006 .. -- 10.04 10.04 N/A N/A -- N/A N/A N/A Equity Income Portfolio December 31, 2007 ........... 37 12.99 14.08 1.40% 2.65% 475 -0.84% -2.09% 2.13% December 31, 2006 ........... 77 13.10 14.38 1.40% 2.65% 1,005 20.40% 18.94% 2.26% December 31, 2005 ........... 54 10.88 12.09 1.40% 2.65% 590 4.02% 2.72% 2.17% December 31, 2004 ........... 35 10.46 11.77 1.40% 2.65% 371 14.44% 13.06% 2.16% December 31, 2003 ........... 18 9.14 8.97 1.40% 2.05% 168 20.57% 19.85% 1.15% Fund Portfolio December 31, 2007 ........... 43 11.51 13.30 1.40% 2.65% 494 3.32% 2.07% 1.06% December 31, 2006 ........... 46 11.14 13.03 1.40% 2.65% 513 14.73% 13.30% 1.08% December 31, 2005 ........... 65 9.71 11.50 1.40% 2.65% 625 4.52% 3.14% 1.19% December 31, 2004 ........... 67 9.29 11.15 1.40% 2.65% 626 9.29% 8.04% 1.21% December 31, 2003 ........... 8 8.50 8.34 1.40% 2.05% 64 21.72% 21.00% 0.64%
78 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ PIONEER VARIABLE CONTRACTS TRUST: (continued) Global High Yield Portfolio December 31, 2007 ........... -- $ 10.32 $ 10.17 1.40% 2.65% $ 4 0.78% -0.49% 7.20% December 31, 2006 ........... -- 10.24 10.22 1.40% 2.65% -- 2.30% 2.10% 0.00% Inception November 1, 2006 .. -- 10.01 10.01 N/A N/A -- N/A N/A N/A High Yield Portfolio December 31, 2007 ........... 97 11.61 11.23 1.40% 2.65% 1,110 4.13% 2.84% 5.11% December 31, 2006 ........... 58 11.15 10.92 1.40% 2.65% 648 6.80% 5.41% 5.42% December 31, 2005 ........... 91 10.44 10.36 1.40% 2.65% 955 4.40% 3.60% 3.59% Inception May 1, 2005 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A International Value Portfolio December 31, 2007 ........... 37 11.76 11.59 1.40% 2.65% 438 11.68% 10.28% 0.22% December 31, 2006 ........... 27 10.53 10.51 1.40% 2.65% 289 5.19% 5.00% 0.00% Inception November 1, 2006 .. -- 10.01 10.01 N/A N/A -- N/A N/A N/A Mid Cap Value Portfolio December 31, 2007 ........... 5 12.54 12.13 1.40% 2.65% 64 3.89% 2.62% 0.77% December 31, 2006 ........... 8 12.07 11.82 1.40% 2.65% 96 10.73% 9.34% 0.00% December 31, 2005 ........... 7 10.90 10.81 1.40% 2.65% 80 8.35% 7.46% 0.17% Inception May 1, 2005 ....... -- 10.06 10.06 N/A N/A -- N/A N/A N/A Small Cap Value Portfolio December 31, 2007 ........... -- 9.42 9.28 1.40% 2.65% 1 -8.45% -9.64% 1.41% December 31, 2006 ........... -- 10.29 10.27 1.40% 2.65% 1 4.57% 4.37% 0.00% Inception November 1, 2006 .. -- 9.84 9.84 N/A N/A -- N/A N/A N/A Strategic Income Portfolio December 31, 2007 ........... 3 10.57 10.42 1.40% 2.65% 27 4.65% 3.37% 5.07% December 31, 2006 ........... -- 10.10 10.08 1.40% 2.65% -- 0.80% 0.60% 0.00% Inception November 1, 2006 .. -- 10.02 10.02 N/A N/A -- N/A N/A N/A ROYCE CAPITAL FUND: Micro-Cap Portfolio December 31, 2007 ........... 34 22.32 14.62 1.40% 2.65% 684 2.53% 1.25% 1.20% December 31, 2006 ........... 31 21.77 14.44 1.40% 2.65% 611 19.42% 17.88% 0.18% December 31, 2005 ........... 39 18.23 12.25 1.40% 2.65% 653 10.02% 8.70% 0.64% December 31, 2004 ........... 37 16.57 11.27 1.40% 2.65% 550 12.26% 10.82% 0.00% December 31, 2003 ........... 10 14.76 14.70 1.40% 2.05% 146 46.81% 46.26% 0.00% Inception May 1, 2003 ....... -- 10.05 10.05 N/A N/A -- N/A N/A N/A Small-Cap Portfolio December 31, 2007 ........... 52 20.21 14.03 1.40% 2.65% 983 -3.49% -4.69% 0.05% December 31, 2006 ........... 47 20.94 14.72 1.40% 2.65% 902 13.99% 12.54% 0.05% December 31, 2005 ........... 78 18.37 13.08 1.40% 2.65% 1,356 7.05% 5.74% 0.00% December 31, 2004 ........... 71 17.16 12.37 1.40% 2.65% 1,178 23.19% 21.63% 0.00% December 31, 2003 ........... 14 13.93 13.87 1.40% 2.05% 197 39.54% 39.01% 0.00% Inception May 1, 2003 ....... -- 9.98 9.98 N/A N/A -- N/A N/A N/A RYDEX VARIABLE TRUST: CLS AdvisorOne Amerigo Fund December 31, 2007 ........... 40 14.00 13.54 1.40% 2.65% 551 12.18% 10.80% 0.38% December 31, 2006 ........... 41 12.48 12.22 1.40% 2.65% 509 10.74% 9.40% 0.10% December 31, 2005 ........... 3 11.27 11.17 1.40% 2.65% 31 12.25% 11.25% 0.45% Inception May 1, 2005 ....... -- 10.04 10.04 N/A N/A -- N/A N/A N/A CLS AdvisorOne Clermont Fund December 31, 2007 ........... 1 11.78 11.40 1.40% 2.65% 11 4.71% 3.45% 3.09% December 31, 2006 ........... -- 11.25 11.02 1.40% 2.65% -- 6.84% 5.56% 0.00% December 31, 2005 ........... -- 10.53 10.44 1.40% 2.65% -- 4.99% 4.09% 0.00% Inception May 1, 2005 ....... -- 10.03 10.03 N/A N/A -- N/A N/A N/A Absolute Return Strategies Fund December 31, 2007 ........... 2 10.55 10.30 1.40% 2.65% 17 2.43% 1.08% 4.47% December 31, 2006 ........... 1 10.30 10.19 1.40% 2.65% 8 3.00% 1.90% 1.29% Inception February 3, 2006 .. -- 10.00 10.00 N/A N/A -- N/A N/A N/A
79 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ RYDEX VARIABLE TRUST: (continued) Banking Fund December 31, 2007 ........... -- $ 8.76 $ 8.36 1.40% 2.65% $ -- -28.08% -29.03% 9.79% December 31, 2006 ........... 5 12.18 11.78 1.40% 2.65% 58 9.73% 8.37% 0.00% December 31, 2005 ........... -- 11.10 10.87 1.40% 2.65% 4 -4.15% -5.31% 1.73% December 31, 2004 ........... -- 11.58 11.48 1.40% 2.65% 1 14.65% 13.78% 1.65% Inception May 1, 2004 ....... -- 10.10 10.09 N/A N/A -- N/A N/A N/A Basic Materials Fund December 31, 2007 ........... 47 20.21 19.31 1.40% 2.65% 944 32.09% 30.47% 0.13% December 31, 2006 ........... 20 15.30 14.80 1.40% 2.65% 305 20.57% 19.07% 0.69% December 31, 2005 ........... 81 12.69 12.43 1.40% 2.65% 1,019 2.59% 1.39% 0.28% December 31, 2004 ........... 4 12.37 12.26 1.40% 2.65% 55 24.07% 22.97% 0.17% Inception May 1, 2004 ....... -- 9.97 9.97 N/A N/A -- N/A N/A N/A Biotechnology Fund December 31, 2007 ........... 2 9.91 9.46 1.40% 2.65% 15 3.01% 1.61% 0.00% December 31, 2006 ........... 1 9.62 9.31 1.40% 2.65% 9 -4.66% -5.86% 0.00% December 31, 2005 ........... 72 10.09 9.89 1.40% 2.65% 716 9.08% 7.85% 0.00% December 31, 2004 ........... 2 9.25 9.17 1.40% 2.65% 19 -5.61% -6.33% 0.00% Inception May 1, 2004 ....... -- 9.80 9.79 N/A N/A -- N/A N/A N/A Commodities Strategy Fund December 31, 2007 ........... -- 10.08 9.81 1.40% 2.65% 1 29.23% 27.57% 0.00% December 31, 2006 ........... -- 7.80 7.69 1.40% 2.65% 1 -19.09% -19.98% 0.00% December 31, 2005 ........... 2 9.64 9.61 1.40% 2.65% 20 -4.08% -4.38% 1.29% Inception October 21, 2005 .. -- 10.05 10.05 N/A N/A N/A N/A N/A N/A Consumer Products Fund December 31, 2007 ........... -- 12.96 12.38 1.40% 2.65% 5 9.55% 8.22% 0.48% December 31, 2006 ........... 1 11.83 11.44 1.40% 2.65% 14 15.75% 14.29% 0.64% December 31, 2005 ........... 7 10.22 10.01 1.40% 2.65% 74 -1.73% -3.00% 0.01% December 31, 2004 ........... -- 10.40 10.32 1.40% 2.65% 3 2.97% 2.28% 0.02% Inception May 1, 2004 ....... -- 10.10 10.09 N/A N/A -- N/A N/A N/A Dow 2X Strategy Fund December 31, 2007 ........... 416 14.37 13.77 1.40% 2.65% 5,959 6.60% 5.28% 2.48% December 31, 2006 ........... 27 13.48 13.08 1.40% 2.65% 353 28.75% 27.11% 0.49% December 31, 2005 ........... -- 10.47 10.29 1.40% 2.65% 1 -5.16% -6.28% 1.28% December 31, 2004 ........... 1 11.04 10.98 1.40% 2.65% 5 11.29% 10.69% 8.31% Inception July 15, 2004 ..... -- 9.92 9.92 N/A N/A -- N/A N/A N/A Electronics Fund December 31, 2007 ........... -- 9.05 8.65 1.40% 2.65% -- -3.93% -5.05% 0.00% December 31, 2006 ........... 15 9.42 9.11 1.40% 2.65% 136 1.07% -0.22% 0.00% December 31, 2005 ........... 41 9.32 9.13 1.40% 2.65% 379 2.42% 1.22% 0.00% December 31, 2004 ........... 2 9.10 9.02 1.40% 2.65% 18 -6.57% -7.39% 0.00% Inception May 1, 2004 ....... -- 9.74 9.74 N/A N/A -- N/A N/A N/A Energy Fund December 31, 2007 ........... 131 23.96 22.88 1.40% 2.65% 3,125 31.36% 29.71% 0.00% December 31, 2006 ........... 64 18.24 17.64 1.40% 2.65% 1,172 10.41% 9.02% 0.00% December 31, 2005 ........... 88 16.52 16.18 1.40% 2.65% 1,459 36.53% 34.95% 0.02% December 31, 2004 ........... 39 12.10 11.99 1.40% 2.65% 471 18.40% 17.32% 0.01% Inception May 1, 2004 ....... -- 10.22 10.22 N/A N/A -- N/A N/A N/A Energy Services Fund December 31, 2007 ........... 127 26.15 24.97 1.40% 2.65% 3,297 35.21% 33.46% 0.00% December 31, 2006 ........... 45 19.34 18.71 1.40% 2.65% 860 9.45% 8.09% 0.00% December 31, 2005 ........... 68 17.67 17.31 1.40% 2.65% 1,198 46.15% 44.49% 0.00% December 31, 2004 ........... 37 12.09 11.98 1.40% 2.65% 447 18.88% 17.80% 0.00% Inception May 1, 2004 ....... -- 10.17 10.17 N/A N/A -- N/A N/A N/A
