497 1 schwab.htm SCHWAB CUSTOM SOLUTIONS schwab.htm
Schwab Custom Solutions™ Variable Annuity
Nationwide Life Insurance Company
Individual Flexible Premium Deferred Variable Annuity Contracts
Issued by Nationwide Life Insurance Company through its Nationwide Variable Account-II
The date of this prospectus is May 1, 2008.

This prospectus contains basic information you should understand about the contracts before investing.  Please read this prospectus carefully and keep it for future reference.
 
Variable annuities are complex investment products with unique benefits and advantages that may be particularly useful in meeting long-term savings and retirement needs. There are costs and charges associated with these benefits and advantages - costs and charges that are different, or do not exist at all, within other investment products. With help from financial consultants and advisers, investors are encouraged to compare and contrast the costs and benefits of the variable annuity described in this prospectus against those of other investment products.  Nationwide offers a wide array of such products, many with different charges, benefit features and underlying investment options. This process of comparison and analysis should aid in determining whether the purchase of the contract described in this prospectus is consistent with your investment objectives, risk tolerance, investment time horizon, marital status, tax situation and other personal characteristics and needs.
 
The Statement of Additional Information (dated May 1, 2008), which contains additional information about the contracts and the variable account, including the Condensed Financial Information for the various variable account charges applicable to the contracts, has been filed with the Securities and Exchange Commission ("SEC") and is incorporated herein by reference.  (The Condensed Financial Information for the minimum and maximum variable account charges is available in Appendix B of this prospectus.)The table of contents for the Statement of Additional Information is on page 39.  For general information or to obtain free copies of the Statement of Additional Information, call Nationwide's service center at 1-800-848-6331 (TDD 1-800-238-3035) or write:
 
Nationwide Life Insurance Company
5100 Rings Road, RR1-04-F4
Dublin, Ohio 43017-1522
 
Information about this and other Nationwide products can be found at: www.nationwide.com.
 
Information about us and the product (including the Statement of Additional Information) 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. 20549-0102.  Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.  The SEC also maintains a web site (www.sec.gov) that contains the prospectus, the SAI, material incorporated by reference, and other information.
 
Before investing, understand that annuities and/or life insurance products are not insured by the FDIC or any other Federal government agency, and are not deposits or obligations of, guaranteed by, or insured by the depository institution where offered or any of its affiliates.  Annuities that involve investment risk may lose value.  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.

 
The following is a list of the underlying mutual funds available under the contract.
 
AIM Variable Insurance Funds
·  
AIM V.I. Capital Development Fund: Series II Shares
 
Alger American Fund
·  
Alger American Balanced Portfolio: Class S Shares
·  
Alger American Mid Cap Growth Portfolio: Class S Shares
 
AllianceBernstein Variable Products Series Fund, Inc.
·  
AllianceBernstein Growth and Income Portfolio: Class B
·  
AllianceBernstein Small/Mid Cap Value Portfolio: Class B
 
American Century Variable Portfolios, Inc.
·  
American Century VP Income & Growth Fund: Class II
·  
American Century VP Mid Cap Value Fund: Class II
·  
American Century VP Value Fund: Class II*
 
American Century Variable Portfolios II, Inc.
·  
American Century VP Inflation Protection Fund: Class II

Dreyfus
·  
Dreyfus Investment Portfolios – Small Cap Stock Index Portfolio: Service Shares
·  
Dreyfus Stock Index Fund, Inc.: Service Shares
·  
Dreyfus Variable Investment Fund – Appreciation Portfolio: Service Shares
·  
Dreyfus Variable Investment Fund – Developing Leaders Portfolio: Service Shares
 
Federated Insurance Series
·  
Federated Capital Appreciation Fund II: Service Shares
 
Fidelity Variable Insurance Products Fund
·  
VIP Energy Portfolio: Service Class 2†
·  
VIP Equity-Income Portfolio: Service Class 2
·  
VIP Growth Portfolio: Service Class 2
·  
VIP Investment Grade Bond Portfolio: Service Class 2
·  
VIP Mid Cap Portfolio: Service Class 2
·  
VIP Overseas Portfolio: Service Class 2R†

1


Franklin Templeton Variable Insurance Products Trust
·  
Franklin Income Securities Fund: Class 2
·  
Franklin Small Cap Value Securities Fund: Class 2
·  
Franklin Templeton VIP Founding Funds Allocation Fund: Class 2
·  
Templeton Foreign Securities Fund: Class 3†
·  
Templeton Global Income Securities Fund: Class 3†
 
Janus Aspen Series
·  
Balanced Portfolio: Service Shares
·  
Forty Portfolio: Service Shares
·  
International Growth Portfolio: Service II Shares†
 
Lehman Brothers Advisers Management Trust
·  
AMT Short Duration Bond Portfolio: I Class
 
MFS Variable Insurance Trust
·  
MFS Value Series: Service Class
 
Nationwide Variable Insurance Trust ("NVIT")
·  
American Funds NVIT Asset Allocation Fund: Class II
·  
American Funds NVIT Bond Fund: Class II
·  
American Funds NVIT Global Growth Fund: Class II
·  
American Funds NVIT Growth-Income Fund: Class II
·  
American Funds NVIT Growth Fund: Class II
·  
Federated NVIT High Income Bond Fund: Class III*†
·  
Gartmore NVIT Emerging Markets Fund: Class VI†
·  
Gartmore NVIT International Equity Fund: Class VI†
·  
Lehman Brothers NVIT Core Plus Bond Fund: Class II
·  
Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II
·  
Neuberger Berman NVIT Socially Responsible Fund: Class II
·  
NVIT Core Bond Fund: Class II
·  
NVIT Government Bond Fund: Class I (Formerly, Nationwide NVIT Government Bond Fund: Class I)
·  
NVIT Health Sciences Fund: Class VI†) (Formerly, Nationwide NVIT Global Health Sciences Fund: Class VI†)
·  
NVIT International Index Fund: Class VIII†
·  
NVIT Investor Destinations Funds: Class II (Formerly, Nationwide NVIT Investor Destinations Funds: Class II)
Ø  
NVIT Investor Destinations Conservative Fund: Class II (Formerly, Nationwide NVIT Investor Destinations Conservative Fund: Class II)
Ø  
NVIT Investor Destinations Moderately Conservative Fund: Class II (Formerly, Nationwide NVIT Investor Destinations Moderately Conservative Fund: Class II)
Ø  
NVIT Investor Destinations Moderate Fund: Class II (Formerly, Nationwide NVIT Investor Destinations Moderate Fund: Class II)
Ø  
NVIT Investor Destinations Moderately Aggressive Fund: Class II (Formerly, Nationwide NVIT Investor Destinations Moderately Aggressive Fund: Class II)
Ø  
NVIT Investor Destinations Aggressive Fund: Class II (Formerly, Nationwide NVIT Investor Destinations Aggressive Fund: Class II)
·  
NVIT Mid Cap Growth Fund: Class II (Formerly, Nationwide NVIT Mid Cap Growth Fund: Class II)
·  
NVIT Mid Cap Index Fund: Class I
·  
NVIT Money Market Fund: Class I (Formerly, Nationwide NVIT Money Market Fund: Class I)
·  
NVIT Multi-Manager International Growth Fund: Class VI†
·  
NVIT Multi-Manager International Value Fund: Class VI† (Formerly, NVIT International Value Fund: Class VI†)
·  
NVIT Multi-Manager Large Cap Growth Fund: Class II
·  
NVIT Multi-Manager Large Cap Value Fund: Class II
·  
NVIT Multi-Manager Mid Cap Growth Fund: Class II
·  
NVIT Multi-Manager Mid Cap Value Fund: Class II
·  
NVIT Multi-Manager Small Cap Growth Fund: Class II (Formerly, Nationwide Multi-Manager NVIT Small Cap Growth Fund: Class II)
·  
NVIT Multi-Manager Small Cap Value Fund: Class II (Formerly, Nationwide Multi-Manager NVIT Small Cap Value Fund: Class II)
·  
NVIT Multi-Manager Small Company Fund: Class II (Formerly, Nationwide Multi-Manager NVIT Small Company Fund: Class II)
·  
NVIT Nationwide Fund: Class II
·  
NVIT Short Term Bond Fund: Class II
·  
NVIT Technology and Communications Fund: Class VI† (Formerly, Nationwide NVIT Global Technology and Communications Fund: Class VI†)
·  
NVIT U.S. Growth Leaders Fund: Class II (Formerly, Nationwide NVIT U.S. Growth Leaders Fund: Class II)
·  
Van Kampen NVIT Comstock Value Fund: Class II*
·  
Van Kampen NVIT Multi Sector Bond Fund: Class I*
·  
Van Kampen NVIT Real Estate Fund: Class II
 
Oppenheimer Variable Account Funds
·  
Oppenheimer Capital Appreciation Fund/VA: Service Shares
·  
Oppenheimer Global Securities Fund/VA: Class 4†
·  
Oppenheimer High Income Fund/VA: Class 4†
·  
Oppenheimer Main Street Fund®/VA: Service Shares
·  
Oppenheimer Main Street Small Cap Fund®/VA: Service Shares
 
Pioneer Variable Contracts Trust
·  
Pioneer Small Cap Value VCT Portfolio: Class I Shares
 
Schwab Annuity Portfolios
·  
Schwab Money Market Portfolio™
 
T. Rowe Price Equity Series, Inc.
·  
T. Rowe Price Blue Chip Growth Portfolio: Class II
·  
T. Rowe Price Equity Income Portfolio: Class II
 
Van Kampen
The Universal Institutional Funds, Inc.
·  
Core Plus Fixed Income Portfolio: Class II*
 
The following underlying mutual funds are only available in contracts for which good order applications were received before July 1, 2008:
 
Neuberger Berman Advisers Management Trust
·  
AMT International Portfolio: S Class †
·  
AMT Socially Responsive Portfolio: I Class

2


 
The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2008:
 
AIM Variable Insurance Funds
·  
AIM V.I. Basic Value Fund: Series II Shares
·  
AIM V.I. Capital Appreciation Fund: Series II Shares
 
American Century Variable Portfolios, Inc.
·  
American Century VP International Fund: Class IV†
·  
American Century VP Vista Fund: Class II
 
Federated Insurance Series
·  
Federated American Leaders Fund II: Service Shares
·  
Federated Market Opportunity Fund II: Service Shares
·  
Federated Quality Bond Fund II: Service Shares
 
Fidelity Variable Insurance Products Fund
·  
VIP ContrafundÒ Portfolio: Service Class 2
 
Franklin Templeton Variable Insurance Products Trust
·  
Templeton Developing Markets Securities Fund: Class 3†
 
Janus Aspen Series
·  
INTECH Risk-Managed Core Portfolio: Service Shares
 
Neuberger Berman Advisers Management Trust
·  
AMT Fasciano Portfolio: S Class *
·  
AMT Mid-Cap Growth Portfolio: S Class
·  
AMT Regency Portfolio: S Class
 
T. Rowe Price Equity Series, Inc.
·  
T. Rowe Price Limited Term Bond Portfolio: Class II
 
Van Kampen
The Universal Institutional Funds, Inc
·  
U.S. Real Estate Portfolio: Class II
 
The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2007:
 
American Century Variable Portfolios, Inc.
·  
American Century VP Ultra Fund: Class II
·  
Oppenheimer High Income Fund/VA: Service Shares†
 
The following underlining mutual funds are only available to contracts issued before May 1, 2006:
 
Franklin Templeton Variable Insurance Products Trust
·  
Franklin Rising Dividends Securities Fund: Class 2
 
MFS® Variable Insurance Trust
·  
MFS Investors Growth Stock Series: Service Class
 
The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2005:
 
Putnam Variable Trust
·  
Putnam VT Growth and Income Fund: Class IB
·  
Putnam VT Voyager Fund: Class IB

 
Effective May 1, 2005, the following underlying mutual fund is no longer available to receive transfers or new purchase payments:
 
Nationwide Variable Insurance Trust
·  
Federated NVIT High Income Bond Fund: Class I*
 
Effective May 1, 2004, the following underlying mutual funds are no longer available to receive transfers or new purchase payments:
 
American Century Variable Portfolios, Inc.
·  
American Century VP International Fund: Class II
 
Franklin Templeton Variable Insurance Products Trust
·  
Templeton Foreign Securities Fund: Class 2
 
Janus Aspen Series
·  
International Growth Portfolio: Service Shares
 
Nationwide Variable Insurance Trust
·  
Gartmore NVIT Global Utilities Fund: Class II
·  
NVIT Global Financial Services Fund: Class II (Formerly, Nationwide NVIT Global Financial Services Fund: Class II)
·  
NVIT Health Sciences Fund: Class II (Formerly, Nationwide NVIT Global Health Sciences Fund: Class II)
·  
NVIT Multi-Manager International Value Fund: Class II (Formerly, NVIT International Value Fund: Class II)
·  
NVIT Technology and Communications Fund: Class II (Formerly, Nationwide NVIT Global Technology and Communications Fund: Class II)
 
Oppenheimer Variable Account Funds
·  
Oppenheimer Global Securities Fund/VA: Service Shares
 
Putnam Variable Trust
·  
Putnam VT International Equity Fund: Class IB
 
Van Kampen
The Universal Institutional Funds, Inc.
·  
Emerging Markets Debt Portfolio: 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.
 
Purchase payments not invested in the underlying mutual funds of the Nationwide Variable Account-II ("variable account") may be allocated to the Guaranteed Term Options (Guaranteed Term Options may not be available in every jurisdiction – refer to your contract for specific information).
 
Not all of the underlying mutual funds offered under the contract are available when the Capital Preservation Plus Option is elected.  Please see "Capital Preservation Plus Option" later in this prospectus for the list of underlying mutual funds available in conjunction with that option.

3


 
To contact Charles Schwab Insurance Services:
 
call:           1-888-311-4887
 
write:       Schwab Insurance Services
P.O. Box 7666
San Francisco, California  94120-7666
 
or go on-line to:  www.schwab.com










4


 
Accumulation unit- An accounting unit of measure used to calculate the contract value allocated to the variable account before the annuitization date.
 
Annuitization date- The date on which Nationwide annuity payments begin.
 
Annuity commencement date- The date on which annuity payments are scheduled to begin.
 
Annuity unit- An accounting unit of measure used to calculate the value of variable annuity payments.
 
Contract value- The value of all accumulation units in a contract plus any amount held under Guaranteed Term Options.
 
Contract year- Each year the contract is in force beginning with the date the contract is issued.
 
FDIC– Federal Deposit Insurance Corporation.
 
General account- All assets of Nationwide other than those of the variable account or in other separate accounts that have been or may be established by Nationwide.
 
Guaranteed Term Option - Investment Options that are part of the Multiple Maturity Separate Account providing a guaranteed interest rate paid over certain period of time (or terms), if certain conditions are met.  Guaranteed Term Option is referred to as Target Term Option in the state of Pennsylvania.
 
Individual Retirement Account- An account that qualifies for favorable tax treatment under Section 408(a) of the Internal Revenue Code, but does not include Roth IRAs.
 
Individual Retirement Annuity or IRA- An annuity contract that qualifies for favorable tax treatment under Section 408(b) of the Internal Revenue Code, but does not include Roth IRAs.
 
Investment-Only Contract- A contract purchased by a qualified pension, profit-sharing or stock bonus plan as defined by Section 401(a) of the Internal Revenue Code.
 
Multiple Maturity Separate Account– A separate account of Nationwide funding the Guaranteed Term Options with terms of 3, 5, 7, or 10 years with a fixed rate of return (subject to a market value adjustment).
 
Nationwide- Nationwide Life Insurance Company.
 
Net Asset Value- The value of one share of an underlying mutual fund at the close of the New York Stock Exchange.
 
Non-Qualified Contract- A contract which does not qualify for favorable tax treatment as a Qualified Plan, IRA, Roth IRA, SEP IRA, Simple IRA, or Tax Sheltered Annuity.

Qualified Plan- A retirement plan that receives favorable tax treatment under Section 401 of the Internal Revenue Code, including Investment-Only Contracts.  In this prospectus, all provisions applicable to Qualified Plans also apply to Investment-Only Contracts unless specifically stated otherwise.
 
Roth IRA- An annuity contract which qualifies for favorable tax treatment under Section 408A of the Internal Revenue Code.
 
SEC – Securities and Exchange Commission.
 
SEP IRA- An annuity contract which qualifies for favorable tax treatment under Section 408(k) of the Internal Revenue Code.
 
Simple IRA- An annuity contract which qualifies for favorable tax treatment under Section 408(p) of the Internal Revenue Code.
 
Sub-accounts- Divisions of the variable account for which accumulation units and annuity units are separately maintained – each sub-account corresponds to a single underlying mutual fund.
 
Target Term Option– Investment options that are, in all material respects, the same as Guaranteed Term Options.  All references in this prospectus to Guaranteed Term Options in connection with the Capital Preservation Plus Lifetime Income Option will also mean Target Term Options (in applicable jurisdictions).
 
Tax Sheltered Annuity- An annuity that qualifies for favorable tax treatment under Section 403(b) of the Internal Revenue Code.  None of the Tax Sheltered Annuities sold under this prospectus are subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
 
Valuation date - Each day the New York Stock Exchange is open for business, or any other day during which there is a sufficient degree of trading of underlying mutual fund shares such that the current Net Asset Value of accumulation units or annuity units might be materially affected.  Values of the variable account are determined as of the close of the New York Stock Exchange which generally closes at 4:00 p.m. Eastern Time, but may close earlier on certain days and as conditions warrant.
 
Valuation period-  The period of time commencing at the close of a Valuation date and ending at the close of the New York Stock Exchange for the next succeeding Valuation date.
 
Variable account- Nationwide Variable Account-II, a separate account of Nationwide that contains variable account allocations.  The variable account is divided into sub-accounts, each of which invests in shares of a separate underlying mutual fund.


