'33 Act File No. 333-106908

'40 Act File No. 811-21398

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-6

REGISTRATION UNDER THE SECURITIES ACT OF 1933
Pre-effective Amendment No. __	o
Post-effective Amendment No. 7	þ

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940	þ
Amendment No. 7	þ

(Check appropriate box or boxes.)

NATIONWIDE VLI SEPARATE ACCOUNT-6

(Exact Name of Registrant)

NATIONWIDE LIFE INSURANCE COMPANY

(Name of Depositor)

One Nationwide Plaza

Columbus, Ohio 43215

(Address of Depositor’s Principal Executive Offices)  (Zip Code)

Depositor’s Telephone Number, including Area Code:  (614) 249-7111

Thomas E. Barnes, VP and SecretaryOne Nationwide Plaza

Columbus, Ohio 43215-2220

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:                                                                                     May 1, 2007

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

o           Immediately upon filing pursuant to paragraph (b)

þ           On May 1, 2007 pursuant to paragraph (b)

o           60 days after filing pursuant to paragraph (a)(1)

o           On (date) pursuant to paragraph (a)(1) of Rule 485.

If appropriate, check the following box:

o           This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

America’s marketFLEX® VUL

Flexible Premium Variable Universal Life Insurance Policies

Issued By

Nationwide Life Insurance Company

Through

Nationwide VLI Separate Account-6

The Date Of This Prospectus Is May 1, 2007

PLEASE KEEP THIS PROSPECTUS FOR FUTURE REFERENCE.

Variable life insurance is complex, and this prospectus is designed to help you become as fully informed as possible in making your decision to purchase or not to purchase the variable life insurance policy it describes.  Prior to your purchase, we encourage you to take the time you need to understand the policy, its potential benefits and risks, and how it might or might not benefit you.  In consultation with your financial adviser, you should use this prospectus to compare the benefits and risks of this policy versus those of other life insurance policies and alternative investment instruments.

Please read this entire prospectus and consult with a trusted financial adviser.  If you have policy specific questions or need additional information, contact us.  Also, contact us for free copies of the prospectuses for the mutual funds available under the policy.

Telephone:	1-800-547-7548
TDD:	1-800-238-3035
Internet:	www.nationwide.com
U.S. Mail:	Nationwide Life Insurance Company
	5100 Rings Road, RR1-04-D4
	Dublin, OH 43017-1522

You should read your policy along with this prospectus.

These securities have not been approved or disapproved by the SEC nor has the SEC passed upon the accuracy or adequacy of the prospectus.  Any representation to the contrary is a criminal offense.

This policy is NOT: FDIC or NCUSIF insured; a bank deposit; available in every state; or insured or endorsed by a bank or any federal government agency.

This policy MAY decrease in value to the point of being valueless.

THIS PROSPECTUS IS NOT AN OFFERING IN ANY JURISDICTION WHERE SUCH OFFERING MAY NOT LAWFULLY BE MADE.

The purpose of this policy is to provide life insurance protection for the beneficiary you name.  If your primary need is not life insurance protection, then purchasing this policy may not be in your best interests.  We make no claim that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund.

In thinking about buying this policy to replace existing life insurance, please carefully consider its advantages versus those of the policy you intend to replace, as well as any replacement costs.  As always, consult your financial adviser.

Not all terms, conditions, benefits, programs, features and investment options are available or approved for use in every state.

We offer a variety of variable universal life policies.  Despite offering substantially similar features and investment options, certain policies may have lower overall charges than others, including this policy.  These differences in charges may be attributable to differences in sales and related expenses incurred in one distribution channel versus another.

Table of Contents	Page
In Summary: Policy Benefits	1
In Summary: Policy Risks	2
In Summary: Variable Universal Life Insurance And The Policy	3
In Summary: Fee Tables	5
Policy Investment Options	11
Variable Investment Options
Allocation of Net Premium and Cash Value
Valuation of Accumulation Units
How Sub-Account Investment Experience is Determined
Cash Value
Transfers	15
Sub-Account Portfolio Transfers
Modes to Make a Transfer
The Policy	17
Policy Owner
The Beneficiaries
To Purchase
Coverage
Coverage Effective Date
Temporary Insurance Coverage
To Cancel (Examination Right)
To Change Coverage
To Exchange
To Terminate (Surrender)
To Assign
Proceeds Upon Maturity
Reminders, Reports And Illustrations
Errors Or Misstatements
Incontestability
If We Modify The Policy
Riders	20
Adjusted Sales Load Life Insurance Rider
Children's Insurance Rider
Long-term Care Rider
Spouse Life Insurance Rider
Accidental Death Benefit Rider
Premium Waiver Rider
Change Of Insured Rider
Additional (insurance) Protection Rider
Deduction (of fees and expenses) Waiver Rider
Policy Guard Rider
Premium	24
Initial Premium
Subsequent Premiums

Table of Contents (continued)	Page
Charges	24
Sales Load
Premium Taxes
Short-Term Trading Fees
Surrender Charges
Partial Surrender Fee
Cost Of Insurance
Mortality And Expense Risk
Administrative
Policy Loan Interest
Adjusted Sales Load Life Insurance Rider
Children's Insurance Rider
Long-term Care Rider
Spouse Life Insurance Rider
Accidental Death Benefit Rider
Premium Waiver Rider
Additional (insurance) Protection Rider
Deduction (of fees and expenses) Waiver Rider
Policy Guard Rider
A Note On Charges
Information On Underlying Mutual Fund Payments
The Death Benefit	31
Calculation Of The Death Benefit Proceeds
Death Benefit Options
The Minimum Required Death Benefit
Changes In The Death Benefit Option
Suicide
Surrenders	32
Full Surrender
Partial Surrender
Reduction Of Specified Amount On A Partial Surrender
The Payout Options	33
Interest Income
Income For A Fixed Period
Life Income With Payments Guaranteed
Fixed Income For Varying Periods
Joint And Survivor Life
Alternate Life Income
Policy Loans	34
Loan Amount And Interest
Collateral And Interest
Repayment
Net Effect Of Policy Loans
Lapse	35
Guaranteed Policy Continuation Provision
Grace Period
Reinstatement

Table of Contents (continued)	Page
Taxes	36
Types Of Taxes Of Which To Be Aware
Buying The Policy
Investment Gain In The Policy
Periodic Withdrawals, Non-Periodic Withdrawals And Loans
Surrender Of The Policy
Withholding
Exchanging The Policy For Another Life Insurance Policy
Taxation Of Death Benefits
Terminal Illness
Special Considerations For Corporations
Taxes And The Value Of Your Policy
Business Uses Of The Policy
Non-Resident Aliens and Other Persons Who are not Citizens of the United States
Tax Changes
Nationwide Life Insurance Company	42
Nationwide VLI Separate Account-6	42
Organization, Registration And Operation
Addition, Deletion, Or Substitution Of Mutual Funds
Voting Rights
Legal Proceedings	43
Nationwide Life Insurance Company
Nationwide Investment Services Corporation
Financial Statements	45
Appendix A: Available Sub-Accounts	46
Appendix B: Definitions	55

In Summary: Policy Benefits

Appendix B defines certain words and phrases we use in this prospectus.

Death Benefit

The primary benefit of your policy is life insurance coverage. While the policy is In Force, we will pay the Proceeds to your beneficiary when the Insured dies.

Your Choice Of Death Benefit Options

ü Option One is the greater of the Specified Amount or the minimum required Death Benefit under federal tax law.

ü Option Two is the greater of the Specified Amount plus the Cash Value or the minimum required Death Benefit under federal tax law.

ü Option Three is the greater of the Specified Amount plus accumulated Premium payments (less any partial surrenders) or the minimum required Death Benefit under federal tax law.

For more information, see "The Death Benefit," beginning on page 31.

Your Or Your Beneficiary's Choice Of Policy Proceeds

You or your beneficiary may choose to receive the Policy Proceeds in a lump sum, or there are a variety of options that will pay out over time.  For more information, see "The Payout Options," beginning on page 33.

Coverage Flexibility

Subject to conditions, you may choose to:

ü Change the Death Benefit option;

ü Increase or decrease the Specified Amount;

ü Change your beneficiaries; and

ü Change who owns the policy.

For more information, see: "Changes In The Death Benefit Option," beginning on page 32; "To Change Coverage," beginning on page 18; "The Beneficiaries," beginning on page 17; and "Proceeds Upon Maturity," beginning on page 19.

Continuation Of Coverage Is Guaranteed

During the guaranteed policy continuation period, your policy will remain In Force so long as you pay the Policy Continuation Premium Amount.  For more information, see "Guaranteed Policy Continuation Provision," beginning on page 35.

Access To Cash Value

Subject to conditions, you may choose to borrow against, or withdraw, the Cash Value of your policy:

ü Take a policy loan of an amount no greater than 90% of the Sub-Account portfolios less any surrender charges.  The minimum amount is $1.  For more information, see "Policy Loans," beginning on page 34.

ü Take a partial surrender.  The minimum amount is $1.  For more information, see "Partial Surrender," beginning on page 32.

ü Surrender the policy at any time while the Insured is alive.  The Cash Surrender Value will be the Cash Values of the Sub-Account portfolios, less any policy loans and surrender charges.  You may choose to receive the Cash Surrender Value in a lump sum, or you will have available the same payout options as if it constituted a Death Benefit.  For more information, see "Full Surrender," beginning on page 32 and "The Payout Options," beginning on page 33.

Premium Flexibility

While we would like you to select a premium payment plan, you will not be required to make your Premium payments accordingly.  Within limits, you may vary the frequency and amount, and you might even be able to skip a Premium payment.  For more information, see "Premium," beginning on page 24.

Investment Options

You may choose to allocate your Premiums after charges among the variable investment options.  The variable investment options constitute the limitedly available mutual funds, and we have divided Nationwide VLI Separate Account-6 into an equal number of Sub-Account portfolios, identified in the "Available Sub-Accounts" section, to account for your allocations.

1

Your Investment Experience will depend on the market performance of the Sub-Account portfolios you have chosen.  For more information, see "Available Sub-Accounts," beginning on page 46 and "Policy Investment Options," beginning on page 11.

Transfers Among Investment Options

The policies are designed to support active trading strategies.  A policy owner who does not intend to use an active trading strategy should consult with his/her registered representative and request information on other Nationwide policies.  For more information, see "Sub-Account Portfolio Transfers," beginning on page 15 and "Modes To Make A Transfer," beginning on page 16.

Taxes

Unless you make a withdrawal, generally, you will not be taxed on any earnings.  This is known as tax deferral.  For more information, see "The Minimum Required Death Benefit," beginning on page 31.  Also, your beneficiary generally will not have to include the Proceeds as taxable income.  For more information, see "Taxes," beginning on page 36.  Unlike other variable insurance products offered by Nationwide, these Flexible Premium Variable Universal Life Insurance Policies do not require distributions to be made before the death of the insured.

Assignment

You may assign the policy as collateral for a loan or another obligation while the Insured is alive.  For more information, see "To Assign," beginning on page 19.

Examination Right

For a limited time, you may cancel the policy, and you will receive a refund.  For more information, see "To Cancel (Examination Right)," beginning on page 18.

Riders

You may purchase any of the available Riders (except for both the Premium Waiver and Deduction Waiver Riders, simultaneously) to suit your needs.  Availability will vary by state, and there may be an additional charge.

ü Adjusted Sales Load Life Insurance Rider

ü Children’s Insurance Rider

ü Long-term Care Rider

ü Spouse Life Insurance Rider

ü Accidental Death Benefit Rider

ü Premium Waiver Rider

ü Change Of Insured Rider (There is no charge for this Rider.)

ü Additional (insurance) Protection Rider

ü Deduction (of fees and expenses) Waiver Rider

ü Policy Guard Rider

For more information, see "Riders," beginning on page 20.

In Summary: Policy Risks

Improper Use

Variable universal life insurance is not suitable as an investment vehicle for short-term savings.  It is designed for long-term financial planning.  You should not purchase the policy if you expect that you will need to access its Cash Value in the near future because substantial surrender charges will apply in the first several years from the Policy Date.

Unfavorable Investment Experience

The variable investment options to which you have chosen to allocate Net Premium may not generate a sufficient, let alone a positive, return, especially after the deductions for policy and Sub-Account portfolio charges.  Besides Premium payments, Investment Experience will impact the Cash Value, and poor Investment Experience (in conjunction with your flexibility to make changes to the policy and deviate from your chosen premium payment plan) could cause the Cash Value of your policy

2

to decrease, resulting in a Lapse of insurance coverage, sooner than might have been foreseen, and, potentially, even cause the policy to terminate without value.

Effect Of Partial Surrenders And Policy Loans On Investment Returns

Partial surrenders or policy loans may accelerate a Lapse because the amount of either or both will no longer be available to generate any investment return.  A partial surrender will proportionately reduce the amount of Cash Value allocated among the Sub-Account portfolios you have chosen.  As collateral for a policy loan, we will transfer an equal amount of Cash Value to the policy loan account, which will also reduce the Cash Value allocated among your chosen investment options.  Thus, the remainder of your policy's Cash Value is all that would be available to generate enough of an investment return to cover policy and Sub-Account portfolio charges and keep the policy In Force, at least until you repay the policy loan or make another Premium payment.  There will always be a Grace Period, and the opportunity to reinstate insurance coverage.  Under certain circumstances, however, the policy could terminate without value, and insurance coverage would cease.

Reduction Of The Death Benefit

A partial surrender could, and a policy loan would, decrease the policy’s Death Benefit, depending on how the Death Benefit relates to the policy’s Cash Value.

Adverse Tax Consequences

Existing federal tax laws that benefit this policy may change at any time.  These changes could alter the favorable federal income tax treatment the policy enjoys, such as the deferral of taxation on the gains in the policy's Cash Value and the exclusion from taxable income of the Proceeds we pay to the policy's Beneficiary.  Partial and full surrenders from the policy may be subject to taxes.  The income tax treatment of the surrender of Cash Value is different in the event the policy is treated as a modified endowment contract under the Code.  Generally, tax treatment on modified endowment contracts will be less favorable when compared to having the policy treated as a life insurance contract.  Consult a qualified tax adviser on all tax matters involving your policy.

Sub-Account Portfolio Limitations

The Rydex Variable Trust expects that you may make frequent transfers among the Sub-Accounts holding its shares.  The other underlying funds expect that you will not make these frequent transfers, and for these Sub-Accounts, frequent trading may dilute the value of your Accumulation Units, cause the Sub-Account to incur higher transaction costs, and interfere with the pursuit of stated investment objectives.  For the affected Sub-Accounts, this disruption may result in lower Investment Experience and Cash Value.  These Sub-Accounts may assess a short-term trading fee in order to minimize disruptive transfers.  For more information, see "Sub-Account Portfolio Transfers," beginning on page 15, "Modes To Make A Transfer," beginning on page 16 and "Short-Term Trading Fees," beginning on page 25.  While we expect these fees to reduce the adverse effect of disruptive transfers, we cannot assure you that we have eliminated these risks.

Sub-Account Portfolio Investment Risk

A comprehensive discussion of the risks of the mutual funds held by each Sub-Account portfolio may be found in that mutual fund’s prospectus. You should read the mutual fund’s prospectus carefully before investing.

In Summary: Variable Universal Life Insurance And The Policy

Variable Universal Life Insurance, in general, may be important to you in two ways.

ü It will provide economic protection to a beneficiary.

ü It may build Cash Value.

Why would you want to purchase this type of life insurance?  How will you allocate the Net Premium among the variable investment options?  Your reasons and decisions will affect the insurance and Cash Value aspects.

While variable universal life insurance is designed primarily to provide life insurance protection, the Cash Value of a policy will be important to you in that it may impair (with poor investment results) or enhance (with favorable investment results) your ability to pay the costs of keeping the insurance In Force.

Apart from the life insurance protection features, you will have an interest in maximizing the value of the policy as a financial asset.

3

It is similar to, but also different from universal life insurance.

ü You will pay Premiums for life insurance coverage on the Insured.

ü The policy will provide for the accumulation of a Cash Surrender Value if you were to surrender it at any time while the Insured is alive.

ü The Cash Surrender Value could be substantially lower than the Premiums you have paid.

What makes the policy different than universal life insurance is your opportunity to allocate Premiums after charges to the Sub-Account portfolios you have chosen.  Also, that its Cash Value will vary depending on the market performance of the Sub-Account portfolios, and you will bear this risk.

From the time we issue the policy through the Insured’s death, here is a basic overview.  (But please read the remainder of this prospectus for the details.)

ü At issue, the policy will require a minimum initial Premium payment.

Among other considerations, this amount will be based on: the Insured’s age and sex; the underwriting class; any substandard ratings; the Specified Amount; the Death Benefit option; and the choice of any Riders.

ü At the time of a Premium payment, we will deduct some charges.  We call these charges transaction fees.

ü You will then be able to allocate the Premium net of transaction fees, or Net Premium, among the variable investment options.

ü From the policy’s Cash Value, on a periodic basis, we will deduct other charges to help cover the mortality risks we assumed, and the sales and administrative costs.

ü You may be able to vary the timing and amount of Premium payments.

So long as there is enough Cash Surrender Value to cover the policy's periodic charges as they come due, the policy will remain In Force.

ü After the first year from the Policy Date, you may request to increase or decrease the policy’s Specified Amount.

This flexibility will allow you to adjust the policy to meet your changing needs and circumstances, subject to: additional underwriting (for us to evaluate an increase of risk); confirmation that the policy’s tax status is not jeopardized; and confirmation that the minimum and maximum insurance amounts remain met.

ü The policy will pay a Death Benefit to the beneficiary.  You have a choice of one of three Death Benefit options.

As your insurance needs change, you may be able to change Death Benefit options, rather than buying a new policy, or terminating this policy.

ü Prior to the Insured’s death, you may withdraw all, or a portion of the policy’s Cash Surrender Value.  Or you may borrow against the Cash Surrender Value.

Withdrawals and policy loans are subject to restrictions, may reduce the Death Benefit and increase the likelihood of the policy Lapsing.  There also could be adverse tax consequences.

4

In Summary: Fee Tables

The following tables describe the fees and expenses that you will pay when buying, owning and surrendering the policy.  Fees in this table may be rounded to the hundredth decimal.  The first table describes the fees and expenses that you will pay at the time that you buy or surrender the policy.

For more information, see "Charges," beginning on page 24.

Transaction Fees
Charge	When Charge Is Deducted	Amount Deducted
Sales Load	Upon Making A Premium Payment	Maximum Guaranteed	Currently
		$25	$5
		Per $1,000 Of Premium Payment
Premium Taxes (1)	Upon Making A Premium Payment	$35 Per $1,000 Of Premium Payment
Short-Term Trading Fee (2)	Upon transfer of sub-account value out of a sub-account within 60 days after allocation to that sub-account	1% of the amount transferred from the sub-account within 60 days of allocation to that sub-account
Surrender Charges (3), (4), (5) Representative - For An Age 35 Male Non-tobacco Preferred With A Specified Amount Of $500,000 And Death Benefit Option One	Upon Full Surrender or policy Laspe	Maximum (6)		Minimum (7)
		$25,590		$2,337
		Representative (8)
		$3,408
		Proportionately From The Policy’s Cash Value
Illustration Charge (9)	Upon Requesting An Illustration	Maximum Guaranteed			Currently
		$25			$0
Partial Surrender Fee (10)	Upon A Partial Surrender	Maximum Guaranteed			Currently
		$25			$0
		From The Policy's Available Cash Value (11)

^{_______________________________________}

⁽¹⁾ We deduct one charge composed of the sales load and premium taxes.  On the Policy Data Page, we call the combined charge a Premium Load.

⁽²⁾ Short-term trading fees are only assessed in connection with Sub-Accounts that correspond to an underlying mutual fund that assesses a short-term trading fee.  See "Total Annual Sub-Account Portfolio Operating Expenses" for a list of mutual funds that assess a short-term trading fee.  For more information about transactions subject to short-term trading fees, see "Short-Term Trading Fees," beginning on page 25.

⁽³⁾ This charge is comprised of two components.  There is an underwriting component, which is based on the Insured's age (when the policy was issued).  There is also a sales expense component, which is based on and varies by the Insured's sex, age (when the policy was issued) and underwriting class.  The amount of the charge we would deduct begins to decrease each year after the second from the Policy Date.  For example, by the ninth year, the amount is 30% of the surrender charge, and, thereafter, there is no charge for a full surrender.  A surrender charge will apply if you surrender or lapse the policy, or if you request to decrease the Specified Amount.  We will calculate a separate surrender charge based on the Specified Amount, and each increase in the Specified Amount, which, when added together, will amount to your surrender charge.  For more information, see "Surrender Charges," beginning on page 26.

5

⁽⁴⁾ To be able to present dollar amounts of this charge here, for a full surrender occurring in the first year from the Policy Date, we assume an aggregate first year Premium in excess of the surrender target premium.  The surrender target premium is an assumed Premium payment amount we use in calculating the surrender charge.  The surrender charge is based on the lesser of the surrender target premium and the Premiums you pay in the first year from the Policy Date.  The surrender target premium varies by: the Insured's sex; age (when the policy was issued); underwriting class and the Specified Amount (and any increases).

⁽⁵⁾ Ask for an illustration, or see the Policy Data Page for more information on your cost.

⁽⁶⁾ The amount is based on a male who is age 80 or older and uses tobacco (representing our greatest underwriting risk).  We assume a policy with a Specified Amount of $500,000 and Death Benefit Option One.  The stated surrender charge is for a surrender occurring in the first year from the Policy Date.

⁽⁷⁾ The amount is based on a female who is age 0.  We assume a policy with a Specified Amount of $500,000 and Death Benefit Option One.  The stated surrender charge is for a surrender occurring in the first year from the Policy Date.

⁽⁸⁾       This amount may not be representative of your cost.

⁽⁹⁾ If we begin to charge for illustrations, you will be expected to pay the charge in cash directly to us at the time of your request.  This charge will not be deducted from the policy's Cash Value.

⁽¹⁰⁾ You may request a partial surrender at any time while the policy is In Force and we may charge a partial surrender fee.

⁽¹¹⁾ Besides this charge, remember that the Cash Value available for a partial surrender is subject to any outstanding policy loans.

The next table describes the fees and expenses that you will pay periodically during the time that you own the policy, not including Sub-Account portfolio operating expenses.

Periodic Charges Other Than Sub-Account Portfolio Operating Expenses
Charge	When Charge Is Deducted	Amount Deducted From Cash Values
Cost Of Insurance (12), (13)  Representative - For An Age 35 Male Non-tobacco Preferred With A Specified Amount Of $500,000 And Death Benefit Option One	Monthly	Minimum	Maximum		Representative (14)
		$0.04	$83.33		$0.14
		Per $1,000 Of Net Amount At Risk - Proportionately From Your Chosen Variable Investment Options
Mortality And Expense Risk	Monthly	Maximum Guaranteed
		$0.50 Per $1,000 Of variable Cash Value (15)
		Proportionately From Your Chosen Variable Investment Options
Administrative	Monthly	Maximum Guaranteed		Currently
		$10		$10 (16)
		Proportionately From Your Chosen Variable Investment Options
Policy Loan Interest (17), (18), (19)	Annually	Maximum Guaranteed		Currently
		$39		$39
		Per $1,000 Of An Outstanding Policy Loan

^{_______________________________________}

6

⁽¹²⁾ This charge varies by: the Insured's sex; age; underwriting class; any substandard ratings; the year from the Policy Date and the Specified Amount.  Cost of Insurance charges are taken from the policy's Cash Value at the beginning of the month starting with the Policy Date and we will not pro rate the monthly fee should the Policy terminate before the beginning of the next month.

⁽¹³⁾ Ask for an illustration, or see the Policy Data Page for more information on your cost.

⁽¹⁴⁾ This amount may not be representative of your cost.

⁽¹⁵⁾ This charge is $0.50 per $1,000 on the first $25,000 of Cash Value. During the first through fifteenth years from the Policy Date, this charge is $0.25 per $1,000 on $25,001 up to $250,000 of Cash Value; otherwise, this charge is $0.17 per $1,000 of Cash Value thereafter.

⁽¹⁶⁾ During the first year from the Policy Date, the monthly maximum guaranteed amount is $10, and the monthly current amount is $10.  Thereafter, the monthly maximum guaranteed amount is $7.50, and the monthly current amount is $5.

⁽¹⁷⁾ On the amount of an outstanding loan, we not only charge, but also credit interest, so there is a net cost to you.  Also, there are ordinary and preferred loans on which interest rates vary.  For more information, see "Policy Loans," beginning on page 34.

⁽¹⁸⁾ We charge 3.9% interest per annum on the outstanding balance, which accrues daily and becomes due and payable at the end of the year from the Policy Date, or we add it to your loan.  Meanwhile, we credit interest daily, too, on the portion of your policy's Cash Value corresponding to, and serving as collateral or security to ensure repayment of, the loan.  During years one through ten, it is 3.0% and 3.9% per annum currently for ordinary and preferred loans, respectively (guaranteed 3.0% minimally), and, thereafter, 3.9% per annum currently (guaranteed 3.65% minimally).

⁽¹⁹⁾ Your net cost for an ordinary loan during years one through ten from the Policy Date is 0.9% per annum currently.  Thereafter, there is no cost (a net cost of zero) for an ordinary loan currently.  There is no cost (a net cost of zero) for a preferred loan currently.  For more information, see "Collateral And Interest," beginning on page 35.

7

Periodic Charges Other Than Sub-Account Portfolio Operating Expenses For Riders
Optional Charge(20)	When Optional Charge Is Deducted	Amount Deducted From Cash Value
Adjusted Sales Load Life Insurance Rider	Monthly	$0.14
		Per $1,000 Of aggregate monthly Premium And 1% Of Premium Load- Proportionately From Your Chosen Variable Investment Options
Children’s Insurance Rider	Monthly	$0.43 Per $1,000 Of Rider Specified Amount - Proportionately From Your Chosen Variable Investment Options
Long-term Care Rider (21) Representative - For An Age 35 Male Non-tobacco Preferred With A Long-term Care Specified Amount Of $500,000 And Death Benefit Option One	Monthly	Minimum	Maximum	Representative
		$0.02	$28.65	$0.02
		Per $1,000 Of Rider Net Amount At Risk - Proportionately From Your Chosen Variable Investment Options
Spouse Life Insurance Rider (22) Representative Spouse - For An Age 35 Female Non-tobacco With A Spousal Life Specified Amount Of $100,000	Monthly	Minimum	Maximum	Representative
		$0.10	$10.23	$0.11
		Per $1,000 Of Spousal Death Benefit - Proportionately From Your Chosen Variable Investment Options
Accidental Death Benefit Rider (23) Representative - For An Age 35 Male Non-tobacco Preferred With An Accidental Death Benefit Of $100,000	Monthly	Minimum	Maximum	Representative
		$0.05	$0.75	$0.06
		Per $1,000 Of Accidental Death Benefit - Proportionately From Your Chosen Variable Investment Options

8

Periodic Charges Other Than Sub-Account Portfolio Operating Expenses For Riders
Optional Charge(20)	When Optional Charge Is Deducted	Amount Deducted From Cash Value
Premium Waiver Rider (24), (25) Representative - For An Age 35 Male Non-tobacco Preferred	Monthly	Minimum	Maximum	Representative
		$42	$315(29)	$42
		Per $1,000 Of Premium Waiver Benefit - Proportionately From Your Chosen Variable Investment Options
Additional Protection Rider (26) Representative - For An Age 35 Male Non-tobacco Preferred With Additional Death Benefit Of $250,000	Monthly	Minimum	Maximum	Representative
		$0.01	$83.33	$0.04
		Per $1,000 Of Rider Net Amount at Risk - Proportionately From Your Chosen Variable Investment Options
Deduction Waiver Rider (27) Representative - For An Age 35 Male Non-tobacco Preferred With A Specified Amount Of $500,000 And Death Benefit Option One	Monthly	Minimum	Maximum	Representative
		$85	$850	$85
		Per $1,000 Of Deduction Waiver Benefit - Proportionately From Your Chosen Variable Investment Options
Policy Guard Rider (28) Representative – The Insured Is Attained Age 85 With a Cash Value of $500,000 and Indebtedness of $480,000	Upon Invoking The Rider	Minimum	Maximum	Representative
		$1.50	$42.50	$32.00
		Deducted From Each $1,000 Of The Policy’s Cash Value

^{_______________________________________}

⁽²⁰⁾ You may elect any of these Riders (except for both the Premium Waiver and Deduction Waiver Riders, simultaneously).  There is also a Change of Insured Rider you may elect for no charge.  The continuation of a Rider is contingent on the policy being In Force.  The amounts presented here may not be representative of your cost.  Ask for an illustration, or see the Policy Data Page, for more information on your cost.

⁽²¹⁾ This charge varies by: the Insured’s sex; age; underwriting class; any substandard ratings; and the Specified Amount.

⁽²²⁾ This charge varies by: the spouse’s sex; age; underwriting class; any substandard ratings; and the Specified Amount.

⁽²³⁾ This charge varies by: benefits elected; the Insured's sex; Attained Age; underwriting class; and any substandard ratings.

⁽²⁴⁾ To be able to present dollar amounts of this charge here, we assume monthly Premium payments of $1,000, the waiver of which would occur in the event of the Insured's total disability for six consecutive months.

⁽²⁵⁾ This charge varies by policy based on individual characteristics of the person being insured.

⁽²⁶⁾ This charge varies by policy based on individual characteristics of the person being insured.  The monthly charge is a product of the Rider’s monthly cost of insurance rate and the Rider Death Benefit.

⁽²⁷⁾ To be able to present dollar amounts of this charge here, we assume total monthly periodic charges of $1,000 (not including this Rider's cost, and any loan amount interest (which are meant to be excluded)), the waiver of which would occur in the event of the Insured's total disability for six consecutive months.

⁽²⁸⁾ You may invoke this Rider only when certain conditions are met that include: 1) the Insured attains age 75; 2) the policy has been In Force 15 years from the Policy Date; 3) the policy's Cash Value is at least $100,000; 4) the policy qualifies as life insurance using the guideline premium/cash value corridor tax test; and 5) the entire cost basis for tax purposes has been withdrawn from the policy.  For more information, see "Policy Guard Rider," beginning on page 23.  The level of Indebtedness as a percentage of Cash Value that will allow you to invoke the

9

Rider will vary with the attained age of the Insured.  Generally, the higher the Insured's attained age, the higher the level of Indebtedness must be to invoke the Rider.

⁽²⁹⁾ For policies issued before July 13, 2006, the maximum charge for this Rider is $105.

The next item shows the minimum and maximum total operating expenses, as of December 31, 2006, charged by the Sub-Account portfolios that you may pay periodically during the time that you own the policy.  The table does not reflect Short-Term Trading Fees.  More detail concerning each Sub-Account portfolio’s fees and expenses is contained in the prospectus for the mutual fund that corresponds to the Sub-Account portfolio.  Please contact us, at the telephone numbers or address on the cover page of this prospectus, for free copies of the prospectuses for the mutual funds available under the policy.

Total Annual Sub-Account Portfolio Operating Expenses
Total Annual Sub-Account Portfolio Operating Expenses	Maximum	Minimum
(expenses that are deducted from the Sub-Account portfolio assets, including management fees, distribution (12b-1) fees, and other expenses)	5.12%	0.56%

The following mutual funds assess a short-term trading fee in connection with transfers from a Sub-Account that occur within 60 days after the date of allocation to that Sub-Account (see "Short-Term Trading Fees"):

· American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class III

· American Century Variable Portfolios, Inc. - American Century VP Ultra Fund: Class III

· American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class III

· Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2R

· Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2R

· Fidelity Variable Insurance Products Fund II - VIP Contrafund® Portfolio: Service Class 2R

· Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III

· Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Cap Growth Fund: Class III

· Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Cap Value Fund: Class III

· Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Company Fund: Class III

· Nationwide Variable Insurance Trust - Nationwide NVIT Government Bond Fund: Class III

· Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Conservative Fund: Class VI

· Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderately Conservative Fund: Class VI

· Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderate Fund: Class VI

· Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderately Aggressive Fund: Class VI

· Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Aggressive Fund: Class VI

· Nationwide Variable Insurance Trust - Nationwide NVIT Mid Cap Growth Fund: Class III

· Nationwide Variable Insurance Trust - Nationwide NVIT Nationwide® Fund: Class III

· Nationwide Variable Insurance Trust - NVIT Nationwide® Fund: Class III

10

Policy Investment Options

When you apply for the policy, you choose how your Net Premium will be allocated among the available Sub-Accounts.  Depending on the right to examine law of the state in which you live, initial Net Premium designated to be allocated to the Sub-Accounts may not be so allocated immediately upon our receipt.  (Any initial Net Premium designated to be allocated to fixed investment options will be so allocated immediately upon receipt.)  If you live in a state that requires us to refund the initial Premium upon exercise of the free-look provision, we will hold all of the initial Net Premium designated to be allocated to the Sub-Accounts in the available money market Sub-Account until the free-look period expires.  At the expiration of the free-look period, we will transfer the variable account Cash Value to the Sub-Accounts based on the allocation instructions in effect at the time of the transfer.  If you live in a state that requires us to refund the Cash Value upon exercise of the free-look provision, we will allocate all of the initial Net Premium to the available money market Sub-Account.  On the next valuation period, we will allocate all of Cash Value to the designated Sub-Accounts based on the allocation instructions in effect at that time.  For more information, see "To Cancel (Examination Right)," beginning on page 18.  When this actually happens depends on the right to examine law of the state in which you live.

Variable Investment Options

The investment options constitute the limitedly available mutual funds, and we have divided the separate account into an equal number of Sub-Account portfolios to account for your allocations.  Each Sub-Account portfolio invests in a mutual fund that is registered with the SEC.  (This registration does not involve the SEC's supervision of the management or investment practices or policies of these mutual funds.)  The "Available Sub-Accounts" section identifies the available mutual funds, by name, investment type and adviser.  Your choices at Policy issue will appear on the Policy Data Page.

Each Sub-Account portfolio’s assets are held separately from the assets of the other Sub-Account portfolios, and each Sub-Account portfolio has investment objectives and policies that are different from those of the other Sub-Account portfolios.  Thus, each Sub-Account portfolio operates as a separate investment fund, and the income or losses of one Sub-Account portfolio generally have no effect on the Investment Experience of any other Sub-Account portfolio.

The Fixed Account

Certain optional riders available when you purchase the policy described in this prospectus require that Cash Value be allocated to a fixed account or special fixed account.  Such allocations will be held in the Fixed Account, which is part of our general account.  The Fixed Account is not currently available as a separate investment option with this policy.

The general account is not subject to the same laws as the separate account and the SEC has not reviewed any disclosures in this prospectus relating to the Fixed Account.

The general account contains all of our assets other than those in the separate accounts, including fixed investment options available with other policies or contracts we issue.  These assets are subject to general liabilities from our business operations and are used to support our insurance and annuity obligations.  We bear the full investment risk for all amounts allocated to the Fixed Account.  Investment income you earn on Cash Value allocated to the Fixed Account will be based on varying interest crediting rates that we set at our sole discretion.

We guarantee that the amounts allocated to the Fixed Account will be credited interest daily at a net effective annual interest rate of no less than 3%.  Interest crediting rates are set at the beginning of each calendar quarter.  We will credit any interest in excess of 3% at our sole discretion.

11

The Sub-Accounts available through this policy are listed below.  For more information about the mutual funds, please refer to “Appendix A: Available Sub-Accounts” and/or the applicable mutual fund’s prospectus.

American Century Variable Portfolios, Inc.

· American Century VP Income & Growth Fund: Class III†

· American Century VP Value Fund: Class III†*

Fidelity Variable Insurance Products Fund

· VIP Equity-Income Portfolio: Service Class 2R†*

· VIP Growth Portfolio: Service Class 2R†

Fidelity Variable Insurance Products Fund II

· VIP Contrafund® Portfolio: Service Class 2R†

Nationwide Variable Insurance Trust ("NVIT") (formerly Gartmore Variable Insurance Trust ("GVIT"))

· Federated NVIT High Income Bond Fund: Class III†

· Nationwide Multi-Manager NVIT Small Company Fund: Class III† (formerly GVIT Small Company Fund)

· Nationwide NVIT Government Bond Fund: Class III†

· Nationwide NVIT Investor Destinations Funds: Class VI†

· Nationwide NVIT Investor Destinations Conservative Fund: Class VI†

· Nationwide NVIT Investor Destinations Moderately Conservative Fund: Class VI†

· Nationwide NVIT Investor Destinations Moderate Fund: Class VI†

· Nationwide NVIT Investor Destinations Moderately Aggressive Fund: Class VI†

· Nationwide NVIT Investor Destinations Aggressive Fund: Class VI†

· Nationwide NVIT Money Market Fund II

· NVIT Nationwideâ Fund: Class III†

Rydex Variable Trust

· Absolute Return Strategies Fund

· Banking Fund

· Basic Materials Fund

· Biotechnology Fund

· Commodities Strategy Fund (formerly, Commodities Fund)

· Consumer Products Fund

· Dynamic Dow Fund

· Dynamic OTC Fund

· Dynamic S&P 500 Fund

· Dynamic Strengthening Dollar Fund

· Dynamic Weakening Dollar Fund

· Electronics Fund

· Energy Fund

· Energy Services Fund

· Europe Advantage Fund

· Financial Services Fund

· Government Long Bond Advantage Fund

· Health Care Fund

· Hedged Equity Fund

· Internet Fund

· Inverse Dynamic Dow Fund

· Inverse Government Long Bond Fund

· Inverse Mid-Cap Fund

· Inverse OTC Fund

· Inverse Russell 2000 Fund

· Inverse S&P 500 Fund

· Japan Advantage Fund

· Large-Cap Growth Fund

· Large-Cap Value Fund

· Leisure Fund

· Mid Cap Advantage Fund

· Mid-Cap Growth Fund

· Mid-Cap Value Fund

· Multi-Cap Core Equity Fund

· Nova Fund

· OTC Fund

· Precious Metals Fund

· Real Estate Fund

· Retailing Fund

· Russell 2000 Advantage Fund

· Sector Rotation Fund

· Small-Cap Growth Fund

· Small-Cap Value Fund

· Technology Fund

· Telecommunications Fund

· Transportation Fund

· Utilities Fund

These sub-accounts are only available in policies issued before May 1, 2007.

American Century Variable Portfolios, Inc.

· American Century VP Ultra Fund: Class III†

These sub-accounts are only available in policies issued before May 1, 2004.

Nationwide Variable Insurance Trust

· Nationwide Multi-Manager NVIT Small Cap Growth Fund: Class III† (formerly GVIT Small Cap Growth Fund)

· Nationwide Multi-Manager NVIT Small Cap Value Fund: Class III† (formerly GVIT Small Cap Value Fund)

· Nationwide NVIT Mid Cap Growth Fund: Class III†

These sub-accounts are no longer available to receive transfers or new premium payments effective May 1, 2005.

American Century Variable Portfolios, Inc.

· American Century VP Income & Growth Fund: Class II

· American Century VP Ultra Fund: Class II

· American Century VP Value Fund: Class II*

Fidelity Variable Insurance Products Fund

· VIP Equity-Income Portfolio: Service Class 2*

· VIP Growth Portfolio: Service Class 2

12

Fidelity Variable Insurance Products Fund II

· VIP Contrafund® Portfolio: Service Class 2

Nationwide Variable Insurance Trust

· Nationwide Multi-Manager NVIT Small Cap Growth Fund: Class II

· Nationwide Multi-Manager NVIT Small Cap Value Fund: Class II

· Nationwide Multi-Manager NVIT Small Company Fund: Class II

· Nationwide NVIT Government Bond Fund: Class I

· Nationwide NVIT Investor Destinations Funds: Class II

· Nationwide NVIT Investor Destinations Conservative Fund: Class II

· Nationwide NVIT Investor Destinations Moderately Conservative Fund: Class II

· Nationwide NVIT Investor Destinations Moderate Fund: Class II

· Nationwide NVIT Investor Destinations Moderately Aggressive Fund: Class II

· Nationwide NVIT Investor Destinations Aggressive Fund: Class II

· Nationwide NVIT Mid Cap Growth Fund: Class I

· NVIT Nationwideâ Fund: Class II

†These underlying mutual funds assess a short-term trading fee.

*These underlying mutual funds may invest in lower quality debt securities commonly referred to as junk bonds.

13

Allocation Of Net Premium And Cash Value

We allocate your Net Premium payments to Sub-Accounts per your instructions.  You must specify your Net Premium payments in whole percentages.  The sum of allocations must equal 100%.

Valuation of Accumulation Units

We will price Sub-Account Units on any day the New York Stock Exchange (NYSE) is open for business, unless we are closed.

We will not price Sub-Account Units on these recognized holidays

· New Year's Day

· Martin Luther King, Jr. Day

· Presidents’ Day

· Good Friday

· Memorial Day

· Independence Day

· Labor Day

· Thanksgiving

· Christmas

In addition, we will not price Sub-Account Units if:

· trading on the New York Stock Exchange is restricted;

· an emergency exists making disposal or valuation of securities held in the separate account impracticable; or

· the SEC, by order, permits a suspension or postponement for the protection of security holders.

SEC rules and regulations govern when the conditions described above exist.  Any transaction you try to effect when we are closed will not happen until the next day the NYSE and we are both open for business.

We must receive transfer requests by 3:00 p.m. Eastern Standard Time for that transfer to be processed in the current Valuation Period. The deadline will be extended to 3:35 p.m. Eastern Standard Time for transactions submitted electronically through our Internet website (www.nationwide.com). We will not accept any request for transactions between the applicable deadline and the close of the NYSE.

We will process transactions we receive after the close of the NYSE on the next Valuation Period that we are open.

How Sub-Account Investment Experience Is Determined

Though the number of Sub-Account Units will not change as a result of Investment Experience, changes in the net investment factor, as described below, may cause the value of a Sub-Account Unit to increase or decrease from Valuation Period to Valuation Period.  Changes in the net investment factor may not be directly proportional to changes in the NAV of the mutual fund shares.

We determine the change in Sub-Account values at the end of a Valuation Period.  The Sub-Account Accumulation Unit value for a Valuation Period is determined by multiplying the Sub-Account Unit accumulation value as of the prior Valuation Period by the net investment factor for the Sub-Account for the current Valuation Period.

We determine the net investment factor for any Valuation Period by dividing (a) by (b) where:

(a) is the sum of:

· the NAV per share of the mutual fund held in the Sub-Account as of the end of the current Valuation Period; and

· the per share amount of any dividend or income distributions made by the mutual fund (if the date of the dividend or income distribution occurs during the current Valuation Period); plus or minus

· a per share charge or credit for any taxes reserved for as a result of the Sub-Account's investment operations if changes to the law result in a modification to the tax treatment of the separate account; and

(b) is the NAV per share of the mutual fund determined as of the end of the immediately preceding Valuation Period.

Cash Value

The policy has a Cash Value.  There is no guaranteed Cash Value.  Rather, it will be based on the values, and vary with the Investment Experience of the Sub-Account portfolios to which you have allocated Net Premium, as well as the values of, and any daily crediting of interest to, the policy loan account.  It will also vary because we deduct the policy's periodic charges from the Cash Value.  So, if the policy's Death Benefit is affected by the amount of Cash Value, then your Death Benefit will fluctuate.

14

We will determine the value of the assets in the separate account at the end of each Valuation Period.  We will determine the Cash Value at least monthly. To determine the number of Sub-Account Units credited to each Sub-Account, we divide the net amount you allocate to the Sub-Account by the Sub-Account Accumulation Unit value for the Sub-Account (using the next Valuation Period following when we receive the Premium).

If you surrender part or all of the policy, we will deduct a number of Sub-Account Units from the separate account that corresponds to the surrendered amount.  Thus, your policy’s Cash Value will be reduced by the surrendered amount.  Similarly, when we assess charges or deductions, a number of Sub-Account Accumulation Units from the separate account that corresponds with the charge or deduction that will be deducted from the policy’s Cash Value.  We make these deductions in the same proportion that your interests in each Sub-Account bears to the policy’s total Cash Value.

The Cash Value in the policy loan will be credited interest daily at the guaranteed minimum annual effective rate stated on the Policy Data Page.  For there to be Cash Value in the policy loan account, you must have taken a policy loan.  We may decide to credit interest in excess of the guaranteed minimum annual effective rate.

On any date during the policy year, the Cash Value equals the Cash Value on the preceding Valuation Period, plus any Net Premium applied since the previous Valuation Period, minus any policy charges, plus or minus any investment results, and minus any partial surrenders.

Transfers

Sub-Account Portfolio Transfers

Prior to the policy’s Maturity Date, you may make transfers among the available Sub-Account portfolios on a daily basis via modes we currently have made available.  We may also permit you to use other modes of communicating a transfer request in the future.  We will process a transfer at the end of the Valuation Period on which we receive your request.

We will determine the amount you have available for transfers among the Sub-Account portfolios in Accumulation Units based on the Net Asset Value (NAV) per share of the mutual fund in which a Sub-Account portfolio invests.  The mutual fund will determine its NAV once daily as of the close of the regular business session of the New York Stock Exchange (usually 4:00 p.m. Eastern time, but see "Valuation of Accumulation Units," beginning on page 14 for information about time based restrictions on transfer requests).  An Accumulation Unit will not equal the NAV of the mutual fund in which the Sub-Account portfolio invests because the Accumulation Unit value will reflect the deduction for any transaction fees and periodic charges.  For more information, see "In Summary: Fee Tables," beginning on page 5, and "How Sub-Account Investment Experience Is Determined," beginning on page 14.

The policies sold with this prospectus are designed to support active trading strategies that require frequent movement between or among certain Sub-Account portfolios (those sub-accounts corresponding to underlying mutual funds of the Rydex Variable Insurance Trust).  A policy owner who does not intend to use an active trading strategy should consult his/her registered representative and request information on other Nationwide policies.

We discourage (and will take action to deter) inappropriate market timing in the policy (frequent trading among underlying mutual funds other than those that are part of the Rydex Variable Insurance Trust) because the frequent movement between or among those Sub-Accounts may negatively impact other investors.  Inappropriate market timing can result in:

· the dilution of the value of the investors' interests in the Sub-Account;

· underlying mutual fund managers taking actions that negatively impact performance (keeping a larger portion of the underlying mutual fund assets in cash or liquidating investments prematurely in order to support redemption requests); and/or

· increased administrative costs due to frequent purchases and redemptions.

To protect investors in this policy from the potentially negative impact of inappropriate market timing of non-Rydex Variable Insurance Trust Sub-Accounts, we have implemented, or reserve the right to implement, several processes and/or restrictions aimed to stop inappropriate market timing while still permitting policy owners to actively trade among the Sub-Accounts of the Rydex Variable Insurance Trust.  We cannot guarantee that our attempts to deter active trading strategies will be successful.  If active trading strategies are not successfully deterred by our actions, the performance of Sub-Accounts that are actively traded will be adversely impacted.

Redemption Fees

We have added, and may continue to add, new underlying mutual funds, or new share classes of currently available underlying mutual funds, that assess short-term trading fees.  In the case of new share class additions, your subsequent allocations may be limited to that new share class.  Short-term trading fees are a charge assessed by an underlying mutual fund when you transfer out of a Sub-Account within 60 days of the date of allocation to the Sub-Account.  The fee is assessed

15

against the amount transferred and is paid to the underlying mutual fund.  Redemption fees compensate the underlying mutual fund for any negative impact on fund performance resulting from short-term trading.  For more information on short-term trading fees, please see "Short-Term Trading Fees," beginning on page 25.

U.S. Mail Restrictions

If we determine that a policy owner (or a third party acting on the policy owner's behalf) is engaging in harmful market timing, we reserve the right to take action to protect investors, including exercising our right to terminate the ability of specified policy owners to submit transfer requests via telephone, facsimile, or over the internet.  If we exercise this right, affected policy owners would be limited to submitting transfer requests via U.S. mail.

Some investment advisers/representatives manage the assets of multiple Nationwide policies pursuant to trading authority granted or conveyed by multiple policy owners.  We generally will require multi-policy advisers to submit all transfer requests via U.S. mail.

Other Restrictions

We reserve the right to refuse or limit transfer requests, or take any other action necessary to protect policy owners and beneficiaries from the negative investment results that may result from inappropriate market timing or other harmful investment practices employed by some policy owners (or third parties acting on their behalf).

Any restrictions that we implement will be applied consistently and uniformly.

Underlying Mutual Fund Restrictions and Prohibitions.

Pursuant to regulations adopted by the SEC, we are required to enter into written agreements with the underlying mutual funds which allow the underlying mutual funds to:

(1)        request the taxpayer identification number, international taxpayer identification number, or other government issued identifier of any of our policy owners;

(2)        request the amounts and dates of any purchase, redemption, transfer or exchange request (“transaction information”); and

(3)        instruct us to restrict or prohibit further purchases or exchanges by policy owners that violate policies established by the underlying mutual fund (whose policies may be more restrictive than our policies).

We are required to provide such transaction information to the underlying mutual funds upon their request.  In addition, we are required to restrict or prohibit further purchases or exchange requests upon instruction from the underlying mutual fund.  We and any affected policy owner may not have advance notice of such instructions from an underlying mutual fund to restrict or prohibit further purchases or exchange requests.  If an underlying mutual fund refuses to accept a purchase or exchange request submitted by us, we will keep any affected policy owner in their current underlying mutual fund allocation.

Modes To Make A Transfer

To make a transfer, send your written request to us at our Home Office via first class U.S. mail.  Upon receipt, we will process a transfer request at the end of the current Valuation Period.  We may also permit you to use other modes of communication subject to limitations.

Our contact information is on the cover page of this prospectus.

We will employ reasonable procedures to confirm that instructions are genuine, including:

· requiring forms of personal identification before acting upon instructions;

· providing you with written confirmation of completed transactions; and/or

· tape recording telephone instructions.

If we follow these procedures, we will not be liable for any loss, damage, cost or expense from complying with what we reasonably believe to be genuine instructions.  Rather, you will bear the risk of loss.

Any computer system or telephone, whether it is yours, your service provider’s, your representative’s, or ours, can experience slowdowns or outages for a variety of reasons.  These slowdowns or outages may delay or prevent our ability to process your request.  Although we have taken precautions to help our system handle heavy usage, we cannot promise complete reliability under all circumstances.  If you are experiencing problems, you should make your request in writing.

16

The Policy

The policy is a legal contract between you and us.  Any change which we would want to make must be in writing, signed by our president or corporate secretary, and attached to or endorsed on the policy.  You may exercise all policy rights and options while the Insured is alive.  You may also change the policy, but only in accordance with its terms.

Generally, the policy is available for an insured age 85 or younger (although these ages may vary in your state).  It is nonparticipating, meaning we will not be contributing any operating profits or surplus earnings toward the Proceeds from the policy.  The policy will comprise and be evidenced by: Policy Date Pages; a written contract; any Riders; any endorsements; and the application, including any supplemental application.  We will consider the statements you make in the application as representations.  We will rely on them as being true and complete.  However, we will not void the policy or deny a claim unless a statement is a material misrepresentation.

In order to comply with the USA Patriot Act and rules promulgated thereunder, Nationwide will implement procedures designed to prevent policies described in this prospectus from being used to facilitate money laundering or the financing of terrorist activities.

Policy Owner

The policy belongs to the owner named in the application.  You may also name a contingent owner.  A contingent owner will become the owner if the owner dies before any Proceeds become payable.  Otherwise, ownership will pass to the owner’s estate, if the owner is not the Insured.  To the extent permitted by law, policy benefits are not subject to any legal process for the payment of any claim, and no right or benefit will be subject to claims of creditors (except as may be provided by assignment).  You may name different owners or contingent owners (so long as the Insured is alive) by submitting your written request to our Home Office, which will become effective when signed rather than the date on which we received it.  There may be adverse tax consequences.  For more information, see "Taxes," beginning on page 36.

The Beneficiaries

The principal right of a beneficiary is to receive Proceeds constituting the Death Benefit upon the Insured's death.  So long as the Insured is alive, you may: name more than one beneficiary; designate primary and contingent beneficiaries; change or add beneficiaries; and provide for another distribution than the following.

If a primary beneficiary dies before the Insured, we will pay the Death Benefit to the remaining primary beneficiaries.  We will pay multiple primary beneficiaries in equal shares.  A contingent beneficiary will become the primary beneficiary if all primary beneficiaries die before the Insured, and before any Proceeds become payable.  You may name more than one contingent beneficiary.  We will also pay multiple contingent beneficiaries in equal shares.  To change or add beneficiaries, you must submit your written request to us at our Home Office, which will become effective when signed, rather than the date on which we received it.  The change will not affect any payment we made, or action we took, before we recorded the change.

To Purchase

To purchase the policy, you must submit to us a completed application and an initial Premium payment.

We must receive evidence of insurability that satisfies our underwriting standards (this may require a medical examination) before we will issue a policy.  We can provide you with the details of our underwriting standards.  We reserve the right to reject an application for any reason permitted by law.  Also, we reserve the right to modify our underwriting standards at any time.

The minimum initial Specified Amount is $100,000.  We reserve the right to modify our minimum Specified Amount at any time.

Coverage

We will issue the policy only if the underwriting process has been completed, we have approved the application and the proposed Insured is alive and in the same condition of health as described in the application.  However, full insurance coverage will take effect only after you have paid the minimum initial Premium.  We begin to deduct monthly charges from your policy Cash Value on the Policy Date.

Coverage Effective Date

Insurance coverage will begin and be In Force on the Policy Date shown on the Policy Data Page.  For a change in the Specified Amount, the effective date will be on the next monthly anniversary from the Policy Date after we have approved your request.  It will end upon the Insured's death, once we begin to pay the Proceeds, or when the policy matures.  It could end if the policy were to Lapse.

17

Temporary Insurance Coverage

Temporary insurance coverage, equal to the Specified Amount up to $1,000,000, may be available for no charge before full insurance coverage takes effect.  You must submit a temporary insurance agreement and make an initial Premium payment.  The amount of the initial Premium will depend on the initial Specified Amount, and your choice of Death Benefit option and any Riders, for purposes of the policy.  During this time, we will deposit your initial Premium payment into an interest bearing checking account.  Temporary insurance coverage will remain In Force for no more than 60 days from the date of the temporary insurance agreement.  Before then, temporary insurance coverage will terminate on the date full insurance coverage takes effect, or five days from the date we mail a termination notice (accompanied by a refund equal to the Premium payment you submitted).  If we issue the policy, what we do with the Net Premium depends on the right to examine law of the state in which you live.

To Cancel (Examination Right)

You may cancel your policy during the free look period.  The free look period expires ten days after you receive the policy or 45 days after you sign the application, or 10 days after we mail or deliver the Notice of Withdrawal Right, whichever is latest, or longer if required by state law.  If you decide to cancel during the free look period, return the policy to the sales representative who sold it to you, or to us at our Home Office, along with your written cancellation request.  Within seven days, we will refund the amount prescribed by the law of the state in which we issued the policy.  Depending on the right to examine law of the state in which you live, this amount will be your initial premium or the policy's Cash Value.  We will treat the policy as if we never issued it.  For more information, see "Allocation of Net Premium and Cash Value," beginning on page 14.