80 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ RYDEX VARIABLE TRUST: (continued) Essential Portfolio Aggressive Fund December 31, 2007 ........... -- $ 10.81 $ 10.65 1.40% 2.65% $ -- 5.26% 3.90% 0.00% December 31, 2006 ........... -- 10.27 10.25 1.40% 2.65% -- 3.63% 3.43% 0.00% Inception November 1, 2006 .. -- 9.91 9.91 N/A N/A -- N/A N/A N/A Essential Portfolio Conservative Fund December 31, 2007 ........... -- 10.62 10.46 1.40% 2.65% -- 4.94% 3.56% 0.00% December 31, 2006 ........... -- 10.12 10.10 1.40% 2.65% -- 1.40% 1.20% 0.00% Inception November 1, 2006 .. -- 9.98 9.98 N/A N/A -- N/A N/A N/A Essential Portfolio Moderate Fund December 31, 2007 ........... -- 10.78 10.63 1.40% 2.65% -- 5.07% 3.81% 0.00% December 31, 2006 ........... -- 10.26 10.24 1.40% 2.65% -- 3.12% 2.91% 0.00% Inception November 1, 2006 .. -- 9.95 9.95 N/A N/A -- N/A N/A N/A Europe 1.25X Strategy Fund December 31, 2007 ........... 24 17.98 17.17 1.40% 2.65% 436 11.54% 10.06% 2.42% December 31, 2006 ........... 19 16.12 15.60 1.40% 2.65% 297 27.63% 26.21% 2.18% December 31, 2005 ........... 4 12.63 12.36 1.40% 2.65% 43 4.90% 3.52% 0.70% December 31, 2004 ........... -- 12.04 11.94 1.40% 2.65% 1 19.09% 18.10% 14.50% Inception May 1, 2004 ....... -- 10.11 10.11 N/A N/A -- N/A N/A N/A Financial Services Fund December 31, 2007 ........... 3 10.78 10.29 1.40% 2.65% 37 -19.91% -20.97% 2.62% December 31, 2006 ........... 16 13.46 13.02 1.40% 2.65% 208 15.14% 13.71% 2.29% December 31, 2005 ........... 17 11.69 11.45 1.40% 2.65% 201 1.92% 0.70% 0.30% December 31, 2004 ........... 2 11.47 11.37 1.40% 2.65% 26 14.13% 13.13% 0.97% Inception May 1, 2004 ....... -- 10.05 10.05 N/A N/A -- N/A N/A 0.00% Government Long Bond 1.2X Strategy Fund December 31, 2007 ........... 87 11.35 11.37 1.40% 2.65% 986 8.20% 6.86% 3.48% December 31, 2006 ........... 24 10.49 10.64 1.40% 2.65% 253 -4.46% -5.59% 3.70% December 31, 2005 ........... 6 10.98 11.27 1.40% 2.65% 61 6.19% 4.84% 3.38% December 31, 2004 ........... 7 10.34 10.75 1.40% 2.65% 72 6.93% 5.60% 3.27% December 31, 2003 ........... 1 9.67 9.63 1.40% 2.05% 9 -3.18% -3.62% 1.09% Inception May 1, 2003 ....... -- 9.99 9.99 N/A N/A -- N/A N/A N/A Health Care Fund December 31, 2007 ........... 8 11.89 11.36 1.40% 2.65% 98 4.48% 3.27% 0.00% December 31, 2006 ........... 38 11.38 11.00 1.40% 2.65% 424 3.74% 2.33% 0.00% December 31, 2005 ........... 17 10.97 10.75 1.40% 2.65% 185 9.05% 7.82% 0.00% December 31, 2004 ........... 1 10.06 9.97 1.40% 2.65% 9 -0.10% -0.89% 0.00% Inception May 1, 2004 ....... -- 10.07 10.06 N/A N/A -- N/A N/A N/A Hedged Equity Fund December 31, 2007 ........... -- 10.45 10.21 1.40% 2.65% 1 1.65% 0.49% 4.60% December 31, 2006 ........... -- 10.28 10.16 1.40% 2.65% 1 2.80% 1.60% 0.08% Inception February 3, 2006 .. -- 10.00 10.00 N/A N/A -- N/A N/A N/A Internet Fund December 31, 2007 ........... 2 12.81 12.24 1.40% 2.65% 23 8.84% 7.46% 0.00% December 31, 2006 ........... 2 11.77 11.39 1.40% 2.65% 22 8.18% 6.85% 0.00% December 31, 2005 ........... 37 10.88 10.66 1.40% 2.65% 399 -2.77% -3.96% 0.00% December 31, 2004 ........... 2 11.19 11.10 1.40% 2.65% 21 14.30% 13.38% 0.00% Inception May 1, 2004 ....... -- 9.79 9.79 N/A N/A -- N/A N/A N/A Inverse Dow 2X Strategy Fund December 31, 2007 ........... 90 6.04 5.79 1.40% 2.65% 545 -10.39% -11.33% 1.95% December 31, 2006 ........... 300 6.74 6.53 1.40% 2.65% 2,004 -22.79% -23.89% 4.46% December 31, 2005 ........... -- 8.73 8.58 1.40% 2.65% 1 0.23% -1.04% 0.13% December 31, 2004 ........... -- 8.71 8.67 1.40% 2.65% 1 -13.59% -13.99% 0.00% Inception July 15, 2004 ..... -- 10.08 10.08 N/A N/A -- N/A N/A N/A
81 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ RYDEX VARIABLE TRUST: (continued) Inverse Government Long Bond Strategy Fund December 31, 2007 ........... 1 $ 8.13 $ 7.67 1.40% 2.65% $ 5 -5.79% -7.03% 0.26% December 31, 2006 ........... 18 8.63 8.25 1.40% 2.65% 155 6.54% 5.23% 5.21% December 31, 2005 ........... 3 8.10 7.84 1.40% 2.65% 28 -6.47% -7.66% 0.00% December 31, 2004 ........... 8 8.66 8.49 1.40% 2.65% 65 -11.99% -13.01% 0.00% December 31, 2003 ........... 1 9.84 9.80 1.40% 2.05% 10 -1.64% -2.04% 0.00% Inception May 1, 2003 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Inverse Mid-Cap Strategy Fund December 31, 2007 ........... -- 7.26 6.95 1.40% 2.65% -- -3.33% -4.66% 0.00% December 31, 2006 ........... 7 7.51 7.29 1.40% 2.65% 52 -5.18% -6.30% 1.84% December 31, 2005 ........... -- 7.92 7.78 1.40% 2.65% -- -9.38% -10.57% 0.00% December 31, 2004 ........... -- 8.74 8.70 1.40% 2.65% -- -12.07% -12.47% 0.00% Inception July 15, 2004 ........ -- 9.94 9.94 N/A N/A -- N/A N/A N/A Inverse OTC Strategy Fund December 31, 2007 ........... -- 7.33 7.00 1.40% 2.65% 1 -12.53% -13.69% 0.08% December 31, 2006 ........... 2 8.38 8.11 1.40% 2.65% 16 -2.78% -3.91% 0.88% December 31, 2005 ........... 32 8.62 8.44 1.40% 2.65% 273 -0.12% -1.40% 0.00% December 31, 2004 ........... 1 8.63 8.56 1.40% 2.65% 12 -14.64% -15.33% 0.00% Inception May 1, 2004 ....... -- 10.11 10.11 N/A N/A -- N/A N/A N/A Inverse Russell 2000 Strategy Fund December 31, 2007 ........... 18 7.29 6.99 1.40% 2.65% 133 3.85% 2.64% 1.83% December 31, 2006 ........... 155 7.02 6.81 1.40% 2.65% 1,067 -13.23% -14.23% 5.75% December 31, 2005 ........... 48 8.09 7.94 1.40% 2.65% 386 -4.37% -5.59% 10.80% December 31, 2004 ........... -- 8.46 8.41 1.40% 2.65% -- -15.06% -15.56% 0.00% Inception July 15, 2004 ..... -- 9.96 9.96 N/A N/A -- N/A N/A N/A Inverse S&P 500 Strategy Fund December 31, 2007 ........... 76 6.30 7.19 1.40% 2.65% 477 -0.63% -1.78% 2.49% December 31, 2006 ........... 9 6.34 7.32 1.40% 2.65% 58 -8.78% -9.85% 6.23% December 31, 2005 ........... 9 6.95 8.12 1.40% 2.65% 62 -2.11% -3.45% 0.00% December 31, 2004 ........... 9 7.10 8.41 1.40% 2.65% 66 -11.47% -12.49% 0.00% December 31, 2003 ........... 9 8.02 7.99 1.40% 2.05% 71 -19.69% -20.05% 0.00% Inception May 1, 2003 ....... -- 9.99 9.99 N/A N/A -- N/A N/A N/A Japan 1.25X Strategy Fund December 31, 2007 ........... 6 11.11 10.61 1.40% 2.65% 68 -12.52% -13.60% 1.69% December 31, 2006 ........... 72 12.70 12.28 1.40% 2.65% 900 3.67% 2.42% 4.54% December 31, 2005 ........... 49 12.25 11.99 1.40% 2.65% 591 18.70% 17.20% 0.00% December 31, 2004 ........... 2 10.32 10.23 1.40% 2.65% 26 4.56% 3.65% 0.00% Inception May 1, 2004 ....... -- 9.87 9.87 N/A N/A -- N/A N/A N/A Large-Cap Growth Fund December 31, 2007 ........... 25 11.32 10.85 1.40% 2.65% 285 3.47% 2.17% 0.00% December 31, 2006 ........... 39 10.94 10.62 1.40% 2.65% 429 3.89% 2.71% 0.00% December 31, 2005 ........... 12 10.53 10.34 1.40% 2.65% 121 0.38% -0.86% 0.18% December 31, 2004 ........... -- 10.49 10.43 1.40% 2.65% 2 5.32% 4.72% 2.01% Inception July 15, 2004 ..... -- 9.96 9.96 N/A N/A -- N/A N/A N/A Large-Cap Value Fund December 31, 2007 ........... 35 12.42 11.90 1.40% 2.65% 427 -6.69% -7.89% 0.89% December 31, 2006 ........... 96 13.31 12.92 1.40% 2.65% 1,275 16.04% 14.64% 1.40% December 31, 2005 ........... 4 11.47 11.27 1.40% 2.65% 48 2.69% 1.44% 1.75% December 31, 2004 ........... -- 11.17 11.11 1.40% 2.65% -- 12.15% 11.55% 0.00% Inception July 15, 2004 ..... -- 9.96 9.96 N/A N/A -- N/A N/A N/A Leisure Fund December 31, 2007 ........... 24 12.63 12.06 1.40% 2.65% 297 -3.88% -5.11% 0.00% December 31, 2006 ........... 26 13.14 12.71 1.40% 2.65% 336 21.78% 20.25% 0.00% December 31, 2005 ........... 9 10.79 10.57 1.40% 2.65% 98 -6.26% -7.36% 0.00% December 31, 2004 ........... 1 11.51 11.41 1.40% 2.65% 5 14.87% 13.87% 0.00% Inception May 1, 2004 ....... -- 10.02 10.02 N/A N/A -- N/A N/A N/A
82 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ RYDEX VARIABLE TRUST: (continued) Mid Cap 1.5X Strategy Fund December 31, 2007 ........... 4 $ 22.35 $ 14.62 1.40% 2.65% $ 80 2.15% 0.83% 0.33% December 31, 2006 ........... 14 21.88 14.50 1.40% 2.65% 297 8.91% 7.57% 0.50% December 31, 2005 ........... 10 20.09 13.48 1.40% 2.65% 178 12.49% 11.13% 0.00% December 31, 2004 ........... 32 17.86 12.13 1.40% 2.65% 550 20.43% 18.92% 0.00% December 31, 2003 ........... 1 14.83 14.77 1.40% 2.05% 12 48.26% 47.66% 0.00% Inception May 1, 2003 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Mid-Cap Growth Fund December 31, 2007 ........... 6 13.22 12.67 1.40% 2.65% 79 6.96% 5.58% 0.00% December 31, 2006 ........... 7 12.36 12.00 1.40% 2.65% 81 1.64% 0.50% 0.00% December 31, 2005 ........... 15 12.16 11.94 1.40% 2.65% 182 9.95% 8.55% 0.00% December 31, 2004 ........... -- 11.06 11.00 1.40% 2.65% 1 9.94% 9.34% 0.00% Inception July 15, 2004 ..... -- 10.06 10.06 N/A N/A -- N/A N/A N/A Mid-Cap Value Fund December 31, 2007 ........... 5 13.10 12.55 1.40% 2.65% 60 -6.16% -7.31% 0.19% December 31, 2006 ........... 81 13.96 13.54 1.40% 2.65% 1,124 15.47% 13.97% 1.13% December 31, 2005 ........... 2 12.09 11.88 1.40% 2.65% 21 6.80% 5.51% 0.16% December 31, 2004 ........... -- 11.32 11.26 1.40% 2.65% 4 12.75% 12.15% 0.03% Inception July 15, 2004 ..... -- 10.04 10.04 N/A N/A -- N/A N/A N/A Multi Cap Core Equity Fund December 31, 2007 ........... 15 10.17 9.93 1.40% 2.65% 152 -6.61% -7.80% 0.56% December 31, 2006 ........... 17 10.89 10.77 1.40% 2.65% 190 9.23% 8.02% 0.09% Inception February 3, 2006 .. -- 9.97 9.97 N/A N/A -- N/A N/A N/A Nova Fund December 31, 2007 ........... 7 13.48 13.60 1.40% 2.65% 89 -0.30% -1.52% 0.86% December 31, 2006 ........... 23 13.52 13.81 1.40% 2.65% 305 17.57% 16.15% 1.59% December 31, 2005 ........... 20 11.50 11.89 1.40% 2.65% 227 2.59% 1.28% 0.46% December 31, 2004 ........... 16 11.21 11.74 1.40% 2.65% 178 13.00% 11.60% 0.04% December 31, 2003 ........... 24 9.92 9.71 1.40% 2.05% 236 37.26% 36.45% 0.00% OTC 2X Strategy Fund December 31, 2007 ........... 150 15.14 14.46 1.40% 2.65% 2,236 26.38% 24.87% 0.63% December 31, 2006 ........... 22 11.98 11.58 1.40% 2.65% 262 3.45% 2.12% 0.08% December 31, 2005 ........... 88 11.58 11.34 1.40% 2.65% 1,023 -4.38% -5.58% 0.00% December 31, 2004 ........... 35 12.11 12.01 1.40% 2.65% 418 23.95% 22.93% 0.47% Inception May 1, 2004 ....... -- 9.77 9.77 N/A N/A -- N/A N/A N/A OTC Fund December 31, 2007 ........... 76 17.01 12.65 1.40% 2.65% 1,244 16.19% 14.79% 0.17% December 31, 2006 ........... 3 14.64 11.02 1.40% 2.65% 41 4.27% 2.99% 0.00% December 31, 2005 ........... 12 14.04 10.70 1.40% 2.65% 158 -0.28% -1.56% 0.00% December 31, 2004 ........... 55 14.08 10.87 1.40% 2.65% 762 7.81% 6.46% 0.00% December 31, 2003 ........... 32 13.06 12.77 1.40% 2.05% 420 43.40% 42.55% 0.00% Precious Metals Fund December 31, 2007 ........... 55 19.28 18.41 1.40% 2.65% 1,045 17.92% 16.37% 0.00% December 31, 2006 ........... 44 16.35 15.82 1.40% 2.65% 715 19.69% 18.24% 0.00% December 31, 2005 ........... 14 13.66 13.38 1.40% 2.65% 188 19.20% 17.78% 0.00% December 31, 2004 ........... 2 11.46 11.36 1.40% 2.65% 24 14.60% 13.60% 0.00% Inception May 1, 2004 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Real Estate Fund December 31, 2007 ........... 11 14.53 13.87 1.40% 2.65% 156 -20.21% -21.28% 2.03% December 31, 2006 ........... 16 18.21 17.62 1.40% 2.65% 290 28.87% 27.31% 2.41% December 31, 2005 ........... 10 14.13 13.84 1.40% 2.65% 147 5.68% 4.37% 5.25% December 31, 2004 ........... 32 13.37 13.26 1.40% 2.65% 423 32.51% 31.42% 0.87% Inception May 1, 2004 ....... -- 10.09 10.09 N/A N/A -- N/A N/A N/A