5



 

Table of Contents
Page
Glossary of Special Terms                                                                                                                                                       
5
Contract Expenses                                                                                                                                                       
8
Underlying Mutual Fund Annual Expenses                                                                                                                                                       
9
Example                                                                                                                                                       
9
Synopsis of the Contracts                                                                                                                                                       
10
Purpose of the Contract
 
Minimum Initial and Subsequent Purchase Payments
 
Charges and Expenses
 
Annuity Payments
 
Taxation
 
Ten Day Free Look
 
Condensed Financial Information                                                                                                                                                       
11
Financial Statements                                                                                                                                                       
11
Nationwide Life Insurance Company                                                                                                                                                       
11
Nationwide Investment Services Corporation                                                                                                                                                       
11
Charles Schwab and Co., Inc.                                                                                                                                                       
11
Investing in the Contract                                                                                                                                                       
12
The Variable Account and Underlying Mutual Funds
 
Guaranteed Term Options
 
The Contract in General                                                                                                                                                       
13
Distribution, Promotional and Sales Expenses
 
Underlying Mutual Fund Payments
 
Profitability
 
Contract Modification
 
Standard Charges and Deductions                                                                                                                                                       
15
Sales Charges
 
Variable Account Charge
 
Contract Maintenance Charge
 
Premium Taxes
 
Short-Term Trading Fees
 
Optional Contract Benefits, Charges and Deductions                                                                                                                                                       
16
Death Benefit Options
 
Beneficiary Protector II Option
 
Capital Preservation Plus Option
 
Removal of Variable Account Charges                                                                                                                                                       
21
Ownership and Interests in the Contract                                                                                                                                                       
22
Contract Owner
 
Joint Owner
 
Contingent Owner
 
Annuitant
 
Contingent Annuitant
 
Co-Annuitant
 
Joint Annuitant
 
Beneficiary and Contingent Beneficiary
 
Changes to the Parties to the Contract
 
Operation of the Contract                                                                                                                                                       
23
Minimum Initial and Subsequent Purchase Payments
 
Pricing
 
Allocation of Purchase Payments
 
Determining the Contract Value
 
Transfer Requests
 
Transfer Restrictions
 
Transfers Prior to Annuitization
 
Transfers After Annuitization
 
Right to Examine and Cancel                                                                                                                                                       
26

6



Table of Contents (continued)
Page
Surrender (Redemption) Prior to Annuitization                                                                                                                                                       
27
Partial Surrenders (Partial Redemptions)
 
Full Surrenders (Full Redemptions)
 
Surrender (Redemption) After Annuitization                                                                                                                                                       
27
Surrenders Under Certain Plan Types                                                                                                                                                       
27
Surrenders Under a Tax Sheltered Annuity
 
Surrenders Under a Texas Optional Retirement Program or a Louisiana Optional Retirement Plan
 
Assignment                                                                                                                                                       
28
Contract Owner Services                                                                                                                                                       
28
Asset Rebalancing
 
Dollar Cost Averaging
 
Systematic Withdrawals
 
Death Benefits                                                                                                                                                       
29
Death of Contract Owner
 
Death of Annuitant
 
Death of Contract Owner/Annuitant
 
Death Benefit Payment
 
Death Benefit Calculations
 
Spousal Protection Feature
 
Annuity Commencement Date                                                                                                                                                       
33
Annuitizing the Contract                                                                                                                                                       
33
Annuitization Date
 
Annuitization
 
Fixed Annuity Payments
 
Variable Annuity Payments
 
Frequency and Amount of Annuity Payments
 
Annuity Payment Options                                                                                                                                                       
34
Annuity Payment Options for Contracts with Total Purchase Payments Less Than or Equal to $2,000,000
 
Annuity Payment Options for Contracts with Total Purchase Payments Greater Than $2,000,000
 
Statements and Reports                                                                                                                                                       
35
Legal Proceedings                                                                                                                                                       
35
Table of Contents of Statement of Additional Information                                                                                                                                                       
39
Appendix A: Underlying Mutual Funds                                                                                                                                                       
40
Appendix B: Condensed Financial Information                                                                                                                                                       
52
Appendix C: Contract Types and Tax Information                                                                                                                                                       
81


7


 
The following tables describe the fees and expenses that a contract owner will pay when buying, owning, or surrendering the contract.
 
The first table describes the fees and expenses a contract owner will pay at the time the contract is purchased, surrendered, or when cash value is transferred between investment options.
 
Contract Owner Transaction Expenses
Sales Charges                                                                                                                                                 
0%1
Maximum Premium Tax Charge (as a percentage of purchase payments)                                                                                                                                                 
Maximum Short-Term Trading Fee (as a percentage of transaction amount)                                                                                                                                                 
5%2
1%
 
The next table describes the fees and expenses (not including underlying mutual fund fees and expenses) that a contract owner will pay periodically during the life of the contract including charges for any optional benefits available under the contract.  The fees associated with any optional benefits elected will be in addition to the variable account charge.
 
Recurring Contract Expenses
Maximum Annual Contract Maintenance Charge                                                                                                                                                 
$303
Variable Account Annual Expenses (annualized rate of total variable account charges as a percentage of the daily net assets)4
 
Variable Account Charge                                                                                                                                             
0.95%
Death Benefit Options (an applicant may elect one death benefit option as a replacement for the standard death benefit)
 
One-Year Enhanced Death Benefit Option                                                                                                                                             
Total Variable Account Charges (including this option only)                                                                                                                                             
0.10%
1.05%
Combination Enhanced Death Benefit Option                                                                                                                                             
Total Variable Account Charges (including this option only)                                                                                                                                             
0.40%5
1.35%
Beneficiary Protector II Option                                                                                                                                                  
Total Variable Account Charges (including this option only)                                                                                                                                                  
0.35%6
1.30%
In addition to the charge assessed to variable account allocations, allocations made to the Guaranteed Term Options will be assessed a fee of 0.35%.
 
Capital Preservation Plus Option                                                                                                                                                  
Total Variable Account Charges (including this option only)                                                                                                                                                  
In addition to the charge assessed to variable account allocations, allocations made to the Guaranteed Term Options or Target Term Options will be assessed a fee not to exceed 0.50%.
0.50%7
1.45%
 
The next table shows the fees and expenses that a contract owner would pay if he/she elected all of the optional benefits available under the contract (and the most expensive of mutually exclusive optional benefits).
 
Summary of Maximum Contract Expenses
Variable Account Charge (applicable to all contracts)                                                                                                                                                  
0.95%
Combination Enhanced Death Benefit Option                                                                                                                                                  
0.40%
Beneficiary Protector II Option                                                                                                                                                  
0.35%
Capital Preservation Plus Option                                                                                                                                                  
0.50%
Maximum Possible Total Variable Account Charges                                                                                                                                                  
2.20%


8


 
 
The next table shows the minimum and maximum total operating expenses, as of December 31, 2007, charged (before any waivers or reimbursements) by the underlying mutual funds periodically during the life of the contract.  The table does not reflect Short-Term Trading Fees.  More detail concerning each underlying mutual fund’s fees and expenses, including waivers and reimbursements, is contained in the prospectus for each underlying mutual fund.
 
Total Annual Underlying Mutual Fund Operating Expenses
Minimum
Maximum
     
(expenses that are deducted from underlying mutual fund assets, including management fees, distribution (12b-1) fees, and other expenses, as a percentage of the underlying mutual fund's average net assets)
0.35%
2.49%
 
The minimum and maximum underlying mutual fund operating expenses indicated above do not reflect voluntary or contractual reimbursements and/or waivers applied to some underlying mutual funds.  Therefore, actual expenses could be lower.  Refer to the underlying mutual fund prospectuses for specific expense information.
 

 
1 There are no sales charges assessed upon purchase payments or surrenders from the contract.
 
2 Nationwide will charge between 0% and 5% of purchase payments for premium taxes levied by state or other governmental entities.
 
3 The Contract Maintenance Charge is deducted proportionally from each sub-account on an annual basis from all contracts containing less than $50,000 on each contract anniversary.  This charge is permanently waived for any contract valued at $50,000 or more on any contract anniversary.
 
4 These charges apply only to sub-account allocations.  They do not apply to allocations made to the Guaranteed Term Options.  They are charged on a daily basis at the annualized rate noted above.
 
5 The Combination Enhanced Death Benefit Option is only available for contracts with annuitants age 80 or younger at the time of application.
 
6 The Beneficiary Protector II Option is only available for contracts with annuitants age 75 or younger at the time of application.
 
7 The Capital Preservation Plus Option may be elected at application.  Nationwide will discontinue deducting the charges associated with the Capital Preservation Plus Option at the end of the Guaranteed Term Option/Target Term Option that corresponds to the end of the program period elected by the contract owner.

 
 
This Example is intended to help contract owners compare the cost of investing in the contract with the cost of investing in other variable annuity contracts.  These costs include contract owner transaction expenses, contract fees, variable account annual expenses, and underlying mutual fund fees and expenses.  The Example does not reflect premium taxes or Short-Term Trading Fees which, if reflected, would result in higher expenses.
 
The Example assumes:
·  
a $10,000 investment in the contract for the time periods indicated;
·  
a 5% return each year;
·  
the maximum and the minimum fees and expenses of any of the underlying mutual funds;
·  
a $30 Contract Maintenance Charge expressed as a percentage of the average contract account size; and
·  
the total variable account charges associated with the most expensive combination of optional benefits (2.20%).
 
For those contracts that do not elect the most expensive combination of optional benefits, the expenses would be lower.
 
Costs associated with surrendering, NOT surrendering or annuitizing at the end of the applicable one-, three-, five- or ten-year time periods are shown below:
 
1
Yr.
3 Yrs.
5 Yrs.
10 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (2.49%)
524*
1,568
2,607
5,183
Minimum Total Underlying Mutual Fund Operating Expenses (0.35%)
299*
916
1,558
3,278
 
*Contracts sold under this prospectus do not permit annuitization in the first or second contract years.

9


 
The contracts described in this prospectus are individual flexible purchase payment contracts.
 
The contracts can be categorized as:
·  
Charitable Remainder Trusts;
·  
Individual Retirement Annuities;
·  
Investment-Only Contracts (Qualified Plans);
·  
Non-Qualified Contracts;
·  
Roth IRAs;
·  
Simplified Employee Pension IRAs;
·  
Simple IRAs; and
·  
Tax Sheltered Annuities (Non-ERISA).
 
For more detailed information with regard to the differences in contract types, please see Appendix C: Contract Types and Tax Information later in this prospectus.
 
This contract is not designed for and does not support active trading strategies.  In order to protect investors in this contract that do not utilize such strategies, Nationwide may initiate certain exchange offers intended to provide contract owners that meet certain criteria with an alternate variable annuity designed to accommodate active trading.  If this contract is exchanged as part of an exchange offer, the exchange will be made on the basis of the relative Net Asset Values of the exchanged contract and no sales loads will be assessed on the new contract.
 
Purpose of the Contract
 
The annuity described in this prospectus is intended to provide benefits to a single individual and his/her beneficiaries.  It is not intended to be used:
 
·  
by institutional investors;
 
·  
in connection with other Nationwide contracts that have the same annuitant; or
 
·  
in connection with other Nationwide contracts that have different annuitants, but the same contract owner.
 
By providing these annuity benefits, Nationwide assumes certain risks.  If Nationwide determines that the risks it intended to assume in issuing the contract have been altered by misusing the contract as described above, Nationwide reserves the right to take any action it deems necessary to reduce or eliminate the altered risk, including, but not limited to, rescinding the contract and returning the contract value (less any market value adjustment).  Nationwide also reserves the right to take any action it deems necessary to reduce or eliminate altered risk resulting from materially false, misleading, incomplete or otherwise deficient information provided by the contract owner.
 

 
Minimum Initial and Subsequent Purchase Payments
 
Contract
Type
Minimum Initial Purchase Payment
Minimum Subsequent Payments*
Charitable Remainder Trust
$5,000
$500
IRA
$3,000
$500
Investment-Only
$3,000
$500
Non-Qualified
$5,000
$500
Roth IRA
$3,000
$500
SEP IRA
$3,000
$500
Simple IRA
$3,000
$500
Tax Sheltered Annuity **
$3,000
$500
 
*For subsequent purchase payments sent via electronic deposit, the minimum subsequent purchase payment is $100.
 
**Only available for contracts issued prior to September 25, 2007 and certain state Optional Retirement Plans and/or Programs that have purchased at least one individual annuity contract issued by Nationwide prior to September 25, 2007.
 
Guaranteed Term Options
 
Guaranteed Term Options are separate investment options under the contract.  The minimum amount that may be allocated to a Guaranteed Term Option is $1,000.
 
Charges and Expenses
 
Variable Account Charge
 
Nationwide deducts a Variable Account Charge equal to an annualized rate of 0.95% of the daily net assets of the variable account.  Nationwide assesses this charge to offset expenses incurred in the day to day business of issuing, distributing and maintaining variable annuity contracts.
 
Contract Maintenance Charge
 
A $30 Contract Maintenance Charge is assessed on each contract anniversary and upon full surrender of the contract.  If, on any contract anniversary (and on the date of a full surrender), the contract value is $50,000 or more, Nationwide will waive the Contract Maintenance Charge from that point forward.
 
Death Benefit Options
 
Two death benefit options are available to replace the standard death benefit under the contract at the time of application:
 
·  
the One-Year Enhanced Death Benefit Option (0.10%); or
 
·  
the Combination Enhanced Death Benefit Option (0.40%).
 
Charges associated with any death benefit election will be assessed as a percentage of the daily net assets of the variable account.
 
For more information about the standard and optional death benefits available, please see "Death Benefit Calculations" later in this prospectus.

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Beneficiary Protector II Option
 
A Beneficiary Protector II Option is available under the contract at the time of application.  This option is only available for contracts with annuitants age 75 or younger at the time of application.  If the contract owner of an eligible contract elects the Beneficiary Protector II Option, Nationwide will deduct an additional charge at an annualized rate of 0.35% of the daily net assets of the variable account.  Additionally, allocations made to the Guaranteed Term Options will be assessed a fee of 0.35%.
 
For more information about the benefits provided by this option, please see "Beneficiary Protector II Option" later in this prospectus.
 
Capital Preservation Plus Option
 
A Capital Preservation Plus Option may only be elected at application.  If the contract owner or applicant elects the Capital Preservation Plus Option, Nationwide will deduct an additional charge at an annualized rate not to exceed 0.50% of the daily net assests of the variable account.  Additionally, allocations made to the Guaranteed Term Options or Target Term Options will be assessed a fee of not more than 0.50%.  Consequently, any guaranteed interest rate of return for assets in the Guaranteed Term Options/Target Term Options will be lowered due to the assessment of this charge.
 
For more information about this option, please see "Capital Preservation Plus Option" later in this prospectus.
 
Charges for Optional Benefits
 
The charges associated with optional benefits are generally only assessed prior to annuitization.
 
Annuity Payments
 
Annuity payments begin on the annuitization date and will be based on the annuity payment option chosen prior to annuitization.  Annuity payments will generally be received within 7 to 10 days after each annuity payment date.
 
Taxation
 
How a contract is taxed depends on the type of contract issued and the purpose for which the contract is purchased.  Nationwide will charge against the contract any premium taxes levied by any governmental authority (see "Federal Tax Considerations" in Appendix C: Contract Types and Tax Information and "Premium Taxes").
 
Ten Day Free Look
 
Under state insurance laws, you have the right, during a limited period of time, to examine your contract and decide if you want to keep it or cancel it. This right is referred to as your “free look” right. The length of this time period depends on the law of your state, and may vary depending on whether your purchase is replacing another annuity contract you own. Check your contract for more details about the free look right in your state. See "Right to Examine And Cancel” later in this prospectus for more information.

 
 
The value of an accumulation unit is determined on the basis of changes in the per share value of the underlying mutual funds and the assessment of variable account charges which may vary from contract to contract (for more information on the calculation of accumulation unit values, see "Determining Variable Account Value – Valuing an Accumulation Unit").  Please refer to Appendix B for information regarding the minimum and maximum class of accumulation unit values.  All classes of accumulation unit values may be obtained, free of charge, by contacting Nationwide’s home office at the telephone number listed on page 1 of this prospectus.
 
 
Financial statements for the variable account and the consolidated financial statements for Nationwide Life Insurance Company are located in the Statement of Additional Information.  A current Statement of Additional Information may be obtained, without charge, by contacting Nationwide’s home office at the telephone number listed on page 1 of this prospectus.
 
 
Nationwide is a stock life insurance company organized under Ohio law in March 1929, with its home office at One Nationwide Plaza, Columbus, Ohio 43215.  Nationwide is a provider of life insurance, annuities and retirement products.  It is admitted to do business in all states, the District of Columbia and Puerto Rico.
 
Nationwide is a member of the Nationwide group of companies.  Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (the "Companies") are the ultimate controlling persons of the Nationwide group of companies.  The Companies were organized under Ohio law in December 1925 and 1933 respectively.  The Companies engage in a general insurance and reinsurance business, except life insurance.
 
 
The contracts are distributed by the general distributor, Nationwide Investment Services Corporation ("NISC"), One Nationwide Plaza, Columbus, Ohio 43215.  NISC is a wholly owned subsidiary of Nationwide.
 
 
The contracts are sold exclusively by representatives of Charles Schwab and Co., Inc., ("Schwab") Schwab Insurance Services, P.O. Box 7666, San Francisco, California 94120-7666.  Schwab is not affiliated with Nationwide or NISC.

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The Variable Account and Underlying Mutual Funds
 
Nationwide Variable Account-II is a variable account that invests in the underlying mutual funds listed in Appendix A.  Nationwide established the variable account on October 7, 1981 pursuant to Ohio law.  Although the variable account is registered with the SEC as a unit investment trust pursuant to the Investment Company Act of 1940 ("1940 Act"), the SEC does not supervise the management of Nationwide or the variable account.
 