To Change Coverage

After the first year from the Policy Date, you may request to change the Specified Amount; however, no change will take effect unless the new Cash Surrender Value would be sufficient to keep the policy In Force for at least three months.  Changes to the Specified Amount will alter the Death Benefit.  For more information, see "Changes In The Death Benefit Option," beginning on page 32.

You may request to increase the Specified Amount, by at least $10,000, which will increase the Net Amount At Risk.  Because the cost of insurance charge is based on the Net Amount At Risk, this will also cause the policy's cost of insurance charge to increase.  As a result, there will be a corresponding increase in the periodic charges we deduct from the policy's Cash Value.  Also, an increase in the Specified Amount may cause an increase to the amount of your subsequent Premium payments and the likelihood that the entire policy is at risk of lapsing sooner.  For more information, see "Lapse," beginning on page 35.

You may request to decrease the Specified Amount.  We first apply decreases to the amount of insurance coverage as a result of any prior Specified Amount increases, starting with the most recent.  Then we will decrease the initial Specified Amount.  We will deny a request, however, to reduce the amount of your coverage below the minimum initial Specified Amount.  For more information, see "To Purchase," beginning on page 17.  Also, we will deny a request that would disqualify the policy as a contract for life insurance.  For more information, see "The Minimum Required Death Benefit," beginning on page 31.

To change the Specified Amount, you must submit your written request to us at our Home Office.  To increase the Specified Amount, you must provide us with evidence of insurability that satisfies our underwriting standards. The Insured must be 85 or younger as of the last policy anniversary.  Changes will become effective on the next monthly anniversary from the Policy Date after we approve the request.  We reserve the right to limit the number of changes to one each year from the Policy Date.

To Exchange

You have an exchange right under the policy.  At any time within the first 24 months of coverage from the Policy Date, you may surrender this policy and use the Cash Surrender Value to purchase a new policy on the Insured’s life without evidence of insurability.  Afterwards, you may also surrender the policy and use the Cash Surrender Value to purchase a new policy on the same Insured’s life, but subject to evidence of insurability that satisfies our underwriting standards.

The new policy may be one of our available flexible premium adjustable life insurance policies.  It may not have a greater Death Benefit than that of this policy immediately prior to the exchange date.  It will have the same Specified Amount, Policy Date, and issue age.  We will base Premiums on our rates in effect for the same sex, Attained Age and premium class of the Insured on the exchange date.  You may transfer any Indebtedness to the new policy.

You must make your request on our official forms to the Home Office.  The policy must be In Force and not in a Grace Period.  You must pay a surrender charge.  For more information, see "In Summary: Fee Tables," beginning on page 5.  The exchange may have tax consequences.  For more information, see "Exchanging The Policy For Another Life Insurance

18

Policy," beginning on page 39.  The new policy will take effect on the exchange date only if the Insured is alive.  This policy will terminate when the new policy takes effect.

To Terminate (Surrender)

You have the right to terminate (surrender) the policy.  The policy will automatically terminate when the Insured dies, the policy matures, or the Grace Period ends.  For more information, see "Surrenders," beginning on page 32.

Generally, if the policy has a Cash Surrender Value in excess of the Premiums you have paid, upon surrender the excess will be included in your income for federal tax purposes.  For more information, see "Surrendering the Policy," beginning on page 38.  The Cash Surrender Value will be reduced by the outstanding amount of a policy loan.  For more information, see "Policy Loans," beginning on page 34.

To Assign

You may assign any rights under the policy while the Insured is alive.  If you do, your beneficiary’s interest will be subject to the person(s) to whom you have assigned rights.  Your assignment must be in writing, and it must be recorded at our Home Office before it will become effective.  Your assignment will be subject to any outstanding policy loans.  For more information, see "Policy Loans," beginning on page 34.

Proceeds Upon Maturity

If the policy is In Force on the Maturity Date, we will pay you the Proceeds.

Normally, we will pay the Proceeds within seven days after we receive your written request at our Home Office.  The payment will be postponed, however, when: the New York Stock Exchange is closed; the SEC restricts trading or declares an emergency; the SEC permits us to defer it for the protection of our policy owners.  The Proceeds will equal the policy's Cash Value minus any Indebtedness.  After we pay the Proceeds, the policy is terminated.

We may offer to extend the Maturity Date to coincide with the Insured's death, after which we will pay the Proceeds to your beneficiary.  During this time, you will still be able to request partial surrenders, and you will still have in effect the Long-term Care Rider (though you will not be charged for it), the termination of benefits under which will coincide with the policy's extended Maturity Date (unless you decide otherwise).  The Maturity Date extension will either be for the policy value (as defined below), or for the Specified Amount (subject to the law of the state in which you lived at the time you purchased the policy).  It is your choice, and, in any event, your policy will be endorsed so that:

· no changes to the Specified Amount will be allowed;

· no additional Premium payments will be allowed;

· no additional periodic charges will be deducted;

· 100% of the policy value will be transferred to a fixed account, which is funded by our general account (for more information, see “The Fixed Account” earlier in this prospectus); and

· to extend for the Cash Value, your policy's Death Benefit will become the Cash Value, irrespective of your previous Death Benefit option choice; or

· to extend for the Specified Amount, the Specified Amount will be adjusted to what it was when the Insured reached Attained Age 70, but excluding any coverage provided by the Additional Protection Rider and subject to any partial surrenders, which will affect the Specified Amount of a policy with Death Benefit Option One based on the Insured's Attained Age at the time the request for a partial surrender is made.  While the Insured is between the Attained Ages of 71 and 90, a partial surrender will decrease the Specified Amount proportionately.  If the Insured reaches Attained Age 91, a partial surrender will reduce the Proceeds by an amount proportionate to the ratio of the partial surrender to the Cash Value prior to the partial surrender.

Notwithstanding your choice, the Proceeds will be the greater of the policy's Specified Amount or Cash Value unless you have invoked the Policy Guard Rider, in which case the proceeds may be reduced.  The Maturity Date will not be extended, however, beyond when the policy would fail the definition of life insurance under the Code.  For more information, see "The Payout Options," beginning on page 33, and "The Death Benefit," beginning on page 31.

Reminders, Reports And Illustrations

On request, we will send you scheduled Premium payment reminders and transaction confirmations.  We will also send you semi-annual and annual reports that show:

· the Specified Amount

· the current Cash Value

19

· minimum monthly Premiums

· the Cash Surrender Value

· Premiums paid

· outstanding Indebtedness

· all charges since the last report

You may receive information faster from us and reduce the amount of mail you receive by signing up for our eDelivery program.  We will notify you by e-mail when important documents, like statements and prospectuses, are ready for you to view, print, or download from our secure server.  If you would like to choose this option, go to www.nationwide.com/login.

We will send these reminders and reports to the address you provide on the application, or to another you may specify.

At any time, you may ask for an illustration of future benefits and values under the policy.  While we do not at present, we may charge if you ask for more than one illustration per year from the Policy Date.

IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS

When multiple copies of the same disclosure document(s), such as prospectuses, supplements, proxy statements and semi-annual and annual reports are required to be mailed to your household, we will mail only one copy of each document, unless notified otherwise by you.  Household delivery will continue for the life of the contracts.  Please call 1-866-223-0303 to resume regular delivery.  Please allow 30 days for regular delivery to resume.

Errors Or Misstatements

If you make an error or misstatement in completing the application, then we will adjust the Death Benefit and Cash Value.

To determine the adjusted Death Benefit, we will multiply the Net Amount At Risk at the time of the Insured’s death by the ratio of the monthly cost of insurance actually applied in the policy month of death to the monthly cost of insurance that should have been applied at the true age and sex in the policy month of death.  We will then add this adjusted amount to the Cash Value of the policy at the Insured’s death.  The Cash Value will also be adjusted to reflect the cost of insurance charges based on the Insured's correct age and sex from the Policy Date.

Incontestability

We will not contest payment of the Death Benefit based on the initial Specified Amount after the policy has been In Force during the Insured's lifetime for two years from the Policy Date.  For any change in Specified Amount requiring evidence of insurability, we will not contest payment of the Death Benefit based on such an increase after it has been In Force during the Insured's lifetime for two years from its effective date.

If We Modify The Policy

Any modification (or waiver) of our rights or requirements under the policy must be in writing and signed by our president or corporate secretary.  No agent may bind us by making any promise not contained in the policy.

We may modify the policy, our operations, or the separate account’s operations to meet the requirements of any law (or regulation issued by a government agency) to which the policy, our company, or the separate account is subject.  We may modify the policy to assure that it continues to qualify as a life insurance contract under the federal tax laws.  We will notify you of all modifications, and we will make appropriate endorsements to the policy.

Riders

Riders are available for you to purchase to design the policy to meet your specific needs.  You may purchase any of them (except for both the Premium Waiver and Deduction Waiver Riders, simultaneously).  Once the policy is In Force, to add a Rider, we may require further evidence of insurability.  Availability will vary by state.  You will be charged for a Rider: so long as the policy remains In Force and the Rider's term has not expired; until we have paid the benefit; or you decide you no longer need the benefit and let us know in writing at our Home Office.  For more information on the costs of the Riders, see "In Summary: Fee Tables," beginning on page 5, and "Charges," beginning on page 24.

Adjusted Sales Load Life Insurance Rider

This Rider is only available to purchase when you purchase the policy.  The benefit is replacing the Premium Load we would otherwise deduct before allocating your Net Premiums with the Rider’s monthly charge, which depends on whether you want to replace all or a portion of the Premium Load.  We will deduct the Rider's charge from the policy's Cash Value over a period of up to fifteen years, but this depends on the number of years over which the Premium payments you plan to make

20

will be covered by this Rider (a whole number up to seven years from the Policy Date).  This deduction will last for up to nine years after the lesser of:

· the number of years (from one to seven) you choose to have the Rider apply to your Premium payments; or

· the number of years in this period during which you actually make Premium payments.

In no case will the deduction be applied for more than fifteen years.

So, say you want to replace all of the Premium Load on each of your Premium payments for five years, but the last Premium payment you make while the Rider is in effect is within the third year from the Policy Date.  Instead of for fourteen years, we will deduct the Rider’s charge through the twelfth year.  Also, if you terminate your policy during the first ten years from the Policy Date, we will reduce your Cash Surrender Value.  The more Premium Load you elect to replace, the higher the Rider’s charge will be.    To better understand how this Rider might benefit you, ask for an illustration of future benefits and rights under the policy with and without the purchase of this Rider.

Children’s Insurance Rider

You may purchase term life insurance on any of the Insured's children at any time.  Before an expiration date, the policy pays a benefit to the named beneficiary upon the insured child’s death.  As long as the policy is In Force, the insurance coverage for each child will continue until the earlier of: 1) the anniversary of the policy on or after the date that the child turns age 22; or 2) the anniversary of the policy on or after the date that the Insured turns age 65.

Subject to certain conditions specified in the Rider, the Rider may be converted into a policy on the life of the insured child without evidence of insurability.  You will be charged for this Rider: so long as the policy remains In Force and the Rider’s term has not expired; until we have paid the benefit; or until you decide you no longer need the benefit and let us know in writing at our Home Office.  Because we deduct the charge for this benefit from the policy's Cash Value, your purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.  Otherwise, the benefit of this Rider and the Death Benefit are independent of one another.

Long-term Care Rider

This Rider is available to purchase at any time only within six months from the Policy Date.  The Insured is paid a monthly benefit upon meeting the eligibility requirements, including having been confined to a care facility (other than a hospital) or provided personal assistance at home while under a physician's care for 90 days.  The benefit may not cover all your prospective long-term care costs.  The benefit may not cover your retrospective long-term care costs.

The benefits paid under the Rider are intended to be "qualified long-term care insurance" under federal tax law, and, generally, the benefits may not be taxable to the payee.  See your tax adviser about the use of this Rider in your situation.

You will be charged for this Rider: so long as the policy remains In Force through maturity; until we have paid the benefit; or until you decide you no longer need the benefit and let us know in writing at our Home Office.  The benefit and the charge associated with the Long-Term Care Rider will end if you invoke the Policy Guard Rider.  Because we deduct the charge for this benefit from the policy's Cash Value, your purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.  Also, the benefits paid under this Rider will reduce the Cash Surrender Value if you were to surrender the policy while the Insured is alive.  More importantly, though, the benefits paid under this Rider will impact your policy's Death Benefit.  The Proceeds payable upon the Insured's death will be adjusted to account for the benefits paid under this Rider.  There is a free look period for this Rider.  Within 30 days of receipt, you may return this Rider to the sales representative who sold it to you, or to us at our Home Office, and we will void this Rider and refund the related charges.

Spouse Life Insurance Rider

You may purchase this Rider at any time.  The benefit is a death benefit payable to the beneficiary you designate upon the Insured’s spouse’s death; otherwise, the benefit is payable to the Insured, or the Insured's spouse after the Insured's death.  The benefit continues until the anniversary of the Rider on or next following the year in which the Insured's spouse turns age 70.  You will be charged for this Rider: so long as the policy remains In Force and the Rider’s term has not expired; until we have paid the benefit; or until you decide you no longer need the benefit and let us know in writing at our Home Office.  The benefit and the charge associated with the Spouse Life Insurance Rider will end if you invoke the Policy Guard Rider.  Because we deduct the charge for this benefit from the policy's Cash Value, your purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.  Otherwise, the benefit of this Rider and the Death Benefit are independent of one another.  This Rider has a conversion right.  The Insured's spouse may exchange this Rider's benefit for a level premium, level benefit plan of whole life or endowment insurance, subject to limitations.

21

Accidental Death Benefit Rider

You may purchase this Rider at any time.  The Rider pays a benefit, in addition to the Death Benefit, to the named beneficiary upon the Insured’s accidental death.  The benefit continues until the Insured reaches Attained Age 70.  You will be charged for this Rider: so long as the policy remains In Force and the Rider’s term has not expired; until we have paid the benefit or until you decide you no longer need the benefit and let us know in writing at our Home Office.  Because we deduct the charge for this benefit from the policy's Cash Value, your purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.  Otherwise, the benefit of this Rider and the Death Benefit are independent of one another.

Premium Waiver Rider

You may purchase this Rider at any time.  The benefit is a monthly credit to the policy upon the Insured’s total disability for six consecutive months.  The amount is the lesser of:

· the Premium you specified, or

· the average actual Premiums you paid over the thirty-six months before the total disability.

However, the monthly credit may not be enough to allow you to rely on this Rider alone.  While the benefit is payable, you may also need to pay additional Premium to keep your policy from Lapsing.  Notwithstanding, purchasing this Rider could help to preserve the Death Benefit.

The benefit continues until the Insured turns age 65, or for two years for an Insured who is age 63 or older at the time of the total disability.  You will be charged for this Rider so long as the policy remains In Force and the Rider's term has not expired or until you decide you no longer need the benefit and let us know in writing at our Home Office.  You do not pay the Rider’s charge while the Rider’s benefit is being paid.

Because we deduct the charge for this benefit from the policy's Cash Value, your purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.  If you choose the Premium Waiver Rider, you may not also choose the Deduction (of fees and expenses) Waiver Rider.

Change Of Insured Rider

You may elect this Rider for no charge at any time.  You may change the Insured for a new Insured, subject to insurability and other conditions.  The costs and benefits under the policy after the change will be based on, and could change with, the underwriting classification and characteristics of the new Insured, but this Rider's benefit will have no impact on the policy's Death Benefit.

Additional (insurance) Protection Rider

The benefit associated with the Additional (insurance) Protection Rider is term life insurance on the Insured, in addition to the Death Benefit, payable to the beneficiary upon the Insured’s death.

You may purchase this Rider at any time while the policy is In Force until the Insured reaches age 85.  The Rider benefit amount may vary monthly and is based on the chosen Death Benefit.  You may renew coverage annually until the Insured reaches Attained Age 100, when this Rider’s term expires.

Before deciding whether to purchase the Additional (insurance) Protection Rider it is important for you to know that when you purchase this Rider, the compensation received by your registered representative and his or her firm is less than when compared to purchasing insurance coverage under the base policy.  As a result of this compensation reduction, the charges assessed for the cost of insurance under this Rider will be lower for a significant period of time.  There are instances where the Additional (insurance) Protection Rider may require lower Premium to maintain the total death benefit over the life of the policy or may require increased Premium when compared to not purchasing the Rider at all.

There are also some distinct disadvantages to purchasing the Rider, such as not being able to extend the Maturity Date for coverage under the Rider (resulting in a loss of coverage at maturity).   Another disadvantage is the Rider only allows coverage under the Guaranteed Policy Continuation Provision for the first five policy years.  In comparison, the base policy allows longer coverage for issue ages under 70.  See the Guaranteed Policy Continuation Provision in the Lapse section of this prospectus.

If you have questions about whether the Rider is appropriate for you, please consult your registered representative for more specific information on this Rider and its potential benefits.  Your registered representative can answer your questions and provide you with illustrations demonstrating the impact of purchasing coverage under the Rider.

Because we deduct the Rider charge from the Cash Value, purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on the Cash Value.

22

Deduction (of fees and expenses) Waiver Rider

You may purchase this Rider at any time.  If an Insured becomes disabled, as defined in this Rider, for six consecutive months within the first three years from the Policy Date, the benefit is a credit to your policy in an amount necessary to keep the policy In Force.  The benefit for subsequent years, however, is a waiver of your policy’s monthly charges.  For example, two years and eight months after the Policy Date you become totally disabled for six consecutive months.  For the first four months, the benefit would be a credit equal to the amount necessary to keep the policy In Force.  After that, the Rider’s benefit is a waiver of your policy’s monthly charges.

After the first three years from the Policy Date, this Rider’s benefit may not be enough to keep your policy from Lapsing without needing to pay additional Premium.

For how long the benefit lasts depends on the Insured's age when total disability begins.  Before age 60, the benefit continues for as long as the Insured is totally disabled (even if that disability extends past when the Insured reaches age 65).  Between ages 60 and 63, the benefit continues until the Insured turns age 65.  From age 63, the benefit lasts only for two years.  The benefit associated with the Deduction (of fees and expenses) Waiver Rider will end if you invoke the Policy Guard Rider.  Because we deduct the charge for this benefit from the policy's Cash Value, your purchase of this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.  If you choose the Premium Waiver Rider, you may not also choose the Deduction (of fees and expenses) Waiver Rider.

Policy Guard Rider

The Policy Guard Rider prevents the policy from Lapsing due to Indebtedness by providing a guaranteed paid-up insurance benefit.  The Rider is dormant until specifically invoked by the policy owner, at which time the policy is assessed a one-time charge.  Invocation of the Rider enables the policy owner of a substantially depleted policy (due to outstanding loans) to avoid the negative tax consequences associated with lapsing a life insurance policy (consult a qualified tax advisor for more details).  Policies issued on or after May 1, 2005 (or a later date if state law requires) will automatically receive the Policy Guard Rider.

The policy owner is eligible to invoke the Policy Guard Rider when outstanding Indebtedness reaches a certain percentage of the policy's Cash Value.  This percentage varies based on the Insured’s Attained Age.  The first time the policy's outstanding Indebtedness reaches the percentage that makes the policy eligible for invocation of the Rider, Nationwide will send a letter to the policy owner notifying them of the policy's eligibility to invoke the Rider.  The letter will also describe the Rider, its cost, and its guaranteed benefits.

In addition, the following conditions must be met in order to invoke the Rider:

· the Insured is Attained Age 75 or older,

· the policy has been In Force for at least 15 years,

· the policy's Cash Value is at least $100,000,

· at the time of policy issuance, you selected the guideline premium/cash value corridor tax test to qualify the policy for life insurance, and

· based on our records of your premium payments, the entire cost basis of the policy (for tax purposes) has been withdrawn.

The policy owner need not invoke the Rider immediately upon notification of eligibility.  The Rider may be invoked at any time, provided that the above conditions are met and the policy remains In Force.

After Nationwide receives the policy owner's request to invoke the Rider, Nationwide will adjust the policy, as follows:

1. If not already in effect, the Death Benefit option will be changed to Death Benefit Option One.

2. The Specified Amount will be adjusted to equal the lesser of: (1) the Specified Amount immediately before you invoked the Rider, or (2) the Specified Amount that will cause the Death Benefit to equal the minimum required death benefit.

3. Any non-loaned Cash Value (after deduction of the Policy Guard Rider charge) will be transferred to the Fixed Account, where it will earn the guaranteed fixed interest rate shown on the Policy Data Page (for more information, see “The Fixed Account” earlier in this prospectus).

After the above adjustments are made, the loan balance will continue to grow at the policy's loan charge rate, and the amount in the collateral loan account will continue to earn interest at the policy's loan crediting rate.  No policy charges will be assessed.  No further loans may be taken from the policy and no withdrawals may be taken from the policy (except for a full policy surrender).  Cash Value may not be transferred out of the fixed account.  Both the charges and benefits of the Long-term Care Rider, Spouse Rider, and Deduction (of fees and expenses) Waiver Rider will terminate.  The Death Benefit will

23

be the lesser of the Specified Amount or the minimum required death benefit.  The policy will remain as described above for the duration of the policy.

Invocation of the Policy Guard Rider is irrevocable.

Premium

This policy does not require a scheduled payment of Premium to keep it In Force.  The policy will remain in effect as long as the conditions that cause the policy to Lapse do not exist.  Upon request, we will furnish Premium receipts.

Initial Premium

The amount of your initial Premium will depend on the initial Specified Amount of insurance, the Death Benefit option, and any Riders you select.  Generally, the higher the required initial Specified Amount, the higher the initial Premium will be.  Similarly, because Death Benefit Option Two and Death Benefit Option Three provide for a potentially greater Death Benefit than Death Benefit Option One, Death Benefit Option Two and Death Benefit Option Three may require a higher amount of initial Premium.  Also, the age, health, and activities of the Insured will affect our determination of the risk of issuing the policy.  In general, the greater this risk, the higher the initial Premium will be.

Whether we will issue full insurance coverage depends on the Insured meeting all underwriting requirements, you paying the initial Premium, and our delivery of the policy while the Insured is alive.  We will not delay delivery of the policy to increase the likelihood that the Insured is not still living.  Depending on the outcome of our underwriting process, more or less Premium may be necessary for us to issue the policy.  We also retain the right to not issue the policy, after which, if we exercise this right, we will return your payment within two business days thereafter.

You may pay the initial Premium to our Home Office or to our authorized representative.  The initial Premium payment must be at least $50.  The initial Premium payment will not be applied to the policy until the underwriting process is complete.

Subsequent Premiums

You may make additional Premium payments at any time while the policy is In Force, subject to the following:

· We may require satisfactory evidence of insurability before accepting any additional Premium payment that results in an increase in the policy’s Net Amount At Risk;

· We will refund Premium payments that exceed the applicable premium limit established by the IRS to qualify the policy as a contract for life insurance.  As discussed in the "Taxes" section of this prospectus, additional Premium payments or other changes to the policy may jeopardize the policy's non-modified endowment status.  We will monitor Premiums paid and other policy transactions and will notify you when the policy’s non-modified endowment contract status is in jeopardy; and

· We may require that policy Indebtedness be repaid prior to accepting any additional Premium payments.  Some, but not all, of the situations when we might exercise this right include when interest rates are low, when your policy loans exceed 90% of the Cash Value of your Sub-Account portfolio allocations, or when a Premium payment may alter the character of the policy for tax purposes.  For more information, see "Lapse," beginning on page 35.  We will let you know ahead of time.

We will send scheduled premium payment reminder notices to you according to the premium payment method shown on the Policy Data Page.  If you decide to make a subsequent Premium payment, you must send it to our Home Office.  Each Premium payment must be at least $50.

Charges

Please read and consider the following, which we intend to be an amplification (but it may also be duplicative of), the fee tables, and the accompanying footnotes, appearing earlier in the prospectus.  See "In Summary: Fee Tables," beginning on page 5.  Also, see the policy, including the Policy Data Page, and the Riders, for more information.

We will make deductions under the policy to compensate us for: the services and benefits we provide; the costs and expenses we incur; and the risks we assume.  Every time you make a Premium payment, we will charge against that Premium payment a Premium Load, which is composed of the sales load and Premium taxes.  If we begin to charge for illustrations, you will be expected to pay the charge directly to us at the time of your request.  We will not deduct this charge from your policy’s Cash Value.  However, we will deduct all other charges from the policy’s Cash Value (rather than a Premium payment), in proportion to the balances of your Sub-Account portfolio allocations.  We will transfer the loan amount interest charge from your investment options to the loan account.

There are also operating charges associated with the Sub-Account portfolios.  While you will not pay them directly, they will affect the value of the assets in the Sub-Account portfolios.  On a daily basis, the manager of each mutual fund that comprises the policy’s

24

available variable investment options deducts operating charges from that mutual fund’s assets before calculating the NAV.  (We use NAV to calculate the value of your corresponding Sub-Account portfolio allocation in Accumulation Units.)  In addition, some mutual funds assess a short-term trading fee in connection with transfers from a Sub-Account that occur within 60 days after the date of the allocation to that Sub-Account.  The fee is assessed against the amount transferred and is paid to the mutual fund.  For more information on the operating charges and short-term trading fees assessed by the mutual funds held by the Sub-Account portfolios, please see the prospectus for the mutual fund and "Short-Term Trading Fees" in this prospectus.

Sales Load

Currently, the sales load portion of the Premium Load charge is $5 per $1,000 of Premium and covers our sales expenses.  The guaranteed maximum sales load is $25 per $1,000 of Premium.

Premium Taxes

The premium taxes portion of the Premium Load charge is $35 per $1,000 of Premium and reimburses us for state and local premium taxes (at the estimated rate of 2.25%), and for federal premium taxes (at the estimated rate of 1.25%).  This amount is an estimated amount.  If the actual tax liability is more or less, we will not adjust the charge, so we may profit from it.

Short-Term Trading Fees

Some mutual funds may assess (or reserve the right to assess) a short-term trading fee in connection with transfers from a Sub-Account that occur within 60 days after the date of allocation to the Sub-Account.

Short-term trading fees are intended to compensate the mutual fund (and policy owners with interests allocated in the mutual fund) for the negative impact on fund performance that may result from frequent, short-term trading strategies.  Short-term trading fees are not intended to affect the large majority of policy owners not engaged in such strategies.

Any short-term trading fee assessed by any mutual fund available in conjunction with the policies described in this prospectus will equal 1% of the amount determined to be engaged in short-term trading.  Short-term trading fees will only apply to those Sub-Accounts corresponding to mutual funds that charge such fees.  Please refer to the prospectus for each Sub-Account portfolio for more detailed information.  Policy owners are responsible for monitoring the length of time allocations are held in any particular Sub-Account.  We will not provide advance notice of the assessment of any applicable short-term trading fee.

For a list of available sub-accounts that assess short-term trading fees, see "Total Annual Sub-Account Portfolio Operating Expenses" earlier in this prospectus.

If a short-term trading fee is assessed, the mutual fund will charge the separate account 1% of the amount determined to be engaged in short-term trading.  The separate account will then pass the short-term trading fee on to the specific policy owner that engaged in short-term trading by deducting an amount equal to the fee from that policy owner’s sub-account value.  All such fees will be remitted to the mutual fund; none of the fee proceeds will be retained by us or the separate account.

Transfers will be considered to be made on a first in/first out (FIFO) basis for purposes of determining short-term trading fees.  In other words, units held the longest time will be treated as being transferred first, and units held for the shortest time will be treated as being transferred last.

Some transactions are not subject to short-term trading fees.  Transactions that are not subject to short-term trading fees include:

· policy loans or surrenders; or

· payment of the Death Benefit proceeds upon the Insured's death.

New share classes of currently available mutual funds may be added as investment options under the policy.  These new share classes may require the assessment of short-term trading fees.  When these new share classes are added, new Premium payments and exchange reallocations to the mutual funds in question may be limited to the new share class.

25

Surrender Charges

A surrender charge will apply if you surrender or lapse the policy.  There are two components of the surrender charge meant to cover our policy underwriting (the underwriting component) and sales expenses (the sales component), including for: processing the application; conducting any medical exams; determining insurability (and the Insured’s underwriting class); and establishing policy records.  The surrender charge equals the underwriting component and 26.5% of the sales component.  We will deduct the surrender charge based on the following schedule:

During Policy Year	Percentage Of Initial Surrender Charge
1	100%
2	100%
3	90%
4	80%
5	70%
6	60%
7	50%
8	40%
9	30%
After 9	0

The underwriting component is the product of the Specified Amount, divided by 1,000, and the administrative target premium.  The administrative target premium is actuarially derived, and we use it to figure out how much to charge for underwriting expenses.  The administrative target premium varies by the Insured's age when the policy was issued.

The sales expense component is the lesser of the following two amounts.   The first amount is the product of the Specified Amount, divided by 1,000, and the surrender target premium.  The surrender target premium is actuarially derived, and we use it to figure out how much to charge per Premium payment for sales expenses.  The surrender target premium varies by: the Insured's sex; age (when the policy was issued); and the underwriting class.  The second amount is the sum of all Premium payments you made during the first year from the Policy Date.

We will calculate a separate surrender charge based on the Specified Amount and each increase in the Specified Amount, which, when added together, will amount to your surrender charge.

All things being equal, the surrender charge will be greater for a policy with: an older Insured; a male insured; a higher Specified Amount; more first year Premium; or a higher-risk Insured.  If you change the Death Benefit option, and it does not change our Net Amount At Risk, we will not deduct a surrender charge.

We will waive the surrender charge of your policy if you elect to surrender it in exchange for a plan of permanent fixed life insurance offered by us subject to the following:

· the exchange and waiver may be subject to your providing us new evidence of insurability and our underwriting approval; and

· you have not elected any of these Riders;

1. Premium Waiver Rider,

2. Deduction (of fees and expenses Waiver Rider) or

3. Long-term Care Rider.

We may impose a new surrender charge on the policy received in the exchange.

Partial Surrender Fee

You may request a partial surrender at any time while the policy is In Force, and we may charge a $25 partial surrender fee to compensate us for the administrative costs in calculating and generating the surrender amount.  However, currently, there is no charge for a partial surrender.

Cost Of Insurance

The cost of insurance charge compensates us for underwriting insurance protection.  The cost of insurance charge is the product of the Net Amount At Risk and the cost of insurance rate.

26

We base the cost of insurance rate on our expectations as to future mortality and expense experience.  The cost of insurance rate will vary by: the Insured’s sex; age; underwriting class; any substandard ratings; for how long the policy has been In Force; and the Specified Amount.  There will be a separate cost of insurance rate for the initial Specified Amount and any increases.  The cost of insurance rates will never be greater than those shown on the Policy Data Page.

We will uniformly apply a change in any cost of insurance rate for Insureds, of the same age, sex, underwriting class and any substandard ratings, on whom policies with the same Specified Amount have been In Force for the same length of time.  The change could increase your cost of insurance charge, which, accordingly, would decrease your policy’s Cash Value, and the converse is true, too.  In contrast, you could cause your cost of insurance charge to decrease with a request to reduce the Specified Amount that also reduces the Net Amount At Risk.

Mortality And Expense Risk

Though the maximum guaranteed mortality and expense risk charge is higher, currently, we deduct this monthly charge according to the following schedule. The charge is $0.50 per $1,000 of Cash Value on the first $25,000 of Cash Value.  During the first through fifteenth years from the Policy Date, the charge is $0.25 per $1,000 of Cash Value on amounts between $25,000 and $250,000 of Cash Value.  Otherwise, the charge is $0.17 per $1,000 of Cash Value thereafter.  This charge compensates us for assuming risks associated with mortality and expense costs, and we may profit from it.  The mortality risk is that the Insured does not live as long as expected.  The expense risk is that the costs of issuing and administering the policy are more than expected.

Administrative

Currently, we deduct $10 per month through the first year from the Policy Date, which is also the maximum guaranteed administrative charge.  Thereafter, we currently deduct $5 per month, and the maximum guaranteed administrative charge is $7.50 per month.  This charge reimburses us for the costs of maintaining the policy, including for accounting and record-keeping.

Policy Loan Interest

We will charge interest on the amount of an outstanding policy loan, at the rate of 3.9% per annum, which will have accrued daily.  The loan and accrued interest becomes due and payable at the end of each year from the Policy Date.  If left unpaid, we will add it to the policy's outstanding Indebtedness.  As collateral or security for repayment, we will transfer Cash Value equal to each loan amount from the Sub-Accounts on a pro-rata basis to the loan account on which interest will accrue and be credited daily.  During years one through ten from the Policy Date, the current interest crediting rate is 3.0% and 3.9% per annum for ordinary and preferred loans, respectively (guaranteed 3.0% minimally).  Thereafter, the current interest crediting rate is 3.9% per annum for all loans (guaranteed 3.65% minimally).  Accordingly, your net cost for an ordinary loan during years one through ten from the Policy Date is 0.9% per annum currently.  Thereafter, there is no cost (a net cost of zero) for an ordinary loan currently.  There is no cost (a net cost of zero) for a preferred loan currently.  For more information, see "Collateral And Interest," beginning on page 35.

Adjusted Sales Load Life Insurance Rider

The charge for this Rider replaces the Premium Load to cover our sales expenses and premium taxes.  You will pay a Premium Load on any amount that you do not elect to be covered by the Rider.  Since the premium tax portion of the Premium Load is an estimated amount not subject to adjustment for the actual tax liability, we may incur a profit from it.  The charge is the product of: your aggregate Premiums since the Policy Date; the portion of Premium Load you choose to replace (expressed as a whole percentage of Premium paid); and the factor of 0.0001345, which is actuarially derived.

The Rider’s charge may vary.  Each Premium payment you make will cause the Rider’s charge to increase.  We will deduct the Rider's charge from the policy's Cash Value over a period of up to fifteen years, but this depends on the number of years over which the Premium payments you plan to make will be covered by this Rider (a whole number up to seven years from the Policy Date).  This deduction will last for up to nine years after the lesser of:

· the number of years (from one to seven) you choose to have the Rider apply to your Premium payments; or

· the number of years in this period during which you actually make Premium payments.

In no case will the deduction be applied for more than fifteen years.

If the policy terminates within the first ten years from the Policy Date, we will recover a portion of the Premium Load replaced by the Rider, based on the following schedule:

27

Years Policy Has Been In Force	Percentage
1	100%
2	90%
3	80%
4	70%
5	60%
6	50%
7	40%
8	30%
9	20%
10	10%
11+	0

This deduction is equal to the product of the amount of Premium Load replaced by the Rider and the percentage from the table above that corresponds to the number of years the policy has been In Force.  For example, say you terminate your policy after five years, on which you had chosen to replace the entire Premium Load for seven years.  Assume that you paid $10,000 of Premium during this time.  The Premium Load the Rider has replaced is $400, and 60% of this amount is $240, which we will deduct from your Cash Surrender Value. This deduction allows us to cover a portion of our sales expenses and premium taxes for which the Rider's charge would have compensated us had the policy remained In Force.

Children’s Insurance Rider

This charge for this Rider is $0.43 per $1,000 of Specified Amount of the Rider.  This charge compensates us for providing term insurance on the life of each child of the Insured.  We will charge for the Rider so long as the policy is In Force and the Rider is in effect.  The cost will remain the same, even if you request to change the number of children covered under the Rider.  However, we may decline your request to add another child based on our underwriting standards.

Long-term Care Rider

This charge for this Rider compensates us for providing long-term care coverage once the Insured meets the eligibility requirements.  The charge is the product of the Net Amount At Risk of the Rider and a long-term care cost of insurance rate.  Because this Rider has no Cash Value, we define its Net Amount At Risk as the lesser of the Specified Amount of the Rider and the Net Amount At Risk of the policy.  We base the long-term care cost of insurance rate on our expectations as to your need for long-term care over time.  The long-term care cost of insurance rate will vary by: the Insured's sex; Attained Age; underwriting class; and any substandard ratings.

Spouse Life Insurance Rider

This charge for this Rider compensates us for providing term insurance on the life of the Insured’s spouse.  The charge is the product of the Specified Amount of this Rider and the spousal life insurance cost of insurance rate.  We base the spousal life insurance cost of insurance rate on our expectations as to the mortality of the Insured's spouse.  The spousal life insurance cost of insurance rate will vary by: the spouse's sex; Attained Age; underwriting class; and any substandard ratings.

Accidental Death Benefit Rider

This charge for this Rider compensates us for providing coverage in the event of the Insured’s accidental death, meaning the Insured’s death as a result of bodily injury caused by external, violent and accidental means from a cause other than a risk not assumed.  The charge is the product of the Specified Amount of this Rider and the accidental death benefit cost of insurance rate.  We base the accidental death benefit cost of insurance rate on our expectations as to the likelihood of the Insured's accidental death.  The accidental death benefit cost of insurance rate will vary by: the Insured's sex; Attained Age; underwriting class; and any substandard ratings.

Premium Waiver Rider

This charge for this Rider compensates us for crediting your policy the amount of scheduled due and payable Premium payments upon the Insured’s total disability for six consecutive months.  The benefit will amount to the lesser of the Premium you specified and the average actual Premiums you paid over the thirty-six months before the total disability.  The charge is the product of the benefit of this Rider and the premium waiver cost rate.  We base the premium waiver cost rate on our expectations as to likelihood of the Insured's total disability for six consecutive months.  The premium waiver cost rate will vary by: the Insured's sex; Attained Age; underwriting class; and any substandard ratings.  If you choose this Rider, you may not also choose the Deduction Waiver Rider.

28

Additional(insurance)Protection Rider

This charge for this Rider compensates us for providing term life insurance on the Insured.  The monthly cost of insurance charge for this Rider is determined by multiplying the Rider monthly cost of insurance rate by the Rider Death Benefit.  The Rider Death Benefit is the death benefit option elected by you.  We base the additional protection cost of insurance rate on our expectation as to the Insured's mortality.  The additional protection cost of insurance rate will vary by: the Insured's sex; Attained Age; underwriting class; any substandard ratings; and the Specified Amount of the Rider.

Deduction (of fees and expenses)Waiver Rider

This charge for this Rider compensates us for waiving monthly charges (excluding this Rider's charge) upon the Insured’s total disability, as defined in this Rider, for six consecutive months.  (However, during the first three years from the Policy Date, we will instead credit your policy with the minimum monthly Premium payment due during the Insured's total disability).  The charge is the product of the amount of periodic charges deducted from the policy on a monthly basis (excluding the cost for this Rider) and the deduction waiver cost rate.  We base the deduction waiver cost rate on our expectations as to the likelihood of the Insured's total disability for six consecutive months.  The deduction waiver cost rate varies by: the Insured's sex; Attained Age; underwriting class; and any substandard ratings.  If you choose this Rider, you may not also choose the Premium Waiver Rider.

Policy Guard Rider

We take a one-time charge at the time you invoke this Rider.  The charge is the product of the policy's Cash Value and an age-based factor shown in the Rider.  If the policy's non-loaned Cash Value is insufficient to pay the Rider's charge, you must make loan repayments sufficient to cover the Rider's charge.  The Rider's charge covers the administrative costs associated with the rider and compensates us for the risk of the Rider's guaranteed paid-up death benefit.  We may profit from the charge.

A Note On Charges

During a policy's early years, the expenses we incur in distributing and establishing the policy exceed the deductions we take.  Nevertheless, we expect to make a profit over time because variable life insurance is intended to be a long-term financial investment.  Accordingly, we have designed the policy with features and investment options that we believe support and encourage long-term ownership.

We make many assumptions and account for many economic and financial factors when we establish the policy's fees and charges.  The following is a discussion of some of the factors that are relevant to the policy's pricing structure.

Distribution, Promotional, and Sales Expenses.  Distribution, promotional and sales expenses include amounts we pay to broker-dealer firms as commissions, expense allowances and marketing allowances.  We refer to these expenses collectively as "total compensation." The maximum total compensation we pay to any broker-dealer firm in conjunction with policy sales is 99% of first year premiums and 3% of renewal premium after the first year.

We have the ability to customize the total compensation package of our broker-dealer firms.  We may vary the form of compensation paid or the amounts paid as commission, expense allowance or marketing allowance; however, the total compensation will not exceed the maximum (99% of first year premiums and 3% of renewal premium after the first year).  Commission may also be paid as an asset-based amount instead of a premium based amount.  If an asset-based commission is paid, it will not exceed 0.25% of the non-loaned cash value per year.

The actual amount and/or forms of total compensation we pay depend on factors such as the level of premiums we receive from respective broker-dealer firms and the scope of services they provide.  Some broker-dealer firms may not receive maximum total compensation.

Individual registered representatives typically receive a portion of the commissions/total compensation we pay, depending on their arrangement with their broker-dealer firm.  If you would like to know the exact compensation arrangement associated with this product, you should consult your registered representative.

Information on Underlying Mutual Fund Payments

Our Relationship with the Underlying Mutual Funds.  The underlying mutual funds incur expenses each time they sell, administer, or redeem their shares.  The separate account aggregates policy owner purchase, redemption, and transfer requests and submits net or aggregated purchase/redemption requests to each underlying mutual fund daily.  The separate account (not the policy owners) is the underlying mutual fund shareholder.  When the separate account aggregates transactions, the underlying mutual fund does not incur the expense of processing individual transactions it would normally incur if it sold its shares directly to the public.  We incur these expenses instead.

29

We also incur the distribution costs of selling the policy (as discussed above), which benefit the underlying mutual funds by providing policy owners with Sub-Account options that correspond to the underlying mutual funds.

An investment adviser or subadviser of an underlying mutual fund or its affiliates may provide us or our affiliates with wholesaling services that assist in the distribution of the policy and may pay us or our affiliates to participate in educational and/or marketing activities.  These activities may provide the adviser or subadviser (or their affiliates) with increased exposure to persons involved in the distribution of the policy.

Types of Payments We Receive.  In light of the above, the underlying mutual funds or their affiliates make certain payments to us or our affiliates (the “payments”).  The amount of these payments is typically based on a percentage of assets invested in the underlying mutual funds attributable to the policies and other variable policies we and our affiliates issue, but in some cases may involve a flat fee.  These payments may be used by us for any corporate purpose, which include reducing the prices of the policies, paying expenses that we or our affiliates incur in promoting, marketing, and administering the policies and the underlying mutual funds, and achieving a profit.

We or our affiliates receive the following types of payments:

· Underlying mutual fund 12b-1 fees, which are deducted from underlying mutual fund assets;

· Sub-transfer agent fees or fees pursuant to administrative service plans adopted by the underlying mutual fund, which may be deducted from underlying mutual fund assets; and

· Payments by an underlying mutual fund’s adviser or subadviser (or its affiliates).  Such payments may be derived, in whole or in part, from the advisory fee, which is deducted from underlying mutual fund assets and is reflected in mutual fund charges.

Furthermore, we benefit from assets invested in our affiliated underlying mutual funds (i.e., Nationwide Variable Insurance Trust) because our affiliates also receive compensation from the underlying mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services.  Thus, we may receive more revenue with respect to affiliated underlying mutual funds than unaffiliated underlying mutual funds.

We took into consideration the anticipated payments from the underlying mutual funds when we determined the charges imposed under the policies (apart from fees and expenses imposed by the underlying mutual funds).  Without these payments, we would have imposed higher charges under the policy.

Amount of Payments We Receive.  For the year ended December 31, 2006, the underlying mutual fund payments we and our affiliates received from the underlying mutual funds did not exceed 0.50% (as a percentage of the average daily net assets invested in the underlying mutual funds) offered through this policy or other variable policies that we and our affiliates issue.  Payments from investment advisers or subadvisers to participate in educational and/or marketing activities have not been taken into account in this percentage.

Most underlying mutual funds or their affiliates have agreed to make payments to us or our affiliates, although the applicable percentages may vary from underlying mutual fund to underlying mutual fund and some may not make any payments at all.  Because the amount of the actual payments we or our affiliates receive depends on the assets of the underlying mutual funds attributable to the policy, we and our affiliates may receive higher payments from underlying mutual funds with lower percentages (but greater assets) than from underlying mutual funds that have higher percentages (but fewer assets).

For additional information related to the amount of payments Nationwide receives, go to www.nationwide.com.

Identification of Underlying Mutual Funds.   We may consider several criteria when identifying the underlying mutual funds, including some or all of the following:  investment objectives, investment process, investment performance, risk characteristics, investment capabilities, experience and resources, investment consistency, and fund expenses.  Another factor we consider during the identification process is whether the underlying mutual fund’s adviser or subadviser is one of our affiliates or whether the underlying mutual fund, its adviser, its subadviser(s), or an affiliate will make payments to us or our affiliates.

There may be underlying mutual funds with lower fees, as well as other variable policies that offer underlying mutual funds with lower fees.  You should consider all of the fees and charges of the policy in relation to its features and benefits when making your decision to invest.  Please note that higher policy and underlying mutual fund fees and charges have a direct effect on your investment performance.

30

The Death Benefit

Calculation Of The Death Benefit Proceeds

We will calculate the Death Benefit and pay it to the beneficiary when we receive at our Home Office proof that the Insured has died, as well as other customary information.  We will not dispute the payment of the Death Benefit after the policy has been In Force for two years from the Policy Date.  The Death Benefit may be subject to an adjustment if you make an error or misstatement upon application, or if the Insured dies by suicide.

While the policy is In Force, the Death Benefit will never be less than the Specified Amount. The Death Benefit will depend on which option you have chosen and the tax test you have elected, as discussed in greater detail below.  Also, the Death Benefit may vary with the Cash Value of the policy, which will depend on investment performance and take into account any insurance provided by Riders, as well as outstanding Indebtedness and any due and unpaid monthly deductions that accrued during a Grace Period.

Death Benefit Options

There are three Death Benefit options under the policy.  You may choose one.

If you do not choose one of the following Death Benefit options, we will assume that you intended to choose Death Benefit Option One.

Death Benefit Option One

The Death Benefit will be the greater of the Specified Amount or minimum required Death Benefit.

Death Benefit Option Two

The Death Benefit will be the greater of the Specified Amount plus the Cash Value as of the date of death, or the minimum required Death Benefit.

Death Benefit Option Three

The Death Benefit will be the greater of the Specified Amount plus the accumulated premium account (which consists of all Premium payments minus all partial surrenders to the date of death) or the minimum required Death Benefit.  The amount of the accumulated premium account will be based on the Option Three Interest Rate stated on the Policy Data Page, and will be no less than zero or more than the Option Three Maximum Increase also stated on the Policy Data Page.

For any Death Benefit option, the calculation of the minimum required Death Benefit is shown on the Policy Data Page.  Not all Death Benefit options are available in all states.

The Minimum Required Death Benefit

The policy has a minimum required Death Benefit.  The minimum required Death Benefit is the lowest Death Benefit that will qualify the policy as life insurance under Section 7702 of the Code.

The tax tests for life insurance generally require that the policy has a significant element of life insurance and not be primarily an investment vehicle.  At the time we issue the policy, you irrevocably elect one of the following tests to qualify the policy as life insurance under Section 7702 of the Code:

· the cash value accumulation test; or

· the guideline premium/cash value corridor test.

The cash value accumulation test determines the minimum required Death Benefit by multiplying the account value by a percentage determined by methodology set out in the federal tax regulations. The percentages depend upon the Insured's age, sex and underwriting classification.  Under the cash value accumulation test, there is no limit to the amount that may be paid in premiums as long as there is sufficient Death Benefit in relation to the account value at all times.

The guideline premium/cash value corridor test determines the minimum required Death Benefit by comparing the Death Benefit to an applicable percentage of the Cash Value.  These percentages are set out in the Code, but the percentage varies only by the Attained Age of the Insured.

Regardless of which test you elect, we will monitor compliance to assure that the policy meets the statutory definition of life insurance for federal tax purposes.  As a result, the Proceeds payable under a policy should be excludable from gross income of the beneficiary for federal income tax purposes.  Conversely, if in the unlikely event that the policy did not qualify as life insurance because your Death Benefit failed to amount to the minimum required Death Benefit, the Proceeds payable under the policy would be includable in the gross income of the beneficiary for federal income tax purposes.  Because of this

31

adverse consequence, we may refuse additional Premium payments or return the gross Premium payments to you so that the policy continues to meet the Code's definition of life insurance.  For more information, see "Periodic Withdrawals, Non-Periodic Withdrawals And Loans," beginning on page 37.

If you do not elect a test, we will assume that you intended to elect the guideline premium/cash value corridor test.

Changes In The Death Benefit Option

After the first year from the Policy Date, you may elect to change the Death Benefit option under the policy from either Option One to Option Two, or from Option Two to Option One.  You may not change from or to Option Three.  We will permit only one change of Death Benefit option per policy year.  The effective date of a change will be the monthly anniversary date following the date we approve the change.

For any change in the Death Benefit option to become effective, the Cash Surrender Value after the change must be sufficient to keep the policy In Force for at least three months.

We will adjust the Specified Amount so that the Net Amount At Risk remains constant before and after the Death Benefit option change.  Because your Net Amount At Risk remains the same, changing the Death Benefit option by itself does not alter the policy’s cost of insurance. The policy’s charges going forward, however, will be based on a new Specified Amount that will change the calculation of those charges.  Depending on changes in factors such as fluctuations in the policy's Cash Value, these charges may increase or decrease after the change of death benefit option.  Notwithstanding, we will refuse a Death Benefit option change that would reduce the Specified Amount to a level where the Premium you have already paid would exceed any premium limit under the tax tests for life insurance.

Suicide

If the Insured dies by suicide, while sane or insane, within two years from the Policy Date, we will pay no more than the sum of the Premiums paid, less any Indebtedness, and less any partial surrenders.  Similarly, if the Insured dies by suicide, while sane or insane, within two years from the date we accept an application for an increase in the Specified Amount, we will pay no more than the Death Benefit associated with the initial Specified Amount, plus the cost of insurance charges associated with the increase in Specified Amount.

Surrenders

Full Surrender

You may surrender the policy for the Cash Surrender Value at any time while the Insured is alive.  We calculate the Cash Surrender Value based on the policy's Cash Value.  For more information, see "Cash Value," beginning on page 14.  To derive the Cash Surrender Value, we will deduct from the Cash Value Indebtedness and the surrender charge.  The effective date of a surrender will coincide with the date on which we receive the policy and your written request at our Home Office.

Partial Surrender

You may request, in writing to our Home Office, a partial surrender of the policy’s Cash Surrender Value at any time while the policy is In Force.  We may charge a $25 partial surrender fee.  Currently, however, there is no charge.  There are two kinds of partial surrenders.  Preferred partial surrenders, of any number in the aggregate, will not exceed 5% of your policy's Cash Surrender Value as of the beginning of the year from the Policy Date.  You must instruct us to treat a partial surrender as preferred at the same time you make your request; otherwise, we will treat it as an ordinary partial surrender.  Ordinary partial surrenders will cause a reduction of your policy's Specified Amount.  In any event, a partial surrender will reduce the Cash Value in each Sub-Account the same proportion as your current allocations, unless you instruct otherwise.

We reserve the right to limit partial surrenders to one per year from the Policy Date.  The minimum amount of any partial surrender request is $1.  The maximum aggregate amount of all partial surrenders cannot exceed 10% of your policy's Cash Surrender Value as of the beginning of each of the first ten years from the Policy Date.  Thereafter, the maximum aggregate amount is limited to the Cash Surrender Value less the greater of $500 or three times your policy's total monthly charges.  A partial surrender cannot cause the total Specified Amount to be reduced below the minimum Specified Amount indicated on the Policy Data Page, and after any partial surrender, the policy must continue to qualify as life insurance under Section 7702 of the Code.  Partial surrenders may be subject to income tax penalties.  They could also cause your policy to become a "modified endowment contract" under the Code, which would change the income tax treatment of any distributions from the policy.  For more information, see "Periodic Withdrawals, Non-Periodic Withdrawals And Loans,” beginning on page 37.

Reduction Of Specified Amount On A Partial Surrender

There is no reduction of Specified Amount with preferred partial surrenders.  When you take an ordinary partial surrender, we may reduce the Specified Amount to ensure that the Net Amount At Risk does not increase.  Because your Net Amount

32

At Risk is the same before and after the reduction, an ordinary partial surrender by itself does not alter the policy’s cost of insurance.  The policy’s charges going forward will be based on a new Specified Amount that will change the calculation of those charges.  Depending on changes in variables such as the Cash Value, these charges may increase or decrease after the reduction in Specified Amount.

Any reduction we make to the Specified Amount will be made in the following order:

· against the most recent increase in the Specified Amount;

· against the next most recent increases in the Specified Amount in succession; and

· against the Specified Amount under the original application.

The Payout Options

You have a number of options of receiving Proceeds, besides in a lump sum, which you may elect upon application.  You may elect one or a combination of options.  We will pay the Proceeds from our general account.  If you do not make an election, when the Insured dies, the beneficiary may do so.  If the beneficiary does not make an election, we will pay the Proceeds in a lump sum.  Normally, we will make the lump sum payment within seven days after we receive your written request at our Home Office.  We will postpone any payment of Proceeds, however, on the days we are unable to price Sub-Account Units.  For more information, see "Valuation of Accumulation Units," beginning on page 14.  To elect more than one payout option, you must apportion at least $2,000 per option, which would amount to a payment, at specified intervals, of at least $20.  At any time before Proceeds become payable, you may request to change your payout option in writing to our Home Office.  Changing the beneficiary of the policy will revoke the payout options in effect at that time.  Proceeds are neither assignable nor subject to claims of creditors or legal process.

Please note that for the remainder of The Payout Options section, "you" means the person we are obligated to pay.

Interest Income

You keep the Proceeds with us to earn interest at a specified rate.  The interest can be paid at the end of twelve-, six-, three- or one-month intervals or left to accumulate.  You may withdraw any outstanding balance by making a written request of us at our Home Office.  We will pay interest on the outstanding balance at a rate of at least 2.5% per annum, compounded annually.  We will determine annually if we will pay any interest in excess of 2.5%.  Upon your death, we will pay any outstanding balance to your estate.

Income For A Fixed Period

You keep the Proceeds with us, but are paid at specified intervals over a number of years (no more than 30).  Each payment will consist of a portion of the Proceeds plus interest at a stated rate.  The Proceeds can be paid at the beginning of twelve -, six-, three- or one-month intervals.  You may withdraw any outstanding balance by making a written request of us at our Home Office.  We will pay interest at an annually determined rate of at least 2.5% per annum, compounded annually.  We will determine annually if we will pay any interest in excess of 2.5%.  Upon your death, we will pay any outstanding balance to your estate.

Life Income With Payments Guaranteed

We pay you the Proceeds at specified intervals for a guaranteed period (10, 15 or 20 years), and, then, for the rest of your life, if you outlive the guaranteed period.  The Proceeds can be paid at the beginning of twelve -, six-, three- or one-month intervals.  During the guaranteed period, we will pay interest on the outstanding balance at a rate of at least 2.5% per annum, compounded annually.  We will determine annually if we will pay any interest in excess of 2.5%.  As the payments are based on your lifetime, you cannot withdraw any amount you designate to this option after payments begin.  If you die before the guaranteed period has elapsed, we will make the remaining payments to your estate.  If you die after the guaranteed period has elapsed, we will make no payments to your estate.

