N-4/A 1 destinationnavigatorcomplete.htm DESTINATION NAVIGATOR AO Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
File No 333-168818
 
 
Pre-Effective Amendment No. 3
þ

Post-Effective Amendment No.
o

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
File No. 811-03330

Amendment No. 356
þ


(Check appropriate box or boxes.)


NATIONWIDE VARIABLE ACCOUNT – II
(Exact Name of Registrant)


NATIONWIDE LIFE INSURANCE COMPANY
(Name of Depositor)


One Nationwide Plaza, Columbus, Ohio 43215
(Address of Depositor's Principal Executive Offices)  (Zip Code)


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


Robert W. Horner, III, Vice President and Secretary, One Nationwide Plaza, Columbus, Ohio 43215
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering
As soon as possible after effective date


Title of Securities Being Registered
Individual Flexible Premium Deferred Variable Annuity Contract

The Registrant hereby agrees to amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall therefore become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 
 

 

Nationwide DestinationSM Navigator
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 __________, 2011.
 
The contracts described in this prospectus are not available in the State of New York.  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, especially other variable annuity and variable life insurance products offered by Nationwide and its affiliates.  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 _____________, 2011), which contains additional information about the contracts and the Variable Account, has been filed with the Securities and Exchange Commission ("SEC") and is incorporated herein by reference.  The table of contents for the Statement of Additional Information is on page 45. 
 
To obtain free copies of the Statement of Additional Information and other information about the Variable Account that has been filed with the SEC, call 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 Nationwide and the variable annuity contract described in this prospectus (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.  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 Statement of Additional Information, 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.  Variable annuity contracts and the associated optional benefit riders involve investment risk and 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.
 
This contract contains features that apply credits to the Contract Value.  The benefit of the credits may be more than offset by the additional fees that the Contract Owner will pay in connection with the credits.  A contract without credits may cost less.

The Sub-Accounts available under this contract invest in underlying mutual funds of the portfolio companies listed below.
·  
AllianceBernstein Variable Products Series Fund, Inc.
·  
American Century Variable Portfolios II, Inc.
·  
American Century Variable Portfolios, Inc.
·  
BlackRock Variable Series Funds, Inc.
·  
Dreyfus
·  
Dreyfus Investment Portfolios
·  
Dreyfus Variable Investment Fund
·  
Fidelity Variable Insurance Products Fund
·  
Franklin Templeton Variable Insurance Products Trust
·  
Huntington VA Funds
·  
Invesco
·  
Ivy Funds Variable Insurance Portfolios, Inc.
·  
Janus Aspen Series
·  
MFS® Variable Insurance Trust
·  
MFS® Variable Insurance Trust II
·  
Nationwide Variable Insurance Trust
·  
Neuberger Berman Advisers Management Trust
·  
Oppenheimer Variable Account Funds
·  
PIMCO Variable Insurance Trust
·  
T. Rowe Price Equity Series, Inc.
·  
Van Eck VIP Trust
·  
Wells Fargo Variable Trust
 
For a complete list of the available Sub-Accounts, please refer to "Appendix A: Underlying Mutual Funds."  For more information on the underlying mutual funds, please refer to the prospectus for the mutual fund.
 
Purchase payments not invested in the Sub-Accounts of the Nationwide Variable Account-II (the "Variable Account") may be allocated to the Fixed Account.


 
1

 

Glossary of Special Terms
 
Accumulation Unit- An accounting unit of measure used to calculate the Contract Value allocated to the Variable Account before the Annuitization Date.
 
Annuitant- The person upon whose continuation of life benefit payments involving life contingencies depends.
 
Annuitization Date- The date on which 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.
 
Co-Annuitant(s)- The person(s) designated by the Contract Owner to receive the Spousal Protection Feature.
 
Contract Owner(s)- the person(s) who owns all rights under the contract.  All references in this prospectus to "you" shall mean the Contract Owner.
 
Contract Value- The value of all Accumulation Units in a contract plus any amount held in the Fixed Account.
 
Contract Anniversary- Each recurring one-year anniversary of the date the contract was issued.
 
Contract Year- Each year the contract is in force beginning with the date the contract is issued.
 
Current Income Benefit Base- For purposes of the 5% Lifetime Income Option and the 10% Lifetime Income Option, it is equal to the Original Income Benefit Base adjusted throughout the life of the contract to account for subsequent purchase payments, excess withdrawals, and reset opportunities.  This amount is multiplied by the Lifetime Withdrawal Percentage to arrive at the benefit amount for any given year.
 
Daily Net Assets- A figure that is calculated at the end of each Valuation Date and represents the sum of all the Contract Owners' interests in the variable Sub-Accounts after the deduction of contract and underlying mutual fund expenses.
 
FDIC- Federal Deposit Insurance Corporation.
 
Fixed Account- An investment option that is funded by Nationwide's General Account.  Amounts allocated to the Fixed Account will receive periodic interest, subject to a guaranteed minimum crediting rate that varies depending on the type of allocation (e.g., new purchase payment, transfer, Dollar Cost Averaging allocation, Enhanced Fixed Account Dollar Cost Averaging allocation, etc.).
 
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.
 
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.
 
Lifetime Withdrawal Percentage- An age-based percentage used to determine the annual amount available for surrender under a Lifetime Income Option.  The applicable percentage is multiplied by the Current Income Benefit Base to arrive at the benefit amount for any given year.
 
Monthly Contract Anniversary- Each recurring one-month anniversary of the date the contract was issued.
 
Nationwide- Nationwide Life Insurance Company.  All references in this prospectus to "we" or "us" shall mean Nationwide.
 
Net Asset Value- The value of one share of an underlying mutual fund investment option 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.
 
Original Income Benefit Base- For purposes of the 5% Lifetime Income Option and the 10% Lifetime Income Option, the initial benefit base calculated on the date the contract is issued, which is equal to the Contract Value.
 
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 that 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, each of which invests in a single underlying mutual fund.
 
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.

 
2

 

 
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.
 



 
3

 

Table of Contents
Page
Glossary of Special Terms                                                                                                                                                       
2
Contract Expenses                                                                                                                                                       
6
Underlying Mutual Fund Annual Expenses                                                                                                                                                       
7
Example                                                                                                                                                       
8
Synopsis of the Contracts                                                                                                                                                       
8
Surrenders
 
Minimum Initial and Subsequent Purchase Payments
 
Dollar Limit Restrictions
 
Credits on Purchase Payments
 
Charges and Expenses
 
Annuity Payments
 
Taxation
 
Death Benefit
 
Ten Day Free Look
 
Condensed Financial Information                                                                                                                                                       
11
Financial Statements                                                                                                                                                       
11
Nationwide Life Insurance Company                                                                                                                                                       
11
Nationwide Investment Services Corporation                                                                                                                                                       
11
Investing in the Contract                                                                                                                                                       
 
The Variable Account and Underlying Mutual Funds
 
The Fixed Account
 
The Contract in General                                                                                                                                                       
14
Distribution, Promotional and Sales Expenses
 
Underlying Mutual Fund Payments
 
Profitability
 
Contract Modification
 
Nationwide's Obligation in Connection with the Lifetime Income Options
 
Standard Charges and Deductions                                                                                                                                                       
15
Mortality and Expense Risk Charge
 
Administrative Charge
 
Contract Maintenance Charge
 
Contingent Deferred Sales Charge
 
Premium Taxes
 
Short-Term Trading Fees
 
Optional Contract Benefits, Charges and Deductions                                                                                                                                                       
18
General Information about Optional Benefits
 
Reduced CDSC Option ("Liquidity Option")
 
Death Benefit Options
 
Beneficiary Protector II Option
 
10% and 5% Lifetime Income Option
 
10% and 5% Spousal Continuation Benefit
 
Income Benefit Investment Options
 
Removal of Variable Account Charges                                                                                                                                                       
26
Ownership and Interests in the Contract                                                                                                                                                       
26
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                                                                                                                                                       
27
Purchase Payment Credits
 
Pricing
 
Application and Allocation of Purchase Payments
 
Determining the Contract Value
 
Transfer Requests
 

 
4

 


Table of Contents (continued)
Page
Transfer Restrictions
 
Transfers Prior to Annuitization
 
Transfers After Annuitization
 
Right to Examine and Cancel                                                                                                                                                       
31
Surrender (Redemption) Prior to Annuitization                                                                                                                                                       
32
Partial Surrenders (Partial Redemptions)
 
Full Surrenders (Full Redemptions)
 
Surrender (Redemption) After Annuitization                                                                                                                                                       
32
Assignment                                                                                                                                                       
32
Contract Owner Services                                                                                                                                                       
33
Asset Rebalancing
 
Dollar Cost Averaging
 
Enhanced Fixed Account Dollar Cost Averaging
 
Dollar Cost Averaging for Living Benefits
 
Fixed Account Interest Out Dollar Cost Averaging
 
Systematic Withdrawals
 
Custom Portfolio Asset Rebalancing Service
 
Death Benefits                                                                                                                                                       
35
Death of Contract Owner
 
Death of Annuitant
 
Death of Contract Owner/Annuitant
 
Death Benefit Payment
 
Death Benefit Calculations
 
Spousal Protection Feature
 
Annuity Commencement Date                                                                                                                                                       
39
Annuitizing the Contract                                                                                                                                                       
39
Annuitization Date
 
Annuitization
 
Fixed Annuity Payments
 
Variable Annuity Payments
 
Frequency and Amount of Annuity Payments
 
Annuity Payment Options                                                                                                                                                       
41
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
 
Annuitization of Amounts Greater than $5,000,000
 
Statements and Reports                                                                                                                                                       
42
Legal Proceedings                                                                                                                                                       
42
Table of Contents of Statement of Additional Information                                                                                                                                                       
45
Appendix A: Underlying Mutual Funds                                                                                                                                                       
46
Appendix B: Condensed Financial Information                                                                                                                                                       
55
Appendix C: Contract Types and Tax Information                                                                                                                                                       
56
Appendix D: State Variations                                                                                                                                                       
64

 
5

 

Contract Expenses
 
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
Maximum Contingent Deferred Sales Charge ("CDSC") (as a percentage of purchase payments surrendered)
7%
 
Range of CDSC over time:
Number of Completed Years from Date of Purchase Payment
0
1
2
3
4
5
6
7+
CDSC Percentage
7%
7%
6%
5%
4%
3%
2%
0%
 
 Maximum Premium Tax Charge (as a percentage of purchase payments) 5%1
 
 Short-Term Trading Fee (as a percentage of transaction amount2) 1%
 
The next table describes the fees and expenses that a Contract Owner will pay periodically during the life of the contract (not including underlying mutual fund fees and expenses).
 
Recurring Contract Expenses
Maximum Annual Contract Maintenance Charge                                                                                                                                                 
$303
Variable Account Annual Expenses (assessed as an annualized percentage of Daily Net Assets)
 
Mortality and Expense Risk Charge                                                                                                                                             
Administrative Charge                                                                                                                                             
1.10%
0.20%
Reduced CDSC Option ("Liquidity Option")4 (assessed as an annualized percentage of Daily Net Assets)
Total Variable Account Charges (including this option only)                                                                                                                                                  
0.50%
1.80%
Death Benefit Options (assessed as an annualized percentage of Daily Net Assets) (eligible applicants may purchase one)
 
One-Year Enhanced Death Benefit Option Charge                                                                                                                                             
Total Variable Account Charges (including this option only)                                                                                                                                             
0.20%
1.50%
One-Month Enhanced Death Benefit Option Charge                                                                                                                                             
Total Variable Account Charges (including this option only)                                                                                                                                             
0.35%
1.65%
Combination Enhanced Death Benefit Option Charge                                                                                                                                             
Total Variable Account Charges (including this option only)                                                                                                                                             
0.45%
1.75%
Beneficiary Protector II Option Charge (assessed as an annualized percentage of Daily Net Assets)
Total Variable Account Charges (including this option only)                                                                                                                                                  
0.35%5
1.65%
Lifetime Income Options (assessed annually as a percentage of the Current Income Benefit Base6 ) (eligible applicants may purchase one)
 
5% Lifetime Income Option Charge                                                                                                                                             
1.00%7
10% Lifetime Income Option Charge                                                                                                                                             
1.20%
Spousal Continuation Benefits (assessed annually as a percentage of the Current Income Benefit Base) (eligible applicants may purchase the option that corresponds to the elected lifetime income option)
 
5% Spousal Continuation Benefit Charge                                                                                                                                             
0.15%
10% Spousal Continuation Benefit Charge                                                                                                                                             
0.30%8
 

 

 
6

 

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
(annualized rate, as a percentage of the Daily Net Assets)
Mortality and Expense Risk Charge (applicable to all contracts)                                                                                                                                                  
1.10%
Administrative Charge (applicable to all contracts)                                                                                                                                                  
0.20%
Reduced CDSC Option ("Liquidity Option")                                                                                                                                                  
0.50%
Combination Enhanced Death Benefit Option Charge                                                                                                                                                  
0.45%
Beneficiary Protector II Option Charge                                                                                                                                                  
0.35%
10% Lifetime Income Option Charge                                                                                                                                                  
1.20%9
10% Spousal Continuation Benefit Charge                                                                                                                                                  
0.30%9
Maximum Possible Total Variable Account Charges                                                                                                                                                  
4.10%10
 
Underlying Mutual Fund Annual Expenses
 
The next table provides the minimum and maximum total operating expenses, as of December 31, 2010, charged by the underlying mutual funds that you may pay periodically during the life of the contract.  More detail concerning each underlying mutual fund's fees and expenses 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 average underlying mutual fund assets)
0.43%
1.85%
 
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 Nationwide will charge between 0% and 5% of purchase payments for premium taxes levied by state or other government entities.  The amount assessed to the contract will equal the amount assessed by the state or government entity.
2 The transaction amount is the amount of the transfer determined to be engaged in short-term trading.  See, "Short-Term Trading Fees," later in this prospectus.
3 On each contract's Contract Anniversary, Nationwide deducts the Contract Maintenance Charge if the Contract Value is less than $50,000 on such Contract Anniversary.  This charge is permanently waived for any contracts valued at $50,000 or more on any Contract Anniversary.
4 Election of the Liquidity Option replaces the standard 7 year CDSC schedule with the following reduced CDSC schedule:
Range of Liquidity Option CDSC over time:
Number of Completed Years from Date of Contract Issuance
0
1
2
3
4
CDSC Percentage
7%
7%
6%
5%
0%
Nationwide will discontinue deducting the charge associated with the Liquidity Option 4 years from the date the contract was issued.
5 In addition to the 0.35% charge assessed to Variable Account allocations, allocations made to the Fixed Account will be assessed a fee of 0.35% by decreasing the interest credited to amounts allocated to the Fixed Account.
6 For information about how the Current Income Benefit Base is calculated, see, "Determination of the Income Benefit Base Prior to the First Surrender," later in this prospectus.
7 The current charge associated with the 5% Lifetime Income Option is equal to 0.75% of the Current Income Benefit Base.
8 Currently, the charge associated with the 10% Spousal Continuation Benefit is equal to 0.20% of the Current Income Benefit Base.
9 This charge is a percentage of the Current Income Benefit Base.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets.
10 The Maximum Possible Total Variable Account Charges associated with a particular contract may be higher or lower than 4.10% depending on whether the Current Income Benefit Base is higher or lower than the Daily Net Assets.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets.

 
7

 

 
Example
 
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 following 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;
·  
the maximum Contingent Deferred Sales Charge under the standard 7 year CDSC schedule;
·  
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 allowable combination of optional benefits (4.10%).1
 
For those contracts that do not elect the most expensive combination of optional benefits, the expenses would be lower.
 
 
If you surrender your contract
at the end of the applicable
time period
If you annuitize your contract
at the end of the applicable
time period
If you do not
surrender
your contract
 
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
1 Yr.
3 Yrs.
5 Yrs.
10 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (1.85%)
$1,286
$2,388
$3,450
$6,120
*
$1,938
$3,180
$6,120
$656
$1,938
$3,180
$6,120
Minimum Total Underlying Mutual Fund Operating Expenses (0.43%)
$1,137
$1,970
$2,802
$5,055
*
$1,520
$2,532
$5,055
$507
$1,520
$2,532
$5,055
 
*The contracts sold under this prospectus do not permit annuitization during the first two Contract Years.
 
1 The total Variable Account charges associated with the most expensive allowable combination of optional benefits may be higher or lower than 4.10% depending on whether the Current Income Benefit Base is higher or lower than the Daily Net Assets.  For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the Daily Net Assets.

Synopsis of the Contracts
 
The annuity described in this prospectus is intended to provide benefits to a single or joint owner and his/her beneficiaries.  The contracts described in this prospectus are individual flexible purchase payment contracts.
 