Income, gains, and losses credited to, or charged against, the variable account reflect the variable account’s own investment experience and not the investment experience of Nationwide’s other assets.  The variable account’s assets are held separately from Nationwide’s assets and are not chargeable with liabilities incurred in any other business of Nationwide.  Nationwide is obligated to pay all amounts promised to contract owners under the contracts.
 
The variable account is divided into sub-accounts, each corresponding to a single underlying mutual fund.  Nationwide uses the assets of each sub-account to buy shares of the underlying mutual funds based on contract owner instructions.
 
Contract owners receive underlying mutual fund prospectuses when they make their initial sub-account allocations and any time they change those allocations. Contract owners can obtain prospectuses for underlying mutual funds at any other time by contacting Nationwide’s home office at the telephone number listed on page 1 of this prospectus.
 
Underlying mutual funds in the variable account are NOT publicly traded mutual funds.  They are only 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.
 
The investment advisers of the underlying mutual funds may manage publicly traded mutual funds with similar names and investment objectives.  However, the underlying mutual funds are NOT directly related to any publicly traded mutual fund.  Contract owners should not compare the performance of a publicly traded fund with the performance of underlying mutual funds participating in the variable account.  The performance of the underlying mutual funds could differ substantially from that of any publicly traded funds.
 
The particular underlying mutual funds available under the contract may change from time to time.  Specifically, underlying mutual funds or underlying mutual fund share classes that are currently available may be removed or closed off to future investment.  New underlying mutual funds or new share classes of currently available underlying mutual funds may be added.  Contract owners will receive notice of any such changes that affect their contract.  Additionally, not all of the underlying mutual funds are available in every state.

 
In the future, additional underlying mutual funds managed by certain financial institutions, brokerage firms or their affiliates may be added to the variable account.  These additional underlying mutual funds may be offered exclusively to purchasing customers of the particular financial institution or brokerage firm, or through other exclusive distribution arrangements.
 
Voting Rights
 
Contract owners who have allocated assets to the underlying mutual funds are entitled to certain voting rights.  Nationwide will vote contract owner shares at special shareholder meetings based on contract owner instructions.  However, if the law changes and Nationwide is allowed to vote in its own right, it may elect to do so.
 
Contract owners with voting interests in an underlying mutual fund will be notified of issues requiring the shareholders’ vote as soon as possible before the shareholder meeting.  Notification will contain proxy materials and a form with which to give Nationwide voting instructions.  Nationwide will vote shares for which no instructions are received in the same proportion as those that are received.  What this means to you is that when only a small number of contract owners vote, each vote has a greater impact on, and may control the outcome.
 
The number of shares which a contract owner may vote is determined by dividing the cash value of the amount they have allocated to an underlying mutual fund by the Net Asset Value of that underlying mutual fund.  Nationwide will designate a date for this determination not more than 90 days before the shareholder meeting.
 
Material Conflicts
 
The underlying mutual funds may be offered through separate accounts of other insurance companies, as well as through other separate accounts of Nationwide.  Nationwide does not anticipate any disadvantages to this.  However, it is possible that a conflict may arise between the interests of the variable account and one or more of the other separate accounts in which these underlying mutual funds participate.
 
Material conflicts may occur due to a change in law affecting the operations of variable life insurance policies and variable annuity contracts, or differences in the voting instructions of the contract owners and those of other companies.  If a material conflict occurs, Nationwide will take whatever steps are necessary to protect contract owners and variable annuity payees, including withdrawal of the variable account from participation in the underlying mutual fund(s) involved in the conflict.
 
Substitution of Securities
 
Nationwide may substitute, eliminate, or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occurs:
 
(1)  
shares of a current underlying mutual fund are no longer available for investment; or

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(2)  
further investment in an underlying mutual fund is inappropriate.
 
No substitution of shares may take place without the prior approval of the SEC.  All affected contract owners will be notified in the event there is a substitution, elimination or combination of shares.
 
In February 2008, Nationwide filed an application with the SEC for an order permitting it to substitute assets allocated to certain underlying mutual funds into other underlying mutual funds available under the contract that have similar investment objectives and strategies.  If and when Nationwide receives SEC approval for these substitutions, affected contract owners will be notified in advance of the specific details relating to the substitutions and will be given an opportunity to make alternate investment allocations.
 
Deregistration of the Separate Account
 
Nationwide may deregister Nationwide Variable Account-II under the 1940 Act in the event the separate account meets an exemption from registration under the 1940 Act, if there are no shareholders in the separate account or for any other purpose approved by the SEC.
 
No deregistration may take place without the prior approval of the SEC.  All contract owners will be notified in the event Nationwide deregisters Variable Account-II.
 
Guaranteed Term Options
 
Guaranteed Term Options ("GTOs") are separate investment options under the contract.  The minimum amount that may be allocated to a GTO is $1,000. Allocations to a Guaranteed Term Option are held in a separate account, established by Nationwide pursuant to Ohio law, to aid in the reserving and accounting for Guaranteed Term Option obligations.  The separate account's assets are held separately from Nationwide's other assets and are not chargeable with liabilities incurred in any other business of Nationwide.
 
However, the general assets of Nationwide are available for the purpose of meeting the guarantees of any Guaranteed Term Option, subject to Nationwide's claims-paying ability.  A Guaranteed Term Option prospectus should be read along with this prospectus.
 
Guaranteed Term Options provide a guaranteed rate of interest over four different maturity durations: three (3), five (5), seven (7) or ten (10) years.  Note:  The guaranteed term may last for up to 3 months beyond the 3, 5, 7, or 10 year period since every guaranteed term will end on the final day of a calendar quarter.
 
For the duration selected, Nationwide will declare a guaranteed interest rate. The guaranteed interest rate will be credited to amounts allocated to the Guaranteed Term Option(s) unless a distribution is taken before the maturity date.  If a distribution occurs before the maturity date, the amount distributed will be subject to a market value adjustment.  A market value adjustment can increase or decrease the amount distributed depending on fluctuations in constant maturity treasury rates.  No market value adjustment will be applied if Guaranteed Term Option allocations are held to maturity.
 
Because a market value adjustment can affect the value of a distribution, its effects should be carefully considered before surrendering or transferring from Guaranteed Term Options.  Please refer to the prospectus for the Guaranteed Term Options for further information. Contract owners can obtain a GTO prospectus, by contacting Nationwide's home office at the telephone number listed on page 1 of this prospectus.Guaranteed Term Options are available only during the accumulation phase of a contract.  They are not available after the annuitization date.  In addition, Guaranteed Term Options are not available for use with Asset Rebalancing, Dollar Cost Averaging, or Systematic Withdrawals.
 
Guaranteed Term Options may not be available in every state.
 
GTO Charges Assessed for Certain Optional Benefits
 
For contract owners that elect the following optional benefits, allocations made to the Guaranteed Term Options will be assessed a fee as indicated:
 
Optional Benefit
GTO Charge
Beneficiary Protector II Option
0.35%
Capital Preservation Plus Option
0.50%
 
The GTO charges are assessed by decreasing the interest rate of return credited to assets allocated to the Guranteed Term Options.
 
 
Target Term Options
 
Due to certain state requirements, in some state jurisdictions, Nationwide uses Target Term Options instead of Guaranteed Term Options in connection with the Capital Preservation Plus Option.  Target Term Options are not available separate from the Capital Preservation Plus Option.
 
For all material purposes, Guaranteed Term Options and Target Term Options are the same.  Target Term Options are managed and administered identically to Guaranteed Term Options.  The distinction is that the interest rate associated with Target Term Options is not guaranteed as it is in Guaranteed Term Options.  However, because the options are managed and administered identically, the result to the investor is the same.
 
All references in this prospectus to Guaranteed Term Options in connection with the Capital Preservation Plus Option will also mean Target Term Options (in applicable jurisdictions).  Please refer to the prospectus for the Guaranteed Term Options/Target Term Options for more information.
 
 
Variable annuities are complex investment products with unique benefits and advantages that may be particularly useful in meeting long-term savings and retirement needs.  There are costs and charges associated with these benefits and advantages – costs and charges that are different, or do not exist at all, within other investment products.  With help from

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a Charles Schwab representative, investors are encouraged to compare and contrast the costs and benefits of the variable
 
annuity described in this prospectus against those of other investment products, especially other variable annuity products offered through Charles Schwab and Co., Inc. This process of comparison and analysis should aid in determining whether the purchase of the contract described in this prospectus is consistent with your investment objectives, risk tolerance, investment time horizon, marital status, tax situation and other personal characteristics and needs.  Not all benefits, programs, features and investment options described in this prospectus are available or approved for use in every state.
 
In order to comply with the USA Patriot Act and rules promulgated thereunder, Nationwide has implement ed procedures designed to prevent contracts described in this prospectus from being used to facilitate money laundering or the financing of terrorist activities.
 
If this contract is purchased to replace another variable annuity, be aware that the mortality tables used to determine the amount of annuity payments may be less favorable than those in the contract being replaced.
 
Investors who purchase the variable annuity described in this prospectus may be eligible to apply the contract value to the total amount of the investor's household assets maintained at Schwab.  If the total amount of the investor's household assets at Schwab meet certain predetermined breakpoints, the investor may be eligible for certain fee reductions or other related benefits offered by Schwab.  All terms and conditions regarding the fees and account types eligible for such consideration are determined by Schwab.  Charges and expenses of the variable annuity contract described in this prospectus are NOT subject to reduction or waiver by Schwab.  Please consult a Charles Schwab representative for more information.
 
In general, deferred variable annuities are long-term investments; they are not intended as short-term investments.  Accordingly, Nationwide has designed the contract to offer features, pricing, and investment options that encourage long-term ownership.  It is very important that contract owners and prospective contract owners understand all the costs associated with owning a contract, and if and how those costs change during the lifetime of the contract.  Contract and optional charges may not be the same in later contract years as they are in early contract years.  The various contract and optional benefit charges are assessed in order to compensate Nationwide for administrative services, distribution and operational expenses, and assumed actuarial risks associated with the contract.
 
Following is a discussion of some relevant factors that may be of particular interest to prospective investors.
 
Distribution, Promotional and Sales Expenses
 
Nationwide pays commissions to Schwab for selling the contracts.  The maximum gross commission that Nationwide will pay on the sale of the contracts is 1.25%.  Nationwide may also, instead of a premium-based commission, pay an asset-based commission (sometimes referred to as "trails" or "residuals"), or a combination of the two.
 
Underlying Mutual Fund Payments
 
Nationwide’s Relationship with the Underlying Mutual Funds
 
The underlying mutual funds incur expenses each time they sell, administer, or redeem their shares.  The variable account aggregates contract owner purchase, redemption, and transfer requests and submits net or aggregated purchase/redemption requests to each underlying mutual fund daily.   The variable account (and not the contract owners) is the underlying mutual fund shareholder.  When the variable 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.  Nationwide incurs these expenses instead.
 
Nationwide also incurs the distribution costs of selling the contract (as discussed above), which benefit the underlying mutual funds by providing contract 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 Nationwide or its affiliates with wholesaling services that assist in the distribution of the contract and may pay Nationwide or its 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 contract.
 
Types of Payments Nationwide Receives
 
In light of the above, the underlying mutual funds and their affiliates make certain payments to Nationwide or its 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 contracts and other variable contracts Nationwide and its 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 contracts, paying expenses that Nationwide or its affiliates incur in promoting, marketing, and administering the contracts and the underlying mutual funds, and achieving a profit.
 
Nationwide or its 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.
 

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Furthermore, Nationwide benefits from assets invested in Nationwide’s affiliated underlying mutual funds (i.e., Nationwide Variable Insurance Trust) because its affiliates also receive compensation from
the underlying mutual fundsfor investment advisory, administrative, transfer agency, distribution, and/or other services.  Thus, Nationwide may receive more revenue with respect to affiliated
underlying mutual funds than unaffiliated underlying mutual funds.  Nationwide took into consideration the anticipated payments from the underlying mutual funds when we determined the charges
imposed under the contracts (apart from fees and expenses imposed by the underlying mutual funds).  Without these payments, Nationwide would have imposed higher charges under the contract.
 
Amount of Payments Nationwide Receives
 
For the year ended December 31, 2007, the underlying mutual fund payments Nationwide and its affiliates received from the underlying mutual funds did not exceed 0.65% (as a percentage of the average daily net assets invested in the underlying mutual funds) offered through this contract or other variable contracts that Nationwide and its 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 Nationwide or its 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 Nationwide and its affiliates receive depends on the assets of the underlying mutual funds attributable to the contract, Nationwide and its 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 amount of payments Nationwide receives, go to www.nationwide.com.
 
Identification of Underlying Mutual Funds
 
Nationwide 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 Nationwide considers 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 contracts that offer underlying mutual funds with lower fees.  You should consider all of the fees and charges of the contract in relation to its features and benefits when making your decision to invest.  Please note that higher contract and underlying mutual fund fees and charges have a direct effect on your investment performance.


Profitability
 
Nationwide does consider profitability when determining the charges in the contract.  In early contract years, Nationwide does not anticipate earning a profit, since that is a time when administrative and distribution expenses are typically higher.  Nationwide does, however, anticipate earning a profit in later contract years.  In general, Nationwide's profit will be greater the higher the investment return and the longer the contract is held.
 
Contract Modification
 
Nationwide may modify the annuity contracts, but no modification will affect the amount or term of any annuity contract unless a modification is required to conform the annuity contract to applicable federal or state law.  No modification will affect the method by which the Contract Values are determined.
 
 
Sales Charges
 
There are no sales charges assessed upon purchase payments or surrenders from the contract.
 
Variable Account Charge
 
Nationwide deducts a Variable Account Charge from the variable account.  This amount is computed on a daily basis and is equal to an annualized rate of 0.95% of the daily net assets of the variable account.  This fee compensates Nationwide for expenses incurred as part of distributing and issuing the annuity contracts, including:
 
·  
mortality and expense risks including the standard death benefit;
 
·  
acquisition and administrative expenses; and
 
·  
compensation to selling agents.
 
If the Variable Account Charge is insufficient to cover actual expenses, the loss is borne by Nationwide.  Nationwide may realize a profit from this charge.
 
Contract Maintenance Charge
 
Nationwide deducts a Contract Maintenance Charge of $30 on each contract anniversary that occurs before annuitization and upon full surrender of the contract.  This charge reimburses Nationwide for administrative expenses involved in issuing and maintaining the contract.
 
If, on any contract anniversary (or on the date of a full surrender), the contract value is $50,000 or more, Nationwide will waive the Contract Maintenance Charge from that point forward.
 
The deduction of the Contract Maintenance Charge will be taken proportionately from each sub-account and the Guaranteed Term Options based on the value in each option as compared to the total contract value.

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Nationwide will not increase the Contract Maintenance Charge.  Nationwide will not reduce or eliminate the Contract Maintenance Charge where it would be discriminatory or unlawful.
 
Premium Taxes
 
Nationwide will charge against the contract value any premium taxes levied by a state or other government entity.  Premium tax rates currently range from 0% to 5%.  This range is subject to change.  The method used to assess premium tax will be determined by Nationwide at its sole discretion in compliance with state law.
 
If applicable, Nationwide will deduct premium taxes from the contract either at:
 
(1)  
the time the contract is surrendered;
 
(2)  
annuitization; or
 
(3)  
such earlier date as Nationwide becomes subject to premium taxes.
 
Premium taxes may be deducted from death benefit proceeds.
 
Short-Term Trading Fees
 
Some underlying 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 underlying mutual fund (and contract owners with interests allocated in the underlying 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 contract owners not engaged in such strategies.
 
Any short-term trading fee assessed by any underlying mutual fund available in conjunction with the contracts 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 underlying mutual funds that charge such fees (see the underlying mutual fund prospectus).  Any short-term trading fees paid are retained by the underlying mutual fund, not by Nationwide, and are part of the underlying mutual fund’s assets.  Contract owners are responsible for monitoring the length of time allocations are held in any particular underlying mutual fund.  Nationwide will not provide advance notice of the assessment of any applicable short-term trading fee.
 
For a complete list of the underlying mutual funds offered under the contract that assess (or reserve the right to assess) a short-term trading fee, please see "Underlying Mutual Fund Annual Expenses" earlier in this prospectus.
 
If a short-term trading fee is assessed, the underlying mutual fund will charge the variable account 1% of the amount determined to be engaged in short-term trading.  The variable account will then pass the short-term trading fee on to the specific contract owner that engaged in short-term trading by deducting an amount equal to the short-term trading fee from that contract owner’s sub-account value.  All such fees will be remitted to the underlying mutual fund; none of the fee proceeds will be retained by Nationwide or the variable account.
 
When multiple purchase payments (or exchanges) are made to a sub-account that is subject to short-term trading fees, 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 the short-term trading fees.  Transactions that are not subject to short-term trading fees include:
 
·  
scheduled and systematic transfers, such as Dollar Cost Averaging, Asset Rebalancing, and Systematic Withdrawals;
 
·  
surrenders;
 
·  
surrenders of annuity units to make annuity payments;
 
·  
surrenders of accumulation units to pay the annual Contract Maintenance Charge;
 
·  
surrenders of accumulation units to pay a death benefit; or
 
·  
transfers made upon annuitization of the contract.
 
New share classes of certain currently available underlying mutual funds may be added as investment options under the contracts.  These new share classes may require the assessment of short-term trading or redemption fees.  When these new share classes are added, new purchase payment allocations and exchange reallocations to the underlying mutual funds in question may be limited to the new share class.
 
 
For an additional charge, the following optional benefits are available to contract owners.  Not all optional benefits are available in every state.  Unless otherwise indicated:
 
(1)  
optional benefits must be elected at the time of application;
 
(2)  
optional benefits, once elected, may not be terminated; and
 
(3)  
the charges associated with the optional benefits will be assessed until annuitization.
 