Fixed Income For Varying Periods

You keep the Proceeds with us, but are paid a fixed amount at specified intervals until principal and interest have been exhausted.  The total amount payable each year may not be less than 5% of the original Proceeds.  The Proceeds can be paid at the beginning of twelve-, six-, three- or one-month intervals.  You may withdraw any outstanding balance by making a written request of us at our Home Office.  We will pay interest on the outstanding balance at a rate of at least 2.5% per annum compounded annually.  We will determine annually if we will pay any interest in excess of 2.5%.  Upon your death, we will pay any outstanding balance to your estate.

Joint And Survivor Life

We pay you the Proceeds in equal payments at specified intervals for the life of the last surviving payee.  The Proceeds can be paid at the beginning of twelve-, six-, three- or one-month intervals.  As the payments are based on the lifetimes of the

33

payees, you cannot withdraw any amount you designate to this option after payments begin.  Also, payments will cease upon the death of the last surviving payee.  We will make no payments to the last surviving payee's estate.

Alternate Life Income

We use the Proceeds to purchase an annuity with the payee as annuitant.  The amount payable will be 102% of our current individual immediate annuity purchase rate on the date of the Insured's death, the Maturity Date or the date the policy is surrendered, as applicable.  The Proceeds can be paid at the end of twelve-, six-, three- or one-month intervals.  As the payments are based on your lifetime, you cannot withdraw any amount you designate to this option after payments begin.  Also, payments will cease upon your death.  We will make no payments to your estate.

Policy Loans

After the expiration of the free-look period and while the policy is In Force, you may take an advance of money from the Cash Value otherwise only available upon surrender or maturity, or upon payment of the Death Benefit.  We call this advance a policy loan.  You must make your request in writing at our Home Office.  You may increase your risk of Lapse if you take a policy loan.  There also may be adverse tax consequences.  You should obtain competent tax advice before you decide to take a policy loan.

Loan Amount And Interest

There are two kinds of policy loans.  Preferred policy loans, of any number in the aggregate, will not exceed 5% of your policy's Cash Surrender Value as of the beginning of the year from the Policy Date.  Otherwise, the loan is an ordinary policy loan.  The minimum policy loan you may take is $1.  You may take no more than the maximum loan value, which is based on the policy's Cash Surrender Value less 10% of the Cash Value of your Sub-Account allocations.  For more information, see "Full Surrender," beginning on page 32.  We charge interest, at the maximum guaranteed rate of 3.9% per annum, on the amount of an outstanding loan, which will accrue daily and be payable at the end of each year from the Policy Date.  If left unpaid, we will add the interest to the loan amount.

34

Collateral And Interest

As collateral or security, we will transfer a corresponding amount of Cash Value to the loan account in the same proportion as your Sub-Account allocations, unless you instruct otherwise.  On this amount, we will credit interest daily based on the current rate in effect, which will not be less than the guaranteed interest crediting rates shown on the Policy Data Page.  We may credit interest in excess of the guaranteed interest crediting rates.  Currently, interest crediting rates are 3.9% and 3.0% per annum for preferred and ordinary loans, respectively, during years one through ten from the Policy Date, and 3.9% per annum on all policy loans thereafter.

Repayment

You may repay all or part of a policy loan at any time while your policy is In Force during the Insured’s lifetime.  The minimum repayment is $50.  Interest on the loan amount will be due and payable at the end of each year from the Policy Date.  If left unpaid, we will add it to the loan amount by transferring a corresponding amount of Cash Value to the loan account in the same proportion as your Sub-Account allocations.  While your policy loan is outstanding, we will continue to treat any payments that you make as a Premium payment, unless you instruct otherwise.  Similarly, we will apply a loan repayment in the same proportion as your current Sub-Account allocations, unless you instruct otherwise.  Outstanding ordinary policy loan balances will be satisfied by your loan repayments before outstanding preferred policy loans.

Net Effect Of Policy Loans

We will charge interest on the loan amount at the same time as the collateral amount will be credited interest.  In effect, we will net the loan amount interest rate against the interest crediting rate, so that your actual cost of a policy loan will be less than the loan amount interest rate.  For more information, see "In Summary: Fee Tables," in particular, the footnotes, beginning on page 5.  Nevertheless, keep in mind that the Cash Value transferred to the loan account will not be affected by the Investment Experience of the Sub-Account portfolios.  Whether repaid, a policy loan will affect the policy, the net Cash Surrender Value and the Death Benefit.  If your total Indebtedness ever exceeds the policy's Cash Value less the policy's Surrender Charge, your policy may Lapse.  Repaying a policy loan will cause the Death Benefit and net Cash Surrender Value to increase accordingly.

Lapse

The policy is at risk of Lapsing when the Cash Surrender Value is insufficient to cover the monthly deduction of periodic charges.  However, it will not Lapse under the guaranteed policy continuation provision so long as you have at least paid the Policy Continuation Premium Amount, irrespective of poor investment results from your Net Premium allocation choices, or that the Cash Surrender Value is less than the amount of the policy's periodic charges deduction (or both).  Subject to its conditions, you may also invoke the Policy Guard Rider to prevent the policy from Lapsing due to Indebtedness.  For more information, see "Policy Guard Rider," beginning on page 23.  In any event, there is a Grace Period before your policy will Lapse.  Also, you may reinstate a policy that has Lapsed, subject to conditions.

Guaranteed Policy Continuation Provision

The policy will not Lapse if you have at least paid the Policy Continuation Premium Amount during the guaranteed policy continuation period, both as stated on the Policy Data Page.  The Policy Continuation Premium Amount will vary by: the Insured's age; sex; underwriting class; any substandard ratings; the Specified Amount; and the Riders purchased.  The Policy Continuation Premium Amount will not account, however, for any subsequent increases in the Specified Amount, policy loans or partial surrenders.  For no charge, you may request that we determine whether your Premium payments are sufficient to keep the guaranteed policy continuation provision in effect at any time, and you should do so especially after you have: requested an increase in the Specified Amount; taken a policy loan; or requested a partial surrender.

The guaranteed policy continuation period will begin when we issue the policy and continue for the lesser of 30 years, or the number of years until the Insured reaches Attained Age 65, from the Policy Date.  For policies issued to ages greater than 55, the guaranteed policy continuation period is ten years.  When the guaranteed policy continuation period ends, if the Cash Surrender Value remains insufficient to cover the monthly deductions of periodic charges, the policy is at risk of Lapsing, and a Grace Period will begin.  The guaranteed policy continuation provision is subject to state insurance restrictions and may be different in your state and for your policy.  There is no charge for the guaranteed policy continuation provision.

Grace Period

We will send you a notice when the Grace Period begins.  The notice will state an amount of Premium required to avoid Lapse that is equal to four times the current monthly deductions or, if it is less, the Premium that will bring the guaranteed policy continuation provision back into effect.  If you do not pay this Premium within 61 days, the policy and all Riders will Lapse.  The Grace Period will not alter the operation of the policy or the payment of Proceeds.

35

Reinstatement

You may reinstate a Lapsed policy by:

· submitting a written request at any time within three years after the end of the Grace Period and prior to the Maturity Date;

· providing further evidence of insurability we may require that is satisfactory to us;

· paying sufficient Premium to cover all policy charges that were due and unpaid during the Grace Period;

· paying sufficient Premium to keep the policy In Force for three months from the date of reinstatement, or, if the policy is in the guaranteed policy continuation period, paying the lesser of (a) and (b) where:

(a)  is Premium sufficient to keep the policy In Force for three months from the date of reinstatement; and

(b)  is Premium sufficient to bring the guaranteed policy continuation provision into effect; and

· paying or reinstating any Indebtedness against the policy which existed at the end of the Grace Period.

At the same time, you may also reinstate any Riders, but subject to evidence of insurability satisfactory to us.

The effective date of a reinstated policy, including any Riders, will be the monthly anniversary date on or next following the date we approve the application for reinstatement.  If the policy is reinstated, the Cash Value on the date of reinstatement, will be set equal to the lesser of:

· the Cash Value at the end of the Grace Period; or

· the surrender charge for the year from the Policy Date in which the policy was reinstated.

We will then add any Premiums or loan repayments that you made to reinstate the policy.

The allocations to the Sub-Accounts in effect at the start of the Grace Period will be reinstated, unless you provide otherwise.

Taxes

The tax treatment of life insurance policies under the Code is complex and the tax treatment of your policy will depend on your particular circumstances.   Seek competent tax advice regarding the tax treatment of the policy given your situation.  The following discussion provides an overview of the Code’s provisions relating to certain common life insurance policy transactions.  It is not and cannot be comprehensive, and it cannot replace personalized advice provided by a competent tax professional.

Types of Taxes

Federal Income Tax.  Generally, the United States assesses a tax on income, which is broadly defined to include all items of income from whatever source, unless specifically excluded.  Certain expenditures can reduce income for tax purposes and correspondingly the amount of tax payable.  These expenditures are called deductions.  While there are many more income tax concepts under the Code, the concepts of "income" and "deduction" are the most fundamental to the federal income tax treatment that pertains to this policy.

Federal Transfer Tax.  In addition to the income tax, the United States also assesses a tax on some or all of the value of certain transfers of wealth made by gift while a person is living (the federal gift tax), and by bequest or otherwise at the time of a person’s death (the federal estate tax).

The federal gift tax is imposed on the value of the property (including cash) transferred by gift.  Each donor is allowed to exclude an amount (in 2007, up to $12,000 per recipient) from the value of present interest gifts.  In addition, each donor is allowed a credit against the tax on the first million dollars in lifetime gifts (calculated after taking into account the $12,000 exclusion amount).  An unlimited marital deduction may be available for certain lifetime gifts made by the donor to the donor's spouse.  Unlike the estate tax, the gift tax is not scheduled to be repealed.

In general, in 2007, an estate of less than $2,000,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability.  The $2 million amount increases to $3.5 million in 2009.  The federal estate tax (but not the federal gift tax) is scheduled to be repealed effective after 2009; however, unless Congress acts to make that repeal permanent, the estate tax is scheduled to be reinstated with respect to decedents who die after December 31, 2010.  If the estate tax is reinstated and Congress has not acted further, the size of estates that will not incur an estate tax will revert to $1 million.

An unlimited marital deduction may be available for federal estate tax purposes for certain amounts that pass to the surviving spouse.

If the transfer is made to someone two or more generations younger than the transferor, the transfer may be subject to the

36

federal generation-skipping transfer tax ("GSTT").  The GSTT provisions generally apply to the same transfers that are subject to estate or gift taxes.  The tax is imposed at a flat rate equal to the maximum estate tax rate (for 2007, 45%), and there is a provision for an aggregate $1 million exemption.  The GSTT tax is scheduled to be repealed effective after 2009; however, unless Congress acts to make that repeal permanent, the GSTT tax is scheduled to be reinstated on January 1, 2011 at a rate of 55%.

State and Local Taxes.  State and local estate, inheritance, income and other tax consequences of ownership or receipt of Policy Proceeds depend on the circumstances of each policy owner or beneficiary.  While these taxes may or may not be substantial in your case, state by state differences of these taxes preclude a useful description of them in this prospectus.

Buying the Policy

Federal Income Tax.  Generally, the Code treats life insurance Premiums as a personal expense.  This means that under the general rule you cannot deduct from your taxable income the Premiums paid to purchase the policy.

Federal Transfer Tax.  Generally, the Code treats the payment of Premiums on a life insurance policy as a gift when the Premium payment benefits someone else (such as when premium payments are paid by someone other than  the policy owner).  Gifts are not generally included in the recipient’s taxable income.  If you (whether or not you are the Insured) transfer ownership of the policy to another person, the transfer may be subject to a federal gift tax.

Investment Gain in the Policy

The income tax treatment of changes in the policy’s Cash Value depends on whether the policy is "life insurance" under the Code.  If the policy meets the definition of life insurance, then the increase in the policy’s Cash Value is not included in your taxable income for federal income tax purposes unless it is distributed to you before the death of the Insured.

To qualify as life insurance, the policy must meet certain tests set out in Section 7702 of the Code.  We will monitor the Policy’s compliance with Code Section 7702, and take whatever steps are necessary to stay in compliance.

Diversification.  In addition to meeting the tests required under Section 7702, Section 817(h) of the Code requires that the investments of the separate account be adequately diversified.  Regulations under Code Section 817(h) provide that a variable life policy that fails to satisfy the diversification standards will not be treated as life insurance unless such failure was inadvertent, is corrected, and the policy owner or the issuer pays an amount to the IRS.  If the failure to diversify is not corrected, the income and gain in the contract would be treated as taxable ordinary income for federal income tax purposes.

We will also monitor compliance with Code Section 817(h) and the regulations applicable to Section 817(h) and, to the extent necessary, will change the objectives or assets of the Sub-Account investments to remain in compliance.  Thus, the policy should receive federal income tax treatment as life insurance.

Representatives of the IRS have informally suggested, from time to time, that the number of underlying mutual funds available or the number of transfer opportunities available under a variable product may be relevant in determining whether the product qualifies for the desired tax treatment.  In 2003, the IRS issued formal guidance, in Revenue Ruling 2003-91, that indicates that if the number of underlying mutual funds available in a variable insurance product does not exceed 20, the number of funds alone would not cause the policy to not qualify for the desired tax treatment.  The IRS has also indicated that exceeding 20 investment options may be considered a factor, along with other factors including the number of transfer opportunities available under the policy, when determining whether the policy qualifies for the desired tax treatment.  The revenue ruling did not indicate the number of fund options, if any, that would cause the policy to not provide the desired tax treatment.  Should the U.S. Secretary of the Treasury issue additional rules or regulations limiting: the number of underlying mutual funds, transfers between underlying mutual funds, exchanges of underlying mutual funds or changes in the investment objectives of underlying mutual funds such that the policy would no longer qualify as life insurance under Section 7702 of the Code, we will take whatever steps are available to remain in compliance.

Periodic Withdrawals, Non-Periodic Withdrawals and Loans

The tax treatment described in this section applies to withdrawals and loans you choose to take from the policy.  It also applies to Premiums we accept but then return to meet the Code's definition of life insurance.

The income tax treatment of distributions of cash from the policy depends on whether the policy is also a "modified endowment contract" under the Code. Generally, the income tax consequences of owning a life insurance contract that is not a modified endowment contract are more advantageous than the tax consequences of owning a life insurance contract that is a modified endowment contract.

The policies offered by this prospectus may or may not be issued as modified endowment contracts.  If a contract is issued as a modified endowment contract, it will always be a modified endowment contract; a contract that is not issued as a modified endowment contract can become a modified endowment contract due to subsequent transactions with respect to the contract, such as payment of additional Premiums.  If the contract is not issued as a modified endowment contract, we will monitor it

37

and advise you if  the payment of a Premium, or other transaction, may cause the contract to become a modified endowment contract.

When the Policy is Life Insurance that is a Modified Endowment Contract.  Section 7702A of the Code defines modified endowment contracts as those life insurance policies issued or materially changed on or after June 21, 1988 on which the total Premiums paid during the first seven years exceed the amount that would have been paid if the policy provided for paid up benefits after seven level annual Premiums.  Under certain conditions, a policy may become a modified endowment contract, or may become subject to a new 7 year testing period as a result of a "material change" or a "reduction in benefits" as defined by Section 7702A(c) of the Code.

All modified endowment contracts issued to the same owner by the same company during a single calendar year are required to be aggregated and treated as a single contract for purposes of determining the amount that is includible in income when a distribution occurs.

The Code provides special rules for the taxation of surrenders, partial surrenders, loans, collateral assignments and other pre-death distributions from modified endowment contracts.  Under these special rules, such transactions are taxable to the extent that at the time of the transaction the Cash Value of the policy exceeds the investment in the contract (generally, the Premiums paid for the policy).  In addition, a 10% tax penalty generally applies to the taxable portion of such distributions unless the policy owner is over age 59½ or disabled, or the distribution is part of a series of substantially equal periodic payments as defined in the Code.

When the Policy is Life Insurance that is NOT a Modified Endowment Contract.  If the policy is not issued as a modified endowment contract, we will monitor Premiums paid and will notify the policy owner when the policy is in jeopardy of becoming a modified endowment contract.  If a policy is not a modified endowment contract, a cash distribution during the first 15 years after a policy is issued which causes a reduction in Death Benefits may still become fully or partially taxable to the policy owner pursuant to Section 7702(f)(7) of the Code.  You should carefully consider this potential tax ramification and seek further information before requesting any changes in the terms of the policy.

Distributions from life insurance contracts that are not modified endowment contracts generally are treated as being from the investment in the contract (generally, the Premiums paid for the contract), and then from the income in the contract.  Because Premium payments are generally nondeductible, distributions not in excess of investment in the contract are generally not includible in income; instead, they reduce the owner’s investment in the contract.

However, if a policy is not a modified endowment contract, a cash distribution during the first 15 years after a policy is issued that causes a reduction in Death Benefits may still become fully or partially taxable to the policy owner pursuant to Section 7702(f)(7) of the Code.  You should carefully consider this potential tax ramification and seek further information before requesting any changes in the terms of the policy.

In addition, a loan from a life insurance contract that is not a modified endowment contract is not taxable when made, although it can be treated as a distribution if it is forgiven during the owner’s lifetime.  Distributions from contracts that are not modified endowment contracts are not subject to the 10% early distribution penalty tax.

Surrendering the Policy

A full surrender, cancellation of the policy by Lapse, or the maturity of the policy on its Maturity Date may have adverse tax consequences.  If the amount you receive plus total policy Indebtedness exceeds the investment in the contract (generally, the Premiums paid into the policy), then the excess generally will be treated as taxable ordinary income, regardless of whether or not the policy is a modified endowment contract.  In certain circumstances, for example when the policy Indebtedness is very large, the amount of tax could exceed the amount distributed to you at surrender.

Withholding

Distributions of income from a life insurance policy, including a life insurance policy that is a modified endowment contract, are subject to federal income tax withholding.  Generally, the recipient may elect not to have the withholding taken from the distribution.  We will withhold income tax unless you advise us, in writing, of your request not to withhold.  If you request that taxes not be withheld, or if the taxes withheld are insufficient, you may be liable for payment of an estimated tax.

A distribution of income from a life insurance policy may be subject to mandatory back-up withholding.  Mandatory backup withholding means that we are required to withhold taxes on a distribution, at the rate established by Section 3406 of the Code, and the recipient cannot elect to receive the entire distribution at once.  Mandatory backup withholding may arise if we have not been provided a taxpayer identification number, or if the IRS notifies us that back-up withholding is required.

In certain employer-sponsored life insurance arrangements, participants may be required to report for income tax purposes, one or more of the following:

38

· the value each year of the life insurance protection provided;

· an amount equal to any employer-paid Premiums; or

· some or all of the amount by which the current value exceeds the employer’s interest in the policy; or

· interest that is deemed to have been forgiven on a loan that we deemed to have been made by the employer.

Participants in an employer-sponsored plan relating to this policy should consult with the sponsor or the administrator of the plan, and/or with their personal tax or legal adviser, to determine the tax consequences, if any, of their employer-sponsored life insurance arrangements.

Exchanging the Policy for Another Life Insurance Policy

Generally, you will pay taxes on amounts that you receive in excess of your Premium payments when you completely surrender the policy.  If, however, you exchange the policy for another life insurance policy, modified endowment contract, or annuity contract, you will not be taxed on the excess amount if the exchange meets the requirements of Code Section 1035.  To meet Section 1035 requirements, the Insured named in the policy must be the Insured for the new policy or contract and the new policy or contract cannot extend the Maturity Date or otherwise delay a distribution that would extend the time that tax would be payable.  Generally, the new policy or contract will be treated as having the same issue date and tax basis as the old policy or contract.

If the policy or contract is subject to a policy Indebtedness that is discharged as part of the exchange transaction, the discharge of the Indebtedness may be taxable.  Owners should consult with their personal tax or legal advisors in structuring any policy exchange transaction.

Taxation of Death Benefits

Federal Income Tax.  The Death Benefit is generally excludable from the beneficiary's gross income under Section 101 of the Code.  However, if the policy is transferred to a new policy owner for valuable consideration, a portion of the Death Benefit may be includable in the beneficiary’s gross income when it is paid.

The payout option selected by your beneficiary may affect how the payments received by the beneficiary are taxed.  Under the various payout options, the amount payable to the beneficiary may include earnings on the Death Benefit, which will be taxable as ordinary income.  For example, if the beneficiary elects to receive interest only, then the entire amount of the interest payment will be taxable to the beneficiary; if a periodic payment (whether for a fixed period or for life) is selected, then a portion of each payment will be taxable interest income, and a portion will be treated as the nontaxable payment of the Death Benefit.  Your beneficiaries should consult with their tax advisors to determine the tax consequences of electing a payout option, based on their individual circumstances.

Special federal income tax considerations for life insurance policies owned by employers.   In 2006, President Bush signed the Pension Protection Act of 2006, which contains new Code Sections 101(j) and 6039I, which affect the tax treatment of life insurance contracts owned by the employer of the Insured.  These provisions are generally effective for life insurance contracts issued after August 17, 2006,  If a life insurance policy was issued on or before August 17, 2006, but materially modified after that date, it will be treated as having been issued after  that date for purposes of section 101(j).  Contracts issued after August 17, 2006 pursuant to a Section 1035 exchange generally are excluded from the operation of these new provisions, provided that the contract received in the exchange does not have a material increase in death benefit or other material change with respect to the old contract.

New Section 101(j) provides the general rule that, with respect to an employer-owned life insurance contract, the amount of death benefit payable directly or indirectly to the employer that may be excluded from income cannot exceed the sum of Premiums and other payments paid by the policyholder for the contract.  Consequently, under this general rule, the entire death benefit, less the cost to the policyholder, will be taxable.  Although Section 101(j) is not clear, if lifetime distributions from the contract are made as a nontaxable return of premium, it appears that the reduction would apply for Section 101(j) purposes and reduce the amount of Premiums for this purpose.

There are 2 exceptions to this general rule of taxability, provided that statutory notice, consent, and information requirements are satisfied.  These requirements are as follows:  Prior to the issuance of the company, (a) the employee is notified in writing that the employer intends to insure the employee's life, and the maximum face amount for which the employee could be Insured at the time that the contract is issued; (b) the employee provides written consent to being insured under the contract and that such coverage may continue after the Insured terminates employment; and (c) the employee is informed in writing that the employer will be a beneficiary of any proceeds payable upon the death of the employee.  If the employer fails to meet all of those requirements, then neither exception can apply.

The 2 exceptions are as follows.  First, if proper notice and consent are given and received, and if the Insured was an employee at any time during the 12-month period before the Insured’s death, then new Section 101(j) would not apply.

39

Second, if proper notice and consent are given and received and, at the time that the contract is issued, and the Insured is either a director, a “highly compensated employee” (within the meaning of Section 414(q) of the Code without regard to paragraph (a)(B)(ii) thereof), or a “highly compensated individual” (within the meaning of Section 105(h)(5), except “35%” is substituted for “25%” in paragraph (C) thereof), then the new Section 101(j) would not apply.

Code Section 6039I requires any policyholder of an employer-owned contract to file an annual return showing (a) the number of employees of the policyholder, (b) the number of such employees insured under employee-owned contracts at the end of the year, (c) the total amount of insurance in force with respect to those contracts at the end of the year, (d) the name, address, taxpayer identification number and type of business of the policyholder, and (e) that the policyholder has a valid consent for each Insured (or, if all consents are not obtained, the number of insured employees for whom such consent was not obtained).  Proper recordkeeping is also required by this section.

It is your responsibility to (a) provide the proper notice to each Insured, (b) obtain the proper consent from each Insured, (c) inform each Insured in writing that you will be the beneficiary of any proceeds payable upon the death of the Insured, and (d) file the annual return required by Section 6039I.  If you fail to provide the necessary notice and information, or fail to obtain the necessary consent, the death benefit will be taxable to you when received.  If you fail to file a properly completed return under Section 6039I, you could be required to pay a penalty.

Federal Transfer Taxes.  When the Insured dies, the Death Benefit will generally be included in the Insured's federal gross estate if: (1) the Proceeds were payable to or for the benefit of the Insured's estate; or (2) the Insured held any "incident of ownership" in the policy at death or at any time within 3 years of death.  An incident of ownership, in general, is any right that may be exercised by the policy owner, such as the right to borrow on the policy or the right to name a new beneficiary.

If the beneficiary is two or more generations younger than the Insured, the Death Benefit may be subject to the GSTT.  Pursuant to regulations issued by the U.S. Secretary of the Treasury, we may be required to withhold a portion of the Proceeds and pay them directly to the IRS as the GSTT tax payment.

If the policy owner is not the Insured or a beneficiary, payment of the Death Benefit to the beneficiary will be treated as a gift to the beneficiary from the policy owner.

Terminal Illness

Certain distributions made under a policy on the life of a “terminally ill individual” or a “chronically ill individual,” as those terms are defined in the Code, are treated as death proceeds.  See, “Taxation of Death Benefits,” above.

Special Considerations for Corporations

Section 264 of the Code imposes a number of limitations on the interest and other business deductions that may otherwise be available to businesses that own life insurance policies.  In addition, the Premium paid by a business for a life insurance policy is not deductible as a business expense or otherwise if the business is directly or indirectly a beneficiary of the policy.

For purposes of the alternative minimum tax ("AMT") that may be imposed on corporations, the death benefit from a life insurance policy, even though excluded from gross income for normal tax purposes, is included in "adjusted current earnings" for AMT purposes.  In addition, although increases to the Cash Surrender Value of a life insurance policy are generally excluded from gross income for normal income tax purposes, such increases are included in adjusted current earnings for income tax purposes.

Due to the complexity of these rules, and because they are affected by your facts and circumstances, you should consult with legal and tax counsel and other competent advisers regarding these matters.

Federal appellate and trial courts have examined the economic substance of transactions involving life insurance policies owned by corporations.  These cases involved relatively large loans against the policy’s Cash Value as well as tax deductions for the interest paid on the policy loans by the corporate policy owner to the insurance company.  Under the particular factual circumstances in these cases, the courts determined that the corporate policy owners should not have taken tax deductions for the interest paid.  Accordingly, the court determined that the corporations should have paid taxes on the amounts deducted.  Corporations should consider, in consultation with tax professionals familiar with these matters, the impact of these decisions on the corporation’s intended use of the policy.

See, also, Business Uses of the Policy, below.

Taxes and the Value of Your Policy

For federal income tax purposes, a separate account is not a separate entity from the company.  Thus, the tax status of the separate account is not distinct from our status as a life insurance company.  Investment income and realized capital gains on the assets of the separate account are reinvested and taken into account in determining the value of Accumulation Units.  As a

40

result, such investment income and realized capital gains are automatically applied to increase reserves under the policies.

At present, we do not expect to incur any federal income tax liability that would be chargeable to the Accumulation Units.  Based upon these expectations, no charge is being made against your Accumulation Units for federal income taxes.  If, however, we determine that taxes may be incurred, we reserve the right to assess a charge for these taxes.

We may also incur state and local taxes (in addition to those described in the discussion of the Premium Taxes) in several states.  At present, these taxes are not significant.  If they increase, however, charges for such taxes may be made that would decrease the value of your Accumulation Units.

Business Uses of the Policy.

The life insurance policy may be used in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans, and others.  The tax consequences of these plans may vary depending on the particular facts and circumstances of each individual arrangement.  The IRS has also recently issued new guidance on split dollar insurance plans.  In addition, Internal Revenue Code Section 409A, which sets forth new rules for taxation of nonqualified deferred compensation, was added to the Code for deferrals after December 31, 2004.  Therefore, if you are contemplating using the Policy in any arrangement the value of which depends in part on its tax consequences, you should be sure to consult a tax adviser as to tax attributes of the arrangement.

Non-Resident Aliens and Other Persons Who are not Citizens of the United States

Special income tax laws and rules apply to non-resident aliens of the United States including certain withholding requirements with respect to pre-death distributions from the policy.  In addition, foreign law may impose additional taxes on the policy, the Death Benefit, or other distributions and/or ownership of the policy.

In addition, special gift, estate and GSTT laws and rules may apply to non-resident aliens, and to transfers to persons who are not citizens of the United States, including limitations on the marital deduction if the surviving or donee spouse is not a citizen of the United States.

If you are a non-resident alien, or a resident alien, or if any of your beneficiaries (including your spouse) are not citizens of the United States, you should confer with a competent tax professional with respect to the tax treatment if this policy.

If you, the Insured, the beneficiary, or other person receiving any benefit or interest in or from the policy, are not both a resident and citizen of the United States, there may be a tax imposed by a foreign country that is in addition to any tax imposed by the United States.  The foreign law (including regulations, rulings, treatiers with the United States, and case law) may change and impose additional or increased taxes on the policy, payment of the Death Benefit, or other distributions and/or ownership of the policy.

Tax Changes

The foregoing discussion, which is based on our understanding of federal tax laws as currently interpreted by the IRS, is general and is not intended as tax advice.

The Code has been subjected to numerous amendments and changes, and it is reasonable to believe that it will continue to be revised.  The United States Congress has, in the past, considered numerous legislative proposals that, if enacted, could change the tax treatment of life insurance policies.  It is reasonable to believe that such proposals, and future proposals, may be enacted into law.  The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may differ from its current positions on these matters.  In addition, current state law (which is not discussed herein) and future amendments to state law may affect the tax consequences of the policy.

In 2001, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) was enacted into law.  EGTRRA contained numerous changes to the federal income, gift, estate and generation skipping transfer taxes, many of which are not scheduled to become effective until a future date.  Among other matters, EGTRRA provides for the repeal of the federal estate and generation-skipping transfer taxes after 2009; however, unless Congress and the President enact additional legislation, EGTRRA also provides that all of those changes will "sunset" after 2010, and the estate and generation skipping transfer taxes will be reinstated as if EGTRRA had never been enacted.

The foregoing is a general explanation as to certain tax matters pertaining to insurance policies.  It is not intended to be legal or tax advice.  You should consult your independent legal, tax and/or financial adviser.

Any or all of the foregoing may change from time to time without any notice, and the tax consequences arising out of a policy may be changed retroactively.  There is no way of predicting if, when, or to what extent any such change may take place.  We make no representation as to the likelihood of the continuation of these current laws, interpretations, and policies.

41

Nationwide Life Insurance Company

We are a stock life insurance company organized under Ohio law.  We were founded in March, 1929 and our Home Office is One Nationwide Plaza, Columbus, Ohio 43215.  We provide long-term savings products by issuing life insurance, annuities and other retirement products.

Nationwide VLI Separate Account–6

Organization, Registration And Operation

Nationwide VLI Separate Account-6 is a separate account established under Ohio law.  We own the assets in this account, and we are obligated to pay all benefits under the policies.  We may use the account to support other variable life insurance policies we issue.  It is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 ("1940 Act") and qualifies as a "separate account" within the meaning of the federal securities laws.  This registration, however, does not involve the SEC’s supervision of this account’s management or investment practice or policies.

It is divided into Sub-Accounts that may invest in shares of the available Sub-Account portfolios.  We buy and sell the Sub-Account portfolio shares at NAV.  Any dividends and distributions from a Sub-Account portfolio are reinvested at NAV in shares of that Sub-Account portfolio.

Income, gains, and losses, whether or not realized, from the assets in the account will be credited to, or charged against, the account without regard to our other income, gains, or losses.  Income, gains, and losses credited to, or charged against, a Sub-Account reflect the Sub-Account’s own Investment Experience and not the Investment Experience of our other assets.  Its assets are held separately from our other assets and are not part of our general account.  We may not use the separate account’s assets to pay any of our liabilities other than those arising from the policies.  If the separate account’s assets exceed the required reserves and its other liabilities, we may transfer the excess to our general account.  The separate account may include other Sub-Accounts that are not available under the policies, and are not discussed in this prospectus.

If investment in the mutual funds or a particular portfolio is no longer possible, in our judgment becomes inappropriate for the purposes of the policy, or for any other reason in our sole discretion, we may substitute another mutual fund or portfolio without your consent.  The substituted mutual fund or portfolio may have different fees and expenses.  Substitution may be made with respect to existing investments or the investments of future Premium, or both.  We will comply with federal securities laws to effect a substitution.  Furthermore, we may close Sub-Accounts to allocations of Premiums or policy value, or both, at any time in our sole discretion.  The mutual funds, which sell their shares to the Sub-Accounts pursuant to participation agreements, also may terminate these agreements and discontinue offering their shares to the Sub-Accounts.

In addition, we reserve the right to make other structural and operational changes affecting this separate account.

We do not guarantee any money you place in this separate account.  The value of each Sub-Account will increase or decrease, depending on the investment performance of the corresponding portfolio.  You could lose some or all of your money.

Addition, Deletion Or Substitution Of Mutual Funds

Where permitted by applicable law, we reserve the right to:

· remove, combine, or add Sub-Accounts and make new Sub-Accounts available;

· substitute shares of another mutual fund, which may have different fees and expenses, for shares of an existing mutual fund;

· transfer assets supporting the policies from one Sub-Account to another or from one separate account to another;

· combine the separate account with other separate accounts, and/or create new separate accounts;

· deregister the separate account under the 1940 Act, or operate the separate account as a management investment company under the 1940 Act, or as any other form permitted by the law; and

· modify the policy provisions to reflect changes in the Sub-Accounts and the separate account to comply with applicable law.

42

Voting Rights

Unless there is a change in existing law, we will vote our shares only as you instruct on all matters submitted to shareholders of the portfolios.

Before a vote of a portfolio’s shareholders occurs, you will have the right to instruct us based on the number of portfolio shares that corresponds to the amount of policy account value you have in the portfolio (as of a date set by the portfolio).  We will vote shares for which no instructions are received in the same proportion as those that are received.

The number of shares which a policy owner may vote is determined by dividing the Cash Value of the amount they have allocated to an underlying mutual fund by the NAV of that underlying mutual fund. We will designate a date for this determination not more than 90 days before the shareholder meeting.

Legal Proceedings

Nationwide Life Insurance Company

Nationwide is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and Nationwide does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. Nationwide does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on Nationwide’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on Nationwide’s consolidated financial results in a particular quarterly or annual period.

In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits relating to life insurance and annuity pricing and sales practices. A number of these lawsuits have resulted in substantial jury awards or settlements against life insurers other than Nationwide.

The financial services industry, including mutual fund, variable annuity, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the National Association of Securities Dealers and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. Nationwide has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by Nationwide. Nationwide has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by Nationwide and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

In addition, state and federal regulators have commenced investigations or other proceedings relating to compensation and bidding arrangements and possible anti-competitive activities between insurance producers and brokers and issuers of insurance products, and unsuitable sales and replacements by producers on behalf of the issuer. Also under investigation are compensation and revenue sharing arrangements between the issuers of variable insurance contracts and mutual funds or their affiliates, the use of side agreements and finite reinsurance agreements, funding agreements issued to back MTN programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives. Related investigations and proceedings may be commenced in the future. Nationwide and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies, state securities law regulators and state attorneys general for information relating to certain of these investigations, including those relating to compensation, revenue sharing and bidding arrangements, anti-competitive activities, unsuitable sales or replacement practices, the use of side agreements and finite reinsurance agreements, and funding agreements backing the Nationwide’s MTN program. Nationwide is cooperating with regulators in connection with these inquiries and will cooperate with Nationwide Mutual Insurance Company (NMIC) in responding to these inquiries to the extent that any inquiries encompass NMIC’s operations.

These proceedings are expected to continue in the future and could result in legal precedents and new industry-wide legislation, rules and regulations that could significantly affect the financial services industry, including life insurance and annuity companies. These proceedings also could affect the outcome of one or more of Nationwide’s litigation matters. There can be no assurance that any such litigation or regulatory actions will not have a material adverse effect on Nationwide in the future.

43

On November 15, 2006, Nationwide was named in a lawsuit filed in the United States District Court for the Southern District of Ohio entitled Kevin Beary, Sheriff of Orange County, Florida, In His Official Capacity, Individually and On Behalf of All Others Similarly Situated v. Nationwide Life Insurance Co., Nationwide Retirement Solutions, Inc. and Nationwide Financial Services, Inc. The plaintiff seeks to represent a class of all sponsors of 457(b) deferred compensation plans in the United States that had variable annuity contracts with the defendants at any time during the class period, or in the alternative, all sponsors of 457(b) deferred compensation plans in Florida that had variable annuity contracts with the defendants during the class period. The Class Period is from January 1, 1996 until the Class Notice is provided. The plaintiff alleges that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint seeks an accounting, a declaratory judgment, a permanent injunction and disgorgement or restitution of the service fee payments allegedly received by the defendants, including interest. On January 25, 2007, Nationwide filed a motion to dismiss.  Nationwide intends to defend this lawsuit vigorously.

On February 11, 2005, Nationwide was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company. The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the Court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The Court certified a class consisting of all residents of the United States and the Virgin Islands who, during the Class Period, paid premiums on a modal basis to Nationwide for term life insurance policies issued by Nationwide during the Class Period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are Nationwide; any parent, subsidiary or affiliate of Nationwide; all employees, officers and directors of Nationwide; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The Class Period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. Nationwide continues to defend this lawsuit vigorously.

On April 13, 2004, Nationwide was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company. Nationwide removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation. In response, on May 13, 2005, the plaintiff filed a First Amended Complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of a Nationwide annuity or insurance product) units of any Nationwide sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The First Amended Complaint purports to disclaim, with respect to market timing or stale price trading in Nationwide’s annuities sub-accounts, any allegation based on Nationwide’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of Nationwide annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if Nationwide is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons who, prior to Nationwide’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of an Nationwide annuity or insurance product) units of any Nationwide sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The First Amended Complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted Nationwide’s motion to dismiss the plaintiff’s complaint. On November 29, 2006, the plaintiff filed its appellate brief with the Fourth Circuit Court of Appeals contesting the District Court’s dismissal. Nationwide continues to defend this lawsuit vigorously.

On January 21, 2004, Nationwide was named in a lawsuit filed in the United States District Court for the Northern District of Mississippi entitled United Investors Life Insurance Company v. Nationwide Life Insurance Company and/or Nationwide Life Insurance Company of America and/or Nationwide Life and Annuity Insurance Company and/or Nationwide Life and Annuity Company of America and/or Nationwide Financial Services, Inc. and/or Nationwide Financial Corporation, and John Does A-Z. In its complaint, the plaintiff alleges that Nationwide and/or its affiliated life insurance companies caused the replacement of variable insurance policies and other financial products issued by United Investors with policies issued by the Companies. The plaintiff raises claims for (1) violations of the Federal Lanham Act, and common law unfair competition and defamation; (2) tortious interference with the plaintiff’s contractual relationship with Waddell & Reed, Inc. and/or its affiliates, Waddell & Reed Financial, Inc., Waddell & Reed Financial Services, Inc. and W&R Insurance Agency, Inc., or with the plaintiff’s contractual relationships with its variable policyholders; (3) civil conspiracy; and (4) breach of fiduciary duty. The complaint seeks compensatory damages, punitive damages, pre- and post-judgment interest, a full accounting, a constructive trust and costs and disbursements, including attorneys’ fees. On December 30, 2005,Nationwide filed a motion for summary judgment. On June 15, 2006, the District Court granted Nationwide’s motion for summary judgment on all grounds and dismissed the plaintiff’s entire case with prejudice. The plaintiff appealed the District Court’s decision to the Fifth Circuit Court of Appeals.

44

The appeal has been fully briefed, and Nationwide is awaiting a decision. Nationwide continues to defend this lawsuit vigorously.

On August 15, 2001, Nationwide was named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. Currently, the plaintiffs’ fifth amended complaint, filed March 21, 2006, purports to represent a class of qualified retirement plans under ERISA that purchased variable annuities from Nationwide. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that Nationwide breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by Nationwide, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class. Nationwide’s motion to dismiss the plaintiffs’ fifth amended complaint is currently pending before the court. Nationwide continues to defend this lawsuit vigorously.

Nationwide Investment Services Corporation

The general distributor, Nationwide Investment Services Corporation, is not engaged in litigation of a material nature.

Financial Statements

The Statement of Additional Information (SAI) contains financial statements of Nationwide VLI Separate Account – 6 and consolidated financial statements for Nationwide Life Insurance Company and subsidiaries.  You may obtain a copy of the SAI free of charge by contacting us at the address or telephone number on the first page of this prospectus.  Please consider the consolidated financial statements of the company only as bearing on our ability to meet the obligations under the policy.  You should not consider the consolidated financial statements of the company and subsidiaries as affecting the investment performance of the assets of the separate account.

45

Appendix A: Available Sub-Accounts

The Sub-Accounts listed below invest in corresponding mutual funds that are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.

The Sub-Account portfolios listed below are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.  There is no guarantee that the investment objectives will be met.  We have entered into agency agreements with certain broker-dealer firms to distribute the policy.  Some of those firms have an affiliate that acts as an investment adviser or a subadviser to one or more of the underlying funds that are offered under the policy.  You have voting rights with respect to the Sub-Accounts.  For more information, see "Voting Rights," beginning on page 43.

Please refer to the prospectus for each sub-account portfolio for more detailed information.

American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         American Century Investment Management, Inc.

Investment Objective:                                                         Capital growth by investing in common stocks.

American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class III

Investment Adviser:                                                         American Century Investment Management, Inc.

Investment Objective:                                                         Capital growth by investing in common stocks.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

American Century Variable Portfolios, Inc. - American Century VP Ultra Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         American Century Investment Management, Inc.

Investment Objective:                                                         Long-term capital growth.

American Century Variable Portfolios, Inc. - American Century VP Ultra Fund: Class III

This sub-account is only available in policies issued before May 1, 2007

Investment Adviser:                                                         American Century Investment Management, Inc.

Investment Objective:                                                         Long-term capital growth.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         American Century Investment Management, Inc.

Investment Objective:                                                         Long-term capital growth with income as a secondary objective.

American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class III

Investment Adviser:                                                         American Century Investment Management, Inc.

Investment Objective:                                                         Long-term capital growth with income as a secondary objective.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Fidelity Management & Research Company

Sub-adviser:                                                         FMR Co., Inc.

Investment Objective:                                                         Reasonable income.

Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2R

Investment Adviser:                                                         Fidelity Management & Research Company

Sub-adviser:                                                         FMR Co., Inc.

Investment Objective:                                                         Reasonable income.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

46

Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Fidelity Management & Research Company

Sub-adviser:                                                         FMR Co., Inc.

Investment Objective:                                                         Capital appreciation.

Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2R

Investment Adviser:                                                         Fidelity Management & Research Company

Sub-adviser:                                                         FMR Co., Inc.

Investment Objective:                                                         Capital appreciation.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Fidelity Variable Insurance Products Fund II - VIP Contrafund® Portfolio: Service Class 2

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         FMR

Sub-adviser:                                                         Fidelity Research & Analysis Company

Investment Objective:                                                         Long-term capital appreciation.

Fidelity Variable Insurance Products Fund II - VIP Contrafund® Portfolio: Service Class 2R

Investment Adviser:                                                         FMR

Sub-adviser:                                                         Fidelity Research & Analysis Company

Investment Objective:                                                         Long-term capital appreciation.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                         Federated Investment Management Company

Investment Objective:                                                         High current income.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Cap Growth Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                        

Oberweis Asset Management, Inc.; Waddell & Reed Investment Management

Company

Investment Objective:                                                         Capital growth.

Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Cap Growth Fund: Class III

This sub-account is only available in policies issued before May 1, 2004

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                         Oberweis Asset Management, Inc.; Waddell & Reed Investment Management

Company

Investment Objective:                                                         Capital growth.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Cap Value Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                         Epoch Investment Partners, Inc.; J.P. Morgan Investment Management Inc.

Investment Objective:                                                         Capital appreciation.

Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Cap Value Fund: Class III

This sub-account is only available in policies issued before May 1, 2004

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                         Epoch Investment Partners, Inc.; J.P. Morgan Investment Management Inc.

Investment Objective:                                                         Capital appreciation.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

47

Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Company Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                         American Century Investment Management Inc.; Franklin Portfolio

Associates LLC; Gartmore Global Partners; Morgan Stanley Investment

Management Inc.; Neuberger Berman, LLC; Waddell & Reed Investment

Management Company

Investment Objective:                                                         Long-term growth of capital.

Nationwide Variable Insurance Trust - Nationwide Multi-Manager NVIT Small Company Fund: Class III

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Sub-adviser:                                                         American Century Investment Management Inc.; Franklin Portfolio

Associates LLC; Gartmore Global Partners; Morgan Stanley Investment

Management Inc.; Neuberger Berman, LLC; Waddell & Reed Investment

Management Company

Investment Objective:                                                         Long-term growth of capital.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Nationwide NVIT Government Bond Fund: Class I

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To provide a high level of income as is consistent with the preservation of capital.

Nationwide Variable Insurance Trust - Nationwide NVIT Government Bond Fund: Class III

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To provide a high level of income as is consistent with the preservation of capital.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Aggressive Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                        

To maximize growth of capital consistent with a more aggressive level of

risk as compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Aggressive Fund: Class VI

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To maximize total investment return primarily by seeking growth of capital.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Conservative Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         High level of return consistent with a conservative level of risk compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT

Investor Destinations Funds for more information.

48

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Conservative Fund: Class VI

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To maximize total investment return seeking income and, secondarily, long-

term growth of capital.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderate Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         High level of total return consistent with a moderate level of risk as

compared to other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderate Fund: Class VI

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To maximize total investment return primarily by seeking growth of capital

and income.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderately Aggressive Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         Growth of capital, but also seeks income consistent with a moderately

aggressive level of risk as compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderately Aggressive Fund: Class VI

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To maximize total investment return primarily by seeking growth of capital

but also income.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

49

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderately Conservative Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         High level of total return consistent with a moderately conservative level of

risk.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several

types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Investor Destinations Moderately Conservative Fund: Class VI

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         To maximize total investment return by seeking income and, secondarily,

long-term growth of capital.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the

fees and expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor Destinations Funds for more information.

Nationwide Variable Insurance Trust - Nationwide NVIT Mid Cap Growth Fund: Class I

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         Long-term capital appreciation.

Nationwide Variable Insurance Trust - Nationwide NVIT Mid Cap Growth Fund: Class III

This sub-account is only available in policies issued before May 1, 2004

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         Long-term capital appreciation.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Nationwide Variable Insurance Trust - Nationwide NVIT Money Market Fund II

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         High level of current income as is consistent with the preservation of capital

 and maintenance of liquidity.

Nationwide Variable Insurance Trust - NVIT Nationwide® Fund: Class II

This sub-account is no longer available to receive transfers or new premium payments effective May 1, 2005

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         Total return through a flexible combination of capital appreciation and

current income.

Nationwide Variable Insurance Trust - NVIT Nationwide® Fund: Class III

Investment Adviser:                                                         Gartmore Mutual Fund Capital Trust

Investment Objective:                                                         Total return through a flexible combination of capital appreciation and

current income.

This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this

prospectus).

Rydex Variable Trust - Absolute Return Strategies Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation consistent with the return and risk characteristics of the

 hedge fund universe and, secondarily, to achieve these returns with low

correlation to and less volatility than equity indices.

50

Rydex Variable Trust - Banking Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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.

Rydex Variable Trust - Basic Materials Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Biotechnology Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Commodities Strategy Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Seeks to provide investment results that correlate to the performance of the

Goldman Sachs Commodity Total Return Index ("GSCI® Index").

Rydex Variable Trust - Consumer Products Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies engaged in manufacturing

finished goods and services both domestically and internationally.

Rydex Variable Trust - Dynamic Dow Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to 200% of the daily performance of the

Dow Jones Industrial Average.

Rydex Variable Trust - Dynamic OTC Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to 200% of the daily performance of the

 NASDAQ 100 Index®.

Rydex Variable Trust - Dynamic S&P 500 Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to 200% of the daily performance of the

 S&P 500® Index.

Rydex Variable Trust - Dynamic Strengthening Dollar Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to 200% of the daily performance of the

U.S. Dollar Index.

Rydex Variable Trust - Dynamic Weakening Dollar Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that inversely correspond to 200% of the daily

performance of the U.S. Dollar Index.

Rydex Variable Trust - Electronics Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Energy Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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.

51

Rydex Variable Trust - Energy Services Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Europe Advantage Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the Dow

Jones STOXX 50 Index.

Rydex Variable Trust - Financial Services Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies that are involved in the

financial services sector.

Rydex Variable Trust - Government Long Bond Advantage Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond with 120% of the daily price movement

of the Long Treasury Bond.

Rydex Variable Trust - Health Care Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies that are involved in the

health care industry.

Rydex Variable Trust - Hedged Equity Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation consistent with the return and risk characteristics of the

 long/short hedge fund universe and, secondarily, to achieve these returns

with low correlation to and less volatility than equity indices.

Rydex Variable Trust - Internet Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies that provide products or

services designed for or related to the Internet.

Rydex Variable Trust - Inverse Dynamic Dow Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that inversely correspond to 200% of the daily

performance of the Dow Jones Industrial Average.

Rydex Variable Trust - Inverse Government Long Bond Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that inversely correspond to the daily performance of the

 Long Treasury Bond.

Rydex Variable Trust - Inverse Mid-Cap Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that inversely correspond to the daily performance of the

S&P Mid Cap 400® Index.

Rydex Variable Trust - Inverse OTC Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that inversely correspond to the daily performance of the

NASDAQ 100 Index®.

Rydex Variable Trust - Inverse Russell 2000 Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that inversely correspond to the daily performance of the

Russell 2000 Index®.

Rydex Variable Trust - Inverse S&P 500 Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that will inversely correlate to the daily performance of

the S&P 500® Index.

52

Rydex Variable Trust - Japan Advantage Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correlate to the daily performance of the Topix 100

Index.

Rydex Variable Trust - Large-Cap Growth Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

500/Citigroup Pure Growth Index.

Rydex Variable Trust - Large-Cap Value Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

500/Citigroup Pure Growth Index.

Rydex Variable Trust - Leisure Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies engaged in leisure and

entertainment businesses.

Rydex Variable Trust - Mid Cap Advantage Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

MidCap 400® Index.

Rydex Variable Trust - Mid-Cap Growth Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

MidCap 400/Citigroup Pure Growth Index.

Rydex Variable Trust - Mid-Cap Value Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

MidCap 400/Citigroup Pure Growth Index.

Rydex Variable Trust - Multi Cap Core Equity Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Long-term capital appreciation.

Rydex Variable Trust - Nova Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to 150% of the daily performance of the

S&P 500® Index.

Rydex Variable Trust - OTC Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the

NASDAQ 100 Index®.

Rydex Variable Trust - Precious Metals Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Real Estate Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies that are involved in the real

estate industry including real estate investment trusts.

Rydex Variable Trust - Retailing Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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.

53

Rydex Variable Trust - Russell 2000 Advantage Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the Russell

2000 Index®.

Rydex Variable Trust - Sector Rotation Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Long-term capital appreciation.

Rydex Variable Trust - Small-Cap Growth Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

SmallCap 600/Citigroup Pure Growth Index.

Rydex Variable Trust - Small-Cap Value Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Investment results that correspond to the daily performance of the S&P

SmallCap 600/Citigroup Pure Value Index.

Rydex Variable Trust - Technology Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Telecommunications Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies engaged in the development,

manufacture, or sale of communications services or communications

equipment.

Rydex Variable Trust - Transportation Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         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 Variable Trust - Utilities Fund

Investment Adviser:                                                         Rydex Investments

Investment Objective:                                                         Capital appreciation by investing in companies that operate public utilities.

54

Appendix B: Definitions

Accumulation Unit – The measure of your investment in, or share of, a Sub-Account after we deduct for transaction fees and periodic charges.  Initially, we set the Accumulation Unit value at $10 for each Sub-Account.

Attained Age– The Insured’s age upon the issue of full insurance coverage plus the number of full years since the Policy Date.

Cash Surrender Value – The Cash Value, subject to Indebtedness and the surrender charge.

Cash Value – The total of the Sub-Accounts you have chosen, which will vary with Investment Experience, and the policy loan account, to which interest will be credited daily.  We will deduct partial surrenders and the policy's periodic charges from the Cash Value.

Code – The Internal Revenue Code of 1986, as amended.

Death Benefit – The amount we pay to the beneficiary upon the Insured’s death, before payment of any unpaid outstanding loan balances or charges.

FDIC – Federal Deposit Insurance Corporation.

Grace Period– A 61-day period after which the Policy will Lapse if you do not make a sufficient payment.

Home Office– Our Home Offices are located at One Nationwide Plaza, Columbus, Ohio 43215.

In Force – The insurance coverage is in effect.

Indebtedness – The total amount of all outstanding policy loans, including principal and interest due.

Insured – The person whose life we insure under the policy, and whose death triggers the Death Benefit.

Investment Experience– The performance of a mutual fund in which a Sub-Account portfolio invests.

Lapse – The policy terminates without value.

Maturity Date – The policy anniversary on or next following the Insured's 100^th birthday.

NCUSIF – National Credit Union Share Insurance Fund.

Net Amount At Risk – The policy’s base Death Benefit minus the policy’s Cash Value.

Net Asset Value (NAV) – The price each share of a mutual fund in which a Sub-Account portfolio invests.  It is calculated by subtracting the mutual fund’s liabilities from its total assets, and dividing that figure by the number of shares outstanding.  We use NAV to calculate the value of Accumulation Units.  NAV does not reflect deductions we make for charges we take from Sub-Accounts. Accumulation Unit values do reflect these deductions.

Net Premium – Premium after transaction charges, but before any allocation to an investment option.

Policy Continuation Premium Amount – The amount of Premium, on a monthly basis from the Policy Date, stated on the Policy Data Page, that you must pay, in the aggregate, to keep the policy In Force under the Guaranteed policy continuation provision; however, this amount does not account for any increases in the Specified Amount, policy loans or partial surrenders, so you should anticipate paying more if you intend to request an increase in Specified Amount; take a policy loan; or request a partial surrender.

Policy Data Page(s)– The Policy Data Page contains more detailed information about the policy, some of which is unique and particular to the owner, the beneficiary and the Insured.

55

Policy Date – The date the policy takes effect as shown on the Policy Data Page.  Policy years and months are measured from this date.

Policy Proceeds or Proceeds – Policy Proceeds may constitute the Death Benefit, or the amount payable if the policy matures or you choose to surrender the policy adjusted to account for any unpaid charges or policy loans and Rider benefits.

Premium – The amount of money you pay to begin and continue the policy.

Premium Load – The aggregate of the sales load and premium tax charges.

Rider – An optional benefit you may purchase under the policy.

SEC – The Securities and Exchange Commission.

Specified Amount – The dollar or face amount of insurance coverage the owner selects.

Sub-Accounts – The mechanism we use to account for your allocations of Net Premium and cash value among the policy’s variable investment options.

Us, we, our or the company – Nationwide Life Insurance Company.

Valuation Period – The period during which we determine the change in the value of the Sub-Accounts.  One Valuation Period ends and another begins with the close of trading on the New York Stock Exchange.

You, your or the policy owner or Owner– The person named as the owner in the application, or the person assigned ownership rights.

56

Outside back cover page

To learn more about this policy, you should read the Statement of Additional Information (the "SAI") dated the same date as this prospectus.  For a free copy of the SAI, to receive personalized illustrations of Death Benefits, net cash surrender values, and cash values, and to request other information about this policy please call our Service Center at 1-800-547-7548 (TDD: 1-800-238-3035) or write to us at our Service Center at Nationwide Life Insurance Company, 5100 Rings Road, RR1-04-D4, Columbus, OH 43017-1522.