83 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ RYDEX VARIABLE TRUST: (continued) Retailing Fund December 31, 2007 ........... -- $ 10.38 $ 9.91 1.40% 2.65% $ -- -13.79% -14.94% 0.00% December 31, 2006 ........... 4 12.04 11.65 1.40% 2.65% 51 8.57% 7.27% 0.00% December 31, 2005 ........... -- 11.09 10.86 1.40% 2.65% -- 4.03% 2.65% 0.00% December 31, 2004 ........... -- 10.66 10.58 1.40% 2.65% -- 6.71% 5.91% 0.00% Inception May 1, 2004 ....... -- 9.99 9.99 N/A N/A -- N/A N/A N/A Russell 2000 1.5X Strategy Fund December 31, 2007 ........... 8 21.93 13.63 1.40% 2.65% 186 -8.05% -9.19% 0.61% December 31, 2006 ........... 25 23.85 15.01 1.40% 2.65% 583 19.19% 17.73% 0.20% December 31, 2005 ........... 30 20.01 12.75 1.40% 2.65% 521 2.46% 1.19% 3.07% December 31, 2004 ........... 47 19.53 12.60 1.40% 2.65% 770 23.45% 21.86% 0.00% December 31, 2003 ........... 14 15.82 15.76 1.40% 2.05% 220 57.96% 57.39% 6.15% Inception May 1, 2003 ....... -- 10.01 10.01 N/A N/A -- N/A N/A N/A Russell 2000 2X Strategy Fund December 31, 2007 ........... 1 8.94 8.81 1.40% 2.65% 7 -13.79% -14.88% 0.00% December 31, 2006 ........... 30 10.37 10.35 1.40% 2.65% 310 7.80% 7.59% 0.00% Inception November 1, 2006 .. -- 9.62 9.62 N/A N/A -- N/A N/A N/A S&P 500 2X Strategy Fund December 31, 2007 ........... 137 14.26 13.62 1.40% 2.65% 1,945 -0.77% -2.01% 2.12% December 31, 2006 ........... 44 14.37 13.90 1.40% 2.65% 629 21.99% 20.45% 1.67% December 31, 2005 ........... 94 11.78 11.54 1.40% 2.65% 1,107 1.90% 0.70% 0.13% December 31, 2004 ........... -- 11.56 11.46 1.40% 2.65% 1 15.02% 14.03% 0.00% Inception May 1, 2004 ....... -- 10.05 10.05 N/A N/A -- N/A N/A N/A Sector Rotation Fund December 31, 2007 ........... 17 20.34 15.78 1.40% 2.65% 337 21.00% 19.55% 0.00% December 31, 2006 ........... 9 16.81 13.20 1.40% 2.65% 148 9.87% 8.46% 0.00% December 31, 2005 ........... 9 15.30 12.17 1.40% 2.65% 120 12.17% 10.74% 0.00% December 31, 2004 ........... 5 13.64 10.99 1.40% 2.65% 56 9.12% 7.85% 0.00% December 31, 2003 ........... -- 12.50 12.45 1.40% 2.05% 4 24.67% 24.23% 0.00% Inception May 1, 2003 ....... -- 10.02 10.02 N/A N/A -- N/A N/A N/A Small-Cap Growth Fund December 31, 2007 ........... 49 12.64 12.11 1.40% 2.65% 617 -1.48% -2.73% 0.00% December 31, 2006 ........... 63 12.83 12.45 1.40% 2.65% 808 6.21% 4.97% 0.00% December 31, 2005 ........... 8 12.08 11.86 1.40% 2.65% 99 4.77% 3.40% 0.00% December 31, 2004 ........... 5 11.53 11.47 1.40% 2.65% 52 14.61% 14.02% 0.00% Inception July 15, 2004 ..... -- 10.06 10.06 N/A N/A -- N/A N/A N/A Small-Cap Value Fund December 31, 2007 ........... 21 10.85 10.39 1.40% 2.65% 226 -21.43% -22.46% 0.22% December 31, 2006 ........... 28 13.81 13.40 1.40% 2.65% 387 17.53% 16.12% 0.99% December 31, 2005 ........... 9 11.75 11.54 1.40% 2.65% 108 2.17% 0.87% 0.00% December 31, 2004 ........... 34 11.50 11.44 1.40% 2.65% 389 14.54% 13.94% 0.10% Inception July 15, 2004 ..... -- 10.04 10.04 N/A N/A -- N/A N/A N/A Strengthening Dollar Strategy Fund December 31, 2007 ........... -- 8.01 7.80 1.40% 2.65% 2 -12.17% -13.24% 0.00% December 31, 2006 ........... -- 9.12 8.99 1.40% 2.65% -- -11.88% -12.89% 0.00% December 31, 2005 ........... -- 10.35 10.32 1.40% 2.65% -- 2.27% 1.98% 0.00% Inception October 21, 2005 .. -- 10.12 10.12 N/A N/A -- N/A N/A N/A Technology Fund December 31, 2007 ........... 60 12.09 11.55 1.40% 2.65% 722 8.82% 7.54% 0.00% December 31, 2006 ........... 1 11.11 10.74 1.40% 2.65% 16 4.42% 3.07% 0.00% December 31, 2005 ........... 33 10.64 10.42 1.40% 2.65% 350 1.72% 0.39% 0.00% December 31, 2004 ........... -- 10.46 10.38 1.40% 2.65% -- 6.30% 5.49% 0.00% Inception May 1, 2004 ....... -- 9.84 9.84 N/A N/A -- N/A N/A N/A
84 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ RYDEX VARIABLE TRUST: (continued) Telecommunications Fund December 31, 2007 ........... 72 $ 13.71 $ 13.10 1.40% 2.65% $ 979 7.70% 6.42% 0.44% December 31, 2006 ........... 4 12.73 12.31 1.40% 2.65% 47 17.87% 16.35% 0.58% December 31, 2005 ........... 33 10.80 10.58 1.40% 2.65% 359 -0.28% -1.49% 0.00% December 31, 2004 ........... 2 10.83 10.74 1.40% 2.65% 18 9.50% 8.59% 0.00% Inception May 1, 2004 ....... -- 9.89 9.89 N/A N/A -- N/A N/A N/A Transportation Fund December 31, 2007 ........... 1 12.80 12.23 1.40% 2.65% 18 -10.05% -11.12% 0.00% December 31, 2006 ........... 9 14.23 13.76 1.40% 2.65% 130 5.88% 4.56% 0.00% December 31, 2005 ........... 20 13.44 13.16 1.40% 2.65% 263 7.01% 5.62% 0.00% December 31, 2004 ........... 6 12.56 12.46 1.40% 2.65% 74 25.35% 24.35% 0.00% Inception May 1, 2004 ....... -- 10.02 10.02 N/A N/A -- N/A N/A N/A U.S. Government Money Market Fund December 31, 2007 ........... 900 10.23 9.90 1.40% 2.65% 9,137 2.40% 1.12% 3.84% December 31, 2006 ........... 1,138 9.99 9.79 1.40% 2.65% 11,314 2.46% 1.14% 3.74% December 31, 2005 ........... 545 9.75 9.68 1.40% 2.65% 5,296 0.52% -0.62% 1.93% December 31, 2004 ........... 206 9.70 9.74 1.40% 2.65% 1,992 -1.12% -2.40% 0.25% December 31, 2003 ........... 14 9.81 9.65 1.40% 2.05% 142 -1.38% -1.96% 0.00% Utilities Fund December 31, 2007 ........... 66 16.69 15.94 1.40% 2.65% 1,084 11.34% 9.93% 2.60% December 31, 2006 ........... 53 14.99 14.50 1.40% 2.65% 786 19.25% 17.79% 2.60% December 31, 2005 ........... 58 12.57 12.31 1.40% 2.65% 726 9.02% 7.70% 0.61% December 31, 2004 ........... 15 11.53 11.43 1.40% 2.65% 178 14.61% 13.62% 1.85% Inception May 1, 2004 ....... -- 10.06 10.06 N/A N/A -- N/A N/A N/A Weakening Dollar Strategy Fund December 31, 2007 ........... 30 12.95 12.60 1.40% 2.65% 390 16.46% 15.07% 31.73% December 31, 2006 ........... 1 11.12 10.95 1.40% 2.65% 15 15.11% 13.59% 13.57% December 31, 2005 ........... -- 9.66 9.64 1.40% 2.65% -- -2.23% -2.43% 0.00% Inception October 21, 2005 .. -- 9.88 9.88 N/A N/A N/A N/A N/A N/A SELIGMAN PORTFOLIOS, INC.: Communications and Information Portfolio December 31, 2007 ........... 14 8.12 15.29 1.40% 2.65% 115 13.57% 12.10% 0.00% December 31, 2006 ........... 15 7.15 13.64 1.40% 2.65% 108 20.37% 18.82% 0.00% December 31, 2005 ........... 39 5.94 11.48 1.40% 2.65% 231 5.88% 4.74% 0.00% December 31, 2004 ........... 46 5.61 10.96 1.40% 2.65% 259 9.36% 7.87% 0.00% December 31, 2003 ........... 24 5.13 5.02 1.40% 2.05% 121 42.06% 41.21% 0.00% Global Technology Portfolio December 31, 2007 ........... 48 6.70 13.71 1.40% 2.65% 558 13.75% 12.29% 0.00% December 31, 2006 ........... 9 5.89 12.21 1.40% 2.65% 69 15.94% 14.65% 0.00% December 31, 2005 ........... 8 5.08 10.65 1.40% 2.65% 49 6.50% 5.13% 0.00% December 31, 2004 ........... 12 4.77 10.13 1.40% 2.65% 70 2.36% 1.10% 0.00% December 31, 2003 ........... 12 4.66 4.56 1.40% 2.05% 58 34.17% 33.37% 0.00% THIRD AVENUE VARIABLE SERIES TRUST: Value Portfolio December 31, 2007 ........... 37 19.68 13.95 1.40% 2.65% 668 -6.15% -7.31% 2.08% December 31, 2006 ........... 36 20.97 15.05 1.40% 2.65% 669 14.15% 12.73% 0.88% December 31, 2005 ........... 77 18.37 13.35 1.40% 2.65% 1,323 13.05% 11.72% 0.85% December 31, 2004 ........... 24 16.25 11.95 1.40% 2.65% 332 18.27% 16.70% 0.68% December 31, 2003 ........... 6 13.74 13.69 1.40% 2.05% 74 37.45% 36.89% 0.00% Inception May 1, 2003 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A
85 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2007