Death Benefit Options
 
For an additional charge, the contract owner may elect one of two death benefit options.  The charges associated with these options will be assessed until annuitization and are assessed on variable account allocations only.

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One-Year Enhanced Death Benefit Option
 
For contracts that have elected this option, if the total of all purchase payments made to the contract is $3,000,000 or less, the death benefit will be the greatest of:
 
(1)  
(a)   if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit, or the contract value as of the date of the
        annuitant's death;
 
                 (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)
the total of all purchase payments, less an adjustment for amounts surrendered; or
 
(3)
the highest contract value on any contract anniversary prior to the annuitant's 86th birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary.
 
For contracts that have elected this option, if the total of all purchase payments made to this contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision on page 30.
 
This option can be elected for an additional charge of 0.10% of the daily net assets of the variable account.  Nationwide may realize a profit from the charge assessed for this option.For more complete information on this death benefit option, please see "Death Benefit Calculations" on page 30.
 
The One-Year Enhanced Death Benefit also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.  Please see "Spousal Protection Feature" later in this prospectus.
 
Combination Enhanced Death Benefit Option
 
For contracts that have elected this option, if the total of all purchase payments made to the contract is $3,000,000 or less, the death benefit will be the greatest of:
 
(1)  
(a)   if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit, or the contract value as of the date of the
       annuitant's death;
 
                (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)  
the total of all purchase payments, less an adjustment for amounts surrendered;
 
(3)  
the highest contract value on any contract anniversary before the annuitant’s 81st birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary; or
 
(4)  
the 5% interest anniversary value (See the "Death Benefit Calculation" section for a description of this value.)
 
For contracts that have elected this option, if the total of all purchase payments made to this contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision on page 30.
 
This option can be elected for an additional charge of 0.40% of the daily net assets of the variable account.  Nationwide may realize a profit from the charge assessed for this option.
 
For more complete information on this death benefit option, please see "Death Benefit Calculations" on page 30.
 
The Combination Enhanced Death Benefit also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.  Please see "Spousal Protection Feature" later in this prospectus.
 
Beneficiary Protector II Option
 
For an additional charge at an annualized rate of 0.35% of the daily net assets of the variable account, the contract owner may purchase the Beneficiary Protector II Option.  In addition, allocations to the Guaranteed Term Options will be assessed a fee of 0.35%. Nationwide will also stop assessing this charge once the contract is annuitized. Nationwide may realize a profit from the charge assessed for this option.  The Beneficiary Protector II Option is only available for contracts with annuitants age 75 or younger at the time of application.
 
The Beneficiary Protector II Option provides that upon the death of the annuitant (and potentially, the co-annuitant, if one is named), and in addition to any death benefit payable, Nationwide will credit an additional amount to the contract (the "benefit").  The amount of the benefit depends on the annuitant’s age at the time of application and, if applicable, the co-annuitant’s age at the time of the first annuitant’s death.
 
After the death of the last surviving annuitant or after all applicable benefits have been credited to the contract, the charge associated with the Beneficiary Protector II Option will be removed and the beneficiary may:
 
(a)  
terminate the contract; or
 
(b)  
continue the contract, subject to any mandatory distribution rules.
 
Calculation of the First Benefit
 
The formula for determining the first benefit, which is paid upon the first annuitant’s death, is as follows:
 
Earnings Percentage x Adjusted Earnings
 
If the annuitant is age 70 or younger at the time of application, the Earnings Percentage will be 40%.  If the annuitant is age 71 through age 75 at the time of application, the Earnings Percentage will be 25%.
 
Adjusted Earnings = (a) – (b); where:

17


 
a =  
the contract value on the date the death benefit is calculated and prior to any death benefit calculation; and
 
b =  
purchase payments, proportionally adjusted for surrenders.
 
The adjustment for amounts surrendered will reduce purchase payments in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
There is a limit on the amount of Adjusted Earnings used in the first benefit calculation.
 
Maximum Adjusted Earnings = 200% of the total of all purchase payments that were applied to the contract more than 12 months before the date of the annuitant’s death, proportionally adjusted for surrenders.
 
The benefit will either be paid in addition to the death benefit, or will be credited to the contract as soon as practicable after being calculated, if there is a co-annuitant named to the contract.  If the benefit is credited to the contract value, it will be subject to any applicable contract charges.
 
If there is no co-annuitant named to the contract, the charge associated with the Beneficiary Protector II Option will be removed after the benefit is paid.
 
Calculation of the Second Benefit
 
If a co-annuitant is named under the contract, a second benefit will be paid upon the death of the co-annuitant if the co-annuitant is age 75 or younger at the date of the first annuitant’s death.  If the co-annuitant is older than age 75 at the date of the first annuitant’s death, no second benefit will be paid and the charge associated with the Beneficiary Protector II Option will be removed.
 
The calculation of the second benefit will be based on earnings to the contract after the first benefit was calculated.  The formula for calculating the second benefit is as follows:
 
Earnings Percentage x Adjusted Earnings from the Date of the First Benefit
 
If the co-annuitant is age 70 or younger at the time of the first annuitant’s death, the Earnings Percentage will be 40%.  If the co-annuitant is age 71 through age 75 at the time of the first annuitant’s death, the Earnings Percentage will be 25%.
 
Adjusted Earnings from the Date of the First Benefit = (a) – (b) – (c), where:
 
a =  
contract value on the date the second death benefit is calculated (before the second death benefit is calculated);
 
b =  
the contract value on the date the first benefit and the first death benefit were calculated (after the first benefit and the first death benefit were applied), proportionately adjusted for surrenders; and
 
c =  
purchase payments made after the first benefit was applied, proportionately adjusted for surrenders.

 
The adjustment for amounts surrendered will reduce the beginning contract value and purchase payments in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
There is a limit on the amount of Adjusted Earnings from the Date of the First Benefit used in the second benefit calculation.
 
Maximum Adjusted Earnings from the Date of the First Benefit = 200% of the total of all purchase payments that were applied to the contract more than 12 months before the date of the co-annuitant’s death, proportionally adjusted for surrenders.
 
After the second benefit is applied, the charge associated with the Beneficiary Protector II Option will be removed.
 
How the Benefit is Allocated
 
Any amounts credited to the contract pursuant to the Beneficiary Protector II Option will be allocated among the sub-accounts or the Guaranteed Term Options in the same proportion as each purchase payment is allocated to the contract on the date the benefit is applied.
 
Capital Preservation Plus Option
 
The Capital Preservation Plus Option provides a "return of principal" guarantee over an elected period of time  (3, 5, 7, or 10 years -- the "program period").  Contract value at the end of the program period will be no less than contract value at the beginning of the period, regardless of market performance.  Note, however, that surrenders or contract charges that are deducted from the contract after this option is elected will reduce the value of the guarantee proportionally.
 
The guarantee is conditioned upon the allocation of contract value between two investment components:
 
(1)  
A Guaranteed Term Option corresponding to the length of the elected program period; and
 
(2)  
Non-Guaranteed Term Option allocations, which consist of certain underlying mutual funds that are available under the program.  This investment component is allocated according to contract owner instructions.
 
In some state jurisdictions, Nationwide uses Target Term Options instead of Guaranteed Term Options in connection with the Capital Preservation Plus Option.  For all material purposes, Guaranteed Term Options and Target Term Options are the same.  Target Term Options are managed and administered identically to Guaranteed Term Options.  The distinction is that the interest rate associated with Target Term Options is not guaranteed as it is in Guaranteed Term Options.  However, because the options are managed and administered identically, the result to the investor is the same.  All references to Guaranteed Term Options in this “Capital Preservation Plus Option” provision will also mean Target Term Options (in applicable jurisdictions).  Please refer to the prospectus for the Guaranteed Term Options/Target Term Options for more information.

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When the Capital Preservation Plus Option is elected, Nationwide will specify the percentage of the contract value that must be allocated to each of these two general
components.  Generally, when interest rates are higher, a greater portion of the contract value will be made available for allocation among underlying mutual funds; when interest rates are lower, lesser portions may be made available for allocation among underlying mutual funds.  Also, longer program periods will typically permit greater allocations to the underlying mutual funds.  Other general economic factors and market conditions may affect these determinations as well.
 
Charges
 
The Capital Preservation Plus Option is provided for an additional charge at an annualized rate not to exceed 0.50% of the daily net assets of the variable account.  This charge will be assessed against the Guaranteed Term Options through a reduction in credited interest rates (not to exceed 0.50%).  Nationwide may realize a profit from the charge assessed for this option.
 
All charges associated with the Capital Preservation Plus Option will remain the same for the duration of the program period.  When the program period ends or an elected Capital Preservation Plus Option is terminated, the charges associated with the option will no longer be assessed.
 
The Advantage of Capital Preservation Plus
 
Without electing the option, contract owners may be able to approximate (without replicating) the benefits of the Capital Preservation Plus Option.  To do this, contract owners would have to determine how much of their contract value would need to be allocated to a Guaranteed Term Option so that the amount at maturity (principal plus interest attributable to the Guaranteed Term Option allocation) would approximate the original total investment.  The balance of the contract value would be available to be allocated among underlying funds.  This represents an investment allocation strategy aimed at capital preservation.
 
Election of the Capital Preservation Plus Option, however, generally permits a higher percentage of the contract value to be allocated outside of the Guaranteed Term Options among underlying mutual funds.  This provides contract owners with a greater opportunity to benefit from market appreciation that is reflected in the underlying mutual fund performance, while preserving the return of principal guarantee.
 
Availability
 
The Capital Preservation Plus Option may only be elected at the time of application.
 
Conditions Associated with the Capital Preservation Plus Option
 
During the program period, the following conditions apply:
 
·  
If surrenders or contract charges are deducted from the contract subsequent to electing this option, the guarantee will be reduced proportionally.
 
·  
Only one Capital Preservation Plus Option program may be in effect at any given time.
 
·  
No new purchase payments may be applied to the contract.
 
·  
If the contract is annuitized, surrendered or liquidated for any reason prior to the end of the program period, all guarantees are terminated.  A market value adjustment may apply to amounts transferred from a Guaranteed Term Option due to annuitization.  A market value adjustment may apply to amounts surrendered or liquidated from a Guaranteed Term Option.
 
· 
If, while the Capital Preservation Plus Option is elected, the annuitant dies and the annuitant's spouse elects to continue the contract, the option will remain in effect and will continue until the end of the original program period.
 
· 
No optional benefit that assesses a charge to the Guaranteed Term Options may be added to the contract.
 
After the end of the program period, or after termination of the option, the above conditions will no longer apply.
 
Investments During the Program Period
 
When the option is elected and after Nationwide receives all required information, Nationwide will declare the amount of the contract value that is available for allocation to the available underlying mutual funds.  The remainder of the contract value must be allocated to a Guaranteed Term Option, the length of which corresponds to the length of the program period elected by the contract owner.
 
Nationwide makes only certain underlying mutual funds available when a contract owner elects the Capital Preservation Plus Option.  Nationwide selected the available underlying mutual funds on the basis of certain risk factors associated with the underlying mutual fund's investment objective.  The underlying mutual funds not made available in conjunction with the Capital Preservation Plus Option were excluded on the basis of similar risk considerations.
 
Not all of the underlying mutual fund options offered under the contract are available for investment when the Capital Preservation Plus Option is elected.  Upon completion or termination of a program period, all of the underlying mutual fund options offered under the contract are made available for investment by a contract owner.
 
The following underlying mutual fund options are available in conjunction with Capital Preservation Plus:
 
AIM Variable Insurance Funds
·  
AIM V.I. Capital Development Fund: Series II Shares
 
Alger American Fund
·  
Alger American Balanced Portfolio: Class S Shares
·  
Alger American Mid Cap Growth Portfolio: Class S Shares
 
AllianceBernstein Variable Products Series Fund, Inc.
·  
AllianceBernstein Growth and Income Portfolio: Class B
·  
AllianceBernstein Small/Mid Cap Value Portfolio: Class B
 
American Century Variable Portfolios, Inc.
·  
American Century VP Income & Growth Fund: Class II
·  
American Century VP Mid Cap Value Fund: Class II
·  
American Century VP Value Fund: Class II*

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American Century Variable Portfolios II, Inc.
·  
American Century VP Inflation Protection Fund: Class II
 
Dreyfus
·  
Dreyfus Stock Index Fund, Inc.: Service Shares
·  
Dreyfus Variable Investment Fund – Appreciation Portfolio: Service Shares
 
Federated Insurance Series
·  
Federated Capital Appreciation Fund II: Service Shares
 
Fidelity Variable Insurance Products Fund
·  
VIP Equity-Income Portfolio: Service Class 2
·  
VIP Growth Portfolio: Service Class 2
·  
VIP Investment Grade Bond Portfolio: Service Class 2
·  
VIP Mid Cap Portfolio: Service Class 2
 
Franklin Templeton Variable Insurance Products Trust
·  
Franklin Income Securities Fund: Class 2
 
Janus Aspen Series
·  
Balanced Portfolio: Service Shares
·  
Forty Portfolio: Service Shares
 
Lehman Brothers Advisers Management Trust
·  
AMT Short Duration Bond Portfolio: I Class
 
MFS Variable Insurance Trust
·  
MFS Value Series: Service Class
 
Nationwide Variable Insurance Trust ("NVIT")
·  
American Funds NVIT Asset Allocation Fund: Class II
·  
American Funds NVIT Bond Fund: Class II
·  
American Funds NVIT Growth Fund: Class II
·  
Lehman Brothers NVIT Core Plus Bond Fund: Class II
·  
Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II
·  
Neuberger Berman NVIT Socially Responsible Fund: Class II
·  
NVIT Core Bond Fund: Class II
·  
NVIT Government Bond Fund: Class I
·  
NVIT Investor Destinations Funds: Class II
Ø  
NVIT Investor Destinations Conservative Fund: Class II
Ø  
NVIT Investor Destinations Moderately Conservative Fund: Class II
Ø  
NVIT Investor Destinations Moderate Fund: Class II
Ø  
NVIT Investor Destinations Moderately Aggressive Fund: Class II
Ø  
NVIT Investor Destinations Aggressive Fund: Class II
·  
NVIT Mid Cap Growth Fund: Class II
·  
NVIT Mid Cap Index Fund: Class I
·  
NVIT Money Market Fund: Class I
·  
NVIT Multi-Manager Large Cap Growth Fund: Class II
·  
NVIT Multi-Manager Large Cap Value Fund: Class II
·  
NVIT Multi-Manager Mid Cap Growth Fund: Class II
·  
NVIT Multi-Manager Mid Cap Value Fund: Class II
·  
NVIT Nationwide Fund: Class II
·  
NVIT U.S. Growth Leaders Fund: Class II
·  
Van Kampen NVIT Comstock Value Fund: Class II*

 
Neuberger Berman Advisers Management Trust
·  
AMT Regency Portfolio: S Class
 
Oppenheimer Variable Account Funds
·  
Oppenheimer Capital Appreciation Fund/VA: Service Shares
·  
Oppenheimer Main Street Fund®/VA: Service Shares
 
Schwab Annuity Portfolios
·  
Schwab Money Market Portfolio™
 
T. Rowe Price Equity Series, Inc.
·  
T. Rowe Price Blue Chip Growth Portfolio: Class II
·  
T. Rowe Price Equity Income Portfolio: Class II
 
Van Kampen
The Universal Institutional Funds, Inc.
·  
Core Plus Fixed Income Portfolio: Class II*
 
The following underlying mutual funds are only available in contracts for which good order applications were received before July1, 2008:
 
Neuberger Berman Advisers Management Trust
·  
AMT Socially Responsive Portfolio: I Class
 
The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2008:
 
AIM Variable Insurance Funds
·  
AIM V.I. Basic Value Fund: Series II Shares
·  
AIM V.I. Capital Appreciation Fund: Series II Shares
 
American Century Variable Portfolios, Inc.
·  
American Century VP Vista Fund: Class II
 
Federated Insurance Series
·  
Federated American Leaders Fund II: Service Shares
·  
Federated Quality Bond Fund II: Service Shares
 
Fidelity Variable Insurance Products Fund
·  
VIP ContrafundÒ Portfolio: Service Class 2
 
Janus Aspen Series
·  
INTECH Risk-Managed Core Portfolio: Service Shares
 
Neuberger Berman Advisers Management Trust
·  
AMT Mid-Cap Growth Portfolio: S Class
 
T. Rowe Price Equity Series, Inc.
·  
T. Rowe Price Limited Term Bond Portfolio: Class II
 
The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2007:
 
American Century Variable Portfolios, Inc.
·  
American Century VP Ultra Fund: Class II
 
The following underlining mutual funds are only available to contracts issued before May 1, 2006:
 
Franklin Templetion Variable Insurance Products Trust
·  
Franklin Rising Dividends Securities Fund: Class 2
 
MFS® Variable Insurance Trust
·  
MFS Investors Growth Stock Series: Service Class

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The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2005:
 
Putnam Variable Trust
·  
Putnam VT Growth and Income Fund: Class IB
·  
Putnam VT Voyager Fund: Class IB
 
Election of the Capital Preservation Plus Option will not be effective unless and until Nationwide receives sub-account allocation instructions based on the preceding list of available underlying mutual funds.  Allocations to underlying mutual funds other than those listed above are not permitted during the program period.
 
If a contract owner terminates a program period early, Nationwide will not change the existing investment allocations, including allocations to the Guaranteed Term Option, unless instructed otherwise by the contract owner.
 
Upon completion of a program period, Nationwide will not change the existing investment allocations to the underlying mutual fund options unless instructed otherwise by the contract owner.  Allocations made to the Guaranteed Term Option and any amounts credited under the program will be allocated to the money market sub-account unless a new program is elected.
 
Nationwide reserves the right to modify the list of available underlying mutual funds upon written notice to contract owners.  If an underlying mutual fund is deleted from the list of available underlying mutual funds, such deletion will not affect Capital Preservation Plus Option programs already in effect.
 