The contracts can be categorized as:
 
·  
Charitable Remainder Trusts;
·  
Individual Retirement Annuities ("IRAs");
·  
Investment-Only Contracts (Qualified Plans);
·  
Non-Qualified Contracts;
·  
Roth IRAs;
·  
Simplified Employee Pension IRAs ("SEP IRAs"); and
·  
Simple IRAs.
 
For more detailed information with regard to the differences in contract types, see "Appendix C: Contract Types and Tax Information," later in this prospectus.  Prospective purchasers may apply to purchase a contract through broker dealers that have entered into a selling agreement with Nationwide Investment Services Corporation.
 
Surrenders
 
Contract Owners may generally surrender some or all of their Contract Value at any time prior to annuitization by notifying Nationwide in writing.  See, "Surrender (Redemption) Prior to Annuitization," later in this prospectus.  After the Annuitization Date, surrenders are not permitted.  See, "Surrender (Redemption) After Annuitization," later in this prospectus.

 
Minimum Initial and Subsequent Purchase Payments
 
For Non-Qualified Contracts and Charitable Remainder Trusts, the minimum initial purchase payment is $10,000.  For all other contract types, the minimum initial purchase payment is $3,000.  A Contract Owner will meet the minimum initial purchase payment requirement by making purchase payments equal to the required minimum over the course of the first Contract Year.
 
The minimum subsequent purchase payment is $1,000.  However, for subsequent purchase payments sent via electronic deposit, the minimum subsequent purchase payment is $150.  Subsequent purchase payments may not be permitted in all states.
 
If the Liquidity Option is elected, subsequent purchase payments are only permitted during the first Contract Year.
 
Nationwide reserves the right to refuse any purchase payment that would result in the cumulative contract value for all contracts issued by Nationwide on the life of any one Annuitant to exceed $1,000,000.  Its decision as to whether or not to accept a purchase payment in excess of that amount will be based on one or more factors, including, but not limited to: age, spouse age (if applicable), Annuitant age, state of issue, total purchase payments, optional benefits elected, current market conditions, and current hedging costs.  All such decisions will be based on internally established actuarial guidelines and will be applied in a non-discriminatory manner.  In the event that we do not accept a purchase payment under these guidelines, we will immediately return the purchase payment in its entirety in the same manner

 
8

 

 
as it was received.  If we accept the purchase payment, it will be applied to the contract immediately and will receive the next calculated Accumulation Unit value.  See, "Pricing," later in this prospectus.  Any references in this prospectus to purchase payment amounts in excess of $1,000,000 are assumed to have been approved by Nationwide.
 
Nationwide prohibits subsequent purchase payments made after death of the Contract Owner(s), the Annuitant or Co-Annuitant.  If upon notification of death of the Contract Owner(s), the Annuitant, or Co-Annuitant, it is determined that death occurred prior to a subsequent purchase payment being made, Nationwide reserves the right to return the purchase payment.
 
Dollar Limit Restrictions
 
In addition to the potential purchase payment restriction listed above, certain features of the contract have additional purchase payment and/or Contract Value limitations associated with them:
 
Annuitization.  Annuity payment options will be limited if the Contract Owner submits total purchase payments in excess of $2,000,000.  Furthermore, if the amount to be annuitized is greater than $5,000,000, we may limit both the amount that can be annuitized on a single life and the annuity payment options.  See, "Annuity Payment Options," for additional information.
 
Death benefit calculations.  Purchase payments up to $3,000,000 will result in a higher death benefit payment than purchase payments in excess of $3,000,000.  See, "Death Benefit Calculations," for additional information.
 
Optional riders.  If the Contract Owner elects either the 10% Lifetime Income Option or the 5% Lifetime Income Option, subsequent purchase payments may be limited to an aggregate total of $50,000 per calendar year.
 
Credits on Purchase Payments
 
Purchase Payment Credits ("PPCs") are additional credits that Nationwide will apply to a contract when cumulative purchase payments reach certain aggregate levels.
 
Each time a Contract Owner submits a purchase payment, Nationwide will perform a calculation to determine if and how many PPCs are payable as a result of that particular deposit.
 
PPCs are considered earnings, not purchase payments, and they will be allocated in the same proportion that purchase payments are allocated on the date the PPCs are applied.  If the Contract Owner cancels the contract pursuant to the contractual free-look provision, Nationwide will recapture all PPCs applied to the contract.  In those states that require the return of purchase payments for IRAs that are surrendered pursuant to the contractual free-look, Nationwide will recapture all PPCs, but under no circumstances will the amount returned to the Contract Owner be less than the purchase payments made to the contract.  In those states that allow a return of Contract Value, the Contract Owner will retain any earnings attributable to the PPCs, but all losses attributable to the PPCs will be incurred by Nationwide.
 
All PPCs are fully vested after the end of the contractual free-look period.
 
For further information on PPCs, please see, "Purchase Payment Credits," later in this prospectus.
 
Charges and Expenses
 
Mortality and Expense Risk Charge
 
Nationwide deducts a Mortality and Expense Risk Charge equal to an annualized rate of 1.10% of the Daily Net Assets of the Variable Account.
 
The Mortality and Expense Risk Charge compensates Nationwide for providing the insurance benefits under the contract, including the contract's standard death benefit that provides a guaranteed death benefit to the beneficiary(ies) even if the market declines.  It also compensates Nationwide for assuming the risk that Annuitants will live longer than assumed.  Finally, the Mortality and Expense Risk Charge compensates Nationwide for guaranteeing that charges will not increase regardless of actual expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the contracts.
 
Administrative Charge
 
Nationwide deducts an Administrative Charge equal to an annualized rate of 0.20% of the Daily Net Assets of the Variable Account.
 
The Administrative Charge reimburses Nationwide for administrative costs it incurs resulting from providing contract benefits, including preparation of the contract and prospectus, confirmation statements, annual account statements and annual reports, legal and accounting fees as well as various related expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the 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 (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.
 
Contingent Deferred Sales Charge
 
Nationwide does not deduct a sales charge from purchase payments upon deposit into the contract.  However, Nationwide may deduct a Contingent Deferred Sales Charge ("CDSC") if any amount is withdrawn from the contract.  This CDSC reimburses Nationwide for sales expenses.  The amount of the CDSC will not exceed 7% of purchase payments surrendered.
 
Reduced CDSC Option ("Liquidity Option")
 
The contract contains a standard 7 year CDSC schedule at no additional charge.  In lieu of the standard 7 year CDSC schedule, an applicant may elect the Liquidity Option at the time of application.  Election of the Liquidity Option replaces the contract's standard 7 year CDSC schedule with a 4 year CDSC schedule that expires 4 years from the contract issue date.

 
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If the Contract Owner elects the Liquidity Option, Nationwide will assess a charge equal to an annualized rate of 0.50% of the Daily Net Assets of the Variable Account during the first 4 Contract Years in exchange for a reduced CDSC schedule.  Subsequent purchase payments will only be permitted during the first Contract Year.
 
Death Benefit Options
 
The contract contains a standard death benefit at no additional charge.  In lieu of the standard death benefit, an applicant may elect one of the following death benefit options at the time of application:
 
Death Benefit Options
Charge*
One-Year Enhanced Death Benefit Option1
0.20%
One-Month Enhanced Death Benefit Option2
0.35%
Combination Enhanced Death Benefit Option2
0.45%
 
*The charges shown are the annualized rates charged as a percentage of the Daily Net Assets of the Variable Account.
 
1The One-Year Enhanced Death Benefit is only available for contracts with Annuitants age 80 or younger at the time of application.
 
2The Combination Enhanced Death Benefit Option and the One-Month Enhanced Death Benefit Option are only available for contracts with Annuitants age 75 or younger at the time of application.
 
The optional death benefits may provide a greater death benefit than the standard death benefit.  For more information about the standard and optional death benefits, see "Death Benefit Calculations."
 
Beneficiary Protector II Option
 
An applicant may elect the Beneficiary Protector II Option at the time of application.  This 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").  This benefit would be advantageous if the Contract Owner anticipates the assessment of taxes in connection with the payment of the death benefit proceeds.  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 Fixed Account will be assessed a fee of 0.35%.
 
10% Lifetime Income Option
 
The 10% Lifetime Income Option provides for lifetime withdrawals, up to a certain amount each year, even after the Contract Value is zero.  Additionally, if the Contract Owner delays taking withdrawals for 10 years, Nationwide will guarantee that the Current Income Benefit Base on the tenth Contract Anniversary (each Contract Anniversary is the "L.Inc Anniversary") will be no less than the Original Income Benefit Base plus simple interest at a rate of 10% annually for each of those 10 years.  The 10% Lifetime Income Option is available under the contract at the time of application.  The Contract Owner (or the Annuitant in the case of a non-natural Contract Owner) must be between age 45 and 85 at the time of application.
 
If the Contract Owner elects the 10% Lifetime Income Option, Nationwide will deduct an additional charge equal to 1.20% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based.  The charge is deducted on each Contract Anniversary and is taken from the Sub-Accounts proportionally based on contract allocations at the time the charge is deducted.
 
5% Lifetime Income Option
 
The 5% Lifetime Income Option provides for lifetime withdrawals, up to a certain amount each year, even after the Contract Value is zero.  Additionally, if the Contract Owner delays taking withdrawals for 10 years, Nationwide will guarantee that the Current Income Benefit Base on the tenth L.Inc Anniversary will be no less than the Original Income Benefit Base plus simple interest at a rate of 5% annually for each of those 10 years.  The 5% Lifetime Income Option is available under the contract at the time of application.  The Contract Owner (or the Annuitant in the case of a non-natural Contract Owner) must be between age 45 and 85 at the time of application.
 
If the Contract Owner elects the 5% Lifetime Income Option, Nationwide will deduct an additional charge not to exceed 1.00% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based.  The current charge for the 5% Lifetime Income Option is 0.75% of the Current Income Benefit Base.  The charge is deducted on each Contract Anniversary and is taken from the Sub-Accounts proportionally based on contract allocations at the time the charge is deducted.
 
10% and 5% Spousal Continuation Benefit
 
The 10% and 5% Spousal Continuation Benefits allow a surviving spouse to continue to receive, for the duration of his/her lifetime, the benefit associated with the respective Lifetime Income Option, provided that certain conditions are satisfied.  The 10% or 5% Spousal Continuation Benefit is only available for election at the time of application if the corresponding Lifetime Income Option is elected.
 
If the Contract Owner elects the 10% Spousal Continuation Benefit, Nationwide will deduct an additional charge not to exceed 0.30% of the Current Income Benefit Base.  Currently, the charge for the 10% Spousal Continuation Benefit is 0.20% of the Current Income Benefit Base.  The Contract Owner's spouse (or the Annuitant's spouse in the case of a non-natural Contract Owner) must be between age 45 and 85 at the time of application.
 
If the Contract Owner elects the 5% Spousal Continuation Benefit, Nationwide will deduct an additional charge equal to 0.15% of the Current Income Benefit Base.  The Contract Owner's spouse (or the Annuitant's spouse in the case of a non-natural Contract Owner) must be between age 45 and 85 at the time of application.
 
The charge is deducted at the same time and in the same manner as the respective Lifetime Income Option charge.

 
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Charges for Optional Benefits
 
The charges associated with optional benefits are generally only assessed prior to annuitization.  However, the charge associated with the Liquidity Option is assessed for the first 4 Contract Years, regardless of when the Contract Owner annuitizes.
 
Underlying Mutual Fund Annual Expenses
 
The underlying mutual funds charge fees and expenses that are deducted from underlying mutual fund assets.  These fees and expenses are in addition to the fees and expenses assessed by the contract.  The prospectus for each underlying mutual fund provides information regarding the fees and expense applicable to the fund (see, "The Variable Account and Underlying Mutual Funds," for information on how to obtain an underlying mutual fund prospectus).
 
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.  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.
 
Annuity Payments
 
On the Annuitization Date, annuity payments begin (see, "Annuity Commencement Date" and "Annuitizing the Contract" for more information).  Annuity payments will be based on the annuity payment option chosen prior to annuitization.  Nationwide will send annuity payments no later than 7 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.  Premium tax rates currently range from 0% to 5% (see "Federal Tax Considerations" in "Appendix C: Contract Types and Tax Information" and "Premium Taxes").
 
Death Benefit
 
An applicant may elect the standard death benefit (at no additional cost) or may elect one of three available enhanced death benefit options for an additional charge.  For more information about the standard and optional death benefits, see, "Death Benefits" later in the prospectus.
 
Ten Day Free Look
 
Under state insurance laws, Contract Owners have the right, during a limited period of time, to examine their contract and decide if they want to keep it or cancel it.  This right is referred to as a "free look" right.  The length of this time period depends on state law and may vary depending on whether your purchase is replacing another annuity contract you own.
 
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 Purchase Payment Credits and applicable federal and state income tax withholding.  Otherwise, Nationwide will return the Contract Value, less any Purchase Payment Credits and less applicable federal and state income tax withholding.
 
See "Right to Examine and Cancel" and "Purchase Payment Credits" later in this prospectus for more information.
 
Condensed Financial 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").  Since this annuity contract was not available as of December 31, 2010, there are no Accumulation Unit values available.
 
Financial Statements
 
Financial statements for the Variable Account and consolidated financial statements for Nationwide 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 Life Insurance Company
 
Nationwide, the depositor, 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.
 
Nationwide Investment Services Corporation
 
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.
 
Investing in the Contract
 
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: Underlying Mutual Funds."  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

 
11

 

 
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 of which invests in shares of 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 funds free of charge at any other time by contacting Nationwide's home office at the telephone number listed on page 1 of this prospectus.  Contract Owners should read these prospectuses carefully before investing.
 
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.
 
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
 
(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.
 
Deregistration of the Variable Account
 
Nationwide may deregister the Variable Account under the 1940 Act in the event the Variable 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.

 
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No deregistration may take place without the prior approval of the SEC.  All affected Contract Owners will be notified in the event Nationwide deregisters the Variable Account.
 
The Fixed Account
 
The Fixed Account is an investment option that is funded by Nationwide's General Account.  The General Account contains all of Nationwide's assets other than those in this and other Nationwide separate accounts and is used to support Nationwide's annuity and insurance obligations.  The General Account is not subject to the same laws as the Variable Account and the SEC has not reviewed material in this prospectus relating to the Fixed Account.
 
Purchase payments will be allocated to the Fixed Account by election of the Contract Owner.  Nationwide reserves the right to limit or refuse purchase payments allocated to the Fixed Account at its sole discretion. Generally, Nationwide will invoke this right when interest rates are low by historical standards.
 
The investment income earned by the Fixed Account will be allocated to the contracts at varying guaranteed interest rate(s) depending on the following categories of Fixed Account allocations:
 
·  
New Money Rate – The rate credited on the Fixed Account allocation when the contract is purchased or when subsequent purchase payments are made.  Subsequent purchase payments may receive different New Money Rates than the rate when the contract was issued, since the New Money Rate is subject to change based on market conditions.
 
·  
Variable Account to Fixed Rate – Allocations transferred from any of the underlying investment options in the Variable Account to the Fixed Account may receive a different rate.  The rate may be lower than the New Money Rate.  There may be limits on the amount and frequency of movements from the Variable Account to the Fixed Account.
 
·  
Renewal Rate – The rate available for maturing Fixed Account allocations which are entering a new guarantee period.  The Contract Owner will be notified of this rate in a letter issued with the quarterly statements when any of the money in the Contract Owner's Fixed Account matures.  At that time, the Contract Owner will have an opportunity to leave the money in the Fixed Account and receive the Renewal Rate or the Contract Owner can move the money to any of the other underlying mutual fund options.
 
·  
Dollar Cost Averaging Rate – From time to time, Nationwide may offer a more favorable rate for an initial purchase payment into a new contract when used in conjunction with a dollar cost averaging program.  Rates will vary depending on the Dollar Cost Averaging program elected (see "Contract Owner Services").
 
All of these rates are subject to change on a daily basis; however, once applied to the Fixed Account, the interest rates are guaranteed until the end of the calendar quarter during which the 12 month anniversary of the Fixed Account allocation occurs.
 
Credited interest rates are annualized rates – the effective yield of interest over a one-year period.  Interest is credited to each contract on a daily basis.  As a result, the credited interest rate is compounded daily to achieve the stated effective yield.
 
The guaranteed rate for any purchase payment will be effective for not less than twelve months.  Nationwide guarantees that the rate will not be less than the minimum interest rate required by applicable state law.
 