==================================================================================================================================== JEFFERSON NATIONAL LIFE ACCOUNT I ------------------------------------------------------------------------------------------------------------------------------------ STANDARD STD WITH STANDARD STD WITH NET STANDARD STD WITH UNITS CONTRACT ALL RIDERS CONTRACT ALL RIDERS ASSETS CONTRACT ALL RIDERS INVESTMENT ------ -------------------- -------------------- ------- -------------------- INCOME FUND DESCRIPTION (000S) UNIT VALUE EXPENSE RATIO (000S) TOTAL RETURN RATIO ------------------------------------------------------------------------------------------------------------------------------------ VAN ECK WORLDWIDE INSURANCE TRUST: Absolute Return Fund December 31, 2007 ........... 49 $ 10.60 $ 10.10 1.40% 2.65% $ 513 2.61% 1.30% 0.64% December 31, 2006 ........... 35 10.33 9.97 1.40% 2.65% 361 7.16% 5.84% 0.00% December 31, 2005 ........... 35 9.64 9.42 1.40% 2.65% 335 -1.23% -2.38% 0.00% December 31, 2004 ........... 12 9.76 9.65 1.40% 2.65% 115 -1.71% -2.92% 0.00% December 31, 2003 ........... 1 9.93 9.89 1.40% 2.05% 8 -0.74% -1.14% 0.00% Inception May 1, 2003 ....... -- 10.00 10.00 N/A N/A -- N/A N/A N/A Bond Fund December 31, 2007 ........... 33 15.38 11.45 1.40% 2.65% 489 8.23% 6.81% 5.93% December 31, 2006 ........... 42 14.21 10.72 1.40% 2.65% 541 4.95% 3.68% 6.26% December 31, 2005 ........... 24 13.54 10.34 1.40% 2.65% 315 -4.38% -5.57% 6.62% December 31, 2004 ........... 20 14.16 10.95 1.40% 2.65% 271 7.68% 6.31% 6.09% December 31, 2003 ........... 13 13.15 12.83 1.40% 2.05% 175 16.52% 15.82% 3.29% Emerging Markets Fund December 31, 2007 ........... 68 32.41 30.31 1.40% 2.65% 2,171 35.66% 34.00% 0.45% December 31, 2006 ........... 109 23.89 22.62 1.40% 2.65% 2,577 37.54% 35.86% 0.57% December 31, 2005 ........... 77 17.37 16.65 1.40% 2.65% 1,322 30.21% 28.57% 0.84% December 31, 2004 ........... 82 13.34 12.95 1.40% 2.65% 1,088 24.09% 22.63% 0.39% December 31, 2003 ........... 27 10.75 10.48 1.40% 2.05% 283 52.05% 51.14% 0.00% Hard Assets Fund December 31, 2007 ........... 68 36.03 32.24 1.40% 2.65% 2,369 43.32% 41.53% 0.05% December 31, 2006 ........... 23 25.14 22.78 1.40% 2.65% 560 22.81% 21.30% 0.10% December 31, 2005 ........... 43 20.47 18.78 1.40% 2.65% 849 49.53% 47.64% 0.24% December 31, 2004 ........... 26 13.69 12.72 1.40% 2.65% 345 22.23% 20.80% 0.21% December 31, 2003 ........... 47 11.20 10.92 1.40% 2.05% 528 43.06% 42.21% 0.48% Real Estate Fund December 31, 2007 ........... 20 26.10 20.21 1.40% 2.65% 490 -0.53% -1.80% 1.11% December 31, 2006 ........... 28 26.24 20.58 1.40% 2.65% 696 29.13% 27.51% 1.56% December 31, 2005 ........... 31 20.32 16.14 1.40% 2.65% 613 19.32% 17.90% 2.06% December 31, 2004 ........... 32 17.03 13.69 1.40% 2.65% 543 34.31% 32.66% 0.91% December 31, 2003 ........... 12 12.68 12.37 1.40% 2.05% 147 32.63% 31.84% 0.52% WELLS FARGO ADVANTAGE VT FUNDS: Discovery Fund December 31, 2007 ........... 18 15.48 14.96 1.40% 2.65% 284 20.56% 19.11% 0.00% December 31, 2006 ........... 9 12.84 12.56 1.40% 2.65% 120 13.03% 11.64% 0.00% December 31, 2005 ........... 11 11.36 11.25 1.40% 2.65% 131 14.75% 13.64% 0.00% Inception April 8, 2005 ..... -- 9.90 9.90 N/A N/A N/A N/A N/A N/A Opportunity Fund December 31, 2007 ........... 27 20.34 14.10 1.40% 2.65% 473 5.17% 3.83% 0.60% December 31, 2006 ........... 38 19.34 13.58 1.40% 2.65% 656 10.64% 9.25% 0.00% December 31, 2005 ........... 50 17.48 12.43 1.40% 2.65% 821 6.39% 5.07% 0.00% December 31, 2004 ........... 50 16.43 11.83 1.40% 2.65% 783 16.61% 15.19% 0.00% December 31, 2003 ........... 25 14.09 13.74 1.40% 2.05% 357 35.10% 34.30% 0.04%
86 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 ================================================================================ (6) UNIT PROGRESSION The change in units outstanding for the year ended December 31, 2007, was as follows:
NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES* OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- 40|86 SERIES TRUST: Balanced ............................................... j 59,718.9 32,834.9 (92,553.8) -- Equity ................................................. j 99,724.2 15,901.1 (115,625.3) -- Fixed Income ........................................... a 27,992.8 9.5 (28,002.3) -- Government Securities .................................. a 25,020.6 927.1 (25,947.7) -- Money Market ........................................... a 118,266.0 83,103.1 (201,369.1) -- AIM VARIABLE INSURANCE FUNDS: Basic Value ............................................ 12,023.0 6,518.8 (7,679.7) 10,862.1 Core Equity ............................................ 5,999.8 10,506.7 (3,640.5) 12,866.0 Financial Services ..................................... 4,246.0 624.7 (847.9) 4,022.8 Global Health Care ..................................... 11,928.6 55,080.6 (5,562.3) 61,446.9 Global Real Estate ..................................... 46,100.4 35,628.4 (55,204.0) 26,524.8 High Yield ............................................. 45,134.8 340,439.9 (363,896.5) 21,678.2 Mid Cap Core Equity .................................... 10,804.5 12,735.4 (10,484.5) 13,055.4 Technology ............................................. 10,483.0 5,791.8 (4,806.0) 11,468.8 THE ALGER AMERICAN FUND: Growth ................................................. 39,790.1 124,158.2 (57,432.1) 106,516.2 Leveraged AllCap ....................................... 24,096.5 31,705.0 (25,416.1) 30,385.4 Midcap Growth .......................................... 37,297.7 92,427.5 (37,642.4) 92,082.8 Small Capitalization ................................... 29,743.2 5,302.0 (11,959.6) 23,085.6 ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC: Growth and Income ...................................... 4,427.4 24,010.6 (4,990.9) 23,447.1 AMERICAN CENTURY VARIABLE PORTFOLIOS, INC: Balanced ............................................... 1,857.1 10,259.5 (2,916.3) 9,200.3 Income & Growth ........................................ 34,555.2 10,742.4 (11,073.6) 34,224.0 Inflation Protection ................................... 5,204.8 23,100.0 (20,493.4) 7,811.4 International .......................................... 78,281.8 281,529.3 (239,003.5) 120,807.6 Value .................................................. 49,187.8 81,807.6 (85,062.8) 45,932.6 Vista .................................................. k -- 24,484.1 (3,624.8) 20,859.3 DIREXION INSURANCE TRUST: Dynamic VP HY Bond ..................................... 72,725.3 33,531.2 (105,934.3) 322.2 DREYFUS INVESTMENT PORTFOLIOS: Small Cap Stock Index .................................. 3,556.6 11,140.9 (10,903.4) 3,794.1 DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND: ................. 25,963.1 379.5 (12,468.8) 13,873.8 DREYFUS STOCK INDEX FUND: ................................. 114,056.5 39,414.7 (79,359.2) 74,112.0 DREYFUS VARIABLE INVESTMENT FUND: Disciplined Stock ...................................... i 12,153.6 153.2 (12,306.8) -- International Value .................................... 62,189.3 37,755.2 (57,231.0) 42,713.5 FEDERATED INSURANCE SERIES: Capital Income II ...................................... 9,727.3 12,963.6 (9,375.7) 13,315.2 High Income Bond II .................................... 124,669.1 45,247.7 (140,349.5) 29,567.3 International Equity II ................................ 20,912.6 13,555.2 (16,123.5) 18,344.3 Kaufmann II ............................................ -- 13,447.9 (13,447.9) 0.0 Market Opportunity II .................................. -- 875.5 -- 875.5 JANUS ASPEN SERIES: Balanced ............................................... k -- 2,953.5 (1,143.2) 1,810.3 Forty .................................................. k -- 7,270.7 -- 7,270.7 Global Life Sciences ................................... k -- 2,614.9 (2.7) 2,612.2 Growth and Income ...................................... 25,533.2 50,401.7 (61,471.2) 14,463.7 International Growth ................................... 33,159.4 31,477.5 (24,246.3) 40,390.6 Large Cap Growth ....................................... 22,980.4 18,423.3 (11,232.8) 30,170.9 Mid Cap Growth ......................................... 20,781.3 18,453.4 (14,034.0) 25,200.7 Mid Cap Value .......................................... k -- 489.0 -- 489.0 Small Company Value .................................... k -- 101.7 -- 101.7 Worldwide Growth ....................................... 13,950.8 16,506.9 (13,948.5) 16,509.2
87 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007