Surrenders During the Program Period
 
If, during the program period, the contract owner takes a surrender, Nationwide will surrender accumulation units from the sub-accounts and an amount from the Guaranteed Term Options.  The amount withdrawn from each investment option will be in proportion to the value in each option at the time of the surrender request, unless Nationwide is instructed otherwise.  Surrenders may not be taken exclusively from the Guaranteed Term Option.  In conjunction with the surrender, the value of the guarantee will be adjusted proportionally.  A market value adjustment may apply to amounts surrendered from Guaranteed Term Options.
 
Transfers During the Program Period
 
Transfers to and from the Guaranteed Term Option are not permitted during the program period.
 
Transfers among sub-accounts are subject to the terms and conditions in the "Transfers Prior to Annuitization" provision.  During the program period, transfers to underlying mutual funds that are not included in the Capital Preservation Plus Option program are not permitted.
 
Terminating the Capital Preservation Plus Option
 
Once elected, the Capital Preservation Plus Option cannot be revoked, except as provided below.
 
If the contract owner elected a program period matching a 7 year Guaranteed Term Option, upon reaching the 5th anniversary of the program, the contract owner may terminate the Capital Preservation Plus Option.  Any termination instructions must be received at Nationwide's home office within 60 days after the option's 5th anniversary.
 
If the contract owner elected a program period matching a 10 year Guaranteed Term Option, upon reaching the 7th anniversary of the program, the contract owner may terminate the Capital Preservation Plus Option.  Any termination instructions must be received at Nationwide's home office within 60 days after the option's 7th anniversary.
 
If the contract owner terminates the Capital Preservation Plus Option as described above, the charges associated with the option will no longer be assessed, all guarantees associated with the option will terminate, the contract's investment allocations will remain the same as when the program was in effect (unless Nationwide is instructed otherwise), and all conditions associated with the Capital Preservation Plus Option are removed.
 
Fulfilling the Return of Principal Guarantee
 
At the end of the program period, if the contract value is less than the guaranteed amount, Nationwide will credit an amount to the contract so that the contract value equals the guaranteed amount.  Amounts credited under this option are considered, for purposes of other benefits under this contract, earnings, not purchase payments.  If the contract owner does not elect to begin a new Capital Preservation Plus Option program, the amount previously allocated to the Guaranteed Term Option and any amounts credited under the guarantee will be allocated to the money market sub-account.
 
Election of a New Capital Preservation Plus Option
 
At the end of any program period or after terminating a Capital Preservation Plus Option, the contract owner may elect to participate in a new Capital Preservation Plus Option program at the charges, rates and allocation percentages in effect at that point in time.  If the contract owner elects to participate in a new program, such election and complete instructions must be received by Nationwide within 60 days after the end of the preceding program period or within 60 days of the program termination, whichever is applicable.
 
 
For certain optional benefits, a charge is assessed only for a specified period of time.  To remove a variable account charge at the end of the specified charge period, Nationwide systematically re-rates the contract.  This re-rating results in lower contract charges, but no change in contract value or any other contractual benefit.
 
Re-rating involves two steps: the adjustment of contract expenses and the adjustment of the number of units in the contract.
 
The first step, the adjustment of contract expenses, involves removing the charge from the unit value calculation.  For example, on a contract where the only optional benefit elected

21


 
is the Beneficiary Protector II Option, the variable account value will be calculated using unit values with variable account charges of 1.30% until the applicable benefit is applied and the charge is no longer assessed.  At the end of that period, the contract will be re-rated, and the 0.35% charge associated with the Beneficiary Protector II Option will be removed.  From that point on, the variable account value will be calculated using the unit values with variable account charges at 0.95%.  Thus, the Beneficiary Protector II Option charge is no longer included in the daily sub-account valuation for the contract.
 
The second step of the re-rating process, the adjustment of the number of units in the contract, is necessary in order to keep the re-rating process from altering the contract value.  Generally, for any given sub-account, the higher the variable account charges, the lower the unit value, and vice versa.  For example, sub-account X with charges of 1.30% will have a lower unit value than sub-account X with charges of 0.95% (higher expenses result in lower unit values).  When, upon re-rating, the unit values used in calculating variable account value are dropped from the higher expense level to the lower expense level, the higher unit values will cause an incidental increase in the contract value.  In order to avoid this incidental increase, Nationwide adjusts the number of units in the contract down so that the contract value after the re-rating is the same as the contract value before the re-rating.
 
 
Contract Owner
 
Prior to the annuitization date, the contract owner has all rights under the contract, unless a joint owner is named.  If a joint owner is named, each joint owner has all rights under the contract.  Purchasers who name someone other than themselves as the contract owner will have no rights under the contract.
 
On the annuitization date, the annuitant becomes the contract owner, unless the contract owner is a Charitable Remainder Trust.  If the contract owner is a Charitable Remainder Trust, the Charitable Remainder Trust continues to be the contract owner after annuitization.
 
Contract owners of Non-Qualified Contracts may name a new contract owner at any time before the annuitization date.  Any change of contract owner automatically revokes any prior contract owner designation.  Changes in contract ownership may result in federal income taxation and may be subject to state and federal gift taxes.
 
Joint Owner
 
Joint owners each own an undivided interest in the contract.
 
Non-Qualified contract owners can name a joint owner at any time before annuitization.  However, joint owners must be spouses at the time joint ownership is requested, unless state law requires Nationwide to allow non-spousal joint owners.
 
Generally, the exercise of any ownership rights under the contract must be in writing and signed by both joint owners.  However, if a written election, signed by both contract owners, authorizing Nationwide to allow the exercise of ownership rights independently by either joint owner is submitted, Nationwide will permit joint owners to act independently.  If such an authorization is submitted, Nationwide will not be liable for any loss, liability, cost, or expense for acting in accordance with the instructions of either joint owner.
 
If either joint owner dies before the annuitization date, the contract continues with the surviving joint owner as the remaining contract owner.
 
Contingent Owner
 
The contingent owner succeeds to the rights of a contract owner if a contract owner who is not the annuitant dies before the annuitization date, and there is no surviving joint owner.
 
If a contract owner who is the annuitant dies before the annuitization date, the contingent owner will not have any rights under the contract, unless such contingent owner is also the beneficiary.
 
The contract owner may name a contingent owner at any time before the annuitization date.
 
Annuitant
 
The annuitant is the person who will receive annuity payments and upon whose continuation of life any annuity payment involving life contingencies depends.  This person must be age 85 or younger at the time of contract issuance, unless Nationwide approves a request for an annuitant of greater age.
 
Only Non-Qualified Contract owners may name someone other than himself/herself as the annuitant.
 
The contract owner may not name a new annuitant without Nationwide’s consent.
 
Contingent Annuitant
 
If the annuitant dies before the annuitization date, the contingent annuitant becomes the annuitant.  The contingent annuitant must be age 85 or younger at the time of contract issuance, unless Nationwide approves a request for a contingent annuitant of greater age.
 
If a contingent annuitant is named, all provisions of the contract that are based on the annuitant’s death prior to the annuitization date will be based on the death of the last survivor of the annuitant and contingent annuitant.
 
Co-Annuitant
 
A co-annuitant, if named, must be the annuitant’s spouse.  The co-annuitant may be named at any time prior to annuitization and will receive the benefit of the Spousal Protection Feature (subject to the conditions set forth in the "Spousal Protection Feature" provision).
 
If either co-annuitant dies before the annuitization date, the surviving co-annuitant may continue the contract and will receive the benefit of the Spousal Protection Feature.
 
Joint Annuitant
 
The joint annuitant is designated as a second person (in addition to the annuitant) upon whose continuation of life any annuity

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payment involving life contingencies depend.  This person must be age 85 or younger at the time of contract issuance, unless Nationwide approves a request for a joint annuitant of greater age.
 
The contract owner may name a joint annuitant at any time before the annuitization date.
 
Beneficiary and Contingent Beneficiary
 
The beneficiary is the person who is entitled to the death benefit if the annuitant dies before the annuitization date and there is no joint owner.  The contract owner can name more than one beneficiary.  Multiple beneficiaries will share the death benefit equally, unless otherwise specified.
 
A contingent beneficiary will succeed to the rights of the beneficiary if no beneficiary is alive when the annuitant dies. The contract owner can name more than one contingent beneficiary.  Multiple contingent beneficiaries will share the death benefit equally, unless otherwise specified.
 
Changes to the Parties to the Contract
 
Prior to the annuitization date (and subject to any existing assignments), the contract owner may request to change the following:
 
·  
contract owner (Non-Qualified Contracts only);
 
·  
joint owner (must be the contract owner’s spouse);
 
·  
contingent owner;
 
·  
annuitant (subject to Nationwide’s underwriting and approval);
 
·  
contingent annuitant (subject to Nationwide’s underwriting and approval);
 
·  
co-annuitant (must be the annuitant’s spouse);
 
·  
joint annuitant (subject to Nationwide’s underwriting and approval);
 
·  
beneficiary; or
 
·  
contingent beneficiary.
 
The contract owner must submit the request to Nationwide in writing and Nationwide must receive the request at its home office before the annuitization date. No change will be effective unless and until it is received and recorded at Nationwide’s home office.   Once Nationwide receives and records the change request, the change will be effective as of the date the written request was signed., The change will not affect any action taken by Nationwide before the change was recorded.
 
In addition to the above requirements, any request to change the contract owner must be signed by the existing contract owner and the person designated as the new contract owner.  Nationwide may require a signature guarantee.
 
If the contract owner is not a natural person and there is a change of the annuitant, distributions will be made as if the contract owner died at the time of the change, regardless of whether the contract owner named a contingent annuitant.

 
Nationwide reserves the right to reject any change request that would alter the nature of the risk that Nationwide assumed when it originally issued the contract (see "Purpose of the Contract" earlier in this prospectus).
 
 
Minimum Initial and Subsequent Purchase Payments
 
Contract
Type
Minimum Initial Purchase Payment
Minimum Subsequent Payments*
Charitable Remainder Trust
$5,000
$500
IRA
$3,000
$500
Investment-Only
$3,000
$500
Non-Qualified
$5,000
$500
Roth IRA
$3,000
$500
SEP IRA
$3,000
$500
Simple IRA
$3,000
$500
Tax Sheltered Annuity**
$3,000
$500
 
 
*For subsequent purchase payments sent via electronic deposit, the minimum subsequent purchase payment is $100.
 
**Only available for contracts issued prior to September 25, 2007 and certain state Option Retirement Plans and/or Programs that have purchased at least one individual annuity contract issued by Nationwide prior to September 25, 2007.
 
The cumulative total of all purchase payments under contracts issued by Nationwide on the life of any one annuitant cannot exceed $1,000,000 without Nationwide’s prior consent.  Nationwide’s consent is contingent on a risk analysis that may involve a medical evaluation.
 
Guaranteed Term Options
 
Guaranteed Term Options are separate investment options under the contract.  The minimum amount that may be allocated to a Guaranteed Term Option is $1,000.
 
Pricing
 
Initial purchase payments allocated to sub-accounts will be priced at the accumulation unit value determined no later than 2 business days after receipt of an order to purchase if the application and all necessary information are complete.  If the application is not complete, Nationwide may retain a purchase payment for up to 5 business days while attempting to complete it.  If the application is not completed within 5 business days, the prospective purchaser will be informed of the reason for the delay.  The purchase payment will be returned unless the prospective purchaser specifically allows Nationwide to hold the purchase payment until the application is completed.
 
Subsequent purchase payments allocated to sub-accounts will be priced at the next available accumulation unit value after the payment is received.

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Except on the days listed below and on weekends, purchase payments, transfers and surrenders are priced every day.  Purchase payments will not be priced when the New York Stock Exchange is closed or on the following nationally recognized holidays:
 
·  New Year’s Day
·  Independence Day
·  Martin Luther King, Jr. Day
·  Labor Day
·  Presidents’ Day
·  Thanksgiving
·  Good Friday
·  Christmas
·  Memorial Day
 
 
Nationwide also will not price purchase payments if:
 
(1)  
trading on the New York Stock Exchange is restricted;
 
(2)  
an emergency exists making disposal or valuation of securities held in the variable account impracticable; or
 
(3)  
the SEC, by order, permits a suspension or postponement for the protection of security holders.
 
Rules and regulations of the SEC will govern as to when the conditions described in (2) and (3) exist.
 
If Nationwide is closed on days when the New York Stock Exchange is open, Contract value may change and contract owners will not have access to their accounts.
 
Allocation of Purchase Payments
 
Nationwide allocates purchase payments to sub-accounts or Guaranteed Term Options as instructed by the contract owner.  Shares of the underlying mutual funds allocated to the sub-accounts are purchased at Net Asset Value, then converted into accumulation units.
 
Contract owners can change future allocations to the sub-accounts or Guaranteed Term Options.  However, no change may be made that would result in an amount less than 1% of the purchase payments being allocated to any sub-account.  Certain transactions may be subject to conditions imposed by the underlying mutual funds, as well as those set forth in the contract.
 
Determining the Contract Value
 
The contract value is the sum of:
 
(1)  
the value of amounts allocated to the sub-accounts of the variable account; and
 
(2)  
amounts allocated to a Guaranteed Term Option.
 
If charges are assessed against the whole contract value, Nationwide will deduct a proportionate amount from each sub-account and any Guaranteed Term Option based on current cash values.
 
Determining Variable Account Value – Valuing an Accumulation Unit
 
Purchase payments or transfers allocated to sub-accounts are accounted for in accumulation units.  Accumulation unit values (for each sub-account) are determined by calculating the net investment factor for the underlying mutual funds for the current valuation period and multiplying that result with the accumulation unit values determined on the previous valuation period.
 
Nationwide uses the net investment factor as a way to calculate the investment performance of a sub-account from valuation period to valuation period.  For each sub-account, the net investment factor shows the investment performance of the underlying mutual fund in which a particular sub-account invests, including the charges assessed against that sub-account for a valuation period.
 
The net investment factor for any particular sub-account is determined by dividing (a) by (b), and then subtracting (c) from the result, where:
 
(a)  
is the sum of:
 
(1)  
the Net Asset Value of the underlying mutual fund as of the end of the current valuation period; and
 
(2)  
the per share amount of any dividend or income distributions made by the underlying mutual fund (if the date of the dividend or income distribution occurs during the current valuation period).
 
(b)  
is the Net Asset Value of the underlying mutual fund determined as of the end of the preceding valuation period.
 
(c)  
is a factor representing the daily total variable account charges, which may include charges for optional benefits elected by the contract owner.  The factor is equal to an annualized rate ranging from 0.95% to 2.20% of the daily net assets of the variable account, depending on which optional benefits the contract owner elects.
 
Based on the change in the net investment factor, the value of an accumulation unit may increase or decrease.  Changes in the net investment factor may not be directly proportional to changes in the Net Asset Value of the underlying mutual fund shares because of the deduction of variable account charges.
 
Though the number of accumulation units will not change as a result of investment experience, the value of an accumulation unit may increase or decrease from valuation period to valuation period.
 
Determining the Guaranteed Term Option Value
 
Nationwide determines the value of a Guaranteed Term Option by:
 
(1)  
adding all amounts allocated to the Guaranteed Term Options, minus amounts previously transferred or surrendered (including any market value adjustment);
 
(2)  
adding any interest earned on the amounts allocated to the Guaranteed Term Options; and
 
(3)  
subtracting charges deducted in accordance with the contract.
 
Transfer Requests
 
Contract owners may submit transfer requests in writing, over the telephone, or via the internet.  Nationwide will use reasonable procedures to confirm that instructions are genuine and will not be liable for following instructions that it

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reasonably determined to be genuine.  Nationwide may restrict or withdraw the telephone and/or internet transfer privilege at any time.
 
Generally, sub-account transfers will receive the accumulation unit value next computed after the transfer request is received.  However, if a contract that is limited to submitting transfer requests via U.S. mail submits a transfer request via internet or telephone pursuant to Nationwide’s one-day delay policy, the transfer will be executed on the next business day after the exchange request is received by Nationwide (see “Managers of Multiple Contracts”).
 
Transfer Restrictions
 
Neither the contracts described in this prospectus nor the underlying mutual funds are designed to support active trading strategies that require frequent movement between or among sub-accounts (sometimes referred to as "market-timing" or "short-term trading").  A contract owner who intends to use an active trading strategy should consult his/her registered representative and request information on other variable annuity contracts that offer underlying mutual funds that are designed specifically to support active trading strategies.
 
Nationwide discourages (and will take action to deter) short-term trading in this contract because the frequent movement between or among sub-accounts may negatively impact other investors in the contract.  Short-term trading can result in:
 
·  
the dilution of the value of the investors’ interests in the underlying mutual fund;
 
·  
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 contract from the negative impact of these practices, Nationwide has implemented, or reserves the right to implement, several processes and/or restrictions aimed at eliminating the negative impact of active trading strategies. Nationwide makes no assurances that all risks associated with short-term trading will be completely eliminated by these processes and/or restrictions.
 
Nationwide cannot guarantee that its attempts to deter active trading strategies will be successful.  If we are unable to deter active trading strategies, the performance of the sub-accounts that are actively traded may be adversely impacted.
 
Redemption Fees
 
Some underlying 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 the sub-account.  The fee is assessed 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 the "Short-Term Trading Fees" provision.
 
U.S. Mail Restrictions
 
Nationwide monitors transfer activity in order to identify those who may be engaged in harmful trading practices.  Transaction reports are produced and examined.  Generally, a contract may appear on these reports if the contract owner (or a third party acting on their behalf) engages in a certain number of "transfer events" in a given period.  A "transfer event" is any transfer, or combination of transfers, occurring on a given trading day (valuation period).  For example, if a contract owner executes multiple transfers involving 10 underlying mutual funds in one day, this counts as one transfer event.  A single transfer occurring on a given trading day and involving only 2 underlying mutual funds will also count as one transfer event.
 