Any interest in excess of the minimum interest rate required by applicable state law will be credited to Fixed Account allocations at Nationwide's sole discretion.  The Contract Owner assumes the risk that interest credited to Fixed Account allocations may not exceed the minimum interest rate required by applicable state law for any given year.
 
Nationwide guarantees that the Fixed Account value will not be less than the amount of purchase payments and Purchase Payment Credits allocated to the Fixed Account, plus interest credited as described above, less any surrenders and any applicable charges including CDSC.  Additionally, Nationwide guarantees that interest credited to Fixed Account allocations will not be less than the minimum interest required by applicable state law.
 
Fixed Account Interest Rate Guarantee Period
 
The Fixed Account interest rate guarantee period is the period of time that the Fixed Account interest rate is guaranteed to remain the same.  During a Fixed Account interest rate guarantee period, transfers cannot be made from the Fixed Account, and amounts transferred to the Fixed Account must remain on deposit.
 
For new purchase payments allocated to the Fixed Account and transfers to the Fixed Account, the Fixed Account interest rate guarantee period begins on the date of deposit or transfer and ends on the one year anniversary of the deposit or transfer.  The guaranteed interest rate period may last for up to 3 months beyond the 1 year anniversary because guaranteed terms end on the last day of a calendar quarter.
 
Fixed Account Charges Assessed for Certain Optional Benefits
 
All interest rates credited to the Fixed Account will be determined as described above.  Based on the criteria listed above, it is possible for a contract with various optional benefits to receive the same rate of interest as a contract with no optional benefits.  However, for Contract Owners that elect certain optional benefits available under the contract, the charge is assessed to assets allocated to the Fixed Account by reducing the interest crediting rate.  Consequently, the charge assessed for the optional benefit will result in a lower credited interest rate (reduced by the amount of the charge), as specified below:
 
Optional Benefit
Fixed Account Charge
Beneficiary Protector II Option
0.35%
 
Although the charge assessed when the above optional benefit is elected will result in a lower credited interest rate, Nationwide guarantees that the interest rate credited to any assets in the Fixed Account will never be less than the minimum interest rate required by applicable state law.

 
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The Contract in General
 
In order to comply with the USA Patriot Act and rules promulgated thereunder, Nationwide has implemented procedures designed to prevent contracts described in this prospectus from being used to facilitate money laundering or the financing of terrorist activities.
 
Not all benefits, programs, features and investment options described in this prospectus are available or approved for use in every state.  For more detailed information regarding provisions that vary by state, see "Appendix D: State Variations" later in this prospectus.
 
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.
 
These contracts are offered to customers of various financial institutions and brokerage firms.  No financial institution or brokerage firm is responsible for any of the contractual insurance benefits and features guaranteed under the contracts.  These guarantees are the sole responsibility of Nationwide.
 
In general, deferred variable annuities are long-term investments; they are not intended as short-term investments.  Deferred variable annuities are not intended to be sold to a terminally ill Contract Owner or Annuitant.  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 the firms that sell the contracts.  The maximum gross commission that Nationwide will pay on the sale of the contracts is 8.00% of purchase payments.  Note that the individual registered representatives typically receive only a portion of this amount; the remainder is retained by the firm.  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.
 
In addition to, or partially in lieu of commission, Nationwide may also pay the selling firms a marketing allowance, which is based on the firm's ability and demonstrated willingness to promote and market Nationwide's products.  How any marketing allowance is spent is determined by the firm, but generally will be used to finance firm activities that may contribute to the promotion and marketing of Nationwide's products.  For more information on the exact compensation arrangement associated with this contract, please consult your registered representative.
 
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 (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 includes 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.
 
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 funds

 
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for 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
 
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 and may lower 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 contract, but no modification will affect the amount or term of any contract unless a modification is required to conform the contract to applicable federal or state law.  No modification will affect the method by which Contract Value is determined.
 
Nationwide's Obligation in Connection with the Lifetime Income Options
 
Nationwide's Lifetime Income Options guarantee that, subject to the terms and conditions of the contract, Nationwide will make lifetime income surrender payments to the Contract Owner (and his or her spouse if a Spousal Continuation Benefit is elected) even after the Contract Value is depleted.  If the Contract Value gets depleted, additional lifetime income surrender payments are: (i) obligations of Nationwide's General Account; and (ii) subject to the rights of Nationwide's creditors and ultimately, its overall claims paying ability.
 
Standard Charges and Deductions
 
Mortality and Expense Risk Charge
 
Nationwide deducts a Mortality and Expense Risk Charge from the Variable Account.  This amount is computed on a daily basis and is equal to an annualized rate of 1.10% of the Daily Net Assets of the Variable Account.  This fee compensates Nationwide for providing the insurance benefits under the contract, including the contract's standard death benefit.  It also compensates Nationwide for assuming the risk that Annuitants will live longer than assumed.  Finally, the Mortality and Expense Risk Charge compensates Nationwide for guaranteeing that charges will not increase regardless of actual expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the contracts.
 
Administrative Charge
 
Nationwide deducts an Administrative Charge from the Variable Account.  This amount is computed on a daily basis and is equal to an annualized rate of 0.20% of the Daily Net Assets of the Variable Account.  This fee reimburses Nationwide for administrative costs it incurs resulting from providing contract benefits, including preparation of the contract and prospectus, confirmation statements, annual account statements and annual reports, legal and accounting fees, as well as various related expenses.  Nationwide may realize a profit from this charge, which Nationwide may use to finance the distribution of the contracts.
 
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 Fixed Account 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.
 
Contingent Deferred Sales Charge
 
No sales charge deduction is made from purchase payments upon deposit into the contracts.  However, if any part of the contract is surrendered, Nationwide may deduct a CDSC.  The CDSC will not exceed 7% of purchase payments surrendered.
 
For contracts that have not elected the Liquidity Option, the standard CDSC schedule applies.  The CDSC is calculated by multiplying the applicable CDSC percentage shown in Table 1 by the amount of purchase payments surrendered.  For purposes of calculating the CDSC, surrenders are considered to come first from the oldest purchase payment made to the contract, then the next oldest purchase payment, and so forth.
 
Table 1
Standard CDSC Schedule
 
Number of Completed Years from Date of Purchase Payment
CDSC Percentage
0
7%
1
7%
2
6%
3
5%
4
4%
5
3%
6
2%
7
0%
 
For contracts that have elected the Liquidity Option, the standard CDSC schedule is replaced with a reduced CDSC schedule.  The CDSC is calculated by multiplying the applicable CDSC percentage shown in Table 2 by the amount of purchase payments surrendered.
 
Table 2
Liquidity Option CDSC Schedule
 
Number of Completed Years from Date of Contract Issuance
CDSC Percentage
0
7%
1
7%
2
6%
3
5%
4
0%
 
Earnings are not subject to the CDSC, but may not be distributed prior to the distribution of all purchase payments.  (For tax purposes, a surrender is usually treated as a withdrawal of earnings first.)
 
The CDSC is used to cover sales expenses, including commissions, production of sales material, and other promotional expenses.  If expenses are greater than the CDSC, the shortfall will be made up from Nationwide's general assets, which may indirectly include portions of the Variable Account charges, since Nationwide may generate a profit from these charges.
 
All or a portion of any withdrawal may be subject to federal income taxes.  Contract Owners taking withdrawals before age 59½ may be subject to a 10% penalty tax.
 
Waiver of Contingent Deferred Sales Charge
 
The maximum amount that can be withdrawn annually without a CDSC is the greater of:
 
(1)  
10% of (purchase payments that are subject to CDSC minus purchase payments previously withdrawn that were already subject to the CDSC); or
 
(2)  
an amount withdrawn to meet minimum distribution requirements for this contract under the Internal Revenue Code.
 
This CDSC-free withdrawal privilege is non-cumulative.  Free amounts not taken during any given Contract Year cannot be taken as free amounts in a subsequent Contract Year.
 
Note: CDSC-free withdrawals do not count as "purchase payments previously withdrawn that were subject to CDSC" and, therefore, do not reduce the amount used to calculate subsequent CDSC-free withdrawal amounts.
 
In addition, no CDSC will be deducted:
 
(1)  
upon the annuitization of contracts which have been in force for at least 2 years;
 
(2)  
upon payment of a death benefit.  However, additional purchase payments made to the contract after receiving the benefit of an increased Contract Value (under the Spousal Protection Feature) are subject to the CDSC provisions of the contract; or
 
(3)  
from any values for which the applicable CDSC period has expired:
 
a.  
for those contracts without the Liquidity Option, purchase payments held for at least seven years from the date of allocation to the contract; and
 
b.  
for those contracts with the Liquidity Option, for any surrenders after the end of the fourth Contract Year.
 
No CDSC applies to transfers among Sub-Accounts or between or among the various investment options in the contract.
 
A contract held by a Charitable Remainder Trust (within the meaning of Internal Revenue Code Section 664) may withdraw CDSC-free the greater of the amount that would otherwise be available for withdrawal without a CDSC; and the difference between:
 
(a)  
the Contract Value at the close of the day prior to the date of the withdrawal; and
 
(b)  
the total purchase payments made to the contract (less an adjustment for amounts surrendered).
 
The CDSC will not be eliminated if to do so would be unfairly discriminatory or prohibited by state law.
 
The waiver of CDSC only applies to partial surrenders.  If the Contract Owner elects to surrender the contract in full, where permitted by state law, Nationwide will assess a CDSC on the entire amount surrendered.  For purposes of the CDSC free withdrawal privilege, a full surrender is:

 
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·  
multiple surrenders taken within a one-year period that deplete the entire Contract Value; or
 
·  
any single surrender of 90% or more of the Contract Value.
 
Long-Term Care/Nursing Home and Terminal Illness Waiver
 
The contract includes a Long-Term Care/Nursing Home and Terminal Illness Waiver at no additional charge.  This waiver is not available in every state.  For more detailed information, see "Appendix D: State Variations" later in this prospectus.
 
Under this provision, no CDSC will be charged if:
 
(1)  
the third Contract Anniversary has passed; and
 
(2)  
the Contract Owner has been confined to a long-term care facility or hospital for a continuous 90-day period that began after the contract issue date; or
 
(3)  
the Contract Owner has been diagnosed by a physician, at any time after contract issuance, to have a terminal illness; and
 
(4)  
Nationwide receives and records such a letter from that physician indicating such diagnosis.
 
Written notice and proof of terminal illness or confinement for 90 days in a hospital or long term care facility must be received in a form satisfactory to Nationwide and recorded at Nationwide's home office prior to waiver of the CDSC.
 
In the case of joint ownership, the waivers will apply if either joint owner meets the qualifications listed above.
 
For those contracts that have a non-natural person as Contract Owner as an agent for a natural person, the Annuitant may exercise the right of the Contract Owner for purposes described in this provision.  If the non-natural Contract Owner does not own the contract as an agent for a natural person (e.g., the Contract Owner is a corporation or a trust for the benefit of an entity), the Annuitant may not exercise the rights described in this provision.
 
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.  Nationwide will assess premium taxes to the contract at the time Nationwide is assessed the premium taxes by the state.  Premium tax requirements vary from state to state.
 
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.
 
To determine whether a particular underlying mutual fund assesses (or reserves the right to assess) a short-term trading fee, see "Appendix A: Underlying Mutual Funds," later 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, including CDSC-free withdrawals;
 
·  
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

 
17

 

 
mutual funds in question may be limited to the new share class.
 
Optional Contract Benefits, Charges and Deductions
 
General Information about Optional Benefits
 
Following is information that describes the various optional benefits available under the contract, how they work, and how they impact the operation of the contract as a whole.   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;
 
(3)   
the charges associated with the optional benefits are calculated and deducted daily as part of the Accumulation Unit value calculation; and
 
(4)  
the charges associated with optional benefits will be assessed until annuitization.
 
Reduced CDSC Option ("Liquidity Option")
 
For an additional charge equal to an annualized rate of 0.50% of the Daily Net Assets of the Variable Account, an applicant may elect the Liquidity Option.  The charge associated with the Liquidity Option will be assessed until the end of the 4th Contract Year.  Nationwide may realize a profit from the charge assessed for this option.
 
If the Liquidity Option is elected, subsequent purchase payments are only permitted during the first Contract Year.
 
Election of the Liquidity Option replaces the contract's standard 7 year CDSC schedule with a 4 year CDSC schedule.
 
The Liquidity Option CDSC schedule applies as follows:
 
Number of Completed Years from Date of Contract Issuance
CDSC Percentage
0
7%
1
7%
2
6%
3
5%
4
0%
 
Under this option, CDSC will not exceed 7% of purchase payments surrendered and no CDSC will be assessed on any surrender taken after the end of the 4th Contract Year.
 
Death Benefit Options
 
For an additional charge, the Contract Owner may elect one of the following death benefit options in lieu of the standard death benefit.
 
One-Year Enhanced Death Benefit Option
 
Applicants with Annuitants age 80 or younger at the time of application can elect the One-Year Enhanced Death Benefit Option for an additional charge equal to an annualized rate of 0.20% of the Daily Net Assets of the Variable Account.  Nationwide may realize a profit from the charge assessed for this option.

 
If the Annuitant dies before the Annuitization Date, the death benefit will be the greatest of:
 
(1)  
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 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 surrenders.
 
Note: For Contract Owners who have elected this option, if the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision.
 
The One-Year Enhanced Death Benefit Option 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.  See "Spousal Protection Feature" later in this prospectus.
 
One-Month Enhanced Death Benefit Option
 
Applicants with Annuitants age 75 or younger at the time of application can elect the One-Month Enhanced Death Benefit Option for an additional charge equal to an annualized rate of 0.35% of the Daily Net Assets of the Variable Account.  Nationwide may realize a profit from the charge assessed for this option.
 
If the Annuitant dies before the Annuitization Date, the death benefit will be the greatest of:
 
(1)  
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 Monthly Contract Anniversary prior to the Annuitant's 81st birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that Monthly Contract Anniversary.
 
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 surrenders.
 
Note: For Contract Owners that have elected this option, if the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision.
 
The One-Month Enhanced Death Benefit Option 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.  See "Spousal Protection Feature" later in this prospectus.
 

 
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Combination Enhanced Death Benefit Option
 
Applicants with Annuitants age 75 or younger at the time of application can elect the Combination Enhanced Death Benefit Option for an additional charge equal to an annualized rate of 0.45% of the Daily Net Assets of the Variable Account.  Nationwide may realize a profit from the charge assessed for this option.
 
If the Annuitant dies before the Annuitization Date, the death benefit will be the greatest of:
 
(1)  
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 (as described in the "Death Benefit Calculations" provision on page 36).
 
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 surrenders.
 
Note: For Contract Owners who have elected this option, if the total of all purchase payments made to the contract is greater than $3,000,000, the death benefit will be adjusted as described in the "Death Benefit Calculations" provision.
 
The Combination Enhanced Death Benefit Option 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.  See "Spousal Protection Feature" later in this prospectus.
 
Beneficiary Protector II Option
 
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").  This benefit would be advantageous if the Contract Owner anticipates the assessment of taxes in connection with the payment of the death benefit proceeds.  Nationwide makes no assurances that the benefit associated with this option will offset all taxes.  Consult a qualified tax adviser.
 
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.
 
The charge associated with the Beneficiary Protector II Option is equal to an annualized rate of 0.35% of the Daily Net Assets of the Variable Account.  In addition, allocations to the Fixed Account will be assessed a fee of 0.35% by decreasing the interest Nationwide credits to amounts allocated to the Fixed Account.  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.
 
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)  
take distribution of the contract in the form of the death benefit or required distributions as applicable; or
 
(b)  
if the beneficiary is the deceased Annuitant's surviving spouse, continue the contract as the new beneficial Contract Owner and 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:
 
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 (if there are Co-Annuitants, then the date of death of the first Co-Annuitant to die) proportionally adjusted for any and all surrenders taken before the Annuitant's death.
 
If there is no Co-Annuitant named, the benefit will be paid in addition to the death benefit.
 
If there is a Co-Annuitant named, the benefit will be credited to the contract.  The Beneficiary Protector II Option will remain on the contract (including the associated charge) until the death of the Co-Annuitant.
 
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.
 

 
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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 (regardless of the date of the first Annuitant's death), proportionally adjusted for any and all surrenders taken from the contract.
 
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 and the Fixed Account in the same proportion as each purchase payment is allocated to the contract on the date the benefit is applied.
 