The SAI has been filed with the SEC and is incorporated by reference into this prospectus. The SEC maintains an Internet website (http://www.sec.gov) that contains the SAI and other information about us and the policy.  Information about us and the policy (including the SAI) may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C., or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, D.C. 20549. Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.

Investment Company Act of 1940 Registration File No. 811-21398

Securities Act of 1933 Registration File No. 333-106908

Nationwide VLI Separate Account-6

(Registrant)

Nationwide Life Insurance Company

(Depositor)

5100 Rings Road, RR1-04-D4

Dublin, OH 43017-1522

1-800-547-7548

TDD: 1-800-238-3035

STATEMENT OF ADDITIONAL INFORMATION

Flexible Premium Variable Universal Life Insurance Policies

This Statement of Additional Information ("SAI'') contains additional information regarding the individual flexible premium variable universal life insurance policy offered by us, Nationwide Life Insurance Company ("Nationwide"). This SAI is not a prospectus and should be read together with the policy prospectus dated May 1, 2007 and the prospectuses for the variable investment options.  The prospectus is incorporated by reference in this SAI.  You may obtain a copy of these prospectuses by writing or calling us at our address or phone number shown above.

The date of this Statement of Additional Information is May 1, 2007.

Table of Contents	Page
Nationwide Life Insurance Company	2
Nationwide VLI Separate Account-6	2
Nationwide Investment Services Corporation	2
Services	2
Underwriting Procedure	2
Maximum Surrender Charge Calculation	3
Illustrations	5
Advertising	5
Tax Definition of Life Insurance	5
Financial Statements	9

SAI-1

Nationwide Life Insurance Company

We are a stock life insurance company organized under the laws of the State of Ohio in March 1929 with our Home Office at One Nationwide Plaza, Columbus, Ohio 43215.  We provide life insurance, annuities and retirement products.  We are admitted to do business in all states, the District of Columbia and Puerto Rico.  Nationwide is a member of the Nationwide group of companies and all of our common stock is owned by Nationwide Financial Services, Inc. ("NFS"), a holding company.  NFS has two classes of common stock outstanding with different voting rights enabling Nationwide Corporation (the holder of all of the outstanding Class B Common Stock) to control NFS.  Nationwide Corporation is a holding company, as well.  All of the common stock is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), the ultimate controlling persons of the Nationwide group of companies.  The Nationwide group of companies is one of America’s largest insurance and financial services family of companies, with combined assets of over $160 billion as of December 31, 2006.

Nationwide VLI Separate Account-6

Nationwide VLI Separate Account-6 is a separate account that invests in mutual funds offered and sold to insurance companies and certain retirement plans.  We established the separate account on July 10, 2001 pursuant to Ohio law.  Although the separate account is registered with the SEC as a unit investment trust pursuant to the Investment Company Act of 1940 the SEC does not supervise our management or the management of the variable account. We serve as the custodian of the assets of the variable account.

Nationwide Investment Services Corporation (NISC)

The policies are distributed by NISC, located at One Nationwide Plaza, Columbus, Ohio 43215, a wholly owned subsidiary of Nationwide.  For contracts issued in Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.

The policies will be sold on a continuous basis by licensed insurance agents in those states where the policies may lawfully be sold.  Agents are registered representatives of broker dealers registered under the Securities Exchange Act of 1934 who are member firms of the National Association of Securities Dealers, Inc. ("NASD").

Gross first year commissions plus any expense allowance payments paid by Nationwide on the sale of these policies provided by NISC will not exceed 99% of the target premium plus 3% of any excess premium payments.  We pay gross renewal commissions in years 2 through 10 on the sale of the policies provided by NISC that will not exceed 3% of actual premium payment, and that will not exceed 2% in policy years 11 and thereafter.

We have paid no underwriting commissions to NISC for each of this separate account's last three fiscal years.

Services

We have responsibility for administration of the policies and the variable account.  We also maintain the records of the name, address, taxpayer identification number, and other pertinent information for each policy owner and the number and type of policy issued to each policy owner and records with respect to the policy value of each policy.

We are the custodian of the assets of the variable account.  We will maintain a record of all purchases and redemption of shares of the mutual funds.

The financial statements of Nationwide VLI Separate Account-6 and the consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.  The audit report of KPMG LLP covering the December 31, 2006 consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries contains an explanatory paragraph that states that Nationwide Life Insurance Company and subsidiaries adopted the American Institute of Certified Public Accountants' Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts, in 2004.  KPMG LLP is located at 191 West Nationwide Blvd., Columbus, Ohio 43215.

Underwriting Procedure

We underwrite the policies issued through Nationwide VLI Separate Account-6.  The policy's cost of insurance depends upon the Insured's sex, issue age, risk class, and length of time the policy has been In Force.  The rates will vary depending upon tobacco use and other risk factors.  Monthly cost of insurance rates will not exceed those guaranteed in the policy.  Guaranteed cost of insurance rates are based on the 1980 Commissioners’ Standard Ordinary Mortality Table, Age Last Birthday (1980 CSO).  Guaranteed cost of insurance rates for policies issued on a substandard basis are based on appropriate percentage multiples of the standard guaranteed cost of insurance rate on a standard basis.  That is, standard guaranteed cost of insurance rates for substandard risks are guaranteed cost of insurance rates for standard risks times a percentage greater

SAI-2

than 100%.  These mortality tables are sex distinct.  In addition, separate mortality tables will be used for tobacco and non-tobacco.  We may deduct a "flat extra" which is an additional constant charge per $1,000 of Specified Amount for certain activities or medical conditions of the Insured.  We apply the same flat extra to all Insured that engage in the same activity or have the same medical condition irrespective of their sex, issue age, underwriting class, or substandard rating, if any.

The rate class of an insured may affect the cost of insurance rate.  We currently place insureds into both standard rate classes and substandard rate classes that involve a higher mortality risk.  In an otherwise identical policy, an insured in the standard rate class will have a lower cost of insurance than an insured in a rate class with higher mortality risks.  Any change in the cost of insurance rates will apply to all insureds of the same age, gender, risk class and whose policies have been in effect for the same length of time.    If the rating class for any increase in the Specified Amount of insurance coverage is not the same as the rating class at issue, the cost of insurance rate used after such increase will be a composite rate based upon a weighted average of the rates of the different rating classes.  The actual charges made during the policy year will be shown in the annual report delivered to policy owners.

Maximum Surrender Charge Calculation

The maximum surrender charge under the policy is based on the following calculation.

Maximum Surrender Charge                                                      26.50% multiplied by the lesser of (a) or (b), where:

(a) = the Specified Amount multiplied by the rate indicated on the chart "Surrender Target Factor" below divided by 1,000; and

(b) = Premiums paid by the policy owner during the first two policy years

Plus (c) multiplied by (d) where:

(c) = the Specified Amount divided by 1,000; and

(d) = the applicable rate from the "Administrative Target Factor" chart below.

Example:  A male non-tobacco, age 35, purchases a policy with a specified amount of $100,000. Assuming the "Surrender Target Factor" applies because "(a)" is less than "(b)", the maximum surrender charge under the policy is $681.70, calculated as:

.2650 * [(10.63 Surrender Target Factor for a male non-tobacco, age 35*$100,000 Specified Amount) /1,000]

+

[($100,000 Specified Amount /1,000)*4.00 Administrative Target Factor for issue ages 0-35]

The Surrender Target Factor allows the company to account for the probability that our costs incurred in the sales process will not be recouped.  The Administrative Target Factor allows the company to account for the probability (at various ages) that death will occur and no CDSC will be recouped.

Surrender Target Factor

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
0	0.00	3.35	0.00	2.54
1	0.00	3.38	0.00	2.57
2	0.00	3.50	0.00	2.66
3	0.00	3.64	0.00	2.75
4	0.00	3.78	0.00	2.86
5	0.00	3.93	0.00	2.96
6	0.00	4.09	0.00	3.08
7	0.00	4.27	0.00	3.20
8	0.00	4.45	0.00	3.34
9	0.00	4.65	0.00	3.47
10	0.00	4.87	0.00	3.62
11	0.00	5.09	0.00	3.78
12	0.00	5.33	0.00	3.94
13	0.00	5.57	0.00	4.12
14	0.00	5.82	0.00	4.30
15	0.00	6.07	0.00	4.48
16	0.00	6.31	0.00	4.67
17	0.00	6.55	0.00	4.87
18	5.11	6.80	4.27	5.08

SAI-3

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
19	5.30	7.05	4.45	5.29
20	5.50	7.32	4.64	5.52
21	5.71	7.60	4.83	5.76
22	5.93	7.90	5.04	6.01
23	6.17	8.22	5.26	6.28
24	6.42	8.57	5.49	6.56
25	6.69	8.94	5.73	6.86
26	6.99	9.34	5.99	7.17
27	7.30	9.77	6.25	7.50
28	7.63	10.22	6.54	7.85
29	7.98	10.71	6.84	8.22
30	8.36	11.23	7.16	8.61
31	8.76	11.79	7.49	9.02
32	9.19	12.38	7.85	9.45
33	9.64	13.01	8.22	9.91
34	10.12	13.67	8.62	10.39
35	10.63	14.38	9.04	10.90
36	11.16	15.12	9.48	11.44
37	11.73	15.92	9.95	12.01
38	12.34	16.75	10.44	12.60
39	12.97	17.64	10.96	13.22
40	13.65	18.58	11.50	13.87
41	14.36	19.56	12.07	14.55
42	15.12	20.60	12.67	15.26
43	15.93	21.70	13.30	16.01
44	16.78	22.87	13.97	16.79
45	17.68	24.09	14.68	17.60
46	18.65	25.39	15.42	18.47
47	19.67	26.76	16.21	19.37
48	20.76	28.21	17.05	20.33
49	21.92	29.76	17.93	21.34
50	23.15	31.40	18.87	22.40
51	24.47	33.13	19.87	23.53
52	25.87	34.98	20.93	24.72
53	27.37	36.93	22.05	25.97
54	28.97	38.99	23.25	27.30
55	30.67	41.17	24.51	28.70
56	32.49	43.48	25.86	30.18
57	34.42	45.92	27.31	31.76
58	36.49	48.52	28.86	33.46
59	38.71	51.28	30.52	35.28
60	41.09	54.23	32.32	37.25
61	43.63	57.36	34.26	39.37
62	46.36	60.70	36.35	41.65
63	49.28	64.24	38.59	44.09
64	52.40	67.98	40.99	46.69
65	55.75	71.92	43.56	49.46
66	59.32	76.10	46.32	52.41
67	63.16	80.52	49.30	55.57
68	67.28	85.23	52.52	58.99
69	71.73	90.27	56.04	62.72
70	76.52	95.66	59.88	66.80
71	81.69	101.41	64.08	71.26
72	87.24	107.54	68.67	76.11
73	93.18	114.01	73.64	81.35
74	99.50	120.81	79.03	86.97
75	106.21	127.90	84.84	92.97
76	113.33	135.27	91.10	99.39
77	120.92	142.94	97.88	106.27
78	129.04	150.99	105.24	113.68
79	137.79	159.53	113.28	121.73
80	147.23	168.60	122.07	130.49

SAI-4

Age	Male Non-Tobacco	Female Non-Tobacco	Male Tobacco	Female Tobacco
81	147.23	168.60	122.07	130.49
82	147.23	168.60	122.07	130.49
83	147.23	168.60	122.07	130.49
84	147.23	168.60	122.07	130.49
85	147.23	168.60	122.07	130.49

Administrative Target Factor

Issue Age	Administrative Target Component
0 through 35	4.00
36 through 55	5.00
56 through 85	6.50

Illustrations

Before you purchase the policy and upon request thereafter, we will provide illustrations of future benefits under the policy based upon the proposed Insured's age and premium class, the Death Benefits option, face amount, planned periodic Premiums, and Riders requested.  We reserve the right to charge a reasonable fee of no more than $25 for this service to persons who request more than one policy illustration during a policy year.

Advertising

Rating Agencies

Independent financial rating services, including Moody's, Standard & Poor's and A.M. Best Company rank and rate us.  The purpose of these ratings is to reflect the financial strength or claims-paying ability of Nationwide.  The ratings are not intended to reflect the Investment Experience or financial strength of the variable account.  We may advertise these ratings from time to time.  In addition, we may include in certain advertisements, endorsements in the form of a list of organizations, individuals or other parties which recommend us or the policies.  Furthermore, we may occasionally include in advertisements comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets, or discussions of alternative investment vehicles and general economic conditions.

Money Market Yields

We may advertise the "yield" and "effective yield" for the money market sub-account.  Yield and effective yield are annualized, which means that it is assumed that the underlying mutual fund generates the same level of net income throughout a year.

Yield is a measure of the net dividend and interest income earned over a specific seven-day period (which period will be stated in the advertisement) expressed as a percentage of the offering price of the underlying mutual fund’s units.  The effective yield is calculated similarly, but reflects assumed compounding, calculated under rules prescribed by the SEC.  Thus, effective yield will be slightly higher than yield, due to the compounding.

Historical Performance of the Sub-Accounts

We will advertise historical performance of the sub-accounts in accordance with SEC prescribed calculations.  Please note that performance information is annualized.  However, if a sub-account has been available in the variable account for less than one year, the performance information for that sub-account is not annualized.  Performance information is based on historical earnings and is not intended to predict or project future results.

Additional Materials.

We may provide information on various topics to you and prospective policy owners in advertising, sales literature or other materials.

Tax Definition of Life Insurance

Section 7702(b)(1) of the Internal Revenue Code provides that if one of two alternate tests is met, a policy will be treated as life insurance for federal tax purposes.  The two tests are referred to as the Cash Value Accumulation Test and the Guideline Premium/Cash Value Corridor Test.  Both tests are available to flexible premium policies such as this one.

The tables below show, numerically, the requirements for each test.

SAI-5

Guideline Premium/Cash Value Corridor Test

Table of Applicable Percentages of Cash Value

Attained Age of Insured	Percentage of Cash Value
0-40	250%
41	243%
42	236%
43	229%
44	222%
45	215%
46	209%
47	203%
48	197%
49	191%
50	185%
51	178%
52	171%
53	164%
54	157%
55	150%
56	146%
57	142%
58	138%
59	134%
60	130%
61	128%
62	126%
63	124%
64	122%
65	120%
66	119%
67	118%
68	117%
69	116%
70	115%
71	113%
72	111%
73	109%
74	107%
75	105%
76	105%
77	105%
78	105%
79	105%
80	105%
81	105%
82	105%
83	105%
84	105%
85	105%
86	105%
87	105%
88	105%
89	105%
90	105%
91	104%
92	103%

SAI-6

Attained Age of Insured	Percentage of Cash Value
93	102%
94	101%
95	101%
96	101%
97	101%
98	101%
99	101%
100	100%

Cash Value Accumulation Test

The Cash Value Accumulation Test also requires the Death Benefit to exceed an applicable percentage of the cash value.  These applicable percentages are calculated by determining net single premiums, as defined in Code Section 7702(b), for each policy year given a set of actuarial assumptions.  The relevant material assumptions include an interest rate of 4% and 1980 CSO guaranteed mortality as prescribed in Revenue Code Section 7702 for the Cash Value Accumulation Test.  The resulting net single premiums are then inverted (i.e., multiplied by 1/net single premium) to give the applicable cash value percentages.  These premiums vary with the ages, sexes, and risk classifications of the Insureds.

The table below provides an example of applicable percentages for the Cash Value Accumulation Test.  This example is for a male non-tobacco preferred issue age 55.

Policy Year	Percentage of Cash Value
1	302%
2	290%
3	279%
4	269%
5	259%
6	249%
7	240%
8	231%
9	223%
10	215%
11	207%
12	200%
13	193%
14	186%
15	180%
16	174%
17	169%
18	164%
19	159%
20	154%
21	150%
22	146%
23	142%
24	139%
25	136%
26	133%
27	130%
28	127%
29	125%
30	123%
31	121%
32	119%
33	118%

SAI-7

Policy Year	Percentage of Cash Value
34	116%
35	115%
36	113%
37	112%
38	111%
39	110%
40	108%
41	107%
42	106%
43	104%
44	103%
45	102%

SAI-8

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and

     Contract Owners of Nationwide VLI Separate Account-6:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide VLI Separate Account-6 (comprised of the sub-accounts listed in note 1(b) (collectively, “the Accounts”)) as of December 31, 2006, and the related statements of operations and changes in contract owners’ equity, and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the Accounts’ 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 audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Accounts as of December 31, 2006, and the results of their operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Columbus, Ohio

March 9, 2007

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2006

Assets:
Investments at fair value:
American Century Variable Portfolios, Inc. – Income & Growth Fund – Class II (ACVPIncGr2) 1,323 shares (cost $9,731)	$	11,400
American Century Variable Portfolios, Inc. – Income & Growth Fund – Class III (ACVPIncGr3) 16,437 shares (cost $130,082)		141,852
American Century Variable Portfolios, Inc. – Ultra® Fund – Class II (ACVPUltra2) 5,725 shares (cost $56,893)		57,137
American Century Variable Portfolios, Inc. – Ultra® Fund – Class III (ACVPUltra3) 6,906 shares (cost $69,220)		69,266
American Century Variable Portfolios, Inc. – Value Fund – Class II (ACVPVal2) 8,065 shares (cost $62,615)		70,408
American Century Variable Portfolios, Inc. – Value Fund – Class III (ACVPVal3) 41,342 shares (cost $336,305)		361,326
Fidelity® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class 2 (FidVIPEIS2) 5,071 shares (cost $120,218)		131,188
Fidelity® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class 2 R (FidVIPEIS2R) 9,561 shares (cost $240,490)		246,008
Fidelity® Variable Insurance Products Fund – Growth Portfolio – Service Class 2 (FidVIPGrS2) 822 shares (cost $26,359)		29,123
Fidelity® Variable Insurance Products Fund – Growth Portfolio – Service Class 2 R (FidVIPGrS2R) 2,000 shares (cost $68,371)		70,574
Fidelity® Variable Insurance Products Fund II – Contrafund®Portfolio – Service Class 2 (FidVIPConS2) 4,869 shares (cost $126,804)		151,465
Fidelity® Variable Insurance Products Fund II – Contrafund®Portfolio – Service Class 2 R (FidVIPConS2R) 22,057 shares (cost $684,490)		684,215
Gartmore GVIT – Federated GGVIT High Income Bond Fund – Class III (GVITFHiInc3) 6,976 shares (cost $54,842)		55,595
Gartmore GVIT – Government Bond Fund – Class I (GVITGvtBd) 2,847 shares (cost $33,175)		32,311
Gartmore GVIT – Government Bond Fund – Class III (GVITGvtBd3) 15,767 shares (cost $179,047)		178,958
Gartmore GVIT – Investor Destinations Aggressive Fund – Class II (GVITIDAg2) 509 shares (cost $5,899)		6,870
Gartmore GVIT – Investor Destinations Aggressive Fund – Class VI (GVITIDAg6) 11,425 shares (cost $143,085)		153,891
Gartmore GVIT – Investor Destinations Conservative Fund – Class VI (GVITIDCon6) 2,676 shares (cost $27,497)		27,935
Gartmore GVIT – Investor Destinations Moderate Fund – Class II (GVITIDMod2) 2,835 shares (cost $31,727)		34,810
Gartmore GVIT – Investor Destinations Moderate Fund – Class VI (GVITIDMod6) 27,354 shares (cost $320,401)		335,092
Gartmore GVIT – Investor Destinations Moderately Aggressive Fund – Class II (GVITIDModAg2) 6,374 shares (cost $71,681)		83,502

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Gartmore GVIT – Investor Destinations Moderately Aggressive Fund – Class VI (GVITIDModAg6) 24,541 shares (cost $305,200)	$	320,499
Gartmore GVIT – Investor Destinations Moderately Conservative Fund – Class II (GVITIDModCon2) 228 shares (cost $2,468)		2,585
Gartmore GVIT – Investor Destinations Moderately Conservative Fund – Class VI (GVITIDModCon6) 2,740 shares (cost $30,100)		31,016
Gartmore GVIT – Mid Cap Growth Fund – Class I (GVITMdCpGr) 140 shares (cost $3,150)		4,171
Gartmore GVIT – Mid Cap Growth Fund – Class III (GVITMdCpGr3) 634 shares (cost $17,148)		18,954
Gartmore GVIT – Money Market Fund II – Class I (GVITMyMktII) 23,746,194 shares (cost $23,746,194)		23,746,194
Gartmore GVIT – Nationwide® Fund – Class II (GVITNWFund2) 1,047 shares (cost $11,663)		13,904
Gartmore GVIT – Nationwide® Fund – Class III (GVITNWFund3) 2,191 shares (cost $27,733)		29,227
Gartmore GVIT – Small Cap Growth Fund – Class II (GVITSmCapGr2) 162 shares (cost $2,137)		2,626
Gartmore GVIT – Small Cap Growth Fund – Class III (GVITSmCapGr3) 77 shares (cost $1,209)		1,250
Gartmore GVIT – Small Cap Value Fund – Class II (GVITSmCapVal2) 335 shares (cost $3,963)		4,128
Gartmore GVIT – Small Cap Value Fund – Class III (GVITSmCapVal3) 2,384 shares (cost $29,741)		29,758
Gartmore GVIT – Small Company Fund – Class II (GVITSmComp2) 1,112 shares (cost $24,565)		27,415
Gartmore GVIT – Small Company Fund – Class III (GVITSmComp3) 2,578 shares (cost $61,389)		64,485
Rydex Variable Trust Portfolios – Absolute Return Strategies Fund (RyAbsRtStr) 13,387 shares (cost $348,650)		350,747
Rydex Variable Trust Portfolios – Banking Fund (RyBank) 9,786 shares (cost $316,821)		317,456
Rydex Variable Trust Portfolios – Basic Materials Fund (RyBasicM) 9,369 shares (cost $312,029)		312,259
Rydex Variable Trust Portfolios – Biotechnology Fund (RyBioTech) 3,520 shares (cost $73,773)		72,725
Rydex Variable Trust Portfolios – Commodities Fund (RyComm100) 3,242 shares (cost $61,343)		58,838
Rydex Variable Trust Portfolios – Consumer Products Fund (RyConsProd) 9,197 shares (cost $337,024)		336,158
Rydex Variable Trust Portfolios – Dynamic Dow Fund (RyDyDow) 21,656 shares (cost $592,736)		582,339
Rydex Variable Trust Portfolios – Dynamic OTC Fund (RyDyOTC) 53,869 shares (cost $1,261,173)		1,263,762
Rydex Variable Trust Portfolios – Dynamic S&P 500 Fund (RyDySP500) 31,236 shares (cost $683,999)		678,139

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Rydex Variable Trust Portfolios – Dynamic Strengthening Dollar Fund (RyDyStrDol) 344 shares (cost $7,825)	$	7,761
Rydex Variable Trust Portfolios – Dynamic Weakening Dollar Fund (RyDyWeakDol) 7,956 shares (cost $223,553)		218,879
Rydex Variable Trust Portfolios – Electronics Fund (RyElec) 2,203 shares (cost $31,344)		30,892
Rydex Variable Trust Portfolios – Energy Fund (RyEnergy) 9,469 shares (cost $371,809)		313,796
Rydex Variable Trust Portfolios – Energy Services Fund (RyEnSvc) 6,599 shares (cost $207,411)		196,587
Rydex Variable Trust Portfolios – Europe Advantage Fund (RyEuroAdv) 32,924 shares (cost $969,908)		974,554
Rydex Variable Trust Portfolios – Financial Services Fund (RyFinSvc) 4,764 shares (cost $155,408)		153,317
Rydex Variable Trust Portfolios – Government Long Bond Advantage Fund (RyGvtLgBd) 11,669 shares (cost $137,167)		134,894
Rydex Variable Trust Portfolios – Health Care Fund (RyHealthC) 13,586 shares (cost $391,810)		385,985
Rydex Variable Trust Portfolios – Hedged Equity Fund (RyHedgeEq) 7,321 shares (cost $194,463)		192,843
Rydex Variable Trust Portfolios – Internet Fund (RyNet) 10,970 shares (cost $179,679)		177,383
Rydex Variable Trust Portfolios – Inverse Dynamic Dow Fund (RyInDyDow) 3,841 shares (cost $131,472)		128,064
Rydex Variable Trust Portfolios – Inverse Government Long Bond Fund (RyInvGovLgBd) 39,303 shares (cost $835,737)		846,980
Rydex Variable Trust Portfolios – Inverse Mid-Cap Fund (RyInvMidCap) 4,648 shares (cost $174,121)		171,795
Rydex Variable Trust Portfolios – Inverse OTC Fund (RyInOTC) 17,246 shares (cost $337,215)		341,289
Rydex Variable Trust Portfolios – Inverse Russell 2000 Fund (RyInRus2000) 6,724 shares (cost $232,945)		232,701
Rydex Variable Trust Portfolios – Inverse S&P 500 Fund (RyInSP500) 172,973 shares (cost $832,845)		759,351
Rydex Variable Trust Portfolios – Japan Advantage Fund (RyJapanAdv) 31,965 shares (cost $1,012,804)		867,213
Rydex Variable Trust Portfolios – Large Cap Growth Fund (RyLgCapGr) 25,381 shares (cost $685,062)		677,165
Rydex Variable Trust Portfolios – Large Cap Value Fund (RyLgCapVal) 12,839 shares (cost $409,536)		408,012
Rydex Variable Trust Portfolios – Leisure Fund (RyLeisure) 10,487 shares (cost $272,120)		274,650
Rydex Variable Trust Portfolios – Mid Cap Advantage Fund (RyMidCapAdv) 28,668 shares (cost $841,289)		693,770
Rydex Variable Trust Portfolios – Mid Cap Growth Fund (RyMidCapGr) 16,891 shares (cost $510,404)		495,399

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Rydex Variable Trust Portfolios – Mid Cap Value Fund (RyMidCapVal) 14,978 shares (cost $331,327)	$	335,206
Rydex Variable Trust Portfolios – Multi Cap Core Equity Fund (RyMCpCoreEq) 674 shares (cost $19,196)		19,270
Rydex Variable Trust Portfolios – Nova Fund (RyNova) 60,456 shares (cost $603,907)		609,996
Rydex Variable Trust Portfolios – OTC Fund (RyOTC) 69,115 shares (cost $1,070,565)		1,063,684
Rydex Variable Trust Portfolios – Precious Metals Fund (RyPrecMet) 92,015 shares (cost $1,106,759)		1,157,547
Rydex Variable Trust Portfolios – Real Estate Fund (RyRealEst) 9,170 shares (cost $465,069)		460,791
Rydex Variable Trust Portfolios – Retailing Fund (RyRetail) 661 shares (cost $20,361)		19,673
Rydex Variable Trust Portfolios – Russell 2000 Advantage Fund (RyRuss2000) 100,362 shares (cost $4,047,500)		4,128,902
Rydex Variable Trust Portfolios – Sector Rotation Fund (RySectRot) 38,826 shares (cost $536,444)		522,990
Rydex Variable Trust Portfolios – Small Cap Growth Fund (RySmCapGr) 17,421 shares (cost $528,515)		521,226
Rydex Variable Trust Portfolios – Small Cap Value Fund (RySmCapVal) 8,347 shares (cost $244,553)		238,732
Rydex Variable Trust Portfolios – Technology Fund (RyTech) 7,540 shares (cost $112,212)		111,139
Rydex Variable Trust Portfolios – Telecommunications Fund (RyTele) 10,208 shares (cost $223,877)		223,663
Rydex Variable Trust Portfolios – Transportation Fund (RyTrans) 3,988 shares (cost $144,732)		139,794
Rydex Variable Trust Portfolios – Utilities Fund (RyUtil) 21,757 shares (cost $489,605)		486,921
Total Investments		49,924,375
Accounts Receivable		–
Total Assets		49,924,375
Accounts Payable		978
Contract Owners Equity (note 7)	$	49,923,397

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF OPERATIONS

Year Ended December 31, 2006

Investment activity:	Total			ACVPIncGr2		ACVPIncGr3		ACVPUltra2		ACVPUltra3		ACVPVal2		ACVPVal3		FidVIPEIS2
Reinvested dividends	$	1,158,198		170		1,037		–		–		788		2,293		3,769
Net investment income (loss)		1,158,198		170		1,037		–		–		788		2,293		3,769
Proceeds from mutual fund shares sold		700,235,793		7,699		17,734		8,894		14,736		3,806		65,919		18,491
Cost of mutual fund shares sold		(698,783,406	)	(7,196	)	(17,037	)	(8,580	)	(15,299	)	(4,116	)	(68,422	)	(16,591	)
Realized gain (loss) on investments		1,452,387		503		697		314		(563	)	(310	)	(2,503	)	1,900
Change in unrealized gain (loss) on investments		(134,263	)	1,142		11,288		(2,395	)	(770	)	5,127		21,365		1,901
Net gain (loss) on investments		1,318,124		1,645		11,985		(2,081	)	(1,333	)	4,817		18,862		3,801
Reinvested capital gains		915,129		–		–		–		–		5,590		14,463		15,450
Net increase (decrease) in contract owners’ equity resulting from operations	$	3,391,451		1,815		13,022		(2,081	)	(1,333	)	11,195		35,618		23,020
Investment activity:	FidVIPEIS2R			FidVIPGrS2		FidVIPGrS2R		FidVIPConS2		FidVIPConS2R		GVITFHiInc3		GVITGvtBd		GVITGvtBd3
Reinvested dividends	$	5,256		48		144		1,569		4,838		2,596		1,631		5,602
Net investment income (loss)		5,256		48		144		1,569		4,838		2,596		1,631		5,602
Proceeds from mutual fund shares sold		25,693		17,550		52,009		48,404		112,629		32,735		17,876		51,030
Cost of mutual fund shares sold		(24,330	)	(15,201	)	(49,012	)	(35,089	)	(100,500	)	(32,651	)	(18,645	)	(51,749	)
Realized gain (loss) on investments		1,363		2,349		2,997		13,315		12,129		84		(769	)	(719	)
Change in unrealized gain (loss) on investments		1,090		(282	)	1,161		(7,924	)	(11,457	)	753		(268	)	(118	)
Net gain (loss) on investments		2,453		2,067		4,158		5,391		672		837		(1,037	)	(837	)
Reinvested capital gains		22,131		–		–		12,494		50,725		–		374		792
Net increase (decrease) in contract owners’ equity resulting from operations	$	29,840		2,115		4,302		19,454		56,235		3,433		968		5,557

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2006

Investment activity:	GVITIDAgg2			GVITIDAgg6		GVITIDCon6		GVITIDMod2		GVITIDMod6		GVITIDModAg2		GVITIDModAg6		GVITIDModCon2
Reinvested dividends	$	131		6,314		1,419		1,028		7,073		1,792		5,095		69
Net investment income (loss)		131		6,314		1,419		1,028		7,073		1,792		5,095		69
Proceeds from mutual fund shares sold		714		570,181		75,809		42,820		127,247		14,223		71,815		64
Cost of mutual fund shares sold		(654	)	(586,738	)	(76,609	)	(41,365	)	(123,626	)	(13,016	)	(68,757	)	(63	)
Realized gain (loss) on investments		60		(16,557	)	(800	)	1,455		3,621		1,207		3,058		1
Change in unrealized gain (loss) on investments		751		10,645		1,610		1,816		13,291		7,516		15,253		99
Net gain (loss) on investments		811		(5,912	)	810		3,271		16,912		8,723		18,311		100
Reinvested capital gains		95		8,160		477		501		2,707		1,034		2,034		33
Net increase (decrease) in contract owners’ equity resulting from operations	$	1,037		8,562		2,706		4,800		26,692		11,549		25,440		202
Investment activity:	GVITIDModCon6			GVITMdCpGr		GVITMdCpGr3		GVITMyMktII		GVITNWFund2		GVITNWFund3		GVITSmCapGr2		GVITSmCapGr3
Reinvested dividends	$	1,389		–		–		758,893		127		299		–		–
Net investment income (loss)		1,389		–		–		758,893		127		299		–		–
Proceeds from mutual fund shares sold		88,641		1,045		5,501		233,590,634		2,158		54,487		242		127
Cost of mutual fund shares sold		(87,784	)	(816	)	(5,181	)	(233,590,634	)	(1,936	)	(54,630	)	(201	)	(117	)
Realized gain (loss) on investments		857		229		320		–		222		(143	)	41		10
Change in unrealized gain (loss) on investments		1,104		205		1,431		–		1,384		877		39		24
Net gain (loss) on investments		1,961		434		1,751		–		1,606		734		80		34
Reinvested capital gains		807		–		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	4,157		434		1,751		758,893		1,733		1,033		80		34

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2006

Investment activity:	GVITSmCapVal2			GVITSmCapVal3		GVITSmComp2		GVITSmComp3		RyAbsRtStr		RyBank		RyBasicM		RyBioTech
Reinvested dividends	$	14		100		15		91		3,945		1,914		3,861		–
Net investment income (loss)		14		100		15		91		3,945		1,914		3,861		–
Proceeds from mutual fund shares sold		12,134		6,304		4,910		2,621		92,849		1,745,016		4,480,096		2,599,055
Cost of mutual fund shares sold		(12,296	)	(6,502	)	(4,737	)	(2,754	)	(90,039	)	(1,742,257	)	(4,443,614	)	(2,592,838	)
Realized gain (loss) on investments		(162	)	(198	)	173		(133	)	2,810		2,759		36,482		6,217
Change in unrealized gain (loss) on investments		1,116		1,776		2,224		4,117		2,098		1,092		727		(580	)
Net gain (loss) on investments		954		1,578		2,397		3,984		4,908		3,851		37,209		5,637
Reinvested capital gains		452		1,960		588		399		5,014		–		5,592		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	1,420		3,638		3,000		4,474		13,867		5,765		46,662		5,637
Investment activity:		RyComm100		RyConsProd		RyDyDow		RyDyOTC		RyDySP500		RyDyStrDol		RyDyWeakDol		RyElec
Reinvested dividends	$	–		2,802		2,622		1,018		6,580		103		8,526		–
Net investment income (loss)		–		2,802		2,622		1,018		6,580		103		8,526		–
Proceeds from mutual fund shares sold		305,948		3,297,539		2,802,930		63,111,420		3,268,282		1,242,806		1,020,554		2,115,504
Cost of mutual fund shares sold		(347,088	)	(3,259,973	)	(2,732,189	)	(62,613,334	)	(3,230,912	)	(1,247,662	)	(1,017,153	)	(2,152,700	)
Realized gain (loss) on investments		(41,140	)	37,566		70,741		498,086		37,370		(4,856	)	3,401		(37,196	)
Change in unrealized gain (loss) on investments		(2,505	)	(643	)	(6,477	)	41,097		2,802		(64	)	(4,673	)	21
Net gain (loss) on investments		(43,645	)	36,923		64,264		539,183		40,172		(4,920	)	(1,272	)	(37,175	)
Reinvested capital gains		–		3,341		54,039		–		25,920		–		131		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	(43,645	)	43,066		120,925		540,201		72,672		(4,817	)	7,385		(37,175	)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2006

Investment activity:	RyEnergy			RyEnSvc		RyEuroAdv		RyFinSvc		RyGvtLgBd		RyHealthC		RyHedgeEq		RyNet
Reinvested dividends	$	–		–		14,740		1,587		95,501		–		2,709		–
Net investment income (loss)		–		–		14,740		1,587		95,501		–		2,709		–
Proceeds from mutual fund shares sold		5,606,929		3,390,312		2,822,961		2,349,330		162,922,622		3,874,137		82,815		1,728,185
Cost of mutual fund shares sold		(5,649,725	)	(3,468,430	)	(2,764,340	)	(2,338,583	)	(162,532,842	)	(3,855,649	)	(81,817	)	(1,704,604	)
Realized gain (loss) on investments		(42,796	)	(78,118	)	58,621		10,747		389,780		18,488		998		23,581
Change in unrealized gain (loss) on investments		(53,190	)	71		3,424		(1,748	)	3,248		(5,769	)	(1,620	)	734
Net gain (loss) on investments		(95,986	)	(78,047	)	62,045		8,999		393,028		12,719		(622	)	24,315
Reinvested capital gains		92,420		33,485		23,987		5,659		–		13,561		5,127		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	(3,566	)	(44,562	)	100,772		16,245		488,529		26,280		7,214		24,315
Investment activity:	RyInDyDow			RyInvGovLgBd		RyInvMidCap		RyInOTC		RyInRus2000		RyInSP500		RyJapanAdv		RyLgCapGr
Reinvested dividends	$	1,865		29,834		938		21,628		3,586		59,961		30,165		–
Net investment income (loss)		1,865		29,834		938		21,628		3,586		59,961		30,165		–
Proceeds from mutual fund shares sold		1,676,315		35,648,073		2,845,937		35,732,002		4,305,518		3,450,333		2,624,105		3,619,439
Cost of mutual fund shares sold		(1,727,492	)	(35,714,155	)	(2,875,169	)	(35,630,876	)	(4,363,989	)	(3,513,662	)	(2,580,123	)	(3,617,140	)
Realized gain (loss) on investments		(51,177	)	(66,082	)	(29,232	)	101,126		(58,471	)	(63,329	)	43,982		2,299
Change in unrealized gain (loss) on investments		(4,312	)	10,599		(1,895	)	833		(109	)	(76,169	)	(187,011	)	(2,330	)
Net gain (loss) on investments		(55,489	)	(55,483	)	(31,127	)	101,959		(58,580	)	(139,498	)	(143,029	)	(31	)
Reinvested capital gains		–		–		–		–		–		–		152,825		9,978
Net increase (decrease) in contract owners’ equity resulting from operations	$	(53,624	)	(25,649	)	(30,189	)	123,587		(54,994	)	(79,537	)	39,961		9,947

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2006

Investment activity:	RyLgCapVal			RyLeisure		RyMidCapAdv		RyMidCapGr		RyMidCapVal		RyMCpCoreEq		RyNova		RyOTC
Reinvested dividends	$	1,997		–		2,675		–		2,495		9		6,286		–
Net investment income (loss)		1,997		–		2,675		–		2,495		9		6,286		–
Proceeds from mutual fund shares sold		6,434,933		907,524		9,782,108		3,813,612		2,067,605		153,715		1,788,157		18,072,853
Cost of mutual fund shares sold		(6,397,732	)	(901,434	)	(9,757,292	)	(3,825,773	)	(2,056,066	)	(151,342	)	(1,734,864	)	(17,793,440	)
Realized gain (loss) on investments		37,201		6,090		24,816		(12,161	)	11,539		2,373		53,293		279,413
Change in unrealized gain (loss) on investments		(434	)	2,539		(134,268	)	(12,840	)	4,308		74		12,828		41,909
Net gain (loss) on investments		36,767		8,629		(109,452	)	(25,001	)	15,847		2,447		66,121		321,322
Reinvested capital gains		6,389		7,301		188,902		30,089		–		18		–		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	45,153		15,930		82,125		5,088		18,342		2,474		72,407		321,322
Investment activity:	RyPrecMet			RyRealEst		RyRetail		RyRuss2000		RySectRot		RySmCapGr		RySmCapVal		RyTech
Reinvested dividends	$	–		6,944		–		15,064		–		–		1,758		–
Net investment income (loss)		–		6,944		–		15,064		–		–		1,758		–
Proceeds from mutual fund shares sold		4,064,920		3,284,191		1,364,279		29,913,611		2,143,253		3,881,562		3,729,375		2,115,244
Cost of mutual fund shares sold		(4,022,344	)	(3,223,241	)	(1,365,173	)	(29,900,677	)	(2,144,300	)	(3,892,853	)	(3,751,075	)	(2,096,657	)
Realized gain (loss) on investments		42,576		60,950		(894	)	12,934		(1,047	)	(11,291	)	(21,700	)	18,587
Change in unrealized gain (loss) on investments		32,974		(3,001	)	(665	)	143,595		(18,750	)	3,147		(5,238	)	1,530
Net gain (loss) on investments		75,550		57,949		(1,559	)	156,529		(19,797	)	(8,144	)	(26,938	)	20,117
Reinvested capital gains		–		13,494		572		–		54,409		15,846		18,406		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	75,550		78,387		(987	)	171,593		34,612		7,702		(6,774	)	20,117

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT- 6

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2006

Investment activity:	RyTele			RyTrans		RyUtil
Reinvested dividends	$	2,568		–		10,927
Net investment income (loss)		2,568		–		10,927
Proceeds from mutual fund shares sold		2,144,862		3,371,455		7,274,640
Cost of mutual fund shares sold		(2,131,635	)	(3,367,786	)	(7,238,533	)
Realized gain (loss) on investments		13,227		3,669		36,107
Change in unrealized gain (loss) on investments		367		(4,426	)	(1,454	)
Net gain (loss) on investments		13,594		(757	)	34,653
Reinvested capital gains		2,514		–		4,844
Net increase (decrease) in contract owners’ equity resulting from operations	$	18,676		(757	)	50,424

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2006 and 2005

	Total					ACVPIncGr2				ACVPIncGr3				ACVPUltra2
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	1,158,198		490,774		170		12,940		1,037		–		–		–
Realized gain (loss) on investments		1,452,387		(304,297	)	503		(11,803	)	697		67		314		1,912
Change in unrealized gain (loss) on investments		(134,263	)	(262,553	)	1,142		(2,138	)	11,288		482		(2,395	)	(5,457	)
Reinvested capital gains		915,129		276,474		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		3,391,451		200,398		1,815		(1,001	)	13,022		549		(2,081	)	(3,545	)
Equity transactions:
Purchase payments received from contract owners (note 6)		21,828,817		19,955,648		–		1,802		11,232		8,412		–		2,816
Transfers between funds		–		–		(6,916	)	(5,914	)	68,956		54,580		(6,881	)	(4,174	)
Surrenders (note 6)		(842,330	)	(1,059,368	)	–		(8,082	)	(443	)	(1,080	)	(377	)	(10,052	)
Death benefits (note 4)		–		70		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(4,896,363	)	(2,067,422	)	–		–		(7,285	)	–		–		(25,188	)
Deductions for surrender charges (note 2d)		(165,947	)	(188,070	)	(80	)	–		(253	)	–		–		(148	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,680,057	)	(1,868,992	)	(648	)	(3,164	)	(4,138	)	(1,288	)	(1,418	)	(7,778	)
Asset charges (note 3)		(145,802	)	(94,548	)	(55	)	(190	)	(329	)	(82	)	(217	)	(480	)
Adjustments to maintain reserves		(4,186	)	12,659		18		(18	)	2		23		13		2
Net equity transactions		13,094,132		14,689,977		(7,681	)	(15,566	)	67,742		60,565		(8,880	)	(45,002	)
Net change in contract owners’ equity		16,485,583		14,890,375		(5,866	)	(16,567	)	80,764		61,114		(10,961	)	(48,547	)
Contract owners’ equity beginning of period		33,437,814		18,547,439		17,288		33,855		61,114		–		68,118		116,665
Contract owners’ equity end of period	$	49,923,397		33,437,814		11,422		17,288		141,878		61,114		57,157		68,118
CHANGES IN UNITS:
Beginning units		2,989,670		1,582,462		1,326		2,714		5,672		–		5,704		9,962
Units purchased		3,083,765		2,729,482		–		1,038		6,701		5,901		–		1,355
Units redeemed		(1,927,271	)	(1,322,274	)	(576	)	(2,426	)	(1,127	)	(229	)	(750	)	(5,613	)
Ending units		4,146,164		2,989,670		750		1,326		11,246		5,672		4,954		5,704

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	ACVPUltra3					ACVPVal2				ACVPVal3				FidVIPEIS2
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		–		788		1,156		2,293		–		3,769		2,054
Realized gain (loss) on investments		(563	)	128		(310	)	(7,313	)	(2,503	)	993		1,900		3,444
Change in unrealized gain (loss) on investments		(770	)	816		5,127		(5,298	)	21,365		3,657		1,901		(2,478	)
Reinvested capital gains		–		–		5,590		16,218		14,463		–		15,450		5,078
Net increase (decrease) in contract owners’ equity resulting from operations		(1,333	)	944		11,195		4,763		35,618		4,650		23,020		8,098
Equity transactions:
Purchase payments received from contract owners (note 6)		13,814		16,270		–		9,946		37,732		68,966		1,961		15,296
Transfers between funds		32,039		15,446		–		(48,156	)	149,284		90,280		(11,345	)	(8,808	)
Surrenders (note 6)		(302	)	(1,036	)	(139	)	(10,166	)	(1,483	)	(1,026	)	(449	)	(2,168	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(42	)	(660	)	–		(242	)	(145	)	(1,674	)	–		28
Deductions for surrender charges (note 2d)		–		(4	)	–		(152	)	–		(4	)	(56	)	(96	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(4,352	)	(1,186	)	(3,368	)	(9,668	)	(14,750	)	(4,926	)	(7,970	)	(8,750	)
Asset charges (note 3)		(270	)	(68	)	(298	)	(512	)	(880	)	(318	)	(631	)	(622	)
Adjustments to maintain reserves		(3	)	24		(2	)	7		–		14		3		(18	)
Net equity transactions		40,884		28,786		(3,807	)	(58,943	)	169,758		151,312		(18,487	)	(5,138	)
Net change in contract owners’ equity		39,551		29,730		7,388		(54,180	)	205,376		155,962		4,533		2,960
Contract owners’ equity beginning of period		29,730		–		63,031		117,211		155,962		–		126,660		123,700
Contract owners’ equity end of period	$	69,281		29,730		70,419		63,031		361,338		155,962		131,193		126,660
CHANGES IN UNITS:
Beginning units		2,692		–		4,744		9,250		14,436		–		9,668		9,968
Units purchased		4,268		2,965		–		2,007		15,225		15,189		874		1,757
Units redeemed		(474	)	(273	)	(270	)	(6,513	)	(1,473	)	(753	)	(2,192	)	(2,057	)
Ending units		6,486		2,692		4,474		4,744		28,188		14,436		8,350		9,668

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	FidVIPEIS2R					FidVIPGrS2				FidVIPGrS2R				FidVIPConS2
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	5,256		–		48		122		144		–		1,569		310
Realized gain (loss) on investments		1,363		149		2,349		982		2,997		2,046		13,315		21,466
Change in unrealized gain (loss) on investments		1,090		4,429		(282	)	2,670		1,161		1,043		(7,924	)	11,517
Reinvested capital gains		22,131		–		–		–		–		–		12,494		44
Net increase (decrease) in contract owners’ equity resulting from operations		29,840		4,578		2,115		3,774		4,302		3,089		19,454		33,337
Equity transactions:
Purchase payments received from contract owners (note 6)		34,274		30,416		–		1,402		10,001		6,550		–		14,246
Transfers between funds		94,811		77,516		(6,060	)	7,464		14,265		49,346		(36,344	)	(55,918	)
Surrenders (note 6)		(672	)	(298	)	(113	)	(8,254	)	(928	)	(1,204	)	(646	)	(11,448	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(7,546	)	–		–		–		(7,434	)	–		–		(204	)
Deductions for surrender charges (note 2d)		(102	)	(4	)	(524	)	–		–		–		(30	)	(160	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(12,069	)	(3,796	)	(2,199	)	(5,178	)	(5,387	)	(1,634	)	(10,615	)	(16,394	)
Asset charges (note 3)		(739	)	(202	)	(150	)	(248	)	(297	)	(96	)	(769	)	(994	)
Adjustments to maintain reserves		(5	)	23		(120	)	3		2		10		(5	)	(7	)
Net equity transactions		107,952		103,655		(9,166	)	(4,811	)	10,222		52,972		(48,409	)	(70,879	)
Net change in contract owners’ equity		137,792		108,233		(7,051	)	(1,037	)	14,524		56,061		(28,955	)	(37,542	)
Contract owners’ equity beginning of period		108,233		–		36,058		37,095		56,061		–		180,421		217,963
Contract owners’ equity end of period	$	246,025		108,233		29,007		36,058		70,585		56,061		151,466		180,421
CHANGES IN UNITS:
Beginning units		9,848		–		3,092		3,356		4,986		–		12,254		17,268
Units purchased		10,980		10,251		–		1,062		2,131		5,245		–		2,675
Units redeemed		(2,156	)	(403	)	(758	)	(1,326	)	(1,227	)	(259	)	(3,022	)	(7,689	)
Ending units		18,672		9,848		2,334		3,092		5,890		4,986		9,232		12,254

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	FidVIPConS2R					GVITFHiInc3			GVITGvtBd				GVITGvtBd3
Investment activity:	2006			2005		2006		2005	2006		2005		2006		2005
Net investment income (loss)	$	4,838		–		2,596		–	1,631		2,042		5,602		1,634
Realized gain (loss) on investments		12,129		1,996		84		–	(769	)	4,095		(719	)	(866	)
Change in unrealized gain (loss) on investments		(11,457	)	11,183		753		–	(268	)	(571	)	(118	)	29
Reinvested capital gains		50,725		–		–		–	374		126		792		62
Net increase (decrease) in contract owners’ equity resulting from operations		56,235		13,179		3,433		–	968		5,692		5,557		859
Equity transactions:
Purchase payments received from contract owners (note 6)		69,193		42,946		490		–	237		30,448		36,486		18,406
Transfers between funds		406,716		156,108		52,164		–	(14,815	)	(28,314	)	88,461		40,162
Surrenders (note 6)		(1,581	)	(1,224	)	(318	)	–	–		–		(371	)	(2,564	)
Death benefits (note 4)		–		–		–		–	–		–		–		–
Net policy repayments (loans) (note 5)		(15,281	)	(732	)	743		–	–		–		314		–
Deductions for surrender charges (note 2d)		(246	)	(4	)	–		–	(49	)	(104	)	(95	)	–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(32,122	)	(6,858	)	(815	)	–	(3,011	)	(4,564	)	(6,068	)	(1,570	)
Asset charges (note 3)		(1,785	)	(330	)	(102	)	–	(239	)	(328	)	(504	)	(122	)
Adjustments to maintain reserves		11		25		15		–	(10	)	2		(4	)	22
Net equity transactions		424,905		189,931		52,177		–	(17,887	)	(2,860	)	118,219		54,334
Net change in contract owners’ equity		481,140		203,110		55,610		–	(16,919	)	2,832		123,776		55,193
Contract owners’ equity beginning of period		203,110		–		–		–	49,236		46,404		55,193		–
Contract owners’ equity end of period	$	684,250		203,110		55,610		–	32,317		49,236		178,969		55,193
CHANGES IN UNITS:
Beginning units		16,980		–		–		–	4,484		4,364		5,436		–
Units purchased		38,417		17,781		5,297		–	429		13,199		12,295		5,618
Units redeemed		(4,059	)	(801	)	(105	)	–	(2,065	)	(13,079	)	(675	)	(182	)
Ending units		51,338		16,980		5,192		–	2,848		4,484		17,056		5,436

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	GVITIDAg2					GVITIDAg6				GVITIDCon2			GVITIDCon6
Investment activity:	2006			2005		2006		2005		2006	2005		2006		2005
Net investment income (loss)	$	131		162		6,314		186		–	14		1,419		838
Realized gain (loss) on investments		60		376		(16,557	)	36		–	(1	)	(800	)	3
Change in unrealized gain (loss) on investments		751		(173	)	10,645		162		–	(22	)	1,610		(1,172	)
Reinvested capital gains		95		162		8,160		212		–	–		477		768
Net increase (decrease) in contract owners’ equity resulting from operations		1,037		527		8,562		596		–	(9	)	2,706		437
Equity transactions:
Purchase payments received from contract owners (note 6)		–		130		36,058		4,276		–	–		3,049		2,400
Transfers between funds		–		3,078		101,096		35,654		–	(2,350	)	(25,006	)	54,020
Surrenders (note 6)		–		–		(97	)	–		–	–		(820	)	(172	)
Death benefits (note 4)		–		–		–		–		–	–		–		–
Net policy repayments (loans) (note 5)		–		–		3,557		(19,432	)	–	–		(137	)	(4,062	)
Deductions for surrender charges (note 2d)		–		–		–		–		–	–		–		–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(674	)	(1,236	)	(14,125	)	(1,378	)	–	(44	)	(3,268	)	(900	)
Asset charges (note 3)		(40	)	(54	)	(852	)	(24	)	–	(4	)	(233	)	(82	)
Adjustments to maintain reserves		17		(6	)	(16	)	22		–	(13	)	7		8
Net equity transactions		(697	)	1,912		125,621		19,118		–	(2,411	)	(26,408	)	51,212
Net change in contract owners’ equity		340		2,439		134,183		19,714		–	(2,420	)	(23,702	)	51,649
Contract owners’ equity beginningof period		6,557		4,118		19,714		–		–	2,420		51,649		–
Contract owners’ equity end of period	$	6,897		6,557		153,897		19,714		–	–		27,947		51,649
CHANGES IN UNITS:
Beginning units		540		366		1,758		–		–	232		4,990		–
Units purchased		–		642		51,877		3,725		–	–		389		5,495
Units redeemed		(54	)	(468	)	(41,897	)	(1,967	)	–	(232	)	(2,835	)	(505	)
Ending units		486		540		11,738		1,758		–	–		2,544		4,990

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	GVITIDMod2					GVITIDMod6				GVITIDModAg2				GVITIDModAg6
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	1,028		1,644		7,073		1,888		1,792		1,560		5,095		1,560
Realized gain (loss) on investments		1,455		189		3,621		334		1,207		114		3,058		1,199
Change in unrealized gain (loss) on investments		1,816		1,267		13,291		1,400		7,516		4,193		15,253		47
Reinvested capital gains		501		1,284		2,707		1,296		1,034		1,748		2,034		1,612
Net increase (decrease) in contract owners’ equity resulting from operations		4,800		4,384		26,692		4,918		11,549		7,615		25,440		4,418
Equity transactions:
Purchase payments received from contract owners (note 6)		–		13,706		93,209		56,874		–		11,816		83,868		50,416
Transfers between funds		(33,920	)	68,502		95,910		115,328		(2,695	)	53,360		131,020		75,376
Surrenders (note 6)		–		–		(468	)	(174	)	(2,216	)	(2	)	(7,418	)	(54	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		–		–		–		(4,118	)	(1,515	)	–		(1,428	)	–
Deductions for surrender charges (note 2d)		–		–		(133	)	–		(948	)	(106	)	(7,231	)	–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(8,623	)	(18,468	)	(39,888	)	(11,538	)	(6,404	)	(9,210	)	(27,125	)	(5,630	)
Asset charges (note 3)		(277	)	(370	)	(1,266	)	(256	)	(444	)	(388	)	(924	)	(230	)
Adjustments to maintain reserves		19		(6	)	(14	)	22		(6	)	8		20		11
Net equity transactions		(42,801	)	63,364		147,350		156,138		(14,228	)	55,478		170,782		119,889
Net change in contract owners’ equity		(38,001	)	67,748		174,042		161,056		(2,679	)	63,093		196,222		124,307
Contract owners’ equity beginning of period		72,831		5,083		161,056		–		86,191		23,098		124,307		–
Contract owners’ equity end of period	$	34,830		72,831		335,098		161,056		83,512		86,191		320,529		124,307
CHANGES IN UNITS:
Beginning units		6,366		468		14,960		–		7,256		2,082		11,276		–
Units purchased		–		7,616		17,232		16,477		–		6,067		18,395		11,829
Units redeemed		(3,632	)	(1,718	)	(4,262	)	(1,517	)	(1,118	)	(893	)	(4,291	)	(553	)
Ending units		2,734		6,366		27,930		14,960		6,138		7,256		25,380		11,276