================================================================================================================================ NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES* OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- LAZARD RETIREMENT SERIES: Emerging Markets ....................................... 29,133.2 143,629.5 (109,091.7) 63,671.0 International Equity ................................... 11,771.3 67,475.8 (70,929.4) 8,317.7 Small Cap .............................................. 27,623.7 6,438.0 (16,993.6) 17,068.1 US Strategic Equity .................................... l 24,070.0 28,258.1 (30,821.5) 21,506.6 LEGG MASON PARTNERS VARIABLE EQUITY TRUST: Aggressive Growth I .................................... b -- 10,661.3 (9,510.8) 1,150.5 Capital and Income I ................................... b -- 5,835.3 (229.0) 5,606.3 Fundamental Value I .................................... b -- 30,159.0 (666.9) 29,492.1 Large Cap Growth I ..................................... b -- 28,043.7 (23,391.0) 4,652.7 LEGG MASON PARTNERS VARIABLE INCOME TRUST: Global High Yield Bond ................................. c -- 198.8 (3.6) 195.2 Government ............................................. d -- 9,003.2 (3,712.3) 5,290.9 Strategic Bond ......................................... c 10,505.1 6,333.9 (2,497.7) 14,341.3 LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, INC: Aggressive Growth ...................................... e 863.8 -- (863.8) -- All Cap Value .......................................... f 14,161.2 2,256.3 (16,417.5) -- Large Cap Growth ....................................... g 6,167.3 134.9 (6,302.2) -- Total Return ........................................... h 3,002.1 1,774.6 (4,776.7) -- LORD ABBETT SERIES FUND: America's Value ........................................ 40,856.5 7,864.0 (12,707.4) 36,013.1 Growth and Income ...................................... 75,327.2 61,467.4 (73,441.6) 63,353.0 NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST: Lehman Brothers High Income Bond ....................... m 1,129.3 87,946.7 (87,284.2) 1,791.8 Lehman Brothers Short Duration Bond .................... n 37,692.0 33,685.9 (20,144.0) 51,233.9 Fasciano ............................................... 2,868.0 1,004.6 (1,270.7) 2,601.9 Mid-Cap Growth ......................................... 13,049.1 51,733.0 (47,259.2) 17,522.9 Partners ............................................... 24,119.5 226,222.2 (182,947.2) 67,394.5 Regency ................................................ 8,296.9 1,493.9 (2,894.3) 6,896.5 Socially Responsive .................................... 2,716.9 11,635.9 (974.2) 13,378.6 NORTHERN LIGHTS VARIABLE TRUST: JNF Balanced ........................................... k -- 89,842.3 (17,104.8) 72,737.5 JNF Equity ............................................. k -- 271,460.7 (35,511.3) 235,949.4 PIMCO VARIABLE INSURANCE TRUST: All Asset .............................................. 1,994.7 -- (1,994.7) -- CommodityRealReturn Strategy ........................... -- 40,509.6 (40,509.6) -- Emerging Markets Bond .................................. 77,010.1 333,643.1 (409,841.2) 812.0 Foreign Bond US Dollar-Hedged .......................... 216.0 -- -- 216.0 Global Bond Unhedged ................................... 8,494.1 145,201.8 (146,891.2) 6,804.7 High Yield ............................................. 13,301.8 263,094.8 (263,648.3) 12,748.3 Long Term US Government ................................ -- 118,085.1 (95,487.0) 22,598.1 Low Duration ........................................... -- 20,319.4 (20,319.4) -- Money Market ........................................... 36,177.8 4,083,885.2 (3,666,290.3) 453,772.7 Real Return ............................................ 74,442.9 21,917.9 (26,564.7) 69,796.1 RealEstateRealReturn Strategy .......................... 2,187.1 7,544.5 (3,949.9) 5,781.7 Short-Term ............................................. 39,387.8 194,668.4 (153,363.1) 80,693.1 Total Return ........................................... 145,485.2 101,277.5 (99,770.5) 146,992.2 PIONEER VARIABLE CONTRACTS TRUST: Core Bond .............................................. ag 348.9 4,463.1 (4,812.0) -- Emerging Markets ....................................... 2,424.1 175,890.3 (151,353.9) 26,960.5 Equity Income .......................................... 77,149.8 24,362.6 (64,964.4) 36,548.0 Fund ................................................... 46,372.8 54,226.0 (57,642.5) 42,956.3 Global High Yield ...................................... -- 212,059.6 (211,634.5) 425.1 High Yield ............................................. 58,258.9 376,379.0 (337,721.8) 96,916.1 International Value .................................... 27,463.0 232,824.2 (223,030.1) 37,257.1 Mid Cap Value .......................................... 7,975.9 5,786.2 (8,635.1) 5,127.0 Small Cap Value ........................................ 48.5 750.4 (744.7) 54.2 Strategic Income ....................................... -- 2,610.1 (18.7) 2,591.4
88 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007
================================================================================================================================ NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES* OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- ROYCE CAPITAL FUND: Micro-Cap .............................................. 31,102.9 55,749.1 (52,620.2) 34,231.8 Small-Cap .............................................. 46,655.1 15,233.2 (9,497.1) 52,391.2 RYDEX VARIABLE TRUST: Absolute Return Strategies ............................. 826.4 1,390.1 (602.8) 1,613.7 Banking ................................................ 4,752.5 43,713.7 (48,466.2) -- Basic Materials ........................................ 19,969.8 368,502.9 (341,540.4) 46,932.3 Biotechnology .......................................... 945.1 125,882.9 (125,248.7) 1,579.3 CLS AdvisorOne Amerigo ................................. 41,282.1 1,081.3 (2,217.3) 40,146.1 CLS AdvisorOne Clermont ................................ -- 1,830.2 (915.1) 915.1 Commodities Strategy ................................... o 97.1 115,926.2 (115,917.5) 105.8 Consumer Products ...................................... 1,218.4 67,950.1 (68,815.7) 352.8 Dow 2X Strategy ........................................ p 26,511.4 854,366.7 (465,247.6) 415,630.5 Electronics ............................................ 14,607.4 165,069.0 (179,676.4) -- Energy ................................................. 64,361.5 276,252.5 (209,662.4) 130,951.6 Energy Services ........................................ 44,554.1 241,551.1 (159,554.8) 126,550.4 Essential Portfolio Conservative ....................... -- 384.7 (384.7) -- Essential Portfolio Moderate ........................... -- 372.0 (372.0) -- Europe 1.25X Strategy .................................. q 18,551.8 324,944.1 (319,044.7) 24,451.2 Financial Services ..................................... 15,511.3 44,974.6 (57,082.3) 3,403.6 Government Long Bond 1.2X Strategy ..................... r 24,151.4 263,056.8 (200,179.1) 87,029.1 Health Care ............................................ 37,625.2 126,922.9 (156,181.1) 8,367.0 Hedged Equity .......................................... 70.8 -- -- 70.8 Internet ............................................... 1,866.7 87,431.8 (87,473.0) 1,825.5 Inverse Dow 2X Strategy ................................ s 300,092.4 834,002.3 (1,043,856.8) 90,237.9 Inverse Government Long Bond Strategy .................. t 18,165.9 98,642.2 (116,171.7) 636.4 Inverse Mid-Cap Strategy ............................... u 7,084.1 20,844.2 (27,928.3) -- Inverse OTC Strategy ................................... v 1,964.3 178,457.8 (180,305.6) 116.5 Inverse Russell 2000 Strategy .......................... w 154,506.8 655,280.3 (791,452.7) 18,334.4 Inverse S&P 500 Strategy ............................... x 9,131.5 589,415.0 (522,887.8) 75,658.7 Japan 1.25X Strategy ................................... y 71,508.1 131,365.2 (196,776.9) 6,096.4 Large Cap Growth ....................................... 39,240.7 133,036.8 (146,935.7) 25,341.8 Large Cap Value ........................................ 96,085.5 310,390.7 (371,739.9) 34,736.3 Leisure ................................................ 25,748.4 21,656.2 (23,817.1) 23,587.5 Mid Cap 1.5X Strategy .................................. z 13,753.6 127,645.5 (137,666.1) 3,733.0 Mid-Cap Growth ......................................... 6,559.2 56,914.9 (57,458.9) 6,015.2 Mid-Cap Value .......................................... 80,800.0 105,847.4 (182,015.3) 4,632.1 Multi-Cap Core Equity .................................. 17,367.5 -- (2,471.2) 14,896.3 Nova ................................................... 22,985.5 114,188.4 (130,518.7) 6,655.2 OTC 2X Strategy ........................................ aa 22,062.9 449,827.8 (321,531.3) 150,359.4 OTC .................................................... 2,828.6 212,830.3 (139,195.4) 76,463.5 Precious Metals ........................................ 43,822.9 176,351.2 (165,055.8) 55,118.3 Real Estate ............................................ 15,957.5 91,727.6 (96,944.6) 10,740.5 Retailing .............................................. 4,291.1 17,022.9 (21,314.0) -- Russell 2000 1.5X Strategy ............................. ab 24,503.7 119,727.3 (135,734.7) 8,496.3 Russell 2000 2X Strategy ............................... ac 29,860.9 41,952.6 (70,984.6) 828.9 S&P 500 2X Strategy .................................... ad 44,016.4 404,017.7 (311,397.1) 136,637.0 Sector Rotation ........................................ 9,280.6 18,684.3 (10,963.5) 17,001.4 Small-Cap Growth ....................................... 63,174.8 135,002.8 (149,146.7) 49,030.9 Small-Cap Value ........................................ 28,088.6 48,068.7 (55,310.8) 20,846.5 Strengthening Dollar 2X Strategy ....................... ae -- 192.4 -- 192.4 Technology ............................................. 1,449.3 137,092.7 (78,819.7) 59,722.3 Telecommunications ..................................... 3,668.1 165,823.5 (97,544.7) 71,946.9 Transportation ......................................... 9,219.0 459,693.3 (467,473.1) 1,439.2 U.S. Government Money Market ........................... 1,137,708.2 6,780,592.8 (7,018,402.8) 899,898.2 Utilities .............................................. 52,507.8 224,574.0 (211,190.9) 65,890.9 Weakening Dollar 2X Strategy ........................... af 1,383.3 63,197.4 (34,426.8) 30,153.9