10% and 5% Lifetime Income Option
 
The 10% Lifetime Income Option and the 5% Lifetime Income Option (collectively, the "Lifetime Income Options") provide for lifetime withdrawals, up to a certain amount each year, even after the Contract Value is zero.  The age of the person upon which the benefit depends (the "determining life") must be between 45 and 85 years old at the time of application.  For most contracts, the determining life is that of the Contract Owner.  For those contracts where the Contract Owner is a non-natural person, for purposes of this option, the determining life is that of the Annuitant, and all references in this option to "Contract Owner" shall mean Annuitant.  If in addition to the Annuitant, a Co-Annuitant has been elected, the determining life will be that of the younger Annuitant.  The determining life may not be changed.
 
Although the tax treatment for surrenders under withdrawal benefits such as the Lifetime Income Options is not clear, Nationwide will treat a portion of each surrender as a taxable distribution, as follows:
 
First, we determine which is greater: (1) the Contract Value immediately before the surrender; or (2) the guaranteed benefit amount immediately before the surrender.  That amount (the greater of (1) or (2)) minus any remaining investment in the contract at the time of the surrender will be reported as a taxable distribution.
 
For any surrender taken when the Contract Value is less than or equal to the total investment in the contract, Nationwide treats the surrender as a tax-free return of investment until the entire investment in the contract has been received tax-free.  Once the entire investment in the contract has been received tax-free, surrenders will be reported as taxable distributions.  Please consult a qualified tax adviser.
 
Availability
 
The 10% Lifetime Income Option or the 5% Lifetime Income Option is available under the contract at the time of application.
 
The Lifetime Income Options are not available to be purchased by contract owners who purchase the contract as a beneficially owned contract.  (A beneficially owned contract is a contract that is inherited by a beneficiary who continues to hold the contract as a beneficiary for tax purposes -- as opposed to treating the contract as his/her own.)  However, contracts that are purchased in the normal course of business with a Lifetime Income Option may keep the elected Lifetime Income Option even after such contract becomes beneficially owned.  However, once a contract becomes beneficially owned, the contract will not receive the benefit of the RMD privilege discussed later in this section.
 
Lifetime Income Option Charge
 
In exchange for the 10% Lifetime Income Option, Nationwide will assess an annual charge equal to 1.20% of the Current Income Benefit Base.  In exchange for the 5% Lifetime Income Option, Nationwide will assess an annual charge not to exceed 1.00% of the Current Income Benefit Base.  The current charge for the 5% Lifetime Income Option is 0.75% of the Current Income Benefit Base.  The charge associated with the respective Lifetime Income Option will not change, except, possibly, upon the Contract Owner's election to reset the benefit base, as discussed herein.
 
The charge will be assessed on each Contract Anniversary (the "L.Inc Anniversary") and will be deducted via redemption of Accumulation Units.  A prorated charge will also be deducted upon full surrender of the contract.  Accumulation Units will be redeemed proportionally from each Sub-Account in which the Contract Owner is invested at the time the charge is taken.  Amounts redeemed as the Lifetime Income Option charge will not negatively impact calculations associated with other benefits elected or available under the contract, and will not be subject to a CDSC and will not reduce amounts available under the CDSC-free withdrawal privilege.  (See below for an

 
20

 

 
explanation of what happens if application of the CDSC causes the gross surrender (the surrender amount plus the CDSC) to exceed the Lifetime Withdrawal Percentage limit).
 
Lifetime Income Option Investment Requirements
 
Election of either of the Lifetime Income Options requires that the Contract Owner, until annuitization, allocate the entire Contract Value to the Custom Portfolio Asset Rebalancing Service (see "Contract Owner Services") or to a limited set of investment options currently available in the contract.  For the list of investment options available under each Lifetime Income Option, see "Income Benefit Investment Options" later in this prospectus.  Allocation requests to investment options other than those listed in the "Income Benefit Investment Options" section will not be honored; they will be treated as though no allocation request was submitted.  The Contract Owner may elect Dollar Cost Averaging for Living Benefits described in the "Contract Owner Services" provision.  Allocation to the Fixed Account is not permitted (except as the originating account when the Contract Owner elects Dollar Cost Averaging for Living Benefits).
 
Transfers Among Permitted Investment Options
 
The Contract Owner may reallocate the Contract Value among the limited set of investment options in accordance with the "Transfers Prior to Annuitization" provision.  The Contract Owner may reallocate the Contract Value within the Custom Portfolio Asset Rebalancing Service in accordance with that provision.  Additionally, Contract Owners may change from the Custom Portfolio Asset Rebalancing Service to the permitted investment options, and vice versa.
 
Subsequent Purchase Payments
 
Where permitted by state law, subsequent purchase payments are permitted under the elected Lifetime Income Option as long as the Contract Value is greater than zero.  There may be instances where a subsequent purchase payment creates a financial risk that Nationwide is unwilling to bear.  If this occurs, Nationwide may exercise its right to refuse subsequent purchase payments which total in aggregate $50,000 or more in any calendar year.  If Nationwide exercises this right to refuse a purchase payment, the entire purchase payment that causes the aggregate amount to exceed $50,000 will be immediately returned to the Contract Owner in the same form in which it was received.
 
Determination of the Income Benefit Base Prior to the First Surrender
 
Upon contract issuance, the Original Income Benefit Base is equal to the Contract Value.  Thereafter, Nationwide tracks, on a continuous basis, the Current Income Benefit Base, which is used to calculate the benefit amount.  The Current Income Benefit Base from the date of contract issuance until the first surrender will reflect any additional purchase payments, Purchase Payment Credits, and reset opportunities, as described below.
 
10% Lifetime Income Option. Provided no surrenders are taken from the contract, the Current Income Benefit Base for the 10% Lifetime Income Option will equal the greater of:
 
(1)
the highest Contract Value on any L.Inc Anniversary plus purchase payments submitted and any Purchase Payment Credits applied after that L.Inc Anniversary; or
 
(2)
the 10% roll-up amount, which is equal to the sum of the following calculations:
 
 
(a)
Original Income Benefit Base with Roll-up: the Original Income Benefit Base, plus 10% of the Original Income Benefit Base for each L.Inc Anniversary up to and including the 10th L.Inc Anniversary; plus
 
 
(b)
Purchase Payments with Roll-up: any purchase payments submitted after contract issuance and before the 10th L.Inc Anniversary, plus any Purchase Payment Credits applied, increased by simple interest at an annual rate of 10% each year through the 10th L.Inc Anniversary; plus
 
 
(c)
Purchase Payments with No Roll-up: any purchase payments submitted after the 10th L.Inc Anniversary, plus any Purchase Payment Credits applied.
 
5% Lifetime Income Option.  Provided no surrenders are taken from the contract, the Current Income Benefit Base for the 5% Lifetime Income Option will equal the greater of:
 
(1)
the highest Contract Value on any L.Inc Anniversary plus purchase payments submitted and any Purchase Payment Credits applied after that L.Inc Anniversary; or
 
(2)
the 5% roll-up amount, which is equal to the sum of the following calculations:
 
 
(a)
Original Income Benefit Base with Roll-up: the Original Income Benefit Base, plus 5% of the Original Income Benefit Base for each L.Inc Anniversary up to and including the 10th L.Inc Anniversary; plus
 
 
(b)
Purchase Payments with Roll-up: any purchase payments submitted after contract issuance and before the 10th L.Inc Anniversary, plus any Purchase Payment Credits applied, increased by simple interest at an annual rate of 5% each year through the 10th L.Inc Anniversary; plus
 
 
(c)
Purchase Payments with No Roll-up: any purchase payments submitted after the 10th L.Inc Anniversary, plus any Purchase Payment Credits applied.
 
Regardless of which Lifetime Income Option is elected, when a purchase payment and any Purchase Payment Credit is applied on a date other than a L.Inc Anniversary, simple interest is calculated using a prorated method based upon the number of days from the date of the purchase payment to the next L.Inc Anniversary.
 
However, if at any time prior to the first surrender the Contract Value equals zero, no further benefit base calculations will be made.  The annual benefit amount will be based on the Current Income Benefit Base in effect at that time.
 
Since the roll-up is only calculated for the first 10 Contract Years, any purchase payments the Contract Owner makes during the first 10 Contract Years will increase the Current

 
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Income Benefit Base more than purchase payments made after the 10 th Contract Year.
 
Lifetime Income Surrenders
 
At any time after the Lifetime Income Option is elected, the Contract Owner may begin taking the lifetime income benefit by taking a surrender from the contract.  The first surrender under the contract constitutes the first lifetime income surrender, even if such surrender is taken to meet minimum distribution requirements under the Internal Revenue Code.  Nationwide will surrender Accumulation Units proportionally from the Sub-Accounts as of the date of the surrender request.
 
As with any surrender, lifetime income surrenders reduce the Contract Value and, consequently, will reduce the amount available for annuitization.  Lifetime income surrenders are subject to the CDSC provisions of the contract.
 
At the time of the first surrender, the Current Income Benefit Base is locked in and will not change unless the Contract Owner takes excess surrenders, elects a reset opportunity (both discussed later in this provision), or submits additional purchase payments.  Additional purchase payments submitted after the first surrender from the contract (including any associated credits) will increase the Current Income Benefit Base by the amount of the purchase payment (and any associated credit).
 
Simultaneously, the Lifetime Withdrawal Percentage is determined based on the age of the Contract Owner and which Lifetime Income Option was chosen (10% or 5%) as indicated in the following tables:
 
10% Lifetime Income Option
 
Contract Owner's Age
(at time of first surrender)
Lifetime Withdrawal
Percentage
45 up to 59½
3%
59½ through 64
4%
65 through 80
5.25%
81 and older
6.25%
 
5% Lifetime Income Option
 
Contract Owner's Age
(at time of first surrender)
Lifetime Withdrawal
Percentage
45 up to 59½
3%
59½ through 64
3.50%
65 through 80
4.50%
81 and older
5.50%
 
A Contract Owner will receive the highest Lifetime Withdrawal Percentage only if he or she does not take a surrender from the contract prior to age 81.  Note: The Internal Revenue Code requires that IRAs, SEP IRAs, and Simple IRAs begin distributions no later than April 1 of the calendar year following the calendar year in which the Contract Owner reaches age 70½.  Thus, if the contract is subject to these minimum distribution rules and distributions are taken at the latest date possible under the tax rules, the Contract Owner would not be able to receive the maximum Lifetime Withdrawal Percentage available to that contract.  Contract Owners may be eligible to take the minimum required distributions from other IRA, SEP IRA, or Simple IRA contracts or accounts, and thus may be able to receive the maximum Lifetime Withdrawal Percentage.  Consult a qualified tax adviser for more information.
 
At the time of the first surrender and on each L.Inc Anniversary thereafter, the Lifetime Withdrawal Percentage is multiplied by the Current Income Benefit Base to determine the benefit amount for that year.  The benefit amount is the maximum amount that can be surrendered from the contract before the next L.Inc Anniversary without reducing the Current Income Benefit Base.  The ability to surrender the current benefit amount will continue until the earlier of the Contract Owner's death or annuitization.
 
The Contract Owner can elect to set up systematic surrenders or can request each surrender separately.  All lifetime income surrender requests must be made on a Nationwide form available by contacting Nationwide's home office at the phone number and address shown on page 1 of this prospectus.
 
Each year's benefit amount is non-cumulative.  A Contract Owner cannot take a previous year's benefit amount in a subsequent year without causing an excess surrender (see below) that will reduce the Current Income Benefit Base.
 
Although surrenders up to the benefit amount do not reduce the Current Income Benefit Base, they do reduce the Contract Value and the death benefit, and are subject to the CDSC provisions of the contract.   Note: If a Contract Owner elects to take a surrender that results in a CDSC, the total amount deducted from the Contract Value (and not the net surrender amount) is the amount used to determine whether the surrender exceeds the Lifetime Withdrawal Percentage limit.
 
Impact of Withdrawals in Excess of the Withdrawal Percentage Limit
 
The Contract Owner is permitted to surrender Contract Value in excess of that year's benefit amount provided that the Contract Value is greater than zero.  Surrenders in excess of the benefit amount will reduce the Current Income Benefit Base, and consequently, the benefit amount calculated for subsequent years.  In the event of excess surrenders, the Current Income Benefit Base will be reduced by the greater of:
 
(1)  
the dollar amount of the surrender in excess of the benefit amount; or
 
(2)
a figure representing the proportional amount of the withdrawal.  This amount is determined by the following formula:
 
dollar amount
of the
excess surrender
X
Current Income
Benefit Base
prior to the surrender
Contract Value (reduced by the amount of the benefit amount surrendered)
 
In situations where the Contract Value exceeds the existing Current Income Benefit Base, excess surrenders will typically result in a dollar amount reduction to the new Current Income Benefit Base.  In situations where the Contract Value is less than the existing Current Income Benefit Base, excess surrenders will typically result in a proportional reduction to the new Current Income Benefit Base.

 
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Currently, Nationwide allows for an "RMD privilege" whereby Nationwide permits a Contract Owner to surrender Contract Value in excess of the benefit amount without reducing the Current Income Benefit Base if such excess surrender is for the sole purpose of meeting Internal Revenue Code required minimum distributions for this contract.  This RMD privilege does not apply to beneficially owned contracts.  In order to qualify for the RMD privilege, the Contract Owner must:
 
(1)
be at least 70½ years old as of the date of the request;
 
(2)
own the contract as an IRA, SEP IRA, Simple IRA, or Investment-Only Contract; and
 
(3)
submit a completed administrative form in advance of the withdrawal to Nationwide's home office which can be obtained by contacting Nationwide's home office at the telephone number listed on page 1 of this prospectus.
 
Nationwide reserves the right to modify or eliminate the RMD privilege if there is any change to the Internal Revenue Code or IRS rules relating to required minimum distributions, including the issuance of relevant IRS guidance.  If Nationwide exercises this right, Nationwide will provide notice to Contract Owners and any surrender in excess of the benefit amount will reduce the remaining Current Income Benefit Base.
 
Once the Contract Value falls to zero, the Contract Owner is no longer permitted to submit additional purchase payments or take surrenders in excess of the benefit amount.  Additionally, there is no Contract Value to annuitize, making the payment of the benefit associated with this option the only income stream producing benefit remaining in the contract.  Surrenders of the benefit amount after the Contract Value falls to zero are not subject to the CDSC provisions of the contract.
 
Reset Opportunities
 
Nationwide offers an automatic reset of the income benefit base.  If, on any L.Inc Anniversary, the Contract Value exceeds the Current Income Benefit Base, Nationwide will automatically reset the Current Income Benefit Base to equal that Contract Value.  This higher amount will be the new Current Income Benefit Base.  This automatic reset will continue until any terms and conditions associated with the Lifetime Income Option change.  A change in terms and conditions is a change in price, a change in investment option availability, a change in Lifetime Withdrawal Percentages, or a change in the age ranges associated with a given Lifetime Withdrawal Percentage.
 
In the event one or more terms and conditions of the Lifetime Income Option change, the reset opportunities still exist, but are not longer automatic.  Instead, the Contract Owner must affirmatively elect to reset their Current Income Benefit Base.  On or about each L.Inc Anniversary, Nationwide will notify Contract Owners that their contract has had a change in terms and conditions, and will provide the Contract Owner with information necessary to make the determination as to whether or not to reset their Current Income Benefit Base.  Specifically, Nationwide will provide: the Contract Value; the Current Income Benefit Base; the current terms and conditions associated with the respective Lifetime Income Option; and instructions on how to communicate an election to reset the benefit base.
 
If the Contract Owner elects to reset the Current Income Benefit Base, it will be at the then current terms and conditions of the respective Lifetime Income Option as described in the most current prospectus.  If Nationwide does not receive a Contract Owner's election to reset the Current Income Benefit Base within 60 days after the L.Inc Anniversary, Nationwide will assume that the Contract Owner does not wish to reset the Current Income Benefit Base.  If the Current Income Benefit Base is not reset, it will remain the same and the terms and conditions of the Lifetime Income Option will not change (as applicable to that particular contract).
 
Contract Owners may cancel the automatic reset feature of the Lifetime Income Option by notifying Nationwide as to such election.  Nationwide reserves the right to modify or terminate the automatic reset feature at any time upon written notice to Contract Owners.
 
Settlement Options
 
If, after beginning the lifetime income surrenders, a Contract Owner's Contract Value falls to zero and there is still a positive Current Income Benefit Base, Nationwide will provide the Contract Owner with one or more settlement options (in addition to the ability to continue annual benefit payments).  Specifically, Nationwide will provide a notification to the Contract Owner describing the following three options, along with instructions on how to submit the election to Nationwide:
 
(1)  
The Contract Owner can continue to take annual surrenders of no more than the annual benefit amount until the death of the Contract Owner;
 
(2)  
The Contract Owner can elect the Age Based Lump Sum Settlement Option, as described below; or
 
(3)  
If the Contract Owner qualifies after a medical examination, the Contract Owner can elect the Underwritten Lump Sum Settlement Option, as described below.
 