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	GVITIDModCon2					GVITIDModCon6				GVITMdCpGr				GVITMdCpGr3
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	69		706		1,389		668		–		–		–		–
Realized gain (loss) on investments		1		908		857		45		229		319		320		26
Change in unrealized gain (loss) on investments		99		(67	)	1,104		(187	)	205		183		1,431		376
Reinvested capital gains		33		348		807		572		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		202		1,895		4,157		1,098		434		502		1,751		402
Equity transactions:
Purchase payments received from contract owners (note 6)		–		–		7,854		2,542		–		1,086		4,371		2,668
Transfers between funds		–		1,180		(34,335	)	60,978		–		(1,254	)	(5,343	)	16,628
Surrenders (note 6)		–		–		(837	)	(56	)	2		–		–		(2	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		–		–		–		(3,694	)	–		–		–		–
Deductions for surrender charges (note 2d)		–		–		–		–		(659	)	–		(53	)	–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(54	)	(2,910	)	(5,664	)	(696	)	(363	)	(1,618	)	(727	)	(636	)
Asset charges (note 3)		(11	)	(184	)	(268	)	(68	)	(25	)	(36	)	(75	)	(32	)
Adjustments to maintain reserves		21		(3	)	(6	)	28		(11	)	24		(18	)	23
Net equity transactions		(44	)	(1,917	)	(33,256	)	59,034		(1,056	)	(1,798	)	(1,845	)	18,649
Net change in contract owners’ equity		158		(22	)	(29,099	)	60,132		(622	)	(1,296	)	(94	)	19,051
Contract owners’ equity beginning of period		2,450		2,472		60,132		–		4,809		6,105		19,051		–
Contract owners’ equity end of period	$	2,608		2,450		31,033		60,132		4,187		4,809		18,957		19,051
CHANGES IN UNITS:
Beginning units		220		232		5,696		–		356		496		1,624		–
Units purchased		–		3,608		757		6,123		–		92		354		1,682
Units redeemed		(4	)	(3,620	)	(3,741	)	(427	)	(74	)	(232	)	(508	)	(58	)
Ending units		216		220		2,712		5,696		282		356		1,470		1,624

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	GVITMyMktII					GVITNWFund2				GVITNWFund3				GVITSmCapGr2
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	758,893		280,066		127		138		299		100		–		–
Realized gain (loss) on investments		–		–		222		(1,404	)	(143	)	8		41		145
Change in unrealized gain (loss) on investments		–		–		1,384		903		877		617		39		110
Reinvested capital gains		–		–		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		758,893		280,066		1,733		(363	)	1,033		725		80		255
Equity transactions:
Purchase payments received from contract owners (note 6)		19,420,036		18,519,308		–		15,754		13,339		8,270		–		846
Transfers between funds		(7,222,375	)	(3,888,046	)	–		(109,292	)	3,507		10,244		–		(1,264	)
Surrenders (note 6)		(496,640	)	(513,586	)	–		–		(392	)	–		–		–
Death benefits (note 4)		–		70		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(4,446,117	)	(1,424,302	)	–		–		–		–		–		–
Deductions for surrender charges (note 2d)		(106,274	)	(105,846	)	–		–		–		–		(30	)	–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,178,263	)	(907,960	)	(2,079	)	(5,032	)	(5,409	)	(1,892	)	(195	)	(326	)
Asset charges (note 3)		(63,505	)	(42,918	)	(79	)	(172	)	(153	)	(48	)	(16	)	(22	)
Adjustments to maintain reserves		(1,020	)	1,745		(14	)	–		(11	)	15		11		(11	)
Net equity transactions		5,905,842		11,638,465		(2,172	)	(98,742	)	10,881		16,589		(230	)	(777	)
Net change in contract owners’ equity		6,664,735		11,918,531		(439	)	(99,105	)	11,914		17,314		(150	)	(522	)
Contract owners’ equity beginning of period		17,082,571		5,164,040		14,345		113,450		17,314		–		2,789		3,311
Contract owners’ equity end of period	$	23,747,306		17,082,571		13,906		14,345		29,228		17,314		2,639		2,789
CHANGES IN UNITS:
Beginning units		1,663,006		514,102		1,130		9,566		1,560		–		222		284
Units purchased		1,925,089		1,859,176		–		1,482		1,237		1,740		–		77
Units redeemed		(1,367,453	)	(710,272	)	(164	)	(9,918	)	(481	)	(180	)	(18	)	(139	)
Ending units		2,220,642		1,663,006		966		1,130		2,316		1,560		204		222

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	GVITSmCapGr3					GVITSmCapVal2				GVITSmCapVal3				GVITSmComp2
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		–		14		–		100		10		15		–
Realized gain (loss) on investments		10		21		(162	)	218		(198	)	12		173		47
Change in unrealized gain (loss) on investments		24		18		1,116		(1,370	)	1,776		(1,759	)	2,224		(334	)
Reinvested capital gains		–		–		452		2,000		1,960		1,576		588		3,482
Net increase (decrease) in contract owners’ equity resulting from operations		34		39		1,420		848		3,638		(161	)	3,000		3,195
Equity transactions:
Purchase payments received from contract owners (note 6)		770		1,216		–		2,278		4,590		4,744		–		872
Transfers between funds		–		(650	)	(11,469	)	(11,354	)	10,799		12,976		–		–
Surrenders (note 6)		–		(2	)	–		(160	)	(275	)	(102	)	–		–
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		–		–		–		–		(4,998	)	–		(4,223	)	–
Deductions for surrender charges (note 2d)		(52	)	–		–		–		–		–		–		–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(69	)	(30	)	(616	)	(1,490	)	(1,097	)	(250	)	(572	)	(692	)
Asset charges (note 3)		(5	)	(2	)	(49	)	(108	)	(89	)	(22	)	(114	)	(112	)
Adjustments to maintain reserves		10		6		6		(2	)	11		9		(21	)	13
Net equity transactions		654		538		(12,128	)	(10,836	)	8,941		17,355		(4,930	)	81
Net change in contract owners’ equity		688		577		(10,708	)	(9,988	)	12,579		17,194		(1,930	)	3,276
Contract owners’ equity beginning of period		577		–		14,844		24,832		17,194		–		29,345		26,069
Contract owners’ equity end of period	$	1,265		577		4,136		14,844		29,773		17,194		27,415		29,345
CHANGES IN UNITS:
Beginning units		48		–		1,076		1,850		1,502		–		2,012		2,002
Units purchased		64		109		–		177		1,246		1,535		–		69
Units redeemed		(10	)	(61	)	(820	)	(951	)	(532	)	(33	)	(330	)	(59	)
Ending units		102		48		256		1,076		2,216		1,502		1,682		2,012

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	GVITSmComp3					RyAbsRtStr			RyBank				RyBasicM
Investment activity:	2006			2005		2006		2005	2006		2005		2006		2005
Net investment income (loss)	$	91		–		3,945		–	1,914		3,774		3,861		530
Realized gain (loss) on investments		(133	)	1		2,810		–	2,759		(55,372	)	36,482		(45,787	)
Change in unrealized gain (loss) on investments		4,117		(1,020	)	2,098		–	1,092		(1,002	)	727		(542	)
Reinvested capital gains		399		1,498		5,014		–	–		38,732		5,592		21,928
Net increase (decrease) in contract owners’ equity resulting from operations		4,474		479		13,867		–	5,765		(13,868	)	46,662		(23,871	)
Equity transactions:
Purchase payments received from contract owners (note 6)		6,541		2,408		1,001		–	5,628		4,732		30,772		15,228
Transfers between funds		42,880		11,732		353,015		–	284,634		24,506		201,626		(65,478	)
Surrenders (note 6)		(2	)	–		(36	)	–	(2,191	)	(29,090	)	(425	)	(6,204	)
Death benefits (note 4)		–		–		–		–	–		–		–		–
Net policy repayments (loans) (note 5)		(1,836	)	–		(9,579	)	–	(2,487	)	–		(4,603	)	(888	)
Deductions for surrender charges (note 2d)		–		–		–		–	(211	)	(5,028	)	(186	)	(3,012	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,846	)	(198	)	(7,018	)	–	(5,843	)	(5,360	)	(20,896	)	(9,252	)
Asset charges (note 3)		(127	)	(22	)	(503	)	–	(297	)	(268	)	(1,003	)	(586	)
Adjustments to maintain reserves		9		8		11		–	(7	)	10		25		77
Net equity transactions		45,619		13,928		336,891		–	279,226		(10,498	)	205,310		(70,115	)
Net change in contract owners’ equity		50,093		14,407		350,758		–	284,991		(24,366	)	251,972		(93,986	)
Contract owners’ equity beginning of period		14,407		–		–		–	32,480		56,846		60,337		154,323
Contract owners’ equity end of period	$	64,500		14,407		350,758		–	317,471		32,480		312,309		60,337
CHANGES IN UNITS:
Beginning units		1,232		–		–		–	2,582		4,394		4,112		10,942
Units purchased		4,012		1,251		35,768		–	20,949		1,350		14,952		1,489
Units redeemed		(322	)	(19	)	(1,702	)	–	(845	)	(3,162	)	(1,660	)	(8,319	)
Ending units		4,922		1,232		34,066		–	22,686		2,582		17,404		4,112

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyBioTech					RyComm100			RyConsProd				RyDyDow
Investment activity:	2006			2005		2006		2005	2006		2005		2006		2005
Net investment income (loss)	$	–		–		–		–	2,802		470		2,622		2,712
Realized gain (loss) on investments		6,217		19,114		(41,140	)	–	37,566		(5,276	)	70,741		(64,596	)
Change in unrealized gain (loss) on investments		(580	)	(202	)	(2,505	)	–	(643	)	(802	)	(6,477	)	33,341
Reinvested capital gains		–		–		–		–	3,341		2,842		54,039		23,594
Net increase (decrease) in contract owners’ equity resulting from operations		5,637		18,912		(43,645	)	–	43,066		(2,766	)	120,925		(4,949	)
Equity transactions:
Purchase payments received from contract owners (note 6)		11,992		6,692		86		–	10,327		7,510		15,345		112,552
Transfers between funds		(190,483	)	182,244		105,320		–	286,129		(89,182	)	(77,614	)	(237,610	)
Surrenders (note 6)		(458	)	(10,174	)	–		–	(4,247	)	(2,230	)	(2,220	)	(7,834	)
Death benefits (note 4)		–		–		–		–	–		–		–		–
Net policy repayments (loans) (note 5)		(8,197	)	(384	)	(385	)	–	(2,840	)	166		(4,868	)	(10,780	)
Deductions for surrender charges (note 2d)		–		(1,214	)	–		–	(279	)	(298	)	–		(986	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(12,404	)	(7,958	)	(2,378	)	–	(11,618	)	(3,874	)	(25,695	)	(20,412	)
Asset charges (note 3)		(696	)	(502	)	(161	)	–	(815	)	(276	)	(1,584	)	(1,060	)
Adjustments to maintain reserves		(1	)	(229	)	5		–	27		73		(16	)	10
Net equity transactions		(200,247	)	168,475		102,487		–	276,684		(88,111	)	(96,652	)	(166,120	)
Net change in contract owners’ equity		(194,610	)	187,387		58,842		–	319,750		(90,877	)	24,273		(171,069	)
Contract owners’ equity beginning of period		267,339		79,952		–		–	16,444		107,321		558,075		729,144
Contract owners’ equity end of period	$	72,729		267,339		58,842		–	336,194		16,444		582,348		558,075
CHANGES IN UNITS:
Beginning units		23,156		7,664		–		–	1,342		8,724		53,398		67,110
Units purchased		3,729		17,371		8,015		–	23,505		1,944		7,156		12,751
Units redeemed		(20,369	)	(1,879	)	(325	)	–	(1,481	)	(9,326	)	(17,870	)	(26,463	)
Ending units		6,516		23,156		7,690		–	23,366		1,342		42,684		53,398

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyDyOTC					RyDySP500				RyDyStrDol			RyDyWeakDol
Investment activity:	2006			2005		2006		2005		2006		2005	2006		2005
Net investment income (loss)	$	1,018		–		6,580		400		103		–	8,526		–
Realized gain (loss) on investments		498,086		28,511		37,370		(181,922	)	(4,856	)	–	3,401		–
Change in unrealized gain (loss) on investments		41,097		(49,004	)	2,802		8,526		(64	)	–	(4,673	)	–
Reinvested capital gains		–		–		25,920		34,852		–		–	131		–
Net increase (decrease) in contract owners’ equity resulting from operations		540,201		(20,493	)	72,672		(138,144	)	(4,817	)	–	7,385		–
Equity transactions:
Purchase payments received from contract owners (note 6)		161,849		77,006		65,806		20,190		288		–	2,912		–
Transfers between funds		(1,159,232	)	815,776		269,189		(403,216	)	17,850		–	214,297		–
Surrenders (note 6)		(1,702	)	(648	)	(2,288	)	(7,442	)	(4,967	)	–	(38	)	–
Death benefits (note 4)		–		–		–		–		–		–	–		–
Net policy repayments (loans) (note 5)		(14,829	)	(22	)	(31,079	)	(9,592	)	(14	)	–	(2,554	)	–
Deductions for surrender charges (note 2d)		(705	)	–		(90	)	(1,082	)	–		–	–		–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(90,840	)	(50,178	)	(41,783	)	(42,394	)	(550	)	–	(2,789	)	–
Asset charges (note 3)		(4,570	)	(2,870	)	(2,126	)	(2,052	)	(28	)	–	(334	)	–
Adjustments to maintain reserves		(52	)	(6,180	)	(8	)	(24	)	5		–	19		–
Net equity transactions		(1,110,081	)	832,884		257,621		(445,612	)	12,584		–	211,513		–
Net change in contract owners’ equity		(569,880	)	812,391		330,293		(583,756	)	7,767		–	218,898		–
Contract owners’ equity beginning of period		1,833,598		1,021,207		347,880		931,636		–		–	–		–
Contract owners’ equity end of period	$	1,263,718		1,833,598		678,173		347,880		7,767		–	218,898		–
CHANGES IN UNITS:
Beginning units		146,814		79,288		24,328		67,356		–		–	–		–
Units purchased		29,951		72,321		20,194		3,880		1,323		–	21,445		–
Units redeemed		(80,273	)	(4,795	)	(6,182	)	(46,908	)	(535	)	–	(561	)	–
Ending units		96,492		146,814		38,340		24,328		788		–	20,884		–

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyElec					RyEnergy				RyEnSvc				RyEuroAdv
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		–		–		108		–		–		14,740		4,428
Realized gain (loss) on investments		(37,196	)	(1,609	)	(42,796	)	72,269		(78,118	)	123,864		58,621		45,554
Change in unrealized gain (loss) on investments		21		(3,527	)	(53,190	)	(5,641	)	71		(11,666	)	3,424		19,075
Reinvested capital gains		–		–		92,420		31,174		33,485		–		23,987		6,456
Net increase (decrease) in contract owners’ equity resulting from operations		(37,175	)	(5,136	)	(3,566	)	97,910		(44,562	)	112,198		100,772		75,513
Equity transactions:
Purchase payments received from contract owners (note 6)		32,713		9,610		44,104		24,402		32,815		66,936		57,407		34,528
Transfers between funds		7,552		(160,224	)	28,959		81,890		(63,299	)	117,360		689,347		(21,386	)
Surrenders (note 6)		(12,757	)	(1,666	)	(8,313	)	(566	)	(6,298	)	(39,436	)	(4,980	)	(38,414	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(6,094	)	–		(2,692	)	(6,558	)	(7,976	)	(778	)	(2,764	)	(5,460	)
Deductions for surrender charges (note 2d)		(721	)	(508	)	(388	)	(166	)	(375	)	(4,096	)	(1,986	)	(5,706	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(11,227	)	(6,462	)	(32,963	)	(39,034	)	(29,324	)	(28,370	)	(36,666	)	(24,108	)
Asset charges (note 3)		(717	)	(280	)	(1,931	)	(1,988	)	(1,914	)	(1,464	)	(1,861	)	(1,514	)
Adjustments to maintain reserves		9		7		37		(10	)	30		97		(6	)	(275	)
Net equity transactions		8,758		(159,523	)	26,813		57,970		(76,341	)	110,249		698,491		(62,335	)
Net change in contract owners’ equity		(28,417	)	(164,659	)	23,247		155,880		(120,903	)	222,447		799,263		13,178
Contract owners’ equity beginning of period		59,323		223,982		290,606		134,726		317,539		95,092		175,289		162,111
Contract owners’ equity end of period	$	30,906		59,323		313,853		290,606		196,636		317,539		974,552		175,289
CHANGES IN UNITS:
Beginning units		6,830		26,786		14,022		9,006		15,384		6,832		11,096		10,914
Units purchased		5,668		1,241		2,918		7,691		6,232		12,466		39,348		5,212
Units redeemed		(9,026	)	(21,197	)	(3,410	)	(2,675	)	(13,032	)	(3,914	)	(2,810	)	(5,030	)
Ending units		3,472		6,830		13,530		14,022		8,584		15,384		47,634		11,096

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyFinSvc					RyGvtLgBd				RyHealthC				RyHedgeEq
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	1,587		956		95,501		22,354		–		–		2,709		–
Realized gain (loss) on investments		10,747		(2,511	)	389,780		26,128		18,488		10,540		998		–
Change in unrealized gain (loss) on investments		(1,748	)	(1,915	)	3,248		(3,189	)	(5,769	)	(244	)	(1,620	)	–
Reinvested capital gains		5,659		7,722		–		–		13,561		–		5,127		–
Net increase (decrease) in contract owners’ equity resulting from operations		16,245		4,252		488,529		45,293		26,280		10,296		7,214		–
Equity transactions:
Purchase payments received from contract owners (note 6)		7,325		2,870		2,104		15,530		16,683		10,274		2,611		–
Transfers between funds		91,790		(20,610	)	(921,146	)	773,862		217,485		86,768		192,542		–
Surrenders (note 6)		(2,126	)	(11,982	)	(40,616	)	(76,112	)	(3,619	)	(4,456	)	–		–
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(14	)	(404	)	(4,500	)	(93,778	)	(5,381	)	(1,398	)	(5,839	)	–
Deductions for surrender charges (note 2d)		(448	)	(1,158	)	(7,065	)	(10,054	)	(115	)	(758	)	–		–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(7,983	)	(7,598	)	(70,491	)	(30,902	)	(16,377	)	(9,846	)	(3,476	)	–
Asset charges (note 3)		(455	)	(392	)	(5,134	)	(1,960	)	(935	)	(662	)	(207	)	–
Adjustments to maintain reserves		(11	)	–		(3,169	)	(763	)	(3	)	73		7		–
Net equity transactions		88,078		(39,274	)	(1,050,017	)	575,823		207,738		79,995		185,638		–
Net change in contract owners’ equity		104,323		(35,022	)	(561,488	)	621,116		234,018		90,291		192,852		–
Contract owners’ equity beginning of period		49,002		84,024		693,237		72,121		151,985		61,694		–		–
Contract owners’ equity end of period	$	153,325		49,002		131,749		693,237		386,003		151,985		192,852		–
CHANGES IN UNITS:
Beginning units		3,668		6,502		57,198		6,408		12,090		5,430		–		–
Units purchased		6,935		232		1,129		86,513		19,220		8,111		19,826		–
Units redeemed		(771	)	(3,066	)	(47,103	)	(35,723	)	(2,098	)	(1,451	)	(956	)	–
Ending units		9,832		3,668		11,224		57,198		29,212		12,090		18,870		–

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyNet					RyInDyDow				RyInvGovLgBd				RyInvMidCap
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		–		1,865		1,420		29,834		–		938		500
Realized gain (loss) on investments		23,581		(14,512	)	(51,177	)	(6,166	)	(66,082	)	63,517		(29,232	)	(43,785	)
Change in unrealized gain (loss) on investments		734		(2,949	)	(4,312	)	5,372		10,599		6,721		(1,895	)	(430	)
Reinvested capital gains		–		5,312		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		24,315		(12,149	)	(53,624	)	626		(25,649	)	70,238		(30,189	)	(43,715	)
Equity transactions:
Purchase payments received from contract owners (note 6)		3,915		9,588		4,105		11,090		30,351		24,196		2,236		728
Transfers between funds		31,030		40,566		108,274		(17,000	)	783,473		(293,802	)	196,327		60,296
Surrenders (note 6)		(7,838	)	(182	)	(184	)	(408	)	(32,441	)	(1,234	)	(4,996	)	(308	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(9,535	)	–		(6,183	)	(648	)	(6,626	)	(3,340	)	379		(2	)
Deductions for surrender charges (note 2d)		(401	)	–		–		(158	)	(7,123	)	(216	)	(247	)	–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(5,562	)	(3,632	)	(13,134	)	(9,076	)	(41,249	)	(24,812	)	(7,134	)	(1,052	)
Asset charges (note 3)		(370	)	(214	)	(541	)	(436	)	(2,295	)	(1,238	)	(495	)	(106	)
Adjustments to maintain reserves		9		7		(11	)	141		(6	)	(442	)	4		5
Net equity transactions		11,248		46,133		92,326		(16,495	)	724,084		(300,888	)	186,074		59,561
Net change in contract owners’ equity		35,563		33,984		38,702		(15,869	)	698,435		(230,650	)	155,885		15,846
Contract owners’ equity beginning of period		141,847		107,863		89,362		105,231		148,540		379,190		15,916		70
Contract owners’ equity end of period	$	177,410		141,847		128,064		89,362		846,975		148,540		171,801		15,916
CHANGES IN UNITS:
Beginning units		10,806		8,104		9,932		11,886		18,996		45,952		1,968		8
Units purchased		3,252		3,389		10,752		3,854		91,952		6,930		22,243		2,130
Units redeemed		(1,738	)	(687	)	(2,490	)	(5,808	)	(10,754	)	(33,886	)	(2,123	)	(170	)
Ending units		12,320		10,806		18,194		9,932		100,194		18,996		22,088		1,968

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyInOTC					RyInRus2000				RyInSP500				RyJapanAdv
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	21,628		–		3,586		1,928		59,961		–		30,165		–
Realized gain (loss) on investments		101,126		(67,232	)	(58,471	)	(169,859	)	(63,329	)	(25,320	)	43,982		28,673
Change in unrealized gain (loss) on investments		833		3,228		(109	)	(134	)	(76,169	)	2,811		(187,011	)	39,849
Reinvested capital gains		–		–		–		–		–		–		152,825		–
Net increase (decrease) in contract owners’ equity resulting from operations		123,587		(64,004	)	(54,994	)	(168,065	)	(79,537	)	(22,509	)	39,961		68,522
Equity transactions:
Purchase payments received from contract owners (note 6)		11,317		4,038		5,534		1,038		258,439		19,214		302,207		40,906
Transfers between funds		11,446		342,780		226,312		302,832		17,559		723,492		104,868		340,974
Surrenders (note 6)		(7,883	)	(30,224	)	(9,870	)	(1,992	)	(34,349	)	(558	)	(272	)	(40,052	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(9,743	)	–		(710	)	(44,368	)	(3,944	)	–		(9,894	)	(4,262	)
Deductions for surrender charges (note 2d)		(605	)	(3,438	)	(500	)	(214	)	(6,964	)	–		(183	)	(3,890	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(33,759	)	(21,432	)	(11,139	)	(9,552	)	(87,035	)	(29,730	)	(57,049	)	(15,302	)
Asset charges (note 3)		(1,912	)	(1,022	)	(848	)	(764	)	(2,304	)	(940	)	(1,914	)	(620	)
Adjustments to maintain reserves		(94	)	16,482		(2	)	(7	)	(11	)	88		(5	)	550
Net equity transactions		(31,233	)	307,184		208,777		246,973		141,391		711,566		337,758		318,304
Net change in contract owners’ equity		92,354		243,180		153,783		78,908		61,854		689,057		377,719		386,826
Contract owners’ equity beginning of period		248,851		5,671		78,925		17		697,499		8,442		489,507		102,681
Contract owners’ equity end of period	$	341,205		248,851		232,708		78,925		759,353		697,499		867,226		489,507
CHANGES IN UNITS:
Beginning units		30,592		706		9,506		2		85,596		1,028		33,996		8,582
Units purchased		18,809		36,699		25,883		15,854		32,615		88,362		28,623		30,318
Units redeemed		(6,859	)	(6,813	)	(3,555	)	(6,350	)	(17,465	)	(3,794	)	(5,333	)	(4,904	)
Ending units		42,542		30,592		31,834		9,506		100,746		85,596		57,286		33,996

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyLgCapGr					RyLgCapVal				RyLeisure				RyMidCapAdv
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		172		1,997		290		–		–		2,675		–
Realized gain (loss) on investments		2,299		(1,814	)	37,201		(2,567	)	6,090		(5,988	)	24,816		102,079
Change in unrealized gain (loss) on investments		(2,330	)	(2,408	)	(434	)	593		2,539		(3,102	)	(134,268	)	(26,202	)
Reinvested capital gains		9,978		4,032		6,389		2,066		7,301		3,292		188,902		1,450
Net increase (decrease) in contract owners’ equity resulting from operations		9,947		(18	)	45,153		382		15,930		(5,798	)	82,125		77,327
Equity transactions:
Purchase payments received from contract owners (note 6)		33,366		15,426		22,154		862		2,628		7,974		85,975		50,718
Transfers between funds		447,552		3,834		388,907		(12,320	)	259,322		(169,730	)	(140,858	)	239,324
Surrenders (note 6)		(6,023	)	(40,590	)	(66,899	)	(28,948	)	(170	)	(240	)	(3,434	)	(18,962	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(4,434	)	(7,532	)	(6,002	)	–		(14	)	(2	)	(22,421	)	(10,830	)
Deductions for surrender charges (note 2d)		(1,316	)	(6,218	)	(9,253	)	(3,062	)	(215	)	–		(790	)	(4,916	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(19,282	)	(8,640	)	(19,642	)	(5,066	)	(4,378	)	(3,358	)	(65,899	)	(60,196	)
Asset charges (note 3)		(1,215	)	(520	)	(1,113	)	(266	)	(269	)	(236	)	(3,034	)	(3,192	)
Adjustments to maintain reserves		3		3		–		23		(10	)	9		(3	)	(7	)
Net equity transactions		448,651		(44,237	)	308,152		(48,777	)	256,894		(165,583	)	(150,464	)	191,939
Net change in contract owners’ equity		458,598		(44,255	)	353,305		(48,395	)	272,824		(171,381	)	(68,339	)	269,266
Contract owners’ equity beginning of period		218,572		262,827		54,732		103,127		1,836		173,217		762,133		492,867
Contract owners’ equity end of period	$	677,170		218,572		408,037		54,732		274,660		1,836		693,794		762,133
CHANGES IN UNITS:
Beginning units		20,598		25,208		4,670		9,168		140		12,566		47,902		35,336
Units purchased		43,016		13,092		33,438		11,946		17,162		1,755		7,558		19,940
Units redeemed		(3,070	)	(17,702	)	(8,518	)	(16,444	)	(338	)	(14,181	)	(15,984	)	(7,374	)
Ending units		60,544		20,598		29,590		4,670		16,964		140		39,476		47,902

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyMidCapGr					RyMidCapVal				RyMCpCoreEq			RyNova
Investment activity:	2006			2005		2006		2005		2006		2005	2006		2005
Net investment income (loss)	$	–		–		2,495		228		9		–	6,286		1,404
Realized gain (loss) on investments		(12,161	)	2,409		11,539		(23,257	)	2,373		–	53,293		28,692
Change in unrealized gain (loss) on investments		(12,840	)	(2,467	)	4,308		9,253		74		–	12,828		(24,380	)
Reinvested capital gains		30,089		–		–		12,028		18		–	–		–
Net increase (decrease) in contract owners’ equity resulting from operations		5,088		(58	)	18,342		(1,748	)	2,474		–	72,407		5,716
Equity transactions:
Purchase payments received from contract owners (note 6)		40,462		8,242		25,673		11,184		–		–	50,851		26,864
Transfers between funds		100,836		156,238		277,229		(179,412	)	17,511		–	32,186		(39,518	)
Surrenders (note 6)		(5,933	)	(12,346	)	(27	)	(254	)	–		–	(1,459	)	(8,684	)
Death benefits (note 4)		–		–		–		–		–		–	–		–
Net policy repayments (loans) (note 5)		(6,116	)	(11,136	)	(6,556	)	(4,060	)	(93	)	–	(48,640	)	(9,308	)
Deductions for surrender charges (note 2d)		(2,118	)	(3,342	)	(375	)	(54	)	–		–	–		(1,646	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(20,597	)	(10,314	)	(12,185	)	(11,278	)	(573	)	–	(29,080	)	(32,580	)
Asset charges (note 3)		(1,349	)	(562	)	(632	)	(474	)	(51	)	–	(1,797	)	(1,920	)
Adjustments to maintain reserves		(4	)	(15	)	(6	)	36		14		–	6		1
Net equity transactions		105,181		126,765		283,121		(184,312	)	16,808		–	2,067		(66,791	)
Net change in contract owners’ equity		110,269		126,707		301,463		(186,060	)	19,282		–	74,474		(61,075	)
Contract owners’ equity beginning of period		385,137		258,430		33,768		219,828		–		–	535,537		596,612
Contract owners’ equity end of period	$	495,406		385,137		335,231		33,768		19,282		–	610,011		535,537
CHANGES IN UNITS:
Beginning units		31,840		23,814		2,706		19,082		–		–	39,642		45,914
Units purchased		11,014		11,465		21,804		2,091		1,894		–	7,968		25,241
Units redeemed		(3,140	)	(3,439	)	(1,564	)	(18,467	)	(76	)	–	(9,752	)	(31,513	)
Ending units		39,714		31,840		22,946		2,706		1,818		–	37,858		39,642

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyOTC					RyPrecMet				RyRealEst				RyRetail
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		–		–		–		6,944		3,682		–		–
Realized gain (loss) on investments		279,413		53,269		42,576		37,894		60,950		14,818		(894	)	(16,448	)
Change in unrealized gain (loss) on investments		41,909		(60,533	)	32,974		18,069		(3,001	)	(2,136	)	(665	)	29
Reinvested capital gains		–		–		–		–		13,494		–		572		1,520
Net increase (decrease) in contract owners’ equity resulting from operations		321,322		(7,264	)	75,550		55,963		78,387		16,364		(987	)	(14,899	)
Equity transactions:
Purchase payments received from contract owners (note 6)		113,429		49,080		77,922		9,400		33,976		19,992		15,402		2,814
Transfers between funds		(1,546,375	)	1,551,706		692,407		237,224		268,581		(30,766	)	(6,901	)	11,530
Surrenders (note 6)		(6,955	)	(10,068	)	(4,951	)	(58	)	(11,993	)	(9,614	)	(58	)	(106	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(15,530	)	(19,162	)	(11,924	)	(490	)	(7,497	)	(16	)	–		–
Deductions for surrender charges (note 2d)		(794	)	(6,240	)	(348	)	–		(1,349	)	(3,678	)	–		–
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(64,819	)	(45,582	)	(37,669	)	(11,608	)	(19,284	)	(12,240	)	(3,940	)	(3,908	)
Asset charges (note 3)		(4,448	)	(2,764	)	(2,842	)	(640	)	(1,187	)	(934	)	(221	)	(266	)
Adjustments to maintain reserves		(8	)	(99	)	83		790		2		26		5		10
Net equity transactions		(1,525,500	)	1,516,871		712,678		234,618		261,249		(37,230	)	4,287		10,074
Net change in contract owners’ equity		(1,204,178	)	1,509,607		788,228		290,581		339,636		(20,866	)	3,300		(4,825	)
Contract owners’ equity beginning of period		2,267,861		758,254		369,412		78,831		121,189		142,055		16,397		21,222
Contract owners’ equity end of period	$	1,063,683		2,267,861		1,157,640		369,412		460,825		121,189		19,697		16,397
CHANGES IN UNITS:
Beginning units		192,028		64,918		28,740		7,414		7,876		9,892		1,402		1,914
Units purchased		16,454		134,416		50,062		22,570		17,411		1,682		1,348		1,804
Units redeemed		(123,332	)	(7,306	)	(4,632	)	(1,244	)	(2,377	)	(3,698	)	(1,220	)	(2,316	)
Ending units		85,150		192,028		74,170		28,740		22,910		7,876		1,530		1,402

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyRuss2000					RySectRot				RySmCapGr				RySmCapVal
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	15,064		134,156		–		–		–		–		1,758		–
Realized gain (loss) on investments		12,934		(233,821	)	(1,047	)	9,856		(11,291	)	(18,272	)	(21,700	)	(14,294	)
Change in unrealized gain (loss) on investments		143,595		(222,883	)	(18,750	)	3,172		3,147		(7,175	)	(5,238	)	3,065
Reinvested capital gains		–		–		54,409		–		15,846		11,910		18,406		11,402
Net increase (decrease) in contract owners’ equity resulting from operations		171,593		(322,548	)	34,612		13,028		7,702		(13,537	)	(6,774	)	173
Equity transactions:
Purchase payments received from contract owners (note 6)		101,312		166,714		91,564		31,516		31,119		18,364		13,254		10,086
Transfers between funds		2,235,487		(1,379,430	)	216,373		94,468		253,432		(45,958	)	156,026		(104,038	)
Surrenders (note 6)		(5,686	)	(14,294	)	(3,279	)	(196	)	(4,880	)	(19,416	)	(839	)	(4,188	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(39,331	)	(322,980	)	(28,410	)	(14	)	(2,950	)	(12,228	)	(3,367	)	(1,880	)
Deductions for surrender charges (note 2d)		(229	)	(4,400	)	(1,005	)	–		(1,044	)	(4,286	)	(1,020	)	(266	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(162,722	)	(147,714	)	(43,583	)	(16,082	)	(17,149	)	(12,892	)	(12,093	)	(8,350	)
Asset charges (note 3)		(8,476	)	(8,364	)	(2,228	)	(608	)	(1,162	)	(648	)	(844	)	(400	)
Adjustments to maintain reserves		30		1		(5	)	7		–		(280	)	7		20
Net equity transactions		2,120,385		(1,710,467	)	229,427		109,091		257,366		(77,344	)	151,124		(109,016	)
Net change in contract owners’ equity		2,291,978		(2,033,015	)	264,039		122,119		265,068		(90,881	)	144,350		(108,843	)
Contract owners’ equity beginning of period		1,836,973		3,869,988		258,967		136,848		256,172		347,053		94,409		203,252
Contract owners’ equity end of period	$	4,128,951		1,836,973		523,006		258,967		521,240		256,172		238,759		94,409
CHANGES IN UNITS:
Beginning units		123,690		270,782		19,448		11,686		20,828		29,966		7,718		17,220
Units purchased		119,367		13,136		23,113		9,142		21,238		1,949		10,252		1,304
Units redeemed		(13,005	)	(160,228	)	(7,299	)	(1,380	)	(2,728	)	(11,087	)	(1,596	)	(10,806	)
Ending units		230,052		123,690		35,262		19,448		39,338		20,828		16,374		7,718

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	RyTech					RyTele				RyTrans				RyUtil
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	–		–		2,568		–		–		–		10,927		1,464
Realized gain (loss) on investments		18,587		8,606		13,227		(15,852	)	3,669		8,701		36,107		7,577
Change in unrealized gain (loss) on investments		1,530		(2,486	)	367		(644	)	(4,426	)	(2,077	)	(1,454	)	(973	)
Reinvested capital gains		–		–		2,514		17,386		–		690		4,844		–
Net increase (decrease) in contract owners’ equity resulting from operations		20,117		6,120		18,676		890		(757	)	7,314		50,424		8,068
Equity transactions:
Purchase payments received from contract owners (note 6)		27,403		17,266		1,789		6,684		30,310		4,762		21,251		9,310
Transfers between funds		(56,475	)	97,854		185,194		27,470		5,865		58,968		312,047		53,254
Surrenders (note 6)		(263	)	(426	)	(502	)	(462	)	(751	)	(56	)	(6,129	)	(6,336	)
Death benefits (note 4)		–		–		–		–		–		–		–		–
Net policy repayments (loans) (note 5)		(11,899	)	(24	)	(10,016	)	(24	)	(6,367	)	–		(8,472	)	(960	)
Deductions for surrender charges (note 2d)		(44	)	–		(551	)	–		(89	)	–		–		(1,352	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(10,735	)	(8,422	)	(8,496	)	(5,422	)	(17,468	)	(2,496	)	(18,090	)	(13,620	)
Asset charges (note 3)		(659	)	(424	)	(554	)	(268	)	(978	)	(194	)	(976	)	(908	)
Adjustments to maintain reserves		(16	)	22		9		16		20		(19	)	(8	)	412
Net equity transactions		(52,688	)	105,846		166,873		27,994		10,542		60,965		299,623		39,800
Net change in contract owners’ equity		(32,571	)	111,966		185,549		28,884		9,785		68,279		350,047		47,868
Contract owners’ equity beginning of period		143,719		31,753		38,133		9,249		130,035		61,756		136,903		89,035
Contract owners’ equity end of period	$	111,148		143,719		223,682		38,133		139,820		130,035		486,950		136,903
CHANGES IN UNITS:
Beginning units		13,002		2,962		3,024		742		9,142		4,710		9,710		6,982
Units purchased		2,574		10,917		13,236		2,787		3,543		4,715		21,652		4,407
Units redeemed		(6,080	)	(877	)	(1,418	)	(505	)	(3,531	)	(283	)	(2,810	)	(1,679	)
Ending units		9,496		13,002		14,842		3,024		9,154		9,142		28,552		9,710

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-6

NOTES TO FINANCIAL STATEMENTS

December 31, 2006 and 2005

(1) Background and Summary of Significant Accounting Policies

(a) Organization and Nature of Operations

The Nationwide VLI Separate Account-6 (The Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on July, 10 2001 and commenced operations on November 30, 2003. The Account is registered as a unit investment trust under the Investment Company Act of 1940.

The Company offers Flexible Premium Variable Universal Life Insurance Policies through the Account. The primary distribution for contracts is through wholesalers and brokers.

(b) The Contracts

Only policies with a front-end sales charge, a contingent deferred sales charge and certain other fees are offered for purchase. See note 2 for a discussion of policy charges and note 3 for asset charges.

Policy owners may invest in the following:

Portfolios of the American Century Variable Portfolios Inc.;

    American Century Variable Portfolios Inc. – Income & Growth Fund – Class I (ACVPIncGr)*

    American Century Variable Portfolios Inc. – Income & Growth Fund – Class II (ACVPIncGr2)

    American Century Variable Portfolios Inc. – Income & Growth Fund – Class III (ACVPIncGr3)

    American Century Variable Portfolios Inc. – Ultra^® Fund – Class I (ACVPUltra)*

    American Century Variable Portfolios Inc. – Ultra^® Fund – Class II (ACVPUltra2)

    American Century Variable Portfolios Inc. – Ultra^® Fund – Class III (ACVPUltra3)

    American Century Variable Portfolios Inc. – Value Fund – Class I (ACVPVal)*

    American Century Variable Portfolios Inc. – Value Fund – Class II (ACVPVal2)

    American Century Variable Portfolios Inc. – Value Fund – Class III (ACVPVal3)

Portfolios of the Fidelity^® Variable Insurance Products Fund;

    Fidelity^® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class (FidVIPEIS)*

    Fidelity^® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class 2 (FidVIPEIS2)

    Fidelity^® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class 2 R (FidVIPEIS2R)

    Fidelity^® Variable Insurance Products Fund – Growth Portfolio – Service Class (FidVIPGrS)*

    Fidelity^® Variable Insurance Products Fund – Growth Portfolio – Service Class 2 (FidVIPGrS2)

    Fidelity^® Variable Insurance Products Fund – Growth Portfolio – Service Class 2 R (FidVIPGrS2R)

Portfolios of the Fidelity^® Variable Insurance Products Fund II;

    Fidelity^® Variable Insurance Products Fund II – Contrafund^® Portfolio – Service Class (FidVIPConS)*

    Fidelity^® Variable Insurance Products Fund II – Contrafund^® Portfolio – Service Class 2 (FidVIPConS2)

    Fidelity^® Variable Insurance Products Fund II – Contrafund^® Portfolio – Service Class 2 R (FidVIPConS2R)

Portfolios of the Gartmore Variable Insurance Trust (GVIT);

    Gartmore GVIT – Federated GGVIT High Income Bond Fund – Class III (GVITFHiInc3)

    Gartmore GVIT – Government Bond Fund – Class I (GVITGvtBd)

    Gartmore GVIT – Government Bond Fund – Class II (GVITGvtBd2)*

    Gartmore GVIT – Government Bond Fund – Class III (GVITGvtBd3)

    Gartmore GVIT – Investor Destinations Aggressive Fund – Class II (GVITIDAgg2)

    Gartmore GVIT – Investor Destinations Aggressive Fund – Class VI (GVITIDAgg6)

    Gartmore GVIT – Investor Destinations Conservative Fund – Class II (GVITIDCon2)*

    Gartmore GVIT – Investor Destinations Conservative Fund – Class VI (GVITIDCon6)

    Gartmore GVIT – Investor Destinations Moderate Fund – Class II (GVITIDMod2)

    Gartmore GVIT – Investor Destinations Moderate Fund – Class VI (GVITIDMod6)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

    Gartmore GVIT – Investor Destinations Moderately Aggressive Fund – Class II (GVITIDModAg2)

    Gartmore GVIT – Investor Destinations Moderately Aggressive Fund – Class VI (GVITIDModAg6)

    Gartmore GVIT – Investor Destinations Moderately Conservative Fund – Class II (GVITIDModCon2)

    Gartmore GVIT – Investor Destinations Moderately Conservative Fund – Class VI (GVITIDModCon6)

    Gartmore GVIT – Mid Cap Growth Fund – Class I (GVITMdCpGr)

    Gartmore GVIT – Mid Cap Growth Fund – Class III (GVITMdCpGr3)

    Gartmore GVIT – Money Market Fund II – Class I (GVITMyMktII)

    Gartmore GVIT – Nationwide Fund – Class I (GVITNWFund)*

    Gartmore GVIT – Nationwide Fund – Class II (GVITNWFund2)

    Gartmore GVIT – Nationwide Fund – Class III (GVITNWFund3)

    Gartmore GVIT – Small Cap Growth Fund – Class I (GVITSmCapGr)*

    Gartmore GVIT – Small Cap Growth Fund – Class II (GVITSmCapGr2)

    Gartmore GVIT – Small Cap Growth Fund – Class III (GVITSmCapGr3)

    Gartmore GVIT – Small Cap Value Fund – Class I (GVITSmCapVal)*

    Gartmore GVIT – Small Cap Value Fund – Class II (GVITSmCapVal2)

    Gartmore GVIT – Small Cap Value Fund – Class III (GVITSmCapVal3)

    Gartmore GVIT – Small Company Fund – Class I (GVITSmComp)*

    Gartmore GVIT – Small Company Fund – Class II (GVITSmComp2)

    Gartmore GVIT – Small Company Fund – Class III (GVITSmComp3)

Portfolios of the Rydex Variable Trust Portfolios;

    Rydex Variable Trust Portfolios – Absolute Return Strategies Fund (RyAbsRtStr)

    Rydex Variable Trust Portfolios – Banking Fund (RyBank)

    Rydex Variable Trust Portfolios – Basic Materials Fund (RyBasicM)

    Rydex Variable Trust Portfolios – Biotechnology Fund (RyBioTech)

    Rydex Variable Trust Portfolios – Commodities Fund (RyComm100)

    Rydex Variable Trust Portfolios – Consumer Products Fund (RyConsProd)

    Rydex Variable Trust Portfolios – Dynamic Dow Fund (RyDyDow)

        (formerly Rydex Variable Trust Portfolios – Long Dynamic Dow 30 Fund)

    Rydex Variable Trust Portfolios – Dynamic OTC Fund (RyDyOTC)

        (formerly Rydex Variable Trust Portfolios – Velocity 100 Fund)

    Rydex Variable Trust Portfolios – Dynamic S&P 500 Fund (RyDySP500)

        (formerly Rydex Variable Trust Portfolios – Titan 500 Fund)

    Rydex Variable Trust Portfolios – Dynamic Strengthening Dollar Fund (RyDyStrDol)

        (formerly Rydex Variable Trust Portfolios – Strengthening Dollar Fund)

    Rydex Variable Trust Portfolios – Dynamic Weakening Dollar Fund (RyDyWeakDol)

        (formerly Rydex Variable Trust Portfolios – Weakening Dollar Fund)

    Rydex Variable Trust Portfolios – Electronics Fund (RyElec)

    Rydex Variable Trust Portfolios – Energy Fund (RyEnergy)

    Rydex Variable Trust Portfolios – Energy Services Fund (RyEnSvc)

    Rydex Variable Trust Portfolios – Europe Advantage Fund (RyEuroAdv)

        (formerly Rydex Variable Trust Portfolios – Large-Cap Europe Fund)

    Rydex Variable Trust Portfolios – Financial Services Fund (RyFinSvc)

    Rydex Variable Trust Portfolios – Government Long Bond Advantage Fund (RyGvtLgBd)

        (formerly Rydex Variable Trust Portfolios – U.S. Government Bond Fund)

    Rydex Variable Trust Portfolios – Health Care Fund (RyHealthC)

    Rydex Variable Trust Portfolios – Hedged Equity Fund (RyHedgeEq)

    Rydex Variable Trust Portfolios – Internet Fund (RyNet)

    Rydex Variable Trust Portfolios – Inverse Dynamic Dow Fund (RyInDyDow)

        (formerly Rydex Variable Trust Portfolios – Inverse Dynamic Dow 30 Fund)

    Rydex Variable Trust Portfolios – Inverse Government Long Bond Fund (RyInGovLgBd)

        (formerly Rydex Variable Trust Portfolios – Juno Fund)

    Rydex Variable Trust Portfolios – Inverse Mid Cap Fund (RyInMidCap)

    Rydex Variable Trust Portfolios – Inverse OTC Fund (RyInOTC)

        (formerly Rydex Variable Trust Portfolios – Arktos Fund)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

    Rydex Variable Trust Portfolios – Inverse Russell 2000 Fund (RyInRus2000)

        (formerly Rydex Variable Trust Portfolios – Inverse Small-Cap Fund)

    Rydex Variable Trust Portfolios – Inverse S&P 500 Fund (RyInSP500)

        (formerly Rydex Variable Trust Portfolios – Ursa Fund)

    Rydex Variable Trust Portfolios – Japan Advantage Fund (RyJapanAdv)

        (formerly Rydex Variable Trust Portfolios – Large-Cap Japan Fund)

    Rydex Variable Trust Portfolios – Large Cap Growth Fund (RyLgCapGr)

    Rydex Variable Trust Portfolios – Large Cap Value Fund (RyLgCapVal)

    Rydex Variable Trust Portfolios – Leisure Fund (RyLeisure)

    Rydex Variable Trust Portfolios – Mid Cap Advantage Fund (RyMidCapAdv)

        (formerly Rydex Variable Trust Portfolios – Medius Fund)

    Rydex Variable Trust Portfolios – Mid Cap Growth Fund (RyMidCapGr)

    Rydex Variable Trust Portfolios – Mid Cap Value Fund (RyMidCapVal)

    Rydex Variable Trust Portfolios – Multi Cap Core Equity Fund (RyMCpCoreEq)

        (formerly Rydex Variable Trust Portfolios – Core Equity Fund)

    Rydex Variable Trust Portfolios – Nova Fund (RyNova)

    Rydex Variable Trust Portfolios – OTC Fund (RyOTC)

    Rydex Variable Trust Portfolios – Precious Metals Fund (RyPrecMet)

    Rydex Variable Trust Portfolios – Real Estate Fund (RyRealEst)

    Rydex Variable Trust Portfolios – Retailing Fund (RyRetail)

    Rydex Variable Trust Portfolios – Russell 2000 Advantage Fund (RyRuss2000)

        (formerly Rydex Variable Trust Portfolios – Mekros Fund)

    Rydex Variable Trust Portfolios – Sector Rotation Fund (RySectRot)

    Rydex Variable Trust Portfolios – Small Cap Growth Fund (RySmCapGr)

    Rydex Variable Trust Portfolios – Small Cap Value Fund (RySmCapVal)

    Rydex Variable Trust Portfolios – Technology Fund (RyTech)

    Rydex Variable Trust Portfolios – Telecommunications Fund (RyTele)

    Rydex Variable Trust Portfolios – Transportation Fund (RyTrans)

    Rydex Variable Trust Portfolios – Utilities Fund (RyUtil)

At December 31, 2006, contract owners were invested in all of the above funds except those noted with an asterisk (*). The contract owners’ equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see notes 2 and 3). The accompanying financial statements include only contract owners’ purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the Accounts of the Company.

A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.

A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.

Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued on the closing net asset value per share at December 31, 2006 of such funds, which value their investment securities at fair value. Fund purchases and sales are accounted for on the trade date (date the order to buy or sell is executed) The cost of investments sold is determined on a First in – First out basis, and dividends (which include capital gain distributions) are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

Operations of the Account form a part of, and are taxed with, operations of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code.

The Company does not provide for income taxes within the Account. Taxes are the responsibility of the contract owner upon termination or withdrawal.

(e) Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(f) New Accounting Pronouncement

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) 157 SFAS 157. also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. SFAS 157 is not expected to have a material impact on the Accounts’ financial position or results of their operations upon adoption.

(2) Policy Charges

(a) Deductions from Premiums

The Company deducts a premium load charge to cover sales loads and state premium taxes. The sales load portion of the premium load charge is $5 per $1,000 of premium and covers sales expenses incurred by the Company. The premium tax portion of the premium load charge is $35 per $1,000 of premium and is used to reimburse the Company for state and local premium taxes (at the estimated rate of 2.25%), and for federal premium taxes (at the estimated rate of 1.25%).

For the periods ended December 31, 2006 and 2005, total front-end sales charge deductions were $686,742 and $533,767, respectively.

(b) Cost of Insurance

A cost of insurance charge is assessed monthly against each contract. The amount of the charge varies widely and is based upon age, sex, rate class, and net amount at risk (death benefit less total contract value). This charge is assessed monthly against each contract by liquidating units.

(c) Administrative Charges

The Company currently deducts $10 per month through the first year from the policy date, which is also the maximum guaranteed administrative charge. Thereafter, the Company will deduct $5 per month, and the maximum guaranteed administrative charge is $7.50 per month. These charges are assessed against each contract monthly by liquidating units.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

(d) Surrender Charges

Policy surrenders result in a redemption of the contract value from the Account and payment of the surrender proceeds to the contract owner or designee. The surrender proceeds consist of the contract value, less any outstanding policy loans and less a surrender charge if applicable. The amount of the charge is based upon a specified percentage of the initial surrender charge which varies by age, sex and rate class. The surrender charge is 100% of the initial surrender charge in the first year, and declines in specified percentages. After the ninth year, the charge is 0%.

Surrender charges are assessed by liquidating units. The Company may wave the surrender charge for certain contracts in which sales expenses normally associated with the distribution of a contract are not incurred.

(3) Asset Charges

The Company deducts a monthly asset fee from each contract. This charge is $0.60 on the first $25,000 of cash value. During the first through fifteenth years from the policy date, the charge is $0.30 per $1,000 of cash value thereafter. Otherwise, the charge is $0.20 per $1,000 of cash value thereafter. This charge is assessed monthly against each contract by liquidating units.

(4) Death Benefits

Death benefit proceeds result in the redemption of the contract value from the Account and payment of those proceeds, less any outstanding policy loans (and policy charges), to the legal beneficiary. The contracts have a minimum required death benefit. The minimum required death benefit is the lowest benefit that will qualify the policy as life insurance under Section 7702 of the Internal Revenue Code.

There are three options a contract owner may choose when determining the death benefit:

1) The death benefit will be the greater of the specified amount or minimum required death benefit;  

2) The death benefit will be the greater of the specified amount plus the cash value as of the date of death, or the minimum required death benefit;  

3) The death benefit will be the specified amount plus the accumulated premium account (which consists of all premium payments minus all partial surrenders to the date of death).  

For any death benefit option, the calculation of the minimum required death benefit is shown on the Policy Data Page. Not all death benefit options are available in all states.

(5) Policy Loans (Net of Repayments)

Contract provisions allow contract owners to borrow 90% of a policy’s variable cash surrender value plus 100% of a policy’s fixed cash surrender value less the applicable value of any surrender charges. Interest is charged on the outstanding loans and is due and payable in advance on the policy anniversary. In certain circumstances a contract owner may elect to use a Preferred Policy Loan. In this case, the loan value cannot exceed 5% of the policy’s cash surrender value as of the beginning of the year from the policy date.

At the time the loan is granted, the amount of the loan is transferred from the Account to the Company’s general account as collateral for the outstanding loan. Collateral amounts in the general account are credited with the stated rate of interest in effect at the time the loan is made, subject to a guaranteed minimum rate. Interest credited is paid by the Company’s general account to the Account. Loan repayments result in a transfer of collateral including interest back to the Account.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

(6) Related Party Transactions

The Company performs various services on behalf of the Mutual Fund Companies in which the Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, preparation, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company.

Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. These transfers are the result of the contract owner executing fund exchanges. Fund exchanges from the Account to the fixed account are included in surrenders, and fund exchanges from the fixed account to the Account are included in purchase payments received from contact owners, as applicable, on the accompanying Statements of Change in Contract Owners’ Equity.

Policy loan transactions (note 5), executed at the direction of the contract owner, also result in transfers between the Account and the fixed account of the Company. The fixed account assets are not reflected in the accompanying financial statements.

For the periods ended December 31, 2006 and 2005, total transfers into the Account from the fixed account were $567,395 and $168,637, respectively, and total transfers from the Account to the fixed account were $5,463,757 and $2,236,023, respectively.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

(7) Financial Highlights

The following is a summary of units, unit fair values and contract owners’ equity outstanding for variable universal life contracts as of the end of the periods indicated, and the contract expense rate, investment income ratio and total return for the three year period ended December 31, 2006 and the period November 30, 2003 (commencement of operations) through December 31, 2003.