89 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007
================================================================================================================================ NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES* OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- SELIGMAN PORTFOLIOS, INC: Communications and Information ......................... 15,055.9 1,960.0 (2,857.6) 14,158.3 Global Technology ...................................... 9,327.2 40,412.8 (1,674.4) 48,065.6 THIRD AVENUE VARIABLE SERIES TRUST: Value .................................................. 36,441.4 19,835.0 (19,475.8) 36,800.6 VAN ECK WORLDWIDE INSURANCE TRUST: Absolute Return ........................................ 35,265.1 25,849.2 (12,027.8) 49,086.5 Bond ................................................... 42,494.2 28,793.7 (38,541.4) 32,746.5 Emerging Markets ....................................... 109,257.9 112,410.6 (153,819.5) 67,849.0 Hard Assets ............................................ 22,720.3 114,083.2 (68,801.1) 68,002.4 Real Estate ............................................ 27,902.9 16,475.7 (24,487.4) 19,891.2 WELLS FARGO ADVANTAGE VT FUNDS: Discovery .............................................. 9,401.4 40,929.2 (31,961.0) 18,369.6 Opportunity ............................................ 37,751.4 1,460.1 (12,144.3) 27,067.2 -------------------------------------------------------------------------------------------------------------------------------- 5,395,431.1 25,779,704.8 (25,049,676.7) 6,125,459.2 ================================================================================================================================
* See Footnote 7 for details 90 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 ================================================================================ (6) UNIT PROGRESSION The changes in units outstanding for the year ended December 31, 2006, were as follows:
================================================================================================================================ NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- 40|86 SERIES TRUST: Balanced ............................................... 53,348.3 67,944.4 (61,573.8) 59,718.9 Equity ................................................. 117,805.4 36,606.8 (54,688.0) 99,724.2 Fixed Income ........................................... 42,864.8 18,777.9 (33,649.9) 27,992.8 Government Securities .................................. 38,367.8 12,780.4 (26,127.6) 25,020.6 High Yield ............................................. a 105,410.4 63,627.8 (169,038.2) 0.0 Money Market ........................................... 276,844.2 1,640,008.8 (1,798,587.0) 118,266.0 AIM VARIABLE INSURANCE FUNDS: Basic Value ............................................ 18,940.6 6,676.3 (13,593.9) 12,023.0 Core Equity ............................................ b -- 7,291.8 (1,292.0) 5,999.8 Core Stock ............................................. c 5,769.9 43.6 (5,813.5) 0.0 Financial Services ..................................... 6,495.7 8,388.4 (10,638.1) 4,246.0 Global Health Care ..................................... 19,610.1 6,514.9 (14,196.4) 11,928.6 Global Real Estate ..................................... d 34,667.3 45,094.9 (33,661.8) 46,100.4 High Yield ............................................. 16,366.0 91,507.0 (62,738.2) 45,134.8 Mid Cap Core Equity .................................... 25,929.3 13,742.7 (28,867.5) 10,804.5 Technology ............................................. 27,638.3 25,661.9 (42,817.2) 10,483.0 THE ALGER AMERICAN FUND: Growth ................................................. 96,218.4 36,833.6 (93,261.9) 39,790.1 Leveraged AllCap ....................................... 34,334.5 6,991.7 (17,229.7) 24,096.5 Midcap Growth .......................................... 56,419.9 27,914.0 (47,036.2) 37,297.7 Small Capitalization ................................... 79,318.1 35,615.0 (85,189.9) 29,743.2 ALLIANCE VARIABLE PRODUCT SERIES, INC.: Growth and Income ...................................... e -- 4,588.9 (161.5) 4,427.4 AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.: Balanced ............................................... 879.0 9,778.3 (8,800.2) 1,857.1 Income & Growth ........................................ 53,124.1 18,019.2 (36,588.1) 34,555.2 Inflation Protection ................................... 5,237.3 5,215.6 (5,248.1) 5,204.8 International .......................................... 34,947.3 121,817.4 (78,482.9) 78,281.8 Value .................................................. 34,716.3 56,172.0 (41,700.5) 49,187.8 DIREXION INSURANCE TRUST: Dynamic VP HY Bond ..................................... f 4,681.5 298,429.8 (230,386.0) 72,725.3 DREYFUS INVESTMENT PORTFOLIO: Small Cap Stock Index .................................. 2,308.1 12,406.9 (11,158.4) 3,556.6 DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND .................. 25,158.5 14,686.0 (13,881.4) 25,963.1 DREYFUS STOCK INDEX FUND .................................. 133,944.3 38,794.0 (58,681.8) 114,056.5 DREYFUS VARIABLE INVESTMENT FUNDS: Disciplined Stock ...................................... 17,203.9 413.0 (5,463.3) 12,153.6 International Value .................................... 53,933.8 58,075.1 (49,819.6) 62,189.3 FEDERATED INSURANCE SERIES: Capital Income II ...................................... 12,297.0 1,989.2 (4,558.9) 9,727.3 High Income Bond II .................................... 64,568.8 191,809.5 (131,709.2) 124,669.1 International Equity II ................................ 22,747.1 22,871.5 (24,706.0) 20,912.6 JANUS ASPEN SERIES: Growth and Income ...................................... 39,780.9 32,880.8 (47,128.5) 25,533.2 International Growth ................................... 13,464.7 72,540.6 (52,845.9) 33,159.4 Large Cap Growth ....................................... 37,119.3 7,377.7 (21,516.6) 22,980.4 Mid Cap Growth ......................................... 52,601.0 18,379.3 (50,199.0) 20,781.3 Worldwide Growth ....................................... 16,057.6 4,840.1 (6,946.9) 13,950.8 LAZARD RETIREMENT SERIES: Emerging Markets ....................................... 70,529.8 81,436.3 (122,832.9) 29,133.2 US Strategic Equity .................................... ag 10,420.5 22,120.6 (8,471.1) 24,070.0 International Equity ................................... 3,693.5 49,474.9 (41,397.1) 11,771.3 Small Cap .............................................. 42,511.5 72,518.0 (87,405.8) 27,623.7
91 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007
================================================================================================================================ NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, INC.: Aggressive Growth ...................................... g -- 863.8 0.0 863.8 All Cap Value .......................................... g 13,216.7 5,189.4 (4,244.9) 14,161.2 Global High Yield Bond ................................. g,h -- 266,265.2 (266,265.2) 0.0 Large Cap Growth ....................................... g 3,430.0 5,458.1 (2,720.8) 6,167.3 Strategic Bond ......................................... g 4,841.1 13,649.7 (7,985.7) 10,505.1 Total Return ........................................... g 2,025.0 11,166.9 (10,189.8) 3,002.1 LORD ABBETT SERIES FUND: America's Value ........................................ 40,580.3 15,653.7 (15,377.5) 40,856.5 Growth and Income ...................................... 96,973.5 90,328.2 (111,974.5) 75,327.2 NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST: Fasciano ............................................... 3,241.2 9,264.2 (9,637.4) 2,868.0 Lehman Brothers High Income Bond ....................... ae 389.3 969.0 (229.0) 1,129.3 Lehman Brothers Short Duration Bond .................... af 47,600.6 10,256.0 (20,164.6) 37,692.0 Mid Cap Growth ......................................... 31,062.6 11,879.6 (29,893.1) 13,049.1 Partners ............................................... 28,480.0 99,547.3 (103,907.8) 24,119.5 Regency ................................................ 7,281.6 3,026.7 (2,011.4) 8,296.9 Socially Responsive .................................... 4,813.6 8,150.3 (10,247.0) 2,716.9 PIMCO VARIABLE INSURANCE TRUST: All Asset .............................................. e -- 5,770.2 (3,775.5) 1,994.7 CommodityRealReturn Strategy ........................... e -- 6,859.2 (6,859.2) 0.0 Emerging Markets Bond .................................. e -- 156,042.2 (79,032.1) 77,010.1 Foreign Bond US Dollar-Hedged .......................... e -- 2,021.5 (1,805.5) 216.0 Global Bond Unhedged ................................... e -- 49,693.3 (41,199.2) 8,494.1 High Yield ............................................. e -- 218,454.9 (205,153.1) 13,301.8 Money Market ........................................... 22,859.6 258,965.1 (245,646.9) 36,177.8 Real Return ............................................ 