The settlement options each result in a different amount ultimately received under the respective Lifetime Income Option.  The Underwritten Lump Sum Settlement Option will generally pay a larger amount than the Age Based Lump Sum Settlement Option when a Contract Owner is healthier than the normal population.  Regardless of age or health, the Underwritten Lump Sum Settlement Option amount will never be less than the Age Based Lump Sum Settlement Option amount.  Election of the Age Based Lump Sum Settlement Option enables the Contract Owner to receive payment without a medical exam, which could potentially delay payment.  Before selecting a settlement option, consult with a qualified financial adviser to determine which option is best for you based on your individual financial situation and needs.
 
The Contract Owner will have 60 days from the date of Nationwide's notification letter to make an election.  Once the Contract Owner makes an election, the election is irrevocable.  If the Contract Owner does not make an election within 60 days of the date of the notification letter, Nationwide will

 
23

 

 
assume that the Contract Owner intends to continue to take surrenders of the annual benefit amount.  If the Contract Owner requested systematic surrenders of the annual benefit amount prior to the notice, those systematic surrenders will continue.  If the Contract Owner did not request systematic surrenders prior to the notice, the Contract Owner may request systematic surrenders by contacting Nationwide at the phone number and address shown on page 1.  It is the Contract Owner's responsibility to establish systematic surrenders or otherwise request the annual benefit amount.  Benefit amounts not withdrawn in a given year are forfeited.
 
Age Based Lump Sum Settlement Option.  Under the Age Based Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, Nationwide will pay the Contract Owner a lump sum equal to the Contract Owner's most recently calculated annual benefit amount multiplied by the Annual Benefit Multiplier listed below:
 
Contract Owner's Age
(as of the date the Age Based Lump Sum Option is elected)
Annual Benefit Multiplier
Up to Age 70
5.5
71-75
4.5
76-80
3.5
81-85
2.5
86-90
2.0
91-95
1.5
96+
1.0
 
For contracts that have elected the Spousal Continuation Benefit, if both spouses are living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the younger spouse minus three years to determine the Annual Benefit Multiplier.  If only one spouse is living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the living spouse to determine the Annual Benefit Multiplier.
 
Underwritten Lump Sum Settlement Option.  Under the Underwritten Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, for those who qualify based on a medical exam, Nationwide will pay the Contract Owner a lump sum based upon the attained age, sex, and health of the Contract Owner (and spouse if the Spousal Continuation Benefit is elected).  Once Nationwide receives the Contract Owner's election to take the Underwritten Lump Sum Settlement Option, Nationwide will provide the Contract Owner with a medical examination form, which must be completed by a certified physician chosen by the Contract Owner and returned to Nationwide's home office within 30 days.  Upon completion of underwriting by Nationwide, the lump sum settlement amount is issued to the Contract Owner. If Nationwide does not receive the completed form within the 30-day period, Nationwide will pay the Contract Owner the amount that would be payable under the Age Based Lump Sum Settlement Option.
 
Annuitization
 
If the Contract Owner elects to annuitize the contract, the Lifetime Income Option will terminate.  Specifically, the charge associated with the option will no longer be assessed and all benefits associated with the Lifetime Income Option will terminate.
 
Death of Determining Life
 
For contracts with no Spousal Continuation Benefit, upon the death of the determining life, the benefits associated with the option terminate.  If the Contract Owner is also the Annuitant, the death benefit will be paid in accordance with the "Death Benefits" provision.  If the Contract Owner is not the Annuitant, the Contract Value will be distributed in accordance with the "Required Distributions" section of "Appendix C: Contract Types and Tax Information."
 
For contracts with the Spousal Continuation Benefit, upon the death of the determining life, the surviving spouse continues to receive the same benefit associated with the elected Lifetime Income Option which had been received by the deceased spouse, for the remainder of the survivor's lifetime.  The Contract Value will reflect the death benefit and Spousal Protection Feature.
 
10% and 5% Spousal Continuation Benefit
 
At the time the 10% Lifetime Income Option or the 5% Lifetime Income Option is elected (at time of application), the Contract Owner may elect the corresponding Spousal Continuation Benefit (not available for contracts issued as Charitable Remainder Trusts).  The charge for the 10% Spousal Continuation Benefit will not exceed 0.30% of the Current Income Benefit Base.  The current charge for the 10% Spousal Continuation Benefit is 0.20% of the Current Income Benefit Base.  The charge for the 5% Spousal Continuation Benefit is 0.15% of the Current Income Benefit Base.
 
 
The Spousal Continuation Benefit allows a surviving spouse to continue to receive, for the duration of his/her lifetime, the benefit associated with the respective Lifetime Income Option, provided that the following conditions are satisfied:
 
(1)  
Both spouses must be between 45 and 85 years old at the time of application.
 
(2)  
Both spouses must be at least age 45 before either spouse is eligible to begin withdrawals.  Note: the Internal Revenue Code imposes a penalty tax if a distribution is made before the Contract Owner reaches age 59½ unless certain exceptions are met.  See, "Federal Tax Considerations," in "Appendix C: Contract Types and Tax Information" for additional information.
 
(3)  
Once the Spousal Continuation Benefit is elected, it may not be removed from the contract, except as provided below.
 
(4)  
The Lifetime Withdrawal Percentage will be based on the age of the younger spouse as of the date of the first surrender from the contract.
 
(5)  
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.

 
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(6)  
Both spouses must be named as beneficiaries.  For contracts with non-natural owners, both spouses must be named as Co-Annuitants.
 
(7)  
No person other than the spouse may be named as Contract Owner, Annuitant or beneficiary.
 
(8)  
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).
 
Note: The Spousal Continuation Benefit is distinct from the Spousal Protection Feature associated with the death benefits. The Spousal Continuation Benefit allows a surviving spouse to continue receiving the lifetime income payments associated with the elected Lifetime Income Option.  In contrast, the Spousal Protection Feature is a death benefit bump-up feature associated with the death benefits.
 
Marriage Termination
 
If, prior to taking any surrenders from the contract, the marriage terminates due to divorce, dissolution, or annulment, the Contract Owner may remove the Spousal Continuation Benefit from the contract. Nationwide will remove the benefit and the associated charge upon the Contract Owner's written request and evidence of the marriage termination satisfactory to Nationwide.  Once the Spousal Continuation Benefit is removed from the contract, the benefit may not be re-elected or added to cover a subsequent spouse.
 
If, after taking any surrender from the contract, the marriage terminates due to divorce, dissolution, or annulment, the Contract Owner may not remove the Spousal Continuation Benefit from the contract.
 
Risks Associated with Electing the Spousal Continuation Benefit
 
There are situations where a Contract Owner who elects the Spousal Continuation Benefit will not receive the benefits associated with the option.  This will occur if:
 
(1)  
your spouse (contingent-annuitant) dies before you;
 
(2)  
the contract is annuitized; or
 
(3)  
withdrawals are taken after the withdrawal start date and the marriage terminates due to divorce, dissolution, or annulment.
 
Additionally, in the situations described in (1) and (3) above, not only will the Contract Owner not receive the benefits associated with the Spousal Continuation Benefit, but he/she must continue to pay for the option and comply with all of the terms and conditions associated with the respective Lifetime Income Option, including the investment option requirements, until annuitization.
 
Income Benefit Investment Options
 
The following investment options are the only investment options available for contracts that have elected a Lifetime Income Option:
 
Custom Portfolio Asset Rebalancing Service (see "Contract Owner Services" later in this prospectus)
·  
Balanced
·  
Capital Appreciation
·  
Conservative
·  
Moderate
·  
Moderately Conservative
 
Fidelity Variable Insurance Products Fund
·  
Fidelity VIP Freedom Fund 2010 Portfolio: Service Class 2
·  
Fidelity VIP Freedom Fund 2020 Portfolio: Service Class 2
 
Nationwide Variable Insurance Trust
·  
American Funds NVIT Asset Allocation Fund: Class II
·  
NVIT CardinalSM Balanced Fund: Class II
·  
NVIT CardinalSM Capital Appreciation Fund: Class II
·  
NVIT CardinalSM Conservative Fund: Class II
·  
NVIT CardinalSM Moderate Fund: Class II
·  
NVIT CardinalSM Moderately Conservative Fund: Class II
·  
NVIT Investor Destinations Balanced Fund: Class II
·  
NVIT Investor Destinations Capital Appreciation Fund: Class II
·  
NVIT Investor Destinations Conservative Fund: Class II
·  
NVIT Investor Destinations Moderate Fund: Class II
·  
NVIT Investor Destinations Moderately Conservative Fund: Class II
 
Static Asset Allocation Model (see below)
·  
American Funds Option (33% NVIT - American Funds NVIT Asset Allocation Fund, 33% NVIT - American Funds NVIT Bond Fund and 34% NVIT - American Funds NVIT Growth-Income Fund)
 
Note: Some of the investment options listed above are funds of funds.  Please refer to "Appendix A: Underlying Mutual Funds" for more information.
 
Static Asset Allocation Model
 
A Static Asset Allocation Model is an allocation strategy comprised of two or more underlying mutual funds that together provide a unique allocation mix not available as a single underlying mutual fund.  Contract Owners that elect a Static Asset Allocation Model directly own Sub-Account units of the underlying mutual funds that comprise the particular model.  In other words, a Static Asset Allocation Model is not a portfolio of underlying mutual funds with one Accumulation Unit/Annuity Unit value, but rather, direct investment in a certain allocation of Sub-Accounts.  There is no additional charge associated with investing in a Static Asset Allocation Model.
 
The Static Asset Allocation Model is just that: static.  The allocations or "split" between one or more Sub-Accounts is not monitored and adjusted to reflect changing market conditions.  However, a Contract Owner's investment in a Static Asset Allocation Model is rebalanced quarterly to ensure that the assets are allocated to the percentages in the same proportion that they were allocated at the time of election.  The entire Contract Value must be allocated to the elected model.
 
With respect to transferring into and out of a Static Asset Allocation Model, the model is treated like an underlying mutual fund and is subject to the "Transfers Prior to

 
25

 

 
Annuitization" provision.  You may request to transfer from a model to a permitted underlying mutual fund.  Each transfer into or out of a Static Asset Allocation Model is considered one transfer event.
 
For additional information about the underlying mutual funds that comprise the Static Asset Allocation Model, see "Appendix A: Underlying Mutual Funds."
 
Removal of Variable Account Charges
 
The Mortality and Expense Risk Charge and the Administrative Charge apply for the life of the contract.  The charge for each optional benefit is assessed until annuitization, except for the charge for the following options:
 
·  
the Beneficiary Protector II Option, the charge for which is removed after the benefit associated with that feature is paid; and
 
·  
the Liquidity Option, the charge for which is removed after the end of the 4th Contract Year.
 
To remove a Variable Account charge, 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 is the Beneficiary Protector II Option, the Variable Account value will be calculated using unit values with Variable Account charges of 1.65%.  Once the benefit is paid, the 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 1.30%.  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 1.65% will have a lower unit value than Sub-Account X with charges of 1.30% (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.
 

Ownership and Interests in the Contract
 
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,

 
26

 

 
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 must be named at the time of application and will receive the benefit of the Spousal Protection Feature, provided all of the requirements listed in the "Spousal Protection Feature" are met.
 
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 payment involving life contingencies depend.  The joint annuitant is named at the time of annuitization.
 
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 a death benefit is paid.  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);
 
·  
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.  Once Nationwide receives and records the change request, the change will be effective as of the date the written request was signed, whether or not the Contract Owner or Annuitant is living at the time it was recorded.  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.
 
Operation of the Contract
 
Purchase Payment Credits
 
Purchase Payment Credits ("PPCs") are additional credits that Nationwide will apply to a contract when cumulative purchase payments reach certain aggregate levels.
 
When determining PPCs Nationwide will include the purchase payments in this contract, as well as the purchase payments of any other Nationwide annuity contract issued to an immediate family member made within the 12 months before the purchase of this contract.  Immediate family members include spouses, children, or other family members living within the Contract Owner's household.  In order to be considered for PPCs, the Contract Owner must notify Nationwide in writing of all Nationwide annuity contracts owned by the Contract Owner or immediate family members.
 
Each time a Contract Owner submits a purchase payment, Nationwide will perform a calculation to determine if and how many PPCs are payable as a result of that particular deposit.
 
The formula used to determine the amount of the PPC is as follows:

 
(Cumulative Purchase Payments x PPC%)
PPCs Paid to Date
=
PPCs Payable
 
Cumulative Purchase Payments = the total of all purchase payments applied to the contract, including the current deposit, minus any surrenders.
 

 
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PPC% = either 0.0%, 0.5%, or 1.0%, depending on the level of Cumulative Purchase Payments as follows:
 
If Cumulative Purchase Payments are . . .
Then the PPC% is . . .
$0 - $499,999
0.0% (no PPC is payable)
$500,000 - $999,999
0.5%
$1,000,000 or more
1.0%
 
PPCs Paid to Date = the total PPCs that Nationwide has already applied to the contract.
 
PPCs Payable = the PPCs that Nationwide will apply to the contract as a result of the current deposit.
 
For example, on March 1, Ms. Z makes an initial deposit of $200,000 to her contract.  She does not receive a PPC since her Cumulative Purchase Payments are less than $500,000.
 
On April 1, Ms. Z applies additional purchase payments of $350,000.  Cumulative Purchase Payments now equal $550,000.  Nationwide will apply PPCs to Ms. Z's contract equal to $2,750, which is (0.5% x $550,000) - $0.
 
On May 1, Ms. Z takes a surrender of $150,000.  Cumulative Purchase Payments now equal $400,000.
 
On June 1, Ms. Z applies additional purchase payments of $500,000.  Cumulative Purchase Payments now equal $900,000.  Nationwide will apply PPCs to Ms. Z's contract equal to $1,750, which is ($900,000 x 0.5%) - $2,750.  At this point in time, a total of $4,500 in PPCs have been applied to Ms. Z's contract.
 
On July 1, Ms. Z applies additional purchase payments of $300,000.  Cumulative Purchase Payments now equal $1,200,000.  Nationwide will apply PPCs to Ms. Z's contract equal to $7,500, which is ($1,200,000 x 1.0%) - $4,500.  At this point in time, a total of $12,000 in PPCs have been applied to Ms. Z's contract.
 
For purposes of all benefits and taxes under these contracts, PPCs are considered earnings, not purchase payments, and they will be allocated in the same proportion that purchase payments are allocated on the date the PPCs are applied.
 
If the Contract Owner cancels the contract pursuant to the contractual free-look provision, Nationwide will recapture all PPCs applied to the contract.  In those states that require the return of purchase payments for IRAs that are surrendered pursuant to the contractual free-look, Nationwide will recapture all PPCs, but under no circumstances will the amount returned to the Contract Owner be less than the purchase payments made to the contract.  In those states that allow a return of Contract Value, the Contract Owner will retain any earnings attributable to the PPCs, but all losses attributable to the PPCs will be incurred by Nationwide.
All PPCs are fully vested after the end of the contractual free-look period and are not subject to recapture.
 
Pricing
 
Generally, Nationwide prices Accumulation Unit values of the Sub-Accounts on each day that the New York Stock Exchange is open.  (Pricing is the calculation of a new Accumulation Unit value that reflects that day's investment experience.)
 
Accumulation Units are not 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, surrenders or transfers 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.
 
Application and Allocation of Purchase Payments
 
Initial Purchase Payments
 
Initial purchase payments will be priced at the Accumulation Unit value next determined no later than 2 business days after receipt of an order to purchase if the application and all necessary information are complete and are received at Nationwide's home office before the close of the New York Stock Exchange, which generally occurs at 4:00 p.m. Eastern Time.  If the order is received after the close of the New York Stock Exchange, the initial purchase payment will be priced within 2 business days after the next business day.
 
If an incomplete application is not completed within 5 business days of receipt at Nationwide's home office, the prospective purchaser will be informed of the reason for the delay.  The purchase payment will be returned unless the prospective purchaser specifically consents to allow Nationwide to hold the purchase payment until the application is completed.
 
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 investment options based on the instructions contained on the application.  In other states, Nationwide will immediately allocate initial purchase payments to the investment options based on the instructions contained on the application.
 
Subsequent Purchase Payments
 
Any subsequent purchase payment received at Nationwide's home office (along with all necessary information) before the close of the New York Stock Exchange will be priced at the Accumulation Unit value next determined after receipt of the purchase payment.  If a subsequent purchase payment is received at Nationwide's home office (along with all necessary information) after the close of the New York Stock Exchange, it will be priced at the Accumulation Unit value determined on the following Valuation Date.