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
American Century Variable Portfolios, Inc. – Income & Growth Fund – Class II
2006	0.00%	750	$	15.229877	$	11,422	1.44%	16.81	%
2005	0.00%	1,326		13.037836		17,288	34.55%	4.52	%
2004	0.00%	2,714		12.474389		33,855	1.01%	12.57	%
American Century Variable Portfolios, Inc. – Income & Growth Fund – Class III
2006	0.00%	11,246		12.615826		141,878	1.36%	17.09	%
2005	0.00%	5,672		10.774753		61,114	0.00%	7.75	%	05/02/05
American Century Variable Portfolios, Inc. – Ultra® Fund – Class II
2006	0.00%	4,954		11.537562		57,157	0.00%	-3.39	%
2005	0.00%	5,704		11.942190		68,118	0.00%	1.97	%
2004	0.00%	9,962		11.710979		116,665	0.00%	10.59	%
American Century Variable Portfolios, Inc. – Ultra® Fund – Class III
2006	0.00%	6,486		10.681571		69,281	0.00%	-3.28	%
2005	0.00%	2,692		11.043659		29,730	0.00%	10.44	%	05/02/05
American Century Variable Portfolios, Inc. – Value Fund – Class II
2006	0.00%	4,474		15.739668		70,419	1.21%	18.46	%
2005	0.00%	4,744		13.286571		63,031	1.04%	4.85	%
2004	0.00%	9,250		12.671512		117,211	0.00%	14.17	%
American Century Variable Portfolios, Inc. – Value Fund – Class III
2006	0.00%	28,188		12.818874		361,338	1.21%	18.65	%
2005	0.00%	14,436		10.803690		155,962	0.00%	8.04	%	05/02/05
Fidelity® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class
2004	0.00%	9,968		12.409671		123,700	0.18%	11.23	%
Fidelity® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class 2
2006	0.00%	8,350		15.711721		131,193	3.01%	19.93	%
Fidelity® Variable Insurance Products Fund – Equity-Income Portfolio – Service Class 2 R
2006	0.00%	18,672		13.176169		246,025	3.37%	19.89	%
2005	0.00%	9,848		10.990361		108,233	0.00%	9.90	%	05/02/05
2005	0.00%	9,668		13.100905		126,660	1.48%	5.57	%
Fidelity® Variable Insurance Products Fund – Growth Portfolio – Service Class
2004	0.00%	3,356		11.053471		37,095	0.11%	3.12	%
Fidelity® Variable Insurance Products Fund – Growth Portfolio – Service Class 2
2006	0.00%	2,334		12.428116		29,007	0.16%	6.57	%
2005	0.00%	3,092		11.661647		36,058	0.25%	5.50	%
Fidelity® Variable Insurance Products Fund – Growth Portfolio – Service Class 2 R
2006	0.00%	5,890		11.983852		70,585	0.21%	6.58	%
2005	0.00%	4,986		11.243640		56,061	0.00%	12.44	%	05/02/05
Fidelity® Variable Insurance Products Fund II – Contrafund® Portfolio – Service Class
2004	0.00%	17,268		12.622344		217,963	0.04%	15.16	%
Fidelity® Variable Insurance Products Fund II – Contrafund® Portfolio – Service Class 2
2006	0.00%	9,232		16.406598		151,466	0.90%	11.43	%
2005	0.00%	12,254		14.723477		180,421	0.14%	16.65	%
Fidelity® Variable Insurance Products Fund II – Contrafund® Portfolio – Service Class 2 R
2006	0.00%	51,338		13.328329		684,250	1.17%	11.43	%
2005	0.00%	16,980		11.961699		203,110	0.00%	19.62	%	05/02/05
Gartmore GVIT – Federated GGVIT High Income Bond Fund – Class III
2006	0.00%	5,192		10.710781		55,610	5.76%	7.11	%	05/01/06
Gartmore GVIT – Government Bond Fund – Class I
2006	0.00%	2,848		11.347304		32,317	4.06%	3.34	%
2005	0.00%	4,484		10.980441		49,236	1.46%	3.26	%
2004	0.00%	4,364		10.633428		46,404	4.89%	3.26	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Gartmore GVIT – Government Bond Fund – Class III
2006	0.00%	17,056	$	10.493015	$	178,969	4.84%	3.35	%
2005	0.00%	5,436		10.153318		55,193	3.43%	1.53	%	05/02/05
Gartmore GVIT – Investor Destinations Aggressive Fund – Class II
2006	0.00%	486		14.191530		6,897	1.97%	16.87	%
2005	0.00%	540		12.143224		6,557	1.85%	7.93	%
2004	0.00%	366		11.250923		4,118	2.95%	12.51	%	05/03/04
Gartmore GVIT – Investor Destinations Aggressive Fund – Class VI
2006	0.00%	11,738		13.110997		153,897	3.10%	16.92	%
2005	0.00%	1,758		11.213798		19,714	2.78%	12.14	%	05/02/05
Gartmore GVIT – Investor Destinations Conservative Fund – Class II
2004	0.00%	232		10.429263		2,420	4.23%	4.29	%	05/03/04
Gartmore GVIT – Investor Destinations Conservative Fund – Class VI
2006	0.00%	2,544		10.985285		27,947	2.88%	6.13	%
2005	0.00%	4,990		10.350568		51,649	1.90%	3.51	%	05/02/05
Gartmore GVIT – Investor Destinations Moderate Fund – Class II
2006	0.00%	2,734		12.739401		34,830	2.04%	11.35	%
2005	0.00%	6,366		11.440576		72,831	2.62%	5.34	%
2004	0.00%	468		10.860228		5,083	1.54%	8.60	%	05/03/04
Gartmore GVIT – Investor Destinations Moderate Fund – Class VI
2006	0.00%	27,930		11.997767		335,098	2.71%	11.44	%
2005	0.00%	14,960		10.765754		161,056	2.34%	7.66	%	05/02/05
Gartmore GVIT – Investor Destinations Moderately Aggressive Fund – Class II
2006	0.00%	6,138		13.605809		83,512	2.13%	14.54	%
2005	0.00%	7,256		11.878625		86,191	2.29%	7.07	%
2004	0.00%	2,082		11.094081		23,098	0.82%	10.94	%	05/03/04
Gartmore GVIT – Investor Destinations Moderately Aggressive Fund – Class VI
2006	0.00%	25,380		12.629205		320,529	2.85%	14.56	%
2005	0.00%	11,276		11.024077		124,307	2.21%	10.24	%	05/02/05
Gartmore GVIT – Investor Destinations Moderately Conservative Fund – Class II
2006	0.00%	216		12.073257		2,608	2.74%	8.42	%
2005	0.00%	220		11.135379		2,450	2.11%	4.49	%
2004	0.00%	232		10.657326		2,472	4.19%	6.57	%	05/03/04
Gartmore GVIT – Investor Destinations Moderately Conservative Fund – Class VI
2006	0.00%	2,712		11.442941		31,033	2.56%	8.39	%
2005	0.00%	5,696		10.556801		60,132	1.93%	5.57	%	05/02/05
Gartmore GVIT – Mid Cap Growth Fund – Class I
2006	0.00%	282		14.845789		4,187	0.00%	9.91	%
2005	0.00%	356		13.507474		4,809	0.00%	9.74	%
2004	0.00%	496		12.308466		6,105	0.00%	15.34	%
Gartmore GVIT – Mid Cap Growth Fund – Class III
2006	0.00%	1,470		12.895981		18,957	0.00%	9.93	%
2005	0.00%	1,624		11.730689		19,051	0.00%	17.31	%	05/02/05
Gartmore GVIT – Money Market Fund II – Class I
2006	0.00%	2,220,642		10.693892		23,747,306	4.02%	4.11	%
2005	0.00%	1,663,006		10.272104		17,082,571	2.50%	2.26	%
2004	0.00%	514,102		10.044777		5,164,040	0.62%	0.41	%
2003	0.00%	16,351		10.003329		163,564	0.06%	0.03	%	08/29/03
Gartmore GVIT – Nationwide® Fund – Class II
2006	0.00%	966		14.395658		13,906	0.92%	13.40	%
2005	0.00%	1,130		12.694519		14,345	0.42%	7.04	%
2004	0.00%	9,566		11.859676		113,450	24.99%	9.53	%
Gartmore GVIT – Nationwide® Fund – Class III
2006	0.00%	2,316		12.620064		29,228	1.16%	13.71	%
2005	0.00%	1,560		11.098742		17,314	0.83%	10.99	%	05/02/05
Gartmore GVIT – Small Cap Growth Fund – Class II
2006	0.00%	204		12.936937		2,639	0.00%	2.99	%
2005	0.00%	222		12.561849		2,789	0.00%	7.73	%
2004	0.00%	284		11.660011		3,311	0.00%	13.17	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Gartmore GVIT – Small Cap Growth Fund – Class III
2006	0.00%	102	$	12.403041	$	1,265	0.00%	3.23	%
2005	0.00%	48		12.015208		577	0.00%	20.15	%	05/02/05
Gartmore GVIT – Small Cap Value Fund – Class I
2004	0.00%	1,850		13.422532		24,832	0.00%	17.00	%
Gartmore GVIT – Small Cap Value Fund – Class II
2006	0.00%	256		16.154401		4,136	0.15%	17.10	%
2005	0.00%	1,076		13.795785		14,844	0.00%	2.78	%
Gartmore GVIT – Small Cap Value Fund – Class III
2006	0.00%	2,216		13.435365		29,773	0.47%	17.37	%
2005	0.00%	1,502		11.447242		17,194	0.12%	14.47	%	05/02/05
Gartmore GVIT – Small Company Fund – Class I
2004	0.00%	2,002		13.021653		26,069	0.00%	18.78	%
Gartmore GVIT – Small Company Fund – Class II
2006	0.00%	1,682		16.298982		27,415	0.05%	11.75	%
2005	0.00%	2,012		14.584947		29,345	0.00%	12.01	%
Gartmore GVIT – Small Company Fund – Class III
2006	0.00%	4,922		13.104467		64,500	0.33%	12.07	%
2005	0.00%	1,232		11.693622		14,407	0.00%	16.94	%	05/02/05
Rydex Variable Trust Portfolios – Absolute Return Strategies Fund
2006	0.00%	34,066		10.296439		350,758	1.53%	2.96	%	05/01/06
Rydex Variable Trust Portfolios – Banking Fund
2006	0.00%	22,686		13.994135		317,471	2.27%	11.25	%
2005	0.00%	2,582		12.579511		32,480	4.89%	-2.77	%
2004	0.00%	4,394		12.937277		56,846	0.29%	14.74	%
Rydex Variable Trust Portfolios – Basic Materials Fund
2006	0.00%	17,404		17.944662		312,309	1.41%	22.29	%
2005	0.00%	4,112		14.673284		60,337	0.40%	4.04	%
2004	0.00%	10,942		14.103745		154,323	0.08%	20.83	%
Rydex Variable Trust Portfolios – Biotechnology Fund
2006	0.00%	6,516		11.161543		72,729	0.00%	-3.32	%
2005	0.00%	23,156		11.545119		267,339	0.00%	10.67	%
2004	0.00%	7,664		10.432198		79,952	0.00%	1.10	%
Rydex Variable Trust Portfolios – Commodities Fund
2006	0.00%	7,690		7.651770		58,842	0.00%	-23.48	%	05/01/06
Rydex Variable Trust Portfolios – Consumer Products Fund
2006	0.00%	23,366		14.388183		336,194	1.29%	17.42	%
2005	0.00%	1,342		12.253101		16,444	0.53%	-0.40	%
2004	0.00%	8,724		12.301853		107,321	0.09%	13.30	%
Rydex Variable Trust Portfolios – Dynamic Dow Fund
2006	0.00%	42,684		13.643242		582,348	0.63%	30.54	%
2005	0.00%	53,398		10.451225		558,075	1.00%	-3.81	%
2004	0.00%	67,110		10.864909		729,144	24.03%	8.65	%	05/03/04
Rydex Variable Trust Portfolios – Dynamic OTC Fund
2006	0.00%	96,492		13.096608		1,263,718	0.08%	4.86	%
2005	0.00%	146,814		12.489256		1,833,598	0.00%	-3.03	%
2004	0.00%	79,288		12.879723		1,021,207	1.71%	14.21	%
Rydex Variable Trust Portfolios – Dynamic S&P 500 Fund
2006	0.00%	38,340		17.688405		678,173	1.33%	23.70	%
2005	0.00%	24,328		14.299570		347,880	0.08%	3.38	%
2004	0.00%	67,356		13.831516		931,636	0.00%	16.90	%
2003	0.00%	14		11.832066		166	0.00%	18.32	%	09/02/03
Rydex Variable Trust Portfolios – Dynamic Strengthening Dollar Fund
2006	0.00%	788		9.856941		7,767	0.89%	-1.43	%	05/01/06
Rydex Variable Trust Portfolios – Dynamic Weakening Dollar Fund
2006	0.00%	20,884		10.481591		218,898	4.51%	4.82	%	05/01/06

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Rydex Variable Trust Portfolios – Electronics Fund
2006	0.00%	3,472	$	8.901590	$	30,906	0.00%	2.49	%
2005	0.00%	6,830		8.685720		59,323	0.00%	3.87	%
2004	0.00%	26,786		8.361905		223,982	0.00%	-21.98	%
2003	0.00%	331		10.717460		3,547	0.00%	7.17	%	09/02/03
Rydex Variable Trust Portfolios – Energy Fund
2006	0.00%	13,530		23.196806		313,853	0.00%	11.93	%
2005	0.00%	14,022		20.725001		290,606	0.02%	38.54	%
2004	0.00%	9,006		14.959597		134,726	0.01%	32.27	%
Rydex Variable Trust Portfolios – Energy Services Fund
2006	0.00%	8,584		22.907246		196,636	0.00%	10.98	%
2005	0.00%	15,384		20.640855		317,539	0.00%	48.30	%
2004	0.00%	6,832		13.918556		95,092	0.00%	33.74	%
Rydex Variable Trust Portfolios – Europe Advantage Fund
2006	0.00%	47,634		20.459178		974,552	3.26%	29.51	%
2005	0.00%	11,096		15.797477		175,289	0.69%	6.36	%
2004	0.00%	10,914		14.853477		162,111	33.87%	16.15	%
Rydex Variable Trust Portfolios – Financial Services Fund
2006	0.00%	9,832		15.594448		153,325	1.39%	16.73	%
2005	0.00%	3,668		13.359373		49,002	1.03%	3.38	%
2004	0.00%	6,502		12.922869		84,024	0.37%	17.12	%
Rydex Variable Trust Portfolios – Government Long Bond Advantage Fund
2006	0.00%	11,224		11.738115		131,749	4.62%	-3.15	%
2005	0.00%	57,198		12.119946		693,237	4.23%	7.69	%
2004	0.00%	6,408		11.254914		72,121	3.37%	8.36	%
Rydex Variable Trust Portfolios – Health Care Fund
2006	0.00%	29,212		13.213853		386,003	0.00%	5.11	%
2005	0.00%	12,090		12.571123		151,985	0.00%	10.64	%
2004	0.00%	5,430		11.361762		61,694	0.00%	6.22	%
Rydex Variable Trust Portfolios – Hedged Equity Fund
2006	0.00%	18,870		10.220049		192,852	2.17%	2.20	%	05/01/06
Rydex Variable Trust Portfolios – Internet Fund
2006	0.00%	12,320		14.400151		177,410	0.00%	9.70	%
2005	0.00%	10,806		13.126669		141,847	0.00%	-1.38	%
2004	0.00%	8,104		13.309860		107,863	0.00%	15.87	%
2003	0.00%	306		11.486698		3,515	0.00%	14.87	%	09/02/03
Rydex Variable Trust Portfolios – Inverse Dynamic Dow Fund
2006	0.00%	18,194		7.038825		128,064	1.53%	-21.77	%
2005	0.00%	9,932		8.997359		89,362	1.51%	1.63	%
2004	0.00%	11,886		8.853319		105,231	0.00%	-11.47	%	05/03/04
Rydex Variable Trust Portfolios – Inverse Government Long Bond Fund
2006	0.00%	100,194		8.453350		846,975	4.68%	8.11	%
2005	0.00%	18,996		7.819540		148,540	0.00%	-5.24	%
2004	0.00%	45,952		8.251871		379,190	0.00%	-10.67	%
Rydex Variable Trust Portfolios – Inverse Mid-Cap Fund
2006	0.00%	22,088		7.778040		171,801	0.77%	-3.83	%
2005	0.00%	1,968		8.087487		15,916	0.37%	-8.16	%
2004	0.00%	8		8.806000		70	0.00%	-11.94	%	05/03/04
Rydex Variable Trust Portfolios – Inverse OTC Fund
2006	0.00%	42,542		8.020429		341,205	3.46%	-1.40	%
2005	0.00%	30,592		8.134507		248,851	0.00%	1.27	%
2004	0.00%	706		8.032405		5,671	0.00%	-11.83	%
Rydex Variable Trust Portfolios – Inverse Russell 2000 Fund
2006	0.00%	31,834		7.310059		232,708	1.74%	-11.95	%
2005	0.00%	9,506		8.302632		78,925	0.79%	-3.05	%
2004	0.00%	2		8.564000		17	0.00%	-14.36	%	05/03/04
Rydex Variable Trust Portfolios – Inverse S&P 500 Fund
2006	0.00%	100,746		7.537297		759,353	7.68%	-7.50	%
2005	0.00%	85,596		8.148729		697,499	0.00%	-0.77	%
2004	0.00%	1,028		8.212022		8,442	0.00%	-10.21	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Rydex Variable Trust Portfolios – Japan Advantage Fund
2006	0.00%	57,286	$	15.138532	$	867,226	4.87%	5.14	%
2005	0.00%	33,996		14.398959		489,507	0.00%	20.35	%
2004	0.00%	8,582		11.964662		102,681	0.00%	10.33	%
Rydex Variable Trust Portfolios – Large Cap Growth Fund
2006	0.00%	60,544		11.184753		677,170	0.00%	5.40	%
2005	0.00%	20,598		10.611331		218,572	0.15%	1.77	%
2004	0.00%	25,208		10.426349		262,827	2.64%	4.26	%	05/03/04
Rydex Variable Trust Portfolios – Large Cap Value Fund
2006	0.00%	29,590		13.789694		408,037	0.55%	17.66	%
2005	0.00%	4,670		11.719808		54,732	0.37%	4.19	%
2004	0.00%	9,168		11.248572		103,127	1.02%	12.49	%	05/03/04
Rydex Variable Trust Portfolios – Leisure Fund
2006	0.00%	16,964		16.190743		274,660	0.00%	23.47	%
2005	0.00%	140		13.113391		1,836	0.00%	-4.87	%
2004	0.00%	12,566		13.784595		173,217	0.00%	23.86	%
Rydex Variable Trust Portfolios – Mid Cap Advantage Fund
2006	0.00%	39,476		17.575073		693,794	0.32%	10.46	%
2005	0.00%	47,902		15.910246		762,133	0.00%	14.07	%
2004	0.00%	35,336		13.948005		492,867	0.00%	22.14	%
Rydex Variable Trust Portfolios – Mid Cap Growth Fund
2006	0.00%	39,714		12.474351		495,406	0.00%	3.13	%
2005	0.00%	31,840		12.096000		385,137	0.00%	11.46	%
2004	0.00%	23,814		10.852000		258,430	0.00%	8.52	%	05/03/04
Rydex Variable Trust Portfolios – Mid Cap Value Fund
2006	0.00%	22,946		14.609575		335,231	1.45%	17.08	%
2005	0.00%	2,706		12.478766		33,768	0.18%	8.32	%
2004	0.00%	19,082		11.520171		219,828	0.04%	15.20	%	05/03/04
Rydex Variable Trust Portfolios – Multi Cap Core Equity Fund
2006	0.00%	1,818		10.606110		19,282	0.05%	6.06	%	05/01/06
Rydex Variable Trust Portfolios – Nova Fund
2006	0.00%	37,858		16.113126		610,011	1.45%	19.27	%
2005	0.00%	39,642		13.509344		535,537	0.27%	3.97	%
2004	0.00%	45,914		12.994126		596,612	0.03%	14.62	%
Rydex Variable Trust Portfolios – OTC Fund
2006	0.00%	85,150		12.491870		1,063,683	0.00%	5.77	%
2005	0.00%	192,028		11.810054		2,267,861	0.00%	1.11	%
2004	0.00%	64,918		11.680186		758,254	0.00%	9.35	%
Rydex Variable Trust Portfolios – Precious Metals Fund
2006	0.00%	74,170		15.607933		1,157,640	0.00%	21.43	%
2005	0.00%	28,740		12.853586		369,412	0.00%	20.89	%
2004	0.00%	7,414		10.632748		78,831	0.00%	-14.21	%
Rydex Variable Trust Portfolios – Real Estate Fund
2006	0.00%	22,910		20.114577		460,825	2.34%	30.72	%
2005	0.00%	7,876		15.387085		121,189	1.68%	7.15	%
2004	0.00%	9,892		14.360615		142,055	0.86%	29.54	%
Rydex Variable Trust Portfolios – Retailing Fund
2006	0.00%	1,530		12.873816		19,697	0.00%	10.08	%
2005	0.00%	1,402		11.695368		16,397	0.00%	5.48	%
2004	0.00%	1,914		11.088014		21,222	0.00%	10.06	%
Rydex Variable Trust Portfolios – Russell 2000 Advantage Fund
2006	0.00%	230,052		17.947904		4,128,951	0.53%	20.85	%
2005	0.00%	123,690		14.851425		1,836,973	4.59%	3.92	%
2004	0.00%	270,782		14.291895		3,869,988	0.00%	25.20	%
Rydex Variable Trust Portfolios – Sector Rotation Fund
2006	0.00%	35,262		14.831991		523,006	0.00%	11.39	%
2005	0.00%	19,448		13.315851		258,967	0.00%	13.71	%
2004	0.00%	11,686		11.710392		136,848	0.00%	10.71	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-6 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Rydex Variable Trust Portfolios – Small Cap Growth Fund
2006	0.00%	39,338	$	13.250290	$	521,240	0.00%	7.73%
2005	0.00%	20,828		12.299413		256,172	0.00%	6.20%
2004	0.00%	29,966		11.581557		347,053	0.00%	15.82%	05/03/04
Rydex Variable Trust Portfolios – Small Cap Value Fund
2006	0.00%	16,374		14.581618		238,759	0.91%	19.21%
2005	0.00%	7,718		12.232292		94,409	0.00%	3.64%
2004	0.00%	17,220		11.803243		203,252	0.09%	18.03%	05/03/04
Rydex Variable Trust Portfolios – Technology Fund
2006	0.00%	9,496		11.704717		111,148	0.00%	5.89%
2005	0.00%	13,002		11.053572		143,719	0.00%	3.11%
2004	0.00%	2,962		10.720064		31,753	0.00%	1.15%
2003	0.00%	323		10.598204		3,423	0.00%	5.98%	09/02/03
Rydex Variable Trust Portfolios – Telecommunications Fund
2006	0.00%	14,842		15.070863		223,682	1.75%	19.51%
2005	0.00%	3,024		12.610236		38,133	0.00%	1.16%
2004	0.00%	742		12.465243		9,249	0.00%	12.68%
Rydex Variable Trust Portfolios – Transportation Fund
2006	0.00%	9,154		15.274190		139,820	0.00%	7.38%
2005	0.00%	9,142		14.223953		130,035	0.00%	8.48%
2004	0.00%	4,710		13.111746		61,756	0.00%	22.99%
Rydex Variable Trust Portfolios – Utilities Fund
2006	0.00%	28,552		17.054864		486,950	3.40%	20.96%
2005	0.00%	9,710		14.099167		136,903	0.64%	10.56%
2004	0.00%	6,982		12.752103		89,035	2.24%	17.31%
Contract Owners’ Equity Total By Year
2006					$	49,923,397
2005					$	33,437,814
2004					$	18,547,439
2003					$	174,215

*  This represents the annual contract expense rate of the variable account for the period indicated and includes only those expenses that are assessed through a reduction in the unit values. Excluded are expenses of the underlying mutual funds and charges made directly to contract owner accounts through the redemption of units.  

**  This represents the dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by average net assets. The ratios exclude those expenses, if any, that result in direct reductions to the contractholder accounts either through reductions in unit values or redemption of units. 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 subaccounts invest.  

***  This represents the total return for the period indicated, including changes in the value of the underlying mutual fund, which reflects the reduction of unit value for expenses assessed. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the Account. The total return is calculated for the period indicated or from the effective date through the end of the period.  

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder

Nationwide Life Insurance Company:

We have audited the consolidated financial statements of Nationwide Life Insurance Company and subsidiaries (the Company) as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedules as listed in the accompanying index. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules 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 consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nationwide Life Insurance Company and subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 3 to the consolidated financial statements, the Company adopted the American Institute of Certified Public Accountants’ Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts, in 2004.

/s/ KPMG LLP

Columbus, Ohio

March 1, 2007

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Income

(in millions)

	Years ended December 31,
	2006		2005		2004
Revenues:
Policy charges	$	1,132.6	$	1,055.1	$	1,025.2
Traditional life insurance and immediate annuity premiums		308.3		260.0		270.4
Net investment income		2,058.5		2,105.2		2,000.5
Net realized gains (losses) on investments, hedging instruments and hedged items		7.1		10.6		(36.4	)
Other income		0.2		2.2		9.8
Total revenues		3,506.7		3,433.1		3,269.5
Benefits and expenses:
Interest credited to policyholder account values		1,330.1		1,331.0		1,277.2
Life insurance and annuity benefits		450.3		377.5		369.2
Policyholder dividends on participating policies		25.6		33.1		36.2
Amortization of deferred policy acquisition costs		450.3		466.3		410.1
Interest expense on debt, primarily with Nationwide Financial Services, Inc. (NFS)		65.5		66.3		59.8
Other operating expenses		531.8		538.8		582.0
Total benefits and expenses		2,853.6		2,813.0		2,734.5
Income from continuing operations before federal income tax expense		653.1		620.1		535.0
Federal income tax expense		30.6		95.6		120.0
Income from continuing operations		622.5		524.5		415.0
Cumulative effect of adoption of accounting principle, net of taxes		—		—		(3.3	)
Net income	$	622.5	$	524.5	$	411.7

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Balance Sheets

(in millions, except per share amounts)

	December 31,
	2006		2005
Assets
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities (cost $25,197.2 in 2006; $26,658.9 in 2005)	$	25,275.4	$	27,198.1
Equity securities (cost $28.5 in 2006; $35.1 in 2005)		34.4		42.1
Mortgage loans on real estate, net		8,202.2		8,458.9
Real estate, net		54.8		84.9
Policy loans		639.2		604.7
Other long-term investments		598.9		641.5
Short-term investments, including amounts managed by a related party		1,722.0		1,596.6
Total investments		36,526.9		38,626.8
Cash		0.5		0.9
Accrued investment income		323.6		344.0
Deferred policy acquisition costs		3,758.0		3,597.9
Other assets		2,001.5		1,699.1
Assets held in separate accounts		67,351.9		62,689.8
Total assets	$	109,962.4	$	106,958.5
Liabilities and Shareholder’s Equity
Liabilities:
Future policy benefits and claims	$	34,409.4	$	35,941.1
Short-term debt		75.2		242.3
Long-term debt, payable to NFS		700.0		700.0
Other liabilities		2,988.1		3,130.1
Liabilities related to separate accounts		67,351.9		62,689.8
Total liabilities		105,524.6		102,703.3
Shareholder’s equity:
Common stock, $1 par value; authorized - 5.0 shares; issued and outstanding - 3.8 shares		3.8		3.8
Additional paid-in capital		274.4		274.4
Retained earnings		4,130.9		3,883.4
Accumulated other comprehensive income		28.7		93.6
Total shareholder’s equity		4,437.8		4,255.2
Total liabilities and shareholder’s equity	$	109,962.4	$	106,958.5

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Shareholder’s Equity

(in millions)

	Capital shares		Additional paid-in capital		Retained earnings			Accumlated other comprehensive income			Total shareholder’s equity
Balance as of December 31, 2003	$	3.8	$	271.3	$	3,257.2		$	467.3		$	3,999.6
Comprehensive income:
Net income		—		—		411.7			—			411.7
Other comprehensive loss, net of taxes		—		—		—			(73.5	)		(73.5	)
Total comprehensive income												338.2
Capital contributed by NFS		—		3.1		—			—			3.1
Dividends to NFS		—		—		(125.0	)		—			(125.0	)
Balance as of December 31, 2004		3.8		274.4		3,543.9			393.8			4,215.9
Comprehensive income:
Net income		—		—		524.5			—			524.5
Other comprehensive loss, net of taxes		—		—		—			(300.2	)		(300.2	)
Total comprehensive income												224.3
Dividends to NFS		—		—		(185.0	)		—			(185.0	)
Balance as of December 31, 2005		3.8		274.4		3,883.4			93.6			4,255.2
Comprehensive income:
Net income		—		—		622.5			—			622.5
Other comprehensive loss, net of taxes		—		—		—			(64.9	)		(64.9	)
Total comprehensive income												557.6
Dividends to NFS		—		—		(375.0	)		—			(375.0	)
Balance as of December 31, 2006	$	3.8	$	274.4	$	4,130.9		$	28.7		$	4,437.8

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Cash Flows

(in millions)

	Years ended December 31,
	2006			2005			2004
Cash flows from operating activities:
Net income	$	622.5		$	524.5		$	411.7
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses on investments, hedging instruments and hedged items		(7.1	)		(10.6	)		36.4
Interest credited to policyholder account values		1,330.1			1,331.0			1,277.2
Capitalization of deferred policy acquisition costs		(569.6	)		(460.5	)		(496.4	)
Amortization of deferred policy acquisition costs		450.3			466.3			410.1
Amortization and depreciation		46.6			65.6			73.0
(Increase) decrease in other assets		(298.0	)		591.0			(303.5	)
Increase (decrease) in policy and other liabilities		225.7			(511.1	)		324.4
Other, net		0.1			(114.9	)		1.5
Net cash provided by operating activities		1,800.6			1,881.3			1,734.4
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale		5,128.6			4,198.5			3,099.4
Proceeds from sale of securities available-for-sale		2,267.3			2,619.7			2,485.5
Proceeds from repayments or sales of mortgage loans on real estate		2,430.8			2,854.6			1,920.9
Cost of securities available-for-sale acquired		(5,658.9	)		(6,924.1	)		(6,291.4	)
Cost of mortgage loans on real estate originated or acquired		(2,180.4	)		(2,524.9	)		(2,169.9	)
Net (increase) decrease in short-term investments		(125.4	)		56.9			205.9
Collateral (paid) received - securities lending, net		(332.6	)		36.6			89.4
Other, net		52.1			121.6			(357.2	)
Net cash provided by (used in) investing activities		1,581.5			438.9			(1,017.4	)
Cash flows from financing activities:
Net (decrease) increase in short-term debt		(167.1	)		27.3			15.2
Capital contributed by NFS		—			—			3.1
Cash dividends paid to NFS		(375.0	)		(185.0	)		(125.0	)
Investment and universal life insurance product deposits		3,400.8			2,845.4			3,561.6
Investment and universal life insurance product withdrawals		(6,241.2	)		(5,022.5	)		(4,156.5	)
Net cash used in financing activities		(3,382.5	)		(2,334.8	)		(701.6	)
Net (decrease) increase in cash		(0.4	)		(14.6	)		15.4
Cash, beginning of period		0.9			15.5			0.1
Cash, end of period	$	0.5		$	0.9		$	15.5

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements

December 31, 2006, 2005 and 2004

(1) Nature of Operations  

Nationwide Life Insurance Company (NLIC, or collectively with its subsidiaries, the Company) was incorporated in 1929 and is an Ohio stock legal reserve life insurance company. The Company is a member of the Nationwide group of companies (Nationwide), which is comprised of Nationwide Mutual Insurance Company (NMIC) and all of its subsidiaries and affiliates.

All of the outstanding shares of NLIC’s common stock are owned by Nationwide Financial Services, Inc. (NFS), a holding company formed by Nationwide Corporation (Nationwide Corp.), a majority-owned subsidiary of NMIC.

Wholly-owned subsidiaries of NLIC as of December 31, 2006 include Nationwide Life and Annuity Insurance Company (NLAIC) and Nationwide Investment Services Corporation (NISC). NLAIC offers universal life insurance, variable universal life insurance, corporate-owned life insurance (COLI) and individual annuity contracts on a non-participating basis. NISC is a registered broker/dealer.

The Company is a leading provider of long-term savings and retirement products in the United States of America (U.S.). The Company develops and sells a diverse range of products including individual annuities, private and public sector group retirement plans, other investment products sold to institutions, life insurance and advisory services. The Company sells its products through a diverse distribution network. Unaffiliated entities that sell the Company’s products to their own customer bases include independent broker/dealers, financial institutions, wirehouse and regional firms, pension plan administrators, and life insurance specialists. Representatives of affiliates who market products directly to a customer base include Nationwide Retirement Solutions, Inc. (NRS), Nationwide Financial Network (NFN) producers and TBG Insurance Services Corporation d/b/a TBG Financial (TBG Financial) through its joint venture with MC Insurance Agency Services, LLC d/b/a Mullin Consulting. The Company also distributes products through the NMIC agency distribution force.

As of December 31, 2006 and 2005, the Company did not have a significant concentration of financial instruments in a single investee, industry or geographic region of the U.S. Also, the Company did not have a concentration of business transactions with a particular customer, lender, distribution source, market or geographic region of the U.S. in which business is conducted that makes it overly vulnerable to a single event which could cause a severe impact to the Company’s financial position.

(2) Summary of Significant Accounting Policies  

The significant accounting policies followed by the Company that materially affect financial reporting are summarized below. The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP).

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ significantly from those estimates.

The Company’s most significant estimates include those used to determine the following: the balance, recoverability and amortization of deferred policy acquisition (DAC) for investment and universal life insurance products; impairment losses on investments; valuation allowances for mortgage loans on real estate; the liability for future policy benefits and claims; and federal income tax provision. Although some variability is inherent in these estimates, the recorded amounts reflect management’s best estimates based on facts and circumstances as of the balance sheet date. Management believes the amounts provided are appropriate.

(a) Consolidation Policy

The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. Minority interest expense is included in other operating expenses in the consolidated statements of income, and minority interest is included in other liabilities on the consolidated balance sheets. All significant intercompany balances and transactions have been eliminated.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(b) Valuation of Investments, Investment Income and Related Gains and Losses

The Company is required to classify its fixed maturity securities and marketable equity securities as held-to-maturity, available-for-sale or trading. All fixed maturity and marketable equity securities are classified as available-for-sale. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of adjustments to DAC, future policy benefits and claims, and deferred federal income taxes reported as a separate component of accumulated other comprehensive income (AOCI) in shareholder’s equity. The adjustment to DAC represents the changes in amortization of DAC that would have been required as a charge or credit to operations had such unrealized amounts been realized and allocated to the product lines. The adjustment to future policy benefits and claims represents the increase in policy reserves from using a discount rate that would have been required had such unrealized amounts been realized and the proceeds reinvested at then current market interest rates, which were lower than the then current effective portfolio rate.

The fair value of fixed maturity and marketable equity securities is generally obtained from independent pricing services based on market quotations. For fixed maturity securities not priced by independent services (generally private placement securities and securities that do not trade regularly), an internally developed pricing model or “corporate pricing matrix” is most often used. The corporate pricing matrix is developed by obtaining spreads versus the U.S. Treasury yield for corporate securities with varying weighted average lives and bond ratings. The weighted average life and bond rating of a particular fixed maturity security to be priced using the corporate matrix are important inputs into the model and are used to determine a corresponding spread that is added to the U.S. Treasury yield to create an estimated market yield for that bond. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular fixed maturity security. Additionally, for valuing certain fixed maturity securities with complex cash flows such as certain mortgage-backed and asset-backed securities, a “structured product model” is used. The structured product model uses third party pricing tools. For securities for which quoted market prices are not available and for which the Company’s structured product model is not suitable for estimating fair values, fair values are determined using other modeling techniques, primarily a commercial software application utilized in valuing complex securitized investments with variable cash flows. As of December 31, 2006, 71% of the fair values of fixed maturity securities were obtained from independent pricing services, 20% from the Company’s pricing matrices and 9% from other sources compared to 72%, 20% and 8%, respectively, in 2005.

Management regularly reviews each investment in its fixed maturity and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments.

Under the Company’s accounting policy for equity securities and debt securities that can be contractually prepaid or otherwise settled in a way that may limit the Company’s ability to fully recover cost, an impairment is deemed to be other-than-temporary unless the Company has both the ability and intent to hold the investment until the security’s forecasted recovery and evidence exists indicating that recovery will occur in a reasonable period of time. Also, for such debt securities management estimates cash flows over the life of purchased beneficial interests in securitized financial assets. If management estimates that the fair value of its beneficial interest is not greater than or equal to its carrying value based on current information and events, and if there has been an adverse change in estimated cash flows since the last revised estimate (considering both timing and amount), then the Company recognizes an other-than-temporary impairment and writes down the purchased beneficial interest to fair value.

For other debt securities, an other-than-temporary impairment charge is taken when the Company does not have the ability and intent to hold the security until the forecasted recovery or if it is no longer probable that the Company will recover all amounts due under the contractual terms of the security. Many criteria are considered during this process including, but not limited to, the current fair value as compared to cost or amortized cost, as appropriate, of the security; the amount and length of time a security’s fair value has been below cost or amortized cost; specific credit issues and financial prospects related to the issuer; management’s intent to hold or dispose of the security; and current economic conditions.

Other-than-temporary impairment losses result in a permanent reduction to the cost basis of the underlying investment.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

For mortgage-backed securities, the Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. When estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. Any resulting adjustment is included in net investment income. All other investment income is recorded using the interest-method without anticipating the impact of prepayments.

The Company provides valuation allowances for impairments of mortgage loans on real estate based on a review by portfolio managers. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When management determines that a loan is impaired, a provision for loss is established equal to the difference between the carrying value and the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral dependent. In addition to the valuation allowance on specific loans, the Company maintains an unallocated allowance for probable losses inherent in the loan portfolio as of the balance sheet date, but not yet specifically identified by loan. Changes in the valuation allowance are recorded in net realized gains and losses on investments, hedging instruments and hedged items. Loans in foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans on real estate is included in net investment income in the period received.

The valuation allowance account for mortgage loans on real estate is maintained at a level believed adequate by management and reflects management’s best estimate of probable credit losses, including losses incurred at the balance sheet date but not yet identified by specific loan. Management’s periodic evaluation of the adequacy of the allowance for losses is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors.

The Company grants mainly commercial mortgage loans on real estate to customers throughout the U.S. As of December 31, 2006, the Company had a diversified portfolio with no more than 25.5% of the mortgage loan portfolio in any geographic region of the U.S. and no more than 2.6% with any one borrower, compared to 23.8% and 1.6%, respectively, as of December 31, 2005. As of December 31, 2006 and 2005, 33.4% and 32.0% of the carrying value of the Company’s commercial mortgage loan portfolio financed retail properties, respectively.

Real estate to be held and used is carried at cost less accumulated depreciation. Real estate designated as held for disposal is not depreciated and is carried at the lower of the carrying value at the time of such designation or fair value less cost to sell. Other long-term investments are carried on the equity method of accounting.

Impairment losses are recorded on investments in long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts.

Realized gains and losses on the sale of investments are determined on the basis of specific security identification. Changes in the Company’s mortgage loan valuation allowance and recognition of impairment losses for other-than-temporary declines in the fair values of applicable investments are included in realized gains and losses on investments, hedging instruments and hedged items.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(c) Derivative Instruments

Derivatives are carried at fair value. On the date the derivative contract is entered into, the Company designates the derivative as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge); a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); a foreign currency fair value or cash flow hedge (foreign currency hedge); or a non-hedge transaction. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for entering into various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used for hedging transactions are expected to be and, for ongoing hedging relationships, have been highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not, or is not expected to be, highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively.

The Company enters into interest rate swaps, cross-currency swaps or Euro futures to hedge the fair value of existing fixed rate assets and liabilities. In addition, the Company uses short U.S. Treasury future positions to hedge the fair value of bond and mortgage loan commitments. Typically, the Company is hedging the risk of changes in fair value attributable to changes in benchmark interest rates. Derivative instruments classified as fair value hedges are carried at fair value, with changes in fair value recorded in realized gains and losses on investments, hedging instruments and hedged items. Changes in the fair value of the hedged item that are attributable to the risk being hedged are also recorded in realized gains and losses on investments, hedging instruments and hedged items.

The Company may enter into “receive fixed/pay variable” interest rate swaps to hedge existing variable rate assets or to hedge cash flows from the anticipated purchase of investments. These derivative instruments are identified as cash flow hedges and are carried at fair value with the offset recorded in AOCI to the extent the hedging relationship is effective. The ineffective portion of the hedging relationship is recorded in realized gains and losses on investments, hedging instruments and hedged items. Gains and losses on derivative instruments that are initially recorded in AOCI are reclassified out of AOCI and recognized in earnings over the same period(s) that the hedged item affects earnings.

Accrued interest receivable or payable under interest rate and foreign currency swaps are recognized as an adjustment to net investment income or interest credited to policyholder account values consistent with the nature of the hedged item, except for interest rate swaps hedging the anticipated sale of investments where amounts receivable or payable under the swaps are recorded as realized gains and losses on investments, hedging instruments and hedged items, and except for interest rate swaps hedging the anticipated purchase of investments where amounts receivable or payable under the swaps are initially recorded in AOCI to the extent the hedging relationship is effective.

The Company periodically may enter into a derivative transaction that will not qualify for hedge accounting. The Company does not enter into speculative positions. Although these transactions do not qualify for hedge accounting, or have not been designated in hedging relationships by the Company, they are part of its overall risk management strategy. For example, the Company may sell credit default protection through a credit default swap. Although the credit default swap may not be effective in hedging specific investments, the income stream allows the Company to manage overall investment yields while exposing the Company to acceptable credit risk. The Company may enter into a cross-currency basis swap (pay a variable U.S. rate and receive a variable foreign-denominated rate) to eliminate the foreign currency exposure of a variable rate foreign-denominated liability. Although basis swaps may qualify for hedge accounting, the Company has chosen not to designate these derivatives as hedging instruments due to the difficulty in assessing and monitoring effectiveness for both sides of the basis swap. Derivative instruments that do not qualify for hedge accounting or are not designated as hedging instruments are carried at fair value, with changes in fair value recorded in realized gains and losses on investments, hedging instruments and hedged items.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(d) Revenues and Benefits

Investment and Universal Life Insurance Products: Investment products consist primarily of individual and group variable and fixed deferred annuities. Universal life insurance products include universal life insurance, variable universal life insurance, COLI, bank-owned life insurance (BOLI) and other interest-sensitive life insurance policies. Revenues for investment products and universal life insurance products consist of net investment income, asset fees, cost of insurance charges, administrative fees and surrender charges that have been earned and assessed against policy account balances during the period. The timing of revenue recognition as it relates to fees assessed on investment contracts and universal life contracts is determined based on the nature of such fees. Asset fees, cost of insurance charges and administrative fees are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Certain amounts assessed that represent compensation for services to be provided in future periods are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policy account values and benefits and claims incurred in the period in excess of related policy account values.

Traditional Life Insurance Products: Traditional life insurance products include those products with fixed and guaranteed premiums and benefits and primarily consist of whole life insurance, limited-payment life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are recognized as revenue when due. Benefits and expenses are associated with earned premiums so that profits are recognized over the life of the contract. This association is accomplished through the provision for future policy benefits and the deferral and amortization of policy acquisition costs.

(e) Deferred Policy Acquisition Costs for Investment and Universal Life Insurance Products

The Company has deferred certain costs of acquiring investment and universal life insurance products business, principally commissions, certain expenses of the policy issue and underwriting department, and certain variable sales expenses that relate to and vary with the production of new and renewal business. Investment products primarily consist of individual and group variable and fixed deferred annuities. Universal life insurance products include universal life insurance, variable universal life insurance, COLI and other interest-sensitive life insurance policies. DAC is subject to recoverability testing in the year of policy issuance and loss recognition testing at the end of each reporting period.

For investment and universal life insurance products, DAC is being amortized with interest over the lives of the policies in relation to the present value of estimated gross profits from projected interest margins, asset fees, cost of insurance charges, administration fees, surrender charges, and net realized gains and losses less policy benefits and policy maintenance expenses. The DAC asset related to investment products and universal life insurance products is adjusted to reflect the impact of unrealized gains and losses on fixed maturity securities available-for-sale, as described in Note 2(b).

The most significant assumptions that are involved in the estimation of future gross profits include future net separate account performance, surrender/lapse rates, interest margins and mortality. The Company’s long-term assumption for net separate account performance is currently 8% growth per year. If actual net separate account performance varies from the 8% assumption, the Company assumes different performance levels over the next three years such that the mean return equals the long-term assumption. This process is referred to as a reversion to the mean. The assumed net separate account return assumptions used in the DAC models are intended to reflect what is anticipated. However, based on historical returns of the Standard & Poor’s (S&P) 500 Index, and as part of its pre-set parameters, the Company’s reversion to the mean process generally limits returns to 0-15% during the three-year reversion period.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

Changes in assumptions can have a significant impact on the amount of DAC reported for investment products and universal life insurance products and their related amortization patterns. In the event actual experience differs from assumptions or future assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense, which could be significant. In general, increases in the estimated general and separate account returns result in increased expected future profitability and may lower the rate of DAC amortization, while increases in lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization.

Management evaluates the appropriateness of the individual variable annuity DAC balance within pre-set parameters. These parameters are designed to appropriately reflect the Company’s long-term expectations with respect to individual variable annuity contracts while also evaluating the potential impact of short-term experience on the Company’s recorded individual variable annuity DAC balance. If the recorded balance of individual variable annuity DAC falls outside of these parameters for a prescribed period of time, or if the recorded balance falls outside of these parameters and management determines it is not reasonably possible to get back within the parameters during this period of time, assumptions are required to be unlocked and DAC is recalculated using revised best estimate assumptions. If DAC assumptions were unlocked and revised, the Company would continue to use the reversion to the mean process.

For other investment and universal life insurance products, DAC is adjusted each quarter to reflect revised best estimate assumptions, including the use of a reversion to the mean methodology over the next three years as it relates to net separate account performance. Any resulting DAC true-up and unlocking adjustments are reflected currently in the consolidated statements of income.

(f) Separate Accounts

Separate account assets and liabilities represent contractholders’ funds, which have been segregated into accounts with specific investment objectives. Separate account assets are recorded at fair value based primarily on market quotations of the underlying securities. The investment income and gains or losses of these accounts accrue directly to the contractholders. The activity of the separate accounts is not reflected in the consolidated statements of income except for (1) the fees the Company receives, which are assessed on a daily or monthly basis and recognized as revenue when assessed and earned, and (2) the activity related to guaranteed contracts, which are riders to existing variable annuity contracts.

(g) Future Policy Benefits and Claims

The process of calculating reserve amounts for a life insurance organization involves the use of a number of assumptions, including those related to persistency (how long a contract stays with a company), mortality (the relative incidence of death in a given time), morbidity (the relative incidence of disability resulting from disease or physical impairment) and interest rates (the rates expected to be paid or received on financial instruments, including insurance or investment contracts).

The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and universal life and variable universal life insurance policies as the policy account balance, which represents participants’ net premiums and deposits plus investment performance and interest credited less applicable contract charges.

The Company’s liability for funding agreements to an unrelated third party trust equals the balance that accrues to the benefit of the contractholder, including interest credited. The funding agreements constitute insurance obligations and are considered annuity contracts under Ohio insurance laws.

The liability for future policy benefits and claims for traditional life insurance policies was calculated by the net level premium method using interest rates varying from 2.0% to 10.5% and estimates of mortality, morbidity, investment yields and withdrawals that were used or being experienced at the time the policies were issued.

The liability for future policy benefits for payout annuities was calculated using the present value of future benefits and maintenance costs discounted using interest rates varying generally from 3.0% to 13.0%.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(h) Participating Business

Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 8% in 2006 (10% in 2005 and 11% in 2004) of the Company’s life insurance in force, 50% of the number of life insurance policies in force in 2006 (52% in 2005 and 55% in 2004) and 5% of life insurance statutory premiums in 2006 (5% in 2005 and 7% in 2004). The provision for policyholder dividends was based on then current dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets.

(i) Federal Income Taxes

The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded in the consolidated financial statements. Any such change could significantly affect the amounts reported in the consolidated statements of income. Management has used best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Management evaluates the appropriateness of such reserves quarterly based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums and other rulings issued by the Internal Revenue Service (IRS) or the tax courts.

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under this method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized.

(j) Reinsurance Ceded

Reinsurance premiums ceded and reinsurance recoveries on benefits and claims incurred are deducted from the respective income and expense accounts. Assets and liabilities related to reinsurance ceded are reported in the consolidated balance sheets on a gross basis, separately from the related balances of the Company.

(k) Reclassification

Certain items in the 2005 and 2004 consolidated financial statements and related notes have been reclassified to conform to the current presentation.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(3) Recently Issued Accounting Standards  

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, Including an amendment of FASB Statements No. 115 (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value. In addition, SFAS 159 does not establish requirements for recognizing and measuring dividend income, interest income or interest expense, nor does it eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 157, Fair Value Measurements (SFAS 157), and SFAS No. 107, Disclosures about Fair Value of Financial Instruments. SFAS 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. The Company currently is evaluating the impact of adopting SFAS 159.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability on its balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS 158 also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end balance sheet is effective for fiscal years ending after December 15, 2008. If in the last quarter of the preceding fiscal year an employer enters into a transaction that results in a settlement or experiences an event that causes a curtailment of the plan, the related gain or loss pursuant to Statement 88 or 106 is required to be recognized in earnings that quarter. The adoption of SFAS 158 did not have a material impact on the Company’s financial position or results of operations.

In September 2006, the FASB issued SFAS 157. SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. SFAS 157 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

In September 2006, the United States Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 108 (SAB 108). SAB 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current-year financial statements. SAB 108 requires registrants to quantify misstatements using both the balance sheet and income-statement approaches and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB 108 does not change the SEC’s previous guidance in SAB No. 99 on evaluating the materiality of misstatements. A registrant applying the new guidance for the first time that identifies material errors in existence at the beginning of the first fiscal year ending after November 15, 2006, may correct those errors through a one-time cumulative effect adjustment to beginning-of-year retained earnings. The cumulative effect alternative is available only if the application of the new guidance results in a conclusion that a material error exists as of the beginning of the first fiscal year ending after November 15, 2006, and those misstatements were determined to be immaterial based on a proper application of the registrant’s previous method for quantifying misstatements. Because of the beginning-of-year recognition of the cumulative effect adjustment, misstatements occurring in the year of adoption cannot be included in that adjustment. SAB 108 requires the following disclosures if a cumulative effect adjustment is recorded: the nature and amount of each individual error included in the cumulative effect adjustment; when and how each error arose; and the fact that the errors had previously been considered immaterial. The cumulative effect adjustment is available only for prior-year uncorrected misstatements. The adjustment should not include amounts related to changes in accounting estimates. SAB 108 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109, Accounting for Income Taxes (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company plans to adopt FIN 48 effective January 1, 2007. FIN 48 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets (SFAS 156).SFAS 156 amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (SFAS 140). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. SFAS 156 permits, but does not require, the subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value. An entity that uses derivative instruments to mitigate the risks inherent in servicing assets and servicing liabilities is required to account for those derivative instruments at fair value. Under SFAS 156, an entity can elect subsequent fair value measurement to account for its separately recognized servicing assets and servicing liabilities. By electing that option, an entity may simplify its accounting because SFAS 156 permits income statement recognition of the potential offsetting changes in fair value of those servicing assets and servicing liabilities and derivative instruments in the same accounting period. SFAS 156 is effective for fiscal years beginning after September 15, 2006, with early adoption permitted. The Company plans to adopt SFAS 156 effective January 1, 2007. SFAS 156 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments (SFAS 155). SFAS 155 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133), and SFAS 140. SFAS 155 also resolves issues addressed in SFAS 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets. In summary, SFAS 155: (1) permits an entity to make an irrevocable election to measure any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation at fair value in its entirety, with changes in fair value recognized in earnings; (2) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (3) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (4) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (5) amends SFAS 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. Earlier adoption is permitted as of the beginning of an entity’s fiscal year, provided the entity has not yet issued financial statements, including financial statements for any interim period for that fiscal year. Provisions of SFAS 155 may be applied to instruments that an entity holds at the date of adoption on an instrument-by-instrument basis. The Company elected to early adopt SFAS 155 as of January 1, 2006. On the date of adoption, there was no impact to the Company’s financial position or results of operations.

In September 2005, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants (AICPA) issued Statement of Position (SOP) 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts (SOP 05-1). SOP 05-1 provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, issued by the FASB. SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights or coverages that occurs as a result of the exchange of a contract for a new contract, or by amendment, endorsement or rider to a contract, or by the election of a new feature or coverage within a contract. SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006, with earlier adoption encouraged. Retrospective application of SOP 05-1 to previously issued financial statements is not permitted. Initial application of SOP 05-1 is required as of the beginning of an entity’s fiscal year. The Company will adopt SOP 05-1 effective January 1, 2007. Although the Company is currently unable to quantify the impact of adoption, SOP 05-1 is not expected to have a material impact on the Company’s financial position and/or results of operations.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS 154), which replaces Accounting Principles Board Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS 154 applies to all voluntary changes in accounting principle as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, with earlier adoption permitted. The Company adopted SFAS 154 effective January 1, 2006. SFAS 154 has not had any impact on the Company’s financial position or results of operations since adoption.

In July 2003, the AICPA issued Statement of Position (SOP) 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts (SOP 03-1) to address many topics. The most significant topic affecting the Company was the accounting for contracts with guaranteed minimum death benefits (GMDB). SOP 03-1 requires companies to evaluate the significance of a GMDB to determine whether a contract should be accounted for as an investment or insurance contract. For contracts determined to be insurance contracts, companies are required to establish a reserve to recognize a portion of the assessment (revenue) that compensates the insurance company for benefits to be provided in future periods. The Company adopted SOP 03-1 effective January 1, 2004, which resulted in a $3.3 million charge, net of taxes, as the cumulative effect of adoption of this accounting principle.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes the components of cumulative effect adjustments recorded in the Company’s 2004 consolidated statements of income:

(in millions)	January 1, 2004
Increase in future policy benefits:
Ratchet interest crediting	$	(12.3	)
Secondary guarantees - life insurance		(2.4	)
GMDB claim reserves		(1.8	)
GMIB claim reserves		(1.0	)
Subtotal		(17.5	)
Adjustment to amortization of deferred policy acquisition costs related to above		12.4
Deferred federal income taxes		1.8
Cumulative effect of adoption of accounting principle, net of taxes	$	(3.3	)

(4) Fair Value of Financial Instruments  

The following disclosures summarize the carrying amount and estimated fair value of the Company’s financial instruments. Certain assets and liabilities are specifically excluded from the disclosure requirements for financial instruments.

The fair value of a financial instrument is defined as the amount at which the financial instrument could be bought or sold, or in the case of liabilities incurred or settled, in a current transaction between willing parties. In cases where quoted market prices are not available, fair value is based on the best information available in the circumstances. Such estimates of fair value should consider prices for similar assets or similar liabilities and the results of valuation techniques to the extent available in the circumstances. Examples of valuation techniques include the present value of estimated expected future cash flows using discount rates commensurate with the risks involved, option-pricing models, matrix pricing, option-adjusted spread models and fundamental analysis. Valuation techniques for measuring assets and liabilities must be consistent with the objective of measuring fair value and should incorporate assumptions that market participants would use in their estimates of values, future revenues and future expenses, including assumptions about interest rates, default, prepayment and volatility.

Many of the Company’s assets and liabilities subject to these disclosure requirements are not actively traded, requiring fair values to be estimated by management using matrix pricing, present value or other suitable valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Although fair value estimates are calculated using assumptions that management believes are appropriate, changes in assumptions could cause these estimates to vary materially. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in the immediate settlement of the instruments.

Although insurance contracts are specifically exempted from the disclosure requirements (other than those that are classified as investment contracts), the Company’s estimate of the fair values of policy reserves on life insurance contracts is provided to make the fair value disclosures more meaningful.

The tax ramifications of the related unrealized gains and losses can have a significant effect on the estimates of fair value and have not been considered in arriving at such estimates.

In estimating its fair value disclosures, the Company used the following methods and assumptions:

Fixed maturity and equity securities available-for-sale: See Note 2(b).

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

Mortgage loans on real estate, net: The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses based on interest rates currently being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. Estimated fair value is based on the present value of expected future cash flows discounted at the loan’s effective interest rate.

Policy loans, short-term investments and cash: The carrying amounts reported in the consolidated balance sheets for these instruments approximate their fair values.

Separate account assets and liabilities: The fair values of assets held in separate accounts are based on quoted market prices of the underlying securities. The fair values of liabilities related to separate accounts are the amounts payable on demand, net of certain surrender charges.

Investment contracts: The fair values of the Company’s liabilities under investment type contracts are based on one of two methods. For investment contracts without defined maturities, fair value is the amount payable on demand, net of certain surrender charges. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used in this analysis are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued.

Policy reserves on life insurance contracts: Included are disclosures for individual life insurance, COLI, BOLI, universal life insurance and supplementary contracts with life contingencies for which the estimated fair value is the amount payable on demand. Also included are disclosures for the Company’s limited payment policies for which the Company has used discounted cash flow analyses to estimate fair value, similar to those used for investment contracts with known maturities.

Short-term debt, collateral received – securities lending and collateral received – derivatives: The carrying amounts reported in the consolidated balance sheets for these instruments approximate their fair values.

Long-term debt, payable to NFS: The fair values for long-term debt are based on estimated market prices.

Commitments to extend credit: Commitments to extend credit have nominal fair values because of the short-term nature of such commitments.

Interest rate and cross-currency interest rate swaps:The fair values for interest rate and cross-currency interest rate swaps are calculated with pricing models using current rate assumptions.

Interest rate futures contracts: The fair values for futures contracts are based on quoted market prices.

Other derivatives: The fair values for other derivatives are based on credit event probabilities, equity option index levels and broker valuations.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes the carrying values and estimated fair values of financial instruments subject to disclosure requirements and policy reserves on life insurance contracts as of December 31:

	2006						2005
(in millions)	Carrying value			Estimated fair value			Carrying value			Estimated fair value
Assets
Investments:
Securities available-for-sale:
Fixed maturity securities	$	25,275.4		$	25,275.4		$	27,198.1		$	27,198.1
Equity securities		34.4			34.4			42.1			42.1
Mortgage loans on real estate, net		8,202.2			8,060.7			8,458.9			8,503.0
Policy loans		639.2			639.2			604.7			604.7
Short-term investments		1,722.0			1,722.0			1,596.6			1,596.6
Cash		0.5			0.5			0.9			0.9
Assets held in separate accounts		67,351.9			67,351.9			62,689.8			62,689.8
Liabilities
Investment contracts		(27,124.7	)		(25,455.2	)		(28,698.1	)		(26,607.2	)
Policy reserves on life insurance contracts		(7,284.7	)		(7,120.4	)		(7,243.0	)		(7,173.1	)
Short-term debt		(75.2	)		(75.2	)		(242.3	)		(242.3	)
Long-term debt, payable to NFS		(700.0	)		(809.3	)		(700.0	)		(822.8	)
Collateral received – securities lending and derivatives		(986.1	)		(986.1	)		(1,359.1	)		(1,359.1	)
Liabilities related to separate accounts		(67,351.9	)		(66,149.8	)		(62,689.8	)		(61,483.5	)
Derivative financial instruments
Interest rate swaps hedging assets		4.2			4.2			3.3			3.3
Cross-currency interest rate swaps		66.1			66.1			178.5			178.5
Interest rate futures contracts		(2.4	)		(2.4	)		1.6			1.6
Other derivatives		128.2			128.2			41.1			41.1

(5) Derivative Financial Instruments  

Qualitative Disclosure

Interest Rate Risk Management

The Company periodically purchases fixed rate investments to back variable rate liabilities. As a result, the Company can be exposed to interest rate risk due to the mismatch between variable rate liabilities and fixed rate assets. In an effort to mitigate this risk, the Company enters into various types of derivative instruments to minimize this mismatch, with fluctuations in the fair values of the derivatives offsetting changes in the fair values of the investments resulting from changes in interest rates. The Company principally uses pay fixed/receive variable interest rate swaps to manage this risk.

Under these interest rate swaps, the Company receives variable interest rate payments and makes fixed rate payments. The fixed interest paid on the swap offsets the fixed interest received on the investment, resulting in the Company receiving the variable interest payments on the swap, generally 3-month U.S. London Interbank Offered Rate (LIBOR), and the credit spread on the investment. The net receipt of a variable rate will then match the variable rate paid on the liability.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

As a result of entering into commercial mortgage loan and private placement commitments, the Company is exposed to changes in the fair value of such commitments due to changes in interest rates during the commitment period prior to the loans being funded. In an effort to manage this risk, the Company enters into short U.S. Treasury futures during the commitment period. With short U.S. Treasury futures, if interest rates rise/fall, the gains/losses on the futures will offset the change in fair value of the commitment attributable to the change in interest rates.

The Company periodically purchases variable rate investments (i.e., commercial mortgage loans and corporate bonds). As a result, the Company can be exposed to variability in cash flows and investment income due to changes in interest rates. Such variability poses risks to the Company when the assets are funded with fixed rate liabilities. In an effort to manage this risk, the Company may enter into receive fixed/pay variable interest rate swaps.

In using these interest rate swaps, the Company receives fixed interest rate payments and makes variable rate payments. The variable interest paid on the swap offsets the variable interest received on the investment, resulting in the Company receiving the fixed interest payments on the swap and the credit spread on the investment. The net receipt of a fixed rate will then match the fixed rate paid on the liability.

The Company manages interest rate risk at the segment level. Different segments may simultaneously hedge interest rate risks associated with owning fixed and variable rate investments considering the risk relevant to a particular segment.

Foreign Currency Risk Management

In conjunction with the Company’s medium-term note (MTN) program, the Company periodically issues both fixed and variable rate liabilities denominated in foreign currencies. As a result, the Company is exposed to changes in fair value of the liabilities due to changes in foreign currency exchange rates and related interest rates. In an effort to manage these risks, the Company enters into cross-currency interest rate swaps to convert these liabilities to a U.S. dollar rate.

The Company is exposed to changes in fair value of fixed rate investments denominated in a foreign currency due to changes in foreign currency exchange rates and related interest rates. In an effort to manage this risk, the Company uses cross-currency interest rate hedges to swap these asset characteristics to variable U.S. dollar rate instruments. Cross-currency interest rate swaps on assets are structured to pay a fixed rate, in the foreign currency, and receive a variable U.S. dollar rate, generally 3-month U.S. LIBOR. These derivative instruments are designated as a fair value hedge of the fixed rate foreign denominated asset.

For a variable rate foreign liability, the cross-currency interest rate swap is structured to receive a variable rate, in the foreign currency, and pay a variable U.S. dollar rate, generally 3-month U.S. LIBOR. As both sides of the cross-currency interest rate swap are variable, the derivative instrument is a basis swap. While the receive-side terms of the cross-currency interest rate swap will line up with the terms of the liability, the Company is not able to match the pay-side terms of the derivative to a specific asset. Therefore, these derivative instruments do not receive hedge accounting treatment.

Cross-currency interest rate swaps on variable rate investments are structured to pay a variable rate, in the foreign currency, and receive a fixed U.S. dollar rate. The terms of the foreign currency paid on the swap will exactly match the terms of the foreign currency received on the asset, thus eliminating currency risk. These derivative instruments are designated as a cash flow hedge.

Equity Market Risk Management

Asset fees calculated as a percentage of the separate account assets are a significant source of revenue to the Company. As of December 31, 2006, approximately 82% of separate account assets were invested in equity mutual funds (approximately 83% as of December 31, 2005). Gains and losses in the equity markets result in corresponding increases and decreases in the Company’s separate account assets and asset fee revenue. In addition, a decrease in separate account assets may decrease the Company’s expectations of future profit margins due to a decrease in asset fee revenue and/or an increase in guaranteed contract claims, which also may require the Company to accelerate the amortization of DAC.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The Company’s long-term assumption for net separate account returns is 8% annual growth. If equity markets were unchanged throughout a given year, the Company estimates that its net earnings per diluted share, calculated using current weighted average diluted shares outstanding, would be approximately $0.05 to $0.10 less than had the Company’s long-term assumption for net separate account returns been realized. This analysis assumes no other factors change and that an unlocking of DAC assumptions would not be required. However, as it does each quarter, the Company would evaluate its DAC balance and underlying assumptions to determine whether unlocking is appropriate. The Company can provide no assurance that the experience of flat equity market returns would not result in changes to other factors affecting profitability, including the possibility of unlocking of DAC assumptions.

Many of the Company’s individual variable annuity contracts offer GMDB features. A GMDB generally provides a benefit if the annuitant dies and the contract value is less than a specified amount, which may be based on the premiums paid less amounts withdrawn or contract value on a specified anniversary date. A decline in the stock market causing the contract value to fall below this specified amount, which varies from contract to contract based on the date the contract was entered into as well as the GMDB feature elected, will increase the net amount at risk, which is the GMDB in excess of the contract value. This could result in additional GMDB claims.

In an effort to mitigate this risk, the Company has implemented a GMDB economic hedging program for certain new and existing business. Prior to implementation of the GMDB hedging program in 2000, the Company managed this risk primarily by entering into reinsurance arrangements. The GMDB economic hedging program is designed to offset changes in the economic value of the GMDB obligation up to a return of the contractholder’s premium payments. However, the first 10% of GMDB claims are not hedged. Currently the program shorts S&P 500 Index futures, which provides an offset to changes in the value of the designated obligation. The futures are not designated as hedges and, therefore, hedge accounting is not applied. The Company’s economic evaluation of the GMDB obligation is not consistent with current accounting treatment of the GMDB obligation. Therefore, the hedging activity is likely to lead to earnings volatility. This volatility was negligible in 2006. As of December 31, 2006 and 2005, the net amount at risk was $562.4 million and $1.08 billion before reinsurance, respectively, and $119.0 million and $178.4 million net of reinsurance, respectively. As of December 31, 2006 and 2005, the Company’s reserve for GMDB claims was $29.3 million and $26.9 million, respectively. See Note 3 to the audited consolidated financial statements included in the F pages of this report for discussion of the impact of adopting a new accounting principle regarding GMDB reserves in 2004.

The Company also offers certain variable annuity products with a guaranteed minimum accumulation benefit (GMAB) rider. A GMAB provides the contractholder with a guaranteed return of premium, adjusted proportionately for withdrawals, after a specified period of time (5, 7 or 10 years) selected by the contractholder at the time of issuance of the variable annuity contract. In some cases, the contractholder also has the option, after a specified period of time, to drop the rider and continue the variable annuity contract without the GMAB. The design of the GMAB rider limits the risk to the Company in a variety of ways including asset allocation requirements, which serve to reduce the Company’s potential exposure to underlying fund performance risks. Specifically, the GMAB terms limit asset allocation by (1) requiring partial allocation of assets to a guaranteed term option (a fixed rate investment option) and excluding certain funds that are highly volatile or difficult to hedge or (2) requiring all assets be allocated to one of the approved asset allocation funds or models defined by the Company. A GMAB represents an embedded derivative in the variable annuity contract that is required to be separated from, and valued apart from, the host variable annuity contract. The embedded derivative is carried at fair value and reported in other future policy benefits and claims. The Company initially records an offset to the fair value of the embedded derivative on the balance sheet, which is amortized through the income statement over the term of the GMAB period of the contract. Subsequent changes in the fair value of the embedded derivative are recognized in earnings. The fair value of the GMAB embedded derivative is calculated based on actuarial assumptions related to the projected benefit cash flows incorporating numerous assumptions including, but not limited to, expectations of contractholder persistency, market returns, correlations of market returns and market return volatility.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The Company began selling contracts with the GMAB feature on May 1, 2003. Beginning October 1, 2003, the Company launched an enhanced version of the rider that offered increased equity exposure to the contractholder in return for a higher charge. The Company simultaneously began economically hedging the GMAB exposure for those risks that exceed a level it considered acceptable. The GMAB economic hedge consists of shorting interest rate futures and S&P 500 Index futures contracts and does not qualify for hedge accounting under current guidance. Quarterly, the Company purchases S&P 500 Index put options and over-the-counter basket put options, which are constructed in order to minimize the tracking error of the hedge and the GMAB liability. See Note 2(c) to the audited consolidated financial statements included in the F pages of this report for discussion of economic hedges. The objective of the GMAB economic hedge strategy is to manage the exposures with risk beyond a level considered acceptable to the Company. The Company is exposed to equity market risk related to the GMAB feature should the growth in the underlying investments, including any GTO investment, fail to reach the guaranteed return level. The GMAB embedded derivative is likely to create volatility in earnings; however, the economic hedging program provides substantial mitigation of this exposure. This volatility was negligible in 2006 and 2005. As of December 31, 2006 and 2005, the balance of the GMAB embedded derivative was $116.3 million and $67.9 million, respectively. The increase in the balance of the GMAB embedded derivative was driven by the value of new business sold during 2006.

Beginning in March 2005, the Company began offering a hybrid GMAB/guaranteed lifetime withdrawal benefit (GLWB) through its Capital Preservation Plus Lifetime Income (CPPLI) contract rider. This living benefit combines a GMAB feature in its first 5-10 years with a lifetime withdrawal benefit which begins upon the maturity of the GMAB and extends for the duration of the insured’s life. In the event that the insured’s contract value is exhausted through such withdrawals, the Company will continue to fund future withdrawals at a pre-defined level until the insured’s death. In some cases, the contract owner has the right to drop the GLWB portion of this rider or periodically reset the guaranteed withdrawal basis to a higher level. This benefit requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy as previously described above.

In March 2006, the Company added Lifetime Income (L.INC), a stand-alone GLWB, to compliment CPPLI in its product offerings. This rider is very similar to the hybrid benefit discussed above. L.INC provides for enhanced retirement income security via guaranteed accumulation rates and withdrawal rates that increase with age without the liquidity loss associated with annuitization. The lifetime withdrawal feature also is being economically hedged. Currently, the Company is using S&P 500 Index and U.S. Treasury futures to hedge exposure to declining equity and interest rate markets, respectively. Similar to GMDBs, the Company’s economic valuation of the lifetime income obligation is not consistent with the accounting treatment of the obligation. Therefore, hedging activity is likely to create volatility in earnings; however, the economic hedging program provides substantial mitigation of this exposure. This volatility was negligible in 2006.

Other Non-Hedging Derivatives

The Company periodically enters into basis swaps (receive one variable rate, pay another variable rate) to better match the cash flows received from the specific variable-rate investments with the variable rate paid on a group of liabilities. While the pay-side terms of the basis swap will line up with the terms of the asset, the Company is not able to match the receive-side terms of the derivative to a specific liability. Therefore, basis swaps do not receive hedge accounting treatment.

The Company sells credit default protection on selected debt instruments and combines the credit default swap with selected assets the Company owns to replicate a higher yielding bond. These selected assets may have sufficient duration for the related liability, but do not earn a sufficient credit spread. The combined credit default swap and investments provide cash flows with the duration and credit spread targeted by the Company. The credit default swaps do not qualify for hedge accounting treatment.

The Company also has purchased credit default protection on selected debt instruments exposed to short-term credit concerns, or because the combination of the corporate bond and purchased default protection provides sufficient spread and duration targeted by the Company. The purchased credit default protection does not qualify for hedge accounting treatment.

Quantitative Disclosure

Fair Value Hedges

During the years ended December 31, 2006, 2005 and 2004, a net gain of $2.9 million, a net gain of $4.1 million and a net loss of $11.3 million, respectively, were recognized in net realized gains and losses on investments, hedging instruments and hedged items. This represents the ineffective portion of the fair value hedging relationships. There were no gains or losses attributable to the portion of the derivative instruments’ changes in fair value excluded from the assessment of hedge effectiveness. There were also no gains or losses recognized in earnings as a result of hedged firm commitments no longer qualifying as fair value hedges.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

Cash Flow Hedges

For the years ended December 31, 2006, 2005 and 2004, the ineffective portion of cash flow hedges was a net loss of $1.5 million, a net gain of $3.1 million and a net gain of $1.0 million, respectively. There were no net gains or losses attributable to the portion of the derivative instruments’ changes in fair value excluded from the assessment of hedge effectiveness.

The Company anticipates reclassifying less than $0.8 million in net losses out of AOCI over the next 12-month period.

In general, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows associated with forecasted transactions, other than those relating to variable interest on existing financial instruments, is twelve months or less.

During 2006, the Company did not discontinue any cash flow hedges because the original forecasted transaction was no longer probable. Additionally, no amounts were reclassified from AOCI into earnings due to the probability that a forecasted transaction would not occur.

Other Derivative Instruments, Including Embedded Derivatives

Net realized gains and losses on investments, hedging instruments and hedged items for the years ended December 31, 2006, 2005 and 2004 included a net loss of $0.5 million, a net loss of $9.1 million and a net gain of $8.1 million, respectively, related to other derivative instruments, including embedded derivatives, not designated in hedging relationships. In addition, the Individual Investments segment included a loss of $11.4 million and a gain of $5.1 million for the years ended December 31, 2006 and 2005, respectively, related to other derivative instruments, including embedded derivatives, not designated in hedging relationships. For the years ended December 31, 2006, 2005 and 2004, net losses of $10.6 million, $80.7 million and $5.9 million, respectively, were recorded in net realized gains and losses on investments, hedging instruments and hedged items reflecting the change in fair value of cross-currency interest rate swaps hedging variable rate MTNs denominated in foreign currencies. Additional net gains of $14.1 million, $78.3 million and $5.9 million were recorded in net realized gains and losses on investments, hedging instruments and hedged items to reflect the change in spot rates of these foreign currency denominated obligations during the years ended December 31, 2006, 2005 and 2004, respectively.

The following table summarizes the notional amount of derivative financial instruments outstanding as of December 31:

(in millions)	2006		2005
Interest rate swaps:
Pay fixed/receive variable rate swaps hedging investments	$	1,930.5	$	2,040.1
Pay variable/receive fixed rate swaps hedging investments		60.4		79.2
Pay variable/receive fixed rate swaps hedging liabilities		—		550.0
Pay variable/receive variable rate swaps hedging liabilities		—		30.0
Pay fixed/receive variable rate swaps hedging liabilities		1,048.8		170.0
Other contracts hedging investments		—		10.0
Cross-currency interest rate swaps:
Hedging foreign currency denominated investments		452.9		439.8
Hedging foreign currency denominated liabilities		1,137.1		1,312.4
Credit default swaps and other non-hedging instruments		478.6		555.3
Equity option contracts		1,640.7		774.4
Interest rate futures contracts		214.2		120.5
Total	$	6,963.2	$	6,081.7

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(6) Investments  

The following table summarizes the amortized cost, gross unrealized gains and losses, and estimated fair values of securities available-for-sale as of the dates indicated:

(in millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
December 31, 2006:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	123.7	$	11.4	$	1.4	$	133.7
Agencies not backed by the full faith and credit of the U. S. Government		559.4		46.2		2.2		603.4
Obligations of states and political subdivisions		266.0		0.7		7.2		259.5
Debt securities issued by foreign governments		34.9		1.7		0.1		36.5
Corporate securities
Public		8,602.0		168.8		109.9		8,660.9
Private		6,015.4		128.8		71.4		6,072.8
Mortgage-backed securities – U.S. Government-backed		6,089.1		21.3		112.8		5,997.6
Asset-backed securities		3,506.7		43.3		39.0		3,511.0
Total fixed maturity securities		25,197.2		422.2		344.0		25,275.4
Equity securities		28.5		6.2		0.3		34.4
Total securities available-for-sale	$	25,225.7	$	428.4	$	344.3	$	25,309.8
December 31, 2005:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	163.8	$	14.3	$	0.6	$	177.5
Agencies not backed by the full faith and credit of the U. S. Government		849.7		61.2		6.2		904.7
Obligations of states and political subdivisions		300.3		2.4		3.8		298.9
Debt securities issued by foreign governments		41.4		2.7		0.1		44.0
Corporate securities
Public		9,520.0		233.7		106.2		9,647.5
Private		6,572.2		195.3		65.3		6,702.2
Mortgage-backed securities – U.S. Government-backed		6,048.3		18.1		107.6		5,958.8
Asset-backed securities		3,463.2		42.6		41.3		3,464.5
Total fixed maturity securities		26,958.9		570.3		331.1		27,198.1
Equity securities		35.1		7.0		—		42.1
Total securities available-for-sale	$	26,994.0	$	577.3	$	331.1	$	27,240.2

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The table below summarizes the amortized cost and estimated fair value of fixed maturity securities available-for-sale, by maturity, as of December 31, 2006. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(in millions)	Amortized cost		Estimated fair value
Fixed maturity securities available-for-sale:
Due in one year or less	$	1,476.3	$	1,488.2
Due after one year through five years		6,350.0		6,406.7
Due after five years through ten years		4,697.0		4,722.5
Due after ten years		3,078.1		3,149.4
Subtotal		15,601.4		15,766.8
Mortgage-backed securities – U.S. Government-backed		6,089.1		5,997.6
Asset-backed securities		3,506.7		3,511.0
Total	$	25,197.2	$	25,275.4

The following table presents the components of net unrealized gains on securities available-for-sale as of December 31:

(in millions)	2006			2005
Net unrealized gains, before adjustments and taxes	$	84.1		$	246.2
Adjustment to DAC		83.3			42.4
Adjustment to future policy benefits and claims		(83.1	)		(104.6	)
Deferred federal income taxes		(29.5	)		(64.4	)
Net unrealized gains	$	54.8		$	119.6

The following table presents an analysis of the net decrease in net unrealized gains on securities available-for-sale before adjustments and taxes for the years ended December 31:

(in millions)	2006			2005			2004
Fixed maturity securities	$	(161.0	)	$	(704.1	)	$	(153.3	)
Equity securities		(1.1	)		(3.4	)		(1.2	)
Net change	$	(162.1	)	$	(707.5	)	$	(154.5	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes by time the gross unrealized losses on securities available-for-sale in an unrealized loss position as of the dates indicated:

	Less than or equal to one year				More than one year				Total
(in millions)	Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses
December 31, 2006:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	49.8	$	0.8	$	17.7	$	0.6	$	67.5	$	1.4
Agencies not backed by the full faith and credit of the U.S. Government		31.7		0.1		120.3		2.1		152.0		2.2
Obligations of states and political subdivisions		82.4		1.0		156.3		6.2		238.7		7.2
Debt securities issued by foreign governments		12.8		0.1		—		—		12.8		0.1
Corporate securities
Public		2,445.0		24.3		2,964.6		85.6		5,409.6		109.9
Private		1,162.7		13.5		1,872.3		57.9		3,035.0		71.4
Mortgage-backed securities – U.S. Government-backed		767.8		6.4		3,809.5		106.4		4,577.3		112.8
Asset-backed securities		539.2		4.2		1,336.6		34.8		1,875.8		39.0
Total fixed maturity securities		5,091.4		50.4		10,277.3		293.6		15,368.7		344.0
Equity securities		0.1		—		3.4		0.3		3.5		0.3
Total	$	5,091.5	$	50.4	$	10,280.7	$	293.9	$	15,372.2	$	344.3
% of gross unrealized losses				15%				85%
December 31, 2005:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	25.1	$	0.5	$	3.7	$	0.1	$	28.8	$	0.6
Agencies not backed by the full faith and credit of the U.S. Government		297.0		4.9		42.2		1.3		339.2		6.2
Obligations of states and political subdivisions		150.7		3.0		29.7		0.8		180.4		3.8
Debt securities issued by foreign governments		7.4		0.1		—		—		7.4		0.1
Corporate securities
Public		3,210.4		63.2		1,088.2		43.0		4,298.6		106.2
Private		1,690.3		39.1		672.6		26.2		2,362.9		65.3
Mortgage-backed securities – U.S. Government-backed		4,062.8		88.6		632.6		19.0		4,695.4		107.6
Asset-backed securities		1,420.7		26.1		432.5		15.2		1,853.2		41.3
Total fixed maturity securities		10,864.4		225.5		2,901.5		105.6		13,765.9		331.1
Equity securities		3.9		—		—		—		3.9		—
Total	$	10,868.3	$	225.5	$	2,901.5	$	105.6	$	13,769.8	$	331.1
% of gross unrealized losses				68%				32%

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

Increases in unrealized losses more than one year are primarily due to changes in the interest rate environment. Those securities are not considered other-than-temporarily impaired because the decline in market value is attributed to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold those investments until recovery.

Proceeds from the sale of securities available-for-sale during 2006, 2005 and 2004 were $2.27 billion, $2.62 billion and $2.49 billion, respectively. During 2006, gross gains of $61.6 million ($71.9 million and $61.5 million in 2005 and 2004, respectively) and gross losses of $64.1 million ($22.6 million and $8.7 million in 2005 and 2004, respectively) were realized on those sales.

The Company had $5.1 million and $22.2 million of real estate investments as of December 31, 2006 and 2005, respectively, that were non-income producing during the preceding twelve months.

Real estate held for use is presented at cost less accumulated depreciation of $16.7 million as of December 31, 2006 ($21.5 million as of December 31, 2005). The carrying value of real estate held for sale totaled $42.1 million and $2.5 million as of December 31, 2006 and 2005, respectively.

The recorded investment of mortgage loans on real estate considered to be impaired was $17.5 million as of December 31, 2006 ($29.7 million as of December 31, 2005), for which the related valuation allowance was $12.3 million ($7.1 million as of December 31, 2005). Impaired mortgage loans with no valuation allowance are a result of collateral dependent loans where the fair value of the collateral is estimated to be greater than the recorded investment of the loan. During 2006, the average recorded investment in impaired mortgage loans on real estate was $3.5 million ($7.4 million in 2005). Interest income on those loans, which is recognized on a cash basis, totaled $1.9 million in 2006 ($2.1 million in 2005).

The following table summarizes activity in the valuation allowance account for mortgage loans on real estate for the years ended December 31:

(in millions)	2006		2005			2004
Allowance, beginning of period	$	31.1	$	33.3		$	29.1
Net additions (reductions) to allowance		3.2		(2.2	)		4.2
Allowance, end of period	$	34.3	$	31.1		$	33.3

The following table summarizes net realized gains (losses) on investments, hedging instruments and hedged items from continuing operations by source for the years ended December 31:

(in millions)	2006			2005			2004
Total realized gains on sales, net of hedging losses	$	88.8		$	75.6		$	65.0
Total realized losses on sales, net of hedging gains		(64.8	)		(22.9	)		(12.7	)
Total other-than-temporary and other investment impairments		(17.1	)		(36.8	)		(90.6	)
Credit default swaps		(1.1	)		(7.5	)		0.3
Periodic net coupon settlements on non-qualifying derivatives		1.9			1.1			6.6
Other derivatives		(0.6	)		1.1			(5.0	)
Net realized gains (losses) on investments, hedging instruments and hedged items	$	7.1		$	10.6		$	(36.4	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes net investment income from continuing operations by investment type for the years ended December 31:

(in millions)	2006			2005			2004
Securities available-for-sale:
Fixed maturity securities	$	1,419.2		$	1,466.2		$	1,461.9
Equity securities		2.6			2.4			1.2
Mortgage loans on real estate		535.4			577.3			577.4
Real estate		17.0			16.6			17.9
Short-term investments		47.3			18.8			8.9
Derivatives		(1.9	)		(31.0	)		(94.3	)
Other		105.8			112.2			78.4
Gross investment income		2,125.4			2,162.5			2,051.4
Less investment expenses		66.9			57.3			50.9
Net investment income	$	2,058.5		$	2,105.2		$	2,000.5

Fixed maturity securities with an amortized cost of $8.1 million and $16.4 million as of December 31, 2006 and 2005, respectively, were on deposit with various regulatory agencies as required by law.

As of December 31, 2006, the Company had not pledged any fixed maturity securities as collateral to various derivative counterparties compared to $8.5 million as of December 31, 2005.

As of December 31, 2006 and 2005, the Company had received $802.3 million and $1.10 billion, respectively, of cash collateral on securities lending and $171.0 million and $203.3 million, respectively, of cash for derivative collateral. As of December 31, 2006 and 2005, the Company had not received any non-cash collateral on securities. Both the cash and non-cash collateral amounts are included in short-term investments with a corresponding liability recorded in other liabilities. As of December 31, 2006 and 2005, the Company had loaned securities with a fair value of $778.6 million and $1.07 billion, respectively. The Company also held $12.8 million and $53.2 million of securities as off-balance sheet collateral on derivative transactions as of December 31, 2006 and 2005, respectively.

(7) Variable Annuity Contracts  

The Company issues traditional variable annuity contracts through its separate accounts, for which investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. The Company also issues non-traditional variable annuity contracts in which the Company provides various forms of guarantees to benefit the related contractholders. The Company provides four primary guarantee types under non-traditional variable annuity contracts: (1) GMDB; (2) GMAB; (3) guaranteed minimum income benefits (GMIB); and (4) a hybrid guarantee with GMAB and GLWB.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The GMDB provides a specified minimum return upon death. Many of these death benefits are spousal, whereby a death benefit will be paid upon death of the first spouse. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract and a second death benefit paid upon the survivor’s death. The Company has offered six primary GMDB types:

• Return of premium– provides the greater of account value or total deposits made to the contract less any partial withdrawals and assessments, which is referred to as “net premiums.” There are two variations of this benefit. In general, there is no lock in age for this benefit. However, for some contracts the GMDB reverts to the account value at a specified age, typically age 75.  

• Reset– provides the greater of a return of premium death benefit or the most recent five-year anniversary (prior to lock-in age) account value adjusted for withdrawals. For most contracts, this GMDB locks in at age 86 or 90, and for others the GMDB reverts to the account value at age 75, 85, 86 or 90.  

• Ratchet– provides the greater of a return of premium death benefit or the highest specified “anniversary” account value (prior to age 86) adjusted for withdrawals. Currently, there are three versions of ratchet, with the difference based on the definition of anniversary: monthaversary – evaluated monthly; annual – evaluated annually; and five-year – evaluated every fifth year.  

• Rollup– provides the greater of a return of premium death benefit or premiums adjusted for withdrawals accumulated at generally 5% simple interest up to the earlier of age 86 or 200% of adjusted premiums. There are two variations of this benefit. For certain contracts, this GMDB locks in at age 86, and for others the GMDB reverts to the account value at age 75.  

• Combo– provides the greater of annual ratchet death benefit or rollup death benefit. This benefit locks in at either age 81 or 86.  

• Earnings enhancement– provides an enhancement to the death benefit that is a specified percentage of the adjusted earnings accumulated on the contract at the date of death. There are two versions of this benefit: (1) the benefit expires at age 86, and a credit of 4% of account value is deposited into the contract; and (2) the benefit does not have an end age, but has a cap on the payout and is paid upon the first death in a spousal situation. Both benefits have age limitations. This benefit is paid in addition to any other death benefits paid under the contract.  

The GMAB, offered in the Company’s Capital Preservation Plus (CPP) contract rider, is a living benefit that provides the contractholder with a guaranteed return of premium, adjusted proportionately for withdrawals, after a specified period of time (5, 7 or 10 years) selected by the contractholder at the issuance of the variable annuity contract. In some cases, the contractholder also has the option, after a specified period of time, to drop the rider and continue the variable annuity contract without the GMAB. In general, the GMAB requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy.

The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB types are:

• Ratchet– provides an annuitization value equal to the greater of account value, net premiums or the highest one-year anniversary account value (prior to age 86) adjusted for withdrawals.  

• Rollup– provides an annuitization value equal to the greater of account value and premiums adjusted for withdrawals accumulated at 5% compound interest up to the earlier of age 86 or 200% of adjusted premiums.  

• Combo– provides an annuitization value equal to the greater of account value, ratchet GMIB benefit or rollup GMIB benefit.  

See Note 5 for a complete description of the Company’s hybrid GMAB/GLWB offered through its CPPLI contract rider. All GMAB contracts with the hybrid GMAB/GLWB rider are included with GMAB contracts in the following tables.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes the account values and net amount at risk, net of reinsurance, for variable annuity contracts with guarantees invested in both general and separate accounts as of December 31:

	2006					2005
(in millions)	Account value		Net amount at risk1		Wtd. avg. attained age	Account value		Net amount at risk1		Wtd. avg. attained age
GMDB:
Return of premium	$	9,231.4	$	17.1	60	$	9,260.6	$	32.5	60
Reset		17,587.0		24.2	63		16,932.1		58.7	63
Ratchet		13,481.0		16.0	66		11,020.6		28.9	65
Rollup		538.4		5.7	70		592.1		8.4	69
Combo		2,588.7		14.9	68		2,530.6		22.3	68
Subtotal		43,426.5		77.9	65		40,336.0		150.8	64
Earnings enhancement		477.8		41.1	61		418.5		27.6	61
Total - GMDB	$	43,904.3	$	119.0	65	$	40,754.5	$	178.4	63
GMAB2:
5 Year	$	2,131.1	$	0.1	N/A	$	1,041.8	$	0.5	N/A
7 Year		1,865.7		0.1	N/A		1,103.5		0.2	N/A
10 Year		784.0		—	N/A		595.5		0.1	N/A
Total - GMAB	$	4,780.8	$	0.2	N/A	$	2,740.8	$	0.8	N/A
GMIB3:
Ratchet	$	450.6	$	—	N/A	$	444.7	$	—	N/A
Rollup		1,187.1		—	N/A		1,189.3		—	N/A
Combo		0.5		—	N/A		0.5		—	N/A
Total - GMIB	$	1,638.2	$	—	N/A	$	1,634.5	$	—	N/A
GLWB:
Lifetime Income (L.INC)	$	993.8	$	—	N/A	$	—	$	—	N/A
Total - GLWB	$	993.8	$	—	N/A	$	—	$	—	N/A

¹   Net amount at risk is calculated on a seriatum basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit). As it relates to GMIB, net amount at risk is calculated as if all policies were eligible to annuitize immediately, although all GMIB options have a waiting period of at least 7 years from issuance, with the earliest annuitizations beginning in 2006.  

²   GMAB contracts with the hybrid GMAB/GLWB rider had account values of $2.95 billion and $939.1 million as of December 31, 2006 and 2005, respectively.  

³   The weighted average period remaining until expected annuitization is not meaningful and has not been presented because there is currently no material GMIB exposure.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table is a rollforward of the liabilities for guarantees on variable annuity contracts reflected in the Company’s general account for the years indicated:

(in millions)	GMDB			GMAB			GMIB		GLWB		Total
Balance as of December 31, 2004	$	23.6		$	20.6		$	0.8	$	—	$	45.0
Expense provision		32.8			—			0.4		—		33.2
Net claims paid		(29.5	)		—			—		—		(29.5	)
Value of new business sold		—			53.4			—		—		53.4
Change in fair value		—			(6.1	)		—		—		(6.1	)
Balance as of December 31, 2005		26.9			67.9			1.2		—		96.0
Expense provision		32.5			—			—		0.3		32.8
Net claims paid		(30.1	)		—			—		—		(30.1	)
Value of new business sold		—			95.2			—		—		95.2
Change in fair value		—			(46.8	)		—		—		(46.8	)
Balance as of December 31, 2006	$	29.3		$	116.3		$	1.2	$	0.3	$	147.1

The following table summarizes account balances of contracts with guarantees that were invested in separate accounts as of December 31:

(in millions)	2006		2005
Mutual funds:
Bond	$	4,467.3	$	3,857.3
Domestic equity		29,808.4		28,011.3
International equity		3,420.5		2,161.4
Total mutual funds		37,696.2		34,030.0
Money market funds		1,414.4		1,350.4
Total	$	39,110.6	$	35,380.4

The Company’s GMDB claim reserves are determined by estimating the expected value of death benefits on contracts that trigger a policy benefit and recognizing the excess ratably over the accumulation period based on total expected assessments. GMIB claim reserves are determined each period by estimating the expected value of annuitization benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total assessments. The Company regularly evaluates its GMDB and GMIB claim reserve estimates and adjusts the additional liability balances as appropriate, with a related charge or credit to other benefits and claims in the period of evaluation if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in calculating GMIB claim reserves are consistent with those used for calculating GMDB claim reserves. In addition, the calculation of GMIB claim reserves assumes benefit utilization ranges from a low of 3% when the contractholder’s annuitization value is at least 10% in the money to 100% utilization when the contractholder is 90% or more in the money.

In accordance with SOP 03-01, GLWB claim reserves for the L.INC rider are determined each period by estimating the expected value of withdrawal benefits in excess of the projected account balance and recognizing such potential additional liabilities of the Company as a benefit reserve expense ratably over the accumulation period. The Company periodically evaluates estimates used and adjusts the additional liability balance as appropriate, with a related charge or credit to life insurance and annuity benefits in the period of evaluation if actual experience or other evidence suggests that earlier assumptions should be revised.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following assumptions and methodology were used to determine the GMDB claim reserves as of December 31, 2006 and 2005:

• Data used was based on a combination of historical numbers and future projections involving 50 probabilistically generated economic scenarios  

• Mean gross equity performance – 8.1%  

• Equity volatility – 18.7%  

• Mortality – 100% of Annuity 2000 table  

• Asset fees – equivalent to mutual fund and product loads  

• Discount rate – 8.0%  

Lapse rate assumptions vary by duration as shown below:

Duration (years)	1	2	3	4	5	6	7	8	9	10+
Minimum	4.00%	5.00%	6.00%	7.00%	8.00%	9.50%	10.00%	11.00%	14.00%	14.00%
Maximum	4.00%	5.00%	6.00%	7.00%	35.00%	35.00%	23.00%	35.00%	35.00%	23.00%

GMABs and hybrid GMABs/GLWBs are considered embedded derivatives under current accounting guidance, resulting in the related liabilities being separated from the host insurance product and recognized at fair value, with changes in fair value reported in earnings, and therefore, excluded from the SOP 03-1 policy benefits.

(8) Short-Term Debt  

The following table summarizes short-term debt as of December 31:

(in millions)	2006		2005
$800.0 million commercial paper program	$	—	$	134.7
$350.0 million securities lending program facility		75.2		75.0
$250.0 million securities lending program facility		—		32.6
Total short-term debt	$	75.2	$	242.3

The Company has available as a source of funds a $1.00 billion revolving variable rate credit facility entered into by NFS, NLIC and NMIC with a group of national financial institutions. The facility provides for several and not joint liability with respect to any amount drawn by any party. The facility provides covenants, including, but not limited to, requirements that the Company maintain consolidated tangible net worth, as defined, in excess of $2.60 billion and that NLIC maintain statutory surplus, as defined, in excess of $1.67 billion. As of December 31, 2006, the Company and NLIC were in compliance with all covenants. The Company had no amounts outstanding under this agreement as of December 31, 2006 and 2005. NLIC also has an $800.0 million commercial paper program and is required to maintain an available credit facility equal to 50% of any amounts outstanding under the commercial paper program. Therefore, borrowing capacity under the aggregate $1.00 billion revolving credit facility is reduced by 50% of any amounts outstanding under the commercial paper program. NLIC had no commercial paper outstanding at December 31, 2006 and $134.7 million outstanding at December 31, 2005 at a weighted average effective interest rate of 4.22%.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

NLIC has entered into an agreement with its custodial bank to borrow against the cash collateral that is posted in connection with its securities lending program. This is an uncommitted facility contingent on the liquidity of the securities lending program. The borrowing facility was established to fund commercial mortgage loans that were originated with the intent of sale through securitization. The maximum amount available under the agreement is $350.0 million. The borrowing rate on this program is equal to one-month U.S. LIBOR. NLIC had $75.2 million and $75.0 million outstanding under this agreement as of December 31, 2006 and 2005, respectively. As of December 31, 2006, the Company had not provided any guarantees on such borrowings, either directly or indirectly.

The Company paid interest on short-term debt totaling $11.7 million, $11.5 million and $3.6 million in 2006, 2005 and 2004, respectively.

(9) Long-Term Debt  

The following table summarizes surplus notes payable to NFS as of December 31:

(in millions)	2006		2005
8.15% surplus note, due June 27, 2032	$	300.0	$	300.0
7.50% surplus note, due December 17, 2031		300.0		300.0
6.75% surplus note, due December 23, 2033		100.0		100.0
Total long-term debt	$	700.0	$	700.0

The Company made interest payments to NFS on surplus notes totaling $53.7 million, $53.7 million and $50.7 million in 2006, 2005 and 2004, respectively. Payments of interest and principal under the notes require the prior approval of the Ohio Department of Insurance (ODI).

(10) Federal Income Taxes  

Through September 30, 2002, the Company filed a consolidated federal income tax return with NMIC, the ultimate majority shareholder of NFS. Effective October 1, 2002, Nationwide Corporation’s ownership in NFS decreased from 79.8% to 63.0%. Therefore, NFS and its subsidiaries, including the Company, no longer qualify to be included in the NMIC consolidated federal income tax return. The members of the NMIC consolidated federal income tax return group participated in a tax sharing arrangement, which provided, in effect, for each member to bear essentially the same federal income tax liability as if separate tax returns were filed.

Under Internal Revenue Code (IRC) regulations, NFS and its subsidiaries cannot file a life/non-life consolidated federal income tax return until five full years following NFS’ departure from the NMIC consolidated federal income tax return group. Therefore, NFS and its direct non-life insurance company subsidiaries will file a consolidated federal income tax return; NLIC and NLAIC will file a consolidated federal income tax return; and the direct non-life insurance companies under NLIC will file separate federal income tax returns, until 2008, when NFS will become eligible to file a single life/non-life consolidated federal income tax return with all of its subsidiaries.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes the tax effects of temporary differences that give rise to significant components of the net deferred tax liability as of December 31:

(in millions)	2006			2005
Deferred tax assets:
Future policy benefits	$	607.8		$	630.5
Other		138.6			185.9
Gross deferred tax assets		746.4			816.4
Less valuation allowance		(7.0	)		(7.0	)
Deferred tax assets, net of valuation allowance		739.4			809.4
Deferred tax liabilities:
Deferred policy acquisition costs		1,022.2			970.5
Other		173.9			237.1
Gross deferred tax liabilities		1,196.1			1,207.6
Net deferred tax liability	$	456.7		$	398.2

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the total gross deferred tax assets will not be realized. Future taxable amounts or recovery of federal income taxes paid within the statutory carryback period can offset nearly all future deductible amounts. The valuation allowance was unchanged during 2006, 2005 and 2004.

The Company’s current federal income tax (asset) liability was $(12.6) million and $53.8 million as of December 31, 2006 and 2005, respectively.

Through June 2006, the Company’s federal income tax returns for tax years 2000-2002 were under IRS examination pursuant to a routine audit. In accordance with its regular practice, management established tax reserves representing its best estimate of additional amounts the Company could be required to pay if certain positions it had taken were challenged and ultimately denied by the IRS with respect to these tax years. These reserves are reviewed regularly and are adjusted as events occur that management believes impacts the Company’s liability for additional taxes, such as lapsing of applicable statutes of limitations; conclusion of tax audits or substantial agreement on the deductibility/non-deductibility of uncertain items; additional exposure based on current calculations; identification of new issues; release of administrative guidance; or rendering of a court decision affecting a particular tax issue. A significant component of the Company’s tax reserve as of December 31, 2005 was related to the separate account dividends received deduction (DRD).

In July 2006, the Company reached substantial agreement with the IRS on all open issues for tax years 2000-2002, including issues related to the DRD. Accordingly, the Company revised its estimate of amounts that may be due in connection with certain tax positions, including the DRD, for all open tax years. As a result of the revised estimate, $110.9 million of tax reserves were released into earnings during the quarter ended June 30, 2006.

During the third quarter of 2006, the Company recorded $7.8 million of net federal income tax expense adjustments primarily related to differences between the 2005 estimated tax liability and the amounts reported on the Company’s 2005 tax returns.

During the third quarter of 2005, the Company refined its separate account DRD estimation process. As a result, the Company identified and recorded additional federal income tax benefits and recoverables in the amount of $42.6 million related to all tax years (2000 – 2005) that were open at that time. In addition, the Company recorded $5.6 million of net benefit adjustments primarily related to differences between the 2004 estimated tax liability and the amounts reported on the Company’s 2004 tax returns.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes federal income tax expense attributable to income from continuing operations for the years ended December 31:

(in millions)	2006			2005		2004
Current	$	(61.8	)	$	90.6	$	181.5
Deferred		92.4			5.0		(61.5	)
Federal income tax expense	$	30.6		$	95.6	$	120.0

Total federal income tax expense differs from the amount computed by applying the U.S. federal income tax rate to income from continuing operations before federal income taxes as follows for the years ended December 31:

	2006					2005					2004
(dollars in millions)	Amount			%		Amount			%		Amount			%
Computed (expected) tax expense	$	228.6		35.0		$	217.0		35.0		$	187.2		35.0
Tax exempt interest and DRD		(67.5	)	(10.3	)		(107.5	)	(17.3	)		(47.2	)	(8.8	)
Reserve release		(110.9	)	(17.0	)		—		—			—		—
Other, net		(19.6	)	(3.0	)		(13.9	)	(2.3	)		(20.0	)	(3.8	)
Total	$	30.6		4.7		$	95.6		15.4		$	120.0		22.4

The Jobs Creation Act of 2004 suspends policyholder surplus accounts (PSA) during 2005 and 2006 and provides that direct and indirect distributions from the PSA during any taxable year beginning after 2004 and before 2007 be treated as zero. Because NLIC had the ability and intent to distribute this PSA balance to its shareholder during the noted period, the potential tax liability was eliminated as of December 31, 2004. The Jobs Creation Act of 2004 had no other significant impact on the Company’s tax position.

Total federal income taxes (refunded) paid were $(4.3) million, $182.2 million and $142.3 million during the years ended December 31, 2006, 2005 and 2004, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(11) Shareholders’ Equity, Regulatory Risk-Based Capital and Dividend Restrictions  

Regulatory Risk-Based Capital

The State of Ohio, where NLIC and NLAIC are domiciled, imposes minimum risk-based capital requirements that were developed by the NAIC. The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. NLIC and NLAIC each exceeded the minimum risk-based capital requirements for all periods presented herein.

Dividend Restrictions

State insurance laws generally restrict the ability of insurance companies to pay cash dividends and make other payments in excess of certain prescribed limitations without prior approval. The Company is limited in the amount of shareholder dividends it may pay without prior approval by the ODI. The statutory capital and surplus of NLIC as of December 31, 2006 and 2005 was $2.68 billion and $2.60 billion, respectively. The statutory net income of NLIC for the years ended December 31, 2006, 2005 and 2004 was $537.5 million, $462.5 million and $317.7 million, respectively. As of January 1, 2007, based on statutory financial results as of and for the year ended December 31, 2006, NLIC could pay dividends totaling $162.5 million without obtaining prior approval. As of March 1, 2007, NLIC will be able to pay dividends to NFS totaling $232.5 million upon providing prior notice to the ODI. On February 21, 2007, NLIC declared an ordinary dividend of $232.5 million and an extraordinary dividend of $242.5 million, both payable to NFS in March 2007. NLIC will provide notice to the ODI of the ordinary dividend and seek prior approval from the ODI of the extraordinary dividend before paying these dividends to NFS.

In addition, the payment of dividends by NLIC may also be subject to restrictions set forth in the insurance laws of the State of New York that limit the amount of statutory profits on NLIC’s participating policies (measured before dividends to policyholders) that can inure to the benefit of the Company and its shareholder.

The Company currently does not expect such regulatory requirements to impair its ability to pay future operating expenses, interest and shareholder dividends.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

Comprehensive Income

The Company’s comprehensive income includes net income and certain items that are reported directly within separate components of shareholder’s equity that are not recorded in net income (other comprehensive income or loss).

The following table summarizes the Company’s other comprehensive loss, before and after federal income tax benefit (expense), for the years ended December 31:

(in millions)	2006			2005			2004
Net unrealized losses on securities available-for-sale arising during the period:
Net unrealized losses before adjustments	$	(171.3	)	$	(687.2	)	$	(182.0	)
Net adjustment to deferred policy acquisition costs		40.9			187.0			99.1
Net adjustment to future policy benefits and claims		21.5			17.0			(11.0	)
Related federal income tax benefit		38.1			169.1			33.3
Net unrealized losses		(70.8	)		(314.1	)		(60.6	)
Reclassification adjustment for net realized losses (gains) on securities available-for-sale realized during the period:
Net unrealized losses (gains)		9.2			(20.3	)		27.5
Related federal income tax (benefit) expense		(3.2	)		7.1			(9.6	)
Net reclassification adjustment		6.0			(13.2	)		17.9
Other comprehensive loss on securities available-for-sale		(64.8	)		(327.3	)		(42.7	)
Accumulated net holding (losses) gains on cash flow hedges:
Unrealized holding (losses) gains		(0.2	)		41.7			(47.4	)
Related federal income tax benefit (expense)		0.1			(14.6	)		16.6
Other comprehensive (loss) income on cash flow hedges		(0.1	)		27.1			(30.8	)
Total other comprehensive loss	$	(64.9	)	$	(300.2	)	$	(73.5	)

Adjustments for net realized gains and losses on the ineffective portion of cash flow hedges were immaterial during the years ended December 31, 2006, 2005 and 2004.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(12) Employee Benefit Plans  

Defined Benefit Plans

The Company and certain affiliated companies participate in a qualified defined benefit pension plan sponsored by NMIC. This plan covers all employees of participating companies who have completed at least one year of service. Plan contributions are invested in a group annuity contract issued by NLIC. All participants are eligible for benefits based on an account balance feature. Participants last hired before 2002 are eligible for benefits based on the highest average annual salary of a specified number of consecutive years of the last ten years of service, if such benefits are of greater value than the account balance feature. The Company funds pension costs accrued for direct employees plus an allocation of pension costs accrued for employees of affiliates whose work benefits the Company. A separate non-qualified defined benefit pension plan sponsored by NMIC covers certain executives with at least one year of service. The Company’s portion of expense relating to these plans was $19.9 million, $16.6 million and $13.7 million for the years ended December 31, 2006, 2005 and 2004, respectively.

In addition to the NMIC pension plan, the Company and certain affiliated companies participate in life and health care defined benefit plans sponsored by NMIC for qualifying retirees. Postretirement life and health care benefits are contributory. The level of contribution required by a qualified retiree depends on the retiree’s years of service and date of hire. In general, postretirement benefits are available to full-time employees who are credited with 120 months of retiree life and health service. Postretirement health care benefit contributions are adjusted annually and contain cost-sharing features such as deductibles and coinsurance. In addition, there are caps on the Company’s portion of the per-participant cost of the postretirement health care benefits. The Company’s policy is to fund the cost of health care benefits in amounts determined at the discretion of management. Plan assets are invested primarily in group annuity contracts issued by NLIC. The Company’s portion of expense relating to these plans was immaterial for the years ended December 31, 2006, 2005 and 2004.

Defined Contribution Plans

NMIC sponsors a defined contribution retirement savings plan covering substantially all employees of the Company. Employees may make salary deferral contributions of up to 80%. Salary deferrals of up to 6% are subject to a 50% Company match. The Company’s expense for contributions to these plans was $6.6 million, $6.2 million and $5.8 million for the years ended December 31, 2006, 2005 and 2004, respectively.

(13) Related Party Transactions  

The Company has entered into significant, recurring transactions and agreements with NMIC, other affiliates and subsidiaries as a part of its ongoing operations. These include annuity and life insurance contracts, office space leases, and agreements related to reinsurance, cost sharing, administrative services, marketing, intercompany loans, intercompany repurchases, cash management services and software licensing. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, the number of full-time employees, commission expense and other methods agreed to by the participating companies and that are within industry guidelines and practices.

In addition, Nationwide Services Company, LLC (NSC), a subsidiary of NMIC, provides computer, telephone, mail, employee benefits administration and other services to NMIC and certain of its direct and indirect subsidiaries, including the Company, based on specified rates for units of service consumed. For the years ended December 31, 2006, 2005 and 2004, the Company made payments to NMIC and NSC totaling $261.7 million, $274.1 million and $194.6 million, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The Company has issued group annuity and life insurance contracts and performs administrative services for various employee benefit plans sponsored by NMIC or its affiliates. Total account values of these contracts were $5.48 billion and $6.39 billion as of December 31, 2006 and 2005, respectively. Total revenues from these contracts were $133.4 million, $136.2 million and $136.5 million for the years ended December 31, 2006, 2005 and 2004, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $110.7 million, $107.3 million and $107.9 million for the years ended December 31, 2006, 2005 and 2004, respectively. The terms of these contracts are consistent in all material respects with what the Company offers to unaffiliated parties who are similarly situated.

The Company leases office space from NMIC. For the years ended December 31, 2006, 2005 and 2004, the Company made lease payments to NMIC of $19.3 million, $18.7 million and $18.4 million, respectively.

NLIC has a reinsurance agreement with NMIC whereby all of NLIC’s accident and health business not ceded to unaffiliated reinsurers is ceded to NMIC on a modified coinsurance basis. Either party may terminate the agreement on January 1 of any year with prior notice. Under a modified coinsurance agreement, the ceding company retains invested assets, and investment earnings are paid to the reinsurer. Under the terms of NLIC’s agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder. The Company believes that the terms of the modified coinsurance agreements are consistent in all material respects with what the Company could have obtained with unaffiliated parties. Revenues ceded to NMIC for the years ended December 31, 2006, 2005 and 2004 were $430.8 million, $429.5 million and $335.6 million, respectively, while benefits, claims and expenses ceded during these years were $470.4 million, $398.8 million and $336.0 million, respectively.

Funds of NWD Investment Management, Inc. (NWD), an affiliate, are offered to the Company’s customers as investment options in certain of the Company’s products. As of December 31, 2006 and 2005, customer allocations to NWD funds totaled $18.26 billion and $15.70 billion, respectively. For the years ended December 31, 2006, 2005 and 2004, NWD paid the Company $64.4 million, $51.6 million and $44.5 million, respectively, for the distribution and servicing of these funds.

Under a marketing agreement with NMIC, NLIC makes payments to cover a portion of the agent marketing allowance that is paid to Nationwide agents. These costs cover product development and promotion, sales literature, rent and similar items. Payments under this agreement totaled $28.3 million, $26.5 million and $23.2 million for the years ended December 31, 2006, 2005 and 2004, respectively.

The Company also participates in intercompany repurchase agreements with affiliates whereby the seller transfers securities to the buyer at a stated value. Upon demand or after a stated period, the seller repurchases the securities at the original sales price plus interest. As of December 31, 2006 and 2005, the Company had no outstanding borrowings from affiliated entities under such agreements. During 2006, 2005 and 2004, the most the Company had outstanding at any given time was $191.5 million, $55.3 million and $227.7 million, respectively, and the amounts the Company incurred for interest expense on intercompany repurchase agreements during these years were immaterial.