As a result of this monitoring process, Nationwide may restrict the method of communication by which transfer orders will be accepted.  In general, Nationwide will adhere to the following guidelines:
 
Trading Behavior
Nationwide's Response
6 or more transfer events in one calendar quarter
Nationwide will mail a letter to the contract owner notifying them that:
 
(1)  they have been identified as engaging in harmful trading practices; and
 
(2)  if their transfer events exceed 11 in 2 consecutive calendar quarters or 20 in one calendar year, the contract owner will be limited to submitting transfer requests via U.S. mail.
More than 11 transfer events in 2 consecutive calendar quarters
OR
More than 20 transfer events in one calendar year
Nationwide will automatically limit the contract owner to submitting transfer requests via U.S. mail.
 
Each January 1st, Nationwide will start the monitoring anew, so that each contract starts with 0 transfer events each January 1.  See, however, the "Other Restrictions" provision below.
 
Managers of Multiple Contracts
 
Some investment advisers/representatives manage the assets of multiple Nationwide contracts pursuant to trading authority granted or conveyed by multiple contract owners.  These multi-contract advisers will generally be required by Nationwide to submit all transfer requests via U.S. mail.
 
Nationwide may, as an administrative practice, implement a "one-day delay" program for these multi-contract advisers, which they can use in addition to or in lieu of submitting transfer requests via U.S. mail.  The one-day delay option permits multi-contract advisers to continue to submit transfer requests via the internet or telephone.  However, transfer requests submitted by multi-contract advisers via the internet

25


 
or telephone will not receive the next available accumulation unit value.  Rather, they will receive the accumulation unit value that is calculated on the following business day.  Transfer requests submitted under the one-day delay program are irrevocable.  Multi-contract advisers will receive advance notice of being subject to the one-day delay program.
 
Other Restrictions
 
Nationwide reserves the right to refuse or limit transfer requests, or take any other action it deems necessary, in order to protect contract owners, annuitants, and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices employed by some contract owners (or third parties acting on their behalf).  In particular, trading strategies designed to avoid or take advantage of Nationwide's monitoring procedures (and other measures aimed at curbing harmful trading practices) that are nevertheless determined by Nationwide to constitute harmful trading practices, may be restricted.
 
Any restrictions that Nationwide implements will be applied consistently and uniformly.
 
Underlying Mutual Fund Restrictions and Prohibitions
 
Pursuant to regulations adopted by the SEC, Nationwide is 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 Nationwide contract owner;
 
(2)
request the amounts and dates of any purchase, redemption, transfer or exchange request (“transaction information”); and
 
(3)
instruct Nationwide to restrict or prohibit further purchases or exchanges by contract owners that violate policies established by the underlying mutual fund (whose policies may be more restrictive than Nationwide’s policies).
 
Nationwide is required to provide such transaction information to the underlying mutual funds upon their request.  In addition, Nationwide is required to restrict or prohibit further purchases or exchange requests upon instruction from the underlying mutual fund.  Nationwide and any affected contract 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 Nationwide, Nationwide will keep any affected contract owner in their current underlying mutual fund allocation.
 
Transfers Prior to Annuitization
 
Transfers from a Guaranteed Term Option
 
A contract owner may request to transfer allocations from a Guaranteed Term Option to the sub-accounts at any time.  Transfers from a Guaranteed Term Option prior to maturity are subject to a market value adjustment.

 
Nationwide reserves the right to limit the number of transfers out of the Guaranteed Term Options to one per calendar year.
 
Nationwide is required by state law to reserve the right to postpone the transfer of assets from the Guaranteed Term Options for a period of up to 6 months from the date of the transfer request.
 
Transfers from the Sub-Accounts
 
A contract owner may request to transfer allocations from the sub-accounts to a Guaranteed Term Option at any time.
 
Nationwide reserves the right to limit the number of transfers from the sub-accounts to the Guaranteed Term Options to one per calendar year.
 
Transfers Among the Sub-Accounts
 
A contract owner may request to transfer allocations among the sub-accounts at any time, subject to terms and conditions imposed by the contract and the underlying mutual funds.
 
 
After annuitization, the portion of the contract value allocated to fixed annuity payments and the portion of the contract value allocated to variable annuity payments may not be changed.
 
After annuitization, transfers among sub-accounts may only be made on the anniversary of the annuitization date.  Guaranteed Term Options are not available after annuitization.
 
 
If the contract owner elects to cancel the contract, he/she may return it to Nationwide’s home office within a certain period of time known as the “free look” period.  Depending on the state in which the contract was purchased (and, in some states, if the contract is purchased as a replacement for another annuity contract), the free look period may be 10 days or longer.  For ease of administration, Nationwide will honor any free look cancellation that is received at Nationwide’s home office or postmarked within 30 days after the contract issue date.  The contract issue date is the next business day after the initial purchase payment is applied to the contract.
 
If the contract owner elects to cancel the contract pursuant to the free look provision, where required by law, Nationwide will return the greater of the contract value or the amount of purchase payment(s) applied during the free look period, less any applicable federal and state income tax withholding.  Otherwise, Nationwide will return the contract value, less any applicable federal and state income tax withholding.
 
In some states, Nationwide will allocate initial purchase payments to the money market sub-account during the free look period.  After the free look period, Nationwide will reallocate the contract value among the sub-accounts based on the instructions contained on the application.
 
Liability of the variable account under this provision is limited to the contract value in each sub-account on the date of revocation.  Any additional amounts refunded to the contract owner will be paid by Nationwide.

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Prior to annuitization and before the annuitant’s death, contract owners may generally surrender some or all of their contract value.  There are no sales charges assessed upon surrenders from the contract.  There may be income tax and/or penalty taxes assessed upon surrenders.  Please see "Federal Tax Considerations" in Appendix C: Contract Types and Tax Information for more information.
 
Surrender requests must be in writing and Nationwide may require additional information.  When taking a full surrender, the contract must accompany the written request.  Nationwide may require a signature guarantee.
 
Nationwide will pay any amounts surrendered from the sub-accounts within 7 days.  However, Nationwide may suspend or postpone payment when it is unable to price a purchase payment or transfer.  (See “Pricing”)
 
Nationwide is required by state law to reserve the right to postpone payment of assets in the Guaranteed Term Options for a period of up to 6 months from the date of the surrender request.
 
Partial Surrenders (Partial Redemptions)
 
If a contract owner requests a partial surrender, Nationwide will surrender accumulation units from the sub-accounts and the Guaranteed Term Options.  The amount withdrawn from each investment option will be in proportion to the value in each option at the time of the surrender request.
 
Partial Surrenders to Pay Registered Representative Fees
 
The contract may be available for use with investment accounts at Schwab that charge an annual fee.  Fees for these accounts would be specified in the respective account agreements.  Any fees and expenses associated with these accounts are separate from and in addition to the fees and expenses of the contract described in this prospectus.  Surrenders taken from this contract to pay advisory or investment management fees may be subject to income tax and/or tax penalties.  Please consult a Schwab representative for more information on the tax status of surrenders made for this purpose.
 
Full Surrenders (Full Redemptions)
 
Upon full surrender, the contract value may be more or less than the total of all purchase payments made to the contract.  The contract value will reflect:
 
·  
variable account charges;
 
·  
a $30 Contract Maintenance Charge (if the contract value is equal to or greater than $50,000, the Contract Maintenance Charge will be waived);
 
·  
underlying mutual fund charges;
 
·  
the investment performance of the underlying mutual funds; and
 
·  
amounts allocated to the Guaranteed Term Options, plus or minus any market value adjustment.
 
 
After the annuitization date, surrenders other than regularly scheduled annuity payments are not permitted.
 
 
Surrenders Under a Tax Sheltered Annuity
 
Contract owners of a Tax Sheltered Annuity may surrender part or all of their contract value before annuitant’s death, except as provided below:
 
(A)  
Contract value attributable to contributions made under a qualified cash or deferred arrangement (within the meaning of Internal Revenue Code Section 402(g)(3)(A)), a salary reduction agreement (within the meaning of Internal Revenue Code Section 402(g)(3)(C)), or transfers from a Custodial Account (described in Section 403(b)(7) of the Internal Revenue Code), may be surrendered only:
 
               (1)
when the contract owner reaches age 59½, separates from service, dies, or becomes disabled (within the meaning of Internal Revenue Code Section 72(m)(7)); or
 
               (2)
in the case of hardship (as defined for purposes of Internal Revenue Code Section 401(k)), provided that any such hardship surrender may not include any income earned on salary reduction contributions.
 
(B)  
The surrender limitations described in Section A also apply to:
 
               (1)
salary reduction contributions to Tax Sheltered Annuities made for plan years beginning after December 31, 1988;
 
               (2)
earnings credited to such contracts after the last plan year beginning before January 1, 1989, on amounts attributable to salary reduction contributions; and
 
               (3)
all amounts transferred from 403(b)(7) Custodial Accounts (except that earnings and employer contributions as of December 31, 1988 in such Custodial Accounts may be withdrawn in the case of hardship).
 
(C)  
Any distribution other than the above, including a ten day free look cancellation of the contract (when available) may result in taxes, penalties, and/or retroactive disqualification of a Tax Sheltered Annuity.
 
In order to prevent disqualification of a Tax Sheltered Annuity after a ten day free-look cancellation, Nationwide will transfer the proceeds to another Tax Sheltered Annuity upon proper direction by the contract owner.
 
These provisions explain Nationwide's understanding of current withdrawal restrictions.  These restrictions may change.
 
Distributions pursuant to Qualified Domestic Relations Orders will not violate the restrictions stated above.

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Surrenders Under a Texas Optional Retirement Program or a Louisiana Optional Retirement Plan
 
Redemption restrictions apply to contracts issued under the Texas Optional Retirement Program or the Louisiana Optional Retirement Plan.
 
The Texas Attorney General has ruled that participants in contracts issued under the Texas Optional Retirement Program may only take withdrawals if:
 
·  
the participant dies;
 
·  
the participant retires;
 
·  
the participant terminates employment due to total disability; or
 
·  
the participant that works in a Texas public institution of higher education terminates employment.
 
A participant under a contract issued under the Louisiana Optional Retirement Plan may only take distributions from the contract upon retirement or termination of employment.  All retirement benefits under this type of plan must be paid as lifetime income; lump sum cash payments are not permitted, except for death benefits.
 
Due to the restrictions described above, a participant under either of these plans will not be able to withdraw cash values from the contract unless one of the applicable conditions is met.  However, contract value may be transferred to other carriers.
 
Nationwide issues this contract to participants in the Texas Optional Retirement Program in reliance upon and in compliance with Rule 6c-7 of the Investment Company Act of 1940.  Nationwide issues this contract to participants in the Louisiana Optional Retirement Plan in reliance upon and in compliance with an exemptive order that Nationwide received from the SEC on August 22, 1990.
 
 
Contract rights are personal to the contract owner and may not be assigned without Nationwide’s written consent.  Nationwide reserves the right to refuse to recognize assignments that alter the nature of the risks that Nationwide assumed when it originally issued the contract.
 
A Non-Qualified Contract owner may assign some or all rights under the contract.  An assignment must occur before annuitization while the annuitant is alive.  Once proper notice of assignment is recorded by Nationwide’s home office, the assignment will become effective.
 
Investment-Only Contracts, IRAs, Roth IRAs, SEP IRAs, Simple IRAs, and Tax Sheltered Annuities may not be assigned, pledged or otherwise transferred except where allowed by law.
 
Nationwide is not responsible for the validity or tax consequences of any assignment.  Nationwide is not liable for any payment or settlement made before the assignment is recorded.  Assignments will not be recorded until Nationwide receives sufficient direction from the contract owner and the assignee regarding the proper allocation of contract rights.
 
Amounts pledged or assigned will be treated as distributions and will be included in gross income to the extent that the cash value exceeds the investment in the contract for the taxable year in which it was pledged or assigned.  Amounts assigned may be subject to a tax penalty equal to 10% of the amount included in gross income.
 
Assignment of the entire contract value may cause the portion of the contract value exceeding the total investment in the contract and previously taxed amounts to be included in gross income for federal income tax purposes each year that the assignment is in effect.
 
 
Asset Rebalancing
 
Asset Rebalancing is the automatic reallocation of contract values to the sub-accounts on a predetermined percentage basis.  Asset Rebalancing is not available for assets held in the Guaranteed Term Options.  Requests for Asset Rebalancing must be on a Nationwide form.
 
Asset Rebalancing occurs every three months or on another frequency if permitted by Nationwide.  If the last day of the three-month period falls on a Saturday, Sunday, recognized holiday, or any other day when the New York Stock Exchange is closed, Asset Rebalancing will occur on the next business day.  Each Asset Rebalancing reallocation is considered a transfer event.  Once Asset Rebalancing is elected, it will only be terminated upon specific instruction from the contract owner; manual transfers will not automatically terminate the program.
 
Asset Rebalancing may be subject to employer limitations or restrictions for contracts issued to a Tax Sheltered Annuity plan.  Contract owners should consult a financial adviser to discuss the use of Asset Rebalancing.
 
Nationwide reserves the right to stop establishing new Asset Rebalancing programs.
 
Dollar Cost Averaging
 
Dollar Cost Averaging is a long-term transfer program that allows you to make regular, level investments over time.  It involves the automatic transfer of a specified amount from certain sub-accounts into other sub-accounts.  Nationwide does not guarantee that this program will result in profit or protect contract owners from loss.
 
Contract owners direct Nationwide to automatically transfer specified amounts from the
 
·  
Lehman Brothers Advisers Management Trust – AMT Short Duration Bond Portfolio: I Class
 
·  
NVIT Government Bond Fund: Class I
 
·  
NVIT Investor Destinations Conservative Fund:
 
Class II

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The following underlying mutual funds are only available in contracts for which good order applications were received before May 1, 2008:
 
·  
Federated Insurance Series – Federated Quality Bond Fund II: Service Shares
 
to any other underlying mutual fund(s).  Dollar Cost Averaging transfers may not be directed to Guaranteed Term Options.
 
Transfers occur monthly or on another frequency if permitted by Nationwide.  Dollar Cost Averaging transfers are not considered transfer events.  Nationwide will process transfers until either the value in the originating investment option is exhausted, or the contract owner instructs Nationwide in writing to stop the transfers.
 
Nationwide reserves the right to stop establishing new Dollar Cost Averaging programs.
 
Systematic Withdrawals
 
Systematic Withdrawals allow contract owners to receive a specified amount (of at least $100) on a monthly, quarterly, semi-annual, or annual basis.  Requests for Systematic Withdrawals and requests to discontinue Systematic Withdrawals must be in writing.
 
The withdrawals will be taken from the sub-accounts proportionately unless Nationwide is instructed otherwise.  Systematic Withdrawals are not available from the Guaranteed Term Options.
 
Nationwide will withhold federal income taxes from Systematic Withdrawals unless otherwise instructed by the contract owner.  The Internal Revenue Service may impose a 10% penalty tax if the contract owner is under age 59½ unless the contract owner has made an irrevocable election of distributions of substantially equal payments.
 
Nationwide reserves the right to stop establishing new Systematic Withdrawal programs.  Systematic Withdrawals are not available before the end of the ten-day free look period.
 
 
Death of Contract Owner
 
If a contract owner (including a joint owner) who is not the annuitant dies before the annuitization date, there is no death benefit payable and the surviving joint owner becomes the contract owner.
 
If no joint owner is named, the contingent owner becomes the contract owner.
 
If no contingent owner is named, the beneficiary becomes the contract owner.
 
If no beneficiary survives the contract owner, the last surviving contract owner’s estate becomes the contract owner.
 
Distributions will be made pursuant to the "Required Distributions for Non-Qualified Contracts" in Appendix C: Contract Types and Tax Information.
 
Death of Annuitant
 
If the annuitant who is not a contract owner dies before the annuitization date, the contingent annuitant becomes the annuitant and no death benefit is payable.  If no contingent annuitant is named, a death benefit is payable to the beneficiary.  Multiple beneficiaries will share the death benefit equally unless otherwise specified.
 
If no beneficiaries survive the annuitant, the contingent beneficiary receives the death benefit.  Multiple contingent beneficiaries will share the death benefit equally unless otherwise specified.
 
If no beneficiaries or contingent beneficiaries survive the annuitant, the contract owner or the last surviving contract owner’s estate will receive the death benefit.  If the contract owner is a Charitable Remainder Trust and the annuitant dies before the annuitization date, the death benefit will accrue to the Charitable Remainder Trust.  Any designation in conflict with the Charitable Remainder Trust’s right to the death benefit will be void.
 
If the annuitant dies after the annuitization date, any benefit that may be payable will be paid according to the selected annuity payment option.
 
Death of Contract Owner/Annuitant
 
If a contract owner (including a joint owner) who is also the annuitant dies before the annuitization date, a death benefit is payable to the surviving joint owner.
 
If there is no surviving joint owner, the death benefit is payable to the beneficiary.  Multiple beneficiaries will share the death benefit equally unless otherwise specified.
 
If no beneficiaries survive the contract owner/annuitant, the contingent beneficiary receives the death benefit.  Multiple contingent beneficiaries will share the death benefit equally unless otherwise specified.
 
If no contingent beneficiaries survive the contract owner/annuitant, the last surviving contract owner’s estate will receive the death benefit.
 
If the contract owner/annuitant dies after the annuitization date, any benefit that may be payable will be paid according to the selected annuity payment option.
 
Death Benefit Payment
 
The recipient of the death benefit may elect to receive the death benefit:
 
(1)  
in a lump sum;
 
(2)  
as an annuity; or
 
(3)  
in any other manner permitted by law and approved by Nationwide.
 