 
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Allocation of Purchase Payments
 
Nationwide allocates purchase payments to Sub-Accounts 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 allocations or make exchanges among the Sub-Accounts.  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.  In the event that Nationwide receives such a request, Nationwide will inform the Contract Owner that the allocation instructions are invalid and that the contract's allocations among the Sub-Accounts prior to the request will remain in effect.  Certain transactions may be subject to conditions imposed by the underlying mutual funds.
 
Determining the Contract Value
 
The Contract Value is the sum of the value of amounts (including any Purchase Payment Credits applied to the contract) allocated to:
 
(1)  
the Sub-Accounts of the Variable Account; and
 
(2)  
the Fixed Account.
 
If charges are assessed against the whole Contract Value, Nationwide will deduct a proportionate amount from each Sub-Account and the Fixed Account based on current cash values.
 
Determining Variable Account Value – Valuing an Accumulation Unit
 
Sub-Account allocations 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 1.30% to 2.60% of the Daily Net Assets of the Variable Account, depending on which optional benefits the Contract Owner elects.
 
Note: The range shown above reflects only those Variable Account charges that are assessed daily as part of the daily Accumulation Unit calculation.  It does not reflect the cost of other optional benefits that assess charges via the redemption of Accumulation Units (the 10% and 5% Lifetime Income Options and the 10% and 5% Spousal Continuation Benefits ).
 
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 Fixed Account Value
 
Nationwide determines the value of the Fixed Account by:
 
(1)  
adding all amounts allocated to the Fixed Account, minus amounts previously transferred or surrendered from the Fixed Account;
 
(2)  
adding any interest earned on the amounts allocated to the Fixed Account; 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 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 the 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 Nationwide variable annuity contracts that offer underlying mutual funds

 
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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, see "Short-Term Trading Fees."
 
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 two underlying mutual funds (or one underlying mutual fund if the transfer is made to or from the Fixed Account) 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 two consecutive calendar quarters or 20 in one calendar year, the Contract Owner will be limited to submitting transfer requests via U.S. mail on a Nationwide issued form.
More than 11 transfer events in two 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 on a Nationwide issued form.
 
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.
 
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 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
 
Contract Owners that are required to submit transfer requests via U.S. mail will be required to use a Nationwide issued form for their transfer request.  Nationwide will refuse transfer requests that either do not use the Nationwide issued form for their transfer request or fail to provide accurate and complete information on their transfer request form.  In the event that a Contract Owner's transfer request is refused by Nationwide, they will receive notice in writing by U.S. mail and will be required to resubmit their transfer request on a Nationwide issued form.
 
Nationwide reserves the right to refuse or limit transfer requests, or take any other action it deems necessary, in order

 
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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 requests to exchange into an underlying mutual fund 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 requests to exchange into an underlying mutual fund.  If an underlying mutual fund refuses to accept a purchase or request to exchange into the underlying mutual fund submitted by Nationwide, Nationwide will keep any affected Contract Owner in their current underlying mutual fund allocation.
 
Transfers Prior to Annuitization
 
Transfers from the Fixed Account
 
A Contract Owner may request to transfer allocations from the Fixed Account to the Sub-Accounts only upon reaching the end of a Fixed Account interest rate guarantee period.  Fixed Account transfers must be made within 45 days after the end of the interest rate guarantee period.  The Fixed Account interest rate guarantee period is the period of time that the Fixed Account interest rate is guaranteed to remain the same.
 
Normally, Nationwide will permit 100% of the maturing Fixed Account allocations to be transferred.  However, Nationwide may limit the amount that can be transferred from the Fixed Account.  Nationwide will determine the amount that may be transferred and will declare this amount at the end of the Fixed Account interest rate guarantee period.  The maximum transferable amount will never be less than 10% of the Fixed Account allocation reaching the end of a Fixed Account interest rate guarantee period.
 
Contract Owners who use Dollar Cost Averaging may transfer from the Fixed Account under the terms of that program.
 
Nationwide is required by state law to reserve the right to postpone the transfer of assets from the Fixed Account 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 the Fixed Account.  Nationwide reserves the right to limit or refuse transfers to the Fixed Account.
 
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 this prospectus and the underlying mutual funds.
 
Transfers After Annuitization
 
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.
 
Right to Examine and Cancel
 
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 date the initial purchase payment is applied to the contract.
 
Where state law requires the return of purchase payments for free look cancellations, Nationwide will return all purchase payments applied to the contract, less any applicable federal and state income tax withholding.  Nationwide will recapture all of any Purchase Payment Credits applied to the contract, but under no circumstances will the amount returned be less than the purchase payments made to the contract.
 
Where state law requires the return of Contract Value for free look cancellations, Nationwide will return the Contract Value as of the date of the cancellation, less any applicable federal and state income tax withholding.  Nationwide will recapture all of any Purchase Payment Credits applied to the contract.  The Contract Owner will retain any earnings attributable to such credits, but all losses attributable to the credits will be incurred by Nationwide.
 
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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Allocation of Purchase Payments during Free Look Period
 
Where state law requires the return of purchase payments for free look cancellations, Nationwide will allocate initial purchase payments allocated to Sub-Accounts to the money market Sub-Account during the free look period.
 
Where state law requires the return of Contract Value for free look cancellations, Nationwide will immediately allocate initial purchase payments to the investment options based on the instructions contained on the application.
 
Surrender (Redemption) Prior to Annuitization
 
Prior to annuitization and before the Annuitant's death, Contract Owners may generally surrender some or all of their Contract Value.  Surrenders from the contract may be subject to federal income tax and/or a tax penalty.  See "Federal Income Taxes" in "Appendix C: Contract Types and Tax 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.  Please see the "Pricing" section for additional information.
 
Nationwide is required by state law to reserve the right to postpone payment of assets in the Fixed Account for a period of up to 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 an amount from the Fixed Account.  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 are subject to the CDSC provisions of the contract.  If a CDSC is assessed, the Contract Owner may elect to:
 
(a)   
have the CDSC deducted from the amount requested, which will result in the Contract Owner receiving an amount less than the amount requested; or
 
(b)   
have the surrender "grossed up" by the amount of the CDSC, which will result in the Contract Owner receiving an amount equal to the original amount requested.  In this case, the total amount surrendered will be the amount requested plus any CDSC.
 
If the Contract Owner does not make a specific election, any applicable CDSC will be deducted from the amount requested by the Contract Owner.
 
The CDSC deducted is a percentage of the amount requested by the Contract Owner.  Amounts deducted for CDSC are not subject to subsequent CDSC.

Partial Surrenders to Pay Investment Advisory Fees
 
Some Contract Owners utilize an investment adviser(s) to manage their assets, for which the investment adviser assesses a fee.  Investment advisers are not endorsed or affiliated with Nationwide and Nationwide makes no representation as to their qualifications.  The fees for these investment advisory services are specified in the respective account agreements and are separate from and in addition to the contract fees and expenses described in this prospectus.  Some Contract Owners authorize their investment adviser to take a partial surrender(s) from the contract in order to collect investment advisory fees.  Surrenders taken from this contract to pay advisory or investment management fees are subject to the CDSC provisions of the contract and may be subject to income tax and/or tax penalties.
 
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;
 
·  
underlying mutual fund charges;
 
·  
a $30 Contract Maintenance Charge (this charge will be waived upon full surrender if the Contract Value is equal to or greater than $50,000 at the time of the full surrender or on any Contract Anniversary prior to the full surrender);
 
·  
the investment performance of the underlying mutual funds;
 
·  
amounts allocated to the Fixed Account and any interest credited; and
 
·  
Purchase Payment Credits, if applicable.
 
Full surrenders are subject to the CDSC provisions of the contract, where permitted by state law.  The CDSC-free withdrawal privilege does not apply to full surrenders of the contract.  For purposes of the CDSC free withdrawal privilege, a full surrender is:
 
·  
multiple surrenders taken within a Contract Year that deplete the entire Contract Value; or
 
·  
any single net surrender of 90% or more of the Contract Value.
 
Surrender (Redemption) After Annuitization
 
After the Annuitization Date, surrenders other than regularly scheduled annuity payments are not permitted.
 
Assignment
 
Investment-Only Contracts, IRAs, Roth IRAs, SEP IRAs, and Simple IRAs may not be assigned, pledged or otherwise transferred except where allowed by law.
 
A Non-Qualified Contract Owner may assign some or all rights under the contract subject to Nationwide's consent.  Additionally, Nationwide reserves the right to refuse to recognize assignments on a non-discriminatory basis.

 
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Nationwide is not responsible for the validity or tax consequences of any assignment and 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.
 
Contract Owner Services
 
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 Fixed Account.  Requests for Asset Rebalancing must be on a Nationwide form.  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 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.
 
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 the Fixed Account and/or 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 Fixed Account and the:
 
Nationwide Variable Insurance Trust
·  
NVIT Core Bond Fund: Class II
·  
NVIT Government Bond Fund: Class I
·  
NVIT Money Market Fund: Class I
·  
NVIT Short Term Bond Fund: Class II
Neuberger Berman Advisers Management Trust
·  
AMT Short Duration Bond Portfolio: I Class
PIMCO Variable Insurance Trust
·  
Low Duration Portfolio: Advisor Class
 
to any other underlying mutual fund(s).  Dollar Cost Averaging transfers may not be directed to the Fixed Account.
 
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 to stop the transfers.
 
Transfers from the Fixed Account must be equal to or less than 1/30th of the Fixed Account value at the time the program is requested.  Contract Owners that wish to utilize Dollar Cost Averaging from the Fixed Account should first inquire whether any Enhanced Fixed Account Dollar Cost Averaging programs are available.
 
Nationwide reserves the right to stop establishing new Dollar Cost Averaging programs.
 
Nationwide is required by state law to reserve the right to postpone transfer of assets from the Fixed Account for a period of up to 6 months from the date of the transfer request.
 
Enhanced Fixed Account Dollar Cost Averaging
 
Nationwide may, periodically, offer Enhanced Fixed Account Dollar Cost Averaging programs.  Only new purchase payments to the contract are eligible for Enhanced Fixed Account Dollar Cost Averaging.
 
Enhanced Fixed Account Dollar Cost Averaging involves the automatic transfer of a specific amount from the Fixed Account into the Sub-Accounts.  Enhanced Fixed Account Dollar Cost Averaging transfers may not be directed to the Fixed Account.  Amounts allocated to the Fixed Account as part of an Enhanced Fixed Account Dollar Cost Averaging program earn a higher rate of interest than other assets allocated to the Fixed Account.  Each enhanced interest rate is guaranteed for as long as the corresponding program is in effect.
 
Transfers occur monthly or on another frequency if permitted by Nationwide.  Enhanced Fixed Account Dollar Cost Averaging transfers are not considered transfer events.  Nationwide will process transfers until either amounts allocated to the Fixed Account as part of an Enhanced Fixed Account Dollar Cost Averaging program are exhausted or the Contract Owner instructs Nationwide to stop the transfers.  For Enhanced Fixed Account Dollar Cost Averaging, when a Contract Owner instructs Nationwide to stop the transfers, Nationwide will automatically transfer any amount remaining in the enhanced Fixed Account according to future investment allocation instructions.
 
Nationwide reserves the right to stop establishing new Enhanced Fixed Account Dollar Cost Averaging programs.
 
Nationwide is required by state law to reserve the right to postpone transfer of assets from the Fixed Account, including transfers as part of an Enhanced Fixed Account Dollar Cost Averaging program, for a period of up to 6 months from the date of the transfer request.
 
Dollar Cost Averaging for Living Benefits
 
Nationwide may periodically offer Dollar Cost Averaging programs with the Lifetime Income Options referred to as "Dollar Cost Averaging for Living Benefits."  Dollar Cost Averaging for Living Benefits involves the automatic transfer of a specific amount from the Fixed Account into another Sub-Account(s).  With this service, the Contract Owner benefits from the ability to invest in the Sub-Accounts over a period of time, thereby smoothing out the effects of market volatility.

 
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Only new purchase payments to the contract are eligible for Dollar Cost Averaging for Living Benefits.  Nationwide reserves the right to require a minimum balance to establish this program.  Additionally, only those investment options available for the elected Lifetime Income Option are available for use in Dollar Cost Averaging for Living Benefits -- transfers may not be directed to the Fixed Account or to any investment option that is unavailable with the respective Lifetime Income Option.  If a Contract Owner elected Custom Portfolio for their Lifetime Income Option, dollar cost averaging transfers into the elected model will be allocated to the Sub-Accounts in the same percentages as the model allocations to those Sub-Accounts.  Please refer to the "Income Benefit Investment Options" section earlier in this prospectus for the investment options available for each Lifetime Income Option.
 
Once a Dollar Cost Averaging for Living Benefits program has begun, no transfers among or between Sub-Accounts is permitted until the Dollar Cost Averaging for Living Benefits program is completed or terminated.  The interest rate credited on amounts applied to the Fixed Account as part of Dollar Cost Averaging for Living Benefits programs may vary depending on the Lifetime Income Option elected.
 
Fixed Account Interest Out Dollar Cost Averaging
 
Nationwide may, periodically, offer Fixed Account Interest Out Dollar Cost Averaging programs.  Fixed Account Interest Out Dollar Cost Averaging involves the automatic transfer of the interest earned on Fixed Account allocations into any other Sub-Accounts.  Fixed Account Interest Out Dollar Cost Averaging transfers may not be directed to the Fixed Account.
 
Transfers occur monthly or on another frequency if permitted by Nationwide.  Fixed Account Interest Out Dollar Cost Averaging transfers are not considered transfer events.  Nationwide will continue to process transfers until the Contract Owner instructs Nationwide to stop the transfers.
 
Nationwide reserves the right to stop establishing new Fixed Account Interest Out Dollar Cost Averaging programs.
 
Nationwide is required by state law to reserve the right to postpone transfer of assets from the Fixed Account for a period of up to 6 months from the date of the transfer request.
 
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 and the Fixed Account proportionately unless Nationwide is instructed otherwise.
 
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.
 
A CDSC may apply to amounts taken through Systematic Withdrawals.  If the Contract Owner takes Systematic Withdrawals, the maximum amount that can be withdrawn annually without a CDSC is the greater of the amount available under the CDSC-free withdrawal privilege, and a given percentage of the Contract Value that is based on the Contract Owner's age.  This translates into CDSC-free Systematic Withdrawals equal to the greatest of:
 
(1)  
10% of the net difference of purchase payments that are subject to CDSC minus purchase payments surrendered that were subject to CDSC;
 
(2)  
an amount withdrawn to meet minimum distribution requirements for this contract under the Internal Revenue Code; or
 
(3)  
a percentage of the Contract Value based on the Contract Owner's age, as shown in the table below:
 
 
Contract Owner's
Age
Percentage of
Contract Value
Under age 59½
5%
59½ through age 61
7%
62 through age 64
8%
65 through age 74
10%
75 and over
13%
 
The Contract Owner's age is determined as of the date the request for Systematic Withdrawals is recorded by Nationwide's home office.  For joint owners, the older joint owner's age will be used.
 
In any given Contract Year, any amount surrendered in excess of the greatest of (1), (2), or (3) above will be subject to the CDSC provisions (see "Contingent Deferred Sales Charge" earlier in this prospectus).
 
The CDSC-free withdrawal privilege for Systematic Withdrawals is non-cumulative.  Free amounts not taken during any Contract Year cannot be taken as free amounts in a subsequent Contract Year.
 
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.
 
Custom Portfolio Asset Rebalancing Service
 
For Contract Owners that have elected a Lifetime Income Option, Nationwide makes available the Custom Portfolio Asset Rebalancing Service ("Custom Portfolio") at no extra charge.  Custom Portfolio is an asset allocation program that Contract Owners can use to build their own customized portfolio of investments, subject to certain limitations.  Asset allocation is the process of investing in different asset classes (such as equity funds, fixed income funds, and money market funds) and may reduce the risk and volatility of investing. There are no guarantees that Custom Portfolio will result in a profit or protect against loss in a declining market.
 
Each model is comprised of different percentages of standardized asset categories designed to meet different investment goals, risk tolerances, and investment time horizons. The Contract Owner selects their model, then selects the specific underlying mutual funds (also classified according

 
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to standardized asset categories) and investment percentages within the model's parameters, enabling the Contract Owner to create their own unique "Custom Portfolio."  Only one "Custom Portfolio" may be created and in effect at a time and the entire Variable Account Contract Value must participate in the model.
 
Note: Contract Owners should consult with a qualified investment adviser regarding the use of Custom Portfolio and to determine which model is appropriate for them.
 