The Company and various affiliates entered into agreements with Nationwide Cash Management Company (NCMC), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC for the benefit of the Company were $601.3 million and $390.9 million as of December 31, 2006 and 2005, respectively, and are included in short-term investments on the consolidated balance sheets.

Certain annuity products are sold through affiliated companies, which are also subsidiaries of NFS. Total commissions and fees paid to these affiliates for the years ended December 31, 2006, 2005 and 2004 were $58.1 million, $59.0 million and $63.1 million, respectively.

During the years ended December 31, 2006 and 2005, the Company did not purchase any fixed maturity securities available-for-sale from NFN compared to $829.9 million during 2004. NFN recorded gross realized gains of $23.4 million on such transactions during 2004.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

An affiliate of the Company is currently developing a browser-based policy administration and online brokerage software application for defined benefit plans. In connection with the development of this application, the Company made net payments, which were expensed, to that affiliate related to development totaling $6.9 million, $2.9 million and $2.6 million for the years ended December 31, 2006, 2005 and 2004, respectively.

Historically, the Company has retained funds for certain claim and benefit payments to customers in the form of interest-bearing accounts. During the year ended December 31, 2006, this practice was discontinued. Eligible participant balances totaling $224.7 million were transferred from the Company to interest-bearing deposit accounts of Nationwide Bank, a wholly-owned subsidiary of NFS, in exchange for cash plus a premium of $0.7 million payable to NFS for the value of the relationships acquired by Nationwide Bank.

Through September 30, 2002, the Company filed a consolidated federal income tax return with NMIC, as discussed in more detail in Note 10. Effective October 1, 2002, NLIC began filing a consolidated federal income tax return with NLAIC. Total payments (from) to NMIC were $(15.3) million, $45.0 million and $37.4 million in the years ended December 31, 2006, 2005 and 2004, respectively. These payments related to tax years prior to deconsolidation.

In 2006, 2005 and 2004, NLIC paid dividends to NFS totaling $375.0 million, $185.0 million and $125.0 million, respectively.

(14) Contingencies  

Legal Matters

The Company is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on the Company’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial results in a particular quarterly or annual period.

In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits relating to life insurance and annuity pricing and sales practices. A number of these lawsuits have resulted in substantial jury awards or settlements against life insurers other than the Company.

The financial services industry, including mutual fund, variable annuity, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the National Association of Securities Dealers and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. The Company has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by the Company. The Company has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by the Company and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

In addition, state and federal regulators have commenced investigations or other proceedings relating to compensation and bidding arrangements and possible anti-competitive activities between insurance producers and brokers and issuers of insurance products, and unsuitable sales and replacements by producers on behalf of the issuer. Also under investigation are compensation and revenue sharing arrangements between the issuers of variable insurance contracts and mutual funds or their affiliates, the use of side agreements and finite reinsurance agreements, funding agreements issued to back MTN programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives. Related investigations and proceedings may be commenced in the future. The Company and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies, state securities law regulators and state attorneys general for information relating to certain of these investigations, including those relating to compensation, revenue sharing and bidding arrangements, anti-competitive activities, unsuitable sales or replacement practices, the use of side agreements and finite reinsurance agreements, and funding agreements backing the NLIC MTN program. The Company is cooperating with regulators in connection with these inquiries and will cooperate with NMIC in responding to these inquiries to the extent that any inquiries encompass NMIC’s operations.

These proceedings are expected to continue in the future and could result in legal precedents and new industry-wide legislation, rules and regulations that could significantly affect the financial services industry, including life insurance and annuity companies. These proceedings also could affect the outcome of one or more of the Company’s litigation matters. There can be no assurance that any such litigation or regulatory actions will not have a material adverse effect on the Company in the future.

On November 15, 2006, NFS, NLIC and NRS were named in a lawsuit filed in the Untied States District Court for the Southern District of Ohio entitled Kevin Beary, Sheriff of Orange County, Florida, In His Official Capacity, Individually and On Behalf of All Others Similarly Situated v. Nationwide Life Insurance Co., Nationwide Retirement Solutions, Inc. and Nationwide Financial Services, Inc. The plaintiff seeks to represent a class of all sponsors of 457(b) deferred compensation plans in the United States that had variable annuity contracts with the defendants at any time during the class period, or in the alternative, all sponsors of 457(b) deferred compensation plans in Florida that had variable annuity contracts with the defendants during the class period. The Class Period is from January 1, 1996 until the Class Notice is provided. The plaintiff alleges that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint seeks an accounting, a declaratory judgment, a permanent injunction and disgorgement or restitution of the service fee payments allegedly received by the defendants, including interest. On January 25, 2007, NFS, NLIC and NRS filed a motion to dismiss. NFS, NLIC and NRS intend to defend this lawsuit vigorously.

On February 11, 2005, NLIC was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company. The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the Court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The Court certified a class consisting of all residents of the United States and the Virgin Islands who, during the Class Period, paid premiums on a modal basis to NLIC for term life insurance policies issued by NLIC during the Class Period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are NLIC; any parent, subsidiary or affiliate of NLIC; all employees, officers and directors of NLIC; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The Class Period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. NLIC continues to defend this lawsuit vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

On April 13, 2004, NLIC was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company. NLIC removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation. In response, on May 13, 2005, the plaintiff filed a First Amended Complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The First Amended Complaint purports to disclaim, with respect to market timing or stale price trading in NLIC’s annuities sub-accounts, any allegation based on NLIC’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of NLIC annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if NLIC is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons who, prior to NLIC’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The First Amended Complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted NLIC’s motion to dismiss the plaintiff’s complaint. On November 29, 2006, the plaintiff filed its appellate brief with the Fourth Circuit Court of Appeals contesting the District Court’s dismissal. NLIC continues to defend this lawsuit vigorously.

On January 21, 2004, NLIC, Nationwide Life Insurance Company of America, NLAIC, NFS and Nationwide Financial Corporation (collectively referred to as the Companies) were named in a lawsuit filed in the United States District Court for the Northern District of Mississippi entitled United Investors Life Insurance Company v. Nationwide Life Insurance Company and/or Nationwide Life Insurance Company of America and/or Nationwide Life and Annuity Insurance Company and/or Nationwide Life and Annuity Company of America and/or Nationwide Financial Services, Inc. and/or Nationwide Financial Corporation, and John Does A-Z. In its complaint, the plaintiff alleges that the Companies and/or their affiliated life insurance companies caused the replacement of variable insurance policies and other financial products issued by United Investors with policies issued by the Companies. The plaintiff raises claims for (1) violations of the Federal Lanham Act, and common law unfair competition and defamation; (2) tortious interference with the plaintiff’s contractual relationship with Waddell & Reed, Inc. and/or its affiliates, Waddell & Reed Financial, Inc., Waddell & Reed Financial Services, Inc. and W&R Insurance Agency, Inc., or with the plaintiff’s contractual relationships with its variable policyholders; (3) civil conspiracy; and (4) breach of fiduciary duty. The complaint seeks compensatory damages, punitive damages, pre- and post-judgment interest, a full accounting, a constructive trust and costs and disbursements, including attorneys’ fees. On December 30, 2005, the Companies filed a motion for summary judgment. On June 15, 2006, the District Court granted the Companies’ motion for summary judgment on all grounds and dismissed the plaintiff’s entire case with prejudice. The plaintiff appealed the District Court’s decision to the Fifth Circuit Court of Appeals. The appeal has been fully briefed, and the Companies are awaiting a decision. The Companies continue to defend this lawsuit vigorously.

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. Currently, the plaintiffs’ fifth amended complaint, filed March 21, 2006, purports to represent a class of qualified retirement plans under ERISA that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NLIC and NFS, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class. NFS’ and NLIC’s motion to dismiss the plaintiffs’ fifth amended complaint is currently pending before the court. NFS and NLIC continue to defend this lawsuit vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

Tax Matters

The Company’s federal income tax returns are routinely audited by the IRS. Management has established tax reserves representing its best estimate of additional amounts it may be required to pay if certain tax positions it has taken are challenged and ultimately denied by the IRS. These reserves are reviewed regularly and are adjusted as events occur that management believes impact its liability for additional taxes, such as lapsing of applicable statutes of limitations, conclusion of tax audits or substantial agreement on the deductibility/non-deductibility of uncertain items, additional exposure based on current calculations, identification of new issues, release of administrative guidance or rendering of a court decision affecting a particular tax issue. Management believes its tax reserves reasonably provide for potential assessments that may result from IRS examinations and other tax-related matters for all open tax years.

(15) Guarantees  

Since 2001, the Company has sold $626.1 million of credit enhanced equity interests in Low-Income-Housing Tax Credit Funds (Tax Credit Funds) to unrelated third parties. The Company has guaranteed cumulative after-tax yields to the third party investors ranging from 3.75% to 5.25% over periods ending between 2002 and 2022. As of December 31, 2006, the Company held guarantee reserves totaling $6.3 million on these transactions. These guarantees are in effect for periods of approximately 15 years each. The Tax Credit Funds provide a stream of tax benefits to the investors that will generate a yield and return of capital. If the tax benefits are not sufficient to provide these cumulative after-tax yields, then the Company must fund any shortfall, which is mitigated by stabilization collateral set aside by the Company at the inception of the transactions. The maximum amount of undiscounted future payments that the Company could be required to pay the investors under the terms of the guarantees is $1.36 billion. The Company does not anticipate making any payments related to these guarantees.

At the time of the sales, $5.9 million of net sale proceeds were set aside as collateral for certain properties owned by the Tax Credit Funds that had not met all of the criteria necessary to generate tax credits. Such criteria include completion of construction and the leasing of each unit to a qualified tenant, among others. Properties meeting the necessary criteria are considered to have “stabilized.” The properties are evaluated regularly, and the collateral is released when stabilized. During 2006 and 2005, no stabilization collateral amounts were released into income. As of December 31, 2006 and 2005, $2.2 million of stabilization collateral was unrecognized and recorded as a reserve, respectively.

To the extent there are cash deficits in any specific property owned by the Tax Credit Funds, property reserves, property operating guarantees and reserves held by the Tax Credit Funds are exhausted before the Company is required to perform under its guarantees. To the extent the Company is ever required to perform under its guarantees, it may recover any such funding out of the cash flow distributed from the sale of the underlying properties of the Tax Credit Funds. This cash flow distribution would be paid to the Company prior to any cash flow distributions to unrelated third party investors.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(16) Variable Interest Entities  

As of December 31, 2006 and 2005, the Company had relationships with 18 and 19 variable interest entities (VIEs), respectively, each of which the Company was the primary beneficiary. As of December 31, 2006, each VIE was a conduit that assists the Company in structured products transactions involving the sale of Tax Credit Funds to third party investors for which the Company provides guaranteed returns (see Note 15). The results of operations and financial position of these VIEs are included along with corresponding minority interest liabilities in the accompanying consolidated financial statements.

VIE net assets were $445.5 million and $440.6 million as of December 31, 2006 and December 31, 2005, respectively. The following table summarizes the components of net assets as of December 31:

(in millions)	2006			2005
Mortgage loans on real estate	$	—		$	31.5
Other long-term investments		432.5			478.6
Short-term investments		33.7			42.3
Other assets		37.8			41.3
Short-term debt		—			(32.6	)
Other liabilities		(58.5	)		(120.5	)

The Company’s total loss exposure from VIEs of which the Company is the primary beneficiary was immaterial as of December 31, 2006 and 2005 (except for the impact of guarantees disclosed in Note 15).

In addition to the VIEs described above, the Company holds variable interests, in the form of limited partnerships or similar investments, in Tax Credit Funds of which the Company is not the primary beneficiary. These investments have been held by the Company for periods of 1 to 10 years and allow the Company to utilize certain tax credits and realize other tax benefits from affordable housing projects. The Company also has certain investments in other securitization transactions that qualify as VIEs, but of which the Company is not the primary beneficiary. The total exposure to loss on these VIEs was $68.9 million and $53.9 million as of December 31, 2006 and 2005, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(17) Segment Information  

Management views the Company’s business primarily based on its underlying products and uses this basis to define its four reportable segments: Individual Investments, Retirement Plans, Individual Protection, and Corporate and Other.

The primary segment profitability measure that management uses is pre-tax operating earnings, which is calculated by adjusting income from continuing operations before federal income taxes to exclude (1) net realized gains and losses on investments, hedging instruments and hedged items, except for periodic net coupon settlements on non-qualifying derivatives and net realized gains and losses related to securitizations and (2) the adjustment to amortization of DAC related to net realized gains and losses.

Individual Investments

The Individual Investments segment consists of individual The BEST of AMERICA^® and private label deferred variable annuity products, deferred fixed annuity products, income products and advisory services. Individual deferred annuity contracts provide the customer with tax-deferred accumulation of savings and flexible payout options including lump sum, systematic withdrawal or a stream of payments for life. In addition, individual variable annuity contracts provide the customer with access to a wide range of investment options and asset protection features, while individual fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods.

Retirement Plans

The Retirement Plans segment is comprised of the Company’s private and public sector retirement plans business. The private sector primarily includes IRC Section 401(k) business, and the public sector primarily includes IRC Section 457 and Section 401(a) business, both in the form of full-service arrangements that provide plan administration and fixed and variable group annuities as well as administration-only business.

Individual Protection

The Individual Protection segment consists of investment life insurance products, including individual variable, COLI and BOLI products; traditional life insurance products; and universal life insurance products. Life insurance products provide a death benefit and generally allow the customer to build cash value on a tax-advantaged basis.

Corporate and Other

The Corporate and Other segment includes certain structured products business; the MTN program; net investment income and certain expenses not allocated to other segments; periodic net coupon settlements on non-qualifying derivatives; interest expense on debt; revenue and expenses of the Company’s non-insurance subsidiaries not reported in other segments; and net realized gains and losses related to securitizations.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

The following table summarizes the Company’s business segment operating results for the years ended December 31:

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2006
Revenues:
Policy charges	$	581.7	$	160.2	$	390.7	$	—		$	1,132.6
Traditional life insurance and immediate annuity premiums		142.5		—		165.8		—			308.3
Net investment income		739.5		636.0		328.2		354.8			2,058.5
Net realized gains on investments, hedging instruments and hedged items1		—		—		—		1.0			1.0
Other income		2.6		—		0.3		3.4			6.3
Total revenues		1,466.3		796.2		885.0		359.2			3,506.7
Benefits and expenses:
Interest credited to policyholder account values		501.7		440.5		179.2		208.7			1,330.1
Life insurance and annuity benefits		202.8		—		247.5		—			450.3
Policyholder dividends on participating policies		—		—		25.6		—			25.6
Amortization of DAC		352.7		37.9		69.6		(9.9	)		450.3
Interest expense on debt		—		—		—		65.5			65.5
Other operating expenses		206.3		179.1		142.4		4.0			531.8
Total benefits and expenses		1,263.5		657.5		664.3		268.3			2,853.6
Income from continuing operations before federal income tax expense		202.8		138.7		220.7		90.9		$	653.1
Net realized gains on investments, hedging instruments and hedged items1		—		—		—		(1.0	)
Adjustment to amortization related to net realized gains and losses		—		—		—		(9.9	)
Pre-tax operating earnings	$	202.8	$	138.7	$	220.7	$	80.0
Assets as of period end	$	55,404.6	$	28,817.2	$	16,948.8	$	8,791.8		$	109,962.4

¹   Excluding periodic net coupon settlements on non-qualifying derivatives and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2005
Revenues:
Policy charges	$	532.4	$	145.0	$	377.7	$	—		$	1,055.1
Traditional life insurance and immediate annuity premiums		96.7		—		163.3		—			260.0
Net investment income		822.4		642.9		332.8		307.1			2,105.2
Net realized gains on investments, hedging instruments and hedged items1		—		—		—		9.5			9.5
Other income		1.3		0.2		—		1.8			3.3
Total revenues		1,452.8		788.1		873.8		318.4			3,433.1
Benefits and expenses:
Interest credited to policyholder account values		557.7		444.8		182.4		146.1			1,331.0
Life insurance and annuity benefits		149.1		—		228.4		—			377.5
Policyholder dividends on participating policies		—		—		33.1		—			33.1
Amortization of DAC		329.1		47.2		89.0		1.0			466.3
Interest expense on debt		—		—		—		66.3			66.3
Other operating expenses		193.1		181.8		148.1		15.8			538.8
Total benefits and expenses		1,229.0		673.8		681.0		229.2			2,813.0
Income from continuing operations before federal income tax expense		223.8		114.3		192.8		89.2		$	620.1
Net realized gains on investments, hedging instruments and hedged items1		—		—		—		(9.5	)
Adjustment to amortization of DAC related to net realized gains and losses		—		—		—		1.0
Pre-tax operating earnings	$	223.8	$	114.3	$	192.8	$	80.7
Assets as of period end	$	52,929.2	$	29,987.2	$	14,728.7	$	9,313.4		$	106,958.5

¹   Excluding periodic net coupon settlements on non-qualifying derivatives and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2006, 2005 and 2004

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2004
Revenues:
Policy charges	$	503.6	$	157.0	$	364.6	$	—		$	1,025.2
Traditional life insurance and immediate annuity premiums		87.5		—		182.9		—			270.4
Net investment income		824.8		627.9		327.2		220.6			2,000.5
Net realized losses on investments, hedging instruments and hedged items1		—		—		—		(43.0	)		(43.0	)
Other income		0.6		—		—		15.8			16.4
Total revenues		1,416.5		784.9		874.7		193.4			3,269.5
Benefits and expenses:
Interest credited to policyholder account values		573.5		435.5		181.5		86.7			1,277.2
Life insurance and annuity benefits		136.9		—		232.3		—			369.2
Policyholder dividends on participating policies		—		—		36.2		—			36.2
Amortization of DAC		276.1		39.6		94.4		—			410.1
Interest expense on debt		—		—		—		59.8			59.8
Other operating expenses		210.0		184.5		159.7		27.8			582.0
Total benefits and expenses		1,196.5		659.6		704.1		174.3			2,734.5
Income from continuing operations before federal income tax expense		220.0		125.3		170.6		19.1		$	535.0
Net realized losses on investments, hedging instruments and hedged items1		—		—		—		43.0
Pre-tax operating earnings	$	220.0	$	125.3	$	170.6	$	62.1
Assets as of period end	$	52,642.5	$	29,668.7	$	12,932.4	$	10,714.3		$	105,957.9

¹   Excluding periodic net coupon settlements on non-qualifying derivatives and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule I          Consolidated Summary of Investments – Other Than Investments in Related Parties

As of December 31, 2006 (in millions)

Column A	Column B		Column C		Column D
Type of investment	Cost		Market value		Amount at which shown in the consolidated balance sheet
Fixed maturity securities available-for-sale:
Bonds:
U.S. Treasury securities and obligations of U.S. Government corporations	$	123.7	$	133.7	$	133.7
Agencies not backed by the full faith and credit of the U.S. Government		559.4		603.4		603.4
Obligations of states and political subdivisions		266.0		259.5		259.5
Foreign governments		34.9		36.5		36.5
Public utilities		1,541.9		1,543.5		1,543.5
All other corporate		22,671.3		22,698.8		22,698.8
Total fixed maturity securities available-for-sale		25,197.2		25,275.4		25,275.4
Equity securities available-for-sale:
Common stocks:
Banks, trusts and insurance companies		13.3		17.8		17.8
Industrial, miscellaneous and all other		7.8		9.1		9.1
Nonredeemable preferred stocks		7.4		7.5		7.5
Total equity securities available-for-sale		28.5		34.4		34.4
Mortgage loans on real estate, net		8,222.9				8,202.2	1
Real estate, net:
Investment properties		66.3				49.7	2
Acquired in satisfaction of debt		5.2				5.1	2
Total real estate, net		71.5				54.8
Policy loans		639.2				639.2
Other long-term investments		677.4				574.9	3, 4
Short-term investments, including amounts managed by a related party		1,722.0				1,722.0
Total investments	$	36,558.7			$	36,502.9

¹   Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans on real estate (see Note 6 to the audited consolidated financial statements), hedges and commitment hedges on mortgage loans on real estate.  

²   Difference from Column B primarily results from adjustments for accumulated depreciation.  

³   Difference from Column B primarily is due to operating gains and/or losses of investments in limited partnerships.  

⁴   Amount shown does not agree to the audited consolidated balance sheet due to $24.1 million in unconsolidated related party investments.  

See accompanying report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule III        Supplementary Insurance Information

As of December 31, 2006, 2005 and 2004 and for each of the years then ended (in millions)

Column A	Column B			Column C		Column D			Column E		Column F
Year: Segment	Deferred policy acquisition costs			Future policy benefits, losses, claims and loss expenses		Unearned premiums1			Other policy claims and benefits payable1		Premium revenue
2006
Individual Investments	$	1,945.0		$	13,004.4						$	142.5
Retirement Plans		288.6			10,839.0							—
Individual Protection		1,441.0			5,574.1							165.8
Corporate and Other		83.4			4,991.9							—
Total	$	3,758.0		$	34,409.4						$	308.3
2005
Individual Investments	$	1,936.4		$	14,970.9						$	96.7
Retirement Plans		290.3			10,847.3							—
Individual Protection		1,328.7			5,531.9							163.3
Corporate and Other		42.5			4,591.0							—
Total	$	3,597.9		$	35,941.1						$	260.0
2004
Individual Investments	$	2,015.5		$	15,500.6						$	87.5
Retirement Plans		301.7			10,139.8							—
Individual Protection		1,244.1			5,430.5							182.9
Corporate and Other		(144.7	)		5,312.2							—
Total	$	3,416.6		$	36,383.1						$	270.4
Column A	Column G			Column H		Column I			Column J		Column K
Year: Segment	Net investment income2			Benefits, claims, losses and settlement expenses		Amortization of deferred policy acquisition costs			Other operating expenses2		Premiums written
2006
Individual Investments	$	739.5		$	704.5	$	352.7			206.3
Retirement Plans		636.0			440.5		37.9			179.1
Individual Protection		328.2			452.3		69.6			142.4
Corporate and Other		354.8			208.7		(9.9	)		4.0
Total	$	2,058.5		$	1,806.0	$	450.3		$	531.8
2005
Individual Investments	$	822.4		$	706.8	$	329.1		$	193.1
Retirement Plans		642.9			444.8		47.2			181.8
Individual Protection		332.8			443.9		89.0			148.1
Corporate and Other		307.1			146.1		1.0			15.8
Total	$	2,105.2		$	1,741.6	$	466.3		$	538.8
2004
Individual Investments	$	824.8		$	710.4	$	276.1		$	210.0
Retirement Plans		627.9			435.5		39.6			184.5
Individual Protection		327.2			450.0		94.4			159.7
Corporate and Other		220.6			86.7		—			27.8
Total	$	2,000.5		$	1,682.6	$	410.1		$	582.0

¹   Unearned premiums and other policy claims and benefits payable are included in Column C amounts.  

²   Allocations of net investment income and certain operating expenses are based on numerous assumptions and estimates, and reported segment operating results would change if different methods were applied.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule IV          Reinsurance

As of December 31, 2006, 2005 and 2004 and for each of the years then ended (dollars in millions)

Column A	Column B		Column C		Column D		Column E		Column F
	Gross amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount assumed to net
2006
Life insurance in force	$	151,109.9	$	58,189.8	$	7.9	$	92,928.0	0.0%
Premiums:
Life insurance 1	$	336.4	$	28.4	$	0.3	$	308.3	0.1%
Accident and health insurance		388.9		417.4		28.5		—	N/A
Total	$	725.3	$	445.8	$	28.8	$	308.3	9.3%
2005
Life insurance in force	$	142,308.1	$	52,339.1	$	10.6	$	89,979.6	0.0%
Premiums:
Life insurance 1	$	311.5	$	51.8	$	0.3	$	260.0	0.1%
Accident and health insurance		415.2		445.1		29.9		—	N/A
Total	$	726.7	$	496.9	$	30.2	$	260.0	11.6%
2004
Life insurance in force	$	123,756.6	$	46,866.2	$	10.2	$	76,900.6	0.0%
Premiums:
Life insurance 1	$	300.7	$	30.6	$	0.3	$	270.4	0.1%
Accident and health insurance		312.7		345.1		32.4		—	N/A
Total	$	613.4	$	375.7	$	32.7	$	270.4	12.1%

¹   Primarily represents premiums from traditional life insurance and life-contingent immediate annuities and excludes deposits on investment products and universal life insurance products.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule V        Valuation and Qualifying Accounts

Years ended December 31, 2006, 2005 and 2004 (in millions)

Column A	Column B		Column C				Column D		Column E
Description	Balance at beginning of period		Charged (credited) to costs and expenses		Charged to other accounts		Deductions1		Balance at end of period
2006
Valuation allowances - mortgage loans on real estate	$	31.1	$	6.0	$	—	$	2.8	$	34.3
2005
Valuation allowances - mortgage loans on real estate	$	33.3	$	1.6	$	—	$	3.8	$	31.1
2004
Valuation allowances - mortgage loans on real estate	$	29.1	$	7.5	$	—	$	3.3	$	33.3

¹   Amounts represent transfers to real estate owned and recoveries.  

PART C. OTHER INFORMATION

Item 26.                   Exhibits

(a) Resolution of the Depositor’s Board of Directors authorizing the establishment of the Registrant – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(b) Not Applicable

(c) Underwriting or Distribution of contracts between the Depositor and Principal Underwriter – Filed previously with the registration statement (333-31725) and hereby incorporated by reference.

(d) The form of the contract – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(e) The form of the contract application – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(f) Articles of Incorporation of Depositor – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(g) The form of Reinsurance Contracts – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(h) The form of Participation Agreements – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(i) Not Applicable

(j) Not Applicable

(k) Opinion of Counsel – Filed previously with the registration statement (333-106908) and hereby incorporated by reference.

(l) Not Applicable

(m) Not Applicable

(n) Consent of Independent Registered Public Accounting Firm – Attached hereto.

(o) Not Applicable

(p) Not Applicable

(q) Redeemability Exemption Procedures – Filed previously with registration statement (333-46338) and hereby incorporated by reference.

(99)               Power of Attorney – Attached hereto.

Item 27. Directors and Officers of the Depositor

Chairman of the Board and Director	Arden L. Shisler
Chief Executive Officer and Director	W. G. Jurgensen
President and Chief Operating Officer	Mark R. Thresher
Executive Vice President and Chief Legal and Governance Officer	Patricia R. Hatler
Executive Vice President-Chief Administrative Officer	Terri L. Hill
Executive Vice President-Chief Information Officer	Michael C. Keller
Executive Vice President-Chief Marketing Officer	James R. Lyski
Executive Vice President-Financial, Investments and Strategy	Robert A. Rosholt
Senior Vice President and Treasurer	Harry H. Hallowell
Senior Vice President-Chief Compliance Officer	Carol Baldwin Moody
Senior Vice President-Chief Financial Officer	Timothy G. Frommeyer
Senior Vice President-Chief Investment Officer	Gail G. Snyder
Senior Vice President-CIO Strategic Investments	Gary I. Siroko
Senior Vice President-Corporate Relations	Gregory S. Lashutka
Senior Vice President-Corporate Strategy	J. Stephen Baine
Senior Vice President-Division General Counsel	Thomas W. Dietrich
Senior Vice President-Enterprise Chief Risk Officer	Brian W. Nocco
Senior Vice President-Health and Productivity	Holly R. Snyder
Senior Vice President-In Retirement Business Head	Keith I. Millner
Senior Vice President-Individual Protection Business Head	Peter A. Golato
Senior Vice President-Information Technology	Srinivas Koushik
Senior Vice President-Internal Audits	Kelly A. Hamilton
Senior Vice President-NF Marketing	Gordon E. Hecker
Senior Vice President-NF Systems	R. Dennis Noice
Senior Vice President-Non-Affiliated Sales	John Laughlin Carter
Senior Vice President-NW Retirement Plans	William S. Jackson
Senior Vice President-President - Nationwide Bank	Anne L. Arvia
Senior Vice President-Property and Casualty Claims	David R. Jahn
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing	W. Kim Austen
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing	James R. Burke
Senior Vice President-Property and Casualty Human Resources	Gale V. King
Senior Vice President-Property and Casualty Personal Lines Product Pricing	J. Lynn Greenstein
Vice President-Assistant to the CEO and Secretary	Thomas E. Barnes
Director	Joseph A. Alutto
Director	James G. Brocksmith, Jr.
Director	Keith W. Eckel
Director	Lydia M. Marshall
Director	Donald L. McWhorter
Director	David O. Miller
Director	Martha Miller de Lombera
Director	James F. Patterson
Director	Gerald D. Prothro
Director	Alex Shumate

The business address of the Directors and Officers of the Depositor is:

One Nationwide Plaza, Columbus, Ohio 43215

Item 28.                 Persons Controlled by or Under Common Control with the Depositor or Registrant.

*	Subsidiaries for which separate financial statements are filed
**	Subsidiaries included in the respective consolidated financial statements
***	Subsidiaries included in the respective group financial statements filed for unconsolidated subsidiaries
****	Other subsidiaries

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
1717 Advisory Services, Inc.	Pennsylvania		The company was formerly registered as an investment advisor and is currently inactive.
1717 Brokerage Services, Inc.	Pennsylvania		The company is a multi-state licensed insurance agency.
1717 Capital Management Company*	Pennsylvania		The company is registered as a broker-dealer and investment advisor.
1717 Insurance Agency of Massachusetts, Inc.	Massachusetts		The company is established to grant proper licensing to the Nationwide Life Insurance Company of America affiliates in Massachusetts.
1717 Insurance Agency of Texas, Inc.	Texas		The company is established to grant proper licensing to the Nationwide Life Insurance Company of America affiliates in Texas.
AGMC Reinsurance, Ltd.	Turks & Caicos Islands		The company is in the business of reinsurance of mortgage guaranty risks.
AID Finance Services, Inc.	Iowa		The company operates as a holding company.
ALLIED General Agency Company	Iowa		The company acts as a general agent and surplus lines broker for property and casualty insurance products.
ALLIED Group, Inc.	Iowa		The company is a property and casualty insurance holding company.
ALLIED Property and Casualty Insurance Company	Iowa		The company underwrites general property and casualty insurance.
ALLIED Texas Agency, Inc.	Texas		The company acts as a managing general agent to place personal and commercial automobile insurance with Colonial County Mutual Insurance Company for the independent agency companies.
Allnations, Inc.	Ohio		The company engages in promoting, extending, and strengthening cooperative insurance organizations throughout the world.
AMCO Insurance Company	Iowa		The company underwrites general property and casualty insurance.
American Marine Underwriters, Inc.	Florida		The company is an underwriting manager for ocean cargo and hull insurance.
Atlantic Floridian Insurance Company (f.k.a Nationwide Atlantic Insurance Company)	Ohio		The company writes personal lines residential property insurance in the State of Florida.
Audenstar Limited	England and Wales		The company is an investment holding company.
BlueSpark, LLC	Ohio		The company is currently inactive.
Cal-Ag Insurance Services, Inc.	California		The company is an insurance agency.
CalFarm Insurance Agency	California		The company is an insurance agency.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Colonial County Mutual Insurance Company*	Texas		The company underwrites non-standard automobile and motorcycle insurance and other various commercial liability coverages in Texas.
Corviant Corporation	Delaware		The purpose of the company is to create a captive distribution network through which affiliates can sell multi-manager investment products, insurance products and sophisticated estate planning services.
Crestbrook Insurance Company* (f.k.a. CalFarm Insurance Company)	Ohio		The company is an Ohio-based multi-line insurance corporation that is authorized to write personal, automobile, homeowners and commercial insurance.
Depositors Insurance Company	Iowa		The company underwrites general property and casualty insurance.
DVM Insurance Agency, Inc.	California		This company places pet insurance business not written by Veterinary Pet Insurance Company outside of California with National Casualty Company.
F&B, Inc.	Iowa		The company is an insurance agency that places business with carriers other than Farmland Mutual Insurance Company and its affiliates.
Farmland Mutual Insurance Company	Iowa		The company provides property and casualty insurance primarily to agricultural businesses.
Financial Settlement Services Agency, Inc.	Ohio		The company is an insurance agency in the business of selling structured settlement products.
FutureHealth Corporation	Maryland		The company is a wholly-owned subsidiary of FutureHealth Holding Company, which provides population health management.
FutureHealth Holding Company	Maryland		The company provides population health management.
FutureHealth Technologies Corporation	Maryland		The company is a wholly-owned subsidiary of FutureHealth Holding Company, which provides population health management.
Gartmore Distribution Services, Inc.*	Delaware		The company is a limited purpose broker-dealer.
Gartmore Investor Services, Inc.	Ohio		The company provides transfer and dividend disbursing agent services to various mutual fund entities.
Gartmore Morley Capital Management, Inc.	Oregon		The company is an investment advisor and stable value money manager.
Gartmore Mutual Fund Capital Trust	Delaware		The trust acts as a registered investment advisor.
Gartmore S.A. Capital Trust	Delaware		The trust acts as a registered investment advisor.
Gates, McDonald & Company	Ohio		The company provides services to employers for managing workers' compensation matters and employee benefits costs.
Gates, McDonald & Company of New York, Inc.	New York		The company provides workers' compensation and self-insured claims administration services to employers with exposure in New York.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
GatesMcDonald DTAO, LLC	Ohio		The company provides disability tax reporting services.
GatesMcDonald DTNHP, LLC	Ohio		The company provides disability tax reporting services.
GatesMcDonald DTC, LLC	Ohio		The company provides disability tax reporting services.
GatesMcDonald Health Plus Inc.*	Ohio		The company provides medical management and cost containment services to employers.
GVH Participacoes e Empreedimientos Ltda.	Brazil		The company acts as a holding company.
Insurance Intermediaries, Inc.	Ohio		The company is an insurance agency and provides commercial property and casualty brokerage services.
Life REO Holdings, LLC	Ohio		The company serves as a holding company for foreclosure entities.
Lone Star General Agency, Inc.	Texas		The company acts as general agent to market automobile and motorcycle insurance for Colonial County Mutual Insurance Company.
Morely & Associates, Inc. (f.k.a. Gartmore Morley & Associates, Inc.)	Oregon		The company brokers or places book-value maintenance agreements (wrap contracts) and guarantee investment contracts for collective investment trusts and accounts.
Morley Financial Services, Inc. (f.k.a. Gartmore Morley Financial Services, Inc.)	Oregon		The company is a holding company.
Mullen TBG Insurance Agency Services, LLC	Delaware		The company is a joint venture between TBG Insurance Services Corporation and MC Insurance Agency Services LLC. The Company provides financial products and services to executive plan participants.
National Casualty Company	Wisconsin		The company underwrites various property and casualty coverage, as well as individual and group accident and health insurance.
National Casualty Company of America, Ltd.	England		This is a limited liability company organized for profit under the Companies Act of 1948 of England for the purpose of carrying on the business of insurance, reinsurance, indemnity, and guarantee of various kinds.  This company is currently inactive.
Nationwide Advantage Mortgage Company*	Iowa		The company makes residential mortgage loans.
Nationwide Affinity Insurance Company of America*	Ohio		The company provides property and casualty insurance products.
Nationwide Agribusiness Insurance Company	Iowa		The company provides property and casualty insurance primarily to agricultural businesses.
Nationwide Arena, LLC*	Ohio		The purpose of the company is to develop Nationwide Arena and to engage in related development activity.
Nationwide Asset Management Holdings	England and Wales		The company operates as a holding company.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Global Asset Management, Inc. (f.k.a. Gartmore Global Asset Management , Inc.)	Delaware		The company operates as a holding company.
Nationwide Assurance Company	Wisconsin		The company underwrites non-standard automobile and motorcycle insurance.
Nationwide Bank			This is a federal savings bank chartered by the Office of Thrift Supervision in the United States Department of Treasury to exercise deposit, lending agency custody and fiduciary powers and to engage in activities permissible for federal savings banks under the Home Owners’ Loan act of 1933.
Nationwide Better Health, Inc.	Ohio		The company is a holding company for the health and productivity operations of Nationwide.
Nationwide Cash Management Company*	Ohio		The company buys and sells investment securities of a short-term nature as the agent for other Nationwide corporations, foundations, and insurance company separate accounts.
Nationwide Community Development Corporation, LLC	Ohio		The company holds investments in low-income housing funds.
Nationwide Corporation	Ohio		The company acts primarily as a holding company for entities affiliated with Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company.
Nationwide Document Solutions, Inc. (f.k.a. ALLIED Document Solutions, Inc.)	Iowa		The company provides general printing services to its affiliated companies as well as to certain unaffiliated companies.
Nationwide Emerging Managers, LLC (f.k.a. Gartmore Emerging Managers, LLC)	Delaware		The company acquires and holds interests in registered investment advisors and provides investment management services.
Nationwide Exclusive Agent Risk Purchasing Group, LLC	Ohio		The company's purpose is to provide a mechanism for the purchase of group liability insurance for insurance agents operating nationwide.
Nationwide Financial Assignment Company	Ohio		The company is an administrator of structured settlements.
Nationwide Financial Institution Distributors Agency, Inc.	Delaware		The company is an insurance agency.
Nationwide Financial Institution Distributors Insurance Agency, Inc. of Massachusetts	Massachusetts		The company is an insurance agency.
Nationwide Financial Institution Distributors Insurance Agency, Inc. of New Mexico	New Mexico		The company is an insurance agency.
Nationwide Financial Services Capital Trust	Delaware		The trust's sole purpose is to issue and sell certain securities representing individual beneficial interests in the assets of the trust.
Nationwide Financial Services, Inc.*	Delaware		The company acts primarily as a holding company for companies within the Nationwide organization that offer or distribute long-term savings and retirement products.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Financial Sp. Zo.o	Poland		The company is currently inactive.
Nationwide Financial Structured Products, LLC	Ohio		The company captures and reports the results of the structured products business unit.
Nationwide Foundation*	Ohio		The company contributes to non-profit activities and projects.
Nationwide General Insurance Company	Ohio		The company transacts a general insurance business, except life insurance, and primarily provides automobile and fire insurance to select customers.
Nationwide Global Finance, LLC	Ohio		The company acts as a support company for Nationwide Global Holdings, Inc. in its international capitalization efforts.
Nationwide Global Funds	Luxembourg		This company issues shares of mutual funds.
Nationwide Global Holdings, Inc.	Ohio		The company is a holding company for the international operations of Nationwide.
Nationwide Global Ventures, Inc. (f.k.a. Gartmore Global Ventures, Inc.)	Delaware		The company acts as a holding company.
Nationwide Indemnity Company*	Ohio		The company is involved in the reinsurance business by assuming business from Nationwide Mutual Insurance Company and other insurers within the Nationwide Insurance organization.
Nationwide Insurance Company of America	Wisconsin		The company underwrites general property and casualty insurance.
Nationwide Insurance Company of Florida*	Ohio		The company transacts general insurance business except life insurance.
Nationwide International Underwriters	California		The company is a special risk, excess and surplus lines underwriting manager.
Nationwide Investment Advisors, LLC	Ohio		The company provides investment advisory services.
Nationwide Investment Services Corporation**	Oklahoma		This is a limited purpose broker-dealer and acts as an investment advisor.
Nationwide Life and Annuity Company of America**	Delaware		The company provides individual life insurance products.
Nationwide Life and Annuity Insurance Company**	Ohio		The company engages in underwriting life insurance and granting, purchasing, and disposing of annuities.
Nationwide Life Insurance Company*	Ohio		The company provides individual life insurance, group life and health insurance, fixed and variable annuity products, and other life insurance products.
Nationwide Life Insurance Company of America*	Pennsylvania		The company provides individual life insurance and group annuity products.
Nationwide Life Insurance Company of Delaware*	Delaware		The company insures against personal injury, disability or death resulting from traveling, sickness or other general accidents, and every type of insurance appertaining thereto.
Nationwide Lloyds	Texas		The company markets commercial and residential property insurance in Texas.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Management Systems, Inc.	Ohio		The company offers a preferred provider organization and other related products and services.
Nationwide Mutual Capital, LLC	Ohio		The company acts as a private equity fund investing in companies for investment purposes and to create strategic opportunities for Nationwide.
Nationwide Mutual Capital I, LLC*	Delaware		The business of the company is to achieve long term capital appreciation through a portfolio of primarily domestic equity investments in financial service and related companies.
Nationwide Mutual Fire Insurance Company	Ohio		The company engages in a general insurance and reinsurance business, except life insurance.
Nationwide Mutual Insurance Company*	Ohio		The company engages in a general insurance and reinsurance business, except life insurance.
Nationwide Private Equity Fund, LLC	Ohio		The company invests in private equity funds.
Nationwide Properties, Ltd.	Ohio		The company is engaged in the business of developing, owning and operating real estate and real estate investments.
Nationwide Property and Casualty Insurance Company	Ohio		The company engages in a general insurance business, except life insurance.
Nationwide Property Protection Services, LLC	Ohio		The company provides alarm systems and security guard services.
Nationwide Provident Holding Company*	Pennsylvania		The company is a holding company for non-insurance subsidiaries.
Nationwide Realty Investors, Ltd.*	Ohio		The company is engaged in the business of developing, owning and operating real estate and real estate investment.
Nationwide Retirement Solutions, Inc.*	Delaware		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Arizona	Arizona		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Ohio	Ohio		The company provides retirement products, marketing and education and administration to public employees.
Nationwide Retirement Solutions, Inc. of Texas	Texas		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Insurance Agency, Inc.	Massachusetts		The company markets and administers deferred compensation plans for public employees.
Nationwide Sales Solutions, Inc.	Iowa		The company engages in direct marketing of property and casualty insurance products.
Nationwide Securities, Inc.*	Ohio		The company is a registered broker-dealer and provides investment management and administrative services.
Nationwide Separate Accounts, LLC (f.k.a. Gartmore Separate Accounts, LLC)	Delaware		The company acts as a registered investment advisor.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Services Company, LLC	Ohio		The company performs shared services functions for the Nationwide organization.
Nationwide Services For You, LLC	Ohio		The company provides consumer services that are related to the business of insurance, including services that help consumers prevent losses and mitigate risks.
Nationwide Services Sp. Zo.o.	Poland		The company is currently inactive.
Newhouse Capital Partners, LLC	Delaware		The company invests in financial services companies that specialize in e-commerce and promote distribution of financial services.
Newhouse Capital Partners II, LLC	Delaware		The company invests in financial services companies that specialize in e-commerce and promote distribution of financial services.
Newhouse Special Situations Fund I, LLC	Delaware		The company owns and manages contributed securities in order to achieve long-term capital appreciation from the contributed securities and through investments in a portfolio of other equity investments in financial service and other related companies.
NF Reinsurance Ltd.*	Bermuda		The company serves as a captive reinsurer for Nationwide Life Insurance Company’s universal life, term life and annuity business.
NFS Distributors, Inc.	Delaware		The company acts primarily as a holding company for Nationwide Financial Services, Inc.'s distribution companies.
NGH UK, Ltd.*	United Kingdom		The company is currently inactive.
NMC CPC WT Investment, LLC	Delaware		The business of the company is to hold and exercise rights in a specific private equity investment.
NorthPointe Capital LLC	Delaware		The company acts as a registered investment advisor.
NWD Investment Management, Inc. (f.k.a. Gartmore Global Investments, Inc.)	Delaware		The company acts as a holding company and provides other business services for the NWD Investments group of companies.
NWD Management & Research Trust (f.k.a. Gartmore Global Asset Management Trust)	Delaware		The company acts as a holding company for the NWD Investments group of companies and as a registered investment advisor.
NWD MGT, LLC (f.k.a. GGI MGT LLC)	Delaware		The company is a passive investment holder in Newhouse Special Situations Fund I, LLC for the purpose of allocation of earnings to the NWD Investments management team as it relates to the ownership and management of Newhouse Special Situations Fund I, LLC.
Pension Associates, Inc.	Wisconsin		The company provides pension plan administration and record keeping services, and pension plan and compensation consulting.
Premier Agency, Inc.	Iowa		This company is an insurance agency.
Provestco, Inc.	Delaware		The company serves as a general partner in certain real estate limited partnerships invested in by Nationwide Life Insurance Company of America.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Quick Sure Auto Agency, Inc.	Texas		The company is an insurance agency and operates as an employee agent "storefront" for Titan Insurance Services.
RCMD Financial Services, Inc.	Delaware		The company is a holding company.
Registered Investment Advisors Services, Inc.	Texas		The company facilitates third-party money management services for plan providers.
Retention Alternatives, Ltd.*	Bermuda		The company is a captive insurer and writes first dollar insurance policies in workers’ compensation, general liability and automobile liability for its affiliates in the United States.
Riverview Alternative Investment Advisors, LLC (f.k.a. Gartmore Riverview, LLC)	Delaware		The company provides investment management services to a limited number of institutional investors.
Riverview Alternative Investment Advisors II LLC (f.k.a. Gartmore riverview II, LLC)	Delaware		The company is a holding company.
Riverview International Group, Inc.	Delaware		The company is a holding company.
RP&C International, Inc.	Ohio		The company is an investment-banking firm that provides specialist advisory services and innovative financial solutions to public and private companies internationally.
Scottsdale Indemnity Company	Ohio		The company is engaged in a general insurance business, except life insurance.
Scottsdale Insurance Company	Ohio		The company primarily provides excess and surplus lines of property and casualty insurance.
Scottsdale Surplus Lines Insurance Company	Arizona		The company provides excess and surplus lines coverage on a non-admitted basis.
TBG Advisory Services Corporation (d.b.a. TBG Advisors)	California		The company is an investment advisor.
TBG Aviation, LLC	California		The company holds an investment in a leased airplane and maintains an operating agreement with Flight Options.
TBG Danco Insurance Services Corporation	California		The corporation provides life insurance and individual executive estate planning.
TBG Financial & Insurance Services Corporation*	California		The company consults with corporate clients and financial institutions on the development and implementation of proprietary and/or private placement insurance products for the financing of executive benefit programs and individual executive's estate planning requirements.  As a broker dealer, TBG Financial & Insurance Services Corporation provides access to institutional insurance investment products.
TBG Financial & Insurance Services Corporation of Hawaii	Hawaii		The corporation consults with corporate clients and financial institutions on the development and implementation of proprietary, private placement and institutional insurance products.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
TBG Insurance Services Corporation*	Delaware		The company markets and administers executive benefit plans.
THI Holdings (Delaware), Inc.*	Delaware		The company acts as a holding company for subsidiaries of the Nationwide group of companies.
Titan Auto Agency, Inc. (d.b.a. Arlans Agency)	Michigan		The company is an insurance agency that primarily sells non-standard automobile insurance for Titan Insurance Company in Michigan.
Titan Auto Insurance of New Mexico, Inc.	New Mexico		The company is an insurance agency that operates employee agent storefronts.
Titan Holdings Service Corporation	Texas		The company is currently inactive.
Titan Indemnity Company	Texas		The company is a multi-line insurance company and is operating primarily as a property and casualty insurance company.
Titan Insurance Company	Michigan		This is a property and casualty insurance company.
Titan Insurance Services, Inc.	Texas		The company is a Texas grandfathered managing general agency.
Titan National Auto Call Center, Inc.	Texas		The company is licensed as an insurance agency that operates as an employee agent "call center" for Titan Indemnity Company.
Union Bond & Trust Company (f.k.a. Gartmore Trust Company)	Oregon		The company is an Oregon state bank with trust powers.
Veterinary Pet Insurance Company*	California		The company provides pet insurance.
Victoria Automobile Insurance Company	Indiana		The company is a property and casualty insurance company.
Victoria Financial Corporation	Delaware		The company acts as a holding company specifically for holding insurance companies of Victoria group of companies.
Victoria Fire & Casualty Company	Ohio		The company is a property and casualty insurance company.
Victoria Insurance Agency, Inc.	Ohio		The company is an insurance agency that acts as a broker for independent agents appointed with the Victoria companies in the State of Ohio.
Victoria National Insurance Company	Ohio		The company is a property and casualty insurance company.
Victoria Select Insurance Company	Ohio		The company is a property and casualty insurance company.
Victoria Specialty Insurance Company	Ohio		The company is a property and casualty insurance company.
Vida Seguradora SA	Brazil		The company operates as a licensed insurance company in the categories of life and unrestricted private pension plan in Brazil.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
VPI Services, Inc.	California		The company operates as a nationwide pet registry service for holders of Veterinary Pet Insurance Company policies, including pet indemnification and a lost pet recovery program.
Washington Square Administrative Services, Inc.	Pennsylvania		The company provides administrative services to Nationwide Life and Annuity Company of America.
Western Heritage Insurance Company	Arizona		The company underwrites excess and surplus lines of property and casualty insurance.
Whitehall Holdings, Inc.	Texas		The company acts as a holding company for the Titan group of agencies.
W.I. of Florida (d.b.a. Titan Auto Insurance)	Florida		The company is an insurance agency and operates as an employee agent storefront for Titan Indemnity Company in Florida.

	COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart  unless otherwise indicated)	PRINCIPAL BUSINESS
*	MFS Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide Multi-Flex Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-A	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-B	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-C	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-D	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-II	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-3	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-4	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-5	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-6	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-7	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-8	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-9	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-10	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-11	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-12	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-13	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-14	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-15	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-16	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-17	Ohio		Issuer of Annuity Contracts
*	Nationwide Provident VA Separate Account 1	Pennsylvania		Issuer of Annuity Contracts
*	Nationwide Provident VA Separate Account A	Delaware		Issuer of Annuity Contracts
	Nationwide VL Separate Account-A	Ohio		Issuer of Life Insurance Policies
	Nationwide VL Separate Account-B	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-C	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-D	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-G	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-2	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-3	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-4	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-5	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-6	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-7	Ohio		Issuer of Life Insurance Policies
*	Nationwide Provident VLI Separate Account 1	Pennsylvania		Issuer of Life Insurance Policies
*	Nationwide Provident VLI Separate Account A	Delaware		Issuer of Life Insurance Policies

Item 29. Indemnification

Ohio's General Corporation Law expressly authorizes and Nationwide’s Amended and Restated Code of Regulations provides for indemnification by Nationwide of any person who, because such person is or was a director, officer or employee of Nationwide was or is a party; or is threatened to be made a party to:

o any threatened, pending or completed civil action, suit or proceeding;

o any threatened, pending or completed criminal action, suit or proceeding;

o any threatened, pending or completed administrative action or proceeding;

o any threatened, pending or completed investigative action or proceeding;

The indemnification will be for actual and reasonable expenses, including attorney's fees, judgments, fines and amounts paid in settlement by such person in connection with such action, suit or proceeding, to the extent and under the circumstances permitted by the Ohio's General Corporation Law.

Nationwide has been informed that in the opinion of the Securities and Exchange Commission the indemnification of directors, officers or persons controlling Nationwide for liabilities arising under the Securities Act of 1933 ("Act") is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities is asserted by a director, officer or controlling person in connection with the securities being registered, the registrant will submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act. Nationwide and the directors, officers and/or controlling persons will be governed by the final adjudication of such issue.  Nationwide will not be required to seek the court’s determination if, in the opinion of Nationwide’s counsel, the matter has been settled by controlling precedent.

However, the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding is permitted.

Item 30.                 Principal Underwriter

(a) Nationwide Investment Services Corporation ("NISC") serves as principal underwriter and general distributor for the following separate investment accounts of Nationwide or its affiliates:

Multi-Flex Variable Account	Nationwide VL Separate Account-C
Nationwide Variable Account	Nationwide VL Separate Account-D
Nationwide Variable Account-II	Nationwide VL Separate Account-G
Nationwide Variable Account-4	Nationwide VLI Separate Account-2
Nationwide Variable Account-5	Nationwide VLI Separate Account-3
Nationwide Variable Account-6	Nationwide VLI Separate Account-4
Nationwide Variable Account-7	Nationwide VLI Separate Account-6
Nationwide Variable Account-8	Nationwide VLI Separate Account-7
Nationwide Variable Account-9
Nationwide Variable Account-10
Nationwide Variable Account-11
Nationwide Variable Account-13
Nationwide Variable Account-14
Nationwide VA Separate Account-A
Nationwide VA Separate Account-B
Nationwide VA Separate Account-C

(b) Directors and Officers of NISC:

President	Keith J. Kelly
Senior Vice President, Treasurer and Director	James D. Benson.
Vice President	Karen R. Colvin
Vice President	Scott A. Englehart
Vice President	Charles E. Riley
Vice President	Trey Rouse
Vice President and Assistant Secretary	Thomas E. Barnes
Vice President-Chief Compliance Officer	James J. Rabenstine
Associate Vice President and Secretary	Glenn W. Soden
Assistant Treasurer	Terry C. Smetzer
Director	John Laughlin Carter
Director	Keith I. Millner

The business address of the Directors and Officers of Nationwide Investment Services Corporation is:

One Nationwide Plaza, Columbus, Ohio 43215

(c)

Name of Principal Underwriter	Net Underwriting Discounts and Commissions	Compensation on Redemption or Annuitization	Brokerage Commissions	Compensation
Nationwide Investment Services Corporation	N/A	N/A	N/A	N/A

Item 31.                 Location of Accounts and Records

Timothy G. Frommeyer

Nationwide Life Insurance Company

One Nationwide Plaza

Columbus, OH  43215

Item 32.                 Management Services

Not Applicable

Item 33. Fee Representation

Nationwide represents that the fees and charges deducted under the contract in the aggregate are reasonable in relation to the services rendered, the expenses expected to be incurred and risks assumed by Nationwide.

SIGNATURES

As required by the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, NATIONWIDE VLI SEPARATE ACCOUNT-6, certifies that it meets the requirements of the Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf in the City of Columbus, and State of Ohio, on this 20^thday of April, 2007.

NATIONWIDE VLI SEPARATE ACCOUNT-6

(Registrant)

NATIONWIDE LIFE INSURANCE COMPANY

(Depositor)

By: /s/ TIMOTHY D. CRAWFORD

            Timothy D. Crawford.

As required by the Securities Act of 1933, the Registration Statement has been signed by the following persons in the capacities indicated on this 20^th day of April, 2007.

W. G. JURGENSEN
W. G. Jurgensen, Director and Chief Executive Officer
ARDEN L. SHISLER
Arden L. Shisler, Chairman of the Board
JOSEPH A. ALUTTO
Joseph A. Alutto, Director
JAMES G. BROCKSMITH, JR.
James G. Brocksmith, Jr., Director
KEITH W. ECKEL
Keith W. Eckel, Director
LYDIA M. MARSHALL
Lydia M. Marshall, Director
DONALD L. MCWHORTER
Donald L. McWhorter, Director
MARTHA MILLER DE LOMBERA
Martha Miller de Lombera, Director
DAVID O. MILLER
David O. Miller, Director
JAMES F. PATTERSON
James F. Patterson, Director
GERALD D. PROTHRO
Gerald D. Prothro, Director
ALEX SHUMATE
Alex Shumate, Director
	By /s/ TIMOTHY D. CRAWFORD
	Timothy D. Crawford
	Attorney-in-Fact