If the recipient of the death benefit does not elect the form in which to receive the death benefit payment, Nationwide will pay the death benefit in a lump sum.  Nationwide will pay (or will begin to pay) the death benefit upon receiving proof of death and the instructions as to the payment of the death benefit.  Contract

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value will continue to be allocated according to the most recent allocation instructions until the death benefit is paid.
 
If the contract has multiple beneficiaries entitled to receive a portion of the death benefit, the contract value will continue to be allocated according to the most recent allocation instructions until the first beneficiary is paid.  After the first beneficiary is paid, remaining contract value will be allocated to the available money market sub-account until instructions are received from the remaining beneficiary(ies).
 
 
An applicant may elect either the standard death benefit, the One-Year Enhanced Death Benefit Option or the Combination Enhanced Death Benefit Option, which are offered under the contract for an additional charge.  If no election is made at the time of application, the death benefit will be the standard death benefit.
 
The value of each component of the applicable death benefit calculation will be determined as of the date of the annuitant’s death, except for the contract value component, which will be determined as of the date described in the applicable death benefit calculation.
 
Standard Death Benefit
 
If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is less than or equal to $3,000,000, the standard death benefit will be the greatest of:
 
(1)  
(a)    if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the
        annuitant's death;
 
                 (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)
the total of all purchase payments, less an adjustment for amounts surrendered; or
 
(3)
the highest contract value on any 5 year contract anniversary before the annuitant’s 86th birthday, less an adjustment for amounts surrendered, plus purchase payments received after that 5 year contract anniversary.
 
The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.
 
The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is greater than $3,000,000, the standard death benefit will be determined using the following formula:

 
(A x F) + B(1 - F), where
 
A = the greatest of:
 
(1)  
(a)   if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of
       the annuitant's death;
 
 
    (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)  
the total of all purchase payments, less an adjustment for amounts surrendered; or
 
(3)  
the highest contract value on any 5 year contract anniversary before the annuitant’s 86th birthday, less an adjustment for amounts surrendered, plus purchase payments received after that 5 year contract anniversary.
 
The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.
 
The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
B =      (1)
if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the annuitant’s death;
 
 
(2)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit.
 
F = the ratio of $3,000,000 to the total of all purchase payments made to the contract.
 
 
The practical effect of this formula is that the beneficiary recovers a lesser percentage of purchase payments in excess of $3,000,000 than for purchase payments up to $3,000,000.  In no event will the beneficiary receive less than the contract value.
 
The standard death benefit also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.  Please see "Spousal Protection Feature" later in this prospectus.
 
One-Year Enhanced Death Benefit Option
 
For an additional charge equal to an annualized rate of 0.10% of the daily net assets of the variable account, an applicant can purchase the One-Year Enhanced Death Benefit Option at the time of application.

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If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is less than or equal to $3,000,000, the death benefit will be the greatest of:
 
(1)
(a)
if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the annuitant's death;
 
                (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)
the total of all purchase payments, less an adjustment for amounts surrendered; or
 
(3)
the highest contract value on any contract anniversary prior to the annuitant's 86th birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary.
 
The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.
 
The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be determined using the following formula:
 
(A x F) + B(1 - F), where
 
A = the greatest of:
 
(1)  
(a)      if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the
          date of the annuitant's death;
 
 
           (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)  
the total of all purchase payments, less an adjustment for amounts surrendered; or
 
(3)  
the highest contract value on any contract anniversary prior to the annuitant’s 86th birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary.
 
The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.

 
The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
If Nationwide does not receive all information necessary to pay the death benefit within one year of the annuitant’s death, the calculation for A above will be the greater of (1) or (2) above.
 
B =    (1)
if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the annuitant’s death;
 
 
(2)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit.
 
F = the ratio of $3,000,000 to the total of all purchase payments made to the contract.
 
 
The practical effect of this formula is that the beneficiary recovers a lesser percentage of purchase payments in excess of $3,000,000 than for purchase payments up to $3,000,000.  In no event will the beneficiary receive less than the contract value.
 
The One-Year Enhanced Death Benefit also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.
 
Combination Enhanced Death Benefit Option
 
For an additional charge at an annualized rate of 0.40% of the daily net assets of the variable account, an applicant can elect the Combination Enhanced Death Benefit Option at the time of application.  The Combination Enhanced Death Benefit is only available for contracts with annuitants age 80 or younger at the time of application.
 
If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is less than or equal to $3,000,000, the death benefit will be the greatest of:
 
(1)
(a)
if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the annuitant's death;
 
 
(b)          if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)
the total of all purchase payments, less an adjustment for amounts surrendered;
 
(3)
the highest contract value on any contract anniversary before the annuitant’s 81st birthday, less an adjustment for amounts

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subsequently surrendered, plus purchase payments received after that contract anniversary; or
 
(4)
the 5% interest anniversary value.
 
The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.
 
The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
The 5% interest anniversary value is equal to purchase payments, accumulated at 5% annual compound interest until the last contract anniversary prior to the annuitant’s 81st birthday, proportionately adjusted for amounts surrendered.  The adjustment for amounts surrendered will reduce the accumulated value as of the most recent contract anniversary prior to each partial surrender in the same proportion that the contract value was reduced on the date of the partial surrender.  Such total accumulated amount, after the surrender adjustment, shall not exceed 200% of purchase payments adjusted for amounts surrendered.
 
If the annuitant dies prior to the annuitization date and the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be determined using the following formula:
 
(A x F) + B(1 - F), where
 
A = the greatest of:
 
(1)
 
(a)
if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the annuitant's death;
 
 
                (b)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit;
 
(2)
the total of all purchase payments, less an adjustment for amounts surrendered;
 
(3)
the highest contract value on any contract anniversary before the annuitant's 81st birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that contract anniversary; or
 
(4)
the 5% interest anniversary value.
 
The contract value in items (1) and (3) above may include a market value adjustment for any amounts allocated to a Guaranteed Term Option.
 
The adjustment for amounts surrendered will reduce items (2) and (3) above in the same proportion that the contract value was reduced on the date(s) of the partial surrender(s).
 
If Nationwide does not receive all information necessary to pay the death benefit within one year of the annuitant’s death, the calculation for A above will be the greater of (1) or (2) above.
 
B = (1)
if the contract was issued prior to February 1, 2005: the greater of the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit or the contract value as of the date of the annuitant’s death;
 
 
(2)
if the contract was issued on or after February 1, 2005: the contract value as of the date that Nationwide receives all the information necessary to pay the death benefit.
 
F = the ratio of $3,000,000 to the total of all purchase payments made to the contract.
 
 
The practical effect of this formula is that the beneficiary recovers a lesser percentage of purchase payments in excess of $3,000,000 than for purchase payments up to $3,000,000.  In no event will the beneficiary receive less than the contract value.
 
The Combination Enhanced Death Benefit also includes the Spousal Protection Feature, which allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse.
 
Spousal Protection Feature
 
The standard death benefit, One-Year Enhanced Death Benefit and Combination Enhanced Death Benefit include a Spousal Protection Feature at no additional charge.  The Spousal Protection Feature is not available for contracts issued as Charitable Remainder Trusts.  The Spousal Protection Feature allows a surviving spouse to continue the contract while receiving the economic benefit of the death benefit upon the death of the other spouse, provided the conditions described below are satisfied:
 
(1)  
One or both spouses (or a revocable trust of which either or both of the spouses is/are grantor(s)) must be named as the contract owner.  For contracts issued as IRAs and Roth IRAs, only the person for whom the IRA or Roth IRA was established may be named as the contract owner;
 
(2)  
The spouses must be co-annuitants;
 
(3)  
Both spouses must be age 85 or younger at the time the contract is issued;
 
(4)  
Both spouses must be named as beneficiaries;
 
(5)  
No person other than the spouse may be named as contract owner, annuitant or primary beneficiary;
 
(6)  
If both spouses are alive upon annuitization, the contract owner must specify which spouse is the annuitant upon whose continuation of life any annuity payments involving life contingencies depend (for IRA and Roth IRA contracts, this person must be the contract owner); and
 
(7)  
If the contract owner requests to add a co-annuitant after contract issuance, the date of marriage must be after the contract issue date and Nationwide will require the

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(8)  
contract owner to provide a copy of the marriage certificate.
 
If a co-annuitant dies before the annuitization date, the surviving spouse may continue the contract as its sole contract owner.  Additionally, if the death benefit value is higher than the contract value at the time of the first co-annuitant’s death, Nationwide will adjust the contract value to equal the death benefit value.  The surviving co-annuitant may then name a new beneficiary but may not name another co-annuitant.
 
 
The annuity commencement date is the date on which annuity payments are scheduled to begin.  Generally, the contract owner designates the annuity commencement date at the time of application.  If no annuity commencement date is designated at the time of application, Nationwide will establish the annuity commencement date as the date the annuitant reaches age 90 for Non-Qualified Contracts and the date the contract owner reaches age 70½ for all other contract types.
 
The contract owner may change the annuity commencement date before annuitization.  This change must be in writing and approved by Nationwide.  The annuity commencement date may not be later than the first day of the first calendar month after the annuitant’s 90th birthday (or the 90th birthday of the oldest annuitant if there are joint annuitants) unless approved by Nationwide.
 
 
Annuitization Date
 
The annuitization date is the date that annuity payments begin.  The annuitization date will be the first day of a calendar month unless otherwise agreed.  The annuitization date must be at least 2 years after the contract is issued, but may not be later than either:
 
·  
the age (or date) specified in your contract; or
 
·  
the age (or date) specified by state law, where applicable.
 
If the contract is issued to fund a Tax Sheltered Annuity, annuitization may occur during the first 2 years subject to Nationwide’s approval.
 
On the annuitization date, the annuitant becomes the contract owner unless the contract owner is a Charitable Remainder Trust.
 
The Internal Revenue Code may require that distributions be made prior to the annuitization dates specified above see "Required Distributions" in Appendix C: Contract Types and Tax Information.
 
Annuitization
 
Annuitization is the period during which annuity payments are received.  It is irrevocable once payments have begun.  Upon arrival of the annuitization date, the annuitant must choose:
 
(1)  
an annuity payment option; and
 
(2)  
either a fixed payment annuity, variable payment annuity, or an available combination.
 
Nationwide guarantees that each payment under a fixed payment annuity will be the same throughout annuitization.  Under a variable payment annuity, the amount of each payment will vary with the performance of the underlying mutual funds chosen by the contract owner.
 
Fixed Annuity Payments
 
Fixed annuity payments provide for level annuity payments.  Premium taxes are deducted prior to determining fixed annuity payments.  The fixed annuity payments will remain level unless the annuity payment option provides otherwise.
 
VariableAnnuity Payments
 
Variable annuity payments will vary depending on the performance of the underlying mutual funds selected.
 
First Variable Annuity Payment
 
The following factors determine the amount of the first variable annuity payment:
 
·  
the portion of purchase payments allocated to provide variable annuity payments;
 
·  
the variable account value on the annuitization date;
 
·  
the age and sex of the annuitant (and joint annuitant, if any);
 
·  
the annuity payment option elected;
 
·  
the frequency of annuity payments;
 
·  
the annuitization date;
 
·  
the assumed investment return (the net investment return required to maintain level variable annuity payments);
 
·  
the deduction of applicable premium taxes; and
 
·  
the date the contract was issued.
 
Subsequent Variable Annuity Payments
 
Variable annuity payments after the first will vary with the performance of the underlying mutual funds chosen by the contract owner after the investment performance is adjusted by the assumed investment return factor.
 
The dollar amount of each subsequent variable annuity payment is determined by taking the portion of the first annuity payment funded by a particular sub-account divided by the annuity unit value for that sub-account as of the annuitization date.  This establishes the number of annuity units provided by each sub-account for each variable annuity payment after the first.
 
The number of annuity units for each sub-account will remain constant, unless the contract owner transfers value from one underlying mutual fund to another.  After annuitization, transfers among sub-accounts may only be made on the anniversary of the annuitization date.
 
The number of annuity units for each sub-account is multiplied by the annuity unit value for that sub-account for

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the valuation period for which the payment is due.  The sum of these results for all the sub-accounts in which the contract owner invests establishes the dollar amount of the variable annuity payment.
 
Subsequent variable annuity payments may be more or less than the previous variable annuity payment, depending on whether the net investment performance of the elected underlying mutual funds is greater or lesser than the assumed investment return.
 
Assumed Investment Return
 
An assumed investment return is the net investment return required to maintain level variable annuity payments.  Nationwide uses a 3.5% assumed investment return factor.  Therefore, if the net investment performance of each sub-account in which the contract owner invests exactly equals 3.5% for every payment period, then each payment will be the same amount.  To the extent that investment performance is not equal to 3.5% for given payment periods, the amount of the payments in those periods will not be the same.  Payments will increase from one payment date to the next if the annualized net rate of return is greater than 3.5% during that time.  Conversely, payments will decrease from one payment to the next if the annualized net rate of return is less than 3.5% during that time.
 
Nationwide uses the assumed investment rate of return to determine the amount of the first variable annuity payment.
 
Value of an Annuity Unit
 
Annuity unit values for sub-accounts are determined by:
 
(1)  
multiplying the annuity unit value for each sub-account for the immediately preceding valuation period by the net investment factor for the sub-account for the subsequent valuation period (see "Determining the Contract Value – Determining Variable Account Value – Valuing an Accumulation Unit"); and then
 
(2)  
multiplying the result from (1) by a factor to neutralize the assumed investment return factor.
 
Frequency and Amount of Annuity Payments
 
Annuity payments are based on the annuity payment option elected.
 
If the net amount to be annuitized is less than $2,000, Nationwide reserves the right to pay this amount in a lump sum instead of periodic annuity payments.
 
Nationwide reserves the right to change the frequency of payments if the amount of any payment becomes less than $20.  The payment frequency will be changed to an interval that will result in payments of at least $20.
 
Annuity payments will generally be received within 7 to 10 days after each annuity payment date.
 
 
The annuitant must elect an annuity payment option before the annuitization date. If the annuitant does not elect an annuity payment option, a variable payment life annuity with a guarantee period of 240 months will be assumed as the automatic form of payment upon annuitization. If the annuitant does not elect an annuity payment option, a variable payment life annuity with a guarantee period of 240 months will be assumed as the automatic form of payment upon annuitization.  Once elected or assumed, the annuity payment option may not be changed.
 
Not all of the annuity payment options may be available in all states.  Additionally, the annuity payment options available may be limited based on the annuitant’s age (and the joint annuitant’s age, if applicable) or requirements under the Internal Revenue Code.
 
Annuity Payment Options for Contracts with Total Purchase Payments Less Than or Equal to $2,000,000
 
If, at the annuitization date, the total of all purchase payments made to the contract is less than or equal to $2,000,000, the annuity payment options available are:
 
·  
Single Life;
 
·  
Standard Joint and Survivor; and
 
·  
Single Life with a 10 or 20 Year Term Certain.
 
Each of the annuity payment options is discussed more thoroughly below.
 
Single Life
 
The Single Life annuity payment option provides for annuity payments to be paid during the lifetime of the annuitant.
 
Payments will cease with the last payment before the annuitant’s death.  No death benefit will be paid.
 
No withdrawals other than the scheduled annuity payments are permitted.
 
Standard Joint and Survivor
 
The Standard Joint and Survivor annuity payment option provides for annuity payments to continue during the joint lifetimes of the annuitant and joint annuitant.  After the death of either the annuitant or joint annuitant, payments will continue for the life of the survivor.
 
Payments will cease with the last payment due prior to the death of the last survivor of the annuitant and joint annuitant. As is the case of the Single Life annuity payment option, there is no guaranteed number of payments. Therefore, it is possible that if the annuitant dies before the second annuity payment date, the annuitant will receive only one annuity payment. No death benefit payment will be paid.
 
No withdrawals other than the scheduled annuity payments are permitted.
 
Single Life with a 10 or 20 Year Term Certain
 
The Single Life with a 10 or 20 Year Term Certain annuity payment option provides that monthly annuity payments will be paid during the annuitant’s lifetime or for the term selected, whichever is longer.  The term may be either 10 or 20 years.

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If the annuitant dies before the end of the 10 or 20 year term, payments will be paid to the beneficiary for the remainder of the term.
 
No withdrawals other than the scheduled annuity payments are permitted.
 
Any Other Option
 
Annuity payment options not set forth in this provision may be available.  Any annuity payment option not set forth in this provision must be approved by Nationwide.
 
Annuity Payment Options for Contracts with Total Purchase Payments Greater Than $2,000,000
 
If, at the annuitization date, the total of all purchase payments made to the contract is greater than $2,000,000, Nationwide may limit the annuity payment option to the longer of:
 
(1)  
a Fixed Life Annuity with a 20 Year Term Certain; or
 
(2)  
a Fixed Life Annuity with a Term Certain to Age 95.
 
Additionally, Nationwide will limit the amount that may be annuitized on a single life to $5,000,000.  If the total amount to be annuitized is greater than $5,000,000, then, for the purpose of annuitization only, Nationwide will permit additional annuitants to be named.
 
 
Nationwide will mail contract owners statements and reports.  Therefore, contract owners should promptly notify Nationwide of any address change.
 
These mailings will contain:
 
·  
statements showing the contract’s quarterly activity;
 
·  
confirmation statements showing transactions that affect the contract's value.  Confirmation statements will not be sent for recurring transactions (i.e., Dollar Cost Averaging or salary reduction programs).  Instead, confirmation of recurring transactions will appear in the contract’s quarterly statements; and
 
·  
semi-annual and annual reports of allocated underlying mutual funds.
 
Contract owners can receive information from Nationwide faster and reduce the amount of mail they receive by signing up for Nationwide’s eDelivery program.  Nationwide will notify contract owners by email when important documents (statements, prospectuses and other documents) are ready for a contract owner to view, print, or download from Nationwide’s secure server. To choose this option, go to www.nationwide.com/login.
 