64,460.2 96,422.8 (86,440.1) 74,442.9 RealReturn Strategy .................................... e -- 9,148.1 (6,961.0) 2,187.1 Short Term ............................................. 24,581.1 28,914.4 (14,107.7) 39,387.8 Total Return ........................................... 113,222.6 220,037.0 (187,774.4) 145,485.2 PIONEER VARIABLE CONTRACTS TRUST: Core Bond .............................................. 335.9 13.0 0.0 348.9 Emerging Markets ....................................... i -- 4,368.9 (1,944.8) 2,424.1 Equity Income .......................................... 54,198.6 62,392.5 (39,441.3) 77,149.8 Europe ................................................. aa 9,175.3 30,871.5 (40,046.8) 0.0 Fund ................................................... 64,529.8 25,191.3 (43,348.3) 46,372.8 High Yield ............................................. 91,421.9 163,312.3 (196,475.3) 58,258.9 International Value .................................... i -- 27,518.3 (55.3) 27,463.0 Mid Cap Value .......................................... 7,330.6 2,493.6 (1,848.3) 7,975.9 Small Cap Value ........................................ i -- 48.5 0.0 48.5 ROYCE CAPITAL FUND: Micro Cap .............................................. 38,891.4 39,072.9 (46,861.4) 31,102.9 Small Cap .............................................. 78,055.0 16,737.6 (48,137.5) 46,655.1 RYDEX VARIABLE TRUST: Absolute Return Strategies ............................. j -- 9,582.2 (8,755.8) 826.4 Banking ................................................ 397.4 15,616.9 (11,261.8) 4,752.5 Basic Materials ........................................ 81,012.3 42,515.4 (103,557.9) 19,969.8 Biotechnology .......................................... 71,574.8 111,288.1 (181,917.8) 945.1 CLS AdvisorOne Amerigo ................................. 2,798.8 38,664.0 (180.7) 41,282.1 Commodities Strategy ................................... ab 2,048.1 9,999.7 (11,950.7) 97.1 Consumer Products ...................................... 7,291.4 3,850.6 (9,923.6) 1,218.4 Dow 2X Strategy ........................................ k 125.4 221,646.5 (195,260.5) 26,511.4 OTC 2X Strategy ........................................ l 88,382.8 278,029.3 (344,349.2) 22,062.9 Russell 2000 2X Strategy ............................... i,ad -- 31,332.6 (1,471.7) 29,860.9 S&P 500 2X Strategy .................................... m 93,974.5 575,141.6 (625,099.7) 44,016.4 Strengthening Dollar 2X Strategy ....................... n -- 1,326.8 (1,326.8) 0.0 Weakening Dollar 2X Strategy ........................... o -- 10,983.2 (9,599.9) 1,383.3 Electronics ............................................ 40,698.4 479,686.0 (505,777.0) 14,607.4
92 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007
================================================================================================================================ NUMBER NUMBER OF UNITS OF UNITS BEGINNING UNITS UNITS END NOTES* OF THE YEAR PURCHASED REDEEMED OF YEAR -------------------------------------------------------------------------------------------------------------------------------- RYDEX VARIABLE TRUST: (continued) Energy ................................................. 88,359.9 135,342.6 (159,341.0) 64,361.5 Energy Services ........................................ 67,835.9 132,260.2 (155,542.0) 44,554.1 Europe 1.25X Strategy .................................. p 3,379.6 106,115.0 (90,942.8) 18,551.8 Financial Services ..................................... 17,185.2 38,305.6 (39,979.5) 15,511.3 Government Long Bond 1.2X Strategy ..................... q 5,537.3 79,102.1 (60,488.0) 24,151.4 Health Care ............................................ 16,907.1 170,786.0 (150,067.9) 37,625.2 Hedged Equity .......................................... j -- 13,368.3 (13,297.5) 70.8 Internet ............................................... 36,660.0 442.5 (35,235.8) 1,866.7 Inverse Dow 2X Strategy ................................ r 67.9 686,627.7 (386,603.2) 300,092.4 Inverse Government Long Bond Strategy .................. s 3,458.2 40,367.9 (25,660.2) 18,165.9 Inverse Mid-Cap Strategy ............................... ac -- 37,541.1 (30,457.0) 7,084.1 Inverse OTC Strategy ................................... t 31,928.4 222,833.6 (252,797.7) 1,964.3 Inverse Russell 2000 Strategy .......................... u 47,723.5 483,935.6 (377,152.3) 154,506.8 Inverse S&P 500 Strategy ............................... v 8,978.7 38,750.6 (38,597.8) 9,131.5 Japan 1.25X Strategy ................................... w 48,698.5 405,205.0 (382,395.4) 71,508.1 Large Cap Growth ....................................... 11,506.1 272,472.3 (244,737.7) 39,240.7 Large Cap Value ........................................ 4,163.6 397,425.1 (305,503.2) 96,085.5 Leisure ................................................ 9,050.9 64,343.4 (47,645.9) 25,748.4 Mid Cap 1.5X Strategy .................................. x 9,792.7 83,766.9 (79,806.0) 13,753.6 Mid-Cap Growth ......................................... 15,025.1 27,997.4 (36,463.3) 6,559.2 Mid-Cap Value .......................................... 1,750.5 120,555.6 (41,506.1) 80,800.0 Multi-Cap Core Equity .................................. j,y -- 17,367.5 0.0 17,367.5 Nova ................................................... 19,631.7 55,141.9 (51,788.1) 22,985.5 OTC .................................................... 11,879.5 94,392.1 (103,443.0) 2,828.6 Precious Metals ........................................ 13,767.1 121,994.2 (91,938.4) 43,822.9 Real Estate ............................................ 10,386.0 76,240.4 (70,668.9) 15,957.5 Retailing .............................................. -- 13,972.1 (9,681.0) 4,291.1 Russell 2000 1.5X Strategy ............................. z 30,431.0 230,802.3 (236,729.6) 24,503.7 Sector Rotation ........................................ 8,768.4 50,503.4 (49,991.2) 9,280.6 Small-Cap Growth ....................................... 8,217.1 82,792.5 (27,834.8) 63,174.8 Small-Cap Value ........................................ 9,162.6 87,505.2 (68,579.2) 28,088.6 Technology ............................................. 32,853.7 82,115.8 (113,520.2) 1,449.3 Telecommunications ..................................... 33,232.6 12,123.3 (41,687.8) 3,668.1 Transportation ......................................... 19,617.5 54,084.6 (64,483.1) 9,219.0 U.S. Government Money Market ........................... 544,809.2 5,632,187.9 (5,039,288.9) 1,137,708.2 Utilities .............................................. 57,785.2 81,213.0 (86,490.4) 52,507.8 SELIGMAN PORTFOLIOS, INC.: Communications & Information ........................... 38,707.5 13,379.0 (37,030.6) 15,055.9 Global Technology ...................................... 7,500.5 4,849.2 (3,022.5) 9,327.2 THIRD AVENUE VARIABLE SERIES TRUST: Value .................................................. 76,590.4 80,059.8 (120,208.8) 36,441.4 VAN ECK WORLDWIDE INSURANCE TRUST: Absolute Return ........................................ 35,091.4 17,818.8 (17,645.1) 35,265.1 Bond ................................................... 23,906.8 42,181.9 (23,594.5) 42,494.2 Emerging Markets ....................................... 76,805.5 144,925.0 (112,472.6) 109,257.9 Hard Assets ............................................ 42,580.3 27,642.3 (47,502.3) 22,720.3 Real Estate ............................................ 31,366.2 29,206.4 (32,669.7) 27,902.9 WELLS FARGO ADVANTAGE VT FUNDS: Discovery .............................................. 11,513.2 4,260.3 (6,372.1) 9,401.4 Opportunity ............................................ 50,456.8 4,897.0 (17,602.4) 37,751.4 -------------------------------------------------------------------------------------------------------------------------------- 4,672,645.5 17,793,537.1 (17,070,751.5) 5,395,431.1 ================================================================================================================================