Once the Contract Owner creates their "Custom Portfolio," that Contract Owner's model is static.  This means that the percentage allocated to each underlying mutual fund will not change over time, except for quarterly rebalancing, as described below.  Note: allocation percentages within a particular model may subsequently change, but any such changes will not apply to existing model participants; the changes will only apply to participants that elect the model after the change implementation date.
 
To participate in Custom Portfolio, eligible Contract Owners must submit the proper administrative form to Nationwide's home office.  While Custom Portfolio is elected, Contract Owners cannot participate in Asset Rebalancing.
 
Asset Allocation Models available with Custom Portfolio
 
The following models are available with Custom Portfolio:
Conservative:
Designed for Contract Owners that are willing to accept very little risk but still want to see a small amount of growth.
Moderately Conservative:
Designed for Contract Owners that are willing to accept some market volatility in exchange for greater potential income and growth.
Balanced:
Designed for Contract Owners that are willing to accept some market volatility in exchange for potential long-term returns.
Moderate:
Designed for Contract Owners that are willing to accept some short-term price fluctuations in exchange for potential long-term returns.
Capital Appreciation:
Designed for Contract Owners that are willing to accept more short-term price fluctuations in exchange for potential long-term returns.
 
The specific underlying mutual funds available to comprise the equity and fixed income components of the models are contained in the election form, which is provided to Contract Owners at the time Custom Portfolio is elected.  At that time, Contract Owners elect their model and the specific underlying mutual funds and percentages that will comprise their "Custom Portfolio."
 
Quarterly Rebalancing
 
At the end of each calendar quarter, Nationwide will reallocate the Variable Account Contract Value so that the percentages allocated to each underlying mutual fund match the most recently provided percentages provided by the Contract Owner.  If the end of a calendar quarter is a Saturday, Sunday, recognized holiday, or any other day that the New York Stock Exchange is closed, the quarterly rebalancing will occur on the next business day.  Rebalancing will be priced using the unit value determined on the last Valuation Date of the calendar quarter.  Each quarterly rebalancing is considered a transfer event.  However, quarterly rebalancing transfers within your Custom Portfolio are not subject to short-term trading fees.
 
Changing Models or Underlying Mutual Fund Allocations
 
Contract Owners who have elected a Lifetime Income Option may change the underlying mutual fund allocations within their elected model, percentages within their elected model and/or may change models and create a new "Custom Portfolio" within that new model.  To implement one of these changes, Contract Owners must submit new allocation instructions to Nationwide's home office in writing on Nationwide's administrative form.  Any model and percentage changes will be subject to short-term trading fees and will count as a transfer event, as described in the "Transfer Restrictions" provision.
 
Nationwide reserves the right to limit the number of model changes a Contract Owner can make each year.
 
Terminating Participation in Custom Portfolio
 
Contract Owners can terminate participation in Custom Portfolio by submitting a written request to Nationwide's home office.  In order for the termination to be effective, the termination request must contain valid reallocation instructions that are in accordance with the terms and conditions of the elected Lifetime Income Option.  Termination is effective on the date the termination request is received at Nationwide's home office in good order.
 
Death Benefits
 
Death of Contract Owner
 
If a Contract Owner (including a joint owner) who is not the Annuitant dies before the Annuitization Date, no death benefit is 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.

 
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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 (please see the "Annuity Payment Options" section for additional information); or
 
(3)  
in any other manner permitted by law and approved by Nationwide.
 
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.  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.  Contract 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 provides Nationwide with all of the information necessary to pay that beneficiary's portion of the death benefit proceeds.  At the time the first beneficiary's proceeds are paid, the remaining portion(s) of the death benefit proceeds that are allocated to Sub-Accounts  will be allocated to the available money market Sub-Account until instructions are received from the remaining  beneficiary(ies).  Any Contract Value allocated to the Fixed Account will remain invested and will not be allocated to the available money market Sub-Account.
 
Death Benefit Calculations
 
An applicant may elect either the standard death benefit or an available death benefit option that is 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 Nationwide receives:
 
(1)  
proper proof of the Annuitant's death;
 
(2)  
an election specifying the distribution method; and
 
(3)  
any state required form(s).
 
Nationwide reserves the right to refuse purchase payments when cumulative contract value exceeds $1,000,000 (see "Synopsis of the Contracts").
 
Standard Death Benefit
 
If the Annuitant dies before the Annuitization Date, the standard death benefit will be the greater of:
 
(1)  
the Contract Value as of the date that Nationwide receives all the information necessary to pay the death benefit; or
 
(2)  
the total of all purchase payments, less an adjustment for amounts surrendered.
 
The adjustment for amounts surrendered will reduce item (2) above in the same proportion that the Contract Value was reduced on the date(s) of the partial surrender(s).
 
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.
 
One-Year Enhanced Death Benefit Option
 
For an additional charge at an annualized rate of 0.20% of the Daily Net Assets of the Variable Account, an applicant can elect the One-Year Enhanced Death Benefit Option at the time of application.  The One-Year Enhanced Death Benefit Option 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)  
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.

 
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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 death benefit will be the greater of (1) or (2) above.
 
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)  
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 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 = the Contract Value as of the date that Nationwide receives all the information necessary to pay the death benefit; and
 
 
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 Option 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.
 
One-Month Enhanced Death Benefit Option
 
For an additional charge at an annualized rate of 0.35% of the Daily Net Assets of the Variable Account, an applicant can elect the One-Month Enhanced Death Benefit Option at the time of application.  The One-Month Enhanced Death Benefit Option is only available for contracts with Annuitants age 75 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)  
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 Monthly Contract Anniversary prior to the Annuitant's 81st birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that Monthly Contract Anniversary.
 
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 death benefit will be the greater of (1) or (2) above.
 
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)  
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 Monthly Contract Anniversary prior to the Annuitant's 81st birthday, less an adjustment for amounts subsequently surrendered, plus purchase payments received after that Monthly Contract Anniversary.
 
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 = the Contract Value as of the date that Nationwide receives all the information necessary to pay the death benefit; and
 
 
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.
 

 
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The One-Month Enhanced Death Benefit Option 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 0.45% 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 Option is only available for contracts with Annuitants age 75 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)  
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 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 death benefit will be the greater of (1) or (2) above.
 
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.
 
For example, assume Joe purchases a contract in 2008 for $100,000.  In the year 2021, his contract stands as follows:
 
Total purchase payments:
$100,000
Contract Value:
$120,000
Highest anniversary Contract Value:
$125,000
5% interest anniversary value:
$197,933
 
If Joe dies in 2021, his death benefit would be $197,933.
 
However if he dies the next year, his death benefit would be $200,000 instead of $207,829 (calculation: 105% X $197,933) since the 5% interest anniversary value is limited to 200% of his initial purchase payment of $100,000.
 
Following is an example of how a surrender would impact the death benefit calculation.  In the year 2015, his contract stands as follows:
 
Total purchase payments:
$100,000
Contract Value:
$120,000
Highest anniversary Contract Value:
$120,000
5% interest anniversary value:
$155,133
 
In 2016, Joe takes a partial surrender of $60,000.  After his surrender, the highest Contract Anniversary value is $60,000 (calculation: $120,000 -– $60,000) and the 5% interest anniversary value is $77,566 (calculation: ($60,000/$120,000) x $155,133).  After the date of the withdrawal, the 5% interest anniversary value is limited to $80,000 (calculation: 200% ($100,000 - $60,000).
 
If, after the first Contract Anniversary, the Fixed Account allocation becomes greater than 30% of the Contract Value solely due to the application of additional purchase payments, additional surrenders, or transfers among investment options, then for purposes of calculating the 5% interest anniversary value, 0% will accrue for that year.  If, however, the 30% threshold is reached due to a combination of market performance and Contract Owner actions, and would not have been reached but for the market performance, interest will continue to accrue at 5%.
 
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)
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 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 = the Contract Value as of the date that Nationwide receives all the information necessary to pay the death benefit; and
 
 
F = the ratio of $3,000,000 to the total of all purchase payments made to the contract.

 
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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 and all of the death benefit options 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)  
(a)  Both spouses must be age 85 or younger at the time the contract is issued for the standard death benefit;
 
 
(b)  Both spouses must be age 80 or younger at the time the contract is issued for the One-Year Enhanced Death Benefit Option;
 
 
(c)  Both spouses must be age 75 or younger at the time the contract is issued for the Combination Enhanced Death Benefit Option or the One-Month Enhanced Death Benefit Option;
 
(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 Contract Owner to provide a copy of the marriage certificate.  The new Co-Annuitant must meet the age requirement of the respective death benefit option on the date the Co-Annuitant is added.
 
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.
 
If the marriage terminates due to the death of a spouse, divorce, dissolution, or annulment, the surviving spouse the Spousal Protection Feature may not elect to cover a subsequent spouse.
 
Additional purchase payments made to the contract after receiving the benefit of the Spousal Protection Feature are subject to the CDSC provisions of the contract.
 
Annuity Commencement Date
 
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.
 
Annuity Commencement Date and Lifetime Income Option
 
If the Contract Owner elected a Lifetime Income Option, Nationwide will, approximately three months before the Annuity Commencement Date, notify the Contract Owner of the impending Annuity Commencement Date and give the Contract Owner the opportunity to defer the Annuity Commencement Date in order to preserve the benefit associated with the Lifetime Income Option.  Deferring the Annuity Commencement Date may have negative tax consequences.  See "Required Distributions for IRAs, SEP IRAs, Simple IRAs, and Roth IRAs" in "Appendix C: Contract Types and Tax Information," and the "10% and 5% Lifetime Income Options" provisions in this prospectus.  Consult a qualified tax adviser.
 
Annuitizing the Contract
 
Annuitization Date
 
The Annuitization Date is the date that annuity payments begin.  Annuity payments will not begin until the Contract Owner affirmatively elects to begin annuity payments.  If the Contract Owner has elected a Lifetime Income Option, an election to begin annuity payments will terminate all benefits, conditions, guarantees, and charges associated with the Lifetime Income Option.

 
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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.
 
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.
 
Any allocations in the Fixed Account that are to be annuitized as a variable payment annuity must be moved to the Variable Account prior to the Annuitization Date.  There are no restrictions on Fixed Account transfers made in anticipation of annuitization.
 
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.
 
Variable Annuity Payments
 
Variable annuity payments will vary depending on the performance of the underlying mutual funds selected.  The underlying mutual funds available during annuitization are those underlying mutual funds shown in "Appendix A: Underlying Mutual Funds."  The Static Asset Allocation Model is not available after annuitization.
 
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 adjusted age and sex of the Annuitant (and joint annuitant, if any) in accordance with the contract;
 
·  
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 comprising each variable annuity payment, on a Sub-Account basis, 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 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.

 
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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 $100.  The payment frequency will be changed to an interval that will result in payments of at least $100.
 
Nationwide will send annuity payments no later than 7 days after each annuity payment date.
 
Annuity Payment Options
 
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.  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.
 
Nationwide reserves the right to refuse purchase payments when cumulative contract value exceeds $1,000,000 (see "Synopsis of the Contracts"). If you are permitted to submit purchase payments when cumulative contract value exceeds $1,000,000, additional restrictions apply, as follows.
 
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.  For example, if the Annuitant dies before the second annuity payment date, the Annuitant will receive only one payment.  The Annuitant will only receive two annuity payments if he or she dies before the third payment date, and so on.  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 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.
 
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.

 
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Annuitization of Amounts Greater than $5,000,000
 
Additionally, we may 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, the Contract Owner must:
 
(1)
reduce the amount to be annuitized to $5,000,000 or less by taking a partial surrender from the contract;
 
(2)
reduce the amount to be annuitized to $5,000,000 or less by exchanging the portion of the Contract Value in excess of $5,000,000 to another annuity contract; or
 
(3)
annuitize the portion of the Contract Value in excess of $5,000,000 under an annuity payment option with a term certain, if available.
 
Statements and Reports
 
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 CONTRACT OWNER 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.
 
A Contract Owner can revoke their consent to household delivery and reinstitute individual delivery by calling 1-866-223-0303 or by writing to the address on page 1 of this prospectus.  Nationwide will reinstitute individual delivery within 30 days after receiving such notification.
 
Legal Proceedings
 
Nationwide Financial Services, Inc. (NFS, or collectively with its subsidiaries, "the Company") was formed in November 1996.  NFS is the holding company for Nationwide Life Insurance Company (NLIC), Nationwide Life and Annuity Insurance Company (NLAIC) and other companies that comprise the life insurance and retirement savings operations of the Nationwide group of companies (Nationwide). This group includes Nationwide Financial Network (NFN), an affiliated distribution network that markets directly to its customer base.  NFS is incorporated in Delaware and maintains its principal executive offices in Columbus, Ohio.
 
The Company is a subject to legal and regulatory proceedings in the ordinary course of its business. The Company's legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. The Company's litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings also could affect the outcome of one or more of the Company's litigations matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs' claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. Management believes, however, that based on their currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company's consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company's consolidated financial position or results of operations in a particular quarter or annual period.
 
The financial services industry has been the subject of increasing scrutiny on a broad range of issues by regulators and legislators. The Company and/or its affiliates have been contacted by, self reported or received subpoenas from state and federal regulatory agencies, including the Securities and Exchange Commission, and other governmental bodies, state securities law regulators and state attorneys general for information relating to, among other things, compensation, the allocation of compensation, revenue sharing and bidding arrangements, market-timing, anticompetitive activities, unsuitable sales or replacement practices, fee arrangements in retirement plans, and the use of side agreements and finite

 
42

 

 
reinsurance agreements. The Company 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.
 
A promotional and marketing arrangement associated with the Company's offering of a retirement plan product and related services in Alabama was investigated by the Alabama Attorney General, which assumed the investigation from the Alabama Securities Commission. On October 27, 2010, the State Attorney General announced a settlement agreement, subject to court approval, between the Company and the State of Alabama, the Alabama Department of Insurance, the Alabama Securities Commission, and the Alabama State Personnel Board. If the court approves the settlement agreement, the Company currently expects that the settlement will not have a material adverse impact on its consolidated financial position. It is not possible to predict what effect, if any, the settlement may have on the Company's retirement plan operations with respect to promotional and marketing arrangements in general in the future.
 
On September 10, 2009, Nationwide Retirement Solutions, Inc. (NRS) was named in a lawsuit filed in the Circuit Court for Montgomery County, Alabama entitled Twanna Brown, Individually and on behalf of all other persons in Alabama who are similarly situated, v Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc., Edwin "Mac" McArthur, Steve Walkley, Glenn Parker, Ulysses Lavender, Diana McLain, Randy Hebson, and Robert Wagstaff; and Unknown Defendants A-Z. On February 17, 2010, Brown filed an Amended Complaint alleging in Count One, that all the defendants were involved in a civil conspiracy and seeks to recover actual damages, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. In Count Two, although NRS is not named, it is alleged that the remaining defendants breached their fiduciary duties and seeks actual damages, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. In Count Three, although NRS is not named, the plaintiff seeks declaratory relief that the individual defendants breached their fiduciary duties, seeks injunctive relief permanently removing said defendants from their respective offices in the Alabama State Employees Association (ASEA) and PEBCO and costs and attorneys fees. In Count Four, it alleges that any money Nationwide paid belonged exclusively to ASEA for the use and benefit of its membership at large and not for the personal benefit of the individual defendants. Plaintiff seeks to recover actual damages from the individual defendants, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. On March 10, 2011, the plaintiff filed a Notice of Dismissal. The Company continues to defend this case vigorously.
 
On November 20, 2007, NRS and NLIC 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 Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc, Alabama State Employees Association, Inc., PEBCO, Inc. and Fictitious Defendants A to Z claiming to represent a class of all participants in the ASEA Plan, excluding members of the Deferred Compensation Committee, ASEA's directors, officers and board members, and PEBCO's directors, officers and board members. The class period is from November 20, 2001 to the date of trial. In the second amended class action complaint, the plaintiffs allege breach of fiduciary duty, wantonness and breach of contract. The second amended class action complaint seeks a disgorgement of amounts paid, compensatory damages and punitive damages, plus interest, attorneys' fees and costs and such other equitable and legal relief to which plaintiffs and class members may be entitled. On April 2, 2010, NRS and NLIC filed an answer. On June 4, 2010, the plaintiffs filed a motion for class certification. On July 8, 2010, the defendants filed their briefs in opposition to plaintiffs' motion for class certification. On October 17, 2010, Twanna Brown filed a motion to intervene in this case. On October 22, 2010, the parties to this action executed a stipulation of settlement that agrees to certify a class for settlement purposes only, that provides for payments to the settlement class, and that provides for releases, certain bar orders, and dismissal of the case, subject to the Circuit Courts' approval. After a hearing on November 5, 2010, on November 9, 2010, the Court denied Brown's motion to intervene. On November 13, 2010, the Court issued a Preliminary Approval Order and held a Settlement Fairness Hearing on January 26, 2011. On November 22, 2010, Brown filed a Notice of Appeal with the Supreme Court of Alabama, appealing the Preliminary Approval Order. On January 25, 2011, the Alabama Supreme Court dismissed the appeal. Class notices were sent out on November 24, 2010. On December 3, 2010, Brown filed a motion with the trial court to stay this case. On December 22, 2010, Brown filed with the Alabama Supreme Court, a motion to stay all further Gwin trial court proceedings until Ms. Brown's appeal of the certification order is decided. On January 25, 2011, the Alabama Supreme Court denied Brown's motion to stay. On February 28, 2011, the Court entered its Order permitting ASEA/PEBCO to assert indemnification claims for attorneys' fees and costs, but barring them from asserting any other claims for indemnification. On March 3, 2011, ASEA and PEBCO filed a cross claim against NLIC and NRS seeking indemnification. On March 9, 2011, the Court severed the cross claim. NRS and NLIC continue to defend this case vigorously.
 