Contract owners should review statements and confirmations carefully.  All errors or corrections must be reported to Nationwide immediately to assure proper crediting to the contract.  Unless Nationwide is notified within 30 days of receipt of the statement, Nationwide will assume statements and confirmation statements are correct.

 
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 multiple contract owners in the same household, Nationwide will mail only one copy of each document, unless notified otherwise by the contract owner(s).  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.
 
 
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, retirement plan, 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 Financial Industry Regulatory Authority 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

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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 and other governmental bodies have commenced investigations, proceedings or inquiries 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, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, funding agreements issued to back medium-term note (MTN) programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives.  Related investigations, proceedings or inquiries may be commenced in the future.  Nationwide and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies and other governmental bodies, 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, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, and funding agreements backing the Nationwide 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 mutual fund, retirement plan, 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.
 
On November 20, 2007, Nationwide and Nationwide Retirement Solutions, Inc. (NRS) were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v NLIC, NRS, Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z.  The plaintiffs purport to represent a class of all participants in the Alabama State Employees Association (ASEA) plan, excluding members of the Board of Control during the Class Period and excluding ASEA’s directors, officers and board members during the class period.  The class period is the date from which Nationwide and/or NRS first made a payment to ASEA or PEBCO arising out of the funding agreement dated March 24, 2004 to the date class notice is provided.  The plaintiffs allege that the defendants breached their fiduciary duties, converted plan participants’ properties, and breached their contract when payments were made and the plan was administered under the funding agreement.  The complaint seeks a declaratory judgment, an injunction, disgorgement of amounts paid, compensatory and punitive damages, interest, attorneys’ fees and costs, and such other equitable and legal relief to which the plaintiffs and class members may be entitled.  On January 9, 2008, Nationwide and NRS filed a Notice of Removal to the United States District Court Northern District of Alabama, Southern Division.  On January 16, 2008, Nationwide and NRS filed a motion to dismiss.  On January 24, 2008, the plaintiffs filed a motion to remand.  The motions have been fully briefed.  Nationwide and NRS intend to defend this case vigorously.
 
On July 11, 2007, Nationwide was named in a lawsuit filed in the United States District Court for the Western District of Washington at Tacoma entitled Jerre Daniels-Hall and David Hamblen, Individually and on behalf of All Others Similarly Situated v. National Education Association, NEA Member Benefits Corporation, Nationwide Life Insurance Company, Security Benefit Life Insurance Company, Security Benefit Group, Inc., Security Distributors, Inc., et. al.  The plaintiffs seek to represent a class of all current or former National Education Association (NEA) members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present (and their heirs and/or beneficiaries).  The plaintiffs allege that the defendants violated the Employee Retirement Income Security Act of 1974, as amended (ERISA) by failing to prudently and loyally manage plan assets, by failing to provide complete and accurate information, by engaging in prohibited transactions, and by breaching their fiduciary duties when they failed to prevent other fiduciaries from breaching their fiduciary duties.  The complaint seeks to have the defendants restore all losses to the plan, restoration of plan assets and profits to participants, disgorgement of endorsement fees, disgorgement of service fee payments, disgorgement of excessive fees charged to plan participants, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees.  On October 12, 2007, Nationwide filed a motion to dismiss.  The motion has been fully briefed.  Nationwide intends to defend this lawsuit vigorously.
 
On November 15, 2006, Nationwide Financial Services, Inc. (NFS), Nationwide and NRS were 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

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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, Nationwide and NRS filed a motion to dismiss.  On September 17, 2007, the Court granted the motion to dismiss.  On October 1, 2007, the plaintiff filed a motion to vacate judgment and for leave to file an amended complaint.  On October 25, 2007, NFS, Nationwide and NRS filed their opposition to the plaintiff’s motion.  NFS, Nationwide and NRS continue 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 plaintiff claims that the total of modal payments that policyholders paid per year exceeded the guaranteed maximum premium provided for in the policy. 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.  On April 30, 2007, Nationwide filed a motion for summary judgment.  On February 4, 2008, the Court entered its ruling on the parties’ pending motions for summary judgment.  The Court granted Nationwide’s motion for summary judgment for some of the plaintiffs’ causes of action, including breach of contract claims on all decreasing term policies, plaintiff Carr’s individual claims for fraud by omission, violation of the Ohio Deceptive Trade Practices Act and all unjust enrichment claims.  However, several claims against Nationwide remain, including plaintiff Carr’s individual claim for breach of contract and the plaintiff Class’ claims for breach of contract for the term life policies in 43 of 51 jurisdictions.  The Court has requested additional briefing on Nationwide’s affirmative defense that the doctrine of voluntary payment acts as a defense to the breach of contract claims. 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 the first amended complaint purporting to represent, with certain exceptions, a class of all persons who 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 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.  The plaintiff appealed the District Court’s decision, and the issues have been fully briefed.  Nationwide continues to defend this lawsuit vigorously.
 
On August 15, 2001, NFS and Nationwide 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 Nationwide.  The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that Nationwide 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 NFS and Nationwide, other unspecified relief for restitution, declaratory

37


 
and injunctive relief, and attorneys’ fees.  To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class.  On September 25, 2007, NFS’ and Nationwide’s motion to dismiss the plaintiffs’ fifth amended complaint was denied.  On October 12, 2007, NFS and Nationwide filed their answer to the plaintiffs’ fifth amended complaint and amended counterclaims.  On November 1, 2007, the plaintiffs filed a motion to dismiss NFS’ and Nationwide’s amended counterclaims.  On November 15, 2007, the plaintiffs filed a motion for class certification.  On February 8, 2008, the Court denied the plaintiffs motion to dismiss the amended counterclaim, with the exception that it was tentatively granting the plaintiffs motion to dismiss with respect to the Companies’ claim that it could recover any disgorgement remedy from plan sponsors.  NFS and Nationwide continue to defend this lawsuit vigorously.
 
The general distributor, NISC, is not engaged in any litigation of any material nature
 
 
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Page
General Information and History
1
Services
1
Purchase of Securities Being Offered
2
Underwriters
2
Advertising
2
Annuity Payments
2
Condensed Financial Information
2
Financial Statements
134
 
To learn more about this product, you should read the Statement of Additional Information (the "SAI") dated the same date as this prospectus.  For a free copy of the SAI and to request other information about this product please call our Service Center at 1-800-848-6331 (TDD 1-800-238-3035) or write to us at Nationwide Life Insurance Company, 5100 Rings Road, RR1-04-F4, Dublin, Ohio 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 product.  Information about us and the product (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. 20549-0102. 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- 3330
 
Securities Act of 1933 Registration File No. 333-105992
 




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The underlying mutual funds 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.
 
Please refer to the prospectus for each underlying mutual fund for more detailed information.
 
AIM Variable Insurance Funds - AIM V.I. Basic Value Fund: Series II Shares
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Invesco Aim Advisors, Inc.
Sub-adviser:
Invesco Trimark Investment Management Inc.; Invesco Global Asset
 
Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
 
Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
 
Management Limited; Invesco Asset Management (Japan) Limited; Invesco
 
Asset Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:
Long-term growth of capital.
 
AIM Variable Insurance Funds - AIM V.I. Capital Appreciation Fund: Series II Shares
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Invesco Aim Advisors, Inc.
Sub-adviser:
Invesco Trimark Investment Management, Inc.; Invesco Global Asset
 
Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
 
Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
 
Management Limited; Invesco Asset Management (Japan) Limited; Invesco
 
Asset Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:
Growth of capital.
 
AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series II Shares
Investment Adviser:
Invesco Aim Advisors, Inc.
Sub-adviser:
Invesco Trimark Investment Management, Inc.; Invesco Global Asset
 
Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
 
Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
 
Management Limited; Invesco Asset Management (Japan) Limited; Invesco
 
Asset Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:
Long-term capital growth.
 
Alger American Fund - Alger American Balanced Portfolio: Class S Shares
Investment Adviser:
Fred Alger Management, Inc.
Investment Objective:
Current income and long-term capital appreciation.
 
Alger American Fund - Alger American Mid Cap Growth Portfolio: Class S Shares
Investment Adviser:
Fred Alger Management, Inc.
Investment Objective:
Long-term capital appreciation.
 
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Growth and Income Portfolio: Class B
Investment Adviser:
AllianceBernstein L.P.
Investment Objective:
Long-term growth of capital.
 
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B
Investment Adviser:
AllianceBernstein L.P.
Investment Objective:
Long-term growth of capital.
 
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II
Investment Adviser:
American Century Investment Management, Inc.
Investment Objective:
Long-term total return using a strategy that seeks to protect against U.S. inflation.
 


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American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class II
Investment Adviser:
American Century Investment Management, Inc.
Investment Objective:
Capital growth by investing in common stocks.
 
American Century Variable Portfolios, Inc. - American Century VP International Fund: Class II
This underlying mutual fund is no longer available to receive transfers or new purchase payments effective May 1, 2004
Investment Adviser:
American Century Global Investment Management, Inc.
Investment Objective:
Capital growth.
 
American Century Variable Portfolios, Inc. - American Century VP International Fund: Class IV
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
American Century Global Investment Management, Inc.
Investment Objective:
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 Mid Cap Value Fund: Class II
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 Ultra Fund: Class II
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2007
Investment Adviser:
American Century Investment Management, Inc.
Investment Objective:
Long-term capital growth.
 
American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class II
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 Vista Fund: Class II
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
American Century Investment Management, Inc.
Investment Objective:
Long-term capital growth.
 
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares
Investment Adviser:
The Dreyfus Corporation
Sub-adviser:
Mellon Capital Management
Investment Objective:
To match performance of the S&P SmallCap 600 Index®.
 
Dreyfus Stock Index Fund, Inc.: Service Shares
Investment Adviser:
The Dreyfus Corporation
Sub-adviser:
Mellon Capital Management
Investment Objective:
To match performance of the S&P 500.
 
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares
Investment Adviser:
The Dreyfus Corporation
Sub-adviser:
Fayez Sarofim
Investment Objective:
Long-term capital growth consistent with the preservation of capital.
 
Dreyfus Variable Investment Fund - Developing Leaders Portfolio: Service Shares
Investment Adviser:
The Dreyfus Corporation
Sub-adviser:
Franklin Portfolio Associates
Investment Objective:
Capital growth.
 
Federated Insurance Series - Federated American Leaders Fund II: Service Shares
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Federated Equity Management Company of Pennsylvania
Investment Objective:
Long-term capital growth, and secondarily income.
 


41


 
Federated Insurance Series - Federated Capital Appreciation Fund II: Service Shares
Investment Adviser:
Federated Equity Management Company of Pennsylvania
Investment Objective:
Capital appreciation.
 
Federated Insurance Series - Federated Market Opportunity Fund II: Service Shares
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Federated Equity Management Company of Pennsylvania
Sub-adviser:
Federated Investment Management Company
Investment Objective:
To provide moderate capital appreciation and high current income.
 
Federated Insurance Series - Federated Quality Bond Fund II: Service Shares
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Federated Investment Management Company
Investment Objective:
Current income.
 
Fidelity Variable Insurance Products Fund - VIP Contrafund® Portfolio: Service Class 2
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Fidelity Management & Research Company
Sub-adviser:
Fidelity Research & Analysis Company
Investment Objective:
Long-term capital appreciation.
 
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2
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 - VIP Equity-Income Portfolio: Service Class 2
Investment Adviser:
Fidelity Management & Research Company
Sub-adviser:
FMR Co., Inc.
Investment Objective:
Reasonable income.
 
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2
Investment Adviser:
Fidelity Management & Research Company
Sub-adviser:
FMR Co., Inc.
Investment Objective:
Capital appreciation.
 
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2
Investment Adviser:
Fidelity Management & Research Company
Sub-adviser:
Fidelity Investments Money Management, Inc.
Investment Objective:
High level of current income.
 
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2
Investment Adviser:
Fidelity Management & Research Company
Sub-adviser:
Fidelity Research & Analysis Company
Investment Objective:
Long-term growth of capital.
 
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R
Investment Adviser:
Fidelity Management & Research Company
Sub-adviser:
Fidelity Research & Analysis Company
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).
 
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2
Investment Adviser:
Franklin Advisors, Inc.
Investment Objective:
Maximum income while maintaining prospects for capital appreciation.
 


42


 
Franklin Templeton Variable Insurance Products Trust - Franklin Rising Dividends Securities Fund: Class 2
This underlying mutual fund is only available in contracts issued before May 1, 2006
Investment Adviser:
Franklin Advisory Services, LLC
Investment Objective:
Long-term capital appreciation.
 
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2
Investment Adviser:
Franklin Advisory Services, LLC
Investment Objective:
Long-term total return.
 
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2
Investment Adviser:
Franklin Templeton Services, LLC
Investment Objective:
Capital appreciation with income as a secondary goal.
 
Franklin Templeton Variable Insurance Products Trust - Templeton Developing Markets Securities Fund: Class 3
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Templeton Asset Management, Ltd.
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).
 
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 2
This underlying mutual fund is no longer available to receive transfers or new purchase payments effective May 1, 2004
Investment Adviser:
Templeton Investment Counsel, LLC
Investment Objective:
Long-term capital growth.
 
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3
Investment Adviser:
Templeton Investment Counsel, LLC
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).
 
Franklin Templeton Variable Insurance Products Trust - Templeton Global Income Securities Fund: Class 3
Investment Adviser:
Franklin Advisors, Inc.
Investment Objective:
High current income consistent with preservation of capital, with capital
 
appreciation as a secondary consideration.
 
This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this prospectus).
 
Janus Aspen Series - Balanced Portfolio: Service Shares
Investment Adviser:
Janus Capital Management LLC
Investment Objective:
Long-term growth of capital, consistent with preservation of capital and
 
balanced by current income.
 
Janus Aspen Series - Forty Portfolio: Service Shares
Investment Adviser:
Janus Capital Management LLC
Investment Objective:
Long-term growth of capital.
 
Janus Aspen Series - INTECH Risk-Managed Core Portfolio: Service Shares
This underlying mutual fund is only available in contracts for which good order applications were received before May 1, 2008
Investment Adviser:
Janus Capital Management LLC
Sub-adviser:
Enhanced Investment Technologies, LLC
Investment Objective:
Long-term growth of capital.
 
Janus Aspen Series - International Growth Portfolio: Service II Shares
Investment Adviser:
Janus Capital Management LLC
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).

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Janus Aspen Series - International Growth Portfolio: Service Shares
This underlying mutual fund is no longer available to receive transfers or new purchase payments effective May 1, 2004
Investment Adviser:
Janus Capital Management LLC
Investment Objective:
Long-term growth of capital.
 
Lehman Brothers Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class
Investment Adviser:
Neuberger Berman Management Inc.
Sub-adviser:
Neuberger Berman, LLC
Investment Objective:
Highest available current income consistent with liquidity and low risk to
 
principal and, secondarily, total return.
 
MFS® Variable Insurance Trust - MFS Investors Growth Stock Series: Service Class
This underlying mutual fund is only available in contracts issued before May 1, 2006
Investment Adviser:
Massachusetts Financial Services Company
Investment Objective:
Capital appreciation.
 
MFS® Variable Insurance Trust - MFS Value Series: Service Class
Investment Adviser:
Massachusetts Financial Services Company
Investment Objective:
Capital appreciation.
 
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II
Investment Adviser:
Capital Research and Management Company
Investment Objective:
Seeks to provide high total return (including income and capital gains)
 
consistent with the preservation of capital.
 
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II
Investment Adviser:
Capital Research and Management Company
Investment Objective:
Income and more price stability than stocks, and capital preservation over
 
the long term.  Seeks to maximize an investor’s level of current income and
 
preserve the investor’s capital.
 
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II
Investment Adviser:
Capital Research and Management Company
Investment Objective:
Capital appreciation through stocks.
 
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II
Investment Adviser:
Capital Research and Management Company
Investment Objective:
Capital appreciation principally through investment in stocks.
 
Nationwide Variable Insurance Trust - American Funds NVIT Growth- Income Fund: Class II
Investment Adviser:
Capital Research and Management Company
Investment Objective:
Seeks returns from both capital gains as well as income generated by
 
dividends paid by stock issuers.
 
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class I
This underlying mutual fund is no longer available to receive transfers or new purchase payments effective May 1, 2005
Investment Adviser:
Nationwide Fund Advisors
Sub-adviser:
Federated Investment Management Company
Investment Objective:
High current income.
 
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III
Investment Adviser:
Nationwide Fund Advisors
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).

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Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class VI
Investment Adviser:
Nationwide Fund Advisors
Sub-adviser:
Gartmore Global Partners
Investment Objective:
Long-term capital growth by investing primarily in equity securities of
 
companies located in emerging market countries.
 
This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this prospectus).
 
Nationwide Variable Insurance Trust - Gartmore NVIT Global Utilities Fund: Class II
This underlying mutual fund is no longer available to receive transfers or new purchase payments effective May 1, 2004
Investment Adviser:
Nationwide Fund Advisors
Sub-adviser:
Gartmore Global Partners
Investment Objective:
Long-term capital growth.
 
Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class VI
Investment Adviser:
Nationwide Fund Advisors
Sub-adviser:
Gartmore Global Partners
Investment Objective:
The Fund seeks long-term capital growth by investing primarily in equity securities of
 
companies in Europe, Australasia, the Far East and other regions, including developing countries.
 
This underlying mutual fund assesses a short-term trading fee (please see "Short-Term Trading Fees" earlier in this prospectus).
 
Nationwide Variable Insurance Trust - Lehman Brothers NVIT Core Plus Bond Fund: Class II
Investment Adviser:
Nationwide Fund Advisors
Sub-adviser:
Lehman Brothers Asset Management LLC
Investment Objective:
The Fund seeks long-term total return.
 
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II
Investment Adviser:
Nationwide Fund Advisors
Sub-adviser:
Neuberger Berman Management Inc.
Investment Objective:
The fund seeks long-term capital growth.
 
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II
Investment Adviser:
Nationwide Fund Advisors