93 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 ================================================================================ a) For the period January 1, 2006 through August 31, 2006 (liquidation of fund). b) For the period April 28, 2006 (inception of fund) through December 31, 2006. c) For the period January 1, 2006 through April 27, 2006 (fund merged into AIM VI Core Equity). d) Formerly AIM VI Real Estate prior to its name change effective July 3, 2006. e) For the period May 1, 2006 (inception of fund) through December 31, 2006. f) Formerly Potomac Insurance Trust and Potomac Dynamic VP HY Bond prior to their name changes on April 28, 2006. g) Formerly Salomon Brothers Variable Series Funds prior its name change effective May 1, 2006. h) Formerly LMP Variable High Yield prior to its name change effective September 1, 2006. i) For the period November 1, 2006 (inception of fund) through December 31, 2006. j) For the period February 3, 2006 (inception of fund) through December 31, 2006. k) Formerly Dynamic Dow prior to its name change effective July 3, 2007 and Long Dynamic Dow 30 prior to its name change effective May 1, 2006. l) Formerly Dynamic OTC prior to its name change effective July 3, 2007 and Velocity 100 prior to its name change effective May 1, 2006. m) Formerly Dynamic S&P 500 prior to its name change effective July 3, 2007 and Titan 500 prior to its name change effective May 1, 2006. n) Formerly Dynamic Strengthening Dollar prior to its name change effective July 3, 2007 and Strengthening Dollar prior to its name change effective May 1, 2006. o) Formerly Dynamic Weakening Dollar prior to its name change effective July 3, 2007 and Weakening Dollar prior to its name change effective May 1, 2006. p) Formerly Europe Advantage prior to its name change effective July 3, 2007 and large-Cap Europe prior to its name change effective May 1, 2006. q) Formerly Government Long Bond Advantage prior to its name change effective July 3, 2007 and U.S. Government Bond prior to its name change effective May 1, 2006. r) Formerly Inverse Dynamic Dow prior to its name change effective July 3, 2007 and Inverse Dynamic Dow 30 prior to its name change effective May 1, 2006.. s) Formerly Inverse Government Long Bond prior to its name change effective July 3, 2007 and Juno prior to its name change effective May 1, 2006. t) Formerly Inverse OTC prior to its name change effective July 3, 2007 and Arktos prior to its name change effective May 1, 2006. u) Formerly Inverse Russell 2000 prior to its name change effective July 3, 2007 and Inverse Small-Cap prior to its name change effective May 1, 2006. v) Formerly Inverse S&P 500 prior to its name change effective July 3, 2007 and Ursa prior to its name change effective May 1, 2006. w) Formerly Japan Advantage prior to its name change effective July 3, 2007 and Large Cap Japan prior to its name change effective May 1, 2006. x) Formerly Mid Cap Advantage prior to its name change effective July 3, 2007 and Medius prior to its name change effective May 1, 2006. y) Formerly Core Equity prior to its name change effective May 1, 2006. z) Formerly Russell 2000 Advantage prior to its name change effective July 3, 2007 and Mekros prior to its name change effective May 1, 2006. aa) For the period January 1, 2006 through December 15, 2006 (fund merged into International Value). ab) Formerly Commodities prior to its name change effective May 1, 2007. ac) Formerly Inverse Mid-Cap prior to its name change effective July 3, 2007. ad) Formerly Dynamic Russell 2000 prior to its name change effective July 3, 2007. ae) Formerly High Income Bond prior to its name change effective May 1, 2007. af) Formerly Limited Maturity Bond prior to its name change effective May 1, 2007. ag) Formerly Equity prior to its name change effective May 1, 2007. 94 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 ================================================================================ (7) DETAIL DESCRIPTIONS FOR STATEMENT OF OPERATIONS AND UNIT PROGRESSION FOOTNOTE REFERENCES a) For the period January 1, 2007 through March 29, 2007 (liquidation of fund). b) For the period April 27, 2007 (inception of fund) through December 31, 2007. c) Formerly in Legg Mason Partners Variable Portfolio I until restructure on April 27, 2007. d) Formerly in Legg Mason Partners Investment Series until restructure on April 27, 2007. e) For the period January 1, 2007 through April 27, 2007 (merged into LMPV Equity Trust - Aggressive Growth). f) For the period January 1, 2007 through April 27, 2007 (merged into LMPV Equity Trust - Fundamental Value). g) For the period January 1, 2007 through April 27, 2007 (merged into LMPV Equity Trust - Large Cap Growth). h) For the period January 1, 2007 through April 27, 2007 (merged into LMPV Equity Trust - Capital and Income). i) For the period January 1, 2007 through April 27, 2007 (liquidation of fund). j) For the period of January 1, 2007 through April 30, 2007 (liquidation of fund). k) For the period of May 1, 2007 (inception of the fund) through December 31, 2007. l) Lazard US Strategic Equity was formerly Lazard Equity prior to its name change effective May 1, 2007. m) Neuberger Lehman Brothers High Income Bond was formerly Neuberger High Income Bond prior to its name change effective May 1, 2007. n) Neuberger Lehman Brothers Short Duration Bond was formerly Neuberger Limited Maturity Bond prior to its name change effective May 1, 2007. o) Rydex Commodities Strategy was formerly Rydex Commodities prior to its name change effective May 1, 2007. p) Rydex Dow 2X Strategy was formerly Rydex Dynamic Dow prior to its name change effective July 3, 2007. q) Rydex Europe 1.25 X Strategy was formerly Rydex Europe Advantage prior to its name change effective July 3, 2007. r) Rydex Government Long Bond 1.2X Strategy was formerly Rydex Government Long Bond Advantage prior to its name change effective July 3, 2007. s) Rydex Inverse Dow 2X Strategy was formerly Rydex Inverse Dynamic Dow prior to its name change effective July 3, 2007. t) Rydex Inverse Government Long Bond Strategy was formerly Rydex Inverse Government Long Bond prior to its name change effective July 3, 2007. u) Rydex Inverse Mid-Cap Strategy was formerly Rydex Inverse Mid-Cap prior to its name change effective July 3, 2007. v) Rydex Inverse OTC Strategy was formerly Rydex Inverse OTC prior to its name change effective July 3, 2007. w) Rydex Inverse Russell 2000 Strategy was formerly Rydex Inverse Russell 2000 prior to its name change effective July 3, 2007. x) Rydex Inverse S&P 500 Strategy was formerly Rydex Inverse S&P 500 prior to its name change effective July 3, 2007. y) Rydex Japan 1.25X Strategy was formerly Rydex Japan Advantage prior to its name change effective July 3, 2007. z) Rydex Mid Cap 1.5X Strategy was formerly Rydex Mid Cap Advantage prior to its name change effective July 3, 2007. aa) Rydex OTC 2X Strategy was formerly Rydex Dynamic OTC prior to its name change effective July 3, 2007. ab) Rydex Russell 2000 1.5X Strategy was formerly Rydex Russell 2000 Advantage prior to its name change effective July 3, 2007. ac) Rydex Russell 2000 2X Strategy was formerly Rydex Dynamic Russell 2000 prior to its name change effective July 3, 2007. ad) Rydex S&P 500 2X Strategy was formerly Rydex Dynamic S&P 500 prior to its name change effective July 3, 2007. ae) Rydex Strengthening Dollar 2X Strategy was formerly Rydex Dynamic Strengthening Dollar prior to its name change effective July 3, 2007. af) Rydex Weakening Dollar 2X Strategy was formerly Rydex Dynamic Weakening Dollar prior to its name change effective July 3, 2007. ag) For the period January 1, 2007 through November 9, 2007 (liquidation of fund). 95 JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I NOTES TO FINANCIAL STATEMENTS - CONTINUED DECEMBER 31, 2007 ================================================================================ (8) SUBSEQUENT EVENTS Effective January 3, 2008, Inviva, Inc., Jefferson National Life Insurance Company's (the "Company") ultimate parent, completed a restructuring transaction whereby it exchanged $111.5 million of debt ($91.5 million principal and $20 million accrued interest) for (a) cash and new debt of approximately $9 million and $7.6 million, including future interest payments, respectively; and (b) a portion of its equity interest in Jefferson National Financial Corp. (JNFC). The new debt resides at JNFC, but will ultimately be serviced by the Company at an annual cost of approximately $0.3 million to $0.5 million. On January 2, 2008, to facilitate the restructuring, the Company paid a $3.6 million extraordinary distribution, which was approved by the Texas Department of Insurance. On a pro forma basis, this dividend will reduce the Company's statutory capital and surplus from $41.1 million to $37.4 million and reduce risk-based capital from 690% to 633% authorized control level. 96 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ================================================================================ TO THE BOARD OF DIRECTORS JEFFERSON NATIONAL LIFE INSURANCE COMPANY AND CONTRACT OWNERS OF JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I We have audited the accompanying statement of assets and liabilities of Jefferson National Life Annuity Account I as of December 31, 2007, the related statements of operations and changes in net assets for the years ended December 31, 2007 and 2006, and the financial highlights for each of the three years for the period ended December 31, 2007. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and others. 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 Jefferson National Life Annuity Account I as of December 31, 2007, the results of its operations, changes in its net assets for the years ended December 31, 2007 and 2006, and financial highlights for each of the three years for the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. /s/ BDO Seidman, LLP New York, New York March 21, 2008 97 ================================================================================ JEFFERSON NATIONAL LIFE ANNUITY ACCOUNT I SPONSOR Jefferson National Life Insurance Company DISTRIBUTOR Jefferson National Financial Securities Corporation INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM BDO Seidman, LLP B-9