On July 11, 2007, NLIC 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 NEA members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present

 
43

 

 
(and their heirs and/or beneficiaries). The plaintiffs allege that the defendants violated 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 May 23, 2008, the Court granted the defendants' motion to dismiss. On June 19, 2008, the plaintiffs filed a notice of appeal. On December 20, 2010, the 9th Circuit Court of Appeals affirmed the dismissal of this case and entered judgment. The plaintiffs did not file a writ of certiorari with the US Supreme Court. NLIC intends to continue to defend this case vigorously.
 
On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. In the plaintiffs' sixth amended complaint, filed November 18, 2009, they amended the list of named plaintiffs and claim to represent a class of qualified retirement plan trustees under ERISA that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys' fees. On November 6, 2009, the Court granted the plaintiff's motion for class certification and certified a class of "All trustees of all employee pension benefit plans covered by ERISA which had variable annuity contracts with NFS and NLIC or whose participants had individual variable annuity contracts with NFS and NLIC at any time from January 1, 1996, or the first date NFS and NLIC began receiving payments from mutual funds based on a percentage of assets invested in the funds by NFS and NLIC, whichever came first, to the date of November 6, 2009". On October 20, 2010, the Second Circuit Court of Appeals granted NLIC's 23(f) petition agreeing to hear an appeal of the District Court's order granting class certification. On October 21, 2010, the District Court dismissed NFS from the lawsuit. On October 27, 2010, the District Court stayed the underlying action pending a decision from the Second Circuit Court of Appeals. On March 2, 2011, the Company filed its brief in the 2nd Circuit Court of Appeals. NLIC continues to defend this lawsuit vigorously.
 
On May 14, 2010, NLIC was named in a lawsuit filed in the Western District of New York entitled Sandra L. Meidenbauer, on behalf of herself and all others similarly situated v. Nationwide Life Insurance Company. The plaintiff claims to represent a class of all individuals who purchased a variable life insurance policy from NLIC during an unspecified period. The complaint claims breach of contract, alleging that NLIC charged excessive monthly deductions and costs of insurance resulting in reduced policy values and, in some cases, premature lapsing of policies. The complaint seeks reimbursement of excessive charges, costs, interest, attorney's fees, and other relief. NLIC filed a motion to dismiss the complaint on July 23, 2010. NLIC filed a motion to disqualify the proposed class representative on August 27, 2010. Plaintiff filed a motion to amend the complaint on September 17, 2010, and NLIC filed an opposition to the motion to amend on November 2, 2010. Those motions have been fully briefed. NLIC continues to vigorously defend this case.
 
On October 22, 2010, NRS was named in a lawsuit filed in the United States District Court, Middle District of Florida, Orlando Division entitled Camille McCullough, and Melanie Monroe, Individually and on behalf of all others similarly situated v. National Association of Counties, NACo Research Foundation, NACo Financial Services Corp., NACo Financial Center, and Nationwide Retirement Solutions, Inc. The Plaintiffs' First Amended Class Action Complaint and Demand for Jury Trial was filed on February 18, 2011. If the Court determines that the Plan is governed by ERISA, then Plaintiffs seek to represent a class of "All natural persons in the United States who are currently employed or previously were employed at any point during the six years preceding the date Plaintiffs filed their Original Class Action Complaint, by a government entity that is or was a member of the National Association of Counties, and who participate or participated in the Section 457 Deferred Compensation Plan for Public Employees endorsed by the National Association of Counties and administered by Nationwide Retirement Solutions, Inc." If the Court determines that the Plan is not governed by ERISA, then the Plaintiffs seek to represent a class of "All natural persons in the United States who are currently employed or previously were employed at any point during the four years preceding the date Plaintiffs filed their Original Class Action Complaint, by a government entity that is or was a member of the National Association of Counties, and who participate or participated in a Section 457 Deferred Compensation Plan for Public Employees endorsed by the National Association of Counties and administered by Nationwide Retirement Solutions, Inc." The First Amended Complaint alleges ERISA Violation, Breach of Fiduciary Duty - NACo, Aiding and Abetting Breach of Fiduciary Duty - Nationwide, Breach of Fiduciary Duty - Nationwide, and Aiding and Abetting Breach of Fiduciary Duty - NACo. The First Amended Complaint asks for actual damages, lost profits, lost opportunity costs, restitution, and/or other injunctive or other relief, including without limitation (a) ordering Nationwide and NACo to restore all plan losses, (b) ordering Nationwide to refund all fees associated with Nationwide's Plan to Plaintiffs and Class members, (c) ordering NACo and Nationwide to pay the expenses and losses incurred by Plaintiffs and/or any Class member as a proximate result of Defendants' breaches of fiduciary duty, (d) forcing NACo to forfeit the fees that NACo received from Nationwide for promoting and endorsing its Plan and disgorging all profits, benefits, and other compensation obtained by NACo from its wrongful conduct, and (e) awarding Plaintiff and Class members their reasonable and necessary attorney's fees and cost incurred in connection with this suit, punitive damages, and pre-judgment and post judgment interest, at the highest rates allowed by law, on the damages awarded. On March 21, 2011, the Company filed a

 
44

 

 
motion to dismiss the plaintiffs' first amended complaint. The Company intends to defend this case vigorously.
 
On December 27, 2006, NLIC and NRS were named as defendants in a lawsuit filed in Circuit Court, Cole County Missouri entitled State of Missouri, Office of Administration, and Missouri State Employees Deferred Comp Plan v NLIC and NRS. The complaint seeks recovery for breach of contract and breach of the implied covenant of good faith and fair dealing against NLIC and NRS as well as a breach of fiduciary duty against NRS. The complaint seeks to recover the amount of the market value adjustment withheld by NLIC ($18,586,380), prejudgment interest, loss of investment income from ING due to Nationwide's assessment of the market value adjustment, and an accounting. On March 8, 2007 the Company filed a motion to remove this case from state court to federal court in Missouri. On March 20, 2007 the State filed a motion to remand to state court and to stay court order. On April 3, 2007 the case was remanded to state court. On June 25, 2007 the Companies filed an Answer. On October 16, 2009, the plaintiff filed a partial motion for summary judgment. On November 20, 2009, the Companies filed a response to the plaintiff's motion for summary judgment and also filed a motion for summary judgment on behalf of the Companies. On February 26, 2010, the court denied Missouri's partial motion for summary judgment and granted Nationwide's motion for summary judgment and dismissed the case. On March 8, 2011, the Missouri Court of Appeals reversed the granting of Nationwide's motion for summary judgment and directed the trial court to enter judgment in favor of the State and against Nationwide in the amount of $18,586,380, plus statutory interest at the rate of 9% per annum from June 2, 2006. On March 22, 2011, the Companies filed with the Missouri Court of Appeals, a motion for rehearing and an application for transfer to the Supreme Court of Missouri. The Companies intend to defend this case vigorously.
 
The general distributor, NISC, is not engaged in any litigation of any material nature.
 
Table of Contents of Statement of Additional Information
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
3

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.  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. 811-03330
Securities Act of 1933 Registration File No. 333-168818

 
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Appendix A: Underlying Mutual Funds
 
Below is a list of the available Sub-Accounts and information about the corresponding underlying mutual funds in which they invest.  The underlying mutual funds in which the Sub-Accounts invest 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.
 

 
Designations Key:
 

STTF:
The underlying mutual fund corresponding to this Sub-Account assesses (or reserves the right to assess) a short-term trading fee (see "Short-Term Trading Fees" earlier in the prospectus).

 
FF:
The underlying mutual fund corresponding to this Sub-Account primarily invests in other mutual funds.  Therefore, a proportionate share of the fees and expenses of any acquired funds are indirectly borne by investors.  As a result, investors in this Sub-Account may incur higher charges than if the assets were invested in an underlying mutual fund that does not invest in other mutual funds.  Please refer to the prospectus for this underlying mutual fund for more information.
 
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class B
Investment Advisor:
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 Advisor:
American Century Investment Management, Inc.
Investment Objective:
Long-term total return using a strategy that seeks to protect against U.S. inflation.
 
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class II
Investment Advisor:
American Century Investment Management, Inc.
Investment Objective:
Long-term capital growth with income as a secondary objective.
 
BlackRock Variable Series Funds, Inc. - BlackRock Global Allocation V.I. Fund: Class III
Investment Advisor:
BlackRock Advisors, LLC
Sub-advisor:
BlackRock Investment Management, LLC; BlackRock International Limited
Investment Objective:
Seeks high total investment return.
 
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares
Investment Advisor:
The Dreyfus Corporation
Sub-advisor:
Mellon Capital Management
Investment Objective:
To match performance of the S&P SmallCap 600 Index®.
 
Dreyfus Stock Index Fund, Inc.: Service Shares
Investment Advisor:
The Dreyfus Corporation
Investment Objective:
To match performance of the S&P 500.
 
Dreyfus Variable Investment Fund - Appreciation Portfolio: Service Shares
Investment Advisor:
The Dreyfus Corporation
Sub-advisor:
Fayez Sarofim & Co.
Investment Objective:
Long-term capital growth consistent with the preservation of capital.
 
Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2010 Portfolio: Service Class 2
Investment Advisor:
Strategic Advisers Inc. Boston MA
Sub-advisor:
FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:
High total return with a secondary objective of principal preservation as the fund approaches its target date and beyond.
Designation: FF
 
Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2020 Portfolio: Service Class 2
Investment Advisor:
Strategic Advisers Inc. Boston MA
Sub-advisor:
FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:
High total return with a secondary objective of principal preservation as the fund approaches its target date and beyond.
Designation: FF

 
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Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2030 Portfolio: Service Class 2
Investment Advisor:
Strategic Advisers Inc. Boston MA
Sub-advisor:
FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:
High total return with a secondary objective of principal preservation as the fund approaches its target date and beyond.
Designation: FF
 
Fidelity Variable Insurance Products Fund - VIP Energy Portfolio: Service Class 2
Investment Advisor:
Fidelity Management & Research Company Boston, MA
Sub-advisor:
FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective:
Capital appreciation.
Designation: STTF
 
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2
Investment Advisor:
Fidelity Management & Research Company Boston, MA
Sub-advisor:
FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:
Reasonable income.
 
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2
Investment Advisor:
Fidelity Management & Research Company Boston, MA
Sub-advisor:
FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, Fidelity Investments Japan Limited
Investment Objective:
Capital appreciation.
 
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2
Investment Advisor:
Fidelity Management & Research Company Boston, MA
Sub-advisor:
Fidelity Investments Money Management, Inc., Fidelity Research & Analysis Company, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:
High level of current income.
 
Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2
Investment Advisor:
Fidelity Management & Research Company Boston, MA
Sub-advisor:
FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective:
Long-term growth of capital.
 
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class 2R
Investment Advisor:
Fidelity Management & Research Company Boston, MA
Sub-advisor:
FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research & Analysis Company, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, Fidelity Investments Japan Limited
Investment Objective:
Long-term capital growth.
Designation: STTF
 
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2
Investment Advisor:
Franklin Advisers, Inc.
Investment Objective:
Maximum income while maintaining prospects for capital appreciation.
 
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2
Investment Advisor:
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 Advisor:
Franklin Templeton Services, LLC
Investment Objective:
Capital appreciation with income as a secondary goal.
Designation: FF

 
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Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3
Investment Advisor:
Franklin Advisers, Inc.
Investment Objective:
High current income, consistent with preservation of capital, with capital appreciation as a secondary consideration.
Designation: STTF
 
Huntington VA Funds - Huntington VA International Equity Fund
Investment Advisor:
Huntington Asset Advisors, Inc.
Investment Objective:
Seeks total return on its assets.
 
Huntington VA Funds - Huntington VA Situs Fund
Investment Advisor:
Huntington Asset Advisors, Inc.
Investment Objective:
Seeks long-term capital appreciation.
 
Invesco - Invesco V.I. Capital Development Fund: Series II
Investment Advisor:
Invesco Advisers, Inc.
Investment Objective:
Long-term growth of capital.
 
Ivy Funds Variable Insurance Portfolios, Inc. - Asset Strategy
Investment Advisor:
Waddell & Reed Investment Management Company
Investment Objective:
High total return over the long run.
 
Janus Aspen Series - Forty Portfolio: Service Shares
Investment Advisor:
Janus Capital Management LLC
Investment Objective:
Long-term growth of capital.
 
Janus Aspen Series - Global Technology Portfolio: Service II Shares
Investment Advisor:
Janus Capital Management LLC
Investment Objective:
Long-term growth of capital.
Designation: STTF
 
Janus Aspen Series - Overseas Portfolio: Service II Shares
Investment Advisor:
Janus Capital Management LLC
Investment Objective:
Long-term growth of capital.
Designation: STTF
 
MFS® Variable Insurance Trust - MFS Value Series: Service Class
Investment Advisor:
Massachusetts Financial Services Company
Investment Objective:
To seek capital appreciation.
 
MFS® Variable Insurance Trust II - MFS® International Value Portfolio: Service Class
Investment Advisor:
Massachusetts Financial Services Company
Investment Objective:
The fund’s investment objective is to seek capital appreciation.  MFS normally invests the fund’s assets primarily in foreign equity securities, including emerging market equity securities.
 
Nationwide Variable Insurance Trust - American Century NVIT Growth Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Sub-advisor:
American Century Investment Management, Inc.
Investment Objective:
Seeks long-term capital appreciation.
 
Nationwide Variable Insurance Trust - American Century NVIT Multi Cap Value Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Sub-advisor:
American Century Investment Management, Inc.
Investment Objective:
The Fund seeks capital appreciation, and secondarily current income.
 
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II
Investment Advisor:
Capital Research and Management Company
Investment Objective:
The fund seeks to provide high total return (including income and capital gains) consistent with the preservation of capital over the long term.
 
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II
Investment Advisor:
Capital Research and Management Company
Investment Objective:
The Fund seeks to maximize an investors level of current income and preserve the investor's capital.
 


 
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Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II
Investment Advisor:
Capital Research and Management Company
Investment Objective:
The Fund is designed for investors seeking capital appreciation through stocks.
 
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II
Investment Advisor:
Capital Research and Management Company
Investment Objective:
The Fund is designed for investors seeking capital appreciation principally through investment in stocks.
 
Nationwide Variable Insurance Trust - American Funds NVIT Growth-Income Fund: Class II
Investment Advisor:
Capital Research and Management Company
Investment Objective:
The fund 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 III
Investment Advisor:
Nationwide Fund Advisors
Sub-advisor:
Federated Investment Management Company
Investment Objective:
The Fund seeks to provide high current income.
Designation: STTF
 
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Sub-advisor:
Neuberger Berman Management LLC
Investment Objective:
The fund seeks long-term capital growth.
 
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Sub-advisor:
Neuberger Berman Management LLC
Investment Objective:
The Fund seeks long-term total return by investing primarily in securities of companies that meet the fund's financial criteria and social policy.
 
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Aggressive Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Investment Objective:
The Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
 
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Balanced Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Investment Objective:
The Fund seeks a high level of total return through investment in both equity and fixed income securities.
Designation: FF
 
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Capital Appreciation Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Investment Objective:
The Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
 
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Conservative Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Investment Objective:
The Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Cardinal Funds.
Designation: FF
 
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderate Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Investment Objective:
The Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Cardinal Funds.
Designation: FF

 
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Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Aggressive Fund: Class II
Investment Advisor:
Nationwide Fund Advisors
Investment Objective:
The Fund seeks growth of capital, but also seeks income consistent with a moderately aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
 
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Conservative Fund: Class II
Investment Advisor: